Unassociated Document


    


    


    
      
        

      



    
 

    
      	
              Exclusive
                Service Agreement

            


    

    


    


    


    
      
 


    


    among

     

    Beijing
      China Broadband Network Technology Co., Ltd.

    


     

    Jinan
      Guangdian Jiahe Digital Television Co., Ltd.

     

    and

     

    Jinan
      Broadcast &Televison Information Network Center 

    


    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Table
      of Contents

    
 

    
      	
              Article

            	
              Page

            
	 	 	 
	
              RECITALS

            	
              3

            
	 	
               

            
	
              1.

            	
              DEFINITIONS
                AND INTERPRETATIONS

            	
              3

            
	 	 	
               

            
	
              2.

            	
              REPRESENTATIONS
                AND WARRANTIES

            	
              5

            
	 	 	
               

            
	
              3.

            	
              SERVICES
                PROVIDED BY PARTY A TO PARTY B AND PARTY C

            	
              5

            
	 	 	
               

            
	
              4.

            	
              SERVICES
                PROVIDED BY PARTY B AND PARTY C TO PARTY A

            	
              6

            
	 	 	
               

            
	
              5.

            	
              NON-COMPETITION

            	
              7

            
	 	 	
               

            
	
              6.

            	
              FEES
                AND PAYMENT TERMS

            	
              7

            
	 	 	
               

            
	
              7.

            	
              FINANCIAL
                MANAGEMENT

            	
              8

            
	 	 	
               

            
	
              8.

            	
              EFFECTIVE
                DATE, BREACH AND TERMINATION

            	
              9

            
	 	 	
               

            
	
              9.

            	
              GOVERNING
                LAW AND DISPUTE RESOLUTION

            	
              11

            
	 	 	
               

            
	
              10.
                

            	
              MISCELLANEOUS
                PROVISIONS

            	
              12

            


    

     

     

    
      
        Exclusive
          Service Agreement 

        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    

    
       

      THIS
        EXCLUSIVE SERVICE AGREEMENT
        (Agreement)
        is made
        on this [•]
        day
        of
        December 2006 in the People's Republic of China ("PRC")
        

      


      by
        and among:

      


      Beijing
        China Broadband Network Technology Co., Ltd.,
        a
        limited company existing under the laws of the PRC, (Party
        A);

      


      Jinan
        Guangdian Jiahe Digital Television Co., Ltd.,
        a
        limited company existing under the laws of the PRC, with its registered address
        at Jinan,
        PRC and
        its legal representative is Jiang Bin, a PRC resident
        (Party
        B);

      


      and

      


      Jinan
        Broadcast &Televison Information Network Center,
        a
        limited company existing under the laws of the PRC, with its registered address
        at [•],
        PRC (Party
        C)

      


      (individually
        a Party
        and
        collectively the Parties).

      


      


      RECITALS

      


      	A.  	
              Party
                A is engaged in the provision of access services including wired
                or
                wireless broadcast/television broadband, digital private lines, web-based
                internet content, consulting services, software, systems integration,
                work
                for hire and other digital television value-added
                businesses;

            


      


      	B.  	
              Party
                B and Party C are engaged in the Business ( as defined below) and
                have
                obtained the necessary permit for the lawful operation of its
                Business;

            


      


      	C.  	
              Party
                A is willing to provide, and Party B and Party C are willing to accept,
                technical services in relation to Party B and Party C 's Business;
                Party B
                and Party C are willing to provide, and Party A is willing to accept,
                backup services in relation to Party B and Party C 's
                Business.

            


       

      NOW,
        THEREFORE,
        THE
        PARTIES AGREE AS FOLLOWS:

      


      
        	
                1.

              	
                DEFINITIONS
                  AND INTERPRETATIONS

              


      

      


      1.1 Definitions.
        Unless
        otherwise indicated, the following terms in this Agreement shall have the
        meanings set forth below:

      


      
        
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                Effective
                  Date

              	
                the
                  effective date of this Agreement, which shall be the date first
                  indicated
                  above;

              
	 	 	 
	 	
                Event
                  of Breach

              	
                as
                  defined in Article 8.3 below;

              
	 	 	 
	 	
                Business

              	
                access
                  services with respect to wired or wireless broadcasting/television
                  broadband, digital private lines and website as well as internet
                  content
                  services and internet value-added services, and other wired or
                  digital
                  television value-added businesses as agreed upon by the Parties;
                  

              
	 	 	 
	 	
                Financial
                  Statements

              	
                cash
                  flow statements, balance sheets, profit and loss statements and
                  any other
                  financial statements relating to the Business,
                  which shall be prepared in accordance with international accounting
                  standards;

              
	 	 	 
	 	
                PRC
                  Law

              	
                all
                  laws and regulations of the PRC which are applicable upon and after
                  the
                  date of signing of this Agreement;

              
	 	 	 
	 	
                Project
                  Account

              	
                as
                  defined in Article 7.1.1;

              
	 	 	 
	 	
                RMB

              	
                Renminbi,
                  the lawful currency of the PRC.

              


      

      


      1.2  Interpretations.
        

      


      1.2.1 The
        headings herein are for reference purposes only and do not affect the meaning
        or
        interpretation of any provision hereof. 

      


      1.2.2 Any
        reference herein to an Article or Appendix is to an article or appendix of
        this
        Agreement. The use of the plural shall include the use of the singular, and
        vice
        versa. The use of the masculine shall include the use of the feminine, and
        vice
        versa.

      


      1.2.3 Unless
        otherwise indicated, a reference herein to a day, month or year is to a calendar
        day, month or year. A reference to a business day is to a day on which
        commercial banks are open for business in both the PRC and Germany.


      


      
        
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                2.

              	
                REPRESENTATIONS
                  AND WARRANTIES

              


      

      


      2.1 Parties.
        Each
        Party represents and warrants that, as of the date of signing
        hereof:

      


      2.1.1 it
        has
        full power and authority to execute and deliver this Agreement and to perform
        its responsibilities and obligations hereunder; and

      


      2.1.2 it
        shall
        maintain as strictly confidential the provisions and existence of this Agreement
        and any information relating to the Business of the other Party to which
        it
        might have access during the performance of this Agreement, including without
        limitation customer database, financial and business development plans, market
        research and other information deemed to be confidential by such other
        Party.

       

      2.2 Party
        B. 
        Party B
        represents and warrants that, as of the date of signing hereof, it has obtained
        and will maintain the validity of all permits from the relevant governmental
        authorities necessary for the lawful operation of its business and its
        performance of this Agreement.

      


      2.3 Party
        C. 
        Party C
        represents and warrants that, as of the date of signing hereof it has obtained,
        and will maintain the validity of, all permits from the relevant governmental
        authorities necessary for the lawful operation of its business and its
        performance of this Agreement. 

      


      
        	
                3.

              	
                SERVICES
                  PROVIDED BY PARTY A TO PARTY B AND PARTY
                  C

              


      

      


      3.1  Exclusivity.
        Party
        B
        and Party C warrant to Party A that during the promotion of the interactive
        digital television businesses, priority will be given to Party A’s internet
        access service (IP or CM) as the circuit .

      


      Party
        B
        and Party C agree to retain Party A as its exclusive services provider with
        respect to CM broadband access services. Specifically, Party B and Party
        C
        (including for purposes of this Article any of its Affiliates and Subsidiaries)
        shall not retain any third party to provide services with respect to CM
        broadband access services, which are the same as or similar to those provided
        by
        Party A under this Agreement.

      


      3.2   Business-Related
        Services. Party
        A
        undertakes to provide various technical services to Party B and Party C
        including but not limited to, assisting Party B and Party C in the
        following:

      


      
        
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      3.2.1 Party
        A
        will provide internet access services (IP or CM) when Party B and Party C
        promote their interactive digital television business;

      


      3.2.2 entering
        into an exclusive cooperation agreement with Party B and Party C with respect
        to
        access services of CM broadband; Party A will use current CM and CMTS terminal
        equipment and will implement new CM terminals in an effort to provide the
        relevant services to Party B and Party C;

      


      3.2.3 provide
        technical troubleshooting assistance, software support, and other technical
        services;

      


      3.2.4 provide
        application software for servers and provide for the continued development,
        upgrading, and implementation of application software for
        customers;

      


      3.2.5 provide
        training services to technical support personnel of Party B and Party C and
        consulting services with respect to the Business;

      


      3.2.6 any
        other
        reasonable technical services as required by Party B and Party C;

      


      


      
        	
                4.

              	
                SERVICES
                  PROVIDED BY PARTY B AND PARTY C TO PARTY
                  A

              


      

      


      4.1 Exclusivity.
        Party
        B
        and Party C shall contribute and share resources, including but not limited
        to,
        governmental authorizations, and customer data records.

       

      4.2 Business-Related
        Services.

      


      4.2.1 Party
        B
        and Party C will afford all necessary support, assistance, and preferential
        treatment to Party A, including but not limited to, Party B’ s preferential
        treatment to Party A with respect to circuit, channel, CM physical transmission
        systems, and optical access networks used in the wired TV network;

      


      4.2.2 Party
        B
        and Party C will afford preferential treatment to Party A with respect to
        the
        use of equipment rooms, business offices, project services facilities, and
        customer service centers;

      


      
        
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      4.2.3 Party
        B
        and Party C will contribute and share resources including, but not limited
        to,
        governmental authorizations and customer data records;

      


      4.2.4 Party
        B
        and Party C will maintain the network of CM and CMTS terminal equipment used
        by
        Party A. 

      


      
        	
                5.

              	
                NON-COMPETITION
                  

              


      

      


      5.1 Party
        B
        and Party C shall not directly or indirectly or cause its respective
        shareholders to directly or indirectly(through agency or other methods)
        encourage or ask for any invitation from, accept suggestions of, consult
        or
        negotiate with, or provide any information to any other individual or entity
        related to any transaction or services under this Agreement.

      


      5.2 If
        Party
        B or Party C or any of their shareholders, are in receipt of suggestions
        or
        other information with respect to any aspect of the Business from third party,
        Party B and Party C must immediately notify the contents of such information
        to
        Party A immediately. Party B and Party C shall ensure that their shareholders
        comply with Article 5. Party B and C will be liable for any breach of this
        Article by their shareholders. 

      


      
        	
                6.

              	
                FEES
                  AND PAYMENT TERMS

              


      

      


      6.1 
        Service
        fees and payment terms provided by Party B and Party C to Party
        A.
        In
        consideration for the all services provided by Party B and Party C to Party
        A,
        Party A shall pay Party B and Party C as a lump sum, on an annual basis,
        the
        Service Fee in the amount of 30, 0000 RMB for the first 3 years. The Service
        Fees from the 4th
        year and
        on shall be agreed upon by Parties. 

      


      The
        Service Fee shall be remitted in full, in RMB to Party B and Party C's
        designated bank account within 3 months after the last day of the preceding
        year. 

       

      6.2 
        Service
        fees and payment terms provided by Party A to Party B and Party
        C.
        In
        consideration for services rendered, licenses and training provided by Party
        A
        to Party B, Party B shall pay Party A a lump sum, on a monthly basis, the
        service fees which shall be of an amount equivalent to revenue before tax
        (deducting business taxes). 

      


      
        
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      If
        Party
        A and Party B require adjusting the arrangement of revenue flow, for instance,
        to pay all the revenues before tax to Party A after deducting direct expenses
        (telecommunication broadband fees), Party B shall try its best to cooperate
        with
        Party A to implement specific revenue flow mechanism. 

      


      The
        Service Fee shall be remitted in full, in RMB, to Party A's designated bank
        account within 30 days after the last day of the proceeding month. Party
        B shall
        also provide to Party A at such time the relevant Financial Statements for
        that
        month as well as any other relevant documents and/or information regarding
        the
        calculation of the Service Fee amount.

      


      6.3 
        Other
        fees. The
        Parties hereby expressly agree that there shall not be any other payment
        obligations arising from the service requirements, other than the services
        fees
        expressly stipulated to in Articles 6.1 and 6.2.

      


      
        	
                7.

              	
                FINANCIAL
                  MANAGEMENT 

              


      

      


      7.1 Project
        Account. The
        Parties agree that, in the interests of clarity, all receivables and payables
        relating to the Business that are generated or incurred during the term of
        this
        Agreement shall be only remitted to and withdrawn from the same dedicated
        bank
        account, in accordance with the following provisions:

      


      7.1.1  within
        30
        days after the Effective Date, Party B shall open a RMB bank account in its
        name
        for use specifically in respect of the Business (the “Project
        Account”);

      


      7.1.2  the
        Project Account shall be opened at the Beijing branch of a bank agreed to
        by the
        Party A and Party B, and shall be set up such that the personal seals of
        1
        representative from each of the Parties are required in order for money to
        be
        deposited or withdrawn from it, which representatives shall be appointed
        by the
        Parties in writing within 10 days after the Effective Date;

      


      7.1.3  the
        Project Account shall be used for the sole purpose of receiving proceeds
        from
        Party B and Party C and/or effecting payments relating to the Business;
        and

      


      7.1.4  Party
        A
        and Party B may request from the relevant bank at any time a statement of
        the
        activities on the Project Account.

      


      
        
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      7.2 
        Records.
        Party
        B
        agrees to maintain comprehensive financial records (including the Financial
        Statements) in respect of the Business, which shall be kept at its registered
        office in Jinan, PRC and shall be available for Party A's inspection at such
        times as Party A may reasonably request in writing. 

      


      7.3 Annual
        Statement. Within
        30
        days after the end of each financial year, Party B shall provide to Party A
        comprehensive Financial Statements for such financial year. Each Financial
        Statement, together with the financial records described in Article 7.2 above,
        shall be subject to an independent audit conducted by a reputable accounting
        firm registered in the PRC approved by Party A, at Party A's sole
        expense.

      


      7.4 
        Financial
        Statements. Within
        10
        days after a written request for such from Party A, Party B shall also provide
        to Party A Financial Statements. 

       

      
        	
                8.

              	
                EFFECTIVE
                  DATE, BREACH
                  AND TERMINATION

              


      

      


      8.1 Effective
        Date. This
        Agreement shall enter into effect from the Effective Date and shall continue
        with full force and effect until the earlier of either:

      


      8.1.1 the
        20th
        anniversary hereof; or

      


      8.1.2 its
        termination by either Party in accordance with Article 8.4 below.

      


      8.2 Extension.
        The term
        of this Agreement may be extended within 60 days before its expiration pursuant
        to Party A’s notice to Party B and Party C indicating its intent to extend the
        term. The extension term shall be determined by Party A and clearly stated
        the
        abovementioned notice. The Party B and Party C shall agree to such extended
        term
        unconditionally, under the condition that the term cannot not exceed 10 years.
        

      


      8.3 Breach.
        The
        occurrence of any one or more of the following events shall constitute a
        breach
        of this Agreement (an “Event
        of Breach”):

      


      8.3.1 either
        of
        the Parties has failed to perform any of its obligations hereunder , thus
        causing substantial losses to the other Party, and such obligation was not
        waived in writing by the other Party; 

      


      
        
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      8.3.2 either
        of
        the Parties is in breach of the terms hereof, and such breach has not been
        remedied for a period of 10 days after receipt of the other Party's written
        notice requesting such remedy; and

      


      8.3.3 any
        representation or warranty made by either of the Parties herein proves to
        be
        false or misleading in any material respect.

      


      8.4 Termination.
        This
        Agreement will terminate automatically upon its expiration, unless terminated
        prematurely under either of the following circumstances, namely:

      


      8.4.1 by
        the
        non-breaching Party with 30 days' written notice upon the occurrence of an
        Event
        of Breach; or

      


      8.4.2 with
        the
        mutual written consent of the Parties.

      


      8.5 Post
        Termination.
        Upon the
        termination of this Agreement by either Party:

      


      8.5.1 the
        licenses granted hereunder shall cease with immediate effect; and 

      


      8.5.2 any
        outstanding fees or other amounts payable hereunder by either Party to other
        Parties shall become due within 10 days after the date of delivery of an
        invoice
        for the same. 

      


      8.6 Survival.
        The
        following obligations shall survive the termination of this Agreement for
        any
        reason:

      


      8.6.1 the
        confidentiality undertakings set forth in Article 2.1.2 above, which shall
        continue indefinitely after the date of termination (unless the disclosure
        of
        confidential information has already entered the public domain or was made
        pursuant to a court order or law of relevant jurisdiction); and

      


      8.6.2 the
        obligation of the Service Fee, which shall continue for as long as any
        receivables generated from the relevant services during this Agreement are
        outstanding.

      


      
        
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                9.

              	
                GOVERNING
                  LAW AND DISPUTE RESOLUTION

              


      

      


      9.1 Governing
        Law.
        The
        execution, validity, interpretation and implementation of this Agreement
        and the
        settlement of disputes under it shall be governed by PRC Law. Where PRC Law
        is
        silent on a particular matter relating to this Agreement, reference shall
        be
        made to general international commercial practice. 

      


      9.2 Interpretation.
        If any
        dispute arises in connection with the interpretation of any provisions of
        this
        Agreement, the Parties shall determine the true intention of those provisions
        by
        making reference to the wording of this Agreement, the relevant Articles,
        the
        objective of the Agreement, commercial practice and the principle of good
        faith.

      


      9.3 Consultation.
        If any
        dispute arises in connection with this Agreement, the Parties shall attempt
        in
        the first instance to resolve such dispute through friendly consultation
        or
        mediation.

      


      9.4 Arbitration.
        If
        the
        dispute cannot be resolved in the above manner within 30 days after the
        commencement of consultations, either Party may submit the dispute to
        arbitration as follows:

      


      9.4.1 all
        disputes arising out of or in connection with this Agreement shall
        be
        submitted to the China Chamber of International Commerce for arbitration
        in
        Beijing under the its rules and by a sole arbitrator appointed in accordance
        with those rules;

      


      9.4.2
         the
        arbitration shall be conducted in the Chinese and English languages, with
        the
        arbitral award final and binding upon both Parties. Unless otherwise determined
        by the arbitrator, the cost of arbitration shall be borne by the losing Party.
        Any award rendered by the arbitrator shall be enforced by any court having
        jurisdiction upon the losing Party or its assets, in accordance with the
        Convention
        on the Recognition and Enforcement of Foreign Arbitral Awards
        (1958);
        and

      


      9.4.3 when
        any
        dispute is submitted to arbitration, except for the matters under dispute,
        the
        Parties shall continue to perform this Agreement.

      


      
        
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                10.
                  

              	
                MISCELLANEOUS
                  PROVISIONS

              


      

      


      10.1 Notices
        and Delivery. All
        notices and communications between the Parties shall be made in writing and
        in
        the Chinese or English language
        by facsimile transmission, delivery in person (including courier service)
        or
        registered airmail letter to the appropriate correspondence addresses set
        forth
        below:

      


      Party
        A

       

      Beijing
        China Broadband Network Technology Co., Ltd.

      


      Address: 

      


      Tel: 

      Fax: 

      Attn: 

      


      Party
        B

      


      Jinan
        Guangdian Jiahe Digital Television Co., Ltd.

      


      Address:  

      Tel: 

      Fax :  

      Attn:  

      


      Party
        C

      


      Jinan
        Broadcast &Televison Information Network Center 

      


      Address:  

      Tel: 

      Fax :  

      Attn:  

      


      10.2 Timing.
        The
        time
        of receipt of the notice or communication shall be deemed to be:

      


      10.2.1 if
        by
        facsimile transmission, at the time displayed in the corresponding transmission
        record, unless such facsimile is sent after 5:00 p.m. or on a non-business
        day
        in the place where it is received, in which case the date of receipt shall
        be
        deemed to be the following business day;

      


      10.2.2 if
        in
        person (including express mail), on the date that the receiving Party signs
        for
        the document; or

      


      
        
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      10.2.3 if
        by
        registered mail, on the 10th
        day
        after the date that is printed on the receipt of the registered
        mail.

      


      10.3 Amendments.
        The
        provisions of this Agreement may not be waived, modified or amended except
        by an
        instrument in writing signed by both Parties (which instrument shall be attached
        as an Appendix hereto).

      


      10.4 No
        Waiver. Failure
        or delay on the part of either Party to exercise any right under this Agreement
        shall not operate as a waiver thereof.

      


      10.5 Severability.
        The
        invalidity of any provision of this Agreement shall not affect the validity
        of
        any other provision of this Agreement which is unrelated to that
        provision.

      


      10.6 Binding
        Effect.
        This
        Agreement is legally binding upon the Parties and enforceable in accordance
        with
        its terms and conditions. Appendices shall form an integral part of this
        Agreement and shall be legally binding upon the Parties.

      


      10.7
         Successors.
        This
        Agreement shall be binding upon the Parties and upon their respective successors
        and assigns (if any).

      


      10.8 Assignment.
        Either
        Party may not assign or otherwise transfer its rights or obligations under
        this
        Agreement without the prior written consent of other Parties.

      


      10.9
         Entire
        Agreement.
        This
        Agreement and any Appendices hereto constitute the entire agreement between
        the
        Parties and supersede
        all
        prior discussions, negotiations
        and
        agreements. 

      


      10.10 Language
        and Versions. This
        Agreement is executed in 3 sets of originals, with each set comprising 1
        Chinese
        and 1 English version. Each Party shall retain 1 set of originals. The 2
        language versions shall have equal validity and the wording of each version
        shall be deemed to carry the same meaning. In the event of any discrepancy
        between the wordings of the 2 versions, such discrepancy shall be interpreted
        according to the purpose of this Agreement.

      


      [The
        space below has been intentionally left blank.]

      


      
        
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      IN
        WITNESS WHEREOF,
        the
        Parties hereto have executed or caused this Agreement to be executed by their
        duly authorised representatives (as the case may be) as of the date first
        indicated above. 

      


      For
        and on behalf of

      Beijing
        China Broadband Network Technology Co., Ltd.]

       

      
        
          	
                  Name

                	
                  :

                	 	 	 
	 	 	 	 	 
	
                  Title

                	
                  :

                	 	 	 
	 	 	 	 	 
	
                  Signature

                	
                  :

                	 	            
                  	 
	 	 	 	 	 
	
                  Company
                    Seal

                	
                  :

                	 	 	 


        

        


        For
          and on behalf of 

        


        Jinan
          Guangdian Jiahe Digital Television Co., Ltd.

        
 

        
          
            	
                    Name

                  	
                    :

                  	 	 	 
	 	 	 	 	 
	
                    Title

                  	
                    :

                  	 	 	 
	 	 	 	 	 
	
                    Signature

                  	
                    :

                  	 	                
                    	 
	 	 	 	 	 
	
                    Company
                      Seal

                  	
                    :

                  	 	 	 


          

        

        


        For
          and on behalf of

        Jinan
          Broadcast & Television Information Network Center

         

        
          
            	
                    Name

                  	
                    :

                  	 	 	 
	 	 	 	 	 
	
                    Title

                  	
                    :

                  	 	 	 
	 	 	 	 	 
	
                    Signature

                  	
                    :

                  	 	                
                    	 
	 	 	 	 	 
	
                    Company
                      Seal

                  	
                    :

                  	 	 	 


          

          


          
            
              Exclusive
                Service Agreement 

              
              

            

            
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