THIS AGREEMENT is made the day of 1999
BETWEEN:
1. MSU (UK) Limited, a United Kingdom Company having its registered office at
Elder House, 000-000 Xxxxx Xxxx, Xxxxxx Xxxxxx, XX0 XXX, Xxxxxxx ("MSU")
and
2. Shanghai Xxxxxxx Electronics Industrial Corp. Limited, 68, Xxxxx Xxxx Road,
Shanghai 200041 PR of China ("Xxxxxxx").
RECITALS
(a) MSU is the owner of the Intellectual Property Rights in the ISP Chip Set and
the Product.
(b) MSU desires to purchase the Product from Xxxxxxx in a fully manufactured
form.
(c) MSU agrees to grant a license to Xxxxxxx on a non-exclusive basis to
manufacture the Product on behalf of MSU and its OEM customers.
(d) The Parties have agreed to enter into the commitments of this Agreement and
regulate their rights in the manner appearing below.
IT IS AGREED as follows:
1. Interpretation
1.1. "Intellectual Property Rights" (IPR's) shall mean industrial and
other rights in the Product and ISP Chip Set including but not
limited to copyright confidential information, patents and the
right to apply for patents, protected designs (whether registered
or not) semi conductor and topography rights and technical
know-how.
1.2. "ISP Chip Set" shall mean the MSU propriety Internet Services
Processor as described in the ISP Chip Set reference manual.
1.3. "Know-how" shall mean:-
1.3.1. Pre-production drawings for the Product;
1.3.2. Layout and other documents for manufacturing assembling
and testing the product;
1.3.3. Purchasing specifications for components of the Product
1.3.4. Test specifications for manufactured items;
1.3.5. Documents relating to installation, maintenance, factory
operation, data testing and training;
1.3.6. Drawing specifications and information for the manufacture
or procurement of all production tools, gauges, inspection
equipment and accessories required for the manufacture of
the Product;
1.3.7. Specifications of machine tools and accessories required
for the manufacture of the Product together with written
advice on their ordering selection and procurement;
1.3.8 Technical assistance and training in the implementation of
all the foregoing in accordance with an agreed detailed
program.
1.4. "Product" shall mean the MSU proprietary Internet Access Device
incorporating the ISP Chip Set and Software.
1.5. "Selling Price" shall mean the xxxx of materials agreed with MSU
from time to time plus $10.00 United States Dollars.
1.6. "Software" shall mean MSU proprietary Internet Access Devise
software including Browser, E-Mail, printer driver and
enhancements.
1.7. "Technical Information" shall mean technical knowledge and data
specifications of materials and the manufacturing techniques and
other information of a secret and confidential nature in
existence at the date of this Agreement which are necessary to
enable XXXXXXX to manufacture the Product properly and
efficiently in reasonable quantities of a standard and quality
required by this Agreement.
2. Commencement Date and Term
2.1. This Agreement shall be effective upon execution by the
authorised representative of both Parties on the date first above
shown.
2.2. The term of this Agreement shall be for an initial period of
eighteen months from the commencement date being the day of April
1999 and shall automatically renew for further periods of one
year unless three months prior notice in writing of termination
is given by either Party.
3. Grant of License
3.1. MSU hereby grants XXXXXXX a non-exclusive license to make the
Product during the continuance of this Agreement using for this
purpose (but not further or otherwise) the ISP Chip Set the
Software the Intellectual Property Rights and the Know How.
3.2. Engagement by XXXXXXX of manufacturing sub-contractors and agents
who will have access to Technical Information shall be subject to
the prior approval of MSU. Such approval shall not be
unreasonably withheld provided the provisions of Clause 3.3
herein are complied with.
3.3. XXXXXXX shall ensure that all manufacturing sub-contractors and
agents who will have access to Technical Information shall enter
into direct covenants of confidentiality with MSU in the form of
the Confidentiality and Trust Agreement set out in Schedule A
hereto.
3.4. Subject to agreement as to terms MSU is prepared to enter into
negotiations for a further license to enable XXXXXXX to make,
distribute and sell the Product itself or an behalf of THAKRAL's
OEM customers.
4. Improvements
4.1. It is anticipated that MSU will continue to develop the Product,
improvements arising from the developments carried on by MSU
shall remain it's exclusive property.
5. Manufacture (General)
5.1. It is the intention of the Parties that the Product will be
manufactured to the agreed specification (sufficient details of
which are to be provided to XXXXXXX) by XXXXXXX for the supply to
MSU and its OEM customers.
5.2. XXXXXXX may sub-contract the whole or any part of the
manufacturing process but always subject to Clause 3.2 and 3.3.
5.3. Suppliers and Subcontractors
5.3.1 XXXXXXX shall use all necessary efforts to ensure that
any sub-contractor or manufacturing agent with access to
the Product, the ISP Chip Set, the Software, IPR's or
Technical Information will not motify, reverse, engineer,
decompile, and or disassemble the Product.
5.3.2. XXXXXXX shall not mask, modify or suppress any copyright
notices or any other propriety right notices.
Furthermore XXXXXXX shall not unload, decode or password
protect any part of the Product or render any part of the
Product to any third party for unauthorized use or
reverse engineering.
5.4. Technical Support
5.4.1. MSU shall support XXXXXXX. MSU shall provide technical
support in relation to the Technical Information free of
charge provided that XXXXXXX shall treat such information
as trade secrets and shall not disclose such
information to any third party within prior written
consent of MSU of pursuant to the terms of clause 3.3
above.
5.4.2. Upon MSU's request, XXXXXXX shall return to MSU all of
the Technical Information provided with all copies or
duplicate documentation on the expiry or termination date
of this Agreement.
5.5. Supply of ISP Chip Set
5.5.1. MSU agrees to provide the ISP Chip Set to XXXXXXX at [*]
US Dollars per set during the contract period. This may
be subject to re-negotiation according to volume.
6. Manufacture for MSU/OEM customers
6.1. XXXXXXX shall undertake MSU to and/or to MSU OEM customers
reasonable obligations in relation to quality control.
6.2. MSU shall place all of its orders for manufacture of the Product
with XXXXXXX subject only to quality, delivery and agreement as
to price
6.3. Payment and Price.
6.3.1. XXXXXXX shall supply the product to MSU and its OEM
customers finished and packaged FOB Shanghai as defined
by Incoterms 1990 Edition, issued by the International
Chamber of Commerce at the Selling Price.
6.3.2. Payment. MSU shall make payment for supply of Product to
MSU or its OEM customers by irrevocable letter of credit
in favour of XXXXXXX which shall be made in the amount of
each purchase order.
7. Confidentiality
7.1. Each party will enter into a Trust and Confidence Agreement in
the form set out in Schedule A regulating to the fullest extent
allowed by the law the respective responsibilities and duties
*The omitted information is confidential and is to be filed separately with the
Securities and Exchange Commission.
of confidentiality governing the ISP Chip Set, the Software,
IPR's Know How and Technical Information, the subject of which
this Agreement.
7.2. XXXXXXX undertakes to ensure that all employees, suppliers, sub-
contractors, sub-licensees and any other person or organisations
who it is reasonable to contemplate having access to the IPR's,
Know How or Technical Information will covenant directly with
MSU in the same terms as the Trust and Confidence Agreement.
8. Marks
8.1. It is anticipated that from time to time the Product will carry a
distinctive xxxx or logo together with an acknowledgement of MSU
design and ownership of rights. Such marks will be carried on the
packaging of the Product.
8.2. XXXXXXX shall leave in position and not cover or erase any notice
or other marks (including without limitation details of patents
or trademark or copyright relating to the Product or its
ownership by MSU which MSU may reasonably insist are placed or
fixed to the Product or their packaging supplied pursuant to this
Agreement).
9. Interest
9.1. All sums due from either of the Parties to the other which are
not paid on the due date shall bear interest from day to day at
the annual rate of 1.5% (one point five percent) over the current
National Westminster Bank Plc daily base rate with a minimum of
7% (seven percent) per annum.
10. Warranty
10.1. XXXXXXX warrants that the Product hardware will conform to the
agreed specification and will be free from all defects in
material (other than the ISP Chipset and any materials supplied
by MSU) and workmenship for a period of 14 months commencing from
the date of delivery to MSU or its OEM customers.
10.2. Provided MSU or its OEM customers notifies XXXXXXX promptly in
writing of any defect or nonconformity, XXXXXXX shall, at its own
expense, promptly repair or replace such defective Product in
XXXXXXX facilities.
11. Indemnities
11.1. MSU shall indemnify and hold harmless XXXXXXX against claim,
costs and expenses that XXXXXXX may incur in connection with any
claim of infringement of any third party IPR's caused by or
arising out of the manufacture, importation, possession, sale or
use of the Product and in respect of claims arising out of any
defect in the ISP Chipset, Know-how, software and Technical
information. This indemnity shall include all costs and expenses
of refuting defending or settling any claims as well as any
damage or compensation ordered to any third party by any Court.
11.2. XXXXXXX shall except to the extent that the claim is due to any
defect in the ISP Chipset, Know-how, software and Technical
information, fully indemnify and hold harmless MSU against any
claims or actions bought by third parties against MSU due to
manufacturing defects in the Product. This indemnity shall
include all costs and expenses of refuting defending or settling
any claims as well as any damage or compensation ordered to any
third party by any Court.
11.3. XXXXXXX shall have no liability and shall be fully and completely
indemnified by MSU for any claim or suit where:
11.3.1. Infringement is primarily attributable to THAKRAL's
incorporation of MSU supplied designs into the Product;
11.3.2. Such claim or suit would have been avoided but for the
combination, operation or use of the Product with
devices, parts or software not supplied by XXXXXXX or is
subcontractors;
11.3.3. Such claim or suit would have been avoided but for the
modification or alteration of the Product by MSU or a
third party.
12. Termination
12.1. Notwithstanding the provisions of clause 2, either party may be
notice in writing to the other terminate this Agreement
immediately upon the happening of any one of the following
events;
12.1.1. If either party shall become bankrupt or be wound up or
make any arrangement or composition with its creditors.
12.1.2. If XXXXXXX attempts or purports to assign or transfer
this Agreement without MSU's prior written consent.
12.1.3. If either Party's ability to carry out its obligations
hereunder is prevented or substantially interfered with
for any reason whatsover (whether or not within the
control of the Party) including without limitation by
reason of any regulation, law, decree or any act of state
or other action of a government.
13. Limitation of Liabilities
13.1. Force Majeure. Neither party shall be liable to the other for any
delay, loss, damage or injury caused by acts of God, governmental
order or regulation, restraining imposed by governmental action,
national strikes, commotion, riots, war, war like situations,
hostilities, governmental disposal, mobilisation, blockage,
embargo, custody, revolution, fire, earthquake, tornado,
explosion, storm, flood or for any other cause beyond its
reasonable control (hereinafter referred to as Force Majeure).
13.1.1. Notification of such delay arising solely from
circumstances attributable to the Force Majeure shall be
given as soon as possible and followed in writing to the
other party within seven days of the occurrence of such
an event.
13.1.2. Should any failure of performance persist for more than
twenty eight days MSU may by written notice to XXXXXXX
forthwith cancel the particular order or part thereof of
effected and such cancellation shall be without any
liability on the part of MSU to pay for any costs or
cancellation charge arising from such cancellation.
13.2. If any section or subsection of this Agreement is found by
competent authority to be void, voidable, illegal or otherwise
unenforceable, the remaining provisions of this Agreement shall
remain in full force and effect.
13.3. No agency or Partnership. The Parties are not partners or joint
ventures nor is one Party entitled to act as the agent of the
other (unless specifically authorized in writing) nor shall
either Party be liable in respect of any representation, act or
omission of the other Party whatever nature.
13.4. Whole Agreement. This Agreement contains the whole agreement
between the Parties and supersedes any prior written or oral
agreements between them in relation to its subject matter and the
Parties confirm that they have not entered into this Agreement on
the basis of any representations that are not expressly
incorporated into this Agreement.
13.5. No Modification. This Agreement may not be modified except by an
instrument in writing signed by both of the Parties of their duly
authorized representatives.
13.6. Survival of Terms. The warranties an indemnities and obligations
of confidentiality contained in this Agreement and the provision
for payment of any accounting in respect of continuing fees and
other sums due to either party under this Agreement shall survive
the termination or expiry of this Agreement.
13.7. Governing Law. Where either Party has any complaint of the other
under this Agreement it may at it's option commence proceedings
in any Court of competent jurisdiction in either London or
Shanghai.
Signed__________________________ Signed__________________________
AUTHORIZED REPRESENTATIVE AUTHORIZED REPRESENTATIVE
OF MSU (UK) LIMITED OF SHANGHAI XXXXXXX
ELECTRONICS INDUSTRIAL
CORP. LIMITED
SCHEDULE A
TRUST AND CONFIDENCE AGREEMENT
This Trust and Confidence Agreement is made the day 199_
B E T W E E N
B E T W E E N:
1. MSU (UK) Limited whose registered office is at Elder House, 000-000 Xxxxx
Xxxx, Xxxxxx Xxxxxx, XX0 XXX, Xxxxxx Xxxxxxx ("MSU")
2. Shanghai Xxxxxxx Electronics Industrial Corp., Limited a corporation
organised under the laws of PR of China whose principal place of business
is at 00, Xxxxx Xxxx Xxxx, Xxxxxxxx 000000 XX of China ("the Recipient").
RECITALS
(a) MSU has developed a product for accessing the Internet incorporating its
Proprietary Internet Services Processor, Chip Set, and Software ("the
Product") and is the owner of confidential information relating to the
Product and of intellectual property rights therein.
(b) To enable the Recipient to evaluate the Product with a view to taking a
license to either:
(i) component supply, or;
(ii) manufacture, and/or;
(iii) sell the same
MSU is willing to disclose information relating to the Product to the
Recipient under conditions of confidentiality.
OPERATIVE PROVISIONS
1. Interpretation
1.1. For the purposes of this Agreement Proprietary Information means any
and all information which is now or at any time hereafter in the
possession of MSU and which relates to the Product, including without
limitation data, know-how, formula, processes, designs, photographs,
drawings, specifications, software programs and samples and any other
material bearing or incorporating any information relating to the
Product.
2. Undertakings of the Recipient
2.1. In consideration of MSU disclosing information relating to the Product
to the Recipient, the Recipient hereby undertakes:
2.1.1. to use all Proprietary Information so disclosed exclusively for
the purpose of evaluation or any license granted in respect of
the Product, and;
2.1.2. to maintain confidential all Proprietary Information that it
may acquire in any manner;
and it will accordingly not directly or indirectly use or
disclose any of the Proprietary Information in whole or in part
save for the purpose of and in accordance with this Agreement
3. Exceptions
3.1. The foregoing restrictions on the Recipient shall not apply to any
Proprietary Information which:
3.1.1. the Recipient can prove by documentary evidence produced to
MSU within 28 days of disclosure that such Proprietary
Information was already in the possession of the Recipient and
at its free disposal before the disclosure to the Recipient;
3.1.2. is hereafter disclosed to the Recipient without any
obligations of confidence by a third party who has not derived
it directly or indirectly from MSU;
3.1.3. is or becomes generally available to the public in printed
publications in general circulation through no act or default
on the part of the Recipient or the Recipient's agents or
employees.
4. Inclusion
4.1. Without prejudice to the generality of clause 3.1.3 information shall
not be deemed to be generally available to the public by reason only
that it is known to only a few of those people to whom it might be of
commercial interest, and a combination of two or more portions of the
Proprietary Information shall not be deemed to be generally available
to the public by reason only of each separation being so available.
5. Confidentiality measures
5.1. To secure the confidentiality attaching to the Proprietary
Information the Recipient shall:
5.1.1. keep separate all Proprietary Information and all information
generated by the Recipient based thereon from all documents
and other records of the Recipient;
5.1.2. keep all documents and other material bearing or incorporating
any of the Proprietary Information at the usual place
business of the Recipient, namely
5.1.3. not use, reproduce, transform, or store any of the Proprietary
Information in any externally accessible computer or electronic
information retrieval system or transmit it in any form or by
any means whatsoever outside of its usual place of business;
5.1.4. allow access to the proprietary exclusively to those
employees of the Recipient who have reasonable need to see and
use it for the purposes of its evaluation by the Recipient and
shall inform each of the said employees of the confidential
nature of the Proprietary Information and of the obligations
on the Recipient in respect thereof;
5.1.5. wherever reasonably practicable obtain a written statement
from each of its employees having access to the Proprietary
Information undertaking to maintain the same confidential and
shall take such steps as may be reasonably desirable to
enforce such obligations.
5.1.6. make copies of the Proprietary Information only to the extent
that the same is strictly required for the purposes of any
licence granted to the Recipient;
5.1.7. on request of MSU made at any time shall deliver up to MSU all
documents and other material in the possession, custody or
control of the Recipient that bear or incorporate any part of
the Proprietary Information.
6. Governing Law
6.1. The construction validity and performance of this Agreement shall be
governed by English Law.
SIGNED _____________________________________________________
SHANGHAI XXXXXXX ELECTRONICS INDUSTRIAL CORP. LIMITED
SIGNED _____________________________________________________
MSU (UK) LIMITED
