EXHIBIT 10.22
SETTLEMENT AGREEMENT
This Settlement Agreement (hereafter "Agreement") is made on August 19th, 2003
between Actoz Soft Co., Ltd ("Actoz"), a company incorporated in Korea, whose
principal place of business is Unsuk X/X 0xx Xxxxx, 000-0 Xxxx Xxx-Xxxx Xxxx
Xxx-Xx, Xxxxx, Xxxxx 136-020, Shanghai Xxxxxx Internet Development Co., Ltd.
[Chinese Name] ("XXXXXX"), a company incorporated in the People's Republic of
China, whose principal place of business is 00X Xxxxxxx Xxxxx, Xx 0000 Xxxxx
Xxxxxx Road Shanghai, P.R.China 200122
WHEREAS, Actoz and Xxxxxx are in the business of development and distribution of
online games;
WHEREAS, Xxxxxx and Actoz (together with Shanghai Pudong New Area Import &
Export Corp) concluded a Software Licensing Agreement on June 29th, 2001
("Software Licensing Agreement"), by which Actoz granted to Xxxxxx the sole and
exclusive licence to use, promote, distribute etc the Chinese version of the
"Software", as defined in the said Software Licensing Agreement;
WHEREAS Actoz and Xxxxxx entered into a Supplementary Agreement On 14 July 2002
("Supplementary Agreement");
WHEREAS, since July 2002, various disputes ("Disputes") have arisen between
Xxxxxx and Actoz, including but not limited to the allegations and
counter-allegations contained in the notice and letters sent by each party to
the other party, including without limitation Shanda's letter dated July 12,
2002 (as sent by Xxxxxxxxx), Shanda's letter dated December 12, 2002 (as sent by
XxxXxxxxx), Actoz's notice of termination dated January 24,2003 (as sent by Xxx
& Xxxxx), Shanda's response letter dated February 10, 2003 (as sent by Xxxxx &
Xxxxxxxx) and Actoz's response letter dated March 14, 2003 (as sent by Xxx &
Xxxxx), all of such notice and letters are attached hereto as ADDENDUM I.
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WHEREAS, both Actoz and Xxxxxx are desirous of resolving any and all existing
disputes, whether known or unknown, between the parties, whether directly or
indirectly connected to, or arising under, the Legend of Mir II in accordance
with terms and conditions hereunder.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Payable Royalty
1.1 Without Shanda's admission of any liability, the parties agree that the
total amount of royalty payable by Xxxxxx to Actoz as of the end of April,
2003 is tentatively US$ 14,394.369.11 ("Tentative Payable Royalty") and that
definitive amount of such payable royalty ("Definitive Payable Royalty")
shall be determined in accordance with Article 2.2 below.
1.2 Both parties acknowledge that the payable royalties for May and June of 2003
shall be paid in 15 business days after receiving Actoz's relevant invoices.
Xxxxxx shall provide the royalty reports for the months of May and June of
2003 in 7 business days after the signing of this agreement.
1.3 On the same date of the payment of the Tentative Payable Royalty, Xxxxxx
shall pay Actoz US $1 million dollars as recovery of the interest plus the
differences in exchange rate calculations for the payable royalties before
the signing of this agreement. Actoz shall share the expenses to fight the
pirated servers of Mir II in proportion to the Actoz's royalty percentage of
the Mir II but, for the convenience of calculation, both parties agree that
Actoz shall provide US $1 million to Xxxxxx to cover all of Actoz's part of
the said expenses with no future obligations to share the said expenses. On
the same date of the payment of the Tentative Payable Royalty, Actoz shall
pay Xxxxxx the above mentioned $1 million dollars to fight the pirated
servers of the Mir II. Such mutual payment of US $1 million dollars between
the two parties shall cancel each other.
1.4 On the same date of the payment of the Tentative Payable Royalty, Xxxxxx
shall pay US$ 3 million to Actoz and Actoz shall pay US$ 3 million to
Xxxxxx. Such mutual payment of US$ 3 million between the two parties shall
cancel each other and shall be the complete and full Settlement Amount to
recover damages of reputation resulting from the Disputes and to resolve any
and all existing disputes, whether
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known or unknown, whether directly or indirectly connected to or arising
under the Legend of Mir II.
2. Payment
2.1 Xxxxxx shall complete all necessary preparation to complete the wire
transfer of the funds in accordance with Section 1 ("the Wired Amount") on the
date of executing this Agreement. The execution of this Agreement and Shanda's
instructions to its bankers to make the wire transfer of the Wired Amount to
Actoz shall occur at the same day. Xxxxxx shall execute the wire transfer by
August 29th. This Agreement shall be effective from the date of the signing,
unless Xxxxxx fails to present to Actoz Pudong Import and Export Co., Ltd's
bank's confirmation of the wiring of the Wired Amount out of the latter's bank
account within twenty five business days from the date of the signing. In case
Xxxxxx fails to present to Actoz the said confirmation above, within twenty-five
business days after the signing of this Agreement, then all agreements and
commitments signed by Actoz after January 24, 2003 shall be deemed null and
void and shall lose their effect forthwith automatically. In case Xxxxxx fails
to present to Actoz the said confirmation above, within twenty-five business
days after the signing of this Agreement, then Actoz shall have the option of
accepting fines amounting to $1 million per day after the said twenty-five
business day period in addition to the Wired Amount, in exchange for resuming
all agreements and commitments signed by Actoz after January 24,2003.
2.2 The receipt of the Wired Amount by Actoz upon signing this Agreement shall
not be deemed as full payment of the Definitive Payable Royalty by Xxxxxx.
Within 30 days after the signing of the Agreement, Actoz may appoint China
operations of one of the big four accounting firms (PriceWaterhouseCooper,
KPMG, Ernst & Young, and Deloitte & Touche Tomatsu) at its total discretion for
the purpose of verifying the conclusive accounting of Definitive Payable
Royalty. Xxxxxx shall extend its full cooperation to such accounting firm,
including keeping all related materials during the term of the Software
Licensing Agreement, and giving access to any related material and personnel of
Xxxxxx and of WOFE if necessary. If there is a difference between Tentative
Payable Royalty and the result of Actoz's accounting firms' verification, Xxxxxx
shall have the right to appoint its own accounting firm (one of the big four
accounting firms) to re-verify the said difference. The Definitive Payable
Royalty and interest accrued thereon shall be determined by the average of the
calculations of the
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two accounting firms and shall be finally effective and binding on Xxxxxx and
Actoz. If the Definitive Payable Royalty is more than the Tentative Payable
Royalty, Xxxxxx shall make full payment of all the difference between the
Tentative Payable Royalty and the Definitive Payable Royalty, and the said
accrued interest calculated by the accounting firms, to Actoz via wire transfer
to the banking account designated by Actoz, within 15 business days from the
date when two accounting firms send their respective reports to Xxxxxx and
Actoz. If the Definitive Payable Royalty is less than the Tentative Payable
Royalty, then Xxxxxx shall be entitled to set-off any excess payment from
future payable royalty.
3. Settlement and Release
3.1 This Agreement shall fully and finally resolve the Disputes. By signing
this Agreement, Actoz and Xxxxxx agree, without any admission as to liability
whatsoever, to a full and final settlement in relation to all the past
allegations and claims, and/or any allegations and claims, whether known and
unknown, of either party against the other party directly or indirectly in
connection with and/or arising under The Legend of Mir II.
3.2 Subject to terms and conditions of this Agreement, Actoz and Xxxxxx
hereby for themselves their successors and assigns irrevocably fully and forever
release and discharge each other (and their respective officers employees
servants and agents), of and from any and all actions, proceedings, claims,
demands, debts, obligations, liabilities, costs or expenses, of whatsoever kind
or nature, in law, equity or otherwise, whether known or unknown, whether or not
concealed or hidden, which Xxxxxx and Actoz has against the other, had, may have
had, or now have for or by reason of any matter, cause, or thing whatsoever
arising out of or in connection with the Disputes.
3.3 At the time of signing of this Agreement or Actoz's receipt of the
transfering bank's confirmation of Shanda's wire transfer of the Wired Amount,
whichever comes later, the Parties shall announce in both China and Korea that
the Disputes have been resolved.
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4. Amendment of Software Licensing Agreement
At the same time as execution of this Agreement, the Software Licensing
Agreement shall be amended as set forth in Amendment Agreement attached hereto
as EXHIBIT 1.
5. Legend of Mir III
The parties agree that Legend of Mir III(a.k.a. "Evil's Illusion") shall not be
a subject of License granted by this Agreement and all the previous agreements
to which both Xxxxxx and Actoz are parties. The parties further agree that
Actoz/Wemade shall not take any responsibility in relation to the formation of
contract of Legend of Mir III with a third party by Actoz and/or Wemade.
Licensee shall not hold Actoz/Wemade responsible for entering into the
license/distribution contract of Mir III with a third party.
6. Others
6.1 Supplementary Agreement
Both Xxxxxx 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 Xxxxxx agree that the following terms in the
Supplementary Agreement shall become null and void automatically between Xxxxxx
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
6.2 Priority
Should the terms and conditions of the original Software Licensing Agreement and
this Agreement conflict with each other, terms and conditions of this Agreement
shall prevail over those of the original Software Licensing Agreement.
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6.3 Entire Agreement
The terms and conditions contained in this Agreement (including its Exhibit)
constitute the entire agreement between Actoz and Xxxxxx relating to its subject
matter and supersede all prior oral and written agreements,
understandings or arrangements relating to the subject matter of this Agreement,
and may not be modified except by an instrument in writing signed by the duly
authorized representatives of the said parties.
6.4 Waiver
No delay or omission by either Actoz or Xxxxxx in exercising any of its rights
or remedies under this Agreement or otherwise available to it shall impair such
right or remedy or constitute a waiver thereof, nor shall any single or partial
exercise of such right or remedy preclude any other or further exercise thereof
or the exercise of any other right or remedy. The said parties' respective
rights and remedies under this Agreement are cumulative and not exclusive of any
rights or remedies which any party would otherwise have available to it.
6.5 Severability
In the event that any clause or provision or part thereof in this Agreement
(including its Exhibit) 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
Actoz and Xxxxxx. In such case, the parties shall make their best efforts to
amend this Agreement or its Exhibit (as the case may be) so that the parties'
original intention is provided in this Agreement or its Exhibit (as the case may
be) to such extent as possible.
6.6 Disclosure
Unless otherwise allowed herein, all of the parties hereto agree that they and
their attorneys will maintain the confidentiality of this settlement and the
specific and general terms thereof as set forth in this Agreement (including its
Addendum and Exhibit). No information concerning this settlement will be
disclosed to any party, including, but not limited to, any representative of the
news media, unless otherwise provided herein.
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Either party or their attorney may disclose the terms of this settlement to any
government agency to which such information must be disclosed according to
applicable rules, regulations or statutes.
6.7 Governing Law and Dispute Resolution
The governing law of the Software Licensing Agreement and provisions in the
Software Licensing Agreement relating to dispute resolution shall apply to this
Agreement.
6.8 Representation and Warranties
In addition to the Warranties contained in the SLA, each Party represents and
warrants on the date hereof as follows:
(a) 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, and perform its obligations under
this Agreement, and to consummate the transactions contemplated hereby;
and
(b) 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.
6.9 Approvals
Xxxxxx shall be responsible for obtaining (if any) all licenses, permits,
registrations and other approvals and for filing reports necessary for the
performance of its obligations and acts under this Agreement from governmental
and other authorities in China in time, and thereafter for maintaining them in
force. Such licenses, permits, registrations, approval and reports include,
without limitation, (if any) the approvals of this Agreement by the government
of China and reports to the foreign exchange authority of China. Actoz shall be
responsible for obtaining (if any) all licenses, permits, registrations and
other approvals and filing reports necessary for the performance of its
obligations and acts under this Agreement from Korean government in time, and
thereafter for maintaining them in force.
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6.10 Language
The English language version of this Agreement shall control in all respects and
for purposes of any and all disputes and litigation.
6.11 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.
In witness whereof this Agreement has been entered into on the date stated at
the beginning.
Actoz Soft Co., Ltd. Shanghai Xxxxxx Internet Development Co., Ltd.
By: /s/ Jong Xxxx Xxx By: /s/ Xxxxxxx Xxxx
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Name: Jong Xxxx Xxx Name: Xxxxxxx Xxxx
Title: CEO & President Title: Chairman of BOD
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