exv10w38



 






Exhibit 10.38




Monternet Short-messaging Service Cooperation

Agreement




Agreement code:
Execution
date: April 28, 2003




Party
A:                                                                          
      Beijing Mobile Communications Corporation



Legal representative: Sha Yuejia



Mail address: No. 58, Dong Zhong Street, Dongcheng District, Beijing, 100027,
China



Tel: 65546699



Fax: 65541330



Opening bank:



Bank account:



Party B: Beijing SINA Internet Information Service Co., Ltd.



Legal representative: Mao Dao Lin



Mail address: 15/F      ,#A1, Wanquanzhuang, Haidian District, Beijing



Tel: 010-82628888



Fax: 010-85803327



Opening bank:



Bank account:



Beijing Mobile Communications Corporation (hereinafter referred to as “Party A”), as the
mobile communication operator and mobile data service operator, provides open
and fee-based communication channels for the application providers. Beijing
SINA Internet Information Service Co., Ltd. (hereinafter referred to as “Party
B”), as a company engaged in the value-added communication services approved by
the competent telecom authorities, provides value-added short-message services
to mobile phone users of China Mobile. To provide better application services
to users, the parties agree as follows as to the joint development of Monternet
short-message services upon adequate consultation in the principle of equality,
mutual benefit and concerted growth.



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I. Basic Description of Cooperation




1. Fundamental conditions





	1)	 	Party B shall be fully compliant with the requirement of Internet Content/Application Service
Management Methods of the State Council Order (No 292), be authorized for the qualification of
the Internet information service business, be able to provide comprehensive after service
system, and have legal and reliable information/message sources and other legal business
operation conditions.
	 
	2)	 	In case Party B is the local partner of Party A, Party B shall provide Monternet short-message
services only to China Mobile mobile phone users in Beijing region via the short-message
channels of Party A.
	 
	3)	 	Party B shall promptly provide detailed business plans and marketing plans in writing to Party A.
	 
	4)	 	Party A shall make regular examination and management to Party B
according to the business regulations of Monternet, and terminate the
cooperation with Party B upon failure of Party B to pass such
examination.





II. Rights and Obligations




1. Party A’s rights and obligations





	1)	 	Party A allows Party B to provide short-message value-added services
to users via the short-message gateway of Party A. Party A is entitled
to adjust the short-message traffic volume according to the capacity
of the short-message center. If such adjustment shall impact on the
business of Party B, Party A shall promptly notify Party B thereof.
	 
	2)	 	Party A shall provide comprehensive GSM mobile communication system,
and ensure smooth and stable information transmission. Upon the
notification of Party B of any communication failure, Party A shall
promptly settle the failure to avoid impairment of Party B’s business.
	 
	3)	 	Party A shall open the technical protocol, standard and interface
standard relevant to the short-message gateway platform to Party B.
Party A shall provide the technical documentation for mutual
communication, and promptly address communication problems of Party B.
	 
	4)	 	Party A shall supply the hardware/software system for the
short-message platform, and bear the relevant operation cost.
	 
	5)	 	Party A shall renovate its own billing system, including the
commission-based collection system of the banks, and bear the cost of
necessary hardware and software.




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	6)	 	Party A shall undertake the billing and payment collection on behalf
of Party B. Party A is entitled to check the business of Party B to
ensure the accurate billing data. Party A shall issue explicit
information service fee invoice to users and the information service
fee bill at the request of the user.
	 
	7)	 	When applicable, Party A shall provide the relevant data of Monternet
invalid users (number canceling, service discontinuance and overdue
information service fee) to Party B to facilitate Party B to dispose
of such invalid Monternet users promptly.
	 
	8)	 	The parties shall make joint marketing and promotion.





2. Party B’s rights and obligations





	1)	 	Party B shall undertake the building and maintenance of its own
software and hardware, including but not limited to all hardware,
system commissioning, cutover, system maintenance, routine business
management and marketing efforts/cost of the subject project.
	 
	2)	 	Party B shall provide the agreed contents and application services to
China Mobile users. Party B shall ensure the legal, prompt and
reliable information sources. Party B shall guarantee that its
information and content are compliant with applicable policies, laws
and regulations, and be liable for any consequence arising out of
illegal contents.
	 
	3)	 	Party B’s Website with customization interface for users is
sms.sina.com.cn to inform users of the contents and service provided
by Party B. The customization interface of Party B shall provide basic
service functions like authentication, adding, deleting, modifying and
searching, and allow users to inquire about the information service
fee list. Party B shall provide explicit fee standards to users
with the service fee standard changing frequency not less than 6
months. That is to say, the service fee standard of a service (new
service or changed service) shall not be changed within the first 6
months. Party B shall keep complete use records of all users of at
least 3 months, keep the user ordering data permanently, and provide
the interface to Party A to inquire about the service records.
	 
	4)	 	Party B shall take necessary measures to effectively control invalid
Monternet users. To ensure normal operation of Monternet business,
Party B shall not send any information to invalid Monternet users it
get to know.
	 
	5)	 	In case the system failure of Party B impairs the communication system
of Party A, Party B shall follow the adjustment measure arranged by
Party A to Party B’s short-message traffic volume to ensure normal and
stable short-message service of Party B, and settle any user complaint
thus incurred at its own cost.
	 
	6)	 	Party B shall not send advertisements and other irrelevant information
to users via the communication channels of Party A during the term of
this agreement. Party B shall strengthen the check of the
short-message contents, restrict the group SMS numbers (at most 2 each
time) and




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	 	 	sending times in each time unit (not over 100 each hour).
Party B shall take technical measures against illegal attack,
unauthorized use of passwords, unauthorized convoking of web pages and
other illegal acts impairing Monternet business information security.
	 
	7)	 	During the term of this Agreement, Party B is obligated to furnish the
monthly report within the first 5 days each month as requested by
Party A to Party A, stating the user development, user categories,
user habits, business forecast and others, the monthly report format
as set out in Exhibit 1 hereto. Party A shall keep the confidentiality
of such data according to Article 8 hereto.
	 
	8)	 	The parties shall undertake joint marketing and promotion.





III. Distribution of Rights and Obligations

	1.	 	Party B shall address the user disputes arising out of contents,
services or transmission failure between the parties. Party A shall
responsible for the user disputes arising out of the short-message
gateway and center. The maintenance labor-division is as follows:










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	2.	 	The contents or applications provided by Party B shall be within the
business scope mutually agreed, otherwise Party A is entitled to
terminate this Agreement with Party B liable to the default penalty.
Party A is entitled to supervise the business development of Party B,
Party B shall assist the efforts of Party A in this regard in an
effort to avoid negative impact on normal business of Party A by the
business of Party B. In case the business development of Party B
negatively impairs the normal business of Party A due to the violation
against this Agreement, Party A is entitled to terminate this
Agreement with Party B liable for the default liability.
	 
	3.	 	Party B shall notify Party A in writing prior to adding or withdrawing
any services hereunder or changing the price of some services. In case
of agreeing with the change of certain service prices, Party A shall
notify Party B in writing. In case of Party A’s written consent of
adding certain services by Party B, Party B shall test the added
services with regular test reports submitted to Party A, and shall not
provide such new services to users without the acceptance of the
sophistication of such services by Party A, details refer to Exhibit 2
hereto.





IV Revenues of the Parties





	1.	 	Party A shall charge the mobile phone user the communication service
fee at RMB 0.10 yuan/message for the short-message services hereunder.
In principle, Party B shall determine the information service fee for
the services hereunder used by the mobile phone users subject to the
approval of China Mobile Corporation. Party A suggests the upper
threshold of the information service fee (maximum RMB 2 yuan/message,
RMB 30 yuan/month for monthly services). Party B shall submit the fee
standards to the price administration authorities, and promptly notify
Party A accordingly.
	 
	2.	 	Party A shall provide the billing service and fee collection service
to Party B. All information




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	 	 	service fee of Beijing region users of
each billing month shall be the due information service fee in
Beijing. Party A shall pay 85% of the due information service fee of
Beijing to Party B, and be liable to the risk of overdue payment of
local users. In case Party B is the full-network partner of Party A,
i.e. Party B provide Monternet short-message value-added services to
nationwide China Mobile users in China, then all information service
fee of non-Beijing users recorded in each billing month shall be the
due information service fee of non-Beijing regions, which shall be
collected by local subsidiaries of China Mobile. Relevant local
subsidiaries of China Mobile will credit 85% local due information
service fee to Party A, which shall then be transferred to Party B by
Party A in full.
	 
	3.	 	In case the monthly short-message entries (downlink) sent by Party B to
nationwide users as recorded in the gateway billing data exceeds those sent
by users to Party B (uplink), thus resulting in ill-balanced communication
fee of Party B (the balance of downlink messages and uplink messages is
the ill-balance communication), Party A shall charge RMB 0.05-0.10
yuan/message for the ill-balance communication as follows:





	 	 	 	 	 	 	 
	Ill-balanced	 	 	 	 
	downlink SM	 	Fee	 	 
	traffic	 	standard (RMB	 	Calculation methods
	(messages/month)	 	yuan/message)	 	X=(MT-MO) message/month
	 
	Below 100,000

	 	 	0.08	 	 	X*0.08, at least RMB 2000 yuan
	100,000-300,000

	 	 	0.07	 	 	(X-100,000)*0.07+100,000*0.08
	300,000-1 million

	 	 	0.06	 	 	(X-300,000)*0.06+200,000*0.07+100,000*0.08
	Over 1 million

	 	 	0.05	 	 	(X-1
	

	 	 	 	 	 	million)*0.05+700,000*0.06+200,000*0.07+10
0,000*0.08







IV. Settlement Method




1. Settlement point: determined by Party A.




2. Settlement methods





	1)	 	Party B shall link with the short-message center of Party A via the
short-message gateway of Party A, which shall record the billing data
as final. The monthly settlement from the 15th day to the 20th day
each month shall cover the fee of the last month from the 1st day to
the last day. After the normal billing accounting period, Party A
shall calculate the current-month information service fee of Party B
and the ill-balance communication fee payable to Party A, which shall
serve as the basis of settlement between the parties.
	 
	2)	 	The parties shall make the account settlement of the current-month
information service fee according to the records of the billing system
of Party A. Both party shall settle the fee based on the 85% portion
of information service fee minus the ill-balance communication fee. In
case the balance is positive, Party a shall pay the balance to Party B
and Party B shall issue service industry invoices to Party A. In case
the balance is negative, Party B shall pay the balance to Party A and




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	 	 	Party A shall issue service industry invoices to Party B. The payment
collecting party shall mail the service industry invoice within three
(3) days after the receipt of the payment (by local post stamp).
	 
	3)	 	The parties shall make the settlement and payment strictly according
to the regulations of settlement model and schedule. In case either
party delays the due payment beyond the stipulated time (the 20th day
each month), the party shall pay to the other party the delay penalty
at the daily rate of 0.1% of the delayed payment. In case either party
fails to make payment overdue for over 2 months after the notice of
the other party, the conforming party is entitled to lodge an action
against the default party with the legal liability borne by the
default party.





V. Marketing and Promotion





	1.	 	The parties shall engage in joint marketing and promotion with their
respective resources in the principle of mutual benefit.
	 
	2.	 	Party A in general shall market/promote Monternet and the major
categories of application services instead of the cooperative
Monternet services separately.
	 
	3.	 	Party B shall market/promote its brand and relevant Monternet services
as well as the brand of Monternet. Party B shall strictly abide by the
brand/marks regulations of Party A in use of Monternet LOGO without
unauthorized distortion or color change with prior approval of Party A
prior to any use thereof.
	 
	4.	 	Party B shall not use Monternet brand for any purpose other than the
marketing/promotion of Monternet services, otherwise Party A is
entitled to require Party B to stop the use thereof and bear any
liability thus incurred, or even claim the legal liability for severe
violations.
	 
	5.	 	Party B must obviously indicate the customer service phone or customer
service Website, compliant email on any promotional material and media
ads. of Monternet business. Party B shall not adopt the similar
products of China Mobile rivals as the promotional gifts of Monternet
business.





VI. Customer Services





	1.	 	The Monternet short messages received by users must be those upon their request or
customization. Party B shall ensure the wholesomeness and legality of the short messages
sent to users, Party A is entitled to supervise the short message contents of Party B, and
strengthen the management thereof, specific regulations as provided for in Exhibit 3.
	 
	2.	 	Party B shall fully inform users of the basic elements of Monternet services prior to any
ordering, including price, sending frequency/times, use model, major contents and etc.
	 
	3.	 	Party A shall process the customer inquiries and complaints arising out of the
communication network problems.




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	4.	 	Party A’s customer service center 1860 and the major outlets will handle the customer
inquiries and complaints about Monternet services, and transfer any customer problem about
information content and services to the customer service center of Party B.
	 
	5.	 	Party B shall keep 24*7 hotline, and inform users thereabout in the Web pages or marketing.
	 
	6.	 	Party B shall assign regular staff to handle user complaints, and respond to customer
complaint within one (1) day thereafter.
	 
	7.	 	To ensure the user understanding of Party B’s services, Party B must process the service
recommendations, customer service instructions and the downlink information of user
passwords free of charge, and send the service prompt information (e.g. price,
customization confirmation, customer service hotline, order rejection and etc) free of
information service fee.
	 
	8.	 	For monthly-payment short-message services, Party B may charge the monthly fee at the user
for the use of the service between half a month to a month, and charge no fee at the user
for the use of the service below half a month.
	 
	9.	 	For users in request of customized services via Internet, Party B shall obviously indicate
the basic business information on the Web page prior to the user confirmation of the
customization. After successful customization, Party B shall send the prompt information
to users, stating “thanks to you”, “successful confirmation of the customization”,
“service information fee standard”, “sending frequency/times”, “order withdrawal
method”, “customer service phone/Website”.
	 
	10.	 	For users of customized services via mobile phones, Party B shall return the prompt
information via short message to the users (including paid users and third-party users)
immediately, stating “thanks to you”, “successful confirmation of the customization”,
“service information fee standard”, “sending frequency/times”, “order withdrawal method”,
“customer service phone”, “Website” (optional).
	 
	11.	 	To the initial ordering intentions acquired in the non-online marketing (e.g. filling out
forms), Party B shall send the second confirmation message (basic service information),
and confirm the actual order after user confirmation of the password.





VII. Termination





	1.	 	Party B shall not send any information to invalid Monternet users. In
case Party B knowingly send information to invalid Monternet users,
Party A is entitled to require Party B to indemnify the economic loss
incurred from user overdue payment, and is entitled to terminate this Agreement and the cooperation hereunder.
	 
	2.	 	Party B is obligated to ensure the compliance of its information
content with Telecom Regulations of PRC, Internet Information Service
Regulations and other applicable laws, regulations and




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	 	 	policies, not
distribute any illegal and obscene information undermining the
national security and interest, Party B shall ensure that its
information content shall not impair the corporate image of China
Mobile. Without written consent of Party A, Party B shall not send ads
and other irrelevant information to mobile users via the short-message
ports furnished by Party A. Otherwise, Party B shall indemnify Party A
for any loss thus incurred, and Party A is entitled to terminate this
Agreement and the cooperation hereunder.
	 
	3.	 	Upon the receipt of user complaint for receiving any un-requested
message from Party B, Party A shall notify Party B accordingly, and
Party B shall investigate the reasons. In this case, Party A shall not
charge user any fee, and return any fee collected back to the users,
and Party A is entitled to terminate this Agreement and the
cooperation hereunder according to the current-month severity of
customer complaints.
	 
	4.	 	To ensure the normal marketing of Monternet services, Party B shall
not directly or indirectly provide cross-operator short-message
services, including domestic cross-operator short-message services and
international short-message services, and shall not carry out
commission-based fee collection services via the short-message system
of Party A. Otherwise, Party B shall indemnify Party A for any loss
thus incurred, and Party A is entitled to terminate this Agreement and
the cooperation hereunder.
	 
	5.	 	In case Party A transfers customer complaints to Party B, Party B
shall initially respond to the customer service department of Party A
within two (2) hours, and investigate the reasons/handle the complaint
within one (1) working day. Party A is entitled to deduct RMB 500 yuan
per each customer complaint from the current-month due payment to
Party B as the default penalty, and Party A is entitled to terminate
this Agreement and the cooperation hereunder according to the default
severity.





VIII. Confidentiality





	1.	 	Proprietary Information refers to any valuable information developed,
created, found or disclosed to the receiving party by the disclosing
party. Proprietary Information includes but not limited to the trade
secrets, intellectual property rights (IPR) and technical secrets.
	 
	2.	 	The parties shall protect the IPR and other Proprietary Information
among other trade secrets of its own and the other party. Without
written consent of the other party, either party shall keep the
confidentiality of the Proprietary Information of the other party, and
shall not disclose any Proprietary Information involving with the
trade secrets and technical secrets of the other party to any third
party.
	 
	3.	 	The parties shall keep the confidentiality of this cooperation and
this Agreement. Without prior written consent of the other party,
either party shall disclose the details of the cooperation and this
Agreement to any third party.





IX. Default Liability




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Failure of either party to perform any provision hereunder shall be deemed as
default. Upon receipt of the other party’s written notice of the default, the
default party, if confirming the default, shall correct the default within
twenty (20) days thereafter with written notice to the other party. It the
notified party denies the default, it shall inform the other party thereof
within twenty (20) days or sate the reasons therefor. In this case, the parties
shall settle the dispute via consultation, or resort to the dispute settlement
provisions hereunder for any dispute failing friendly consultation, the default
party shall be liable for the loss thus incurred to the conforming party.



X. Liability Limitation



In case both party or either party fails to perform, partly or as a whole, the
obligations hereunder due to force majeure event, neither party shall be held
liable for the default liability. However, the affected party or the parties
shall notify the other party within fifteen (15) days thereafter and furnish
relevant supporting evidence. Either party or both parties shall resume the
performance of this Agreement after the elimination of the force majeure.



XI. Dispute Settlement



The parties may settle the dispute arising out of the performance hereunder via
friendly consultation. Either party may submit the dispute failing friendly
consultation to Beijing



Arbitration Committee for arbitration according to its rules. The arbitration
award is final and binding upon the parties.



XII. Effectiveness, Modification, Termination and Renewal of Agreement




	1.	 	This Agreement shall take effect from May 1, 2003, and expire upon October 31, 2003. In
case the parties do not terminate this Agreement upon the expiration, this Agreement shall
automatically renew for another 6 months. The party rejecting the renewal shall notify the
other party thirty (30) days in advance of the expiration in writing thereabout.
	 
	2.	 	This Agreement, 13 pages, is made in six (6) copies with each party holding three (3)
copies of equal validity. It shall take effect upon execution and stamp of the duly
authorized representatives of the parties.
	 
	3.	 	The exhibits hereto constitute an integral part of this Agreement with equal legal validity.
	 
	4.	 	During the term of this Agreement, the parties may modify the provision hereunder or
terminate this Agreement upon friendly consultation. Either party intending to change or
modify this Agreement shall notify the other party in writing thirty (30) days in advance.
The party unilaterally terminating this Agreement shall indemnify all loss thus incurred to
the other party.




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	Party A (seal):

	 	Party B (seal):
	 
	 	 
	Representative: Xiang Wenjie

	 	Representative: Benjamin Tsiang







	 	 	 	 	 	 	 
	Exhibits:

	 	 	1.	 	 	Monthly statistic report of Monternet business
	

	 	 	2.	 	 	Procedures for adding new services
	

	 	 	3.	 	 	Regulations of Monternet short message contents







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Exhibit 1: Monthly Statistic Report of Monternet Business




Table 1: Nationwide service based on short messages




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	SP corporate	 	 	 	New registered	 	Current-month	 	Current-month	 	Short-message
	S.N.
	 	code
	 	SP name
	 	users
	 	users
	 	premium users
	 	items

	1
	 	 	 	 	 	 	 	 	 	 	 	 







Table 2: Local service based on short message




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	SP corporate	 	 	 	 	 	New registered	 	Current-month	 	Current-month	 	Short-message
	S.N.
	 	code
	 	SP name
	 	users
	 	users
	 	premium users
	 	items









	Note: 	 	 	 
	 
	1.	 	 	New registered users: additional users logging on and registering via the service end of certain
SP in the current month.
	 
	2.	 	 	Current-month users: users in use of the short-message service of the SP at least once in the
current month.
	 
	3.	 	 	Current-month premium users: registered users in use of SP premium services in the current month.
	 
	4.	 	 	Short-message items: all short messages sent and received to our gateway via the SP service end
in the current month.
	 
	5.	 	 	SP engaged in nationwide short-message services shall fill out table 1, and SP engaged in local
short-message services should fill out table 2.



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Exhibit 2 Procedures for Adding New Services





	1.	 	Party B shall report to Party A the new services within the first 5
days each month in the standard format, any services not reported
during the period shall be automatically transferred to the next
month.
	 
	2.	 	Party A shall respond to the new service application of Party B within
three (3) working days as to whether to allow test.
	 
	3.	 	The test period of Party B is the first 25 days each month, Party B
shall promptly submit the test reports to Party A, Party A shall check
the test report and promptly respond to Party B. Party A shall not
accept test reports submitted beyond the above period.
	 
	4.	 	After the test, if the parties deem the test successful, Party A shall
notify Party B within five (5) working days as to the formal cutover
date. In case unsuccessful test, the test will be terminated, or Party
B shall make another test in the next test period.





Remarks: future business management regulations of China Mobile will prevail.




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Exhibit 3:
Management Regulations of Monternet Short Message Contents



Chapter 1 General




     Article 1 To ensure the wholesome development of China Mobile Monternet
Program, safeguard the long-term interest of the operators and partners, and
protect legal rights of all users, Beijing Mobile Communications Corporation hereby
promulgates the Management Regulations of Monternet Short Message Contents
according to Internet Information Management Regulations of China and Monternet
Service Content Review/management Methods of China Mobile.



     Article 2 This Regulation shall make open and transparent supervision
of the short message contents of all SPS providing Monternet services in the
principle of fairness and equality.



     Article 3 This Regulation is subject to amendment and supplement based
on the market changes, which shall prevail over the original version.



Chapter 2 Requirements on Short Message Contents




     Article 4 It is prohibited to make impolite and obscene personal attack
to mobile phone users of China Mobile via the short message words/languages in
any manner.



     Article 5 It is prohibited to undermine the image of China Mobile via
the short message words/languages in any manner.



     Article 6 It is prohibited to distribute obscene and indecent contents
via the short message words/languages in any manner.



     Article 7 It is prohibited to misguide user behaviors via the short
message words/languages in any manner in an effort to cheat users and incur
user loss.



Chapter 3 Examination Methods




     Article 8
Beijing Mobile Communications Corporation will make irregular spot check of
short message contents of SPs providing Monternet services.



     Article 9
Beijing Mobile Communications Corporation will make regular survey to
investigate the customer satisfaction of the short message contents of SPs.



     Article 10
Beijing Mobile Communications Corporation customer service center 1860 will
handle the customer complaint of the short message contents.



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Chapter 4 Handling Method




     Article 11 When Beijing Mobile Communications Corporation aware of the prohibited short
message content, it will issue written warning to the SP and SP shall make
corrective action within three (3) days.



     Article 12 If no corrective action were make by SP, Beijing Mobile Communications Corporation
will issue the second written warning. SP shall examine and amend its short
message contents within three (3) days.



     Article 13 Beijing Mobile Communications Corporation will terminate contract with the SP
failing to correct prohibited content after the second warning, and order
correction within stipulated period based on the severity.



     Article 14 For SPs liable for prohibited contents during multiple spot
checks, frequency user complaints and failing prompt correction,
Beijing Mobile Communications Corporation will terminate contract with them and order correction within
stipulated period based on the severity.



Chapter 5 Supplement




     Article 15 This Regulation shall be interpreted by Marketing Department of
Beijing Mobile Communications Corporation.



     Article 16 This Regulation shall be enforced since the execution date (May
2001).




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