Unassociated Document


    Unofficial
      Summary Translation 

    


    Cooperative
      Agreement

    


    


    Party
      A:
      Beihai Hi-Tech Wealth Technology Development Co., Limited 

    


    Party
      B:
      Shanghai Xiang Guo Wang Lu Technology Development Limited Co.,
      and  Shanghai
      Xiang Guo Advertising Limited Co.

    


    1. Cooperation
      Principles:

    


    
      	 	
              ·

            	
              Both
                parties agree to establish separate principles for direct TV marketing
                and
                distribution. Party B will be the sole direct TV marketing and distributor
                of Party A’s goods, regardless of any possible changes in the model of the
                goods.

            


    

    


    
      	 	
              ·

            	
              Party
                A bears the cost to supply the goods for direct TV marketing (including
                tax):

            


    

    Costs
      of
      supply (“COS”) = Bill Of Material price (“BOM”) + damages incurred during
      production + costs of production + service charge (after-sales) + reasonable
      damage + research fees + tax.

    


    
      	 	
              ·

            	
              Both
                parties agree that the COS provided by Party A to Party B should
                be
                evaluated every 60 days. In the event of any outrageous cost, over
                10% of
                previously evaluated, the COS shall be re-evaluated by both
                parties.

            


    

    


    
      	 	
              ·

            	
              Party
                A should notify Party B the BOM per
                month.

            


    

    


    
      	 	
              ·

            	
              If
                Party A carries out any major distributions activities and having
                a major
                adjustment to the COS for the distribution, both parties should evaluate
                in advance the COS provided by Party A to Party
                B.

            


    

    


    
      	 	
              ·

            	
              The
                principle of COS for the cellular phone accessories provided by Party
                A to
                Party B are based on the followings: The supply of accessories that
                are
                produced Party A are based on the costs of production. The supply
                of
                accessories that are purchased externally depends on their purchase
                price.

            


    

    


    
      	 	
              ·

            	
              To
                encourage Party B, Party A will subsidize Party B for TV advertising
                on a
                monthly basis, subject to the quantity of the goods sold. Prior to
                availability of a new model in the market, both parties should have
                a
                mutual agreement for the amount and standard of subsidy from Party
                A to
                Party B.

            


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


    


    
      	 	
              ·

            	
              The
                subsidy standard for F8 brand is RMB400 per device. If there are
                any
                upgraded new goods that have been released in the market, both parties
                can
                adjust the subsidy standard for F8 brand. The subsidy cost for other
                goods
                will be calculated separately, and will be an exhibit to this agreement.
                

            


    

    


    
      	 	
              ·

            	
              The
                number of goods sold by the party A will be counted from the starting
                date
                of the advertisement through the actual quantity of the products
                sold out
                by Party A, (including the quantity of the products that Party A
                sold
                through other means of
                distribution).

            


    

    


    
      	 	
              ·

            	
              Both
                parties agreed that party B will be compensated for the subsidy from
                the
                first broadcasting date of the TV advertisement, which must be supported
                by TV program broadcasting record.

            


    

    


    
      	 	
              ·

            	
              The
                deadline for compensating subsidy to party B will be extended to
                the
                60th
                day following the termination of this agreement (starting from the
                formal
                termination date of this agreement), provided that Party B promise
                to
                advertise the monthly volume of commercial attaining to every day
                for 180
                minutes and continue over two
                months.

            


    

    


    
      	 	
              ·

            	
              The
                subsidy will be clearing before the 10th day of every month. Party
                A
                should pay Party B in cash (to
                Shanghai
                Xiang
                Guo
                Advertising Ltd. which
                will collect and
                issue checks on behalf of Party B). In the event of any delays in
                the
                payment, Party A should pay Party B penalty of 0.3% for each day.
                If the
                delay in payment exceeds 15 business days, Party B has rights to
                take
                legal action against party A; and Party B has right to breach this
                agreement (stop broadcasting the advertisement as stipulated in this
                agreement).

            


    

    


    
      	 	
              ·

            	
              If
                Party B obtains (passes) the qualification standard for local
                distribution, both parties agree to have a new agreement with respect
                to
                COS and subsidy, as a supplement to this
                agreement.

            


    

    


    
      	 	
              ·

            	
              To
                protect Party B’s right, Party A agrees to let the people assigned by
                Party B to second in Party A’s factory to inspect the quantity and
                production flow. Therefore, both parties agree to sign an “Inspection
                Method of the Sale of HTW Smartphone”, as a supplement to and concurrent
                with executing this agreement.

            


    

    


    
      	 	
              ·

            	
              Based
                on the unified retail market price in the country and approved by
                Party A,
                Party B has the right to decrease the selling price no more than
                RMB200.

            


    

    


    2. Method
      of
      Co-operation: Party A authorizes Party B for a countrywide direct TV marketing
      of the product line of [Stealth] cell phone (“HTW cell phone” under the Brand
“Shang Wu Tong”). Party B is responsible for an overall, widespread and
      effective direct TV marketing broadcast, promotion and sale of “HTW cell phone”
in China. Party B can obtain 100% of the profit resulting from the direct TV
      marketing. However, Party B cannot sell the products on the market through
      a
      store or to wholesalers.


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


    


    3. Right
      to
      use:

    


    
      	 	
              ·

            	
              Scope:
                Limited to the marketing promotion and the sale of the HTW cell phone
                products within the effectiveness of this agreement made by Party
                A and
                Party B.

            


    

    


    
      	 	
              ·

            	
              Party
                A authorizes Party B, within the duration of this agreement, to use
                relevant trademarks, stores and enterprise identification of Party
                A such
                as “HTW”, “Shang
                Wu Tong” “Stealth Cell Phone”
                in
                the direct TV marketing.

            


    

    


    
      	 	
              ·

            	
              In
                the marketing promotion of the HTW cell phone, Party B shall promote
                the
                brand under the names “Shang Wu Tong ”, “HTW Stealth Cell Phone”. Names
                and models of products can be changed in the
                future.

            


    

    


    
      	 	
              ·

            	
              The
                image representative will be arranged by Party A. Party B can include
                additional image representative subject to Party A’s
                consent.

            


    

    


    4. Product:
      Product means cell phone products of “Shang Wu Tong” or its extensive-brand
      within the effectiveness of this agreement. 

    


    5. Guarantee
      of the product quality: Party A guarantees that the supplied products meet
      the
      qualifications under the relevant laws and regulations in China.

    


    6. The
      price
      chart for F8 product:

    


    
      	
              Category

            	
              Direct
                TV Marketing

            	
              Nationwide’s
                Retail Price

            	
              Costs
                of supply

            	
              Commercial
                Subsidy

            
	
              Acorn
                International

            	
              3780-3980

            	
              3980

            	 	
              400

            
	
              HTW’s
                Distribution Price Chart

            
	
              Provincial
                Agency

            	
              --

            	
              3980

            	
              2630

            	
              200

            
	
              Local
                Agency

            	
              --

            	
              3980

            	
              2930

            	
              100

            
	
              Dealers

            	
              --

            	
              3980

            	
              3580

            	
              0

            


    

    


    


    Duration
      of Agreement: One year (effective from the date of execution of this
      agreement).


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


    


    Production:
      In accordance to the orders received from the previous month, on the
      10th
      day of
      each month, both parties will carve out the order plan for the following month.
      A written agreement shall be signed by both parties’ representatives with
      respect to such ordering plans per month. In the event that there are any
      changes to the status of the monthly ordering plan, party B should give 15
      days
      advance written notice to party A.

    


    Under
      the
      monthly ordering plan, Party A is responsible for production of goods.


    


    After
      the
      execution of the monthly ordering plan, Party B shall, within 3 working days,
      make a deposit payment to party A for 10% of the order price. Upon delivery
      of
      the goods, such 10% payment should be applied to the remaining
      balance.

    


    Party
      B
      shall order the goods and indicate the time of delivery via facsimile (the
      date
      of order and time of delivery shall be over 7 working days). Each monthly
      ordering plan is independently valid and effective, and this Agreement is a
      supplement to its provisions.

    


    Party
      A
      should deliver the goods to Party B on the date specified in the order forms.
      Party B should authorize representatives to be sent to Party A’s factory to
      examine and pick up the goods. Within 5 working days after receiving and
      examining the goods, Party B should transfer the outstanding amount in full
      to
      the bank account specified by Party A. Thereafter, Party A issues the invoice
      of
      valued-added tax in full amount to Party B within 1 working day after receiving
      the money. If Party B delays the payment, Party B should pay 0.3% penalty for
      every day of such delays. If the delay is not cured within 15 working days,
      Party A has right to take legal action against Party B. Both parties agree
      to
      sign a “HTW examining standard”, which is attached as an exhibit to this
      agreement.

    


    Party
      A
      is responsible for the delivery of the ordered goods to Beijing, Shanghai and
      Guangzhou at the stations specified by Party B. Party A is also responsible
      for
      any expenses that may occur before the goods are delivered to the destinations
      mentioned above. If Party B requests the goods to be delivered via airmail,
      it
      should be stated in the order form in advance and be responsible for any
      additional fees.

    


    Party
      B
      has the ownership right to the TV commercials.

    


    Agreement
      dated as of April 10, 2006.