Agreement of Development Service and Service Support for Tentative Parfait Station
Exhibit
4.2
Agreement of
Development Service and Service Support for
Tentative Parfait
Station
WEBZEN Inc.
(hereinafter referred to as “A Party”) has requested NHN Games
Co., Ltd. (hereinafter referred to as “B Party”) to provide research and
development service specified in Article 3 below (hereinafter referred to as
“Development
Service”) and caused
this Agreement to be executed in order to specify rights between both parties
related to its output (Parfait Station).
Article 1 [Purpose
of Agreement]
Purpose of this
Agreement is to specify legal relations where B Party sincerely carries out
Development Service and service support works of the outputs of the Development
Service requested by A Party to B Party and A Party pays B Party the
cost.
Article 2
[Definition of Terms]
1. Net Revenue: It
refers to the remaining amount, which deducts partner fee of A Party, all
expenses generated from actions of the government, laws, etc. of the relevant
country, expenses determined by written agreement of the parties hereto and
other expenses such as package, sales, distribution, etc. not more than
manufacturing cost (in accordance with common accounting rules of USA) from
sales revenue of A Party generated through sales, operation and distribution of
Parfait Station within service areas of A Party, provided that for the prepaid
card, sales shall be recognized at the time of purchasing additional items by
the ‘Game User’ in connection with ‘Parfait Station’.
2. Down Payment:
Initial amount promised to be paid to A Party by the local partner as the
consideration for granting limited licensing right of Parfait Station to the
local partner.
3. Royalty: Amount
paid to A Party by the local partner after deducting all of its expenses from
the sales revenue related to the local services in case A Party provides Parfait
Station by granting license to the local partner.
4. License Right:
It refers to the right to allow A Party to exclusively sell, operate and
distribute the output of Development Service (Parfait Station) throughout the
world itself or through the third parties.
Article 3 [Contents
of Development Service and Service Support]
Specific contents
and schedule of Development Service and service support to be carried out by B
Party under this Agreement shall be as follows:
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1. In connection
with Development Service, B Party shall develop and provide A Party with
commercial version of an online game ‘Parfait Station’ until development service
period specified in Article 4.
2. In connection
with service support, B Party shall support all sorts of works related to
domestic/abroad commercialization services (including marketing and
advertisement activities) such as localization, patch, update, bug correction,
etc. of ‘Parfait Station’.
3. For “service
support” of previous clause, A Party shall discuss with B Party in advance about
support schedule and travel expenses for oversea support.
Article 4 [Contract
Term]
1. Duration to
carry out service development specified in Attachment #1 of this Agreement shall
be twenty three months from the date of contract.
2. However, if
there is a written agreement between both parties, the term may be extended or
decreased.
3. “Service
support” term shall be five years from the date of commercialization in Korea
and automatically extended for five years unless otherwise expressed until
thirty days before termination.
Article 5 [Contract
Price]
1. Price of
Development Service to be paid to B Party by A Party under this Agreement
(hereinafter referred to as “Contract Price”) shall be three billion won
(excluding VAT).
2. Specific payment
method and schedule of the Contract Price shall be as follows:
1) Prepayment: 1.2
billion won (40.0%, within 15 days after signing the agreement/ Apr.
2009)
2) 1st
Intermediate Payment: 300 million won (10%, within 15 days after
submitting/inspecting basic development output/ target Sept. 2009)
3) 2nd
Intermediate Payment: 300 million won (10%, within 15 days after
submitting/inspecting the 1st
extension development output/ target Dec. 2009)
4) 3rd
Intermediate Payment: 600 million won (20%, within 15 days after
submitting/inspecting CBT development output/ target May 2010)
5) Balance Payment:
600 million won (20%, within 15 days after submitting/inspecting
commercialization output/ target Aug 2010)
Article 6
[Consideration for Service Support]
As a consideration
for “service support” for ‘Parfait Station’ (hereinafter referred to as “Commission”), A Party shall
pay B Party part of Net Revenue generated after commercialization in each market
throughout the world (or licensing Down Payment or Royalty) as
below.
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1. In case A Party
serves Parfait Station directly, A Party agrees to pay B Party 20% of Net
Revenue as ‘Commission’ for “Service Support”.
2. In case A Party
serves Parfait Station by granting license to the local partner, A Party agrees
to pay B Party 30% of licensing Down Payment and 50% of Royalty generated after
the service as ‘Commission’ for “Service Support”.
3. In connection
with A Party’s OSMU (One Source Multi Use: Additional Business – Advertisement
within Game, publication, video, etc.), A Party agrees to pay B Party 30 % of
Net Revenue related to OSMU as ‘Commission’ for “Service Support”.
4. Commissions to
be paid to B Party specified in Clause 1 through 3 of this Article shall be
calculated by applying the relevant rates based on the amount from which tax
(referred to VAT for domestic sales / withholding tax of export price for
overseas sales) for the Net Revenue (or licensing Down Payment or Royalty) is
not deducted.
5. Commissions to
be paid to B Party as specified in Clause 1 through 3 of this Article shall be
paid by A Party to B Party from the Net Revenue (or licensing Down Payment or
Royalty) remitted to A Party each month in accordance with the method stated in
Clause 4 of this Article until the 15th day of
the next month.
Article 7
[Obligation to Report Implementations]
1. A Party may
check and confirm progress status of Development Service performed by B Party
when necessary, and B Party shall report to A Party progress status of
Development Service in writing upon request of A Party.
Article 8
[Inspection]
1. B Party shall
deliver Development Service output to A Party pursuant to schedule and contents
specified in Article 2, and A Party shall inspect Development Service output and
notify B Party of its result. When the output has passed inspection of A Party,
implement of Development Service shall be deemed to be completed.
2. If Development
Service output provided by B Party does not meet the standard agreed between A
Party and B Party in advance and has failed to pass inspection of A Party, A
Party may request B Party to correct and complement the relevant matters and in
such case B Party shall correct and complement them at its expenses and
responsibilities and receive re-inspection of A Party without
delay.
3. If Development
Service output provided by B Party has failed to pass inspection of A Party
three times or more, A Party may terminate this Agreement without
notification.
4. A Party and B
Party shall discuss quarterly Development Service output contents and inspect
pursuant to [Quarterly Milestone] [Attachment #2].
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Article 9
[Liquidated Damage]
1. B Party shall
comply with Article 4 (Contract Term) strictly, and if not, it shall pay A Party
liquidated damage corresponding to 3/1,000 of the total contract price per one
day of delay. However, the delay agreed by both parties shall be exempted from
the liquidated damage.
2. A Party may
deduct the amount of liquidated damage from the service fee to be paid to B
Party.
Article 10
[Belonging, etc. of Intellectual Property Right and Development
Output]
1. B Party warrants
that it does not infringe any intellectual property rights including patents and
copyrights of the third parties in connection with output of, and method to
carry out, Development Service (hereinafter referred to as “Intellectual Property
Right”). If any claim or lawsuit has been instituted by the third party against
A Party in connection with output of, and method to carry out, Development
Service, B Party shall resolve it at its expenses and responsibilities and
indemnify A Party for all sorts of damages arising from it.
2. Title of the
website opened and operated by A Party in connection with ’Parfait Station'
shall be solely possessed by A Party.
3. Any and all of
rights such as title of Development Service output, intellectual property right,
exclusive distribution right, etc. related to it shall be possessed by A
Party.
4. If A Party
develops other output based on this Development Service output, A Party agrees
to designate B Party as the preferred negotiator for such
development.
Article 11
[Confidentiality]
1. A Party and B
Party shall keep all sorts of information of the other party such as market,
management, sales, technology, product or other information (hereinafter
referred to as “Confidential Information”) acquired or known in connection with
Development Service in secret and shall not disclose, leak or provide them to
the third party without prior written consent of the other party nor use them
for other purpose than this Agreement.
2. The obligation
to keep confidentiality specified in the previous clause shall be effective not
only during the term of this Agreement but also for three years after expiration
of this Agreement. If either party violates the said obligation and makes damage
on the other party, the defaulting party shall be responsible for indemnity of
all sorts of damage on the other party.
3. In the event of
termination or expiration of this Agreement, both parties shall immediately
return to the other party originals and copies of all sorts of documents and
other materials provided from the other party.
Article 12
[Termination or Cancellation of Agreement]
1. If there is any
non-fulfillment or delay of obligation by the other party, A Party and B Party
may notify the other party of corrective action by specifying due date within
ten days and terminate or cancel this Agreement immediately if there is no
proper corrective action within the said period.
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2. A Party or B
Party may terminate this Agreement promptly if there are any of the followings
for the other party:
1) When issued note
or check has been dishonored or either party has experienced attachment for
unpaid tax;
2) When it has
encountered attachment, provisional attachment, provisional disposition or other
enforced execution by the third party;
3) When it has
encountered or applied itself bankruptcy, composition or corporate
reorganization;
4) When it is
recognized that it is difficult for either party to continue this Agreement due
to suspension or cancellation of business by the relevant
authority.
3. If A Party
terminates or cancels this Agreement due to causes attributable to B
Party, B Party may not claim consideration for the Development
Service against A Party and shall return the paid service fee to A Party
immediately.
4. In spite of
Clause 1 or 2 of this article, A Party may terminate this Agreement by fifteen
day prior written notice if it decides that it is difficult to continue this
Agreement due to change in the government’s policy, amendment of related laws or
other managerial causes of A Party. In this case, B Party may request A Party to
pay only cost of the Development Service accrued until the time of termination
of the agreement and the output developed by B Party until the termination shall
belong to A Party.
Article 13
[Indemnity]
In the event that
there is any damage on A Party due to intentional or neglectful act of B Party
in connection with performance of this Agreement, B Party shall indemnify A
Party for all sorts of direct/indirect damage on A Party.
Article 14 [Force
Majeure]
1. Either A or B
Party shall not be responsible for nonperformance or delay of obligations under
this Agreement against the other party due to the causes that cannot be properly
controlled by itself, including war, riot, civil war, natural disaster,
establishment/amendment of laws or government’s actions.
2. In the event of
force majeure specified in the previous clause, the relevant Party shall
immediately notify the other party of the fact and take all available actions so
that the agreement can be implemented as soon as possible and carry out the
obligations not performed or delayed immediately after the said force majeure
has been released.
3. If delay of
implementation of the agreement due to force majeure has continued or is
expected to continue for fifteen days, A Party or B Party may terminate this
Agreement by written notice to the other party.
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Article 15
[Prohibition of Assignment]
Either A or B Party
shall not assign, subcontract, provide as collateral any part or all of rights
and obligations under this Agreement to the third party without written consent
of the other party.
Article 16 [Change
or Amendment of Agreement]
1. A Party may
request B Party to change or modify contents of Development Service during
performance of the Development Service and in such case B Party shall cooperate
as much as possible.
2. When it is
expected that increase/decrease of development period or contract price due to
request of change or modification of the contents of Development Service by A
Party, it shall be decided by mutual discussion.
3. Otherwise A
Party or B Party may modify or change contents of this Agreement by mutual
written agreement.
Article 17 [Ethical
Obligations]
1. B Party warrants
that it shall be aware of and sincerely comply with all relevant laws and
government policies of Korea, A Party’s ethics charter, code of conduct,
practice guideline, etc. in connection with this Agreement or performance of
this Agreement .
2. B Party warrants
that it shall not provide A Party’s directors and employees with all sorts of
economical benefits such as money and other valuables, entertainment, rebate,
etc. nor conduct improper trade activities such as gambling, borrowing and
lending of money, personnel solicitation, etc. in connection with this
Agreement.
3. If B Party has
breached ethical obligations specified in Clause 1 or 2, B Party shall bear all
sorts of civil or criminal punishment and A Party may terminate or cancel this
Agreement immediately without notification.
4. In the event
that A Party terminates or cancels this Agreement due to causes on Clause 1 or 2
above, B Party agrees not to claim any indemnity against A Party.
Article 18
[Resolution and Jurisdiction]
1. If there is any
matter not specified in this Agreement or any difference with regard to
construction of the agreement between both parties, in principle, it shall be
resolved by mutual discussion in accordance with general commercial
practice.
2. In the event
that any dispute has occurred concerning this Agreement and has proceeded with a
lawsuit, the Seoul Central District Court shall have jurisdiction over
it.
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In Witness Whereof,
both parties hereto have prepared and signed two original copies of this
Agreement to be executed, of which each one copy shall be kept by each party,
respectively.
Apr. ,2009
|
A
Party:
|
9th
Fl. of Daelim Acrotel, 000-0, Xxxxx-xxxx, Xxxxxxx-xx,
Xxxxx
|
|
|
Kim,
Chang-geun/ Representative
Director (Seal)
|
|
B
Party:
|
6th
Fl., I-Park Bundang 102 Bldg., Jeongja-dong, Bundang-gu, Seongnam-si,
Gyeonggi-do
|
|
|
NHN Games
Co., Ltd.
|
|
Xxx,
Xxxxxx-gwan/ Representative Director (Seal)
|
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1. Development
Schedule of Project PS (Written by: Xxx, Xxx-xxxx/ Final Update: Jan. 28,
2009)
(Start of Project:
Jan. 1, 2009 – OBT Target within Aug. 2010)
| Jan 2009 | Mar. | June | Sept. | Dec | Mar. 2010 | May (CBT) Aug |

60;
|
Stage
|
P1 (3
months)
|
M1 (3
months)
|
M2 (3
months)
|
M3 (3
months)
|
M4 (3
months)
|
M5 (3
months)
|
M6 (3
months~)
|
|
Pre-development
|
Basic System
Development
|
Extension
Development 1
|
Extension
Development 2
|
Test and CBT
Preparation
|
OBT and
Commercialization Preparation
|
||
|
Development
Sector
|
● Play
prototyping
● Technical
system establishment
● Project
Overview
- To set up
Game feature
- To
determine contents specifications for OBT criteria
development
- To
determine art concept ·
- To analyze
project risk
●
Determination of promotion direction
|
● Village -
> Stage movement
● NPC
function handling
● Basic
community function
● Combat
system
● QA system
plan
|
● Party
system
● Guild
system
● Item system
and job change
● Quest
function
|
● Housing
system (not yet determined)
● Emotion
expression
● Extension
system 1 (not yet determined)
●
…ETC
● To start
music/ sound production (outsourcing, in-house)
● QA report
start
● Outsourced
graphic production plan
|
● Extension
system 2 (not yet determined)
●
…ETC
● To enter
into graphic pumping period
|
● Extension
system 3. (not yet determined, simple subsystem development under priority
item)
● Service
function development – Patch system and management tool
development
● CBT level
contents play Q/A
● Development
issue for CBT event
|
● OBT level
content splay Q/A
● Development
issue for OBT event OBT
|
|
Outputs
|
● Prototype
Build
- To produce
a build to allow playing stage 1 quantity
- To identify
operation feeling, artwork and play feeling by playing 2 class
characters
- Contents
development tool
● Game
overview document
- Artwork,
tech, game play and risk analysis, introduction plan, etc.
|
● M1
Milestone Build
- Build
version containing basic elements of online game
-
Village/ battlefield
movement, NPC function, combat system, basic community, basic growth
balance.
|
● M2
Milestone Build
- To design
and introduce quest function, guild, party extension community
function and basic economy system
|
● M3
Milestone Build
- Version to
allow online playing and quest
- A part of
extension contents functions such as housing, etc. can be
played.
|
● M4
Milestone Build
- Version to
allow game play with CBT level contents.
- All planned
extension contents can be played.
|
● CBT Version
Build. ·
Version to
allow all of contents required to CBT to be played at perfect
level.
- Build
containing patch, packing and service management functions
|
● OBT Version
Build.
- To derive a
version to allow OBT
- Zero bug
test completed CBT for OBT contents
part.
|
● As OBT base
contents will be determined at P1 stage, detailed schedule (M1 ~ M4) and
employment plan may be adjusted.
● At P1,
developments required for M1 ~ M2 will be planned in advance (Most of P1 are
connected to M1 period.).
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