<PAGE>
EXHIBIT 4.14
SONY BMG
Sale Agreement in Relation
to True Tone, Ringback Tone and IVR of Linktone
[Sale Agreement in Relation
to True Tone, Ringback Tone and IVR - the letterhead
of Song BMG must be used in
this Agreement]
Date:
Name and Address of the
Service Provider:
To:
Re: Sale Agreement in
Relation to True Tone, Ringback Tone and IVR
Dear Mr. Raymond
Yang,
By signing this Agreement,
your company and our company unanimously agree to the
following terms in respect of
true tone, ringback tone and IVR. The terms "our
company", "we" and "our" used
herein shall mean "SONY BMG MUSIC ENTERTAINMENT
(HONG KONG) LTD", and "your
company", "you" and "your" shall mean the "Service
Provider".
A. Definition
"Distribution Channels" shall mean the Worldwide Web, Wireless
Application
Protocol,
or Interactive Voice Response System.
"Distributors" shall mean the mobile telecom operators specified in
Clause
C3 hereof,
which own or have the right to control wireless
communication
networks
in the Agreed Zone.
"Agreed
Products" shall mean (i) Music Segments that are
separately
selected
by us from the Audio Products and confirmed in our letter
of
authorization and which can be used in True Tone, Ringback Tone
(also
known as
the "Coloring Ringback Tone") and IVR. (ii) The letter
of
authorization in connection with True Tone, Ringback Tone and IVR
shall be
signed by
our authorized representative and prepared in the form as
shown
in
Attachment A (or in the form as expressly indicated to you by us
in
writing).
"Agreed
Service" shall mean, in relation to each of the
Distributors
listed in
this Agreement, any commercial service involving the
provision
and sale
of True Tone, Ringback Tone and IVR to the Subscribers
through
the
Distribution Channels mentioned herein.
"Agreed
CODECs" shall mean CODECs set forth in Attachment B and
other
forms of
CODECs confirmed by us in writing. Notwithstanding the
aforesaid,
we shall
have the right to demand for the use of other CODECs in
accordance
with a notice served by us.
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SONY BMG
"Agreed
DRMs" shall mean the standards set forth in Attachment B and
other
encryptions that can implement the rules concerning the use of
content in
a safe and
reliable manner as confirmed by us in writing.
Notwithstanding
the
aforesaid, we shall have the right to demand for the use of other
DRMs
in
accordance with a notice served by us.
"True
Tone" shall mean any Music Segment to be produced on the basis
of
the Audio
Products delivered by us, which is decoded by CODEC and
in
compliance
with technical and safety standards and which can be
downloaded
as mobile
phone ringtones. Such Music Segment must keep the melody
and
lyrics of
a song in its original form.
"Music
Segment" shall mean any recording to be produced by you on
the
basis of
the Audio Products delivered by us, which can be used in
the
value-added service of mobile phones and the duration of which
shall be no
greater
than sixty (60) seconds.
"Audio
Products" shall mean any audio products owned and controlled by
us.
"Ringback
Tone" shall mean (a) any Music Segment used in the
"Agreed
Service"
mentioned herein, which is extracted from any Audio Products
and
the
duration of which shall be no greater than 30 seconds; (b) any
Music
Segment
which can be transmitted to a caller through conversion and
heard
by him/her
from the time when a call is made until the earlier of (i)
the
line is
cut by the caller himself/herself, or (ii) an incoming call
is
taken by a
Subscriber or relevant telecom systems (such as message
service).
The Ringback Tone may substitute traditional non-musical
ringtones
that are usually heard by callers when phone calls are made
to
the
Subscribers.
"IVR"
shall mean the service where (a) a complete Audio Product in
the
"Agreed
Service" set forth herein is used; (b) regular Subscribers
can
listen on
a trial basis and select songs through their connection with
the
IVR system
by dialing an exclusive premium phone number provided to
you;
(c) any
mobile phone subscriber may send short messages with
personalized
songs to
the other mobile phone subscribers. Short messages can be
created
in two
ways. First, mobile phone subscribers may complete the creation
of
short
messages directly through their mobile phones by dialing the
premium
phone
number exclusively for mobile phone subscribers provided to
you.
Mobile
phone subscribers may listen on a trial basis and select
songs
through
their connection with IVR system. The IVR system will direct
these
subscribers to go through the whole process of song selection,
including
setting
mobile phone numbers of recipients and recording greetings
prior
to song
playing. In addition, the subscribers may also complete
the
creation
of short messages online. These subscribers are only required
to
key in the
phone number of recipients on a special webpage with
password
protection
that is provided by your company and may select songs from
a
song list.
If the configuration of computers conforms with
applicable
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SONY BMG
requirements, the mobile phone subscribers may also record their
greeting
through
computers. A short message created by any such subscriber
itself
is not
attached with any songs. Such message merely contains a
signal
which
directs the connection to the central server of network, in
which
all songs
selected by such subscriber are stored. A recipient is
notified
of such
short message through SMS from his/her mobile phone. After
the
recipient
dials the premium number for SMS, the greeting recorded and
the
song
selected by the subscriber will be sent out in the form of a
general
phone call
by your server through public telephoning network system.
No
copy of
the song will be included in the short message received by
the
recipient,
and such copy can only be saved in the central server of
the
Distributors; (c) "sender" shall mean any mobile phone subscriber
who is
authorized
by you to create and send short messages with songs; (d)
"short
messages
with songs" shall mean any short messages with songs created
by
the
service, which include: (i) signals that are connected with a
central
server in
which songs are stored; (ii) greetings recorded by the
sender
(or
signals built into the server); (iii) the mobile phone number of
the
sender.
Each short message with song only contains a song or a
music
recording
of any third party; (e) "recipient" shall mean any
intended
recipient
of a short message with song created by the sender.
"Downloading Service" shall mean
the True Tone downloading service in the
downloading value-added service of mobile phones.
"Downloading Service Website" shall mean the website owned or
controlled
by you in
the Agreed Zone, from which the Subscribers can download
True
Tone under
this Agreement. The front page's URL of the website is
www.linktone.com.
"Agreed
Mobile Phone" shall mean any mobile phone which can provide
and
accept the
Agreed Service and offer support to the standard of OMA DRM
1.0
or above
and which can download True Tones through downloading
value-added
service of
mobile phones.
"Art Work"
shall mean any cover design of a special edition used by us
in
the
packaging of Audio Products (which is the first release of
Audio
Products
by us through the normal retailing channels in sales
areas).
"Content"
shall mean the Audio Products, the cover design of
special
editions
and trademarks.
"Network
Medium" shall mean the Worldwide Web and over-the-air
network
medium
(applicable to True Tone only).
"Server"
shall mean a computer server owned or controlled by you in
the
Agreed
Zone, which is used for the downloading value-added service
of
mobile phones.
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SONY BMG
"Trademark" shall mean any registered or unregistered trademarks,
service
trademarks, industry names, brand names, company names, logos,
business
addresses,
other commodity terms, designs, labels, marks, designs,
colors,
combination of colors or product appearances owned or controlled by
us,
which can
be used by your company in accordance with the terms and
conditions
hereof.
"Subscriber" shall mean any person, who (1) is a resident of the
Agreed
Zone (for
example, the correspondence address listed in a bill is
within
the Agreed
Zone); (ii) is a customer or subscriber of the Distributors
of
this
Agreement; (iii) can use the service of Ringback Tone and IVR
subject
to the
approval of your company or the Distributors of this
Agreement.
"Agreed
Zone" shall mean the Mainland China, excluding Hong Kong
Special
Administrative Region ("Hong Kong"), Macau Special Administrative
Region
("Macau")
and Taiwan Province ("Taiwan").
"Transmission" shall mean, in respect of the Agreed Products,
the
transmission of the Agreed Products from your server to outsiders
through
the
telecommunication network of the Distributors.
"Opposition Activities" shall mean any unlawful activities or
activities
that
facilitate or promote unlawful activities, and any activities
that
infringe
or assist in infringing any intellectual property rights by
way
of
incorporation of additional content.
B. Term of this
Agreement
This
Agreement shall be for a term of 12 months from April 11, 2005
to
April 10,
2006.
In
accordance with the relevant requirements hereof, this Agreement
may
also be
terminated prior to its expiration. This Agreement shall
become
effective
subject to the settlement of any deposit by you under Clause
C4
hereof.
C. Specific
Scope
1.
Rights:
Subject to your compliance with applicable laws and
regulations of the Agreed Zone and the terms and conditions
hereof,
you may be granted from us the following non-exclusive rights
during
the term hereof and within the Agreed Zone:
In relation to True Tone:
(i) copies of
each of the Audio Products and related Art Work
delivered by us to you as required under Clause C2
hereof
shall be
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SONY BMG
transmitted to the server owned or controlled by your
company,
which shall be in reasonable quantity, and in a minimum
number
that is sufficient for digital transmission or content
display
in accordance with this Agreement. Upon expiration or
early
termination of this Agreement, you shall destroy or delete
the
copies immediately at our request.
(ii) Prior to the
expiration or early termination of this
Agreement, the Audio Products and related Art Work shall
be
standardized in format, coded and stored in the server
owned
or controlled by your company, to the extent where True
Tones
can
be provided and sold to end-users.
(iii) In accordance with the terms of this Agreement,
additional
content will be included in the Downloading Service for
the
purpose of transmission to the Subscribers: (i) in any
event,
only the Subscribers can use the relevant contents through
the
Network Medium during the term hereof and within the
Agreed
Zone; (ii) Unless your right to transmit the relevant
content
has been restricted by this Agreement, the Subscribers
may
download True Tones from the Downloading Service Website
at
any time during the term hereof.
(iv) In accordance
with the terms of this Agreement, True Tones
will be provided and sold, and the Art Work will also be
displayed, on the Downloading Service Website.
(v) In
accordance with the terms of this Agreement, the
Subscribers may listen on a trial basis any True Tone on
the
Downloading Service Website free of charge, the length
of
which shall be fifteen (15) seconds, for marketing
purposes.
In relation to Ringback Tone and IVR:
(i) Ringback
Tone and IVR will be provided and sold to the
Distributors, who will then provide and distribute to
the
Subscribers through the Distribution Channels of this
Agreement hereunder.
(ii) Any Agreed
Products produced by you as required under Clause
C2 hereof will be reproduced or authorized to be
reproduced,
and will be stored or installed in a storage device owned
or
controlled by your company (such storage device shall
provide
all technical procedures as necessary for Ringback Tone
and
IVR service, such as network server or computer
hardware)
(collectively referred to as the "Product Service System"),
in
order
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SONY BMG
to enable (a) the Subscribers to listen on a trial basis
(but
not to download) the Agreed Products free of charge
through
the Distribution Channels, the length of which shall be
no
greater than fifteen (15) seconds, for the purpose of
marketing the Agreed Products only; and (b), in the service
of
Ringback Tone and IVR as expressly stated in this
Agreement,
the Product Service System to transmit the Agreed Products
on
behalf of all Distributors.
(iii) You will, within sixty (60) days, transmit to the
Subscribers
the Agreed Products that have been purchased by or
otherwise
distributed to them on behalf of the Distributors through
the
Product Service System owned or controlled by your
company.
(iv) The Distributors
will be authorized to make copies of any
Agreed Product that is delivered by you so as to store them
in
each of their Product Service Systems and apply them in
the
service of Ringback Tone and IVR.
For avoidance of doubt, the above authorizations shall not
include
the use of any rights pertinent to music elements of the
Agreed
Products. You agree to observe and procure each Distributor
to
observe any and all restrictions in connection with the Agreed
Zone,
name and likeness, and trademarks and other restrictions on use
that
we have informed you of, and to continue to observe this
Agreement
during the provision or sale of the Agreed Products. Without
our
prior written consent, you shall not use our name and logo or
the
name, likeness or autobiography of performers of any Audio
Products
in any media, including without limitation, advertisements or
press
announcements.
You agree and warrant that neither you nor any Distributor
will
participate in any Opposition Activities. Without the prior
written
consent of our company, the Agreed Products or Audio Products
shall
not be used in the testing or free trial use of the Agreed
Products.
Without the prior written consent of our company and except
as
required under Clause C2 hereof, you shall not (i) pack
and
distribute the Agreed Products and any other Ringback Tone and
IVR
services or products; and (ii) edit or change the Agreed
Products.
2.
Production
and Delivery of the Agreed Products:
We will provide you with the Audio Products (in the form of CD
or
otherwise), from which you will produce Music Segments to
the
satisfaction of both parties. Such Music Segments shall
be
technically able to cause the Agreed Products to be transmitted
to
the Subscribers and will not affect any artistic or
innovative
elements contained in the Agreed
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SONY BMG
Products. You shall, at the request of our company, return to
us
copies of any Agreed Products (including copies in digital
format),
Audio Products and other art work and texts or promotion
materials
which are delivered to you hereunder. During the term of
this
Agreement, we agree to deliver to you not less than one
hundred
(100) Audio Products that are separately selected by us. You
shall
make the best endeavor to produce the Agreed Products that can
be
used in the Agreed Services within seven (7) days after the
delivery
of the Audio Products to you. Unless otherwise required by
this
Clause, neither you nor any Distributors shall have the right
to
edit or change the Audio Products.
3.
Distributors:
The key information of the Distributors shall include their
full
name, address and contact person, the commencement date
and
subscription fee of the Agreed Service. The particulars are
detailed
in Attachment C. After the execution of this Agreement, we
shall
have the right to approve in writing other mobile telecom
operators
in the Agreed Zone as Distributors. We shall also be entitled
to
serve you a 60-day prior notice to revoke our approval of
any
Distributors.
4.
Deposit:
(1) You shall
pay us a security deposit of RMB One Million
(RMB1,000,000) (including taxes) on the execution date
hereof
(the "Security Deposit"). The Security Deposit may be used
to
offset against any cost of the Agreed Products payable by
you
to our company during the term of this Agreement in
accordance
with Clause 5 hereof. Upon expiration of this Agreement,
we
shall be under no obligation to refund to you any balance
of
the Security Deposit in case there is any, unless the
circumstance set forth in Clause 17 (i) occurs.
(2) This
Agreement shall become effective after the Security
Deposit is fully paid by your company. If you have not
paid
the Security Deposit prior to the agreed date, this
Agreement
shall have no effect.
5.
Cost of
the Agreed Products:
You will be granted the relevant rights from us in accordance
with
Clause C1 hereof. As consideration for the relevant rights
granted
to you, you will pay us 40% of the total amount received by
the
relevant Distributors in connection with the Agreed
Products
subscribed by the Subscribers (including taxes) as the cost of
the
Agreed Products.
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SONY BMG
The parties agree that you shall be responsible for the
digitalization, consistence of format, delivery, content
approval,
transmission, payment, clients, technical support of all the
Agreed
Products, and the provision of other services as stipulated in
the
Agreed Service, of which the delivery, transmission,
payment,
clients, technical support and other services shall be provided in
a
professionally and commercially reasonable manner. You agree
that
you will use your best efforts to ensure that each of
the
Distributors will report to you in a timely manner, which
would
enable you to submit a statement to us in accordance with Clause
7
hereof. You shall also be liable for all bad debts.
6.
Minimum
Retail Price:
After deduction of any limited promotion discounts offered by
the
Distributors to the Subscribers as agreed by us, the retail
unit
price of each Agreed Product to be sold through the Agreed
Service
shall be no less than the agreed retail unit price: a) Ringback
Tone
and
True Tone shall not be sold at a price less than RMB2; (b)
IVR
shall not be sold at a price less than RMB1/minute. If you,
without
the prior written consent of our company, sell or provide free
of
charge to the Subscribers any Agreed Product at a price lower
than
the agreed retail unit price, you shall, at our request, pay us
a
fine of RMB2 (in the case of Ringback Tone and True Tone) or
RMB1
(in the case of IVR) and a sum to be calculated as follows:
the
difference between such price and the retail unit price of
that
Agreed Product multiplied by 1.5 and the total sales of that
Agreed
Product. For avoidance of doubt, such fine shall not be used
to
offset against any amount payable to us by you.
7.
Accounting, Statement and Audit
You shall, within seven (7) days after the end of each
month,
provide us with a detailed statement in respect of each
Distributor
and an account which sets out the cost of the Agreed
Products
payable to us. The cost statement shall be prepared in
an
electronic, digital or other form as required by us, and
shall
include information in respect of each Agreed Product, such as
ISRC
Code, RAAS Code, our designated artists, the name of the
Audio
Products used in Ringback Tone or IVR, the amount of sales
or
distribution, retail unit price, and costs payable to us, etc.
If
we, within thirty (30) days after the end of each month, do
not
receive a complete cost statement from you or there exists
the
circumstance that you are in default of payment under
this
Agreement, you
shall, at our request, immediately pay us a fine of
RMB80,000 (which is 1/12 of the total annual deposit). For
avoidance
of doubt, such fine shall not be used to offset against any
amount
payable by you to us.
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SONY BMG
You shall maintain accurate and complete records and books,
which
shall at least include all documents that we need for
calculating
and checking the relevant amounts paid by you to us. During the
term
of this Agreement or within three (3) years after the
termination
hereof, we shall have the right to audit or authorize an
independent
PRC accountancy firm which possesses an audit qualification in
the
PRC to audit the relevant books and records of your company
in
connection with the use of the Agreed Products and the costs paid
to
us. If the audit result shows that you are in default of payment
or
have not paid the amount payable, you shall pay any
balance
incurred, as well as, a late penalty to be calculated on the
balance
at a rate of 6% for each day overdue during the period from
the
agreed payment date to the actual payment date, provided that
the
total amount of late penalty shall not exceed sixty percent (60%)
of
the amount payable. Any cost arising from such audit shall,
in
principle, be borne by us. If, however, the audit result shows
that
the actual payment is less than ninety-five percent (95%) of
the
amount payable, you shall bear any cost relating to such
audit.
You shall, within seven (7) days after the end of each month,
submit
to us a monthly sales report in respect of each Distributor,
setting
out the total number of subscribers for each of the Agreed
Products,
top 20 True Tone, Ringback Tone and IVR (whether it is the
Agreed
Product), and the current status report of all the Audio
Products
delivered to you by us hereunder.
All costs in connection with this Agreement shall be denominated
in
RMB as its standard bookkeeping currency. You shall, at our
request,
remit to a Hong Kong account designated by us the US or
HK
equivalent to be calculated at an exchange rate published by
the
Bank of China on the payment dates.
After serving you notice within the reasonable time and on the
basis
that we will bear all relevant costs, we shall have the right
to
carry out a technical inspection on your company in order
to
understand and check the storage, deposit, safety and delivery
of
the Audio Products. The above inspection shall include but not
be
limited to the inspection on the records of hardware, software
and
servers of the Agreed Service System.
8.
No
Deductions or Withholdings:
You shall pay in full all the amounts payable under this
Agreement,
and no offset, restriction or condition has been made in
respect
thereof, and there are no deductions or withholdings in respect
of
or involving any tax or other taxes of any nature. If your
company
or any other person makes any deduction or withholdings (for
tax
purpose or otherwise) from any amount payable to us as required
by
law or regulation, you shall pay us an
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SONY BMG
additional amount while making such payment of deductions
or
withholdings to ensure that we receive all amounts that
would
otherwise have been received if there were no deductions
or
withholdings in respect of or involving any tax.
