OPERATING AGREEMENT by and among ORIENTAL INTRA-ASIA ENTERTAINMENT (CHINA) LIMITED, CHINA TRANSINFO TECHNOLOGY GROUP CO., LTD., BEIJING PKU CHINAFRONT HIGH TECHNOLOGY CO., LTD.,
Exhibit
10.14
by
and among
ORIENTAL
INTRA-ASIA ENTERTAINMENT (CHINA) LIMITED,
CHINA
TRANSINFO TECHNOLOGY GROUP CO., LTD.,
BEIJING
PKU CHINAFRONT HIGH TECHNOLOGY CO., LTD.,
BEIJING
TIAN XXX XXXX XIN SCIENCE AND TECHNOLOGY CO., LTD.,
BEIJING
ZHANGCHENG CULTURE AND MEDIA CO., LTD.
BEJING
ZHANGCHENG SCIENCE AND TECHNOLOGY CO., LTD.,
CHINA
TRANWISEWAY INFORMATION TECHNOLOGY CO., LTD.,
SHANGHAI
YOOTU INFORMATION TECHNOLOGY CO., LTD.,
XINJIANG
ZHANGCHENG SCIENCE AND TECHNOLOGY CO., LTD.,
DALIAN
DAJIAN ZHITONG INFORMATION SERVICE CO., LTD.
and
THE
SHAREHOLDERS OF
CHINA
TRANSINFO TECHNOLOGY GROUP CO., LTD.
NAMED
HEREIN
This
Operating Agreement (the “Agreement”) is entered into on February 3, 2009 by and
among Oriental Intra-Asia Entertainment (China) Limited (“Oriental”), China
TransInfo Technology Group Co., Ltd. (“Group Company”), Beijing PKU Chinafront
High Technology Co., Ltd. (“PKU”), Beijing Tian Xxx Xxxx Xin Science and
Technology Co., Ltd. (“Bejing Tian Hao”), Beijing Zhangcheng Culture and Media
Co., Ltd. (“Zhangcheng Culture”), Bejing Zhangcheng Science and Technology Co.,
Ltd. (“Zhangcheng Science”), China TranWiseway Information Technology Co., Ltd.
(“Chian TranWiseway”) Xinjiang Zhangcheng Science and Technology Co., Ltd.
(“Xinjiang Zhangcheng”), Dalian Dajian Zhitong Information Service Co., Ltd.
(“Dalian Dajian”) and Shanghai Yootu Information Technology Co., Ltd. (“Shanghai
Yootu” and together with Group Company, PKU, Beijing Tian Hao, Zhangcheng
Culture, Zhangcheng Science, China TranWiseway, Xinjiang Zhangcheng and Dalian
Dajian, the “VIE Entities”) and the shareholders of Group Company identified
blow (the “Shareholders”). Each of the parties to this Agreement is
individually referred to herein as a “Party” and collectively, as the
“Parties.”
WHEREAS:
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1.
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Oriental
is a wholly foreign-owned enterprise organized in the People’s Republic of
China (the “PRC”);
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2.
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Each
of the VIE Entities is a limited liability company and duly organized and
validly existing under the laws of PRC and is approved by the competent
governmental authorities to carry on the business of traffic information
services;
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3.
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Oriental
has established a business relationship with the VIE Entities by entering
into the Exclusive
Technical Consulting and Services Agreement (the
“TSA”);
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4.
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Pursuant
to the TSA by and among Oriental and the VIE Entities, the VIE Entities
shall make certain payments to Oriental in consideration of the services
provided by Oriental thereunder. However, the relevant payables
have not been paid yet and the daily operation of the VIE Entities will
have a material impact on their capacity to pay the payables to
Oriental.
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5.
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Xxxxxxx
Xxx is a shareholder of the Group Company who owns 70.68% equity in the
Group Company.
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6.
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Xxxxxxx
Xxxxx is a shareholder of the Group Company who owns 8.83% equity in the
Group Company.
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7.
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Xxxxxx
Xxx is a shareholder of the Group Company who owns 8.83% equity in the
Group Company.
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8.
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Xxx
Xxx is a designee of SAIF Partners III L.P., which owns 11.66% equity in
the Group Company.
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9.
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The
Parties agree to further clarify matters relating to the operation of the
VIE Entities pursuant to provisions
herein.
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NOW, THEREFORE, through mutual
negotiations, the Parties hereto agree as follows:
1
1. In
order to ensure the VIE Entities’ normal operation, Oriental agrees, subject to
the VIE Entities’ satisfaction of the relevant provisions herein, to act as the
guarantor for the VIE Entities in the contracts, agreements or transactions in
association with the VIE Entities’ operation between the VIE Entities and any
other third parties and to provide full guarantee for the VIE Entities in
performing such contracts, agreements or transactions subject to the applicable
laws. In consideration for such guaranty, each of the VIE Entities
agrees to pledge the receivables of its operation and mortgage all of its assets
which have not been mortgaged to any third parties at the execution date of this
Agreement to Oriental. Notwithstanding the foregoing, no guaranteed
obligation of Oriental shall arise unless and until Oriental assumes such
obligation in writing. Pursuant to the above guarantee arrangement,
Oriental, as the guarantor for the VIE Entities and upon request of the VIE
Entities’ counter parties, shall enter into written guarantee contracts with
such parties that are reasonably acceptable to Oriental and that do not violate
any applicable laws or material contracts that Oriental is subject
to.
2. Subject
to the requirement herein set forth in Article 1, in order to ensure the
performance of the various operational agreements between Oriental and the VIE
Entities and to ensure the payment of various payables by the VIE Entities to
Oriental, the VIE Entities together with the Shareholders hereby jointly agree
that the VIE Entities shall not conduct any transaction which may materially
affect their assets, obligations, rights or their business operation without
obtaining a prior written consent from Oriental or Oriental’s affiliates,
including without limitation the following:
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2.1
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To
borrow money from any third parties or assume any
debt;
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2.2
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To
assign to any third parties the rights and obligation under the
Agreement;
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2.3
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To
create or undertake any mortgage, pledge or any other type of encumbrance
on any of the VIE Entities’ existing properties or properties acquired in
the future;
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2.4
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To
acquire assets of any third party on behalf of the VIE Entities, or to
execute any agreement, arrangement, commitment or memorandum for the
same;
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2.5
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To
sell, lease or otherwise dispose of any assets of the VIE Entities, or to
execute any agreement, arrangement, commitment or memorandum for the
same;
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2.6
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To
borrow or lend money to any third party on behalf of the VIE Entities, or
to execute any agreement, arrangement, commitment or memorandum for the
same;
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2.7
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To
assume any obligation, give a guarantee or endorsement for any third party
on behalf of the VIE Entities or assume responsibility in whatever form
for any third party’s obligation on behalf of the VIE Entities, or to
execute any agreement, arrangement, commitment or memorandum for the
same;
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2.8
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To
approve the annual budget and annual business plan of the VIE Entities and
any material deviations thereof;
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2.9
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To
make any capital expenditure by the VIE Entities other than in the
ordinary course of its business;
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2.10
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To
take any action (including but not limited to voting at shareholders’
meetings and signing resolutions at shareholders’ meetings) that,
according to the effective articles of association of the Group Company,
requires a unanimous consent of all shareholders or
directors;
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2
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2.11
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When
exercising his right in his capacity as a shareholder (including but not
limited to the exercise of his voting rights) of the Group Company, to
adopt any resolution or otherwise take any shareholder action that
contradicts or jeopardises the rights and interests of Oriental or its
affiliates; and
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2.12
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To
take any action which violates the terms of this Agreement and any of
other agreements entered into by the VIE
Entities.
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3. Each
of the Shareholders hereby undertakes:
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3.1
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To
approve in his/her capacity as a shareholder, upon receiving instruction
from Oriental, the entering into by the Group Company of the TSA with
Oriental, its affiliate or any other entity designed by
Oriental;
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3.2
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To
provide to Oriental the monthly consolidated financial statements of the
Group Company within five (5) days after the end of each month as well as
any other documentation and information on the VIE Entities’ business
operations and financial condition, to the extent that he is entitled to
receive the same in his capacity as a shareholder of the Group Company as
requested by Oriental from time to time (excluding information provided by
the Group Company);
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3.3
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That
if, according to the law of China, his equity interest in the Group
Company is deemed to be common property, he should obtain a written
statement from his spouse indicating that it is not common property
between himself and his spouse but his own personal
property;
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3.4
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At
any time to defend claims and assertion regarding his equity interest in
the Group Company and the creditor’s rights of any third party who claims
interest in the same, provided that the Group Company shall not be
obligated to defend any such claim or assertion unless it is at Oriental’s
cost;
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3.5
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To
cooperate with Oriental at its request by consenting to or adopting in his
capacity as a shareholder pursuant to Oriental’s instructions or requests
relating to the operation of the Group
Company;
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3.6
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To
strictly keep confidential the existence of this Agreement and its
provisions, any correspondence, resolutions, attached agreements and other
documents in connection with this
Agreement;
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3.7
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To
immediately notify Oriental of the occurrence or possible occurrence of
any litigation, arbitration or administrative proceeding relating to the
Group Company’s assets, business and revenue of which he may become
aware;
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3.8
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At
Oriental’s written request, approve in his capacity as a shareholder any
action of the Group Company that is not in violation of any applicable
laws.
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4. In
order to ensure the performance of the various agreements between Oriental and
the VIE Entities and to ensure the payment of the various payables by the VIE
Entities to Oriental, the VIE Entities together with the Shareholders hereby
jointly agree to accept the provision of the corporate policies and guidance by
Oriental at any time in respect of the appointment and dismissal of the VIE
Entities’ employees, the VIE Entities’ daily operation and administration as
well as financial administrative systems.
3
5. The
VIE Entities together with the Shareholders hereby jointly agree that the VIE
Entities and the Shareholders shall appoint personnel recommended by Oriental as
the directors of each of the VIE Entities. Each of the Shareholders
shall, to the extent applicable PRC law requires a shareholder to vote, vote his
shares of the Group Company to cause the board of directors of the Group Company
to appoint persons nominated by Oriental to hold the positions as directors and
senior management of the Group Company. Each of the VIE Entities
shall engage Oriental’s senior managers recommended by Oriental as General
Manager, Chief Financial Officer, and other senior managers of each of the VIE
Entities. If any of the above officers leaves or is fired by
Oriental, he or she will lose the qualification to undertake any positions in
any of the VIE Entities. The VIE Entities and the Shareholders shall
appoint other senior managers of Oriental recommended by Oriental to undertake
such position.
To ensure
performance of such arrangement, Oriental and the VIE Entities agree to cause
such directors or senior managers to enter into director or senior manager
employment agreements with the VIE Entities in compliance with the above
arrangement.
The
Shareholders hereby agree to sign a power of attorney upon execution of this
Agreement, by which the Shareholders will authorize the individual employed by
Oriental to exercise all of their respective voting rights as a shareholder at
the Group Company’s shareholder meetings according to laws and the Articles of
Association of the Group Company.
6. The
VIE Entities together with the Shareholders, hereby jointly agree and confirm
that, except as set forth in Article 1 herein, the VIE Entities shall seek a
guarantee from Oriental first if the VIE Entities need any guarantee for their
performance of any contract or loan of working capital in the course of
operation. In this case, Oriental shall have the right but not the
obligation to provide appropriate guarantee to the VIE Entities at its own
discretion. If Oriental decides not to provide such guarantee,
Oriental shall issue a written notice to the VIE Entities immediately and the
VIE Entities shall seek a guarantee from other third parties.
7. In
the event that any of the agreements between Oriental and the VIE Entities
terminates or expires, Oriental shall have the right but not the obligation to
terminate all agreements between Oriental and the VIE Entities, including
without limitation to the TSA.
8. All
notices and communications between the Parties shall be written in Chinese and
sent by fax (to be confirmed by transmission reports), delivery by hand
(including courier services) or registered mail to the appropriate addresses set
forth below:
If to
Oriental, to:
Oriental
Intra-Asia Entertainment (China) Limited
Address: Xxxx 0000, Tower C2,
Oriental Plaza, Xx. 0 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxxx, Xxxxxxx
Xxxxx
Tel:
000-00000000
Fax:
000-00000000
If to the
VIE Entities, to:
China
TransInfo Technology Group Co., Ltd.
4
Address: Room 1601 E-wing
Center, Xx. 000 Xxxxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx,
Xxxxx.
Telephone:
000-00000000
Fax:
000-00000000
If to
Xxxxxxx Xxx, to:
Xxxxxxx
Xxx
Address:
Xxxx 0-0-000 Xxxxxxxxxxxxxxx , Xxxxxx,Xxxxxxx Xxxxxxxx,
Xxxxxxx,Xxxxx
Telephone:
000-00000000
Fax:
000-00000000
If to
Xxxxxxx Xxxxx, to:
Xxxxxxx
Xxxxx
Address:
Haidian Rencaizhongxin, , Jia 00, Xxxxxxx Xxxxxx,Xxxxxxx Xxxxxxxx,
Xxxxxxx
Telephone:
000-00000000
Fax:
000-00000000
If to
Xxxxxx Xxx, to:
Xxxxxx
Xxx
Address:
Huanxi, Peking University,No.5 Yiheyuan Road, Haidian District,
Beijing
Telephone:
000-00000000
Fax:
000-00000000
If to Xxx
Xxx, to:
Xxx
Xxx
Address:
Room 307, Xxxx 0, Xxxxxxxx X0, Xxxxxxxxx #00, Xxxxxxx Xxxx, Xxxxxxx Xxxxxxxx,
Xxxxxxx, Xxxxx
Telephone:
000-00000000
Fax：
000-00000000
A notice
or a correspondence shall be deemed to be received in accordance with the
following:
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8.1
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If
sent by fax and confirmed by the transmission report, at the time of the
date indicated on the transmission report, unless the fax is transmitted
after 5pm of the day, or if the day is not a business day in the place
where the recipient is domiciled, on the date immediately after such
day;
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8.2
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If
delivered by hand (including courier services), at the time of the date of
which the recipient receives and accepts the notice or correspondence or
another person at the address of the recipient receives and accepts the
notice or correspondence; or
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5
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8.3
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If
delivered by registered mail, at the time of the third day after the date
on the receipt issued by the relevant post
office.
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9. The
provisions of this Agreement may only be waived, amended or altered by a written
instrument signed by all the Parties (such written instrument shall be an
appendix of this Agreement).
10. The
failure or delay of exercise of any right under this Agreement by either Party
shall not be deemed to be a waiver of such right.
11. The
invalidity of any provision in this Agreement shall not affect the validity of
other provisions which are not related to such provision.
12. If
this Agreement is terminated for any reason, the confidentiality obligations of
the Parties shall remain valid and binding.
13. The
Parties shall bear their own stamp taxes and other government charges, taxes and
fees and reasonable additional expenditure (including reasonable legal fees)
incurred due to the loan conversion, various equity transfers carried out
according to this Agreement, and preparation of this Agreement.
14. This
Agreement shall be binding on the Parties, their successors and assigns (if
any). In the event the VIE Entities adopt the power of attorney, the successors
shall include the persons specified in Article 4 above.
15. Without
Oriental's prior written consent, the VIE Entities shall not assign or otherwise
transfer their rights and obligations under this Agreement. Subject to
compliance with the laws of China, Oriental may assign this Agreement to any
affiliate or any other designated entity without the prior consent of the VIE
Entities.
16. The
execution, validity, interpretation and performance of this Agreement and the
resolution of disputes thereunder shall be governed by the laws of
China.
17. Arbitration
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17.1
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Any
dispute or difference of any kind whatsoever arising out of or in
connection with this Agreement, including any question in connection with
the existence, construction, interpretation, validity, termination or
implementation of this Agreement, shall be submitted to the China
International Economic and Trade Arbitration Commission ("CIETAC"), for
arbitration in Beijing, which shall be conducted in accordance with the
then effective CIETAC's rules.
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17.2
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The
arbitration tribunal shall comprise of three (3) arbitrators. Each of
Oriental and the Group Company shall be entitled to appoint one (1)
arbitrator and the arbitrators so appointed shall appoint a third (3rd)
arbitrator who shall preside as
Chairman.
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17.3
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The
language to be used in any arbitral proceedings shall be
English.
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17.4
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The
costs of arbitration shall be borne by the losing Party, unless otherwise
determined by the arbitration
award.
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6
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17.5
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The
Parties further acknowledge that monetary damages alone shall not
adequately compensate Oriental for the breach of the VIE Entities’
undertakings in this Agreement and, therefore, agree that if a breach or
threatened breach of any such undertaking occurs, Oriental shall be
entitled to apply or petition for, and the VIE Entities shall not resist,
object or challenge, injunctive relief compelling specific performance of
such undertakings or immediate cessation of such actions in order to be in
compliance with the terms of this Agreement in any competent court of the
PRC.
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18. This
Agreement and its appendixes shall constitute the entire agreement among the
Parties and supersede all previous discussions, consultations and agreements
with respect to the subject herein. The appendixes of this Agreement
shall be an integral part of this Agreement and shall be equally valid and
binding. In the event of inconsistency between this Agreement and its appendix,
this Agreement shall prevail.
19. This
Agreement is written in both English and Chinese.
[Signature
Page Follows]
7
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed by their
representatives hereunto duly authorized as of the date first set forth above
written.
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Oriental
Intra-Asia Entertainment (China) Limited
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By:
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/s/ Xxxxxxx Xxx |
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Authorized
Representative: Xxxxxxx Xxx
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Name:
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Position:
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China
TransInfo Technology Group Co., Ltd.
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By:
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/s/ Xxxxxxx Xxx |
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Authorized
Representative: Xxxxxxx Xxx
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Name:
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Position:
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Beijing
PKU Chinafront High Technology Co., Ltd.,
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By:
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/s/ Xxxxxxx Xxx |
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Authorized
Representative: Xxxxxxx Xxx
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Name:
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Position:
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Beijing
Tian Xxx Xxxx Xin Science and Technology Co., Ltd.,
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By:
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/s/ Xxxxxxx Xxx |
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Authorized
Representative: Xxxxxxx Xxx
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Name:
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Position:
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Beijing
Zhangcheng Culture and Media Co., Ltd.
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By:
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/s/ Xxxxxxx Xxx |
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Authorized
Representative: Xxxxxxx Xxx
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Name:
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Position:
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Bejing
Zhangcheng Science and Technology Co., Ltd.,
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By:
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/s/ Xxxxxxx Xxx |
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Authorized
Representative: Xxxxxxx Xxx
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Name:
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Position:
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China
TranWiseway Information Technology Co., Ltd.,
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By:
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/s/ Xxxxxxx Xxx |
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Authorized
Representative: Xxxxxxx Xxx
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Name:
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Position:
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Shanghai
Yootu Information Technology Co., Ltd.
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By:
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/s/ Xxxxxxx Xxx |
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Authorized
Representative: Xxxxxxx Xxx
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Name:
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Position:
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Xinjiang
Zhangcheng Science and Technology Co., Ltd.
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By:
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/s/ Xxxxxxx Xxx |
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Authorized
Representative: Xxxxxxx Xxx
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Name:
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Position:
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Dalian
Dajian Zhitong Information Service Co., Ltd.
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By:
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/s/ Xxxxxxx Xxx |
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Authorized
Representative: Xxxxxxx Xxx
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Name:
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Position:
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