EXHIBIT 10.12
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Technical Services Agreement
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by and between
Sohu ITC Information Technology (Beijing) Co. Ltd.
and
Legend (Beijing) Limited
Dated as of 26/th/ January, 2000
THIS TECHNICAL SERVICES AGREEMENT ("Agreement") is dated as of 26/th/ day of
January 2000 in Beijing, People's Republic of China ("PRC")
BY AND BETWEEN
Sohu ITC Information Technology (Beijing) Co. Ltd., with its registered address
at ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, PRC ("Party A")
AND
Legend (Beijing) Limited, with its registered address at No.10, Ke ▇▇▇ ▇▇▇▇
Nanlu, ▇▇▇▇▇ ▇▇▇▇ Cun, Haidian District, Beijing 100080, PRC ("Party B")
(Individually a "Party" and collectively the "Parties").
1. DEFINITIONS
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Unless otherwise stipulated, the following terms mentioned in this
Agreement shall have the meanings set forth below:
"Force Majeure" Those events that are unforeseen, or, if
foreseen, reasonably unavoidable, and that
arise due to the special nature of network
technology and network media, effecting
adversely the normal operation of
networks. Force majeure includes the
result of attacks by hackers, of technical
adjustments made by the relevant
telecommunications departments, the
temporary shutting down of networks due to
government control (with written
verification issued by the relevant
authority), in addition to natural and
human-caused disasters.
"Impression" The technical effect that results from a
user viewing an information banner posted
on a web site.
"Information Banner" A message banner or similar type of
placard which is designed and displayed on
Sohu's web site in accordance with
this Agreement, and which is linked to
Party B's designated web address and
contains information relating to Party B
or its affiliates.
"Number of Impressions" A figure describing the number of views,
within a given period of time, of Party
B's Information Banners, as provided by
the advertisement tracking statistics
report system of Party A, which system
uses software designed by an independent
third party.
"Party B's Web Address" The IP address or internal network address
owned by Party B or its affiliates to
which a given Information Banner is
linked.
"RMB" Renminbi, the official currency of the
PRC.
"Sohu Web Site" A Chinese language web site that operates
with the approval of the post and
telecommunications administrative
department of China under the domain name
"▇▇▇.▇▇▇▇.▇▇▇".
"USD" United States Dollar, the official
currency of the United States of America.
2. SCOPE OF SERVICES
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2.1 Party A shall provide to Party B technical services relating to its
promotional activities on the Sohu Web Site in the following areas:
(a) Information Banners;
(b) Sponsorship of channels;
(c) Directories; and
(d) E-commerce platform.
2.2 The technical services provided by Party A to Party B shall include
but not be limited to the design, animation, production and posting of
Information Banners for display on the Sohu Web Site, as well as the
establishment of links between those Information Banners and Party B's
Web Address, all of which shall be recorded in a form such as that
provided in the Appendix hereto.
2.3 Party A shall post Party B's Information Banners on the appropriate
pages of the Sohu Web Site, in accordance with Party B's requirements
and the terms set out in this Agreement.
2.4 In providing the services described in Article 2.2 above, Party A
shall, on Party B's request and in accordance with this Agreement,
design and produce the necessary software, install and maintain such
software and provide Party B with related technical consulting.
2.5 Party A must obtain Party B's written acceptance of the design for any
Information Banner produced by Party A before posting it on Sohu's Web
Site. Should Party B provide its own design for an Information
Banner, Party A's written acceptance of such must be obtained before
the Information Banner in question may be posted on Sohu's Web Site.
2.6 The Parties shall negotiate and determine separately details such as
the position of an Information Banner and the minimum Number of
Impressions, all of which shall be recorded in a form such as that
provided in the Appendix hereto.
2.7 If, due to operational requirements, Party A needs to amend the home
page, catalogue pages or channels on the Sohu Web Site, and such
amendment will result in changes to the Number of Impressions, or the
position and size of an Information Banner, then it shall notify Party
B in writing of its intended amendments fifteen (15) days in advance,
specifying the revised Number of Impressions, position and size of the
Information Banner. Party B shall, within ten (10) days of receiving
the aforementioned notice, confirm its understanding of such in
writing to Party A. If Party B fails to reply to Party A's notice
within the stipulated period, it shall be deemed to have accepted the
changes.
2.8 In addition to the services described in Article 2.2 above, Party A
may, upon Party B's request, assist Party B to collect information
about network users or to conduct market surveys, including collecting
information on potential customers and carrying out
online surveys. The fees for such assistance shall be determined
separately by the Parties.
3. TERM OF SERVICE
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The term of this Agreement shall be thirty-six (36) months: 1 January 2000
to 31 December 2002. Any negotiations to extend this Agreement shall be
completed sixty (60) days before its expiry.
4. FEES
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4.1 As consideration for the services described in Article 2.2 above,
Party B shall pay to Party A total service fees in RMB of an amount
equivalent to USD [*] as set forth in the payment schedule below and
at the median rate of exchange set by the People's Bank of China on
the day of payment. These service fees are to be paid into a RMB
account designated by Party A.
Amount
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Year (USD)
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(1 January 2000 - 31 December 2000) [*]
(1 January 2001 - 31 December 2001) [*]
(1 January 2002 - 31 December 2002) [*]
Each of the amounts of USD [*] shall be referred to in this Agreement
as the Annual Service Fee. Notwithstanding any other provision herein
to the contrary, Party B shall have the right to assign any or all of
the services it receives hereunder to any of its operating companies
or affiliates (each, an "Assigned Company" and collectively, the
"Assigned Companies"). Party B shall notify Party A in writing at
least twenty (20) days in advance of each such assignment. Party A and
the Assigned Company shall, prior to the expiration of the twenty-day
period, enter into a contract that specifies the services to be
rendered by Party A and the services fees to be paid by the Assigned
Company. Such services fees shall be paid by the Assigned Company into
a RMB account designated by Party A within thirty (30) days after the
date of such contract, and the Annual Service Fee payable by Party B
to Party A shall be reduced by the aggregate amount of all services
fees (the
* REDACTED INFORMATION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT.
"Assigned Company Fees") due to Party A from the Assigned Companies
pursuant to contracts contemplated in this Article 4.1.
4.2 Party B shall, during the term of this Agreement, pay to Party A on
each December 31st the relevant [ * ] paid by the Assigned
Companies to Party A during such year. Such Annual Service Fee shall
be payable in RMB equivalent of USD by wire transfer to a bank account
designated by Party A. Party A shall issue to Party B a receipt within
five (5) days after receiving such payment. If, in any year during the
term of this Agreement, Party B fails to effect payment of the Annual
Service Fee within thirty (30) days after such payment is due as
specified herein, a penalty of 0.05 percent (0.05%) simple interest
per day will be charged on the overdue amount.
4.3 Party A shall charge Party B and/or the Assigned Companies fees for
the services described under Articles 2.2 and 2.8 that are [*] to
Party A's most preferred customers.
4.4 Party A shall, during each year of the term of this Agreement, provide
to Party B and/or the Assigned Companies an amount of services
corresponding to the relevant [*] ("Annual Service Quota"). Party B
and/or the Assigned Companies may, within the scope of the Annual
Service Quota, give instructions to Party A from time to time
requesting Party A to provide services described under Articles 2.1 to
2.7 above.
4.5 If, during all but the final year of this Agreement, Party B and/or
the Assigned Companies cannot or does not exhaust the Annual Service
Quota for that year, then the remaining amount may be carried forward
to the next year for the use of Party B and/or the Assigned Companies,
provided that such amount does not exceed ten percent (10%) of the
total Annual Service Quota in question.
4.6 Party B and/or the Assigned Companies shall use all available amount
of each Annual Service Quota within the term of this Agreement. If any
amount of Annual Service Quota remains unused upon the expiry of this
Agreement, then Party B and the Assigned Companies shall be deemed to
have forfeited its right to such, and Party A shall have no obligation
to reimburse Party B or the Assigned Companies for the same.
* REDACTED INFORMATION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT.
5. INFORMATION SECURITY AND CONFIDENTIALITY
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5.1 The ultimate responsibility for the content of all Party B's
Information Banners shall rest with Party B, which shall also bear all
corresponding legal liabilities.
5.2 If Party A reasonably believes in its sole discretion that the content
provided by Party B for an Information Banner violates PRC law or is
otherwise inappropriate, then it reserves the right to refuse to
provide services for that portion of the content or to request Party B
to revise the Information Banner in question.
5.3 Party A shall not be liable for any disputes, controversies or claims
arising from or in connection with any content provided by Party B.
Party B warrants that it shall indemnify Party A for all actual and
non-speculative losses caused by any such disputes, controversies or
claims.
5.4 Party A shall maintain as confidential all information relating to
Party B's business activities with which it is provided by Party B for
purposes of producing Information Banners, where such information is
not already in the public domain. Similarly, Party B shall be
responsible for maintaining as confidential any technical or
commercial information relating to the Sohu Web Site that is not in
the public domain.
5.5 Notwithstanding the provisions of Article 5.4 above, neither Party
shall be deemed to have breached this Agreement if it releases
confidential information pursuant to a written agreement between the
Parties, at the request of a government authority or where it is
legally obliged to do so.
6. COPYRIGHT
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6.1 Party B owns all rights to the information it provides to Party A and
which is displayed on Sohu's Web Site on its behalf, as well as the
copyright to the Information Banners.
6.2 With reference to Articles 5.1 and 5.3 above, Party B warrants that no
disputes relating to copyright arising from the contents of its
Information Banners shall involve or otherwise implicate Party A, that
all corresponding legal liabilities shall be assumed by Party B, and
that it shall reimburse Party A for any actual and non-speculative
losses suffered by Party A as a direct result of such a
copyright dispute.
7. RIGHTS AND OBLIGATIONS OF PARTY A
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7.1 Party A shall complete the design, production or posting of an
Information Banner, as described in Article 2.2 above, within thirty
(30) days after receiving all the relevant materials, characters,
graphics and other necessary information from Party B, and according
to a specific schedule for the Information Banner in question to be
determined by both Parties through consultation.
7.2 Party A shall maintain a complementary advertisement tracking report
system using software designed by an independent third party, so as to
enable Party B to check free of charge the Number of Impressions of
its Information Banners on a daily, weekly and monthly basis.
7.3 Party A shall not be liable for any delays associated with the
production and design of any Information Banner due to Party B's
failure to pay Party A's service fees or to provide to Party A all
necessary materials for the production and design of the Information
Banner.
7.4 Party A agrees to prevent or to withdraw the posting of any content or
advertisements, including Information Banner, on the Sohu Web Site,
that either contain incorrect information regarding Party B or reflect
negatively, in the reasonable judgment of Party B, on the image of
Party B.
8. RIGHTS AND OBLIGATIONS OF PARTY B
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8.1 In accordance with Section 4 above, Party B shall pay to Party A on
time and in full the service fees, and shall use its best efforts to
exhaust the Annual Service Quota.
8.2 Notwithstanding Article 9.1 below, Party B shall continue to pay the
total service fees then due for services rendered prior to the date of
termination pursuant to Article 9.1, if any.
8.3 Notwithstanding anything to the contrary and in addition to any other
right of termination and remedy by Party B of this Agreement, (i) in
the event that the Sohu Web Site either does not rank among the top
five websites, in terms of Number of Impressions, in the
PRC on an average monthly basis at any time during the second and
third year of the term of this Agreement, or (ii) in the event that
Party A breaches its obligations under Article 7.4 hereof at any time
during the term of this Agreement, Party B shall have the right to
terminate this Agreement without any further obligations and
liabilities, including but not limited to the obligations to pay any
unpaid portion of the Annual Service Fees, provided, however, that if
Party A rectifies or cures the breach mentioned in clause (ii) above
within two (2) days of receipt of notice given by Party B of such
breach, Party B shall not have the right to terminate this Agreement.
For purposes of this Article 8.3, Party A and Party B agree to use an
internationally recognized independent third party mutually agreeable
to both parties that utilizes statistical sampling method to conduct
the ranking mentioned in clause (i) of this Article 8.3, to provide
information as to such ranking.
9. LIABILITIES FOR BREACH OF THIS AGREEMENT
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9.1 Subject to Article 8.3 hereof, if at any time during the term of this
Agreement either Party breaches any material provisions hereof, then
the other Party may request in writing that such breach be rectified.
The Party in breach shall rectify such breach accordingly within
fifteen (15) days of receipt of such written request.
9.2 Where the Party in breach is unable to effect rectification within
fifteen (15) days of receiving the other Party's written request to do
so, then the other Party may terminate this Agreement immediately and
request from the Party in breach compensation for all actual and non-
speculative losses incurred as a result of that breach.
9.3 If Party A terminates this Agreement pursuant to Article 9.2 above,
Party B shall pay to Party A a penalty amount equivalent to the
standard quarterly service fee referred to in Article 4.2 above for
the year in question.
9.4 If Party B terminates this Agreement pursuant to Article 9.2 above,
the total amount of any compensation payable by Party A to Party B
shall be limited to the total amount of the service fees already paid
by Party B to Party A.
10. FORCE MAJEURE
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10.1 If Party A is unable to perform all or part of this Agreement due to
the occurrence of Force Majeure, then Party A shall notify Party B of
such in writing. The performance of those provisions of this Agreement
that are affected shall be suspended during the term and to the extent
of the Force Majeure, including Party B's payment obligations to Party
A.
10.2 If Party B is unable to perform all or part of this Agreement due to
the occurrence of Force Majeure, then Party B shall notify Party A of
such in writing. The performance of those provisions of this Agreement
that are affected shall be suspended during the term and to the extent
of the Force Majeure, including Party A's payment obligations to Party
B.
11. NOTICES
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11.1 Any notices and communications between the Parties shall be made in
writing in the English language and delivered by facsimile, e-mail,
courier (including express courier service) or registered airmail
letter.
11.2 Unless changed by written notice, all notices and communications
shall be sent to the appropriate correspondence addresses set forth
below:
If to Party A:
Responsible Person: ▇▇▇▇▇▇ ▇▇▇
Address: ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
Department: Corporate Business Development
Telephone: ▇▇▇▇-▇▇▇▇
Facsimile: 6510-2159
E-mail: ▇▇▇▇@▇▇▇.▇▇▇.▇▇
If to Party B:
Responsible Person: ▇▇▇▇▇▇▇ ▇▇▇
Address: No. 10, Ke ▇▇▇ ▇▇▇▇ Nanlu, ▇▇▇▇▇
▇▇▇▇ Cun Haidian District, Beijing
100080, PRC
Department: Business Development
Telephone: ▇▇▇▇-▇▇▇▇
Facsimile: 6264-9505
E-mail: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇.▇▇
11.3 For notices or communications sent by facsimile, the time of receipt
shall be deemed to be the exact time displayed in the corresponding
transmission record, unless such facsimile is sent after 5:00 PM or on
a non-business day in the place of receipt, in which case the date of
receipt shall be deemed to be the following business day. For those
sent by e-mail, the time of receipt shall be deemed to be as recorded
in the e-mail message in question evidencing the receipt of the
relevant message. For those sent by courier, the time of receipt shall
be deemed to be the date that the receiving party signs for the
document; For those sent by registered airmail, the date of receipt
shall be deemed to be seven (7) days after the recorded date of
dispatch.
12. DISPUTE RESOLUTION AND GOVERNING LAW
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12.1 The execution, performance and interpretation of this Agreement as
well as the settlement of any related disputes shall be governed by
the laws of the PRC. If there is no published and publicly available
law in the PRC governing a particular matter relating to this
Agreement, reference shall be made to common international commercial
and/or industrial practice.
12.2 All disputes arising out of or in connection with this Agreement
shall be finally settled in Beijing conducted in the English language
under the Rules of Arbitration of the International Chamber of
Commerce by a sole arbitrator appointed in accordance with the said
Rules.
12.3 All arbitration proceedings shall be conducted in English and a daily
transcript of such proceedings shall be prepared in English.
12.4 During arbitration, the Parties shall, to the extent possible,
continue to perform the parts of this Agreement not under arbitration.
13. MISCELLANEOUS
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13.1 The headings contained herein are inserted for reference purposes only
and shall not affect the meaning interpretation of any part of this
Agreement.
13.2 This Agreement may only be amended by a written instrument signed by
the Parties.
13.3 This Agreement shall be binding on the Parties and their successors
and assignees.
13.4 Failure or delay on the part of either Party to exercise any right,
authority or privilege under this Agreement, or under any other
agreement relating hereto, shall not be deemed as a waiver thereof;
nor shall any single or partial exercise of any right, authority or
privilege preclude any other future exercise thereof.
13.5 A reference to a day herein refers to a calendar day. A reference to a
business day herein refers to a day on which commercial banks are open
for business in the PRC.
13.6 This Agreement and the Appendix constitute the entire agreement
between the Parties and supersede all prior discussions, negotiations
and agreements between them. The Appendix forms an integral part of
this Agreement and has the same legal effect as this Agreement. If
there is any inconsistency between the provisions of this Agreement
and the Appendix, the provisions of this Agreement shall prevail to
the extent of the inconsistency.
13.7 This Agreement is executed in two (2) original versions, in the
English language, one (1) original version shall be retained by each
Party.
This Agreement is hereby concluded by both Parties on the date first set forth
above:
For and on behalf of:
Party A: Sohu ITC Information Technology (Beijing) Co. Ltd.
Signature:
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Position: Chairman and CEO
Party B: Legend (Beijing) Limited
Signature:
Name:
Position: