Document:

ex101.htm

Exhibit 10.1

 

	Baoding City Digital TV Set-top Box Supply Contract 	
   Contract No.: BP20080111

 

SET-TOP BOX SUPPLY CONTRACT

 

Party A: Daoding Bai Shi Kai Li Cable Broadcasting and TV Integrated Information Network Co., Ltd.

 

Address: No.64, Chaoyang Street, Daoding City, Hebei Province

 

Tel.: 0312-3311632                                    Fax: 0312-3035874

 

Party B: Vecast China Co., Ltd.

 

Address: 5/F, No.18, Hongda North Road, Beijing Economy & Technology Development Park, Beijing

 

Tel.: 010-67863500                                    Fax: 010-67874921

 

Party C: Huizhou Jiulian Technology Co., Ltd.

 

Address: 18/F, Huayang Building, Yand Da Yi Road, Huizhou City, Guangdong Province

 

Tel.: 0752-5839155                                    Fax: 0752-2526660

 

1. PARTIES AND PROJECT

 

Party A is a cable TV net integrated operator in Baoding City, and provides the service of accessing and transmission of information and contents to users. Party A is the purchaser in the Project and shall purchase the equipment and pay the Contract Price in accordance with this Contract;

 

Party B is a digital TV equipment and value-added service provider, and is responsible for investment in the digital TV front-end system in Beading City and supply of the set-top boxes jointly with Party C;

 

Party C is a professional manufacturer of electronic products and responsible for manufacturing the digital TV set-top boxes for Party A in accordance with this Contract.

 

In order to successfully complete the project of overall conversion of digitalized cable TV system in Baoding City ("Overall Conversion") and to supply the quality products and perfect services to the cable TV users, the Parties hereby enter into the following terms and conditions regarding the supply of digital TV set-top boxes required for the Overall Conversion in Baoding City based on the principles of equality, voluntariness, creditability and reciprocity, through the friendly negotiation and in accordance with the Contract Law of the People's Republic of China.

 

 

  

  

  

 

	Baoding City Digital TV Set-top Box Supply Contract 	
   Contract No.: BP20080111

The Parties will jointly complete the overall conversion of digitalized cable TV system in Baoding City on the basis of the obligations of each Party hereunder, including supply of the digitalized TV set-top boxes required for the conversion, implementation of the specific overall conversion works and the before-sale and after-sale services for users.

 

2. RIGHTS, RESPONSIBILITIES AND OBLIGATIONS OF THE PARTIES 2.1 Rights, Responsibilities and Obligations of Party A

 

2.1.1 To coordinate with the local government, the broadcasting and TV bureau and the network company of Hebei Province to ensure the successful implementation of the Overall Conversion;

 

2.1.2 To prepare the implementing plan for the Overall Conversion;

 

2.1.3 To implement the Overall Conversion of digitalized TV in Baoding City, formulate the operational procedures and improve the FAQs for the users;

 

2.1.4 To build a calling center, answer the questions raised by the users, accept the users' complaints and direct the relevant agencies to provide the services to users;

 

2.1.5 To draft the user network protocol, etc.; 2.1.6 To grant license to the TV receiving system;

 

2:1.7 To provide Party B with the data regarding the progress of the Overall Conversion and the data required for the after-sale services;

 

2.1.8 To ensure the safety of the cable TV circuit and the normal transmission of digitalized TV signals;

 

2.1.9 To test and accept the sample set-top boxes manufactured by Party C in accordance with the Set-top Box Specifications (refer to Appendix A) and issue a Sample Performance Testing Report; the samples and the Sample Performance Testing Report shall become the standards of technical performance and acceptance for mass production of the set-top boxes;

 

2.1.10 To complete the testing and acceptance of the received set-top boxes, and issued to Party B and Party C the Acceptance Report and the Confirmation of Acceptance of Equipment in the Batch (collectively as "Documents", refer to Appendix B hereto for the format) (issue a copy thereof to Party B and issue an original thereof to Party C) within 30 days upon receipt of the set-top boxes according to Article 5.4 hereof and as per the result of testing and the actual quantity used in the batch;

 

2.1.11 To retrieve the set-top boxes from the users who refuse to pay the digital TV subscription fee;

 

2.1.12 To timely and fully pay the price of the set-top boxes (including the interests of Party C's bank loans) in accordance with this Contract; and

 

2.1.13 To bear all costs and expenses incurred from Party A's performance of the obligations mentioned above.

 

 

  

  

  

	Baoding City Digital TV Set-top Box Supply Contract 	
   Contract No.: BP20080111

 

2.2 Rights, Responsibilities and Obligations of Party B

 

2.2.1 To provide the technical solution and subsequent R&D service to the set-top boxes according to the requirements of Party A, and to timely supply the set-top boxes to Party A as per the specifications and quantity stipulated herein;

 

2.2.2 To assist Party A in the marketing and promotion of the Overall Conversion, participate in formulating the strategy of products, processes and marketing of the Overall Conversion, and participate in providing the services relating to the Overall Conversion, such as distribution of set-top boxes, user training and coordination of technical team in the Overall Conversion;

 

2.2.3 To install the set-top boxes in the Overall Conversion, and provide information and door-to-door services relating to the set-top boxes within seven days after installation, while Party A shall provide the door-to-door services from the eighth day;

 

2.2.4 To provide Party A with a temporary business office to distribute the set-top boxes to users, and deploy necessary on-site service personnel to assist Party A in promoting and distributing the set-top boxes; the said business office must has the capacity to accommodate 5,000 sets of set-top boxes;

 

2.2.5 To fully support Party A in establishing a comprehensive interactive platform, and try to achieve the objective of development of value-added services with the input of resources from Party A and Party B;

 

2.2.6 To communicate with Party A and Party C, and jointly prepare and adjust the set-top production and delivery plan, ensure the punctual and full delivery of set-top boxes and avoid excessive inventory;

 

2.2.7 To satisfy the terms of payment stipulated herein and avoid insufficient or excessive delivery, Party B shall set up a set-top box turnover warehouse ("Central Warehouse") in Baoding City. The set-top boxes in the Central Warehouse shall be otherwise purchased by Party B from Party C subject to a separate purchase contract signed between Party B and Party C. The Central Warehouse must accommodate up to 5,000 sets of set-top boxes, to coordinate with the sale and delivery of the stocks of set-top boxes;

 

2.2.8 If Party C cannot finish the production task according to the new requirement due to any change in the scheduled delivery plan determined by the Parties, Party A may pick up the stocks in the Central Warehouse to implement the Overall Conversion. The products delivered from the Central Warehouse shall be deemed as the delivery hereunder and also the stocks lent by Party B to Party C, and therefore Party C must return the set-top boxes to Party B within 30 days after the stocks are picked up by Party A;

 

2.2.9 Party B and Party C agree that 3,000 sets of set-top boxes shall be transferred to the Central Warehouse from 8,000 sets delivered in the month;

 

2.2.10 To timely communicate with the financial and product management departments of Party A and Party C, and check the inventory with Party A at least once a week and check the quantity of delivered products; to inspect the quality and quantity of products delivered by Party C; to procure Party A to make payment and procure Party C to deliver the products in accordance with this Contract;

 

 

  

  

  

	Baoding City Digital TV Set-top Box Supply Contract 	
   Contract No.: BP20080111

 

2.2.11 To pay the royalty for the license of CA, EnReach browser and other software required for Party A's set-top boxes, which will not be paid by Party A or Party C; and

 

2.2.12 To ensure the products conform to 3C qualification requirement of relevant national authority, and the requirement of network access inspection and quality supervision of SARFT.

 

2.3 Rights, Responsibilities and Obligations of Party C

 

2.3.1 To produce the set-top boxes in accordance with this Contract and the Specifications of Set-top Boxes;

 

2.3.2 To provide one-year warranty service for the set-top boxes, and provide the paid maintenance services after expiration of the warranty period according to this Contract and the applicable state regulations; the warranty service for the critical parts, such as main chip, memory and radio frequency head shall be three years;

 

2.3.3 To produce and deliver the products in accordance with this Contract, and ensure the timely delivery and quality of the products; to actively satisfy Party A's and Party B's requirements for improvement and enhancement of product quality, and provide operation training to Party A;

 

2.3.4 To provide perpetual free software upgrades for the set-top boxes according to Party A's requirement;

 

2.3.5 The set-top boxes produced by Party C must comply with the applicable state laws and regulations, and pass the Chinese compulsory certification (3C certification) adopted by the designated certifying institute, obtain the Chinese compulsory certification issued by the designated certifying institute and attach an appropriate label on the set-top boxes;

 

2.3.6 To provide the exterior packing in compliance with Party A's requirement;

 

2.3.7 The set-top boxes produced by Party C must pass the inspection of SARFT and obtain the network access permit from SARFT;

 

2.3.8 The package of the set-top boxes must printed the enterprise standard number;

 

2.3.9 In case of return of any set-top box by users due to any defect, Party C shall repair or replace such product;

 

2.3.10 Upon receipt of the products from Party C, Party C shall make the preliminary inspection together with Party A and Party B; if it is found there is any shortage or inconformity in the preliminary inspection report, Party C shall make up the deficient products and replace the substandard products;

 

2.3.11 The conformity rate of the products in unpacked inspection shall be no less than 97%; if the actual conformity rate is less than 97%, all products in the batch shall be deemed as substandard, and all losses resulting therefrom shall be borne by Party C;

 

2.3.12 Party C shall provide the "guaranteed return, repair and replacement" services in accordance with the applicable laws and regulations, such as the Law on Protection of

 

 

  

  

  

	Baoding City Digital TV Set-top Box Supply Contract 	
   Contract No.: BP20080111

 

Interests of Consumers and the Law of Product Quality;

 

2.3.13 Party C shall provide paid maintenance services to the products damaged due to artificial reason during the warranty period, at the maintenance service rate and time period in accordance with the relevant state regulations regarding electronic products and Party C's warranty undertaking;

 

2.3.14 After expiration of the warranty period, Party C shall provide the paid maintenance services to the products according to the relevant state regulations;

 

2.3.15 The warranty period of the products shall commence from the date of invoices issued by Party A to the users; and

 

2.3.16 Party C shall set up an after-service office at Party A's site and dispatch the appropriate after-sale service personnel, and ensure that the quality of after-sale services provided to the users shall not be lower than the commitment made by Party A to the users.

 

3. PRICE AND TERMS OF PAYMENT

 

3.1 The unit price of the set-top boxes provided by Party B to Party C is RMB 464.5 per set, inclusive of all costs of the set-top boxes (including the cost of browser and other third-party software), transportation (including the return of products to be repaired), Party C's bank loan interests and the costs of technical services and marketing services provided by Party B.

 

3.2 The unit price of the set-top boxes produced by Party C with the consignment of Party B is RMB 432.5 per set, inclusive of all costs of the products produced by Party C, transportation (including the return of products to be repaired) and Party C's bank loan interests.

 

3.3 Party A shall confirm its debt to Party C as per the confirmed Documents, and Party C shall use such account receivable to get finance. Prior to the obtainment of the finance, Party A shall remit the account payable to the following bank account designated by Party B and confirmed by Party C: NC No.: 2002020519100141908; name of bank: ICBC Zhuhai Branch, Nanshan Sub-branch. In the account is changed, Party B and Party C shall jointly give a written notice to Party A. After Party A remits the account payable to the aforesaid account, it shall be deemed that Party A has fulfilled its payment obligation to Party C. After the obtainment of the finance, Party A shall directly remit the account payable to Party C's designated account: A/C No.: 2002020519100141908- bank name: ICBC Zhuhai Branch, Nanshan Sub-branch.

 

To simplify the account settlement process, Party A shall fully pay the price of the set-top boxes (unit price of RMB 464.5, inclusive of the portion of RMB 32 payable to Party B) to the special account for receiving the account payable opened by Party C at the loan bank. After that, Party C shall pay an amount of RMB 32 per set to Party B.

 

3.4 After the obtainment of the finance, if only Party A has made payment to the account designated by Party C's loan bank, it shall be deemed that Party A has fulfilled its payment obligation.

 

4. QUANTITY AND AFTER-SALE SERVICES

 

4.1 it is agreed by the Parties that 100,000 sets of set-top boxes will be produced and supplied hereunder. The set-top boxes shall be delivered according to the following schedule (tentative):

 

 

  

  

  

	Baoding City Digital TV Set-top Box Supply Contract 	
   Contract No.: BP20080111

 

8,000 sets shall be delivered by the end of September 2007; 20,000 sets shall be delivered on or before October 28, 2007; 40,000 sets shall be delivered on or before November 15, 2007; and 30,000 sets shall be delivered on or before December 15, 2007.

 

4.2 It is agreed by the Parties that Party A may adjust the monthly delivery plan as per the actual progress of the Overall Conversion, provided that Party A must give a written notice to Party B and Party C at least 7 days prior to the scheduled delivery.

 

4.3 Party C shall provide the after-sale services (such as guaranteed repair and maintenance) for the set-top boxes supplied hereunder, including provision of certain quantity of standby products, free package and product updates according to Party A's requirement. It is agreed by the Parties that the free exterior package provided by Party C to Party A shall be no more than 8% of the total quantity of the products supplied hereunder; the free replaced set-top boxes (including the exterior case, remote controller and cable thereof) shall be no more than 5% of the total quantity of the products supplied hereunder. In case of any excess, Party C may charge the costs against Party A pro rata. The ownership of the standby products freely provided to replace the defective or malfunctioned set-top boxes (no more than 1% of the quantity of products in the batch) shall reserved by Party C.

 

5. DELIVERY, INVOICING AND PAYMENT

 

5.1 It is agreed that Party A shall pay the Contract Price in several installments within a period of three years.

 

5.2 Upon delivery of the products, Party C shall issue a VAT invoice at the full price of the products in the batch to Party B. Party B shall issue a VAT invoice at the full price of the products in the batch to Party A prior to Party A's payment. Regardless of the issuance of the invoice by Party C or Party B, Party A shall make a confirmation on the delivery of products by Party C and the price payable to Party C. If Party A delays to pay the due and payable amount due to Party B's failure in issuing the VAT invoice to Party A, Party B shall be subject to the liabilities for breach of contract accordingly.

 

5.3 Other than 8,000 set of products delivered in the first batch, Party A shall fax a Delivery Notice to Party B and Party C at least one week prior to the delivery of each batch, including the quantity and delivery date, etc. Party C shall timely deliver the products after the receipt of the Delivery Notice. If Party C fails to deliver the products on time, it shall notify Party A and Party C of the specific delivery date within two business days. In addition, Party C shall give a written notice to Party B for borrowing the products from the Central Warehouse. If Party C obtains the finance from its bank with the said account receivable, Party A shall make the payment to Party C's bank.

 

5.4 Party C shall deliver the products to Party A as the Delivery Notice. If the products pass the inspection, Party A shall issue a Preliminary Inspection Report to Party B, Party C and Party C's loan bank. The Acceptance Report and the Confirmation of Acceptance of Equipment in the Batch (collectively as "Documents") issued by Party A shall be the evidence of its acceptance of the products in the batch. The date of issuance of the Documents shall be due date of payment of the product price ("Payment Due Date"). The date of issuance of the Documents shall be no later than 30 days upon delivery of the products in the batch.

 

 

  

  

  

 

	Baoding City Digital TV Set-top Box Supply Contract 	
   Contract No.: BP20080111

 

5.5 Party A shall pay the Price of the set-top boxes in four installments according to the amount listed in the Documents confirmed by Party A and as per the following schedule:

 

A. 1st Installment: 25% of the price of the set-top boxes of the batch shall be paid within one month as from the commencement date of payment;

 

B. 2nd Installment: 30% of the price of the set-top boxes of the batch shall be paid within 13 month as from the commencement date of payment;

 

C. 3rd Installment: 30% of the price of the set-top boxes of the batch shall be paid within 25 month as from the commencement date of payment;

 

D. 4th Installment: 15% of the price of the set-top boxes of the batch shall be paid within 37 month as from the commencement date of payment.

 

5.6 The base price paid by Party A to Party C's loan bank shall be RMB 464.5 per set. The amount and due date of the payment shall be subject to the terms of payment stipulated herein.

 

6. EFFECTIVENESS AND TERM

 

This Contract shall become effective as of being duly executed by the Parties and shall remain effective until all obligations of the Parties hereunder are fulfilled.

 

7. FORCE MAJEURE

 

"Force Majeure" shall mean any event can not be reasonably controlled, foreseen or avoided by the Parties, wherein any Party may be hindered from, affected by or delayed in performance of all or part of its obligations hereunder. Such events include but not limited to earthquake, typhoon, floods, fire or any other natural disaster, war, commotion, strike or any other similar events.

 

Upon the occurrence of any event of force majeure, the influenced party shall immediately notify the other parties in written forms within 15 days, and shall, within 20 days, provide the other parties with the supporting documents stating the details of such event and the reason of nonperformance, or partial nonperformance, or delay in performance. The influenced party may be released from the performance of its obligations or any part thereof due to the event of force majeure.

 

8. GOVERNING LAW AND DISPUTE SETTLEMENT

 

Any dispute or controversy arising from the performance of this Contract shall be settled through friendly negotiation by the Parties. In case no settlement can be reached, any Party may file an action before the competent people's court where Party A resides at in accordance with the Civil Procedural Law of the People's Republic of China.

 

 

  

  

  

 

	Baoding City Digital TV Set-top Box Supply Contract 	
   Contract No.: BP20080111

9. ENTIRE CONTRACT

 

If any provision of this Contract is held as invalid by the competent court or the arbitration institution according to law, the validity of other provisions of the Contract will not be prejudiced.

 

10. MISCELLANEOUS

 

Issues absent hereof shall be settled by the Parties through friendly consultations.

 

Party A: Daoding Bai Shi Kai Li Cable Broadcasting and TV Integrated Information Network Co., Ltd.

 

Signature:

 

Date: September 6, 2007

 

Party B: Vecast China Co., Ltd. Signature:

 

Date: September 6, 2007

 

Party C: I-luizhou Jiulian Technology Co., Ltd. Signature:

 

Date: September 6, 2007ex102.htm

Exhibit 10.2

 

Letter of Project Cooperation

This agreement is entered into as of July 17, 2010 by the both parties listed below, in Beijing.

Contract #: HZH2010-7a

Party A: Beijing Haidian Wired Broadcast and CATV Network Information Center

Address: #11, West 4th Ring Road North Road, Haidian District, Beijing

Legal representative: Zhang Wenming

Party B: Zhongdiantong (Beijing) Digital TV Development Co., Ltd.

Address: Room 729, Beijing Jingdong Road 3, Yizhuang District, Beijing

Legal representative: Wu Aiping

Whereas,

(1) Project cooperative relationship will be established between Party A and Party B, as they will jointly responsible for the bidirectional network restructuring, HD digital TV broadcasting, and interactive TV application service development of the digital CATV within the administrative region of Haidian District; and

(2) The project will be implemented by the both parties in the mode of project cooperation at the initial stage. The both parties shall invest the related resources, allocate the incomes as per the specified proportions, and standardize the project implementation as per the cooperative framework agreement of this project. The both parties agree to establish a new company to sustain and continue the current services for permanent operation if the project is well conducted and good achievements are obtained.

Thereby, Party A and Party B, through good-faith negotiations, reach a consensus in terms of bidirectional network restructuring, HD digital TV broadcasting, and interactive TV application service development, and conclude the agreement below.

Article One                                Foundation for Cooperation

1.1 Driven by the demands of respective service development, the both parties conduct, under the premises of mutual benefits, cooperation on this project out of their own will. The both parties will invest the complementary resources and are committed to create more benefits through win-win cooperation. Party A shall be responsible for providing the operating qualifications, network resources, engineering and operating services, while Party B shall be responsible for providing the equipment investment, technical supports, and engineering mounting listed in Article Four herewith. The both parties will develop the market jointly.

Article Two                                Cooperative Services

2.1 Party A shall be responsible for providing any and all operating qualifications (business license, business certificate, and governmental approvals, etc.) required by the cooperative project, channel and program resources, engine room and auxiliary facilities and mounting environment, HFC trunk optical cable transmission network, and all HFC network linked directly to the user’s family;

 

 

  

  

  

2.2 Party B shall be responsible for providing digital TV and cable broadband service frontend, service support system software and hardware platform, HFC transmission device, CMTS and RFOG device, and terminal device (STB, CM);

2.3 The both parties will operate through cooperation the HD-based (compatible with SD) cable digital TV services, and cable broadband (hereinafter shortened as HDBS), including shifted signal, program-on-demand, and interactive TV services and other application services, and shall allocate the operating incomes as per this Agreement.

2.4 The both parties shall jointly plan HDBS product varieties, bundling methods and sales prices, and work out jointly the sales and service strategies, with a view to get accustomed to the market development.

Article Three                                HFC Optical fiber Network Restructuring

3.1 Party A shall be responsible for conducting network restructuring and supplementary engineering over the original HFC optical fiber trunk network, to cover the entire regions with no less than 150,000 users. The restructuring standards of this optical fiber trunk network shall be worked out by Party A and Party B jointly, which shall measure up with the cooperative requirements of bidirectional access network of this project.

3.2 Party A shall bear and borne the costs and expenses incurred by network restructuring and supplementary engineering.

Article Four                                Obligations, Rights and Responsibilities of the Both Parties

4.1 Party A

4.1.1 Responsible for the operation of this project;

4.1.2 Responsible for providing sufficient cable broadband outlet bandwidth;

4.1.3 Responsible for providing all operating qualifications associated with the lawful operation of this project, including but without limitation to the business license, business certificate and the related approvals (please refer to Annex 1);

4.1.4 Responsible for providing the frontend engine room, auxiliary facilities and premises required by Party B and frontend device mounting, as well as the environment and facilities required for mounting of all RFOG nodes;

 

 

  

  

  

4.1.5 Responsible for providing any and all HFC transmission network from the frontend to the user end, the optical fiber of which shall be paved to the staircase or floors of the covered areas, combing the coaxial cable, reducing amount of the branch distributor and removing the secondary branch distributor and active amplification device;

4.1.6 Responsible for safekeeping, safe operation and maintenance of devices of Party B;

4.1.7 Responsible for protecting the lawful rights and interests invested by Party B. Under such situation that this project can’t be performed normally due to acquisition of it by a third party, Party A shall solicit for the opinions of Party B and shall not dispose devices and facilities invested by Party B and the investment allocation rights of Party B;

4.1.8 The implementation scope of this project shall cover the network coverage of Party A. based upon the market-oriented step-specific implementation rules, the both parties shall list areas for implementation of this project during different stages in Annex 2 to this Agreement, as well as the project schedule, in a bid to reach the expected objective;

4.1.9 Keep appropriately and maintain the service frontends, service support system software and hardware platform, HFC transmission device, CMTS and RFOG devices invested by Party B and ensure them operate in a good condition. If the above-mentioned items are damaged or get lost due to Party A’s deliberate behaviors or misconduct, Party A shall bear any and all costs and expenses required for Party B to invest again the devices and facilities; and

4.1.10 Assume other responsibilities jointly negotiated and agreed by the both parties.

4.2 Party B

4.2.1 Responsible for providing the digital TV frontends, and CMTS devices and management systems listed in Annex 3 and Annex 4 hereto. The devices and systems provided shall accord with the requirements of current services of the both parties;

4.2.2 Responsible for providing for free the set-top-boxes to users applying for digital TV services, and the set-top-boxes provided shall provide support for HD and SD presence simultaneously;

4.2.3 Responsible for free-of-charge maintenance and replacement of the devices, systems and facilities invested during the operating period of this project;

4.2.4 Responsible for meeting, through technical and functional upgrade, the demands for new services of both parties in the future;

4.2.5 Responsible for providing HFC transmission device, bidirectional restructuring and RFOG, the optical access node devices of FTTB;

 

 

  

  

  

4.2.6 Responsible for mounting RFOG devices with the help of Party A;

4.2.7 Responsible for providing CM to users of cable broadband services; and

4.2.8 Responsible for construction and implementation of interactive TV application service system platform.

Article Five                                Program Progress Schedule

5.1 Startup stage

5.1.1 Within four (4) weeks after this Agreement is concluded, the both parties shall complete discussions, review Annex 1 ~ Annex 4, and conclude Annex 2, Annex 3 and Annex 4;

5.1.2 Within four (4) months after this Agreement is concluded, Party A shall complete the assignments listed in 4.1.4 ~ 4.1.5;

5.1.3 Within four (4) months after this Agreement is concluded, Party B shall complete the assignments listed in 4.2.4~4.2.9; and

5.1.4 The both parties shall finish the joint receiving inspection and handover of the above-mentioned assignments within four (4) months after this Agreement is concluded.

5.2 Operating stage

5.2.1 The project shall start to operate in the fourth month after this Agreement is concluded; and

5.2.2 The both parties shall assume their obligations and responsibilities respectively as per their provisions herewith.

Article Six                                Operating Income Allocation

The both parties shall, under the premises of due diligence, allocate the operating incomes as the specified proportions:

6.1 Allocation of digital TV subscription: based upon the amount of digital TV users for who the set-top-boxes have been mounted, Party A shall pay RMB 10 / user as the division to Party B each month. If Party A collects the subscription from users once a year, a half year or a quarter, then Party A shall pay the division to Party B by months of subscription collected × RMB 10/month, at one go;

6.2 Cable broadband access service income allocation: based upon amount of users that have provisioned (Party A has collected the service expenses for such services from the users) the cable broadband access services, Party A shall Party B RMB 15 / month • user. If Party A collects the services expenses from users once a year, a half year or a quarter, then Party A shall similarly pay the division to Party B by months of service expenses collected × RMB 15/month, at one go;

 

 

  

  

  

6.3 For other value-added services, the both parties shall specify in the additionally executed agreements;

6.4 The divisions mentioned above shall be settled once a quarter; and

6.5 After this Agreement expires, the residual values of all devices, systems and facilities invested to this project will be calculated after the depreciation is accrued by 6-year depreciation proportion, and Party A might choose to purchase such devices, systems and facilities by the calculated residual value, in whole or in part.

Article Seven                                           Period of Validity of the Agreement and Relevant Provision

7.1 The cooperative term of the both parties over this project is eight (8) years (to be calculated as per the actual operating income division cycle);

7.2 During the cooperative term of this project, Party B shall continue to invest and upgrade the device, system and facility resources as per user service and amount growth, and Party A agrees that the service frontends, service support system hardware platform, HFC transmission devices, CMTS, and RFOG invested by Party B will be depreciated by 6-year linear depreciation. For the devices that have not been fully depreciated, Party A shall allocate operating income to Party B as per the provisions in Article Six herewith until such devices are fully depreciated, or Party A shall purchase back such devices as per the afore-said residual value, in cash;

7.3 After this Agreement is executed, either party shall not conduct the same or similar cooperation with other companies within the implementation scope of this project, except otherwise agreed by the both parties;

7.4 The both parties are not limited to conduct services other than this cooperative project. At the same time, the both parties shall support the other party to conduct other value-added services other than this cooperative project; and

7.5 The Party B shall provide a performance bond with a value of RMB 1.00m within ten (10) days after this Agreement is executed, which shall be saved into a jointly managed account or a bank supervised account. One year after project implementation (or the actual costs of devices, systems and facilities invested by Party B have exceed RMB 1.00m), Party B can take back the above-mentioned performance bond, which shall be returned to Party B, in whole.

Article Eight                                Breach Responsibilities

To be provided in the formally executed agreement (omitted herewith).

 

 

  

  

  

Article Nine                                Miscellaneous

This Agreement will be executed in duplicates, with each party holds one, and will become effective on the very day the representative of each party signs and chops its common stamps on it. For affairs untouched in this Agreement, the both parties shall conclude a supplementary agreement, which shall be of the same and equal force to this Agreement.

Party A: Beijing Haidian Wired Broadcast and CATV Network Information Center (common stamp)

Legal representative or authorized representative (signature): Zhang Wenming

Party B: Zhongdiantong (Beijing) Digital TV Development Co., Ltd. (common stamp)

Legal representative or authorized representative (signature): Wu Aiping

Annex 1 (business license, business certificate, and governmental approvals)

Annex 2 (the estimated finish dates below can be advanced)

	
Implementation stage

	
Implementation region

	
Target amount of users for mounting

	
Estimated finish date

	
Stage 1

	
Xibeiwang, Shangzhuang

	
20,000

	
Oct. 31, 2010

	
Stage 2

	
Beibu Xinqu

	
30,000

	
Jan. 31, 2011

	
Stage 3

	
Overall translation of digital TV of the 

affiliated regions finishes completely

	
100,000

	
Dec. 31, 2011

Note: based upon the service promotion progress, the implementation regions during Stage 2 and Stage 3 will be fixed by the both parties after discussions.

 

 

  

  

  

Annex 3 broadband network frontend system and bidirectional access network restructuring

	
Item #

	
Device description

	
Device specification

	
Device amount

	
Remarks

	
1

	
CMTS exchange

	
US CASA

	
1 set

	
The system will be escalated 

along with user growth

	
2

	
RFoG photoelectric switcher

	
Taiwan UMEC

	
1 for 250 users

	
As per the coverage

	
3

	
CMTS user management system

	
SMS user management 

Billing and settlement

	
1 set

	  
	
4

	
HFC photoelectric transmission device

	  	  	
In support of optical nodes 

to all services provisioned

Note: the detailed list of the actual system devices will be fixed by the both parties as per the service development situation.

Annex 4 Digital TV presence frontend system and value-added application service system

	
Item #

	
Device description

	
Device specification

	
Remarks

	
1

	
DVB digital TV broadcasting frontend system

	
Basic requirements on digital 

TV broadcasting of Haidian District

	  
	
2

	
Data broadcasting system

	
Server

	
As per the coverage

	
3

	
Value-added application service system

	
IP Base value-added application 

service frontend

	
As per each application 

service function demand

Note: the detailed list of actual system devices required will be fixed by the both parties as per the service development demands.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00211-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00211-of-00352.parquet"}]]