INFORMATION AND COMMUNICATIONS TECHNOLOGY AGREEMENT BY AND BETWEEN CHINA NETWORK COMMUNICATIONS GROUP CORPORATION AND CHINA NETCOM GROUP SYSTEM INTEGRATION LIMITED CORPORATION
EXHIBIT 4.37
BY AND BETWEEN
CHINA NETWORK COMMUNICATIONS GROUP CORPORATION
AND
CHINA NETCOM GROUP SYSTEM INTEGRATION LIMITED CORPORATION
This Agreement is made and entered into on November 6, 2007 in Beijing by and between the following
two parties (hereinafter referred to as “both Parties” or “Party A and Party B”):
Party A:
|
China Network Communications Group Corporation, a state owned enterprise organized existing under the laws of the People’s Republic of China (“PRC”) | |
Address:
|
Xxxxxxxx X, Xx.000, Xxxxxxxxxxxx Xxxxxx, Xxxxxxx | |
| Xxxxxxxx, Xxxxxxx, PRC | ||
Party B:
|
China Netcom Group System Integration Limited Corporation, a limited liability company organized existing under the laws of the PRC | |
Address:
|
Xx.0, Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx and Technology Development District, Beijing, PRC |
Whereas:
(1) Party B is a company ultimately controlled by Party A through the Listed Company and China
Netcom (Group) Company Limited.
(2) The Listed Company is the main provider on fixed-line telephone, broadband, other
internet-related services, and business and data communication services in 10 provinces in northern
China, including Beijing, Tianjing, Hebei, Henan, Shandong, Liaoning, Hei Longjiang, Xx Xxx, Nei
Menggu and Shanxi.
(3) Party A owns and operates fixed-line telecommunication network, and provides
telecommunication services on fixed-line telephone, broadband, and other internet-related
telecommunications services in all provinces of the PRC other than Listed Company’s northern and
southern service area.
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(4) Party A and Party B coordinate to provide information technology services for external
clients regarding system integration services, software development services, product sales and
distribution related services, operational maintenance services, and consultancy services in the
PRC.
(5) Prior to the date of this Agreement, Party A and the Listed Company, through their relevant
subsidiaries, have been providing Information Technology Service to external clients in China.
Pursuant to basic principles and pricing principles provided in Article 4 and Article 5 of this
Agreement, Party A and the Listed Company, along with their relevant subsidiaries, agree to provide
Services listed in Article 3.1 and Article 3.2 of this Agreement to each other.
(6) Party A and its relevant subsidiaries, in day-to-day businesses, need relevant supporting
Services provided by Party B and its relevant subsidiaries.
(7) Party B and its relevant subsidiaries, in day-to-day businesses, need relevant supporting
Services provided by Party A and its relevant subsidiaries.
On equal and fair basis, both Party A and Party B agree to the following agreement after adequate
negotiation:
1. DEFINITION
Unless otherwise provided or required, the following expressions have the meanings set forth below:
“Listed Company” means China Netcom Group Corporation (Hong Kong) Limited, a company incorporated
and existing under laws of Hong Kong and listed on the Hong Kong Stock Exchange and the New York
Stock Exchange;
“Services” means all kinds of services provided under Article 3 of this Agreement;
“Service Receiver” means the Party and its relevant subsidiaries that receive the Services provided
by Service Provider;
“Market Price” means the price determined by the business operator and attained through market
competition. The market price shall be determined by the following order: (1) the price charged by
any independent third party providing the same kind of services in the same or surrounding area
under normal situation; or (2) the price charged by any independent third party providing the same
kind of services within China under normal situation;
“Service Provider” means the Party and its relevant subsidiaries that provide Services to the
Service Receiver;
“State Price” means price set by the governmental pricing department or other related departments
based on the pricing limits and range under the Pricing Law of the People’s Republic of China;
“Government Guidance Price” means price set by business operators following guidance provided by
the governmental pricing department or other related departments based on the pricing limits, basic
price range and its floating range under the Pricing law of the People’s Republic of China;
“China” means People’s Republic of China, excluding Hong Kong, Macao, and Taiwan for the purpose of
this Agreement;
“Hong Kong” mans Hong Kong Special Administrative Region of People’s Republic of China; and
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“Listing Rules” means the securities listing rules of the Hong Kong Stock Exchange.
2. SERVICES PROVISION AND RECEPTION
2.1 Party A agrees to urge its relevant subsidiaries to provide relevant Services to Party B and
its relevant subsidiaries pursuant to terms and conditions of this Agreement as the Service
Provider. Party B agrees to urge its relevant subsidiaries to receive such Services pursuant to the
terms and conditions of this Agreement. In the meantime, Party B agrees to urge its relevant
subsidiaries to provide relevant Services to Subsidiaries of Party B pursuant to the terms and
conditions of this Agreement as Service Providers, and Party A agrees to urge its subsidiaries
appointed by it to receive such Services pursuant to the terms and conditions of this Agreement as
Service Receivers. Both provision and reception of such services are non-exclusive.
3. CONTENTS OF THE SERVICES
3.1 Under this Agreement, Party A and its relevant subsidiaries shall provide the following
Services as Service Providers:
3.1.1 Construction and Installation Supporting Services
Construction and Installation Supporting Services include, but not limited to, providing project
planning and designing, exploration, construction, supervision and testing services according to
individual requirement, and installing cables, cabinets, network cabling, terminal equipments,
technology business supporting system, system maintenance, and the entire service process for
meeting certain usage requirements.
3.2 Under this Agreement, Party B and its relevant subsidiaries shall provide the following
Services as Service Providers:
3.2.1 System Integration Services
Including, but not limited to, the entire service process of integrating software, hardware and
network by certain functions and usage requirements for purpose of realizing certain functions and
meeting certain usage requirements according to individual requirements. The contents of system
integration services include, but not limited to, designing, installation and collocation, project
construction, installation and collocation of supporting software, network adjustment and testing,
system joint adjustment, and application development.
3.2.2 Software Development
Including, but not limited to, the entire service process of developing certain application
software by using basic operating system, data room and development tools for purpose of realizing
certain functions and meeting certain usage requirements according to individual requirements.
3.2.3 Product Sales and Distribution Related Services
Including the sale of software products and all kinds of hardware equipment products produced by a
third party to Party A or its relevant subsidiaries.
3.2.4 Operational Maintenance Services
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Including, but not limited to, providing maintenance and relevant consultancy services regarding
the structure, process, software and hardware of the IT system, and maintenance of all kinds of
network system and business platforms.
3.2.5 Consultancy Services
Including, but not limited to, providing project research and development services, providing
solutions for information systems and communication systems, etc., and providing evaluation and
testing services for all kinds of software and hardware products, and platforms and systems.
3.2.6 Leasing Services
Including, but not limited to, providing leasing services regarding network, equipments and
application systems according to individual requirements.
4. BASIC PRINCIPLES
4.1 For the Services provided by the Service Provider to the Service Receiver under this
Agreement, the Service Provider reserves the right to charge reasonable service fees under the
terms of this Agreement. The Service Receiver shall make the payment for the Services rendered.
4.2 The terms of Services offered by the Service Provider under this Agreement shall not be worse
than the same or similar services it offers to any other third party.
4.3 Services provided under this Agreement shall meet the standards required by the State, if
applicable.
4.4 Under conditions of not violating the State’s prohibitive regulations, the Service Provider
may entrust a third party, including its subsidiaries, affiliates and related companies, to provide
certain specific Services under this Agreement to the Service Receiver on behalf of the Service
Provider. However, the Service Provider shall ensure that such third party has the required
qualifications required by the State, that the Service standard provided by such third party is not
worsen than the standard undertaken by it, and that it takes ultimate and all the responsibilities
for all the obligations therefore raised.
4.5 In the event of any breach of this Agreement by either Party that leads to any damage
suffered by the other Party, the Party in breach shall be liable for all immediate and full damages
for breaching this Agreement. However, In the event of Force Majeure that causes both Parties or
either Party to fail completely or partially in performing the obligations under this Agreement,
that said Party is not liable for breach of agreement.
4.6 Both Parties shall provide all reasonable and essential assistance to the other Party for the
purpose of fulfilling the obligations set out in this Agreement.
4.7 Under conditions of compliance of this Agreement, the relevant subsidiaries of Party A and
Party B may sign specific execution documents regarding the provision of certain Services within
their authorized scope, and may agree on the specific content, standard, scope, method, or any
other specific requirement of the Services. But such agreement shall not go beyond the content of
this Agreement and shall not have any conflict with this Agreement.
5. PRICING PRINCIPLE
5.1 The pricing or charging standard under this Agreement shall be governed by the principle in
this provision and in the following order: those that are fixed by the State shall follow the
Government-Fixed
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Price; those that have the Government Guidance Price shall follow the said guidance price; those
that have no fixed price nor government guidance price yet have a Market Price shall follow the
Market Price.
5.2 Party A and Party B agrees that if the Market Price is followed due to lack of fixed price or
government guidance price, when the contract value of any construction, installation and supporting
services provided by Party A and its relevant subsidiaries to Party B and its relevant subsidiaries
exceeds XXX 000 xxxxxxxx xxxx, a bidding process must be conducted to settle the price, which means
that the pricing basis is to settle the price by holding a publicly bidding event in accordance
with the Bidding Law of People’s Republic of China.
5.3 Party A and Party B agree that if the Market Price is followed due to lack of fixed price or
government guidance price, when the contract value of any system integration, software development,
operational maintenance, consultancy and leasing services provided by Party B and its relevant
subsidiaries to Party A and its relevant subsidiaries exceeds XXX 000 xxxxxxxx xxxx, xx the
contract value of any single product sales and distribution related services exceeds RMB 2 million
yuan, a bidding process must be conducted to settle the price, which means that the pricing basis
is to settle the price by holding a publicly bidding event in accordance with the Bidding Law of
People’s Republic of China.
5.4 Under conditions of not violating the laws of China, for the same kind of Services, if an
independent third party cannot offer better conditions and terms to the other Party, one Party have
preferential right to use the Services from the other Party.
5.5 Both Parties will sign the specific execution documents separately if one Party of this
Agreement is successful in the bidding, and such execution documents must carry the terms regarding
specific services needed, as well as the binding principles, terms and conditions.
5.6 The specific amount of service charge agreed upon under this Agreement shall from time to
time be calculated by the accounting principles applicable in China (if applicable).
5.7 Both Parties shall, before December 31 of every calendar year, conduct a review on the price
of every item of services and facilities stated in this Agreement for the next accounting year (if
necessary).
6. PAYMENT OF SERVICE CHARGE
6.1 The Service Receiver shall, based on the provisions of this Agreement, any supplementary
agreement of this Agreement (if any), and in specific execution documents, pay the Service Provider
service charge in consideration for the Services provided by the Service Provider.
6.2 If the Service Receiver fails to pay on time the said service charge agreed upon under the
provisions of this Agreement, any supplementary agreement of this Agreement (if any), and the
specific execution documents, the Service Receiver shall, for each 1 day (calendar day, and the
same applies below) late, pay a late charge penalty of 0.05% of the outstanding balance to the
Service Provider; and after 60 days of late payment, the Service Provider is entitled to notify the
Service Receiver the termination of Services; if the Service Receiver still fails to pay for the
outstanding balance upon 30 days after receiving the written notice to terminate Services, the
Service Provider shall be entitled to terminate the Services immediately. The suspension or
termination of such Services shall not in any way prejudice or affect the rights and obligations
under this Agreement prior to such event.
7. REPRESENTATIONS, WARRANTIES, AND UNDERTAKINGS
7.1 Each Party represents, warrants and undertakes to the other Party that this Agreement is
legitimate, effective, and equally binding on both Parties.
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7.2 Each Party of this Agreement warrants and undertakes to the other Party that:
(1) It is an independent legal person existing in accordance with the laws of China, and have the
power and authority (including but not limited to any approval, consents or permission granted by
the government departments to enter into and perform this Agreement);
(2) No provision in this Agreement violates the constitutive documents or the laws and
regulations of China;
(3) It will use its best endeavors to take all necessary and procure appropriate or advantageous
measures to perform its obligations under this Agreement and to make this Agreement effective in
accordance with the laws and regulations of China and the terms of this Agreement.
7.3 Party A and Party B each warrants to the other Party that its relevant subsidiaries have
agreed to execute this Agreement as Service Receiver and Service Provider respectively from the
effective date of this Agreement.
7.4 Party A and Party B each warrants to the other Party that its relevant subsidiaries who
provide Services have all the qualifications and licenses that are required by the State’s
supervision authorities, and that such qualifications and licenses are continuously effective
within the term of this Agreement.
7.5 Party A and Party B each warrants to the other Party that its relevant subsidiaries who
provide Services hire qualified, highly experienced, and professional employees, and that the
number and skills of such employees meet the needs under this Agreement.
7.6 Party A and Party B each warrants to the other Party that employees of its relevant
subsidiaries who provide Services are able to receive sufficient guidelines and instructions
regarding such Services under this Agreement, have reasonable care and technology to meet the
standard required by the other Party, and will not cause damage to the Service Receiver because of
employees’ behaviors.
7.7 Party A and Party B each warrants to the other Party that its relevant subsidiaries will
receive Services provided by the other Party (and its subsidiaries), provide necessary conditions
and assistance, and will not cause damage to the Service Receiver because of employees’ behaviors.
7.8 It is agreed that both Parties will take further actions to ensure the realization of the
principles and provisions in this Agreement. It is further agreed that both Parties will ensure
that, Party B, being a subsidiary of Listed Company, shall comply with the Listing Rules of the
Hong Kong Stock Exchange for connected transactions.
8. TERM
8.1 This Agreement shall come into effect from January 1, 2008 to December 31, 2010. If agreed by
both Parties, this Agreement shall be renewed automatically for another 3 years on the same terms.
There is no limit on the number of renewal.
8.2 Both Parties agrees that from the date on which this Agreement takes effect, the Information
Communication Technology Agreement executed by both Parties on November 7, 2006 will be terminated
and replaced by this Agreement.
9. FORCE MAJEURE
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9.1 In the event of Force Majeure that causes both Parties or either Party to fail completely or
partially in performing the obligations under this Agreement, that said Party is not liable for
breach of agreement. However, in the event of such an incident, the affected Party shall inform the
other Party by written notice within fifteen (15) days after the said incident and provide relevant
proof and evidence to the other Party. At the same time, the affected Party shall use its best
endeavors to minimize the damage caused by the Force Majeure event. The affected Party or both
Parties shall resume its obligations under this Agreement within a reasonable time once the Force
Majeure event has ended.
9.2 Force Majeure in this Agreement means all objective situations that are unforeseeable,
unavoidable and that cannot be overcome.
10. CONFIDENTIALITY
10.1 Unless with written approval by the other Party, neither Party can announce nor supply or
reveal to any third Party any information regarding this Agreement or the business information of
the other Party, with the exception of requests by the legal or governmental departments or any
other relevant securities regulatory authorities or for the purpose of the Listing Company seeking
listing or retaining listing.
11. TRANSFER OF RIGHTS AND OBLIGATIONS
11.1 Unless otherwise specified by Article 4.4 of this Agreement, without the written approval of
the other Party, neither Party may transfer any single right and obligation as agreed upon under
this Agreement.
12. NON-WAIVER
12.1 Unless otherwise specified by law, the failure or delay of exercising the right, power or
privilege as endowed by this Agreement on the part of any Party cannot be deemed as the waiver of
such rights, power or privileges. Besides, the partial exercise of such rights, power or privileges
should not hinder the exercise of such rights, power or privileges of this Party in the future.
13. NOTICE
13.1 All notices required to be delivered pursuant to this Agreement shall be in writing, and
delivered to the address as stated at the beginning part of this Agreement, or to addresses or
facsimile numbers designated by one Party to the other Parties in writing from time to time.
13.2 Any notice shall be delivered either by hand, registered mail, or facsimile. Any notice shall
be deemed to have been delivered at the time of actual receipt if delivered by hand; three days
after the date of return receipt if delivered by registered mail; and at the time of transmission
if delivered by facsimile.
14. GOVERNING LAW AND DISPUTE RESOLUTION
14.1 This Agreement shall be governed, interpreted, and executed in accordance with the laws of
China.
14.2 In case of disputes as to the power, interpretation or implementation of this Agreement,
both Parties shall seek to settle the matters of dispute by friendly negotiation. If the matters of
dispute cannot be settled by negotiation within thirty (30) days from the day the matters of
dispute arise, either Party has the right to resort to litigation at the people’s court which has
jurisdiction over such Party.
15. EFFECTIVENESS AND MISCELLANEOUS
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15.1 This Agreement will come into effect upon signed and sealed by the legal representatives or
authorized representatives of both Parties.
15.2 This Agreement may be made in several copies and executed by each Party separately, which
together form an effective Agreement. If this Agreement is signed on copies, the date on which each
Party successfully exchange the signed copy by facsimile is considered the signing date.
15.3 Under condition where the Listed Company meets the supervision requirements on related party
transaction provided by Listing Rules, this Agreement may be amended or supplemented as agreed by
both Parties. All such amendments or supplements shall come into effect only when executed or
sealed by the legal representative or authorized representative of both Parties.
15.4 This Agreement is severable, that is, if any provision of this Agreement is held to be void,
illegal, or unenforceable at any time, the effectiveness and performance of other provisions of
this Agreement shall not be affected.
15.5 This Agreement is made into four (4) duplicate originals. Each party holds two (2) copies,
and each copy shall have the same legal binding effect.
IN WITNESS WHEREOF, the legal representatives or authorized representatives of the both Parties
hereto have executed this Agreement as of the date and venue first written above.
Signature Page
| PARTY A: CHINA NETWORK COMMUNICATIONS GROUP CORPORATION (SEAL) |
||||
| By: | /s/ Zuo Xunsheng | |||
| Legal representative or Authorized representative | ||||
| PARTY B: CHINA NETCOM GROUP SYSTEM INTEGRATION LIMITED CORPORATION (SEAL) |
||||
| By: | /s/ Sun Shizhen | |||
| Legal representative or Authorized representative | ||||
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