Short Messaging Services Agreement - Beijing Mobile Communication Co. Ltd. and Beijing Lei Ting Wan Jun Network Technology Ltd.
[Translation of Chinese original]
Short Messaging Services Agreement
Contract No.: LTWJ-1578
Execution date:
Party A: Beijing Mobile Communication Co., Ltd.
Authorized representative: Sha Yuejia
Address: 58 Dongzhong Street
Dongcheng District
Beijing
The People's Republic of China
Postal code: 100027
Tel: 65546699
Fax: 65541330
Banker:
Bank account:
Party B: Beijing Lei Ting Wan Jun Network Technology Limited
Legal representative: Wang Leilei
Correspondence address: 8/F Block 3
West Tower
Oriental Plaza
1 Dongchangan Avenue
Dongcheng District
Beijing
The People's Republic of China
Postal Code: 100738
Tel: 65283399
Fax: 85181165
Banker: Bank of China, Beijing Economic and Technology
Development District branch
Bank account: 08675908091001
Beijing Mobile Communication Co., Ltd. (hereinafter "Party A") is a mobile
communications operator and mobile data service provider. It provides an open
communications platform for service providers. Beijing Lei Ting Wan Jun Network
Technology Limited (hereinafter "Party B") is a value-added communication
service provider authorised by the communication service regulatory authority to
provide value-added short messaging service to mobile users. To provide better
services to their users, Party A and Party B enter into this agreement through
thorough and arm's length negotiation on a mutual and cooperative basis to
jointly undertake the Monternet Short Message Service(s) on the following terms:
<PAGE>
1. Basic Description of the Cooperation
(A) Conditions
(1) Party B must be in full compliance with the requirements of the Order (No.
292) "Regulations on Internet Content/Application Services" promulgated by
the State Council of the People's Republic of China (hereinafter the
"PRC"), is qualified to provide internet content services with a
well-established after-sale service system and legal and reliable sources
of contents and other necessary resources for its operation.
(2) Where Party B is Party A"s local cooperation partner, Party B may only
provide Monternet short message services to mobile users of China Mobile in
the Beijing region through the short message channels of Party A.
(3) Party B shall promptly provide to Party A detailed statement of its
operation and its proposal on marketing strategy.
(4) Party A will conduct regular inspections on Party B's operation according
to the Monternet Short Message Service(s) Management Memorandum. If Party B
fails in the inspection, Party A may terminate this joint venture
relationship with Party B.
2. Rights and Obligations
(A) Rights and Obligations of Party A
(1) Party A shall allow Party B access to its short message gateway for the
provision of value-added short messaging services. Party A may regulate the
traffic of such short messages in accordance with the capacity of its short
message centre. If the regulation could affect the services of Party B,
Party A shall promptly notify Party B in advance.
(2) Party A shall provide a well-established GSM mobile communications system
and shall guarantee its stability and availability. Upon receipt of
notification from Party B of any communication issues thereof, Party A
shall promptly remedy the same to avoid any interruption to Party B's
operations.
(3) Party A shall allow Party B access to its technical protocol standards and
access information of its short message gateway and any related parameters.
Party A shall also provide Party B all necessary technical documentation
for their communications connection and shall assist to solve in a timely
manner any communications problems encountered by Party B in the process.
<PAGE>
(4) Party A shall be responsible for the software and hardware necessary for
its short message platform and shall bear their operating costs.
(5) Party A shall revise its billing system, including the bank's fee
collection system, and shall be responsible for the provision of all
relevant hardware and software.
(6) Party A shall provide billing and fee collection services to Party B and
shall monitor such operation of Party B and ensure the accuracy of fee
calculation. Party A shall issue invoice for such message service to users.
Party A shall also provide fee statement to users upon request.
(7) Subject to the circumstance, Party A shall promptly provide Party B with
the related information of invalid users of Monternet (those who with
cancelled account, terminated service and overdue message fees), for Party
B to follow up on such invalid users.
(8) Party A and Party B shall conduct marketing and promotional activities for
such services jointly.
(B) Rights and Obligations of Party B
(1) Party B shall be responsible for the development and maintenance of its
software and hardware, including but not limited to the testing,
implementation and maintenance of all hardware and systems involved in the
project, business operation, marketing and shall bear the relevant costs.
(2) Party B shall provide the pre-agreed contents and applications to users of
China Mobile. Party B shall ensure that the contents provided are legal,
timely, and reliable and do not violate any policy, regulation or order of
the State. Party B shall be responsible for any consequences arising from
illegal contents.
(3) The URL of Party B's user account interface is sms.tom.com, which is used
for acknowledging to users the contents and services provided by Party B.
Such interface shall also at least provide basic functions such as
identification, addition, deletion, alteration and inquiry, as well as a
billing inquiry function in relation to information fees. Party B shall
provide a clearly stated tariff structure to the users. The minimum
interval for any changes to the tariff structure is six months, i.e. the
tariff structure may not be changed within six months from the launch of a
service (whether a new or revised service). Party B shall maintain service
records of all users for at least three months and shall maintain permanent
records of user subscription. Party B shall also allow Party A access to
such service records.
<PAGE>
(4) Party B shall take necessary measures to effectively manage invalid
Monternet accounts. To ensure the healthy operation of all Monternet
services, Party B may not knowingly provide message communication services
to the invalid accounts.
(5) Where Party A's communication system has been affected by Party B's
systems, Party B shall comply with the regulation arrangements made by
Party A in relation to the short message broadcast capacity allocated to
Party B to ensure the normal and stable provision of short message service.
Any user dispute so arisen shall be dealt with and consequences borne by
Party B.
(6) Party B may not, while this agreement is in force, send irrelevant messages
such as advertisements to the users through the channel provided by Party
A. Party B shall frequently inspect the contents of short messages and
shall exercise effective control the number of broadcasting messages by the
users (no more than two messages each time) and the number of messages sent
in a specified period (no more than 100 messages per hour). Party B shall
also adopt effective technologies to safeguard the Monternet against
illegal acts such as hacker attack, theft of passwords and unauthorized use
of web page.
(7) During the term of this agreement, Party B shall, at the request of Party
A, provide reports on user base development, profile, preferences and
business forecast before the fifth calendar day of each month in the form
as set out in Annex 1. Party A has obligations of confidentiality to such
information in accordance with Clause 9.
(8) Party A and Party B shall conduct marketing and promotional activities for
such services jointly.
<PAGE>
3. Sharing of Rights and Obligations
(A) Party B shall be responsible for user complaints arising from the message
contents or services or communication issues between Party A and Party B,
whereas Party A shall be responsible for user complaints concerning the
short message gateway and short message centre. The sharing of maintenance
responsibilities is as follows:
[CHART APPEARS HERE]
(B) Contents or applications provided by Party B shall not exceed the agreed
scope, failing which Party A shall have the right to revoke this agreement
and Party B shall be responsible for its defaulting liabilities. Party A
has the right to supervise the operation of Party B and Party B shall
cooperate to ensure that its operation does not have adverse effect to the
daily operation of Party A. If the operation of Party B violates any
provision herein resulting in an adverse effect to the daily operation of
Party A, Party A shall have the right to revoke this agreement and Party B
shall be responsible for its defaulting liabilities.
(C) If Party B intends to change the cooperation scope contemplated in this
agreement or to adjust the fee of certain services, it shall give a written
notice to Party A in advance. Party A shall give its written consent to
Party B if it agrees to the fee adjustment. If Party A gives written
consent to the change of business scope, Party B shall conduct trial runs
of the new service and shall submit to Party A regular trial run reports.
The new service may not be launched until upon satisfaction of Party A that
it is mature. For details, please refer to Annex 2.
<PAGE>
4. Income of Both Parties
A. The message fee receivable by Part A arising from the use of short message
service under this agreement by Party A's mobile user is RMB0.10 per
message. The message fee payable by the mobile users in relation to use of
services contemplated herein shall in principle be determined by Party B
and reported to China Mobile Communication Corporation (hereinafter "China
Mobile") for approval. Party A proposes to adopt a tariff ceiling (the
ceiling for tariff per message is RMB2 while that for tariff per month is
RMB30). Party B shall submit the suggested tariff structure to the relevant
pricing authority for approval of the and shall notify Party A of the
approved tariff structure promptly.
(B) Party A shall provide billing and fee collection services to Party B. The
aggregate message billing amount of all users in Beijing for each billing
month is the accrued message service fee in the Beijing region. Party A
shall pay to Party B 85% of such accrued message service fee and shall bear
the risk of uncollectible fee. Where Party B is Party A's network-wide
partner providing Monternet value-added services to China Mobile users
across the People's Republic of China (hereinafter the "PRC"), the
aggregate message billing amount of all users in other cities and provinces
for each billing month is the accrued message service fee for mobile
service providers of other cities and provinces. The said message service
fee shall be collected by such mobile service providers who shall pay the
fee to Party A according to the settlement proportion prescribed by this
agreement, being 85% of the accrued message service fee in the region.
Party A shall transfer to Party B all the accrued message service fee so
collected.
(C) For the unequal communication compensation incurred to Party B arising from
the difference between the number of short messages sent by Party B to the
users across the PRC (downloaded messages) in excess of that sent by the
users across the PRC to Party B (uploaded messages) (such difference is
called "unequal communication"), Party A shall charge Party B on the basis
of RMB0.05-0.10 per message. The detailed fee structure is set out below:
--------------------------------------------------------------------------------
Unequal
downloaded short Calculation:
message (per month) Fee (RMB/message) X=(MT-MO)message/month
--------------------------------------------------------------------------------
Below 100,000 0.08 X*0.08, minimum $2000
--------------------------------------------------------------------------------
100,000-300,000 0.07 (X-100,000)*0.07+100,000*0.08
--------------------------------------------------------------------------------
300,000-1,000,000 0.06 (X-300,000)*0.06+200,000*0.07+
100,000*0.08
--------------------------------------------------------------------------------
Above 1,000,000 0.05 (X-1,000,000)*0.05+700,000*0.06+
200,000*0.07+100,000*0.08
--------------------------------------------------------------------------------
<PAGE>
5. Settlement
(A) Place of settlement: to be established pursuant to the request of Party A.
(B) Settlement:
(1) The equipment of Party B is connected to Party A's short message centre
through the short message gateway of Party A. Charged messages shall be
counted on the basis of the records of the short message gateway of Party
A. The fee shall be calculated monthly during the period from the 15th to
20th calendar day of each month for the fee incurred in the last fee
calculation period. Party A shall calculate the message fee receivable by
Party B and unequal communication compensation payable to Party A after the
billing period for that month and the result shall form the basis of
settlement between both parties.
(2) Both parties shall determine the the accrued message service fee of the
current month according to the billing system of Party A. 85% of the
accrued message service fee so determined will be subtracted by the unequal
communication compensation receivable from Party B. Where the net amount is
positive, Party A shall pay such net amount to Party B and receive the
relevant invoice thereof. Where the net amount is negative, Party B shall
pay the net amount to Party A and receive the relevant invoice thereof. The
receiving party shall issue and mail the invoice to the paying party within
three days upon receipt of the amount (as evidenced by post chop)..
(3) Party A and Party B shall strictly comply with such requirements on
settlement and fee calculation period. Where any party fails to pay the
required amount as it falls due on the 20th calendar day of each month, a
daily penalty of 0.1% of the amount due shall be payable by the defaulting
party to the receiving party. If the amount remains overdue for over two
months despite demand for payment is made, the receiving party has the
right to take legal action therefor and all legal costs and liabilities so
incurred shall be borne by the defaulting party.
6. Marketing and Promotion
(A) Party A and Party B may use their respective resources to market and
promote the joint services based on the principle of mutual benefit.
(B) In principle, Party A will only market and promote the Monternet brand name
and its major applications but not the Monternet joint services separately.
<PAGE>
(C) Party B will promote its brand name, the relevant Monternet services and
Monternet brand name. Party B must strictly follow the specifications for
the brand name when using the Monternet logo and may not use any different
shape or colour. Party B shall notify Party A prior to the actual use of
such logo.
(D) Party B shall not use the Monternet brand name beyond the sales and
marketing of the Monternet services, failing which Party A has the right to
forbid Party B from using the logo and Party B shall be responsible for the
consequence of such improper use. Party A may also take legal action
depending on the seriousness of the case.
(E) When preparing the Monternet promotion materials and advertisements, Party
B shall clearly state its customer service hotline number, website and
email address for complaints in prominent places. Party B may not use any
rival products of China Mobile as gifts or prizes for the purpose of
marketing and promotion of the Montenetservices.
7. Customer Service
(A) Monternet short messages to be received by the users are restricted to
those ordered or subscribed by the users. Party B shall ensure that the
messages provided are decent and legal. Party A has the right to inspect
the contents of such short messages and take necessary enhancement
measures. Details are set out in Annex 3.
(B) Party B shall ensure that the users are fully aware of the price, broadcast
frequency, usage and contents of the services before use.
(C) Party A shall deal with any user enquires and complaints arising from
communication issues.
(D) In respect of the Monternet services, the 1860 customer service centre and
offices of Party A shall deal with users' enquires and complaints. Enquires
and complaints in relation to contents and services shall be referred to
Party B by Party A.
(E) Party B shall set up a 24-hour hotline and notify its users by means of its
website and promotion materials.
(F) Party B shall assign a dedicated representative(s) to deal with user
complaints and shall provide reply within one day.
<PAGE>
(G) To facilitate user access of service information, Party B shall provide for
free download messages concerning service recommendation, customer service
commands and password retrivals. Service alerts such as, inter alia, those
on prices, subscription confirmation, customer service hotline,
subscription cancellation of service , shall be provided to users free of
charge.
(H) In respect of short message services charged on a monthly basis, Party B
may charge a whole-month fee from users whose usage is more than half a
month but less than a month. In case the usage is less than half a month,
Party B may not charge anything for that month.
(I) In respect of service subscription made through the internet, Party B must
provide the required basic information on a prominent place of the web page
before the user confirms the subscription. Upon successful completion of
the subscription, Party B shall send a short message reminder to the
subscriber setting out information including "thank you message",
"confirmation of successful subscription", "message service fee", "sending
frequency", "subscription cancellation method" and "customer service
hotline/website".
(J) In respect of service subscription made via mobile phone, Party B shall
promptly send to the user (including the user charged and the third party
user) a short message reminder setting out information including "thank you
message", "confirmation of successful subscription", "message service fee",
"sending frequency", "unsubscription method" and "customer service
hotline/website" (Optional).
(K) As for initial subscriptions secured through sales and marketing in
physical form (such as by form filling), Party B shall send a second
confirmation message (setting out the required basic information on the
service) to the potential subscriber, and subscription relationship is not
established until upon the potential subscriber's confirmation with
password.
8. Termination of the Agreement
(A) Party B may not deliver any message to users with invalid accounts. If
Party B knowingly allow message to be delivered to such users, Party A
shall have the right to demand from Party B compensation of economic loss
arising from the outstanding fee and to terminate this agreement and the
Agreement contemplated herein.
(B) Party B shall ensure that the contents provided do not contravene any
relevant policies, laws and regulations and orders such as the
"Telecommunication Ordinance of the People's Republic of China" and
"Regulations on Internet Content /Application Services". It may not
broadcast information that undermines the State's security and benefit,
advocates sedition or contains pornography. Party B shall also ensure that
the contents it provides do not has
<PAGE>
any adverse effect on the corporate image of China Mobile. Without written
consent by Party A, Party B may not send any irrelevant message such as
advertisements to mobile users through the short message gateway of Party
A. If Party B is found to have committed such acts, it shall compensate
Party A for any financial loss so incurred and Party A shall have the right
to revoke this agreement and terminate the contemplated herein.
(C) If Party A receives user complaints for the receipt of uninvited message
from Party B without any request for Party B's service, Party A shall
notify Party B of the complaints and Party B shall seek out the underlying
causes. Party A will not charge the user and shall return to the user any
fee received. Party A has the right to revoke this agreement and terminate
the joint venture contemplated herein with reference to the seriousness of
the user complaints for the month.
(D) To ensure the healthy operation of the Monternet business, Party B may not
directly or indirectly provide inter-operator short message services
including short message service across domestic operators and international
short message service. Also, Party B may not provide pure fee collection
service through the short message system of Party A. IfParty B is found to
have committed such acts, it shall compensate Party A for any financial
loss so incurred and Party A shall have the right to revoke this agreement
and terminate the joint venture contemplated herein.
(E) When Party A refers to Party B a user complaint , Party B shall be give
Party A's customer service department an initial reply within two hours and
shall seek out the underlying causes within one working day so as to
resolve the complaint. Party A has the right to impose a fine of RMB500 per
complaining user from the fee to be settled for the month. Party A shall
also have the right to revoke this agreement and terminate the joint
venture contemplated herein with reference to the seriousness of the
incident.
9. Confidentiality
(A) Proprietary Information refers to information developed, invented,
discovered by or transferred to and of value to the disclosing party and
obtained by the other party during the term of this agreement, including
but not limited to trade secrets, intellectual properties and technical
know-hows.
(B) Both parties shall protect the intellectual properties, trade secrets and
any other Proprietary Information of themselves or the counterpart. Unless
written consent is given, each party shall keep confidential all
Proprietary Information and may not disclose to any third party the
technical know-hows, trade secrets or any other Proprietary Information of
the other party.
(C) Both Party A and Party B shall keep the particulars of this cooperation and
<PAGE>
this agreement confidential. No party may disclose to any third party the
particulars of this cooperation and this agreement without the prior
written consent of the other party.
10. Defaulting Liabilities
Failure by either party to comply with any provision of this agreement
shall be considered as a default. When a party receives a notice of alleged
default from the other party, the receiving party shall, if the allegation
is found to be valid, take remedial action within 20 days and notify the
other party in writing accordingly. If the receiving party considers that
the allegation is invalid, it shall raise objection or provide explanation
to the other party in writing within 20 days and both parties shall seek to
resolve the matter through negotiation. Where negotiation fails, the matter
shall be resolved in accordance with Clause 12 herein. The defaulting party
shall indemnify all economic loss suffered by the complying party arising
from such default.
11. Disclaimer
If both Party A and Party B or any of them fails to perform or fully
perform their respective obligation under this agreement due to force
majeure, they shall have no defaulting liabilities. The party affected by
the force majeure shall inform the other party with supporting evidence
within 15 days from the occurrence of the same. The party(ies) concerned
shall resume its/their performance of obligation under this agreement once
the effect of the force majeure no longer exists.
12. Resolution of Disputes
Any dispute arising from this agreement shall be resolved through
negotiation, failing which, either party may submit the dispute to Beijing
Arbitration Commission for arbitration. The arbitration so awarded shall be
final and have binding effect on both parties.
13. Effectiveness, Amendment, Termination and Extension of the Agreement
(A) This agreement comes into effect on 1 May 2003 and expires until 31 October
2003. If both parties are agreeable to this agreement during its
subsistence, this agreement will be automatically renewed for six months.
Should there be any objection from either party, the objecting party shall
give the other party a written notice thereof 30 days before this agreement
expires.
(B) This agreement has 12 pages and is in six counterparts. It is given effect
when it is signed and sealed by both parties. Each party shall keep 3
copies which have the same legal effect.
<PAGE>
(C) The annex forms an integral part of this agreement and has the same legal
effect.
(D) During the term of this agreement, both parties may amend the terms of the
agreement or terminate the same as agreed. If either party intends to amend
or terminate the agreement, it shall give 30 days' notice to the other
party. Any party who unilaterally terminate the agreement shall be
responsible for any loss incurred to the other party.
Party A: Beijing Mobile Communication Party B: Beijing Lei Ting Wan Jun
Co., Ltd. (sealed) Network Technolocy Limited
(sealed)
Authorized representative of Party A: Authorized representative of Party B:
(signed) (signed)
Date: Date:
Annexure:
1. Monthly Statistics of Monternet Services
2. Procedures for the Addition of New Service(s)
3. Monternet Interactive Voice Response Business Management Memorandum
<PAGE>
Annex 1: Monthly Statement of Monternet Services
--------------------------------------------------------------------------------
Table 1: Network-wide Short Messaging Service
--------------------------------------------------------------------------------
Serial no.
--------------------------------------------------------------------------------
1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Table 2: Regional Short Messaging Service
--------------------------------------------------------------------------------
Serial no.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Notes:
1. Number of new users: number of new users having logged in and registered at
any SP in the month.
2. Number of users for the month: number of users having used the SP's short
message service for at least once in the month.
3. Number of paying users for the month: number of registered users having
used the SP's charged services.
4. Number of short messages sent and received: total number of short messages
communicated between our network and the SP service terminal.
5. Fill in Table 1 for network-wide short messaging service and Table 2 for
regional short messaging service.
<PAGE>
Annex 2: Procedures for the Addition of New Service(s)
1. If Party B intends to introduce new service(s), it shall file an
application thereof in the specified format before the fifth calendar day
of each month. Any new service application submitted after then will be
handled in the next cycle.
2. Within three working days upon receiving such application from Party B,
Party A shall give Party B a reply clearly specifying whether or not any
trial run is approved.
3. Party B's trial run is to be conducted from the first to the 25th calendar
day of the second month. Party B is required to promptly submit test
reports to Party A. Party A will perform inspection against the test
reports and feedback the findings to Party B. Any late test reports from
Party B will be rejected by Party A..
4. After completion of the trial run, on condition that both parties accepted
that the test results are satisfactory, Party A will notify Party B within
five working days as to when the new service(s) will be launched. In the
event that the test results are unsatisfactory, the trial run will be
terminated or rescheduled for a new round in the next cycle.
Remarks:
In the event that any relevant business management practice is introduced by
China Mobile Communications Corporation, it shall prevail over the above.
<PAGE>
Annnex 3 Monternet Short Message Service(s) Management Memorandum
Chapter 1 General
Clause 1 This memorandum on Moneternet Short Message Service(s) is devised by
Beijing Mobile Communication Co., Ltd. in accordance with "Regulation
on Internet Message" of the PRC and "Inspection and Control of the
Contents of Monternet" of China Mobile to ensure the healthy
development of China Mobile's Monternet Project, the long-term
interests of operators and joint venture partners and the legal rights
of customers.
Clause 2 This memorandum is prepared on a fair and reasonable basis,
implementing open and transparent supervision and control over the
short messages from all Monternet service partners (hereinafter the
"SPs").
Clause 3 This memorandum is subject to supplements and amendments made in
accordance with market conditions. The latest version of this
memorandum shall prevail over all other versions.
Chapter 2 Requirement of Short Message
Clause 4 Delivery of impolite, indecent and abusive short messages in any
form to mobile users is prohibited.
Clause 5 Short Messages undermining the image of China Mobile are prohibited.
Clause 6 Short Messages of indecent contents in any form are prohibited.
Clause 7 Short Messages containing misleading information which may be
deceiving and may induce losses to the users are prohibited.
Chapter 3 Inspection
Clause 8 Beijing Mobile Communication Co., Ltd. will randomly inspect the
short message contents of the SPs of Monternet.
Clause 9 Beijing Mobile Communication Co., Ltd. will conduct public survey to
gauge users' feedback on the message quality of the SPs.
Clause 10 The 1860 customer hotline of Beijing Mobile Communication Co., Ltd.
shall handle user complaints on the contents of short messages.
<PAGE>
Chapter 4 Remedial Measures
Clause 11 If it comes to the notice of Beijing Mobile Communication Co., Ltd.
that any message is inappropriate, Beijing Mobile Communication Co.,
Ltd. will issue a written warning to the relevant SP demanding
rectification within three days.
Clause 12 If the relevant SP fails to rectify such contents, Beijing Mobile
Communication Co., Ltd. may issue another written warning demanding
rectification within three days.
Clause 13 If the relevant SP still fails to rectify its contents after
receipt the second warning, Beijing Mobile Communication Co., Ltd. may
terminate this agreement and demand rectification, depending on the
seriousness of the problem.
Clause 14 If irregularities are frequently found during examination or a
large number of customers' complaints are received in respect of any
SP, Beijing Mobile Communication Co., Ltd. may terminate this
agreement and demand rectification, depending on the seriousness of
the problem.
Chapter 5 By-laws
Clause 16 This memorandum shall be construed by the marketing and sales
department of Beijing Mobile Communication Co., Ltd.
Clause 17 This memorandum shall become effective on the date hereof (May
2001).