EXHIBIT 10.1
SOFTWARE LICENSE AGREEMENT
(the "Agreement")
(RUSH ONLINE)
THIS SOFTWARE LICENSE AGREEMENT (this "Agreement') is entered into on 10th day
of October 2004 by and between JC Entertainment Corp., a Korean corporation
organized and existing under the laws of the Republic of Korea, having its
principal office at 4th floor Rosedale Building, 724 Suseo-Dong, Kangnam-Ku,
Seoul 135-885, Korea ("Licensor') and Shanghai T2 Entertainment Co., Ltd.
(License) a Chinese corporation organized and existing under the laws of the
People's Republic of China, having its principal office at 12A, Civil Defense
Building, 593 Fu Xin MiddIe Road, Shanghai, China ("Licensee").
RECITALS
WHEREAS, Licensor has developed and possesses rights to a certain Game Title
which it refers to as "Rush Online"; and
WHEREAS, Licensee desires to license such certain Game Title for operating
online game service in the Territory and Licensor is willing to grant to
Licensee an exclusive license for such purposes on the terms and conditions set
forth herein.
NOW, THEREFORE, In consideration of the mutual agreements and covenants
contained herein, the parties agree as follows:
Section 1 Definition
For the purpose of this Agreement:
(a) "Business Day(s)" shall mean business day(s) of the commercial banks
in China.
(b) "Commercial Launch Date" shall mean the date when Licensee
commercially launches the Game Service in the Territory.
(c) "Confidential information" means Information that (i) is confidential
to the business of a party, including but not limited to, computer
software source code, technical documentation and information regarding
proprietary computer systems, marketing and product development plans,
financial and personnel information, and other business information not
generally known to the public, and (ii) is designated and identified as
such by a party, or which the other party should have reasonably known was
confidential.
(d) "Designated Locations" shall mean the particular locations set forth
in Exhibit (A) where Server Software is permitted to be used pursuant to
the terms and conditions of this Agreement.
(e) "Effective Date" shall mean the date on which this Agreement is
executed by Licensor and Licensee, or this Agreement is approved by the
Government of the People's Republic of China as contemplated in Section 15
hereunder whichever is later.
(f) "Error" shall mean a defect in the code or routine of the Licensed
Program making the software non-operational.
(g) "Exclusive License Fees" shall have the meaning as described in Clause
3.1 herein.
(h) "Game Service" shall mean the online game service to the Subscribers
in the Territory utilizing the Licensed Program and the Licensed
Materials.
(i) "Game Title" shall mean the name of the online game which is developed
by Licensor and licensed to Licensee under this Agreement.
(j) "Gold Master CD" shall mean a CD-ROM on which a localized version of
the Client Software is recorded and which is delivered to Licensee for
reproduction, sale and distribution to the Subscribers.
(k) "Net Sales Revenues" shall mean the total sales revenues earned by
Licensee from the sale of the Licensed Product's Points Cards and the
Client Software with deduction of distribution margin.
(l) "Improvement(s)" shall mean modifications, enhancements, updates, or
other changes to the Licensed Program and the Licensed Materials.
(m) "Intellectual Property" shall mean (i) patents, trademarks, service
marks, trade and business names, logos, slogans, characters and designs,
whether registered or not, and (ii) copyright, know-how, Confidential
Information, domain names and any other similar rights protected in any
country.
(n) "License Fees" shall mean either or both of the Software's Exclusive
License Fees and technical support and maintenance fees (Royalties) paid
by Licensee to Licensor in the operation period.
(o) "Licensed Materials" shall mean the user guides, server operating
manuals, education materials, product descriptions and specifications,
technical manuals and other materials included in or related to the
Licensed Program (including any characters, stories, sounds
there-related), of used in association with the Game Service, including
but not limited to those specified in Exhibit (A) attached to this
Agreement. All improvements and new versions of such materials are also
included in the definition of "Licensed Materials".
(p) "Licensed Program" shall mean the online game computer program in
machine readable object code only (i) which is developed by Licensor with
its Korean title as "_______", its English title as "Rush Online" and its
Chinese title as "_____" and (ii) which consists of Game Server Software
and Client Software. Any Improvements made to the Licensed Program are
also included in the definition of "Licensed Program".
(q) "Marks" shall mean trademarks, service marks, trade and business
names, logos, slogans, characters, or other properties that are used on or
in association with the Licensed Program and the Game Service, whether
registered or not, including but not limited to those specified in Exhibit
(B) attached to this Agreement.
(r) "Open Code" shall mean the directly executable program in binary code
derived from Source Code using a compiler or otherwise.
(s) "Open Beta Service Date" shall mean the date when Licensee launches
the beta version of the Game Service to general public in the Territory.
(t) "Royalty" or "Royalties" shall have the- meaning as describe in Clause
3.2 herein.
(u) "Servers" shall mean computers with the Game Server Software installed
therein at the Designated Locations, including but not limited to, Web
servers and game servers which are required for online gaming.
(v) "Game Server Software" shall mean a computer program which is
installed in Servers.
(w) "Source Code" shall mean all material necessary to enable a programmer
of reasonable skill and experience to maintain and enhance software,
including but not limited to, logic, logic diagrams, flowcharts,
orthographic representations, algorithms, routine, sub-routines,
utilities, modules, file structures, coding sheets, specifications and the
program instructions.
(x) "Subscribers" shall mean persons who are allowed to connect to the
Servers in order to play the online game in the Territory. The Subscribers
consist of Paying Subscribers and Free Subscribers.
(y) "Territory" shall mean the People's Republic of China, including Hong
Kong, Macao.
(z) "Upgrade Version" shall mean an online game which is developed by
Licensor as a subsequent version (not a sequel) of the Licensed Program
which uses the same title with the Licensed Program.
Section 2 Grant of Licenses
2.1 (Use of Licensed Program) Subject to the terms and conditions
contained in this Agreement, Licensor grants the Licensee an exclusive,
non-transferable and royalty bearing right and license to do the following
within the Territory;`
(a) to use the Game Server Software;
(b) to use, copy, duplicate, sell, and distribute the Client Software on
various media including but not limited to CD-ROM;
(c) to use, copy, and distribute the Licensed Materials for use on the
Game Service or in the course of the operation of the Game Service;
(d) to provide the Game Service to the Subscribers;
(e) to advertise, promote and market the Game Service; and
(f) to produce, sell and distribute Points Cards.
2.2 (Use of Marks) Subject to the terms and conditions contained in this
Agreement, Licensor grants to Licensee during the term of this Agreement
an exclusive, non-transferable, and royalty free right to use the Marks
and the Game Title for the purpose of advertising, promoting and marketing
the Client Software and the Game Service in the Territory in a style and
manner approved by Licensor in writing prior to such use.
2.3 (Use of Know-how) Subject to the terms and conditions contained in
this Agreement, Licensor will provide Licensee with the Confidential
Information, excluding the Source Code, in relation to the operation of
the Game Service.
2.4 (Translation) For the purpose of this Agreement, Licensee shall be
entitled to translate the documents of Licensed Program and Licensed
Materials into Chinese and adopt the Chinese versions. In order to avoid
unnecessary disputes arising from languages, Licensee shall be responsible
for the translation of explanatory documents into Chinese and both parties
shall examine and amend the translation when necessary.
2.5 (Modification to Licensed Program) For the purpose of marketing and
promotion of Licensed Program in Chinese markets, Licensee shall be
entitled to modify such the visual aspects of Licensed Programs upon prior
written approval of Licensor of such modifications, which approval shall
not be unreasonably withheld. In the case that such approval is delayed
for more than three (3) business days in Korea, it shall be regarded as
the approval of such modification. Licensee shall grant to Licensor the
use of such modified or remanufactured works for free in case of
Licensor's request.
2.6 (No Right to Copy) Except as otherwise provided in this Agreement,
Licensee shall not copy, reproduce,
Modify, translate, or create derivative works or excerpt any of the
Licensed Program and the Licensed Materials for any purposes.
2.7 (Sub-Licensing) Upon the approval of the Licensor, Licensee may grant
sub-license Licensed Program or derivative works hereof to third party,
which is limited to the affiliated companies or subsidiary companies in
China of Licensee. Such sub-license requires no extra Software license
Fees.
Section 3 Payments
3.1 (Exclusive License Fees) Subject to performance by Licensor of its
obligations under this Agreement, Licensee shall pay Licensor an exclusive
license fee of US 570,000 dollars (the "Exclusive License Fees"). this
shall be paid by (4) installment payment as follows:
(a) First Installment Payment: US 30,000 dollars.
(b) Second Installment Payment: US 120,000 dollars on the Close Beta
Service Date in twenty (20) Business Days
(c) Third Installment Payment: US 180,000 dollars on the Open Beta
Service Date in twenty (20) Business Days
(d) Last Installment Payment: US 240,000 dollars on the Commercial
Launch Date in twenty (20) Business Days
The parties hereby agree that if the daily top concurrent users can reach
30,000 during the Open Beta Service Period of the Licensed Product, the
third installment payment fee under the above 3.1(c) shall be reduced by
US 100,000.
3.2 (Royalties) Subject to the full performance of Licensor of its
obligations under this Agreement, in addition to the Exclusive License
Fees specified in Section 3.1, Licensee shall pay Licensor the thirty (30)
percent (%) of the licensed Product's Net Sales Revenue accrued for each
calendar month until termination of this Agreement if any (the
"Royalties"). These Royalties shall accrue commencing with the first
commercial launch of the Game Service in the Territory.
3.3 (Time of Payments) Licensee shall pay to Licensor the Royalties under
Section 3.2 on a monthly basis, not later than thirty (30) days after the
end of each calendar month. The royalty can be deferred by Licensee if
clause 6 is not performed by licensor.
3.4 (Bad Accounts Confirmation) The normal payment cycles of any Client
Software and Points Cards is ninety (90) days from sales. The unpaid
amounts overdue for more than one hundred and eighty (180) days from sales
shall be confirmed as bad accounts, which shall be responsible 50% for
License and 50% for Licensor. Short of compelling reasons, bad accounts
below ten percent (10%) of Total Sales Revenue shall be recognized as
uncollectible income and cancelled from calculation of Total Sales Revenue
for the purpose of royalty payment.
3.5 (Form of Payments)
Royalties and any other payments due to Licensor under this Agreement
shall be paid to Licensor in United States dollars. Licensee shall first
determine the Royalties and other payments owed to Licensor in the Chinese
currency and then convert the amount into equivalent United States funds,
using the applicable exchange rate quoted by the People's Bank of China on
the last business day of each calendar month for which such Royalties or
other payments are due.
3.6 (Taxes)
3.6.1 In the event that the Chinese government imposes any income
taxes on any part of the Royalties and any other payments and
requires Licensee to withhold such tax from payments to Licensor in
order to remit such payments to Licensor, Licensee shall withhold
such tax from the payments.
3.6.2 Licensee shall promptly furnish Licensor with official tax
authorities or such other evidence as is reasonably requested by
licensor to establish that such taxes specified in Section 3.6.1
have been paid so as to enable licensor to support a claim for
credit against income taxes which may be paid by Licensor.
3.6.3 All taxes (other than such withheld Chinese income taxes
imposed on Licensor on its receipt of the Royalties, and other
payments), duties, assessments, fees and other governmental charges
of any kind (including sales, use, excise taxes) which are .imposed
by or under the authority of any government or any political
subdivision thereof on the Royalties and any other payments shall be
borne by Licensor and Licensee respectively in accordance with
applicable laws and regulations and may be considered a part of, a
deduction from or an offset against, the Royalties and any other
payments upon mutual agreement of both parties.
3.6.4 Either party hereto shall hold the other party harmless from
all claims and liability arising from the party's failure to report
or pay any such taxes, duties, assessments, fees and other
governmental charges of any kind.
Section 4 Records, Reports and Audits
4.1 (Records) Licensee shall maintain complete and accurate books and
records in sufficient detail to reflect its operations under this
Agreement and to enable the Royalties accrued and payable under this
Agreement to be determined.
4.2 (Reports) Licensee shall, at its expense, provide Licensor with a
written report acknowledged by the C.P.A (Certified Public Accountant) of
Licensee within fifteen (15) days of the end of each calendar month
(except the first calendar month) for the prior month for the Total Sales
Revenue made during such prior month period including but not limited to
those specified in Exhibit (C).
4.3 (User's Database) Licensor shall have access to user's database and
billing database, provided that notice shall be required regarding any
actual entry by Licensor and such entry shall only be conducted in working
hours of Licensee.
4.4 (Audits)
4.4.1 Licensor shall have the right, directly or through its
representative, upon a fifteen (15) days' prior written notice to
Licensee, (i) to review Licensee's books and records to verify the
number of copies of the Client Software sold and distributed to
Subscribers by Licensee, the number of Subscribers, and the number
and locations of the Servers, and (ii) to enter Licensee's premises
in order to inspect the Servers during regular business hours to
verify compliance with the terms of this Agreement, provided that
Licensee agrees not to conceal or destroy any software, materials of
information after receiving such notice, through the completion of
such review and inspection.
4.4.2 Licensor or representatives of Licensor shall protect the
confidentiality of Licensee's confidential information and abide by
Licensee's reasonable security regulations while on Licensee's
reasonable security regulations while on Licensee's premises while
on Licensee's premises.
4.4.3 If the results of such review disclose a deficiency in any
Royalty payable by Licensee to Licensor in excess of five (5)
percent for any three (3) consecutive month period and manifest
evidence of such deficiency is provided by Licensor, then Licensee
shall promptly reimburse Licensor for the reasonable costs of such
review and inspection including, but not limited to professional
fees, traveling and accommodation expenses. Licensee shall also pay
the shortfall in the Royalties ascertained to be due from such
review and inspection including any interest at the rate of five (5)
% per month for the shortfall.
Section 5 Delivery and Acceptance
5.1 (Delivery) Within [ ] days from the date this Agreement is executed,
Licensor shall deliver to licensee (i) Beta testing version(s) of the
Licensed Program, (ii) one (1) copy of Gold Master CD, and (iii) copies of
the Licensed Materials in the quantities pursuant to specification set
forth in Exhibit (D).
5.2 (Acceptance) Licensee shall within seven (7) days following its
receipt of the items specified in Section 5.1, in writing, accept, or
reject any items if Licensee reasonably believes that such item fail to
meet the specifications identified in Exhibit (D). If any of the above
items are rejected, Licensor shall send new items to Licensee in
substitute for the rejected items.
Section 6 Technical Support/Assistance and Maintenance
6.1 (Technical Support) Licensor covenants that it now has and for the
term of this Agreement will continue to have sufficient personnel to
support its technical assistance and maintenance obligations hereunder.
6.2 (System Requirements) Licensee shall at its expenses arrange the
server computers ready for installation by Licensor of the Game Server
Software therein. The servers must satisfy the servers must satisfy the
specifications set forth in Exhibit (E). Licensee shall assign any
Internet Data Center (IDC) in the Territory upon specifications set forth
in Exhibit (E)
6.3 (Installation)
6.3.1 Licensor will perform installation of the Game Server Software
in Server computers via Internet or at Licensee's sites on the date
when mutually agreed by the parties, subject to Licensee satisfying
the system requirements set forth in Exhibit (E).
6.3.2 If Licensor decides that it is necessary to install the Game
Server Software at Licensee's site 3, Licensor shall bear its own
travel, hotel, and out-of-pocket expenses related to the provision
of installation assistance pursuant to this Section 6.3.
6.4 (Maintenance) Licensor shall exercise its best efforts to maintain the
Licensed Program free of Errors at no cost to Licensee for the term of
this Agreement in accordance with the following procedure:
6.4.1 In the event Licensee discovers Errors in the Licensed Program
which cause the Licensed Program not to operate in material
conformance to Licensor's specifications, Licensee shall submit to
Licensor a written report, via e-mail or by facsimile, describing
the nature of such Errors in sufficient detail to perm it Licensor
to reproduce and/or correct such Errors.
6.4.2 Upon receipt of any such written reports, License to use its
best efforts to respond to the reported Errors and prepare an update
or patch program in a timely manner to correct such Errors as early
as practicable.
6.4.3 The Licensor shall be responsible for train operation and
maintenance of game server system to licensee at the first install
game system. In addition, licensor shall assign an engineer in
charge to solve the problem that game sever system repair and
maintenance problem required by Licensee.
6.5 (Hacking) Both Licensor and Licensee shall use their best efforts to
protect the Servers from hacking. In the event Licensee discovers any
hacking activities, Licensee shall submit to Licensor a Written report,
via e-mail or facsimile describing the nature of such activities, in
sufficient detail, to permit Licensor to provide preventive measures. Upon
receipt of any such written report, Licensor agrees to use its best
efforts to respond to the reported hacking activities on an urgent basis
and solve the hacking problems.
6.6 (Upgrade) When Game Upgrade after release of initial version, licensor
shall supply Upgrade version in two months advanced period test to
licensee. Also, licensor shall endeavor to positively consider for the
next Upgrade version release with examining enough for the requirement at
the Chinese local users or Licensee.
6.7 (Respond Time) Licensor shall assign competent engineers to respond
(online support is also acceptable) to the service requirement of licensee
regarding any breakdown arising in the course of service and operation by
Licensee within three (3) working hours after the receipt of such
requirement on working days and at the soonest possible basis on
non-working days. In the event of any major breakdown (with both parties'
negotiation) that requires spot services, licensor's engineers shall
arrive at the spot within three (3) working days (eight working hours to
count as one working day) Repair cost is for the account of Licensor if
the breakdown is directly or indirectly caused by Licensor (including but
not limited to problems of licensed Program, problems of upgrade version
or failure of licensor to fully perform its obligations under Article 6
herein) and for the account of Licensee if directly or indirectly caused
by Licensee (problems of game server hardware and OS, IDC problems,
substantial mistakes of operation).
6.8 (Urgent Action by Licensee) In the event of any failure by Licensor to
fully perform its obligations under this Article 6 or to fully settle any
problem occurring in the operation and service of Licensed Program,
Licensee shall be entitled to take urgent action to maintain its operation
and service of Licensed Program. The reasonable cost and expense related
to such urgent action shall be borne by Licensee as service provider, but
if Licensor decide to adopt the system from Licensee or the third party,
the reasonable costs and expenses related to adopting the system shall be
borne by licensor as game developer. Also these urgent actions and/or the
estimation of such costs and expenses shall be notified to Licensor prior
to the actual urgent action.
6.9 (Expenses) In the event Licensor's personnel must travel to perform
maintenance or on-site technical assistance, licensee shall reimburse
Licensor for any reasonable out-of-pocket expenses incurred, including
travel to and from Licensee's sites. Meals and shipping, as may be
necessary in connection with duties performed under Sections 6.1, 6.4 and
6.5 by Licensor provided that Licensee has pre-approved such expenses and
the licensor shall provide relevant evidence of such expenses.
Section 7 Training
7.1 (Training) On Licensee's request, licensor will provide training to
Licensee's personnel for the licensed Program. Training will be in the
areas of engineering, use and maintenance of the Licensed Program,
operations, sales and marketing. Training will be conducted at times
mutually agreeable to licensor and Licensee.
7.2 (Expenses) Licensee will reimburse Licensor for any reasonable
out-of-pocket expenses incurred, including travel to and from licensee's
sites, lodging meals and shipping in the event that Licensor provides the
Training at Licensee's premises.
Section 8 Responsibilities of Licensee
8.1 Licensee is responsible for the following actions:
(a) Procuring and operating server computers and operating systems
to run the Game Server Software in accordance with the
specifications;
(b) Establishing adequate operational back-up provisions to protect
against data loss and/or a defect or malfunction that render the
Server non-operational.
(c) Exercising its best efforts in distributing, advertising,
promoting, marketing the Client Software and the Game Service; and
(d) Selling the Client Software and Points Cards either to
wholesalers or to retailers Licensee reasonably regard as legitimate
for resale and distribution to the Subscribers;
8.2 In order to fulfill the responsibilities specified above, Licensee
shall provide Licensor with master business plan which includes, without
limitation, information as to the marketing plan and sales channel
deployment plan.
Section 9 Ownership of Intellectual Property
9.1 (Ownership) Except otherwise provided in Section 9.2 below, licensee
acknowledges that rights to Intellectual Property in relation to the
Licensed Program, all Improvements thereof and Licensed Materials shall be
and remain the exclusive property of Licensor whether or not specifically
recognized or registered under applicable law, provided that any
Intellectual Property in any Improvements and derivative works of the
Licensed Program and the Licensed Materials that Licensee independently
develops shall be the authorization of reprocessed outputs which occur
from above and shall be of both parties' joint ownership. Except otherwise
provided in Section 9.2 below, Licensee will not, during or after the term
of this Agreement, claim any right, title, interest in any of the
Licensor's rights to Intellectual Property.
9.2 (Licensee's right) Licensor hereby acknowledges that all and any
copyrights in relation to any simply Chinese version of the Licensed
Program as well as all Improvements thereof shall belong to and shall
remain vested in Licensee during the term hereof. Licensee will be
responsible for the registration with the relevant PRC authorities of the
copyrights described in the immediately preceding sentence. Upon the
termination of this Agreement, licensee shall no longer hold the said
copyrights, which shall be reverted to Licensor after both parties' going
through all necessary copyrights transfer procedures required under the
relevant PRC laws.
9.3 (Licensee's Obligation) Without prejudice to Section 9.2 above,
Licensee shall not, and it shall not cause or assist any third party to
register or attempt to register in its own name or otherwise, any of the
Licensor's Marks and Game Title owned by or associated with Licensor or
any similar forms of Marks and Game Title.
9.4 (Ownership of User's Database) Licensor and Licensee own the rights to
user's database and billing database.
9.5 (Reverse Engineering) Subject to section 2.5 herein, Licensee shall
not decompile, reverse engineer or otherwise attempt to derive or modify
the Licensed Program including the Source Code thereof. Licensee shall not
merge the Licensed Program with another software program.
9.6 (Grant-back) Licensee grants to Licensor a nonexclusive, royalty-free
perpetual license for the term of this Agreement to all Improvements and
derivative works of the Licensed Program and the Licensed Materials that
Licensee independently develops.
9.7 (Copyright and Trademark Notices) Licensee shall assure that all
Licensed Program and Licensed Materials sold and distributed by Licensee
will include copyright and trademark notices. Such notices shall (i) be
affixed in a prominent location on the media, in the Licensed Materials on
the media packaging, and, if applicable, in a readable file in the code,
and (ii) appear on at least one display screen for at least two seconds
during execution of the Licensed Program.
Section 10 Representations and Warranties
10.1 (Warranty of licensor) Licensor hereby represents and warrants:
(a) that it has the sufficient right, title, power and interest in
the licensed Program and licensed Materials to enter this Agreement
and has full abilities to bear the obligations hereunder
(b) that - its execution, delivery or performance of this Agreement
is not in infringement of any legitimate rights or interests of any
third party;
(c) that it is not aware of any infringement of Intellectual
Property Rights relating to Licensed
Programs or Licensed Materials by any third party in the Territory
that may adversely affect the commercial application of such
licensed Programs or licensed Materials by licensee;
(d) that it is not aware of any claims or proceedings against it,
either present or prospective with respect to the infringement of
any third party's software license and intellectual property rights;
(e) that it has capabilities to reasonably develop and support
licensed Programs in according to the developing plans attached
hereto as Exhibit (F);
(i) that Licensed Program provided by it shall be in accordance with
the technical standards agreed by the parties and readable to be
developed continuously for the purpose of normal use of the final
customers in the valid term of their purchases;
(g) that Licensed Program, to the extent commercially reasonable,
withstands normal, common, ordinary or constantly occurred
abnormality, disconnection or flaws in its operating environment for
normal use or application.
(h) that licensee will enjoy the sole service and operation right of
licensed Program upon this Agreement taking effect;
10.2 (Warranty of licensee) Licensee hereby represents and warrants:
(a) that it has the full power and authorization to execute this
Agreement and has full abilities to bear the obligations hereunder;
(b) that to the best knowledge of licensee, either in performing
this Agreement nor in accomplishing the transactions hereunder shall
licensee violate present effective laws and regulations of PRC or
violate other contracts, arrangements or conventions with respect to
the other party that may cause adverse legal consequences to
licensee;
(c) that licensee shall comply with all laws, regulations, rules and
provisions of PRC with respect to the use, maintenance, market
development and promotion of Licensed Program;
(d) that to the best knowledge of licensee, there should be no
problem under the relevant regulations and laws of the People's
Republic of China in making payments of all Exclusive license Fees,
Royalties and other payments to licensor in United States dollars;
and
(e) licensee will make best efforts to continuously develop markets
and organize advertising and promoting activities for the sales of
licensed Program in Territory in various manners, provided that
Licensee is entitled to organize promoting activities through
posters, advertisements and any other means of promotion (it may not
use such promoting materials for purposes other than promotion) and
licensor provides necessary information of markets, public
responses, advertisements and promotions concerning licensed
Program.
Section 11 Confidential Information
11.1 Confidential Information belonging to licensor includes, without
limitation, the licensed Program, the Source Code thereof, and the
licensed Materials. For avoidance of doubt, the Source Code obtained by
licensee from any third party, is the confidential information of
Licensor.
11.2 Both parties undertake not to divulge customer codes and server codes
of licensed Program as well as copies thereof to Territory and shall be
liable for indemnifying to the other party for the losses due to such
divulge.
11.3 Confidential Information and physical embodiments thereof received by
either party (the "Receiving Party") from the other party (the "Disclosing
Party") during the term of this Agreement are confidential to and are and
will remain the sole and exclusive all times, both during the term of this
Agreement and after its termination, the Receiving Party shall hold all
Confidential Information of the Disclosing Party in confidence, and will
not use, copy or disclose such Confidential information or any physical
embodiments thereof (except as permitted by this Agreement), or cause any
of the Confidential Information to lose its character as confidential
Information.
11.4 Within thirty (30) days after the termination or this Agreement, the
Receiving Party shall deliver to the Disclosing Party all Confidential
Information belonging to the Disclosing Party, and all physical
embodiments thereof, then in the custody, control or possession of the
Receiving Party.
Section 12 Indemnity
12.1 Either party hereto shall immediately notify Licensor if it becomes
aware of (i) any threatened or actual liability claim by a third party
relating to the Licensed Program and (ii) any unauthorized use in the
Territory of the Licensed Program and Licensed Materials or breach of
Licensor's rights to Intellectual Property therein.
12.2 Licensor shall take all necessary actions at its own costs to defend
Licensee and indemnify Licensee from and against any damages, liabilities,
costs and expenses arising out of any claim, suit, investigation or any
other proceedings in which the Licensed Program is alleged to infringes a
valid copyright, trade secret or other intellectual property right of a
third party, PROVIDED THAT Licensee gives Licensor prompt, written notice
of any such claim and all reasonable cooperation, information and
assistance to defend such claim. Licensor shall have sole control and
authority with respect to the defense, settlement, or compromise thereof,
PROVIDED THAT a written notice of such defense settlement or compromise
shall be given prior to the they are actual made and such defense,
settlement or compromise shall in no event cause any substantial damages
to Licensee. Licensee may appear in such action with counsel of its
choice, at its own expense.
12.3 Licensor shall have no liability or obligation to Licensee under
Section 12.2 if such claims, damages, and liabilities solely and
exclusively result from (i) Licensees breach of any term of this
Agreement, (ii) Licensee's unauthorized use of the Licensed Program, or
(iii) modifications, alterations, or enhancements of the Licensed Program,
which are not created by Licensor.
12.4 Subject to Section 10.1 (vii), Licensor shall be not responsible for
the system operating errors solely and exclusively due to the causes as
follows:
(a) servers of the Licensee can not run normally, including the
abnormal running of hardware, operation systems and application
software other than Licensed Program;
(b) abnormal' running of Licensed Program due to the delay or
disconnection of net, including the abnormal service due to the
abnormal running of the net at the servers, office LAN and IDC;
(c) system suspension caused by necessary system update and
maintenance; and (d) other reasons of force majeure.
12.5 Subject to Section 10.1 (vii), Licensor is not responsible for the
liabilities of the abnormal running of the Licensed Program due to the
operating faults of the staff of licensee (for which evidences are needed
from Licensor.
Section 13 Terms and Termination
13.1 This Agreement enters into effect on the date upon the later of (i)
execution of this Agreement by the Licensor and the Licensee, or (ii)
approval of this Agreement by relevant governmental authorities of the
People's Republic of China. The effective term of this Agreement shall be
two (2) years commencing from the date on which this Agreement takes
effect.
13.2 The parties may terminate this Agreement by mutual consent upon such
terms as they may agree in writing.
13.3 If one party breaches any material provision of this Agreement, the
non-breaching party may terminate this Agreement by giving fifteen (15)
days written notice of termination to the breaching party. If the breach
is capable of being cured and the other party acts diligently and
continuously to cure such breach, within the fifteen (15) days, the
termination shall not become effective.
13.4 In addition to the above Section 13.3, Licensor may immediately
terminate this Agreement by giving fifteen (15) days written notice to
licensee:
.
(a) if Royalties and Exclusive License Fee payments due to Licensor
under Section 3, or any part thereof, become sixty (60) days or more
overdue;
(b) if the confidentiality provisions contained in Section 11 are
breached by Licensee with manifest evidence; if the Game Service in
the Territory is stopped, suspended, discontinued or disrupted for
more than forty five (45) days in total during the term of this
Agreement due to causes solely exclusively attributable to Licensee.
13.5 In addition to the above Section 13.3, Licensee may immediately
terminate this Agreement by giving fifteen (15) days written notice to
Licensor:
(a) if the confidentiality provisions contained in Section 11 are
breached by Licensor with manifest evidence;
(b) if any obligation of Licensor under Section 6 herein is not
fully performed by Licensor;
(c) if the Game Service in the Territory is stopped, suspended,
discontinued or disputed for more than ninety (90) days in total
during the term of this Agreement due to causes solely and
exclusively attributable to Licensor.
13.6 (Bankruptcy) In the event that either party or its creditor is under
wind-up, bankruptcy, ;liquidation, restructuring, dissolution or at a
compulsive status, or such party is unable to pay for the due debts or any
apparent or secret debts due (excluding of those with good credit), or if
the creditor of such party has received the management power upon n or the
banks and other financial institutions of such party have terminated their
accounting preferential treatments for it, then the other party may adopt
one or more of the following measures:
(a) suspend its corresponding performance of obligations until the
other party has fully performed its obligations;
(b) terminate this Agreement;
(c) claim for compensation for relevant loss, damage or expenses
from the other party;
(d) pursue consultation with the breaching party for settlement of
any relevant disputes or directly seeking arbitration of the same dispute;
and/or
(e) take such other measures or remedies as permissible under
applicable laws.
13.7 (Force Majeure) The obligations of the parties under this Agreement
shall be suspended to the extent a party is hindered or prevented from
complying therewith because if labor disturbances, including strikes or
lockouts, wars, act of God, fires, storms, flood, epidemic, accidents,
governmental regulations, failure of telecommunications vendors or
suppliers, banking system breakdown, or any other cause whatsoever beyond
a party's reasonable control. For so long as such circumstances prevail.
the party whose performance is delayed or hindered shall seek to mitigate
the effect of force majeure and continue to use all commercially
reasonable efforts to recommence performance without delay. If the effect
of force majeure lasts for over ten (10) weeks the parties to this
Agreement shall negotiate to resolve relevant issues and possibly
terminate this Agreement.
13.8 (Extension) Unless the Agreement is terminated during the period
pursuant to Clause 13.1, the Agreement shall be extended for one (1) year
with the same terms herein by the mutual agreement between Licensor and
Licensee sixty (60) days prior to the expiration of this Agreement.
(Licensor shall grant priority to the Licensee upon negotiation of the
Agreement when the Licensee's terms and conditions are identical to those
of other candidates.)
Section 14 Effects of Termination
14.1 Upon termination or expiration of this Agreement, Licensee shall
have no further right to use, copy. duplicate. modify, enhance, create
derivative works of, or sell and distribute the Licensed Program and
licensed Materials.
14.2 Upon termination or expiration of this Agreement for any reason, all
rights, licenses granted to Licensee hereunder shall terminate and revert
immediately to Licensor: and Licensee shall immediately cease using the
licensed Marks and the Game Title.".
14.3 In the event of termination or expiration of this "Agreement",
Licensee shall, according to the written instruction of Licensor
immediately (i) return to Licensor all Gold Master CD duplication disks
together with all copies of the Licensed Materials, and all other
materials associated; and (ii) destroy all copies of improvements and
certify in writing to the Licensor to that effect.
14.4 In the event of termination or expiration of this Agreement, Licensee
may stop paying for Exclusive License Fees and Royalty Fees hereunder,
provided that it shall payoff all unpaid amounts payable pursuant to the
provisions herein.
14.5 Licensor shall have no liability to Licensee for damages of any kind.
including indirect, incidental or consequential damages, on account of the
termination or expiration of this Agreement in accordance with its terms.
Without limiting the generality of the foregoing, licensor shall not 00-
liable to Licensee for reimbursement or damages for the loss of goodwill,
prospective profits or anticipated sales, or on account of any sales, or
on account of any expenditures, investment, leases or commitments made by
licensee or for any other reason whatsoever based upon, or growing out of,
such termination or expiration.
14.6 Unless that the relevant parties have issued written declaration of
waiver, the termination or expiration of the Agreement may not affect the
antecedent rights and obligations of both parties already generated.
14.7 Subject to provisions otherwise provides herein, neither party hereto
shall have any liability to the other party for damages of any kind,
including indirect, incidental or consequential damages, on account of the
termination or expiration of this Agreement in accordance with its terms.
Without limiting the generality of the foregoing, neither party shall not
be liable to the other party for reimbursement or damages for the loss of
goodwill, prospective profits or anticipated sales, or on account of any
sales, or on account of any expenditures, investment, leases or
commitments made thereby or for any other reason whatsoever based upon, or
growing out of, such termination or expiration.
Section 15 Government Approval
15.1 It shall be the responsibility of Licensee to obtain promptly from
the proper authorities in the People's. Republic of China any required
governmental approval of this Agreement. This Agreement shall not take
effect until such approval is obtained on terms and conditions acceptable
to Licensor. Licensee shall inform Licensor immediately of the date of
such approval.
15.2 Licensor may terminate this Agreement by written notice to Licensee
if the Government of the People's Republic of China does not approve it as
contemplated in Section 15.1 within six (6) months from the date of its
execution.
Section 16 Dispute Resolution
16.1 (Arbitration) All disputes, controversies or differences which may
arise between the parties, out of or in relation to or in connection with
this Agreement, or for the breach thereof, shall be finally settled by
arbitration in Singapore in accordance with the Commercial Arbitration
Rules of the Singaporean Commercial Arbitration Board and under the laws
of Singapore. The award rendered by the arbitrator(s) shall be final and
binding upon both parties concerned.
16.2 (Governing laws) The construction, validity, performance and effect
of this Agreement shall be governed by the laws of Singapore.
Section 17 Miscellaneous
17.1 (Notice) Any notices relating to this Agreement shall be in writing
and other personally delivered or sent by certified mail, postage prepaid,
return receipt requested, or by facsimile transmission or overnight
courier service, addressed to the party at the address set force below, or
at has advised to the other party in writing and shall be deemed given an
received when actually receive:
Shanghai T2 Entertainment Co., Ltd.
12A, Civil Defense Building, 593 Fu Xin Middle Road, Shanghai, China
Attn: Wang Ji
JC Entertainment Corp. .
41h Floor Rosedale Building, #724 Suseo-Dong, Kangnam-Ku, Seoul
135-885, Korea
Attn: IS Baik
17.2 No Change of address shall be binding upon the other party hereto
until written notice thereof is received by such party at the address
shown herein. All notices shall be in English and shall be effective upon
receipt.
17.3 (Entire Agreement) This Agreement constitutes the entire agreement
and understanding between the parties with respect to the subject matter
contained herein. All prior negotiation, representation, representations,
agreements and understandings, oral or otherwise, are merged into this
Agreement. The parties may, from time to time during the continuance of
this Agreement, modify, vary or alter any of the provisions of this
Agreement, but only by an instrument duly executed by authorized
representatives of both parties hereto.
17.4 (Modification) If either party desires to modify this Agreement, the
parties shall, upon reasonable notice of the proposed modification by the
party desiring the change, confer in good faith to determine the
desirability of such modification. No modification will be effective until
a written amendment is duly signed by authorized representatives of both
parties hereto.
17.5 (Severability) In the event one or more of the provisions of this
Agreement are found to be in valid, illegal or unenforceable by a court
with jurisdiction or by panel of arbitrators, the remaining provisions
shall continue in full force and effect.
17.6 (No Waiver) The waiver by either party of a breach or a default party
of a breach or a default of any provision of this Agreement by the other
party shall not be construed as a waiver of any succeeding breach of the
same or any other provision, nor shall any delay or omission on the part
of either party to exercise or avail itself of any right, power or
privilege that it has, or may have hereunder operate as a waiver of any
right power or privilege by such party.
17. 7 (Relationship between the Parties) The relationship between the
parties is that of independent contractors. Nothing contained in this
Agreement shall be deemed to imply or constitute either party as the agent
or representative of the other party, or both parties as joint ventures or
partners for any purpose. Each party has the right and authority to make
any statement or undertaking (whether apparent or implied) or propose
obligations on behalf of the other party, or bind the other party to
perform solely in accordance with the manners provided in the Agreement.
17.8 (Further Cooperation) If Licensor searches cooperative operation
partner for its follow-up versions of License Program in the future.
Licensee has priority if Licensee's conditions are at least the same or
similar with or comparable to those of third parties who want to acquire
the license of the follow-up version.
17.9 (Headings) Captions and headings contained in this Agreement have
been included for ease of reference and convenience and shall not be
considered in.
17.10 (Assignment) without written consents of Licensee, the rights or
obligations of Licensor hereunder may not be transferred to any third
party.
17.11 (Counterpart) This Agreement is made of four (4) copies (two in
Chinese and two in English) and each party holds two of them. The exhibits
attached hereto are the indivisible component of the Agreement with equal
Legal effects to the Agreement. If any dispute occurs, legal construction
will set on the basis of the English contract.
This contract clause with Written English contract in standard, it has the
effect.
[Execution Page]
JC Entertainment Corporation Shanghai T2 Entertainment Co,
Ltd.
Name: /s/ Yang Shin Kim Name: /s/ Wang Ji
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Signature: /s/ Yang Shin Kim Signature: /s/ Wang Ji
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Date: 10/10/04 Date: 10/10/04
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