EXHIBIT 10.25
EXCLUSIVE RAGNAROK
LICENSE AND DISTRIBUTION AGREEMENT
THIS LICENSE AND DISTRIBUTION AGREEMENT (this "Agreement") is made and entered
into on this 16th day of July, 2004, by and between GRAVITY CORPORATION,
(Licensor) a corporation duly organised and existing under the laws of the
Republic of Korea ("Korea") and having its offices at 4th Fl. Shingu Bldg.,
620-2, Shinsa-Dong, Kangnam-Ku, Seoul, 135-894, Korea ("Licensor"), and
Ongamenet PTY LTD., a corporation duly organized and existing under the laws of
Australia, and having its offices at 36 Culloden Marsfield, NSW 2122 Australia
(Licensee).
RECITALS:
WHEREAS, Licensor has developed and possesses all rights in computer programs of
online game "Ragnarok" ("Game") as well as the know-how and technical
information on the installation, design, service and use of the Game;
WHEREAS, Licensee desires to enter into an exclusive license agreement with
Licensor pursuant to which Licensee will distribute and market the Game in the
territories specified below; and
WHEREAS, Licensor desires to grant such license to Licensee under the mutual
terms and conditions herein below specified.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein and other good and valuable consideration, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
The terms defined in this Article shall have the meaning ascribed to them herein
whenever they are used in this Agreement, unless otherwise clearly indicated by
the context.
1.1 "Agreement" shall mean this License and Distribution Agreement, and all
annexes, amendments and supplements hereto.
1.2 "Confidential Information" shall mean all materials, know-how, software
or other information including, but not limited to, proprietary
information and materials regarding a Party's technology, products,
business information or objectives, including the software for the Game
and Technical Information under this Agreement, which is designated as
confidential in writing by the providing Party or which is the type
that is customarily considered to be confidential information by
persons engaged in similar activities.
1.3 "End Users" shall mean the users of the Game through a network game
service system established and operated by Licensee with individually
assigned ID Numbers for each End User.
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1.4 "Game" shall have the meaning stipulated in the recitals above,
including any modified or advanced version of the Game distributed by
Licensor 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 "ID Number" shall mean an identification number assigned to each End
User, with which such End User can access and use the network game
service system established and operated by Licensee.
1.6 "English Version" shall mean the Game provided in the English language.
1.7 "Intellectual Property" shall mean all patents, designs, utility
models, copyrights, know-how, trade secrets, trademarks, service mark,
trade dress and any other intellectual property rights in or related to
the Game or Technical Information.
1.8 "Local Language" shall mean English and/or local dialects used in the
Territory.
1.9 "Local Version" shall mean the Game provided in the Local Language.
1.10 "Parties" and "Party" shall mean Licensor and Licensee, collectively
and individually, respectively.
1.11 "Servers" shall mean the servers established, installed and operated by
Licensee within the Territory only for the service of Game to End Users
in the Territory.
1.12 "Service-Sales Amount" shall mean the total service-sales amount that
has been paid by End Users for the Game, including the amounts paid by
way of prepaid card, and calculated by the billing system.
1.13 "Technical Information" shall mean the software, know-how, data, test
result, layouts, artwork, processes, scripts, concepts and other
technical information on or in relation to the Game and the
installation, operation, maintenance, service and use thereof.
1.14 "Territory" shall mean Australia and New Zealand.
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 subject, however, to the prior written approval of Licensor
of the identity of the sub-licensee. Licensor's approval shall not be
required for the terms of the sublicense agreement between Licensee and
Sub-licensee.
2.2 The service, use, promotion, distribution and marketing of the Game by
Licensee under this Agreement shall be made in English using English
Version in the Territory. Licensor shall provide Licensee with the game
script and 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.
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2.3 Licensee shall provide services of the Game only by the IBM PC on-line
method (excluding mobile access) using the Servers. However, in
consideration of the current level of development of information
technology in the Territory, which primarily operates on a narrow-band
basis, Licensee shall be allowed to manufacture, distribute and sell
the Game in a compact disk ("CD") format.
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, however, that if
a change in any of such Titles is required due to any special lingual
or social circumstance of the Territory, the Parties shall decide and
use new Title ("New Title") for the Game. All of the rights in or to
the Title and New Title shall be exclusively owned by Licensor and
Licensee shall not use any such Title or New Title in a manner that
falls outside the scope of this Agreement without the prior written
approval of Licensor.
2.5 All of the rights in or to the Game, except as granted under this
Agreement, including but not limited to the rights to the character
business of the Game, shall remain exclusively with Licensor. However,
Licensor will grant to Licensee the right of first negotiation for
sixty (60) days to produce and/or sell and distribute in the Territory
merchandise relating to the Game, including, but not limited to,
character dolls, reproductions of the characters in collaterals, and
such other merchandising accessories, under a separate merchandising
agreement. Such right of first negotiation shall include the right of
Licensee to match any written offer received by Licensor from any third
party. Licensee shall also have the right of first negotiation for
thirty (30) days to acquire the rights to all new game titles of
Licensor from the date when such new game is available in the Territory
or the date that Licensor gives Licensee written notice, whichever date
is later. Also included is the right of Licensee to match any offer
received by Licensor from any party. If Licensee fails to exercise such
right, Licensor may grant the license for a new game title to the
offering party, provided the terms of such license shall not be more
favourable than those offered and rejected by the Licensee, and
provided further that Licensor shall grant such license to the offering
party no later than 30 days from expiration of Licensee's right of
first negotiation. If the offering party renews its offer beyond this
30 day period, then Licensee shall again be immediately notified by
Licensor and the Licensee's right of first negotiation shall again come
into effect.
Licensor shall notify licensee in writing within seven (7) days upon
receipt of an offer from any party relating to merchandise or new games
as described above.
ARTICLE 3
DELIVERY OF GAME
3.1 Subject to the terms and conditions of this Agreement, Licensor shall
provide Licensee with its full assistance and cooperation, including
preparation of the Local Language Version and providing technical
assistance, in order to enable a launch of the beta service and
commercial service of the Game in the Territory.
3.2 Licensor shall deliver the Local Language Version of the Game to the
Licensee at its servers in Australia for testing, not later than Forty
Five (45) days from the date of execution of this Agreement. The closed
beta test of the Game shall commence not later than 15 days from
initial acceptance of the Local Language Version by the Licensee.
Licensee shall launch the open beta test of the Game in the territory
within One Hundred Twenty (120) days from the date of execution of this
agreement, and commercial service of the Game in the Territory within
One hundred Eighty (180)
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days from the date of execution of this agreement, however, that all
defects and bugs detected in the Game during the beta service are
corrected or rectified by Licensor. The Parties agree to cooperate with
each other and exert their best efforts to launch the services of the
Game in accordance with the above schedule in this Section 3.2. The
above target dates for launching the services of the Game may be
changed by mutual agreement between the Parties.
3.3 Once Licensee receives the English Version and technical documents on
the Game (collectively "Delivery Materials") from Licensor, Licensee
shall perform its review and test promptly and inform Licensor of any
defect in or modifications that have to be made to the Delivery
Materials within forty five (45) days after receipt thereof.
Licensee's failure to so inform within the designated period shall be
regarded as acceptance by Licensee of the Delivery Materials, and any
revision or modification of any of the Delivery Materials which may be
made by Licensor thereafter upon the request by Licensee shall be at
Licensee's sole expense. Upon the written request of Licensee and
written Licensor's approval thereon, Licensee shall provide the
translated transcript of the Game into the Local Language and Licensor
shall prepare Local Version by incorporating such translation into the
Game. Licensee shall guarantee the accuracy of such translation in the
Local Version and all of the rights in or related to Local Version
shall be exclusively owned by Licensor. Licensee hereby assigns all of
its right on the translation to Licensor and promises not to claim any
right or reimbursement on the translation or Local Version in any case.
It is understood however that any defects in the game that appear after
said forty five (45) day period shall continue to be rectified by
Licensor.
3.4 The Game shall be serviced in the Territory only in the manners
permitted by Licensor under this Agreement. Licensee shall be strictly
prohibited from any modification, amendment or revision of any part of
the Game including the title of the Game and the name of the characters
in the Game, without the prior written approval of Licensor.
ARTICLE 4
TECHNICAL ASSISTANCE
4.1 During the term of this Agreement, Licensor shall provide Licensee free
of charge with the technical assistance, and technical support and
maintenance needed and requested by Licensee to enable the latter to
provide and maintain high-quality service for the Game, including, but
not limited to software installation and set-up, maintenance support,
patch updates in connection with the Game and the localization of the
Game into the English Version, training Licensee's technical personnel
in respect of the maintenance and operation of the Game provided that,
any and all expenses actually incurred by any engineers dispatched by
Licensor to perform the above technical assistance in this Section 4.1,
including, without limitation, economy or business class airfare ,
lodging, food and other general living expenses incurred during their
stay at Licensee's premises, shall be borne by Licensee. The Parties
shall agree in writing on the budget for the aforesaid expenses prior
to Licensor's incurring the same.
4.2 Within twenty-four (24) hours of Licensee's request for technical
assistance, technical support or maintenance, Licensor shall confirm
such request and give Licensee a written notice setting out the
particulars and the schedule(s) of the technical assistance, technical
support or maintenance to be provided.
4.3 Licensor shall, upon the request of Licensee, dispatch its engineers to
Licensee for
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the installation of Servers and training of Licensee's personnel. The
total period for such technical assistance excluding the travelling
time shall not exceed ten (10) man days [based on eight (8) hours of
work per engineer per day], and any further assistance through dispatch
of Licensor's engineers shall be determined by the mutual agreement of
the Parties. After the initial dispatch by Licensor of its engineers
for the said 10 man-day period, the salaries of Licensor's engineers
for the dispatched period shall be reimbursed by Licensee to Licensor.
All the expenses incurred by the engineers of Licensor for economy
class airfare, lodging and food and other general living expenses
during their stay for the period of technical assistance shall be borne
by Licensee provided that, the same are within the budget as agreed
upon by the Parties under Section 4.1.
4.4 During the term of this Agreement, Licensor shall receive Licensee's
personnel in its office in Korea for training with respect to the
installation and service of the Game and the installation, maintenance
and operation of the Servers. The number of the trainees from Licensee
shall not exceed three (3) persons at one time and the total period of
training shall not exceed seven (7) man-days [based on eight (8) hours
of training per trainee per day], unless otherwise agreed in writing by
Licensor. All of the expenses for travel, lodging, food and other
general living expenses incurred by such dispatched personnel of
Licensee shall be borne by Licensee.
4.5 Any further assistance may be rendered by Licensor upon mutual
agreement of the Parties.
4.6.1 Each Party shall be fully responsible and fully indemnify the other
Party for the behaviour of and activities performed by its employees
and personnel during their stay at the other Party's facilities.
4.6.2 Both parties agree to cooperate fully and in good faith in all
technical matters relating to the operation of the Game, in order to
maintain good service to the Users.
4.7 Licensee agrees to pay the following expenses to Licensor on dispatch
of technical supporting personnel by Licensor
- Daily Allowance to be paid to the personnel in Local Office, and
Daily Allowance being be no less than 60 Australian Dollars per
day
- Accommodation for 2 Staffs
- Commuting Cost for the personnel from the airport to the office
- Economic Round-Trip fair for the staffs in case of Must-Travelling
to Korea
- Basic Salaries of the Staffs upon Licensors Invoice to be issued
- Mobile Phones and Telephone Call Expenses
- The terms of stay for the staffs shall prevail until RAGNAROK's
commercial service is complete
ARTICLE 5
PAYMENT
5.1 In consideration of the License and technical assistance granted under
this Agreement, Licensee shall pay the following amounts to Licensor:
(A) INITIAL PAYMENT
Licensee shall pay to Licensor a sum of Two Hundred Five Thousand
United States
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Dollars (USD 250,000.00) ("Initial Payment") upon the schedule below:
- within seven (7) days of executing the agreement: One Hundred
Thousand US Dollars (USD100,000.00)
- within seven (7) days of commencing the open beta test: Fifty
Thousand US Dollars (USD50,000.00)
- within Thirty (30) days of commencing the commercial service: One
Hundred Thousand US Dollars (USD100,000.00)
The Initial Payment, whether in part or in whole, shall not be refunded
to (or recouped by) Licensee, except in circumstances where the
commercial service pursuant to Section 3.2 fails to commence. Under
such circumstances, Licensee shall have the right to demand a refund of
the last payment amount of the Initial Payment in whole or in part,
whether or not such failure is attributable to any acts or omissions of
the Licensor.
(b) ROYALTY AND REPORT
In addition to the Initial 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 5.3 below, the
Royalty shall be paid on a monthly basis within twenty (20) days of the
end of the applicable month. Payment shall be deemed made upon
presentation by Licensee whether in fax or any other means the
remittance confirmation or notice to Licensor. In any case, unless
Licensor actually receives the remitted amount, the payment shall not
be deemed to be paid. Licensee shall also provide Licensor with a
report ("Royalty Report") on a monthly basis within twenty (20) days
after the end of the applicable month. Each Royalty Report shall
contain detailed information on the calculation of Service-Sales Amount
for the applicable month. For avoidance of any doubts, the Royalty
shall be calculated in accordance with the following formula: A = (B-C)
x 30%, where A is the Royalty, B is the Sales-Service Amount, and C is
a value added tax amount which shall equal eight percent (8%) or less
of the Service-Sales Amount.
5.2 Any and all payments under this Agreement by Licensee to Licensor shall
be made in United States Dollar (USD) except for Royalty payment and by
wire transfer to the account designated by Licensor or in such other
method as may be mutually agreed between the Parties. Royalty payment
shall be made by Australian Dollars by wire transfer to the account
designated by Licensor.
5.3 In the event any payment is delayed by Licensee under this Agreement, a
default interest at a rate of [18]% per annum ("Default Interest")
shall apply. For the avoidance of doubt, Licensor's entitlement to such
Default Interest pursuant to this Section 5.4 shall not affect any of
the other rights of Licensor under this Agreement.
5.4 Licensee shall pay the Royalties in strict compliance with the due date
set forth in Section 5.1(b) above.
5.5 Any and all taxes including the sales tax and income tax on any payment
to Licensor under this Agreement shall be borne by Licensee except for
value added tax with the maximum rate of 8%, provided, however, if any
government in the Territory requires
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Licensee to withhold the income or other tax on the payment to
Licensor, Licensee is allowed to withhold such tax up to fifteen
percent (15%) from such payments only if Licensor is entitled to
receive such payments as a tax credit under the relevant laws of Korea
or any existing tax treaty between the respective countries of
operation of Licensor and Licensee. 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 relevant payment. Any withholding tax in excess of the aforesaid
limit shall be borne by Licensee, and Licensee shall not deduct such
withheld amount from the actual payment amount.
ARTICLE 6
REPORT & AUDIT
6.1 Licensee shall provide Licensor with all the information on the
development of its business in relation to the Game. Without limiting
the generality of the foregoing, Licensee shall inform Licensor
promptly in the event of its launch of the beta service or the
commercial service of the Game.
6.2 Licensee shall provide Licensor with a monthly report (the "Monthly
Report") within twenty (20) days of 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, the total Service-Sales Amounts for the pertinent month,
advertising activities and the expenses therefore, complaints received
from End Users and market trends in the Territory.
6.3 Licensee shall keep all of its records, contractual and accounting
documents and company documents in relation to its business and
activities under this Agreement in its offices, during the term of this
Agreement and for two (2) years after the expiration or termination of
this Agreement.
6.4 During the term of this Agreement and One (1) year after the expiration
or termination thereof, Licensor may by itself or through an accountant
designated by Licensor investigate and audit the accounting documents
of Licensee with respect to its Game business. For this purpose,
Licensor may request Licensee to produce the relevant documents, and
may visit Licensee's office and make copies of Licensee's documents.
Licensee shall provide all assistance and co-operation required by
Licensor for such investigation and audit. All expenses incurred for
such investigation and audit shall be borne by Licensor unless such
investigation and audit reveals underpayment by greater than one
percent (1%) of the annual Royalty amount, in which case Licensee shall
bear all expenses for such investigation and audit and shall also
promptly pay to Licensor the unpaid amount together with a per annum
default interest thereon equivalent to eighteen (18%) percent thereof.
[In the event of Licensee's understatement of the Royalty amount
without any justifiable reasons, Licensor shall be entitled to
terminate this Agreement pursuant to Section 13.3(b) below.
ARTICLE 7
ADVERTISING & PROMOTION
7.1 Licensee shall exert its best efforts to advertise, promote and perform
marketing activities for the Game in the Territory.
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7.2 Licensor will provide Licensee with samples of the marketing and
promotional materials for the Game that have been or will be produced
and used by Licensor during the term of this Agreement. Licensee shall
pattern all its advertising, marketing and promotional materials for
the Game in the Territory after the samples furnished to Licensee by
Licensor, and Licensee shall provide Licensor with samples of the
advertising, marketing and promotional materials for the Game produced
by Licensee no later than seven (7) days after launching them. Within
seven (7) days from receipt by Licensor of samples of Licensee's
advertising, marketing and promotional materials, Licensor shall notify
Licensee in writing of Licensor's approval or disapproval thereof, or
of any changes that Licensor may require Licensee to make thereto.
Licensor's failure to respond within the said period of seven (7) days
after receipt of such samples of advertising material shall be deemed
as approval of such advertising materials.
7.3 The ownership of and the copyright in the marketing and advertising
materials produced or used by Licensee on the Game ("Advertising
Materials") shall remain exclusively with Licensor, and Licensee shall
not use the Advertising Materials for any purpose other than the
promotion, marketing and advertising of the Game permitted under this
Agreement.
7.4 Licensee may provide End Users with such number of free points and free
accounts as may be reasonably necessary, in Licensee's opinion, for the
purposes of the promotion, operation and advertisement of the Game only
with prior written approval from Licensor. The detailed information on
the free points and accounts provided by Licensee to End Users shall be
provided to Licensor on a monthly basis in the Monthly Report as
stipulated in Section 6.2. Licensor's approval shall not be
unreasonably withheld.
ARTICLE 8
OTHER OBLIGATIONS OF LICENSEE
8.1 Licensee shall exert its best efforts to supply, distribute and sell
the Game in the Territory.
8.2 Licensee shall be solely responsible for service, use, promotion,
distribution and marketing of the Game in the Territory, and Licensor
shall not be responsible for or obligated to provide any of such
activities unless stipulated otherwise in this Agreement.
8.3 Licensee shall provide full and comprehensive technical support to End
Users to assist them in their use of the Game, including but not
limited to Licensee's maintaining 24-hour technical contact window,
on-line customer services, sufficient outbound bandwidth and circuits
for operating business under this Agreement, and game servers required
for on-line game operation.
8.4 Licensee shall provide its best efforts to protect the Intellectual
Property rights of Licensor and shall assist Licensor to procure
appropriate legal and administrative measures against any and all
activities by third parties infringing the Game or any of the
Intellectual Property rights of Licensor on or in relation to the Game,
including without limitation to, manufacture or sales of counterfeiting
CDs, manuals, workbooks or other products. Any and all expenses
incurred by Licensee in activities described in this section 8.4 shall
be for the account of the Licensor and the Licensor shall reimburse
Licensee within seven working days upon presentment of requests for
reimbursement.
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8.5 Licensee shall abide by all laws and regulations of the Territory in
its service, use, promotion, distribution and marketing of the Game in
the Territory.
8.6 Licensee shall provide a prior written notice to Licensor in the event
Licensee intends to change its marketing strategies, including budget,
advertising, marketing, promotional materials, product packaging and
price policies relating to the Game, and other important policies.
8.7 Licensee shall indemnify and hold harmless Licensor and its officers
and employees from any kind of losses, costs, expenses or liabilities,
including reasonable attorneys' fees resulting from any claim by a
third party on or in relation to Licensee's service, use, promotion,
distribution and marketing of the Game in the Territory.
8.8 Upon prior arrangement of the Parties, Licensee shall provide Licensor
with suitable office space and office supplies in Licensee's office for
the auditing activities of Licensor. Access to such office space shall
be limited only to persons designated by Licensor. All expenses
incurred by Licensor's employees dispatched to Licensee's offices for
transportation, postage, telecommunications, lodging, food and other
general living expenses, and the salaries for such employees during
their stay at such offices shall be borne and paid by Licensor.
ARTICLE 9
TECHNICAL INFORMATION AND INTELLECTUAL PROPERTY
9.1 Technical Information and Intellectual Property shall be exclusively
owned by Licensor, and this Agreement shall not grant Licensee or
permit Licensee to exercise any right or license in or over the
Technical Information and Intellectual Property except for the License
granted under this Agreement. Licensee shall not obtain or try to
obtain any registered industrial property or copyright in or over any
of the Technical Information and Intellectual Property of Licensor
regardless of the territory and exploitation area.
9.2 Licensor hereby represents and warrants that Licensor is the legal
owner of the Technical Information and Intellectual Property; that it
has a legal and valid right to grant the rights and License 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. Licensor shall take all reasonable action, legal
or otherwise, under the circumstances to prevent and/or halt any
threatened or actual infringement or violation of Intellectual Property
rights by third parties in the Territory, or to address and answer any
third party claims or demands in respect of the Intellectual Property
rights, so as to ensure that Licensee may continue to service, market,
distribute and use the Game in the Territory in the manner contemplated
under this Agreement.
9.3 Trademark - Licensee shall use the trademarks designated by Licensor in
advance with respect to the Game, which it may distribute and/or sell
under the terms and conditions of this Agreement. Licensee shall not
use any other trademark nor shall it change, modify, or supplement such
trademarks in any manner with respect to the manufacture and sale of
the Game without written approval of Licensor.
9.4 Licensor further guarantees and warrants to Licensee that the Game and
the corresponding Technical Information and accompanying Intellectual
Property:
a) do not violate any Intellectual Property rights of any third party
or any rights of publicity or privacy in Korea;
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b) do not violate any law, statute, ordinance or regulation
(including without limitation the laws and regulations governing
export control, unfair competition, anti-discrimination or false
advertising) of Korea or any other country; and
c) do not contain any obscene, child pornographic or indecent
contents.
9.5 Licensor agrees to indemnify and hold harmless Licensee from any kind
of losses, costs, expenses or liabilities, including reasonable
attorneys' fees and costs of settlement, resulting from the breach by
Licensor of its express warranties given herein provided that Licensee
(a) promptly notifies Licensor of such claim; (b) allows Licensor to
control the defense of such claim and/or any related settlement
negotiations; and (c) provides any reasonable assistance requested by
Licensor in connection with such claim.
9.6 It is understood that by the grant of the License to Licensee, Licensor
undertakes to accord to Licensee all rights and privileges normally
accorded and granted by Licensor to all other entities to which a
similar license for the Game has or will be granted by Licensor.
Licensor warrants there is no outstanding contract, commitment or
agreement to which it is a party, or legal impediment, prohibition or
restriction of any kind known to Licensor, which conflicts with this
Agreement or might limit, restrict or impair the rights granted to
Licensee hereunder.
ARTICLE 10
LIMITATION OF LIABILITY
10.1 Except as may be otherwise provided for herein, Licensor makes no
warranties, express or implied, concerning the Game including but not
limited to its merchantability or salability in the Territory.
10.2 In no event will either party be liable to the other for any indirect,
consequential, incidental, punitive or special damages, whether based
on breach of contract, tort (including negligence) or otherwise, and
whether or not such party has been advised of the possibility of such
damage.
10.3 The aggregate liability of either Party under or relating to this
Agreement whether in contract, tort (including without limitation
negligence) or otherwise, shall be limited to an amount equal to the
total amount of the payments made by Licensee during the preceding
period of six (6) months.
ARTICLE 11
CONFIDENTIALITY
11.1 All Confidential Information disclosed by either Party under this
Agreement shall be maintained in confidence by the receiving Party and
shall not be used for any purpose other than explicitly granted under
this Agreement. Each Party agrees that it shall provide Confidential
Information received from the other Party only to its employees,
consultants and advisors who have a need to know for the performance of
this Agreement. The receiving Party shall be responsible for any breach
of this Article by its employees, consultants and advisors.
11.2 In the event that any Confidential Information, including but not
limited to the source
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codes of the Game, Technical Information and financial information, is
disclosed or divulged to any third party who is not authorized to have
access to or obtain such Confidential Information under this Agreement,
the Parties shall cooperate with each other and exert their best
efforts to protect or restore such Confidential Information from such
unauthorized disclosure or divulgement. If such disclosure or
divulgement of the Confidential Information was made due to the
receiving Party's gross negligence or bad faith, the receiving Party
shall be responsible for all of the damages incurred by the disclosing
Party, including but not limited to any attorneys' fees incurred by the
disclosing Party in order to protect its rights under this Article 11.
11.3 The confidential obligation shall not apply, in the event that it can
be shown by competent documents that the Confidential Information;
(a) becomes published or generally known to the public before or after
the execution of this Agreement without any breach of this
Agreement by any Party;
(b) was known by the receiving Party prior to the date of disclosure
to the receiving Party;
(c) Either before or after the date of disclosure is lawfully
disclosed to the receiving Party by a third party who is not under
any confidentiality obligation to the disclosing Party for such
information;
(d) is independently developed by or for the receiving Party without
reference to or reliance upon the Confidential Information; or
(e) is required to be disclosed by the receiving Party in accordance
with the applicable laws and orders from the government or court;
provided that, in this case, the receiving Party shall provide
prior written notice of such disclosure to the providing Party and
takes reasonable and lawful actions to avoid and/or minimize the
degree of such disclosure.
ARTICLE 12
TERM
12.1 This Agreement shall become effective on the execution date of this
Agreement and shall remain in effect for a period of two (2) years
counted from the Commercial Service Date, unless sooner terminated in
accordance herewith.
12.2 Provided that Licensee is in due performance of this Agreement,
Licensee shall have an option to renew the term of this Agreement for
an additional term of one (1) year ("Renewed Term") under the same
terms and conditions hereof. At the expiration of the Renewed Term,
Licensee shall also have the further option to extend the term of this
Agreement on an on-going, yearly basis for an additional term of one
(1) year (the "Extended Term") under the same terms and conditions
provided for herein. Licensee shall exercise the aforesaid options to
renew at least six (6) months prior to the expiration of the original
term of this Agreement or the Renewed Term, as the case may be.
ARTICLE 13
TERMINATION
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13.1 This Agreement may be terminated upon the mutual agreement of the
Parties.
13.2 Each Party shall have the right to immediately terminate this
Agreement:
(a) upon written notice to the other Party in the event of the other
Party's material breach of this Agreement and such breach shall
continue for a period of thirty (30) days after the breaching
Party's receipt of written notice setting forth the nature of the
breach or its failure to perform and the manner in which it may be
remedied;
(b) if the other Party or its creditors or any other eligible party
files for its liquidation, bankruptcy, reorganization, composition
or dissolution, or if the other Party is unable to pay any kind of
debts as they become due, or the creditors of the other Party have
taken over its management; or
(c) in accordance with Section 13.3 below.
13.3 Notwithstanding Section 13.2 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 5.1(b)
above is not paid by Licensee within twenty (20) days after
receiving written notice from Licensor for late payment;
(b) in the event of a willful, gross understatement by Licensee of the
Royalty payments due Licensor without any justifiable reasons, as
defined in Section 6.4 above;
(c) if the beta service of the Game is not launched in the Territory
within the period set forth in Section 3.2, unless such failure
has been caused by Licensor or is due to force majeure event as
set forth in Article 14;
(d) if the commercial service of the Game is not launched in the
Territory within the period set forth in Section 3.2, unless such
failure has been caused by Licensor or is due to force majeure
event as set forth in Article 14; or
(e) if the service of the Game in the Territory is stopped, suspended,
discontinued or disrupted for more than thirty (30) consecutive
days during the term of this Agreement due to causes attributable
to Licensee.;
13.4 Upon the effective date of such termination, all rights granted to
Licensee hereunder shall immediately cease and shall revert to
Licensor, and Licensee shall immediately cease servicing of the Game
and return to Licensor any and all software, technical documents and
other materials or information provided by Licensor to Licensee under
this Agreement, and shall destroy any and all copies of such software,
technical documents, materials or information. Furthermore, Licensee
shall provide and deliver to Licensor any and all such information and
documents related to the Game, including but not limited to database
related to the Game and information and/or data source about the Game
users, as may be requested by Licensee.
13.5 No termination of this Agreement shall affect the Parties' rights or
obligations that were incurred prior to the termination. The expiration
or termination of this Agreement shall not affect the effectiveness of
Articles 6, 9, 10, 11, and 13.4, which shall survive the expiration or
termination of this Agreement.
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ARTICLE 14
FORCE MAJEURE
14.1 Notwithstanding anything in this Agreement to the contrary, no default,
delay or failure to perform on the part of either Party shall be
considered a breach of this Agreement if such default, delay or failure
to perform is shown to be due entirely to causes occurring without the
fault of or beyond the reasonable control of the Party charged with
such default, delay or failure, including, without limitation, causes
such as strikes, lockouts or other labour disputes, riots, civil
disturbances, actions or inactions of governmental authorities or
suppliers, electrical power supply outage, a failure or breakdown in
the services of internet service providers, epidemics, war, embargoes,
severe weather, fire, earthquake and other natural calamities or, acts
of God or the public enemy. Force majeure shall include actions taken
by the Australian government or agencies thereof, which restrict the
ability of Licensee to remit payments to Licensor under this agreement,
or failure of the Australian government or agencies thereof to approve
such payments.
14.2 If the default, delay or failure to perform as set forth above in
Section 14.1 exceeds one hundred eighty (180) days from the initial
occurrence, a Party who is not affected by such force majeure event
shall have the right to terminate this Agreement with a written notice
to the other Party.
ARTICLE 15
GENERAL PROVISIONS
15.1 Licensee may not assign, delegate or otherwise transfer in any manner
any of its rights, obligations and responsibilities under this
Agreement, without prior written consent of Licensor. Such prior
written consent of Licensor, however, shall not be necessary if the
assignment or transfer is made to a corporation or other entity in
which Licensee holds at least 51% of the stockholders equity or has
management control (defined as the right to appoint the chief executive
officer of the corporation).
If the Licensee assigns this Agreement without the prior written
consent of the Licensor, the Licensee shall continue to be liable for
the performance by the Assignee of its obligations to Licensor under
this Agreement.
Licensor may, with prior written notice to Licensee, assign, delegate
or otherwise transfer all or any part of its rights, obligations and
responsibilities under this Agreement to a third party designated by
Licensor, provided that such third-party transferee shall execute an
undertaking in favour of Licensee to respect this Agreement in its
entirety.
15.2 It is understood and agreed by the Parties that this Agreement does not
create a fiduciary relationship between them, that Licensee shall be an
independent contractor, and that nothing in this Agreement is intended
to constitute either Party an agent, legal representative, subsidiary,
joint venture, employee or servant of the other for any purpose
whatsoever.
15.3 If any kind of notices, consents, approvals, or waivers are to be given
hereunder, such notices, consents, approvals or waivers shall be in
writing, shall be properly addressed to the Party to whom such notice,
consent, approval or waiver is directed, and shall be either hand
delivered to such Party or sent by certified mail, return
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receipt requested, or sent by FedEx, DHL or comparable international
courier service, or by telephone, facsimile or electronic mail (in
either case with written confirmation in any of the other accepted
forms of notice) to the following addresses or such addresses as may be
furnished by the respective Parties from time to time:
If to Licensor.
Attention: Mr. Andrew Sohn
4th Fl. Shingu Bldg., 620-2, Shinsa-Dong, Kangnam-Ku, Seoul,
135894, Korea
Fax: +82-2-3442-7097
If to Licensee
Attention: Mr. Cho Young-Kyu
Fax:
15.4 No course of dealing or delay by a Party in exercising any right,
power, or remedy under this Agreement shall operate as a waiver of any
such right, power or remedy except as expressly manifested in writing
by the Party waiving such right, power or remedy, nor shall the waiver
by a Party of any breach by the other Party of any covenant, agreement
or provision contained in this Agreement be construed as a waiver of
the covenant, agreement or provision itself or any subsequent breach by
the other Party of that or any other covenant, agreement or provision
contained in this Agreement.
15.5 This Agreement, including all exhibits, addenda and schedules
referenced herein and attached hereto, constitutes the entire agreement
between the Parties hereto pertaining to the subject matter hereof, and
supersedes all negotiations, preliminary agreements, and all prior and
contemporaneous discussions and understandings of the Parties in
connection with the subject matter hereof.
15.6 This Agreement shall be written in English and all disputes on the
meaning of this Agreement shall be resolved in accordance with English
version of this Agreement.
15.7 This Agreement may be amended only upon the execution of a written
agreement between Licensor and Licensee that makes specific reference
to this Agreement.
15.8 This Agreement shall be governed by and construed in accordance with
the laws of Korea.
15.9 Any controversy or claim arising out of or in relation to this
Agreement shall be finally settled through the proper courts in Korea.
15.10 If any section, subsection or other provision of this Agreement or the
application of such section, subsection or provision, is held invalid,
then the remainder of the Agreement, and the application of such
section, subsection or provision to persons or circumstances other than
those with respect to which it is held invalid shall not be affected
thereby.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first
above-written.
GRAVITY CORPORATION,
By: /s/ Jung Ryool Kim
---------------------------
Name: Jung-Ryool Kim
Title: Chairman
Date: July 16th 2004
ONGAMENET PTY LTD.
By: /s/ Seo, Sang-Beom
---------------------------
Name: Seo, Sang-Beom
Title: CEO, President
Date: July 16th 2004
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