Technology Cooperation Agreement
EXHIBIT
10.32
Party A:
Xi De Long (China) Co., Ltd.
Party B:
China Institute of Sports Science of the General Administration of Sport of
China
In
accordance with the relevant regulations of the Contract Law and the General
Principles of the Civil Law of the People’s Republic of China, and through
friendly negotiations, Party A and Party B (hereinafter referred to as the
“Parties”) hereto have agreed as follows on the development of scientific
research and technology cooperation:
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1.
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General
Cooperation Mode
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The
Parties will establish strategic partnership aiming at developing science and
technology cooperation on the basis of scientific research in order to enhance
the health standards of the Chinese people and raise the quality of national
physical fitness.
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(a)
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During
the cooperation period, Party A shall have the right to use the words
“Strategic Partner of China Institute of Sports Science of the General
Administration of Sport of China” in its business promotions, product
packaging and other promotional activities; however, Party A must abide by
the relevant laws and regulations of the State in using these
words.
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(b)
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During
the cooperation period, Party B shall organize and implement the relevant
scientific research projects and technology researches for Party A by
utilizing the scientific and technology methods and related conditions
obtained from home and abroad.
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(c)
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The
Parties will jointly form a coordination team on technology research to
ensure the success of the R&D efforts of the Parties. Upon
commencement of the technology cooperation, Party B shall agree to set up
a R&D unit under the name of Party B in the premise of Party
A.
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(d)
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Based
on the marketing needs of Party A, Party B shall assist Party A in its
R&D efforts, science and technology consulting services,
popularization of science, advertising, strategic planning, international
and domestic academic exchanges, community services and
etc.
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(e)
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When
conditions permit, Party B shall assist Party A to prepare and incorporate
a public company in the sports
industry.
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(f)
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The
cooperation period between the Parties shall be a period of five (5) years
beginning from October 20, 2006 to October 20, 2011. Upon expiry of this
cooperation period, Party A shall have the priority to renew the
contract.
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2.
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Aspects
of Technology Cooperation
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Party B
shall perform R&D services for Party A to increase the technological
contents and improve the materials of sport products of Party A.
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(a)
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The
aspects of technological cooperation identified and agreed by the Parties
are as follows:
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(1)
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Party
B shall provide Party A with foot-measuring apparatus and solutions,
together with the relevant technical parameters, in order to help Party A
make statistical analysis of the
data.
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(2)
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Party
B shall conduct researches on and develop foot
scanners.
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(3)
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Party
B shall, in cooperation with the R&D strengths at home and abroad,
conduct researches on and develop plantar pressure and pressure intensity
measurement devices and provide the relevant technical
parameters.
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(4)
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Party
B shall provide the relevant testing and produce analysis reports on Party
A’s sport products.
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(5)
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Party
B shall assist Party A in developing national standards for its relevant
products.
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(6)
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Party
B shall assist Party A in preparing the relevant documents on protecting
technologies in international
trade.
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(b)
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In
addition to the above agreed aspects of technological cooperation, all the
R&D results of Party B and the research projects assigned to Party B
by Party A are within the scope of technology services of Party
B.
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(c)
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For
the research projects to be conducted by Party B for Party A, Party B
shall first develop project plans and must obtain written consent from
Party A prior to their
implementation.
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3.
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Cooperation
in Brand Marketing
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(a)
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Party
B agrees to engage in technology promotional activities for promoting
Party A’s brand and products.
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(b)
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Party
B shall, where appropriate, carry out sales promotions for Xi De Long
products by taking advantage of such opportunities as academic activities
held at home and abroad, activities for promoting the results of science
and technology researches, as well as popularization of science
activities.
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(c)
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Party
B agrees that it will assist Party A in preparing R&D and marketing
plans, as well as brand and product promotional activities for Party A’s
products.
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(d)
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The
brand marketing activities of Party A shall be closely linked with the
national physical fitness plan of the state
government.
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4.
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Preparing
to Incorporate a Public Company in the Sports
Industry
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(a)
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A
multifaceted cooperation plan shall be developed to help the sports
industry switch to the market economy following the year
2008.
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(b)
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Party
B shall assist Party A in developing solutions to help the Company go
public and bring the concepts of “sports, technology and industry” into
practice.
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(c)
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The
shareholding structure of the public company shall be agreed separately on
the basis of the situation of
cooperation.
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5.
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Fees
for Cooperation and Payment Method
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(a)
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Party
A shall pay a “strategic partner” authorization fee to Party B in the
amount of RMB 500,000 yuan per year of cooperation, and the first year’s
payment shall be paid within fifteen (15) days upon execution of this
Agreement and on the same date in each of the four subsequent
years.
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(b)
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Party
A shall provide Party B with the funds needed for implementing the R&D
and technology cooperation projects organized by Party B for Party A,
while Party B shall use such funds in accordance with the Measures on the
Management and Use of Government Funds on Science and
Technology.
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(c)
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All
costs and expenses incurred by Party B in organizing or participating in
the promotional activities in coordination with the promotional activities
of Party A’s products shall be borne by Party
A.
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6.
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Rights
and Obligations of the Parties
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(a)
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Rights
and Obligations of Party A
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(1)
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Party
A shall have the right to use the words “Strategic Partner of China
Institute of Sports Science of the General Administration of Sport of
China” on its products, such as sport shoes, sportswear, bags, caps,
socks, as well as business promotional
materials.
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(2)
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Party
A shall pay all fees and costs to Party B in full subject to the terms and
conditions agreed hereunder.
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(3)
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Party
A shall guarantee the quality of products that bear the Xi De Long brand
and be responsible for all legal and financial liabilities arising from
quality issues of its
products.
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(4)
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Party
A shall assist Party B to perform all the relevant science and technology
researches, as well as testing and promotional
activities.
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(5)
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Party
A shall enjoy priority in using the relevant science and technology
R&D results of Party B with self-owned intellectual property rights
and in cooperating with Party B on certain projects, if conditions are the
same for all parties.
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(6)
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All
data generated from technology testing, as well as documentations such as
analysis reports resulting from of the cooperation between the Parties,
shall be filed with Party B when used for business promotion purposes. If
Party B raises objections, the Parties shall negotiate separately and such
activities shall be conducted only upon mutual
agreement.
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(b)
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Rights
and Obligations of Party B
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(1)
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Party
B shall ensure that Party A is the sole person who is entitled to entering
into “strategic partnership” with Party B for such product categories
including sport shoes, sportswear, bags, caps and
socks.
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(2)
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Party
B shall set up a R&D unit on Party A’s premise upon identification of
the first cooperative project.
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(3)
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Subject
to a clear expression of non-cooperation by Party A, Party B shall have
the right to develop cooperative relations with third parties on its
research projects in the field of technology
cooperation.
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(4)
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Party
B shall be entitled to charge Party A the fees as agreed by the Parties
hereunder within the said time
period.
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(5)
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Party
B shall engage in promotional activities in relation to the marketing of
Party A’s products.
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(6)
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Party
B shall select and enroll technology workers from a pool of experts both
at home and abroad to participate in the research and testing
activities.
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7.
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Liabilities
for Breach of Contract
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(a)
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If
Party A fails to pay the fees within the time period as agreed hereunder
and fails again within fifteen (15) days upon receipt of a written notice
from Party B, Party A shall pay damages for payment default according to
the relevant regulations of the Supreme People’s Court on Delayed
Payment.
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(b)
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Both
parties shall keep the contents of cooperation in strict confidence and,
in case of any disclosure by either party has resulted in economic losses
to the other party, the injured party shall be entitled to demand damages
for default to recover its economic losses from the breaching
party.
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(c)
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Party
A shall not use the name of Party B discretionarily to engage in any civil
and business activities beyond its rights as provided
hereunder.
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(d)
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In
case of any loss incurred as a result of any breach of this Agreement by
either party, the breaching party shall be held liable for breaching the
Agreement.
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8.
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Dispute
Resolution
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Any
dispute between the Parties arising from this Agreement or from breaching this
Agreement by either party will first be settled through negotiations between the
Parties. If the Parties fail to reach an agreement through negotiations, either
party shall be entitled to file a suit against the other with a competent
People’s Court by virtue of this Agreement.
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9.
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Miscellaneous
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(a)
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The
R&D results generated from cooperation between the Parties shall be
owned by the Parties.
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(b)
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Party
B shall actively assist Party A in producing the documents related to
their cooperation in the process of making applications for government
funding for science and technology innovations by Party A in accordance
with the relevant government
policies.
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(c)
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During
the cooperation period, should any dispute arise over the quality of the
Xi De Long products between Party A and consumers, Party A shall be held
liable for all the business disputes as well as all related claims or
liabilities arising from the business operations of Party
A.
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(d)
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Party
A acknowledges any and all existing agreements or contracts between Party
B and third parties prior to the execution of this
Agreement.
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(e)
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The
effective date of this Agreement shall the date of its execution by the
Parties.
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(f)
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This
Agreement is executed in four counterparts, and each party shall hold two
copies, with each copy having the same legal
effect.
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Party A:
Xi De Long (China) Co., Ltd.
Address:
Quanzhu City, Fujian Province
Signature
of Authorized Representative: /s/ Lin Shuipan
Date:
October, 20, 2006
Party B:
China Institute of Sports Science of the General Administration of Sport of
China
Address:
Xx. 00, Xxxxxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx
Signature
of Authorized Representative: /s/ Xxxxx Xxxxx
Date:
October, 20, 2006
