Cooperation Agreement - Sohu ITC Information Technology (Beijing) Co. Ltd. and Beijing Sohu Online Network Information Services Co. Ltd.
Execution Copy
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Cooperation Agreement
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between
Sohu ITC Information Technology (Beijing) Co., Ltd.
and
Beijing Sohu Online Network Information Services Co., Ltd.
TransAsia Lawyer
June , 2000
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THIS COOPERATION AGREEMENT (this "Agreement") is made on this day of June 2000
in Beijing, People's Republic of China ("PRC")
by and between
(1) Sohu ITC Information Technology (Beijing) Co., Ltd., a wholly foreign-owned
company, duly established and registered under the laws of the PRC with its
registered address at Suite 1519, Tower 2 Bright China Chang An Building, 7
Jianguomen Nei Avenue, Beijing 100005, PRC ("Party A")
and
(2) Beijing Sohu Online Network Information Services Co., Ltd., a limited
liability company duly established and registered under the laws of the PRC
with its registered address at No 7, Beibingmasi Hutong, Dongcheng
District, Beijing 100027, PRC ("Party B")
(individually a "Party" and collectively the "Parties").
WHEREAS
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A. Party A is engaged in the development of technology and provision of
services relating to Internet portals, e-commerce and online advertising,
as well as the development and application of Internet software and on-line
databases. Party A has accumulated operational and managerial expertise in
these areas and has acquired advanced technology, especially through the
development of the Chinese language Internet portal www.Sohu.com (the
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"Website").
B. Party B is engaged in the development of computer hardware, technical
support and services, and has obtained a license to operate as an Internet
content provider to engage in the provision of Internet information
services, including the collection, classification and supervision of
Website content.
C. Based on the requirements of the relevant government departments, the
Parties, through mutual consultation, agreed on June, 2000 to restructure
their respective assets and business (see the attached agreement) in view
of their respective areas of expertise and the development stage of the
Website.
D. Party A undertakes to provide technical support and assistance to Party B
in respect of Party B's Internet information services, in exchange for
which Party B undertakes to provide Internet information services to Party
A.
THE PARTIES THEREFORE AGREE AS FOLLOWS:
1. Nature and Objectives of Cooperation
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By complementing each other's respective areas of expertise and market
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position, the Parties intend hereunder to strengthen cooperation in such
business areas as content development, application services and e-commerce.
2. Content of Cooperation
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2.1 Technical Services and Support
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2.1.1 Party A undertakes to provide to Party B exclusive technical
services and support for its Internet information service
business, which shall relate, but not be limited to, the
following areas:
2.1.1.1 portal website technology;
2.1.1.2 website server application software;
2.1.1.3 systems solutions; and
2.1.1.4 training of technical personnel and provision of
technical consulting.
2.1.2 Party B agrees to rely exclusively on Party A's technical
services and support for the operation and development of the
Website, and to remunerate Party A for such services.
2.1.3 The Parties agree to enter into a separate agreement to
stipulate the specific content to be provided, the means of
provision, the amount of fees paid by Party A in consideration
of such services and related method of payment.
2.2 Domain Name and Company Name
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2.2.1 For the purpose of assisting Party B's business development
efforts during the term of this Agreement, Party A authorises
Party B to use, on a non-exclusive basis, the second-tier
domain name www.Sohu.com.cn, which is registered in the name of
and held by Party A. Moreover, Party A undertakes to assist
Party B in obtaining from Party A's parent company, Sohu.com
Inc., a license to use on a non-exclusive basis the top-level
domain name, www.Sohu.com.
2.2.2 Further to Article 2.2.1 above, Party A authorises Party B to
use, for the duration of this Agreement, the trade names
"Chinese Symbol" and "Sohu", which are registered in the name
of and held by Party A.
2.2.3 The Parties shall enter into separate licensing agreements for
the rights outlined in Articles 2.2.1 and 2.2.2 above, which
will specify the terms and conditions of use of those rights.
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2.2.4 Party B understands that Party A and its parent company,
Sohu.com Inc, are now in the process of registering Sohu's
trade marks in the PRC. The Parties agree that, when the said
registration is completed and should Party B so desire, they
shall negotiate and enter into a separate trade mark licensing
contract.
2.3 Information Services Permit and Supervision of Network Security
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2.3.1 Party B shall be responsible for the following:
2.3.1.1 obtaining and maintaining the continuous validity of
the Internet Information Services Permit, in addition
to all other operating permits (including, but not
limited to, an online news dissemination permit) if
required necessary to Party B's lawful operation of
its business;
2.3.1.2 filing and maintaining the relevant computer network
security registrations;
2.3.1.3 establishing a responsibility mechanism and
supervisory system to handle security issues arising
during the course of the Website's operation resulting
to content displayed on the Website; and
2.3.1.4 implementing and complying with PRC laws in connection
with the release of any information online.
2.4 Content Development and Copyright Licence
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2.4.1 Party B shall be responsible in consultation with Party A, for
developing cooperative relationships, with traditional media
and other partners with regard to Website content, and for
executing all necessary related agreements, such as content
development agreements and content licensing contracts.
2.4.2 Upon the expiry of any existing content development agreements
executed by Party A, Party A shall assist Party B to negotiate
with the relevant counter-parties and renew such agreements.
2.4.3 Party A shall develop in digitalised form the Website content
collected by Party B to be released in online and wireless
access protocol (WAP) versions, and shall provide to Party B
the necessary related technical consulting and guidance
services.
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2.4.4 For the duration of this Agreement, Party A shall license to
Party B the overall copyright of the Website design, which is
owned by Party A, and the digitalised content developed and
owned by Party A as set out above in Article 2.4.3.
2.4.5 Upon the reasonable request of Party B, Party A undertakes to
improve and update the design of the user interface and
digitalised content of the Website. Any copyrights arising from
such improvements and updating shall be the exclusive property
of Party A and licensed to Party B.
2.4.6 The Parties shall enter into separate licensing agreements for
the rights outlined in Articles 2.4.4 and 2.4.5 above, which
shall specify the terms and conditions of the use of such
rights.
2.5 Provision of Business Platform
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2.5.1 In order to assist Party A in the development of its content
and related business operations, Party B agrees to provide
Party A with:
2.5.1.1 space on the Website for exclusive use by Party A in
conducting its online advertising and e-commerce
activities on the Website;
2.5.1.2 access to and use of any required computer hardware;
and
2.5.1.3 other Internet information services reasonably
requested by Party A.
2.6 Equipment, Leased Line and Personnel
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2.6.1 The Parties agree to address issues such as the
transfer of equipment and the subleasing of the private leased
line according to the attached Assets and Business
Restructuring Agreement.
3. Service Fees and Expenditures
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3.1 During the term of this Agreement, in consideration of the network
security supervision, content development and e-commerce services
provided by Party B under Articles 2.3, 2.4 and 2.5 above and Party A
will pay to Party B a monthly service fee within ten (10) days of the
commencement of each calendar month to reimburse Party B for all its
costs and expenses incurred in conducting its services for Party A
hereunder and incremental business tax, which fee is currently RMB
three hundred thousand (300,000) and will be subject to periodic
adjustments as agreed by the Parties.
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3.2 Unless the Parties agree otherwise in writing, the monthly fee that
Party B is obliged to pay to Party A under Article 2 of the Assets and
Restructuring Agreement will be used to set off the fees that Party A
is obliged to pay to Party B under Article 3.1 of this Agreement.
Pursuant to the set-off outlined above, the Parties' payment
obligations should be discharged automatically. However, if the
outstanding amount which one Party is obliged to pay to the other
Party exceeds the outstanding amount to be paid by that other Party,
the first Party must pay the difference ("Set-off Difference") to the
other Party.
4. Representations and Warranties
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4.1 Each Party represents and warrants that, as of the date of signing
hereof:
4.1.1 it has fully power and authority (corporate or otherwise) as an
independent legal person to execute and deliver this Agreement
and to carry out its responsibilities and obligations
hereunder; and
4.1.2 it has executed and delivered all necessary documentation and
engaged in all necessary activities to enable it to perform
this Agreement.
4.2 Party A represents and warrants that it lawfully possesses the above-
mentioned domain name, trade names and copyright, namely:
4.2.1 www.Sohu.com.cn;
4.2.2 the "Sohu" and "Chinese Symbol" trade names and trade marks;
and
4.2.3 copyright to existing digitalised content of the Website.
4.3 Party B represents and warrants that it has obtained, and will
maintain the validity of, an Internet Information Services Permit
issued by the relevant competent government authorities, and that it
has filed and is maintaining its computer network security
registration in accordance with the relevant regulations.
5. Limitation of Rights
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5.1 Without first securing Party A's written consent to do so, the
technical support and various licenses in respect of domain names,
trade names, trade marks, and copyrights provided by Party A to Party
B may not be transferred, mortgaged or sub-licensed by Party B to any
third party or used for the benefit of any third party; nor may
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any of Party B's rights and obligations hereunder be assigned or
sub-licensed to any third party.
5.2 Party B undertakes to use the rights granted to it by Party A strictly
in accordance with the terms of this Agreement, and not to use those
rights in any way which, in the opinion of Party A, is misleading or
which damages the commercial reputation and interests of Party A.
5.3 Party B undertakes to assist Party A in protecting the latter's domain
name, trade name, trade mark and copyright, to notify Party A of any
relevant infringement thereof as soon as it comes to Party B's
attention and, at the request of Party A, to undertake or participate
in any related litigation or claim for damages.
5.4 Party B agrees that it shall not, either during the term of this
Agreement or at any time thereafter, dispute the rights of Party A
with respect to the technology, domain name, trade name, trade mark,
copyright, or the validity of this Agreement.
6. Confidentiality
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6.1 Each Party undertakes to maintain as confidential any trade secrets
concerning the other Party that, in connection with the execution and
performance hereunder, such Party learns or receives during the term
of this Agreement. The Parties agree to use such trade secrets solely
in connection with the performance of their respective obligations
under this Agreement. Without written permission from the other Party,
neither Party shall allow any third party to use such commercial
secrets, nor disclose any such secrets, including the execution,
performance or contents of this Agreement, to any third party. Failure
to abide by this provision shall constitute a breach of this
Agreement, and shall result in the liability of the breaching Party
for any corresponding damages.
6.2 Each Party shall ensure that , with the appropriate written permission
has been acquired from the other Party, it only discloses trade
secrets of the other Party to its respective employees, advisors,
agents or contractors for the purposes of performing this Agreement.
Furthermore, each Party guarantees to the other Party that any such
employees, advisors, agents or contractors will maintain the
confidentiality of the trade secrets thus disclosed, failing which it
shall be liable for any corresponding damages.
6.3 Each Party shall, upon the other Party's request, return, destroy, or
otherwise dispose of all documents, information or software containing
trade secrets relating to the other Party, and cease to use the said
trade secrets.
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7. Breach
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7.1 In the event that either Party breaches or fails to fully carry out
any of its representations, warranties, agreements or obligations
hereunder, the non-breaching Party may send a written notice to the
breaching Party demanding rectification within ten (10) days, and
demanding that the breaching Party continue to perform the Agreement
and take sufficient, effective and timely measures to clear up any
consequences of such breach, as well as to compensate the non-
breaching Party for any losses that it may have sustained as a
consequence of such breach.
7.2 The total amount for which the breaching Party is liable to compensate
the non-breaching Party for any losses that the latter has sustained
due to it's the breach shall be equivalent to the total actual and
potential losses sustained as a result of the said breach, including
contractual interests that the non-breaching Party would have been
able to obtain upon the Agreement being performed.
8. Force Majeure
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8.1 "Force Majeure" refers to any event, including but not limited to wars
or natural disasters, that is unforeseeable or if foreseeable, the
occurrence and effect of which is unavoidable and insurmountable. In
light of the special nature of computer networks, Force Majeure shall
also include all of the following, where they affect the normal
operation of the Parties' respective computer networks:
8.1.1 attacks by hackers or invasion by or activation of computer
viruses;
8.1.2 failure on the part of either or both Parties, as a result of
the damaged, paralysed or otherwise incapacitated state of
their computer systems, to perform their services or
obligations under this Agreement;
8.1.3 major disruption due to technical adjustments by
telecommunications departments; or
8.1.4 temporary suspension of operations as a result of government
controls.
8.2 Should either Party, due to the occurrence of Force Majeure, fail to
perform this Agreement in full or in part, such Party shall, in
consideration of the effect of the Force Majeure, be exempted from all
or some of its responsibilities hereunder, except where PRC laws
provide otherwise.
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8.3 Should either Party fail to perform in a timely manner its duties
under this Agreement and subsequently Force Majeure were to occur,
such Party shall not be exempted from any of its liabilities hereunder
as a result of its failure to perform said duties.
8.4 Should either Party be unable to perform this Agreement as a result of
Force Majeure, it shall inform the other Party, as soon as possible
following the occurrence of such Force Majeure, of the situation and
the reason(s) for non-performance, so as to minimize any losses
incurred by the other Party as a consequence thereof. Furthermore,
within a reasonable period of time after the notification of Force
Majeure has been provided, the Party encountering Force Majeure shall
provide a legal certificate issued by a public notary (or other
appropriate organization) of the place wherein the Force Majeure
occurred, in witness of the same.
8.5 The Party affected by Force Majeure may suspend the performance of its
obligations under this Agreement until any disruption resulting from
the Force Majeure has been resolved. However, such Party shall make
every effort to eliminate any obstacles resulting from the Force
Majeure, thereby minimising to the greatest extent possible the
adverse effects of such, as well as any resulting losses.
9. Effective Date and Term
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9.1 Subject to the provisions of Article 10.2 hereof, this Agreement shall
be effective as of the date first indicated above shall have a term of
twenty (20) years and may be extended upon its expiry by the mutual
written consent of the Parties.
9.2 Should either Party wish to extend the term of this Agreement, it
shall notify the other Party to this effect in writing at least thirty
(30) days prior to the expiry hereof, to which the other Party shall
respond in writing within ten (10) days thereafter.
10. Amendments and Termination
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10.1 This Agreement shall not be amended or assigned, except by means of a
written instrument executed by the duly authorised representatives of
the Parties.
10.2 This Agreement may only be terminated in the following situations:
10.2.1 with the mutual written consent of the Parties following
consultation;
10.2.2 within ten (10) days following the issue by the non-
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breaching Party of a written notice in accordance with Article
7.1 of this Agreement, the breaching Party fails to remedy the
breach or to take sufficient, effective and timely measures to
resolve any consequences of the said breach, or to compensate
the non-breaching Party for any losses it may have sustained as
a consequence of that breach, the non-breaching Party shall be
entitled to terminate this Agreement unilaterally by means of a
written notice; or
10.2.3 where Force Majeure prevails for thirty (30) or more days, such
that the continued performance of this Agreement becomes
impossible, either Party shall be entitled to terminate this
Agreement by means of a written notice, with immediate effect.
10.3 The termination or early termination of this Agreement for any reason
whatsoever shall not affect:
10.3.1 the validity of any provisions contained herein concerning the
settlement of accounts and damages;
10.3.2 the obligations of Party B under Article 5 of this Agreement in
respect of the limitation of rights;
10.3.3 the continuing obligations of the Parties under Article 6 of
this Agreement to observe their commitments in respect of
confidentiality.
11. Settlement of Disputes and Applicable Law
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11.1 Should a dispute arise between the Parties in connection with the
interpretation or performance of this Agreement, they shall attempt to
resolve such dispute through friendly consultations between
themselves. If the dispute cannot be resolved within thirty (30) days
after the commencement of such consultations, then either Party may
submit it to the China International Economic and Trade Commission in
Beijing for arbitration in accordance with its current effective
arbitration rules.
11.2 The execution, validity, interpretation and performance of this
Agreement shall all be subject to the laws of the PRC, as shall the
resolution of any disputes arising in respect of this Agreement.
11.3 During arbitration, the Parties shall, to the extent possible,
continue to implement those parts of this Agreement unrelated to such
arbitration.
12. Notices
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12.1 Unless prior notice of a change of address is given by the relevant
Party, all correspondence between the Parties during the performance
of this Agreement shall be delivered either in person, by express
courier, facsimile transmission, registered mail or e-mail to the
following correspondence addresses:
Party A: Sohu ITC Information Technology (Beijing) Co., Ltd.
Address: Suite 1519, Tower 2 Bright China Chang An
Building, No. 7 Jiangguomennei Avenue, Beijing, PRC
Zip code: 100005
Telephone: (86 10) 6510 2160
Facsimile: (86 10) 6510 2159
E-mail: tom@itc.com.cn
Contact person: Mr Tom Gurnee
Party B: Beijing Sohu Online Network Information Services
Co., Ltd.
Address: No.7 Beibingmasi Hutong, Dongcheng District,
Beijing, PRC
Zip code: 100027
Telephone: (86 10) 6510 1234
Facsimile: (86 10) 6510 1234
E-mail: maxguo@sohu.com.cn
Contact person: Mr Max Guo
12.2 Notices or communications shall be deemed to have been received:
12.2.1 at the exact time displayed in the corresponding transmission
record, if delivered by facsimile, unless such facsimile is
sent after 5:00 p.m. or on a non-business day in its place of
receipt, in which case the date of receipt shall be deemed to
be the following business day in the place of receipt;
12.2.2 on the date that the receiving Party signs to acknowledge
receipt of the correspondence, in the case of delivery by
person (including express mail);
12.2.3 fifteen (15) days after the date shown on the registered mail
receipt, in the case of a registered letter; or
12.2.4 on the successful printing by the sender of a transmission
report evidencing the delivery of the relevant e-mail, in the
case of an e-mail transmission.
13. Miscellaneous
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13.1 Failure or delay on the part of either Party to exercise any right
hereunder shall not operate or be interpreted as a waiver thereof, nor
shall any single or partial exercise of any right preclude any other
future exercise thereof.
13.2 The invalidity of any provision of this Agreement shall not affect the
validity of any other provision hereof.
13.3 Any matter not specified in this Agreement shall be handled through
discussions between the Parties and resolved in accordance with the
laws of the PRC.
Attachment: Assets and Business Restructuring Agreement
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SIGNED for and on behalf of
Sohu ITC Information Technology (Beijing) Co., Ltd. (affix company seal)
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Signature of authorised representative
Name :
Title :
SIGNED for and on behalf of
Beijing Sohu Online Network Information Services Co., Ltd (affix company seal)
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Signature of authorised representative
Name : He Jinmei
Title :
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