SMS Cooperation Agreement - Guangdong Mobile Communications Corp. and Shanghai Weilan Computer Co. Ltd.
SUMMARY OF THE KEY TERMS:
SMS COOPERATION AGREEMENT
PARTY A: GUANGDONG MOBILE COMMUNICATIONS CORPORATION
PARTY B: SHANGHAI WEILAN COMPUTER CO., LTD.
DATED: JANUARY 16, 2004
Guangdong Mobile Communications Corporation (hereinafter referred to as "Party
A") is a network operation company that has been approved by the Chinese
authority in charge of information industry under the State Council to provide
mobile network telephone services (including voice message, data and multimedia)
to the general public within Guangdong province.
Shanghai Weilan Computer Co., Ltd. (hereinafter referred to as the "Party B")
uses wireless interconnections as its major platform to provide a range of
mobile message services to customers who can access the Internet via mobile
terminals or PCs.
For the purposes of giving full play of the advantage of each Party in its
service area and providing Monternet WAP services to its subscribers in
Guangdong and other users permitted by Party A, the parties have reached the
following agreement with respect to SMS cooperation in accordance with the
principles of equal benefit, advantage sharing, and mutual development.
ARTICLE 1 COOPERATION PROJECT
(1) As a provider of the platform for the delivery of SMS, Party A will
provide networking channel to Party B for a fee.
(2) Party B shall, through Party A's SMS platform, provide the following
information and application services to Party A's subscribers in
Guangdong and other subscribers agreed by Party A. Party B shall,
according to subscribers' customization requirements, provide
subscribers with timely information services with sound quality and
quantity.
(3) Party A shall use its billing and business supporting system to provide
Party B with paid business billing and fee collection service.
ARTICLE 2 PARTY A'S RIGHTS AND OBLIGATIONS
(1) Party A shall have the right to verify operation license for internet
information services or operation license for telecom value-added
services, credit certificate, business license, source of information
and bank account and other materials relating to the normal operation
of business provided by Party B.
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(2) Party A shall provide Party B with the connection point for SMS service
and SMS service volume control. Party A has the right to adjust SMS
service volume according to the capacity of its SMS center.
(3) Any expansion of Party B's business offerings or its application to
alter its business shall be subject to Party A's review within 10 days
upon submission of related materials by Party B.
(4) Party A shall have the ownership of its subscribers and the right to
know about Party B's business. Party A has the right to request Party B
to provide Party A with customer information, business profile, log and
statistics relating to Party B's Monternet services.
(5) Party A shall have the right to stipulate measures for the management
of the Monternet services and to examine the performance standards and
the documentation with respect to customer services; Party A also have
the right to require Party B to observe and implement the above
mentioned measures and standards. Party A shall carry out 1-2
performance reviews on Party B each year according to the management
requirements mentioned above.
(6) Party A shall provide Party B with a system to identify and verify user
registration and log-on information, which system shall be connected
with Party B's content service system, and the subscriber data recorded
by such system shall be the controlling information on the subscribers'
usage of Party B's services.
(7) Party A shall provide Party B with a customer service number for the
customer to make complaint and enquiry calls. Party A's customer
service center shall be the party to make final confirmation and
distribution of Monternet customer service problems, Party B's customer
service personnel or customer service system shall assist Party A to
analyze and deal with complaints and enquiries relating to relevant
customer services. Party A has the right to forward such customer
complaints and enquiries not arising from network communication
problems. Party A shall be liable for such customer enquiries and
complaints due to network communication problems.
(8) Party A shall collect the service fee from subscribers for Party B
based on Party A's billing information.
(9) Party A shall provide to Party B volume information at its SMS gateway
recording the amount of SMS sent by Party B; Party A's information will
be the basis for the settlement of SMS communication network fee.
(10) Party A has the right to verify the profit forecast of the parties
provided by Party B to Party A prior to the activation of the service
to be provided by Party A.
(11) Party A and Party B can jointly engage in marketing and customer
advertisement. Party A has the right to request Party B to identify the
brand of "MONTERNET" upon Party A's examination and approval. In the
event that Party B's promotion and advertisement involves the corporate
name and other brand specifications of Party A, it shall be subject to
Party A's prior examination and approval.
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ARTICLE 3 PARTY B'S RIGHTS AND OBLIGATIONS:
(1) Party B shall provide Party A with true and reliable operation license
for internet information services or operation license for telecom
value-added services, credit certificate, business license, source of
information and bank account and other materials relating to the normal
operation of business, and guarantee that the billing for such
information services is in compliance with relevant provisions of the
State pricing authority.
(2) Party B shall ensure content compliance with regulations and the nine
categories of illegal information listed in Information Source
Networking Information Safety and Security Liability Statement (Exhibit
4).
(3) Party B shall provide Party A with its preliminary response within 2
hours of receiving customer complaints and verify the reasons for the
problems underlying such complaints within one working day.
(4) Party B shall verify the true identity of users and display calling
number along with the SMS.
(5) Party B shall strictly control the function of group SMS service and
ensure a piece of SMS can be reached by at most 1-2 calling numbers.
(6) During the term of this agreement, Party B shall not provide any third
parties the same information services that it provides to Party A
through any channels or any means; Party B must create a separate
database for Party A's subscribers that is separate from that for the
subscribers of any third parties. Further, Party B shall not provide
any Monternet services to any third parties any time through any means.
(7) Party B shall not publish advertisement or other non-relevant
information on its website. Any supplement to Party B's business and
application for business alteration shall be subject to Party A's
review and approval, and shall be verified by Party A's billing
examination. Party B shall timely deliver to Party A such business
materials that require Party B's resolution. (As of the date of this
Agreement, basic information provided by Party B are listed as Exhibit
3 hereto.)
(8) Party B shall provide Party A with reports on the customer development,
customer category, customer habit, business forecast and subscriber
information necessary for the administration of Party B's services, and
ensure timely upgrade of Party A's customer database. Party A shall
keep such information confidential in accordance with Article 7
"Confidential Information." Party B shall be responsible for providing
system to keep a log of the required information mentioned above and
shall keep historical records for at least one month.
(9) Party B shall ensure that customers are informed of the price, content
and the manner through which its services are provided prior to the
delivery of its services.
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(10) Party B shall obtain customer's consent before providing its services
and shall, according to subscribers' customization requirements,
provide subscribers with timely, quality and the correct quantity of
information services.
(11) Party B shall observe Party A's measures with respect to the management
of the Monternet services and standards of customer service and
documentation; in addition, Party B shall be subject to Party A's
inspection and supervision. If, for whatever reason, Party B withdraws
from providing WAP services to Party A, Party B must provide a
one-month grace period to continue its service and make a website
announcement on its website (WW/WAP) or other channels to keep Party
A's subscribers informed.
(12) Party B shall handle customer enquiries and complaints not resulting
from network communication problems and establish effective channels
for complaints that will be directed to Party A's customer service
center. Party B shall assume the ultimate liability to customers for
such customer complaints for which neither Party A nor Party B can give
a reasonable explanation.
(13) Party B shall fill out the number of billable characters in each
delivered message as required by Party A.
(14) Party B shall be solely liable for tax payment on its profit.
(15) Party B shall issue a formal invoice to Party A for such information
service fees collected from Party A.
(16) Party B shall actively engage itself in marketing and customer
promotion. The content of Party B's promotion and advertisement
materials shall include the "MONTERNET" brand as required by Party A.
(17) Within 6 months after the effectiveness of the Agreement, Party B shall
not conduct the same or similar WAP services within Guangdong province
for any third party.
ARTICLE 4 MAINTENANCE RESPONSIBILITIES
(1) Responsibilities for maintenance shall be divided at the point where
the equipment of the parties connects; each Party shall perform its
respective obligations to ensure the normal operation of their
services.
(2) Detailed responsibilities of the parties are listed in Exhibit 1
hereto.
ARTICLE 5 BILLING AND SETTLEMENT
(1) Party A shall be entitled to the network fees arising from customers'
use of SMS services. Party A and Party B together shall share in the
information service fees paid by customers in accordance with a
pre-determined percentage.
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(2) If subscribers refuse to pay the information service fees due to
problems with the quality of Party B's service, such unpaid amount
shall be deducted from Party B's share of the information fees.
(3) If Party B fails to transmit its information services in accordance
with the format requirements of Party A (i.e., by including in each
message certain wordings regarding information service fees), Party A
will not include such amount in the information fees collected for
Party B and Party B shall be solely liable for any consequence arising
therefrom.
(4) Detailed method for billing and settlement is set forth in Exhibit 2
hereto.
ARTICLE 6 REWARD AND PUNISHMENT PROVISIONS
(I) PUNISHMENT
1. The occurrence of any of the following shall result in public
censor (such as including Party B on China Mobile's internal
blacklist or prohibiting Party B from working with other
provincial affiliates); suspension of its approval of Party
B's new businesses (by 3-12 months); and deduction of 10-20
points/occurrence in performance review on Party B.
(i) Party B's users create SMS content and Party B fails
to restrict the flow of group-SMS to a
non-insubstantial degree;
(ii) National anthem, flag or emblem is made downloadable
by Party B;
(iii) No identity verification by Party B which results in
anonymous SMS to customer's mobile phones;
(iv) Party B's system cannot support "Help and
Information" function;
(v) Party B fails to display the Monternet brand in its
marketing and media promotion materials and
information releases.
(vi) Party B fails to comply with state telecommunications
and internet laws, regulations or orders in a
non-insubstantial degree.
(vii) Party B fails to keep all users' business log for at
lease three months.
Party B's customers are seriously affected by Party
B's system testing, activation and modification,
which results in strong complaints from the
customers.
(viii) Party A's network system is damaged due to Party B's
system testing, activation and modification.
(ix) Other conduct of Party B in violation of this
Agreement.
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2. The occurrence of any of the following shall require public
apology to each of the affected users and a deduction of 20-30
points in performance review on Party B for each occurrence.
(i) Sending SMS to other provinces through Party A's
connection points at Guangdong.
(ii) Party B knowingly interrupts SMS delivery to increase
fees to be paid by users.
(iii) If Party B sends promotional advertisements in small
volume and limited scope without prior consent of its
users, Party B undertakes to pay damages to China
Mobile.
3. The occurrence of any of the following shall empower Party A
to deny settlement and demand damages from Party B and to
deduct 40-60 points in Party A's performance review of Party B
for each occurrence.
(i) Party B fails to take effective measures to prevent
technology loophole, hacker attack, misappropriation
of password, or other illegal acts that are
detrimental to information security safeguards.
(ii) Party B discloses technical standards, user
information and code sections provided by China
Mobile.
(iii) Party B fails to keep its original customer service
hotline in operation for the two months following a
change of the telephone for such hotline.
(iv) Party B fails to restrict group SMS in a serious
manner.
(v) Party B's SMS services have a negative impact on the
corporate identity of China Mobile.
(vi) Party B provides services to users without users'
prior consent.
(vii) Party B suspends or changes its business at its own
discretion.
(viii) Party B fails to identify customers for internet or
other non-mobile users, and fails to provide service
statement at prominent place at its website or
promotion materials.
(ix) Party B collect fees from customers for free
information service.
(x) Party B undertakes billable services through other
Monternet platform.
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4. The occurrence of any of the following shall empower Party A
to order Party B's rectification of the situation described
below and to deduct 50 points in its performance review on
Party B for each occurrence.
(i) Party B generates any overloading volume that
jeopardizes network security with respect to the
delivery of SMS.
(ii) Party B's system testing causes network breakdown and
seriously affects the normal operation of the network
of China Mobile.
(iii) Party B fails to screen out illegal words or words
that are detrimental to network security, especially
politically sensitive words.
(iv) Party B delivers negative information about China
Mobile with negative social impact.
(v) Party B uses the Monternet brand for authorized use
in ways that have a negative impact on China Mobile.
(vi) Party B's SMS information violates state laws,
regulations, policies or the nine categories of
illegal information listed in Information Source
Networking Information Safety and Security Liability
Statement.
(vii) Party B fails to address junk information or illegal
attack as required.
(viii) Party B fails to cooperate with competent authorities
and China Mobile for the purposes of tracking network
problems and relevant information gathering.
(ix) Party B undertakes billable services through other
Monternet network.
5. The occurrence of any of the following shall empower Party A
to deduct 60 points in its performance review of Party B for
each occurrence, terminate the whole agreement and, for the
two years thereafter, prohibit Party B from providing services
for Party A's subscribers.
(i) Use Guangdong Mobile's SMS system purely as a fee
collection service;
(ii) Provide services to customers without first obtaining
their consent;
(iii) Overcharge customers;
(iv) Cause incorrect computation of fees with respect to
services provided to customers;
(v) Fail to provide customers with a channel or method to
cancel their order of services and to refund
customers for cancelled orders;
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(vi) Commit excessive pricing by charging prices for its
services in violation of its pre-determined pricing
standards;
(vii) Violate the restriction against interlinking (such as
by providing to any third parties the same
information services that Party B provides to Party
A); and
(viii) Receive a large number of strong customer complaints
by users over Party B's service quality or if such
complaints lead to serious social impact.
(II) REWARD
1. Promotional support if Party B ranks among the top 15 in Party
A's monthly review.
2. Promotional support in the Monternet Business Manual if Party
B ranks among the top 20 in its half-year review.
If Party B effectively performs relevant terms and conditions hereunder
and the average annual rate of customer complaints on Party B's SMS
service is low, Party A shall give preferential consideration to extend
this Agreement with Party B.
ARTICLE 7 CONFIDENTIALITY
(1) Both parties shall be responsible to keep confidential all the customer
materials obtained from such services.
(2) Proprietary information received by one Party from the other Party (the
"Disclosing Party") that is developed, created, discovered or learned
by the Disclosing Party, or transferred to the Disclosing Party, and is
of commercial value to the business of the Disclosing Party, including
but not limited to relevant commercial secret, computer program, design
techniques, idea, know-how, process, data, business and product
development plan, customer information relating to the business of the
Disclosing Party and other information, or confidential information
that the Disclosing Party receives from another party, shall remain the
property of the Disclosing Party, the other Party shall keep
confidential any and all proprietary information, and without prior
written consent of the Disclosing Party, shall not use or disclose such
proprietary information to any individual or entity, except for the
purpose of normal performance of the obligations hereunder.
(3) Both parties shall be responsible to keep confidential this cooperation
and the terms and conditions of this Agreement. Without prior written
consent of the other Party, neither Party shall disclose to any third
party details of the cooperation between the parties and the terms and
conditions of this Agreement.
ARTICLE 8 LIABILITY FOR BREACH
(1) If this Agreement cannot be performed due to any Party's violation of
this Agreement, the other Party shall have the right to terminate this
Agreement.
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(2) If any party breaches any obligations under this Agreement and incurs
bad social impact or economic losses to the other party, the other
party shall have the right to hold the breaching party responsible for
such breach, requires the breaching party to reverse such impact and
make corresponding compensations, and to terminate this Agreement.
ARTICLE 9 FORCE MAJEURE
Any party hereto shall not be held responsible for the other party's economic
losses or the failure or delay to perform all or any part of this Agreement due
to force majeure events that could not be predicted and the result of which
cannot be controlled or prevented. However, the party affected by such force
majeure events shall promptly provide the other party with written notice of
such occurrence and, within 15 days thereafter, send a valid certificate issued
by the relevant authority explaining the details of such events and the reason
for its failure or delay to perform all or any part of this Agreement. Both
Parties shall negotiate the performance or termination of this Agreement
according to the degree of impact on the performance hereof caused by such
events.
ARTICLE 10 AMENDMENT OR MODIFICATION
(1) During the cooperation between the parties, relevant business
management requirements and relevant customer management requirements
stipulated by Party A for the Monternet shall be incorporated as a
supplement hereto. If there is any conflict between the provisions of
this Agreement and the management requirements, the management
requirements shall prevail. Both parties agree to negotiate on the
conflicting provisions, and execute a supplemental agreement.
(2) If any party hereof intends to modify or terminate this Agreement, it
shall provide written notice to the other party at least 15 day prior
thereto. Notice in oral form shall be invalid. Any dispute arising from
the termination of this Agreement shall be negotiated in order to reach
a resolution between the parties.
(3) Any issues not included in this Agreement shall, upon agreement through
amicable negotiations between the parties, be included as a written
supplement hereto.
(4) This Agreement shall be governed by the laws of the People's Republic
of China. If the Parties hereto fail to reach an agreement in the event
of any dispute, either Party may file a lawsuit before the court of the
place where Party A is located.
(5) This Agreement shall become effective after it is signed by the
representative of the Parties and affixed with the official seal of the
Parties, the term hereof shall be one year, which is renewable upon
agreement by both Party A and Party B through consultation.
(6) This Agreement and Exhibits hereto are in four originals, each of Party
A and Party B holds two originals thereof, with the equal legal effect.
EXHIBIT 1: MAINTENANCE RESPONSIBILITIES
EXHIBIT 2: BILLING AND SETTLEMENT
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EXHIBIT 3: BASIC INFORMATION OF PARTY B'S COMPANY
EXHIBIT 4: INFORMATION SOURCE NETWORKING INFORMATION SAFETY AND
SECURITY LIABILITY STATEMENT
PARTY A: GUANGDONG MOBILE COMMUNICATIONS CORPORATION
Authorized Representative: /s/ Hong Xiaoqin
Date: January 13, 2004
PARTY B: SHANGHAI WEILAN COMPUTER CO., LTD.
Authorized Representative: /s/ Mark Begert
Date: January 16, 2004
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EXHIBIT 1
MAINTENANCE RESPONSIBILITIES
A. DIAGRAM OF THE MAINTENANCE SECTIONS
B. PARTY A'S RIGHTS AND OBLIGATIONS
(1) Party A shall contribute software and hardware required by its WAP
service platform.
(2) Party A shall connect Party B's server to its WAP service platform.
(3) Party A shall provide Party B with the WAP service specifications and
interface technical specifications.
(4) Party A shall maintain the normal operation of the network
telecommunications (including WAP service platform), and assume
responsibility for network problems not caused by Party B.
(5) Party A shall provide statistics for the information transmission
volume through Party A's telecommunications channel, and ensure the
reliability and timeliness of such statistics data, and assume
responsibilities for any damages arising therefrom.
(6) Party A shall notify Party B in advance for any transmission
interruption resulting from testing, maintenance or other foreseeable
reasons, including the reason, time and period for such transmission
interruption.
(7) Party A shall immediately notify Party B of any transmission
interruption caused by unforeseeable reasons such as problems with
network switch or other network problems.
C. PARTY B'S RIGHTS AND OBLIGATIONS
(1) Party B shall be responsible for the construction and maintenance of
its own system, including all hardware equipment, system testing,
connecting, maintenance, daily service management, marketing promotion
and expenses.
(2) Party B shall be responsible for the connection between Party B's
system and Party A's WAP platform and expenses for the application,
lease and maintenance of relevant telecommunication lines.
(3) Party B shall be responsible for the editing, review and production of
the information that it provides, and ensure the timeliness,
truthfulness, reliability and legality of such information, and assume
related liabilities thereto.
(4) Party B shall ensure the testing and connecting of its system would not
affect the normal operation of Party A's network and assume related
liabilities for any damages to Party A's network system arising
therefrom.
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(5) Party B shall make prior notice to Party A in writing for the testing,
activation and modification of its system, and notify subscribers of
the same through effective means such as email, advertisement or short
messages upon Party A's confirmation thereof, and shall reduce the
impact on subscribers to the minimum degree.
(6) Party B shall observe Party A's emergency adjustment to the volume of
short messages so as to ensure the normal operation of WAP services.
(7) Party B undertakes not to create overload transmission volume that
would harm the network safety when transmitting short-messages to Party
A's WAP service platform.
(8) Party B shall provide 7 days a week and 24 hours a day system
maintenance.
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EXHIBIT 2
BILLING AND SETTLEMENT
For uploading service: 0.1 Yuan/piece;
For asymmetrical downloading of SMS, Party B shall pay Party A network fees
according to the following rate:
<TABLE>
<CAPTION>
NUMBER OF
MESSAGES/MONTH YUAN/MESSAGE X= (MT-MO) MESSAGE/MONTH
---------------------------------------------------------------------------
<S> <C> <C>
Below 100k 0.08 X*0.08, minimum 2000 Yuan
---------------------------------------------------------------------------
100k-300k 0.07 (X-100k)*0.07+100k*0.08
---------------------------------------------------------------------------
300k-1mm 0.06 (X-300k)*0.06+200k*0.07+100k*0.08
---------------------------------------------------------------------------
Above 1mm 0.05 (X-1mm)*0.05+700k*0.06+200k*0.07+100k*0.08
---------------------------------------------------------------------------
</TABLE>
Party A shall send the invoice by month and Party B may pay by cash, bank
collection, credit card or book entry voucher.
Party B shall be entitled to the information service fees paid by customers,
which shall be collected by Party A on Party B's behalf and Party B shall pay
Party A 15% of the fees collectable as collection fee, and the remaining 85% of
fees collectable shall be paid to Party B. Fees collectable shall not include
the fees from users whose phone has been turned off or whose phone number does
not exist.
For monthly-paid services, the full amount of monthly payment shall be collected
as of the date on which the subscribers are made accessible to the service.
The parties shall before the 15th of each month (settlement month) verify the
data of previous month's information service fees receivable and actually paid,
and, upon verification, settle the account no later than the 25th of each month
(settlement month).
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EXHIBIT 3
BASIC COMPANY INFORMATION OF PARTY B
Full Name: Shanghai Weilan Computer Company Limited
Address: 6/F, No.18 Xizang Central Road, Shanghai
Bank Info: CCBC
Customer service hot-line: 020-37600941/37600946
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EXHIBIT 4
INFORMATION SOURCE NETWORKING INFORMATION
SAFETY AND SECURITY LIABILITY STATEMENT
Party B shall ensure its content complies with regulations and the nine
categories of illegal information listed in Information Source Networking
Information Safety and Security Liability Statement.
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