Letter of Intent - Chong Qing Branch of Ji Tong Network Communications Co., Ltd. and Big Sky Network Canada Ltd.
THE LETTER OF INTENT BETWEEN CHONG QING BRANCH OF
JI TONG NETWORK COMMUNICATIONS CO., LTD. AND BIG
SKY NETWORK CANADA LTD.
Ji Tong Network Communication Co., Ltd. is a large Telco permitted by the
Chinese Government to operate the Tele communication business nation-wide. It
owns a commercial network - CHINAGRB (China Golden Bridge Network). Chong Qing
Branch of the Ji Tong Network Communication Co., Ltd. (The "Cong Qing Ji Tong")
is responsible for the business development and the network construction in
Chong Qing area. It has a fibre network of 1,500 kilometers and providing Telco
services. Big Sky Network Canada Ltd. (the "Canadian Party") is a private
company headquartered in Calgary, Alberta Canada and its main business is to
provide high-speed broadband Internet technology services. The Canadian Party
desires to cooperate with Cong Qing Ji Tong and to jointly build area networks
and to provide Internet services, data transmission and other Internet related
value-added services (the "Project"). Based on the spirit of friendly
cooperation and mutual development, after discussions and negotiations, both
Parties agreed the tasks for the next Thirty (30) days.
1. Both parties fully agree to jointly build broadband Internet
networks for the residential areas and Internet data networks.
Canadian Party shall bare the risk of the Project, which is to
provide capital, equipment and technology for the Project. Chong
Qing Ji Tong shall operate the networks after they are built and
provide broadband Internet services, IP phone services and other
value-added services.
2. The Project shall be deployed in two stages. The first stage of
the Project is to start the Project in the core city area and to
connect 60,000 households before the end of year 2001. The
penetration rate should not be lower than 10% and try to reach
20%. At the end of year 2002, 100,000 households should be
connected and the penetration rate should not be lower than 10%.
The second stage of the Project should connect all other areas of
the Metropolitan Chong Qing. If the condition allows, the first
stage and the second stage can be deployed at the same time.
3. The estimated total investment is at eighty (80) million RMB. This
amount can be increased, if the market requires doing so.
4. At the late June, the Canadian Party shall send its technical
personnel to Chong Qing. Along with the engineers of Ji Tong Chong
Qing, the technical team shall conduct the field test and draw a
preliminary technical plan for the Project.
5. The business model, the Project Team, the total investment, the
term of the cooperation and the method of return of the investment
of the Project shall be discussed by the Parties and be defined in
the contract of the Project.
6. The signing of this Letter of Intent is only to indicate that the
Parties have reached consensus to cooperate in this Project. The
details shall be listed in the contract of the Project.
7. The contract of the Project shall be completed within thirty (30)
days after signing of this Letter of Intent.
8. The Parties shall ensure its employees to keep all commercial
secrets obtained during the Parties' business discussion
confidential. No Party shall disclose to a third party or mass
media without the prior consent of the other Party. No Party shall
use this Letter of Intent to raise capital.
9. This Letter of Intent is written in Chinese and four (4) original
copies were made. Each Party holds two copies of the originals.
10. This Letter of Intent is signed by the authorized representatives
of the Parties on June 20, 2001.
<PAGE>
JI TONG NETWORK COMMUNICATION CO., LTD. CHONG BIG SKY NETWORK CANADA LTD.
QING BRANCH
AUTHORIZED REPRESENTATIVE AUTHORIZED REPRESENTATIVE
/s/ CUI, HUA TING /s/ YANG, WEI
------------------------- -------------------------
SIGNATURE: CUI, HUA TING SIGNATURE: YANG, WEI