Global Game Portal webzen.com Joint Venture Agreement
Exhibit
4.12
Global
Game Portal ▇▇▇▇▇▇.▇▇▇ Joint Venture Agreement
Webzen
Inc.,(hereinafter referred to as “A”) has begun the operation of the global game
portal “▇▇▇▇▇▇.▇▇▇” and to promote growth of “▇▇▇▇▇▇.▇▇▇” and produce
synergistic effect, “A” is entering into this agreement that stipulates that NHN
Games Co., Ltd.,(hereinafter referred to as “B”) will have joint ownership and
conduct joint operation of “▇▇▇▇▇▇.▇▇▇” and that “A” will service its game
titles MU and SUN Online and B its game titles Archlord and Reign of Revolution
(“R2”) through “▇▇▇▇▇▇.▇▇▇”. As such, “A” and “B” agree to execute the following
contents of this agreement in good faith.
Article 1
(Purpose)
The purpose of this
agreement is to define the rights, obligations, and other necessary items of
each party with regards to the global game portal “▇▇▇▇▇▇.▇▇▇,” jointly owned
and operated by “A” and “B”.
Article 2
(Definitions)
Unless otherwise
stipulated, the definitions of the terms used in this agreement are as
follows.
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1.
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Game Sales:
Direct sales from within the games. Examples include the sales of items
and subscription fees from flat rate
games.
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2.
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Change of
Management: Situations in which certain entities, excluding the management
(registered directors) of the two companies, as of the date of signing
this agreement (a) possess 10% or more of the company’s stock or (b)
possess stock in excess of the stock possessed by the current management,
resulting in the current management being unable to manage the company as
it intends.
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3.
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Global Portal
Committee: The committee that is composed of personnel from the two
parties that are in charge of making important decisions regarding the
Portal Business (as defined below).
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4.
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Global Portal
Task Force Team (“TFT”): Refers to the department or organization made up
of personnel in charge of the practical operations of the Portal Business
(as defined below).
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5.
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Merchandising:
Offshoot or related products utilizing the Portal
Business.
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6.
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Billing
System: Refers to the computer programs and related tools needed to
process the billing related data (Game Sales, recharging and spending of W
Coins (as defined below), Billing DB (as defined below) etc.) from the
global game portal “▇▇▇▇▇▇.▇▇▇”.
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7.
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Billing DB:
Refers to all information on the overall process of users recharging their
W Coins, spending and being reimbursed for W Coins in games serviced on
the portal at “▇▇▇▇▇▇.▇▇▇”. The Billing DB refers to information related
to the process of recharging, spending and reimbursement W Coins, and
includes age, gender, payment method, number of accounts and total
playtime in addition to payment information. However, certain personal
information that needs to be protected is
excluded.
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8.
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Website
Advertisement: Refers to advertisements displayed on the
website.
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9.
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“▇▇▇▇▇▇.▇▇▇”:
Refers to the global game portal service provided to users through the
portal page ▇▇▇.▇▇▇▇▇▇.▇▇▇
and related pages.
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10.
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User
DB: Refers to all information related to game playing and the member
management of the portal. Member management information includes all
information necessary to certify and manage members on the portal, i.e.,
account ID, email address, gender, address, nationality, name, member
level and others etc. Game play information refers to all information
needed for a user to play games which is actually recorded on the server,
for example, character name, face type, appearance, class, level,
experience, skill tree, stat, owned items and items attached etc. However,
certain personal information that needs to be protected is
excluded.
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11.
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In-Game
Advertisements: Refers to advertisements displayed in the
games
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12.
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Channeling:
Refers to affiliated operations which take game titles serviced by other
companies and allow members of “▇▇▇▇▇▇.▇▇▇” to play said games
using “▇▇▇▇▇▇.▇▇▇” ID/PW through the
“▇▇▇▇▇▇.▇▇▇”
website. In return “▇▇▇▇▇▇.▇▇▇” receives a portion of the sales from such
games as a fee from other
companies.
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13.
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Channeling
Sales: Refers to the income collected as fees from other companies that
“▇▇▇▇▇▇.▇▇▇”
receives through Channeling
services.
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14.
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Titles of
Other Companies: Refers to game titles developed by third-parties other
than the parties to this agreement.
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15.
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Common Portal
Services: Refers to services of the global game portal “▇▇▇▇▇▇.▇▇▇” offered to all portal
users rather than users of individual game titles such as the main page
service and general user related page (portal membership sign up,
withdrawal, customer service pages
etc.).
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16.
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Portal
Business: Refers to the global game portal publishing service in which “A”
and “B” provide game service to the users through
“▇▇▇▇▇▇.▇▇▇.”
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17.
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Portal
Infrastructure Assets: Refers to the basic assets required to operate the
Portal Business. The Portal Infrastructure Assets include all User DB and
Billing DB of “▇▇▇▇▇▇.▇▇▇,” the domain address of “▇▇▇▇▇▇.▇▇▇,”
the websites that fall under the Common Portal Services and the Billing
System.
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18.
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W Coins: The
game money (cyber money) that can be used in all the games serviced by the
Portal Business and which can be recharged using cash and credit
cards.
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Article 3
(Operation of the Global TFT)
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1.
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The Portal
Business is owned and operated jointly by the parties with the detailed
rights and obligations agreed upon as
follows.
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①
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The Portal
Infrastructure Assets are owned jointly by the
parties.
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②
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Notwithstanding
① above, ownership of the hardware and software purchased individually by
“A” or “B” using its own funds to operate the Portal Business is held by
the party that paid for and purchased such hardware and software
equipment.
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③
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Notwithstanding
① above, the titles owned by “A” and “B” and serviced through the Portal
Business are owned by the original owner of the
title.
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④
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The business
rights to Titles of Other Companies belong to the party who entered into
contract with the third party. When both parties have entered into
contract with the third party jointly regarding Titles by Other Companies,
the usage rights are allotted to the parties in accordance with the
percentages stipulated by the relevant
contract.
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2.
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The method of
operation of the Portal Business is as
follows.
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①
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The final
decision rights concerning how to operate individual game title of the
Portal Business lie with the title owner or user rights holder. Therefore,
when the Titles of Other Companies is owned jointly by both the parties to
this agreement, the party with the higher rights percentage holds the
final decision rights of the game title in
question.
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②
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When the
operation levels of the Portal Business are significantly lower than those
of similar businesses, the Global Portal Committee can demand revisions
and the Global Portal TFT must accept such
demands.
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3.
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A Global
Portal TFT composed of personnel from both parties will be formed to
operate the Portal Business and the Global Portal Committee is to be
installed for making important
decisions.
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4.
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Each party
can recommend up to 3 personnel to the Global Portal Committee, which is
not to exceed a total of 6
personnel.
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5.
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The important
decisions that need to be made by the Global Portal Committee are as
follows.
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①
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Decision on
the games to be provided to the Portal
Business.
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②
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Composition
of the Global Portal Committee and any changes
thereof.
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③
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Other
decisions on important items of resolution regarding the operation of the
Portal Business.
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6.
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Resolutions
of the Global Portal Committee requires an attendance of more than half of
the committee members and majority of the votes of the attending
members.
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Article 4
(Allotment of Sales and Expenses)
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1.
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The sales
from the Portal Business will be collected in its entirety by “A” and
divided amongst “A” and “B” in accordance with the standards stipulated in
Article 5.
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2.
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The expenses
accrued with regards to the Portal Business are paid by “A” and then
settled with “B” in accordance with the standards stipulated in Article
6.
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3.
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Contracts/affiliations
occurring in relation to the Portal Business are conducted in the name of
“A”. However, in the case of publishing contracts in which titles the
ownership etc., of which are held by third party companies other than “A”
or “B” can be conducted independently or jointly by both
parties.
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Article 5
(Sales)
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1.
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All sales
accrued from the Portal Business are managed through the account in the
name of “A” to be exclusively used for the Portal Business (bank
name: , account
number: , currency:
USD).
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2.
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“A” pays “B”
the percentage of sales due to “B” each month in US
Dollars.
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3.
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Sales will be
recognized at the point in which the client uses W Coins and spends W
Coins for each game. Such sales accrued each month in the portal business
will be allotted each month. The refunds by users are deducted by each
game title when allotting the sales
amounts.
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4.
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When sales
from the titles of “B” occur, “A” must notify “B” of the sales allocation
statement calculated in accordance with Annex 1 in writing or through
e-mail not later than 5 working days before the end of the month following
the month during which the sales
occurred.
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5.
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When “B” has
no objections to the statement mentioned in section 4 of this article, “B”
shall request payment for the month in question through an invoice based
on the sales allocation statement to “A” and “A” shall pay the amount in
question based on this invoice by the end of the following
month.
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6.
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When “B” has
objections to the statement mentioned in section 4 of this article and
there is an ensuing mutual agreement regarding the payment, “B” sends an
invoice based on such agreement to “A” to request payment. When there is
no agreement reached by 10 working days after “A” makes notification of
the statement, “B” issues an invoice in accordance with the amount
stipulated by section 4 of this article and requests “A” to make
payment.
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7.
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After
receiving request for payment of the sales, “A” must pay the amount in
question by the end of the month following the month during which sales
occurred.
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8.
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Miscalculations
(calculation adjustments made in accordance with the latter paragraph of
section 6 of this article included) will be reflected in the settlement of
the month following the month in which such miscalculation is
discovered.
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9.
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When “A” does
not pay “B” by the date stipulated by this article, a penalty interest
rate of 5% per annum will be levied, on a daily basis, in addition to the
obligation to pay the unpaid
amount.
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10.
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When the
payment dates stipulated in sections 5 and 8 of this article are public
holidays, such payment dates are presumed to refer to the first working
day following the public holiday.
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Article 6
(Expenses)
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1.
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All expenses
occurring from the Portal Business shall be first settled in the name of
and paid by “A” at the time of their occurrence and then billed to and
settled with “B” in accordance with the standards set by this article and
Annex 1.
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2.
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The wages of
the members of the Global Portal TFT are borne by the company to which
each member respectively belongs.
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3.
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Requests by
“A” to “B” for the payment of expenses shall be by quarter (every 3
months), at the end of each
quarter.
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4.
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“A” shall
provide “B” with an invoice and expense allotment data within 10 working
days after the end of the quarter for which payment expenses was
requested. In the case of expenses accrued domestically in relation to the
Portal Business, tax statements are issued to “B” based on the tax
statements provided to “A” and payment requested in KRW, and in case of
expenses accrued overseas, payment of the amount in question is requested
in USD based on the invoice submitted to
“A”.
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5.
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When there
are no problems with the invoice and expense allotment data provided by
“A”, “B” pays the expenses calculated based on the tax statements and
invoices provided by “A” by the end of the month following the end of each
quarter.
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6.
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Sections 6
through 10 of the previous article are deemed to apply to the settlement
of expenses.
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Article 7 (Auditing
of the Sales/Expenses Allotment Data)
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1.
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“A” may not unlawfully
edit or correct information in Portal Business statements and must keep
the materials related to the calculation and allotment of sales/expenses
(“Sales/Expenses Allotment Data”) for the duration as required by
law.
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2.
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During the
term of this agreement or within 2 years after expiration or termination
of this agreement and with prior written notice to “A”, “B” can inspect
and audit the data of “A” on sales, expense and sales/expenses allotment
directly or through public auditors designated by “B”. The expenses of
auditing will be borne by “B”, but if the difference between the sales
allotted and expenses actually paid and such amount that should have been
allotted or paid shows is more than 10%, the audit expenses will be borne
by “A”.
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3.
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If results of
the audit of section 2 above show that the payments made by “A” to “B” are
less than they should have been, “A” must immediately pay “B” the unpaid
amount. In this case, interest of 5% a year should also be paid in
addition to the unpaid amount.
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4.
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If results of
the audit of section 2 above show that the payments made by “A” to “B” are
more than they should have been, “B” shall immediately return the surplus
to “A”. In this case an interest rate of 5% a year must be added to the
surplus.
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5.
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Sections 3
and 4 of this article are deemed to apply to cases in which results of the
audit of section 2 show that “B” has paid more or less expenses than they
should have.
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Article 8 (Term of
Agreement)
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1.
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The term of
this agreement is 3 years from the day of this
agreement.
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2.
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If a party
does not express its intention to terminate this agreement by at least one
month before the day of its expiration, this agreement shall be
automatically extended by one year.
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Article 9
(Termination or Cancellation of the Agreement)
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1.
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When there is
a default on obligations or delay of execution by a party, the other party
can designate a term and notify in writing that such situations be
remedied, and if no action is taken to remedy the situation during that
term, that party cam immediately terminate or cancel this
agreement.
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2.
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However, in
the following cases, a party can immediately cancel (terminate) this
agreement.
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①
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When issued
checks or promissory notes do not clear or a party receives disposition
for failure to pay
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②
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When a party
receives seizure, provisional attachment, injunctions, auctions, or other
forms of forcible execution by a third
party
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③
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When a party
goes through or requests bankruptcy, composition, or corporate
reorganization
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④
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When a party
receives an order of cessation or cancellation of operations by the
governing authorities and it is deemed difficult for this contract to be
sustained
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⑤
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When there is
a “change of management” during the term of this agreement without prior
written consent of the other party
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3.
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A party’s
obligation to pay settlement or bear expenses is still valid even if the
agreement is terminated or cancelled, but when a party has the right to
demand compensation from the other party, they can cancel said rights out
with their obligations to pay settlement or bear
expenses.
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Article 10 (Effects
of Termination)
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1.
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The parties
agree to divide the tangible/intangible assets (Common Portal Service
rights and Portal Infrastructure Assets included) that the parties have
joint ownership of as of the date of termination of this
agreement.
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2.
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However, in
the case of jointly owned assets that are required for one party to
independently service games that they own (or hold user rights to) and
were serviced through the existing portal business such as the Billing DB
or personal information, such assets are not to be divided but
continuously owned jointly and each party allowed to enjoy usage within
the necessary boundaries of usage without limitation, but in the case of
transferring such assets to a third party, the prior written consent of
the other party is required.
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3.
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From the date
of dividing assets, the Portal Infrastructure Assets may be used by “A”
and “B” for their respective portals. However, in the case of domain
address, “B” can specify a domain to replace “▇▇▇▇▇▇.▇▇▇” and use
it.
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4.
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As sections 1
and 2 of this article only regulate jointly owned assets, they do not
apply to the ownership of software and hardware purchased by each party
with their own funds for the operation of the Portal Business” and such
ownership remains with the relevant party and the other party loses usage
rights to such assets.
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5.
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Ownership of
game titles serviced on the Portal Business returns to the original
owners.
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6.
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Notwithstanding
section 5 of this article, it must be possible for users to access and
play games, that was offered through “▇▇▇▇▇▇.▇▇▇” during the six months
period before the termination of this agreement, through the new portal
sites of “A” and “B” for 1 year. However, the terms and conditions of
sales and expense settlement remain the same as with this
agreement.
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Article 11
(Compensation)
When damages are
incurred upon a party by defaults on obligations or illegal actions for which a
party is responsible, the responsible party must compensate the other party for
damages.
Article 12
(Confidentiality)
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1.
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The parties
cannot reveal to third parties (other related businesses and newspapers,
TV, internet or media) or use for other purposes the technical and
business secrets acquired through the contracting and execution of this
agreement for 3 years after expiration of this agreement without the prior
written consent of the other party and must strictly abide by other
obligations of confidentiality.
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2.
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When the
violation of the previous section leads to infringement of rights of “A”
or “B”, the party that suffered damages is entitled to demand
compensation, and the party that caused the damages must
comply.
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Article 13
(Prohibition of the Transfer of Rights, Obligations)
Unless the other
party gives prior written consent, a party cannot dispose of the rights or
obligations acquired through this agreement to a third party through transfer,
succession, providing of collateral etc.
Article 14
(Resolution of Conflicts)
When a clash of
opinions or conflicts arise with relation to this agreement, efforts must be
made to peacefully resolve them through agreement foremost, and if that is not
possible legal proceedings will be initiated through the Seoul Central District
Court as the court of jurisdiction.
For the purpose of
evidencing this contract and its contents, 2 copies of this lease contract are
to be drafted, signed, and sealed, and “A” and “B” shall each keep a
copy.
August 1,
2009
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“A”
▇▇▇-▇
▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
▇▇ Daelim
Acrotel
Representative
Director ▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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“B”
NHN GAMES
CO., LTD.
▇▇▇▇▇▇-▇▇▇▇,
▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇-▇▇
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
Representative
Director ▇▇▇, ▇▇▇▇▇ Gwan
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Annex
1
Ⅰ.
Sales
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1.
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“Common Portal
Services” Related Sales
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Category
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Standard of
Sales Allotment
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Example of
Item
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Sales from
Advertisements in the Portal Main Page and Common Service
Pages
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Allotted to
“A” and “B” 5:5
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Sales from
banner ads on the main page of the portal, advertisement sales from the
membership subscription page, email advertisement sales
etc.
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Game
Channeling Sales
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Allotted to
“A” and “B” 5:5
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Channeling
sales
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Portal Common
Merchandising
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The sales of
merchandising using the “▇▇▇▇▇▇.▇▇▇” portal are allotted
to “A” and “B” 5:5
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Sales of
merchandising products using portal logos
etc.
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2.
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Sales of
Individual Game Titles
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Category
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Standard of
Sales Allotment
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Example of
Item
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Game
Sales
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Sales are
assigned to each owner/user rights holder of the game in question as of
the time of W-Coin consumption for individual games
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Partial
charged item sales, monthly flat rate game sales
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Advertisement
Sales per Game
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1. The
advertisement sales accrued from the webpage of each game title are
assigned to the owner/user rights holder of the game in
question
2. The
in-game advertisement sales accrued each game title are assigned to the
owner/user rights holder of the game in question
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Webpage ads,
in-game ads
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Individual
Title Merchandising Sales
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The sales
from merchandising using the characters of individual games etc., are
assigned to the owner/users right holder of each individual
title.
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Merchandising
product sales.
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3.
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Publishing
Sales from “Titles of Other
Companies”
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Category
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Standard of
Sales Allotment
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Example of
Item
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Game Sales
from “Titles of Other Companies”
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Allotted to
“A” and “B” respectively in accordance with the usage rights percentages
of the publishing game titles in question
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4.
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Advance
Profits of Payments Etc.
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Category
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Standard of
Sales Allotment
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Example of
Item
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Interest on
Advances
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All interest
on advances are assigned to “A”
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Interest on
advances
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Ⅱ.
Expenses
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1.
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Expenses
Related to “Common Portal Services”
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Category
(Sales/Expenses)
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Standard of
Expense Allotment
|
Example of
Item
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Web
Planning/Design/Development
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Borne 100% by
“A” using web planning/design/development personnel of “A” or
outsourcing
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Systems
Operations
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Borne 100% by
“A” using system operations personnel of “A” or
outsourcing
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Hardware,
Software
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Purchased by
“A”, 100% of expenses borne by ”A”
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Business,
Analysis Personnel
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Employed and
paid for 100% by “B”
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Web
QA
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Borne 100% by
“B” using web QA personnel of “B” or outsourcing
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Common Portal
Operations/CS and Lines Expenses
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Borne by “A”
and “B”, 5:5
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Common Portal
Marketing Expenses
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Borne by “A”
and “B”, 5:5
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2.
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Individual
Game Title Service Expense Bearing
Standard
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Category
(Sales/Expenses)
|
Standard of
Expense Allotment
|
Example of
Item
|
|
Web
Planning/Design/Development of Web Pages of Individual Game
Titles
|
Borne 100% by
the owner of each individual game title. However, in the case of Titles of
Other Companies, borne by “A” and “B” respectively according to their user
rights percentages
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|
Hardware and
Software for the Service/Operation of Individual Game
Titles
|
Borne 100% by
the owner of each individual game title. However, in the case of Titles of
Other Companies, borne by “A” and “B” respectively according to their user
rights percentages
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|
Lines
Expenses for the Service/Operation of Individual Game
Titles
|
Borne 100% by
the owner of each individual game title. However, in the case of Titles of
Other Companies, borne by “A” and “B” respectively according to their user
rights percentages
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Marketing
Expenses of Individual Game Titles
|
Borne 100% by
the owner of each individual game title. However, in the case of Titles of
Other Companies, borne by “A” and “B” respectively according to their user
rights percentages
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|
Business/Analysis,
Operation/CS of Individual Games
|
Borne 100% by
the owner of each individual game title. However, in the case of Titles of
Other Companies, borne by “A” and “B” respectively according to their user
rights percentages
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|
Billing
Fees
|
1. Borne 100%
by the owner of each individual game title. However, in the case of Titles
of Other Companies, borne by “A” and “B” respectively according to their
user rights percentages
2. In cases
in which the billing fees for each title cannot be clearly separated,
expenses for billing fees are allotted to the owner of each title
according to the percentage of each title of the entire payment
amounts
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