Exhibit 10.18
EXECUTION COPY
MANAGEMENT SERVICES AGREEMENT
This MANAGEMENT SERVICES AGREEMENT (this "Agreement") is made and entered
into this 30th day of June, 2004 (the "Effective Date"), by and between ASIA
NETCOM CORPORATION LIMITED, a company formed and validly existing under the laws
of Bermuda ("Asia Netcom") and EAST ASIA NETCOM LTD., a company formed and
validly existing under the laws of the Bermuda ("EAN Network"). Asia Netcom and
EAN Network are sometimes hereinafter referred to as individually a "Party" and
collectively, the "Parties".
WHEREAS, Asia Netcom and EAN Network and their respective Subsidiaries are
currently wholly-owned indirect Subsidiaries of CNC-BVI;
WHEREAS, it is contemplated that an initial public offering will be made
of a portion of the capital stock of Asia Netcom's parent company, China Netcom
Corporation (Hong Kong) Limited, resulting in an indirect partial public
ownership of Asia Netcom;
WHEREAS, Asia Netcom and its Subsidiaries currently provides certain
services to EAN Network and its Subsidiaries and Asia Netcom and its
Subsidiaries and EAN Network and its Subsidiaries both desire for Asia Netcom
and its Subsidiaries to continue to provide such services to EAN Network and its
Subsidiaries following the initial public offering; and
WHEREAS, Asia Netcom and EAN Network desire to enter into this Agreement
(for and on behalf of themselves and their respective Subsidiaries) to set forth
the roles and responsibilities of the Parties and their respective Subsidiaries
with regard to the foregoing.
NOW THEREFORE, in consideration of the mutual covenants and promises made
in this Agreement, the sufficiency of which is acknowledged by the Parties, the
Parties hereby agree:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions.
1.1.1 "CNC BVI" shall mean China Netcom Holdings (BVI)
Limited, the ultimate parent company of both EAN Network and Asia Netcom.
1.1.2 "Fees" shall individually mean any of the Category 1
Fees, the Category 2 Fees or the Category 3 Fees and shall collectively mean all
of them.
1.1.3 "Governmental Authority" shall mean any federal, state,
regional, county, city, municipal, local, territorial, or tribal government,
whether foreign or domestic, or any department, agency, bureau or other
administrative or regulatory body obtaining authority from any of the foregoing,
including without limitation, courts, public utilities and similar governmental
authority.
1.1.4 "Interest Rate" shall mean the interest rate then in
effect for inter-company balances under the Transfer Pricing Policy.
1.1.5 "Laws and Regulations" shall mean all applicable laws,
codes, ordinances, rules, restrictions, regulations and orders of any federal,
state, regional or any local government (including those resulting from the
initiative or referendum process) and judicial or administrative orders and
decrees which are in effect as of the Effective Date or any time thereafter
during the Term.
1.1.6 "Regulatory Approvals" shall mean all local, regional,
national state and federal agreements, studies, findings, permits, approvals,
certifications, licenses and other authorizations required to be obtained or
completed under applicable Laws and Regulations prior to undertaking any
particular activity contemplated by this Agreement.
1.1.7 "Services" shall have the meaning ascribed to it in
Section 2.1.1 hereof.
1.1.8 "Subsidiary" shall mean, with respect to any Person, any
other entity, of which (a) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
board of directors or others performing similar functions with respect to such
entity is directly or indirectly owned or controlled by such Person or by any
one or more of its Subsidiaries, or by such Person and any one or more of its
Subsidiaries or (b) such Person or any other Subsidiary of such Person is a
general partner (excluding any such partnership where such Person or any
Subsidiary of such Person does not have a majority of the voting interest in
such partnership).
1.1.9 "Term" shall have the meaning ascribed to it in Section
9.1.
1.1.10 "Transfer Pricing Policy" shall mean the transfer
pricing policy of CNC BVI respecting the provision of goods, services and
intellectual property among its Subsidiaries. This policy may be modified from
time to time by CNC BVI, but shall in all cases provide for a fair, arms' length
price for such goods, services and property, and shall at all times comply with
both the Organization for Economic Cooperation and Development Guidelines for
Multinational Enterprises and Tax Administrations and U.S. Internal Revenue Code
rules for transfer pricing.
Section 1.2 Interpretation.
1.2.1 The headings in this Agreement are for convenience only
and shall not affect its interpretation.
1.2.2 In this Agreement, unless the context otherwise
requires, the singular shall include the plural and vice versa and reference to
a gender shall include the other genders.
1.2.3 The Service Schedules to this Agreement form a part of
this Agreement and any reference therein to this Agreement is a reference to
this Agreement and the said Service Schedule.
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1.2.4 Any reference herein to an Article, Articles, Section or
Sections is a reference to the referenced Article, Articles, Section or Sections
of this Agreement unless otherwise specifically provided.
1.2.5 Any reference to an entity herein includes such entity's
successors in title and permitted assigns.
ARTICLE 2
SERVICES
Section 2.1 Service Schedules.
2.1.1 Service Schedules 1 through 8 attached hereto and made a
part of this Agreement describe the services to be provided by Asia Netcom and
its Subsidiaries to EAN Network and its Subsidiaries (the "Services"). The
Parties have made a good faith effort as of the date hereof to identify each
Service to be provided hereunder and to describe such Service on the relevant
Service Schedules as completely and accurately as possible. In the event that
any Service Schedule is incomplete or inaccurate, the Parties agree to use good
faith efforts to modify such Service Schedule to describe such Service
completely and accurately.
2.1.2 From time to time, the Parties may also identify
additional Services that they wish to incorporate into this Agreement. In such
circumstances, the Parties agree to create additional Service Schedules
describing such Services, the Fees for such Services and any other terms and
conditions applicable thereto.
2.1.3 In the event certain terms that are specifically set
forth in the Service Schedule attached hereto conflict with the terms set forth
in this Agreement, the conflicting terms set forth in the Service Schedule shall
govern in all cases with respect to that particular Service.
Section 2.2 Independent Contractors. Asia Netcom and its Subsidiaries will
provide the Services either through their own resources or by contracting with
independent contractors in accordance with this Section 2.2. To the extent that
Asia Netcom or any of its Subsidiaries decides to provide a Service to EAN
Network or of any its respective Subsidiary through an independent contractor,
Asia Netcom (for and on behalf of itself or its Subsidiary) shall notify and
consult with EAN Network (for and on behalf of itself or its Subsidiary) prior
to contracting with such independent contractor; provided however, that the
final decision to use an independent contractor for a particular Service shall
be within the sole and absolute discretion of Asia Netcom (for and on behalf of
itself or its Subsidiary).
Section 2.3 Standard of Care. In providing the Services hereunder, each of
Asia Netcom and its Subsidiaries will exercise the same degree of care as it has
historically exercised in providing such Services prior to the date hereof,
including without limitation at least the same level of quality, responsiveness
and timeliness as has been exercised by Asia Netcom and its Subsidiaries with
respect to such Services.
Section 2.4 Records. Each of Asia Netcom and its Subsidiaries shall keep
full and detailed records dealing with all aspects of the Services performed by
it
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hereunder (including time sheets if required under a particular Service
Schedule) (hereafter the "Records") and Asia Netcom (for and on behalf of itself
and its Subsidiaries) shall:
2.4.1 provide access to the Records to EAN Network and its
Subsidiaries at all reasonable times; and
2.4.2 shall maintain the Records in accordance with good
record management practices and with at least the same degree of completeness
and care as it maintains for its other similar business interests.
ARTICLE 3
FEES
Section 3.1 General. EAN Network (for and on behalf of itself and its
Subsidiaries) shall pay to Asia Netcom (for and on behalf of itself and its
Subsidiaries) the quarterly fee for each Service indicated on the attached
Service Schedule describing such Service, which shall be one of the following:
3.1.1 "Category 1 Fees" shall be the lesser of:
(a) the amount of the aggregate expenditures of Asia Netcom
and its Subsidiaries incurred with respect to their employees performing the
Service including without limitation salaries, fringe benefits and executive
compensation benefits (if applicable) (the "Employee Costs") determined as the
sum of (x) the product of (A) the quotient of the time recorded by such
employees in performing the Service as evidenced by employee time sheets divided
by the total time recorded by such employees on such employee time sheets
multiplied (B) by the total Employee Costs for all such employees plus (y) a
management fee equal to five percent (5%) of the aggregate amount calculated
pursuant the subparagraph (x); or
(b) the amount of a valid bona-fide third party quote for the
Service that is received by EAN Network and provided to Asia Netcom prior to the
beginning of the year in which Asia Netcom shall provide such Service to EAN
Network.
3.1.2 "Category 2 Fees" shall be the lesser of:
(a) the amount determined as the sum of (x) the aggregate
depreciation or amortization reported by Asia Netcom and its Subsidiaries for
equipment and software used by the employees performing the Service plus (y) the
pro rata portion of the license and maintenance fees payable by Asia Netcom for
equipment and software used by employees performing the Service; or
(b) the amount of a valid bona-fide third party quote for the
Service that is received by EAN Network and provided to Asia Netcom prior to the
beginning of the year in which Asia Netcom shall provide such Service to EAN
Network.
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3.1.3 "Category 3 Fees" shall be the amount required to
reimburse all payments made by Asia Netcom and its Subsidiaries on behalf of EAN
Network and its Subsidiaries in performing the Service.
The Fees constitute full compensation to Asia Netcom and its Subsidiaries for
all charges, costs and expenses incurred by Asia Netcom and its Subsidiaries on
behalf of EAN Network and its Subsidiaries in providing the Services, unless
otherwise specifically provided in the Service Schedules.
Section 3.2 Payments.
3.2.1 The Fees set forth in Section 3.1 shall be invoiced by
Asia Netcom (for and on behalf of itself and its Subsidiaries) quarterly on or
about January 1, April 1, July 1 and October 1 of each calendar year and paid
for by EAN Network (for and on behalf of itself and its Subsidiaries) in
accordance with this Section 3.2.
3.2.2 EAN Network agrees that all invoices presented by Asia
Netcom under this Agreement shall become due and payable thirty (30) days after
the date of EAN Network's receipt of said invoice. Except as otherwise provided
herein or as otherwise agreed upon between the Parties, all payments made by EAN
Network hereunder shall be in U.S. Dollars. Any sums not paid by EAN Network
when due and payable under this Section 3.2 shall bear interest at the Interest
Rate from the due date for payment up to but not including the date that such
sum is paid. Asia Netcom's invoices shall include, and EAN Network agrees to
pay, all applicable taxes required to be collected by EAN Network (for and on
behalf of itself and its respective Subsidiaries). The form of Asia Netcom's
invoices shall comply with all applicable Laws and Regulations.
3.2.3 Notwithstanding anything herein to the contrary, with
respect to the Services, EAN Network may notify Asia Netcom in writing of any
bona-fide, good-faith dispute with the charges on an invoice within thirty (30)
calendar days of receipt of the invoice. The notice shall include the reasons
for and amount of the dispute. If the disputed amount does not exceed three
percent (3%) of the invoiced amount in the statement, EAN Network shall pay the
amount in full and not withhold any disputed amount. If the disputed amount
exceeds three percent (3%) of the invoiced amount in the statement, EAN Network
may withhold payment only on the amount properly disputed hereunder. Undisputed
amounts shall be paid in accordance with the payment terms set forth in Section
3.2.2. The Parties agree to use their respective best efforts to resolve any
dispute within thirty (30) calendar days after the receipt of the dispute
notice. If the dispute is resolved in Asia Netcom's favor, any amounts to be
paid by EAN Network shall be immediately due and payable and shall be subject to
the Interest Rate charges from the due date of the disputed charges up to but
not including the date of payment of such disputed charges. If the dispute is
resolved in EAN Network's favor, any disputed amounts previously paid by EAN
Network that are to be returned by the providing Party shall be paid in the form
of a credit on EAN Network's first invoice following the dispute resolution date
and shall be immediately due and payable and shall be subject to the Interest
Rate charges from the due date of the disputed charges up to but not including
the date of payment of such disputed charges. All amounts not timely and
appropriately disputed shall be deemed final and not subject to further dispute.
Notwithstanding anything herein to
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the contrary, EAN Network shall not withhold any disputed amounts while its
account with Asia Netcom is delinquent.
ARTICLE 4
THIRD PARTY AGREEMENTS; AUTHORITY AS AGENT
Section 4.1 Third Party Agreements. To the extent that it is not
practicable to have EAN Network or its respective Subsidiary as the contracting
Party for any third party obligation contracted for by Asia Netcom and its
Subsidiaries for the provision of Services on behalf of EAN Network or its
respective Subsidiary, Asia Netcom or its respective Subsidiary shall use
commercially reasonable efforts to cause all such third party contracts to
extend to and be enforceable by EAN Network or such respective Subsidiary. If
such contracts are not extendable and enforceable, Asia Netcom or its respective
Subsidiary shall act as agent for EAN Network or its respective Subsidiary
pursuant to Section 6.2 with respect to such contracts including without
limitation in the pursuit of any claims, issues, demands or actions against such
third party provider at EAN Network's expense; provided that EAN Network or its
respective Subsidiary will indemnify Asia Netcom or its respective Subsidiary
for any liability under third party contracts arising directly out of the acts
or omissions of EAN Network or any of its Subsidiaries.
Section 4.2 Authority as Agent. Asia Netcom and its Subsidiaries are
hereby authorized to act as agents for EAN Network and its Subsidiaries for the
purpose of performing Services hereunder. EAN Network or its respective
Subsidiary will execute and deliver to Asia Netcom or its respective Subsidiary
any document or other evidence, which may be reasonably required by Asia Netcom
or such respective Subsidiary to demonstrate to third parties the authority of
Asia Netcom or such respective Subsidiary described in this Section 4.2;
provided that neither Asia Netcom nor any of its Subsidiaries shall be so
entitled to act as agent for EAN Network or its Subsidiaries under this Section
4.2 with respect to any third party agreement which would require EAN Network to
pay (for and on behalf of itself or its Subsidiaries) an amount in excess of
US$100,000 hereunder without the prior written consent of EAN Network.
ARTICLE 5
INFORMATION; COOPERATION; CONSENTS
Section 5.1 Information Regarding Services. Each Party shall make
available to the other Party any information required or reasonably requested by
the other Party (for and on behalf of itself or its Subsidiaries) regarding the
performance of any Service and shall be responsible for timely providing that
information and for the accuracy and completeness of that information; provided,
however, that a Party shall not be liable for not providing any information that
is subject to a confidentiality obligation owed by such Party or its respective
Subsidiary to a Person other than an Subsidiary of such Party or the other
Party. Asia Netcom and its Subsidiaries shall not be liable for any impairment
of any Service caused by its not receiving information, either timely or at all,
or by its receiving inaccurate or incomplete information from EAN Network or its
respective Subsidiary, in each case that is required or reasonably requested
regarding such Service.
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Section 5.2 Cooperation. The Parties and their respective Subsidiaries
will use good faith efforts to cooperate with each other in all matters relating
to the provision and receipt of Services. Such good faith cooperation will
include providing electronic access to systems used in connection with Services
and using commercially reasonable efforts to obtain all consents, licenses,
sublicenses or approvals necessary to permit each Party or its Subsidiaries to
perform the obligations thereof. The Parties and their respective Subsidiaries
will cooperate with each other in making such information available as needed in
the event of any and all internal or external audits, whether in Hong Kong or
any other country. If this Agreement is terminated in whole or in part, the
Parties and their respective Subsidiaries will cooperate with each other in all
reasonable respects in order to effect an efficient transition and to minimize
the disruption to the business of both Parties, including the assignment or
transfer of the rights and obligations under any contracts.
Section 5.3 Further Assurances. Each Party shall take such actions, upon
request of the other Party and in addition to the actions specified in this
Agreement, as may be necessary or reasonably appropriate to implement or give
effect to this Agreement.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 6.1 Representations and Warranties. Each Party (for and on behalf
of itself and its respective Subsidiaries) represents and warrants that: (i)
such Party and each of its respective Subsidiaries has the full right and
authority to enter into, execute, deliver and perform its obligations under this
Agreement; (ii) such Party and each of its respective Subsidiaries has taken all
requisite corporate action to approve the execution, delivery and performance of
this Agreement; (iii) this Agreement constitutes a legal, valid and binding
obligation enforceable against such Party (for and on behalf of itself and its
Subsidiaries) in accordance with its terms, subject to bankruptcy, insolvency,
creditors' rights and general equitable principles; and (iv) the execution of
and performance under this Agreement by such Party (for and on behalf of itself
and its Subsidiaries) shall not violate any applicable existing Laws and
Regulations.
Section 6.2 Covenants. Each Party covenants and agrees that its shall
procure the performance of each of its respective Subsidiaries in accordance
with the terms of this Agreement.
ARTICLE 7
LIMITATION OF LIABILITY
Notwithstanding any provision of this Agreement to the contrary, neither
Party shall be liable to the other Party hereunder for any special, incidental,
indirect, punitive or consequential damages, or damages for lost profits, lost
income or lost revenue, whether foreseeable or not, arising out of, or in
connection with the failure of such Party or its respective Subsidiaries to
perform its respective obligations hereunder (whether arising out of
transmission interruptions or problems, any interruption or degradation of
service or otherwise), whether occasioned by any construction, reconstruction,
relocation, repair or maintenance performed by, or failed to be performed by,
the other Party or its respective Subsidiaries or any other cause
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whatsoever, including breach of contract, breach of warranty, negligence, or
strict liability, all claims for which damages are hereby specifically waived.
Nothing contained herein shall operate as a limitation on the right of either
Party hereto or its respective Subsidiaries to bring an action for damages
against any third Party, including claims for indirect, special or consequential
damages, based on any acts or omissions of such third Party.
ARTICLE 8
FORCE MAJEURE
Except with respect to a Party's obligations to pay monies due hereunder,
neither Party shall be in default under this Agreement if and to the extent that
any failure or delay in the performance by such Party or any of its respective
Subsidiaries of one or more of its obligations hereunder is caused by any of the
following conditions, and the performance by such Party or any of its respective
Subsidiaries of such obligation or obligations shall be excused and extended for
and during the period of any such delay: act of God; fire; flood; fiber, cable,
conduit or other material failures, shortages or unavailability or other delay
in delivery not resulting from the failure of the responsible Party or any of
its respective Subsidiaries to timely place orders therefore; lack of or delay
in transportation; Laws and Regulations; or any other cause beyond the
reasonable control of such Party or its respective Subsidiaries (each a "Force
Majeure Event"). The Party claiming relief under this Article (for and on behalf
of itself or any of its respective Subsidiaries) shall notify the other Party in
writing of the existence of the event relied on and the cessation or termination
of said event.
ARTICLE 9
TERM AND TERMINATION
Section 9.1 Term. This Agreement shall be effective upon the Effective
Date commencing on the Effective Date and shall continue in full force and
effect for an initial period of three (3) years thereafter, to be extended
thereafter by mutual agreement of the Parties (the "Term"). Any such extension
is subject to the transactions contemplated under this Agreement complying with
the relevant provisions of the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited governing connected transactions at the time
of the extension and that The Stock Exchange of Hong Kong Limited granting a
waiver from the announcement and independent shareholders' approval requirements
with respect to the transactions contemplated under this Agreement, where
necessary.
Section 9.2 Defaults; Limitations of Liability.
9.2.1 An "Event of Default" exists under this Agreement upon
the following events:
(c) subject to Section 3.2.3, a Party fails to comply with or
perform any material term, provision, covenant, agreement, or obligation
contained in this Agreement including, without limitation, payment of applicable
charges and fees hereunder, and such failure is not cured or corrected within
ten (10) business days, in the case of non-payment, and within thirty (30) days,
in all other cases, from the date the non-defaulting party gives written notice
of such default, or, with respect to
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defaults other than payment defaults, if such default is not capable of being
cured within such thirty (30)-day period despite the exercise of diligent,
commercially reasonable efforts, within such longer period necessary to effect a
cure;
(d) a Party makes a general assignment for the benefit of its
creditors, initiates a voluntary petition in bankruptcy or any petition or
answer seeking, consenting to or acquiescing in reorganization, arrangement,
adjustment, composition, liquidation, dissolution or similar relief; or
(e) an involuntary petition in bankruptcy, other insolvency
protection against a Party is filed and not dismissed within one hundred twenty
(120) days.
9.2.2 Upon the occurrence of an Event of Default either Party
may terminate all or a portion of this Agreement following the delivery of
written notice to the other Party specifying the scope of termination, which
termination shall be effective on the date such notice is delivered or such
other later date as specified in the notice or, subject to Article 7, pursue any
of its other available legal and equitable remedies relating to such Event of
Default, including an action for damages, specific performance and/or injunctive
relief.
Section 9.3 Termination Assistance Services. Asia Netcom agrees that, upon
termination of this Agreement or any of the Schedules, Asia Netcom will
cooperate in good faith with EAN Network to provide EAN Network (or its
designee) with reasonable assistance to make an orderly transition from Asia
Netcom to another supplier of the Services. Transition assistance services shall
include the following:
9.3.1 developing a transition plan with assistance from EAN
Network or its designee;
9.3.2 providing training to EAN Network personnel or its
designee's personnel to perform Services; and
9.3.3 organizing and delivering to EAN Network records and
documents necessary to allow continuation of the Services, including delivering
such materials in electronic forms and versions as requested by EAN Network.
Section 9.4 Termination For Convenience. Notwithstanding anything herein
to the contrary, either Party (for and on behalf of itself and its Subsidiaries)
may in its sole discretion terminate this Agreement upon thirty (30) days prior
written notice to the other Party.
ARTICLE 10
ASSIGNMENT
Section 10.1 Neither Party may assign, encumber or otherwise transfer this
Agreement or any Service Schedule without the prior written consent of the other
Party, provided that, however, Asia Netcom shall have the right, without EAN
Network's consent, but with prior written notice to EAN Network, to assign,
delegate or otherwise transfer this Agreement or any Service Schedule and any
right or
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obligations arising thereunder to an Subsidiary. Any assignee or transferee
shall continue to be subject to all of the provisions of this Agreement.
Section 10.2 This Agreement and each of the Parties' respective rights and
obligations under this Agreement, shall be binding upon and shall inure to the
benefit of the Parties hereto and each of their respective permitted successors
and assigns.
ARTICLE 11
CONFIDENTIALITY
Section 11.1 The Parties agree (for and on behalf of themselves and their
respective Subsidiaries) that if either Party or its respective Subsidiaries
provides confidential or proprietary information to the other Party or its
respective Subsidiaries ("Proprietary Information"), such Proprietary
Information shall be held in confidence, and the receiving Party or its
respective Subsidiary shall afford such Proprietary Information the same care
and protection as it affords generally to its own confidential and proprietary
information (which in any case shall be not less than reasonable care) in order
to avoid disclosure to or unauthorized use by any third Party. The Parties
acknowledge and agree (for and on behalf of themselves and their respective
Subsidiaries) that all information disclosed by either Party or its respective
Subsidiaries to the other Party or its respective Subsidiaries in connection
with or pursuant to this Agreement shall be deemed to be Proprietary
Information, provided that verbal information is indicated as being confidential
or proprietary when given. All Proprietary Information, unless otherwise
specified in writing, shall remain the property of the disclosing Party or its
respective Subsidiary, shall be used by the receiving Party or its respective
Subsidiaries only for the intended purpose, and such written Proprietary
Information, including all copies thereof, shall be returned to the disclosing
Party or its respective Subsidiary or destroyed after the need of the receiving
Party or its respective Subsidiaries for such information has expired or upon
the request of the disclosing Party or its respective Subsidiary. Proprietary
Information shall not be reproduced except to the extent necessary to accomplish
the purpose and intent of this Agreement, or as otherwise may be permitted in
writing by the disclosing Party or its respective Subsidiary.
Section 11.2 The foregoing provisions of Section 11.1 shall not apply to
any Proprietary Information which (i) becomes publicly available other than
through the disclosing Party; (ii) is required to be disclosed by a Law or
Regulation; (iii) is independently developed by the receiving Party; or (iv)
becomes available to the receiving Party without restriction from a third Party.
Section 11.3 Notwithstanding Sections 11.1 and 11.2 either Party and its
respective Subsidiaries may disclose Proprietary Information to its employees,
agents, lenders, funding partners and legal and financial advisors and providers
to the extent necessary or appropriate in connection with the negotiation and/or
performance of this Agreement or in obtaining financing, provided that each such
Party is notified of the confidential and proprietary nature of such Proprietary
Information and is subject to or agrees to be bound by similar restrictions on
its use and disclosure.
Section 11.4 Neither Party shall issue any public announcement or press
release relating to the execution of this Agreement without the prior approval
of the other Party, which approval shall not be unreasonably withheld.
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Section 11.5 In the event either Party or its respective Subsidiaries
shall be required to disclose all or any part of this Agreement in, or attach
all or any part of this Agreement to, any regulatory filing or statement, each
Party agrees to discuss and work cooperatively, in good faith, with the other
Party, to protect, to the extent possible, those items or matters which the
other Party or its respective Subsidiary deems confidential and which may, in
accordance with applicable laws, be deleted therefrom.
Section 11.6 The provisions of this Article 11 shall survive expiration or
termination of this Agreement.
ARTICLE 12
DISPUTE RESOLUTION
If the Parties are unable to resolve any service, performance or budget
issues or if there is a material breach of this Agreement that has not been
corrected within thirty (30) days of receipt of notice of such breach, the
Chairman of the Board of Directors of EAN Network and the CFO of Asia Netcom,
will meet promptly to review and resolve those issues in good faith.
ARTICLE 13
CHOICE OF LAW AND FORUM
This Agreement shall be governed and construed under and pursuant to the
laws of Hong Kong Special Administrative Region. Any dispute arising under the
terms hereof shall be heard only before courts of competent jurisdiction in Hong
Kong S.A.R.
ARTICLE 14
NOTICES
All notices or other communications which are required or permitted herein
shall be in writing and sufficient if delivered personally, sent by prepaid
overnight air courier, or sent by registered or certified mail, postage prepaid,
return receipt requested, or by facsimile with follow up next day commercial
hand delivery, addressed as follows:
IF TO ASIA NETCOM:
Asia Netcom Corporation Limited
00/X Xxxxxx Xxxx Xxxxxx
0 Xxxxx'x Xxxx, Xxxxxxx
Xxxx Xxxx SAR
Attn: General Counsel
Facsimile x000-0000-0000
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IF TO EAN NETWORK:
East Asia Netcom Ltd.
x/x 00/X Xxxxxx Xxxx Xxxxxx
0 Xxxxx'x Xxxx, Xxxxxxx
Xxxx Xxxx SAR
Attn: General Counsel
Facsimile x000-0000-0000
or at such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith. Any such
communication shall be deemed to have been given when delivered if delivered
personally, on the business day after dispatch if sent by overnight air courier,
or on the third business day after posting if sent by pre-paid, first class
mail.
ARTICLE 15
MISCELLANEOUS
Section 15.1 Entire Agreement; Amendment. This Agreement constitutes the
entire and final agreement and understanding between the Parties with respect to
the subject matter hereof and supersedes all prior agreements relating to the
subject matter hereof, which are of no further force or effect. The Schedules
referred to herein are integral parts hereof and are hereby made a part of this
Agreement. This Agreement may only be modified or supplemented by an instrument
in writing executed by a duly authorized representative of each Party.
Section 15.2 Agency. The relationship between Asia Netcom and EAN Network
and their respective Subsidiaries shall not be that of partners, agents, or
joint venture partners, and nothing contained in this Agreement shall be deemed
to constitute a partnership or agency agreement between any of them for any
purposes, including but not limited to tax purposes.
Section 15.3 Severability. If any provision of this Agreement shall be
declared invalid or unenforceable under applicable law, said provision shall be
ineffective only to the extent of such declaration and shall not affect the
remaining provisions of this Agreement. In the event that a material and
fundamental provision of this Agreement is declared invalid or unenforceable
under applicable law, the Parties shall negotiate in good faith respecting an
amendment hereto which would preserve, to the fullest extent possible, the
respective benefits and burdens imposed on each Party under this Agreement as
originally executed.
Section 15.4 Joint Work Product. The Parties acknowledge that this
Agreement is the joint work product of the Parties. Accordingly, in the event of
ambiguities in this Agreement, no inferences shall be drawn against either Party
on the basis of authorship of this Agreement.
Section 15.5 Waivers. The failure of either Party to insist on strict
performance of any provision of this Agreement shall not be construed as a
waiver of such provision in any other instance.
12
Section 15.6 Exclusivity. This Agreement shall not be exclusive as to
either Party and nothing herein shall prevent Asia Netcom or EAN Network from
contracting with other parties to provide or receive services to or on behalf of
Asia Netcom or EAN Network.
Section 15.7 Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one and the same
instrument.
[Signature Page Follows]
13
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
ASIA NETCOM CORPORATION LIMITED EAST ASIA NETCOM LTD.
By: /s/ Wenlong Sun By: /s/ Xxxxxxx Xxxxxxxx
------------------------------- -------------------------------
Name: Wenlong Sun Name: Xxxxxxx Xxxxxxxx
Title: Director Title: Director
Signature Page to the Management Services Agreement
SERVICE SCHEDULE 1
GOVERNMENT AND CORPORATE AFFAIRS SERVICES
I DESCRIPTION OF SERVICES
A. SCOPE
Asia Netcom and its Subsidiaries will provide government and
corporate affairs services to EAN Network and its Subsidiaries in all
jurisdictions where EAN Network and its Subsidiaries do business. Such Services
will be provided by Asia Netcom and its Subsidiaries in consultation with the
Board of Directors of EAN Network in accordance with the terms and conditions of
this Agreement.
B. SPECIFIC SERVICES
The specific services that Asia Netcom and its Subsidiaries will
provide are as follows:
- Provide coverage and advocacy on international, federal, state
and local governmental issues affecting EAN Network's business
operations.
- Oversee EAN Network's regulatory filings in respect of its
Type I telecommunications business licenses.
- Additional services may be included upon agreement of both
Parties.
II SERVICE FEES
Category 1 Fees and Category 3 Fees.
Schedule 1
SERVICE SCHEDULE 2
TREASURY SERVICES
I DESCRIPTION OF SERVICES
A. SCOPE
Asia Netcom and its Subsidiaries will provide treasury services to
EAN Network and its Subsidiaries in consultation with EAN Network's Board of
Directors, including cash management, risk management, short and long-term
borrowings, investment of benefit trusts, arrangement of credit facilities and
coordination with credit rating agencies, all in accordance with the terms and
conditions of this Agreement.
B. SPECIFIC SERVICES
The specific services that Asia Netcom and its Subsidiaries will
provide are as follows:
1. CASH MANAGEMENT
- Poll daily bank account balances for EAN Network's banks
and perform cash position.
- Post EAN Network's cash desk activity to EAN Network's
general ledger.
- Provide reporting on short-term borrowings and
investments and interface with EAN Network's general
ledger.
- Support EAN Network's bank accounts, including opening,
closing and modifying accounts at the request and
approval of EAN Network.
- Pay EAN Network bank fees.
- Obtain bank credit lines for EAN Network's letter of
credit needs.
- Structure/maintain efficient bank network with banks and
analyze bank service needs.
2. RISK MANAGEMENT
- Administering risk management, safety and claim
services.
- Monitoring and managing counter party risk.
Schedule 2
- Negotiation and acquisition of insurance coverage,
including, but not limited to, property and business
interruption casualty (including worker's compensation),
directors', officers' and other liability coverage.
- Risk, safety and claim vendor selection and oversight.
- Risk, safety and claim processes and measurements.
- Additional services may be included upon agreement of
both parties.
II SERVICE FEES
Category 1 Fees and Category 3 Fees.
Schedule 2
SERVICE SCHEDULE 3
FINANCIAL SERVICES, REPORTING, RESEARCH AND LEDGER
I DESCRIPTION OF SERVICES
A. SCOPE
Asia Netcom and its Subsidiaries will provide financial reporting,
advising and auditing services to EAN Network and its Subsidiaries in
consultation with EAN Network's Board of Directors, all in accordance with the
terms and conditions of this Agreement. These services will include payroll,
accounts payable, external audit coordination, and other governmental reporting
and financial research.
B. SPECIFIC SERVICES
The specific services that Asia Netcom and its Subsidiaries will
provide are as follows:
1. FINANCIAL SERVICES
- Preparation and distribution of employees payroll
checks.
- Payment of related taxes, garnishment and other
deductions to appropriate parties.
- Preparation and filing of employer tax returns.
- Processing and paying invoices and purchase orders,
including input into the accounts payable system.
- Processing travel vouchers and balancing travel advance
accounts.
- Recording all payments and maintaining all related
files.
- Preparing all checks for vendor payment and employees
reimbursement.
- Processing and paying employees travel and entertainment
expense reports.
- Preparing and circulating weekly and monthly standard
reports.
- Preparing special reports on a timely basis and
responding to all inquiries for research and analysis.
Schedule 3
- Preparing documentation for inter-company billing.
2. FINANCIAL CONSOLIDATIONS AND REPORTING
- Preparing quarterly, annual and any other required
governmental reports.
- Monthly consolidation of EAN Network's financial
statements.
- Assist in the preparation of EAN Network's annual report
and earnings releases, if applicable.
- Preparing monthly reporting of results of operations for
distribution to EAN Network's Board of Directors.
- Assisting EAN Network in the preparation of reports to
committees of its Board of Directors (e.g., Audit
Committee and Compensation Committee).
3. FINANCIAL RESEARCH
- Evaluating and coordinating EAN Network's compliance
with new regulatory requirements
- Assisting EAN Network in responding to accounting
regulatory bodies regarding their solicitation of
comments on proposed Laws and Regulations.
- Preparing other governmental reports.
- Coordinating external audit services.
4. HEADQUARTERS LEDGER SERVICES
- Maintaining a general ledger for holding company and
accounting for debt, stock and inter-company
transactions at the holding company level.
- Additional services may be included upon agreement of
both parties.
II SERVICE FEES
Category 1 Fees and Category 3 Fees.
Schedule 3
SERVICE SCHEDULE 4
INFORMATION TECHNOLOGY SERVICES
I DESCRIPTION OF SERVICES
A. SCOPE
Asia Netcom and its Subsidiaries will provide Information Technology
services to EAN Network and its Subsidiaries in consultation with EAN Network's
Board of Directors to enable EAN Network and its Subsidiaries to attain its
business objectives of developing, implementing, operating and supporting
Information Technology requirements, all in accordance with the terms and
conditions of this Agreement.
B. SPECIFIC SERVICES
The specific services that Asia Netcom and its Subsidiaries will
provide are as follows:
1. Basic Maintenance.
2. Operational Continuity.
- Asia Netcom will provide regular updates on the status
of work, activity levels, development work and overall
spending. In addition, certain investment projects
identified by EAN Network will be subject to Capital
Expenditure review and approval policies, which will
include scope, rate of return, functionality milestones
reviews, etc.
3. Chief technical office services, including:
- Enterprise architecture and design.
- Application technology, security and enterprise
programs.
- Information technology research and development.
- Project management.
- Network design, procurement and implementation.
- Enterprise and other information technology services
previously provided by Asia Netcom Group, which includes
the EAN Network employees assumed by Asia Netcom.
4. Enhancements.
Schedule 4
5. Investment Projects.
6. Negotiation of contracts with major vendors, including Global
Marine, Alcatel, Lucent, Cisco, NEC and SAP.
II SERVICE FEES
Category 1 Fees, Category 2 Fees and Category 3 Fees.
Schedule 4
SERVICE SCHEDULE 5
LEGAL AND CORPORATE SECRETARY SERVICES
I DESCRIPTION OF SERVICES
A. SCOPE
Asia Netcom and its Subsidiaries will provide legal and corporate
secretary services to EAN Network and its Subsidiaries in accordance with
the terms and conditions of this Agreement. The services will include
legal support to all business units of EAN Network.
B. SPECIFIC SERVICES
The specific services that Asia Netcom and its Subsidiaries will
provide are as follows:
- Providing general legal advice.
- Providing Corporate Secretary services for EAN Network and
the EAN Network Subsidiaries, including preparations for the
annual meeting of shareholders, assistance with respect to
shareholder resolutions and services relating to corporate
governance matters.
- Providing intellectual property law support for EAN Network
and the EAN Network Subsidiaries.
- Overseeing and articulating legal policy regarding litigation
and regulatory compliance.
- Additional services may be included upon agreement of both
parties.
II SERVICE FEES
Category 1 Fees and Category 3 Fees.
III ADDITIONAL TERMS
It is understood and agreed that the attorneys of Asia Netcom and its
Subsidiaries providing legal services pursuant to this Agreement have been
retained by EAN Network and its Subsidiaries for the express purpose of
providing legal advice to EAN Network and its Subsidiaries and that their
communication with EAN Network and its Subsidiaries will be subject to the
attorney-client privilege to the extent permitted by law and by applicable
ethical requirements. The parties agree that no conflict of interest between
Asia Netcom and its Subsidiaries, on the one hand, and EAN Network and its
Subsidiaries, on the other hand, currently exists with respect to the services
being
Schedule 5
provided. To the extent a conflict of interest arises Asia Netcom (for and
on behalf of itself and its Subsidiaries) and EAN Network (for and on behalf of
itself and its Subsidiaries) will discuss and resolve such conflict consistent
with the principles and obligations of professional responsibility.
Schedule 5
SERVICE SCHEDULE 6
TAX SERVICES
I DESCRIPTION OF TAX SERVICES
A. SCOPE
Asia Netcom and its Subsidiaries will provide comprehensive income
and franchise tax services ("Tax Services") to EAN Network and its Subsidiaries
as described herein in consultation with EAN Network's Board of Directors, all
in accordance with the terms and conditions of this Agreement
B. TAX SERVICES
The Tax Services that Asia Netcom and its Subsidiaries will provide
to EAN Network and its Subsidiaries are as follows:
1. TAX RETURNS
- Prepare in accordance with all applicable laws and file
on a timely basis all Returns of EAN Network and its
Subsidiaries ("Returns" is defined for the purpose of
this Service Schedule 6 to mean all income and franchise
returns, reports and forms required to be filed by EAN
Network and its Subsidiaries with any governmental
authority).
2. TAX AUDITS
- Respond to any audit or other similar proceeding with
respect to a Return of EAN Network or any of its
Subsidiaries or any audit or other similar proceeding in
which EAN Network or any of its Subsidiaries is included
as a party.
3. TAX PLANNING
- Identify federal, state and international tax planning
opportunities and implement tax strategies, as
appropriate, and reviewing the tax implications of
business operations and proposals.
- Advise on various tax planning opportunities including
dividend repatriation, financial transactions, business
operations and proposals.
Schedule 6
- Asia Netcom and its Subsidiaries will interpret the
meaning of "Tax Services" so as to insure that EAN
Network and its Subsidiaries comply fully with all
applicable tax laws. Asia Netcom and its Subsidiaries
will perform each Tax Service for the purpose of
minimizing, to the extent possible, the tax liabilities
of EAN Network and its Subsidiaries.
- Additional services may be included upon agreement of
both Parties.
II SERVICE FEES
Category 1 Fees and Category 3 Fees.
Schedule 6
SERVICE SCHEDULE 7
THIRD PARTY CONTRACT AND REIMBURSEABLE EXPENSES
I DESCRIPTION OF SERVICES
A. SCOPE
Asia Netcom and its Subsidiaries will calculate and arrange for
payment of the amounts listed in subparagraph B below, on behalf of EAN Network
and its Subsidiaries, all in accordance with the terms and conditions of this
Agreement.
B. SPECIFIC SERVICES
- Auditing Fee
- Maintenance of the Network
- Network and Facility Insurance
- Facility Management
- Cable Landing OA&M
- Tax consulting and filing fees
- Asset taxes
- Property taxes, etc.
II SERVICE FEES
Category 3 Fees.
Schedule 7
SERVICE SCHEDULE 8
ENGINEERING AND OPERATION SERVICES
I DESCRIPTION OF SERVICES
A. SCOPE
Asia Netcom and its Subsidiaries will provide comprehensive
Engineering and Operation Services on behalf of EAN Network and its Subsidiaries
as described herein in consultation with EAN Network's Board of Directors, all
in accordance with the terms and conditions of this Agreement.
B. SPECIFIC SERVICES
- Asia Netcom and its Subsidiaries will perform Engineering and
Operations Services on behalf of EAN Network and its
Subsidiaries. In connection therewith, Asia Netcom (for and on
behalf of itself and its Subsidiaries) agrees to provide all
labor, equipment and miscellaneous materials and to do all
things necessary to perform preventive, routine, emergency and
corrective maintenance on the Network, including, but not
limited to the equipment set forth on Attachment 1 to this
Service Schedule 8 (hereafter the "Services"). The Services
shall include all labor necessary for (i) the proper operation
and maintenance of the Network; (ii) capacity planning; (iii)
delivery of capacity to Persons; (iv) network systems
engineering, architecture and operations/integration testing
and troubleshooting; and (v) the proper operation and
maintenance of the HVAC systems, main entry power switchgear,
emergency generators and transfer switches, UPS systems and
batteries, and fire protection components associated with the
Network. The standard of care for all Services performed or
furnished by Asia Netcom and its Subsidiaries under this
Service Schedule shall be in accordance with the average
standards applicable to members of Asia Netcom's profession.
- Where EAN Network or its Subsidiary is under current contract
with other suppliers for the operation and/or maintenance of
the Network and its components, Asia Netcom or its Subsidiary
will assume management of those contracts on behalf of EAN
Network of its respective Subsidiary .
- In order to provide the Services contemplated under this
Service Schedule, Asia Netcom or its respective Subsidiary, at
its option, may acquire, at book value, certain assets (to be
specifically identified in writing between the Parties) from
EAN Network and its Subsidiaries which enable Asia Netcom or
its respective
Schedule 8
Subsidiary to integrate use of those assets with the assets of
Asia Netcom and its Subsidiaries in order to achieve
efficiencies in providing the Service to EAN Network and its
Subsidiaries. Among the assets that are subject to transfer
may include certain Network assets, test-lab assets and
infrastructure assets (including the network operations center
in Singapore).
- EAN Network and its Subsidiaries shall not enter into any
service level commitments with any Person that could require
compliance by Asia Netcom or any of its Subsidiaries under
this Service Schedule, without the prior consent of Asia
Netcom (for and on behalf of itself or its Subsidiary), which
consent will not be unreasonably withheld.
- Within the leasing term of three year, EAN Network or its
respective Subsidiary will assign to Asia Netcom or its
respective Subsidiary, at no charge to Asia Netcom or such
Subsidiary, all necessary or appropriate third-party licenses
and agreements currently used by EAN Network or any of its
Subsidiaries in the operations, maintenance and management of
the Network. EAN Network and its respective Subsidiary will be
responsible for obtaining the consents of third parties and
for paying any assignment fee, transfer fee or other costs in
connection with the assignment of such licenses and agreements
to Asia Netcom.
- Each Party and its Subsidiaries will not have any interest in
any proprietary specifications, designs, patents, plans,
drawings, software, processes and procedures, or other
technical and business information of or developed
independently by the other Party and its Subsidiaries (the
"Other Party Network Information") disclosed to the first
Party or any of its Subsidiaries in connection with the
Agreement. The other Party (for and on behalf of itself and
its Subsidiaries) will grant to the first Party (for and on
behalf of itself and its Subsidiaries) a nonexclusive,
nontransferable, royalty-free license (without the right to
sublicense, except to Subsidiaries) to use such Other Party
Network Information during the Term, but only in connection
with the performance or receipt of the Services.
- Integration. If at a future time it is desirable to integrate
the Network with another cable system or an extension of the
Network, the terms and conditions of such integration shall be
decided by mutual consent of the Parties (for and on behalf of
themselves and their respective Subsidiaries).
II SERVICE FEES
Category 1 Fees and Category 3 Fees.
Schedule 8
SERVICE SCHEDULE 8
ATTACHMENT 1
SCOPE OF WORK
Asia Netcom and its Subsidiaries will provide the following Services on behalf
of EAN Network and its Subsidiaries with respect to the Network:
A. PROVISIONING
1. Work with Asia Netcom's Service Delivery Department to ensure timely
installation/provisioning of customers.
2. Perform local testing and commissioning of circuits which are
activated on the Network.
3. Perform all field activities related to provisioning of capacity on
the Network.
4. Establish, commission and test circuits such that the path
performance meets/exceeds the standard technical or industry
requirements.
B. DEACTIVATION
1. Work with Asia Netcom's Service Delivery Department during customer
deactivations.
2. Perform all field activities related to deactivation of circuits.
C. SYSTEM INVENTORY AND SYSTEM SPARES MANAGEMENT
1. Manage the inventory and maintain the integrity of Network equipment
spares, as required to maintain accurate Network inventory.
2. Work with suppliers relating to repair and return of Network system
spares.
3. Perform periodic inventories of Network system spares.
4. Perform periodic audits of the installed boards and equipment to
support the process of capacity/Configuration Management.
Schedule 8
D. TRANSMISSION EQUIPMENT MAINTENANCE
1. Work with the Asia Netcom's Network Operation Center ("ANOC"),
utilizing existing Operation Interfaces in resolving faults with
respect to the Network.
2. Perform preventive maintenance and corrective maintenance on
transmission equipment.
3. Preventive maintenance including, without limitation, the following:
a. Inspect transmission equipments and document the status of
each.
b. Schedule and perform routine preventive maintenance of all
transmission equipment.
c. Track and report routine preventive maintenance of all
transmission equipment.
d. Meet all supplier preventive maintenance requirements.
4. Corrective maintenance including, without limitation, the following:
a. Perform corrective maintenance of all transmission equipment.
b. Track and report all corrective maintenance of all
transmission equipments.
c. Replace all faulty boards and reset equipment to performance
level specifications.
d. Install work-around solutions approved by the suppliers when
necessary to ensure customer network continuity.
e. Escalate faults to the supplier, when necessary, in a timely
fashion and cooperate with such suppliers to resolve such
faults.
f. Assist suppliers in their diagnosis of faults, and in access
to the cable station and telehouse when faults are escalated
to suppliers.
5. Respond to all telecommunications management network (TMN) Alarms in
coordination with the ANOC in resolving faults.
E. SUBSEA CABLE LAND SECTION MAINTENANCE
1. Perform preventive maintenance and corrective maintenance on subsea
cable land section.
2. Preventive maintenance including, without limitation, the following:
Schedule 8
a. Manage the performance of preventive maintenance.
b. Manage the performance of any necessary testing to further
investigate any loss of performance or suspected cable damage
to the fibers in an optical section.
3. Corrective maintenance including, without limitation, the following:
a. Locate fault(s) on the cable.
b. Manage the repair of all faults within the specified cable
section.
c. Manage the performance of all necessary testing to determine
the fault location.
d. Manage the performance of all necessary testing after repairs.
F. RESTORATION
1. Assist in developing short and long-term system restoration plans
and disaster recovery plans.
2. Monitor implementation and normalization of system restoration
plans.
3. Support restoration plans and operations.
G. FACILITIES MAINTENANCE
1. Perform inspections of all areas of all sites of the cable station,
including interior and exterior of the building, grounding, power
equipment, and air conditioning where applicable.
2. Inspect internal and external appearances and conditions of cable
station where applicable.
3. Manage site repairs and modifications where applicable.
4. Manage site cleaning for all parts of cable station.
5. Provide access to the sites (cable station and telehouse) to
customers and approved third party contractors, as necessary.
6. Perform inspections to ensure that power equipment, grounding, and
air conditioning at the telehouse are functioning at optimum levels
for the proper operation of all telecommunications equipment.
Schedule 8
H. AIR CONDITIONING
1. Perform inspections to ensure that air conditioning systems at cable
Stations are functioning at optimum levels for the proper operation
of all telecommunications equipments.
2. Manage the repair of all air conditioning system malfunctions at
cable stations.
3. Ensure operational personnel at cable stations have immediate access
to services and emergency services of local air conditioning
technician in the event of an air conditioning system malfunction.
4. Ensure proper tests and inspections are performed at cable stations
so that contractual warranties with respect to all air conditioning
systems are kept valid.
I. POWER EQUIPMENT
1. Perform timely inspections to ensure that power equipments at all
sites (cable stations and telehouses) are working at optimum levels
to prevent loss of power or disruption of service.
2. Manage the repair of all power system malfunctions at all sites
(cable station and telehouse).
3. Ensure operational personnel at all sites (cable stations and
telehouses) have immediate access to services and emergency services
of local power technician in the event of a power system
malfunction.
4. Ensure proper tests and inspections are performed at all sites
(cable stations and telehouses) so that contractual warranties with
respect to all power systems are kept valid.
J. SECURITY SYSTEM EQUIPMENT
1. Manage the performance of all physical security.
2. Perform inspections to ensure all security system equipments are
adequate for all sites (cable stations and telehouses) on both in
and out of normal working hours.
3. Manage the repair of all security system malfunctions at all sites
(cable stations and telehouses).
4. Ensure operational personnel at all sites (cable stations and
telehouses) have immediate access to services and emergency services
of local security system technician in the event of a security
system malfunction.
Schedule 8
5. Ensure proper tests and inspections are performed at all sites
(cable stations and telehouses) so that contractual warranties with
respect to all security systems are kept valid.
K. OPERATIONS ADMINISTRATION
1. Manage the receipt, filing and updating of technical documentation.
2. Survey and select third parties for the provision of specialized
maintenance.
3. Secure necessary work permits with local government and commercial
power firms.
Schedule 8
EXECUTION COPY
AMENDMENT NO. 1 TO
MANAGEMENT SERVICES AGREEMENT
This AMENDMENT NO. 1 TO MANAGEMENT SERVICES AGREEMENT is made and entered
into this 6th day of October, 2004, by and between ASIA NETCOM CORPORATION
LIMITED, a company formed and validly existing under the laws of Bermuda ("Asia
Netcom") and EAST ASIA NETCOM LTD., a company formed and validly existing under
the laws of the Bermuda ("EAN Network"). Asia Netcom and EAN Network are
sometimes hereinafter referred to as collectively, the "Parties".
WHEREAS, Asia Netcom and EAN Network entered into a certain management
services agreement (the "Management Services Agreement") dated June 30, 2004;
WHEREAS, Asia Netcom and EAN Network desire to make certain amendments to
the Management Services Agreement relating to term and termination.
NOW THEREFORE, in consideration of the mutual covenants and promises made
in this Agreement, the sufficiency of which is acknowledged by the Parties, the
Parties hereby agree that Section 9.1, or "Term and Termination--Term", of the
Management Services Agreement, shall be deleted in its entirety and replaced
with the following:
"Section 9.1 Term. This Agreement shall be effective upon the Effective
Date commencing on the Effective Date and shall continue in full force and
effect until December 31, 2006, to be extended thereafter by mutual agreement of
the Parties (the "Term"). Any such extension is subject to the transactions
contemplated under this Agreement complying with the relevant provisions of the
Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited governing connected transactions at the time of the extension and that
The Stock Exchange of Hong Kong Limited granting a waiver from the announcement
and independent shareholders' approval requirements with respect to the
transactions contemplated under this Agreement, where necessary."
IN WITNESS WHEREOF, the Parties have executed this Amendment No.1 to
Management Services Agreement as of the date first written above.
ASIA NETCOM CORPORATION LIMITED EAST ASIA NETCOM LTD.
By: /s/ Sun Wenlong By: /s/ Xxxxxxx Xxxxxxxx
----------------------- -----------------------
Name: Sun Wenlong Name: Xxxxxxx Xxxxxxxx
