Exhibit 10.36
(ENGLISH TRANSLATION)
COOPERATION AGREEMENT
Party A: Ministry of Education
ShanDong Province
Party B: Beijing Tengtu TianDi Network Co. Ltd.
Based on the foundation of the already signed Memorandum of Intent regarding the
cooperation framework between the Audio/Visual Education Department under the
Ministry of Education of the ShanDong Province and Beijing Tengtu Co., both
Parties have now reached the following agreement on the establishment of the
ShanDong Province Educational Information Network and the implementation of the
"School-To-School Connection - Phase I" project.
AGREEMENT #1: DEFINITION
1. School-To-School Connection - Phase I" Project
Under the Agreement, all the elementary/secondary schools under Party A
shall be connected with the Morning Sun Resources Center of the
National Center for Audio/Visual Education under the Ministry of
Education through the Satellite-Based Broadband Educational network.
2. Main-Trunk Network of the ShanDong Province Educational Information
Network
This Main-Trunk Network is formed by 4-level Centers: the Provincial
Educational Information Center, Regional Node-Center, City-Level
Educational Information Center, and the County-Level Educational
Information Center, thus realizing broadband connection for these
4-level Centers. Upon completion of the establishment of the Main-Trunk
Network, it is then able to fully support educational system office
automation, educational information dissemination on the network, and
mutual sharing of various types of educational resources.
AGREEMENT #2: COOPERATION ITEMS
1. Parties A and B shall jointly set up the technical specifications and
system commissioning standards in order to fully support the
establishment of the ShanDong Province Educational Information Network
and its associated educational resources.
2. Parties A and B shall jointly implement the "School-To-School
Connection - Phase I" Project in order to provide the Information
technology (IT) educational environment for the elementary/secondary
schools in ShanDong Province.
AGREEMENT #3: RIGHTS AND RESPONSIBILITIES OF PARTY A
1. Responsible for stipulating the related policies and implement
associated procedures to encourage all regions to establish the various
levels of educational information centers according to the technical
standards and timescales set up by both Parties.
2. Responsible for coordinating with all the Connection Channel Providers.
3. Promises to utilize Party B's investment reasonably and efficiently;
and accept the supervision of the utilization of funding by Party B.
4. Promises to allow Party B to act as the strategic partner of the
"School-To-School Connection - Phase I" Project for the ShanDong
Province.
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5. Responsible for the unified management of the operation of the ShanDong
Province Educational Information Network.
6. Jointly stipulate with Party B the redeemable resources utilization
policy and standard. Resources will be provided on redemption and
downloaded with authorization.
7. In order to guarantee that Party B is able to redeem its investment,
Party A shall request all the elementary/secondary schools in the
Province to gradually connect to the Broadband Satellite Network and
the Main-Trunk Network of the ShanDong Province Educational Network.
8. Implements positive measures to encourage and support all the
elementary/secondary schools in ShanDong Province to use Party B's
educational software jointly promoted by the Ministry of Education and
Party B under "Operation Morning Sun".
9. To complete the implementation of the "School-To-School Connection -
Phase I" project for at least 1,000 elementary/secondary schools within
the period from July 1 to September 30, 2001.
10. To complete the "School-To-School Connection - Phase I" project
associated with at least 5,000 elementary/secondary schools before the
end of the calendar year 2001.
11. To complete the implementation of the "School-To-School Connection -
Phase I" project for approximately 12,000 elementary/secondary schools
before the calendar year 2002.
12. Set up a "School-To-School Connection - Phase I" Project Implementation
Leading Group, with members appointed by both Parties. Under the
Leading Group is an Operating Office which will be formed by
representatives appointed by both Parties.
13. Has the right to evaluate the works performed by Party B and identify
any parts deemed unreasonable or unsatisfactory. Party A shall then
help to resolve the problems.
AGREEMENT #4: RIGHT AND RESPONSIBILITIES OF PARTY B
1. The establishment of a Main-trunk Network of the ShanDong Province
Educational Network requires the investment of approximately RMB
56-Million. Party B promises to inject the required capital in phases.
Before the end of September, 0000, XXX 10-Million will first be
invested mainly for the establishment of the ShanDong Provincial
Educational Information Center.
2. To invest an additional RMB 20-Million before December 31, 2001, mainly
for the establishment of educational resources. The investment shall be
increased by 20% in proportion every year thereafter. With the view of
improving the quality of the educational resources continuously, the
resources customers' opinions shall be consulted every 3 months. Should
the complaints deemed reasonable, Party B shall resolve the problems
together with Party A.
3. To assist Party A to set up plans for the establishment of the ShanDong
Province Educational Information Network and the Educational
Information Center.
4. Assist Party A to set up the unified system commissioning standards,
and assist Party A to commission the various levels of Portals.
5. Before the end of the calendar year 2002, establishment of the
City-Level Educational Information Center should be completed at the
City under the direct jurisdiction of the ShanDong Province, and more
than 50% of the elementary/secondary schools should have passed the
commissioning of the "School-To-School Connection - Phase I" Project.
Party B shall then furnish RMB 0.5-Million to praise, in the name of
Party A, that City. That City shall also be awarded the "Teng Fai Cup",
funded by Party B.
6. Before the end of June, 2003, establishment of the County-Level
Educational Information Center should be completed at the County under
the direct jurisdiction of the ShanDong Province, and more than 50% of
the elementary/secondary schools should have passed the commissioning
of the "School-To-School Connection - Phase I" Project. Party B shall
then furnish RMB $300,000 to praise, in the name of party A, that
County. That County shall also be awarded the "Tu Kiang Cup", funded by
Party B.
7. Provides satellite reception equipment, application software (See
Attachment #1) and associated training, free of charge, to those
elementary/secondary schools which have implemented the
"School-To-School Connection - Phase I" Project (approximately RMB
$4,500 for each school).
8. Has the right to evaluate the works performed by Party A and identify
any parts deemed unreasonable or unsatisfactory. Party B shall then
help to resolve the problems.
AGREEMENT #5: REVENUE
1. Revenue sources from the Resources Utilization Fees paid by the
subscribing schools which are connected with the "Morning Sun Resources
Center" of the National Center for Audio/Visual Education under the
Ministry of Education (see Attachment #1 for details).
2. Resources Utilization Fees will be collected by the "Operating Office"
as specified in Agreement #3, Item 12, twice a year, at the first month
of each academic term and for the rest of the 6 months at one time.
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3. Of the utilization fees collected by Party B, 17%, 10%, and 8% shall be
allocated to the County-Level, City-Level and Provincial-Level
Educational Information Centers respectively. The remaining 65% shall
be kept by Party B. On completion of redeeming the investment by Party
B, the standard of utilization fees collection and the method of
distribution of revenue shall then be reviewed and set accordingly.
AGREEMENT #6: TERMS OF CONFIDENTIALITY
Both Parties shall keep the materials, information and intellectual rights
belonging to the opposite Party strictly confidential and shall not leak the
same to the third Party.
AGREEMENT #7: CHANGES TO AND TERMINATION OF CONTRACT
Through mutual consultation by both Parties, changes to or termination of this
Agreement shall be made in written form. Should either Party wishes to terminate
this Agreement, it shall inform the opposite Party 30 days in advance by
writing.
AGREEMENT #8: UNPREDICTABLE INCIDENTS
Unforeseen, unavoidable and uncontrollable incidents, such as Government order
of prohibition, change of law, fire, earthquake, labor strike, turmoil, war,
power outage, communication circuits breakdown, etc. which has caused one Party
or both Parties unable to implement this agreement, the responsibility of
infringement of contract can then be exempted. The Party which cannot implement
the contract shall inform the opposite Party timely; and shall provide evidence
for the unpredictable incidents should it be requested by the opposite Party.
AGREEMENT #9: RESTRICTION ON TRANSFER OF RIGHTS AND RESPONSIBILITIES
Without any prior written agreement, either Party shall not transfer its rights
and responsibilities endowed by this agreement to the Third Party.
AGREEMENT #10: RESOLUTION OF DISPUTES
Any dispute arises during the implementation of this contract shall initially be
resolved through friendly consultation. However, should the consultation fails,
both Parties agree that the dispute be arbitrated by the Beijing Arbitration
Committee. The verdict by the Arbitration Committee shall be treated as the
final verdict.
AGREEMENT #11: EFFECTIVENESS
1. Any uncompleted matters in this Agreement shall be resolved through
friendly consultation by both Parties. Contents and results of the
consultation shall appear in separate agreement, notes or attachment.
These documents will form part of this Agreement and cannot be
segregated; and they all carry equal legal effect as this Agreement
after signed and stamped by both Parties.
2. This Agreement is in quadruplicate. Each Party is to retain 2 copies
and they all carry equal legal effects.
3. The effective period for this Agreement is from September 1, 2001
through September 1, 2014, and will take effect as from the date that
this document is signed and stamped by Party A and Party B.
Party A: Ministry of Education Party B: Beijing Tengtu TianDi
ShanDong Province Network Co. Ltd.
Representative: Representative:
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Date: Date:
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"SCHOOL-TO-SCHOOL CONNECTION - PHASE I "PROJECT FOR THE ELEMENTARY/SECONDARY
SCHOOLS IN SHANDONG PROVINCE
LIST OF PRODUCTS AND FEES
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Category Product Cost
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Product 1. Satellite Reception Card 2. KU 11, 30GHZ, 1 PBI High Freq.
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Head 3. 1 KU1.2M Antenna 4. Tengtu Customer End Application Software
5. Tengtu Multimedia Teaching Resources Database (100 CD) 6. Tengtu Satellite
Resources Database Management System Provided by Party B Free of charge
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Authorized resources Services 1. 160G/Yr. Satellite
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Transmitted Teaching resources Contents 2. 400 Hrs/Yr. Distance Learning
Classroom Programs 3. Free Satellite Technology Training & Installation
Senior High Schools: RMB 500/Month Junior High Schools (include 9 years
schools): RMB 300/Month Elementary Schools: RMB 200/Month
Note: 160 G/Yr. Resources (approximately 300 CD's) to be donated to authorized
schools.
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