Document:

Exhibit 4.31

 

 

(English
Translation)

 

 

Operator-based Comprehensive

Services Agreement

 

 

 

Between

 

Unicom New Guoxin Telecommunications
Corporation Limited

 

And

 

China United Telecommunications Corporation Limited

 

 

 

March 24, 2005

 

 

Table of Contents

 

	
  1.

  	
  BASIC PRINCIPLE

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  THE CONTENT OF OPERATOR-BASED COMPREHENSIVE
  SERVICES

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  PRICING
  PRINCIPLE AND PAYMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  TERM

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  STATEMENTS,
  WARRANTIES AND PROMISES

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  TRANSFER

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  TAKING
  EFFECT

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  FORCE
  MAJEURE

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  CONFIDENTIALITY

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  NON-WAIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  NOTIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  APPLICABLE
  LAW

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  SETTLEMENT
  OF DISPUTES

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  ANNEX I: CELLULAR SUBSCRIBER VALUE-ADDED SERVICES

  	
   

  
	
   

  	
   

  
	
  ANNEX
  II: 10010/10011 CUSTOMER SERVICES

  	
   

  
	
   

  	
   

  
	
  ANNEX
  III: AGENCY SERVICES

  	
   

  

 

1

 

This Agreement is entered into as of March 24,
2005 between the two Parties in Beijing, the People’s Republic of China (“PRC”):

 

(1) Provider: Unicom New GuoXin
Telecommunications Corporation Limited 

(“Unicom New Guoxin”)

Address: BoRuiQi Building, No 53, XiBianMenNei Avenue, XuanWu District

Beijing

Legal Representative: Ge Lei

 

(2) Receiver: China United Telecommunications Corporation Limited (“A
Share

Company”)

Address: 40 floor of JinMao Building, No 88, ShiJi Avenue, Shanghai 

Legal Representative: Chang Xiaobing

 

Whereas:

 

(1)                                  Unicom New GuoXin is a limited liability comapny
registered and existing under the PRC laws. A Share Company is a joint-stock limited company registered
and existing under the PRC laws, with its shares listed in Shanghai
Stock Exchange on October 9, 2002. China United Telecommunications Corporation (“Unicom
Group”) holds 69.3224% of its shares.

 

2

 

(2)                                  On August 12, 2002, Unicom Group and A Share
Company signed a memorandum of understanding on the transactions to be
conducted after the listing of the shares of A Share Company (“Connected
Transactions MoU”) between Unicom Group or its subsidiaries (excluding A Share
Company and the subsidiaries held by A Share Company) and China Unicom Limited
(the “Red-chip Company”) indirectly held by A Share Company and its
subsidiaries. According to the understanding reached in the Connected
Transactions MoU, in the event that the transactions to be conducted between
Red-chip Company itself or its subsidiaries and Unicom Group or any of its
subsidiaries (excluding A Share Company and the subsidiaries held by A Share
Company) require approval of the
minority shareholders of A Share Company under the Rules Governing the Listing
of Shares on Shanghai Stock Exchange (“Rules of SSE”) applicable from time to
time, which are deemed at the same time as connected transactions that require
approval of the minority shareholders of Red-chip Company under the Rules
Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (“Rules
of SEHK”) applicable from time to time, the above connected transactions shall
be conducted in a 2-step approach: (1) Unicom Group or any of its subsidiaries
enters into an agreement on the intended transaction with A Share Company or
China Unicom (BVI) Limited (“Unicom BVI”), identifying the rights and
obligations of the 2 parties involved in the transaction under the agreement
(including, but not limited to, approval of Unicom Group of the transfer of the
rights and obligations of A Share Company or Unicom BVI under the agreement to
Red-chip Company or any of its subsidiaries); (2) A Share Company or Unicom BVI
transfers its rights and obligations under the above mentioned agreement to Red-chip
Company or any of its subsidiaries;

 

3

 

(3)                                  According to the
agreements set in the memorandum about the connected transaction, Unicom Group,
Unicom New Guoxin and A Share Company signed the Operator-based Comprehensive
Services Agreement (“old Comprehensive Operator Services Agreement”) on
November 20, 2003. A Share
Company signed the Transfer Agreement on the Operator-based Comprehensive
Services Agreement with China Unicom Corporation
Limited (“CUCL”), Unicom New World
Telecommunications Corporation Limited (‘Unicom New World”) and Unicom
New Century Telecommunications Corporation Limited (“Unicom New Century”) at the
same date, which indicated that its rights and obligations under the old
Comprehensive Operator Services Agreement are hereby transferred to CUCL,
Unicom New Century and Unicom New World. Accordingly Unicom Group and Unicom
New Guoxin provide CUCL, Unicom New Century and Unicom New World with cellular subscriber value-added services,
“10010/10011” customer services and agency services.

 

(4)                                  CUCL assimilated and
merged with Unicom New Century on July
30, 2004, and the rights and obligations of Unicom New World under the old
Comprehensive Services Agreement II have been inherited by CUCL. The
Ministry of Commence has approved, pursuant to MOC’S
Approval of the Merging between China Unicom Corporation Limited and Unicom New World Telecommunications Co. Ltd.(MOC [2005]No.258), of the merging between CUCL
and Unicom New World. At present, CUCL
is going through the rest of the legal procedures necessary for its merging
with Unicom New World, upon completion
of which Red-chip Company would have CUCL as its sole operating entity
in China;

 

Based on the performance and
amendment of the old Comprehensive Operator Services Agreement as of the date it entered into force, the
two Parties, after joint research and consultation on the basis of equality and
mutual benefit, have reached the Agreement as follows.

 

4

 

1.                                      Basic Principle

 

1.1                                 The
operator-based comprehensive services under this Agreement refer to the various
services and facilities that the Provider in the Agreement provides to the
Receiver, based on which the Receiver shall pay the service fees due to the
Provider.

 

1.2                                 The
services and/or the facilities provided by the Provider to the Receiver are the
compensated transactions in the economic activities between enterprises. Pursuant
to the fair market principle, the Provider is entitled to collect service
charges applicable for the services and/or facilities provided to the Receiver.
And the Receiver shall make payment accordingly.

 

1.3                                 The
conditions and service quality of the services and/or facilities provided by
the Provider to the Receiver shall be no inferior to those of the same or similar
services and/or facilities provided to any third party.

 

Both parties to the Agreement should abide by the principle of fair
transaction when executing the rights or performing the obligations under the
Agreement.

 

1.4                                 If
the Provider is required to add services and/or facilities under the Agreement,
the Provider shall make such additions as the Receiver requires on a
best-effort basis, with conditions no inferior to that of the services and/or
facilities provided to the third party.

 

1.5                                 If
the Provider fails to provide or fully provide the services and/or facilities under
this Agreement due to the reasons not attributable to the Provider, the
Provider shall notify the Receiver in a timely way and assist the Receiver on a
best-effort basis in obtaining the same or similar services and/or facilities through
other channels.

 

1.6                                 The
provision of services and/or facilities under this Agreement shall conform to
the purposes as the Parties agree to intend for and the related standards
issued by the authorities.

 

5

 

1.7                                 In
case any party to this Agreement breaches any article herein and cause the
losses of the other party, the breaching party shall bear the liabilities for
breach, including but not limited to covering all the direct and indirect
losses arising herefrom. Whereas such a party shall be exempted from
liabilities in case the losses to the other is due to force majeure.

 

1.8                                 When
any party performs the obligations under this Agreement, the other should provide
assistance as is deemed reasonable and necessary.

 

1.9                                 Based
on the prerequisite in Article 1.3 of this Agreement, and in case the charges
raised by the Provider are no higher than that of the third Party, the Receiver
will take the services provided by the Provider as its first choice.

 

1.10                           If in an
area where the Provider provides the services, there is an independent third
Party who (i) provides service with quality superior to that of the Provider;
or (ii) charges less when providing services at the same level, the Receiver is
entitled to terminate the relevant services from the Provider in this area
after notifying the Provider in written form, with no compensation being made
to the Provider.

 

2.                                      The Content of Operator-based Comprehensive Services

 

Please see the following Annexes for the
operator-based comprehensive services provided by the Provider to the Receiver
and the concerned agreements:

 

Annex 1 Cellular Subscriber Value-added Services

Annex 2 “10010/10011” Customer Services

Annex 3 Agency Services

 

3.                                      Pricing Principle
and Payment

 

3.1                                 Please
see the Annexes to the Agreement for the pricing principle and/or charging standards
of the service fees.

 

6

 

3.2                                 The
amounts of service fees under the Agreement shall be calculated according to
the relevant accounting principles in force from time to time in the PRC.

 

3.3                                 If
the Parties fail to reach an agreement over the amounts of service fees under this
Agreement, they shall submit it to the competent authority, which will decide
the amounts pursuant the spirit and articles of this Agreement, as well as the
national pricing policies and regulations. And the decision made by this
authority shall have the final binding force over the Parties.

 

3.4                                 The
Receiver shall make payments due to the Provider in a timely way according to
the pricing principle & standards under this Agreement and its Annexes.

 

3.5                                 If
the Receiver fails to pay the related service fees to the Provider as is agreed,
the Receiver shall be charged 0.05% of the unpaid amount due to the Provider for
each day overdue. 60 days after the due date, the Provider will notify the
Receiver in written form to suspend the related services. If the Receiver fails
to pay the said amount 30 days after receiving the written notice, the Provider
can declare the immediate termination of the corresponding services. However,
the suspension or termination of such services does not affect the rights and
obligations already executed or performed by the two Parties under the
Agreement.

 

3.6                                 In
each October, both parties shall review the pricing standards and other articles
for the next financial year as to each service and facility provided under this
Agreement, and sign a supplementary agreement. If the Parties fail to reach an
agreement about the articles set in the supplementary agreement as of the
above-said time, the pricing standards and related articles of that year shall
apply for the next financial year before the Parties reach any agreement or the
disputes between them are settled pursuant to Article 3.3.

 

7

 

4.                                      Term

 

4.1                                 This
Agreement will enter into force as of January 1, 2005 as the conditions under
Article 7 hereinafter are fulfilled. The valid term is 2 years (“Valid Term”).

 

4.2                                 Unless the Receiver notify the Provider in
written form about terminating the Agreement 60 days in advance, the Agreement
shall be extended automatically another Valid Term when the Valid Term or an extended term expires as long as the
relevant law, regulations and other regulatory principles apply.

 

5.                                      Statements, Warranties and Promises

 

Each of the
parties of this Agreement makes the following statements, undertakings and commitments:

 

5.1                                 That is has the full power and authority
(including, but not limited to, approval, permission or license obtained from
relevant government authorities) necessary to sign this Agreement and its
attachments;

 

5.2                                 That this Agreement and its attachments are
deemed as valid and binding and enforceable pursuant to their terms once signed
and sealed as required in this Agreement;

 

5.3                                 That no terms and conditions of this
Agreement, nor those of its attachments, are against the laws and regulations
of the PRC.

 

6.                                      Transfer

 

6.1                                 On the basis of the terms and conditions
established in this Agreement and the arrangements made in Connected
Transactions MoU, the Provider irrevocably agrees the Receiver to transfer its
rights and obligations under this Agreement to the subsidiaries of Red-chip
Company operating business in Mainland China and that the Receiver needs no further consent from Provider for
transfer of its rights and obligations under this Agreement to CUCL.

 

8

 

6.2                                 Once the Receiver has transferred its rights and obligations
under this Agreement to the subsidiaries of Red-chip Company operating business
in Mainland China, the said subsidiaries shall immediately inherit all of the Receiver’s rights and obligations under this
Agreement and the Receiver shall
immediately terminate the relevant rights and obligations already inherited by
the said subsidiaries.

 

7.                                      Taking Effect

 

This Agreement shall take
effect as of the date agreed by the parties of the Agreement when the following
requirements are met:

 

7.1                                 The shareholders’ meeting of A Share Company
approves of the implementation of this Agreement in line with the laws,
regulations and listing rules, as applicable to it.

 

7.2                                 The shareholders’ meeting of Red-chip Company
approves of the transfer by A Share Company of its rights and obligations under
this Agreement to CUCL in line with the laws, regulations and listing rules, as
applicable to it.

 

8.                                      Force Majeure

 

Should either party fails
to fulfill relevant obligations under this Agreement and related attachments in
line with the agreed requirements because of unpredictable force majeure events
the occurrence and consequences of which can neither be avoided nor overcome,
it shall immediately notify the other party and provide within 15 days relevant
details as well as valid evidence to show that fulfillment of relevant
obligations or part of the obligations under this Agreement and related
attachments is impossible or that fulfillment of such obligations needs to be
postponed. The 2 parties shall negotiate with each other and decide whether to
suspense such obligations, partially exempt the other party from such
obligations or postpone the fulfillment of such obligations on the basis of the
extent to which fulfillment of such obligations is affected by the force
majeure event.

 

9

 

9.                                      Confidentiality

 

Unless otherwise
stipulated or required by the law or relevant regulatory authorities, and
except for the purpose of information disclosure by A Share Company and
Red-chip Company to the securities regulatory authority, neither of the 2
parties is allowed to provide or disclose materials and information related to
the other party’s business to any company, enterprise, organization or
individual without written permission from the other party.

 

10.                               Non-waiver

 

Unless
otherwise stipulated by the law, failure or delay of either party to exercise
the rights, powers or privileges entitled to it under this Agreement shall not
be deemed as waiver of such rights, powers or privileges, and exercising part
of such rights, powers
or privileges shall not hamper exercising of such rights, powers or privileges
in the future.

 

11.                               Notification

 

Any
notification related to this Agreement shall be made in written form and sent
by one party of this Agreement to the other, either via a special courier, or
by fax, or by postal delivery, to the other party. Such notification is deemed
as delivered upon delivery via a special courier, or when the sender’s fax
machine indicates that the pages have been transmitted if it is sent by fax, or
on the 3rd working day(excluding legal holidays)after
it is mailed. Any notification shall be deemed as valid upon delivery.

 

The addresses of both of the Parties, to
which the notices shall be delivered, are listed below:

 

Unicom
New Guoxin Telecommunications Corporation Limited

Recipient: Xiao Baoyu

Address: Rm.873, No.133th, Xidan Bei Avenue,
Xicheng District, Beijing

Postal
Code: 100032

 

10

 

China
United Telecommunications Corporation Limited

Recipient: Zhao Yilei

Address: 40 floor of JinMao Building, No 88, ShiJi Avenue, Shanghai

Postal Code: 200121

 

12.                               Applicable Law

 

The agreement signed herein shall be subject
to the jurisdiction of laws of the PRC and shall be interpreted and performed
according to the above-said laws.

 

13.                               Settlement
of Disputes

 

Any disputes between the two parties arising
from the validity, interpretation or performance shall be settled through
friendly consultations unless Article 3.3 provides otherwise. In case of the
failure of any consultations within 30 days from the date when any disputes
arise, each party is entitled to bring suit in the People’s courts with
jurisdiction.

 

14.                               Miscellaneous

 

14.1                           The
Old Comprehensive Operator Services Agreement terminates automatically upon the
entering into force of this Agreement.

 

14.2                           Annex
I through Annex III are an integral part of this
Agreement with the equal binding force as the provisions herein. In case any
provisions in the above-said annexes conflict with those in this Agreement, the
annexes shall prevail.

 

14.3                           As
the two parties agree, each party may revise or make additions to this
Agreement and its annexes. Any revisions or additions shall come into force
upon the signature and seal by the legal representative of each party or an
authorized person acting on his behalf.

 

11

 

14.4                           If
any provisions in this Agreement and its annexes are determined to be
non-compliant or impossible to impose compulsory measures, other provisions in
this Agreement and its annexes shall remain in force and therefore be performed
if applicable.

 

14.5                           This
agreement is made in quadruplication with each party holding two thereof. The
counterparts have equal validity.

 

12

 

(Signatures Only)

 

 

Unicom New Guoxin Telecommunications
Corporation Limited
(Seal)

 

 

	
  Legal Representative or his authorized
  person:

  	
  /s/ Cheng Huoming

  	
   

  

 

 

 

China United Telecommunications Corporation
Limited (Seal)

 

 

	
  Legal Representative or his authorized
  person:

  	
  /s/ Sun Qian

  	
   

  

 

13

 

Annex
I: Cellular Subscriber
Value-added Services

 

 

I.                                         Service
Description in Brief

 

The Provider,
through the operator-based paging service platform, delivers all kinds of
operator-based comprehensive value-added services to the cellular subscribers
of the Receiver defined in this Agreement. The said services include Unicom
secretary services and operator-based SMS value-added services.

 

II.                                     Settlement

 

i.                                          The
actual revenue in cash generated from the value-added services described herein
delivered to the Receiver shall be shared between the respective subsidiaries
of the Receiver and the Provider at a ratio of 4:6. This revenue sharing ratio
shall be no higher than the average ratio the Receiver offers to any other
value-added service Providers (CP/SP) in the same area, which are independent
of the Provider.

 

ii.                                       The
accounts shall be settled according to the billing materials of the Receiver.

 

iii.                                    Both
parties agree that their respective subsidiaries or branches involved shall
make monthly settlement directly in compliance with the settlement arrangement
defined herein.

 

III.                                 Obligations

 

i.                                          In
case any party is engaged in network construction, including but not limited to
network expansion or upgrade, the party shall inform the other six months prior
to any possibilities occurring to influence the obligations to be performed
under this annex.

 

14

 

ii.                                       Each
party shall maintain their networks to ensure the routine operation of the
whole networks according to the related regulations promulgated from time to
time by the competent authority.

 

iii.                                    In
the absence of the consent of the other, no party is allowed to recklessly
interrupt the communication necessary for the service delivery under this
annex. In the case of interruption or severely blocked communication, each
party shall take effective measures for remedy.

 

15

 

Annex
II: 10010/10011
Customer Services

 

 

I.                                         Service
Description in Brief

 

The Provider,
through its 10010/10011 service platform, provides the Receiver with
operator-based customer services, including service consulting, telephony bill
inquiry, service acceptance, complaint handling (“10010 Basic Service”) as well
as customer interview and customer retention (“10010 Value-Added Service”) and
charges the Receiver accordingly.

 

II.                                     Settlement
Standard

 

i.                                          The
settlement standard for the services under this annex is, cost of customer
services mentioned above plus profit-to-cost ratio, which is no higher than
10%.

 

ii.                                       The
above-said cost of customer services will be calculated as follows, cost per
operator seat is multiplied the number of actual and effective seats.

 

a) The cost per operator seat in economically
developed metropolises, such as Beijing and Shanghai, shall be the actual cost
per operator seat (as defined below) in such area for the previous year. The
cost per operator seat in areas apart from those economically developed
metropolises shall be the lower of the actual cost per operator seat in the
same area and the nationwide (excluding Beijing and Shanghai) average of actual
cost per operator seat plus 10%, in each case, for the pervious year.

 

16

 

The actual cost per operator seat consists of
wages, administration expenses, operation and maintenance expenses, equipment
depreciation and premises leasing fees attributable to “10010” customer
service. The actual cost per seat in a certain area shall be the product of
dividing the total cost of “10010/10011” customer services in this area of the
previous year by the average number of monthly operator seats of the previous
year, which shall be confirmed by the audit report prepared by an external
audit firm. The said auditing report and relevant supporting documents shall be
submitted to the auditor hired by the Receiver.

 

b)  How
to determine the actual number of effectively operating seats: the Provider
shall provide the number of previous-month seats to the Receiver before the
tenth day of each month. And the Receiver shall confirm the number as is
provided within 5 working days based on the criteria for the customer service
center as set out in the Service Standard for Telecommunication Operations (For
Trial Implementation) published by the MII. And the number of effectively
operating seats will be subject to the final confirmation by the Receiver.

 

3.                                       Both
parties agree that their respective subsidiaries or branches involved shall
make monthly settlement directly in compliance with the settlement arrangement
defined herein.

 

IV.                                 Obligations

 

i.                                          The
Provider, as is required by the Receiver, shall add seats for operator-based
service or enrich the service contents if appropriate, including but not
limited to providing seats exclusively for 10010 value-added services if the
Receiver instructs as such in written format. As how to
determine the cost per seat, the Article II (a) shall apply.

 

ii.                                       The
Receiver shall keep the Provider updated about the new services available to
its cellular subscribers and shall provide the information about all kinds of
services delivered to its cellular subscribers as is required by the Provider.

 

17

 

iii.                                    In
the absence of the consent of the other, no party is allowed to recklessly
interrupt the communication necessary for the service delivery under this
annex. In case of the interruption or severely blocked communication, each
party shall take effective measures for remedy.

 

18

 

Annex
III: Agency
Services

 

 

I.                                         Service
Description in Brief

 

The Provider
conducts products/services promotion and marketing activities to the customers
if the market calls for it and the Receiver requires the services on the
initiative of the Provider.

 

II.                                     Settlement
Standard

 

The service standard for the Provider shall
be no inferior to that of any independent third party agency who
helps to expand the subscriber base of the Receiver in the same area. And the
commissions the Provider charges the Receiver shall be no higher than the
average commissions such independent third party agency in the same area
charges the Receiver.

 

III.                                 Other
Issues on Settlement

 

a)                                      The
accounts shall be settled according to the billing materials of the Receiver.

 

b)                                     Both
parties agree that their respective subsidiaries or branches involved shall
make monthly settlement directly in compliance with the settlement arrangement
defined herein.

 

19Exhibit 4.32

 

(English
Translation)

 

 

 

Transfer Agreement of

The Operator-based Comprehensive

Services Agreement

 

 

 

Between

 

China United
Telecommunications Corporation Limited

 

And

 

China
Unicom Corporation Limited

 

Unicom New
World Telecommunications Corporation Limited

 

 

 

March 24,
2005

 

 

This Agreement was signed in Beijing, People’s
Republic of China (“China”), on March 24, 2005, by the representatives of the
following parties:

 

(1)   The
Transferor:

 

China United Telecommunications Corporation
Limited ( “A Share Company”) 

Location: F40th, Jinmao Building, No.88 ShiJi Avenue, Shanghai 

Legal Representative: Chang Xiaobing

 

(2)   The
Transferee:

 

China Unicom Corporation Limited (“CUCL”) 

Location: F12 of No. 1 Building, Henderson Center, No.18, JianGuoMen Nei
Street, Beijing 

Legal Representative: Chang Xiaobing

 

Unicom New World Telecommunications
Corporation Limited (“Unicom New World”) 

Location: Room 1009, F10th of No. 1 Building, No. 18, JianGuoMen Nei Street,
DongCheng District, Beijing 

Legal Representative: Chang Xiaobing

 

In this Agreement, CUCL and Unicom New World
are separately or collectively referred to as the Transferee.

 

Whereas,

 

(1)   CUCL is a foreign invested enterprise established and survived in
compliance with the Chinese law, with 100% of its shares being held by China
Unicom Limited (“Red-chip Company”).  A
Share Company is a limited holding company established and survived in
compliance with the Chinese law, listed in Shanghai Stock Exchange (SSE) on
October 9, 2002, with 69.3224% of its shares being held by China United
Telecommunications Corporation (“Unicom Group”);

 

1

 

(2)   On August 12, 2002, Unicom Group and A Share Company signed a memorandum
of understanding on the transactions to be conducted after the listing of the
shares of A Share Company (“Connected Transactions MoU”) between Unicom Group
or its subsidiaries (excluding A Share Company and the subsidiaries held by A
Share Company) and Red-chip Company indirectly held by A Share Company and its
subsidiaries. According to the understanding reached in the Connected
Transactions MoU, in the event that the transactions to be conducted between
Red-chip Company itself or its subsidiaries and Unicom Group or any of its
subsidiaries (excluding A Share Company and the subsidiaries held by A Share
Company) require approval of the minority shareholders of A Share Company under
the Rules Governing the Listing of Shares on Shanghai Stock Exchange (“Rules of
SSE”) applicable from time to time, which are deemed at the same time as
connected transactions that require approval of the minority shareholders of
Red-chip Company under the Rules Governing the Listing of Securities on the
Stock Exchange of Hong Kong Limited (“Rules of SEHK”) applicable from time to
time, the above connected transactions shall be conducted in a 2-step approach:
(1) Unicom Group or any of its subsidiaries enters into an agreement on the
intended transaction with A Share Company or China Unicom (BVI) Limited (“Unicom
BVI”), identifying the rights and obligations of the 2 parties involved in the
transaction under the agreement (including, but not limited to, approval of
Unicom Group of the transfer of the rights and obligations of A Share Company
or Unicom BVI under the agreement to Red-chip Company or any of its
subsidiaries); (2) A Share Company or Unicom BVI transfers its rights and
obligations under the above mentioned agreement to Red-chip Company or any of
its subsidiaries;

 

2

 

(3)   Pursuant to the arrangements made in the above mentioned Connected
Transactions MoU, Unicom Group, Unicom New Guoxin Telecommunications
Corporation Limited (“Unicom New Guoxin”) and A Share Company singed the
Operator-based Comprehensive Services agreement (“Old Operator Services
Agreement”). On the same day, A Share
Company signed the Agreement on Transfer of the old Operator Services Agreement with CUCL, Unicom
New World Telecommunications Corporation Limited (“Unicom New World”) and Unicom New Century Telecommunications
Corporation Limited (“Unicom New
Century”) to transfer all its rights and obligations under the old Operator Services Agreement to Unicom New Century,
Unicom New World and CUCL. Under such
arrangement, Unicom Group and Guoxin offer Agency Services, Cellular subscriber
value-added services and 10010/10011 Customer service to CUCL, Unicom New
Century and Unicom New World;

 

(4)   CUCL assimilated and merged with Unicom New Century on July 30, 2004, and the
rights and obligations of Unicom New World under the old Operator Services Agreement have been inherited by CUCL.
The Ministry of Commence has approved, pursuant to MOC’S Approval of the Merging between China Unicom Corporation Limited and
Unicom New World Telecommunications Co.
Ltd.(MOC
[2005]No.258), of the merging between CUCL and Unicom New World. At present, CUCL is going through the rest of
the legal procedures necessary for its merging with Unicom New World, upon completion of which Red-chip Company would have CUCL
as its sole operating entity in China;

 

(5)   Unicom New Guoxin is a limited corporating company established and
survived in compliance with the established Chinese law. Unicom New Guoxin and A
Share Company signed the Operator-based Comprehensive Services Agreement (“Agreement”) on March 24, 2005.

 

3

 

Considering of the implementation
and amendment of the old Comprehensive Operator Service Agreement, with common
studies and consultations, the Parties to this Agreement, in the principle of
equality and mutual benefit, have agreed as follows:

 

1.     If
the conditions of entry into force described in Article 6 of this Agreement
were met, the Transferor agrees to transfer all its rights and obligations
under the Agreement and its attachments to the Transferee. The Transferee
hereupon agrees to acquire the rights and obligations of the Transferor under
the Agreement.

 

2.     Once
the Transferor transferred its rights and obligations under the Agreement to
the Transferee, the Transferee would immediately succeed to all the rights and
obligations of the Transferor under the Agreement. And the Transferor should
terminate all the relevant rights and obligations succeeded by the Transferee
under the Agreement.

 

3.     The
Transferor acknowledges that, in accordance with Article 6 of the Agreement,
Unicom New Guoxin have irrepealably agreed that the Transferor may transfer its
rights and obligations under the Agreement to the Transferee, and no further
consent from the Unicom New Guoxin for such transfer is required.

 

4.     The
Parties to this Agreement should ensure that they have the rights, power and
capability to sign and implement this Agreement. This Agreement shall
constitute the lawful, effective and binding obligations of the Parties immediately
upon its signing.

 

5.     The
Transferee agrees to undertake the rights and obligations in the past and
future under the Agreement in compliance with the terms and conditions defined
in the Agreement in its period of validity.

 

4

 

6.     Come
into Effect

 

This Agreement comes into effect together
with the Agreement, with the following conditions being satisfied.

 

6.1   The
shareholders’ meeting of Red-chip Company approves in accordance with its applicable
laws, regulations and listing rules, the transfer of the Transferor’s rights
and obligations under the Agreement to the Transferee;

 

6.2   The
shareholders’ meeting of the Transferor approves in accordance with its applicable
laws, regulations, and listing rules, the signing and implementation of the
Agreement.

 

7.     Further
Arrangement

 

The Ministry of Commerce has approved the
merger of Unicom New World by CUCL, and the relevant legal procedures are going
to be completed. Therefore the Parties to this Agreement now agree and
acknowledge that, after the completion of the legal procedures to merge Unicom
New World by CUCL, all the rights and obligations of Unicom New World under
this Agreement will be succeeded by CUCL. And CUCL may succeed the rights and
obligations of Unicom New World under this Agreement without any other approval
or consent from A Share Company.

 

5

 

8.     Force
Majeure

 

Any party who fails to carry out the relevant
obligations under this Agreement in accordance with the agreed conditions due
to any events of Force Majeure which could not be predicted, and the occurrence
or results of which could not be avoided or overcome, the party should inform
other parties of its occurrence as soon as possible and thereafter provide
detailed information and a valid document for evidence explaining the reason of
its inability to execute or delay the execution of all or part of the
obligations under this Agreement and its attachments within 15 days. The
Parties shall, through consultations, decide whether to suspend, partially
exempt or delay the execution of such obligations according to the effects of
the events of Force Majeure on the performance of the obligation.

 

9.     Confidentiality

 

Unless otherwise defined or required by law
or the relevant regulatory authority, or for the purpose of information
disclosure by the Transferor to SEC, or by Red-chip Company to Stock Exchange
of Hong Kong Limited (SEHK), either party shall not provide or disclose any
data or information related to the business of other parties to any company,
enterprise, organization or personnel without the written permission of the
relevant party.

 

10.   No
waiver

 

Unless otherwise stipulated by law, the
failure or delay of execution of the rights, power or privileges under this
Agreement by any party shall not be construed as a waiver of such rights, power
or privileges. And the partial execution of such rights, power and privileges
shall not obstruct the future execution of such rights, power and privileges.

 

6

 

11.   Notice

 

Any notice related to this Agreement shall be
made in writing, and delivered in person by one party to other parties, or sent
by facsimile or by mail. Such notices shall be deemed delivered upon receipt
when delivered in person; or upon confirmation of delivery displayed in the fax
machine of the addresser if transmitted by facsimile; or within three working
days (automatically extended when falls on legal holidays) after being
delivered by mail. Any notice shall come into effect upon delivery.

 

The communication addresses of the Parties to
this Agreement are as follows: 

	
  China United

  Telecommunications

  Corporation Ltd.

  	
   

  	
  China
  Unicom

  Corporation Limited

  	
   

  	
  Unicom
  New World

  Telecommunications

  Corporation Limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Addressee: Zhao Yilei

  	
   

  	
  Addressee: Yang Xiaowei

  	
   

  	
  Addressee: Yang Xiaowei

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address: F40th, Jinmao

  Building, No.88 ShiJi

  Avenue, Shanghai

  	
   

  	
  Address: Room 1029,

  F10, No. 133 A, Xidan

  North Street, Xicheng

  District, Beijing

  	
   

  	
  Address: Room 1029,

  F10, No. 133 A, Xidan

  North Street, Xicheng

  District, Beijing

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Postal Code: 200121

  	
   

  	
  Postal Code: 100032

  	
   

  	
  Postal Code: 100032

  

 

12.   Applicable
Law

 

This Agreement shall be governed by the laws
of the People’s Republic of China, and be construed and executed in accordance
with the laws of China.

 

7

 

13.   Settlement
of Disputes

 

All disputes arising from the effectiveness,
interpretation or performance of this Agreement shall be settled through
friendly negotiation. Should no settlement be reached through negotiation
within 30 days after the arising of the disputes, any party shall be entitled
to proceed to the People’s Court with proper jurisdiction.

 

14.   Miscellaneous

 

14.1      Each
party may make revisions or supplements to this Agreement under consultations
with other Parties. All the revisions and supplements shall be effective when
signed and sealed by the legal representatives of the Parties or their
authorized representatives.

 

14.2      This
Agreement is severable. If any provisions of this Agreement is held to be
against the law or unenforceable, the effectiveness and implementation of the remaining
provisions shall not be affected.

 

14.3      This Agreement was done in six
original copies, two for each Party, being equally authenticated.

 

8

 

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China United Telecommunications Corporation Ltd. (Stamp)

 

 

	
  Legal representative or his authorized representative:

  	
  /s/ Sun Qian

  	
   

  

 

 

 

 

China Unicom Corporation Limited (Stamp)

 

 

	
  Legal representative or his authorized representative:

  	
  /s/ Tong Jilu

  	
   

  

 

 

 

 

Unicom New World Telecommunications Corporation Limited (Stamp)

 

 

	
  Legal representative or his authorized representative:

  	
  /s/ Tong Jilu

  	
   

  

 

9

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