Exclusive Ragnarok License and Distribution Agreement - Gravity Corp. and Burda Holding International GmbH
EXCLUSIVE RAGNAROK
LICENSE AND DISTRIBUTION AGREEMENT
THIS LICENSE AND DISTRIBUTION AGREEMENT (this "Agreement") is made and entered
into on this 26th day of November, 2003, by and between GRAVITY CORPORATION, a
corporation duly organised and existing under the laws of the Republic of Korea
("Korea") and having its offices at 3rd Fl. Shingu Bldg., 620-2, Shinsa-Dong,
Kangnam-Ku, Seoul, 135-894, Korea ("Licensor"), and Burda Holding International
GmbH, a corporation duly organised and existing under the laws of Germany and
having its offices at Arabellastrasse 23, 81925 Munich, Germany ("Licensee").
RECITALS:
WHEREAS, Licensor has developed and possesses all rights in computer programs of
online game "Ragnarok" ("Game") as well as the know-how and technical
information on the installation, design, service and use of the Game;
WHEREAS, Licensee desires to enter into an exclusive license agreement with
Licensor pursuant to which Licensee will distribute and market the Game in the
Territory specified below; and
WHEREAS, Licensor desires to grant such license to Licensee under the mutual
terms and conditions herein-below specified.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein and other good and valuable consideration, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
The terms defined in this Article shall have the meaning ascribed to them herein
whenever they are used in this Agreement, unless otherwise clearly indicated by
the context.
1.1 "Agreement" shall mean this License and Distribution Agreement, and all
annexes, amendments and supplements hereto.
1.2 "Confidential Information" shall mean all materials, know-how, software or
other information including, but not limited to, proprietary information
and materials regarding a Party's technology, products, business
information or objectives, including the softwares for the Game and
Technical Information under this Agreement, which is designated as
confidential in writing by the providing Party or which is the type that
is customarily considered to be confidential information by persons
engaged in similar activities.
1.3 "End Users" shall mean the users of the Game through a network game
service system established and operated by Licensee with individually
assigned ID Numbers for each End User.
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1.4 "Game" shall have the meaning stipulated in the recitals above, including
any modified or advanced version of the Game distributed by Licensor under
the same title. Any subtitled version, series or sequel to the Game, which
may be developed or distributed by Licensor using the Ragnarok brand
("Other Ragnarok Games") after the execution of this Agreement shall be
excluded from the scope of this Agreement. With respect to Other Ragnarok
Games, Licensor grants to Licensee a right of first negotiation for a
license to service, use, promote, distribute and market the Other Ragnarok
Games in the Territory. Such right of first negotiation shall include the
right of Licensee to match any written offer received by Licensor from any
third party. In case the parties cannot agree on a license agreement for
Other Ragnarok Games, Licensor agrees not to launch a Commercial Service
for Other Ragnarok Games in Territory before December 31st, 2005.
1.5 "ID Number" shall mean an identification number assigned to each End User,
with which such End User can access and use the network game service
system established and operated by Licensee.
1.6 "English Version" shall mean the Game provided in the English language.
1.7 "Intellectual Property" shall mean all patents, designs, utility models,
copyrights, know-how, trade secrets, trademarks, service mark, trade dress
and any other intellectual property rights in or related to the Game or
Technical Information.
1.8 "Local Language" shall mean the official languages and/or local dialects
used in the Territory.
1.9 "Local Version" shall mean the Game provided in the Local Language.
1.10 "Parties" and "Party" shall mean Licensor and Licensee, collectively and
individually, respectively.
1.11 "Servers" shall mean the servers established, installed and operated by
Licensee within the Territory only for the service of Game to End Users in
the Territory.
1.12 "Service-Sales Amount" shall mean the total amount that has been
calculated by the billing system and has been paid by End Users for the
Game, including the amounts paid by way of prepaid card, to BHI' billing
account in the Territory.
1.13 "Technical Information" shall mean the software, know-how, data, test
result, layouts, artwork, processes, scripts, concepts and other technical
information on or in relation to the Game and the installation, operation,
maintenance, service and use thereof.
1.14 "Territory" shall mean all Germany, Switzerland, Austria, Italy, and
Turkey.
1.15 "Remaining Europe" shall mean all countries in Europe excluding those
listed in 1.14 ("Territory") including Russia.
1.16 "Gross Sales Amount" shall mean the Service-Sales Amount collected by end
users payment, which are to be deposited to Licensor's final billing
account in the
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Territory, excluding any applicable VAT payable in the respective
countries of the Territory.
1.17 "Setup Phase" shall mean the timeframe in which the Game is installed and
working on the platform provided by the Licensee and shall not exceed ten
(10) business days.
1.18 "iRO Player" shall mean an End User playing on the international Servers
of Licensor and "iRO Players" shall mean multiple of iRO Player.
1.19 "User's Billing Data" shall mean all data stored about End Users in a
database operated by Licensee excluding the ID Number.
ARTICLE 2.
GRANT OF LICENSE
2.1.1 Licensor hereby grants to Licensee, subject to the terms and conditions
contained in this Agreement, the exclusive, royalty-bearing and
non-transferable license (the "License") to service, use, promote,
distribute and market the Game to End Users and to use the Technical
Information for such purpose within the Territory, and to grant a
sublicense subject, however, to the prior written approval of Licensor. A
transfer of the licenses to the affiliate company of the Hubert Burda
Media Group shall not be considered a transfer within the meaning of
Sentence 1.
2.1.2 Additionally after at latest six (6) months of Commercial Operation,
Licensor and Licensee shall conclude negotiations to be held in good faith
with the objective to mutually agree on Licensor granting Licensee an
additional license with a total Initial Fee of 250,000 USS according to
the terms established in 2.1.1 for Remaining Europe. During this term of
six (6) months, Licensor and Licensee shall exert their best effort to
evaluate and analyze future Commercial Service in Remaining Europe taking
into account Licensors intention to have one single Licensee for all of
Europe. However, during the six-month period and thereafter Licensor shall
reserve the right to grant a license for certain countries or all of
Remaining Europe to any other third party.
2.2 The service, use, promotion, distribution and marketing of the Game by
Licensee under this Agreement shall be made in the English language or in
the official languages of the countries within the territory using the
English or a Local Version in the Territory to be determined by Licensee.
Any service, use, promotion, distribution and marketing of the Game
outside the Territory and any use of the Technical Information for any
purpose other than performance under this Agreement are strictly
prohibited.
2.3 Licensee shall provide services of the Game only by the IBM PC on-line
method (excluding mobile access) using the Servers. However, in
consideration of the current level of development of information
technology in the Territory, which primarily operates on a narrow-band
basis, Licensee shall be allowed to manufacture, distribute and sell the
Game in a compact disk ("CD") format, and the imposition of such terms and
conditions will serve to protect the rights of Licensor in and to the
Intellectual Property and Technical Information.
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2.4 The Game shall be serviced, promoted, distributed and marketed under the
titles, trademark, character names and other names of the Game ("Title")
as originally created and used by Licensor, as listed in the schedule
attached hereto as Annex "A" and made an integral part hereof, provided,
however, that if a change in any of such Titles is required due to any
special lingual or social circumstance of the Territory, the Parties shall
decide and use new Title ("New Title") for the Game. All of the rights in
or to the Title and New Title shall be exclusively owned by Licensor and
Licensee shall not use any such Title or New Title in a manner that falls
outside the scope of this Agreement without the prior written approval of
Licensor.
2.5 All of the rights in or to the Game, except as granted under this
Agreement, including but not limited to the rights to the character
business of the Game, shall remain exclusively with Licensor. However,
Licensor will grant to Licensee the right of first negotiation to produce
and/or sell and distribute in the Territory merchandise relating to the
Game, including, but not limited to, character dolls, reproductions of the
characters, and such other merchandising accessories, only under a
separate written merchandising agreement. Such right of first negotiation
shall include the right of Licensee to match any written offer received by
Licensor from any third party. Licensee shall have the right of first
negotiation for to service all new game titles of Licensor from the date
when such new game is available for distribution outside of Korea. Also
included is the right of Licensee to match any offer received by Licensor
for such new game from any party.
Both in respect of Merchandising as well as in case of new game(s)
Licensor shall notify Licensee within fourteen (14) days upon receipt of
an offer from any party. The Licensee shall then have thirty (30) days to
match an offer from another party by giving notice to Licensor.
2.6 In any event Licensor is granting any rights to a third party to transform
the Game or its characters into a television format, a movie (including
Video, DVD and other storage media), or a print product to be shown or
distributed in the Territory or itself pursues such activity after
beta-service and commercial launching of the Game in the Territory of
this Agreement, Licensee shall be entitled to receive a certain percentage
of the Net Profits from such activities in consideration for building the
Ragnarok Brand in the Territory subject to a separate agreement between
the Parties in the spirit of this sentence and Agreement.
2.7 Licensor agrees to transfer all iRO Players account according to Annex "B"
from within the Territory currently registered with Licensor within a
one-month period after the Licensee has commercially launched the Game in
the Territory to Licensee. Licensor guarantees the technical
transferability of the iRO Players' game status to Licensee's platform.
2.8 Other Restrictions
(a) Copies - Licensee shall not copy Game or Technical information in
whole or in part without prior authorization from the Licensor.
Ownership in such copies shall vest in Licensor. All such copies
shall be subject to the terms of this Agreement and shall bear an
external human readable notice reading as follows:
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"This Game contains authorized copies, which are the property of
Gravity Corporation (Licensor's registered company Name) of
copyrighted programs made under the terms of a license agreement
between Gravity Corporation and Burda Holding International
GmbH"(Licensee's registered Company).
(b) No Representation or Warranties - Licensee shall not make any
representations or warranties of any kind whatsoever to any third
party with respect to the Game of Technical Information or any part
thereof.
2.9. During the course of performance of this Agreement, Licensor may gain
access to or knowledge of information or data that is proprietary to
Licensee including but not limited to User's Billing Data. Licensee shall
be and shall remain the sole and exclusive owner of any and all such
information of data (such as all Licensee proprietary data, information
and records, internal financial information) (hereinafter collectively
referred to as "Licensee Data"). Licensor agrees not to use such knowledge
of Licensees proprietary information for any purpose, not to store such
knowledge and honour Licensees proprietary rights in each and every
respect.
2.11. Notification of Unauthorised Use - If it comes to the knowledge of
Licensee that any other person or company within the Territory is making
unauthorised use of the Game or Technical Information or any part thereof
or any confidential information supplied to Licensee by Licensor under
this Agreement, it shall forthwith notify Licensor.
ARTICLE 3
DELIVERY OF GAME
3.1 Subject to the terms and conditions of this Agreement, Licensor shall
provide Licensee with its full assistance and cooperation, including
preparation of the English Version and providing technical assistance, in
order to enable a launch of the beta service and commercial service of the
Game in the Territory including delivery of the Game and any related
software, documentation and other means of enabling the operation of the
game, excluding Operating Systems and Database Server Software.
3.2 Licensor and Licensee agree to launch the beta service of the Game in the
Territory within sixty (60) days from the date of execution of this
Agreement, and to launch the commercial service of the Game in the
Territory within ninety (90) days from the date of launch of the beta
service of the Game, provided, however, that all defects and bugs detected
in the Game during the beta service are corrected or rectified by
Licensor. The Parties agree to cooperate with each other and exert their
best efforts to launch the services of the Game in accordance with the
above schedule in this Section 3.2. The above target dates for launching
the services of the Game may be changed only by mutual written agreement
between the Parties.
3.3 Once Licensee receives the English Version and technical documents on the
Game (collectively "Delivery Materials") from Licensor, Licensee shall
perform its review and test promptly and inform Licensor of any defect in
or modifications that have to be made to the Delivery Materials within
sixty (60) days after receipt thereof if such defects or modifications can
be detected within such period. Licensee's failure to so
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inform within such period shall be regarded as full acceptance by Licensee
of the Delivery Materials, and any revision or modification of any of the
Delivery Materials, which may be made by Licensor thereafter upon the
request by Licensee shall be at Licensee's sole expenses. Upon the written
request of Licensee and Licensor's written approval thereon, Licensee
shall provide the translated transcript of the Game into the Local
Language and Licensor shall prepare Local Version by incorporating such
translation into the Game. Licensee shall guarantee the accuracy of such
translation in the Local Version and any and all rights in or related to
Local Version shall be exclusively owned by Licensor. Licensee hereby
assigns all of its right on the translation to Licensor and promises not
to claim any right or reimbursement on the translation or Local Version in
any cases. It is understood however that any defects in the game that
appear after said sixty (60) day period shall continue to be rectified by
Licensor without additional charges.
3.4 The Game shall be serviced in the Territory only in the manners permitted
by Licensor under this Agreement. Licensee shall be strictly prohibited
from any modification, amendment or revision of any part of the Game
including the title of the Game and the name of the characters in the
Game, without the prior written approval of Licensor. Minor changes due to
technical necessities are not subject to prior approval of Licensor.
3.5 Licensee agrees to use N-Cash's Billing System ("Bill Crux") in order to
bill any required payment as long as N-Cash provides conditions at arms
length, and to enter into a separate agreement with N-Cash for this.
ARTICLE 4
TECHNICAL ASSISTANCE
4.1 During the term of this Agreement, Licensor shall provide Licensee free of
charge with the technical assistance, and technical support and
maintenance needed and requested by Licensee to enable the latter to
provide and maintain high-quality service for the Game, including, but
not limited to software installation and set-up, maintenance support,
patch updates in connection with the Game and the localization of the Game
into the English Version, training Licensee's technical personnel in
respect of the maintenance and operation of the Game provided that, any
and all expenses actually incurred by any engineers dispatched by Licensor
to perform the above technical assistance in this Section 4.1, including
economy airfare, lodging, and a fixed amount of US-Dollar fifty (US-$ 50)
for additional expenses/day shall be borne by Licensee. The Parties shall
agree in writing on the budget for the aforesaid expenses prior to
Licensor's incurring the same. During the Setup Phase, the above mentioned
costs shall be covered by the Licensor.
4.2 Licensor shall, upon the request of Licensee, dispatch its engineers to
Licensee for the installation of Servers and training of Licensee's
personnel. The total period for such technical assistance excluding the
travelling time shall not exceed ten (10) man days based on eight (8)
hours of work per engineer per day, and any further assistance through
dispatch of Licensor's engineers shall be determined by the mutual
agreement of the Parties. All the expenses incurred by the engineers of
Licensor for economy airfare, lodging and a fixed amount of US-Dollar
fifty (US-$ 50) shall be borne by
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Licensee provided that the same are within the budget as agreed upon by
the Parties under Section 4.1.
4.3 During the term of this Agreement, Licensor shall receive Licensee's
personnel in its office in Korea for training with respect to the
installation and service of the Game and the installation, maintenance and
operation of the Servers. The number of the trainees from Licensee shall
not exceed three (3) persons at one time and the total period of training
shall not exceed seven (7) man-days [based on eight (8) hours of training
per trainee per day], unless otherwise agreed in writing by Licensor. All
of the expenses for travel, lodging, food and other general living
expenses incurred by such dispatched personnel of Licensee shall be borne
by Licensee.
4.4 Any further assistance may be rendered by Licensor upon mutual agreement
of the Parties. Provided however, any and all Technical support or
training beyond the scope of this Article, including any further
development or other services, shall be performed pursuant to "consulting
services agreement" as in separate written agreement and invoiced on a
time and material basis, at Licensor's then-current rates.
4.5 Each Party shall be fully responsible and fully indemnify the other Party
for the behaviour of and activities performed by its employees and
personnel during their stay at the other Party's facilities.
ARTICLE 5
PAYMENT
5.1 In consideration of the License and technical assistance granted under
this Agreement, Licensee shall pay the following amounts to Licensor:
(a) INITIAL PAYMENT
Licensee shall pay to Licensor a sum of 150,000 United States Dollars (USD
150,000) ("Initial Payment") within ten (10) days after the date of
signing the Agreement and before the commencement of commercial service of
the Game ("Commercial Service Date"). Such payment as well as the
following payments are conditional upon the Game functioning as expected
to start and operate the Commercial Service including all technical parts,
patches, and external or internal software (such as any external drivers,
billing systems, administration tools required) provided by Licensor and
provided that article 2.7 is fulfilled by the Licensor, additional
payments shall be made according to the following list.
[X] After one (1) month after Commercial Service Date an additional
payment of 100,000 United States Dollars (USD 100,000).
[X] After at latest six (6) months after Commercial Service Date and
provided that Licensor will grant to Licensee a license according to
article 2.1.2 for Remaining Europe an additional payment of 250,000
United States Dollars (USD 250,000).
The Initial Payment, whether in part or in whole, shall not be refunded to
or recouped by Licensee, except for cases where the Game does not function
properly due to inherent defects or bugs therein including any external
software and technology provided by the Licensor, which are not remedied
by Licensor within eighty (80) days
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from the date when the written report upon such defects or bugs been
delivered to Licensor by Licensee or in cases where the Game cannot be
launched in the Territory due to force majeure.
(b) ROYALTY AND REPORT
In addition to the Initial Payment, Licensee shall pay to Licensor as
continuing royalties thirty-three percent (33%) of the Gross Sales Amount
("Royalty"). The Royalty shall be paid on a monthly basis within
twenty-five (25) days after the Royalty Report as provided for below has
been received by Licensor. Payment shall be deemed made upon presentation
of Licensee whether in fax or any other means the remittance confirmation
or notice to Licensor. In any case, unless Licensor actually receives the
remitted amount, the payment shall not be deemed to be paid. Licensee
shall also provide Licensor with a report ("Royalty Report") on a monthly
basis within twenty (20) days after the end of the applicable month. Each
Royalty Report shall contain detailed information on the calculation of
Service-Sales Amount for the applicable month and shall be accompanied by
the accounting statement showing the calculation and aggregate amount of
royalties. For the first month after the Commercial Service Date, Licensee
shall be allowed to pay the Royalty due within sixty (60) days after the
end of the applicable month.
5.2 Any and all payments under Clause 5.1 (a) of this Agreement by Licensee to
Licensor shall be made in United States Dollar (USD) and by wire transfer
to the account designated by Licensor or in such other method as may be
mutually agreed between the Parties, Provided however, that in the event
of any delay in payment by the Licensee, the most favorable exchange rate
to Licensor during such delay period shall be applied. Royalty payments
are to be made in Euro (EUR) and by wire transfer to the account
designated by Licensor or in such other method only upon the Parties
written agreement.
5.3 In the event any payment is delayed by Licensee under this Agreement, a
default interest at a rate of 8% per annum ("Default Interest") shall
apply for the amount under default. For the avoidance of doubt, Licensor's
entitlement to such Default Interest pursuant to this Section 5.4 shall
not affect any of the other rights of Licensor under this Agreement.
5.4 Licensee shall pay the Royalties in strict compliance with the due date
set forth in Section 5.1(b) above.
5.5 Licensee agrees to setup a website in cooperation with Licensor for
Licensor's use to access daily statistics showing the number of End Users
and the amount of payments received.
5.6 In case Licensee is legally required to withhold tax for payments to the
Licensor under this Agreement on behalf of Licensor, such payments shall
be made without the withheld amount. Licensee shall promptly inform
Licensor of such withholding tax and provide Licensor with a certification
issued by the relevant tax authorities with respect to the withheld tax
amount.
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ARTICLE 6
REPORT & AUDIT
6.1 Licensee shall provide Licensor with all the information on the
development of its business in relation to the Game. Without limiting the
generality of the foregoing, Licensee shall inform Licensor promptly in
the event of its launch of the beta service or the commercial service of
the Game.
6.2 Licensee shall provide Licensor with a monthly report (the "Monthly
Report") within twenty (20) days after the end of the applicable month in
writing on its business activities in relation to the Game, including, but
not limited to, the number of End-Users, the fees charged by Licensee,
the total Service-Sales Amounts for the pertinent month, advertising
activities and the expenses therefore, complaints received from End Users
and market trends in the Territory.
6.3 Licensee shall keep all of its records, contractual and accounting
documents and company documents in relation to its business and activities
under this Agreement in its offices, during the term of this Agreement and
for two (2) years after the expiration or termination of this Agreement.
6.4 During the term of this Agreement and two (2) years after the expiration
or termination thereof, Licensor may by itself or through an accountant
designated by Licensor investigate and audit the accounting documents of
Licensee with respect to its Game business. For this purpose, Licensor may
request Licensee to produce the relevant documents, and may visit
Licensee's office and make copies of Licensee's documents. Licensee shall
provide all assistance and co-operation required by Licensor for such
investigation and audit. All expenses incurred for such investigation and
audit shall be borne by Licensor unless such investigation and audit
reveals underpayment by greater than ten percent (10%) of the annual
Royalty amount, in which case Licensee shall bear all expenses for such
investigation and audit and shall also promptly pay to Licensor the unpaid
amount together with a per annum default interest thereon equivalent to
eight (8%) percent thereof.
ARTICLE 7
ADVERTISING & PROMOTION
7.1 Licensee shall exert its best efforts to advertise, promote and perform
marketing activities for the Game in the Territory.
7.2 For the marketing of the Game in the Territory, Licensee agrees to use its
best efforts to take advantage of all relevant media channels within the
Hubert Burda Media Group. In view of the exclusive right and license
granted to Licensee hereunder, Licensee shall make utmost efforts to
promote the use of the licensed Game and enhance the sales growth thereof
in the Territory pursuant to the terms and conditions of this Agreement.
Licensee shall be responsible for establishing and pursuing a
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marketing plan and any costs incurred in connection therewith, including
sales expenditure, shall be borne by Licensee. In addition to that
Licensee shall pay up to 2 Euro per paying user per month to partners
providing it with new users, Licensee shall provide Licensor with detailed
information on Licensee's advertising activities every month in the
Monthly Reports as stipulated in Section 6.2.
7.3 Licensor will provide Licensee with samples of the marketing and
promotional materials for the Game that have been or will be produced and
used by Licensor during the term of this Agreement. Licensee shall pattern
all its advertising, marketing and promotional materials for the Game in
the Territory after the samples furnished to Licensee by Licensor, and
Licensee shall provide Licensor with samples of the advertising, marketing
and promotional materials for the Game produced by Licensee no later than
seven (7) days after launching them. Within seven (7) days from receipt by
Licensor of samples of Licensee's advertising, marketing and promotional
materials, Licensor shall notify Licensee in writing of Licensor's
approval or disapproval thereof, or of any changes that Licensor may
require Licensee to make thereto. Licensor's failure to respond within the
said period of seven (7) days after receipt of such samples of advertising
material shall be deemed as approval of such advertising materials.
7.4 The copyright in the marketing and advertising materials produced or used
by Licensee on the Game ("Advertising Materials") shall remain exclusively
with Licensor, and Licensee shall not use the Advertising Materials for
any purpose other than the promotion, marketing and advertising of the
Game permitted under this Agreement.
7.5 Licensee may provide End Users with such number of free points and free
accounts as may be reasonably necessary, in Licensee's opinion, for the
purposes of the promotion, operation and advertisement of the Game. The
detailed information on the free points and accounts provided by Licensee
to End Users shall be provided to Licensor on a monthly basis in the
Monthly Report as stipulated in Section 6.2.
ARTICLE 8
OTHER OBLIGATIONS OF LICENSEE
8.1 Licensee shall exert its best efforts to supply, distribute and sell the
Game in the Territory.
8.2 Licensee shall be solely responsible for service, use, promotion,
distribution and marketing of the Game in the Territory, and Licensor
shall not be responsible for or obligated to provide any of such
activities unless stipulated otherwise in this Agreement.
8.3 Licensee shall provide full and comprehensive technical support to End
Users to assist them in their use of the Game, including but not limited
to Licensee's maintaining 24-hour technical contact window, on-line
customer services, sufficient outbound bandwidth and circuits for
operating business under this Agreement, and game servers required for
on-line game operation.
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8.4 Licensee shall provide its best efforts to protect the Intellectual
Property rights of Licensor in the Territory and shall assist Licensor to
procure appropriate legal and administrative measures against any and all
activities by third parties infringing the Game or any of the Intellectual
Property rights of Licensor on or in relation to the Game, including
without limitation to, manufacture or sales of counterfeiting CDs,
manuals, workbooks or other products.
8.5 Licensee shall abide by all laws and regulations of the Territory in its
service, use, promotion, distribution and marketing of the Game in the
Territory.
8.6 Licensee shall provide a prior written notice to Licensor in the event
Licensee intends to materially change its marketing strategies, including
budget, advertising, marketing, promotional materials, product packaging
and price policies relating to the Game, and other important policies.
8.7 Licensee shall indemnify and hold harmless Licensor and its officers and
employees from any kind of losses, costs, expenses or liabilities,
including reasonable attorneys' fees resulting from any claim by a third
party on or in relation to Licensee's service, use, promotion,
distribution and marketing of the Game in the Territory.
8.8 Upon prior arrangement of the Parties, Licensee shall provide Licensor
with suitable office space and office supplies in Licensee's office for
the auditing activities of Licensor. Access to such office space shall be
limited only to persons designated by Licensor. All expenses incurred by
Licensor's employees dispatched to Licensee's offices for transportation,
postage, telecommunications, lodging, food and other general living
expenses, and the salaries for such employees during their stay at such
offices shall be borne and paid by Licensor.
ARTICLE 9
TECHNICAL INFORMATION AND INTELLECTUAL PROPERTY
9.1 Technical Information and Intellectual Property shall be exclusively owned
by Licensor, and this Agreement shall not grant Licensee or permit
Licensee to exercise any right or license in or to the Technical
Information and Intellectual Property except for the License granted under
this Agreement. Licensee shall not obtain or try to obtain any registered
industrial property or copyright in or over any of the Technical
Information and Intellectual Property of Licensor regardless of the
territory and exploitation area.
9.2. Licensor shall indemnify, defend and hold harmless Licensee from and
against all damages, costs) and other liabilities (collectively,
"Damages") directly arising out of any third-party claim or suit
{hereinafter referred to as the "Claim") alleging that the Game or the
Technical Information infringes such third party's duly-registered patent,
copyright, or trademark, provided that Licensee (i) promptly notifies
Licensor of any such Claim, (ii) permit Licensor to control the defense or
settlement of such Claim, and (iii) provides Licensor with all reasonable
assistance necessary for the defense or settlement of such Claim.
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9.3. Licensor shall have no liability to indemnify, defend and hold harmless
Licensee to the extent alleged infringement is based on:
(a) modification of the Game or Technical Information by anyone other
than Licensor; or
(b) use of a previous version of the Game, where infringement could have
been avoided by using the latest version; or
(c) use of the Game or Technical Information other than in accordance
with the terms and conditions of this Agreement
This Section 9 sets forth the sole and exclusive liability of Licensor, with
regard to any Claim of infringement with respect to the Game or Technical
Information.
9.4. Trademark - Licensee shall use the trademarks designated by Licensor in
advance with respect to the Game, which it may distribute and/or sell under the
terms and conditions of this Agreement. Licensee shall not use any
other-trademark nor shall it change modify or supplement such trademarks in any
manner with respect to the manufacture and sale of the Game without written
approval of Licensor.
9.5. Licensor further guarantees and warrants to Licensee that the Game and the
corresponding Technical Information and accompanying Intellectual Property:
a) do not violate any Intellectual Property rights of any third party
or any rights of publicity or privacy in Korea;
b) do not violate any law, statute, ordinance or regulation (including
without limitation the laws and regulations governing export
control, unfair competition, anti-discrimination or false
advertising) of Korea or any other country; and
c) do not contain any obscene, child pornographic or indecent contents.
9.6. Licensor agrees to indemnify and hold harmless Licensee from any kind of
losses, costs, expenses or liabilities, including reasonable attorneys'
fees and costs of settlement, resulting from the breach by Licensor of its
express warranties given herein provided that Licensee (a) promptly
notifies Licensor of such claim; (b) allows Licensor to control the
defense of such claim and/or any related settlement negotiations; and (c)
provides any reasonable assistance requested by Licensor in connection
with such claim.
9.7. It is understood that by the grant of the License to Licensee, Licensor
undertakes to accord to Licensee all rights and privileges normally
accorded and granted by Licensor to all other entities to which a similar
license for the Game has or will be granted by Licensor. Licensor warrants
there is no outstanding contract, commitment or agreement to which it is a
party, or legal impediment, prohibition or restriction of any kind known
to Licensor, which conflicts with this Agreement or might limit, restrict
or impair the rights granted to Licensee hereunder.
ARTICLE 10
LIMITATION OF LIABILITY
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10.1 Except as may be otherwise provided for herein, Licensor makes no
warranties, express or implied, concerning the Game including but not
limited to its merchantability or salability in the Territory.
10.2 In no event will either party be liable to the other for any indirect,
consequential, incidental, punitive or special damages, whether based on
breach of contract, tort (including negligence) or otherwise, and whether
or not such party has been advised of the possibility of such damage.
10.3 The aggregate liability of either Party under or relating to this
Agreement whether in contract, tort (including without limitation
negligence) or otherwise, shall be limited to an amount equal to the total
amount of the payments made by Licensee during the preceding period of six
(6) months.
10.4. Notwithstanding the provisions of Article 9, Licensor shall have no
obligation or liability with regard to any error, that it caused, in whole
or in part, by (a) modifications to the Game or Technical Information made
by Licensee or any third party; or (b) use of the Game or Technical
Information other than as described in the documentation provided or as
instructed by Licensor; or (c) due to by use of hardware, software, or
other products not provided by Licensor; or (d) negligence, misuse, or
improper use of Game or Technical Information by Licensee or any third
Party.
10.5. Each Party warrants that (i) it has the full corporate right, power, and
authority to enter into this Agreement; and (ii) the execution of this
Agreement and performance of its duties and obligations hereunder do not
and will not violate any agreement to which it is a party or by which it
is otherwise bound; and (iii) when executed and delivered by it, this
Agreement will constitute its legal, valid and binding obligation,
enforceable against it in accordance with the terms hereof.
10.6. THE RESPECTIVE WARRANTIES OF LICENSOR AND LICENSEE AS SET FORTH IN THIS
ARTICLE 10 ARE THE SOLE AND EXCLUSIVE WARRANTIES MADE BY THE PARTIES.
GAME AND TECHNICAL INFORMATION SHALL BE PROVIDED ON AN "AS-IS" BASIS.
LICENSOR EXPRESSLY DISCLAIMS, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL
OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING THE
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NONINFRINGEMENT, TITLE, AND DATA ACCURACY. IF THIS EXCLUSION IS HELD
UNENFORCEABLE, THEN ALL EXPRESS AND IMPLIED WARRANTIES SHALL BE LIMITED IN
DURATION TO A PERIOD OF THIRTY (30) DAYS AFTER THE EFFECTIVE DATE, AND NO
WARRANTIES SHALL APPLY AFTER SUCH PERIOD.
ARTICLE 11
CONFIDENTIALITY
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11.1 All Confidential Information disclosed by either Party under this
Agreement shall be maintained in confidence by the receiving Party and
shall not be used for any purpose other than explicitly granted under this
Agreement. Each Party agrees that it shall provide Confidential
Information received from the other Party only to its employees,
consultants and advisors who need to know for the performance of this
Agreement. The receiving Party shall be responsible for any breach of this
Article by its employees, consultants and advisors.
11.2 In the event that any Confidential Information, including but not limited
to the source codes of the Game, Technical Information and financial
information, is disclosed or divulged to any third party who is not
authorized to have access to or obtain such Confidential Information under
this Agreement, the Parties shall cooperate with each other and exert
their best efforts to protect or restore such Confidential Information
from such unauthorized disclosure or divulgement. If such disclosure or
divulgement of the Confidential Information was made by the receiving
Party shall be responsible for all of the damages incurred by the
disclosing Party, including but not limited to any attorneys' fees
incurred by the disclosing Party in order to protect its rights under this
Article 11.
11.3 The confidential obligation shall not apply, in the event that it can be
shown by competent documents that the Confidential Information;
(a) becomes published or generally known to the public before or after
the execution of this Agreement without any breach of this Agreement
by any Party;
(b) was known by the receiving Party prior to the date of disclosure to
the receiving Party;
(c) Either before or after the date of disclosure is lawfully disclosed
to the receiving Party by a third party who is not under any
confidentiality obligation to the disclosing Party for such
information;
(d) is independently developed by or for the receiving Party without
reference to or reliance upon the Confidential Information; or
(e) is required to be disclosed by the receiving Party in accordance
with the applicable laws and orders from the government or court;
provided that, in this case, the receiving Party shall provide prior
written notice of such disclosure to the providing Party and takes
reasonable and lawful actions to avoid and/or minimize the degree of
such disclosure.
11.4. Licensee agree that the Game and Technical Information contain
information which is proprietary to, and the express trade secrets of
Licensor and agrees to treat as confidential and not to disclose, provide
or otherwise make available to any third party, except as required to
market, install and support the Game effectively, any information received
from Licensor concerning the Game and Technical Information.
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ARTICLE 12
TERM
12.1 This Agreement shall become effective on the execution date of this
Agreement and shall remain in effect for a period of two (2) years counted
from the Commercial Service Date, unless sooner terminated in accordance
herewith.
12.2 Licensee shall have an option to renew the term of this Agreement for an
additional term of one (1) year ("Renewed Term") under the same terms and
conditions hereof. At the expiration of the Renewed Term, Licensee shall
also have the further option to extend the term of this Agreement on an
on-going, yearly basis for an additional term of one (1) year (the
"Extended Term") under the same terms and conditions provided for herein.
Licensee shall exercise the aforesaid options to renew at least three (3)
months prior to the expiration of the original term of this Agreement or
the Renewed Term, as the case may be.
ARTICLE 13
TERMINATION
13.1 This Agreement may be terminated upon the mutual agreement of the Parties.
13.2 Each Party shall have the right to immediately terminate this Agreement:
(a) upon written notice to the other Party in the event of the other
Party's material breach of this Agreement and such breach shall
continue for a period of thirty (30) days after the breaching
Party's receipt of written notice setting forth the nature of the
breach or its failure to perform and the manner in which it may be
remedied; The party that allegedly has committed such material
breach of this agreement has the right to bring a claim before a
panel of arbitrators as provided for in Clause 15.9 of this
Agreement to determine whether such material breach indeed has
occurred. Only upon the decision of such panel the termination shall
become effective.
(b) if the other Party or its creditors or any other eligible party
files for its liquidation, bankruptcy, reorganization, composition
or dissolution, or if the other Party is unable to pay any kind of
debts as they become due, or the creditors of the other Party have
taken over its management; or
(c) in accordance with Section 13.3 below.
Notwithstanding sentences (a) to (c), Licensee shall be entitled to
terminate the Agreement in case the number of paying End Users does not
reach thirty-thousand (30,000) in a month within six (6) months after
Commercial Service Date.
13.3 Notwithstanding Section 13.2 above, Licensor may immediately terminate
this Agreement upon a written notice to Licensee;
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(a) if the Royalty for any given month as set forth in Section 5.1(b)
above is not paid by Licensee within thirty (30) days after
receiving a written notice from Licensor for late payment;
(b) in the event of a willful, gross understatement by Licensee of the
Royalty payments Licensor, as defined in Section 6.4 above;
(c) if the beta service of the Game is not launched in the Territory
within the period set forth in Section 3.2 plus an additional grace
period of 30 days, unless such failure has been caused by Licensor
or is due to force majeure event as set forth in Article 14;
(d) if the commercial service of the Game is not launched in the
Territory within the period set forth in Section 3.2 plus an
additional grace period of 30 days, unless such failure has been
caused by Licensor or is due to force majeure event as set forth in
Article 14; or
(e) if the service of the Game in the Territory is stopped, suspended,
discontinued or disrupted for more than thirty (30) consecutive days
during the term of this Agreement due to causes attributable to
Licensee.;
13.4 Upon the effective date of such termination, all rights granted to
Licensee hereunder shall immediately cease and shall revert to Licensor,
and Licensee shall at the latest 1 month after the effective date of
termination cease servicing of the Game and return to Licensor any and all
software, technical documents and other materials or information provided
by Licensor to Licensee under this Agreement, and shall destroy any and
all copies of such software, technical documents, materials or
information. Furthermore, Licensee shall provide and deliver to Licensor
any and all such information and documents related to the Game, including
but not limited to database related to the Game and information and/or
data source about the Game users excluding User's Billing Data and all
other material allowing Licensor to identify Game users, as may be
requested by Licensee.
13.5 No termination of this Agreement shall affect the Parties' rights or
obligations that were incurred prior to the termination. The expiration or
termination of this Agreement shall not affect the effectiveness of
Articles 6, 9, 10, 11, and 13.4, which shall survive the expiration or
termination of this Agreement.
ARTICLE 14
FORCE MAJEURE
14.1 Notwithstanding anything in this Agreement to the contrary, no default,
delay or failure to perform on the part of either Party shall be
considered a breach of this Agreement if such default, delay or failure to
perform is shown to be due entirely to causes occurring without the fault
of or beyond the reasonable control of the Party charged with such
default, delay or failure, including, without limitation, causes such as
strikes, lockouts or other labour disputes, riots, civil disturbances,
actions or inactions of governmental authorities or suppliers, electrical
power supply outage, a failure or breakdown in the services of internet
service providers, epidemics, war,
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embargoes, severe weather, fire, earthquake and other natural calamities
or, acts of God or the public enemy.
14.2 If the default, delay or failure to perform as set forth above in Section
14.1 exceeds sixty (60) days from the initial occurrence, a Party who is
not affected by such force majeure event shall have the right to terminate
this Agreement with a written notice to the other Party.
ARTICLE 15
GENERAL PROVISIONS
15.1 Licensee may not assign, delegate or otherwise transfer in any manner any
of its rights, obligations and responsibilities under this Agreement,
without prior written consent of Licensor except as stipulated in Clause
2.1.1.
15.2 It is understood and agreed by the Parties that this Agreement does not
create a fiduciary relationship between them, that Licensee shall be an
independent contractor, and that nothing in this Agreement is intended to
constitute either Party an agent, legal representative, subsidiary, joint
venture, employee or servant of the other for any purpose whatsoever.
15.3 If any kind of notices, consents, approvals, or waivers are to be given
hereunder, such notices, consents, approvals or waivers shall be in
writing, shall be properly addressed to the Party to whom such notice,
consent, approval or waiver is directed, and shall be either hand
delivered to such Party or sent by certified mail, return receipt
requested, or sent by FedEx, DHL or comparable international courier
service, or by telephone, facsimile or electronic mail (in either case
with written confirmation in any of the other accepted forms of notice) to
the following addresses or such addresses as may be furnished by the
respective Parties from time to time:
IF TO LICENSOR:
Attention: Andrew Moohak Sohn, Gravity Overseas Support
3rd Fl. Shingu Bldg., 620-2, Shinsa-Dong, Kangnam-Ku, Seoul,
135-894, Korea
Fax: +82-2-3442-5259
IF TO LICENSEE:
Attention: Imdat Solak, Director New Media International
Burda Holding International GmbH Arabellastr. 23, 81925
Munich, Germany
Fax: +49 89 9250 3941
15.4 No course of dealing or delay by a Party in exercising any right, power,
or remedy under this Agreement shall operate as a waiver of any such
right, power or remedy except as expressly manifested in writing by the
Party waiving such right, power or remedy, nor shall the waiver by a Party
of any breach by the other Party of any covenant, agreement or provision
contained in this Agreement be construed as a waiver of the covenant,
agreement or provision itself or any subsequent breach by the other Party
of that or any other covenant, agreement or provision contained in this
Agreement.
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15.5 This Agreement, including all exhibits, addenda and schedules referenced
herein and attached hereto, constitutes the entire agreement between the
Parties hereto pertaining to the subject matter hereof, and supersedes all
negotiations, preliminary agreements, and all prior and contemporaneous
discussions and understandings of the Parties in connection with the
subject matter hereof.
15.6 This Agreement shall be written in English and all disputes on the meaning
of this Agreement shall be resolved in accordance with English version of
this Agreement. All documents in respect of the contractual relationship
between the parties shall be in the English language.
15.7 This Agreement may be amended only upon the execution of a written
agreement between Licensor and Licensee that makes specific reference to
this Agreement.
15.8 This Agreement shall be governed by and construed in accordance with the
laws of Korea.
15.9 Any controversy or claim arising out of or in relation to this Agreement
shall be finally settled by arbitration in Seoul, Korea. The arbitration
shall be conducted before three arbitrators in accordance with the Rules
of Arbitration and Conciliation of the International Chamber of Commerce
then in effect. The Parties shall be bound by the award rendered by the
arbitrators and judgement thereon may be entered in any court of competent
jurisdiction. Any award rendered by the arbitrators shall be final, and
the Parties shall not have any right of appeal.
15.10 If any section, subsection or other provision of this Agreement or the
application of such section, subsection or provision, is held invalid,
then the remainder of the Agreement, and the application of such section,
subsection or provision to persons or circumstances other than those with
respect to which it is held invalid shall not be affected thereby.
IN WITNESS WHEREOF, the Parties have caused and executed this Agreement on the
date first above-written in duplicate originals by their duly authorized
representatives as of the day and year first above written.
FOR AND ON BEHALF OF FOR AND ON BEHALF OF
GRAVITY CORPORATION, Burda Holding International GmbH
By: /s/ Jung-Ryool Kim By:
------------------ Name:
Name: Jung-Ryool Kim Title: Managing Director
Title: Chairman Date: 26, November 2003
Date: Witness:
Witness:
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