Exclusive Ragnarok License and Distribution Agreement - Gravity Corp., Soft-World International Corp. and Value Central Corp.
EXCLUSIVE RAGNAROK
LICENSE AND DISTRIBUTION AGREEMENT
THIS LICENSE AND DISTRIBUTION AGREEMENT (this "Agreement"), is made and entered
into on this 21st day of October, 2002, 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 6th Fl. Shingu Bldg., 620-2, Shinsa-Dong,
Kangnam-Ku, Seoul, 135-894, Korea ("Licensor"), SOFT-WORLD INTERNATIONAL
CORPORATION, a corporation duly organised and existing under the laws of Taiwan,
R.O.C and having its offices at 13th Fl., No. 1-16, KuoCien Road, Chien-Chen
District, Kaoshiung 806, Taiwan ("Softworld"), and VALUE CENTRAL CORPORATION, a
corporation duly organised and existing under the laws of the Independent State
of Western Samoa and having its offices at P.O. Box 217, Apia, Samoa
("Licensee").
RECITALS:
WHEREAS, Licensor has developed and possesses all rights in computer programs of
online game "Ragnarok" ("Game") and also possesses valuable know-how and
technical information on the installation, design, service and use of the Game;
WHEREAS, Softworld is engaged in the business of sale and distribution of game
products in Taiwan, and Licensee is Softworld's subsidiary company with 100%
investment by Softworld;
WHEREAS, Softworld and Licensee desire to distribute and market the Game in the
Territory (as defined in Article 1) through the Service Company (as defined in
Article 1) which will be established after the execution of this Agreement and
which will be engaged in the sale, distribution, promotion and marketing of the
Game to wholesalers and will provide an accurate figure of the Service-Sales
Amount calculated with its billing system in the Territory; and
WHEREAS, Licensor desires to grant such license to the Service Company through
Licensee under the full guarantee of its performance by Licensee and Soft-world.
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 "Chinese Version" shall mean the Game in Chinese language.
1
<PAGE>
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 network game
service system established and operated by Licensee with individually
assigned ID numbers for each End User.
1.4 "Game" shall have the meaning stipulated in the recitals above,
including any modified or advanced version of the Game distributed by
Licensor for error correcting, updating or debugging purpose, under the
same title. Any subtitled version, series or sequel to the Game which
may be developed or distributed by Licensor after the execution of this
Agreement shall be clearly excluded from the scope of this Agreement.
1.5 "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.
1.6 "Parties" and "Party" shall mean Licensor, Softworld and Licensee,
collectively and individually, respectively.
1.7 "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.
1.8 "Service Company" shall mean the company which will be established by
Softworld and/or Licensee after the execution of this Agreement, 100%
of whose issued and outstanding shares will be owned or controlled by
Softworld or Licensee and which will be engaged in the sale,
distribution, promotion and marketing of the Game to wholesalers and
will provide an accurate figure of the Service-Sales Amount calculated
through its billing system in the Territory.
1.9 "Service-Sales Amount" shall mean the total service-sales amount paid
by End Users for the Game, including amount paid by prepaid card,
calculated in the Billing System with the deduction of the
Wholesaler-Discounts granted under this Agreement.
1.10 "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.
1.11 "Territory" shall mean the People's Republic of China.
1.12 "Wholesaler-Discounts" shall mean the discount which will be offered by
the Licensee to all wholesalers who run sales market; provided,
however, that if the payment by End Users is made by prepaid card or
numbers through traditional sales channel (includes PC game rooms,
Computer shops, Convenient stores,, Wholesaler-Discounts
2
<PAGE>
granted to any wholesaler shall not exceed thirty percent (30%) of the
prepaid card amount, if the payment by End Users is made through online
channel, Wholesaler-Discounts granted to any wholesaler shall not
exceed fifteen percent (15%) of the amount paid online which includes
credit cards, bank wire transfer, mobile and phone and if the payment
by End Users is not made by traditional sales channel or online sales
channel, there will be negotiation between both parties.
ARTICLE 2.
GRANT OF LICENSE
2.1 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 only to the Service Company.
2.2 The service, use, promotion, distribution and marketing of the Game
under this Agreement by Licensee shall be made only in Chinese language
using the Chinese Version in the Territory. 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 The service of the Game by Licensee shall be made only through the IBM
PC on-line method (excluding mobile access) using the Servers. Without
prior written approval by Licensor Licensee shall not manufacture any
free of charge "Prepaid Card" if points per such ID exceed one hundred
fifty (150) points, and such cards are only to be used for promoting
new end-users and up to one hundred fifty (150) free points for one
game account id. Licensee shall not manufacture, sell or distribute the
Game in any other forms including CDs.
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. Provided,
however, that, if it is required to change any of such Title 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
right on the Title and New Title shall be exclusively owned by Licensor
and Licensee shall not use any of such Title or New Title out of the
scope of this Agreement without a prior written approval of Licensor.
2.5 All of the rights on or in relation to the Game, except as granted
under this Agreement, including but not limited to the rights on the
character business of the Game, shall remain exclusively with Licensor.
ARTICLE 3
SERVICE COMPANY
3.1 Soft-world and/or Licensee shall establish the Service Company after
the date of execution of this Agreement. Promptly upon establishment of
the Service Company,
3
<PAGE>
Licensee shall provide Licensor with the relevant corporate information
on the Service Company, including the shareholding details thereof, and
such other information thereon as may be reasonably requested by
Licensor.
3.2 Within 30 days after the date of establishment of the Service Company,
Licensee shall enter into a fully valid and binding sublicense
agreement ("Sublicense Agreement") with the Service Company, a copy of
which shall be provided to Licensor promptly upon execution and which
shall contain all of the terms and conditions of this Agreement mutatis
mutandis. Under the Sublicense Agreement, Licensor shall be designated
as a third party beneficiary and shall be entitled to exercise the
rights of Licensee provided therein directly against the Service
Company.
3.3 After the execution of the Sublicense Agreement, all service, use,
promotion, distribution and marketing of the Game to End Users required
under this Agreement shall be performed only by the Service Company.
3.4 In addition to the obligations of the Service Company provided in the
Sublicense Agreement, all of Licensee's obligations provided in this
Agreement shall apply to the Service Company, and Licensee shall cause
the Service Company to perform all of Licensee's obligations under this
Agreement. In this regard, the performance by the Service Company of
Licensee's obligations under this Agreement shall be deemed to be the
performance thereof by Licensee itself. Further, the term "Licensee"
used throughout this Agreement in relation to Licensee's obligations
hereunder shall be interpreted such as to include the Service Company.
3.5 During the term of this Agreement, Soft-world shall, together with
Licensee, maintain the ownership of at least fifty one percent (51%) of
the total issued and outstanding shares and the control over the
management of the Service Company. In the event Software loses such
ownership or control, the Service Company shall lose all its rights in
relation to the Game and the Sublicense Agreement shall expressly
provide that it shall be automatically terminated in such event.
ARTICLE 4
DELIVERY OF GAME
4.1 Subject to the terms and conditions of this Agreement, Licensor shall
provide Licensee with its full assistance and cooperation including
preparation of Chinese Version and providing technical assistance in
order for Licensee to launch its beta service of the Game in the
Territory within thirty (30) days to Forty-Five (45) days from the
signing of the contract and to launch its commercial service of the
Game in the Territory within forty five (45) to Sixty (60) days from
the approval date of Chinese Government on the publication of the Game.
The Parties agree that the above dates are the target dates for
launching the beta and commercial service of the Game and such dates
may be changed based on the market situations by the mutual agreement
of the Parties.
4.2 Once Licensee receives the Chinese Version and technical documents on
the Game (collectively "Delivery Materials") from Licensor, Licensee
shall perform its review
4
<PAGE>
and test promptly and inform Licensor of any defect within thirty (30)
days after receipt thereof. Licensee's failure to inform within the
designated period shall be regarded as acceptance by Licensee, 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 expense.
4.3 The Game shall be serviced in the Territory only in the manner provided
by Licensor under this Agreement. Licensee shall be strictly prohibited
from any modification, amendment or revision of any part of the Game
including the name of title and characters of the Game, without prior
written approval from Licensor.
ARTICLE 5
TECHNICAL ASSISTANCE
5.1 During the term of this Agreement, Licensor shall provide Licensee for
free of charge with technical assistance including software
installation and set-up, maintenance support, patch updates in
connection with the Game and the localization of the Game into Chinese
language, provided that any and all expenses actually incurred by any
engineers dispatched by Licensor to perform the above technical
assistance in this Section 5.1, including, without limitation, business
class airfare, lodging, food and other general living expenses incurred
during their stay at Licensee's premises, shall be borne by Licensee.
5.2 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 [10] man days (based on 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. After the initial dispatch by Licensor of its engineers
for [10 man-day period], the salaries of Licensor's engineers for the
dispatched period shall be paid by Licensee. All the expenses incurred
by the engineers of Licensor for business class airfare, lodging and
food and other general living expenses during their stay for the period
of technical assistance shall be borne by Licensee.
5.3 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 [3] persons at one time and the total period of
training shall not exceed [7] man days (based on 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.
5.4 Any further assistance may be rendered by Licensor upon mutual
agreement of the Parties.
5.5 Each Party shall be fully responsible and fully indemnify the other
Party for the behavior of and activities performed by its employees and
personnel during their stay at the other Party's facilities.
5
<PAGE>
ARTICLE 6
PAYMENT
6.1 In consideration of the License and technical assistance granted under
this Agreement, Licensee shall pay to Licensor as follows:
(a) INSTALLMENT PAYMENT
Licensee shall pay to Licensor a sum of Seven Hundred Thousand United
States Dollars (USD 700,000) ("Installment Payment") in the following
manner:
(i) 1st Installment Payment: a sum of Four Hundred and Six
Thousand United States Dollars (USD 406,000) which is
equivalent to Fifty eight percent (58%) of the Installment
Payment shall be paiduntil thirtieth day of November, 2002.
(ii) 2nd Installment Payment: a sum of Two Hundred and Ninety four
Thousand United States Dollars (USD 294,000) which is
equivalent to forty two percent (42%) of the Installment
Payment shall be paid within seven (7) days after to the date
of commencement of commercial service of the Game("Commercial
Service Date").
No installment payment shall be refunded to or recouped by Licensee for
any reason.
(b) ROYALTY AND REPORT
In addition to the Installment Payment, Licensee shall pay to Licensor
as continuing royalties thirty percent (30%) of the Service-Sales
Amount paid by End Users ("Royalty"). Subject to Section 6.1(c) below,
the Royalty shall be paid on a monthly basis within twenty (20) days
after the end of the applicable month. 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.
(c) MINIMUM GUARANTEE
As a minimum guarantee ("Minimum Guarantee") for the Royalty payment,
Licensee shall pay to Licensor a sum of Four Hundred Thousand United
States Dollars (USD 400,000) in advance for every six (6) months'
period after Commercial Service Date. The Minimum Guarantee for the
first 6-month period after the Commercial Service Date shall be paid
within two (2) weeks after the Commercial Service Date and those for
the subsequent 6-month periods shall be paid within two (2) weeks after
the beginning of the applicable 6-month period. The Minimum Guarantee
shall be deemed to be an advance payment of the Royalty to the extent
of the amount thereof for each six-month period, thus if the Royalty
exceeds the Minimum Guarantee within any such six-month period,
Licensee shall pay to Licensor the Royalty amount in excess of the
Minimum Guarantee in accordance with Section 6.1(b) above. For the
6
<PAGE>
avoidance of doubt, Licensee shall (i) pay the Installment Payment set
forth in Section 6.1(a) regardless of Sections 6.1(b) and (c), and (ii)
provide Licensor with the Royalty Report pursuant to Section 6.1(b)
regardless of whether the Royalty exceeds the Minimum Guarantee.
6.2 Any and all payment under 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.
6.3 For all payments to be made in United States Dollar under this
Agreement, the applicable foreign exchange rate shall be the basic
exchange rate published by the Chinese Bank on the due date for the
relevant payment. Provided, however, that, in the event of any delay in
payment, the most favourable exchange rate to Licensor of the rates
from the due date for the relevant payment to the date of actual
payment shall apply.
6.4 In the event any payment is delayed by Licensee under this Agreement, a
default interest at a rate of [18] % per annum shall apply. For the
avoidance of doubt, Licensor's entitlement to such default interest
pursuant to this Section 6.4 shall not affect any other rights of
Licensor under this Agreement.
6.5 Any and all taxes including the sales tax, value added tax, income tax
on any payment to Licensor under this Agreement shall be borne by
Licensee, provided, however, if Chinese Government requires Licensee to
withhold the income tax on the payment to Licensor, Licensee is allowed
to withhold as such tax up to ten percent (10%) of the respective
payment amount. In the event that any amount is withheld for the tax
payment under this Section 6.5, Licensee shall promptly inform Licensor
of such payment and provide Licensor with a certification issued by the
relevant tax authorities with respect to the royalty payment. Any
withholding tax in excess of ten percent (10%) of the respective
payment amount shall be borne by Licensee, and Licensee shall not
deduct such withheld amount from the actual payment amount.
ARTICLE 7
REPORT & AUDIT
7.1 Licensee shall provide Licensor with all the information on the
development of its business in relation to the Game. Without limiting
the foregoing, Licensee shall inform Licensor promptly after its launch
of the beta service and the commencement of the commercial service of
the Game.
7.2 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 list of End-Users, the fees charged by Licensee,
sale revenue of the pertinent month, advertising activities and the
expenses therefor, complaints received from End Users and market trends
in the Territory.
7.3 Licensee shall keep all of its record, contractual and accounting
documents and company documents in relation to its business and
activities under this Agreement in
7
<PAGE>
its offices, during the term of this Agreement and for two years after
the expiration or termination of this Agreement.
7.4 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 all of the
company 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 5% of the required 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 [18] % default
interest thereon.
ARTICLE 8
ADVERTISING
8.1 Licensee shall exert its best efforts to advertise, promote and perform
marketing activities on the Game in the Territory.
8.2 For the advertising of the Game in the Territory, Licensee agrees to
spend no less than Five Hundred Thousand United States Dollars (USD
500,000) for each twelve-month period after the commencement of the
term of this Agreement. Licensee shall provide Licensor with detailed
information on Licensee's advertising activities every month in the
Monthly Reports as stipulated in Section 7.2. In addition, Licensee
shall provide Licensor with a separate advertisement report on June 30
and December 31 of each year covering the preceding 6 months' period.
8.3 Licensor will provide Licensee with samples of the marketing and
promotional materials for the Game which have been or will be produced
and used by Licensor during the term of this Agreement. For the
marketing and advertising materials for use in the Territory, Licensee
shall provide Licensor with samples thereof and shall obtain Licensor's
written approval prior to Licensee's actual use of such advertising
materials. Licensor's failure to respond within seven (7) days after
receipt of such samples of advertising material shall be deemed as
approval of such advertising materials.
8.4 All of the copyright on the marketing and advertising materials
produced or used by Licensee on the Game ("Advertising Materials")
shall be exclusively owned by Licensor, and Licensee shall not use any
Advertising Materials in a manner outside the scope of this Agreement.
For the effectiveness of this provision, Licensee hereby assigns all of
its right on such Advertising Materials to Licensor.
ARTICLE 9
OTHER OBLIGATION OF LICENSEE
8
<PAGE>
9.1 Licensee shall exert its best efforts to supply, distribute and sell
the Game in the Territory.
9.2 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 any of such activities unless stipulated
otherwise in this Agreement.
9.3 Licensee shall provide full and comprehensive technical support to End
Users to assist 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.
9.4 Licensee shall provide its best effort and procure appropriate legal
and administrative measures against any and all activities by third
parties infringing the Game or any of the Intellectual Property of
Licensor on or in relation to the Game, including without limitation
to, manufacture or sales of counterfeiting CDs, manuals, workbooks or
other products.
9.5 Licensee shall conform to all laws and regulations of the Territory in
its service, use, promotion, distribution and marketing of the Game in
the Territory.
9.6 Licensee shall provide a prior written notice to Licensor in the event
Licensee intends to change its marketing strategies, including budget,
advertising, marketing, promotional materials, product packaging and
etc., price policies relating to the Game, and other important
policies.
9.7 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, provided that Licensor (a)
promptly notifies Licensee of such claim; (b) allows Licensee to
control the defence of such claim and/or any related settlement
negotiations; and (c) provides any reasonable assistance requested by
Licensee in connection with such claim.
9.8 Without prior written approval by Licensor Licensee shall not publish
free of charge account of the Game when number of such free of charge
account exceeds eight hundred units (800) and such information shall be
provided to licensor in monthly basis.
9.9. Licensee shall provide Licensor an exclusive and separated office and
office supplies including but not limited to desks and computers up to
4 persons in the Service Company's main office and all branch offices
for Gravity's own activities including but not limited to co-marketing
and auditing. And this office will be accessible only by person
designated by Licensor. All the expenses incurred by these employees of
Licensor for transportation, posts and telecommunications, salaries,
lodging and food and other general living expenses, etc. during the
mission shall be borne by Licensor.
9.10 Licensee shall provide Licensor with the ids of any prepaid cards
manufactured to serve and charge End Users for the Licensed Product
immediately during the term of
9
<PAGE>
this Agreement. And the Licensee shall obtain Licensor's written
approval prior to launching any free of charge prepaid cards if points
per card exceed one hundred fifty (150) points, and these cards are
used only for promoting new end-users.
ARTICLE 10
INTELLECTUAL PROPERTY
10.1 Technical Information shall be exclusively owned by Licensor, and this
Agreement shall not grant Licensee or permit Licensee to exercise any
right or license on the Intellectual Property except for the License
granted under this Agreement. Licensee shall not obtain or try to
obtain any registered industrial property or copyright on any of the
Intellectual Property of Licensor regardless of the territory and
exploitation area.
10.2 Licensor hereby represents and warrants that Licensor has a legal and
valid right to grant the rights and licenses under this Agreement to
Licensee and that the Game and Technical Information do not violate or
infringe any patent, copyright and trademark of any third party in
Korea.
10.3 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 any claim by a
third party upon Licensor's breach of Section 10.2; 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.
ARTICLE 11
LIMITATION OF LIABILITY
11.1 EXCEPT FOR THE WARRANTY AND INDEMNIFICATION OBLIGATIONS SET FORTH IN
SECTIONS 10.2 AND 10.3 ABOVE, LICENSOR MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, CONCERNING THE GAME INCLUDING BUT NOT LIMITED TO ITS
MERCHANTABILITY, AND THE GAME IS LICENSED HEREUNDER "AS IS".
11.2 IN NO EVENT WILL EITHER PARTY HERETO 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.
11.3 THE AGGREGATE LIABILITY OF LICENSOR 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 [6]
MONTHS.
10
<PAGE>
ARTICLE 12
CONFIDENTIALITY
12.1 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.
12.2 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 has no
confidential obligation 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.
ARTICLE 13
TERM
13.1 This Agreement shall become effective on the execution date of this
Agreement and, unless terminated earlier in accordance with this
Agreement, shall remain in effect for a period of two (2) years from
the date of commencement of Commercial service of Chinese version in
the Territory.
13.2 No later than four (4) months prior to the expiration of this
Agreement, Licensor shall give Licensee the first right of negotiation
for a period of thirty (30) days for re-execution of a license
agreement for an additional term of one (1) year ("Renewed Term") for
the Game. For the extension one (1) year with initial two (2) year
terms of this agreement, Licensee shall be given continuous execution
of this license agreement if there have been no critical defects during
the initial two year term. If no agreement in writing is made between
the Parties for renewal or re-execution of a
11
<PAGE>
license agreement during such period, this Agreement shall expire
without any further extension or renewal.
ARTICLE 14
TERMINATION
14.1 This Agreement may be terminated upon the mutual agreement of the
Parties.
14.2 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;
(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 15.2 below.
(d) In the event of Licensee's intended material breach of Billing
system and such breach shall be clarified and proved truth by
Parties after Licensee's receipt of the Licensor's written
notice setting forth the nature of the breach, and Licensee
shall promptly pay to Licensor the unpaid-amount together with
[18]% default interest thereon.
14.3 Notwithstanding Section 14.2 above, Licensor may immediately terminate
this Agreement upon a written notice to Licensee:
(a) if the Royalty for any given month as set forth in Section
6.1(b) above is not paid within 15 days from receiving written
notice from Licensor for late payment;
(b) if the beta service of the Game is not commenced in the
Territory within forty five (45) days from the date of signing
of the contract unless such failure has been caused by
Licensor;
(c) if the commercial service of the Game is not commenced in the
Territory within thirty (30) to sixty (60) days from the date
on which the commercialization of the Game in the Territory is
duly approved by the Chinese Government unless such failure
has been caused by Licensor;
(d) if the service of the Game in the Territory is stopped,
suspended, discontinued or disrupted for more than ten (15)
days in total during the term of this Agreement due to causes
attributable to Licensee unless such suspension is caused by
Chinese Government;
12
<PAGE>
(e) if Soft-world fails to obtain approval by the Chinese
Government for commercial service of the game in the territory
until thirty first (31st) of January, 2003. In this case
Licensor shall pay to Licensee a sum of fifty (50) percent of
initial licensee fee received from Licensee with seven days
after the dated on 31st of January, 2003; or
(f) if Soft-World loses its ownership or control stipulated in
Section 3.5.
14.4 Upon the effective date of such termination, all rights granted to
Licensee hereunder shall immediately cease and shall revert to
Licensor, and Licensee shall immediately cease servicing of the Game
and return to Licensor any and all softwares, Technical Documents and
other materials or information provided by Licensor to Licensee under
this Agreement.
14.5 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 7, 10, 11, 12, 14.4 and 16 which shall survive the expiration
or termination of this Agreement.
ARTICLE 15
FORCE MAJEURE
15.1 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 beyond the reasonable
control of the Party charged with such default, delay or failure,
including, without limitation, causes such as strikes, lockouts or
other labor disputes, riots, civil disturbances, actions or inactions
of governmental authorities or suppliers, epidemics, war, embargoes,
severe weather, fire, earthquake, acts of God or the public enemy.
15.2 If the default, delay or failure to perform as set forth above in
Section 15.1 exceeds [thirty (30)] days from the initial occurrence, a
Party who is not affected from such force majeure event shall have the
right to terminate this Agreement with a written notice to the other
Party.
ARTICLE 16
GUARANTEE
16.1 In consideration of the License granted by Licensor to Licensee under
this Agreement, Softworld hereby irrevocably and unconditionally
guarantees all of the performance and activities of Licensee under or
in relation to this Agreement and Softworld shall be jointly and
severally responsible to Licensor for all the obligations of Licensee
and its performance, non-performance and any other activity under this
Agreement.
16.2 Any notice given in accordance with this Agreement from Licensor to
Licensee shall be deemed to be given and delivered to Softworld and the
Service Company.
16.3 Licensee and Soft-world irrevocably and unconditionally guarantee the
due
13
<PAGE>
performance and observance by the Service Company of the terms of this
Agreement and the Sublicense Agreement, and Licensee and Soft-world
shall be jointly and severally responsible to Licensor for the
performance or failure of performance by the Service Company of the
terms of this Agreement and the Sublicense Agreement, and any other
activities performed by the Service Company in relation to this
Agreement or the Sublicense Agreement.
ARTICLE 17
GENERAL PROVISIONS
17.1 Neither Party's rights, duties or responsibilities under this Agreement
may be assigned, delegated or otherwise transferred in any manner,
without prior written consent of the other Party.
17.2 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 venturer, employee or servant of the other for any purpose
whatsoever.
17.3 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 Fed, Ex, 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: Hyunduck Na
6th Fl. Shingu Bldg., 620-2, Shinsa-Dong, Kangnam-Ku, Seoul,
135-894, Korea
Fax: +82-2-3442-7097
If to Licensee
Attention: Mr. Yu-shun
13th Fl., No. 1-16, Kuo-Chien Road, Chien-Chen District,
Kaohsiung 806, Taiwan
Fax: +886 7 8151020
17.4 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.
14
<PAGE>
17.5 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 matters hereto and
supersedes all negotiations, preliminary agreements, and all prior and
contemporaneous discussions and understandings of the Parties in
connection with the subject matters hereof.
17.6 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.
17.7 This Agreement may be amended only upon the execution of a written
agreement between Licensor and Licensee which makes specific reference
to this Agreement.
17.8 This Agreement shall be governed by and construed in accordance with
the laws of Korea.
17.9 Any controversy or claim arising out of or in relation to this
Agreement shall be finally settled by arbitration in 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.
17.10 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 executed this Agreement the day and year
first above-written.
GRAVITY CORPORATION,
By:______________________________
Name: Jung-Ryool Kim
Title: Chairman
Date :
15
<PAGE>
VALUE CENTRAL CORPORATION,
By:______________________________
Name: Yu-Shu Hung
Title: CEO
Date :
SOFT-WORLD INTERNATIONAL CORPORATION.
By:______________________________
Name: Mr. Chin - Po Wang
Title: President
Date :
16