Exhibit 10.32
Co-operation Agreement
Soyea Ltd.
&
MyWeb Inc. com
Date: 18th May 1999
<PAGE>
This agreement is signed by
Soyea Ltd.(hereafter referred to as "Soyea") A Company established based on the
laws of China
Add:
&
MyWeb Inc. com (hereafter referred to as "MyWeb")
A Company established based on the laws of the United States of America
Add: 712 Fifth Avenue, 7th floor, New York N.Y., 10019
In accordance with the laws of China on 18th May 1999
In view of:
Soyea and MyWeb will utilize their strengths to tap and research products which
are related to Internet t.v. and together they will broaden the market in
China for Internet communication products.
After consultation and discussion with each other, Soyea and MyWeb (hereinafter
refered to as "Both parties" or individually as "one party" or "the other
party", respectively) have reached an agreement as below:
1. Co-operation of Set-Top Box.
1.1 The above mentioned Set-Top Box refers to an electronic device that
provides connection to the internet through television and telephone line.
1.2 Both parties agree, under the terms of this agreement, to co-operate in
the production of the Set-Top Box and to promote it into the market of
China.
1.3 MyWeb will set up a company in Beijing (hereinafter referred as "MyWeb
Beijing"). After setting up MyWeb Beijing, MyWeb will transfer all the
responsibility and authority pursuant to this agreement to Myweb Beijing.
In due course, MyWeb Beijing will inform Soyea, in writing to confirm this
transfer. Soyea has agreed to this method of confirmation.
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2. Methods of Co-operation.
2.1 Both parties agree that Soyea would be the manufacturer of MyWeb in China.
Soyea will manufacture the Set-Top Box according to the following methods:
(1) Semi Knock Down (SKD) method
Under this method, Soyea will assemble the Set-Top Box according to the
assembling formula provided by MyWeb and using parts/components provided
by MyWeb.
(2) Complete Knock Down (CKD) method
Under this method, Soyea will follow the design, formula and standards
provided by MyWeb to carry out the production, either using accessories
provided by MyWeb or to buy the accessories themselves. Soyea will also
install the software provided by MyWeb.
(3) Joint Development Method
Under this method, MyWeb will provide the required software for the
Set-Top Box, whereas Soyea will be responsible for hardware design and
production.
2.2 Both parties agree as this agreement shall not hinder or forbid MyWeb from
making the same or similar agreements as this agreement with other
electrical/electronic manufacturing companies in China to explore,
research, design, produce, manufacture, sell or other ways of co-operation
for the Set-Top Box or similar products.
3. SKD Method.
3.1 Both parties agree that the first phase of this co-operation will be
carried out under the SKD method, that is MyWeb will provide the parts and
components (Details and specifications in Attachment 1; SKD List
Regulations) and Soyea will assemble according to the assembling
instructions provided by MyWeb (Details in Attachment 2; Assemble and
Production Procedures). Soyea must meet the standard of system design and
quality control required by MyWeb. (Details in Attachment 3; System Design
And Quality Control Standards).
3.2 Both parties agree that the number of Set-Top Box produced under the SKD
method will be approximately [***] units. Details will be discussed and
confirmed by separate letter/written documentation. MyWeb will provide the
parts and components to Soyea according to Attachment 1 SKD List. Detail
numbers of parts provided and progress will be confirmed in writing.
3.3 Soyea agrees that if the production of Set-Top Box in the 1st phase under
the SKD method does not exceed [***] units, no extra fees and domestic
transport fees would be charged. If the production exceeds [***] units,
extra fees will be charged only for the portion exceeding [***] units.
Both parties will in due course, discuss and confirm the details of the
extra fees in writing.
<PAGE>
3.4 In order, MyWeb will fax the Telegraphic Transfer ("TT") payment slip to
Hangzhou Westlake Electronics I/E Co. Ltd. ("Westlake"). Westlake will
manage all the import and custom procedures and process of the importation
of parts provided by MyWeb. The import custom duty of parts of 15% and
import value added tax of 17%, would be temporarily paid by Westlake to
the China customs department on behalf of MyWeb. Westlake will then bill
MyWeb based on [***] of the amount declared in the import declaration
forms of each part, multiplied by the total number of units (quantity)
imported in RMB on a bill called value added tax bill. (The [***] will
include both the import duties and import value added tax). MyWeb upon
receiving the written notice from Westlake for the imported goods shall,
based on this clause, pay the custom tax (value added tax, custom tax) the
following day by faxing the TT payment slip to Westlake, and at the same
time ensure the money is transferred to a Westlake designated bank account
within 10 days of the TT slip being faxed to Westlake. If MyWeb, after
receiving Westlake's request for payment of the custom duties, is not able
to transfer the amount of tax into Westlake's designated bank account
within the stipulated deadline, any interest arising from the tax would be
borne by MyWeb, and the interest rate will be computed from the day after
the 10 working days after the written notice based on the lastest fixed
interest rate publish by China bank. If the import of the parts requires a
permit, Westlake will be responsible for applying for and obtaining the
permit.
3.5 Parts that are sent by MyWeb must be delivered to Westlake at the port
determined by Westlake. Westlake shall then receive those parts at the
designated port at a time and location determined by MyWeb. Westlake shall
also inspect and arrange for custom declaration. Any difference in the
quantity and quality of the parts shall be reported within 35 working days
after delivery to Soyea's factory in Hangzhou.
3.6 MyWeb will bear the transportation charges and other charges such as
insurance and delivery of the parts to the port determined by Westlake.
MyWeb will also bear the transportation charges and all other related
charges of delivering the parts from the port to Soyea's factory.
3.7 The responsibility of custody and risk of the parts will be transferred
from MyWeb to Soyea at the designated port. Within the time period where
Soyea receives the parts until MyWeb receives the completed Set-Top Box,
any impair of parts due to loss, theft, damage, destruction or other
man-made causes, third party responsibilies, accident or any cause that is
beyond control causing the destruction or loss of the part will be borne
fully by Soyea, regardless wheather Soyea is personally responsible for
the loss or damage.
3.8 Soyea can only use the parts provided by MyWeb for the purpose
specifically indicated in this agreement. Soyea cannot transfer, sell, or
give to third party vide any other methods, nor allow third party to
manufacture, develop, research or for any other purposes without the prior
written notice and consent by MyWeb.
<PAGE>
3.9 Soyea agrees to complete the manufacture of MyWeb Set-Top boxes on an
agreed time frame by both parties based on the SKD production that is
based on the standard specification of MyWeb Set-Top box (as per
Attachment III) for MyWeb.
3.10 With reference to the agreement clause 3.3, Soyea's phase 1 manufacturing
(based on the SKD method) will not receive any fees from MyWeb. MyWeb will
be responsible for arranging the sales of these boxes and receive all the
profit from the sales. Soyea will bear full cost on transportation of the
specified quantity of MyWeb Set-Top boxes at an agreed date and location
in Beijing or other location specified by MyWeb via written notice.
4. CKD method and joint development method.
4.1 Both parties have agreed on the second phase of cooperation (after phase 1
SKD) will be based on the CKD method or joint development method. Details
of the agreement will be determined/arranged in another agreement.
4.2 Both parties will share the profit of the sales of the boxes manufactured
(based on the CKD method or joint development method). The Set Top Boxes
should be installed with the software provided by MyWeb.
5. Self Manufacture.
5.1 Soyea will be responsible for the assembling, production, design and
manufacturing of the boxes based on the 3 methods as stated in the
agreement. Soyea agrees not to provide any parts, assembling process,
design, standard and software provided by Myweb to any third party
(including Soyea's business partners/associates that are not recognize by
MyWeb) to carry out the process of assembling, design, develop, produce or
manufacturing without the prior written notice and approval/agreement by
MyWeb.
6. Linkage supply.
6.1 Both parties agree that hot links to Soyea's homepage will be placed on
MyWeb's homepage on all the MyWeb Set-Top box manufactured by Soyea under
this agreement.
7. Product competition.
7.1 Other than with MyWeb, Soyea agrees not to work with any other third
parties using any co-operation method, to manufacture software and
hardware identical to that of this agreement for the set-top box product
within the effective date of this agreement.
8. Set-Top box -After sales service
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8.1 Soyea agrees to provide after sales support and service to the users of
Set-Top Box produced under this agreement including the [***] Set-Top Box
in phase 1 which are to be sold by MyWeb. The costs of the after sales
services and support is fully borne by the manufacturer regardless of the
expiration or termination of this agreement.
9. Trademark.
9.1 Both parties agree to use "Soyea" and "MyWeb" trademark on the set-top box
manufactured by Soyea under this agreement. Both parties agree to register
and own their respective trademark separately. Both parties agree to place
their trademark separately on the set-top box. Both parties will not have
a joint trademark nor come out with a joint trademark. Each party is
responsible for any matters which may arise on their respective
trademarks.
10. Set-top box software installation.
10.1 Soyea agrees to assemble, develop, design, produce, manufacture or sell
the set-top box manufactured within this agreement and is bound to install
the software provided by MyWeb, unless the installation of the software is
against the law or not ethical.
10.2 The set-top box shall not be installed with any other softwares or
programs other than that stated under 10.1 without the prior written
notice and consent from MyWeb.
10.3 MyWeb will have the full rights to the software installed. MyWeb will have
the right to cancel, change, upgrade, or modify the installed software, by
giving Soyea notice within a reasonable timeframe. Soyea agrees not to
raise any objection on MyWeb' s rights on this matter.
11. Copyrights of the installed software.
11.1 MyWeb will hold the copyrights of the software installed in the Set-top
box under this agreement. Soyea is not allowed to duplicate, transfer,
allow usage or either give out free or sell the software without the prior
written notice and consent from MyWeb. Soyea will not be responsible for
any disagreements arising on the third party's copyrights issues, other
than MyWeb, in this agreement.
12. Purchase of MyWeb products.
12.1 MyWeb has the right to purchase the set-top boxes manufactured under this
agreement based on factory pricing (EX FACTORY PRICE) from Soyea. Soyea
agrees to supply/deliver the manufactured quantity of set-top box
requested by MyWeb within reasonable time at the EX FACTORY PRICE.
<PAGE>
13. MyWeb support.
13.1 MyWeb agrees to provide Soyea the following support for the manufacture
and sale of Set-top boxes:
(a) Provide training and support to Soyea's staff.
(b) Assist Soyea in ordering and providing recommended suppliers when/if
Soyea faces difficulties in obtaining parts and accessories to
manufacture the set-top boxes.
(c) Assist Soyea in sourcing sales channel and recommending customers to
Soyea when Soyea is selling the set-top box and at the same time
assist in developing the set-top box market.
(d) In situations where the cost of manufacturing the set-top box is
higher than the retail price, MyWeb will consider subsidizing a
specific amount of the cost of manufacturing the box in order to
assist in developing the set top box market. MyWeb will have the full
right to decide on the subsidy for the cost of manufacturing the box.
14. Confidentiality.
14.1 For the purpose of this agreement, confidential information refers to any
non-published information about the set-top box product, including all or
partial information on the development, design, research, production,
manufacture, repair related technical information, menu, graphics, bills,
standard, software, program, internet design related information, set-top
box development, design, productions and other necessary parts and
accessories, pricing, vendors, technical method and standard, set-top box
sales and rental related business secrets, business plans, development
plans, market research, sales channels, financial records, signed
agreements, memo, appendices, drafts and records (including this
agreement) and any other information that have not been published to the
public.
14.2 One party agrees not to disclose any confidential information to third
parties without the prior written notice and agreement/consent of the
other party.
14.3 Both parties agree to enforce the policy to keep the confidential
information within relevant people in the organisation, and enforce the
relevant personnel to strictly adhere to this clause, and to not disclose
any confidential information to third parties. Both parties also agree not
to disclose any confidential information to non-relevant staff within the
organisation.
14.4 Both parties agree on the exception of the circumstances below which will
not be deemed/considered as a breach of the agreement on disclosure of
confidential information:-
(1) Disclosing confidential information that is leaked out and known by
the public before the disclosure.
(2) Prior written notice and consent/agreement of the other party has
been obtained.
(3) Enforcement of law or required by the government department to do so.
Otherwise, any party to the agreement must refuse to disclose the
confidential information subject to receiving a written formal
letter/document from the relevant government authorities.
14.5 Under any circumstances on clause 14.4 which allows one party to disclose
confidential information, the party will have to inform the other party
before the disclosure is made and if the other party has any objection to
the disclosure, both parties should agree to discuss and come to an
agreement prior to the disclosure.
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14.6 Any party that violates the above clause, shall compensate the other party
according to the terms set forth in this agreement, for the losses
suffered by the other party.
15 Responsibility for violation of agreement.
15.1 The party that breaks any clause in the contract shall compensate the
other party according to the terms in this agreement and any legal terms
for the losses suffered by the other party. The compensation shall include
any direct and indirect losses incurred, interest and costs incurred
during the compensation process.
15.2 The obligation under clause 14 of this agreement will continue to be
effective for 2 years after the due date of this agreement or 2 years
after the date of any early termination date of this agreement. If one
party breaks clauses 7 or 14 of this agreement within the effective period
of the agreement or within 2 years of the due date or early termination of
this agreement, both parties agree that the amount of [***] shall be the
amount of losses incurred by the other party and the party which violates
the agreement shall pay this amount as compensation without examining the
actual amount of losses incurred by the other party. Where the acts of
violating the agreement results in an illegal profit which is more than
the compensation amount to the other party, the other party has the right
to request from the party which violated the agreement for a compensation
amount of more that [***] as the compensation amount.
16. Compliance with Law.
16.1 Both parties shall comply with all laws, regulations, policies and
guidelines of China with exception on the Conflicting Regulations of China
laws.
17. Arbitration.
17.1 Any differences or disputes arising from or related to this agreement
shall be brought upon to the committee of International Economy and
Business of China. The settlement shall be carried out by proper court
procedure. The decision from the committee is final and is binding on both
parties.
17.2 The arbitration shall be carried out in HangZhou or Beijing, using the
Chinese Language.
18. Force majeure.
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18.1 Force majeure.
The agreement shall interpret the force majeure as labor disputes,
strikes, war or acts of war, insurrections, riot, civil commotion, acts of
public enemy, accident, fire, diseases, acts of God, natural disasters,
unworkable facilities, closure of factory or other similar causes which
cannot be reasonably foreseen or if it can be reasonably foreseen, the
cause and result of it cannot be reasonably controlled, avoided or
resisted that will cause the affected party to be unable to perform and
execute the contract totally or on time.
18.2 Notice.
The party that is affected by any force majeure shall inform the other
parties to the agreement, of the force majeure, immediately in writing.
(If there is a breakdown in the lines of communication, to do so after the
line of communication is reestablished.)
18.2 Documentary Proof.
The party affected by any force majeure shall provide written documentary
proof, issued by the local authorities of the place where the force
majeure occurs, on the details of the force majeure within 15 days of the
event, (the number of days shall be calculated from the day the
communication channel is operating) to prove that the event is affecting
the execution of the agreement partially, totally or causing delay in the
execution of the agreement.
18.3 Either party that is affected by the force majeure shall not be exempted
partially or totally from performing the contract unless the force majeure
is affecting partially or totally the executions that are related to the
agreement.
19. Title.
19.1 The establishment of the title of each clause is only to facilitate
checking and searching. The content of the clause shall be followed as the
standard of the agreement and no reference or inference should be made
from the titles of the clause.
20. Validity of the agreement.
20.1 This agreement is valid for 2 years effective on the day of signing the
agreement.
21. Changes and termination of the agreement.
21.1 The agreement can be terminated for the following reasons:
A. Either party breaks the contract resulting in the other party being unable
to perform the contract or no longer beneficial from the original
agreement, causing the validity of the agreement to become meaningless.
B. The occurrence of force majeure, as mentioned in clause 15, resulting in
the inability/impossibility to execute this agreement.
C. Termination because the due date of the agreement and this agreement has
not been extended, or when both parties agree to cancel or terminate the
agreement earlier.
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D. Required by law or other conditions/terms stated in this agreement.
If either party breaks the agreement, the other party will have the right
to terminate the agreement with written notice and, at the same time,
requests the party which is breaking the contract for compensation.
21.2 This agreement cannot be altered during the term of the agreement without
the prior written consent of both parties to the agreement.
22. Notice and Delivery.
22.1 Any notice or communication (including mail, fax, telephone, telegraph and
e-mail) under this agreement shall be delivered to the recipients
according to the following address or telephone or fax stating the name of
the contact person as listed below, in order for the notice to be valid.
Soyea
Contact Person : __________________ or _________________
Address :
Fax:
Telephone:
E-mail:
MyWeb Inc.com
Contact Person : __________________ or _________________
Address :
Fax:
Telephone:
E-mail:
22.2 The time of delivery of all notices vide the communication methods as
stated in clause 22.1 shall be determined as follows:
A. All physical delivery or notice to the recipient must be acknowledged
receipt/signed by recipient to be considered as a valid delivery or
notice. Delivery or notice which is not acknowledged by the recipient is
invalid.
B. Any notice via mailing method have to use registered express post or
special express delivery, and is considered received by the recipient 72
hours after mailing.
C. Any telephone, faxes or e-mail to give notice to the recipient is
considered received by the recipient upon receiving confirmation of
delivery. If the notice is sent on a holiday, the notice shall be
considered sent to the recipient on the first working day after the
holiday.
D. Any telegraph notice shall be considered sent to the recipient after 24
hours of sending the telegraph.
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If there are any changes in the above contact address and numbers, the party
concerned will have to inform the company or other share holders of the company
within 7 days of the changes.
23. Other.
23.1 There are in total 2 copies of this agreement, each party holds one copy
and each copy is equally valid.
23.2 The agreement will be effective upon signing by both parties.
(There is no actual content after this line)
The parties have caused this agreement to be executed by their duly authorized
representatives.
Soyea (stamp)
Authorised Representative : /s/ Dai Yang (Signature)
18th May 1999 ------------
Dai Yang
MyWeb Inc.com
Authorised Representative By: /s/ Danny Teow Teck Tow (Signature)
18th May 1999 -----------------------
Danny Teow Teck Tow
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Description Price (USD)
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Motherboard [***]
Modem [***]
Ram (16 M ) [***]
Flash ( 8 M ) [***]
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Total [***]
Power Suppy [***]
Wireless Keyboard [***]
Remote control [***]
Box [***]
Accessories [***]
Software [***]
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Grand Total [***]
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