Preliminary Cooperation Agreement
The Preliminary Cooperation Agreement ("Agreement")
set forth, as of September 30, 1998, agreements between ASPAC
Communications, Inc., a Delaware incorporated company ("ASPAC")
and Beijing Change Electronic Co., Ltd., a People's Republic of
China incorporated company ("Beijing Change Electronic").
WHEREAS, ASPAC agrees to enter into a Sino-foreign joint venture
by itself or its wholly owned subsidiary and/or with
participation of its strategic partner(s) ("Party A") with
Beijing Change Electronic or its wholly owned subsidiary and/or
its cooperation partner(s) ("Party B") to participate in the
construction, development and profit sharing of a China
nationwide internet service network.
NOW THEREFORE, ASPAC and Beijing Change Electronic
hereby agree as follows:
1. ASPAC or its wholly owned subsidiary and/or its
participating strategic partner(s), and Beijing Change
Electronic or its wholly owned subsidiary and/or its cooperation
partner(s) agree to form a Sino-foreign equity joint venture
company (the "Company"), temporarily named as Beijing ASPAC
Telecom, Inc.
2. The total registered capital of the Company is
US$10 million.
3. Conditions for co-operation to be provided by
Party A shall include:
(a) Party A shall contribute capital equivalent to
seven million dollars (US$ 7,000,000) to the Company towards
registered capital, accounting for 70% of the total registered
capital. The contributions by Party A shall be in cash or
tangible assets approved by the Two Parties.
(b) Party A shall provide to the Company engineering
support and assistance for the network's construction.
(c) Party A shall be responsible for raising
additional funding required by this Project in the international
market if such funding cannot be obtained locally. The
additional funding shall be injected in the form of loans with
terms and conditions to be agreed by the two parties and
interest to be reviewed annually and paid by the Company.
Conditions concerning Party B's investment and
co-operation shall include:
(a) Party B shall contribute three million dollars
(US$ 3,000,000) to the Company towards registered capital,
accounting for 30% of the total registered capital. The
contributions by Party B shall be in US Dollars in cash or other
tangible assets approved by the Two Parties.
(b) Party B is responsible in obtaining and
processing for the Company all necessary approvals, licenses,
and other legal procedures related to the Project in PRC.
4. Equities and profits of the Company shall be
distributed in percentage as follows:
PRELIMINARY COOPERATION AGREEMENT PAGE NUMBER
Party A: 70% Party B: 30%
5. The Company's scope of business is:
(a) to invest in, construct, service and maintain
a nationwide Internet network in the PRC to
provide the following services: access to the
World Wide Web, electronic mail transfer, business
and individual web pages, search engines, news and
updates, on-line shopping, and other services as
customarily available by Internet service
providers. The Company expects to admit up to 5
million customers into the Internet network in 7
years.
(b) to invest in other telecommunication projects
when opportunity rises.
(c) to research, develop and manufacture telecom
equipment when opportunity rises.
6. The Board of Directors (the "Board") of the
Company will consists of five members, of which three members,
the Chairman of the Board (the Legal Representative), the
Managing Director and a Director will be nominated by ASPAC with
the remaining two members, Vice Chairman of the Board and a
Director to be nominated by Beijing Change Electronic. The
responsibility of the Board of Directors will be specified in
the Articles of the Company.
7. The General Manager of the Company is
responsible for the operation and will report to the Board of
Directors. Beijing Change Electronic will nominate the General
Manager subject to the approval of the Board. ASPAC will
nominate the Vice General Manager and Controller subject to the
approval of the Board.
8. The Company will finance necessary investment
primarily with local banks and other local sources. ASPAC will
be responsible for additional financing in the international
market if necessary.
9. Duration of the Joint Venture is 30 years.
The two parties commit to sign further
supplementary agreement(s) to complete and finalize all details
and further discussions of the Joint Venture in addition to this
Preliminary Agreement. Each of the Preliminary and
Supplementary agreements shall be deemed an original, all of
which together shall constitute one and the same instrument.
This Preliminary Agreement is effective upon
signatures of both parties. In case disputes cannot be settled
among the two parties, such disputes shall be submitted to an
arbitration committee agreed by both parties.
This Preliminary Agreement has four sets of
original copies with two sets to be held by each party.
ASPAC Communications, Inc. Beijing Xxxxx Electronic Co, Ltd.
__________________________ __________________________________
Xxxx X. Xxxxxxx Xxxx Xxx
President President
Date: Date:
