Common use of Calculation and Payment of the Service Fee Clause in Contracts

Calculation and Payment of the Service Fee. 1. The Service Fee payable hereunder shall be determined, calculated and paid in accordance with this Appendix 2. 2. In the Initial Term of this Agreement, the Service Fee shall be an amount equal to 80% of Party B’s annual gross revenue. The Service Fee may be adjusted by mutual agreement of the Parties to appropriately reflect the value of the services provided under this Agreement. In adjusting or setting the Service Fee the Parties shall consider, the following factors: 2.1. the technical difficulty and complexity of technical consulting and services; 2.2. the time taken by Party A’s employees for the technical consulting and services; 2.3. the specific content and commercial value of the technical consulting and services; 2.4. the market reference price of technical consulting and services of the same category. If at any time and for any reason Party A believes that the then applicable Service Fee pricing mechanism is no longer acceptable, it shall provide Party B written notice of the same and shall propose in such notice a new pricing mechanism. Party B shall actively negotiate with Party A in good faith within ten (10) working days after receiving the written notice of Party A with a view to agreeing upon a new pricing mechanism. If Party B fails to respond to such notice with such ten-working day period, Party B shall be deemed to have agreed to and accepted the proposed pricing mechanism set forth in the notice. 3. The Service Fee shall be due annually and shall be paid in one annual installment, provided, however, that if Party B has no capability to pay the Service Fee due to its actual operation situation in any given year, then with the consent of Party A, the Service Fee payable with respect to that year shall be postponed, and shall not be due and payable, until the end of the next succeeding year in which Party B makes a profit. Within thirty (30) days of year end, Party A shall deliver to Party B an invoice for the previous year’s Service Fee. Party B shall pay the Service Fee into the bank account designated by Party A within ten (10) working days after receiving the invoice from Party A, and Party B shall fax or post a copy of the payment certificate to Party A within ten working days after making the payment.