<DOCUMENT>
<TYPE>EX-4.54
<SEQUENCE>25
<FILENAME>u99891exv4w54.txt
<DESCRIPTION>EX-4.54 LICENSING CONTRACT FOR RINGTONES
<TEXT>
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EXHIBIT 4.54
License No.:
LICENSING CONTRACT FOR RINGTONES
PARTY A: BMG Music Publishing Hong Kong Ltd. of 11 /Floor, One Harbourfront, 18
Tak Fung Street, Hunghom, Kowloon, Hong Kong
PARTY B: Linktone of 5F Eastern Tower, 689 Beijing Dong Road, Shanghai 200001,
PRC
WHEREAS, Party A owns, controls, and/or administers the rights in and to certain
Compositions (as defined below) (the "BMG Catalog"), and
WHEREAS, Party B desires to select certain Compositions from the BMG Catalog and
incorporate them into Ringtones (as defined below) and Party A desires to grant
Party B a license to use the Compositions, subject to the terms and conditions
set forth herein:
NOW THEREFORE, in consideration of the mutual covenants and conditions contained
herein, the parties hereto agree as follows:
Definitions:
"COMPOSITIONS" means musical works which are performed by the artist - Jay Chou
Jie Lun, and solely to the extent that they are owned and/or controlled by Party
A in and throughout the Territory, which Party A has approved for use by Party B
in the creation of Ringtone(s) as set forth on Appendix I
I. GRANT OF RIGHTS
Party A hereby grants to Party B a non-exclusive right and license
throughout the Territory to adapt and record of each Composition in the
BMG Catalogue and to create a Ringtone embodying each such Composition.
Party A shall provide a list of its most recent songs it owns or
represents and which are available for Ringtone use within 10 working days
following the payment of advance. From time to time, Party B will submit a
list of songs it will use to Party A. Party A will try its best efforts to
reply within 8 working days informing Party B which songs can be used for
Ringtone Download. For
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songs Party A not replying with 8 working days, Party B can assume that
approval is not given for those songs.
II. USAGE
1. Recording and Usage: Party B shall be only allowed to reproduce
Party A's Compositions in a ringtone format for cellular or wireless
phone usage. "Ringtone" means, collectively, Monophonic Ringers and
Polyphonic Ringers. "Ringers" shall mean an audible electronic code,
embodying a performance of a pre-determined synthesized melodic
fragment of a Composition, whether monophonic, polyphonic, MIDI,
MMF, PMD, SIS, DXL, AMR or other formats created for the purpose of
causing a wireless device to play such fragment. These Ringtones
shall be stored at a facility under control of party B to allow
cellular or wireless phone end-users (hereinafter "End-users") to
use ringtone download services (hereinafter "Ringtone Download").
2. Product: Party B shall not create and/or reproduce the Ringtone in
any format other than specified in clause 1 above.
3. Authorized duration: each Ringtone provided by Party B using Party
A's Compositions for download shall not exceed 60 seconds
4. Song name: the song title cannot be changed without written
permission from Party A.
5. Licensed Period: the contract is for 1 year starting from November
15, 2004 to November 14, 2005.
6. Licensed Territory: limited to People's Republic of China only (but
not including Taiwan, Penghu, Jinmen, Mazhu, Hong Kong and Macau
area)
7. Number of authorized songs: Unlimited
8. Pre-Listening: Party B is allowed to reproduce the Compositions into
Ringtones for consumer end-use to pre-listen the Ringtone via the
Internet, MMS, WAP, IVR, or whatever technology becomes available
provided (i) the duration of the trial-listening of the Ringtone not
to exceed forty five (45) seconds and (ii) the Ringtones are
protected from permanent download and further copying and (iii) the
trial-listening of the Ringtone is free of charge to End-users.
III. LICENSE FEE AND PAYMENT
Party B shall pay Party A the royalty fee, the method is as follows:
1. Advance payment per this contract
Upon signing the contract, Party B shall pay to Party A an advance
against fees payable to Party A pursuant to sub-clause III (2)
below, the non-returnable sum of RMB 100,000 (net of withholding
tax) within 30 days of receipt of the wiring instructions from Party
A.
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While Party A is responsible for its own taxes and fees, Party B
agrees it shall pay for all the related taxes payable to the
government of the People's Republic of China by Party A in regard of
the advance payment only and this shall be known as the "Party A
Prepayment Tax". The "Party A Prepayment Tax" amount paid on behalf
of Party A by Party B will not be deducted from future royalty
payments paid by Party B to Party A. Upon the advance paid under
this Agreement fully recouped, Party B will deduct all the related
taxes payable to the government of the People's Republic of China
from all future royalty payment to Party A.
If the advance has been fully recouped prior to the expiry of the
Licensed Period, Party B shall start to pay royalty fees to Party A
on a quarterly basis as specified below in the payment section and
for these payments.
Party A is not required to refund the unrecouped advance to Party B
if the advance has not been fully recouped at the expiry of the
Licensed Period.
2. Royalty fee calculation
(a) Each Composition's royalty fee shall be calculated based on
the below formula subject to Minimum Royalty in Clause 2 (b):
Royalty that Party B shall pay Party A = retail price
for each Ringtone Download x % of the Composition
controlled/owned by Party A x total number of Ringtone
Download x 14%
(b) Minimum Royalty
(i) The Royalty per Ringtone Download will be subject
to a minimum of RMB0.20 per download.
(ii) For Ringtone Download provided free of charge to
End-user other than for the purpose of
pre-listening, the Royalty per Ringtone Download
will be subject to a minimum of RMB 0.20 per
download.
3. Reporting Method
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Both parties have agreed that the calculation will be based on the
data retrieved from Party B's server or data from other systems
involved in billing that may be controlled by others.
IV. DOWNLOAD REPORT AND PAYMENT METHOD
1. Download Report
Report Content and Payment Process
Party B shall prepare a report to Party A each quarter
respectively. The report shall be sent within 45 days after
the quarter is closed (i.e. on or before November 30, February
28, May 30 and August 31). Party B's report shall have
detailed list including "title of the Composition", "writer's
name", "total downloads for each Composition", "the contract's
royalty rate", "price for each download", "provinces where the
aggregate downloads occurred", and "royalty to be received"
for those downloads. Party B has agreed to email the form with
above-mentioned information (refer to Appendix II). Party A
will send an invoice to Party B which will be paid within 30
days of receipt unless there is a major difference between the
amounts specified by Party A and Party B.
2. Audit
The download report shall be part of the contract and to be provided
by Party B to Party A within 45 days of the end of the quarter.
Within 95 days and no earlier than 45 days following the expiration
of the contract, Party A shall have the right to request Party B to
submit reasonable additional information or request to Party B to
cooperate with independent accounting firm to confirm the report if
Party A believes Party B's report is not accurate (if the
independent accounting reported is needed, Party A shall be
responsible for the audit fee and related expenses except as noted
below. Party B shall prepare the additional information within 20
working days upon Party A's request. All information of Party B
remains at the premises of Party B and due to the highly
confidential information involved, no copies will be allowed to be
made nor any materials removed from Party B's premises.
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In the event an examination of Party B's books and records reveal a
deficiency in payments paid to Party A of five percent (5%) or more
of the total amount accounted to Party A during the period of audit,
Party B shall pay its own expense for the preparation of such
information and shall pay to Party A the underpayment of royalties
and all reasonable out-of-pocket expenses related to the performance
of such examination, including, without limitation, travel expenses,
hotel expenses and per diems, together with the underpayment and
interest as provided herein- within 30 days. For purposes of the
calculation of deficiency in payment, the deficiency in payments
will not include the projected and unconfirmed revenues outstanding
at the time the audit is initiated.
3. Payment method
The payment will be electronically transferred within 30 days upon
receipt of the invoice. Any late payment will bear an interest at
the rate of Prime plus 2% of the US prime-lending rate quoted in the
Wall Street Journal on the date the payment is due.
V. PUBLISHING RIGHTS
This contract covers only music publishing rights and does not cover
master recording rights.
VI. NO COPY
Party B shall not make a copy of Party A's Compositions for a third party
with or without a charge. Party A has a right to request a copy of the
product list that is under the contract scope from Party B once per
quarter. Party B shall provide the copy based on Party A's written
request. Party A shall keep the copy in a safe place and shall not share
it with a third party.
VII. WARRANTY
Party A warrants that the Compositions being licensed to Party B are owned
or administered by Party A and Party A has the right to license the
Compositions.
VIII. RIGHT TO NAME USE
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Party A agrees that Party B shall be able to use Party A's name on its
website or print out or in promotions as the proof to substantiate Party B
has obtained approval from Party A to use the Compositions.
IX. TERMINATION
(a) Party A may terminate this Agreement by giving Party B notice in any
of the following circumstances:
(i) If Party B fails to perform any of its material obligations
under this agreement for any reason (including but not limited
to impossibility of performance, usage of Compositions without
obtaining prior approval from Party A, failure to submit
royalty report, failure of payment of advance, failure of
royalty payment and incorrect reporting) and such failure has
not been remedied to conform to the terms of the contract
unless waived by Party A within thirty (30) days after Party A
giving Party B notice of it.
(b) This Agreement will terminate automatically, without notice, if
either Party A or Party B is dissolved or its assets are liquidated,
or if either Party A or Party B becomes insolvent, or if a
proceeding in bankruptcy, for a reorganization, or for other relief
from the claims of creditors, or any similar proceeding, takes place
with respect to Party B or its property.
(c) Upon the expiration or termination of the Term, all of Party B's
rights hereunder shall terminate. Party B shall withdraw the Ring
Tones hereunder from the database of possible Customer retrieval. It
will not sell the ringtones hereunder to end-users.
X. PRIOR APPROVAL
During the Licensed Period, Party B is required to obtain Party A's prior
written approval in Appendix I.
XI. MATERIAL BREACH
If there is a material breach of contract by Party A or Party B, then the
other party shall provide notification to the first party of this breach.
The first party must respond within 30 days and if there is a material
breach, both parties agree to work to address the breach. If
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within 60 days, from the first notification, both parties cannot resolve
the issue or the breach is contested, then the dispute will go to
arbitration.
Following the settlement, and if the violation is not addressed within 60
days of the notification, the non-violating party has the option to
terminate the contract.
XII. MERGER OR ACQUISITION OR TRANSFER
This contract will survive under a merger or acquisition of either party.
Both parties have the right to assign this contract to an affiliated
company.
Party B has agreed that during the contract period Party A has the right
to transfer partial or all of the rights to a third parties who will
continue honor the contract.
XIII. GOVERNING LAW
Both parties agree that the People's Republic of China will have
jurisdiction of any controversies regarding this agreement; any action or
other proceeding which involves such a controversy will be handled by
arbitration (need arbitrating body name in China).
BMG Music Publishing Hong Kong Ltd. (Seal)
/s/ Illegible
--------------------------------
Date: 2004.12.6
Linktone (Seal)
/s/ Raymond Yang
--------------------------------
Date: 2004.11.15
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Appendix I
Request Form
<TABLE>
<CAPTION>
Serial Number Name & Title Of Song Artist Composer Lyricist
------------- -------------------- ------ -------- --------
<S> <C> <C> <C> <C>
Love in BC Jay Chou Jay Chou
[CHINESE CHARACTER]
Dad, I have come back Jay Chou Jay Chou
[CHINESE CHARACTER]
Simple Love Jay Chou Jay Chou
[CHINESE CHARACTER]
Ninja Jay Chou Jay Chou
[CHINESE CHARACTER]
Cannot Speak Jay Chou Jay Chou
[CHINESE CHARACTER]
Shanghai 1943 Jay Chou Jay Chou
[CHINESE CHARACTER]
Sorry Jay Chou Jay Chou
[CHINESE CHARACTER]
William's Castle Jay Chou Jay Chou
[CHINESE CHARACTER]
Nun-Chuks Jay Chou Jay Chou
[CHINESE CHARACTER]
Silence Jay Chou Jay Chou
[CHINESE CHARACTER]
The Orcs Jay Chou Jay Chou
[CHINESE CHARACTER]
The Iron Box of the Island Jay Chou Jay Chou
[CHINESE CHARACTER]
Secret Signal Jay Chou Jay Chou
[CHINESE CHARACTER]
The Tea Grandpa Makes Jay Chou Jay Chou
[CHINESE CHARACTER]
Go Back to the Past Jay Chou Jay Chou
[CHINESE CHARACTER]
Final Battle Jay Chou Jay Chou
[CHINESE CHARACTER]
Milan's Small Ironsmith Jay Chou Jay Chou
[CHINESE CHARACTER]
Where is the Jay Chou Jay Chou
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Train Going?
[CHINESE CHARACTER]
Dragon Fist Jay Chou Jay Chou
[CHINESE CHARACTER]
Split Jay Chou Jay Chou
[CHINESE CHARACTER]
In the Name of the Father Jay Chou Jay Chou
[CHINESE CHARACTER]
Coward Jay Chou Jay Chou
[CHINESE CHARACTER]
Fine Day Jay Chou Jay Chou
[CHINESE CHARACTER]
Third Year Class Two Jay Chou Jay Chou
[CHINESE CHARACTER]
East Wind Breaks Jay Chou Jay Chou
[CHINESE CHARACTER]
You can Hear it Jay Chou Jay Chou
[CHINESE CHARACTER]
The Same Kind of Tune Jay Chou Jay Chou
[CHINESE CHARACTER]
Her Eyelashes Jay Chou Jay Chou
[CHINESE CHARACTER]
Cliff of Love Jay Chou Jay Chou
[CHINESE CHARACTER]
Terraced Field Jay Chou Jay Chou
[CHINESE CHARACTER]
Double Blade Jay Chou Jay Chou
[CHINESE CHARACTER]
Orbit Jay Chou Jay Chou
[CHINESE CHARACTER]
Broken String Jay Chou Jay Chou
[CHINESE CHARACTER]
My Territory Jay Chou Jay Chou
[CHINESE CHARACTER]
Common Jasmin Organge Jay Chou Jay Chou
[CHINESE CHARACTER]
Excuse Jay Chou Jay Chou
[CHINESE CHARACTER]
Maternal Grandmother Jay Chou Jay Chou
[CHINESE CHARACTER]
General Jay Chou Jay Chou
[CHINESE CHARACTER]
Run Aground Jay Chou Jay Chou
</TABLE>
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<TABLE>
<S> <C> <C> <C>
[CHINESE CHARACTER]
Chaotic Dance of Spring and Jay Chou Jay Chou
Autumn
[CHINESE CHARACTER]
Desperate Fight Jay Chou Jay Chou
[CHINESE CHARACTER]
Garden Party Jay Chou Jay Chou
[CHINESE CHARACTER]
Casualties of Stopping War Jay Chou Jay Chou
[CHINESE CHARACTER]
</TABLE>
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Appendix II
Download Report Format
<TABLE>
<CAPTION>
%
Composer Controlled Provinces
Song & by Party No. of Royalty Price per of Royalty per
Title Lyricist Artist A Downloads rate download Downloads Composition
----- -------- ------ ---------- --------- ------- -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
----- -------- ------ ---------- --------- ------- -------- --------- -----------
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</TABLE>
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