exv10w16




Exhibit 10.16


Exclusive Consulting and Service Agreement



This Exclusive Consulting and Service Agreement (hereinafter referred to as this “Agreement”) is
entered into on this 1st day of July, 2008 in Shanghai by and between:



Shengqu Information Technology (Shanghai) Co., Ltd., located at No. 356 Guoshoujing Road,
Zhangjiang Hi-Tech Park, Shanghai, hereinafter referred to as “Party A”; and



Shanghai Shulong Technology Development Co., Ltd., located at No. 690 Bibo Road, Zhangjiang Hi-Tech
Park, Shanghai, hereinafter referred to as “Party B”.



Party A and Party B may hereinafter collectively be referred to as the “ Parties” and,
individually, as the “Party”




Whereas,





	 	1.	 	Party A, a wholly foreign-owned enterprise incorporated and existing in the People’
Republic of China (the “PRC”) according to law, has consulting and service resources;
	 
	 	2.	 	Party B is a limited liability company incorporated in the PRC ;
	 
	 	3.	 	Party A has agreed to provide Party B with the consulting and services, and Party B
has agreed to accept such consulting and services from Party A.




NOW THEREFORE, the Parties have reached the following terms and conditions on the principle of
equal footing and mutual benefits through friendly negotiation:





	1.	 	Consulting and Services: Exclusive Rights and Benefits






	 	1.1	 	Party A has agreed to provide Party B with consulting and services acting as
the exclusive consulting and service provider of Party B as set forth in Appendix 1 in
the Term of this Agreement. .
	 
	 	1.2	 	Party B has agreed to accept the consulting and services provided by Party A
in the Term of this Agreement. In consideration of the value of the consulting and
services provided by Party A, and of good cooperation relationships between the
Parties, Party B has further agreed not to accept other consulting and services for
the business scopes involved in this Agreement from any third party in the Term of
this Agreement, unless otherwise agreed by Party A in writing in advance.




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	 	1.3	 	Any rights, ownerships, rights and benefits, intellectual properties
(including but not limited to the copyrights, patent rights, know-how, trade secrets
and other rights) arising out of the performance of this Agreement, whether developed
by Party A, or developed by Party B on the basis of Party A’s intellectual properties
or developed by Party A on the basis of Party B’s intellectual properties, shall be
owned by Party A exclusively, and Party B shall not claim any such rights, ownerships,
rights and benefits, and intellectual properties against Party A. In case the said
development is carried out by Party A on the basis of Party B’s intellectual
properties, Party B shall ensure that there is no defect on such intellectual
properties. Otherwise, Party B shall bear Party A’s losses arisen therefrom.
Furthermore, if Party A is required to indemnify any third party due to the said
development, it is entitled to claim all of its losses from Party B after it
indemnifies such third party.
	 
	 	1.4	 	In consideration of good cooperation relationship between the Parties, Party
B has undertaken to obtain Party A’s prior consents if it intends to carry out any
business cooperation not set forth in Appendix 1 hereto. If Party B does so, Party A
or its affiliates shall cooperate with Party B with priority under the same
conditions. Without Party A’s prior consents, Party B shall not carry out the said
cooperation business at its own discretions.






	2.	 	Calculation and Payment for Consulting and Service Fees (hereinafter referred to as the
“Service Fees”)






	 	2.1	 	The Parties have agreed that the Service Fees hereunder shall be confirmed and
paid in accordance with Appendix 2 hereto.
	 
	 	2.2	 	An additional 50/000
 interest per day will be incurred on any late fees and payments
in the event that Party B fails to pay the Service Fees and other fees in accordance
with this Agreement.
	 
	 	2.3	 	Party A is entitled to appoint its employee or a certified public accountant
from the PRC or other country (hereinafter referred to as “Party A’s Authorized
Representative”) to check Party B’s accounts for examining the calculation methods and
amount of the Service Fees. For this purpose, Party B shall provide Party A’s Authorized
Representative with the documentation, books, records and information required by such
Authorized Representative, so that such Authorized Representative shall audit Party B’s
accounts and confirm the amount of the Service Fees. Save for significantly material
errors, the amount of the Service Fees shall be subject to such amount as is confirmed
by Party A’s Authorized Representative.




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	 	2.4	 	Unless otherwise agreed by the Parties, Party B shall not deduct any fees from or
offset the Service Fees that shall be paid to Party A in accordance with this Agreement,
such as banking charges, etc.
	 
	 	2.5	 	In addition to the Service Fees, Party B shall reimburse Party A with the
out-of-pockets arising from the consulting and services hereunder, including but not
limited to all travelling expenses, transport fees (taxi fees, etc.), printing fees,
postages and so on.






	3.	 	Statements and Warranties






	 	3.1	 	Party A hereby states and warrants as follows:






	 	3.1.1	 	It is a company incorporated and existing in accordance with the
laws of the PRC;
	 
	 	3.1.2	 	It shall perform this Agreement subject to its capacities and
business scopes; its performance of this Agreement has been duly authorized, and
has been consented and approved by relevant third party and the governmental
authorities, and has not (will not) violated the laws or contracts that may be
binding upon or restrain it;
	 
	 	3.1.3	 	The conclusion of this Agreement shall constitute a legal document
lawful to, effective to, binding upon and enforceable to it.






	 	3.2	 	Party B hereby states and warrants as follows:






	 	3.2.1	 	It is a company incorporated and existing in accordance with the
laws of the PRC;
	 
	 	3.2.2	 	It shall perform this Agreement subject to its capacities and
business scopes; its performance of this Agreement has been duly authorized, and
has been consented and approved by relevant third party and the governmental
authorities, and has not (will not) violated the laws or contracts that may be
binding upon or restrain it;
	 
	 	3.2.3	 	The conclusion of this Agreement shall constitute a legal document
lawful to, effective to, binding upon and enforceable to it.






	4.	 	Confidentiality






	 	4.1	 	Party A and Party B have agreed to take all reasonable confidential measures as
possible as practical to keep well the confidential data and information (hereinafter
referred to as the “Confidential Information”, the Party




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	 	 	 	providing the data and information (the “Disclosing Party”) shall state that such data
and information is confidential in writing) , which they may know or have access to
during the performance of this Agreement. Without prior written consents of the
Disclosing Party,, no Party can disclose, give or transfer any such Confidential
Information to any third party in any circumstances (including such circumstances in
which the Party receiving the Confidential Information (the “Receiving Party”) has a
merger with a third party, or is consolidated or controlled by a third party, whether
directly or indirectly). Once this Agreement is terminated, Party A and Party B shall
return any documents, data or software bearing the Confidential Information to the
original owner of such Confidential Information or the Disclosing Party, or destroy such
Confidential Information upon the consents of such original owner or Disclosing Party,
including the deletion of any such Confidential Information from memory devices, and
shall not continue to use any such Confidential Information. Party A and Party B shall
only disclose the Confidential Information to Party B’s employees, its agents or
professional consultants who need to know such information under necessary confidential
measures, and shall cause such employees, agents or professional consultants to observe
the confidential obligations hereunder. For the purpose of observing the Confidential
Obligations hereunder, Party A and Party B shall enter into a confidential agreement with
any such employees, agents or professional consultants.






	 	4.2	 	The foregoing restrictions shall not apply to:






	 	4.2.1	 	Any information that has already come to the public when such
information is disclosed;
	 
	 	4.2.2	 	Any information that comes to the public without the defaults of
Party A or Party B after such information is disclosed;
	 
	 	4.2.3	 	Any information that has been possessed or developed by Party A or
Party B independently before such information is disclosed, which can be verified
by Party A or Party B;
	 
	 	4.2.4	 	Any of the said Confidential Information that shall be disclosed
to relevant governmental authorities and stock exchanges by Party A or Party B in
accordance with the laws, or shall be disclosed to its direct legal counsel and
financial consultants by Party A or Party B by virtue of its normal business
demands.






	 	4.3	 	The Parties have agreed that this section shall survive, irrespective of whether this
Agreement is amended, rescinded or terminated.




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	5.	 	Indemnification






	 	5.1	 	In the event that either Party hereto breaches this Agreement or any of its
statements and warranties hereunder (the “Breaching Party”), the Non-breaching Party may
notify the Breaching Party to correct its breaches within ten (10) days upon receipt of
such notice in writing, and to take the measures for avoiding any damages promptly and
effectively, and to continue to perform this Agreement. In case of any damages, the
Breaching Party shall indemnify the Non-breaching Party, so that the Non-breaching Party
obtains all rights and benefits as if this Agreement would have been performed.
	 
	 	5.2	 	The Breaching Party shall indemnify and hold the Non-breaching Party harmless against
and from any expenses, liabilities or losses (including but not limited to the company’s
profit losses), lost interests and attorney’s fees that may be sustained by the
Non-breaching Party arising from or in relation to its breaches. The total compensations
paid to the Non-breaching Party by the Breaching Party shall equal to the losses arising
from any such breaches, and such compensations shall include the benefits that would have
been obtained by the Non-breaching Party as if this Agreement would have been performed.
However, such compensations shall not be more than such benefits as are anticipated by the
Parties reasonably.
	 
	 	5.3	 	Party B shall be liable for any claims that may be demanded by any person arising
from the failure to observe Party A’s indication by it, or misuse of Party A’s
intellectual properties by it, or its inappropriate technical operations. In the event
that Party B has fund that anybody is using Party A’s intellectual properties without
lawful authorization, it shall forthwith notify Party A of such use and assist any action
that may be taken by Party A.
	 
	 	5.4	 	In the event that either Party breaches this Agreement, such Party shall make
indemnification subject to its breaches.






	6.	 	Validity, Performance and Term






	 	6.1	 	This Agreement comes to effect on the date first written above when it is entered
into.
	 
	 	6.2	 	Unless otherwise terminated by Party A earlier, this Agreement shall be valid for
twenty (20) years from the date when it comes to effect (the “Term”). The Parties shall
extend this Agreement at Party A’s request provided that Party A requests doing so prior
to the expiration of the Term of this Agreement, and shall enter into a new exclusive
consulting and service agreement or continue to perform this Agreement at Party A’s
request.




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	7.	 	Termination






	 	7.1	 	In the event that Party B terminates this Agreement earlier without any justified
reasons during the Term of this Agreement, it shall indemnify and hold Party A harmless
against and from any losses that may be sustained arising from such termination, and shall
pay Party A for the completed services forthwith.
	 
	 	7.2	 	This Agreement may be terminated upon the consensus of the Parties.
	 
	 	7.3	 	After this Agreement is terminated, the rights and obligations of the Parties under
section 4 and 5 shall survive.






	8.	 	Dispute Resolution






	 	8.1	 	Any dispute arising out of the interpretation to or performance of this Agreement
shall be resolved through friendly negotiation in good faith by the Parties; if not
reached, any Party may submit such dispute to the China International Economic and Trade
Arbitration Commission Shanghai Commission (“CIETACSC”) according to the Rules of CIETACSC
in force for the time being. Such arbitration shall be carried out in Shanghai. The
language in the arbitration proceedings shall be Chinese. The awards are final and binding
upon the Parties. This section shall not be affected by any termination or revocation of
this Agreement.
	 
	 	8.2	 	Save for the matters under disputes, the Parties shall continue to perform their
respective obligations in good faith in accordance with this Agreement.






	9.	 	Force Majeure






	 	9.1	 	“Force Majeure Events” shall mean any events beyond the reasonable controls of the
Party so affected (the “Affected Party”), which are unavoidable even if the Affected Party
takes a reasonable care, including but not limited to governmental acts, Act of God,
fires, explosion, storms, floods, earthquakes, morning and evening tides, lightning or
wars. However, any shortage of credits, funds or financing shall not be deemed as the
events beyond reasonable controls of the Affected Party. The Affected Party seeking for
the exemption of any performance under this Agreement or any provision hereof shall inform
the other Party of such exemption and its proposed measures to make further performance as
soon as practicable.
	 
	 	9.2	 	In the event that the performance of this Agreement is delayed or interrupted due to
the said Force Majeure Events, the Affected Party shall be excused from any liability to
the extent of the delayed or interrupted performance.





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	 	 	 	The Affected Party shall take necessary measures for reducing or eliminating the adverse
impacts arising from such Force Majeure Events. Once the said Force Majeure Events
eliminate, the Parties have agreed to try their best efforts to recover the performance
of this Agreement.






	10.	 	Notices






	 	10.1	 	All notices and correspondences to or upon each Party to be effective for the
performance of the rights and obligations hereunder shall be in writing, and sent to the
following address of the other Party by personal delivery, registered mail, postage
prepaid mail, generally accepted courier service or fax.
	 
	 	 	 	Party A: Shengqu Information Technology (Shanghai) Co., Ltd.

Address: No. 356 Guoshoujing Road, Zhangjiang Hi-Tech Park, Shanghai

Fax:

Tel:

Addressee:
	 
	 	 	 	Party B: Shanghai Shulong Technology Development Co., Ltd.

Address: No. 690 Bibo Road, Zhangjiang Hi-Tech Park, Shanghai

Fax:

Tel:






	 	10.2	 	Any notice and correspondence shall be deemed to be served as follows:
	 
	 	 	 	If it is sent by fax, it shall be deemed to be served on the recording date on
the faxed copy. However, if it is sent after 17:00 P.M. on a business day or on a
non-business day of the addressee, it shall be deemed to be served on the next
business day following the recording date on the faxed copy. If it is sent by personal
delivery (including the express mail service), the date when it is entered into and
accepted shall prevail. If it is sent by registered mail, the 15th day
following the date recorded on the return receipt shall prevail.






	11.	 	Assign
	 
	 	 	Unless otherwise agreed by Party A in writing in advance, Party B shall not assign all of its
rights and obligations hereunder to any third party. Party A may assign all of its rights and
obligations hereunder to its affiliates without Party B’s prior consents; however, it shall
inform Party B of such assignment.






	12.	 	Severability




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	 	 	In the event that any provision hereof becomes invalid or unenforceable because such
provision conflicts with the laws, such provision shall be held invalid or unenforceable to
the extent required by the governing laws, and shall not affect the validity of the
remaining provisions of this Agreement.
	 
	13.	 	Amendment and Supplement
	 
	 	 	The Parties can amend and supplement this Agreement in writing only. Any amendment and
supplement shall be integral to this Agreement after the same is entered into by the
Parties, which shall have the same force and effect with this Agreement.
	 
	14.	 	Governing Law
	 
	 	 	The conclusion, validity and performance of, interpretation to and dispute resolution in
relation to this Agreement shall be governed by the laws of the PRC.




IN WITNESS WHEREOF, the Parties have caused their authorized representatives to enter into this
Agreement on the date first written above.



[No Text Follow, Signature Page for Exclusive Consulting and Service Agreement Follow]




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Party A: Shengqu Information Technology (Shanghai) Co., Ltd. (Seal)






Legal Representative/Authorized Representative:      
           
      
   



Title:           
                
             
                         
                      
       



Date:        
                  MM
            
              DD       
     
             YY



Party B: Shanghai Shulong Technology Development Co., Ltd. (Seal)






Legal Representative/Authorized Representative:      
           
      
   



Title:           
                
             
                         
                      
       



Date:        
                  MM
            
              DD       
     
             YY







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Appendix 1:




Consulting and Service List



The consulting and services hereunder shall cover technical consulting, services and business
consultancy in respect of the development, maintenance and supports of and for computer software,
hardware and system based on the business operating demands of Party B.




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Appendix 2:




Calculation and Payment Method for Service Fees





	1	 	The amount for the Service Fees shall be agreed by the Parties subject to the provisions of
the services, and shall be calculated and paid quarterly.






	2	 	The amount for the Service Fees shall be negotiated and agreed on the basis of the following
factors:






	 	2.1	 	Technical degree and complexity level of consulting and services;
	 
	 	2.2	 	Consulting and service time of Party A’s employees;
	 
	 	2.3	 	Concrete contents and business value of the consulting and services hereunder;
	 
	 	2.4	 	Reference to marketing price of similar consulting and services.






	3	 	Party A shall collect the Service Fees quarterly, and send the Service Fee Bill for the
immediately preceding quarter to Party B within thirty (30) days from the first day of any
quarter. Party B shall remit the Service Fees to the bank account designated by Party A within
ten (10) business days upon the receipt of the said Bill. Party B shall send the copy of the
remittance certificate to Party A by fax or mail within ten (10) business days after the
Service Fees are remitted.






	4	 	In the event that Party B considers that the service price mechanism hereunder is not
applicable and needs to be adjusted for some reasons, it shall actively negotiate on
determining the new pricing standards or mechanism with Party A within ten (10) business days
after Party A demands adjusting the service price mechanism in writing. In the event that
Party B fails to give a response within ten (10) business days after it receives the said
service price adjustment demand, it shall be deemed to accept such service price adjustment.
Party A shall negotiate on adjusting the Service Fees with Party B at Party B’s request as
well.






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