Purchase and License Agreement - Nortel Networks Ltd. and China Broadband Corp.


                                        [COMPANY LOGO GOES HERE]



Nortel Networks
Service Provider & Carrier
8200 Dixie Road, Suite 100
Brampton, Ontario L6T 5P6
(905) 863-3107 (esn 333) Main
(905) 824-9310 (esn 335-1280) Home Office
(905) 863-5751 (esn 333) FAX

www.nortelnetworks.com

[email protected]

      Richard Dugal
 Regional Vice President
merging Service Providers
         Canada


NORTEL NETWORKS CONFIDENTIAL SPECIAL HANDLING

January 19, 2001

Mr. Matt Hcysel
Chairman & CEO
China Broadband Corp.
2080, 440 - 2 Avenue SE
Calgary, Alberta
T2P 5E9

Dear Matt:

Attached is a new Supplement No. 1 to the Purchase and License Agreement
("PLA") between Nortel Networks Limited ("Nortel Networks") and China Broadband
Corporation ("CBC") dated September 28, 2000.  The parties wish to replace the
existing "PLA Supplement", which was attached to the PLA at the time of
execution of the PLA, with the attached Supplement No. 1.

If you agree with the following, please arrange for execution by China
Broadband Corporation in the space indicated below to indicate acceptance of the
amendment of the PLA.








Nortel Networks United and China Broadband Corporation hereby agree to amend the
Purchase and License Agreement ("PLA") between them dated September 28, 2000 by
deleting the "PLA Supplement" which was attached to the PLA at the time of
execution of the PLA with the "Supplement No. 1" a copy of which is attached to
this letter, such amendment to have retroactive effect from September 28, 2000.

Agreed:

NORTEL NETWORKS LIMITED                         CHINA BROADBAND CORPORATION

By:/s/RICHARD DUGAL                             By:/s/MATT HEYSEL   
   -------------------                             ------------------- 
Name: Richard Dugal                             Name: Matt Heysel    
     -----------------                               ----------------- 
Title: Region Director                          Title: Chairman & CEO 
      ----------------                                ---------------- 
Date: Jan. 24, 2001                             Date: Jan. 23, 2001    
      ----------------                                ---------------- 
 




Yours very truly,


/s/RICHARD DUGAL


                                               


China Broadband Corporation                                     NORTEL
                                                                  NETWORKS
PLA Supplement Number 1
--------------------------------------------------------------------------------

The terms and conditions provided to this Supplement ("Supplement Number 1")
are in addition to those contained in the Purchase and License Agreement ("PLA")
dated September 28, 2000 between China Broadband Corporation ("Customer") and
Nortel Networks Limited ("Nortel Networks"). Capitalized terms used in this
Supplement and not otherwise defined herein have the meanings ascribed thereto
in the PLA.

1. REPLACEMENT OF EXISTING SUPPLEMENT

The PLA Supplement attached to the PLA as of the daft of execution of the PLA is
hereby deleted in its entirety and replaced with this Supplement Number 1.

2. TERM

This Supplement Number 1 is effective from September 28, 2000 and will continue
in effect for a period of five years thereafter ("Term").

3. SHIPMENT AND DELIVERY

Nortel Networks will ship the equipment listed in Exhibit "A", and all other
Products to be shipped under this agreement, FOB Nortel Networks' factory.

Customer is responsible for shipping the goods into the People's Republic of
China ("PRC") to the installation site(s). Customer shall comply fully with all
relevant laws, rules and regulations in respect of the importation of the goods
into the PRC.

Customer is responsible for payment of all shipping costs, customs duties and
related amounts including all taxes other than taxes calculated on the net
income of Nortel Networks.

4. ESTIMATED VOLUME

Customer agrees that during the Term it shall purchase from Nortel Networks and
make full payment for Products and Services having an aggregate price of up to
US$250,000,000.00 (Two Hundred and Fifty Million United States Dollars).

5. PRICING ANTI PAYMENT

The prices for the quantities of Products set forth in Exhibit "A" shall be as
set forth in such Exhibit. Nortel Networks agrees that during the Term, the
price applicable to the Products listed in Exhibit "B" shall be calculated in
accordance with Exhibit "B". Nortel Networks shall be entitled to invoice 100%
of the price for any Products upon shipment of such Products.

6. PURCHASE ORDER: AND LETTER OF CREDIT

Customer shall issue one purchase order in respect of each calendar quarter for
all products required to be shipped in such quarter. Such purchase order shall
be issued no more than quarterly, but may be issued semiannually or annually at
Customer's discretion. Each such purchase order (i) shall be paid in full prior
to any shipment being made for product ordered therein, or (ii) shall be
accompanied by an irrevocable standby letter of credit in the form attached
hereto as Exhibit "C", or such other form as is agreed by the parties in
writing, issued by a Canadian Bank. Customer agrees that Nortel Networks may
make a demand under such letter of credit in respect of any payment not made
within 30 days of invoice at any time from and after such 30 days during the
term of such letter of credit.

Propietary and Confidential Information                                        1





China Broadband Corporation                                     NORTEL
                                                                  NETWORKS
PLA Supplement Number 1
--------------------------------------------------------------------------------

7. ACCOUNT TEAM

Nortel Networks will assign as account team in both North America and China to
work closely with Customer to implement the business plan, assist Customer with
marketing programs, introductions and participation in mutually agreed to trade
shows, special events such as the Lighting Ceremonies etc.

8. AUTHORITY

China Broadband Corporation warrants that it has the authority to bind big Sky
and SHBS and guarantees the performance by Big Sky and SHBS of all of their
obligations specified in the PLA and this Supplement Number 1.


CHINA BROADBAND CORPORATION 
                            
By:/s/MATT HEYSEL           
   -------------------      
Name: Matt Heysel           
     -----------------      
Title: Chairman & CEO       
      ----------------      
Date: Jan. 23, 2001         
      ----------------      


NORTEL NETWORKS LIMITED 
                        
By:/s/RICHARD DUGAL     
   -------------------  
Name: Richard Dugal     
     -----------------  
Title: Region Director  
      ----------------  
Date: Jan. 24, 2001     
      ----------------  



Propietary and Confidential Information                                        2





China Broadband Corporation NORTEL NETWORKS PLA Supplement Number 1 -------------------------------------------------------------------------------- EXHIBIT "A" MODEL DESCRIPTION QTY LIST US$ EXT ------------- ---------------------------------------------- ------- -------- ------- DE3801E02 CMTS-1000 * * * DE3804031 Receiver Card * * * ARSVS01031 CPS-2000 V1.1 * * * ARSVS01020 CPS-2000 Software Kit V1.1 * * * ARSVS01016 CPS-2000 Documentation * * * DE3810001 SNMPC 4.2 Software * * * DE3810004 On Net Server Software Arris * * * DE3313001 LCn Software Arris * * * ARCD21522 Cable Modem, Ethernet (Revised 9-14) * * * AL2012F14 BayStack 450-24T Switch * * * DS1410005-1.0 Optivity Campus NMS 702 Network Management * * * NTJT55AH Australia Power Cord * * * NTJT02FA BSN-5000 System - 10G * * * NTJT16AA Slot Cover * * * NTJT29CA Sub Svc Card + 4xSub Svc Module no encryption * * * NTJT36CA 8xFE(UTPS) * * * NTJT60BA SW - ISOS Software Release 2.0 * * * NTJT63AA SW - ISOS - Aggregation - 1000 users * * * NTJT64AA SW - ISOS - Residential Firewalls - 1000 users * * * NTJT68AA SW - ISOS - Interdomain Routing (BG P-4) * * * NTJTB0BA SW - SC5- Entry - 2000 subscribers * * * NTJT878A SW - SC5 Server for ISOS 2.0 - Domain Tier * * * NTJT50AA AC Power Shelf * * * NTJT51AA AC Power Module * * * NTJT52AA Status Cable * * * NTJT90BA Perf Pak * * * TOTAL * * - Information has been omitted and has been filed separately with the United States Securities and Exchange Commission pursuant to an application for confidential treatment under Rule 406 of the Securities Exchange Act of 1933, as amended.
PROPRIETARY AND CONFIDENTIAL INFORMATION 3 China Broadband Corporation NORTEL NETWORKS PLA Supplement Number 1 -------------------------------------------------------------------------------- EXHIBIT "B" For the Term Nortel Networks agrees that the following discounts shall apply to purchases of the listed Products by Customer: o ********* o ********* o ********* o ********* o ********* o ********* o ********* ********* - Information has been omitted and has been filed separately with the United States Securities and Exchange Commission pursuant to an application for confidential treatment under Rule 406 of the Securities Exchange Act of 1933, as amended. PROPRIETARY AND CONFIDENTAL INFORMATION 4