EXHIBIT 10.27
ANNEX B
ONLINE GAME DISTRIBUTION AND SERVICE AGREEMENT I
THE AGE
ONLINE GAME DISTRIBUTION AND SERVICE AGREEMENT I
THE AGE
JULY 14, 2004
SHANGHAI SHENGPIN NETWORK TECHNOLOGY DEVELOPMENT CO., LTD.
SHENGQU INFORMATION TECHNOLOGY (SHANGHAI) CO., LTD.
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THIS ONLINE GAME DISTRIBUTION AND SERVICING AGREEMENT (this "Agreement") is
entered into as of July , 2004 ("Effective Date") by and between:
(1) SHANGHAI SHENGPIN NETWORK TECHNOLOGY DEVELOPMENT CO., LTD., a corporation
organized and existing under the laws of the People's Republic of China
(the "PRC") and having its registered address at Room 000-X, 000
Xxxxxxxxxxx Xxxx, Xxxxxx Xxx Xxxx, Xxxxxxxx, the PRC ("Shengpin"); and
(2) SHENGQU INFORMATION TECHNOLOGY (SHANGHAI) CO., LTD., a corporation
organized and existing under the laws of the PRC and having its registered
address at Xxxx 000-0, Xxxxxxxx 0, 000 Xxxxxxxxxxx Xxxx, Xxxxxxxxxx
Hi-Tech Park, Shanghai, the PRC ("Shengqu").
RECITALS
WHEREAS, Shengpin engages in the business of developing, distributing and
selling computer games, including online games played by multiple users;
WHEREAS, Shengqu engages in the business of the operating, publishing and
selling online games;
WHEREAS, Shengpin desires to grant Shengqu (i) a license to distribute and sell
an online game known as The Age (the "Game", as defined in clause 1.4) in
mainland China and Hong Kong Special Administrative Region (the "Territory") and
(ii) a right to manage and operate servers for the Game, to provide technical
support to users of the Game, to xxxx users, and to provide marketing services,
each in the Territory (the "Services"); and
WHEREAS, Shengqu desires to distribute and sell the Game and to provide the
Services within the Territory and/or to grant a sublicense to do so to a third
party, all in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual consideration
received and to be received pursuant to this Agreement, the parties agree as
follows:
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1. DEFINITIONS.
In this Agreement, unless the context otherwise requires, the following
expressions shall have the meanings set forth below:
1.1 "Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday in the PRC.
1.2 "Client Software" shall mean software sold, provided or distributed to the
users and therefore, to be loaded onto the user's personal computer.
1.3 "Server Software" shall mean system software and a proprietary database
(including the content and records located in such database) located on
servers connected to the Internet.
1.4 "Game" shall mean an online game developed by Shengpin known as The Age,
which can be played by a user with other users by installing the Client
Software onto a user's computer and then accessing the Server Software
connected to the Internet.
1.5 "Intellectual Property" shall mean any and all (by whatever name or term
known or designated) tangible and intangible and now known or hereafter
existing (a) rights associated with works of authorship throughout the
universe, including, but not limited to, copyrights (including without
limitation, the sole and exclusive right to prepare "derivative works of
the copyrighted work and to copy, manufacture, reproduce, distribute
copies of, modify, perform and display the copyrighted work and all
derivative works thereof), moral rights (including without limitation any
right to identification of authorship and any limitation on subsequent
modification) and mask-works; (b) rights in and relating to the protection
of trademarks, service marks, trade names, goodwill, rights of publicity,
merchandising rights, advertising rights and similar rights; (c) rights in
and relating to the protection of trade secrets and confidential
information; (d) patents, designs, algorithms and other industrial
property rights and rights associated therewith; (e) other intellectual
and industrial property and proprietary rights (of every kind and nature
throughout the universe and however designated) relating to intangible
property that are analogous to any of the foregoing rights (including
without limitation logos, rental rights and rights to remuneration),
whether arising by operation of law, contract, license or otherwise; (f)
registrations, applications, renewals, extensions, continuations,
divisions or reissues thereof now or hereafter in force throughout the
universe (including without limitation rights in any of the foregoing);
and (g) rights in and relating to the sole and exclusive possession,
ownership and use of any of the foregoing throughout the universe,
including without limitation, the right to license and sublicense, assign,
pledge, mortgage, sell, transfer, convey, grant, gift over, divide,
partition and use (or not use) in any way any of the foregoing now or
hereafter
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(including without limitation any claims and causes of action of any kind
with respect to, and any other rights relating to the enforcement of, any
of the foregoing).
2. DISTRIBUTION LICENSE
2.1 Shengpin grants Shengqu an exclusive license to distribute and sell the
Game and its peripheral products in the Territory, and a right to grant a
sublicense to a third party. In addition, Shengpin grants Shengqu a
license to use any and all of Shengpin's trademarks, whether now possessed
by Shengpin or hereafter acquired, in connection with the distribution and
sale of the Game and its peripheral products in the Territory, and a right
to sublicense such trademarks to a third party.
2.2 Shengqu shall, during the term of this Agreement, diligently and
faithfully provide the Services, distribute and sell the Game and its
peripheral products in the Territory and shall use its best endeavors to
maintain the goodwill of Shengpin in the Territory. Shengqu shall leave in
position and not cover or erase any notices or other marks (including,
without limitation, details of patents or notices that a trademark design
or copyright relating to the Game is owned by Shengpin or a third party)
which Shengpin may place or affix to the Game.
2.3 During the term of this Agreement, Shengqu shall not sell, sublicense,
export or assist in or be a party to the export of the Game outside the
Territory.
3. INTELLECTUAL PROPERTY RIGHTS
3.1 Shengpin expressly covenants and warrants that it has good title to the
Game, Client Software, Server Software and the right to license their use
to Shengqu free of any proprietary rights of any other party or any other
encumbrance whatsoever.
3.2 Shengpin acknowledges that ownership rights in all data and data files
(including, but not limited to, user data, data recorded and stored in the
game database, connection log, billing log, chatting log and other related
data) which are generated by the servers during operation of the Game
within the Territory, and the contents of related documentation, and
Intellectual Property Rights therein or associated therewith, will remain
with Shengqu, who will have the exclusive right to protect the same.
3.3 Shengqu acknowledges that the Game, in its original and/or localized form
and any part thereof, the game engine, the Client Software, the Server
Software, and the contents of related documentation are proprietary in
nature and that Shengpin claims all related Intellectual Property Rights
granted by or
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available under law therein. Title and sole ownership rights in and to the
Game, in its original and/or localized form and any part thereof, the game
engine, the Client Software, the Server Software, and the contents of
related documentation, and Intellectual Property Rights therein or
associated therewith, will remain with Shengpin, who will have the
exclusive right to protect the same.
3.4 Shengqu agrees to report to Shengpin any known infringements, illegal uses
or misuses of the Intellectual Property Rights of Shengpin in connection
with the Game in its original and/or localized form and any part thereof,
the game engine, the Client Software, the Server Software, and the
contents of related documentation in the Territory. Shengqu agrees to
assist Shengpin in enforcing or obtaining protection of such items and
acknowledges that Shengpin shall have the sole right to bring a legal
action or suit for infringement thereof. Such assistance shall be at
Shengpin's expense unless the matter to which such assistance applies
arises out of or from or is related in any way to the breach by Shengqu of
any term or condition of this Agreement or by Shengqu's willful
misconduct, in which case such assistance shall be at Shengqu's expense.
4. INITIAL PAYMENT
4.1 Shengqu agrees to pay to Shengpin an initial licensing fee of RMB
2,000,000 for the rights granted under this Agreement (the "Initial
Payment"). The Initial Payment shall be non-refundable, except in the
event that Shengpin breaches the Agreement.
4.2 Shengpin shall provide with Shengqu the receipt by the 15th day after
Shengqu makes such payment.
5. MONTHLY ROYALTY PAYMENT
Shengqu shall make monthly royalty payment to Shengpin as set forth:
5.1 Shengqu shall pay to Shengpin 20% of the revenues received in connection
with operating the Game.
5.2 Shengqu shall provide an income statement for each month to Shengpin for
its review and confirmation by the 10th day of the following month.
5.3 Shengqu shall pay to Shengpin the monthly royalty payment for each month
by the 30th day of the month after the month in which Shengpin confirms
the income statement under Clause 5.2.
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5.4 Shengpin shall provide Shengqu the receipt for a monthly royalty payment
by the 15th day after Shengqu makes such monthly royalty payment.
5.5 The monthly royalty payment shall initially be offset against the Initial
Payment, with Shengqu paying the monthly royalty payment to Shengpin only
to the extent that the aggregate monthly royalty payment exceeds the
Initial Payment. Shengqu shall have no obligation to pay the monthly
royalty payment for the first 30 days following the commercial launch of
the Game.
5.6 Shengqu shall have no obligation to pay the monthly royalty payment and
have right to terminate this agreement at any time, in the event that the
average concurrent users for each month of the Game are less than 20,000
during six concurrent months after the Game has been commercially
launched.
6. TERM
The term of this Agreement shall be for a period of twelve (12) months begging
on May 1, 2004.
7. RIGHTS ON TERMINATION
Upon termination of this Agreement:
7.1 All of Shengqu's rights with respect to the Game, in its original and/or
localized form and any part thereof, the game engine, the Client Software,
the Server Software, the tools, and the codes will automatically and
immediately terminate, and Shengqu shall immediately cease to use the Game
in its original and/or localized form and any part thereof, the game
engine, the Client Software, the Server Software, the tools, and the
codes, and shall destroy or return (at Shengpin's option) any materials
representing the same to Shengpin, along with a written confirmation of
destruction or return, signed by an officer of Shengqu.
7.2 Any termination of this Agreement shall not affect any rights and
obligations accrued as of the date of the termination. For the avoidance
of doubt, any monthly royalty payment accrued prior to the termination
shall be payable notwithstanding the termination and the payment shall be
governed to the same extent by the terms of monthly royalty payment under
this Agreement.
8. DEFAULT
8.1 For the purposes of this Agreement, a party shall be in default if (i) it
materially breaches a term of this Agreement causing serious harm to the
goodwill and advantages of the other party, and such breach
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continues for a period of sixty (60) days after the party committing the
breach has been notified of the breach, or (ii) it become insolvent.
8.2 Upon occurrence of an event of default as described in the clause 8.1, the
party not in default may immediately terminate this Agreement by giving
written notice to the party in default. The rights and remedies provided
to the parties in this Clause shall not be exclusive and are in addition
to any other rights and remedies provided by this Agreement or at law or
in equity.
9. INDEMNIFICATION
9.1 Shengqu shall indemnify, defend and hold Shengpin and its affiliates,
directors, officers, employees, shareholders, and agents harmless from and
against any and all claims, losses, liabilities, costs and expenses
arising out of any third-party claim relating to:
9.1.1 Any violation by Shengqu of any of the provisions of this Agreement;
and
9.1.2 Any gross misconduct or intentional acts or omissions on the part of
Shengqu or its employees or agents.
9.2 Shengpin shall indemnify, defend and hold Shengqu and its affiliates,
directors, officers, employees, shareholders, and agents harmless from and
against any and all claims, losses, liabilities, costs and expenses
arising out of any third-party claim relating to:
9.2.1 Any violation by Shengpin of any of the provisions of this
Agreement; and
9.2.2 Any gross misconduct or intentional acts or omissions on the part of
Shengpin or its employees or agents.
9.3 Indemnification procedure shall be as follows:
9.3.1 A party seeking indemnification (the "Indemnified Party") will
promptly notify the other party (the "Indemnifying Party") in
writing of any claim for indemnification.
9.3.2 The Indemnifying Party will, if requested by the Indemnified Party,
give assistance to the Indemnified Party in defense of any claim.
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9.3.3 The Indemnified Party will have the right to consent to the entry of
judgment with respect to, or otherwise settle, an indemnified claim
with the prior written consent of the Indemnifying Party.
10. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the PRC.
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IN WITNESS WHEREOF, Shengpin and Shengqu have each caused this Agreement to be
executed and delivered by a duly authorized representative, officer or agent,
effective as of the Effective Date.
SHANGHAI SHENGPIN NETWORK TECHNOLOGY DEVELOPMENT CO., LTD.
By: /s/ Xxxxxxx Xxx
___________________________
Name: Xxxxxxx Xxx
Title: General Manager
SHENGQU INFORMATION TECHNOLOGY (SHANGHAI) CO., LTD.
By: /s/ Tianqiao Chen
___________________________
Name: Tianqiao Chen
Title: Executive Director
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