Agreement on the Establishment of Cooperation Joint Venture - Zhuhai Cable Television Station and Big Sky Network Canada Ltd.
THE AGREEMENT ON THE ESTABLISHMENT
OF COOPERATION JOINT VENTURE BETWEEN ZHUHAI CABLE
TELEVISION STATION AND BIG SKY NETWORK CANADA LTD.
Zhuhai Cable Television Station ("Party A") and Big Sky Network Canada
Ltd. ("Party B"), in compliance with the "Law of the People's Republic of China
on Cooperation Joint Ventures" and other relevant laws of China and regulations
of Zhuhai, adopting the principle of equality and mutual benefits, spirit of
friendship and cooperation, have decided to enter into an Agreement on the
establishment of cooperation joint venture in Zhuhai. Agreements reached are as
follows before signing a formal contract:
The legal address of the Cooperation Joint Venture shall be at Zhuhai,
the People's Republic of China. The name of the Cooperation Joint Venture is
Zhuhai Big Sky Cable Network, Ltd. Both Parties have reached the following
agreements.
1. Party A shall contribute to the project with its right of using data
transmission channels on the cable television network. A total
investments from US$4,500,000 to US$5,000,000 to the project will
be contributed by Party B. Both parties shall jointly upgrade of one
way transmission function to two way transmission function on the
Zhuhai cable television network and develop the business related to
Internet services approved by the Chinese government. The first
amount of US$500,000 for registered capital shall be made by Party B
within fifteen (15) days of the approval date of Foreign Economy and
Trade Commission of Zhuhai. Party B shall commit to have the rest
funds invested in accordance with the plan of network construction
by the Cooperation Joint Venture. Party B fails to make the amount
due shall constitute an event of default pursuant to the terms of
the Agreement.
2. The duration of the Cooperation Joint Venture shall be fifteen (15)
years from the Establishment Date. The ownership rights of assets of
the Cooperation Joint Venture shall belong to Party A upon the
termination of the duration. After the Cooperation Joint Venture
pays the tax and contributes statuory funds as required by
applicable PRC law:
Party A Party B
Phase I (2000-2004): 40% 60%
Phase II (2005-2009): 50% 50%
Phase III (2010-2014): 60% 40%
3. The Board of Directors of the Cooperation Joint Venture shall come
into existence on the Establishment Date shown on the formal
Contract. Chairman of the Board of Directors shall be designated by
Party A. The Board of
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Directors will be comprised of seven (7) Directors. Of these, the
distribution of Directors shall be as follows:
Party A Party B
Phase I (2000-2004): 3 4
Phase II (2005-2009): 4 4
Phase III (2010-2014): 4 3
4. All necessary documents required by formal registration and
establishment of the Cooperation Joint Venture, in accordance with
applicable PRC's law and regulatory , shall be completed before July
20, 1999 and submitted to the Foreign Economy and Trade Commission
of Zhuhai for approval.
5. The Agreement is written both in the Chinese and English languages.
Both versions shall have equal validity. Four (4) copies of each
version shall be provided to both Parties.
6. The Agreement shall become effective upon an approval comes from
Foreign Economy and Trade Commission of Zhuhai and relevant approval
authority in the industry. The Agreement shall lose its validity
without signing the Contract for the Cooperation Joint Venture.
7. Both Parties shall negotiate and settle the details of the Contract.
Party A Party B
Zhuhai Cable Television Station Big Sky Network Canada Ltd.
Signature:/s/ HUANG XUEZHONG Signature: /s/ DAMING YANG
------------------ ---------------
Name: Huang Xuezhong Name: Daming Yang
Title: Director Title: President and CEO
Date: May 27, 1999 Date: May 27, 1999