Exhibit 10.31 - Shaanxi Framework Agreement
FRAMEWORK AGREEMENT
On the principle of mutual benefit and joint development, the two parties to the
agreement, after full feasibility study, have decided to set up a company to
jointly engage in the relevant business. The following agreement is hereby
formulated for this purpose:
SECTION 1: PARTIES TO THE AGREEMENT
Party A: Shaanxi Provincial Center for Audio and Visual Education
Legal representative: Li Jianjun
Address: 155 Yaowangdong, Xian, Shaanxi Province
Post code: 710003
Tel: 000-0000000
Fax: 000-0000000
Party B: Beijing Tengtu Tiandi Network Co., Ltd.
Legal representative: Zhang Fanqi
Address: 4th Floor, Orient Lianfa Building, Beijing West Railway Station
Post code: 100055
Tel: 000-00000000
Fax: 000-00000000
SECTION 2: ITEMS AGREED
1. Both parties shall make contributions to set up a company with a
provisional name of "Shaanxi Educational Network Co., Ltd." (hereinafter
referred to as "the company").
2. Both parties agree that the business purpose of "the company" is to
provide the educational information service to the public through the
modern communication networks; to integrate excellent audio and visual
education resources to promote the development of IT-based education in
Shaanxi province; to speed up the project to connect the primary and
middle schools in the province with the satellite broadband network.
3. Both parties agree that the provisional business scope of "the company"
is to construct and operate Shaanxi Education Resources Center to
provide distance learning service and sell the related education
software in Shaanxi province.
4. Both parties agree that period for the cooperation is 12 years
provisionally.
SECTION 3 CONTRIBUTIONS
1. Ways of contributions
a. Party A shall contribute RMB 2,000,000 Yuan in currency, and RMB
2,000,000 Yuan in the form of expertise (to be evaluated).
b. Party B shall contribute RMB 6,000,000 Yuan in currency.
2. Contribution proportion
a. Party A shall contribute RMB 4,000,000 Yuan, accounting for 40% of
"the company" stock;
b. Party B shall contribute RMB 6,000,000 Yuan, accounting for 60% of
"the company" stock;
3. Contribution Time:
a. Both parties agree that "the company" shall be registered in the
registration department for industry and commerce before Jan. 31,
2002.
b. Both parties shall complete their contributions in accordance with
the date specified by the registration department for industry and
commerce. Party A shall complete the formalities for the
contribution in the form of expertise before the date. Party A and
Party B shall pay the contributions in currency in a lump sum way
before the date.
4. Registered capital of "the company"
Both parties agree that the registered capital of "the company" is XXX 00
xxxxxxx Xxxx.
SECTION 4 MANAGEMENT OF "THE COMPANY"
1. Both parties shall exercise the business and management powers in
accordance with the proportion of stock in "the company".
2. Both parties agree that the board of directors shall be composed of 7
members with Party A appointing 3 and Party B appointing 4. Number of
directors chosen by each party should keep the ratio of 3:4 for Party A
and Party B respectively.
3. Both parties agree that Xx. Xx Jianjun serves as Chairman of the board,
and Xx. Xxxxx Fanqi serves as Vice Chairman of the board.
4. Both parties agree that Xx. Xx Jianjun is the legal representative.
5. Both parties agree that "the company" shall have a president, a deputy
president (s) and other posts.
SECTION 5 COVENANTS
Responsibilities of each party are as follows:
1. Party A undertakes to coordinate the relations with the departments
concerned, and promote sales.
2. Party A will bring into "the company" other business items suitable for
it after agreed by both parties.
3. Party A shall assist "the company" to complete the construction of the
Shaanxi computer and satellite broadband receiving networks as soon as
possible, so that more and more schools will have access to the NCA/VE
Morning Sun Resources Center to acquire the advanced education
resources.
4. Both parties undertake to purchase "Tengtu web school platform", the
resources in the Morning Sun Resources Center, the excellent domestic
and foreign education resources database, education software or the
similar products of other companies with low cost, and will settle
accounts with "the company" with the purchase price.
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5. Party B shall provide the equipment and resources management platforms
on the satellite receiving end free of charge, and provide technical and
business support to the construction and operation of the Shaanxi
education resources center.
6. Party A shall coordinate with the Shaanxi Branch Company of Tengtu
Culture and Education Electronics Developing Co., Ltd. to merge its
business in Shaanxi into "the company".
Profits shall be shared as follows:
1. Both parties agree that for each set of "Tengtu school web platform"
sold by "the company", Party A will directly get a profit of RMB 5000
Yuan. All expenses incurred in the sales and services shall be borne by
Party B.
2. Both parties agree that because Party B has provided the equipment and
resources management platform on the satellite receiving end free of
charge, the resources usage fees paid by the related schools to "the
company" for using the resources in the Morning Sun Resources Center for
the first year shall be wholly given to Party B as compensation. The
expenses incurred during the transportation, installation and training
shall be borne by Party B. The resources usage fees paid by the related
schools to "the company" for using the resources in the Morning Sun
Resources Center from the second year will be owned by "the company"
after deduction of the resources product cost.
This contract is made in four identical copies with each party holding two
copies.
Shaanxi Provincial Center for Audio and Visual Education (sealed)
Signed by the authorized representative:
Date:
Beijing Tengtu Tiandi Network Co., Ltd. (sealed)
Signed by the authorized representative:
Date:
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