EXHIBIT 10.23
AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT (this "Agreement") is entered into on this 19th day of
August 2003 by and between:
ACTOZ SOFT CO., LTD., a company incorporated and existing under the laws of the
Republic of Korea ("Korea") with its principal place of business at Unsuk X/X
0xx Xxxxx, 000-0, Xxxxxxx-xxxx, Xxxxxxx-xx, Xxxxx, Xxxxx ("Licensor"); and
SHANGHAI XXXXXX INTERNET DEVELOPMENT CO., LTD. [Chinese Name], a company
incorporated and existing under the laws of the People's Republic of China
("China") with its principal place of business at 00X Xxxxxxx Xxxxx, Xx 0000
Xxxxx Xxxxxx Xxxx Shanghai, P.R. China 200122 ("Licensee).
SHANGHAI PUDONG IMPORT & EXPORT CO., LTD. [Chinese Name] a company incorporated
and existing under the laws of the People's Republic of China ("China") with its
principal place of business Xx 0X, Xx 00 Xxxxxxx Xxxx, Xxxxxxxx, X.X.Xxxxx
000000
[Chinese Name], (WOFE) a company incorporated and existing under the laws of the
People's Republic of China ("China") with its principal place is No 638-7, Xx 0,
Xx 000 Xxxxxxxxxxx Xxxx, Xxxxxxxxxx High Technical Park, Shanghai, P.R.China
200122
WITNESSETH:
WHEREAS, Licensor and Licensee (together with Shanghai Pudong New Area Import &
Export Corp) have entered into a Software Licensing Agreement dated June 29,
2001 ("SLA") for Licensor to license to Licensee the rights to provide on-line
game service in China by using Licensor's Legend of Mir II game ([Chinese] as a
corresponding Chinese name), attached hereto as Appendix I;
WHEREAS, Licensor and Licensee, together with Wemade Entertainment Co, Ltd
("Wemade"), entered into a Supplementary Agreement on 14 July 2002
("Supplementary Agreement"); and
WHEREAS, the parties now wish to amend the terms and conditions of the SLA in
the manner specified in this Agreement.
NOW, THEREFORE, the parties agree as follows:
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1. Amendments to the SLA. The SLA shall be amended as follows.
1.1 Section 2.03 of the SLA shall be amended so that the term of the SLA
shall be extended to September 28, 2005 (The End of the License Period) unless
earlier terminated under this Agreement or other related agreements. The said
End of the License Period shall be further extended to September 28, 2006 with
no changes in any terms and conditions of this agreement or of other related
agreements if and only if there are no disputes on the Mir II between both
parties.
1.2 Exhibit One-2-C, D and Two-2-I, J shall be amended so that the royalty
percentage for Legend of Mir II shall be 17.55% of the total user payment until
September 28, 2003 and from September 29th, 2003, it shall be 21% of total user
payment, whether or not Actoz provides the technical support, upgrades or
patches as defined in Clause 1.5 of this Agreement. The license fee for the
extension of Mir II from September 29 2003 to the End of the License Period
shall be four (4) million US dollars. Licensee shall wire the said license fee
to Actoz on or before September 28th, 2003. Total user payment herein shall mean
the gross sales amount calculated based on the actual retail price of each and
every item related to CDs, pre-paid cards and any other forms of the Software
sold by Licensee or by its distributor or agent to end users, or other total
earnings made by Licensee in direct connection with playing of the Legend of Mir
II. For the avoidance of doubt, the total user payment for any of the items
referred to in the above, shall be equal to the actual retail price offered to
end users multiplied by the number of the item sold either by on-line or
off-line during the relevant royalty period. Licensee agrees to issue dedicated
pre-paid cards for Mir II, which will not be combined with other games.
(1)Of the said licensee fee of four (4) million US dollars, Licensor
agrees to donate 500,000 US dollars to the following non-profit
organization:
a) The organization shall be named "China-Korea Game Industry
Promotion Fund" and shall be established and controlled by
Actoz.
1.3 Section 4.01 shall be amended so that the monthly royalty fee shall be
paid within 15 business days after Licensee receives the invoice from
the Licensor. Licensee shall submit the royalty report on the previous
month by the 15th day of the following month.
1.4 Section V and Exhibit One-1/Two-1 are already executed and are no
longer applicable.
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1.5 With regard to the technical support, patches and upgrades, the
following terms and conditions shall be added to the existing terms
and conditions of the SLA:
(1) Licensor shall not be obligated to, but is entitled to provide
Licensee with technical support, patches and upgrades regarding to
the Legend of Mir II. Should such technical support or upgrades or
patches not be provided by Licensor, Licensee shall request a
written approval from Licensor to provide Licensee's own technical
support or patches or upgrades. Licensor agrees to answer to the
requested written approval within ten (10) business days.
(2) If there is no written reply by Licensor to Licensee's proposal
to Licensor within ten (10) business days since Licensee sends
the written proposal to Licensor, the written proposal shall be
deemed to be disapproved by Licensor.
(3) Licensee shall be entitled to provide technical solutions for
hacker attacks, piracy servers, and cheating programs with written
notice to Licensor. Licensor shall not be liable or be responsible
in any way for these provisions of technical solutions by
Licensee. Licensor shall not, under any circumstances, be
responsible for any damages or losses due to or arising out of the
provision of such technical solution by Licensee whether or not
Licensor has consented to such provision by Licensee.
(4) Licensee respects Licensor's property rights for the Mir II
Software. Licensee agrees that the titles and property rights for
the patches and/or upgrades to the Mir II during the license period,
excluding technical solutions specified in 1.6 (3) above, shall
belong to Licensor, whether or not the said patches and/or upgrades
are provided by Licensor or licensee.
1.6 With regard to the audit and report, the following terms and
conditions shall be added to the existing terms and conditions of the
SLA:
(1) In order to improve the transparency in the calculation of
royalty payments, Licensee shall provide to Licensor on or before
the 15th day of each month commencing September 15,2003, the data
on peak and average concurrent users during the previous month
and the basis on which Licensee calculates the royalties
commencing from September 15, 2003 (Royalty Report). After
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receiving the previous month's Royalty Report, Actoz has the option of
sending a representative to Licensee to verify the calculation and the
on-screen data views (operated by Shanda's employees) from the billing
system of the Mir II royalties for the previous month with Licensee's
finance department(s). All activities of Actoz's representative shall
be accompanied by relevant employees of Licensee.
(2) Licensee also agrees to provide an annual royalty report, prepared
by one of the big four international accounting firms
(PriceWaterhouseCooper, KPMG, Ernst & Young, and Deloitte & Touche
Tomatsu), related to Licensee's calculation of royalties in connection
to the Legend of Mir II, once per year upon request by Licensor.
(3) Licensee also agrees to allow Licensor once a quarter to appoint
one of the big four international accounting firms
(PriceWaterhouseCooper, KPMG, Ernst & Young, and Deloitte & Touche
Tomatsu) to verify the calculation of the royalty payments at
Licensor's expenses. In case the total user payment reported by
Licensee shows discrepancy with the one calculated by the
Licensor-appointed accounting firm, the Licensee has the right to
appoint its own accounting firm from one of the big four
international accounting firms (PriceWaterhouseCooper, KPMG, Ernst
& Young, and Deloitte & Touche Tomatsu) to re-verify the
Licensor-appointed accounting firm's calculations. The final
royalties payable shall be determined by the average of the two
accounting firms' calculations.
(4) The average of the calculations of the royalty amounts by the two
accounting firms appointed by the Parties shall be finally
effective and binding on both Licensee and Licensor. If the
Licensee's payment of the royalties is less than the average of the
two calculations, the Licensee shall pay the difference within 15
business days from the date each of the two accounting firms sends
its report to the Parties, whichever is later. If the Licensee's
payment of the royalties is more than the average amount of the two
calculations, then the Licensee shall be entitled to set-off any
excess payment from future payable royalty.
(5) For the avoidance of doubt, once the Licensor appoints its accounting
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firm according to section 1.6(3) to verify the Licensee's computations
for the previous quarter as provided above, the time for the Licensee
to make payment for that specific quarter is automatically extended
until after the Licensee-appointed accounting firm has completed and
submitted its re-verification report to the Parties and the Licensee
shall not be considered to have made any delay in payment.
1.7 With regard to the cause for termination of the SLA, the following
terms and conditions shall be added to the existing terms and
conditions of the SLA:
Subject to clause 1.6 above, Licensor and Licensee agree that the SLA
shall terminate automatically if Licensee does not pay the monthly
royalty according to Licensee's monthly royalty report for two (2)
months or more (whether consecutive or not), or if Licensee delays to
pay the monthly royalty according to Licensee's monthly royalty report
for three (3) months or more without the prior written agreement of
Licensor, except for the following situations:
(1) Delays of payment or partial payment as a result of disagreements
between Licensee's royalty report(s) and the verifications by Actoz's
representative and/or by Actoz's accounting firm per clause 1.6;
(2) Delays of payment or partial payment as a result of factors not
under Licensee's direct control, for example, natural disasters or
delays from foreign exchange agencies with official confirmation
letters from respective government office.
1.8 With regard to the severability of the SLA, the following terms and
conditions shall be added to the existing terms and conditions of the
SLA:
In the event that any clause or provision or part thereof in the SLA
shall for any reason be determined by any court or tribunal to be
illegal, invalid or unenforceable, then the remaining clause or
provision or part thereof shall not be affected, impaired or
invalidated and shall remain in full force and effect and shall
continue to be binding upon Licensor and Licensee. In such case, the
parties shall make their best efforts to amend the SLA so that the
parties' original intention is provided in the SLA to such extent as
possible.
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1.9 With regard to the approval for the performance of the SLA, the
following terms and conditions shall be added to the existing terms
and conditions of the SLA:
Each of the Licensor and Licensee shall be responsible for obtaining
(if any) all licenses, permits, registrations and other approvals or
consents and for filing reports necessary for the performance of its
obligations and acts under the SLA from governmental and other
authorities, or any other relevant party in Korea and China
respectively in time, and thereafter for maintaining them in force.
Such licenses, permits, registrations, approval, consent and reports
include, without limitation, the approvals of the SLA by the government
of Korea and China and reports to the relevant authorities in Korea and
China.
1.10 Licensee agrees not to force end-users of Mir II to leave Mir II to
switch to any other games operated by Licensee, not to carry
promotional advertisements of other games operated by the Licensee on
the web-site xxx.xxx0.xxx.xx. and not to change the Chinese name
[Chinese] of Mir II without prior consent by Licensor.
1.11 Licensee shall not transfer the user ID, password, and character
information including character type, level, items etc related to the
Legend of Mir II to any other games nor utilize user ID, password, and
character information including character type, level, items etc
related to the Legend of Mir II for the benefit of any other games.
Upon Licensee's failure to comply with this article 1.11, the Licensee
shall pay US $1 million for each incidence to the Licensor and all
agreements and commitments signed by Actoz shall be deemed null and
void and shall lose their effect forthwith automatically.
1.12 All existing and future disputes on the Intellectual Property Rights of
the Legend of Mir II or of Legend of Mir III shall not affect the
terms and conditions of this Agreement and of the Settlement Agreement.
2. Other Terms. Except as amended by this Agreement, all provisions of the
SLA shall remain in full force and effect.
3. Supplementary Agreement
Both Licensee and Actoz acknowledge that by the Supplementary Agreement
WeMade has granted all the rights and representations to Actoz in connection
with the Legend of Mir II in China during the effective period. Upon the signing
of this Agreement, both Actoz and
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Licensee agree that the following terms in the Supplementary Agreement shall
become null and void automatically between Licensee and Actoz, both of whom
shall waive any and all allegations and claims, whether known and unknown,
against anyone, under the following terms of the Supplementary Agreement.
(1) Section 1
(2) Section 2
(3) Section 3
(4) Section 4
(5) Section 5
(6) Section 6
4. Language. The English language version of this Agreement shall control
in all respects and for purposes of any and all disputes and litigation.
5. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart. Signatures may be evidenced by
facsimile.
6. Assignment. This Agreement may not be assigned by any party to a third
party without prior written consent of the other party.
7. Integral Part. This Agreement shall constitute the integral and
inseparable part of the SLA.
8. Obligations and duties of WOFE: .
(1) Actoz and Xxxxxx and WOFE agree that WOFE shall become part of
Licensee if and only if Wemade signs this agreement and the Settlement
Agreement dated August 19th, 2003.
(2) For the avoidance of doubt, in this Agreement the term of "both
parties" refers to Xxxxxx and Actoz and does not refer to WOFE unless
after WOFE becomes part of Licensee as specified above.
9. Representation and Warranties. In addition to the original Representations
and Warranties in the SLA, each Party represents and warrants on the date hereof
as follows:
(1) Each Party is a corporation duly organized, validly existing and in
good standing under all applicable laws and is duly registered and
qualified to do business. Each Party has all requisite corporate power
and authority to execute and deliver,
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and perform its obligations under this Agreement, and to consummate the
transactions contemplated hereby; and
(2)The execution, delivery and performance of this Agreement by each
Party has been duly authorized by all necessary corporate actions on
the part of such Party. This Agreement has been duly executed and
delivered by each Party, and is the valid and legally binding
obligation of each Party, enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized signatories as of the day and year first
written above.
LICENSOR LICENSEE
By: /s/ Jong Xxxx Xxx By: /s/ Xxxxxxx Xxxx
------------------- ---------------------
Name: Jong Xxxx Xxx Name: Xxxxxxx Xxxx
Title: CEO & President Title: Chairman of BOD
Actoz Soft Co., Ltd. Shanghai Xxxxxx Internet
Development Co., Ltd.
Acknowledge and agree to the terms and conditions of this Agreement:
By: /s/ Xxxxxxx Xxxx
--------------------
Name: Xxxxxxx Xxxx
Title: Chairman of BOD
[CHINESE NAME] (WOFE)
[SEAL]
By: (sign)
Name:
Title: Chairman of BOD
Shanghai Xxxxxx Import & Export Cor., Ltd.
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