EXHIBIT 10.8
CONFIDENTIAL TREATMENT REQUESTED BY LINKTONE LTD. THIS EXHIBIT HAS BEEN
REDACTED. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
COOPERATION AGREEMENT
This Agreement, dated June 3, 2003, is between:
1. SHANGHAI LINKTONE CONSULTING LTD., a company incorporated in the PRC
with its legal address at 6th Floor, Harbour Ring Plaza, Xizang Zhong
Road Shanghai, 200002, PRC ("LINKTONE"); and
2. SATELLITE TELEVISION ASIAN REGION LIMITED, a company incorporated in
the HKSAR with its principle office at ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ One, 18
▇▇▇ ▇▇▇▇ Street, Hunghom, Kowloon, HKSAR ("STAR")
(each a "PARTY" and collectively, the "PARTIES").
Now, Therefore, the Parties agree as follows:
1. THE COOPERATION
STAR and LINKTONE agree to cooperate in developing and operating the
Services and Applications in the PRC to be delivered by LINKTONE over
the Mobile Operators' wireless networks to the End-Users subject to and
upon the terms and conditions set out below.
2. RESPONSIBILITIES AND OBLIGATIONS OF LINKTONE
2.1 LINKTONE agrees to develop, provide, maintain and support the Services
and Applications in co-operation with STAR so as to facilitate the
delivery of Services and Applications from the Mobile Operators to
Mobile Devices of End-Users and fulfil the functions of the Services
and Applications as anticipated in this Agreement. LINKTONE shall work
with STAR and its promotional partners to develop the Services and
Applications that support the multimedia programming and/or activities
of Channel [V] and Xing Kong ▇▇▇ ▇▇▇ as requested by STAR. The
information of the Services and Applications and Content will be
provided to LINKTONE by STAR. Such information and Content may include
the names and/or logos of STAR's sponsors and/or advertisers (if
applicable).
2.2 LINKTONE further agrees to permit the End-Users to use Mobile Devices
to send messages of the Services and Applications to STAR by dialling
into the Independent Code and/or the Special Code and to receive
messages of the Services and Applications originated from STAR, through
the utilization of the Services and Applications.
1
2.3 LINKTONE shall provide the Special Code within ten (10) business days
of the execution of this Agreement. If STAR or any of its affiliates is
assigned the Independent Code at any time during the Term, LINKTONE
undertakes to migrate all the Services and Applications from the
Special Code to the Independent Code seamlessly and continue to perform
all of its obligations under this Agreement without causing any
interruption to the utilization of any Service and/or Application by
any End-User using the Independent Code. If the Independent Code
becomes available as aforesaid at any time during the Term, any terms
and conditions regarding the sharing between the Parties of the Net
Revenue hereunder shall remain and the Parties will enter into and sign
a side letter containing the terms and conditions regarding the sharing
between the Parties of the net revenue that is generated and derived
from the Services and Applications using the Independent Code.
Notwithstanding of the availability of the Independent Code as
aforesaid, LINKTONE shall permit all of the End-Users to use the
Special Code at their own discretion for a transition period to be
agreed upon by the Parties after good faith consultation and all the
messages of the Services and Applications sent and/or received by the
End-Users using the Special Code will be forwarded to the Independent
Code seamlessly. Any additional costs and expenses charged by the
Mobile Operators in relation thereto shall be borne by STAR and
LINKTONE in equal share.
2.4 LINKTONE shall further agree not to use the Special Code on its own or
permit any other third party to use the same for a period of twelve
(12) months following the termination or expiration of the Term in
accordance with the terms and provisions of this Agreement.
2.5 In the course of the performance of the duties and obligations of
LINKTONE under this Agreement, LINKTONE shall specifically be
responsible for the following matters at its own costs and expenses:
(i) Providing STAR with all the necessary technical capabilities
to help develop and deliver the Services and Applications of
the quality, standard and appeal to be reasonably expected for
the Content and brands of STAR in the PRC. LINKTONE shall
procure and ensure that the Technical Platform shall be
reliable and in good working condition according to industrial
standards and practices throughout the Term so as to be
responsive to any technical requirements thereof;
(ii) Assisting STAR in the coordination and distribution of the
Services and Applications throughout PRC and the maintenance
of a close relationship and connection with the Mobile
Operators;
(iii) Providing STAR with all the necessary marketing promotion
resources, whether online or on-mobile fields, and all the
necessary marketing
2
campaign launching abilities and experience, including but not
limited to:
(a) LINKTONE shall use its best efforts to capitalize on its
close relationships with the Mobile Operators to promote
and market the Services and Applications. Such efforts
shall include, without limitation, applying to the Mobile
Operators for free wireless advertisements (including, but
not limited to, wireless short message advertisements) for
STAR to promote and market the Services and Applications
during the Term;
(b) LINKTONE shall permit STAR to promote and market the
Services and Applications in any on-ground events that it
holds from time to time, whether independently or jointly
with the Mobile Operators or any of their local branches,
provided that STAR shall bear the costs and expenses
associated with the aforesaid promotion and marketing
activities subject to the relevant agreements;
(c) LINKTONE shall place the buttons of "Xing Kong ▇▇▇ ▇▇▇"
and "Channel [V]" on the wireless product menu list of
LINKTONE, being on the homepage of LINKTONE's website,
namely ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇, for STAR to promote, market and
provide the Services and Applications throughout the Term.
It is hereby acknowledged that the buttons of "Xing Kong
▇▇▇ ▇▇▇" and "Channel [V]" can link directly to the
wireless service pages of the websites of Xing Kong ▇▇▇
▇▇▇ and Channel [V] respectively;
(d) LINKTONE shall add the wireless service channels of Xing
Kong ▇▇▇ ▇▇▇ and Channel [V] prominently to the first-tier
menu list, which is on the homepage of LINKTONE's wireless
application protocol, namely ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇, for STAR to
promote, market and provide the Services and Applications
throughout the Term. The content architecture of such
wireless service channels shall be provided by STAR. Prior
written confirmation shall be obtained by LINKTONE from
STAR for the design and layout of such wireless service
channels;
(e) LINKTONE shall provide the same opportunities as its own
wireless channel for the wireless service channels of Xing
Kong ▇▇▇ ▇▇▇ and Channel [V] to be added prominently to
the first-tier menu list of mobile phone cards (including
but not limited to Subscriber Identification Module and
SIM Tool Kit cards) to be issued by the Mobile Operators
to End-Users from time to time throughout the Term;
3
(f) LINKTONE shall promote and market in the prominent places
of the homepage of its website as promptly as practically
reasonable any new Services and Applications to be
developed and provided by STAR from time to time
throughout the Term;
(g) LINKTONE shall integrate all the Services and Applications
into its services and applications as may be agreed upon
by the Parties from time to time, including but not
limited to LINKTONE's "PET" product, throughout the Term;
(h) LINKTONE shall place on its website the video clips to be
provided by STAR throughout the Term with respect to the
programming of Xing Kong ▇▇▇ ▇▇▇ and Channel [V] in such a
way that the video clips can readily be accessed while on
LINKTONE's website.
(iv) Dedicating a highly-trained and competent project team to work
closely with STAR and rendering personalized attention and
support to STAR, including but not limited to: upon delivery
of the marketing and promotion plan by STAR to LINKTONE for
each Service and/or Application, LINKTONE shall fulfil and
complete the development of each such Service and/or
Application within the timeframes prescribed below:
- SMS: 20 business days; and
- MMS AND OTHER SERVICES AND APPLICATIONS (EXCEPT FOR SMS):
30 business days.
(v) Strictly acting as a technical enabler and marketing supporter
so as not to bring the Services and Applications, the Content
and brands of STAR into disrepute;
(vi) Providing STAR with a stable and reliable revenue billing and
payment collection system;
(vii) Paying the Minimum Guarantee and/or (as the case may be)
STAR's share of the Net Revenue to STAR in accordance with
Schedule 2;
(viii) Providing STAR with extensive customer service expertise;
(ix) Providing STAR with the relevant resources (including but not
limited to jokes, pictures and ring tones) which LINKTONE
owns, controls and/or has the right to use for STAR's usage in
its provision of the Services and Applications and paying any
royalties or fees in connection with the use of such jokes,
pictures and ring tones by STAR; and
4
(x) Providing any other assistance that STAR may reasonably
request from time to time in connection with the cooperation
referred to in Clause 1.
3. RESPONSIBILITIES AND OBLIGATIONS OF STAR
3.1 STAR shall provide Content to LINKTONE to be sent to End-Users as part
of the Services and Applications via the Technical Platform connected
to the Mobile Operators.
3.2 In the course of the performance of the duties and obligations of STAR
under this Agreement, STAR shall specifically be responsible for the
following matters at its own costs and expenses:
(i) Undertaking promotional and marketing activities on Xing Kong
▇▇▇ ▇▇▇ and Channel [V] or via other means selected in its
sole discretion during the Term to make the Services and
Applications available and attractive to the End-Users. STAR
shall procure and ensure that the promotional clips to be
provided by STAR for the Services and Applications from time
to time during the Term will be broadcast 10 times on average
on each channel per day;
(ii) Providing human resources support as interface of content
providing, technical supporting, business coordination and
project management, including but not limited to two
managerial personnel responsible for each of Xing Kong ▇▇▇ ▇▇▇
and Channel [V], in the overview of and coordination in future
marketing campaigns;
(iii) Providing all the necessary information to LINKTONE relating
to the Services and Applications from time to time;
(iv) Promoting the Services and Applications on the websites of
Xing Kong ▇▇▇ ▇▇▇ and Channel [V]; and
(v) Providing any other assistance that LINKTONE may reasonably
request from time to time in connection with the cooperation
referred to in Clause 1.
4. BRANDING
4.1 STAR shall have exclusive right to brand the Services and Applications
in the provision, promotion and marketing thereof during and after the
expiration of the Term.
4.2 STAR agrees that, during the Term, it will include in all its
promotional materials of the Services and Applications (other than
on-air promotional materials) a presentation credit "Powered by
LINKTONE" or such other credit(s) as may be agreed by the Parties. The
design, layout and presentation of such credit(s) shall be determined
by STAR in its sole discretion.
5
5. PRICING
STAR and LINKTONE shall jointly be responsible for determining the
prices for the Services and Applications after good faith consultation
with the Mobile Operators.
6. CONDITIONS OF USE
6.1 LINKTONE shall be responsible for the technical compliance, security
and proper functioning of any equipment or other facilities installed,
or cause to be installed, by LINKTONE connecting STAR with the Mobile
Operators in relation to the Services and Applications.
6.2 LINKTONE shall be responsible to initiate communication with End-Users
who received or sent the messages of the Services and Applications from
or to STAR or use the Services and Applications.
7. REVENUE SHARING
7.1 LINKTONE and STAR agree to share the Net Revenue for the period
commencing from the Commencement Date and ending on the last date of
the Term, upon and subject to the provisions in Schedule 2.
7.2 LINKTONE and STAR also agree that notwithstanding the earlier
termination or expiration of the Term, LINKTONE shall continue to
perform and discharge its duties and obligations under Schedule 2 with
respect to each of the Revenue Share Determination Periods and the
Revenue Share Clearance Periods completed prior to such earlier
termination or expiration, whether such period is completed in full or
in part.
7.3 LINKTONE and STAR further agree that nothing contained herein shall
entitle LINKTONE to withhold, delay or otherwise set-off STAR's share
of the Net Revenue or any part thereof when it falls due and payable in
accordance with the terms and provisions of this Agreement.
8. NON-COMPETITION
During the Term, LINKTONE shall not, by itself or through any third
party, contact, discuss, make any commitment, negotiate and/or sign any
contract with ***************** for the purpose of offering services
and applications similar to the Services and Applications, without
STAR's prior written approval:
(a) *****;
6
(b) *****************************************************************
*******;
(c) *************;
(d) *************;
(e) *************;
(f) *************; and
(g) *************.
9. ADVERTISING AND SPONSORSHIP
9.1 LINKTONE shall not solicit any third party to participate in the
Services and Applications by way of sponsorship or advertisement on any
form of media (including but not limited to the Mobile Devices, the
Internet, on-air or on-ground). Furthermore, LINKTONE shall not have
any right and interest in, or benefit of, such advertising and
sponsorship.
9.2 STAR may, in its sole discretion, display the logos and/or brand of the
Mobile Operators in the promotional materials of the Services and
Applications during the Term.
10. COPYRIGHTS AND OTHER INTELLECTUAL PROPERTY RIGHTS
10.1 STAR acknowledges that LINKTONE is and will continue to be the
perpetual worldwide owner of the Programming Codes.
10.2 LINKTONE acknowledges that STAR is and will continue to be the
perpetual worldwide owner of all copyrights and other intellectual
property rights in and to the Services and Applications and all
materials relating thereto, including but not limited to:
(i) the video clips and promotional clips to be provided by STAR
to LINKTONE under this Agreement; and
(ii) the Content and its concepts and personas.
10.3 If STAR, on a service-by-service and application-by-application basis,
determines to make commercial use of any of the Programming Codes in
connection with its modification, provision, maintenance and support of
any Service and/or Application after the termination or expiration of
the Term,
7
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AND CONFIDENTIAL TERMS HAVE BEEN
OMITTED
LINKTONE agrees to grant STAR the exclusive license to use such
Programming Codes in connection with the purposes as aforesaid, subject
to STAR's agreement to pay royalties to LINKTONE as follows:
PERIOD ROYALTY/PERIOD
(a) First Royalty Period: With respect to Amount Received during the First
Relevant Service and/or Application, whether Royalty Period x ***.
within or outside PRC, the initial six-month
period after the Relevant Service and/or
Application becomes so available.
(b) Second Royalty Period: With Respect to Amount Received during the Second
the Relevant Service and/or Application, the Royalty Period x ****.
six-month period immediately following the
expiration of the First Royalty Period.
(c) Third Royalty Period: With Respect to Amount Received during the Third
the Relevant Service and/or Application, the Royalty Period x ****.
nine-year period immediately following the
expiration of the Second Royalty Period.
10.4 LINKTONE further acknowledges that upon and after the termination or
expiration of the Term:
(a) STAR shall have the exclusive right to exploit all or any of the
Services and Applications, whether within or outside the PRC; and
(b) STAR shall be entitled, in its sole discretion, to use the Content
and develop, either by itself or with another third party, any
programming code (other than the Programming Codes) to develop,
provide, maintain and support any Service and/or Application,
whether within or outside the PRC. For the avoidance of doubt,
LINKTONE is not entitled to any royalty or payment from STAR in
connection therewith.
8
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AND CONFIDENTIAL TERMS HAVE BEEN
OMITTED
11. REPORTING AND AUDITING
11.1 LINKTONE shall provide STAR with a reporting system acceptable to STAR
for STAR to conduct inspection and examination of all material aspects
(including performance and status) of the Services and Applications
throughout the Term.
11.2 LINKTONE agrees that STAR shall have access to the Books and Records at
any time during the Term for auditing purpose. LINKTONE shall make the
Books and Records available to STAR at any time during the Term
PROVIDED that a 24-hour's prior notice is served by STAR on LINKTONE,
requesting such auditing, but such auditing shall not be conducted more
than once a month during the Term.
11.3 In the event that STAR is not satisfied with the accuracy, correctness
or completeness of any information contained in the Books and Records,
STAR shall be entitled to retain any third party in its sole discretion
as an independent auditor to inspect and examine the Books and Records
but such inspection and examination shall not be conducted more than
twice a year during the Term. Any costs and expenses incurred as a
result of such independent auditing shall be born by STAR and LINKTONE
in equal share.
11.4 STAR shall provide a report to LINKTONE within thirty (30) days
following each two (2) month period during the Term, specifying the
number of the broadcasting references to the Services and Applications
on Xing Kong ▇▇▇ ▇▇▇ and Channel [V] respectively for such period.
12. SERVICE SUSPENSION
12.1 Without prejudice to Clause 12.2, LINKTONE may suspend all or any part
of the Services and Applications between 2.00am and 6.00am on any day
only due to maintenance or service of any wireless network of the
Mobile Operators as long as LINKTONE has notified STAR in writing of
the suspension at least seventy-two (72) hours in advance, provided
however that, such suspension shall not take place within seven (7)
days prior to and after any Service or Application becoming
commercially available to the End-Users.
12.2 LINKTONE may, at any time with notice as early as practicably
reasonable, suspend all or any part of the Services and Applications
immediately in one or more of the following events:
(a) suspension of the Services and Applications is reasonably
required to reduce or prevent fraud or interference within the
Services and Applications;
9
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AND CONFIDENTIAL TERMS HAVE BEEN
OMITTED
(b) LINKTONE is required to comply with any laws or regulations
affecting Mobile Operators' wireless networks in connection
with the Services and Applications;
(c) suspension of the Services and Applications to End-Users as a
result of their failure to pay any charges due to Mobile
Operators in connection with the messages of the Services and
Applications they have sent to or received from STAR via the
Technical Platform; and
(d) significant problems are experienced interconnecting between
the Services and Applications and the Mobile Operators'
wireless networks,
provided however that, such suspension shall not take place within
seven (7) days prior to and after any Service or Application becoming
commercially available to the End-Users, except for the circumstances
as provided in this Clause 12.2(d). If such suspension occurs as a
result of the circumstances as provided in this Clause 12.2(d),
LINKTONE shall resume the provision of the Services and Applications in
accordance with the terms and conditions of this Agreement as promptly
as reasonably practicable.
12.3 If suspension occurs to the Services and Applications for whatever
reasons (including those set out in Clauses 12.1 and 12.2) for more
than three (3) hours a day for six (6) consecutive days, STAR is
entitled to terminate this Agreement immediately.
13. TERM AND TERMINATION
13.1 This Agreement shall commence on the Commencement Date and continue to
be valid for the Term, unless earlier terminated or otherwise renewed
in accordance with the terms and provisions hereof.
13.2 This Agreement shall be automatically renewed for another two (2) years
if LINKTONE is not notified in writing by STAR of the termination of
this Agreement at least one (1) month prior to its expiration. Such
renewal shall be on the same terms and conditions of this Agreement
unless otherwise agreed in writing by the Parties.
13.3 LINKTONE may terminate this Agreement immediately upon fifteen (15)
days' prior written notice to STAR if:
(a) STAR is in breach of its obligations under Clauses 3, 14 or 16
and has failed to remedy that breach (if it is capable of
remedy) within thirty (30) days of its receipt of a written
notice requiring it to do so;
(b) STAR takes any step or action or institutes or is subject to
any legal proceedings for its winding-up, liquidation or
dissolution; or
10
(c) an event of Force Majeure has occurred and continued for more
than sixty (60) consecutive days.
13.4 In addition to Clause 12.3 and Section (C) of Schedule 2, STAR may also
terminate this Agreement at any time by notice in writing to LINKTONE
if:
(a) LINKTONE is in breach of its obligations under this Agreement
(other than that set out in Clause 12.3) and has failed to
remedy that breach (if it is capable of remedy) within thirty
(30) days of its receipt of a written notice requiring it to
do so;
(b) LINKTONE and/or the Mobile Operators takes or take any step or
action or institutes or is or are subject to any legal
proceedings for its or their winding-up, liquidation or
dissolution; or
(c) LINKTONE is engaged or involved in any services and
applications competing with, or causing damages or harm to the
Services and Applications during the Term; or
(d) any change in the Control of LINKTONE occurs at any time
during the Term, and its Control belongs to any party that is
engaged or involved in any business, directly or indirectly,
competing with, or causing damages or harm to, the business of
STAR Group; or
(e) an event of Force Majeure has occurred and continued for more
than sixty (60) consecutive days.
13.5 The termination of this Agreement for any reason will not prejudice any
rights, which have accrued to either Party prior to the date of
termination, including but not limited to the right of a Party to claim
compensation against the other Party for any loss, costs, damages,
charges and expenses which such Party may sustain or incur as a result
of any act, omission or negligence of such other Party.
13.6 It is agreed by the Parties that Clause 2.4, Clause 7, Clause 10,
Clause 13.5 and Clauses 15 to 21 shall survive the termination of this
Agreement.
14. REPRESENTATIONS AND WARRANTIES
14.1 LINKTONE represents and warrants to STAR that throughout the Term of
this Agreement:
(a) it is duly authorised and has obtained all necessary
agreements, consents, licences, permits and approvals to
comply with its obligations under this Agreement including but
not limited to any necessary agreements,
11
consents, licences, permits and approvals required for
rendering the Services and Applications through the Mobile
Operators and sending and receiving messages of the Services
and Applications to and from End-Users;
(b) it has the expertise in supplying the Services and
Applications and enabling the functioning of the Services and
Applications;
(c) its performance of its duties and obligations under this
Agreement does not constitute any infringement of any rights
of any third parties;
(d) it shall, at its own costs and expenses, remedy any failure of
the Services and Applications as a result of any act, omission
or negligence of LINKTONE within two (2) hours after such
failure is detected on the Services and Applications by
LINKTONE or any other party and it shall keep STAR informed of
the status of such default on the Services and Applications;
(e) it shall not suspend the Services and Applications at any time
during the Term of this Agreement other than in the
circumstances described in Clauses 12.1 and 12.2;
(f) it is not in breach of any undertaking, obligations or
arrangement (whether written or otherwise) or in breach of any
law and regulation by entering into this Agreement;
(g) it shall procure and ensure that the Mobile Operators are duly
authorised and have obtained all necessary agreements,
consents, licences, permits and approvals to perform its
business as a mobile operator and also to allow their
End-Users' Mobile Devices to send and/or receive the messages
of the Services and Applications including but not limited to
any necessary agreements, consents, licences, permits and
approvals required for accepting and using the Services and
Applications; and
(h) it shall also procure and ensure that the use of the Special
Code by STAR for the End-Users are authorised by Mobile
Operators.
14.2 STAR represents and warrants to LINKTONE that throughout the Term of
this Agreement:
(a) it is duly authorised and has obtained all applicable
consents, licences, permits and approvals to comply with its
obligations under this Agreement;
(b) it is not in breach of any undertaking, obligations or
arrangement (whether written or otherwise) or in breach of any
law or regulation by entering into this Agreement;
(c) any Services and Applications shall;
12
i. comply with the licence (if any) granted by the
relevant government bodies of the PRC and not breach
any laws and regulations of the PRC;
ii. not be misleading or deceptive or likely to mislead
or deceive; and
iii. not be defamatory, obscene or offensive in any way.
14.3 STAR shall procure and ensure that all the Content provided or to be
provided to LINKTONE by it for the purpose of this Agreement shall not
contain defamatory, offensive, abusive, indecent, menacing or harassing
material or against the laws and regulations of the PRC. Any disputes
or problems arising from STAR's breach of this Clause shall be dealt
with by STAR at its own costs and expenses.
15. INDEMNITY
15.1 LINKTONE shall indemnify STAR against all losses, expenses, damages and
costs (including legal costs on a full indemnity basis) incurred by or
awarded against STAR arising out of or in connection with:
(a) any claim by any party relating to the supply of the Services
and the Applications or the reliance on the same by any person
including without limitation, any End-User;
(b) any claim by any party relating to the provision of the
Services and Applications as a result of LINKTONE's breach of
any obligation under this Agreement and the use of the Special
Code by STAR infringes any third party's intellectual property
rights and any other rights;
(c) any act or omission or negligence of LINKTONE in its
performance of its obligations under this Agreement; and
(d) any breach by LINKTONE of any provisions of this Agreement.
15.2 STAR shall indemnify LINKTONE against all losses, expenses, damages and
costs incurred by or warded against LINKTONE arising out of or in
connection with breach by STAR of any provisions of this Agreement,
except if such breach is caused by LINKTONE's act, omission or
negligence.
16. CONFIDENTIALITY
16.1 A Party may only use the Confidential Information of the other Party
for the purposes of this Agreement.
13
16.2 No Confidential Information of a Party may be disclosed by the other
Party to any person except:
(a) to its directors, officers, employees and legal, financial and
professional advisors for the purpose of exercising its rights
and performing its duties and obligations under this
Agreement;
(b) if the recipient party is required to disclose the information
by law; or
(c) if the recipient party is required to disclose the information
in connection with legal proceedings relating to this
Agreement.
17. PRESS RELEASES
17.1 The Parties shall jointly issue a press release after the execution of
this Agreement, announcing the Parties' intentions to cooperate in
developing, providing, maintaining and supporting the Services and
Applications in PRC.
17.2 In addition, the Parties may from time to time during the Term jointly
issue additional press releases in PRC and/or HKSAR for high profile
Services and Applications after such Services and Applications become
commercially available.
17.3 It is agreed between the Parties that no press release may be issued in
connection with the Services and Applications or the announcement of
this Agreement by either Party without the prior written approval of
the other Party.
18. DATA PRIVACY
18.1 LINKTONE shall not disclose Personal Information except:
(a) to an officer, employee or contractor of STAR to the extent
necessary for the performance of this Agreement;
(b) as required by law, subject to LINKTONE notifying STAR
immediately if it becomes aware that such a disclosure may be
required; or
(c) with the prior consent of STAR.
18.2 LINKTONE shall procure and ensure that any person to whom Personal
Information is disclosed to under Clause 18.1 shall not disclose the
Personal Information to any other party for whatever reasons.
18.3 LINKTONE shall comply with all applicable laws and regulations in the
PRC in connection with its collection, use, disclosure, transfer,
storage or otherwise handling of the Personal Information which relates
to or from End Users.
14
19. NOTICES AND DELIVERY
All notices required under this Agreement or for the performance of
this Agreement shall be in writing and shall be deemed to be delivered
by sending to the following addresses in the following manner: (1) if
delivered in person, the signing of the return receipt by the receiver;
(2) if mailed, 7 days after its despatch; (3) if by fax, upon dispatch
and receipt of a transmission report confirming dispatch.
If to LINKTONE
Address: ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇, PRC
Telephone: (▇▇▇▇) ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile: (8621) ▇▇▇▇ ▇▇▇▇
Contact person: Carter P. Agar
If to STAR
STAR Shanghai Representative Office
Address: ▇▇. ▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇
Telephone: (8621) ▇▇▇▇ ▇▇▇▇
Facsimile: (8621) 6217 6993
With a copy to:
Satellite Television Asian Region Limited
Address: 8th Floor, One Harbourfront, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇▇ ▇▇▇▇
20. GENERAL PROVISIONS
20.1. Force Majeure
The suspension or failure to perform this Agreement or part of this
Agreement by either Party due directly to the occurrence of an event of
Force Majeure will not be deemed a violation of this Agreement. The
affected Party shall notify the other Party in writing of the event of
Force Majeure as soon as practicable after it occurs.
15
20.2. Amendment
No amendment to this Agreement will be valid unless agreed upon in
writing by an authorized representative of each Party.
20.3. Prohibition from the Assignment of Rights and Obligations under this
Agreement
Neither Party shall assign or dispose of, attempt to assign or dispose
of the rights and/or obligations under this Agreement without the prior
written consent of the other Party, except that STAR may transfer to
any member in the STAR Group .
20.4. Relationship of the Parties
Nothing in this Agreement shall be deemed to place the Parties in the
relationship of employer-employee, principal-agent or partners. Neither
Party has any right or authority to make any representation or warranty
on behalf of the other Party, whether express or implied, or to bind
the other Party in any respect whatsoever; neither Party shall bear any
liabilities for the actions of the other Party.
20.5. Entire Agreement
This Agreement sets forth the entire agreement of the parties relating
to this project and supersedes all prior agreements, arrangements and
understandings in respect of this project between the Parties.
20.6. Waiver
No failure or delay by either Party in exercising any right, power, or
remedy under this Agreement shall operate as a waiver of any such
right, power or remedy. Any waiver by a Party of any provision of this
Agreement shall not be construed as a waiver of any other provision of
this Agreement, nor shall such waiver operate as or be construed as a
waiver of such provision respecting any future event or circumstance.
20.7. Severability of the Provisions
(a) The invalidity of any provision of this Agreement shall not
affect the validity of any other provisions of this Agreement.
(b) In the event the invalidity of some provisions of this
Agreement are under dispute by any party or some provisions of
this Agreement are under examination or determined by an
adjudicatory authority to be
16
invalid, the remainder of this Agreement shall continue to be
performed except for those provisions under examination or
confirmed to be invalid.
20.8. Governing Law
The formation, validity, interpretation and execution of this Agreement
and settlement of any dispute in respect of this Agreement shall be
governed by the law of the HKSAR.
20.9. Dispute Resolution
Unless agreed otherwise in this Agreement, any dispute arising out of
the performance of this Agreement shall be settled through friendly
consultation between the Parties. The mediation period shall be 60 days
from the day of occurrence of the dispute. The top management executive
of each Party to this Agreement shall consult with each other for the
settlement of dispute. If no mediation agreement is reached after the
mediation period or one Party refuses to conduct mediation, a Party
shall be entitled to submit the dispute to CIETAC for arbitration. Such
arbitration shall be conducted in Shanghai in accordance with its
arbitration rules in effect at such time. The arbitral award is final
and binding upon the Parties and may be enforced by any court or
judicial authority having competent jurisdiction over the Party or its
assets against which the arbitral award is to be enforced. The
arbitration proceedings shall be conducted by a panel of arbitrators
composed of one arbitrator appointed by each of the petitioner and the
respondent and an additional arbitrator appointed by the arbitration
commission. Unless it is determined otherwise in the arbitration, the
arbitration expenses shall be borne by the losing Party. During the
arbitration period, other provisions of this Agreement shall continue
to be performed by the Parties, except for the provisions which are
under arbitration.
21. DEFINITIONS
In this Agreement, the following expressions, except where the context
otherwise requires, have the following meanings:
"AMOUNT RECEIVED" means the total net revenue generated and derived
directly from the Relevant Service and/or Application pursuant to
Clause 10.3 which has actually been received by STAR;
"BOOKS AND RECORDS" mean all of the books and records that are in
LINKTONE's possession and relating to the Services and Applications at
any time during the Term;
"CIETAC" means the China International Economic and Trade Arbitration
Commission;
17
"COMMENCEMENT DATE" means April 1, 2003;
"COMMON ACCESS CODE(S)" means the common short code(s) to be assigned
by the Mobile Operators, which End-Users dial into, or send the
messages of the Services and Applications, in order to receive Content;
"CONFIDENTIAL INFORMATION" of a party means all information treated by
that party as confidential (regardless of its form and whether the
other party becomes aware of it before or after the date of this
Agreement), including but not limited to the Relevant Data and Relevant
Materials, except information that is in public domain otherwise than
as a result of a breach of any obligation of confidentiality;
"CONTENT" means any information, graphics, games, polls, entries,
schedules, news, alerts, etc. relating to STAR, originated from and
sent by STAR via its console operators connecting to the Services and
Applications to End Users;
"CONTROL" means the power, directly or indirectly, to direct or cause
the direction of the management and policies of LINKTONE, whether by
ownership of voting securities, by contract or otherwise.
"END-USER(S)" means the customers who are connected to the Mobile
Operators' wireless networks in PRC from time to time;
"FORCE MAJEURE" shall mean all events which are beyond the control of a
Party to this Agreement, and which are unforeseen, unavoidable or
insurmountable, and which arise after the date of this Agreement and
which prevent total or partial performance by any Party, such events
shall include earthquakes, typhoons, flood, fire, war, epidemics or any
other events which cannot be foreseen, prevented or controlled,
including acts or omissions of government or administrative authorities
and events which are accepted as Force Majeure in general international
commercial practice;
"GROSS REVENUE" means all gross revenues collected by Mobile Operators
from the End-Users during the Term, which are generated and derived
from the traffic of the messages of the Services and Applications sent
and/or received by LINKTONE on behalf of STAR through Mobile Operators
during the Term;
"HKSAR" means Hong Kong Special Administration Region of the PRC;
"INDEPENDENT CODE" means an independent Common Access Code assigned by
the Mobile Operators at any time during the Term to STAR or any of its
affiliates for the utilization of the Services and Applications by the
End-Users;
18
"MOBILE DEVICES" means a mobile phone handsets or other mobile device
of End-Users connected to Mobile Operators;
"MOBILE OPERATORS" means the telecommunications/cellular service
providers in the PRC, including but not limited to China Mobile
Communication Corporation and China United Telecommunications Co., Ltd.
which are linked to the Services and Applications, as set out in
Schedule 1;
"NET REVENUE" means the Gross Revenue less any Mobile Operator's share
of the Gross Revenue and the business tax applicable thereto under PRC
laws and regulations;
"PERSONAL INFORMATION" means personal information collected by Mobile
Operators and/or LINKTONE via the Services and Applications under this
Agreement;
"PRC" means the People's Republic of China, excluding, for the purpose
of this Agreement, HKSAR, Macau and Taiwan;
"PROGRAMMING CODES" means all or any programming codes embedded in the
Services and Applications;
"RELEVANT DATA" means the traffic data for the Services and
Applications, lucky draw information, End-User information (including
but not limited to the number of the End-Users, their personal details
and mobile numbers, the number of Services and Applications actually
and successfully sent and/or received by the End-Users) for the purpose
of determining STAR's share of the Net Revenue in each Revenue Share
Determination Period;
"RELEVANT MATERIALS" means a detailed revenue report prepared by
LINKTONE and other necessary information (including the bad debt ratio
underlying the Gross Revenue, which shall be completely based on the
information and details provided to LINKTONE by the Mobile Operators)
required by STAR in its reasonable opinion for the purpose of
determining STAR's share of the Net Revenue in each Revenue Share
Determination Period;
"REVENUE SHARE DETERMINATION PERIOD" means each calendar month
commencing from the Commencement Date, on which basis both Parties
shall determine their respective shares of the Net Revenue;
"REVENUE SHARE CLEARANCE PERIOD" means the regular two-month period,
which is constituted by two consecutive Revenue Share Determination
Periods, on which basis LINKTONE shall pay STAR its share of the Net
Revenue. For the purposes of this Agreement, the last date of each such
Revenue Share
19
Clearance Period during the Term shall be May 31, July 31, September
30, November 30, January 31 and March 31 respectively;
"RELEVANT SERVICE AND/OR APPLICATION" means any Service and/or
Application using any of the Programming Codes, which becomes
commercially available after the termination or expiration of the Term,
whether within or outside PRC;
"SERVICE(S) AND APPLICATION(S)" means various wireless application(s)
and service(s) to be developed, provided, maintained and supported by
STAR throughout the Term in cooperation with LINKTONE, via the
Technical Platform, in accordance with the terms and provisions of this
Agreement; the scope of the Services and Applications shall include,
without limitation, SMS, WAP, EMS, MMS, BREW, JAVA, and more advanced
services and offerings for the market, such as mobile video streaming,
which STAR develops in cooperation with LINKTONE from time to time
during the Term, based on LINKTONE and STAR's joint assessment of the
market readiness and revenue opportunity. The ratio of revenue sharing
between LINKTONE and STAR on such more advanced services and offerings
shall be separately agreed upon by LINKTONE and STAR after good faith
consultation;
"SPECIAL CODE" means a special Common Access Code provided by LINKTONE
in accordance with the terms and conditions of this Agreement and
acceptable to STAR for the utilization of the Services and Applications
by the End-Users;
"STAR GROUP" means STAR Group Limited and any subsidiaries thereof;
"TECHNICAL PLATFORM" means the technical platform including, without
limitation, the hardware, database, bandwidth, systems and other
necessary components as described in Schedule 3 to be provided by
LINKTONE for the purpose of developing, providing, maintaining and
supporting the Services and Applications during the Term;
"TERM" means a period of twelve (12) months commencing from the
Commencement Date, unless earlier terminated or otherwise renewed in
accordance with Clause 13 of this Agreement; and
"USER BASE" means the user base of the End-Users who have registered to
use the Services and Applications throughout the Term.
20
In witness whereof this Agreement has been duly executed in two (2) copies by
the Parties hereto the day and year first above written.
Signed for and on behalf of )
SHANGHAI LINKTONE CONSULTING LTD )
by ) Name: ▇▇▇▇▇▇▇ ▇▇▇▇
in the presence of : ) Title: Chief Executive Officer
Date: June , 2003
/S/▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------
Witness
Signed for and on behalf of )
SATELLITE TELEVISION ASIAN )
REGION LIMITED by ) Name: ▇▇▇▇▇ ▇▇▇▇▇
In the presence of : ) Title: President
Date: June , 2003
/S/▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Witness
21
SCHEDULE 1
LIST OF MOBILE OPERATORS
Mobile Operators
1. China Mobile Communication Corporation ("CHINA MOBILE")
2. China United Telecommunications Co., Ltd. ("CHINA UNICOM")
3. Any other mobile operator that the Parties may agree from time to time
during the Term after good faith consultation.
22
SCHEDULE 2
REVENUE SHARING
(A) REVENUE SHARING BETWEEN LINKTONE AND STAR
REVENUE SHARING BETWEEN STAR AND LINKTONE (%)
STAR's share of Net Revenue *
LINKTONE's share of Net Revenue *
(B) METHODS AND SCHEDULE OF REVENUE SHARING AND MINIMUM GUARANTEE
(1) LINKTONE and STAR agree to share the Net Revenue in accordance
with this Agreement.
(2) The fee collection avenues, which exist and will be further
developed by LINKTONE from time to time during the Term of
this Agreement, include but not limited to the following:
(i) the End-Users in Shanghai (CHINESE CHARACTER),
Zhejiang (CHINESE CHARACTER), Guangdong (CHINESE
CHARACTER), Tianjin (CHINESE CHARACTER), Jilin
(CHINESE CHARACTER), Jiangsu (CHINESE CHARACTER),
Fujian (CHINESE CHARACTER), Sichuan (CHINESE
CHARACTER), Shanxi (CHINESE CHARACTER), Shanxi
(CHINESE CHARACTER), Beijing (CHINESE CHARACTER),
Hunan (CHINESE CHARACTER), Hubei (CHINESE CHARACTER),
Liaoning (CHINESE CHARACTER), Henan (CHINESE
CHARACTER) and Chongqing (CHINESE CHARACTER) ; and
(ii) the End-Users in the PRC other than the areas
mentioned in Section (B)(2)(i) above, who are
connected to China Mobile's networks via Shanghai.
(3) The detailed methods of calculation of and payment for the
Parties' share of the Net Revenue shall be as follows:
(i) Within five (5) business days after every Revenue
Share Determination Period, LINKTONE shall deliver to
STAR the Relevant Data for such Revenue Share
Determination Period;
(ii) Within thirty-five (35) days after every Revenue
Share Determination Period, LINKTONE shall deliver to
STAR the Relevant Materials for such Revenue Share
Determination Period; and
23
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AND CONFIDENTIAL TERMS HAVE BEEN
OMITTED
(iii) In the event STAR disputes in writing the accuracy,
correctness and/or completeness of the Relevant Data
and/or Relevant Materials provided by LINKTONE in
accordance with Section (B)(3)(i) and (ii) above,
LINKTONE shall forthwith issue a written explanation
to STAR within three (3) days of STAR's written
dispute.
(4) STAR's share of the Net Revenue for every Revenue Share
Clearance Period during the Term shall become due and payable
by LINKTONE as follows:
(i) No later than sixty-five (65) days following such
Revenue Share Clearance Period for the Net Revenue
from China Mobile (other than China Mobile Zhejiang
Provincial Branch);
(ii) No later than ninety-five (95) days following such
Revenue Share Clearance Period for the Net Revenue
from China Mobile Zhejiang Provincial Branch; and
(iii) Within five (5) business days after LINKTONE has
collected the Net Revenue for such Revenue Share
Clearance Period from China Unicom.
The due date of STAR's share of the Net Revenue for every
Revenue Share Clearance Period from the Mobile Operators other
than China Mobile and China Unicom, if any, shall be
determined by the Parties jointly after good faith
consultation.
(5) LINKTONE shall wire STAR's share of the Net Revenue for each
such Revenue Share Clearance Period to the bank account as
designated by STAR.
(6) In the event that STAR's aggregate share of the Net Revenue
for the first six (6) months of the Term is less than
************, LINKTONE shall pay the difference to STAR within
five (5) days after the end of such period, subject to STAR's
exercising of its right of termination under Section (C).
(7) In the event that STAR's aggregate share of the Net Revenue
for the Term is less than ***************, LINKTONE shall pay
the difference to STAR within five (5) days after the end of
the Term.
(8) In the event of LINKTONE defaulting in any payment in
accordance with Section (B)(4), (6) and (7) above, STAR shall
be entitled (without
24
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AND CONFIDENTIAL TERMS HAVE BEEN
OMITTED
prejudice to any other right or remedy hereunder) to charge
LINKTONE interest on the outstanding amount from the due date
until actual payment by LINKTONE at a rate per annum equal to
5%.
(C) PERFORMANCE REVIEW
STAR shall have the right to review the performance of Services and
Applications within ten (10) days after the end of the first six (6)
months of the Term. If STAR reasonably believes that the said
performance fails to meet the short-term operation target of STAR
and/or is not consistent with the long-term business development
objectives of STAR, STAR shall be entitled to terminate this Agreement
on or before the expiration of the said 10-day period by serving a
written notice to LINKTONE.
25