EXHIBIT 10.32
SERVICE AND DISTRIBUTION OF EARNINGS & PROFIT
AGREEMENT OF "RAGNAROK ONLINE"
THIS SERVICE AND DISTRIBUTION OF EARNINGS & PROFIT AGREEMENT ("Agreement"), is
made and entered into on this 1st day of April, 2003, by and between GRAVITY
CORPORATION, a corporation duly organized and existing under the laws of the
Republic of Korea ("Parent Company") and having its offices at 6th Fl. Shingu
Bldg., 000-0, Xxxxxx-Xxxx, Xxxxxxx-Xx, Xxxxx, 000-000, Xxxxx ("Parent Company"),
and GRAVITY INTERACTIVE, LLC., a Limited Liability Company duly organized and
existing under the laws of United States of America(USA) and having its offices
at 0000 Xxxxxxx Xxx. Xxxxxx Xxx Xxx, XX 00000, XXX ("Subsidiary Company").
RECITALS:
WHEREAS, Parent Company has developed and possesses all rights in computer
programs of online game "Ragnarok Online" ("Game") and also possesses valuable
know-how and technical information on the installation, design, service and use
of the Game;
WHEREAS, Subsidiary Company desires to enter into an agreement of Distribution
of earnings & Profits with Parent Company pursuant to which Subsidiary Company
will distribute and market the Game in the North America territory.
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 "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.
1.2 "Total Sales Amount" shall mean the total amount paid by End Users for
the Game which is approved and reconciled monthly in the Billing
System.
1.3 "End Users" shall mean the users of the Game through game service
system established and operated by Subsidiary Company with
individually assigned ID for each End User.
1.4 "English Version" shall mean the Game in English language.
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1.5 "Servers" shall mean the servers established, installed and operated
by Subsidiary Company within the Territory only for the service of
Game to End Users in the Territory.
1.6 "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.
1.7 Service Expenses" shall mean the Payment Gateway Service Commission,
Data Centre Collocation Service expense, financial cost (Loan Interest
expense), Equipment and billing program lease expense and marketing
expense.
1.8 "Service-Sales Amount" shall mean the Total Sales amount paid by End
Users for the Game calculated in the Billing System with the deduction
of the Service Expenses granted under this Agreement.
1.9 "Service Territory" shall mean North America Territory for the
commercial game service.
ARTICLE 2
OBLIGATION: PARENT COMPANY
2.1 Parent Company shall provide Subsidiary Company with its full
assistance and cooperation including providing technical assistance in
order for Subsidiary Company to launch its service of the Game.
2.2 Parent Company shall provide Subsidiary Company with its full
assistance and cooperation in the specified Territory in which English
Version is used.
2.3 The Parent Company shall provide Subsidiary Company for free of charge
with technical assistance including software installation and set-up,
maintenance support, patch updates in connection with the Game, and
also Parent Company, upon the request of Subsidiary Company, will
dispatch its engineers and Support staffs to Subsidiary Company for
the technical and other assistance set forth.
2.4 Parent Company shall provide Subsidiary Company with its full
assistance and cooperation including preparation of English Version
and providing technical assistance in order for the Subsidiary Company
to launch its beta service of the Game in the Territory no later than
[April 30th, 2003] and its commercial service of the Game in the
Territory no later than [June 30th, 2003].
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2.5 Parent Company have a right to request Subsidiary Company detailed
financial data including but not limited to Monthly Service Sales
Amount and Expenses incurred during specific accounting period and
Parent Company may by itself or through an accountant designated by
itself perform annual audit all of the documents of Subsidiary Company
with respect to its Game business at Subsidiary Company's facility.
ARTICLE 3
OBLIGATION: SUBSIDIARY COMPANY
3.1 Subsidiary Company shall exert its best efforts to protect Technical
Information which is exclusively owned by Parent Company and without
prior written approval by Parent Company, Subsidiary Company shall not
release, distribute, and sell any of Technical Information to the 3rd
party.
3.2 In the event there are any problems or defects found in the commercial
service of the game to the End users, the Subsidiary Company shall
promptly notify the Parent company to take necessary actions to cure
such problems or defects.
3.3 Subsidiary Company shall expand its business or its territory base
upon prior written approval from Parent Company.
3.4 If any End User claims a compensation for any loss or damages incurred
due to any defects of the Game, the Parties shall consult with each
other in good faith and Subsidiary Company must take necessary action
to remedy such claims.
3.5 In consideration of the License and technical assistance granted under
this Agreement, Subsidiary Company shall distribute to Parent Company
a monthly Distribution of Earnings and Profits in an amount equal to
twenty percent [20%] of Service-Sales Amount paid by End Users for a
period of one (1) year from the initial commercial service launch
date, according to the laws and regulations of the relevant
governmental authorities of U.S.A. and the company's operating
agreements and other internal guidelines, accompanied by the detailed
information on End Users for such month, provided.
Distribution of Earnings & Profits = Service-Sales Amount (Total
Sales Amount - Service Expenses) x 20%
3.6 1(one) year after the initial commercial service launch date,
Subsidiary Company shall distribute the earnings and Profits in the
form of stock certificate or cash to the Parent Company, upon approval
of the Subsidiary Company's annual board meeting or the equivalent
authoritative body.
3.7 Any and all Distribution payment under this Agreement by Subsidiary
Company to Parent Company shall be made in US dollar and by wire
transfer to the account designated by the Parent Company or in such
other method as may be mutually agreed between the Parties.
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3.8 When tax or other regulations issue raised by the relevant government
authorities of U.S.A., in Distribution of Earnings and Profits
payments made to the Parent Company, both, Parent and Subsidiary
Company shall take necessary action to remedy such claims.
3.9 Subsidiary Company shall keep all of its record, contractual and
accounting documents and company documents in relation to its business
in its offices for the period of five (5) years. Even after period of
five (5) years, Subsidiary shall not destroy any of its record,
contractual and accounting documents unless prior approval from the
Parent Company.
3.10 Subsidiary Company should work with a Parent Company designated
Accounting Firm in respect to its Accounting and Tax consulting needs.
Parent Company may also, through an accountant designated by Parent
Company investigate and perform annual audit of the company documents
of Subsidiary Company with respect to its Game business. For this
purpose, Subsidiary Company shall provide all assistance and
co-operation required by Parent Company for such investigation and
audit.
3.11 Subsidiary Company shall exert its best efforts to supply, distribute
and sell the Game in the Territory.
ARTICLE 4
FORCE MAJEURE
4.1 In the event of Subsidiary Company's business or management situation
do not allow continuing the commercial service of game, Subsidiary
Company may file for a corporate dissolution to wind up its business
and existence as a remedy upon a written agreement by the both
parties.
4.2 If Subsidiary Company is unable to perform its normal business is
shown to be due entirely to causes beyond the reasonable control of
the Subsidiary Company including, without limitation, causes such as
strikes, lockouts or other labour disputes, riots, civil disturbances,
actions or inactions of governmental authorities or suppliers,
epidemics, war, embargoes, severe weather, fire, earthquake, acts of
God or the public enemy, Subsidiary Company may choose corporate
dissolution as an ultimate remedy.
4.3 The Terms of agreement and the relationship between the two parties
shall be governed by and interpreted in accordance with the laws of
the Republic of Korea, excluding its choice of laws.
4.4 This Agreement shall be written in Korean and English and all disputes
on the meaning of this Agreement shall be resolved in accordance with
Korean version of this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement the day and year
first above-written.
APRIL. 01. 2003
GRAVITY CO., LTD.
By: /s/ Jung Xxx Xxxxx
---------------------------------
Name: Xxx Xxxxx. Jung
Title: C.E.O.
GRAVITY INTERACTIVE, LLC.
By: /s/ Jung Ryool Xxx
---------------------------------
Name: Jung Ryool. Xxx
Title: C.E.O.
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