COOPERATION AGREEMENT
EXHIBIT
10.23
THIS
AGREEMENT is
made
on 1st
January,
2006
BETWEEN
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(1)
|
|
(2)
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WHEREAS:
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(A)
|
Party
A is engaging in the business of producing DVD+/-R Discs (the
"Products")
and pursuant to a licence agreement dated 29th
January, 2004 between Party A (as licensee) and the relevant intellectual
property owner (the "Licence
Agreement"),
Party A has been duly given the licence and right by the intellectual
property owner to produce the Products, and is also the holder of
the
“Licence for the Manufacture of Optical Disc/Stampers” issued by the
Customs and Excise Department of Hong Kong (the "Manufacturing
Licence")
for manufacturing the Products.
|
| (B) |
Party
B has the requisite production facilities and labour that are capable
of
manufacturing the Products.
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(C)
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Both
Parties have agreed that it would be in their common business interests
to
combine their respective resources referred to in recitals (A) and
(B)
above for the added benefit of both under the terms and conditions
contained herein.
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IT
IS HEREBY
AGREED
as
follows:
| 1. |
TERMS
OF COOPERATION
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|
1.1
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Each
of Party A and Party B hereby declares that as at the date of this
Agreement, it has under its management and control the respective
resources as follows:
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(a)
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in
respect of Party A, a copy of each of the Licence Agreement and
ManufacturingLicence, both annexed hereto and marked as Appendix
I and
Appendix II, respectively, and each certified as true copy by a director
of Party A; and
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(b)
|
in
respect of Party B, with details of plant and equipment currently
located
at Xxxx X0, 00xx
Xxxxx, Xxxxxxx Factory Building, 40 Xxx Xxxxx Street, Chai Wan, Hong
Kong,
the particulars of which are set out in Appendix III, [with an updated
list as 31st
March of each year not later than 28th
April of that year as Clause 2.2
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|
1.2
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Each
of Parties A and B hereby agrees that during the period from 1st
January 2006 to 31st
December 2006 (the "Cooperation
Period")
to combine operationally their
production
|
faculties
as respectively set out in Clause 1.1 (the "Combined
Facilities")
for
the benefit of both under the following terms and conditions:
|
(a)
|
each
Party shall primarily be responsible for supervising and overseeing
the
proper application of their respective resources (as respectively
referred
to in Clause 1.1 above) being contributed by each Party under this
Agreement with its management and control as referred to in Clause
1.1;
|
| (b) |
Party
B shall use the Combined Facilities to manufacture the Products and
sell
such Products at Party B’s own discretion at different price and quantity
to whatever person and party.
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(c)
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In
respect of the Products being manufactured through using the Combined
Resources under this Agreement:
|
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(i)
|
Party
A shall be solely responsible for duly paying all licensee fees to
the
intellectual property rights owner in connection with producing the
Products and making all other payments to the relevant third parties
which
Party A is liable and that Party B shall not be held responsible
or liable
whatsoever for paying any third parties or any liabilities arising
therefrom; and
|
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(ii)
|
Party
B shall be solely responsible for all the recurrent costs and expenses
incurred therein for those Products being sold by Party B;
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(d)
|
Party
B hereby undertakes with Party A that Party B will increase the resources
within the tenure of this Agreement, which shall include plant and
equipment, for a minimum monthly production capability of up to Six
Million and Five Hundred Thousand ( *6,500,000*) Unit of DVD+R (the
“Minimum
Quantity”).
The legal title and full beneficial ownership of the Minimum Quantity
of
the Products manufactured by the Combined Facilities within each
whole
month during the Cooperation Period shall belong to Party B and in
this
connection, Party B shall have the
right:
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(i)
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to
sell such Products to third party buyers at the prevailing market
price;
and/or
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(ii)
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to
sell such Products to Party A at the prevailing market price and/or
at a
favourable price and terms as agreed between both Parties,
|
| and in both cases, Party B shall be entitled to keep all the profits arising therefrom; and |
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(e)
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Excluding
those quantities being sold by Party A to Party B pursuant to Clause
1.2(b), for all units manufactured in excess of the Minimum Quantity
with
the Combined Facilities within each whole month during the Cooperation
Period, the direct production cost shall be wholly borne by Party
B and
the gross profits, which is the difference between the net sales
revenue
and the respective direct production cost, shall be shared between
Party A
and Party B in the proportion of 30:70
respectively.
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1.3
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This
Agreement shall terminate upon the happening of the following events,
whichever is the earliest:
|
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(a)
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automatically
upon expiration of the Cooperation Period (unless extended as mutually
agreed);
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| (b) |
upon
mutual agreement in writing;
and
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|
(c)
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there
is any material breach of its obligations in this Agreement by any
one
Party and who fails to remedy such breach within the reasonable period
designated in writing by the innocent Party, upon giving notice to
the
breaching Party by the innocent
Party.
|
| 2. |
REPRESENTATIONS
AND
WARRANTIES AND
UNDERTAKINGS
|
|
2.1
|
Each
Party hereby represents, warrants and undertakes to the other as
follows,
and acknowledges that such other Party is entering into this Agreement
on
the basis of, and in reliance on, such representations, warranties
and
undertakings:
|
|
(a)
|
it
has the power and authority to enter into and perform its obligations
pursuant to this Agreement;
|
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(c)
|
neither
this Agreement nor its performance hereunder requires any licence,
consent
or other approval which has not already been obtained; and
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(d)
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that
this Agreement constitutes valid, legal and binding obligations upon,
and
enforceable against, it, in accordance with its
terms.
|
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2.2
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Party
B hereby undertakes with Party A that in respect of the details of
the
plant and equipment referred to in Clause 1.1(b) above, Party B shall
provide to Party A an updated list thereof as of 31st
March in that year and that such list shall be provided on a date
not
later than 28th
April of that year.
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| 3. |
GENERAL
|
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3.1
|
Parties
shall not assign, transfer, charge and/or deal in any other manner
with
this Agreement or any of its rights arising hereunder or purport
so to do,
or sub-contract any or all of its obligations under this Agreement,
without the prior written consent of the other party.
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3.2
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The
invalidity, illegality or unenforceability of any provision herein
shall
not affect the other provisions and this Agreement shall be given
effect
as if the invalid, illegal or unenforceable provision had been deleted
and
replaced with a provision with a similar economic effect to that
intended
by the Parties.
|
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3.3
|
This
Agreement sets out the entire agreement and understanding between
the
Parties relating to the subject matter hereof and shall not be altered
or
supplemented except by a written instrument signed by the
Parties.
|
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3.4
|
This
Agreement shall supersede all and any previous agreements, or
arrangements, between the Parties relating to the subject matter
hereof
and all or any such previous agreements or arrangements shall cease
and
determine with effect from the date
hereof.
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| 3.5 |
No
variation of this Agreement shall be effective unless it is made
in
writing, refers specifically to this Agreement and is signed by the
Parties.
|
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3.6
|
Each
Party hereby undertakes to the other Party that it will do all such
acts
and things and execute all such agreements and documents as may be
necessary or desirable to carry into, or give legal effect, to the
provisions of this Agreement.
|
| 3.7 |
Time
shall be the essence in respect of the obligations of the Parties
set out
herein.
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| 4. |
LAW
AND JURISDICTION
|
This
Agreement shall be governed by and construed in accordance with the laws of
Hong
Kong and each of the Parties hereby irrevocably submits to the jurisdiction
of
the Hong Kong Courts.
IN
WITNESS
whereof
this Agreement has been entered into the day and year first before
written.
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SIGNED
by
|
)
For and Behalf of Mega Century
|
|
)
Limited
|
|
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for
and on behalf of Mega Century Limited
|
)
|
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in
the presence of:
|
)
/s/ Xxxxxx Xxxx Xxxx
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| Authorized Signature (s) |
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SIGNED
by
|
)
For and on behalf of Infosmart
|
|
)
Technology Limited
|
|
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for
and on behalf of Infosmart Technology Limited
|
)
|
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in
the presence of:
|
)
/s/ Xxxx Xxxxx
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| Authorized Signature (s) |
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