EXCLUSIVE COOPERATION AGREEMENT (English Translation)
EXHIBIT
10.1
(English
Translation)
This
Exclusive Cooperation Agreement is entered into by and between the following
parties (each, a “Party”
and
collectively, the “Parties”)
as of
September 20, 2007:
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1.
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Golden
Group Holdings (Shenzhen) Limited (“Golden”)
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Address:
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▇/▇,
▇▇▇▇ ▇/▇, ▇▇▇▇▇ Science & Technology Park, Huaqiang, Shenzhen,
China
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Fax:
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▇▇▇▇-▇▇▇▇▇▇▇▇
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Represented
by:
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TU
Guoshen
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2.
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Shenzhen
▇▇▇▇▇▇ ▇▇▇▇ Intelligent Network Technology Co., Ltd. (“Company”)
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Address:
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39/F,
Shenzhen Special ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇
▇▇▇▇▇
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Fax:
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▇▇▇▇-▇▇▇▇▇▇▇▇
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Represented
by:
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ZHANG
Feize
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3.
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China
Security & Surveillance Technology, Inc. (OTCBBæCSCT)
(“CSST”)
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Address:
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13/F,
Shenzhen Special ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇
▇▇▇▇▇
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Fax:
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▇▇▇▇-▇▇▇▇▇▇▇▇
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Represented
by:
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TU
Guoshen
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RECITALS
WHEREAS,
the
Company is a company organized and existing under the laws of the People’s
Republic of China (“PRC”);
WHEREAS,
Golden
is a company organized and existing under the laws of the PRC, with CSST, its
ultimate holding company currently listing on the OTCBB in United
States;
WHEREAS,
the
Company desires and Golden agrees to provide technical support and other
necessary services to the Company;
WHEREAS,
the
Parties desire to set forth certain covenants and agreements between and among
themselves in connection with the exclusive cooperation relationship
contemplated by this Agreement;
NOW,
THEREFORE,
in
consideration for the mutual covenants and promises set forth herein, each
Party
agrees as follows:
AGREEMENT
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1.
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DEFINITION
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Unless
otherwise defined in the Agreement, the following definitions shall be used
in
this Agreement:
“Business
scope of the Company”
shall
mean the business scope describes in the business license of the Company, which
includes, inter
alia,
establishment of separate entities (subject to the approval of governmental
authorities on a case by case basis), domestic commercial business, supply
and
sale of raw materials (exclusive of commodities under special control of the
State); development and sale of computer soft- and hard-wares; development
of
network technology; design, installment and maintenance of safety and
surveillance system, and contract of intelligent construction
system.
“Certificate”
shall
mean the certificate issued by relevant PRC governmental department on
10th
March,
2003 with regard to the computer information system certificate involving
government secret and all subsequent renewal of this certificate.
“Permitted
Business Activities”
shall
refer to any business activities that, according to existing or future laws
and
regulations of PRC, are permitted to be engaged by foreign companies or foreign
invested companies, regardless of the restrictions over the equity ownership
percentage, by any method or through any type of transaction
structure.
“Restricted
Business Activities”
shall
refer to the other business activities that are excluded from the scope of
the
Permitted Business Activities.
“Service”
shall
mean the services provided by Golden to the Company under Clause 2.1.1(1) of
this Agreement.
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2.
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EXCLUSIVE
COOPERATION
RELATIONSHIP
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2.1
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Scope
of Cooperation
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2.1.1
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Exclusive
Cooperation over Permitted Business
Activities
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For
the
Permitted Business Activities, the cooperation between the Company and Golden
will include, without limitation:
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(1)
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Golden
shall provide the Service to the Company as
below:
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(a)
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Appointment
and provision of the workforce for any business activities of the
Company.
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(b)
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Provision
of any technology license, equipment, consultation and
support.
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(c)
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Provision
of training services, and
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(d)
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Other
service and support as agreed by all
parties.
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(2)
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The
Company shall subcontract all business to Golden or any party nominated
by
Golden. Without the prior written consent from Golden, the Company
shall
not subcontract any business activities of the Company to any third
party.
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(3)
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Golden
has the right to appoint certain representatives and staffs in the
Company.
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(4)
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Golden
has the right, at its discretion, to require establishing a joint
venture
with the Company for the purpose of engaging into any business activities.
Without the prior written consent from Golden, the Company shall
not
engage in any joint venture with any third party for any purpose
with
regard to the same business
activities.
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(5)
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The
Parties hereby agree that any marketing and business development
activities shall be in the name of both the Company and Golden or
its
joint venture. Golden has the right to require the Company to ▇▇▇▇
on any
marketing documents, advertising brochures and any other materials
of this
kind the full name of the Golden. Without the prior written consent
from
Golden, the Company shall not engage in any marketing and business
development activities, or print out and distribute any marketing
material, with any third party.
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(6)
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The
Service provided by Golden is exclusive in nature. During the course
of
the term of this Agreement, without the prior written consent from
Golden,
the Company shall not sign any agreement with any third party for
the same
or similar Service in this
Agreement.
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2.1.2
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Exclusive
Cooperation over Restricted Business
Activities
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For
the
Restricted Business Activities, the cooperation between the Company and Golden
shall include, without limitation:
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(1)
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The
Service provided by Golden to the Company. The provision of the aforesaid
shall not make the Company to lose its qualifications under the
Certificate.
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(2)
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The
Service provided by Golden is exclusive in nature. During the course
of
the term of this Agreement, without the prior written consent from
Golden,
the Company shall not sign any agreement with any third party for
the same
or similar Service in this
Agreement.
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2.1.3
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Right
Not to Perform
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Notwithstanding
anything to the contrary, Golden may decline to perform any of its set forth
as
above if Golden, based on its sole judgment, reasonably and in good faith
believes that it is not in a position to render such service as required by
the
Company; provided, however, that Golden shall promptly notify the Company of
its
such decision and provide reasonable assistance to the Company in making
alternative arrangement.
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2.2
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Exclusivity
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During
the term of this Agreement, without the prior written consent from Golden,
the
Company shall not (1) enter into any contract or any cooperation relationship
with any third party; and/or (2) engage in any other activities that, at the
sole discretion of Golden, may impair Golden’s exclusive right granted
hereunder. The Company shall take all necessary actions (including but not
limited to corporate actions) to ensure that Golden be the exclusive cooperation
partner in any possible business activities, provided however, such cooperation
shall not violate any PRC laws and regulations. Except as otherwise provided
herein, the Company shall notice Golden of any contract offer from any client
as
soon as practicable.
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3.
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CONSIDERATION
FOR THE EXCLUSIVE COOPERATION
RELATIONSHIP
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3.1
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Consideration
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As
consideration of the exclusive cooperation arrangement, Golden agrees to provide
to the Company RMB5,000,000 in cash and US$8,907,350 worth of restricted stocks
(the “Shares”).
The
number of Shares to be issued shall be calculated based on the 20-day average
closing price of CSST’s stocks prior to the signing of this Agreement
(US$19.094/stock), i.e., 466,500 shares. The Shares shall be issued to the
Company or its designee(s) within 90 days of the signing of this
Agreement.
Considering
the support and services provided and/or to be provided by Golden, the Company
hereby agrees to the following profits sharing scheme:
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3.2
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Profits
Sharing Scheme
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3.2.1
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Profits
Arising from Permitted Business
Activities
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The
Parties agree to enter into subcontracting arrangement where all the work
belonging to the Permitted Business Activities, including without limitation
to
the installment of security and surveillance equipments, will be subcontracted
to Golden at the face value of the contracts.
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3.2.2
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Profits
Arising from Restricted Business
Activities
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The
Parties acknowledge that, for all business activities of the Company that belong
to Restricted Business Activities, the Company agree to pay an amount equals
to
the face value of any contract minus the costs and expenses incurred in the
process of obtaining and performing this contract by the Company to Golden
for
every contract it entered into with any third party.
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4.
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REPRESENTATIONS
AND WARRANTIES OF THE
COMPANY
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The
Company shall hereby make the following representations and warranties for
the
benefit of Golden:
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4.1
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Corporate
Existence and Power
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(a)
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The
Company is a limited liability company duly organized and validly
existing
under the laws of the People’s Republic of China, and has all corporate
powers and all governmental licenses, authorizations, consents
and
approvals required to carry on its business as now conducted and
as
currently contemplated to be conducted and as currently contemplated
to be
conducted.
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(b)
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The
Company has the full power and qualifications to guarantee the
subsistence
of the Certificate.
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(c)
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The
Company has not ever approved, or commenced any proceeding or made
any
election contemplating, the dissolution or liquidation of the Company
or
the winding up or cessation of the business or affairs of the
Company.
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4.2
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Authorization;
No Consent
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(a)
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The
Company has taken all necessary corporate actions to authorize
its
execution, delivery and performance of this Agreement and all
related
documents and has the corporate power and authorization to execute,
deliver and perform this Agreement and the other related
documents.
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(b)
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The
Company has the absolute and unrestricted right, power, authority,
and
capacity to execute and deliver this Agreement and the other
related
documents and to perform their obligations under this Agreement
and the
other related Documents.
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(c)
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The
Company shall not require giving any notice to or obtaining any
consent
from any person in connection with the execution and delivery
of this
Agreement or the consummation or performance of any of the exclusive
cooperation arrangement contemplated
hereunder.
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(d)
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The
Company owns all the governmental authorizations necessary to
permit the
Company to lawfully conduct and operate its business in the manner
it
currently conducts and operates such business and to permit the
Company to
own and use its assets in the manner in which it currently owns
and uses
such assets. To the best knowledge of the Company, there is no
basis for
any governmental authority to withdraw, cancel or cease in any
manner any
of such governmental
authorizations.
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4.3
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No
Conflicts
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Execution
and perform of this Agreement by the Company will not contravene, conflict
with,
or result in violation of (A) any provision of the organizational documents
of
the Company; (B) any resolution adopted by the board of directors or the
shareholders of the Company; (C) any laws and regulations to which the exclusive
cooperation arrangement contemplated in this Agreement is subject; and (D)
any
provisions of any contracts or agreements of any kind that the Company is a
party or the Company is subject to.
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4.4
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Other
Warranties
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The
Company warrants that it staffs (including Zhang Feize) shall not engage in
any
activity which will result in direct competition with the Company for a period
of five (5) years after the signing of this Agreement.
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5.
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REPRESENTATIONS
AND WARRANTIES OF
GOLDEN
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Golden
makes the following representations and warranties for the benefit of the
Company:
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5.1
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Authorization;
No Consent
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Golden
has taken all necessary corporate actions to authorize its execution, delivery
and performance of this Agreement and all related documents and has the
corporate power and authorization to execute, deliver and perform this Agreement
and the other related documents.
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5.2
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No
Conflicts
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Execution
and perform of this Agreement by Golden will not contravene, conflict with,
or
result in violation of (A) any provision of the organizational documents of
Golden; (B) any resolution adopted by the board of directors or the shareholders
of Golden; (C) any laws and regulations to which the exclusive cooperation
arrangement contemplated in this Agreement is subject; and (D) any provisions
of
any contracts or agreements of any kind that Golden is a party or Golden is
subject to.
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6.
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TERMINATION
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This
Agreement shall become effective upon signing by the Parties for a period of
twenty (20) years, unless terminate by Golden unilaterally. This Agreement
shall
automatically renew for a period of twenty (20) years further when the aforesaid
period expires, unless terminate by Golden unilaterally.
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7.
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MISCELLANEOUS
PROVISIONS
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7.1
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Notices
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Any
notices given pursuant to this Agreement must be in writing. Notices may be
delivered personally, sent by registered airmail (postage prepaid) or by a
recognized courier service, or sent by facsimile transmission to the Parties’
addresses first set forth above. Notices given by personal delivery will be
deemed effectively given on the date of personal delivery. Notices given by
registered airmail (postage prepaid) will be deemed effectively given on the
seventh (7th) day after the date on which they were mailed (as indicated by
the
postmark). Notices given by air courier will be deemed effectively given on
the
date of delivery (as indicated by the airway ▇▇▇▇). Notices given by facsimile
transmission will be deemed effectively given on the first (1st) business day
following the date of transmission. Any Party may at any time change its address
for service of notices by delivering written notice of its new address to the
other Parties in accordance with this Article 7.1.
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7.2
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Disputes;
Arbitration
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(e)
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Mandatory
Arbitration
All disputes arising out of or relating to this Agreement will
be resolved
by mandatory, binding arbitration in accordance with this Article
7.2.
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(f)
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Friendly
Negotiations
Before any arbitration is commenced pursuant to this Article 7.2,
the
Parties must endeavour to reach an amicable settlement of the dispute
through friendly negotiations.
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(g)
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Commencement
of Arbitration
If
no mutually acceptable settlement of the dispute is made within
the sixty
(60) days from the commencement of the settlement negotiation or
if any
Party refuses to engage in any settlement negotiation, any Party
may
submit the dispute for arbitration.
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(h)
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Arbitration
Any arbitration commenced pursuant to this Article 7.2 will be
conducted
in Hong Kong under the Arbitration Rules of the United Nations
Commission
on International Trade Law by arbitrators appointed in accordance
with
such rules. The arbitration and appointing authority will be the
Hong Kong
International Arbitration Centre (“HKIAC”).
The arbitration will be conducted by a panel of three arbitrators,
one
chosen by the Company, one chosen by the CSST, and the third by
agreement
of the parties; failing agreement within 30 days of commencement
of the
arbitration proceeding, the HKIAC will appoint the third arbitrator.
The
proceedings will be confidential and conducted in English. The
arbitral
tribunal will have the authority to grant any equitable and legal
remedies
that would be available in any judicial proceeding instituted to
resolve a
disputed matter, and its award will be final and binding on the
parties.
The arbitral tribunal will determine how the parties will bear
the costs
of the arbitration. Notwithstanding the foregoing, each party will
have
the right at any time to immediately seek injunctive relief, an
award of
specific performance or any other equitable relief against the
other party
in any court or other tribunal of competent jurisdiction. During
the
pendency of any arbitration or other proceeding relating to a dispute
between the parties, the parties will continue to exercise their
remaining
respective rights and fulfill their remaining respective obligations
under
this Agreement, except with regard to the matters under
dispute.
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7.3
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Headings
and Gender
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The
headings of Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to “Section”
or “Sections” refer to the corresponding Section or Sections of this Agreement.
All words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
word “including” does not limit the preceding words or terms.
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7.4
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Severability
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If
any
provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain
in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to
the
extent not held invalid or unenforceable.
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7.5
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Waiver
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No
failure or delay by any Party to exercise any right, power or remedy under
this
Agreement will operate as a waiver of any such right, power or
remedy.
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7.6
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Integration
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This
Agreement contains the sole, final and complete expression and understanding
between the Parties with respect to the exclusive cooperation arrangement
contemplated herein.
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7.7
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Assignments,
Successors, and no Third-Party
Rights
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No
Party
may assign any of its rights under this Agreement without the prior consent
of
the other Parties, which will not be unreasonably withheld. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
Parties. Nothing expressed or referred to in this Agreement will be construed
to
give any Person other than the Parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions
are
for the sole and exclusive benefit of the Parties to this Agreement and their
successors and assigns.
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7.8
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Governing
Law
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This
Agreement will be construed, and the rights and obligations under this Agreement
determined, in accordance with the laws of the PRC,
without
regard to the principles of conflict of laws thereunder.
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7.9
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Amendment
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This
Agreement may not be amended, altered or modified except by a subsequent written
document signed by all Parties.
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7.10
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Language
and Counterparts
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This
Agreement may be executed in any number of counterparts. When each Party has
signed and delivered to all other Parties at least one such counterpart, each
of
the counterparts will constitute one and the same instrument. This Agreement
is
written in the Chinese language.
[The
remainder of this page is intentionally left blank.]
IN
WITNESS WHEREOF,
the
Parties hereto have caused this Exclusive Cooperation Agreement to be executed
by their duly authorized representatives as of September 20, 2007.
“Golden”:
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Golden
Group Holdings (Shenzhen) Limited
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/s/Tu
Guoshen
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Name:
TU Guoshen
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Its:
Legal Representative
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The
“Company”:
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Shenzhen
▇▇▇▇▇▇ ▇▇▇▇ Intelligent Network Technology Co., Ltd.
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/s/
Zhang Feize
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Name:
ZHANG Feize
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Its:
President
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“CSST”:
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China
Security & Surveillance Technology, Inc.
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/s/
Tu Guoshen
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Name:
TU Guoshen
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Its:
President
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