EXHIBIT 10.11
ENGINEERING AND INFORMATION TECHNOLOGY SERVICES AGREEMENT
BY AND BETWEEN
CHINA NETCOM (GROUP) COMPANY LIMITED
AND
CHINA NETWORK COMMUNICATIONS GROUP CORPORATION
ENGINEERING AND INFORMATION TECHNOLOGY SERVICES AGREEMENT
THIS AGREEMENT is made and entered into on [-], 2004 in Beijing, People's
Republic of China ("PRC") between the following two parties (hereinafter
referred to as "both parties" or "Party A and Party B"):
Party A: China Netcom (Group) Company Limited
Address: Xxxxxxxx X, Xx. 000, Xxxxxxxxxxxx Xxxxxx, Xxxxxxx
Xxxxxxxx, XXX
Legal Representative: Zhang Xxxx Xxxxx
Party B: China Network Communications Group Corporation
Address: Xx. 000, Xxxxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxxxx, PRC
Legal Representative: Zhang Xxxx Xxxxx
Based on fair and reasonable basis, following cooperative negotiation,
regarding the Project Designing, Construction and IT services provided by Party
B (including branches, subsidiaries, and other controlled units) to Party A
(including branches, subsidiaries, and other controlled units), it is hereby
agreed by and between both parties hereto as follows:
1. BASIC PRINCIPLES
1.1 For the Project Designing, Construction and IT services provided by Party
B to Party A under this Agreement, Party B reserves the right to collect
reasonable service fees under the terms of this Agreement. Party A shall
make the payment for the services rendered.
1.2 The terms of Project Designing, Construction and IT services offered by
Party B under this Agreement shall not be worse than any other third party
offering the same or similar services.
1.3 If Party B fails to provide or fully provide the agreed Project Designing,
Construction and IT services due to reasons other than its own fault,
Party B shall promptly inform Party A in writing, and shall use its best
endeavors to assist Party A to find the same or similar services through
other means.
1.4 The agreed Project Designing, Construction and IT services provided by
Party B to Party A shall fully comply with the purposes agreed upon under
this Agreement and the standard set by the State.
1.5 In the event of any breach of provision by either party under this
Agreement that leads to any damage suffered by the other party, the party
in default shall be liable for all immediate and full damages for
breaching this Agreement.
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1.6 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.
2. BASIC CONTENTS OF PROJECT DESIGNING, CONSTRUCTION AND IT SERVICES
2.1 Project Designing, Construction and IT services to be provided to Party A
by Party B under this Agreement mainly consist of:
(1) Project Designing, including:
Planning & designing, project survey, communication circuitry works
(including plumbing works, optical fiber cables, cable works,
overhead pole and route works), communication equipment works
(including telephone exchange, transmission works, data and
multimedia works, communication power source and air conditioning
works, microwave communication works, systematic technical support
works, etc.), and enterprise communication works;
(2) Project Construction, including:
Communication equipments, communication lines, communication power
supply (including special air conditioning system for communication
projects), communication pipeline, technical business support
system;
(3) Project Supervision.
2.2 IT services to be provided to Party A by Party B under this Agreement
include: office automation, software testing, network upgrading, R & D of
new services, development of support system, etc.
3. PRICING PRINCIPLE
3.1 Except for the cases specified in Clause 3.2 of this section, all price
and/or charging standard under the Agreement shall be determined with the
reference to the market price. The "Market Rate" means the rate determined
by the business operator and attained through market competition. The
market rate shall be determined by the following order: (1) the rate
charged by any independent third party providing the same kind of service
in the same or surrounding area under normal situation; or (2) the rate
charged by any independent third party providing the same kind of service
within China under normal situation.
3.2 Both Parties have agreed that when the value of any project designing or
project supervision services exceeds RMB five hundred thousand (500,000),
or when the value of any project construction services exceeds RMB two
million (2,000,000), then the price to be determined by Invitation for
Tenders will be used as the basis of pricing. In addition, in regard to
the pricing and/or charging standard of other services under this
Agreement, the price determined by Invitation for Tenders (i.e.: the price
that is determined by the way of open invitation of bidding in accordance
with the Law of the Peoples Republic of China on Bid Invitation and
Bidding and other regulations and rules) will be used as the basis of
pricing.
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In the above said bid invitation, there should be at least three (3) or
more service providers present in the bidding, and Party B shall not be
given any preferential treatment by Party A, and Party A will be entitled
to select any independent third party to provide related service to it;
however, on the premise that it is not prohibited by laws and regulations
of China, if the terms & conditions provided by Party B are at least
equally favorable as that provided by an independent third party for a
same service, then Party A may select Party B as the successful bidder.
If Party B is chosen as the successful bidder, Party B shall sign specific
documents for execution, which states clearly specific services required
by Party A at that time, the binding principles within this Agreement, as
well as the terms and conditions for the performance of the said services.
3.3 The specific amount of service charge agreed upon under this Agreement
shall from time to time be calculated by the accounting principle
applicable in China (if applicable).
3.4 Both parties shall, before December 31 of every calendar year, conduct a
review on the price of every item of service and facility stated in this
Agreement for the next accounting year (if necessary).
4. PAYMENT OF SERVICE CHARGE
4.1 Party A shall, based on the provisions of this Agreement, any
supplementary agreement of this Agreement (if any), and in specific
execution documents, pay Party B or its trustee service charge in
consideration for the services provided by Party B or its trustee.
4.2 If Party A 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, Party A 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 Party B; and after
60 days of late payment, Party B is entitled to notify Party A the
termination of service; if Party A still fails to pay for the outstanding
balance upon 30 days after receiving the written notice to terminate
service, Party B shall be entitled to terminate the service immediately.
The suspension or termination of such service shall not in any way
prejudice or affect the rights and obligations under this Agreement prior
to such event.
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5. RIGHTS AND OBLIGATIONS OF BOTH PARTIES
5.1 Rights and obligations for Party A
5.1.1 Rights for Party A
(1) Party A (including its subsidiary, divisions, and other controlled
units) has the right to receive the agreed services provided by
Party B;
(2) The auditor of Party A has the right to inspect and examine the
accounting books of Party B and its connected persons in relation to
the connected transactions under this Agreement..
5.1.2 Obligations for Party A
(1) Guarantee and/or procure its subsidiaries, branches and all other
controlled units to enter into specific execution documents with
Party B and its subsidiaries, branches or controlled units in
relation to this Agreement and/or any supplementary agreement of
this Agreement (if any);
(2) Coordinate with all relating matters with regard to the
abovementioned specific execution documents;
(3) Pay the service charge as stated in this Agreement and all other
specific execution documents;
(4) Guarantee to pay for any damage suffered by Party B or counter party
of specific execution documents that is caused by the breach of
Party A of any provisions in this Agreement and specific execution
documents.
5.2 Rights and obligations of Party B
5.2.1 Rights of Party B
(1) Party B is entitled to the service charge agreed upon under this
Agreement;
(2) Right to provide the same or similar service to a third party, on
the condition that Party B continues to provide the same service
agreed upon under this Agreement.
5.2.2 Obligations of Party B
(1) Guarantee and/or prompt its subsidiaries, branches and all other
controlled units to enter into specific execution documents with
Party A and its subsidiaries, branches or its other controlled units
in relation to this Agreement and/or any supplementary agreement of
this Agreement (if any);
(2) Provide the services and monitor the services provided by its
subsidiaries, branches and other controlled units at a good quality
according to the provisions of this Agreement;
(3) Coordinate with all relating matters with regard to the
abovementioned specific execution documents;
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(4) Guarantee to pay for any damage suffered by Party A or counter party
of specific execution documents that is caused by the breach of
Party B of any provisions in this Agreement and all other specific
execution documents;
(5) Agree to provide the auditor of Party A the accounting books of
Party B and its connected persons in relation to the connections
transactions under this Agreement.
5.3 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 A, being a
subsidiary of a company to be listed or listed, China Netcom Group (Hong
Kong) Limited (hereinafter "Listing Company"), shall comply with the
Listing Rules of the Hong Kong Stock Exchange for connected transactions.
6. PREFERENTIAL RIGHT
6.1 Unless otherwise specified, for the same service, if an independent third
party cannot offer better conditions and terms to Party A than Party B,
Party A have preferential right to use the services from Party B;
6.2 Party B undertakes to Party B that Party B shall not offer the same or
similar services stated under this Agreement to a third party at terms
more favorable than those offered to Party A;
6.3 Party B has the right to provide the same or similar service to a third
party, on the condition that Party B continues to provide the same service
agreed upon under this Agreement.
7. TERM
7.1 This Agreement shall come into effect once signed by the legal
representatives or authorized representatives of both Parties and affixed
with their official seals. This Agreement shall be effective till June 30,
2007. If Party A wishes to renew this Agreement and notifies Party B with
3 month's notice, this Agreement shall be renewed automatically for
another 3 years on the same terms. There are no limits on the number of
renewal.
8. REPRESENTATIONS, WARRANTIES, AND UNDERTAKINGS
Each party represents, warrants and undertakes to the other party that:
(1) It is an independent legal person existing in accordance with the
laws of PRC, 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 PRC;
(3) It will use its best endeavors to take all necessary and procure
appropriate or advantageous measures to perform this Agreement and to make
this Agreement effective in accordance with the law and regulations of
China and this Agreement.
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9. FORCE MAJEURE
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 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 once the Force Majeure
event has ended within a reasonable time.
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 (and remain as one).
11. TRANSFER OF RIGHTS AND OBLIGATIONS
11.1 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
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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. NOTICES
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.this Agreement.
13.2 Any notice above 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; on the date of return receipt if
delivered by registered mail; and at the time of transmission if delivered
by facsimile.
14. DISPUTES RESOLUTIONS
14.1 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 where Party A situates.
15. MISCELLANEOUS
15.1 Without written confirmation from both parties, no party can change or
amend this Agreement. Upon the agreement of both parties, both parties can
amend this Agreement or enter into supplementary agreement to this
Agreement. The amendments or supplementary agreements of this Agreement
shall come into effect once signed by the legal representatives or
authorized representatives of both Parties and affixed with their official
seals.
15.2 This Agreement is severable, that is, if any provision of this Agreement
is held to be void, illegal, void or unenforceable at any time, the
effectiveness and performance of other provisions of this Agreement shall
not be affected.
15.3 This Agreement shall be governed and interpreted in accordance with the
laws of PRC.
15.4 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.
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IN WITNESS WHEREOF, the legal representatives or authorized
representatives of both Parties hereto have executed this Agreement as of the
date and venue first written above.
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Signature page:
PARTY A: CHINA NETCOM (GROUP) COMPANY LIMITED (SEAL)
By :______________
Legal Representative or Authorized Representative
PARTY B: CHINA NETWORKS COMMUNICATIONS GROUP CORPORATION (SEAL)
By :______________
Legal Representative or Authorized Representative_
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