EXHIBIT 4.12
COPYRIGHT LICENSE AGREEMENT (EXTENDED FOR YEAR 2004)
This Copyright License Agreement (Extended for Year 2004) (the "Agreement") is
signed by and between:
Party A: Shanghai Yide Network Co., Ltd., a company established in China with
legal address at Suite 701, No. 1 Building, Lane 186, Dagu Road, Shanghai, PRC;
and
Party B: Shanghai Weilan Computer Co., Ltd., a company established in China with
legal address at 5th Floor, No. 689, Beijing East Road, Shanghai, PRC;
on September 1, 2004 at the above address of Party A, based on the Copyright
License and Cooperative Marketing Agreement ("Original Agreement").
Whereas Party A has obtained the exclusive right ("License Acquired by Party A")
to produce digital images and short messages for cell phones based on the images
and literal content in Volume 16-36 and subsequent volumes of the Japanese
version of the cartoon series Crayon Shinchan (author: Yoshito Usui) that have
been or to be distributed by Japanese FUTABASHA Co., Ltd.("Works") and to
provide related sales service to subscribers of China Mobile Communications
Corporation through telecom and mobile networks in the Territory, under the
authorization of Japanese MULAN Film & TV Culture Development Co., Ltd., (Party
A states that this license was duly authorized by Japanese MULAN Film & TV
Culture Development Co., Ltd);
Whereas Party A and Party B agrees that, Party B may, by way of paying copyright
royalty to Party A, enjoy the exclusive right to produce digital images and
short messages for cell phones based on the images and literal content in the
Works and to provide related sales service to subscribers of China Mobile
Communications Corporation through telecom and mobile networks in the Territory,
within the scope of the License Acquired by Party A;
Therefore, the two parties agree to be bound by the agreement as follows after
friendly consultation:
ARTICLE 1 SCOPE OF THE LICENSE
Party A licenses Party B to exercise the copyright to the Works within the
following territory, scope and term. The License Scope has been clearly defined
and specified, such that other rights beyond such scope shall not be deemed
licensed. Unless otherwise specified, terms such as Works, Territory, License
Term and License Scope shall have the meanings as follows:
1. Works: Volume 16-36 of the Japanese version of the cartoon series Crayon
Shinchan (author: Yoshito Usui) distributed by Japanese FUTABASHA Co.,
Ltd.("FUTABASHA") ;
2. Territory: the People's Republic of China (excluding Hong Kong, Macau and
Taiwan);
3. License Term: August 1, 2004 until August 31, 2005. If either party would not
like to extend such term, it shall notify the other in writing at least 30 days
prior to expiration of the
term; if neither party makes such notice to the other within such time limit, it
should be deemed that the two parties agree to extend the term for another one
year.
4. License Scope: Party A licenses Party B the exclusive right to produce
digital images and short messages for cell phones based on the images and
literal content in the Works and to provide related wireless sales service
("Wireless Service") to subscribers of China Mobile Communications Corporation
("Mobile Operator") through telecom and mobile networks in the Territory. Party
B can not sub-license its rights acquired under such license.
5. the Agreement: includes main body of the agreement, documents expressly
identified as annexes hereto and other written documents supplemented or added
in the future and approved by the two parties as the annexes hereto.
ARTICLE 2 REPRESENTATIONS AND WARRANTIES
2.1 Party B hereby represents and warrants that:
a) Party B is a company duly registered and validly existing under the
laws of PRC, possessing independent status as a legal person; is a
Chinese qualified telecom and network operator; possesses certain
volume of property; is in good standing; and is capable of
performing this Agreement and assuming liabilities hereunder;
b) Party B has gone through all legal and internal procedures necessary
for executing and performing this Agreement;
c) Party B has acquired the permits from the government that are
necessary for executing and performing this Agreement;
d) Conclusion, implementation and performance of this Agreement and all
payments made in line with the payment day specified herein are all
in compliance with laws of PRC;
e) Party B agrees to make a copy of this Agreement to Japanese MULAN
Film & TV Culture Development Co., Ltd for its reference;
f) Party B will use its best efforts to assist Party A in actions taken
pursuant to Article 9 herein that are aimed at the protection of
Party A's rights hereunder;
g) Party B warrants that without Party A's prior written consent, it
will not use images and literal content in the Works beyond the
License Scope; and
h) Party B warrants that it will submit written reports which are true
and accurate and pay royalties to Party A, in accordance with the
Agreement.
2.2 Party A hereby represents and warrants that:
a) Party A is a company duly registered and validly existing under the
laws of PRC, possessing independent status as a legal person;
possesses certain volume of property; is in good standing; and is
capable of performing this Agreement and assuming liabilities
hereunder;
b) Party A has gone through all legal and internal procedures necessary
for executing and performing this Agreement;
c) Party A has acquired the permits from the government that are
necessary for executing and performing this Agreement;
d) Party A warrants that, within the License Term, Territory and
License Scope, it will lawfully, constantly and completely own the
exclusive right to use the Works that has been licensed to Party B,
e) Party A has never licensed the right to use the Works within the
Territory and License Scope, to any person other than Party B prior
to executing this Agreement;
f) Party A warrants that, all materials and articles related to the
Works that will be provided by Party A to Party B upon a written
handover document signed by the two parties will be legally
obtained; otherwise Party A will be liable for all consequences;
g) Party A agrees that, for the purpose of marketing the Wireless
Service based on the Works, Party B may use images and literal
content in the Works in a way permitted herein and within the
License Scope;
h) Party A warrants that within the scope of this Agreement, Party B
shall be the sole partner of Party A for carrying out the Wireless
Service.
i) In the event that Party A acquires other licenses as to the images
in the Works beyond the scope of the License in the future
(hereinafter "New License"), Party A warrants that it will also
sublicense such New License to Party B if conditions offered by
Party B are comparable to those offered by other competitors, as
long as Party B has fully abided by the representations and
warranties made in Article 2.1 above.
ARTICLE 3 OBJECTS, MEANS, CONTENT AND PRICING OF WIRELESS SERVICE
Objects of Wireless Service: subscribers to cell phone services of China Mobile
Communications Corporation (special service No. of Linktone SMS: 2000).
Means of Wireless Service: digital images and short messages as to Crayon
Shinchan for cell phones acquired through: ordinary SMS subscription, STK card
SMS subscription, subscription through websites, WAP, MMS and wireless download
based on Java technologies. Means of charge for Wireless Service include charge
based on number of messages; charge on a monthly-package basis and charge based
on flows, etc, which should have been recognized by the Mobile Operator.
Content of Wireless Service: black-and-white pictures, colored pictures, short
message games and multimedia colorful messages. Form of these messages may be
pure picture, plain text or combination of text and picture, which can be in
black-and-white, a single color or multiple colors.
Pricing of Wireless Service: minimum price for monthly package of pictures: RMB
5 yuan; minimum price for monthly package of short messages: RMB 3 yuan. Final
Prices will vary based on specific services provided, and shall be reported to
the Mobile Operator for approval. The prices approved by the Mobile Operator
shall be the basis for the final prices and financial settlement between the two
parties. Such final prices shall be the Final Prices
referred to herein and be an annex hereto. Party B shall notify the Final Prices
to Party A in writing prior to offering Wireless Service to subscribers on a
for-profit basis. Subscribers of the Mobile Operator will accept the Wireless
Service provided by Party B by the means described herein, and shall pay for
such services to the Mobile Operator at the Final Prices.
The parties hereby agree that the Wireless Service may be provided by the means
described above on a non-profit basis for the purpose of marketing.
ARTICLE 4 COPYRIGHT ROYALTIES AND SETTLEMENT THEREOF
4.1 Parties agree that the last day of each month shall be the base day for
settling the copyright royalty, a period of settlement shall commence from first
day of each month and end on last day of the month.
4.2 Parties agree that, Party B shall pay to Party A 40% of Final Prices as set
forth in Article 3 for all Wireless Service each month as the copyright royalty,
provided such royalty for each period of settlement shall at no time be lower
than RMB 50,000 yuan.
4.3 Party B shall provide Party A with monthly written reports. Within 15 days
upon the end of each settlement period, Party B shall provide Party A with
detailed reports on Wireless Service operating performance and sales of the
period; and shall pay the copyright royalty for such period in full within 10
business days upon receipt of Party A's invoice, upon acknowledgement by Party
A. If Party B is delayed in paying such amount, Party A shall promptly send a
notice to urge Party B to make the payment. If Party B fails to pay the royalty
due to its own fault after 10 business days following Party A's notice, Party A
shall have the right to unilaterally terminate the Agreement or impose a late
fee on Party B at the rate of 0.1% of the amount owed each day. If Party B's
delay in payment is caused by Party A's failure to issue an invoice in time,
Party B shall not be liable for the delay; if Party B's delay in payment is
caused by the Mobile Operator's failure to provide the data report, Party B
shall not be liable for the delay, provided that Party B has presented documents
evidencing the failure of the Mobile Operator.
4.4 Given that Mobile Operator offers discounts or suffers loss in receiving
payments from its subscribers, the royalty might be correspondingly reduced, by
20% in average.
4.5 The parties agree that the Copyright License and Cooperative Marketing
Agreement (Renewed) and Amendment to the Copyright License and Cooperative
Marketing Agreement (Renewed) signed by the two parties in November 2003
terminate on the day when this Agreement is executed and all outstanding
payments with respect to those agreements shall be settled within one month upon
execution hereof.
ARTICLE 5 PROVISION OF SOURCE MATERIALS, DERIVATIVE WORKS AND MARKETING
5.1 Party B warrants that it will not use or transfer to third parties the
source materials, data, documents and digital images in all forms that have been
acquired from Party A, and shall only use the digital images produced and text
translated based on the Works for the purpose of Wireless Service as described
herein. Documents (software) containing digital images produced by Party B for
cell phone users based on the Works shall constitute derivative works and shall
be the property of Party B; provided Party B may not use such derivative
works for a commercial purpose other than Wireless Service without Party A's
written consent, whether during or after the expiration of the term of the
Agreement.
5.2 When offering Wireless Service hereunder, Party B must establish plans as to
content, prices and products of Wireless Service and a marketing plan with
respect thereto, together with Party A. Plans, promotion means and articles used
in implementing such plans and samples and quantity of paper promotion materials
mentioned in Article 7 shall be subject to the prior approval of Party A. When
marketing Wireless Service and Party B's network operating services together
with Party A, paper promotional materials produced by Party B shall be approved
by Party A in advance. Party A shall respond to Party B within 8 business days
upon receipt of draft designs for promotional materials sent by Party B; if
Party A fails to respond in time, Party B may deem that Party A has approved the
draft designs.
5.3 Party B warrants that it will try its best to add Wireless Service set forth
in Article 3 into MZONE, STK card or other marketing tools favorable for
improving operating performance.
5.4 Party B shall set up pages on all websites it owns to introduce and
regularly update the content of Wireless Service set forth in Article 3, and
place advertisements for Wireless Service on important place on the homepage of
such websites and provide shortcut links on the navigation bar.
ARTICLE 6 PRODUCTION, APPROPRIATE ALTERATION AND OPERATING LICENSE
6.1 Party B has right to produce digital images and short messages for cell
phones based on the Works, and in such course appropriately alter and translate
the Works to adapt to a cell phone user's language style and display format of
various cell phones; provided that Party B shall bear relevant liabilities and
costs on its own. While producing such images/messages and altering and
translating the Works as described above, the personal rights of the original
author shall be respected. The appropriate alterations refer to those other than
alteration of characters' gestures and motions, which have been permitted to be
conducted by Party B.
6.2 Party B shall not formally put the Wireless Service into use in the telecom
(telecom service areas) or mobile network until it has informed Party A of the
operating website, starting date, areas covered, service schemes, methods of
use, prices, estimated earnings and marketing plan in writing and acquired
written approval from Party A.
6.3 Party B shall not formally put the digital images for cell phones into use
in the telecom (telecom service areas) or mobile network until it has uploaded
the proposed images to the server designated by Party A in advance and has
acquired consent from Party A. Additional images put into use during the
operating period shall also be acknowledged by Party A following above
procedures. Party B shall upload the images to such server and notify Party A;
if Party A does not raise any objection within 5 business days upon such notice;
Party B may deem that Party A has approved the images it has uploaded.
6.4 Party B shall facilitate Party A with examining all cell phone digital
images and short messages in use or to be used within 48 hours upon a request of
Party A.
6.5 Party B shall start to operate the Wireless Service described in Article 3
within 30 days upon execution hereof. If Party B delays in operating the
Wireless Service by reason of Party
A, Party A shall be liable for the delay; if Party B fails to start operating
the Wireless Service within 30 days upon execution hereof by reason of itself,
Party A shall have right to terminate this Agreement without assuming any
liabilities for Party B.
ARTICLE 7 INDICATION OF INFORMATION OF COPYRIGHT AND LICENSE
Upon prior approval by Party A in writing, Party B may produce promotional
materials on hand bills, posts, newspapers, magazines, websites and the internet
using part or all of the pictures in the Works for the purpose of marketing its
telecom and network operating services; provided that in all of above materials,
information regarding copyright and licensing to the Works shall be expressly
and clearly indicated as follows:
(C)USUI YOSHITO/FUTABASHA
LICENSED BY MULAN (English words must be in capital letters)
[CHINESE CHARACTERS]
or (C)[CHINESE CHARACTERS]
[CHINESE CHARACTERS]
or (C)U/F
LICENSED BY MULAN
Copyright and license information as to colored pictures for display:
(C)U/F/M
ARTICLE 8 TRADEMARKS AND REGISTRATION THEREOF
Party B shall not apply for registration of trademarks and service marks as to
the Works, and shall not use any part of the Works as trademarks, service marks
or any other marks.
ARTICLE 9 DATA KEEPING/INVESTIGATION AND SURVEILLANCE
9.1 Party B shall keep in the server or in written format information as to the
number of clicks and downloads and details of expenditures and receipts with
respect to the Wireless Service, in a way that is convenient for Party A to
check at any time.
9.2 To supervise the implementation hereof and service performance of Party B,
Party A shall have the right to click on, read and copy all of the cell phone
images and short messages used or to be used by Party B as described herein as
well as data described in Article 9.1 above. For this purpose, Party A may
retain attorneys, accountants and other personnel, at its own expense.
ARTICLE 10 INFRINGEMENT BY A THIRD PARTY
In the event that Party B discovers that any third party has infringed or is
infringing on the copyrights of the original author and lawful rights of Party A
or is competing with the services of Party B permitted hereunder in an unfair
way (collectively "Infringement by a
Third Party"), it shall immediately inform Party A of the fact in writing. If
infringement by a third party arises in the Territory, Party A shall have the
right to take appropriate actions to investigate or to seek remedies against the
third party for the infringement. Under such circumstances, Party B shall assist
and cooperate with Party A in doing so.
ARTICLE 11 TERMINATION OF THE AGREEMENT
11.1 Party A may terminate the Agreement by written notice to Party B in the
event of any of following, and the Agreement will be terminated upon service of
such notice to Party B:
a) Party B has breached Article 4, 5, 6, 8, 9, 12 and/or 14;
b) Party B is subject to forcible enforcement of the court such as
property preservation, or a petition for bankruptcy has been raised
by or against Party B;
c) Bank accounts of Party B have been frozen;
d) Party B's operations are suspended;
e) Acts of Party B or its directors or employees have seriously injured
the interests or reputation of Party A;
f) Japanese MULAN Film & TV Culture Development Co., Ltd. has cancelled
or narrowed the license to Party A due to reasons that shall be
attributable to Party B;
g) Data such as number of short messages sent through Wireless Service
that have been displayed on the server for Party A's examination and
serves as a basis for settlement of royalties between the two
parties is incorrect due to Party B's willful misconduct or
negligence; or
h) Other similar circumstances under which Party B is not likely to
perform its obligations hereunder.
11.2 In the event that Party A terminates the Agreement pursuant to the above
Article 11.1, it will not refund the royalties already paid by Party B.
11.3 Provisions in the above Article 11.2 shall not affect Party A's right to
claim against Party B for damages resulting from Party B's breaching acts,
provided that such claim for damages shall only be for losses that are
foreseeable at the time of the execution of the Agreement hereof.
11.4 Under any of following circumstances, Party B shall have right to terminate
the Agreement during the term hereof:
a) Party A's breach of the Agreement has led to Party B's inability to
reach the objectives described hereunder;
b) Acts of Party A or its directors or employees have seriously injured
the interests or reputation of Party B;
c) Other similar circumstances under which Party A is not likely to
perform its obligations hereunder;
d) Party A breaches or can not fulfill its warranties made in Article
2.2;
e) Party A is subject to forcible enforcement of the court such as
property preservation, or a petition for bankruptcy has been raised
by or against Party A;
f) Bank accounts of Party A have been frozen;
g) Party A's operations are suspended.
11.5 Provisions in the above Article 11.4 shall not affect Party B's right to
claim against Party A for damages resulting from Party A's breaching acts,
provided that such claim for damages shall only be for losses that are
foreseeable at the time of execution hereof.
ARTICLE 12 TRADE SECRETS
Both Parties shall keep confidential this Agreement, all documents provided to
each other for performing under ("Performance Documents"), and the conditions of
services carried out hereunder ("Service Information"); unless the Agreement and
conditions of the parties are publicly available; or prior written consent has
been acquired by the party intending to disclose the above information from the
other party; or the information is disclosed in response to the judicial
department's requests. Both parties shall prevent their respective shareholders,
directors and employers from disclosing the Agreement, and amendments hereto,
Performance Documents as well as Service Information regarding the operation and
sales of Wireless Service to any third party, except to attorneys and
accountants engaged by the two parties for executing and performing this
Agreement.
ARTICLE 13 MATTERS SUBSEQUENT TO TERMINATION
Upon expiration or termination hereof, Party B shall immediately return all
materials (including paper documents, audio and video materials, floppy discs,
compact discs and tapes) and articles that have been furnished by Party A during
the course of performance hereof, and shall not continue to use or license
others (including implied license) to use the Works (including Derivative Works
as described in Article 5) in any way. And at that time, Party B shall also
permanently delete digital images and short messages as to the Works produced
and kept by Party B without any backup, at the presence of Party A.
ARTICLE 14 ASSIGNMENT OF RIGHTS
Party B shall not assign all or part of its rights hereunder to any third party;
nor can it provide guarantees for others with such rights.
ARTICLE 15 ENTIRE AGREEMENT
This Agreement constitutes an entire agreement between the two parties as to
matters hereunder. Any understandings, agreements and commitments reached
between the two parties prior to the signing of this Agreement shall
automatically terminate on the day when this Agreement is executed.
ARTICLE 16 NOTICES
Notices with respect hereto shall be sent to following addresses by fax or
mails. If either party's address has changed, it shall promptly notify the
other.
To Party A: Shanghai Yide Network Co., Ltd.
Address: Suite 701, No. 1 Building, Lane 186, Dagu Road,
Shanghai, PRC
Fax: (86)-021-63272371
To Party B: Shanghai Weilan Computer Co., Ltd.
Address: 5th Floor, No. 689, Beijing East Road, Shanghai, PRC
Fax: (86)-021-63611576
ARTICLE 17 SETTLEMENT OF DISPUTES
17.1 Any disputes arising out of this Agreement or as to matters not specified
herein shall be resolved first through consultations between both parties.
17.2 If the dispute cannot be resolved through consultation, either Party may
bring an action regarding the matter to the People's Court in the place where
the defendant is located.
ARTICLE 18 SUPPLEMENTARY PROVISIONS
18.1 This Agreement shall come into effect upon the signatures and seals of both
parties. This Agreement is signed in four copies, with each party holding two.
All copies shall have equal legal force.
Party A: Shanghai Yide Network Co., Ltd.(sealed)
Authorized Representative: /s/ Illegible
Party B: Shanghai Weilan Computer Co., Ltd.(sealed)
Authorized Representative: /s/ Illegible