Letter of Intent for Development of Hunan Province CATV Network Business - Hunan Provincial Broadcast and Television Media Co. Ltd. and Big Sky Network Canada Ltd.
TRANSLATION OF LETTER OF INTENT FOR DEVELOPMENT OF HUNAN PROVINCE CATV NETWORK BUSINESS Hunan Provincial Broadcast and Television Media Co. Ltd. (hereinafter " Party A"), is developing and investing the construction and development of HFC network within the cities and countries in the territory of Hunan Province. Big Sky Network Canada Ltd. (hereinafter "Party B"), a company with the business of IT project investment with office in Calgary, Alberta, Canada and register in British Virgin Island, is willing to cooperate with Party A in developing new business on the Hunan Provincial cable TV network (hereinafter HPCATV) in the territory of Hunan Province. After exchange of information by both parties, both mutually agree there will be a good opportunity for cooperation and a potential market for the business on the HPCATV network. NOW, THEREFORE, Party A and Party B have reached an agreement for the cooperation intent and planned work schedule as follows: 1. Party A and Party B hereby agree that jointly developing broadband high speed internet connection, broadband data transferring and network value added service through HPCATV which control three million cable TV subscribers by Party A. Party B will provide all investment funds and technology required by the project to develop business on the HPCATV network (these funds and technology mainly are for the head end room equipment, two way upgrade from Notes to end-user and the equipment for end-user) . Now Party A owns and controls HFC network and related hardware and soft ware platform which will be used the broadband service in the future. Party A will deliver the exclusive operation 1 <PAGE> right of its current network facility and equipment as its contribution to JV. 2. Party B will not share any current interest owned by Party A. JV project will not related with current business of television and the income from television program. 3. The name of JV will be determined by both parties. Both parties will discuss total investment, registration capital, and ratio of distribution of net profit. Both parties agree that the term of contract will be twenty years that will be claimed in the final contract. 4. Both parties agree that official business negotiation will be called in city of Chungsha in next one month. 5. This agreement is written both in the Chinese and English languages. Two copies of both versions shall be respectively provided to both parties. 6. This agreement, which may be executed in counterparts, is executed as of the date below written by duly authorized representatives of Party A and Party B. Party A: HUNAN PROVINCIAL TELEVISION PARTY B: BIG SKY NETWORK TELEVISION AND BROADCAST MEDIA CO. LTD. CANADA LTD. By: /s/ ZHENG DE By:/s/ DONGHE XUE ------------ ------------------ Name: Zheng De Name: Donghe Xue Title: Title: Vice President Date: November 8, 2000 Date: November 8, 2000 2