Exhibit (10.6)
INNER MONGOLIA 1ST. HIGH SCHOOL CAMPUS NETWORK CONTRACT
Party A: Inner Mongolia 1st. High School
Party B: Tengtu Culture & Electronics Development Co. Ltd.
1. Scope of Project
1.1 Purchase of software, hardware and related materials for the
Local Area Network (LAN);
1.2 Comprehensive cable installation for the network; 1.3
Installation, tuning and testing of hardware; 1.4 Installation,
tuning and testing of system software; 1.5 Installation, tuning
and testing of user application software; 1.6 Other reasonable
and necessary tasks.
2. Cost of Project
2.1 Cost: RMB 1.95 Million
2.2 Training of network administrators and operators of Party A will
be performed by Party B free of charge;
2.3 Party A has no liability to pay for any other charges.
3. Methods of Payment
Party A will make payment for this project to Party B in four stages:
Stage 1: 30% of the contract cost will be paid three working days after
signing of this contract;
Stage 2: 40% of the contract cost on completion of cable
installation and renovation;
Stage 3: 25% of the contract cost on completion of the project,
subject to satisfaction with the commissioning results;
Stage 4: balance will be paid within two months of the date when the
acceptance certificate of the system is signed.
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4. Rights and Liabilities of Party A
Party A will designate Xx. Xxxx Song to be their representative
responsible for the Computerized Teaching Research Room. Party A can
change the representative any time should it consider necessary, but
requires to inform Party B in time.
4.1 Party B's project schemes, based upon the information nodes
distribution chart provided by Party A, shall be certified by
Party A;
4.2 Party A must make payments for the project on time according
to the "funds usage plan" agreed by both partie. Method of
payment is by "account transfer cheque";
4.3 Party A has the right to designate hardware suppliers with
purchase implemented by Party B. If Party A does not designate
any hardware supplier, Party B shall be directly responsible
for the purchase of the hardware;
4.4 If Party A considers that the specifications, types and
quality of the software, hardware and various materials
purchased by Party B have any problems, Party B must stop
using these products and provide reliable evidence for their
quality compliance for Party A's approval before resuming
using the same products;
4.5 If there was evidence that there were major or hidden quality
problems with the implementation of the project, Party A has
the right to order Party B to stop the project until the
problems are resolved; and the project can only be resumed
with the written approval of Party A. Should there be quality
problems repeatedly, Party A has the right to terminate the
contract and seek compensation from Party B;
4.6 Should there be any evidence that damage to the network
hardware was caused by Party A not operating according to the
operating method stipulated by Party B, the latter party has
the reliability to repair the faulty hardware with the
incurred cost paid by Party A;
4.7 Party A will provide Party B with water and electricity, and
temporary storage rooms for equipment, tools and materials
free of charge.
5. Rights and Liabilities of Party B
5.1 Party B shall provide proof for the qualification of the four
technical representatives designated for the testing of the
system, two each for hardware and software. Should Party B
change any of those technicians, they shall be approved by
Party A. Party A shall consult Party B should the former party
consider it necessary to change the technicians and the latter
party will make the changes;
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5.2 If Party A Cannot make payment 5 working days or more after
the date as stipulated in the "funds usage plan", Party B can
remind Party A in writing. If Party A still cannot make the
payment 5 working days after the reminding note, Party B can
consider this as deliberate delay of payment and stops
implementation of the project as well as seeking compensation;
5.3 Party B shall implement the project according to the mutually
agreed project progress plan. If actual situation changes, the
progress plan can be adjusted after consultation.
5.4 The supplier names, methods of communications, functional
specifications and quality assurance certificates must be
attached to the software, hardware and related materials
purchased by Party B. If such evidence is not available, Party
A can reject Party B from using these products. The same
products can only be used until relevant documents are
available and approved by Party A;
5.5 In the process of the project, Party B shall report its
progress (including compilation of software) to Party A in
time in order to obtain the latter party's understanding and
coordination.
6. Training of Personnel of Party A
Party B shall provide necessary training to the network administrators
and operators according to the mutually agreed training plan. Party B
will provide all training material and arrange all other training
activities free of charge. For those who cannot take part in the group
training due to work, Party B will provide them with free complementary
training within 5 working days after Party A's request.
7. Commissioning and System Trial Run
Within 5 days after completion of the project, Party A will organize
specialist group to perform commissioning on hardware, system software,
comprehensive cable layout and application software. The commissioning
standard will be based on the current National Standard.
7.1 Party B can appeal the commissioning conclusion should it deem
necessary and the report will be revised by the Commissioning
Specialist Group as long as the reasons are established;
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7.2 Should any defects found from commissioning, Party B will
clear all these faults unconditionally and free of charge. If
effective repair is impossible, rework shall be carried out
and Party A can seek compensation from Party B.
7.3 The network system will undergo a 6-month trial run after
passing the commissioning. If defects are found in the
software during this period, Party B must carry out effective
repair in time and free of charge.
8. Maintenance and Upgrading of Software and Hardware
Party B shall undertake these tasks based on the following reasons:
1) Application software unable to meet the requirements of Party A
due to inadequate and careless user survey;
2) Original software unable to meet Party A's requirements due to
business expansion and reorganization;
3) Advance in computer technology making Party A's LAN unable to
meet its demand;
4) Damage to the LAN hardware due to unexpected reasons;
5) Defects in design and project implementation caused by Party B
thus making Party A unable to use the LAN in a convenient and
normal manner.
Maintenance of the LAN shall be free of charge for a period of 24
months, commencing from the next day after the commissioning
certificate is signed and issued.
Maintenance for the above situations is charged according to
the following scheme:
Reason 1: Party B shall perform the survey again and provide free
software maintenance.
Reason 2: Both parties will discuss and agree the methods and charges
for the maintenance and upgrading;
Reason 3: Party B will provide maintenance at cost price;
Reason 4: Within the software warranty period, Party B will carry
out maintenance unconditionally. Upon its expiration,
maintenance shall be provided at cost price.
Reason 5: Apart from providing unconditional maintenance by Party
B, Party A will seek compensation from Party B.
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9. Responsibilities of Infringement of Contract
9.1 If delay or termination of the project is caused by Party A
who has not made payment according to the terms of the
contract, Party A shall compensate the loss incurred by Party
B according to the current bank loan rate and the number of
days delayed (at RMB 200 per day). Also, the project
implementation period will be extended accordingly;
9.2 If Party B has not implemented the project according to the
mutually agreed plan, Party B must submit a "work expedition
plan" in writing in order to ensure that the project schedule
meets the requirements. Any cost increases due to work
expedition shall be born by Party B and party B must
compensate Party A for the project delay at XXX 000 per day;
9.3 If Party A terminates the contract due to Party B's
responsibility, the latter party must refund the former party,
which is equivalent to the payment already made by Party A
less the cost of the hardware already purchased within 5
working days; and also indemnify Party A with an equivalent of
5% of the returned payment;
9.4 If Party A's LAN cannot be used in a convenient or normal
manner due to design deficiency caused by Party B, the latter
party must rectify such deficiencies and compensate the loss
of the former party. The amount of compensation will be
determined separately according to the extent of the loss;
9.5 If Party B has not carried out network maintenance, requested
by Party A, within the time limit as stipulated in the
contract, the former party must produce acceptable evidence to
the latter party and perform maintenance as soon as possible
in order to eliminate the infringement responsibility;
otherwise, the compensation amount shall be XXX 00 per event
per hour;
9.6 If the software and technical documents provided to Party A by
Party B are incomplete and inconsistent, Party B must rectify
this deficiency within 10 working days and seek Party A's
understanding; otherwise, compensation must be made by Party B
for RMB 2,000;
9.7 For the project deficiencies identified in the final
commissioning, Party B will undertake the maintenance
according to the contract and compensate the loss of Party A.
The compensation amount is to be determined through mutual
consultation but will not be less than RMB 5,000 per item.
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10. Others
10.1 A maintenance logbook is to be established immediately after
Party A's network system has passed the commissioning.
Subsequent software and hardware maintenance activities will
be logged for each event in detail and signed by both parties;
10.2 Any terms of this contract which may have conflicts with the
national laws and regulations will be based on the same laws
and regulation.
Party A : Inner Mongolia 1st. High School Party B :Tengtu Culture & Education
Electronics Development
Co. Ltd.
Legal Representative: Legal Representative:
August 25, 2000 July 24, 2000
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