{"id":42196,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/contractual-joint-venture-contract-deyang-guangshi-network.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"contractual-joint-venture-contract-deyang-guangshi-network","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/contractual-joint-venture-contract-deyang-guangshi-network.html","title":{"rendered":"Contractual Joint Venture Contract &#8211; Deyang Guangshi Network Development Ltd. and Big Sky Network Canada Ltd."},"content":{"rendered":"<pre>                            CONTRACTUAL JOINT VENTURE\n\n\n                             CONTRACT BETWEEN DEYANG\n\n\n                                GUANGSHI NETWORK\n\n\n                            DEVELOPMENT LTD. AND BIG\n\n\n                             SKY NETWORK CANADA LTD.\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n                                    PREAMBLE\n\nIn  accordance  with the \" Law of the  People's  Republic  of  China on  Chinese\nForeign  Contractual  Joint Ventures\" and other relevant laws and regulations of\nthe  People's  Republic of China,  Sichuan  Province  and the City of Deyang and\nadhering to the principle of equality and mutual  benefit,  spirit of friendship\nand cooperation,  Deyang Guangshi  Network  Development Ltd. and Big Sky Network\nCanada Ltd. agree to form a contractual joint venture company at Deyang, Sichuan\nProvince, the People's Republic of China.\n\n\n                                       2\n\n\n\n\n\n                                    CHAPTER 1\n                               GENERAL PROVISIONS\n\nArticle 1.1          Definitions\n\nIn this  Contract,  unless there is something in the  subject-matter  or context\ninconsistent therewith,\n\n     1.   \"Approval  Authority\"  means the Deyang  Municipal  Government and its\n          functional departments.\n\n     2.   \"Approvals\"  means all  approvals,  permits,  licenses,  certificates,\n          authorizations,   sanctions,   consents,   permissions,   filings  and\n          registrations required from or with any governmental authority.\n\n     3.   \"Articles of  Incorporation\"  means the \"Articles of  Incorporation of\n          Deyang Guangshi Big Sky Ltd.\n\n     4.   \"Board of Directors\"  means the Board of Directors of Deyang  Guangshi\n          Big Sky Ltd.\n\n     5.   \"Business  License\" means the business  license of Deyang Guangshi Big\n          Sky Ltd. issued by the State Administration for Industry and Commerce.\n\n     6.   \"Company\" means Deyang Guangshi Big Sky Ltd.\n\n     7.   \"Contract\"  means this  Contractual  Joint  Venture  Contract  between\n          Deyang Guangshi  Network  Development  Ltd. and Big Sky Network Canada\n          Ltd.\n\n     8.   \"Effective Date\" means the date on which the approval document of this\n          Contract is issued by the Approval Authority.\n\n     9.   \"Parties\" means Party A (Deyang Guangshi Network Development Ltd.) and\n          Party B (Big Sky Network Canada Ltd.).\n\n     10.  \"RMB\" means the currency of the People's Republic of China.\n\n     11.  \"Foreign   Currency\"   means  the  currencies  of  foreign   countries\n          (including   paper  money)  and  foreign  payment  orders   (including\n          commercial instruments and bank deposit certificates, etc.).\n\n     12.  \"Senior  Officers\"  means the  General  Manager,  the  Deputy  General\n          Manager, the Chief Engineer and the Chief Accountant.\n\n\n                                       3\n\n\n\n\n                                    CHAPTER 2\n                    PARTIES OF THE CONTRACTUAL JOINT VENTURE\n\nArticle 2.1          The Parties\n\nParties to this Contract are as follows:\n\nParty A: Deyang Guangshi Network Development Ltd.\n\nPlace of Registration: Jinghu Hi-tec Development District, the City of Deyang,\nthe Province of Sichuan, the People's Republic of China\n\nLegal Address: #50, MinJang Road East, Jinghu Hi-tec Development District, the\n               City of Deyang, the Province of\n               Sichuan, the People's Republic of China\n\nLegal Representative:\nName: Zhou, Jinan\nPosition: Chairman of the Board.\nNationality: Chinese\nTelephone: 86-838-223-2538\nFax: 86-838-220-3326\n\nParty B: Big Sky Network Canada Ltd. [Chinese Characters Appear Here]\n\nPlace of Registration: British Virgin Islands\n\nLegal Address: 2080, 440 2nd Ave., SW, Calgary, Alberta, Canada\n\nLegal Representative:\nName: Matthew Heysel\nPosition: Chairman\nNationality: Canadian\nTelephone: 1-403-234-8885\nFax: 1-403-265-8808\n\n\n                                       4\n\n\n\n\n\n                                    CHAPTER 3\n                           DECLARATIONS AND WARRANTIES\n\nArticle 3.1          Declarations and Warranties of Party A. Party A hereby\ndeclares and warranties as follows:\n\n     1.   Party A is a legal  entity  duly  incorporated  under  the laws of the\n          People's Republic of China.\n\n     2.   The  execution  and  performance  by Party A of this  Contract and its\n          appendices (i) are within its corporate power and business scope, (ii)\n          have been duly authorized by necessary corporate resolutions, (iii) do\n          not  contravene  its  Articles  of  Incorporation   and  (iv)  do  not\n          contravene any law or contractual restrictions binding on or affecting\n          part A.\n\n     3.   Party A owns and  controls  the  entire  HFC  network  of Deyang  (the\n          \"Network\")  and  the  right  to  use  the  facilities,  equipment  and\n          frequencies  (collectively,  the \"Facilities and  Frequencies\") of the\n          Network for data transmission and Internet- related business.\n\n     4.   Party A understands  and guarantees to act in good faith and shall not\n          relinquish,  transfer  or permit  the  transfer  of the  ownership  or\n          control of, the Network or Party A's right to use the  Facilities  and\n          Frequencies  to any third  party,  and shall  ensure  that the Company\n          shall be the  Internet  technology  service  provider  for the Network\n          during the term of this  Contract.  Party A shall not engage or permit\n          any one to engage  any third  party  for the  aforementioned  services\n          without the prior written consent of the Company.\n\n     5.   Party A has all necessary  qualifications to obtain all Approvals that\n          Party A may  require in order to act as an Internet  service  provider\n          and to provide Internet connectivity services to its customers through\n          the Network.\n\n     6.   Party A shall  obtained all necessary  Approvals for the execution and\n          performance of this Contract.\n\n     7.   Party  A  ensures  that  all  additional  contracts  or  supplementary\n          documents relating to this Contract to be performed as the Contract.\n\n     8.   Subject to the  approval of this  Contract and its  appendices  by the\n          Approval  Authority,  this Contract  creates legal,  valid and binding\n          obligations  that are  enforceable  against Party A in accordance with\n          this Contract and all applicable laws and regulations.\n\n\n                                       5\n\n\n\n\nArticle 3.2          Declarations and Warranties of Party B. Party B hereby\ndeclares and warranties  as of the date hereof as follows:\n\n     1.   Party B is a legal entity duly incorporated  under the laws of British\n          Virgin Island.\n\n     2.   The  execution  and  performance  by Party B of this  Contract and its\n          appendices (i) are within its corporate power and business scope, (ii)\n          have been duly authorized by all necessary corporate resolution, (iii)\n          do not  contravene  its  Articles  of  Incorporation  and  (iv) do not\n          contravene any law or contractual  restriction binding on or affecting\n          Party B.\n\n     3.   The   investment   funds,   the   equipment,   the   manner   of   the\n          investment (pound) the   timing  and  the  amount  of  contribution\n          stipulated  in the  Contract  shall be observed by Party B in order to\n          ensure  the  progress  of the  project.\n\n     4.   Party  A  ensures  that  all  additional  contracts  or  supplementary\n          documents, signed by the Parties, relating to this Contract or Project\n          having the same legal status and effect as the Contract.\n\n     5.   Subject to the  approval of this  Contract and its  appendices  by the\n          Approval  Authority,  this Contract  creates legal,  valid and binding\n          obligations  that are  enforceable  against Party B in accordance with\n          this Contract and all applicable laws and regulations.\n\n\n                                       6\n\n\n\n\n\n                                    CHAPTER 4\n                        ESTABLISHMENT OF THE CONTRACTUAL\n                              JOINT VENTURE COMPANY\n\nArticle 4.1          Establishment of the Company\nThe Company shall be a contractual  joint venture with limited  liability formed\nunder the \"Law of the People's Republic of China on Chinese Foreign  Contractual\nJoint Ventures\" and other relevant laws and regulations of the People's Republic\nof China.\n\nArticle 4.2          The Legal Name and Address of the Company\nParties to this Contract are as follows:\n\nParty A: Deyang Guangshi Network Development Ltd.\n\nPlace of Registration:   Jinghu Hi-Tec Development District, the City of Deyang,\n                         the Province of Sichuan, the People's Republic of China\n\nLegal Address:           #50, MinJang Road East, Jinghu Hi-tec Development Dis-\n                         trict, the City of Deyang, the Province of Sichuan, the\n                         People's Republic of China\n\nLegal Representative:\nName: Zhou, Jinan\nPosition: Chairman of the Board\nNationality: Chinese\nTelephone: 86-838-223-2538\nFax: 86-838-220-3326\n\nArticle 4.3          Laws of the People's Republic of China\nThe Company shall be a contractual joint venture registered in Deyang,  approved\nby the relevant  Approval  Authorities.  As a legal  entity,  the Company  shall\ncomply with the laws and  regulations  of the  People's  Republic of China.  All\nactivities  of the Company  shall be governed and  protected by the laws and the\npertinent rules and regulations of the People's Republic of China.\n\nArticle 4.4          Limited Liability\nThe  Company  is  a  limited  liability  company.   The  investment  funds,  the\ncooperative  conditions  and the terms  provided by both Parties of the Contract\nshall constitute part of the property of the Company. The Company's  liabilities\nshall be settled by the  properties  of Company,  except the  ownership  and the\nright of use of the Network. Both Parties of the Contract have reached consensus\non the following:  the terms and conditions of the  cooperation  and investment,\nprofit distribution,  business management and operation, and assets distribution\non termination of the Contract.\n\n\n                                       7\n\n\n\n\n\n\n                                    CHAPTER 5\n                 OBJECTIVE OF THE CONTRACT AND SCOPE OF BUSINESS\n\nArticle 5.1          Objective\nThe objective of the Company is to provide Internet technology services for data\ntransmission  and Internet  related  business in the Deyang  area.  This will be\naccomplished by economic  cooperation and technical exchanges as well as through\nadopting advanced technology and scientific  management  expertise,  in order to\nachieve reasonable economic results and ensure a maximum rate of return for both\nParties.\n\nArticle 5.2          Scope of Business\nThe scope of business of the Company  shall  include the  provision  of Internet\ntechnology services including,  without  limitation,  the purchase,  processing,\nupgrading, development,  installation,  operation, maintenance and management of\nnetwork   platform  for  broadband   data   transmission,   network  based  data\ntransmission and value-added  business;  application software  development;  and\ntechnical, consulting, management and training services.\n\nArticle 5.3          Business Plan\n\nThe following sets out a description of the Company's business plan:\n\n     1.   Party A wishes  to use the  Network,  Facilities  and  Frequencies  to\n          provide  Internet   connectivity   services  to  customers  in  Deyang\n          (collectively,  \"Network Customers\"). However, the Network, Facilities\n          and  Frequencies  cannot be used for such  purpose  until  appropriate\n          hardware and software is installed on the Network.\n\n     2.   Party A and Party B agree that the Company  shall act as the exclusive\n          Internet  technology service provider for this purpose.  Specifically,\n          the Company shall select,  purchase, own, process,  upgrade,  install,\n          manage,  operate and  maintain  all  hardware  and  software  that the\n          Company  considers  necessary  for the purpose of enabling  Party A to\n          provide internet  connectivity  services to its HFC Network  Customers\n          through the Network, Facilities and Frequencies.\n\n     3.   Upon  receiving  an  Internet  operating  permit  and other  necessary\n          Approvals,  Party A shall contract with one or more of the government-\n          approved Internet Network Provider(s) to interconnect the Network with\n          the  Internet.  Party  A  shall  be  responsible  for  paying  all the\n          interconnection fees payable to such Internet Network Provider(s).\n\n\n                                       8\n\n\n\n\n\n  4.   In consideration for providing internet  connectivity services to Network\n       Customers as an Internet Service Provider,  Party A shall require Network\n       Customers to pay to Party A, a monthly  connection  fee (the  \"Connection\n       Fee\").   Party  A  shall  use  such   Connection   Fees  to  offset   the\n       interconnection  fees that Party A shall be  required to pay to Party A's\n       Internet Network Provider(s).\n\n  5.   In consideration  for providing  Internet  technology  services that will\n       enable Network  Customers to obtain  Internet  connectivity  from Party A\n       through the Network,  the Company shall require Network  Customers to pay\n       to the Company, an initial installation fee and a monthly maintenance fee\n       (the  \"Installation  and  Maintenance  Fee\").  The Company shall use such\n       Installation  and  Maintenance  Fees to offset the Company's  capital and\n       operating costs and to earn an acceptable  return on its investment.  The\n       Company shall distribute to Party A and Party B, all the net profits that\n       the Company may derive  from such  activities  in the manner set forth in\n       Article 9.1 of this Contract.\n\n  6.   Immediately  after  the  Company  has been  established,  Party A and the\n       Company shall  develop  specific  plans for  attracting  and  maintaining\n       Network Customers on a cooperative basis, including: (i) the schedule for\n       the selection, purchase, and installation of hardware and software on the\n       Network and the other Internet  technology services that the Company will\n       provide; (ii) marketing plans; (ii) pricing policies;  (iii) the form and\n       content of the Connection Fee agreement that Party A will require Network\n       Customers  to sign for the  purpose of  obtaining  Internet  connectivity\n       services  from  Party  A  as  well  as  the  separate   Installation  and\n       Maintenance   Fee  agreement  that  the  Company  shall  require  Network\n       Customers  to sign  for  providing  Internet  technology  services;  (iv)\n       collection of fees; and (v) other operational matters.\n\n\n                                       9\n\n\n\n\n\n                                    CHAPTER 6\n                  TOTAL INVESTMENT, REGISTERED CAPITAL, CAPITAL\n                CONTRIBUTIONS AND COOPERATIVE CONDITIONS FOR THE\n                           CONTRACTUAL JOINT VENTUREE\n\n\nArticle 6.1          Total Investment\n\n     1.   The  total  investment  of the  Company  shall be  US$4,500,000  (four\n          million five hundred thousand US Dollars).\n\n     2.   The unit of currency for the total investment,  registered capital and\n          other  contributions  shall be the U.S. dollar.  The exchange rate for\n          the two currencies shall be the average exchange rate announced by the\n          State Administration of Foreign Exchange of China for U.S. dollars and\n          RMB for the date on which the capital contributions are made.\n\n     3.   All  capital  contributions  in cash  shall be  deposited  into a bank\n          account  designated by the Company in Deyang or a foreign bank account\n          designated by the Company, if approved by the State  Administration of\n          Foreign  Exchange of China,  pursuant to the relevant foreign exchange\n          laws regulations.\n\n     4.   All capital contributions to the Company,  whether in cash or in other\n          form, shall be used exclusively for the Company.\n\nArticle 6.2          Registered Capital\n\n     1.   The  registered  capital of the  Company  shall be  US$2,250,000  (two\n          million  and two hundred  and fifty  thousand US Dollars)  that may be\n          contributed in the form of cash, equipment or services.  The equipment\n          investment  is  US$1,250,000  (one  million  and two hundred and fifty\n          thousand US Dollars)  and the cash  investment  is  US$1,000,000  (one\n          million US Dollars).  The differences between the total investment and\n          the  registered  capital  shall be raised  by Party B abroad.  2. By a\n          unanimous consent of the Parties and the Board of Directors, the total\n          investment   may  be  increased   for  the   Company's   new  business\n          development.\n\nArticle 6.3          Cooperative Conditions\nThe cooperative conditions of the Parties are as follows:\n\n     1.   Party A shall:\n\n          (1)    Party A ensure that the Company shall be the exclusive provider\n                 of the Internet  technology services in relation to the Network\n                 (the  ownership  of the Network  belongs to Party A) and enable\n                 Party A to use the HFC Network,  Facilities and  Frequencies to\n                 provide Internet  connectivity services to Party A's customers;\n                 and\n\n\n                                       10\n\n\n\n          (2)    obtain all  regulatory  Approvals,  licenses  and permits  that\n                 either  the  Company or Party A may  require  to  perform  this\n                 Contract.  Without  limiting the  generality of the  foregoing,\n                 Party A shall  obtain an  Internet  operating  permit  from the\n                 Ministry of Information  Industries and any other Approval that\n                 Party A may  require  in  order  to  legally  provide  Internet\n                 connectivity  services  in  the  manner  contemplated  by  this\n                 contract.\n\n     2.   Party B shall contribute to the Company in the form of cash, equipment\n          or services to the Company  with an aggregate  value of  US$4,500,000.\n          The  differences  between  the  total  investment  and the  registered\n          capital shall be raised by Party B abroad.\n\n     3.   Timing of Contributions\n\n          The contributions stipulated in the Contract shall be carried out as\n          follows:\n\n          (1)  Party A shall obtain all the  Approvals  contemplated  by Article\n               6.3(1) above  within  fifteen (15) days after the issuance of the\n               Business License. If all such Approvals are not obtained by Party\n               A within  fifteen  (15) days after the  issuance of the  Business\n               License  due to the  reasons  of policy  change  or  governmental\n               delay,  Party A shall  not to be  considered  in  breach  of this\n               Contract.\n\n          (2)  The initial registered capital contribution of US$1,000,000 shall\n               be made by Party B within twenty (20) days after  receiving  each\n               of the following documents in form and substance  satisfactory to\n               Party B: (i) true  copies of all the  Approvals  contemplated  by\n               Article  6.3(1)  above;  and  (ii) a legal  opinion  issued  by a\n               qualified  Chinese  law  firm  selected  by  Party  B  confirming\n               relevant legal matters, such as: (a) all such Approvals have been\n               validly  issued  and are in good  standing;  (b) Party A owns and\n               controls the Network and has the right to use the  Facilities and\n               Frequencies for data  transmission and Internet related business;\n               and (c) this  Contract is legal,  valid and  enforceable  against\n               Party A. If Party B does not receive all such  documents  in form\n               and substance  satisfactory to Party prior to such date,  Party B\n               shall not be obliged to contribute any capital to the Company and\n               Party B shall not be considered in breach of the Contract.\n\n          (3)  The remaining registered capital and other contributions to the\n               Company  shall be made in accordance  with the Company's  project\n               schedule  (as the  Board  of  Directors  may  establish)  and the\n               relevant legal requirements of the People's Republic of China.\n\n\n                                       11\n\n\n\n. Modification of Cooperative Conditions\n\nDuring the term of this Contract,  the Parties shall not modify the  cooperative\nconditions upon which the Parties have mutually agreed.\n\nArticle 6.4          Verification of Contributions\n\nA reputable  international  accounting firm registered in China shall be engaged\nby the Company to verify the contributions of Party B and issue a Certificate of\nVerification.  Upon receipt of a satisfactory  Certificate of Verification,  the\nCompany shall issue a new Certificate of Capital Contribution to each Party. The\nCertificate of Capital  Contribution shall include the following items: the name\nof the Company,  the date of  establishment,  the names of the Parties and Party\nB's  contributions,  the date on which the capital  contributions were made, and\nthe date of issuance of the Certificate of Capital Contribution. The Certificate\nof  Capital  Contribution  shall be the  final  evidence  of Party  B's  capital\ncontribution to the Company.  The Certificate of Capital  Contribution  shall be\neffective  when signed by the  Chairman  and Vice  Chairman of the Board and the\nseal of the Company is affixed thereon.\n\nArticle 6.5          Assignment of Interest, Rights and Obligations\n\n     1.   If a Party (the  Transferring  Party) to the Contract intends to sell,\n          assign,  transfer,  wholly  or  in  part,  its  interest,  rights  and\n          obligations to a third party, a prior written consent must be obtained\n          from the  other  Party  (the  Non-Transferring  Party).  The  modified\n          Contract  can only be  effective  after  the  modifications  have been\n          registered  with the State  Administration  for  Industry and Commerce\n          within  thirty  (30) days  after  approved  by the  relevant  Approval\n          Authorities.\n\n     2.   If the Transferring Party desires to sell, assign or transfer,  wholly\n          or in part,  its  interest,  rights and  obligations  to a third party\n          other than a subsidiary of the  Transferring  Party,  the Transferring\n          Party shall secure a binding  written  offer (the \"Third Party Offer\")\n          from such third party. The Non-Transferring Party shall have the right\n          (the \"First Right of Refusal\")  exercisable  within  fifteen (15) days\n          after  receiving  a copy of the  Third  Party  Offer to  purchase  the\n          Transferring  Party's interest,  rights and obligations in the Company\n          on the same terms and  conditions as set out in the Third Party Offer.\n          The  Non-Transferring  Party shall  notify the  Transferring  Party in\n          writing prior to exercise its First Right of Refusal.\n\n\n                                       12\n\n\n\n\n     3.   If the  Non-Transferring  Party  exercises  its First Right of Refusal\n          within  fifteen  (15) days after  receiving  a copy of the Third Party\n          Offer to  purchase  the  Transferring  Party's  interest,  rights  and\n          obligations  in  the  Company,  the  Transferring  Party's  respective\n          interest,   rights  and  obligations   shall  be  transferred  to  the\n          Non-Transferring Party on the same terms and conditions set out in the\n          Third Party Offer.\n\n     4.   If the  Non-Transferring  Party fails to  exercise  its First Right of\n          Refusal within fifteen (15) days after  receiving the  notification of\n          the Third Party Offer, the Transferring  Party may,  provided that the\n          Transferring  Party has  obtained the prior  written  consent from the\n          Non-Transferring   Party   (such   consent   shall  not  be   withheld\n          unreasonably),  sell,  assign  or  transfer,  wholly  or in part,  its\n          respective  interest,  rights and  obligations  in the  Company to the\n          Third Party pursuant to Article 6.5(1) of this Contract.\n\n     5.   Notwithstanding  the foregoing,  but subject to any required approvals\n          from the Approval Authority, a Party, after notifying the other Party,\n          may  sell,  assign or  transfer,  wholly  or in part,  its  respective\n          interest, rights and obligations in the Company to its Subsidiary. The\n          Parties agree that such assignment  shall not require prior consent of\n          the  other  Party  and  shall  not  attach  any   conditions  to  such\n          assignment.  The  Parties  also agree that the First Right of Refusal,\n          shall not be applied to such assignment.\n\n     6.   Any sale,  assignment  or transfer of a Party's  interest,  rights and\n          obligations  in the  Company,  wholly or in part,  under this  Article\n          shall  not be  effective  until  all  necessary  Approvals  have  been\n          obtained. Upon receipt of such Approvals,  the Parties shall cause the\n          Company to cancel or amend the  Certificate  of  Capital  Contribution\n          referred to in Article 6.4.\n\n\n                                       13\n\n\n\n\n\n                                    CHAPTER 7\n         RESPONSIBILITIES OF EACH PARTY OF THE CONTRACTUAL JOINT VENTURE\n\nArticle 7.1          Costs\n\nThe Parties shall be responsible  for performing  their  respective  obligations\ncontained in this Contract in a timely and effective fashion.  The Parties agree\nthat the cost incurred in performing the following  obligations shall be paid by\nthe Company,  except to the extent that any such cost is specifically designated\nas part of a Party's  contribution to the registered capital of the Company or a\ncooperative condition of a Party, as described in Article 6.3.\n\nArticle 7.2          Obligations of Party A:\n\n     1.   To handle  applications for project approval,  business  registration,\n          business   license  and  other  matters  from  relevant   governmental\n          authorities  with respect to the  establishment of the Company and the\n          business operations  contemplated in this Contract.  The company shall\n          be responsible for the cost incurened.\n\n     2.   To assist the Company in matters involving governmental departments or\n          agencies of the People's Republic of China.\n\n     3.   To assist the Company in obtaining  satisfactory access to the Network\n          for the Company.\n\n     4.   To assist the Company in applying for and  obtaining of all  necessary\n          approvals,  permits, certificates and licenses required for conducting\n          Company's business;\n\n     5.   To assist the Company in  applying  for and  obtaining  of the maximum\n          benefit,  under  the tax  policies  and  regulations  of the  People's\n          Republic of China, of all permitted reductions in, or exemptions from,\n          the income  tax,  withholding  tax,  import  duties,  value added tax,\n          business and consumption  tax, local tax, real estate tax, vehicle tax\n          or any  other  tax  reductions,  rebates  or  exemptions  to which the\n          Company is currently entitled or may become entitled in the future;\n\n     6.   To assist  Party B in  obtaining  all  necessary  licenses and foreign\n          exchange approvals,  from the appropriate  authorities of the People's\n          Republic of China,  to permit  Party B to transfer out of China of all\n          its profits,  dividends,  returning of invested  capital,  proceeds of\n          liquidation,  after  paying  all  applicable  taxes  of  the  People's\n          Republic of China;\n\n     7.   To assist the Company to rent work site and office space;\n\n\n                                       14\n\n\n\n\n     8.   To  assist  the  Company  in   purchasing  or  leasing  any  necessary\n          equipment, material, office supplies, tools of transportation and Tele\n          communication facilities, etc;\n\n     9.   To assist the Company in getting the utilities for business operation,\n          such as water, electricity, transportation, etc.\n\n     10.  To  assist  the  Company  in  recruiting   management   and  technical\n          personnel,  workers  and other  personnel  required  from the  Chinese\n          labour market.\n\n     11.  To assist  expatriate and foreign  personnel in applying for Temporary\n          Residential  Card,  entrance visa, work permit,  travel  documents and\n          other documents required.\n\n     12.  To give  convenience to Party B in  implementing  and  supervising its\n          investment.\n\n     13.  To Provide  Party B, within  fifteen  (15) days after  signing of this\n          Contract,  with written evidence that Party A is able to provide Party\n          A's cooperative conditions as stipulated under Article 6.3 (1) of this\n          Contract to ensure that this Contract can be carried out by Party A.\n\n     14.  To assist the Company, with the best effort, to promote its business.\n\n     15.  To assist with other matters that entrusted by the Company.\n\nArticle 7.3          Obligations of Party B:\n\n     1.   To  assist  Party  A to  handle  applications  for  project  approval,\n          business  registration,   business  license  and  other  matters  from\n          relevant   Approval   Authorities   in  Deyang  with  respect  to  the\n          establishment of the Company\n\n     2.   To assist the Company: (i) to develop financial planning and reporting\n          systems, and (ii) to apply advanced scientific management systems;\n\n     3.   To assist the Company in matters involving governmental departments or\n          agencies of the People's Republic of China.\n\n     4.   As  entrusted  by the  Company:  (i) to  select  advanced  technology,\n          equipment  parts,  software  and  other  related  materials,  that are\n          unavailable in the People's  Republic of China, from the international\n          market;  (ii)  on  behalf  of the  Company,  to  select  and  purchase\n          appropriate equipment necessary for the project at a comparable price,\n          quality and  specifications;  (iii) to ship the equipment to Deyang or\n          such other  destinations  in the People's  Republic of China where the\n          Company  is  engaged  in  business;  and  (iv) the  cost  incurred  in\n          performing the aforementioned duties shall be paid by the Company.\n\n\n                                       15\n\n\n\n\n     5.   To train the  technical  personnel and employees of the Company at the\n          Company's cost.\n\n     6.   To assist the Company, with the best effort, to promote its business.\n\n     7.   Party  B  shall  provide  Party A with a  Credit  Certificate  from an\n          investment  bank within  fifteen (15) days after signing this Contract\n          to show commitment to this Contract.\n\n     8.   To assist with other matters that entrusted by the Company.\n\nArticle 7.4          Responsibilities  of Both  Parties  The  Parties  shall be\nmutually responsible for the following:\n\n     1.   Making  their  respective  contributions  to the  Company  pursuant to\n          Article 6.3;\n\n     2.   To use  their  best  efforts  and in good  faith:  (i) to  ensure  the\n          economic viability and profitability of the Company;  (ii) to maximize\n          revenue of the Company by increasing  the number of  subscribers;  and\n          (iii)  protect  the  goodwill,   the   trademarks   and  patented  and\n          non-patented technology of the Company from infringement;\n\n     3.   To  ensure  that  two (2)  sets  of  books  and  records  are  kept in\n          accordance with the applicable accounting  regulations of the People's\n          Republic of China.  One set is in the Chinese  language and another is\n          in the English language.  Parallel  Accounting Method shall be applied\n          for each set of books and records in RMB and US Dollars.  All vouchers\n          are to be kept with the Chinese books;\n\n     4.   No party shall mortgage, pledge or permit any liens on any property of\n          the  Company  without  prior  approval  of the Parties and the written\n          approval of the Board of Directors;\n\n     5.   Parties shall cooperate to each other,  execute all Company  documents\n          and take all necessary  actions to achieve the objectives and goals of\n          the Company set forth in this Contract.\n\n     6.   No party shall  borrow from or lend money to or provide  guarantee  in\n          the name of the Company or  establish  any  subsidiary  of the Company\n          without prior approval of the Parties and the written  approval of the\n          Board of Directors.\n\n\n                                       16\n\n\n\n\n\n                                    CHAPTER 8\n                                    EQUIPMENT\n\n\nArticle 8.1          Purchase of Equipment\n\nAll  equipment  for  the  Company  can  be  purchased   either  in  domestic  or\ninternational  market.  If the  Company  needs to  purchase  from  international\nmarket,  the Board of Directors of the Company shall make a decision to purchase\nthe  equipment.  The  Company  shall  submit the  equipment  purchased  from the\ninternational  market  for  inspection  by the  commodity  inspection  authority\npursuant  to the \"Law of the  People's  Republic of China on the  Inspection  of\nImport and Export Commodities.\"\n\n\n                                       17\n\n\n\n\n\n                                    CHAPTER 9\n                               INCOME DISTRIBUTION\n\nArticle 9.1          Income Distribution\n\nAfter the  Company  pays all taxes,  fees and  statutory  duties as  required by\napplicable laws and regulations of the People's Republic of China, and allocates\nthe public  reserve funds and public  welfare funds and other  relevant funds as\nrequired  by the  \"Company  Law of the  People's  Republic  of China  \"and other\nregulations,  the net income  derived by the  Company  from  providing  Internet\ntechnology services as contemplated hereunder shall be distributed as follows:\n\n                                          Party A          Party B\n          Phase I  (2001*-2005):            20%                        80%\n          Phase II (2006-2010):             40%                        60%\n          Phase III (2011-2015):            50%                        50%\n          Phase III (2016-2020):            60%                        40%\n\n*Or the Effective Date which ever occurs earlier.\n\n\n                                       18\n\n\n\n\n\n                                   CHAPTER 10\n                               BOARD OF DIRECTORS\n\n\nArticle 10.1         Establishment of Board of Directors\nThe Board of  Directors is the highest  authority  of the Company.  The Board of\nDirectors of the Company shall come into existence on the Effective Date.\n\nThe Board of Directors shall have all the powers under the law to make decisions\nconcerning the business, management and other impotent matters of the Company.\n\nThe Board of  Directors  shall be consisted  of seven (7)  Directors.  Three (3)\nDirectors of the Board shall be  appointed by Party A and four (4)  Directors of\nthe Board shall be  appointed by Party B. The Chairman of the Board of Directors\nshall be  designated  by Party A and the Vice Chairman of the Board of Directors\nshall  be  designated  by Party B. The  term of  office  of the  Chairman,  Vice\nChairman and Director of the Board is three (3) years. The term of office may be\nrenewed if the Director is continuously  appointed by their respective  Parties.\nThe distribution of Directors shall be as follows:\n\n                                          Party A          Party B\n          Phase I (2001*-2005):             3                4\n          Phase II (2006-2010):             3                4\n          Phase III (2011-2015):            4                3\n          Phase III (2016-2020):            4                3\n\n*Or the Effective Date which ever occurs earlier.\n\nThe powers, procedures,  requirements and other matters relating to the Board of\nDirectors are set out in the Articles of Incorporation.  If there is a conflict,\nthe Articles of Incorporation shall prevail.\n\nArticle 10.2         Board of Directors and the Chairman\nThe  Chairman  of the  Board of  Directors  is the legal  representative  of the\nCompany.  The Chairman of the Board exercises powers  authorized by the Articles\nof  Association,  or to act as expressly  authorized  in writing by the Board of\nDirectors,  or to sign  the  document  that has  legal  power  binding  upon the\nCompany.\n\n\n                                       19\n\n\n\n\n\nArticle 10.3         Meeting of the Board of Directors and its Quorum\nThe Board of Directors  shall  convene at least two meetings  every year. At any\nmeeting,  a quorum shall  consist of at least four (4)  Directors,  of which not\nless than one (1)  Director  is  appointed  by Party A and one (1)  Director  is\nappointed by Party B, attending in person,  by proxy or by telephone.  A meeting\nshall be  called by the  Chairman,  or,  if the  Chairman  is unable to call the\nmeeting,  the Chairman shall  delegate the Vice Chairman or another  Director to\ncall and preside over the meeting.\n\nThe  Chairman  of the  Board  must call a meeting  upon the  request  of any two\nDirectors.  Board of Directors  meeting  shall be called upon fourteen (14) days\nwritten notice (or upon a shorter notice if all Directors  unanimously  agree in\nwriting from time to time) to all  Directors.  The Board  meeting can be held at\nany  jurisdiction  approved  by  two  thirds  (2\/3)  majority  of the  Board  of\nDirectors,  provided that  adequate  facilities  are  available  for  electronic\nparticipation.\n\nDirectors  may be present  and vote in  person,  by proxy or by  telephone.  The\nChairman and the Vice Chairman shall each have one vote. For matters which would\notherwise need to be approved at a meeting of the Board of Directors, in lieu of\na meeting of the Board of Directors,  a written resolution may be adopted by the\nBoard of  Directors  if such  resolution  is sent to all members of the Board of\nDirectors  signed and adopted by the number of Directors  necessary to make such\ndecision as  stipulated  in this  Contract  and the  Articles of  Incorporation.\nNotice of a Board  meeting  may be waived in writing at any time before or after\nthe  meeting.  A notice  shall be deemed to be  waived  by  attending  the Board\nmeeting in person, by proxy or participating by telephone or video conference.\n\nArticle 10.4         Powers of the Board of Directors\nThe Board of Directors may exercise all of the powers  belonging to the Company.\nExcept specifically  stipulated in the Contract hereof. All actions taken by the\nBoard of Directors shall require approval by simple majority of the Directors at\nthe meeting at which a quorum is present. However, the following matters require\napproval of two thirds (2\/3) majority of the Board of Directors:\n\n     1.   Annual and any interim  production and operating plans, the annual and\n          any interim operating budget,  including  anticipated  operating costs\n          and expenses,  and annual and any interim financial  statements of the\n          Company and any significant change to the aforementioned.\n\n\n                                       20\n\n\n\n\n\n     2.   Significant  changes to the  business  scope or  business  plan of the\n          Company as stipulated in Articles 5.2 and 5.3 hereof;\n\n     3.   Determining  the salary and  benefits  for the  General  Manager,  the\n          Deputy  General  Manager and the other Senior  Officers of the Company\n          and any changes thereto;\n\n     4.   The  appointment  and removal of the General  Manager,  Deputy General\n          Manager, and other Senior Officers of the Company;\n\n     5.   Determining  the  scale  of  wages,  benefits  and  allowances  of the\n          employees of the Company and changes thereto;\n\n     6.   The approval and amendment of the following:\n\n          (i)  Any overdraw which is not included in the annual  budget,  single\n               contract which is equivalent to US$100,000 (one hundred  thousand\n               US  Dollars),  any  commitment  or  expenditure,   or  any  other\n               contract, commitment or expenditure,  which is not included in an\n               annual budget and by itself,  or together  with other  contracts,\n               commitments  or  expenditure   exceeds  US$100,000  (one  hundred\n               thousand US Dollars);\n\n          (ii) Any  expenditure,  contract or commitment  approved in the annual\n               budget which exceeds the amount provided for in the budget by 10%\n               or any contract, commitment or expenditure approved in the annual\n               budget which exceeds an amount  equivalent  to US$300,000  (three\n               hundred  thousand US Dollars)or any higher dollar amounts and any\n               higher percentage as the Board of Directors determines;\n\n          (iii)Any  borrowing by the Company which would result in total debt of\n               the Company  exceeds an amount  equivalent to  US$300,000  (three\n               hundred thousand US Dollars);or\n\n          (iv) The  disposition,  mortgage or transfer of fixed  assets owned by\n               the  Company  with a value in  excess  an  amount  equivalent  to\n               US$150,000 (one hundred and fifty thousand US Dollars).\n\n     7.   The   commencement  or  settlement  of   arbitration,   litigation  or\n          conciliation with any third party; and\n\n     8.   The  appointment of a team of  liquidation  and its members to conduct\n          the  liquidation of the Company in accordance  with Chapter 16 of this\n          Contract.\n\n\n                                       21\n\n\n\n\n\nArticle 10.5         Matters Requiring Unanimous Approval of All Directors\nThe following matters shall require the unanimous approval of all Directors of\nthe Board:\n\n     1.   Any modification of the Contract and the Articles of Incorporation;\n\n     2.   Discontinuation or dissolution of the Company;\n\n     3.   Increase,  decrease or  assignment  of the  registered  capital of the\n          Company;\n\n     4.   Pledge of assets of the Company;\n\n     5.   Amalgamation with other economic organizations, splitting the Company,\n          or changing the organization of the Company.\n\nArticle 10.6         Minutes of the Board Meeting\nThe minutes of the Board  meeting shall be confirmed and signed by the Directors\nattending the meeting and shall be filed with the Company.\n\n\n                                       22\n\n\n\n\n\n                                   CHAPTER 11\n                          BUSINESS AND LABOR MANAGEMENT\n\nArticle 11.1         Management Office\nThe Company shall establish a management office,  which shall be responsible for\nits day-to-day  operation and  management.  The  management  office shall have a\nGeneral  Manager and a Deputy General  Manager.  The General  Manager and Deputy\nGeneral Manager shall be appointed by the Board of Directors. The term of office\nfor the General  Manager and Deputy General Manager is three (3) years. In Phase\nI (2001*-2005), the General Manager shall be nominated by Party B and the Deputy\nGeneral  Manager  shall be  nominated by Party A. A Director of the Board may be\nappointed  as the General  Manager or the Deputy  General  Manager.  In Phase II\n(2006-2010),  Phase III  (2011-2015)  and Phase IV, the General  Manager and the\nDeputy General Manager shall be appointed by public recruitment.\n\n*Or the Effective Date which ever occurs earlier.\n\nArticle 11.2         General Manager and Deputy General Manager\nThe  responsibility  of the General Manager is to carry out the decisions of the\nBoard of Directors,  and conduct the day-to-day  management of the Company.  The\nDeputy  General  Manager  shall  assist the  General  Manager  to conduct  daily\noperation of the Company.\n\nArticle 11.3         Powers of Board to Dismiss Corporate Officers\nIn case of  graft or  serious  dereliction  of duty on the  part of the  General\nManager or the Deputy  General  Manager,  the Board of Directors  shall have the\npower to dismiss them at any time.\n\nArticle 11.4         Labor Management\nLabor contract covering  employment,  dismissal,  resignation,  wages,  welfare,\ninsurance,   protection,   discipline,   rewards,  penalty,  and  other  matters\nconcerning  the  employees of the Company  shall be drawn up between the Company\nand the  Trade  Union  of the  Company  as a whole  or  individual  employee  in\naccordance with the laws and  regulations of the People's  Republic of China and\nthe City of Deyang on labor management. The labor contracts, after being signed,\nshall be filed with the Deyang Labor Bureau for record.\n\n\n                                       23\n\n\n\n\n\nArticle 11.5         Senior Officers\nThe  appointment of senior  Officers who are  recommended by the Parties,  their\nsalaries,  social  insurance,  welfare and their standard of traveling  expenses\netc.  shall be decided by the Board of  Directors  with  reference  to the trade\nstandard in Deyang.\n\n\n                                       24\n\n\n\n\n\n                                   CHAPTER 12\n                                 CONFIDENTIALITY\n\n\nArticle 12.1         Confidentiality\nNo Party to this Contract shall, nor shall it permit any of its employees or the\nemployees of the Company to,  divulge to any person any  technical or commercial\nsecrets  concerning  execution of the business of the Company during the term of\nthe cooperation.  The  confidentiality  shall remain for a period of twenty (20)\nyears from signing of this Contract.\n\n\n                                       25\n\n\n\n\n\n                                   CHAPTER 13\n         TAXES, FINANCE, AUDIT, STATISTICS AND ENVIRORNMENTAL PROTECTION\n\n\nArticle 13.1         Taxation\nThe Company shall pay taxes in accordance  with the laws and  regulations of the\nPeople's Republic of China.\n\nArticle 13.2         Income Tax\nAll employees of the Company shall pay individual  income tax in accordance with\nthe \"Law of the People's Republic of China on Individual Income Tax.\"\n\nArticle 13.3         Funds\nAllocations for public reserve funds,  Company  expansion funds,  public welfare\nfunds and bonus for employees shall be set aside in accordance with the \"Company\nLaw of the People's  Republic of China \"and other relevant laws and  regulations\nof the People's Republic of China and the City of Deyang. The annual proportions\nof  allocation  shall be  determined  by the Board of Directors  pursuant to the\nlegal requirements and the business situation of the Company.\n\nArticle 13.4         Accounting\nThe  financial  affairs and  accounting  of the Company  shall be carried out in\naccordance  with the applicable  accounting  principle and financial  management\nrules of the Ministry of Finance of the People's  Republic of China and the City\nof Deyang. The accounting system of the Company shall be filed for record at the\nBureau of Finance and  Taxation in the City of Deyang and be  supervised  by the\nrelevant authorities of the City.\n\nArticle 13.5         Auditing\nFinancial  auditing  and  examination  of the Company  shall be  conducted by an\naccounting firm registered in China and the auditor's  report shall be submitted\nto the Board of Directors and the General  Manager.  The Parties to the Contract\nhave the right to engage, on their own, an registered  auditor in China to audit\nthe Company's books.\n\nArticle 13.6         Reports\nThe monthly  reports,  quarterly  reports and annual reports  including  Balance\nSheet,  Profit and Loss Statement and Cash Flow Statement  shall be submitted to\nthe relevant  authorities  in accordance  with the  regulations  of the People's\nRepublic of China.\n\n\n                                       26\n\n\n\n\n\nArticle 13.7         Environment\nThe  Company  shall  commit  to  bear  the   responsibility  of  protecting  the\nenvironment  in  accordance  with the \"Law of the People's  Republic of China on\nEnvironment Protection\".\n\n\n                                       27\n\n\n\n\n\n                                   CHAPTER 14\n                          MAMAGMENT OF FOREIGN CURRENCY\n\n\nArticle 14.1         Foreign Currency\nAll matters concerning foreign currency and foreign exchange shall be managed in\naccordance with the  \"Regulations  of the People's  Republic of China on Foreign\nExchange Control.\"\n\nArticle 14.2         Balance of Foreign Currency Reserve\nThe  Company  shall  maintain a balance of foreign  currency  reserve.  Any debt\nincurred or guarantee  made as the terms and  conditions of this  cooperation by\neither Party shall be settled by the respective Party, not by the Company.\n\nArticle 14.3         Remittance Foreign Currency\nAll profits,  income and funds after liquidation of Party B shall be entitled to\nbe remitted to outside China in accordance with relevant  regulations on foreign\nexchange control of China.\n\nArticle 14.4         Remittance of Employment Income of Foreign Personnel  and\nExpatriates  The employment  income and other  legitimate  income of foreign and\nexpatriate  personnel in the Company shall be entitled to remit their employment\nincome and other  legitimate  income to outside China after paying  relevant tax\nand deducting expenses incurred in China.\n\n\n                                       28\n\n\n\n\n\n                                   CHAPTER 15\n                            DURATION OF THE CONTRACT\n\nArticle 15.1         Duration\nThe  duration of the  Contract is twenty (20) years.  The  establishment  of the\nCompany shall start from the date on which the relevant  approvals are obtained.\nAn  application  for the  extension of the  Contract,  proposed by one Party and\nunanimously  agreed  by the  Parties  ,  shall  be  submitted  to  the  approval\nauthorities  one hundred  and eighty  (180) days prior to the expiry date of the\nContract.\n\n\n                                       29\n\n\n\n\n\n                                   CHAPTER 16\n                          THE DISPOSAL OF ASSETS AFTER\n             EXPIRATION OF THE CONTRACT OR DISOLUTION OF THE COMPANY\n\n\nArticle 16.1         Committee of Liquidation\nUpon expiration of this Contract, the Company shall liquidate the assets, credit\nand debt. The liquidation  shall be carried out by a Committee of Liquidation in\naccordance  with the  terms of the  Contract  and the  relevant  laws and  legal\nprocedures.  A Committee of  Liquidation  shall be consisted of  representatives\nappointed by the Parties\n\nArticle 16.2         Assets Distribution\nUpon early  termination  or expiration of this  Contract,  the Company's  assets\nafter  the  liquidation  shall  be  settled  in  accordance  with the Law of the\nPeople's Republic of China on Chinese and Foreign Contractual Joint Ventures:\n\n     (1)  All Company's fixed assets and capital shall be turned to Party A upon\n          the expiration of the Contract;\n\n     (2)  Upon early  termination  of the Contract,  after paying in full of the\n          debts of the Company,  the Liquidation  Committee shall distribute the\n          remaining  assets ( except the  ownership  and the right of use of the\n          Network) in accordance with the profit  distribution ratios stipulated\n          in  Article  9.1  hereto  as  of  the  liquidation   date.  After  the\n          liquidation,  Part  A  has  the  pre-emptive  right  to  purchase  the\n          remaining equipment.\n\n\n                                       30\n\n\n\n\n\n                                   CHAPTER 17\n                                    INSURANCE\n\n\nArticle 17.1         Insurance\nThe  Company  shall  purchase  insurance  policies  from an  underwriter  of the\nPeople's  Republic of China.  The type, value and duration of the policies shall\nbe determined by the Board of Directors in accordance  with the  regulations  of\nthe People's Republic of China.\n\n\n                                       31\n\n\n\n\n\n                                   CHAPTER 18\n                                MODIFICATION AND\n                           TERMINATION OF THE CONTRACT\n\n\nArticle 18.1         Modification\nThe modification of the Contract and the Articles of Incorporation, any increase\nor decrease of the registered capital,  pledge of the corporate assets, merge or\nsplit  of  the  Company,   discontinuation   or   dissolution  of  the  Company,\namalgamation  with other economic  organization or any other  important  matters\nshall be unanimously  agreed by all Directors present at the Board meeting.  The\nagreement  signed by both Parties can be effective  only after it is approved by\nthe original examination and approval authority.\n\nArticle 18.2         Early Termination\nIf the Company is unable to fulfill the  Contract or to continue  the  operation\ndue to heavy loss in successive years, or as a result of Force Majeure,  Chinese\nlaw and policy change, the change of governmental administrative activities, the\nContract can be  terminated  before the  expiration  of the Contract  only after\nconsultation  between the  Parties and  obtaining  approvals  from the  original\nexamination and approval authorities. If the Board of Directors can not reach an\nagreement on this matter,  the Parties shall have the right to refer the dispute\nto Arbitration.\n\nArticle 18.3         Termination\nIf the Company is unable to continue its  operations  or achieve the  objectives\nstipulated in this Contract due to that one of the contracting  Parties fails to\nperform the obligations under the Contract and the Articles of Incorporation, or\nbreaches  the  Contract  and the  Articles of  Incorporation  (particularly  the\nprovisions of Chapter 3 of this Contract),  that Party shall be deemed as having\nunilaterally  terminated  the Contract.  The other Party shall have the right to\nterminate the Contract in accordance  with the  provisions of the Contract after\napproved by the original approval authority as well as to claim damages.  If the\nParties  agree to  continue  to operate  the  Company,  the Party that failed to\nperform the  obligations  under the Contract shall be liable for the losses thus\ncaused to the Company.\n\n\n                                       32\n\n\n\n\n\n                                   CHAPTER 19\n                      LIABILITIES FOR BREACHING OF CONTRACT\n\n\nArticle 19.1         Failure to Contribute Capital or to provide Terms and\n                     Conditions of the Cooperation\nIf a Party fails to  contribute  on schedule  the  capital  contributions  or to\nprovide the  cooperative  conditions it is required to provide under Article 6.3\nof this  Contract,  the Party shall be liable for breaching the Contract and pay\nthe other Party in cash in an amount  equal to 0.04% per day of the value of the\nregistered  capital,  for each day  following  the date  when  such  cooperative\ncondition  should have been, but was not provided.  If the breaching Party fails\nto remedy such material breach within ninety (90) days after receiving a written\nnotice of breach from the other Party,  the breaching  Party shall pay a penalty\nto the  other  Party in an amount  equal to 4.5% of the value of the  registered\ncapital.  In  addition  to the  penalty,  the other  Party  shall have the right\ndemanding  to terminate  the  Contract and claim the total damage  caused by the\nbreaching Party.\n\nArticle 19.2         Breaching of Contract by Fault\nIf a Party is in fault and fails to perform the  obligations of the Contract and\nits appendices,  the Party in fault shall bear the responsibilities thus caused.\nThe  breaching  Party shall take action to remedy such  material  breach  within\nthirty (30) days after notice in writing from the other Party.  Should it be the\nfault  of  both  Parties,  each  of the  Parties  shall  bear  their  respective\nresponsibilities and losses, based on their specific circumstances.\n\n\n                                       33\n\n\n\n\n\n                                   CHAPTER 20\n                                  FORCE MAJEURE\n\n\nArticle 20.1         Force Majeure\nShould either of the Parties to the Contract be prevented  from  performing  the\nContract by Force Majeure, such as earthquake,  typhoon, flood, fire and war and\nother unforeseen  events, and their happening and consequences are unpreventable\nand  unavoidable,  the  prevented  Party  shall  notify the other Party by cable\nwithout any delay, and within fifteen (15) days thereafter  provide the detailed\ninformation  of the  events  and a valid  document  for  evidence  issued by the\nrelevant  public  notary  organization  at where the Force  Majeure  happens  for\nexplaining  the reason of its inability to perform or delay the  performance  of\nall or part of the Contract.  Both Parties shall, through consultations,  decide\nwhether to terminate the  Contract,  or to execute the part of  obligations  for\nimplementation  of the  Contract  ,or  whether to delay the  performance  of the\nContract or to release from the  obligations  of the Contract or to release from\npart of the  obligations of the Contract  according to the effects of the events\non the performance of the Contract.\n\n\n                                       34\n\n\n\n\n\n                                   CHAPTER 21\n                                 APPLICABLE LAW\n\nArticle 21.1         Applicable Law\nThe  formation of this  Contract,  its validity,  interpretation,  execution and\nsettlement  of the  disputes  shall  be  governed  by the  relevant  laws of the\nPeople's Republic of China.\n\nArticle 21.2\nIf changes are made to the current laws, regulations or policies of the People's\nRepublic  of China  applicable  to this  Contract  to  provide  more  favourable\nconditions  for the  achievement  of the objectives of the Parties as set out in\nArticle 5.1, 5.2 and 5.3 of this Contract,  the Parties shall  negotiate in good\nfaith to amend this Contract so that the Parties can benefit from the favourable\nconditions to the greatest extent possible.\n\nArticle 21.3\nIf  changes  are made to the  laws,  regulations  or  policies  of the  People's\nRepublic of China at any time that cause the economic  interests of any Party to\nsuffer a material  adverse effect,  the Parties shall negotiate in good faith to\namend this Contract  and\/or the  operations of the Company to remove or mitigate\nsuch  material  adverse  effect as soon as possible and to the  greatest  extent\npossible.\n\n\n                                       35\n\n\n\n\n\n                                   CHAPTER 22\n                             SETTLEMENT OF DISPUTES\n\n\nArticle 22.1         Consultation\nAny disputes or differences  between the Parties arising out of or in connection\nwith this Contract or as to rights or obligations  hereunder  shall initially be\nreferred to the legal  representatives  of Party A and Party B for resolution to\nthe satisfaction of the Parties,  if possible.  The legal  representative of the\nParties  may,  if they so desire,  consult  outside  experts for  assistance  in\narriving at a resolution.  Such persons shall make a bona fide attempt,  through\nfriendly  negotiation,  to settle amicably any such dispute or difference within\n30 days after its submission  and, if unable to do so, the dispute or difference\nmay be referred by any of them to Arbitration.\n\nArticle 22.2         Arbitration\n\n     1.   Any  dispute  arising  out of or in  connection  with  this  Contract,\n          including   any  question   regarding  its   existence,   validity  or\n          termination or as to rights or  obligations  of the Parties  hereunder\n          which is not settled by friendly consultation pursuant to Article 24.1\n          shall be referred to and finally  resolved by arbitration in Stockholm\n          in   accordance   with  the   Arbitration   Rules  of  the   Stockholm\n          International  Arbitration  Centre  (the \" SIAC  Rules\")  for the time\n          being in force which rules are deemed to be  incorporated by reference\n          into this Article.\n\n     2.   The tribunal shall consist of one  arbitrator to be jointly  appointed\n          by  the  Parties.  If  the  Parties  are  unable  to  agree  upon  the\n          appointment  of the  arbitrator  within 30 days,  then the  arbitrator\n          shall be appointed in accordance with the SIAC Rules.\n\n     3.   The Chinese and English  languages  shall both be used in the arbitral\n          proceedings.  Unless  otherwise  agreed by the  Parties,  all  hearing\n          materials,  statements  of claim or  defense,  award  and the  reasons\n          supporting it shall be written in both Chinese and English languages.\n\n     4.   To the  extent  this  Article  is  deemed to be a  separate  agreement\n          independent  from this Contract,  Article 24.4 concerning  notices are\n          incorporated herein by reference.\n\nArticle 22.3         Operation of the Company\nPending for the  resolution of any dispute or difference  submitted to the legal\nrepresentatives  of the  Parties  pursuant  to  Article  22.1 or to  arbitration\npursuant to Article  22.2,  the Company  shall  continue to conduct its business\nactivities in accordance with the business plans of the Company then in effect.\n\n\n                                       36\n\n\n\n\n\n                                   CHAPTER 23\n                                    LANGUAGE\n\nArticle 23.1         Language\nThe Contract shall be written in Chinese and English  languages.  Both languages\nhave equal legal  authority and effect.  Should there be a conflict  between the\ntwo versions, the spirit and the objectives of the Contract shall be the guiding\nprinciple to interpret the Contract.\n\n\n                                       37\n\n\n\n\n\n                                   CHAPTER 24\n                          EFFECTIVENESS OF THE CONTRACT\n                                AND MISCELLANEOUS\n\n\nArticle 24.1         Appendices\nThe appendices (including the Articles of  Incorporation)drawn  up in accordance\nwith the principles of this Contract are an integral part of this Contract.\n\nArticle 24.2         Headings\nThe headings of the Articles of this Contract are for  convenience  of reference\nonly and shall not be deemed or  construed  as in any way  limiting or extending\nthe language of the provisions to which such headings may refer.\n\nArticle 24.3         Effective Date\nThis Contract and its  appendices  shall come into force on the date of approval\nby the relevant approval authorities of the Government. This approval date shall\nbe the Effective Date.\n\nArticle 24.4         Notice\nShould notices in connection  with any Party's rights and obligations be sent by\neither Party A or Party B by telegram,  telex,  email or fax,  etc., the written\nnotices  shall  be also  required  afterwards.  Such  written  notices  shall be\ndelivered by postal  services,  and be considered to be received by the Party in\nten (10) business  days from the date of postmark.  The legal address of Party A\nand Party B listed in this  Contract (or such other  address as either Party may\nnotify the other Party in writing) shall be the postal addresses.\n\nArticle 24.5         Severability\nIf any provision of this Contract  becomes fully or partly  invalid,  illegal or\nunenforceable in any respect for any reason whatsoever,  the validity,  legality\nand enforceability of the remaining provisions of this Contract shall not in any\nway be affected or impaired thereby.\n\nArticle 24.6         Original Copies\nThis  Contract  is  executed  in Chinese  and  English  versions  and in six (6)\noriginal  counterparts  each of which shall have equal effect in law. Each Party\nshall keep one (1) copy of the original Contract.\n\n\n                                       38\n\n\n\n\n\nIN WITNESS WHEREOF,  the Parties hereto have signed this Contract as of November\n25, 2000.\n\n\nParty A:                                       Party B:\nDeyang Guangshi Network              Big Sky Network Canada\nLtd.\nDevelopment Ltd.                     [Chinese Characters Appear Here]\n[Chinese Characters Appear Here]\n[Chinese Characters Appear Here]\n\nLegal Representative                            Authorized Representative\n\n\n\n------------------------                        ------------------------\nJinan Zhou [Chinese Characters Appear Here]     Daming Yang\nChairman                                        President\n\n\n\n[Seal]                                                   [Seal]\n\n\n                                       39\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7079],"corporate_contracts_industries":[9517],"corporate_contracts_types":[9613,9617],"class_list":["post-42196","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-china-broadband-corp","corporate_contracts_industries-telecommunications__other","corporate_contracts_types-operations","corporate_contracts_types-operations__jv"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42196","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42196"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42196"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42196"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42196"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}