Exhibit 4.21
[English Translation]
TELECOMMUNICATIONS SERVICES AGREEMENT
This Agreement was entered into on 10 April 2002 in Hefei City, Anhui Province,
the People's Republic of China (hereinafter the "PRC") by and between:
Anhui Mobile Communication Company Limited (hereinafter referred to as "PARTY
A"), Address: You ▇▇▇▇ Building, 303 Huai He Road, Hefei City
And
Anhui Communications Service Company (hereinafter referred to as "PARTY B"),
Address: You ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
WHEREAS:
1. Party A, a limited liability company duly established and in good
standing under the laws of the PRC, has the legal right to engage in
the construction of and investment in mobile telecommunications
networks and operate mobile telecommunications and other
telecommunications businesses;
2. Party B, a state-owned enterprise duly established and in good standing
under the laws of the PRC, has the legal right to engage in
telecommunications services and other related services;
3. To facilitate the development of its mobile telecommunications business
and engage in standard production and operating activities, Party A
requires certain telecommunications services from Party B;
4. Both parties wish to conclude fair and reasonable arrangements whereby
Party B will render the relevant telecommunications services to Party
A.
THEREFORE, this Agreement was concluded by and between Party A and Party B, on
the basis of mutual and equitable benefit and after amicable consultation, on
the following terms and conditions:
ARTICLE 1. SERVICES SPECIFICATIONS AND BASIC PRINCIPLES
1.1 For the purpose of this Agreement, the "Telecommunications Services"
means part or all of the following services rendered by Party B to
Party A:
(1) The consultation of the planning and design of
telecommunications facilities;
1
(2) The construction of telecommunications facilities (exclusive
of telecommunication lines and ducts construction);
(3) The maintenance of telecommunication lines,
(4) The utilization of supplied assets and materials.
1.2 As the Telecommunications Services are to be rendered by Party B to
Party A for a consideration, Party B may charge reasonably on the basis
of fair market principles for its services, and Party A shall make
payment accordingly.
1.3 The terms on which Party B renders the Telecommunications Services to
Party A shall not be inferior to those extended by Party B to any third
party for the same or similar services.
1.4 If, without Party B's fault, Party B is unable to provide, or is unable
to completely provide, the Telecommunications Services, Party B shall
give notice to Party A in a timely manner, and shall use its best
efforts to assist Party A to obtain the same or similar services from
other channels.
1.5 The Telecommunications Services shall be rendered for such intended
purposes as both parties may specify and shall conform to relevant
state-mandated standards (if any).
1.6 Party B may delegate a third party (including its subsidiaries) to
provide certain of the Telecommunications services specified under this
agreement to Party A on behalf of Party B, subject to obtaining the
prior written consent of Party A.
1.7 Should a breach of this Agreement by any party cause a loss to the
other party, the breaching party shall be responsible for the payment
of damages to the other party to compensate for the full amount of such
loss. However, neither party shall be liable for any loss caused from
force majeure.
1.8 Each party shall provide all reasonable and necessary further
assistance to the other party during the course of the performance of
this Agreement.
1.9 Additional terms of agreement on the Telecommunications Services are
contained in the various appendices attached to this Agreement.
ARTICLE 2 PRICING PRINCIPLES AND PAYMENT
2.1 service charges shall be determined according to the following
principles:
(1) If there are any prevailing state-mandated or local prices
fixed by the state or local governments (as amended from time
to time), such prices shall apply, or;
-2-
(2) If there are any prevailing state-mandated or local prices
fixed by the state or local governments (as amended from time
to time), market prices negotiated and agreed upon by both
parties shall apply.
On basis of the above principles, the particular pricing and/or
charging criteria hereunder are enclosed in the relevant appendices
hereinto; the prices of the Telecommunications Services stipulated in
the relevant official pricing documents as enclosed on the appendices
hereinto are upper limits, and both parties shall sign the relevant
services agreements on basis of market prices that do not exceed such
upper limits.
2.2 The particular sum of the service charges hereunder shall be calculated
according to such relevant PRC accounting standards as are applicable
from time to time.
2.3 Party A shall make timely payment for the relevant services obtained
from Party B, according to the pricing principles and standards
provided for in this Agreement and its appendices.
2.4 Unless otherwise provided in the appendices to this Agreement, if Party
A fails to make payment to Party B within such period as has been
agreed upon by both parties, then Party A shall pay Party B a late
payment penalty calculated at 0.05% of the unpaid amount, for each day
of the late payment; if the late payment exceeds 60 days, Party B may
give Party A written notice to terminate further services. If after 30
days of Party A's receipt of the written notice, Party A still has not
paid the said service charges, then Party B may, without prejudice to
any other rights and obligations already accrued or incurred to it
under this Agreement, terminate the said services.
ARTICLE 3 TERM OF THIS AGREEMENT
3.1 This Agreement is valid until 31 December 2002.
3.2 Subject to compliance with applicable laws and regulations, this
Agreement shall automatically be extended for a further year upon the
expiration of this Agreement or the expiry of any extension hereof,
unless Party A gives written notice to terminate this Agreement 60 days
before such expiration.
ARTICLE 4 REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
4.1 Party A and Party B separately represent and warrant that this
Agreement is valid and binding on both parties.
4.2 Party B shall ensure the recruitment of sufficient qualified employees
to provide satisfactory telecommunications services stipulated under
this Agreement.
-3-
4.3 Party B shall ensure that its employees are prepared to receive and
provide sufficient instructions and explanations relating to the
Telecommunications Services, and that the services are rendered with
reasonable care and skill, such that the services can meet the
standards required by Party A, and warrants that no harm will be caused
to Party A by the acts or omissions of the Party B employees
responsible for rendering the services.
4.4 Party A warrants that it will, in accordance with the provisions of
this Agreement, accept the Telecommunications Services rendered by
Party B and pay various charges, and that no harm will be caused to
Party B by the acts or omissions of Party A.
ARTICLE 5 FORCE MAJEURE
5.1 If, due to a force majeure event, the occurrence of which is
unpredictable and the consequences of which are unavoidable and
insurmountable, either party is prevented from performing this
Agreement or the relevant obligations under its appendices in
accordance with the agreed provisions, the affected party shall
immediately give notice to the other party, and shall, within 15 days,
provide the relevant detailed information and valid documents of proof
evidencing the grounds for non-performance, partial performance, or
withheld performance of the relevant obligations under this Agreement
or its appendices. Depending upon the extent to which the performance
may be affected by the force majeure event, both parties shall discuss
and agree whether or not to terminate, partially excuse, or delay the
performance of the obligations concerned.
ARTICLE 6 CONFIDENTIALITY
6.1 Unless otherwise required by the relevant laws or supervisory and
regulatory authorities, neither party shall provide or divulge to any
other company, enterprise, organization or individual any information
or data concerning the contents of this Agreement or relating to the
business of the other party, unless the prior written consent of the
other party has been obtained (and such consent shall not be
unreasonably refused or withheld).
ARTICLE 7 ASSIGNMENT
7.1 Without the prior written consent of the other party, neither party may
assign or delegate any right or obligation accruing to it under this
Agreement.
ARTICLE 8 NO WAIVER
8.1 Unless otherwise provided by law, any failure to exercise, or delay in
exercising any right, power or privilege to which a party is entitled
under this Agreement shall not be construed as a waiver of such right,
power, or privilege, and any
-4-
partial exercise of such right, power, or privilege shall not prejudice
the future exercise of such right, power, or privilege.
ARTICLE 9 NOTICE
9.1 Any notice related to this Agreement shall be made in writing and
delivered in person, or by facsimile or post. Any notice shall be
deemed to have been delivered at the time of handing over of the
notice, if delivered in person; or at the time when the facsimile
machine indicates that the facsimile has been sent, if delivered by
facsimile; or on the fifth working day (not accounting statutory
holidays) if delivered by post. Any notice is effective upon delivery.
9.2 The addresses for notices for both parties hereto are as follow:
Anhui Mobile Communication Company Anhui Communications Service Company
Limited Recipient: ▇▇ ▇▇▇▇▇'en
Recipient: ZHANG Daode Correspondence address: You ▇▇▇▇
Correspondence address: You ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
Building, 303 Huai He Road, Hefei City Post code: 230001
Post code: 230001 Telephone: ▇▇▇▇-▇▇▇▇▇▇▇
Telephone: ▇▇▇▇-▇▇▇▇▇▇▇ Facsimile: 0551-2681533
Facsimile: 0551-2681613
ARTICLE 10 APPLICABLE LAWS AND DISPUTE SETTLEMENT
10.1 This Agreement shall be governed by, and interpreted and enforced in
accordance with the laws of the PRC.
10.2 Any dispute between the parties relative to the validity,
interpretation or performance of this Agreement shall be settled
through amicable consultation. Should the parties fail to resolve the
dispute within 30 days from the date of the occurrence of the dispute,
then both parties agree that such dispute shall be submitted to Hefei
City Arbitration Commission for arbitration in accordance with the then
effective arbitration rules of that Commission. The arbitration award
shall be final and binding on both parties. Except for the matter of
dispute that is submitted for arbitration, all the remaining parts of
this Agreement shall remain valid and effective during the arbitration.
ARTICLE 11 EFFECTIVENESS OF THE AGREEMENT AND MISCELLANEOUS
11.1 This Agreement shall be effective upon due execution by the legal
persons or their authorized representatives of both parties and the
affixation of their official seals.
-5-
11.2 Party B hereby confirms that Party A may convert into a wholly
foreign-owned enterprise during the term of this Agreement without the
need to seek the consent or confirmation from Party B before or after
the conversion, and the rights and liabilities of Party A under this
Agreement will not be affected or changed by such conversion of Party
A. Party B will recognize the legal standing of the wholly
foreign-owned enterprise to perform this Agreement.
11.3 Party A may terminate this Agreement if the following conditions are
not satisfied. Upon the termination of this Agreement, with the
exception of any rights and obligations accrued prior to such
termination, the parties shall enjoy no further rights or bear any
further obligation in relation to the Agreement or the termination
thereof:
(1) China Mobile (Hong Kong) Limited (hereinafter "CMHK") obtained
waivers from the Stock Exchange of Hong Kong Limited
(hereinafter the "SEHK") for transactions to be carried out
under this Agreement which constitute "connected transactions"
in accordance with the Listing Rules of the SEHK; and
(2) the independent shareholders of CMHK, who are determined not
to be "connected parties" in accordance with the Listing Rules
of the SEHK, approve the relevant transactions.
11.4 The various appendices to this Agreement are constituent parts of this
Agreement, and have equal effect as the main text of this Agreement. In
the event of any discrepancy between the provisions of this Agreement's
appendices and those of the main text of this Agreement, the former
shall prevail.
11.5 Following discussion and agreement by both parties, this Agreement and
its appendices may be amended or supplemented by both parties, and any
amendment or supplement shall take effect after execution by the legal
persons or their authorized representatives of both parties and after
the affixation of the official seals.
11.6 This Agreement is severable. If any provision of this Agreement or its
appendices are determined to be unlawful or unenforceable, the validity
and enforcement of other provisions shall not be affected.
11.7 This Agreement is written in Chinese and executed in four (4) original
counterparts, two of which shall be retained by each party. Each
original counterpart has equal legal validity.
Anhui Mobile Communication Company Limited
/s/ ZHANG Daode
-------------------------------
Legal Representative or his/her
-6-
Authorized Representative
Anhui Communications Service Company
/s/ ▇▇ ▇▇▇▇▇'en
-------------------------------
Legal Representative or his/her
Authorized Representative
Appendices
-7-
APPENDIX I
THE CONSULTATION OF THE PLANNING AND DESIGN OF TELECOMMUNICATIONS FACILITIES
1. BASIC PRINCIPLES
1.1 Party B agrees to provide planning and design and other relevant
services for the telecommunications engineering projects of Party A
(including new construction works and extension works) under the terms
and conditions of this Agreement, including, but not limited to,
project specific research, compilation of project proposals,
feasibility study report and engineering design documentation.
1.2 Both parties shall, in accordance with the relevant laws, regulations
and the procedures specified by the regulatory authorities of the
industry, separately execute specific services agreement(s) in relation
to the concrete project, whereby such agreements will be incorporated
into this agreement as appendices. In the specific services agreements,
both parties shall specifically agree on the work title, location,
size, and the estimated amount of investment of the work, and other
matters.
1.3 Under the specific services agreement(s) executed according to the
preceding section 1.2, the provision of, and the payment of relevant
charges for, the concrete services shall be performed in accordance
with the basic principles and relevant conditions stipulated in this
Agreement.
2. STANDARD AND PAYMENT OF DESIGN FEES
2.1 The basis for the pricing of the design fees and the pricing standard
shall be determined in accordance with the provisions of the following
documents: (1) Circular in relation to the Promulgation of the
Administrative Provisions on Works Survey Design Fees, (JiJiaGe [2002]
No. 10), by the State Development and Planning Commission and the
Ministry of Construction; (2) Interim Provisions on Consultation Fees
in Early Stage of Construction Project, (JiJiaGe [1999] No. 1283),
printed and issued by the State Development and Planning Commission on
September 10, 1999. If the above documents are superceded by other
government documents, both parties shall use the newly issued
government documents as the basis for pricing.
2.2 Party A shall pay Party B a deposit equivalent to 10% of the estimated
design fees within 7 working days after the specific services
agreement(s) take effect. The deposit will be used as the design fees
after the performance of the Agreement. If Party A fails to perform the
specific services agreement(s), then Party A has not right to demand
the return of the deposit. If Party B fails to perform the specific
services agreement(s), Party B shall return twice the amount of the
deposit.
-8-
2.3 Depending on the provision of the specific services agreement(s),
design fees may be paid in installments according to the stages of
progress of the submission of the design documents, or may be paid in a
lump sum upon final submission of the works.
2.4 The actual design fees shall be verified and confirmed against the
estimation cost of the preliminary design, with a refund for over
payment or an additional payment for any deficiency, as the case may
be.
2.5 The amount and the payment of other consulting services except for the
designing services provided by Party B to Party A shall be determined
by both parties in the specific services agreement(s) in accordance
with the preceding provision 2.1.
3. RESPONSIBILITIES OF BOTH PARTIES
3.1 Party A's responsibilities
(1) Party A shall be responsible for timely providing Party B with
basic information and documents, which are complete and
accurate. Party A may not require Party B to design in
violation of the relevant national standards.
(2) If Party A is late in providing the abovementioned information
and documents and such a delay is not more than 15 working
days, the delivery date of design documents by Party B shall
be extended by the same number of days accordingly; if the
delay in submission of the information and documents by Party
A exceeds 15 working days, Party B has the right to reset the
delivery date of the design documents.
(3) If the design is reworked by Party B due to Party A's changing
the assigned design project, or the size or the conditions of
the project, or due to errors in the submitted information or
subsequent material change to the submitted information, Party
A shall compensate Party B with the rework expenses based on
the actual work expended by Party B, unless the relevant
provisions have been revised and confirmed afresh after the
consultation and execution of supplementary agreement(s).
(4) Party A may terminate or cancel the agreement during the term
of this Agreement, and if Party B has not yet commenced the
design work, the deposit will not be refunded; if Party B has
commenced the design work, and if less than half of the
quantities for that phase is completed, then half of design
charge payable at that phase shall be paid; and if more than
half of the quantities for that phase is completed, then full
design charge payable at that phase shall be paid. Party B
shall hand over the completed work results (design documents)
to Party A in the circumstances where the Agreement is
terminated or cancelled under this section.
-9-
(5) Party A's request of early delivery of design documents ahead
of schedule shall be subject to Party B's consent, and shall
not substantially deviate from reasonable design cycles. Party
A shall pay extra charge for such early delivery.
(6) For employees that Party B sends to station in Party A's site,
Party A shall provide them with convenient conditions on
working, living and moving about and also with necessary labor
protection equipment.
3.2 Party B's responsibilities
(1) Party B shall design in accordance with the relevant
regulations and technical specifications and standards agreed
upon in the specific services agreement(s). Party B shall
deliver design documents to Party A in accordance with the
contents, timing and number of copies as stipulated in the
specific services agreement(s), and Party B shall be
responsible for the quality of the submitted design documents.
(2) The design shall accommodate the reasonable anticipated
lifespan of use as shall be agreed by the parties.
(3) Party B is responsible for supplementing or correcting
omissions or errors in the design documents. For any losses
relating to work quality matters caused by design errors of
Party B, apart from the responsibility to take remedial
measures, Party B shall not receive payment of the design fees
in connection to the part of work incurring such losses, and
Party B shall compensate Party A based on the actual extent of
losses.
(4) If delay in delivery of design documents is attributable to
Party B, for each day withheld, 0.3% of the design fees shall
be deducted from the design fees payable to Party B. For delay
exceeding 30 working days, Party A has the right to terminate
the specific services agreement(s) and ask Party B for refund.
(5) After delivery of design documents, Party B shall, in
accordance with the requirement, undergo design examination
and checking by the relevant authority. Party B shall be
responsible for making the necessary adjustments and/or
additions (based on the conclusion of examination and
checking) to the contents that are not beyond the original
scope (of work). If the construction commences within one year
after the delivery date of the design documents as scheduled
under the Agreement, Party B shall have the obligation to
inform Party A and the construction team of the design basis,
deal with relevant design issues and participate in work
completion verification and acceptance. If the construction
commences more than one year after the delivery date of the
design documents as
-10-
scheduled under the Agreement, Party B shall be responsible
for the abovementioned work and charge Party A for
consultation services as appropriate, according to actual
quantities of work. Such fees shall be separately agreed upon
by both parties.
-11-
APPENDIX II
THE CONSTRUCTION OF TELECOMMUNICATIONS FACILITIES
(EXCLUSIVE OF TELECOMMUNICATION LINES AND DUCTS CONSTRUCTION)
1. BASIC PRINCIPLES
1.1 Party B agrees to provide construction services (exclusive of lines and
telecommunications ducts construction; same below) for the
telecommunications works of Party A (including new construction works
and extension works) under the terms and conditions of this Agreement.
1.2 Both parties shall, in accordance with the relevant laws, regulations
and the procedures specified by the relevant regulatory authority of
the industry, separately execute specific services agreement(s) in
relation to the construction project and the number of projects,
whereby such agreements will be incorporated into this Agreement as
appendices.
1.3 Under the specific services agreement(s) executed according to the
preceding section 1.2, the provision of, and the payment of relevant
charges for, the concrete services shall be performed in accordance
with the basic principles and relevant conditions stipulated in this
Agreement.
1.4 Party A shall ensure that the particular construction project
commissioned to Party B has obtained approval for project handling and
that it timely collects the approval for commencement of work.
2. STANDARD AND PAYMENT OF CHARGES
2.1 The basis for the pricing of the design fees and the pricing standard
shall be performed in accordance with the provisions of the following
documents: (1) Budget Quota of Integrated Wiring System for Buildings
and Building Clusters and Budget Quota of Installation of Mobile
Telecommunications Equipment (amended), (XinBuGui [2000] No. 904),
promulgated in September 2000 by the Ministry of Information Industry;
(2) Estimation, Budget Compilation and Expenses Quota of
Telecommunications Construction Works, Budget Quota of
Telecommunications Construction Works, First Volume (Telecommunications
Equipment Works) (YouBu [1995] No. 626), by the former Ministry of Post
and Telecommunications; (3) Type Classification Criteria of
Telecommunications Construction Works, (YouBu [1995] No. 945), by the
former Ministry of Post and Telecommunications. If the above documents
are superceded by other government documents, then both parties shall
use the newly issued government documents as the basis for pricing.
-12-
2.2 Both parties agree that, based on the service charges stipulated in the
abovementioned section 2.1, such service charges are to be paid in the
following manner:
(1) Party A shall pay Party B a sum equivalent to 10% of the total
service charges within 7 working days after both parties agree
on each particular item of services and sign the specific
services agreement(s) under the abovementioned section 1.2.
(2) Party B shall, in accordance with the specific services
agreement(s), regularly provide Party A with a statement on
amount of work completed; Party A shall pay Party B a sum
equivalent to 70% of the total service charges within 10
working days upon the completion of all works and after
examination and verification that there is no error;
(3) After the completion and verification and acceptance of the
works, Party B shall, based on the time limit stipulated under
the specific service agreement(s), provide Party A with works
settlement documents; within 20 working days upon receipt of
the works settlement documents and after undergoing auditing,
Party A shall pay Party B the balance of the service charges
in accordance with the results of the auditing.
2.3 After the execution of the specific services agreement(s), if the
amount of the construction increases or decreases due to a change in
the works project's design, then based on the actual amount of work
actually provided by Party B, the service charge shall be adjusted in
accordance with the pricing principles and criteria stipulated under
this Agreement and the specific services agreement(s).
3. QUALITY ASSURANCE
3.1 Both parties shall jointly study and discuss the construction project
before the commencement of the various specific services. Before
construction begins, Party B shall organize its staff to learn and get
acquainted with the blueprints of the works design, and Party B shall
develop construction proposals satisfactory to Party A, finish
preparatory work for the commencement of construction, and document the
process.
3.2 Party B shall complete particular telecommunications engineering
project on scheduled under the specific services agreement(s) according
to relevant construction procedures, and ensure that the quality
conforms with relevant standards and regulations, secure normal
operation of the telecommunications system or equipment, satisfy Party
A's reasonable demands, and timely report to Party A on the progress of
the relevant works.
-13-
3.3 If the service quality of Party B does not conform with the relevant
standards and regulations, Party A may, in a reasonable manner and
according to circumstances, reduce service charges payable to Party B.
3.4 Party A may regularly or randomly inspect the construction progress of
Party B.
3.5 Party B shall bear all responsibilities in the event of any injury to
any third party or construction workers caused by Party B's
construction problems.
4. EXAMINATION AND VERIFICATION OF CONSTRUCTION COMPLETION, AND
MAINTENANCE
4.1 Party B shall notify Party A of the verification date by giving a
written notice to this effect within 5 working days before the
completion of each particular construction work; if Party A is unable
to participate in the examination and verification as scheduled, Party
A shall give prior notice to Party B and discuss with Party B to fix
another examination and verification date.
4.2 If the completed construction work passes the examination and is
accepted, Party B shall hand over the work to Party A within 15 working
days after the date of examination and verification; if Party A is
unable to take over the work in time, thereby causing losses to the
completed work, then such losses shall be borne by Party A.
4.3 If any rework or repair and remedial work is found to be necessary on
any part of the work during the examination and verification of the
completed work, both parties shall, on acceptance, determine remedial
measures and a time limit. Party B shall complete the remedial work by
such a time limit, and then, on completion and after examination and
acceptance, it shall be handed over to Party A. Any expenses thus
incurred shall be borne by Party B.
4.4 Party B is responsible for maintaining the quality of the work and make
repairs for a period of one year after the examination and verification
of the completion of work. During the period of the abovementioned
warranty, Party B is responsible for repairing any matters that are
related to the quality of the work and caused by the construction, and
Party B shall bear all the repairing charges. However, Party B shall
take no responsibility for any loss caused by the quality defect of the
equipment itself.
4.5 Party B shall be responsible for the repair or rework, without
compensation, of work the construction quality of which does not
conform to requirements. In case of any delay in delivery caused by
repair or rework, Party B shall be liable to a delay penalty.
4.6 If Party B fails to complete as scheduled under the specific services
agreement(s), then for each day withheld, Party B shall pay Party A a
delay penalty at a rate equivalent to 0.3% of the total service charges
stipulated under the specific services agreement(s).
-14-
APPENDIX III
THE MAINTENANCE OF TELECOMMUNICATION LINES
1. BASIC PRINCIPLES
1.1 Party B agrees to provide telecommunication lines maintenance services
to Party A in accordance with the terms and conditions under this
Agreement.
1.2 Both parties shall, in accordance with the relevant laws, regulations
and the procedures specified by the relevant regulatory authority of
the industry, separately execute specific services agreement(s) in
relation to specific telecommunication lines as appendices to this
Agreement. In such services agreement(s), both parties shall
specifically agree on matters such as the category, quantity, scope,
maintaining areas of the telecommunication lines, etc.
1.3 Under the specific services agreement(s) executed according to the
preceding section 1.2, the provision of, and the payment of relevant
charges for, the concrete services shall be performed in accordance
with the basic principles and relevant conditions stipulated in this
Agreement.
1.4 The telecommunication lines maintenance services provided by Party B
shall conform with the relevant regulations and standards in relation
to manufacturing safety and technology quality stipulated by the
relevant authorities.
1.5 Party A shall provide reasonable and necessary assistance for Party B
to perform the relevant maintenance services under the appendices of
this Agreement.
2. MAINTENANCE SERVICE CHARGES AND PAYMENT
2.1 The basis for the pricing of the maintenance services and the pricing
standard shall be performed in accordance with the relevant provisions
of the Tariff Manual of Posts and Telecommunications issued in 1999 by
the Ministry of Information Industry. If the above pricing document is
superceded by other government documents, then both parties shall use
the newly issued government documents as the basis for pricing.
2.2 The maintenance fees shall be paid monthly. The payment time is the
15th day of each month. The amount of advance payment for the
maintenance fees shall be calculated based on the relevant standards
stated in the preceding section 2.1 and depend on the numbers of
telecommunication lines that Party B is responsible for maintaining.
2.3 Party B shall bear the relevant expenses for low-value and easily-worn
items, tools, vehicles, transportation fees and personnel fee incurred
in providing the maintenance services, while Party A shall bear the
relevant expenses for back-up
-15-
items, spare parts, fees for emergency repair main material and
manufacturers supporting fees.
2.4 Both parties shall verify the settlement of maintenance service charges
every 3 months, that is to say, within fifteen (15) working days after
the end of each quarter, the verification for the settlement of
maintenance service charges for that period shall be conducted. After
the confirmation of settlement of the maintenance service charges, any
surplus shall be refunded and any shortfall made good.
3. QUALITY ASSURANCE
3.1 Both parties shall jointly test, inspect, confirm, and record and file,
the quality status of the telecommunication lines before the
commencement of the maintenance services.
3.2 Party B shall maintain the telecommunication lines according to the
relevant maintenance procedures and maintenance areas of the
telecommunication lines specified under this Appendix, and ensure that
the quality conforms with relevant standards and regulations, ensure
normal operation of the telecommunication lines, satisfy Party A's
reasonable demands, and timely provide Party A with the relevant
statements and data.
3.3 Party A has the right to regularly or irregularly inspect the quality
of Party B's maintenance services. If Party B fails to complete the
maintenance services in accordance with the relevant maintenance
procedures of the State and the provisions under this Appendix, and the
quality of the maintenance does not conform with Party A's
requirements, the maintenance fees for the current period may be
deducted at Party A's discretion. If Party B fails to provide Party A
with the relevant statements and data in a timely manner or the said
statements and data are inaccurate and incomplete, the maintenance fees
for the current period may be deducted at Party A's discretion.
3.4 If mismanagement or improper maintenance of Party B or third parties
entrusted by Party B causes damage to telecommunication lines equipment
or causes the equipment to be unusable or causes the equipment to be
working abnormally, then Party B shall bear all direct losses of the
damaged equipment, and Party A has the right to deduct from the
maintenance service charges that is payable by Party A a sum of money
equivalent to the losses as confirmed by both parties.
3.5 Party B shall bear full responsibility for any loss to third parties or
to the maintenance personnel resulting from Party B's maintenance
problems.
-16-
APPENDIX IV
THE UTILIZATION OF SUPPLIED ASSETS AND MATERIALS
1. PROPERTY USE AND FUNCTION
1.1 Party B agrees to provide to Party A a number of premises of its own
("Proprietary Property") and premises of a third party with the use
right (the "Third Party's Property"), in accordance with the
requirements stated by Party A from time to time.
Among the premises used by Party A when this Agreement is signed, the
list of self owned premises of Party B is stated in Schedule 1 to this
appendix, while the list of third party's premises is stated in
Schedule 2 to this appendix.
Party A may, during the term of this Agreement, demand to increase or
decrease the number of the premises in accordance with Party A's
operational needs, and Party B shall satisfy such requirements as
practicable as possible.
1.2 Party A shall use the premises as mentioned in section 1.1 for such
legal purposes as offices, retail outlets, and for operation.
2. LEASING FEE AND ITS PAYMENT
2.1 For uses of Party B's abovementioned Proprietary Property by Party A,
Party A shall pay a leasing fee according to market rental value (real
estate management fee included). Specific leasing fees stipulated in
accordance with such principles are stated in the Schedule 1 to this
appendix.
2.2 For uses of the abovementioned Third Party's Property by Party A, Party
A shall only need to pay such leasing fee as was actually paid by Party
B to the third party (such royalty is subject to Party A's prior review
and confirmation) as well as taxes and levies stipulated by the
government. Party B shall not demand any other charges from Party A.
2.3 Party A shall verify the number of premises by March 15th and September
15th each year and pay the leasing fee for the first half year and the
second half year by March 25th and September 25th, respectively, of the
current year.
2.4 For arrears in royalty payment by Party A, an overdue penalty
equivalent to 0.03% of the arrears shall be paid by Party A to Party B
for each day of arrears.
2.5 Party B shall be liable for all taxes related to the Party B's
Proprietary Property that is used by Party A.
-17-
3. REPRESENTATIONS AND WARRANTIES
3.1 Party B warrants that it has the right to provide the abovementioned
Proprietary Property and Third Party's Property for Party A's use. If
the property right and /or use right vested in the abovementioned
property are challenged and, for any reason and in any circumstances,
thereby causing Party A's rights of use under this appendix to be
incapable of being realized or suffer other losses, then Party B agrees
to bear responsibility and compensate Party A for all the direct
monetary losses caused to Party A.
3.2 Party A warrants that Party A will compensate Party B for all the
direct monetary losses incurred by Party B arising from any damage to
or loss of the abovementioned properties caused by Party A.
3.3 Party B warrants to carry out inspection and repair to the property
provided to Party A for use, and if Party B's mismanagement causes
losses to Party A's property, Party B will compensate Party A for all
the direct monetary losses that are thereby caused to Party A.
-18-
