Online Game Software Sales and License Agreement for World of Legend 1.5 - Shengqu Information Technology (Shanghai) Co. Ltd. and Shanghai Shanda Networking Co. Ltd.
AMENDED AND RESTATED ONLINE GAME
SOFTWARE SALES AND LICENSE AGREEMENT
between
SHENGQU INFORMATION TECHNOLOGY (SHANGHAI) CO., LTD.
and
SHANGHAI SHANDA NETWORKING CO., LTD.
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AMENDED AND RESTATED ONLINE GAME
SOFTWARE SALES AND LICENSE AGREEMENT
THIS AMENDED AND RESTATED ONLINE GAME SOFTWARE SALES AND LICENSE AGREEMENT (this
"Agreement") is entered into as of this 9th day of December, 2003 ("Effective
Date") by and between:
(1) SHENGQU INFORMATION TECHNOLOGY (SHANGHAI) CO., LTD., a corporation
organized and existing under the laws of the People's Republic of China
(the "PRC") and having its registered address at Rm 638-7, Building 2,
351 Guoshoujing Road, Zhangjiang Hi-Tech Park, Shanghai PRC ("Shengqu");
and
(2) SHANGHAI SHANDA NETWORKING CO., LTD., a corporation organized and
existing under the laws of PRC and having its registered address at Rm
402-B, 727 Zhangjjiang Road, Pudong New Area, Shangha, the PRC
("Shanda"); and
WHEREAS:
(1) Shengqu engages in the business of developing and sales of various computer
games, including multi-user online games;
(2) Shanda engages in the business of operating and sales of online games;
(3) Shengqu agrees to sell online games to Shanda and to grant Shanda (i) a
license to distribute and sell an online game known as the World of Legend
Version 1.5 (the "Game") in mainland China and Hong Kong Special Administrative
Region (the "Territory") and (ii) a right to manage and operate servers for the
Game and to charge fees to users. The Parties entered into an Online Game
Software Sales and License Agreement on October 28, 2003; and
(4) In accordance with the applicable circumstances, the Parties desire to make
certain modifications and amendments to the Online Game Software Sales and
License Agreement.
NOW THEREFORE, the Parties hereby agree to amend and restate the Online Game
Software Sales and License Agreement, and the Online Game Software Sales and
License Agreement shall be superseded by this Agreement after the effective date
hereof.
1. DEFINITIONS.
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In this Agreement, unless the context requires otherwise, the following
expressions shall have the following meanings:
a. "Business Day" shall mean any day other than Saturday, Sunday or a
statutory holiday in the PRC.
b. "Client Software" shall mean software sold, provided or distributed to
the users and therefore, to be installed in a user's personal computer.
c. "Server Software" shall mean the system software and all the databases
(including the content and records located in such database) which
located on servers connected to the Internet.
d. "Game Software" shall mean the online game developed by Shengqu, known as
the World of Legend version 1.5, which can be played by a user with other
users by installing the Client Software onto a user's computer and then
accessing to the Server Software connected to the Internet. For the
purpose of this Agreement, "Game Software" also includes five (5) game
patches (upgrades of functions or maps) and the complimentary World of
Legend version 1.6.
e. "Territory" shall mean all parts of PRC, including Hong Kong Special
Administrative Region but, for the purpose of this Agreement, excluding
Macao Special Administrative Region and Taiwan.
f. "Intellectual Property Rights" shall mean any and all (by whatever name
or term known or designated) tangible or intangible, presently identified
or hereafter existing (a) rights associated with works of authorship
throughout the universe, including, but not limited to, copyrights
(including, without limitation, the sole and exclusive right to prepare
"derivative works of the copyrighted work and to copy, manufacture,
reproduce, distribute copies of, modify, perform and display the
copyrighted work and all derivative works thereof) and moral rights
(including, without limitation, all the rights under authorship and all
the rights to subsequent amendments); (b) rights in relation to the
protection of trademarks, service marks, trade names, goodwill, rights of
publicity, merchandising rights, advertising rights and similar rights;
(c) rights in relation to the protection of trade secrets and
confidential information; (d) patents, designs, algorithms and other
industrial property rights and rights associated therewith; (e) other
intellectual and industrial property and proprietary rights (of every
kind and nature throughout the universe and however designated) relating
to intangible rights that are analogous to any of the foregoing rights
(including, without limitation, logos, rental rights and rights to
remuneration), whether arising by operation of law, contract, license or
otherwise; (f) registrations, applications, renewals, extensions,
continuations, divisions or reissues thereof now or hereafter in force
throughout the universe (including, without limitation, rights in any of
the
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foregoing); and (g) rights in relation to the sole and exclusive
possession, ownership and use of any of the foregoing throughout the
universe, including, without limitation, the right to enter into
sub-agreement, designate, pledge, mortgage, sell, transfer, convey,
grant, gift , divide, licence, partition and use (or not to use) in any
way now or hereafter (including, without limitation, any claims and
causes of action of any kind with respect to, and any other rights
relating to the enforcement of, any of the foregoing).
2. DISTRIBUTION LICENSE
a. Shengqu grants Shanda an exclusive license to distribute and sell the
Game Software and its peripheral products in the Territory.
b. Shanda shall distribute and sell the Game Software and its peripheral
products in the Territory pursuant to this Agreement and shall use its
best endeavors to protect the rights of Shengqu in the Territory. Shanda
shall leave in position and not to cover or erase any notices or other
marks (including, without limitation, details or notices of patents,
trademark rights or design rights relating to the Game Software owned by
Shengqu or a third party) which Shengqu may place or affix to the Game
Software.
c. During the term of this Agreement, Shanda shall not sell outside the
Territory, sub-license, export or assist in or be a party to export the
Game Software from the Territory. In the event that Shanda intends to
sub-license the Game Software to a third party in the Hong Kong Special
Administrative Region, a separate agreement shall be entered into by and
among Shanda, Shengqu and the third party.
d. In the event that Shengqu intends to release new online games to the
Chinese market, Shengqu shall give Shanda a right of first negotiation
and priority in entering into an exclusive license agreement for the new
game, provided that the basic terms and conditions suggested by Shanda
are equal to the terms and conditions suggested by the other companies
who may also be interested in licensing the new game.
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3. OWNERSHIP AND INTELLECTUAL PROPERTY RIGHTS
a. Shengqu expressly covenants and warrants that it has good title to the
online game, Client Software, Server Software and the right to license
their use to Shanda free of any proprietary rights of any other party or
any other encumbrances whatsoever.
b. Shengqu acknowledges that ownership rights in all data and data files
(including, but not limited to, user data, data recorded and stored in
the game database, connection log, billing log, chatting log and other
related data) which are generated by the Servers during the operation
within the Territory, and any related documentation, and any existing or
future Intellectual Property rights, will be remained with Shanda, who
will have the exclusive right to protect the same. The ownership rights
for such data and data files shall be (i) wholly transferred to Shengqu
free of charge if Shanda breaches a term of this Agreement causing
termination of the Agreement; or (ii) wholly transferred to Shengqu,
after paying a reasonable compensation amount (which shall be negotiated
by Shanda and Shengqu) to Shanda if this Agreement is terminated upon
mutual agreement or if Shengqu breaches a term of this Agreement causing
termination of this Agreement.
c. Shanda acknowledges that the online game in its original and/or localized
form and any part thereof, Client Software, Server Software and any
related documentation are proprietary in nature. Shengqu claims that all
related Intellectual Property Rights granted by or available under law
therein, title and sole ownership rights in relation to the online game
in its original and/or localized form and any part thereof, game engine,
Client Software, Server Software, any related documentation, and any
existing or future Intellectual Property Rights, will be remained with
Shengqu, who will have the exclusive right to protect the same.
d. Shanda agrees that it shall not at any time attempt to register, assert
or claim any interest in, or do anything that may adversely affect the
validity or enforceability of, any Intellectual Property Rights belonging
to or licensed by Shengqu. Shanda will execute such related documents as
Shengqu may reasonably request from time to time to record or effectuate
Shengqu's ownership of the online game in its original and/or localized
form and any part thereof, game engine, Client Software, Server Software,
and related corporate goodwill. Shanda shall hold the online game in its
original and/or localized form and any part thereof, game engine, Client
Software, Server Software and any related documentation, and the
Intellectual Property Rights therein (including, without limitation, all
originals and subsequent localized versions thereof) in trust for Shengqu
and shall have no rights therein, except for the limited right to use for
the purposes expressly set forth in this Agreement. All data and data
files (including, but not limited to, user data,
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data recorded and stored in the game database, connection log, billing
log, chatting log and other related datas) which are generated by the
Servers during the operation within the Territory, and any related
documentation, and any existing or future Intellectual Property Rights
therein (including, without limitation, all originals and subsequent
localized versions thereof) shall belong to Shanda. Shanda has the
exclusive right to hold and deal with the same.
e. Shanda shall endeavor to protect the proprietary technologies licensed to
it by Shengqu in this Agreement, including the development and
implementation of a system for the purpose of the subject matter, to
ensure that no unauthorized persons shall have access to the game engine,
Server Software, tools, and any related confidential documentation, and
that all authorized persons having access to the game engine, Server
Software, tools, and the related confidential documentation shall refrain
from any disclosure, duplication or reproduction thereof, except as
permitted herein.
f. For the avoidance of doubt, all intellectual property and other
proprietary rights in the online game, including any version of the
software, upgrades, adaptation, variation, modification of the Game
Software and all related Intellectual Property Rights provided by
contractors of either Shanda or Shengqu thereon shall at all times vest
wholly in Shengqu; But all data and data files (including, but not
limited to, user data, data recorded and stored in the game database,
connection log, billing log, chatting log and other related datas) which
are generated by the Servers during the operation within the Territory,
and any related documentation, and any existing or future Intellectual
Property Rights therein shall belong to Shanda. Shengqu and Shanda both
shall obtain no rights with respect to the Intellectual Property Rights
of each other's, except for those expressed in this Agreement.
Accordingly, Shanda shall not be permitted to use in any way the software
including such upgrades, adaptation, variation, modification and/or
localization and translation thereto in any part of the world except in
the Territory and shall act strictly in accordance to the terms of this
Agreement. Shengqu shall be entitled to use, distribute and/or license
such software (including such upgrades, adaptations, variations,
modifications and/or localizations and translations thereto) (i) after
the completion of this Agreement in any part of the world and (ii) for
the duration of this Agreement, in any part of the world except for the
Territory. This foregoing provision shall apply unless such upgrades,
adaptations, variations, modifications and/or localizations and
translations thereto may have been devised, implemented or incorporated
by or at the cost of Shanda.
g. Shanda agrees to report to Shengqu any identified infringements, illegal
uses or misuses of the Intellectual Property Rights of Shengqu in
connection with the Game Software,
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including the software in its original and/or localized form and any part
thereof, game engine, Client Software, Server Software and the content of
any related documentation within the Territory. Shanda agrees to assist
Shengqu in enforcing or protecting such items and acknowledges that
Shengqu shall have the right to bring a legal action or suit for
infringement thereof. Such assistance shall be at Shengqu's expenses
unless the matter to which such assistance applies arises out of or from
or is related in any way to the breach by Shanda of any terms or
conditions of this Agreement or by Shanda's willful misconduct, in which
case such assistance shall be at Shanda's expense.
4. INITIAL PAYMENT
a. Shanda agrees to pay to Shengqu an initial licensing fee of RMB
50,000,000 for the rights granted under this Agreement ("Initial
Payment"). Such Initial Payment has been paid by Shanda to Shengqu in
October 2003. Shanda shall not request any refund of such Initial Payment
except in the case of a breach of this Agreement by Shengqu. In addition,
Shanda shall not request to apply any of the Initial Payment as payment
of any future revenue sharing fee for the software.
b. Shengqu shall provide with Shanda a receipt within fifteen (15) days of
the payment of the said Initial Payment.
5. REVENUE SHARING FEE OF THE SOFTWARE
The revenue sharing fee for the software payable by Shanda to Shengqu under this
Agreement shall be as follows:
a. Shanda shall pay to Shengqu a quarterly revenue sharing fee which equals
to 26% of Shanda's book revenue from the online game;
b. Shanda shall, within the first month of the following quarter, provide
Shengqu with a quarterly sales revenue statement of the online game (the
"Statement");
c. Shanda shall make payment of the quarterly revenue sharing fee before
each 30th of the month immediately following the month of Shengqu's
acknowledgement of the Statement;
d. Shengqu shall provide with Shanda a receipt within fifteen (15) days of
each payment of revenue sharing fee made by Shanda.
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6. AMENDMENT
No variation of or supplement to this Agreement shall be effective unless the
Parties have agreed in writing and have respectively obtained the required
authorizations and approvals (including an approval that Shengqu must obtain
from the audit committee or other independent institution, which has been
established under the Sarbanes-Oxley Act and the NASDAQ Rules, of the board of
directors of Shanda Interactive Entertainment Limited, Shengqu's overseas
holding company).
7. CONSEQUENCES OF TERMINATION
Except where both parties agreed to the otherwise, upon termination of this
Agreement under any circumstances:
a. All of Shanda's rights with respect to the online game, including in its
original and/or localized form and any part thereof, game engine, Client
Software, Server Software, tools, and codes will automatically and
immediately terminate, and Shanda shall immediately cease to use the
online game in its original and/or localized form and any part thereof,
game engine, Client Software, Server Software, tools, and codes, and
shall destroy or return (at Shengqu's option) any materials representing
the same to Shengqu, along with a written confirmation of destruction or
return, signed by an authorized officer of Shanda.
b. The termination of this Agreement under any circumstances shall not
affect any rights and obligations already acquired as of the date of the
termination, for example, any quarterly revenue sharing fee prior to the
termination shall be payable notwithstanding the termination.
8. DEFAULT
a. A party shall be considered as in default if (i) it materially breaches a
term of a contract entered into between the party and a third party,
causing serious harm to the third party, and such breach continues for a
period of sixty (60) days, or (ii) it becomes insolvent.
b. Upon occurrence of an event of default as described in the above section
(a), the party not in default may immediately terminate this Agreement by
giving written notice to the defaulting party. The rights and remedies
provided to the parties in this section shall not be exclusive and are in
addition to any other rights and
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remedies provided by this Agreement or at law or in equity.
9. CONFIDENTIALITY
a. Without prior written consent from the other party, Shanda and Shengqu
agree that they will not use for their own benefits or disclose to any
third party anything that relates to the term of this Agreement or any
extensions or renewals thereof or subsequent to termination, any
confidential information of the other party. For purposes of this
Agreement, confidential information shall mean all information relating
to the business of Shengqu or Shanda, including, without limitation, any
unreleased information regarding the online game and technologies
relating thereto or embodied therein, the particulars of arrangements
with any person or entity, manufacturing sources, financial information
of Shengqu or Shanda.
b. Upon termination of this Agreement for any reason whatsoever, each party
shall promptly deliver to the other party any and all confidential
information, including, without limitation, the manuals, letters,
notebooks, reports, advertising literature, sales aids, and other
materials relating to the business of the other party (including all
copies of such confidential information) which are owned by, and in
custody and control of that party. This section shall survive the
expiration or termination of this Agreement.
10. INDEMNIFICATION
a. Shanda shall indemnify and defend Shengqu and its agents, directors,
officers, employees and shareholders, and hold them harmless from and
against any damages arising out of any third-party claim relating to:
(I) Any violation by Shanda of any provisions under this Agreement;
and
(II) Any gross misconduct or intentional acts on the part of Shanda or
its employees or agents.
b. Shengqu shall indemnify and defend Shanda and its agents, directors,
officers, employees and shareholders, and hold them harmless from and
against any damages arising out of any third party claim relating to:
(I) Any violation by Shengqu of any provisions under this Agreement;
and
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(II) Any gross misconduct or intentional acts on the part of Shengqu or
its employees or agents.
c. Indemnification procedure shall be as follows:
(I) A Party seeking indemnification (the "Indemnified Party") will
promptly notify the other Party (the "Indemnifying Party") of any
claim for indemnification.
(II) The Indemnifying Party will, if requested by the Indemnified
Party, give assistance to the Indemnified Party in defense of any
claim.
(III) The Indemnified Party will, on its own, go through the legal
procedure, and upon the completion of such legal procedure, the
Indemnifying Party shall provide indemnification upon the request
of the Indemnified Party.
11. EXCLUSION OF LIABILITY
Neither Party shall be exempted from liability if, due to such Party's
negligence or other defaults, the other Party has suffered any losses.
12. COST
Unless otherwise stated, each party shall bear all costs incurred in the
performance of its own undertakings, duties and obligations under this
Agreement.
13. RELATIONSHIP OF THE PARTIES
It is the intention and understanding of Shengqu and Shanda that the
relationship between them shall be at all times independent. This Agreement
shall not be considered as the creation of an agency relationship, or similar
relationship, between them.
14. NO ASSIGNMENT
Neither Party shall assign this Agreement or any of its rights, nor delegate any
of its obligations hereunder, in whole or in part, without the other Party's
prior written consent, to third party.
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15. COMPLIANCE WITH LAWS
Shanda warrants that it complies with all laws and regulations in the Territory
during the operation.
16. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the PRC.
17. DISPUTE RESOLUTION
In the event of any dispute which may arise between the parties relating to the
performance of this Agreement, the parties hereto shall first settle such
dispute through amicable negotiations. If such dispute cannot be satisfactorily
resolved by the parties themselves through friendly negotiations within a period
of forty (40) days, then any party shall be entitled to submit such dispute to
the Shanghai Arbitration Commission in accordance with its arbitration rules to
settle the dispute.
18. COMPLYING WITH ARBITRAL AWARD
All disputes relating to this Agreement shall be resolved in Shanghai. The
losing party shall bear all costs and expenses (including, but not limited to,
the attorney fees) incurred by the winning party during the course of
arbitration.
19. NOTICES
Any notice or other communication to be given in connection with this Agreement
shall be in writing, and shall be either (as elected by the party giving such
notice): (a) personally delivered; (b) transmitted by registered or certified
mail; (c) transmitted by courier service; (d) sent by confirmed facsimile; or
(e) sent by confirmed e-mail. Unless there are other evidences, all notices will
be deemed to have been duly given on: (x) the date of receipt (or if delivery is
refused, the date of such refusal) if delivered personally or by courier; (y)
five (5) days after the date of posting if transmitted by mail; or (z) if
transmitted by facsimile or e-mail with confirmation, the date of transmission.
Neither party may change its address for purposes hereof unless a prior notice
of no less than five (5) days has been given to the other party.
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20. HEADINGS
Captions and section headings used herein are for convenience only, are not part
of this Agreement, and shall not be used in construing it.
21. FURTHER DOCUMENTS
Each of the parties agrees to enter into and execute such further documents,
which shall have the same binding effect as this Agreement.
22. VALIDITY
If any provision of this Agreement is declared or found to be inappropriate or
unenforceable, then both parties shall negotiate with each other and modify the
provision to the extent necessary to make it valid and enforceable. If that is
not possible, another provision that is legal and enforceable will be
substituted.
23. WAIVER
The failure of either party to exercise any right hereunder shall not be
construed to be a waiver of such right.
24. ENTIRE AGREEMENT
This Agreement supersedes and replaces any and every other prior or
contemporaneous agreement, understanding or negotiation. This Agreement shall
constitute the entire agreement on the licensing of the World of Legend Version
1.5 between the parties.
IN WITNESS WHEREOF, Shengqu and Shanda have each caused this Agreement to be
executed and delivered by their duly authorized representatives as of the date
first written above.
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[Execution Page]
SHENGQU INFORMATION TECHNOLOGY (SHANGHAI) CO., LTD.
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Authorized representative (signature)
SHANGHAI SHANDA NETWORKING CO., LTD.
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Authorized representative (signature)
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