EXHIBIT 10.20
FIRST AMENDMENT
TO
AGREEMENT
This amendment (this "Amendment") is (a) made and entered into June 1, 2005
("Amendment Effective Date"), by and among Sega Corporation, a Japanese
Corporation , having its principal place of business at 1-2-12, Haneda, Ohta-ku,
Tokyo, 144-8531, Japan ("Sega"), JC Enterntainment Corporation, a Republic of
Korea Corporation, having its principal place of business at 4th floor, Rosedale
building, Suseo-dong 724, Kangnam-ku, Seoul, Korea ("JCE") and Shanghai T2
Entertainment Co. Ltd. , a corporation duly organized and existing under the
laws of The Peoples Republic of China, having its principal place of business at
5th Floor, 88 Qinjiang Road, Shanghai, China 200233 ("T2"; and Sega, JCE and T2
collectively, the "Parties" or each separately, a "Party"), and (b) an amendment
to the Exclusive Software License Agreement (Game Title: Shenmue Online) dated
August 3, 2004 (the "Agreement").
Recitals
WHEREAS, T2 was formally known as Shanghai T2 Internet Technologies Co. Ltd.
WHEREAS, the Parties wish to amend the Agreement hereby.
NOW, THEREFORE, in consideration of the foregoing and of the mutual promises
hereinafter set forth, the parties agree as follows:
1. DEFINITIONS.
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Except as expressly stated herein or modified in accordance with the provisions
of this Amendment, all capitalized words and phrases contained herein shall have
the definitions and meanings set forth in the Agreement.
2. AMENDMENT TO THE AGREEMENT.
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The Agreement is hereby amended by removing JCE from the Agreement as a Party.
All rights, obligations and duties of JCE contained in or concerning the
Agreement shall belong to Sega (for the purpose of clarity, Sega can
sub-contract any Sega obligation or duty which was a JCE obligation or duty,
prior to the Amendment Effective Date) with retroactive effect as of the
Amendment Effective Date. For the purpose of clarity, Parties hereby expressly
acknowledges and agrees that JCE shall have no claims, rights, causes of action,
obligations, duties or liabilities in or concerning the Agreement as of the
Amendment Effective Date. The foregoing notwithstanding, JCE's obligations
contained in Section 10 and Section 11.8 (as applied to Section 10) shall
survive and apply to JCE notwithstanding JCE's removal from the Agreement.
3. TERM OF THIS AMENDMENT.
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This Amendment shall be effective from the Amendment Effective Date and shall
end on expiration or termination of the Agreement.
4. REMAINS OF THE ORIGINAL AGREEMENT.
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Except as expressly modified in accordance with the provisions of this
Amendment, all other terms and conditions set forth in the Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be signed
by their duly authorized officers or representatives.
Sega: JCE:
Sega Corporation JC Entertainment Corporation
By: /s/ Hisao Oguchi By: /s/ Yang Shin, Kim
Name: Hisao Oguchi Name: Yang Shin, Kim
Title: President & Chief Operating Title: Chief Executive Officer
Officer
Date: 08/22/05 Date: 08/09/05
T2:
Shanghai T2 Entertainment Co. Ltd.
By: /s/ Wang Ji
Name: Wang Ji
Title: President
Date: 08/12/05
AMENDMENT
TO
AGREEMENT
This amendment ("Amendment") is (a) made and entered into August 5, 2005
("Amendment Effective Date"), by and between Sega Corporation, a Japanese
Corporation , having its principal place of business at 1-2-12, Haneda, Ohta-ku,
Tokyo, 144-8531, Japan ("Sega") and Shanghai Shanghai T2 Entertainment Co. Ltd.,
a corporation duly organized and existing under the laws of The Peoples Republic
of China, having its principal place of business at 5th Floor, 88 Qinjiang Road,
Shanghai, China 200233("Company"; and Sega and Company collectively, the
"Parties" or each separately, a "Party"), and (b) an amendment to the following
agreement(s) (collectively, the "Agreement"): the Exclusive Software License
Agreement (Game Title: Shenmue Online) dated August 3, 2004, as amended by the
Parties and JC Entertainment Corporation, by the Amendment to Agreement dated
June 1, 2005, pursuant to which T2 has already paid to SEGA One Million Five
Hundred Thousand Dollars (USD$1,500,000) (the "T2 Original Payment").
Recitals
WHEREAS, the Parties wish to amend the Agreement hereby.
NOW, THEREFORE, in consideration of the foregoing and of the mutual promises
hereinafter set forth, the parties agree as follows:
1. DEFINITIONS.
- -------------------------------------------------------------------------------
Except as expressly stated herein or modified in accordance with the
provisions of this Amendment, all capitalized words and phrases contained
herein shall have the definitions and meanings set forth in the Agreement.
2. AMENDMENT TO THE AGREEMENT.
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The Agreement is hereby amended as follows:
(a) Section 5.4 is hereby deleted in its entirety and replaced by the
following:
"5.4 Delivery. SEGA shall deliver the Open Beta Version to T2 as set
forth in this Agreement, to T2's place of business as set forth in
Section 15.1. SEGA shall make such delivery by not later than August
31, 2006. The Open Beta Version will be delivered in CD-ROM form, by
FTP, or by such other electronic means as the SEGA and T2 may agree
from time to time.";
(b) Section 5.5 is hereby deleted in its entirety and replaced by the
following:
"5.5 Development Progress. SEGA shall set targets to inform T2 of the
progress of development of the Licensed Software according to the
following schedule:
1. The target for SEGA to update T2 on the progress of development
of the prototype of the Licensed Software shall be during the
month of September, 2005.
2. The target for SEGA to update T2 on the progress of development
of the Closed Beta Version of the Licensed Software shall be
during the month of June, 2006.
3. The target for SEGA to update T2 on the progress of development
of the Open Beta Version of the Licensed Software shall be during
the month of August, 2006.";
(c) Section 7.1 is hereby deleted in its entirety and replaced by the
following:
"7.1 License Fee. T2 shall pay SEGA a non-refundable and non-recoupable
license fee equal to Three Million Dollars (USD$3,000,000) (the
"License Fee"). The License Fee shall be deemed fully-accrued on the
Effective Date and shall be paid in four (4) installments as
follows:
7.1.1 On the Amendment Effective Date, T2 shall pay SEGA the first
of the four (4) installment payments, which payment shall be
equal to Three Hundred Thousand Dollars (USD$300,000);
7.1.2 On September 30, 2005, T2 shall pay SEGA the second of the
four (4) installment payments, which payment shall be equal to
Three Hundred Thousand Dollars (USD$300,000);
7.1.3 On June 30, 2006, T2 shall pay SEGA the third of the four (4)
installment payments, which payment shall be equal to One
Million Two Hundred Thousand Dollars (USD$1,200,000);
7.1.4 On August 31, 2006, T2 shall pay SEGA the fourth of the four
(4) installment payments, which payment shall be equal to One
Million Two Hundred Thousand Dollars (USD$1,200,000).";
(d) Section 7.2 is hereby amended by deleting the words "Commercial Release"
and replacing them with the words "Commercial Launch Date of the
Commercial Version;
(e) A new Section 7.10 is hereby added as follows:
7.10 Penalties. The following penalties shall apply:
"7.10.1 If SEGA fails to deliver the Open Beta Version of the Licensed
Software to T2 (which delivery shall be made in CD-ROM form,
by FTP, or by such other electronic means as SEGA and T2 may
agree) by September 1, 2006, then the Royalties shall be
reduced from thirty-three percent (33%) to twenty-eight
percent (28%) for the same number of days that pass between
September 1, 2006 and the actual date that SEGA delivers the
Open Beta Version of the Licensed Software, and then shall
return to thirty-three percent (33%) thereafter.
"7.10.2 If SEGA fails to deliver the Open Beta Version of the Licensed
Software to T2 for more than five (5) months after August 31,
2005, such that SEGA has not yet delivered the Open Beta
Version of the Licensed Software to T2 by February 1, 2006,
then T2 may elect to terminate this Agreement, in which case
SEGA shall return any portion of the License Fee already paid
by T2 to SEGA plus interest based on the basic monthly deposit
interest rate of the People's Bank of China, which shall be
calculated as having started accruing on September 1, 2006 and
continuing to accrue until either (a) the date that SEGA
delivers the Open Beta Version of the Licensed Software to T2,
or (b) T2 provides written notice of termination of this
Agreement pursuant to this subsection to Sega, whichever
occurs earlier.
"7.10.3 If, after Sega delivers the Open Beta Version of the Licensed
Software to T2 (the "Actual Open Beta Delivery Date"), T2 then
makes the Commercial Launch Date of the Commercial Version
more than three (3) months after the Actual Open Beta Delivery
Date, then the Royalties shall be increased from thirty-three
percent (33%) to thirty-eight percent (38%) for the same
number of days that pass between the Actual Open Beta Delivery
Date and the Commercial Launch Date of the Commercial Version,
and then shall return to thirty-three percent (33%)
thereafter.";
and
(f) A new Section 7.11 is hereby added as follows:
"7.11 Repayment of T2 Original Payment. SEGA shall pay back to T2
the total amount of the T2 Original Payment in the amount of One
Million Five Hundred Thousand Dollars (USD$1,500,000) in full on the
Amendment Effective Date".
3. TERM OF THIS AMENDMENT.
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This Amendment shall be effective from the Amendment Effective Date and shall
end on expiration or termination of the Agreement.
4. REMAINS OF THE ORIGINAL AGREEMENT.
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Except as expressly modified in accordance with the provisions of this
Amendment, all other terms and conditions set forth in the Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be signed
by their duly authorized officers or representatives.
Sega: Company:
Sega Corporation Shanghai T2 Entertainment Co. Ltd.
By: /s/ Hisao Oguchi By: /s/ Wang Ji
Name: Hisao Oguchi Name: Wang Ji
Title: President & Chief Operating Title: President
Officer
Date: 08/22/05 Date: 08/11/05