exv10w4



 




Exhibit 10.4





DATED
THIS 29th
DAY OF March 2004
 BY AND AMONG




CHINACAST TECHNOLOGY (SHANGHAI) LIMITED




THE CCLX SHAREHOLDERS




AND

CHINACAST LI XIANG CO LTD




 






SUPPLEMENTAL DEED TO

TECHNICAL SERVICES AGREEMENT




 






 









 





TABLE
OF CONTENTS




	 	 	 	 	 	 	 
	CLAUSE	 	HEADING	 	PAGE	 
	1.
	 	INTERPRETATION	 	 	1	 
	 	 	 
	2.
	 	AMENDMENTS TO THE TECHNICAL SERVICES AGREEMENT	 	 	1	 
	 	 	 
	3.
	 	SAVINGS	 	 	3	 
	 	 	 
	4.
	 	COUNTERPARTS	 	 	3	 
	 	 	 
	5.
	 	GOVERNING LAW	 	 	4	 






 









 





THIS SUPPLEMENTAL AGREEMENT is made on 29 March 2004



BETWEEN:





	(1)	 	CHlNACAST TECHNOLOGY (SHANGHAI) LIMITED, a wholly foreign-owned
limited liability enterprise organised and existing under the laws of
the PRC (“CCT Shanghai”);
	 
	(2)	 	CHlNACAST LI XIANG CO LTD, a limited liability company organized and
existing under the laws of the PRC (“CCLX”);
	 
	(3)	 	CHlNACAST CO., LTD, a limited liability company organized and existing under
the laws of the PRC (“CCL”); and
	 
	(4)	 	LI WEI, an individual and citizen of the PRC
(“LW”).





WHEREAS:





	(A)	 	This Supplemental Agreement is supplemental to the Technical Services Agreement
dated 11 August 2003 (the “Technical Services Agreement”) entered into between
CCT Shanghai, CCLX, CCL and LW.
	 
	(B)	 	CCT Shanghai, CCLX, CCL and LW have agreed to vary and amend the Technical
Services Agreement upon the terms and conditions herein with effect from the date of
the Technical Services Agreement and in consideration of the mutual covenants and
obligations herein contained (the sufficiency of which is hereby acknowledged).




NOW IT IS HEREBY AGREED as follows:





	1.	 	INTERPRETATION
	 
	 	 	Terms defined and expressions in respect of which a construction is given in the Technical
Services Agreement shall bear the same meaning or, as the case may be, construction when
used herein unless otherwise defined or given a construction herein except where the
context otherwise requires.
	 
	2.	 	AMENDMENTS TO THE TECHNICAL SERVICES AGREEMENT
	 
	 	 	The Technical Services Agreement shall be varied and amended with effect from the date of
the Technical Services Agreement as follows:






	 	(a)	 	Inserting immediately after Section 1.5,
	 
	 	 	 	“Section 1.6 Financial Support To the extent that CCT Shanghai, in its
absolute discretion, deems it necessary for the provision of Services with





 









 






	 	 	 	respect to the Business, CCT Shanghai shall provide CCLX financial support in such
amount and form as it may determine. CCLX shall repay all financial support extended by
CCT Shanghai immediately upon demand by CCT Shanghai.”






	 	(b)	 	Section 2.1 is hereby amended by deleting it in its entirety and inserting the
following in substitution therefor:
	 
	 	 	 	“Section 2.1 Compensation.
	 
	 		 	a.     No later than the 10th day of each calendar month, CCLX will deliver
to CCT Shanghai a statement (the “Statement of Monthly Operating Results”) of the total revenue CCLX has earned in the preceding month
(including any cost reimbursements) (“CCLX Revenue”) and of the operating
expenses (including any taxes) which CCLX has reasonably incurred with in
the course of the Business during that month as agreed between CCLX and
CCT Shanghai from time to time (“CCLX Operating
Expenses”). The parties
shall have regard to any other agreement entered into between themselves in
determining the CCLX Operating Expenses.
	 
	 		 	b.     As compensation for the performance of the Services, including the
provision of ancillary Equipment, CCLX will pay to CCT Shanghai on the
tenth business day of each calendar month, in Renminbi and in immediately
available funds in an account designated by CCT Shanghai, service fees
(“Service Fees”) in an amount equal the difference between the CCLX
Revenue and CCLX Operating Expenses for the preceding month..
	 
	 	 	 	In the event that CCLX Operating Expenses exceed CCLX Revenue for the relevant calendar
month, CCT Shanghai shall, on the first day of the calendar month following receipt of
the applicable Statement of Monthly Operating Results, reimburse CCLX an amount
equivalent to such excess.
	 
	 	 	 	Section 2.1A Budget. CCLX shall prepare an annual
budget (the “Budget”) in
relation to its Business which Budget shall include projections for each month of CCLX
Revenue and CCLX Operating Expenses CCLX pricing policies and payment terms. CCLX shall
submit the Budget to CCT Shanghai for its approval and CCT Shanghai shall review the
budget on a quarterly basis. Any changes or deviation to the Budget also requires the
approval of CCT Shanghai.
	 
	 	 	 	CCLX hereby undertakes to CCT Shanghai that it shall use its best endeavours to operate the
Business within the Budget. Notwithstanding that the Auditors have certified (in accordance
with Clause 5.2) that the Operating Expenses have been reasonably incurred in accordance
with Sections 2.1, CCT Shanghai shall not be responsible and will not reimburse CCLX for
any Operating Expenses that exceed the amount set out in the Budget (the “Unbudgeted
Operating Expenses”). However, CCT Shanghai may in its absolute discretion, consent to
any Unbudgeted Operating Expenses, in whole or in part, and it shall be responsible for
such Unbudgeted Operating Expenses that it has consented to.”





 









 






	 	(c)	 	Inserting immediately after Section 5.2,
	 
	 	 	 	“CCT Shanghai shall have the right, at its request and expense, to inspect
and/or procure the Auditor to inspect any records kept by CCLX in relation to
the CCLX Revenue, CCLX Operating Expenses and Service Fees. The Auditor shall
after such inspection, at the request of CCT Shanghai, issue a certificate
certifying the amount of the CCLX Revenue, the amount of CCLX Operating Costs
and certifying the extent to which the CCLX Operating Costs are reasonable and
have been incurred on an arm’s length basis. The Parties hereby agree that a
certificate issued by the Auditor in relation to the Operating Expenses incurred
and the Service Fees payable under Section 2.1 shall be final, conclusive and
binding on the Parties with respect to the matters certified.
	 
	 	 	 	Section 5.2A Right to Audit. CCT Shanghai shall have the right, at its
cost and expense, to have the accounts of CCLX audited by the Auditor for each
accounting year in accordance with International Accounting Standards or in
accordance with such other accounting standards, principles and practices
generally accepted (including but not limited to Singapore Accounting Standards
and U.S. GAAP) at CCT Shanghai’s absolute discretion (the “Agreed Accounting
Standards”).
	 
	 	 	 	Section 5.2B Comfort Undertakings. CCL and Li Wei hereby severally and jointly
undertake to procure and CCLX hereby undertakes to CCT Shanghai that :-
	 
	 		 	a.     the accounts of CCLX shall be prepared in accordance with Agreed
Accounting Standards;
	 
	 		 	b.     all revenue earned in the course of the Business shall be accurately and
timely reflected in the accounts of CCLX; and
	 
	 		 	c.     in the course of the Business, CCLX will only incur Operating
Expenses which are reasonable.”






	3.	 	SAVINGS
	 
	 	 	Save and except for the variations and amendments contemplated by this Supplemental
Agreement, the Technical Services Agreement shall continue in full force and effect in all
other respects. Nothing in this Supplemental Agreement shall vary any liability or
obligation of any party under the Technical Services Agreement other than to the extent
specified herein. All rights and benefits previously enjoyed by any party under the
Technical Services Agreement shall remain unaffected and undiminished except to the extent
specified herein. In the event of any conflict or inconsistency between the terms of this
Supplemental Agreement and the Technical Services Agreement, the provisions of this
Supplemental Agreement shall prevail.
	 
	4.	 	COUNTERPARTS
	 
	 	 	This Supplemental Agreement may be signed in any number of counterparts, all of which taken
together shall constitute one and the same instrument. Either party may





 









 






	 	 	enter into this Supplemental Agreement by signing any such counterpart and each
counterpart may be signed and executed by the parties and transmitted by facsimile
transmission and shall be as valid and effectual as if executed as an original.






	5.	 	GOVERNING LAW
	 
	 	 	The construction, validity and performance of this Supplemental Agreement shall be governed
in all respects by the laws of the PRC.




 









 










IN WITNESS WHEREOF this Agreement has been duly executed by the parties hereto.




	 	 	 	 	 
	CHINACAST TECHNOLOGY (SHANGHAI) LIMITED
	 	 	 	 
	 
	 	 	 	 
	The Seal of

CHINACAST TECHNOLOGY

(SHANGHAI) LIMITED

was hereunto affixed in the 

presence of:


	 	)

)

)

)

)
	 	
	 
	 	 	 	 
	
 


	 	 	 	Authorised Representative






	 	 	 	 	 
	CHINACAST LI XIANG CO. LTD
	 	 	 	 
	 
	 	 	 	 
	The Seal of

CHINACAST LI XIANG CO. LTD

was hereunto affixed in the

presence of:


	 	)

)

)

)
	 	
	 
	 	 	 	 
	
 


	 	 	 	Authorised Representative






	 	 	 	 	 
	CHINACAST CO., LTD
	 	 	 	 
	 
	 	 	 	 
	The Common Seal of

CHINACAST CO., LTD

was hereunto affixed in the

presence of:


	 	)

)

)

)
	 	
	 
	 	 	 	 
	
 


	 	 	 	Director






 









 






	 	 	 	 	 
	LIWEI


	 	)

)

)

)
	 	
	 
	 	 	 	 
	signed in the presence of: