**Exhibit 4.18**

 

(English Translation)

 

 

**Comprehensive Services Agreement**

 

**between**

 

**China United Telecommunications Corporation**

 

**and**

 

**China United Telecommunications CorporationLimited**

 

 

**November 20, 2003**

 

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**Comprehensive Services Agreement**

 

This Agreement (the “Agreement”) is entered into on November 20, 2003,in Beijing, People’s Republic of China (the “PRC”), between

 

(1)           PartyA: China United Telecommunications Corporation

Address: Huang Cheng Hotel, 15 Yangfangdianlu, Haidian District,

Beijing

Legal Representative: Wang Jianzhou

 

(2)           PartyB: China United Telecommunications Corporation Limited

Address: 40th Floor, Jinmao Tower, 88 Century Boulevard,Shanghai

Legal Representative: Wang Jianzhou

 

**Whereas:**

 

(1)           Party A, a limited liability company dulyincorporated and validly existing in the PRC, is a provider of integratedtelecommunications services;

 

(2)           Party B, a joint-stock limited company dulyincorporated and validly existing under the laws of the PRC, has had its commonstock listed on the Shanghai Stock Exchange since October 9, 2002, 74.6017% ofwhich is held by Party A;

 

(3)           Party A and Party B entered into amemorandum, dated August 12, 2002 (the “Memorandum on Connected Transactions”),regarding certain transactions between Party A or its subsidiaries (excludingParty B and any subsidiaries controlled by Party B) and China Unicom Limited(the “Unicom Red-Chip Company”), which is indirectly controlled by Party B, orits subsidiaries;

 

(4)           Unicom New World TelecommunicationsCorporation Limited (“Unicom New World”), a limited liability company whollyowned by Party A and a provider of integrated telecommunications servicesestablished on November 4, 2003, has been injected by Party A with its GSMmobile telecommunications assets (“GSM Assets”) in the following nine provinces(or autonomous regions): Shanxi, Inner Mongolia, Hunan, Hainan, Yunnan, Tibet(no GSM assets), Gansu, Qinghai and Ningxia (the “9B Areas”).  Following the approval of the Ministry ofInformation Industry of the PRC in Xinbu Dianhan [2003] No. 443, Unicom NewWorld has been authorized by Party A to provide mobile telecommunicationsservices within the 9B Areas; and

 

(5)           Party A is contemplating on injecting, via awholly owned overseas subsidiary, all the rights and interests of the shares ofUnicom New World it now holds (the “Target Interests”) into Unicom Red-ChipCompany, which is established in Hong Kong (the “Offshore Capital InjectionProject”).  Following the completion ofthe Offshore Capital Injection Project, Unicom New World will become one ofUnicom Red-Chip Company’s subsidiaries that provide telecommunication servicesdomestically.

 

NOW THEREFORE, for the purpose of the Offshore Capital InjectionProject, in accordance with the Memorandum on Connected Transactions and theapplicable transaction principles set forth in the related listing rules, andon the basis of equality and mutual benefit, both Parties hereby have reachedthe following agreements after friendly consultations:

 

**1.****             General Principles:**

 

1.1           The “Comprehensive Service” hereunder refersto certain services and facilities provided by the Parties to each other or byone party to the other under this Agreement and any payment by the

 

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Served Party to the Serving Party (the“Service Fees”).

 

1.2           Such services and/or facilities provided byone Party to the other Party pursuant to this Agreement are non-gratuitouscommercial transactions. In accordance with the fair-market principles, theServing Party shall collect reasonable Service Fees for any services andfacilities provided by it, and the Served Party shall make any due payment.

 

1.3           The condition or quality of any of theComprehensive Service provided hereunder by either Party to the other Partyshall not be lower than that of the same or similar services or facilities theServing Party provides to any third party.

 

1.4           In the event that either Party requires theother Party to increase the supply of any of the Comprehensive Service, theother Party shall do its utmost to provide such requested amount of theservices or facilities, of which the condition or quality shall not be lowerthan that of the same or similar services or facilities the Serving Partyprovides to any third party.

 

1.5           In the event that any Party is not able toprovide, in full amount or at all, any of the Comprehensive Service due to anyreasons other than its own fault, such Party shall promptly notify the otherParty and do its utmost to assist the other Party in seeking the same orsimilar services or facilities through other channels.

 

1.6           The Comprehensive Service provided hereundershall be in accordance with the specific purposes agreed by both Parties aswell as with the applicable national standards.

 

1.7           In the event that either Party breaches thisAgreement and losses are incurred by the other Party, the defaulting Partyshall bear any liabilities for such breach, including, but not limited to, anydirect and indirect losses resulting from the breach, provided that such lossesare not caused by any force majeure event.

 

1.8           Each Party shall provide all reasonable andnecessary efforts to assist the other Party’s performance hereunder.

 

**2.****             Basic Content of theComprehensive Service:**

 

2.1           The Comprehensive Service provided by theParties to each other and other related arrangements are set forth in theAnnexes hereto:

 

Annex I:      Interconnection and Settlement(to be provided by both Parties to each other);

 

Annex II:     Roaming Arrangement (to be providedby both Parties to each other);

 

Annex III:    Special Phone Cards (to be provided byParty A to Party B);

 

Annex IV:    Equipment Acquisition Service (to beprovided by Party A to Party B); and

 

Annex IV:    Use of the Properties (to be provided byParty A to Party B).

 

**3.****             Pricing and Payment:**

 

3.1           The principles for pricing and billingstandards in connection with the Service Fees are set forth in the Annexeshereto.

 

3.2           Anyspecific amounts of the Service Fees shall be calculated under the currentapplicable Chinese accounting rules.

 

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3.3           In the event that the Parties fail to agreeupon a certain amount of the Service Fees, such issue shall be reported to therelevant authorities, who shall determine such amount in accordance with thisAgreement and the national pricing policies and rules. Such authorities’decisions shall be final and binding on both Parties.

 

3.4           Each Party shall pay the due Service Feesfor the relevant services provided by the other Party in accordance with thepricing principles and standards set forth in this Agreement and the Annexeshereto.

 

3.5           In the event that either Party fails to payany due Service Fee, such Party shall pay to the other Party a late fee of0.05% of the due amount on a daily basis. In the event that the payment isoverdue for more than 60 days, the other Party may notify in writing of itsintention to suspend the relevant services. In the event that such Service Feesare not paid within 30 days after the receipt of the written notice, the otherParty may declare to terminate the relevant services. The suspension or terminationof such services shall not affect any rights or obligations hereunder broughtforth prior to such event.

 

3.6           Every October, both Parties shall discussthe next fiscal year’s pricing standards for each item of the ComprehensiveService as well as other related matters and enter into certain supplementalagreements. If the Parties fail to enter into such supplemental agreements bythen, the current pricing standards and other related clauses shall apply tothe next fiscal year until certain agreement is reached or the dispute isresolved pursuant to Section 3.3 herein.

 

**4.****             Term:**

 

4.1           The term of this Agreement shall be oneyear. Subject to Section 7 herein, this Agreement shall become effective onDecember 31, 2003.

 

4.2           Subject to applicable laws and governmentregulations, this Agreement shall be automatically renewed each year, unlessParty B notifies Party A in writing 60 days prior to the expiration day.

 

**5.****             Representations,Warranties and Covenants:**

 

Each Party hereto represents and warrants to the other Party asfollows:

 

5.1           Such Party has the full power and authority(including, but not limited to, obtaining relevant approvals, consents orpermits from government authorities) to execute this Agreement and its Annexes;

 

5.2           This Agreement and its Annexes will becomeeffective and binding once it is signed in the way specified herein and can beenforced in a mandatory manner; and

 

5.3           No provision in this Agreement and itsAnnexes shall run counter to the applicable laws and regulations of the PRC.

 

**6.****             Assignment:**

 

6.1           Subject to the terms and conditions underthis Agreement and the Memorandum on Connected Transactions, Party A herebygives an irrevocable consent that Party B may transfer its rights andobligations hereunder to Unicom New World. No other or further consent by Party A shall be required for Party B totransfer its rights and obligations hereunder to Unicom New World.

 

6.2           Once Party B transfers its rights andobligations hereunder to Unicom New World, Unicom New

 

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World shall immediately assume all of Party B’s rights and obligationshereunder, while Party B shall immediately terminate all such rights andobligations.

 

**7.****             Effectiveness:**

 

The Agreement shall be effective on the dayagreed to by the Parties after the following conditions have been satisfied:

 

7.1           PartyB shall have approved through a shareholder meeting in accordance with theapplicable laws, regulations and listing rules the purchase by China Unicom(BVI) Limited (“Unicom BVI”), a subsidiary of Party B, of the Targeted Interestsindirectly or directly held by Party A.

 

7.2           PartyB shall have approved implementation of this Agreement through a shareholdermeeting in accordance with the applicable laws, regulations and listing rules.

 

7.3           TheUnicom Red-Chip Company shall have approved through a shareholder meeting inaccordance with the applicable laws, regulations and listing rules its purchaseof the Targeted Interests from Unicom BVI.

 

7.4           TheUnicom Red-Chip Company shall have approved through a shareholder meeting in accordancewith the applicable laws, regulations and listing rules the transfer by Party Bof its rights and obligations under this Agreement to Unicom New World.

 

**8.****             Force Majeure:**

 

In any force majeure event that is unforeseeable and the consequencesof which are unavoidable or insurmountable and which results in either Party’sfailure to duly perform its obligations hereunder, such Party shall promptlynotify the other Party of such situation and provide within 15 days any validdocuments evidencing the details and explaining the reasons for not being ableto perform all or part of its obligations hereunder or the reasons for anynecessary delays of such performance. Based on the impact of the force majeureevent on the performance of any obligations hereunder, the Parties shall decidethrough negotiations whether to terminate, partially waive or postpone suchperformance.

 

**9.****             Confidentiality:**

 

Unless required by law or any regulations or requirements of anyrelevant regulatory authorities, or unless for the purpose of Party B’sinformation disclosure to the Shanghai Stock Exchange, each Party shall not,without the other Party’s written consent, provide or disclose any data andinformation in connection with the other Party’s businesses to any other company,enterprise, organization or person.

 

**10.****          No Waiver:**

 

Unless otherwise required by law, any failure or delay in exercisingany of its rights, powers or privileges by one Party shall not be construed asa waiver of such rights, powers or privileges. Any one time or partial exerciseof such rights, powers or privileges shall not affect any further or completeexercise of such rights, powers or privileges.

 

**11.****          Notification:**

 

Any notification given in connection with this Agreement shall be inwriting and shall be delivered by one Party to the other Party by hand, fax ormail. Such a notification by hand shall be deemed to have been duly given onthe date of delivery. Such a notification via fax shall be deemed to have beenduly given upon the completion of the fax transmission. Such a notification bymail shall be deemed to have been duly given on the third working day (extendedwhen there is a public holiday) after the postal date. Notifications 

 

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become effective upon their arrival.

 
|                                         | Addresses of the Parties hereto for receiving notifications are as  follows: |
|----------------------------------------------|------------------------------------------------------------------------------|
|                                         |
| China United Telecommunications Corporation: |

 
|                                                 | Addressee: | Yi Yongji                                                      |
|------------------------------------------------------|------------|----------------------------------------------------------------|
|                                                 | Address:   | A133, Xidanbeidajie, Room 1167, 11th Floor, Xicheng  District, |
|                                                 |       | Beijing, China 100032                                          |
|                                                 |       |                                                           |
| China United Telecommunications Corporation Limited: |

 
|   | Addressee: | Zhao Yilei                                      |
|--------|------------|-------------------------------------------------|
|   | Address:   | 40th Floor, Jinmao Tower, 88 Century Boulevard, |
|   |       | Shanghai, China 200121                          |

 

**12.****          Governing Law:**

 

This Agreement is under the jurisdiction of the PRC laws and shall beinterpreted and executed in accordance with the PRC laws.

 

**13.****          Dispute Resolution:**

 

Other than the exceptions under Section 3.3 herein, both Parties shallendeavor to resolve any dispute over the effectiveness, interpretation orexecution of this Agreement through friendly consultations. Should any disputeremain unsettled for more than 30 days after its occurrence, either Party isentitled to bring a lawsuit based on this Agreement to a competent PRC Court.

 

**14.****          Miscellaneous**

 

14.1         Annexes I to V hereof are integral parts ofthis Agreement with equal legal binding force. Should there be any conflictbetween the Annexes and the Agreement, the Annexes shall prevail.

 

14.2         Based on mutual consultations, both Partiescan make modifications, revisions or additions to this Agreement and theAnnexes hereto. No revision or addition shall become effective until it is dulysigned in writing and sealed by both Parties or their authorizedrepresentatives.

 

14.3         This Agreement is severable, that is, when anyof the clauses in this Agreement or the Annexes hereto is deemed illegal ornon-enforceable, the effectiveness and enforcement of the other clausescontained herein shall by no means be affected.

 

14.4         ThisAgreement has six original copies with equal legal binding force, and eachParty shall retain three.

 

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| China United Telecommunications Corporation (Company Seal)         |
|--------------------------------------------------------------------|
|                                                               |
| Legal Representative or Authorized Representative:                 | /s/ Wang Jianzhou |   |
|                                                               |
|                                                               |
| China United Telecommunications Corporation Limited (Company Seal) |
|                                                               |
| Legal Representative or Authorized Representative:                 | /s/  Sun Qian |   |
|                                                                    |  |  |  |

 

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**Annex I**

 

**Interconnection and Settlement**

 

1.             Typesof interconnection:

 

For the purpose of operating various telecommunication networks,including the mobile network of the Nine Service Areas, Party A and Party B herebyagree to interconnect all of their telecommunication networks, including eachParty’s own mobile networks and other networks.

 

2.             Technicalspecifications and standards, cost sharing and network construction in respectof the interconnection:

 

2.1           Any such interconnection shall be subject tothe interconnection standards and specifications set forth by governmentaltelecommunications authorities.

 

2.2           Issues such as cost-sharing methods andnetwork construction shall be discussed and decided by both Parties, inaccordance with applicable regulations set forth by governmentaltelecommunications authorities.

 

3.             EachParty’s obligations:

 

3.1           Each Party shall ensure that the quality ofthe interconnection shall not be lower than that of the telecommunicationwithin their own networks.

 

3.2           Based on the technology available, eachParty shall unconditionally and promptly provide the other Party’s customers,upon the customers’ requests, any services (including special services andintelligent services) available to the customers in its own networks and shallguarantee the quality of such services.

 

4.             Networkmanagement and adjustment:

 

4.1           Each Party shall notify the other Party ofits construction work on network expansions, if such construction work may affectthe usage of the other Party’s customers, six months before such constructionwork starts.

 

4.2           Each Party shall notify the other Party ofits technical adjustment work on router systems, frame relays, transmissionmethods, cell data or software upgrades, etc., if such adjustment may affectthe usage of the other Party’s customers, 30 days before such adjustment workstarts.

 

4.3           Each Party shall provide timely cooperationand assistance, at the other Party’s request, in the other Party’s adjustment workon router systems, frame relays, transmission methods, cell data or softwareupgrades, etc., so as to ensure the quality of the interconnection.

 

5.             Maintenance,technical problems and solutions:

 

5.1           Both Parties shall maintain their networksby the current standards and regulations set forth by the governmentaltelecommunications authorities so as to ensure normal operation of the entirenetwork.

 

5.2           EachParty may not terminate the interconnection without the other Party’s consent.

 

5.3           Should there be a network breakdown or heavynetwork traffic, both Parties shall take effective 

 

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measures to resume operations.

 

6.             Settlementand payment:

 

6.1           SettlementPrinciples:

 

(1)           Settlementbetween both Parties’ mobile networks:

 

The two different settlement methods for mobile calls between differentprovinces are as follows:

 

(i)            If the settlement standards stipulated inthe MII’s March 14, 2001 “Notice Regarding Announcement of ‘Settlement Measuresfor Interconnection Telecommunications Fees’” (Xinbu Dian [2001] No. 195)announcement is applied, the caller’s network shall retain RMB0.06 of thelong-distance charge while the receiver’s network shall retain RMB0.06. Theremainder shall be collected by Party B.

 

(ii)           Currently, both Parties agree to adopt thesettlement method specified in 6.1(1)(ii). However, both Parties also agree that, if any other settlement methodset forth and modified from time to time by the relevant governmentalauthorities, are found more favorable to Party B than the settlement methodspecified in 6.1(1)(ii), such settlement method shall be adopted.

 

ii.             Allother interconnection settlement between both Parties:

 

Both Parties agree to make settlements in accordance with the MII’sannouncement dated March 14, 2001 and its amendments from time to time.

 

6.2           Billingprinciples:

 

The interconnection settlement between the Parties shall be based onParty B’s billing data. However, if the discrepancy between Party A’s billingdata and Party B’s accounting billing is larger than 3%, both Parties shallnegotiate to determine a settlement basis.

 

6.3           Deliveryof billing data and settlement:

 

(1)           Settlementbetween the Parties’ mobile networks

 

Both Parties agree to submit relevant billing data on the 25thday of each month to the Settlement Center, controlled by Party B. TheSettlement Center is in charge of data collecting and processing, and creatingnetwork settlement statements.

 

Both Parties also agree to make settlements once a month on the networksettlement statements created by the Settlement Center.

 

(2)           Othersettlements between the Parties’ mobile networks and fixed networks

 

Both Parties agree to have their subsidiaries make settlements once amonth based on the settlement principles set forth in this Annex.

 

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**Annex II**

 

**Roaming Arrangement**

 

1.             BecauseParty A and Party B provide mobile services in their own respective serviceareas and in order to provide roaming services to both Parties’ mobilesubscribers, both Parties hereby agree to make arrangements as follows:

 

1.1           Both Parties agree to arrange for automaticroaming, so that either Party’s mobile subscribers can make and receive callsin the other Party’s service areas.

 

1.2           Both Parties agree that a mobile subscriberusing roaming services shall be charged with a fixed roaming fee of RMB0.60 perminute for both incoming and outgoing calls.

 

(1)           If a Party B’s subscriber uses the roamingservice in Party A’s service area, the roaming charge shall be collected byParty B and shall be distributed as follows: (i) RMB0.40 is collected by PartyA; and (ii) RMB0.20 is retained by Party B.

 

(2)           If a Party A’s subscriber roams in the NineService Areas, the roaming charge shall be collected by Party A and shall bedistributed as follows: (i) RMB 0.56 is collected by Party B; and (ii) RMB 0.04is retained by Party A.

 

2.             Roamingon the networks of other domestic and/or international mobiletelecommunications services operators (“Other Operators”)

 

2.1           PartyA agrees to make the necessary arrangements to allow Party B roaming capabilitieson the mobile networks of Other Operators; and Party B agrees to provide itsentire long distance network for realizing such roaming capability.

 

2.2           Bothparties agree to carry out the roaming and settlement arrangements according tothe relevant roaming agreements between Party A and the Other Operators.

 

2.3           Whensubscribers of Party A’s mobile networks roam on the networks of anythird-party operators under Party A’s international roaming arrangements, orwhen subscribers of Other Operators roam on Party A’s networks under sucharrangements, Party B shall receive 50% of all roaming revenues to which PartyA is entitled under its international roaming arrangements.

 

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**Annex III**

**Special Phone Cards**

 

1.             Scopeof the special phone cards service:

 

Based on its actual needs, Party B may request Party A to provide, viaUnicom Xingye, a subsidiary held by Party A, or other subsidiaries of Party A,certain telephone cards for various purposes, including SIM cards, UIM cards,IP cards, long-distance cards and rechargeable cards (the “Phone Cards”collectively).

 

2.             Quantityof the Phone Cards:

 

2.1           Annualand periodical plans for ordering the Phone Cards:

 

2.1.1        In October of each year, Party B shall submitto Party A its annual order plan for the coming year, based on its operationplan for the year.

 

2.1.2        In February, May and September of each year,Party B shall confirm its order plans for the periods from May to August, fromSeptember to December, and from January to April of the next year,respectively. Party A shall deliver the Phone Cards according to the orderplans confirmed by Party B, unless there is a force majeure event.

 

2.2           Rushorders and temporary orders:

 

Party B may request to modify its order plans. Should there be any rushorders or temporary orders resulting from such modifications, Party A shall doits utmost to supply the order as requested by Party B and shall confirm withinthree days after Party B’s request whether it will be able to perform asrequested by Party B.

 

3.             Pricesfor the Phone Cards

 

3.1           Both Parties agree that the prices for thePhone Cards shall be determined by the actual cost of the Phone Cards to bedelivered by Party A to Party B (including the import cost, manufacture costand distribution cost) plus a marginal profit no higher than 20% (which is tobe determined from time to time by both Parties) of the overall cost. BothParties also agree to set up a discount rate based on the volume of Party B’sorders.

 

3.2           As for Party B’s rush orders or temporaryorders, Party A may add an expedited fee of up to 10% on top of the prices setforth above.

 

3.3           Both Parties agree to negotiate anddetermine in December of each year the price for each type of Phone Card forthe coming year.

 

4.             Deliverytime and place:

 

Party A shall deliver the Phone Cards to Party B at the time and placesdesignated in Party B’s order plans or as requested by any rush/temporaryorders.

 

5.             Qualityof the Phone Cards:

 

5.1           Party A shall guarantee the quality of thePhone Cards to be up to the standards stipulated by the relevant governmentalauthorities, and provide any necessary certification.

 

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5.2           Party A shall guarantee all the numbers,codes and passwords of the Phone Cards to be produced under a secure andconfidential condition, and guarantee the technology, security andconfidentiality of such numbers, codes or passwords.

 

5.3           In the event that Party B raises anyquestions regarding the quality of any Phone Cards within five days after itreceives such Phone Cards, Party A shall exchange or repair such defectivePhone Cards, unless the defect was caused by Party B, until the applicablestandards and Party B’s requirements are satisfied.

 

5.4           In the event that Party B fails, after itsreasonable efforts, to discover any existing quality defects in the PhoneCards, Party A shall indemnify Party B for all of Party B’s direct lossescaused by such defects.

 

6.             Payment:

 

6.1           By the time that Party B confirms with PartyA of Party B’s order plan, it shall make a prepayment of 15% of the total priceof the Phone Cards ordered by Party B;

 

The remaining 85% of the total payment shall be delivered to Party A bythe time that Party A completes the delivery of all the Phone Cards pursuant toParty B’s order plan.

 

6.2           Paymentfor rush/temporary orders:

 

By the time that Party A confirms with Party B of any rush or temporaryorder, Party B shall make the full payment of such order (including anyexpedited fees) and Party B may require Party A to deliver such order on atimely basis.

 

7.             OtherPhone Cards:

 

Based on its business needs, Party B may request Party A to provideother types of Phone Cards. Party A shall give complete consideration based onthe available technology, operating conditions and other factors and shallprovide such cards if able to confirm a workable plan.

 

Both Parties agree that they shall discuss the amount, prices, andpayment methods of such other types of Phone Cards. The price shall be based onthe actual cost incurred by Party A in manufacturing and delivering such PhoneCards plus a marginal profit no higher than 20% of the total cost.

 

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**Annex IV**

 

**Equipment Acquisition Services**

 

1.             Scopeof the equipment acquisition services:

 

Based on its actual needs, Party B may request Party A to act on itsbehalf (via Unicom Import and Export Co. Ltd. (“Unicom I&E”), a subsidiarycontrolled by Party A), to handle overseas or domestic acquisitions oftelecommunications equipment and other materials.

 

Unicom I&E shall, at Party B’s request, provide comprehensiveacquisition services, including bidding, consulting, and acting as theprocessing agent. Unicom I&E may also authorize Party A’s othersubsidiaries to provide such acquisition services.

 

2.             Proceduresfor the acquisition services:

 

Both Parties agree to authorize Unicom I&E to provide the equipmentaquisition services to Party B in accordance with “Notice on Centralized Importand Export Operations (No. [1994]001)”, “Rules on Centralized EquipmentAcquisitions of China Unicom (No. [1995]380)”, “Rules on CentralizedAcquisitions of Equipment and Instruments (No. [1996 ]31)”, “Methods ofEquipment Acquisitions of China Uniform (No. [1998] 059)” and other applicabledocuments agreed upon by both Parties.

 

3.             ServiceFees and Payment:

 

3.1           PartyB shall pay Unicom I&E such service fees for the acquisitions of anyequipment and materials as follows:

 

3.1.1           0.7% of the underlying amount (including anybank processing fees) in any overseas acquisition contract of major equipmentsigned by Unicom I&E on Party B’s behalf;

 

3.1.2           0.5% of the underlying amount in anydomestic acquisition contract of major equipment signed by Unicom I&E onParty B’s behalf; and

 

3.1.3           Unicom I&E agrees not to charge Party Bfor the acquisition of any power switches, storagebatteries, diesel-electric sets, constant power supplies, the airconditioning of equipment rooms, optic fibers and other transmission materialsand necessary accessories.

 

3.2           Both Parties agree that the payment time forthe agent service fees shall be determined by both       Party B and Unicom I&E, based on the specificcircumstance of the equipment acquisition. Should there be any payment overdue,Party B shall pay Unicom I&E a late fee of 0.5% of the total amount due ona daily basis.

 

4.             Party A shall cause Unicom I&E totreat Party B in the same manner as it would Party A in respects of import andexport prices as well as other material provisions or conditions.

 

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**Annex V**

 

**USE OF THE PROPERTIES**

 

1.             Useand purposes of the properties:

 

1.1           Each party agrees to, based on the otherparty’s requests from time to time, to give the other party access to usecertain properties it owns (the “Owned Properties”) and certain otherproperties procured by it from certain third parties (the “Third Parties’Properties”), including premises, air conditioners, power supplies, powerdevices and other accessorial facilities.

 

1.2           Anyparty that uses the other party’s property shall use such above-mentionedproperties only for the purposes of its offices, retail outlets, andoperations.

 

2.             Feesand payments:

 

2.1           Payment by one party for using any of theother party’s Owned Properties shall be based on the depreciation cost or themarket price of similar properties in the same geographical area, whichever islower.  Such provision notwithstanding,Party B can choose to charge Party A a property use fee based on the marketprice of properties in the same geographical area.

 

2.2           As for any of the Third Parties’ Propertiesused by either party, both Parties shall share the payment to such third party,based on the proportion used by each Party.

 

2.3           Paymentsshall be made within 30 days after the end of each quarter.

 

2.4           Should there be any payment overdue, a latefee of 0.05% of the total amount due on a daily basis shall be assessed.

 

3.             Warrantiesand Covenants:

 

Party A warrants that it has full rights to provide suchabove-mentioned Owned Properties and Third Parties’ Properties (includingpremises, power supplies, air conditioners, power devices and other accessorialfacilities) for Party B to use. Party A agrees to indemnify Party B for all thelosses resulting from any dispute regarding Party A’s ownership or rights ofuse of such Properties that prevents Party B from exercising its rights underthis Annex or any other damages incurred by Party B.

 

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