EXHIBIT 10.9
CONFIDENTIAL TREATMENT REQUESTED BY LINKTONE LTD. THIS EXHIBIT HAS BEEN
REDACTED. REDACTED MATERIAL IS MARKED WITH "*" AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
CARTOON NETWORK INTERACTIVE -
MOBILE LICENCE AGREEMENT - LINKTONE
This licence agreement (AGREEMENT) is entered into on the date set out in
Schedule A to this Agreement (EFFECTIVE DATE) by and between:
(a) Xxxxxx Broadcasting System Asia Pacific, Inc., a company incorporated
in Georgia, United States of America, with an office in Hong Kong at
00/X, Xxxxxx Xxxxx, Xxx Xxx Place, 979 Xxxx'x Xx, Quarry Bay, Hong Kong
(XXXXXX);
(b) the Developer named in Schedule A, with its principal place of business
at the address set out in Schedule A (DEVELOPER); and
(c) the Distributor named in Schedule A, with its principal place of
business at the address set out in Schedule A (DISTRIBUTOR),
regarding the production of the CN Content by Developer and the use and
distribution of the CN Content and the Xxxxxx Content by Distributor using the
Designated Technology via the telecommunications networks of Service Operators
within the Territory, as described below.
1. DEFINITIONS.
In this Agreement, the following terms shall have the meanings ascribed to them
below:
(a) AFFILIATE means in respect of either party: (i) a subsidiary company of
such party; (ii) a company of which such party is a subsidiary company
("the parent company"); or (iii) a subsidiary company of the parent
company.
(b) CN CHARACTERS means the characters from the Cartoon Network television
series entitled The Powerpuff Girls, Scooby Doo, Xxx & Xxxxx, Dexter's
Laboratory and The Flintstones, as provided by Xxxxxx or its Affiliate
to Developer under this Agreement for the sole purpose of (i) Developer
producing the CN Content and the CN Page in the manner authorised by
this Agreement and (ii) Distributor distributing the CN Content and
exhibiting the CN Page in the manner authorised by this Agreement.
(c) CN CONTENT means all content and other materials (including all CN
Games) produced by Developer using the CN Characters and/or the CN
Functionality and approved by Xxxxxx under this Agreement for use as
specifically authorised by this Agreement, as further described in
Paragraph 4.1 of this Agreement.
(d) CN FUNCTIONALITY means all functionality and other elements and
materials provided by Xxxxxx or its Affiliate to Developer under this
Agreement in order for Developer to produce, and for Distributor to
operate, the CN Games in the manner authorised by this Agreement, as
further described in Schedule.
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(e) CS GAMES means the SMS-based games described in Schedule A comprised by
the Game Components.
(f) CN PAGE means the Cartoon Network-branded page established, maintained
and hosted by Distributor within the Web Site and bearing the uniform
resource locator http://://xxx.xxxxxxxx.xxx.xx/xxxxxxxxxxxxxx,
accessible Subscribers in the Territory only, for the display and
distribution of the CN Content, the Xxxxxx Content and such other
Cartoon Network characters, names, logos, trade marks and other
properties as have been licensed to Linktone Parties for such purpose
by Xxxxxx and its Affiliates.
(g) COMMENCEMENT DATE means either the date no later than 30 days after
Xxxxxx grants Developer approval to proceed with the first instalment
of the Xxxxxx Content and the CN Content, or 1 October 2003, whichever
is the earlier.
(h) DESIGNATED TECHNOLOGY means the technology described in Schedule A.
(i) EMS means Enhanced Message Service, being a mobile telecommunications
service that allows mobile telephone users to send and receive SMS
messages which also include text formatting, black-and-white images and
sounds.
(j) GAME COMPONENTS means each question or piece of information sent by
Distributor to a Subscriber and each request or answer sent by a
Subscriber to Distributor that initiates or constitutes the operation
of an SMS game.
(k) GROSS REVENUE means the total of ***********actually received by the
Distributor from the Service Operator(s) in respect of the CN Content
and the Xxxxxx Content in accordance with Paragraph 4.6 and based on
the information provided by Developer in accordance with Paragraph 4.7
during a period ************************ ******************************
****************************************** pursuant to the relevant
agreement between the Distributor and that Service Operator.
(l) LICENCE has the meaning set out in Paragraph 3 in respect of the rights
granted to Developer and Distributor respectively.
(m) LINKTONE PARTIES means Developer and Distributor.
(n) MARKETING DEDUCTION means, for the first three months of the Term, the
******** described in Paragraph 4.10(a) and, beginning from the fourth
month of the Term, *************** for the previous month of the Term,
up to an amount of **********.
(o) MMS means Multimedia Message Service, being a mobile telecommunications
service that allows mobile telephone users to send and receive SMS
messages which also include images, text formatting, audio clips and
video clips.
(p) NET REVENUE means the ********** for a period, ****************** for
that period.
(q) SERVICE means the wireless telecommunications services provided by
Service Operators in the Territory, enabling users of mobile telephones
or other wireless or handheld
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AND CONFIDENTIAL TERMS HAVE BEEN
OMITTED
devices in the Territory to gain access to the CN Content and/or the
Xxxxxx Content by means of the Designated Technology OR the wireless
telecommunications services or other relevant telecommunications
networks in the Territory that Subscribers use to request and/or
receive the CN Content and/or Xxxxxx Content by means of the Designated
Technology and that the patties have approved in writing.
(r) SERVICE OPERATOR means the owner and operator of a Service.
(s) SMS means Short Message Service, being a mobile telecommunications
service that allows mobile telephone users to send and receive short
text messages.
(t) SUBSCRIBER means any individual or entity who requests the download of
or subscription to the CN Content and/or the Xxxxxx Content via the
Service or the CN Page and whose billing address is located in the
Territory.
(u) SUBSCRIPTION FEE means the fee paid by Subscribers for the CN Content
and/or the Xxxxxx Content, as further described in Paragraph 4.6.
(v) TERM means the term set out in Schedule A.
(w) TERRITORY means the territory set out in Schedule A.
(x) TRADEMARKS means any trademarks, trade names, service marks or logos of
a party or its Affiliates provided and/or approved by such party for
use in connection with the rights granted under this Agreement.
(y) XXXXXX CONTENT means all content and other materials, including CN
Games, provided by Xxxxxx to Developer under this Agreement for use as
specifically authorised by this Agreement, as described in Schedule A.
(z) WAP means Wireless Application Protocol, being a specification for a
set of communication protocols to standardise the manner in which
wireless devices can be used for Internet access.
(aa) WEB SITE means the Internet page owned by Developer and hosted and
operated by Distributor on behalf of Developer and bearing the uniform
resource locator xxxx://xxx.xxxxxxxx.xxx.xx.
(bb) YEAR means a consecutive twelve-month period during the Term commencing
on the Effective Date.
2. XXXXXX OBLIGATIONS.
Xxxxxx agrees as follows:
2.1 Provision of CN Characters. During the Term, Xxxxxx or its Affiliate
shall procure the delivery of the CN Characters to Developer in order
to allow Developer to produce the
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CN Content and promote the CN Content and the Xxxxxx Content as
authorised by this Agreement.
2.2 Production of Xxxxxx Content. During the Term, Xxxxxx or its Affiliate
shall produce the Xxxxxx Content for Distributor's distribution via the
Service to Subscribers via the Designated Technology as authorised by
this Agreement.
2.3 Access to CN Characters and Xxxxxx Content. During the Term, Xxxxxx
shall make the CN Characters and the Xxxxxx Content available to
Developer in accordance with the access method set out in Schedule A.
2.4 CN Characters and Xxxxxx Content Rights. Xxxxxx shall obtain and
maintain throughout the Term all licences and/or consents necessary to
provide the CN Characters and the Xxxxxx Content to Linktone Parties as
authorised by this Agreement.
3. LICENCE.
Subject to the terms and conditions of this Agreement and conditional on the
parties agreeing (and continuing to agree) on the pricing described in Paragraph
4.6 below, Xxxxxx grants a limited, non-transferable licence (Licence) during
the Term on a non-exclusive basis (except as expressly set out in this
Agreement):
(a) for Developer to:
(i) produce and update the CN Content, including using the CN
Characters in accordance with this Agreement for the purpose
of producing and/or updating the CN Content;
(ii) deliver the CN Content and the Xxxxxx Content to Distributor;
and
(iii) use the CN Characters to market and promote the availability
of the CN Content and the Xxxxxx Content in the Territory on
the Service and the CN Page,
in accordance with the terms and conditions set out in this Agreement;
and
(b) for Distributor to:
(i) distribute the CN Content and the Xxxxxx Content to
Subscribers;
(ii) use the CN Functionality on the Service in order to operate
the CN Games;
(iii) host and display the CN Content and the Xxxxxx Content on the
CN Page; and
(iv) use the CN Characters to market and promote the availability
of the CN Content and the Xxxxxx Content in the Territory on
the Service and the CN Page,
in accordance with the terms and conditions set out in this Agreement.
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4. LINKTONE PARTIES OBLIGATIONS.
4.1 Production of CN Content by Developer
(a) During the Term, Developer shall produce the CN Content solely for
distribution to Subscribers as permitted by this Agreement using the CN
Characters and such other Cartoon Network logos and characters as
Xxxxxx and/or its Affiliate may supply to Developer. Production of the
CN Content by Developer shall be in accordance with the Cartoon Network
style guide materials supplied to it by Xxxxxx and with the
instructions of Xxxxxx. Developer shall seek the prior written consent
of Xxxxxx to each piece of CN Content that Developer proposes to
produce. If Xxxxxx consents to the production of such piece of CN
Content, Developer shall only produce such CN Content in the manner
prior approved by Xxxxxx. Developer shall supply Xxxxxx with a sample
of each piece of CN Content produced under this Agreement. Developer
shall make the first instalment of the Xxxxxx Content and the CN
Content available to Xxxxxx for its approval and sign off no later than
30 days after the Effective Date.
(b) Developer shall update the types of CN Content made available for
distribution to Subscribers on a regular basis during the Term as set
out in Schedule A. With Xxxxxx'x prior consent, Developer shall also
update and enhance the CN Content using such new technology as may
become available in respect of the Designated Technology in the
Territory during the Term.
4.2 Display and Distribution of CN Content and Xxxxxx Content by Developer
During the Term, Developer shall:
(a) deliver the CN Content and the Xxxxxx Content to Distributor solely for
the purposes of Distributor performing the obligations set out in
Paragraph 4.3 below;
(b) use the CN Characters to market and promote the availability of the CN
Content and the Xxxxxx Content on the Service and the CN Page, subject
to the prior written approval of Xxxxxx in each instance; and
(c) procure that Distributor performs the services and obligations set out
in Paragraph 4.3 below.
4.3 Display and Distribution of CN Content and Xxxxxx Content by
Distributor
(a) During the Term, Distributor shall:
(i) host and display the CN Content and the Xxxxxx Content on the
CN Page as set out in this Paragraph 4, for the sole purpose
of Subscribers viewing and requesting the download of the CN
Content and/or Xxxxxx Content via the Designated Technology on
the Service only; and
(ii) host and use the CN Functionality on the Service in the
Territory as set out in this Paragraph 4 in order to operate
the CN Games via the Designated Technology; and
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(iii) distribute the CN Content and the Xxxxxx Content, and permit
and procure the distribution of the CN Content and the Xxxxxx
Content by Service Operators, on the Service via the
Designated Technology to the Subscribers as set out in this
Paragraph 4.
(b) Distributor shall establish, maintain and host the CN Page on behalf of
Developer during the Term on the condition that the display and use on
the CN Page of all CN Content, Xxxxxx Content and any other Cartoon
Network characters, names, logos, trademarks and other properties
provided by Xxxxxx for this purpose shall in all respects be subject to
the prior approval and reasonable instructions of Xxxxxx. The CN
Content and the Xxxxxx Content may not be displayed on any part of the
Web Site other than the CN Page. The CN Page shall be located on the
first screen of the Web Site and shall contain a prominent and
persistent hyperlink, in the form of a CN Character, a Xxxxxx Trademark
or such other device as is approved by Xxxxxx, from the CN Content to
such web site(s) as are notified by Xxxxxx to Developer. These
hyperlinks, when clicked on by a Subscriber, will link to the Xxxxxx
web site notified by Xxxxxx or its Affiliate to Developer. Distributor
shall provide details at the CN Page as to how to download the CN
Content and the Xxxxxx Content from the CN Page, including displaying
the SMS and WAP numbers and/or addresses to be used for such download
(via the Designated Technology) by Subscribers. Linktone Parties
represent and undertake to Xxxxxx that only Subscribers may access the
CN Page and that such Subscribers must use a log-in name or number and
a password in order to download the CN Content and Xxxxxx Content from
the CN Page. In no event shall Developer or Distributor permit the sale
or placement of any advertising, sponsorship and/or promotional
messages or materials within the CN Page, except for such Cartoon
Network promotional messages as Xxxxxx may provide.
(c) Distributor shall make the Xxxxxx Content and the CN Content
commercially available to Service Operators and Subscribers on or
before the Commencement Date. If Distributor has not made the Xxxxxx
Content and the CN Content available to Xxxxxx and Service Operators
and Subscribes (as applicable) in accordance with this sub-paragraph,
Xxxxxx may immediately terminate this Agreement on written notice to
Linktone Parties. Provided that Distributor has made the Xxxxxx Content
and the CN Content commercially available to Service Operators and
Subscribers in accordance with this sub-paragraph,
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AND CONFIDENTIAL TERMS HAVE
BEEN OMITTED
4.4 Display and Distribution of CN Content and Xxxxxx Content by Linktone
Parties
(a) During the Term, Linktone Parties shall ensure that the CN Content and
Xxxxxx Content is listed are shown as one of the highlighted offerings
of the Linktone-branded general entertainment services provided by
Distributor to Subscribers and is always included in the general or
basic entertainment services offered by Distributor for distribution on
the Service via the Designated Technology.
(b) Linktone Parties shall procure the delivery to Subscribers of the CN
Content and/or the Xxxxxx Content on an "as is" basis via the
Designated Technology. Linktone Parties will procure the inclusion of
Cartoon Network branding in the transmission of the Xxxxxx Content and
the CN Content to the extent such branding is included in the Xxxxxx
Content, or required to be included in the CN Content, by Xxxxxx.
Linktone Parties shall have no right to modify, edit or supplement (or
permit any modification, editing or supplementing of) any of the Xxxxxx
Content provided by Xxxxxx under this Agreement or any of the CN
Content approved by Xxxxxx under this Agreement, except that it may:
(i) permit Subscribers to the CN Content and/or the Xxxxxx Content
to access only part of the CN Content and/or the Xxxxxx
Content from that available (subject to technology limitations
associated with the Subscribers' hardware); and
(ii) implement minor technical changes to the format as necessary
solely for the proper display of the CN Content and/or the
Xxxxxx Content on the Service or the CN Page without changing
any substantive elements of the CN Content and/or the Xxxxxx
Content.
Inadvertent edits of the CN Content and/or the Xxxxxx Content as a
result of technical or transmission problems shall not be deemed a
breach of this sub-paragraph.
(c) Except as expressly required or authorised in this Agreement, neither
Developer nor Distributor will, nor will either of them authorise any
entity to, transmit, modify, distribute, exhibit, copy, sub-licence or
otherwise use the CN Content or the Xxxxxx Content (or any portion of
either) by any means. Linktone Parties shall take all reasonable steps
to prevent any tampering or interference with the CN Content or the
Xxxxxx Content.
4.5 Consents. As between the parties to this Agreement, Linktone Parties
shall obtain and maintain throughout the Term all equipment and access
technology necessary to produce, download and/or distribute the CN
Content and the Xxxxxx Content (as applicable) as authorised by this
Agreement. Specifically, Linktone Patties must secure, maintain and pay
for all Linktone Parties' equipment, tariffs, telecommunications
service, digitization, decoding (if the CN Content and/or the Xxxxxx
Content is encrypted) and any related or other charges necessary for
the production and distribution of the CN Content or for the download
and distribution of the Xxxxxx Content, including any connections
and/or servers designed to receive commands, queries or requests from
Subscribers and obtain the appropriate information from the CN Content
or the Xxxxxx Content. Despite anything to the contrary contained in
this Agreement, Linktone Parties shall at their sole cost and expense
obtain and maintain throughout the Term all licences and/or consents
(including
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all mechanical, synchronisation, public performance and other music
licences or consents necessary for it to produce and distribute the CN
Content and to distribute the Xxxxxx Content) for the production and
distribution of the CN Content and for the download and distribution of
the Xxxxxx Content as authorised by this Agreement and be responsible
for all necessary payments relating to them.
4.6 Pricing. Distributor shall charge each Subscriber, or shall procure
that each Subscriber is charged, a monthly Subscription Fee on the
first occasion during each month that a Subscriber requests and/or
downloads a piece of CN Content or Xxxxxx Content. Such fee shall
entitle the Subscriber to request and download up to eleven pieces of
CN Content and/or Xxxxxx Content within the calendar month in which the
Subscription Fee is charged. The above Subscription Fee shall be agreed
in writing by the parties and shall be additional and separate to any
fees or other costs or taxes charged by Distributor to Subscribers. The
Subscription Fee agreed by the parties as at the Effective Date is set
out in Schedule A. No change in the Subscription Fee will be effective
unless agreed in writing by the parties.
4.7 Reporting and Audit: Unless otherwise instructed by Xxxxxx, Linktone
Parties shall promptly report to Xxxxxx on the 15th day of each month
during the Term the total number of Subscribers who have requested the
Xxxxxx Content and the CN Content during the immediately preceding
calendar month, the category of such Xxxxxx Content and CN Content, the
Subscription Fee charged to each Subscriber for the Xxxxxx Content and
the CN Content in accordance with Paragraph 4.6 above and such other
information reasonably requested by Xxxxxx. During the Term and for one
year after its expiry or termination, Developer and Distributor shall
each keep and maintain complete and accurate records of the
Subscription Fees charged to Subscribers for their request and/or
download of the Xxxxxx Content and the CN Content. At any time during
such period, upon reasonable written notice, Xxxxxx may request an
audit of such records and Linktone Parties shall agree to and use all
reasonable efforts to facilitate that audit, provided that any such
audit is not undertaken more than once in any three-month period.
Audits may be performed by Xxxxxx personnel or by outside third parties
reasonably approved by Developer. Xxxxxx shall pay all costs associated
with such an audit, unless that audit shows that Linktone Parties has
underpaid Xxxxxx by more than 3%, in which case Linktone Parties shall
pay to Xxxxxx, on demand, all the costs of the audit together with the
amount underpaid. Any Tuner personnel or outside third parties
conducting such an audit shall comply with the confidentiality
obligations contained in this Agreement.
4.8 Customer Service. As between the parties, Linktone Parties shall be
solely responsible for processing all orders, activating services,
billing and collecting all fees for Subscribers receiving the CN
Content and the Xxxxxx Content and providing all customer service
related to the CN Content and the Xxxxxx Content Linktone Parties shall
use their best endeavours to inform Subscribers clearly that neither
Xxxxxx nor its Affiliates are responsible for the provision of any
aspect of the Service.
4.9 Liability for Service. As between the parties, Linktone Parties shall
be solely liable for all parts of the Service, including any messages
transmitted as part of or via the Service other than the Xxxxxx Content
provided that Linktone Parties shall not be liable for any
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transmission failure in respect of any message transmitted as part of
or via the Service caused by any technical problems beyond the control
of Linktone Parties including defects, congestion or failures of
capacity in a Service Operator's hardware and/or software. Linktone
Parties shall be solely liable for any other unsuccessful transmission
or any message transmitted as part of or via the Service including
where such failure is caused by the failure of Linktone Parties' own
hardware and/or software. In connection with its obligations under this
paragraph, Linktone Parties shall monitor the reliability and capacity
of each Service Operator's network and shall use its best efforts to
report to Xxxxxx on the predicted and actual level of network and
system failures and other hardware and/or software problems which might
cause or have caused the transmission failure of any message
transmitted as part of or via the Service.
4.10 Marketing
(a) Within three months of the Effective Date, Developer will spend
************* solely to promote the availability of the CN Content and
Xxxxxx Content on the Service in the Territory. Developer shall submit
its marketing plan in this regard to Xxxxxx at least 15 days prior to
the Effective Date for Xxxxxx'x approval.
(b) Commencing at the beginning of the fourth month of the Term, Developer
will spend ************** each month solely to promote the availability
of the CN Content and Xxxxxx Content on the Service in the Territory.
Developer shall submit its marketing plan in this regard to Xxxxxx at
least 30 days prior to the start of each month or at least 30 days
prior to the start of any marketing stunt or campaign for the Service.
If any of the Marketing Deduction remains unspent at the end of the
Term, Developer shall pay **************** to Xxxxxx within 30 days of
the end of the Term.
5. XXXXXX CONTENT
5.1 Quality Control. Linktone Parties acknowledge and agree that Xxxxxx
shall have complete and exclusive control with respect to all matters
related to the CN Content and the Xxxxxx Content (including the
quality, production and selection of the Xxxxxx Content and the
quality, production and selection of the CN Content). Xxxxxx may, on
occasion, include a Cartoon Network promotional message with the Xxxxxx
Content to refer Subscribers to other Cartoon Network services relevant
to the Xxxxxx Content and third party advertising within or around the
Xxxxxx Content and may require Linktone Parties to include such a
promotional message with the CN Content, subject to Linktone Parties
gaining any consent required under the relevant agreement with the
Service Operator(s).
5.2 Ownership. As between the parties, Linktone Parties acknowledge and
agree that Xxxxxx shall own and retain, throughout the universe and in
perpetuity, the exclusive ownership of all rights and title in and to
the CN Characters, the CN Content and the Xxxxxx Content, including all
rights of trademark, copyright and copyright renewal. Xxxxxx'x
exclusive ownership and control of the CN Characters, the CN Content
and the Xxxxxx Content shall be absolute and without any further
obligation to Developer and/or Distributor or to any third party except
as specifically provided for in this Agreement.
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AND CONFIDENTIAL TERMS HAVE
BEEN OMITTED
Linktone Parties agree that nothing in this Agreement shall provide
either of them with any other rights whatsoever to the CN Characters,
the CN Content and the Xxxxxx Content, nor convey, confer, grant,
assign or otherwise provide Developer and/or Distributor with
copyright, title or any other proprietary or ownership interest in or
to the CN Content or the Xxxxxx Content or any elements of them. All
goodwill associated with the CN Characters, CN Content and the Xxxxxx
Content (in whole or in part) shall inure for the sole benefit of
Xxxxxx. Linktone Parties assign to Xxxxxx all rights in the CN
Characters, the CN Content and the Xxxxxx Content that they may own or
control now or in the future. Where necessary, this assignment takes
effect as a present assignment of future rights. Linktone Parties shall
do all acts reasonably required by Xxxxxx to assist Xxxxxx in
protecting or registering the CN Characters, the CN Content and the
Xxxxxx Content.
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6. FEES.
On behalf of Linktone Parties, Developer shall pay the following amounts to
Xxxxxx in consideration for the right to use the CN Characters, CN Content,
Tuner Content and the marketing and trademark rights licensed by Xxxxxx under
this Agreement, in accordance with the terms set out below:
6.1 Annual Minimum Guarantee. An annual minimum guaranteed fee in such
amount and payable on such terms as are set out in Schedule A.
6.2 Revenue Fee. The *************** set out in Schedule A (Xxxxxx Revenue
Share), **************** only:
(i) subject to Paragraph 6.3(b), ********************* as imposed
by the government of the Territory and paid by Developer on
the Xxxxxx Revenue Share during the relevant period; and
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AND CONFIDENTIAL TERMS HAVE
BEEN OMITTED
(ii) **************** as imposed by the government of the Territory
and paid by Developer on the Xxxxxx Revenue Share during the
relevant period,
payable on such terms as are set out in Schedule A. The parties
acknowledge and agree that business tax will be deductible in
calculating the above withholding tax.
6.3 Payment and Taxes
(a) All payments under this Agreement shall be in United States dollars.
Except as expressly set out in this Agreement, Linktone Parties shall
be jointly and severally responsible for the payment of all taxes
(including any value-added, goods and services tax or other turnover
taxes), levies, duties, fees or other assessments and related penalties
and surcharges levied in the Territory in connection with the CN
Content, the Xxxxxx Content, the CN Characters and the marketing and
trademark rights licensed by Xxxxxx, and Developer shall hold Xxxxxx
and its Affiliates harmless from the same.
(b) If any payments made by Developer to Xxxxxx under this Agreement are
subject to withholding tax levied by a governmental authority in the
Territory, Developer may withhold the applicable withholding tax from
the relevant payment and remit the balance to Xxxxxx, provided that
Developer supplies Xxxxxx with ------------- original documentation
evidencing the appropriate payment by Developer of that withholding tax
immediately following each such remittance. Xxxxxx is a resident of the
United States of America for tax purposes, regardless of the location
of its designated remittance or payment address. Accordingly, if the
territory in which Developer is incorporated is party to an applicable
taxation treaty with the United States of America, withholding tax
under this Agreement should follow the prescribed tax rate under that
treaty. Developer acknowledges and agrees that if it fails to withhold
and/or pay withholding tax as set out in this paragraph, Xxxxxx (i)
shall not be liable to refund to Developer or Distributor any payment
made under this Agreement (or any part of it) in connection with any
withholding tax payable on it; and (ii) shall continue not to be
responsible for any withholding tax payable under this Agreement. If
Developer is legally restricted from remitting any payment due under
this Agreement, it shall promptly notify Xxxxxx and follow Xxxxxx'x
instructions with respect to that payment.
6.4 Timeliness. All payments under this Agreement shall be made to Xxxxxx
at the address set out in this Agreement (or subsequently advised in
writing by Xxxxxx) by the due date and in the manner specified in this
Agreement, without deduction, set-off or counterclaim. The parties
acknowledge and agree that the time within which Developer is required
to make payment in accordance with this Agreement is of the essence of
this Agreement and any failure to do so by Developer shall constitute a
breach of this Agreement.
7. WITHDRAWAL.
Linktone Parties acknowledge and agree that if Xxxxxx (or its Affiliate) on any
occasion reasonably considers it necessary or advisable in the exercise of its
business judgment to withdraw individual elements of CN Content or Xxxxxx
Content due to any question concerning
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AND CONFIDENTIAL TERMS HAVE BEEN
OMITTED
any right or claim to it, Xxxxxx may immediately remove such individual element
from the CN Content or the Xxxxxx Content so as to deny Linktone Parties any
further access to that element of the CN Content or the Xxxxxx Content (as
applicable), and Linktone Parties shall promptly withdraw such element from
distribution in the Territory. This withdrawal right is not intended to alter
Xxxxxx'x obligations under this Agreement, but only to provide Xxxxxx a means to
withdraw particular elements from the CN Content or the Xxxxxx Content as it
deems reasonably necessary.
8. TRADEMARKS.
Without making any representations or warranties of any kind with respect to its
respective Trademarks, each party consents to the non-exclusive use by the other
party (in this paragraph referred to as the user) of its designated Trademarks
to the extent necessary for the user to perform this Agreement and then only in
accordance with the following.
(a) The user must comply with all reasonable instructions by the first
party as to the use of the Trademarks of the first party.
(b) The user must not use a Trademark of the first party in combination
with any other trademark or service xxxx without the prior written
consent of the first party.
(c) The user must not use a Trademark in a way that is derogatory to or
critical of the first party or its affiliates or any of their products
or services.
(d) The user will acquire no ownership of the Trademarks licensed to it
under this Agreement and will not attack or assist any other person to
attack the ownership of a Trademark licensed to the user under this
Agreement.
(e) If any unauthorised use of the other party's Trademarks by third
parties comes to a party's attention, it shall promptly notify the
other party of that unauthorised use.
(f) On termination or expiry of this Agreement, the user agrees promptly to
discontinue all use of the first party's Trademarks and to destroy, or
deliver to the first party at its request, all materials bearing the
first party's Trademarks.
(g) Each party reserves all rights in and to its Trademarks not
specifically granted in this Agreement.
9. AUTHORIZED REPRESENTATIVES.
Xxxxxx and Linktone Parties each agree to designate one suitably qualified and
experienced representatives as its primary contact for business matters relating
to this Agreement and to act on behalf of them for all purposes in connection
with this Agreement. If the representative of a party is unable or likely to be
unable to carry out his or her role under this Agreement, then that party shall
promptly appoint a new suitably qualified and experienced representative and
advise the other party of the change.
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10. CONFIDENTIALITY.
All parties agree to keep confidential the terms of this Agreement and all
negotiations related to the Agreement and to limit disclosure of the contents of
this Agreement and ongoing negotiations to its employees and advisors on a
need-to-know basis. However, each party may disclose such information to its
Affiliates who are advised of the confidential nature of such information and
who have a legitimate need to know in connection with continuing negotiations
contemplated under this Agreement. Each party may also disclose such information
in accordance with, but only to the extent required by, applicable law. The
obligations set out in this paragraph shall survive the expiration or
termination of this Agreement.
11. TERMINATION.
(a) Except as otherwise provided in this Agreement, Xxxxxx may immediately
terminate this Agreement by written notice to Linktone Parties if:
(i) Developer or Distributor is in breach of any provision of this
Agreement and, in case of breach capable of remedy, has failed
to remedy that breach within 14 days of notice requiring it to
do so;
(ii) it believes on reasonable grounds that Developer or
Distributor is unable to pay its debts when they fall due.
(b) Except as otherwise provided in this Agreement, Linktone Parties may
immediately terminate this Agreement by written notice to Xxxxxx if:
(i) Xxxxxx is in breach of any provision of this Agreement and, in
the case of breach capable of remedy, has failed to remedy
that breach within 14 days of notice requiring it to do so;
(ii) Linktone Parties believe on reasonable grounds that Xxxxxx is
unable to pay its debts when they fall due.
(c) The termination of this Agreement shall be without prejudice to any
action or remedy of a party arising prior to the date of termination.
(d) On expiration or termination of this Agreement or on demand by Xxxxxx,
Linktone Parties shall destroy all CN Content and Xxxxxx Content and
certify to Xxxxxx that they have done so.
12. FORCE MAJEURE.
No party will be responsible for delays in performance caused by acts of God or
governmental authority, strikes or labour disputes, electrical outage, equipment
failure, fires or other loss of facilities or any other cause beyond the party's
reasonable control. The affected party must use reasonable efforts to minimise
the effect of the delay. If such a delay in Linktone Parties' performance of
this Agreement continues for 20 or more consecutive days or 30 or more days
within a single 90-day period, Xxxxxx may terminate this Agreement without
further liability or
13
obligation. If such a delay in Xxxxxx'x performance of this
Agreement continues for 20 or more consecutive days or 30 or more days within a
single 90-day period, Linktone Parties may terminate this Agreement without
further liability or obligation.
13. REPRESENTATIONS AND WARRANTIES.
(a) Linktone Parties, on the one part, and Xxxxxx, on the other part,
represent and warrant to each other that:
(i) it has the right, power and authority to enter into and
perform this Agreement and to consummate any and all
transactions provided for in this Agreement;
(ii) the provisions of this Agreement do not violate any other
understandings, contracts or agreements that it has entered
into with any other individual or entity or by which it may be
bound;
(iii) it shall comply with the statutes, rules and regulations of
duly constituted governmental authorities having jurisdiction
over its respective activities and/or having jurisdiction over
Xxxxxx, including the United States Foreign Corrupt Practices
Act; and
(iv) it recognises the goodwill attached to, and will not knowingly
or negligently take any action that would be detrimental to,
the goodwill associated with the CN Content and the Xxxxxx
Content, or the Service, respectively.
(b) Developer represents and warrants to Xxxxxx that:
(i) the CN Content produced by it will not infringe or violate any
copyright, trademark or other intellectual property right of
any third party; and
(ii) it is legally entitled to remit the payments due to Xxxxxx
under this Agreement and shall take all steps, obtain all
permits and registrations and make all necessary filings to
the Shanghai Commission of Foreign Economic Relations and
Trade (or such other organisation as may be required by
applicable laws) and bank applications required during the
Term to ensure that it may, and may continue to, remit the
payments due to Xxxxxx under this Agreement.
(c) Xxxxxx represents and warrants to Linktone Parties that the CN
Characters provided by it under this Agreement will not themselves
infringe or violate any copyright, trademark or other intellectual
property right of any third party provided that they are used in
accordance with this Agreement.
14. INDEMNIFICATION.
(a) On demand Linktone Parties shall indemnify Xxxxxx, its Affiliates and
their respective employees, agents and contractors against any claim,
loss or cost (including reasonable legal fees) incurred as a direct or
reasonably foreseeable result of any act or omission of
14
Linktone Parties or their employees, agents and contractors, including
any breach by Linktone Parties of any provisions or this Agreement or
of any third party rights.
(b) On demand Xxxxxx shall indemnify Linktone Parties, their Affiliates and
their respective employees, agents and contractors against any claim,
loss or cost (including reasonable legal fees) incurred as a direct or
reasonably foreseeable result of any act or omission of Xxxxxx or its
employees, agents and contractors, including any breach by Xxxxxx of
any provisions of this Agreement or of any third party rights.
(c) No party shall be liable to any other party for any indirect,
incidental, special or consequential damages, including damages for
loss of profits, data or use.
15. NOTICES.
All notices to the parties required under this Agreement shall be given in
writing and delivered by hand, facsimile (with documented confirmation of
receipt) or sent by registered mail (return receipt requested) to the address of
the receiving party set out below as updated by that party during the Term:
if to Turner: with a simultaneous copy to:
Xxxxxx Broadcasting System Asia Xxxxxx Broadcasting System Asia
Pacific, Inc. Pacific, Inc.
00/X, Xxxxxx Xxxxx, Xxx Xxx Place 30/F, Oxford House, Xxx Xxx Place
000 Xxxx'x Xx, Xxxxxx Xxx, 000 Xxxx'x Xx, Xxxxxx Xxx, Xxxx Xxxx
Xxxx Xxxx Attention: Senior Counsel
Attention: Vice President, Network Facsimile: (000) 0000 0000
Distribution
Facsimile: (000) 0000 0000
if to Linktone Parties:
The address set out in Schedule A.
All notices mailed shall be deemed given on the fifth day after mailing; all
notices delivered by personal delivery shall be deemed given on the date of
delivery; and all notices sent by facsimile shall be deemed given on the date of
transmission and confirmation.
16. GOVERNING LAW AND DISPUTE RESOLUTION.
The laws of the Hong Kong Special Administrative Region govern this Agreement.
If any dispute or difference arises out of or in connection with this Agreement
it must be resolved by, and either party can submit it to, compulsory and
binding arbitration in Hong Kong under the rules of the Hong Kong International
Arbitration Centre. The arbitration shall be held in Hong Kong and all
proceedings and submissions shall be in English.
17. GENERAL PROVISIONS.
This Agreement contains the entire agreement between the parties with respect to
its subject matter and supersedes all prior agreements or understandings between
the parties with respect to
15
that subject matter. No amendment to this Agreement will be valid unless
confirmed in writing by both parties. Any provision of this Agreement that is
unenforceable in a jurisdiction is ineffective as to that jurisdiction to the
extent of the unenforceability. That does not affect the validity or
enforceability of that provision in any other jurisdiction nor invalidate the
remaining provisions of this Agreement. A party's failure or delay in exercising
any right under this Agreement will not operate as a waiver by that party nor
will any single or partial exercise of any right or the exercise of any other
right preclude any further exercise. This Agreement does not constitute either
party as the partner, agent or employee or representative of the other. Neither
Developer nor Distributor may assign this Agreement without the prior written
consent of Xxxxxx. All obligations imposed on both Developer and Distributor
under this Agreement shall be borne jointly and severally by them.
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The parties to this Agreement have caused their duly authorised representatives
to execute this Agreement as of the Effective Date.
Xxxxxx Broadcasting System Asia Developer Distributor
Pacific, Inc.
/S/ Xxx Xxxxxxx /S/ Xxxxxxx X. Xxxx /S/ Xxxxxxx X. Xxxx
-------------------------------- --------------------------- --------------------
Xxxxxxx Xxx Xxxxxxx Print name: Xxxxxxx X. Xxxx Print name: Xxxxxxx X. Xxxx
General Manager Print title: CEO Print title: CEO
17
SCHEDULE A
AGREEMENT DETAILS
Effective Date: I July 2003
Developer name: Linktone Consulting Co., Ltd.
Developer address: Harbour Ring Plaza, 6th floor
00 Xx Xxxx Xxxx Xxxx
Xxxxxxxx 000000
The People's Republic of China.
Attention: Xx. Xxxxxx Agar, Vice President,
Business Development
Developer facsimile no.: +8621 5385 3826
Distributor name: Shanghai Weilan Computer Company Ltd.
Distributor address: Harbour Ring Plaza, 6th floor
00 Xx Xxxx Xxxx Xxxx
Xxxxxxxx 000000
The People's Republic of China.
Attention: Xx. Xxxxxx Agar
Distributor facsimile no.: +8621 5385 3826
CN Functionality: All software, code, technology protocols, graphics,
text animation, audio, video and any other content
or materials that are provided to Developer under
this Agreement for the purpose of the installation
and operation of the CN Games by Developer on the
Service and/or resulting from the use of the CN
Games on the Service and/or the production of CN
Games by Developer.
CN Games: The CN Games produced by Developer and distributed
by Distributor shall be interactive. SMS-based games
that result from the installation of the CN
Functionality on the Service and the exchange of
Game Components on the Service as follows: a
Subscriber requests a CN Game from Distributor.
Distributor sends the first question of that CN Game
to the Subscriber via the Designated Technology. The
Subscriber answers the question sent by Distributor,
also via the Designated Technology. Distributor
sends the Subscriber the next question of that CN
Game to the Subscriber, via the Designated
Technology. The question and answer pattern repeats
until that playing of the CN Game ends.
CN Content: The CN Content includes text and graphics in
simplified Chinese characters, being downloadable
operator logos, wallpaper features,
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picture messages and any CN Games produced by
Developer in accordance with this Agreement. The CN
Content shall be based on the CN Characters supplied
to Developer by Xxxxxx in accordance with this
Agreement and the Cartoon Network television channel
broadcast by Xxxxxx'x Affiliate.
During the Term, the CN Content shall comprise the
following, as approved by Xxxxxx in its sole
discretion:
- picture messages;
- wallpaper features;
- operator logos;
- SMS-based games; and
- screen savers.
The number of each type of CN Content shall be as
approved by Xxxxxx in its sole discretion. The first
instalment of the CN Content shall comprise the
following types of content:
- 150 picture messages;
- 150 wallpaper features;
- 75 operator logos;
- 1 CN Game.
Developer shall ensure that further instalments of
the CN Content will be released on a quarterly
basis, as approved by Xxxxxx in its sole discretion.
Xxxxxx and Developer shall review each of
Developer's subsequent CN Content instalment plans
30 days after the launch of each preceding
instalment.
Xxxxxx Content: The Xxxxxx Content includes and text and graphics,
being downloadable operator logos, wallpaper
features, picture messages, ringtones and CN Games.
The Turner Content shall be based on the characters
of the Cartoon Network television channel broadcast
by Xxxxxx'x Affiliate.
During the Term, the Turner Content shall comprise
the following:
- picture messages;
- wallpaper features;
- operator logos;
- 35 ringtones; and
- 3 CN Games.
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The number of picture messages, wallpaper features
and operator logos comprising part of the Xxxxxx
Content shall be as notified and supplied by Xxxxxx
to Developer during the Term.
Format of Xxxxxx Content: The parties acknowledge and agree that the format of
the Xxxxxx Content as delivered to Developer by
Xxxxxx may presently only be downloadable to Nokia
handsets. Developer may reformat the Xxxxxx Content
to allow it to be downloaded to other manufacturers'
handsets or onto Java-enabled mobile telephones,
provided that such reformatting does not modify or
alter the Xxxxxx Content in any way or diminish or
distort the appearance or sound of the Xxxxxx
Content. Any such reformatting shall be at
Developer's sole cost, and Developer shall indemnify
Xxxxxx for any costs or claims arising from such
reformatting.
Designated Technology: Wireless mobile telecommunications services intended
to transmit data via SMS, MMS. EMS or WAP
technology, or such other wireless mobile
telecommunications technology that becomes available
in the Territory during the Term, to mobile
telephones only.
Term: The period commencing as of the Effective Date and
continuing until the expiry of twelve months from
the Commencement Date or 30 September 2004,
whichever is the earlier, unless earlier terminated
pursuant to the terms of this Agreement. At the
expiration of the Term, this Agreement will
automatically renew for a period of one year on the
same terms unless either party notifies the other of
its intent not to renew at least 60 days prior to.
the expiration of the then-current Term.
Territory: The People's Republic of China, excluding Hong Kong
and Macau.
Access method: Xxxxxx shall deliver (i) the CN Characters on or
before the Effective Date and (ii) the Xxxxxx
Content, from time to time during the Term, to
Developer via email in .bmp files. If Developer does
not supply Xxxxxx with an appropriate e-mail address
for the delivery of the CN Characters and the Xxxxxx
Content to Developer, or if such email delivery is
not effective in any instance, Xxxxxx may deliver
the CN Characters and the Xxxxxx Content in .bmp
files on disc to Developer's address as set out
above. Developer shall bear the cost of the delivery
of the CN Characters and the Xxxxxx Content to
Developer under either delivery method set out in
this paragraph.
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Subscription Fee: Distributor shall charge each Subscriber, or shall
procure that each Subscriber is charged, a minimum
monthly Subscription Fee of ********** on the first
occasion during each calendar month that such a
Subscriber requests the CN Content or Xxxxxx
Content. After the initial launch of the Service,
the parties may agree on a revised minimum monthly
Subscription Fee to be charged to Subscribers based
on the market conditions in the Territory at that
time. In the absence of agreement between the
parties, the minimum monthly Subscription Fee shall
remain a *************.
Annual minimum guarantee: ************ payable on execution of this Agreement.
Developer shall pay the annual minimum guarantee
without deduction, set-off or counterclaim.
Revenue Fee: The Revenue Fee is:
(a) ************, less
******************************
************** described in Paragraph
6.2, until such time that the Linktone
Parties have recouped the annual
minimum guarantee; and thereafter
(b) ************, less
************************************
************ described in Paragraph
6.2.
The Revenue Fee is payable quarterly in arrears
within 60 days of Distributor's receipt of Gross
Revenue from the Service Operator(s).
Developer shall pay Xxxxxx the Revenue Fee in United
States dollars, without deduction, set-off or
counterclaim. Developer shall calculate the United
States dollar-denominated; payment of each
instalment of the Revenue Fee using a Renminbi :
United States dollar exchange rate of, for the first
year of the Term, *******. On or before the
commencement of each subsequent Year of the Term (if
any), Xxxxxx shall advise Developer of the Renminbi
: United States dollar exchange rate applicable to
that subsequent Year of the Term, failing which the
applicable Renminbi : United States dollar exchange
rate for the second year of the Term
***************.
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AND CONFIDENTIAL TERMS HAVE BEEN
OMITTED
