EXHIBIT 10.5
INVESTMENT CONTRACT BETWEEN BEIJING GOLDVISION TECHNOLOGIES LTD.
AND STRATEGIC COMMUNICATIONS PARTNERS, INC. DATED
DECEMBER 18, 1002
Investment Contract
--------------------------------------------------------------------------------
INVESTMENT CONTRACT
THIS AGREEMENT made as of the 18th day of December 2002
BETWEEN:
Beijing Goldvision Technologies Ltd. (Chinese characters omitted), a
Chinese company, having an office at Central TV Tower No. 02-21, Xx.
00 Xx Xxx Xxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxx'x Xxxxxxxx of China 100036
(hereinafter called "Goldvision")
OF THE FIRST PART
AND:
Strategic Communications Partners, Inc., a US company having its
office at 0000 Xxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 Xxxxxx
Xxxxxx of America .
(hereinafter called "SCP")
OF THE SECOND PART
WHEREAS:
1. Goldvision is in the business of providing satellite communication,
broadband Internet, content, wireless access and transport in Beijing,
People's Republic of China ("China");
2. SCP is in the business of providing financial, technical and marketing
services based in Denver, Colorado, United States of America ("USA");
and
3. Goldvision wishes to sell and SCP wishes to purchase certain percentage
of the equity ownership of Goldvision.
In accordance with the relevant Chinese laws and regulations, adhering
to the principle of equality and mutual benefit and through friendly
consultation, the parties agreed to reach the following agreement and sign this
Investment Contract.
ARTICLE 1 DEFINITIONS
In this Contract,
(1) "Board of Directors" means the board of directors of Goldvision to be
reorganized under the terms of this Contract; The board of
directors shall have authority over Goldvision, Goldinfo, Goldtel,
and any future subsidiaries.
1
Investment Contract
--------------------------------------------------------------------------------
(2) "Effective Date" means the date the parties sign this agreement;
(3) "Conciliation Committee" means a committee, whose composition,
procedure, and mandate to be embodied in a separate document to be
agreed upon between the parties;
(4) "Equity" means the equity ownership that the Goldvision Existing Equity
Owners will transfer to SCP in accordance with this Contract;
(5) "Financial Statements" means financial information, account
reconciliation, accounting books, statement of revenue and
expenditure, statement of income and loss, assets evaluation, and
any other financial and accounting information of Goldvision,
Goldinfo, Goldtel and/or any future subsidiaries;
(6) "Generally Accepted Accounting Principles" means the accounting rules
and standard set in China by the Chinese accounting professional
bodies and the Ministry of Finance;
(7) "Goldinfo" refers to Beijing TianGuang Information Services Co., Ltd.
(Chinese characters omitted);
(8) "Goldtel" refers to Beijing TianZhao Information Services Co., Ltd.
(Chinese characters omitted);
(9) "Subsidiary(ies)" refers to any controlled (over 51% ownership) joint
venture business (Goldvision or Goldvision subsidiary initiated),
equity investment, or wholly owned Goldvision business.
(10) "GoldVision" refers to GoldVison or GoldTel, GoldInfo, or any future
subsidiaries;
(11) "Goldvision Assets" means all the assets listed under Schedule A to
this Contract.
(12) "Goldvision Existing Equity Owners" means Pei Xxxxx Xxx, Yun Fu, and
Xxxx Xxx Fu;
(13) "Reasonable Amount of Reinvestment" means during the first five years
from the Effective Date of this Contract, Goldvision shareholders
shall re-invest at least sixty-five percent (65%) of net profits.;
(14) "Related Companies" means subsidiaries, affiliations, joint venture,
associated entities, and any other body corporate or partnership
that are owned or controlled directly or indirectly, in whole or
partially by SCP or Goldvision;
2
Investment Contract
--------------------------------------------------------------------------------
(15) "Marketing Agreement" refers to the sales, marketing and operations
agreement between Goldvision and SCP signed on December 18, 2002;
and
(16) "Senior Management" means any officials of Goldvision above vice-
president deputy General Manager and/or the company legal
representative level.
(17) "Subsidiary(ies)" refers to any controlled (over 51% ownership) joint
venture business (Goldvision or Goldvision subsidiary initiated),
equity investment, or wholly owned Goldvision business.
ARTICLE 2 INITIAL EQUITY OWNERSHIP
In order to acquire a total of eighteen percent (18%) of the current
equity of Goldvision, SCP shall
(a) Invest four million eight hundred thousand US dollars (US $4,800,000)
within twelve (12) months after the Effective Date of this Contract;
and SCP shall contribute a payment of two hundred thousand US dollars
(US $200,000) to the capital investment account of Goldvision within 60
days of signing this agreement. After sixty (60) days of the Effective
Date of this Contract, SCP shall contribute one hundred seventy
thousand US dollars (US $170,000) on a monthly basis for ten (10)
months to the capital investment account of Goldvision. At the close of
the 12th month from the Effective Date of this Contract, SCP will
contribute an additional payment of two million nine hundred thousand
US dollars (US $2,900,000) reaching the total of four million eight
hundred thousand US dollars (US $4,800,000) within the first twelve
(12) months after the Effective Date of this Contract. All investments
will be from SCP HK directly to Goldvision's PRC account.
After signing this Contract, Goldvision shall transfer equity of
Goldvision to SCP at the rate of 1% each 2 months and not before each additional
$266,666 0investment. Goldvision will undertake
(1) to complete all necessary corporate steps for the transfer of
Equity; Goldvision will issue an equity ownership certificate for
each 1% issued. After the full $4.8M is invested Goldvision will
replace these certificates with an 18% certificate and receive
back all 1% ownership certificates previously issued.
(2) to completely and accurately file with Beijing Administration for
Industry and Commerce all reports and/or forms necessary to
successfully approve SCP's ownership in Goldvision.
3
Investment Contract
--------------------------------------------------------------------------------
ARTICLE 3 INCREASED EQUITY OWNERSHIP
In order to acquire an additional six percent (6%) of the current
equity of Goldvision, SCP shall invest two hundred thousand US dollars (US
$200,000) per month for twelve (12) months from the thirteenth (13) month to the
twenty-fourth (24) month after the Effective Date of this Contract, equaling a
total of two million four hundred thousand US dollars (US $2,400,000).
Goldvision will issue an equity ownership certificate of 1% for each $400,000
invested. After the 24th month, Goldvision will register this investment and
replace 18% registration and the new 1% certificates with a 24% ownership
Between December 18, 2002 and December 18, 2007 SCP shall have the
first right of refusal to invest in the next 12 city market businesses at a rate
of $2 Million USD per 000X XXX of city GDP (GDP as of the last government
completed calculation). All the same terms and conditions shall remain in effect
as stipulated in this agreement.
In the future assuming SCP remains a viable business and an active
partner as agreed in this contract, SCP shall have the first right of refusal to
invest in all future business opportunities. Excluding the next 12 markets, all
projects are included under this clause. The specific terms would be negotiated
at the time. If terms cannot be reached or if for some other reason SCP cannot
support the project properly, SCP gives up the right to participate or may have
to accept other partners.
Depending on the negotiation among the Goldvision Existing Equity
Owners, the parties acknowledge that more than fifty percent (50%) ownership of
the total equity of Goldvision may or may not mean voting control of Goldvision.
Certain decisions require unanimous approval with all board members or
shareholders voting implying greater than 50% ownership does not grant voting
control.
ARTICLE 4 NET PROFIT DISTRIBUTION
After Goldvision has deducted all its product cost, paid income tax,
deducted all sales expenses, reinvestment, the net proceeds shall be distributed
to the equity owners of Goldvision in accordance with their respective equity
ownership holding in Goldvision unless otherwise negotiated in advance with SCP.
For SCP, initially its equity ownership in Goldvision is eighteen percent (18%).
If SCP's equity ownership in Goldvision is increased, its portion of profit
share shall also be increased proportionately unless otherwise negotiated in
advance with SCP. Future markets and business opportunities shall be based on a
proportional basis with this original opportunity.
ARTICLE 5 USE OF INVESTMENT FUND
Goldvision shall ensure that the investment from SCP shall be solely
used to purchase capital equipment and fund operating costs.
ARTICLE 6 DILUTION
4
Investment Contract
--------------------------------------------------------------------------------
Notwithstanding the ownership interest expressed as a percentage held
by a party from time to time, a party's undivided percentage equity ownership in
Goldvision will be determined by its participating interest which will be
calculated in accordance with the following:
(1) if each party subscribes and contributes according to the provisions
of this Contract, the parties shall have the following participating
interests and shall be deemed to own the following contributions:
PARTICIPANT PARTICIPATING INTEREST CONTRIBUTION (US)
Goldvision's Existing 82%
Ownership Interest
SCP 18% US $4,800,000
(2) If all parties agree to increase the capital of Goldvision, each party
shall increase its share of contribution to the equity of Goldvision
in accordance with its initial share of the equity ownership in
Goldvision. If a party is unable to contribute the increased portion,
then the other contributing parties shall have the following options:
increase its capital contribution and treat such increased portion as
a loan to Goldvision with priority repayment privilege from the net
profit and interests earned by Goldvision, or increase equity
ownership holding in Goldvision.
The failing party shall have its portion of the equity ownership in
Goldvision reduced to a percentage equal to the product of the
following formula:
cumulative contributions in the equity ownership by failing party x 100%
-----------------------------------------------------------------
cumulative contributions in the equity ownership by all parties
ARTICLE 7 ASSIGNMENT
With not less than ninety (90) days's notice to the other party, SCP or
Goldvision may assign part or whole of the rights and obligations contained in
this Contract to its Related Companies.
ARTICLE 8 BUSINESS SCOPE
The parties intend that the business scope for cooperation will be
the same as the approved business scope of Goldvision, Goldtel, Goldinfo, and
Related Companies as stated in its constituting documents and permitted under
Chinese law.
5
Investment Contract
--------------------------------------------------------------------------------
ARTICLE 9 REPRESENTATIONS OF GOLDVISION
In order to induce SCP to enter into this Contract and to conclude the
transactions contemplated herein, Goldvision hereby represents and warrants to
SCP that as at the date of this Contract and as at the Closing:
(1) Goldvision is a limited liability company duly incorporated, validly
organized and is validly subsisting and in good standing under the
laws of China;
(2) Goldvision Assets consist of all the assets listed under Schedule A to
this Contract;
(3) the subsidiaries, related companies, and branch offices listed under
Schedule B to this Contract are all the corporate entities and offices
that Goldvision owns or operates;
(4) Goldvision has the corporate power and capacity to own the assets
owned by it and to carry on its businesses as now being conducted by
it;
(5) Goldvision is duly authorized, qualified, registered and licensed to
do business in China and satisfies all requirements in China to enable
it to carry on its business and own its assets in China;
(6) the registered capital of Goldvision is RMB(pound) 2,000,000 which
has been fully subscribed and paid;
(7) the directors of Goldvision as of the date of this Contract are:
Name Position
--------------------------- -------------------------
PEI XXXXX XXX Chairman
YUN FU Director
FU XXXX XXX Director
(8) except for the rights of SCP under this Contract, no person, firm or
corporation has any agreement, option, right or privilege (whether by
law, pre-emptive or contractual) that constitutes or is capable of
becoming an agreement, option, right or privilege, including
convertible securities, warrants or convertible obligations of any
nature, for the purchase, subscription, allotment or issuance of any
of the unissued shares in the capital of Goldvision or in respect of
any other securities of or interests in Goldvision;
(9) Goldvision does not own any interests in any entity other than
Goldvision Assets and has not entered into any agreements of any
nature to acquire any shares or other interests in any other
corporation or entity;
(10) except for its interest in Goldvision Assets, Goldvision has no
interests in and
6
Investment Contract
--------------------------------------------------------------------------------
does not own any portion of any business association, partnership, or
unincorporated entity and has not entered into any agreements of any
nature to acquire any such interest or become a party to any such
organization;
(11) Goldvision is not a party to or bound by any agreement of guarantee,
indemnification, assumption or endorsement or any other like
commitment of the obligations, liabilities (contingent or otherwise)
or indebtedness of any other person, firm or corporation;
(12) the Financial Statements of Goldvision were prepared in accordance
with Chinese generally accepted accounting principles applied on a
consistent basis and present fairly the financial condition of
Goldvision for the dates or periods represented thereby;
(13) the corporate records and minute books of Goldvision contain complete
and accurate copies of all of the constituting documents of
Goldvision, minutes of all meetings of its directors and equity owners
held since its date of incorporation and all resolutions consented to
in writing;
(14) As of the Closing Date:
a. there has been no material adverse change in the financial
position or condition of Goldvision nor any damage, loss or
other change in circumstances materially affecting the
business or property of Goldvision or its right or capacity to
carry on business;
b. Goldvision has not waived or surrendered any right of material
value;
c. Goldvision has not discharged or satisfied or paid any lien
or encumbrance or obligation or liability other than current
liabilities paid in the ordinary course of business;
d. the business of Goldvision has been carried on in the ordinary
course; and
e. Goldvision has not declared or paid any dividends or declared
or made any other distribution on any of its shares nor
redeemed, purchased or otherwise acquired any of its shares
nor agreed to do so;
(15) the entering into of this Contract and the performance of the
obligations contemplated hereby will not result in the violation of
any of the terms or provisions of the constituting documents of
Goldvision, or of any indenture or other agreement, written or oral,
to which Goldvision is a party, or any law, judgement, order, writ,
injunction or decree of any court, administrative agency or other
tribunal or any regulation of any governmental authority;
(16) other than as disclosed in the Financial Statements or the management
of Goldvision, Tiangui has no outstanding debts, bonds, debentures,
mortgages,
7
Investment Contract
--------------------------------------------------------------------------------
notes or other evidence of indebtedness and there are no outstanding
agreements of Tiangui to create or issue any debts, bonds, debentures,
mortgages, notes or other evidences of indebtedness;
(17) Goldvision owns good and marketable title to its services,
obligations, property and assets, including without limitation its
ownership interest in Goldvision assets, free and clear of any and all
mortgages, liens, pledges, charges, security interests,
hypothecations, pre-emptive rights, actions, adverse claims, demands
or any other encumbrance of any nature whatsoever or howsoever
arising;
(18) there are no outstanding actions, suits or proceedings (whether or not
purportedly on behalf of Goldvision), or, to the best of Goldvision's
knowledge, pending or threatened against or affecting Goldvision or
its assets at law or in equity, or before or by any federal, state,
provincial, municipal or other governmental department, commission,
board, bureau, agency or instrumentality and Goldvision is not aware
of any existing grounds on which any such action, suit or proceeding
might be commenced;
(19) Goldvision is not in default under or in breach of any contracts or
agreements, written or oral, or indentures or other instruments to
which it is a party and there exists no state of facts which after
notice or lapse of time or both would constitute such a default or
breach, and all such contracts, agreements, indentures or other
instruments are now in good standing;
(20) Goldvision has duly filed on a timely basis all tax returns required
to be filed by it and has paid all taxes which are due and payable,
and has paid all assessments and reassessments, and all other taxes,
governmental charges, penalties, interest and fines due and payable on
or before the date hereof;
(21) there are no outstanding actions, suits, proceedings, investigations
or claims or, to the best of Goldvision's knowledge, now threatened or
pending against Goldvision in respect of taxes, governmental charges
or assessments, or any matters under discussion with any governmental
authority relating to taxes, governmental charges or assessments
asserted by any such authority;
(22) Goldvision has no outstanding loans which have been made to or
received from or outstanding indebtedness owing to or from directors,
supervisors, former directors, officers, equity owners or employees of
Goldvision nor to any associates of such persons;
(23) there are no material liabilities of Goldvision of any kind
whatsoever, whether or not accrued and whether or not determined or
determinable, in respect of which Goldvision may become liable on or
after the consummation of the transactions contemplated by this
Contract other than liabilities incurred in the ordinary course of
business as of the Closing Date; and
8
Investment Contract
--------------------------------------------------------------------------------
(24) the business of Goldvision has been conducted by Goldvision in all
material respects in compliance with all applicable laws, statutes,
rules, registrations, orders and policies.
ARTICLE 10 COVENANTS OF GOLDVISION
Goldvision covenants with SCP that it shall do the following:
(1) take all necessary steps to protect its existing spectrum licenses,
other license, rights to operate or other government granted approvals
adding to the asset value of Goldvision; SCP has the right to take any
and all steps necessary to cure in defaults with respect to licenses,
rights to operate or other government granted approvals adding to the
asset value of Goldvision.
(2) gain additional spectrum licenses as they become available;
(3) maintain the right and authorization to operate BWIN, VSAT, ISP, Value
Added Telecommunications Service Providerand other similar rights and
authorizations for the duration of the term of the Sales, Marketing
and Operations Agreement;
(4) not claim intellectual property rights to such assets in SCP's shell,
or its assigns; and
(5) not disclose any confidential or proprietary information of SCP as
specified and agreed upon in Schedule C.
ARTICLE 11 OBLIGATIONS OF GOLDVISION
Goldvision shall:
(1) comply, manage, and advise on regulatory and legal requirements or
issues;
(2) seek new spectrum opportunities in other desirable China markets as
mutually agreed upon terms which shall be embodied in a separate
contract;
(3) seek other government licenses and approvals that will increase the
asset value of Goldvision.
(4) seek synergistic investment opportunities for SCP;
(5) provide support for investor related activities as required in the
form of tours, briefs, etc;
(6) ensure that all accounting and auditing will be done in accordance
with the
9
Investment Contract
--------------------------------------------------------------------------------
Generally Accepted Accounting Principles;
(7) allow audit of accounts and operations at least once a year; and
(8) provide reasonable efforts which could help to position Goldvision to
become a publicly traded company.
ARTICLE 12 OBLIGATIONS OF SCP
SCP shall:
(1) provide reasonable financial advice in an effort to position
Goldvision to be ready to become a public company at the appropriate
time;
(2) pay for any audit of Goldvision requested by SCP,
(3) abide by the confidentiality requirements in Schedule C.
ARTICLE 13 NEW PROJECTS
The parties agree:
(1) equity owners of Goldvision will automatically receive net profits for
their respective shares in Goldvision under Chinese company law;
(2) any outside investment in Goldvision will be at a valuation greater
than or equal to the valuation used between Goldvision and SCP for
this investment round. In any case, investment will not alter the
current profit sharing formula, sales cost remuneration formula and
any other negotiated fees; and
(3) Goldvision and SCP will establish new project structures as needed
working out equity participation and profit sharing of investment
partners on a per project basis.
ARTICLE 14 COMPOSITION AND FUNCTION OF BOARD OF DIRECTORS OF GOLDVISION
The Board of Directors is the supreme authority of Goldvision. The
Board of Directors shall be composed of three (3) directors, among which two (2)
shall be appointed by Goldvision and one (1) by SCP. The chairman shall be
appointed by Goldvision and the vice-chairmen by SCP. The terms of office for
the directors shall be three years, and their terms of office may be renewed.
The names of the directors and the chairmen shall be appointed with written
notice.
The following persons are not qualified to be appointed as the director
or the senior officer of Goldvision:
10
Investment Contract
--------------------------------------------------------------------------------
(1) criminally convicted in China or other countries;
(2) administratively punished under the public security regulations of
China;
(3) mainly responsible for causing bankruptcy in another economic
organisation due to mismanagement;
(4) without civil capacity or with restricted civil capacity;
(5) convicted for corruption, bribery, conversion of property,
embezzlement or disturbing the socio-economic order and sentenced, and
the time is shorter than five years from the completion of the
sentence fulfilment; or convicted and deprived of political rights,
and the time is shorter than five years from the completion of the
sentence fulfilment;
(6) acting as the director, head, or manager of a bankrupt or insolvent
company or enterprise and is personally responsible for the bankruptcy
of Goldvision or enterprise, and the time is shorter than three years
from the completion of the bankruptcy and liquidation;
(7) acting as the legal representative of a company or enterprise whose
business license has been revoked due to illegal activities, and is
personally responsible for such illegal activities, and the time is
shorter than three years from the revocation of the business license;
(8) has not paid personal debts of large amount which is overdue; or
(9) acting as civil servants in a government department.
The responsibility and obligation of directors and senior officers
include without limitation, the following:
(1) observe the regulation of Goldvision, honestly perform their duties,
vindicate the interest of Goldvision;
(2) not pursue personal ends by utilizing their status and position in
Goldvision;
(3) shall not accept bribery and other illegal income by using their
position and power in Goldvision;
(4) not possess or convert property of Goldvision;
(5) not embezzle the funds of Goldvision or lend the funds to others;
(6) not deposit the funds of Goldvision in his or her or any other
person's personal
11
Investment Contract
--------------------------------------------------------------------------------
account;
(7) not place the funds of Goldvision as a security guarantee for either
party of Goldvision or any other person;
(8) not operate for self or for others any business similar with the
business of Goldvision or conduct any activities detrimental to the
interest of Goldvision. The income gained through such business
operation or activity shall belong to Goldvision;
(9) not sign any contract or make any deal with Goldvision unless with
consent from the Board of Directors or in accordance with the Articles
of Association of Goldvision;
(10) not disclose any confidential information of Goldvision unless with
consent from the Board of Directors or in accordance with the Articles
of Association of Goldvision; and
(11) compensate the losses to Goldvision caused by violation of law,
administrative regulations or the Articles of Incorporation of
Goldvision in his/her performance of duties to Goldvision.
The Board of Directors shall keep a complete and accurate record of the
meeting.
The following matters shall require the unanimous approval of the directors of
the Board of Directors to be effective:
(1) revision and amendment to Goldvision's Articles of Incorporation;
(2) termination and dissolution of Goldvision;
(3) increase and transfer of Goldvision's registered capital;
(4) approval of stock option and employee bonus plans;
(5) merger of Goldvision with other economic organizations;
(6) Debts, leases;
(7) All capital distributions, dividends, ownership interest distributions
(8) with reasonable advanced notice by Goldvision, any board director
absent from the board meeting will be regarded as give up his/her
voting right in that particular meeting.
The Board of Directors shall decide the following matters by more than
half of the
12
Investment Contract
--------------------------------------------------------------------------------
directors to become effective:
(1) determine and approve significant reports on production planning,
annual operation and fund allocation proposed by the general manager
or president;
(2) appointment of accountant;
(3) take responsibility for the liquidation in time when Goldvision stops
operation;
(4) other significant matters which require decision of the Board of
Directors;
(5) determine the appointment and the remuneration (not including stock
option and bonus plans) of Senior Management; and
(6) Annual operating budget and reinvestment of net profits.
(7) Increase or transfer of major assets, joint venture agreements, and/or
equity investments exceeding 450,000 RMB in investment or any capital
of 450,000 RMB and not included in the annual budget or amended annual
budget. At least one SCP board member or board member substitute will
be present for such votes. By unanimous vote of all members, this
amount can be increased to 900,000 RMB for both items referenced here
in the future--board minutes will reflect this vote and all members
voting if and when it is enacted.
(8) with reasonable advanced notice by Goldvision, any board director
absent from the board meeting will be regarded as give up his/her
voting right in that particular meeting.
Enforcing all the above clauses, each director shall sign a waiver
accepting personal liability for violations by a vote of the board of directors.
ARTICLE 15 LABOR MATTERS
Goldvision shall reorganize its labour force in accordance with the
modern acceptable labour practice and renegotiate and resign all employment
contracts with all retained employees.
ARTICLE 16 TAX
Goldvision shall pay all applicable taxes according to Chinese laws and
regulations and advise SCP of tax liabilities or implications if requested by
SCP.
ARTICLE 17 FOREIGN EXCHANGE CONTROL
The foreign currency transaction of Goldvision shall be conducted
according to
13
Investment Contract
--------------------------------------------------------------------------------
China's relevant regulations on foreign exchange control. Goldvision shall
set up a regular and an investment foreign currency accounts with a bank in
China. Goldvision shall work out a plan to ensure that SCP is paid in Hong
Kong for its management fee and other payments in hard currency.
ARTICLE 18 TERMINATION
During termination, Goldvision Assets shall be distributed in
accordance with the proportion of equity ownership holding possessed by the
parties.
Goldvision shall be dissolved or liquidated under the following
circumstances:
(1) the objectives of Goldvision cannot be realised or are very difficult
to be realised, for example, major natural disasters or radical change
in Chinese law and policy;
(2) Goldvision cannot continue to operate due to force majeure events and
has suffered huge loss;
(3) if Goldvision has a cumulative loss of forty percent (40%) and SCP has
not chosen to cure the condition of the registered capital and the
loss has resulted in that Goldvision cannot operate normally, the
parties shall consult on whether Goldvision should continue. After the
consultation, all the parties agree that Goldvision shall be
terminated;
(4) the loss of Goldvision accounts for eighty percent (80%) of the
registered capital of Goldvision and one party requests the
liquidation of Goldvision and SCP has not chosen to cure the
condition;
(5) one party fails to perform the contractual obligations contained in
this Contract or fails to perform its contractual obligations up to
the standards required under this Contract; and such non-performance
has caused significant loss to the other parties;
(6) for whatever reason Goldvision or its subsidiaries loses without
ability to cure its right to operate its spectrum rights in part or in
whole, ISP rights, VSAT rights, Value Added Services rights as granted
by the Chinese government and SCP believes the business is no longer
viable.
(7) the Chinese government authority has struck Goldvision off the record
or orders it to stop operations due to illegal activities; or
(8) all parties agree to dissolve Goldvision.
The Board of Directors shall establish a liquidation committee composed
of a
14
Investment Contract
--------------------------------------------------------------------------------
minority of members from the defaulting party and the majority of members from
the non-defaulting party and not according to equity ownership in accordance
with the corporate records of Goldvision. The mandate of the liquidation
committee shall be clearing all the assets and debts of Goldvision, making a
financial report and balance sheet, preparing a liquidation plan, and reporting
to the Board of the Directors for approval and implementation. The Board of
Directors shall adopt the liquidation principles and procedures. The Board
of Directors shall decide the composition of the liquidation committee. During
the liquidation period, the liquidation committee shall represent Goldvision in
any litigation involving Goldvision.
Goldvision shall be responsible for its debts with all its assets. The
remaining assets after the payment of all debts shall be distributed to the
parties on the basis of their respective equity ownership holding in Goldvision
at the time of liquidation.
The liquidation committee shall have the right to sell Goldvision as a
"Going Concern" upon the approval of the Chinese Government. The Board of
Directors in consultation with the liquidation committee shall decide the price
of the sale. The parties shall share the proceeds of the sale in accordance with
their respective equity ownership holding in Goldvision at the time of sale.
Provisions set out in this Article shall be valid after this Contract
is expired or Goldvision is early terminated.
ARTICLE 19 CONTRACT ENFORCEMENT
Any revision to the Contract and its Schedules shall be done in
writing. Where any party fails to perform the Contract or seriously violate the
clause of the Contract, and cause Goldvision's failure to conduct normal
operation or reach the operation purpose stated in the Contract, the breaching
party shall be deemed to cause the formation of the liquidation committee. If
Goldvision and SCP agree to continue to operate, the breaching party shall bear
the economic loss in the amount equal to its loss.
The following constitutes a default event:
(1) any party fails to perform its obligations under this Contract in
the sole opinion of the Conciliation Committee as evidenced by its
formal report after due process including hearing and debate, and
such non-performance remains for ninety (90) days from the date the
report of the Conciliation Committee was delivered, ;
(2) any party requests liquidation or ordered to be liquidated;
(3) any party or most of its assets are taken over by a liquidation
organization or its management; or
15
Investment Contract
--------------------------------------------------------------------------------
(4) any party declares bankrupt or is insolvent or applies for
bankruptcy.
Under any of the above-referenced circumstances, the non-defaulting
party shall have the right to adopt any remedial means under this Contract or
law, which may include legal actions in the court or other institutions with
legal authority in order to stop the default and breach. The defaulting party
shall not oppose to any legal measures or means adopted by the non-defaulting
party. The defaulting party shall be liable for its negligence that has caused
that this Contract and its Schedules could not be performed or fully performed.
The non-defaulting party has the following rights:
(1) to apply to the original approval authority for the termination of
this Contract in accordance with this Contract;
(2) to claim and xxx for damages from the defaulting party caused by the
default of the defaulting party; and
(3) to agree to continue the operation of Goldvision, however, such
agreement shall not exonerate the defaulting party from paying
damages to the non-defaulting party.
The non-defaulting party shall have the following means to enforce its
rights:
(1) cessation of infringements;
(2) removal of obstacles;
(3) return of property;
(4) compensation for losses;
(5) payment of contract breach damages; and
(6) any other means allowed by law.
The limitation period for the claim for compensation shall not be more
than four years from the time that the non-defaulting party knows or should have
known that its rights have been infringed upon or this Contract has been
breached.
ARTICLE 20 DISPUTE SETTLEMENT
The construction, validity, interpretation, performance and settlement
of the disputes shall be governed by the laws announced or publicized in China.
Where there do not exist any laws governing certain matters in relation to this
Contract in China, general practice on international business shall be applied.
16
Investment Contract
--------------------------------------------------------------------------------
All disputes concerning the Contract or the execution of this Contract
shall be settled through friendly discussion. If the parties cannot resolve the
disputes through friendly discussion, any party may submit the disputes to
Singapore International Arbitration Centre according to its Arbitration Rules.
The arbitration proceedings are in English and Chinese. The arbitration
proceedings shall be conducted in accordance with the Chinese laws. The
arbitration fee should be absorbed by the failing party. The decision shall be
final and binding upon all parties.
Where a dispute arises and is being settled through arbitration, the
remaining provisions not in dispute shall still govern and the parties shall
continue to perform their respective obligations.
ARTICLE 21 NOTICE AND LANGUAGE
Any notice or communication, which is issued from one party to any
other party, if it is sent by cable, telex, fax, e-mail, and concerns the right
and obligation of all parties, a written notice shall be followed by mail. The
legal addresses set forth in this Contract shall be deemed to be the
correspondence addresses of the parties.
This Contract is written in both English and Chinese, and both languages
are equally authoritative. This Contract is signed in Beijing, China, by the
authorized representatives of Goldvision and SCP on the date first written
above.
THE CORPORATE SEAL of )
STRATEGIC COMMUNICATIONS )
PARTNERS, INC. )
was affixed in the presence of: ) c/s
)
-------------------------------------- )
Authorised Signatory )
)
-------------------------------------- )
Authorised Signatory
THE CORPORATE SEAL of )
BEIJING GOLDVISION TECHNOLOGIES )
LTD. was affixed in the presence of: )
) c/s
-------------------------------------- )
Authorised Signatory )
)
-------------------------------------- )
Authorised Signatory
17
Investment Contract
--------------------------------------------------------------------------------
SCHEDULE A
o GoldInfo ISP Authorization
o Goldinfo VSAT Authorization
o Goldtel BWIN Network Authorization
o List of Assets including cash balances of all accounts on Closing Account
Statements as of November 29, 2002
o List of Physical Network Assets of Goldtel
o List of Physical Infrastructure Assets of Goldinfo
o List of current customer accounts of Goldinfo and Goldtel
o Mpeg Technology
o (Other Intellectual Property Assets)
18
Investment Contract
--------------------------------------------------------------------------------
SCHEDULE B
Beijing Goldwave Network Developments Incorporated, Ltd. (Chinese characters
omitted), a Chinese company, having an office at Central TV Tower No.
02-21, Xx. 00 Xx Xxx Xxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxx'x Xxxxxxxx of
China 100036
Beijing GoldTech System Integration Incorporated, Ltd. (Chinese characters
omitted), a Chinese company, having an office at Central TV Tower No.
02-21, Xx. 00 Xx Xxx Xxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxx'x Xxxxxxxx of
China 100036
19
Investment Contract
--------------------------------------------------------------------------------
SCHEDULE C
CONFIDENTIALITY PROTECTION OF TRADE SECRETS OF SCP
This agreement is made and entered into this __________day of _________, 2002
between_______________________________________________________________________as
"Disclosee" and STRATEGIC COMMUNICATIONS PARTNERS, INC. (Hereafter referred as
STRATEGIC).
IN CONSIDERATION OF THE DISCLOSING OF CERTAIN INFORMATION by STRATEGIC to
Disclosee, the parties hereby agree as follows:
For purposes of this Agreement only such confidential information, disclosed
verbally, or via special access through the Internet, or in writing and
designated as confidential by STRATEGIC, shall be treated as confidential under
terms of this agreement. This includes but is not limited to technical,
financial and intellectual information of a proprietary nature. Disclosee agrees
to treat such confidential information as property of STRATEGIC and agrees to
use the same degree of care that Disclosee would use in protecting their own
proprietary information.
Disclosee agrees to not disclose any STRATEGIC information to any third party
without the written permission and consent of STRATEGIC or its designated
representative. In the case of such disclosure, even with permission, the third
party must be similarly bound by signing of this agreement.
Disclosee agrees not to use proprietary information for any purpose whatsoever
without the written consent of STRATEGIC. Disclosee agrees not to capture and or
store any information designated by this agreement in any medium, electronic or
otherwise. This agreement shall include all information regarding the software,
programs, information databases, information systems, computer network
resources, and all plans, descriptions and representations of STRATEGIC, its
products and services, and prototypes, and all data found stored on any Internet
server.
Disclosee agrees that during the period of twenty four (24) month following the
date hereof, they will not, directly or indirectly, engage in (or assist others
to engage in) any business, trade or occupation that produces, trades, develops,
sell, and/or markets in wholesale or retail channels any product or service in
competition with the product or services of STRATEGIC's about which the
Disclosee has or will obtain confidential information, as contemplated by this
agreement, such as production, development, selling or marketing of any such
product or service.
This agreement shall be binding upon the parties hereto and their respective
heirs, administrators, successors, assigns, representatives, agents and
employees. Parties may document in writing, within ten days of any oral
communication, any items discussed that are designated as confidential.
This agreement may not be superceded except by written agreement of the parties
hereto. This agreement shall be construed and interpreted according to the laws
of the State of
20
Investment Contract
--------------------------------------------------------------------------------
Wyoming. A waiver of any breach by the other party shall be deemed a waiver of
subsequent breach.
Upon a breach of this agreement by Disclosee, STRATEGIC may pursue all legal or
equitable remedies available to it and will be entitled to recover its costs,
expenses and reasonable attorney's fees incurred in enforcing this agreement.
All terms applying to the Disclosee, apply for all material, information, items,
and processes equally to STRATEGIC relative to the Disclosee.
Disclosee and STRATEGIC agree that the restriction herein is reasonable.
The representative of STRATEGIC and Disclosee executing this agreement
are duly authorized on behalf of their respective parties, and once
executed, the Agreement shall be valid and binding upon each party.
Once executed, this document is binding upon Disclosee and upon STRATEGIC.
STRATEGIC COMMUNICATIONS
DISCLOSEE PARTNERS, INC.
Signed By:
---------------------------- ----------------------------------
Print Name:
---------------------------- ----------------------------------
Signed By:
---------------------------- ----------------------------------
Print Name:
---------------------------- ----------------------------------
Date:
---------------------------- ----------------------------------
21
