Cooperative Agreement
(Translation for reference only)
Pursuant to applicable laws, regulations of the People's Republic of China and
Shenzhen and in accordance with the principles of equality, mutual benefit, good
faith and legitimacy, through friendly consultation, both parties have worked
out the following agreement regarding the joint establishment of a business
enterprise and the acquisition of assets.
Article 1 Parties to the Agreement
Parties to this Agreement are :
Shenzhen Jiayin Investment Development Co., Ltd. (hereinafter referred to as
"Party A"), a company registered in Shenzhen, the People's Republic of China
("PRC") with its registered address at Pengyi Garden, Shenzhen City, PRC. Legal
representative : Xxx Xxx, Position : Chairman, Nationality : Chinese.
IMOT Information Technology (Shenzhen) Ltd. (hereinafter referred to as "Party
B"), a company registered in Shenzhen, PRC, with its registered address at
38/F., Guomao Building, Shenzhen, Legal representation : Xxx Xxxxx, Position :
General Manager, Nationality : Chinese.
Article 2 Definitions
1. "Assets" refers the physical assets of electronic mailbox, e-commerce,
telephone payment systems software owned by Party A; ownership right of the
telephone payment system software and related technical data, patent
certificate, permits, etc. In other words, "Assets" shall refer to all the
tangible and/or intangible assets owned by Party A which are related to the
electronic commerce and Telephone Payment System, however, it shall not
include any liabilities of Party A or its obligations to derives its assets
and properties.
2. "Business" refers to all the design, manufacturing and marketing operations
of electronic commerce, electronic mailbox, and telephone payment system
businesses of Party A that it engages in prior to the date of this
Agreement, including business network, list of customers, voice platform
for electronic mailbox, beneficiary rights in contracts and agreements, and
permits for operating electronic mailbox business (both parties may set out
details of the "Assets" and "Business" in separate schedule as annex to
this Agreement)
3. "Newco" refers to the Shenzhen Jiayin E-commerce (Information) Technology
Co., Ltd. to be jointly established by Party A and Party B in Futian
District of Shenzhen in accordance with "The Company Law of the PRC" and
other relevant regulations.
Article 3 Objective and Format of Cooperation
Objective of Cooperation : Complementary of each party's strengths, to
jointly develop the e-commerce and information
business, etc.
Format of Cooperation : 1. Both Parties will jointly set up the Newco.
2. The Newco shall acquire certain assets and
business of Party A.
3. The Newco shall recruit the technical
and research & development staff of
Party A. Party A shall warrant these people
shall work for Party B and shall
abide by the "Non-competition Agreement)
(List of the staff is set out in Appendix 2)
Article 4 Business Scope, Registered Capital, Shareholding Structure and Board
of Directors for the Newco
1. Business Scope of the Newco : development of new and advanced technology,
electronic mailbox, electronic commerce, network services, voice-mail
platform; design, production and dissemination of various advertisements in
PRC and overseas using its own media; retail and supply of materials
(excluding products that are exclusively sold, controlled or operated by
the state).
2. Registered capital and shareholding structure : Both parties shall
contribute an aggregate of RMB5 million, which shall become the registered
capital of Newco,
of which: Party A RMB1,500,000 accounts for 30% shareholding
Party B RMB3,500,000 accounts for 70% shareholding
3. Board of Directors : The Board of Directors shall consist of 5 directors,
of which 2 directors shall be appointed by Party A and 3 directors shall be
appointed by Party B. The directors shall have an office of 4 years. They
may be re-appointed by the appointing party.
Article 5 Acquisition of Party A's certain Assets and Businesses
1. Target of Acquisition : The assets and businesses as set out in item (1)
and (2) of Article 2 and all the rights and benefits associated with these
assets and Business.
2. Consideration for the Acquisition : The consideration for the acquisition
of these assets and businesses of Party A shall be RMB4,500,000.
3. Payment Terms
(1) Newco shall pay RMB300,000 (including deposit of RMB50,000) to Party A
within 10 days after the issuance of the Newco's Business License.
(2) Newco shall pay RMB300,000 to Party A within the second month after
the issuance of the Newco's Business License.
(3) Newco shall pay RMB200,000 to Party A within the third month after the
issuance of the Newco's Business license.
(4) Newco shall pay the remaining balance of RMB3,700,000 within the
fourth month after the issuance of the Newco's Business License.
Article 6 Legal Documents and Inter-relationships
This Agreement stipulates all the principles agreed by both parties regarding
the subject matter. Both parties may enter into separate agreements based on
these principles for detailed cooperation plans so as to confirm each party's
rights and obligations. These detailed agreements shall also form an integrated
component of this Agreement.
Should there be any discrepancies between the detailed agreements and this
Agreement, the detailed agreements shall prevail, provided that the detailed
agreements do not violate the principles stipulated in this Agreement.
The detailed agreements shall include, but not limited to :-
1. The contract and articles of association for the Newco to be signed by both
parties based on the Article 4 of this Agreement.
2. Asset and Business Acquisition Agreement between Party A and Newco.
3. Representation made by Party A regarding the consent of the transfer of the
staff to Newco and the Non-competition Agreement (Schedule 3).
4. Representation made by certain staff of Party A to accepting the transfer
to the Newco and consent to abide by the non-competition restriction
(Schedule 4)
Article 7 Warranties and Undertakings
For the execution of this Agreement, Party A and Party B hereby represent,
warrant and undertake to the other party the following :
1. Party A or/and Party B are corporations duly incorporated in the PRC and
they have full authority needed to sign and execute this Agreement and
shall not need consent from any other party (except for the consent and
permission by government authorities)
2. The signing and execution of this Agreement shall not violate any laws or
regulations, the Articles of Association of each party or other government
approval documents.
3. The acquisition of Party A's certain assets and businesses by the Newco
shall not :
1. Cause any loss on the rights or benefit of the Business.
2. Offer an excuse for any person to terminate the Business.
3. Cause the government to dismiss Party A's permit to conduct electronic
mailbox services business.
4. Violate any binding judgment, verdict or order by any courts,
arbitration organizations or government authorities.
5. Cause the Newco to bear any other obligation not stipulated in this
Agreement.
4. Party A has not and shall not (unless as required by normal business
operations) disclose to any third party any technology, business secrets
and customer list, etc. which are related to the business of Newco. Details
of this Clause are as follows :
1. Within two years after the date of this Agreement, Party A shall not
in any way, including but not limited to, individually or jointly with
other parties or assist other parties to conduct any business in
Shenzhen which is similar to all or part of the business of Newco.
2. Within two years after the date of this Agreement, Party A shall not
in any way, including but not limited to, individually or jointly with
other parties or assist other parties to convince or solicit or intent
to convince or solicit the customers as listed in Schedule 1 so as to
conduct any business with the customers which is in competition with
the Newco's Business.
3. Within two years after the date of this Agreement, Party A shall not
in any way, including but not limited to convince or solicit employees
of Party B or the Newco to conduct any business which is in
competition with the Newco's Business.
4. Upon signing of this Agreement, Party A shall not in any way, disclose
to any one the technology secrets as related to the subject matter of
this Agreement. Party A shall also put all reasonable effort to
prevent those technology secrets from being stolen.
5. Upon signing of this Agreement, Party A shall promptly inform the
Newco about any enquiry on the Business and shall deliver if possible
to the Newco all the purchase order for the relevant Business.
5. Prior to the date of this Agreement, Party A is not engaged in any
litigation, arbitration or tribunal proceeding which may affect the signing
and execution of this Agreement.
6. Party A shall warrant the staff as list on Schedule 2 of this Agreement
shall accept the appointment by the Newco and shall abide by the
non-competition clause as stipulated in Representation 1 and 2.
Article 8 Responsibilities of Both Parties
The parties hereto shall each fulfil their respective obligations as follows :
(A) Responsibilities of Party A
(1) To handle the Newco's application for incorporation, registration and
Business License;
(2) To contribute the registered capital pursuant to the stipulations of
this Agreement.
(3) To provide its existing office premises (2 rooms) for the Newco's use
free of charge for one year.
(4) To assist the Newco in coordinating and handling application
procedures for water, electricity, transportation and other utilities.
(5) To fulfil all of its obligations as stipulated in the "Acquisition
Agreement for Assets and Business" to be signed by Party A and the
Newco, including but not limited to :-
1. To provide the physical properties in relation to electronic
mailbox, e-commerce, telephone payment system software as listed
on Schedule 1.
2. To provide a full set of the ownership documents for the
telephone payment system software (only confined to those of
existing developed software, detailed as set out in Schedule 1)
3. To provide information on the investment details and financial
statements, and revenue & expenditure of the original
shareholders of Shenzhen Jiayin Future Industries Co., Ltd.
In accordance with this principle, Party A shall complete all the
legal procedures needed for transferring the assets and Business to
the Newco, including but not limited to :
a. To handle the legal procedures required to transfer Party A's
License to Operate Electronic Mailbox Business to the Newco.
b. To handle all the legal procedures to transfer to the Newco all
the Party A's existing or potential contracts with its customers
which could bring in benefits to the Newco (the list of the
contracts is set out in Schedule 1)
c. To handle all the procedures required to transfer Party A's
ownership right of its "Telephone Payment System Software" to the
Newco.
d. To handle all the application and filing procedures with relevant
business and tax authorities in relation to the acquisition of
Business.
(6) To assist the Newco to recruit management and technical staff, workers and
other necessary employees.
(7) To handle other matters as entrusted by the Newco or matters entrusted by
Party B pursuant to this Agreement.
(B) Responsibilities of Party B
(1) To contribute the registered capital of the Newco as stipulated in
this Agreement;
(2) To assist Party A in the establishment of the Newco.
(3) To handle other matters as entrusted by the Newco or matters entrusted
by Party A pursuant to this Agreement.
(4) Upon its establishment, Party B shall be responsible for all the
capital investment for its future development (subject to its
operation and development plan)
Article 9 Breach of Contract
Should all or part of this Agreement and its appendices be unable to be
fulfilled owing to the fault of one party, the breaching party shall bear the
responsibilities thus caused. Should it be the fault of both parties, they shall
bear their respective responsibilities according to actual situations.
Article 10 Force Majeure
Should either of the parties to this Agreement be prevented from executing this
Agreement by force majeure, sure as earthquake, flood, fire, typhoon and other
unforeseen events, and their happening and consequences are unpreventable and
unavoidable, the party encountering this event of force majeure shall notify the
other party by cable without any delay, and within 15 days thereafter provide
the detailed information of the events and a valid document for evidence issued
by the relevant public notary organization for explaining the reason of its
inability to execute or delay the execution of all or part of this Agreement.
Both parties shall, through consultations, decide whether to terminate this
agreement or to exempt the part of obligations for implementation of this
Agreement or whether to delay the execution of this Agreement according to the
effects of the events on the performance of this Agreement.
Article 11 Applicable Law
The formation of this Agreement, its validity, interpretation, execution and
settlement of the disputes shall be governed by the related laws of the People's
Republic of China.
Article 12 Settlement of Disputes
Any disputes arising from the execution of or in connection with this Agreement
shall be settled through friendly consultation between both parties. In case no
settlement can be reached through consultation, the dispute shall be submitted
to Shenzhen Arbitration Committee for arbitration according to its enforced
arbitration rules. The arbitration award shall be final and binding upon both
parties.
Article 13 Special Stipulations
1. Party B shall be responsible for the expenses in relation to the
establishment of the Newco.
2. Party B may assign other party to fulfil its obligations as stipulated in
this Agreement, however it's the rights and benefits shall remain
unchanged.
3. The RMB2,200,000 of the acquisition consideration received by Party A shall
only be used to purchase the common stock of Intermost Corporation
("IMOT"). Party B undertakes to issues to Party A certain number of IMOT
stock based on 50% of the average close price of IMOT for the 5 trading
days prior to the date of this Agreement and the exchange rate announced by
the state authorities. Should Party A be unable to get the IMOT stock due
to any reasons, both parties shall discuss and determine the payment method
for the RMB2,200,000 acquisition consideration.
4. Party A shall be responsible for handling for any disputes arising from
other shareholders of Jiayin Future Industries Co., Ltd. other
organizations or individual in relation to this Agreement. These disputes
shall not affect the execution of this Agreement.
PartyA undertakes that : In respect of this clause, Party A shall, if
necessary and at appropriate time, liquidate Jiayin Future Industries Co.,
Ltd. so as to ensure the execution of this Agreement.
5. Upon signing of this Agreement, a working team shall be set up for the
establishment of the Newco.
6. The Newco shall have no responsibilities on any of the liabilities or
claims of Party A (including its associate companies. Party A shall warrant
not to engage in any business as stipulated in Schedule 1. As long as Party
A is its majority shareholder, Guangzhou Zhaoyin Technology Co. shall not
engage in electronic mailbox service and value-added services same as the
Newco. 7. Upon establishment of the Newco, Party B shall be responsible for
capital requirement for the Newco's future development (details subject to
its operating and development plan). Investment by Party B which is under
RMB500,000 shall not affect the shareholding of the Newco. For Investment
made by Party B which exceeds RMB500,000, subject to both parties consent,
the shareholding ratio may be adjusted. Details will be discussed and
determined by both parties.
Article 14 Others
This Agreement shall be written in Chinese.
This Agreement shall come into effect after signing by the authorized
representatives of both parties with company seal.
No variation, modification, termination or dismissal of this agreement shall be
effective unless in writing (signed by authorized representative of both parties
with Company seal).
Any amendment on this Agreement shall form an integral part of this Agreement.
Should any clauses in this Agreement become void, all other clauses shall remain
binding and effective.
This Agreement shall be executed in duplicate and each party shall keep one
copy.
Signed by Party A Signed by Party B
Date : June 11, 1999
