SERVICE AGREEMENT
THIS AGREEMENT is made as of the 2nd day of April, 2002
BETWEEN:
DALIAN BEIGANG INFORMATION INDUSTRY DEVELOPMENT CO. LTD.
a company duly incorporated under the laws of China
("Beigang")
AND:
DALIAN NORTHPORT INFORMATION DEVELOPMENT CO. LTD.,
a company duly incorporated under the foreign joint venture laws of China
("Nopo")
AND:
XXXX XXX and XXX XXXXX BO of Dalian, Liaoning, China,
("Founders")
Whereas:
A. Beigang has sold the assets pertaining to an online tax
payment/reporting system it developed called "Xxxxx" to Nopo;
B. The Founders are the principal persons involved in the development of
the Xxxxx System for Beigang; and
C. Beigang and the Founders have agreed to assist Nopo in order to expand
the use of Xxxxx in accordance with the terms and condition
hereinafter set forth.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the
representations, covenants and agreements set forth the parties agree as
follows:
INTERPRETATION
1. The following words have the following meaning.
"Co Op Agreement" means an agreement with a LTB Office which authorizes the use
of Xxxxx by the Taxpayers in a LTB area;
"Confidential Information" means information or knowledge of Nopo which:
(i) is, or may be, used in all or some of the businesses of Nopo;
(ii) is not generally known in businesses and is the subject of efforts to
maintain its secrecy; and (iii) becomes known or is disclosed in the
course of this agreement.
and includes information or knowledge contained in, or related to, the products,
processes, methods, trade secrets, designs, programs, innovations, techniques,
business
or marketing plans or strategies, financial information, or plans or
strategies or lists, data, customers or clients, or contracts with customers or
clients, salaries of personnel, support services or practices, of, or used in,
the businesses of Nopo but excludes information or knowledge which is in the
public domain at the date on which it becomes known or which thereafter enters
the public domain.
"Innovations" means any and all industrial designs, processes, formulae, data,
specialized know-how, inventions (whether patented or not), improvements, trade
secrets and specialized techniques;
"Cost" means the annual costs incurred by Beigang to undertake the Services;
"LTB" means a Local Tax Bureau;
"Fee" means 10% of Nopo's Pre Tax Profit in each year during the term of this
agreement;
"Platform" means the computer system that links Subscribers to the Tax Bureau
and a Bank and stores the relevant data being filed by the Subscribers;
"Pre Tax Profit" means the difference between all revenues generated by Nopo
related to the Xxxxx System and Nopo's costs including costs paid to Beigang but
before all applicable taxes including income, business, value-added and other
corporate taxation and regulatory deduction costs;
"Services" means those obligations set forth in Clause 2(i) through (iv);
"Subscribers" mean commercial tax payers in Dalian that have agreed to use the
Xxxxx System;
"Subscription Agreements" mean Nopo approved agreements that Subscribers sign in
order to use Xxxxx.
"Taxpayers" mean commercial taxpayers within a LTB area;
SERVICES
2. Beigang and the Founders hereby agree to provide and or deliver to Nopo the
following services:
(i) To be responsible for the daily operation of the Dalian based Xxxxx
business which includes: servicing the Subscribers in accordance with
the Dalian Subscription Agreements; expanding the Dalian based
Subscribers; offering training and technical support to all Dalian
Subscribers;
(ii) To maintain and operate the Dalian Platform;
(iii) To market the Xxxxx System to LTB offices where and when asked by
Nopo and where possible secure Co-op Agreements from them; and
(iv) To do such other tasks that may reasonably be asked of it by Nopo.
2.1 Beigang will do its best to perform the Services to the best of its ability
however if in Nopo's sole discretion it is not performing the Services to a
standard required by Nopo, Nopo
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may assume control of that aspect of the Services it wishes control over
and thereafter Beigang shall not be responsible for such aspect of the
Services, Provided however that nothing hereunder shall affect the amount
of the Fee without the specific agreement of Beigang.
COMPENSATION
3.1 Nopo agrees to pay Beigang its Cost to deliver the Services plus the Fee;
3.2 Beigang will present an annual budget being an estimate of the costs it
will incur over the next year to deliver the Services which both parties
will review and settle the terms of before Beigang begins to deliver the
Services;
3.3 Nopo will ensure that Beigang has at the beginning of each Fical Year a sum
equivalent to 1/6th of the Cost in order to ensure that it has adequate
cash flow to deliver the Services;
3.4 Beigang will provide Nopo a detailed monthly report of each month's
activity together with a financial report over the preceding month in a
format acceptable to Nopo;
3.5 Nopo will provide Beigang a detailed annual budget no later than 30 days
before the beginning of Nopo's fiscal year which shall, inter alia,
estimate the Fee.
3.6 Nopo will pay Beigang 1/4 of the estimate of the Fee within 15 days of the
end of each quarter period of the Fiscal Year and within 3 months following
the end of the Fiscal year Nopo will deliver to Beigang its annual
financial statements together with a calculation of the Fee and payment of
that portion of the Fee that remains outstanding, if any, for the Fiscal
Year.
SUBCRIPTION AGREEMENTS
4. Beigang will ensure that all Subscriber fees will be paid to Nopo's bank
account as directed by Nopo from time to time.
INTELLECTUAL PROPERTY RIGHTS
5. Beigang and the Founders agree that the intellectual property that is
associated with Xxxxx; including source code, ideas, system processes, the
name "Xxxxx", and any copyright etc are the property of Nopo (collectively
called IP) and that Beigang has no rights to such IP without the express
written permission of Nopo
5.1 Beigang and the Founders agree that if during the currency of this
agreement they are made aware of any Innovation that they will immediately
pass it to Nopo who shall have the sole discretion as to whether they will
adopt or use the Innovation and should Nopo chose not to deal with it or
any part thereof, neither Beigang nor the Founders have the right to purse
the Idea, nor advise others of the Innovation
NON COMPETITION
6.1 During the period of this agreement and for a period of three years after
its termination (except where expressly permitted by Nopo) neither Beigang
nor the Founders shall be engaged in any business that might be considered
competitive to Nopo which includes working or consulting for any such
party, investing in or in any way supporting such party.
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6.2 During the currency of this agreement and for a term of three years after
its termination Beigang and the Founder shall keep secret any Confidential
Information
General
7.1 Notices
All notices and other communications between the Parties with respect to this
Agreement shall be personally delivered, or sent by facsimile or post to the
address or facsimile number of the relevant Party at the address first above
written or as otherwise advised.
7.2 Whole Agreement
This Agreement and the documents referred to in it contain the whole agreement
between the parties relating to the transactions contemplated by this Agreement
and supersede all previous agreements between the parties relating to this
transaction.
7.3 Governing Law, Governing Language and Dispute Resolution
This Agreement is governed by and shall be construed in accordance with the laws
and regulations of the PRC.
This Agreement is written in both English and Chinese languages. In the event of
any discrepancy between the two languages, the English version shall prevail.
7.5 DISPUTE RESOLUTION
Any dispute, controversy or claim between the Parties that arises from this
Agreement or is related to this Agreement (including, without limitation,
disputes or claims with respect to the effectiveness, interpretation,
performance, amendment and termination of this Agreement) (collectively, "the
Dispute") shall be resolved through friendly consultations. If within fourteen
(14) days after a Party has notified the other Party in writing of the existence
of such Dispute, the Parties are still unable to resolve the matter through
friendly consultations, any Party may at any time submit the Dispute to the
China International Economic and Trade Arbitration Commission ("Arbitration
Institution") for arbitration in accordance with its arbitration rules in force
on the date hereof. Arbitration proceedings shall be held in Beijing. Any award
made by the Arbitration Institution shall be final and binding on the Parties.
Except where the Arbitration Institution stipulates otherwise, the arbitration
costs shall be borne by the losing Party.
7.6 ENUREMENT
This agreement shall enure to the benefit of and be binding upon the parties
hereto and, except as otherwise provided herein or as would be inconsistent with
the provisions hereof, their respective heirs, executors, administrators,
successors and assigns.
7.7 FURTHER ASSURANCES
The parties shall execute all other documents and instruments and do all other
things necessary to implement and carry out the terms of this agreement.
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AS WITNESS the hands of the duly authorized representatives of the parties on
the date hereinbefore mentioned.
/s/ Xxx Xxxxx Bo
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DALIAN BEIGANG INFORMATION INDUSTRY DEVELOPMENT CO. LTD.
/s/ Xxxx Xxx
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DALIAN NORTHPORT INFORMATION DEVELOPMENT CO. LTD.
/s/ Xxxx Xxx
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XXXX XXX
/s/ Xxx Xxxxx Bo
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XXX XXXXX BO
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