This TECHNICAL SERVICES AGREEMENT (“Agreement”) is entered into as of November 15, 2000, by and among ChinaCast Technology (Shanghai) Limited, a wholly foreign-owned limited liability enterprise organized and existing under the laws of the People’s Republic of China (“PRC”) (“CCT Shanghai”); CHINACAST CO. LTD., a limited liability company organized and existing under the laws of the PRC (“CCL”); and BEIJING COL NETWORK TECHNOLOGY CO., LTD, a limited liability company organized and existing under the laws of the People’s Republic of China (“PRC”), (“Beijing Col”); SHENZHEN ZHONGXUN TENG INVESTMENT DEVELOPMENT CO., LTD., a limited liability company organized and existing under the laws of the PRC (“Shenzhen Zhongxun”); TIBET TIANTAI INVESTMENT MANAGEMENT CO., LTD., a limited liability company organized and existing under the laws of the PRC (“Tibet Tiantai”) (Beijing Col, Shenzhen Zhongxun and Tibet Tiantai are referred to collectively as the “CCL Shareholders”). CCL and CCT Shanghai are each individually referred to herein as a “Party” and both are collectively referred to herein as the “Parties”.
WHEREAS, CCL wishes to secure the assistance of CCT Shanghai to assist CCL in the implementation of CCL’s Turbo 163, DDN Enhancement and Cablenet businesses in the PRC;
AND WHEREAS, CCT Shanghai wishes to assist CCL to implement CCL’s Turbo 163, DDN Enhancement and Cablenet businesses in the PRC
NOW THEREFORE, in consideration of the foregoing and the mutual promises, covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged expressly, the Parties hereby agree as follows:
ARTICLE I. PROVISION OF SERVICES AND ANCILLARY EQUIPMENT
Section 1.1 Services. CCT Shanghai will, during the term of this Agreement and to the extent of CCL’s need, provide and CCL will take and pay for the Services set forth in Appendix A, with respect to CCL’s Turbo 163 business, DDN Enhancement business and Cablenet business all as contemplated in the Business Plan dated as of August, 2000. CCT Shanghai will provide the Services solely in the capacity of an independent contractor and consultant to CCL. The General Manager of CCL will retain all authority and responsibility to conduct the affairs of and to manage CCL. CCT Shanghai may, at its option, assign any of its rights hereunder and/or delegate the performance of the Services described in this Section 1.1 to a subcontractor or affiliate of CCT Shanghai, provided that any such assignment, delegation, or subcontract will not relieve CCT Shanghai of its obligations hereunder. CCL shall not assign this Agreement without the prior written approval of CCT Shanghai.
Section 1.2 Equipment. In connection with provision of the Services hereunder, CCT Shanghai will supply to CCL for its use ancillary Equipment as set forth in Appendix A hereto together with associated software and technical documentation. Such use of ancillary Equipment by CCL will be without additional charge.
Section 1.3 Obligation to Return Equipment. Upon the occurrence of any of the following events in the determination of CCT Shanghai, CCL will promptly take all action to deliver and return the Equipment and the related software and documentation in the possession of CCL to CCT Shanghai, except to the extent CCT Shanghai has waived its right to the return of such Equipment as contemplated in Section 2.3 hereof : (i) termination of this Agreement, or (ii) material breach by CCL of this Agreement or the Pledge Agreement among certain shareholders of CCL and CCT Shanghai of even date herewith (the “Pledge Agreement”). In the event CCL fails to promptly and fully return the Equipment in good operating condition and the related software and documentation to CCT Shanghai it its sole determination, such event shall be an equipment return default (“Equipment Return Default”), and CCT Shanghai shall be entitled to immediately avail itself of any and all legal actions and proceedings to recover the Equipment and/or to foreclose upon the Pledged Collateral pursuant to the Pledge Agreement.
Section 1.4 Rights to Use Equipment and Software. CCT Shanghai hereby grants to CCL the non-exclusive, non-transferable right to use all Equipment and software provided by CCT Shanghai under this Agreement solely in the conduct of CCL’s Turbo 163, DDN Enhancement and Cablenet businesses.
Section 1.5 Warranty. CCT Shanghai warrants that the Services will be provided in a good and workmanlike manner, exercising that degree of skill, diligence, prudence and foresight which would reasonably be expected from a fully skilled, experienced and competent contractor and/or operator engaged in the same type of undertaking under the same or similar conditions in the same or a similar location. CCL’s sole and exclusive remedy for breach of this warranty will be the provision of replacement Services by CCT Shanghai. CCT Shanghai makes no other warranty, express or implied, relating to the Services, ancillary Equipment, software, know how or other things delivered under this Agreement.