Technical Services Agreement - Sohu ITC Information Technology (Beijing) Co. Ltd. and PCCW International Marketing Ltd.
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Technical Services Agreement
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by and between
Sohu ITC Information Technology (Beijing) Co. Ltd.
and
PCCW International Marketing Limited
Dated as of 26/th/ January, 2000
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THIS TECHNICAL SERVICES AGREEMENT ("Agreement") is made on this 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 Suite 519, Tower 2, Bright China Chang An Building, 7 Jianguomennei Avenue,
Beijing 100005, PRC ("Party A")
AND
PCCW International Marketing Limited, with its registered address at P.O. Box
957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands
("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
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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
"www.sohu.com".
"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
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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.
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3. TERM OF SERVICE
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The term of this Agreement shall be thirty (30) months: 1 July 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.
Year Amount
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(USD)
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(1 July 2000 - 31 December 2000) [*]
(1 January 2001 - 31 December 2001) [*]
(1 January 2002 - 31 December 2002) [*]
Each of the amounts of USD [*], [*] and [*] shall be referred to in
this Agreement as the Annual Service Fee.
4.2 Party B shall, during the term of this Agreement, pay the relevant
Annual Service Fee in equal quarterly installments in RMB equivalent
of USD by wire transfer to a bank account designated by Party A within
five (5) working days following each December 1, March 1, June 1 and
September 1; provided, however, that Party A shall deliver an invoice
to Party B requesting payment of such quarterly amount not less than
fifteen (15) business days prior to the date on which payment is due;
and provided further that Party B shall make an initial quarterly
payment of the RMB equivalent of USD [*] on or before 15 July 2000.
Party A shall issue to Party B a receipt within five (5) days after
receiving such payment. If Party B fails to effect payment of the
service fees in a timely manner, a penalty of 0.05 percent (0.05%)
simple interest per day will be charged on the overdue amount.
* REDACTED INFORMATION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT.
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4.3 Party A shall charge Party B 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 a total amount of services corresponding to the relevant
[*] ("Annual Service Quota"). Party B 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 cannot or
does not exhaust the Annual Service Quota for that year, then the
remaining amount may be carried forward to the next year, provided
that such amount does not exceed ten percent (10%) of the total Annual
Service Quota in question.
4.6 Party B 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
shall be deemed to have forfeited its right to such, and Party A shall
have no obligation to reimburse Party B for the same.
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
* REDACTED INFORMATION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT.
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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
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necessary materials for the production and design of the Information
Banner.
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.
9. LIABILITIES FOR BREACH OF THIS AGREEMENT
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9.1 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
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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: Victor Koo
Address: 7 Jianguomennei Avenue
Suite 519, Tower 2
Bright China Chang An Building
Beijing 100005, China
Department: Corporate Business Development
Telephone: 86-10-6510-2160
Facsimile: 86-10-6510-2159
E-mail: vkoo@itc.com.cn
If to Party B:
Responsible Person: Aley Chang
Address: 38/th/ Floor, Citibank Tower,
Citibank Plaza
3 Garden Road, Central, Hong Kong
Department:
Telephone: 852-2514-8657
Facsimile: 852-2514-8651
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E-mail: aleychang@pcg-group.com
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 shall
be governed by the laws of the State of Delaware, United States of
America. If there is no published and publicly available law in the
State of Delaware 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 Hong Kong 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.
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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. No Party's rights, duties or responsibilities under
this Agreement may be assigned, delegated or otherwise transferred in
any manner, without the prior written consent of the other Party.
Notwithstanding the foregoing, no such consent shall be required in
connection with the assignment, delegation or other transfer of any
such rights, duties or responsibilities by Party B to any of its
affiliate or subsidiary provided that Party B unconditionally
guarantees in writing to Party A the due and punctual performance by
such affiliate or subsidiary of Party B's obligations under this
Agreement.
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.
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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: Charles Zhang
Position: Chairman and CEO
Party B: PCCW International Marketing Limited
Signature:
Name: Mico Chung
Position: Director