Strategic Consulting Service Agreement - Shanghai Shanda Networking Co. Ltd. and Shengqu Information Technology (Shanghai) Co. Ltd.
AMENDED AND RESTATED
STRATEGIC CONSULTING SERVICE AGREEMENT
Between
SHANGHAI SHANDA NETWORKING CO., LTD.
And
SHENGQU INFORMATION TECHNOLOGY (SHANGHAI) CO., LTD.
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AMENDED AND RESTATED
STRATEGIC CONSULTING SERVICE AGREEMENT
THIS AMENDED AND RESTATED STRATEGIC CONSULTING SERVICE AGREEMENT ("this
Agreement") is entered into in Shanghai, People's Republic of China on this 9th
day of December 2003 by and between:
Party A ("Entrusting Party"): Shanghai Shanda Networking Co., Ltd. ("Party A"),
with its registered address at 21/F, Hua Rong Plaza, 1289 South Pudong Road,
Shanghai; and
Party B ("Entrusted Party"): Shengqu Information Technology (Shanghai) Co., Ltd.
("Party B"), with its registered address at Room 638-7, Building 2, No. 351
Guoshoujing Road, Zhangjiang Hi-Tech Park, Shanghai.
Each of Party A and Party B shall hereinafter individually be referred to as a
"Party" and collectively as the "Parties".
WHEREAS,
1. Party A is a company organized and existing under the laws of the People's
Republic of China (the "PRC") and its main business is operating online PC
games in the PRC (the "Business"). Party B is a company with limited
liability organized and existing under the laws of the PRC and it has
expertise and resources in strategic consulting in the area of the
Business. Party A agrees to entrust Party B to provide strategic consulting
services ("Services") with respect of the Business, and Party B agrees to
accept such entrustment under the terms and conditions set out below. Party
A and Party B entered into a Management and Service Agreement and a
Strategic Consulting Service Agreement on February 18, 2003 and October 28,
2003 respectively.
2. The Parties intend to make further amendments to the above agreements.
NOW AND THEREFORE, the Management and Service Agreement dated February 18, 2003
and the Strategic Consulting Service Agreement dated October 28, 2003 shall be
superseded by this Agreement after the effective date hereof. The Parties agree
to the terms and conditions under this Agreement as follows:
ARTICLE 1 ENTRUSTED MATTERS
Matters entrusted by Party A to Party B under this Agreement (the "Entrusted
Matters") shall be providing Services within the scope of this Agreement.
ARTICLE 2 SCOPE OF SERVICES
Services to be provided by Party B to Party A under this Agreement shall mainly
include the following subject to the regulation of applicable laws:
1. EVALUATING AND CONSULTING OF LICENSED GAMES FROM OVERSEAS
(1) Monitoring the PRC and foreign markets of internet PC games;
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(2) Evaluating and testing new PC games;
(3) Recommending PC games from overseas based on the results of the evaluation
and the test.
2. CONSULTING SERVICES ON PC GAME PROJECTS
(1) Recommending plans for the integral operation of PC games through the
establishment of a PC game project team;
(2) Making preparations for the operation of PC games at the early stage by
communicating and coordinating with technical and game development staffs;
(3) Conducting external tests by communicating and coordinating with
technicians, game development staffs and members of the project teams;
(4) Making suggestions on the commercialized operation after the external
tests;
(5) Planning activities within the PC games and enriching game contents;
(6) Making periodical updates on users' trends and providing constructive
suggestions on the development of each game project;
(7) Providing suggestions on handling special events of PC games.
3. ANALYSIS ON AND DEVELOPMENTS OF THE WORLD TRENDS
(1) Collecting information on competitors of Party A and alerting Party A on
special events;
(2) Updating developments of competitors' online games;
(3) Providing other relevant information.
4. MARKET PROMOTION AND PLANNING SERVICES
5. OTHER CONSULTING SERVICES RELATING TO PARTY A'S CORPORATE STRATEGY;
ARTICLE 3 FEE AND PAYMENT
The Parties agree that consulting fee hereunder shall be calculated and paid in
the following manner:
1. The formula for calculating monthly consulting fee payable by Party A to
Party B hereunder shall be:
Monthly consulting fee = standard monthly fee per concurrent online player
x average number of concurrent online player per month - fees paid to
cooperative parties - other reasonable costs) x 60%
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(1) Average number of concurrent online player per month shall be the aggregate
of average number of concurrent online player for all pay games in the
month
(2) Standard monthly fee per concurrent online player shall be as follows:
a. RMB 98 per month for the year 2003
b. RMB 86 per month for the year 2004 and thereafter
(3) Fees paid to cooperative parties include:
a. Fees payable by Party A under other contracts entered into
between Party A and Party B
b. Fees payable by Party A under contracts entered into between
Party A and other PC game developers
c. Rentals and revenue sharing fees payable under contracts between
Party A and telecommunication operators
d. Fees paid to other cooperative parties
(4) Other reasonable costs:
a. Other reasonable costs per month for the year 2003 shall be RMB
1,720,000
b. Other reasonable costs per month for the year 2004 and thereafter
shall be RMB 1,900,000
2. Party B reserves the right to adjust the amount of standard monthly fee and
the amount of other reasonable costs in accordance to the actual
performance of Party A.
3. Party A shall provide Party B with data of concurrent online players and
relevant contracts entered with other PC game developers and
telecommunication operators. Party B shall be entitled to check and verify
the aforesaid contracts and data provided by Party A at any time.
4. The consulting fee hereunder shall be paid on a quarterly basis. Party A
shall, within three (3) months of the last day of each quarter, pay
consulting fee of each quarter into an account designated by Party B. At
the end of each year, Party B shall settle the consulting fee with Party A
in accordance with the actual fees payable by Party A under this Agreement;
5. It is further agreed by the Parties that the consulting fee payable between
February 19 and November 2003 under the Management and Service Agreement
and the previous Strategic Consulting Service Agreement shall be adjusted
accordingly pursuant to this Article 3.
ARTICLE 4 OBLIGATIONS OF THE PARTIES
1. THE OBLIGATIONS OF PARTY A
(1) Party A shall promptly provide Party B with any materials and information
necessary for the fulfillment of the Services hereunder, and shall warrant
the authenticity and accuracy of all such materials and information it
provides.
(2) Party A shall pay consulting fee to Party B pursuant to Article 3 hereof;
(3) Unless otherwise agreed by Party B in writing, Party A shall not entrust
any third party
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to provide any Services as stipulated in Article 2 hereof;
(4) Party A shall perform other obligations under applicable laws and
regulations of the PRC.
2. THE OBLIGATIONS OF PARTY B
(1) Party B shall provide the Services to Party A pursuant to this Agreement;
(2) Party B warrants to Party A that the information and suggestions provided
by Party B to Party A under this Agreement shall be in compliance with
relevant laws and regulations of the PRC;
(3) During the term of this Agreement and upon termination of this Agreement
due to any reasons whatsoever, Party B shall keep confidential of any
technical information and materials provided by Party A, and all other
information which Party A does not want to disclose.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES
1. Party B represents, warrants and covenants to Party A (such
representations, warranties and covenants shall become effective from the
Effective Date of this Agreement) that:
(1) Party B shall use its expertise and resources in strategic consulting with
respect to the Business to organize and coordinate the Entrusted Matters
and shall set up working groups consisting of experienced personnel to
provide Services to Party A;
(2) Party B shall, during the course of providing the Services hereunder, act
in due diligence and perform its obligations pursuant to applicable laws,
regulations and relevant administrative rules of the PRC as well as the
terms and conditions of this Agreement.
2. Party A represents and warrants to Party B (such representations and
warranties shall become effective from the Effective Date of this
Agreement) that:
(1) The obligations of Party A under this Agreement shall be legal and binding
on Party A. Party A's performance of its obligations hereunder shall
neither conflict with any of its obligations under any other agreement or
document, nor contravene any applicable laws, regulations or administrative
rules of the PRC;
(2) Any document and material provided by Party A to Party B under this
Agreement shall be authentic and accurate.
3. Upon the occurrence of an event which may make any representation, warranty
or covenant of a Party hereto under this Articles 5 become unauthentic or
inaccurate, such Party shall promptly inform the other Party thereof, and,
upon reasonable request of the other Party, take measures to remedy and
disclose details of such event.
4. The legal liabilities arising out of a breach of any of the
representations, warranties or covenants mentioned above shall not be
affected upon the completion of the Entrusted Matters hereunder.
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5. No Party hereto shall assign any of its rights or obligations under this
Agreement to any third party.
ARTICLE 6 INDEMNIFICATION
In the event that a Party fails to comply with any of its obligations hereunder
and such failure result in losses to the other Party, the defaulting Party shall
make full and effective compensation to the other Party; if the failure makes it
impossible to continue to perform this Agreement, the other Party shall have the
right to terminate this Agreement and the defaulting Party itself shall bear its
losses arising out of such termination.
ARTICLE 7 FORCE MAJEURE AND CHANGE OF CIRCUMSTANCES
If, at any time before the completion of the Entrusted Matters, a significant
change or event in politics, economy, finance, law or otherwise occurs, and such
change or event has had or may have a material adverse effect to the performance
of the Entrusted Matters, the Parties may consult with each other to suspend or
terminate this Agreement and neither Party shall assume any defaulting liability
to the other Party.
ARTICLE 8 TERMINATION
1. Each Party shall have the right to terminate this Agreement by giving the
other Party a notice in writing if:
(1) The other Party breaches or fails to fulfill any obligations under this
Agreement; or
(2) Any representation, warranty or covenant made by the other Party hereunder
is materially unauthentic or misleading and therefore not fulfilled.
2. In the event that this Agreement is terminated pursuant to Section 1 of
this Article 8 or Article 7 hereof, the obligations of both Parties
hereunder shall be terminated immediately. Notwithstanding the forgoing
sentence, any right or claim having come into existence, or any liability
arising out of the representation, warranty, covenant or indemnification
hereunder, shall remain unaffected upon such termination.
ARTICLE 9 DISPUTE RESOLUTION
1. Any and all disputes, controversy or claim arising from or relating to
this Agreement or its interpretation, violation, termination or validity
shall be first settled through amicable negotiations between the Parties;
such negotiations shall commence on the date on which a Party issues a
written notice to the other Party requesting for such negotiations. If the
dispute fails to be settled within thirty (30) days of the issuance of the
written notice, then, upon the request of and notification by either Party
to the other Party, such dispute shall be submitted for arbitration.
2. The arbitration shall be conducted in Shanghai by the China International
Economic and Trade Arbitration Commission Shanghai Commission in accordance
with such Commission's Arbitration Rules then in effect.
3. The arbitration award shall be final and binding on the Parties, and the
costs of the
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arbitration shall be borne by the losing Party, unless the arbitration
award stipulates otherwise.
ARTICLE 10 VARIATION AND SUPPLEMENT
Both Parties hereto shall fulfill their respective obligations hereunder. No
variation of or supplement to this Agreement shall be effective unless the
Parties have agreed in writing and have respectively obtained the required
authorizations and approvals (including an approval that Party B must obtain
from the audit committee or other independent institution, which has been
established under the Sarbanes-Oxley Act and the NASDAQ Rules, of the board of
directors of Party B's overseas holding company, Shanda Interactive
Entertainment Limited).
ARTICLE 11 VALIDITY
This Agreement shall become effective immediately after it is signed and sealed
by the legal representatives or the authorized representatives of both Parties,
and shall supersede all the relevant agreements and documents previously signed
by the Parties on the subject matter upon the effectiveness of this Agreement.
The term of this Agreement shall be twenty (20) years, which will be
automatically renewed for another one (1) year upon expiry of each term unless
Party B notifies Party A of its intention not to renew thirty (30) days before
the current term expires.
ARTICLE 12 COUNTERPARTS
This Agreement is executed in two counterparts. Each Party shall hold one
counterpart, and both counterparts shall have the same legal force.
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[EXECUTION PAGE]
PARTY A: SHANGHAI SHANDA NETWORKING CO., LTD.
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Authorized representative
PARTY B: SHENGQU INFORMATION TECHNOLOGY (SHANGHAI) CO. LTD.
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Authorized representative
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