EXHIBIT 10.7
Strategic Partnership Agreement Between
Chengdu Huayu Information Industry Co., Ltd. and
Big Sky Network Canada Ltd.
THIS AGREEMENT is made and entered into this 21st day of July, 2000, by and
between Chengdu Huayu Information Industry Co., Ltd. (the "Party A") and Big Sky
Network Canada Ltd. (the "Party B") in Chengdu.
Party A's Registered Address is: 14F Jinyu Building, #19, Section 4 North,
First Ring Road, Chendu, Sichuan, PRC
Party B's Registered Address is: 2080,440 2nd Avenue, SW, Calgary, Alberta,
Canada
WHEREAS:
1. Party A is a company duly registered under the laws of Chengdu City,
Sichuan Province, the Peoples Republic of China. The Party A's
business scope and its business activities are to build information
network infrastructure, to develop information industry and to provide
related services.
2. Party A has built a HFC network which has one hundred twenty thousand
(120,000) subscribers. The Party A is currently building a City-wide
integrated broadband information network, based on its existing HFC
network, in the Greater Chengdu Area to provide high speed Internet
access, data transmission and value-added business on the network for
its five hundred thousand (500,000) cable and data network
subscribers. The Party A intents to build a Province-wide integrated
broadband network in three (3) years. This network could bring the
above-mentioned services to the one million five hundred thousand
(1,500,000) potential customers (including cable subscribers and data
network subscribers).
3. Party B is a corporation duly registered under the laws of British
Virgin Island and its headquarter is located at Calgary, Canada. Party
B's main businesses are to invest in the broadband network
infrastructure, development and construction of broadband networks.
The Party B intends to develop the City-Wide-Area networks in Sichuan
Province to deliver broadband services to more than three million and
five hundred thousand (3,500,000) cable subscribers. Party B desires
to joint with Party A to build a Greater-Chengdu-Area and a
Province-Wide-Area Integrated Information Network and to provide the
high speed Internet access, data transmission and value-added business
to customers.
4. On the 8th day of July, 2000, the Parties signed "the Contractual
Joint Venture Contract for Huayu and Big Sky" (the "Contract") and its
"Articles of Association". The Parties agreed to upgrade the existing
HFC network to deliver
broadband over the cable services. Based on the principal of equality, mutual
benefits and the spirit of friendship and cooperation, after a full discussion,
the Parties agree that the above mentioned business developments have enormous
potential and huge market. The Parties fully agree to continue the cooperation
between the Parties, and, therefore, the Parties further agree as follows:
General Principle
1. Parties fully agree that the priority should be given to the upgrading
of the HFC network in accordance with the Contract signed on the 8th
day of July, 2000 and to deliver quality high speed broadband to its
customers. At the same time, the Parties agree to devclop a
Greater-Chengdu-Area integrated high speed broadband network (the
"Data-Over-HFC System") utilizing Chengdu's existing Education
Network, Government Network, Cable TV Broadcasting Network and Tele
Communication Network to provide high speed Internet access, data
transmission and value-added business for five hundred thousand
(500,000) potential customers.
2. Upon completion of the Greater-Chengdu-Area integrated high-speed
broadband network and its service platform and being provided with
quality Internet and other related services to customers, the Parties
shall begin to invest jointly in the development of the
Province-Wide-Area integrated broadband network to deliver broadband
services to more than five million (5,000,000) customers (including
data network subscribers and cable subscribers).
3. Parties shall jointly develop the Greater- Chengdu-Area and the
Province-Wide-Area integrated broadband networks (the "Project"). The
Parties shall invest the funds, equipments, technology and
professional personnel to the Projects. The estimate investment for
the Projects could reach fifty million (50,000,000) to one hundred
million (100,000,000) US Dollars.
The Responsibility of Fach Party
1. Party A
(1) To obtain official approval and government policy support for the
Project.
(2) To seek integration of relevant network resources of Greater
Chengdu Area and Sichuan Province within the limits of the
government policy; to co-operate with each other in order to
maximize the Parties' benefits; to obtain the legal rights to use
and commercially operate the Tele communication backbones in
Sichuan Province.
(3) To apply and to obtain all relevant govcrnmental approval and
operating permits.
(4) To coordinate with all relevant government authorities in order
to achieve the maximum efficiency in building and operating the
networks.
(5) To invest the existing fiber optical network and relevant
equipments for the Project.
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2. Party B
(1) To invest cash and equipments to the Project.
(2) To develop international strategic partnership for the Project.
(3) To seek advanced technology and scientific management
methodology.
(4) To develop individual City-Wide-Area Network (the "City LAN") in
the cities of the Sichuan Province, that to be used for high
speed Internet access, data transmission, value-added network
related business and to connect the individual cities to the
Province-Wide-Area integrated broadband network.
(5) To assist in the market development and to provide training to
the technical personnel of the Project.
(6) To assist Party A in applying and obtaining all relevant
government approvals and permits for the joint operation of the
Parties.
The Mutual Responsibilities of the Parties
1. To seek effective cooperation with the providers of Tele communication
(such as China Jitong Telcom). Through Party A's networks and Party
B's City LANs of the Province, the Parties and the Tele communication
providers will jointly develop the province-wide market for Voice over
IP, fiber optical connection, DDN connection, communication line
rental, enterprises VPN and other businesses.
2. To maximize the benefits of the Parties involved
The Methods and the Term of the Co-operation
The methods of co-operation shall be negotiated in the manner that is
permissible by industry policies of the People's Republic of China. The Parties
will determine the ratio of distribution of interests in the future. The
distribution of interests or profits shall be agreed and specifed in the
agreement or the contract of the Project. The term of the proposed Project will
be twenty (20) years.
The Declaration
Party A and Party B declare that this Agreement does riot require the
departmental approval of the Chinese government. This Agreement does not cause
the Parties to violate the laws and regulations of the People's Republic of
China and/or other territories outside China.
General
1. Confidentiality
This Agreement is strictly confidential. No Party shall disclose the
contents of this Agreement to any person or a third party without
prior written consent of the other Party.
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2. Term of this Agreement
The term of this Agreement is sixty (60) days from the date of signing
of this Agreement. This Agreement may be extent for another sixty (60)
days upon written request made by a Party and to he consented by the
other Party with fifteen (15) days prior to the expiration of this
Agreement.
3. Language
This Agreement shall be written in English and the Chinese languages.
Both languages have the same legal validity and effect. Every set of
this Agreement shall contain two (2) copies of each language.
4. Contracting With a Third Party
Both Parties are legal entities and have power to establish contrac-
tual relationship with a third party. The Parties agree not to sign
a contract that contains the same or similar terms and/conditions
with any third party within the term of this Agreement.
5. Contract or Agreement for the Contractual Joint Venture or Equity
Joint Venture Company
Based on the spirit of co-operation, the Parties shall try to com-
plete the Contract or the Agreement for the Contractual Joint
Venture or Equity Joint Venture within the Term of this Agreement.
Party A Party B
Chengdu Huayu Information Industry Big Sky Network Canada Ltd
Co., Ltd.
[Chinese Characters Appear Here]
Authorized Representative Authorized Representative
GONG YONGRONG QIFENG XUE
[Chinese Characters Appear Here]
Title: General Manager Title: Vice President in Marketing &
Sales
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