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
|
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:
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.
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:
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;
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 XXX 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).
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.
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;
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.
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.
Exclusive
Service Agreement
Page
11
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
Exclusive
Service Agreement
Page
12
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.]
Exclusive
Service Agreement
Page
13
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
Page
14