EXHIBIT 10.1
VIDEO GAME DISTRIBUTION AGREEMENT
This Video Game Distribution Agreement (this "AGREEMENT") is entered into as of
August 9, 2002 (the "EFFECTIVE DATE") by and between Vivendi Universal Games,
Inc., a Delaware corporation, with its principal place of business at 0000
Xxxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 ("VUG"), and Interplay Entertainment
Corp., a Delaware corporation, with its principal place of business at 00000 Xxx
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000 ("INTERPLAY").
WHEREAS, Interplay has broad experience and unique talent and skill in the field
of video game development and publishing, and VUG has broad experience and
unique talent and skill in the field of video game reproduction, manufacture,
marketing, promotion, distribution and sale;
WHEREAS, Interplay is currently developing and owns or controls the video game
products described in SECTION 3 of EXHIBIT B, attached hereto, and wishes to
further develop and license these products to VUG, and VUG desires to receive
such license from Interplay, on an exclusive basis for the purposes of
reproduction, manufacture, marketing, promotion, distribution and sale, as
provided herein;
WHEREAS, VUG desires to utilize and rely on Interplay's broad experience, unique
talent and skill and to receive from Interplay, and Interplay desires to utilize
and rely on VUG's broad experience, unique talent and skill and to grant to VUG,
an exclusive license to the products listed in SECTION 3 of EXHIBIT B for the
purpose of reproduction, manufacture, marketing, promotion, distribution and
sale, as set forth herein.
NOW, THEREFORE, by reason of the foregoing premises and in consideration of the
mutual covenants and premises hereinafter set forth and for other valuable
consideration, the sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have the
meanings set forth below:
1.1 MINIMUM GUARANTEE has the meaning given to it in SECTION 1.1 of
EXHIBIT A, attached hereto.
1.2 APPROVED GOLD MASTER means (i) with respect to PC Partner Products
only, a Gold Candidate approved by VUG Customer Quality Care in
accordance with SECTION 3 below, and (ii) with respect to Non-PC
Partner Products, a Gold Candidate approved by the applicable Game
Hardware Platform Licensor in accordance with SECTION 3 below.
1.3 AUTHORIZED CHANNEL means the distribution channel, as specified in
SECTION 1 of EXHIBIT B, attached hereto, in which VUG is authorized to
reproduce, manufacture, market, promote, distribute and sell Partner
Products.
1.4 AUTHORIZED DEDUCTIONS shall have the meaning set forth in SECTION 3 of
EXHIBIT A, attached hereto.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 1
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1.5 BETA VERSION means the version of a Partner Product which (a) is in
all material respects feature complete, playable and testable; (b)
contains opening credits and title screens; and (c) is substantially
free of Program Errors and ready for fine tuning.
1.6 CONFIDENTIAL INFORMATION has the meaning given to it in SECTION 15.1
of this Agreement.
1.7 DEFAULT has the meaning given to it in SECTION 12.2 of this Agreement.
1.8 DELETION NOTICE has the meaning given to it in SECTION 12.5.
1.9 DISCLOSING PARTY has the meaning given to it in SECTION 15.1 of this
Agreement.
1.10 DOUBTFUL PRODUCT NOTICE has the meaning given to it in SECTION 12.5.
1.11 END-USER(S) means a person or entity that acquires the Partner
Product(s) for use rather than resale or distribution.
1.12 FINAL GROSS SALES PROJECTION has the meaning given to it in SECTION
1.2 of EXHIBIT A.
1.13 GAME HARDWARE PLATFORM LICENSOR means a manufacturer of the platform
hardware upon which a Non-PC Partner Product is designed to play
(e.g., Sega for Dreamcast, Sony for PlayStation 2, Nintendo for Game
Cube and Game Boy Advance, and Microsoft for Xbox).
1.14 GENERAL RESERVE has the meaning given to it in SECTION 3 of EXHIBIT A.
1.15 GOLD CANDIDATE(S) means: (i) For PC-Partner Products, a master copy of
the object code and all Related Assets of and relating to the Partner
Product(s) once submitted to VUG Customer Quality Care in accordance
with SECTION 3 below and from which multiple copies of the Partner
Product(s) may be reproduced; and (ii) for Non-PC Partner Products, a
master copy of the object code and Related Assets that has been
submitted to VUG Customer Quality Care in accordance with SECTION 3
below and which has been submitted for approval by the applicable Game
Hardware Platform Licensor.
1.16 GROSS SALES REVENUES means the aggregate price of all Partner Product
Units shipped by or for VUG.
1.17 INDEMNIFIED PARTY has the meaning given to it in SECTION 19.3 of this
Agreement.
1.18 INDEMNIFYING PARTY has the meaning given to it in SECTION 19.3 of this
Agreement.
1.19 INITIAL MINIMUM GUARANTEE has the meaning given to it in SECTION
1.1(I) of EXHIBIT A.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
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1.20 INITIAL SHIPMENT means the period commencing from the first commercial
shipment of a Partner Product to VUG's various retailers and expiring
*** business days thereafter.
1.21 INTERPLAY PROCEEDS has the meaning given to it in SECTION 2.1 of
EXHIBIT A.
1.22 IP RIGHTS has the meaning given to it in SECTION 13 of this Agreement.
1.23 LICENSE has the meaning given to it in SECTION 2.1 of this Agreement.
1.24 LICENSED TERRITORY means that geographic region described in SECTION 2
of EXHIBIT B.
1.25 NET SALES has the meaning given to it in SECTION 2.2 of EXHIBIT A,
attached hereto.
1.26 NON-PC PARTNER PRODUCT means a Partner Product designed for play on a
Platform other than a personal computer system (e.g., PlayStation 2,
Game Cube, Game Boy Advance, Xbox).
1.27 PARTNER PRODUCT(S) means (i) Interplay's computer and/or video game
software product SKUs stated in SECTION 3 of EXHIBIT B, AND (II) any
and all additional computer and/or video game products developed by or
on behalf of Interplay in its sole discretion and completed during the
three (3) year period following the Effective Date, including any and
all sequels, new titles or derivative works of previously published
titles, together with all Related Assets and any and all Program Error
Corrections but only if and to the extent that as of the Effective
Date no third party already possesses such rights (or such party
subsequently waives such rights in their sole discretion). For
purposes of clarification, Partner Products shall not include computer
and/or video game products which are both developed and
distributed/published by third parties under sale or license from
Interplay.
1.28 PC PARTNER PRODUCT means a Partner Product designed for play on
personal computer systems (e.g., IBM and Macintosh personal
computers).
1.29 PARTNER PRODUCT CONCEPT AND DESCRIPTION DOCUMENT means, with respect
to each Partner Product, the document to be provided to VUG by
Interplay no later than the Six Month Evaluation, which sets forth the
fundamental product concept and description for such Partner Product.
1.30 PARTNER PRODUCT REQUIREMENTS DOCUMENT means, with respect to each
Partner Product, the document to be provided to VUG by Interplay no
later than the Six Month Evaluation, which sets forth the fundamental
technology requirements of such Partner Product.
1.31 PERIOD has the meaning given to it in SECTION 11.5 of this Agreement.
1.32 PLATFORM means each of the following: personal computers or "PC's"
(regardless of manufacturer or operating system), XxxxXxxxxxx,
XxxxXxxxxxx 0, X00, XxxxXxxx, Game Boy, Game Boy Color, Game Boy
Advance and Xbox.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 3
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1.33 PROGRAM ERROR(S) means any case where a Partner Product abnormally and
materially ceases functioning, produces material incorrect or
misleading information or erroneously interprets material information
given to it or does not function substantially in accordance with its
technical specifications described in the Partner Product Requirements
Document; provided, however that minor "bugs" generally acceptable
within industry standards shall not be considered Program Errors under
this Agreement.
1.34 PROGRAM ERROR CORRECTION means a modification of, addition to or
deletion from any software component of a Partner Product (whether
during development or by patch available after commercial release)
that had been experiencing a Program Error, that causes such component
to perform substantially (i.e, within acceptable industry standards)
in accordance with the Partner Product's technical specifications
described in the Partner Product Requirements Document.
1.35 RECEIVING PARTY has the meaning given to it in SECTION 15.1 of this
Agreement.
1.36 RELATED ASSETS means all art assets, system specification information,
manual text and other ancillary materials necessary for VUG to create
the Partner Product packaging and manual.
1.37 ROYALTIES has the meaning given to it in SECTION 2 of EXHIBIT A.
1.38 SECONDARY MINIMUM GUARANTEE has the meaning given to it in SECTION
1.1(II) of EXHIBIT A.
1.39 SELL-OFF PERIOD has the meaning given to it in SECTION 12.4(C).
1.40 SIX MONTH EVALUATION means a preliminary evaluation (in accordance
with SECTION 3) of the development of a Partner Product six (6) months
prior to the Submission Date for such Partner Product. During this
evaluation, Interplay shall submit to VUG the Partner Product Concept
and Description Document and the Partner Product Requirements Document
for such Partner Product. Based on the delivery of these items, VUG
and Interplay shall cooperate in good faith regarding the progress and
development schedule of the Partner Product. Furthermore, at this
time, and in accordance with SECTION 1.2 of EXHIBIT A and SECTION 6,
respectively, VUG shall formulate its initial Net Sales projections
and initial marketing budget at Initial Shipment for such Partner
Product.
1.41 SKU means, a version of a video game designed to operate on a
particular Platform. An example of a SKU is a version of a game
designed to play on the Sony PlayStation 2 Platform.
1.42 STATEMENT has the meaning given to it in SECTION 11.4 of this
Agreement. An example of such Statement is attached hereto and
referred to as EXHIBIT E.
1.43 SUBMISSION DATE has the meaning given to it in SECTION 3.1.
1.44 TERM has the meaning given to it in SECTION 12.1.
1.45 TERMINATION NOTICE has the meaning given to it in SECTION 12.5.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 4
Video Game Publishing Agreement
1.46 THREE MONTH EVALUATION means the final evaluation (in accordance with
SECTION 3) of the development of the Partner Product to occur three
(3) months prior to the Submission Date for such Partner Product.
During this evaluation, Interplay shall submit to VUG a Beta Version
for the Partner Product. Based on the Beta Version and other
meaningful consultation and cooperation between the parties with
respect to the progress of the Partner Product, VUG will at such time
submit to Interplay VUG's marketing strategy with respect to such
Partner Product and commit to a marketing budget with respect to such
Partner Product (in accordance with SECTION 6).
1.47 THREE MONTH GROSS SALES PROJECTION has the meaning given to it in
SECTION 1.2 of EXHIBIT A.
1.48 THIRD PARTY LICENSOR means any licensors or owner (other than
Interplay or VUG) of intellectual property that is used in any Partner
Product. For purposes of clarification, a Third Party Licensor may
include a third-party developer hired by Interplay to develop a
Partner Product and which retains certain credit rights, marketing
approval rights, or other rights with respect to the Partner Product.
1.49 THIRD PARTY LICENSE means any license by a Third Party Licensor of
intellectual property that is used in any Product.
1.50 VUG CUSTOMER QUALITY CARE means VUG's department or group that reviews
product compatibility and that shall ultimately be responsible for
accepting or rejecting Gold Candidates of PC Partner Products in
accordance with SECTIONS 3 and 4.
1.51 VUG AFFILIATE means a wholly-owned subsidiary or parent company of
VUG, provided such wholly-owned subsidiary or parent company of VUG is
in the interactive entertainment software business.
2. GRANT OF RIGHTS.
2.1 LICENSE TO DISTRIBUTE. Subject to the terms and conditions contained
in this Agreement, Interplay hereby grants to VUG and VUG hereby
accepts, the exclusive right, license and obligation during the Term
and any Sell-Off Period, to reproduce, manufacture (except during any
Sell-Off Period), market and promote (in any and all forms and media,
including print, digital, optical, and public performance and
display), distribute copies of, and sell, the Partner Product(s), on
an individual-unit (i.e., non-bundled) and packaged-goods basis via
the Authorized Channels throughout the Licensed Territory on terms
that are reasonable and customary in the interactive entertainment
software industry, with the additional right to subcontract any or all
of the foregoing rights in accordance with SECTION 20.2 below (the
above grant of rights being hereinafter referred to as the "LICENSE").
2.2 ***.
2.3 EXCLUSIVE LICENSE. Subject to the terms and conditions contained in
this Agreement (including SECTIONS 2.6, 2.7 and 2.8), Interplay shall
provide the License set forth in SECTION 2.1 exclusively to VUG during
the Term. Therefore, none of the rights Interplay provides under the
License shall be assigned, licensed, offered, transferred or otherwise
provided
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 5
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by Interplay to any third parties nor shall they be exercised by
Interplay except as expressly permitted by this Agreement.
2.4 TRADEMARK LICENSE. Subject to the terms and conditions contained in
this Agreement (including SECTION 2.8 below), Interplay hereby grants
to VUG and VUG hereby accepts a non-exclusive, non-transferable right
and license in the Licensed Territory to reproduce and use the
trademarks associated with the Partner Product(s) solely in connection
with the reproduction, manufacturing, marketing, promotion,
distribution and sale of the Partner Product(s) during the Term and
any Sell-Off Period.
2.5 MANUFACTURING RIGHTS. With respect to all PC Partner Products, in its
capacity as distributor of each PC Partner Product, VUG will be solely
responsible for, and will pay all costs of (i) manufacturing the PC
Partner Product units to be distributed pursuant to this Agreement,
including CD- and DVD-materials (and any other component materials)
and pressing, packaging materials, printing of packaging and inserts,
and pack-out, (ii) assembly of finished-goods PC Partner Product
units, and (iii) shipping, and securing delivery of, completed
finished-goods units of PC Partner Products to VUG's distribution
center, VUG's customers and/or End-Users. Subject to SECTION 3.2,
herein, with respect to all Non-PC Partner Products, VUG will be
solely responsible for all costs of (i) manufacturing the Non-PC
Partner Product units to be distributed pursuant to this Agreement,
including CD- and DVD-materials (and any other component materials)
and pressing, Game Hardware Platform Licensor royalties, packaging
materials, printing of packaging and inserts, and pack-out, (ii)
assembly of finished-goods Non-PC Partner Product units (to the extent
the Game Hardware Platform Licensor allows VUG to, and VUG elects to,
perform any such assembly), and (iii) shipping, and securing delivery
of, completed finished-goods units of Non-PC Partner Products to VUG's
distribution center, VUG's customers and/or End-Users.
2.6 RESERVED RIGHTS. All rights not expressly granted to VUG in this
Agreement, including all rights outside the Licensed Territory, any
electric transmission rights (such as through cable, the Internet and
any on-line services), and all merchandizing rights of any kind
whatsoever, are specifically excluded from this Agreement and are
retained and reserved by Interplay. Interplay also reserves the right,
without obligation, to publish trailers and demos of the Partner
Products (which trailers and demos will be made available to VUG for
its use hereunder in marketing the Partner Products) in combination
with other entertainment software products that are not Partner
Products under this Agreement. Any use by Interplay (or any licensee
of Interplay) of such reserved rights, or any portion thereof, shall
not be deemed unfair competition, nor interference with nor
infringement of VUG's rights hereunder. Without limiting the
generality of the foregoing, Interplay specifically reserves the right
to authorize third parties to distribute Partner Products with
third-party software and/or hardware in the form of a single combined
product and selling such combined products in or outside of the
Licensed Territory and as a premium to augment the value of
non-computer related products and so-called "covermounts" in and
outside the Licensed Territory ("OEM LICENSES"); PROVIDED, HOWEVER,
that Interplay agrees that it will not, without the prior written
approval of VUG, grant any OEM Licenses with respect to any Partner
Product that authorize distribution of any combined product that
includes such Partner Product to commence earlier than *** following
Initial Shipment of such Partner Product by VUG hereunder.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 6
Video Game Publishing Agreement
2.7 INTERPLAY DIRECT SALES AND ONLINE SALES. Notwithstanding anything to
the contrary in this Agreement, Interplay shall be entitled to sell
Partner Products directly to End-Users through (i) Interplay's own
direct sales program, including offering the Partner Products for sale
direct to End-Users through Interplay's direct mailing programs,
Interplay's telemarketing programs, Interplay's websites and
Interplay's on-line stores (and Interplay may engage third-party
subcontractors to fulfill orders that Interplay has itself received
directly from End-Users), and/or (ii) third-parties hired by Interplay
to sell the Partner Products online through their websites (e.g.,
Yahoo, Amazon). Interplay shall have the right to purchase from VUG on
a royalty-free basis, via delivery to VUG of a standard purchase order
finished-goods Partner Product units at a price equal to VUG's actual
manufacturing and shipping costs plus *** ($***) per unit . VUG shall
be entitled to deduct amounts due VUG under this Section from the
Interplay Proceeds. VUG shall use its commercially reasonable efforts
to promptly fulfill Interplay's purchase orders.
2.8 APPROVAL BY LICENSORS. Notwithstanding any other provision of this
Agreement to the contrary, VUG's rights and obligations under this
Agreement with respect to each Partner Product will be (i) conditioned
upon such Partner Product having been approved for distribution in the
Licensed Territory by the appropriate Game Hardware Platform Licensor,
if any, and by any applicable content licensors (including any Third
Party Licensors) and other entities whose approval is legally or
contractually required to allow the distribution by VUG of the Partner
Products and use by VUG of the trademarks associated with the Partner
Product, in the Licensed Territory; and Interplay will use its
diligent good faith efforts to secure such necessary approvals so that
the Partner Products may be marketed and distributed as provided in
this Agreement, and (ii) subject to any conditions and restrictions
contained in any Third Party Licenses.
3. DEVELOPMENT AND DELIVERY; RELEASE.
3.1 DELIVERY OF GOLD MASTERS. Interplay shall develop at its own cost and
deliver to VUG the Gold Candidate with respect to each Partner
Product(s) for acceptance in accordance with the dates set forth in
EXHIBIT B (the "SUBMISSION DATES"), or with respect to Partner
Products where no Submission Date is set forth in EXHIBIT B, then such
Submission Date shall be agreed upon by the parties in good faith. By
the respective Submission Date for any Gold Candidate of a PC Partner
Product, such Gold Candidate shall substantially conform to the
technical specifications and descriptions set forth in the
corresponding Partner Product Requirements Document and the Partner
Product Concept and Description Document, and shall be free from
material Program Errors, and VUG has the right to test and approve or
reject the Gold Candidate accordingly and in accordance with the
procedure described in SECTION 3.3 below in order to determine if such
Gold Candidate will be re-classified as an Approved Gold Master.
Interplay understands that during the process of developing the
Partner Product(s), Interplay shall be expected to meet with VUG on a
regular basis to discuss progress on the Partner Product(s) and
receive feedback and suggestions. With respect to Non-PC Partner
Products, and after delivery of the Gold Candidate, Interplay's only
obligation to make changes to such Gold Candidates (which Interplay
shall perform at its own cost and expense) shall be as required by the
various Game Hardware Platform Licensors in order to obtain such Game
Hardware Platform Licensors' approvals, and, upon receipt of such
approval in accordance with SECTION 3.2 below, such Gold Candidate
shall be deemed an Approved Gold Master.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 7
Video Game Publishing Agreement
3.2 OBTAINMENT OF NECESSARY CONSENTS AND LICENSES. Interplay shall, at its
sole cost and expense (except with respect to royalties due to Game
Hardware Platform Licensors, which costs shall be VUG's sole
responsibility), obtain any and all necessary consents and licenses
relating to the development of the Partner Product(s) and their use by
VUG, its customers and End-User as contemplated by this Agreement,
including any and all consents and licenses required for any music,
voices, names or likeness of characters or third party copyrighted
works or trademarks which are embodied in the Partner Product(s).
Interplay shall be solely responsible for making all necessary
submissions of the Gold Candidates of Non-PC Partner Products to the
applicable Game Hardware Platform Licensors for approvals, and
Interplay shall provide VUG with copies of all Game Hardware Platform
Licensors' written feedback and/or final approvals in a timely manner.
3.3 ACCEPTANCE OF GOLD CANDIDATES. Any Gold Candidate of a PC Partner
Product shall be accepted by VUG (and subsequently re-classified as an
Approved Gold Master) provided it substantially conforms to the
technical specifications and descriptions in its corresponding Partner
Product Requirements Documents and Partner Product Concept and
Description Documents, and such Gold Candidate shall be free from
material Program Errors. After Interplay submits to VUG a Gold
Candidate of a PC Partner Product, VUG shall have *** business days to
(a) examine and test such Gold Candidate to determine whether, in its
reasonable judgment, it meets the acceptance criteria for such Gold
Candidate set forth in the preceding sentence, and (b) to notify
Interplay in writing of VUG's acceptance or rejection of such Gold
Candidate. In the case of any rejection, VUG shall provide Interplay
along with such written rejection a reasonable detailed written list
of deficiencies in such Gold Candidate and (if applicable) an
explanation of why, in VUG's reasonable judgment, such Gold Candidate
will not be viewed by VUG as an Approved Gold Master. If VUG fails to
notify Interplay of VUG's acceptance or rejection within such ***
business day period, then such Gold Candidate shall be deemed approved
by VUG and shall be considered an Approved Gold Master. VUG and
Interplay acknowledge and agree that such *** day period and the
acceptance or rejection of the Gold Candidate as described herein
shall not apply with respect to Gold Candidates of the Non-PC Partner
Products where the respective Game Hardware Platform Licensor shall
grant or withhold such approval. In no event shall a Gold Candidate of
a Non-PC Product be deemed approved without the express written
approval of the applicable Game Hardware Platform Licensor. In the
case of a rejection of any Gold Candidate of a PC Partner Product by
VUG in accordance herewith (or of a Non-PC Partner Product by the
applicable Game Hardware Platform Licensor), Interplay shall use its
best efforts to consult with VUG in order to correct the deficiencies
to the reasonable satisfaction of VUG (or the applicable Game Hardware
Platform Licensor) and shall resubmit the Gold Candidate, as
corrected, within *** business days of VUG's rejection (or such longer
period as to which VUG may agree in writing and in its reasonable
discretion based on the nature of the rejection and extent of changes
required) (or within such time as required by the applicable Game
Hardware Platform Licensor). This procedure shall iterate until VUG
(or the applicable Game Hardware Platform Licensor) accepts the Gold
Candidate; provided, however, that with respect to rejected Gold
Candidate(s), in the event that (i) Interplay fails to deliver a
corrected acceptable Gold Candidate of a PC Partner Product in a
commercially reasonable time period following at least *** rejections
in accordance with the procedure described hereinabove, such that VUG
shall have sufficient time to examine, test and accept the corrected
Gold Candidate through its standard compliance testing process, or
(ii) Interplay fails to obtain final Game Hardware Platform Licensor
approval within in a
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 8
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commercially reasonable time period following at least *** rejections
in accordance with the procedure described hereinabove, then either
VUG or Interplay may terminate this Agreement with respect to such
Partner Product only, and without any liability therefor. In the event
VUG elects to so terminate the Partner Product, Interplay's sole
liability with respect to such terminated Partner Product shall be to
reimburse VUG for its actual unrecouped expenditures with respect to
such Partner Product incurred through the date of termination.
3.4 TIMELY MANUFACTURING/DISTRIBUTION OF PARTNER PRODUCTS. Subject to
VUG's receipt of any and all necessary Interplay and Third Party
Licensor approvals, and unless otherwise agreed to by Interplay in its
reasonable discretion, VUG agrees to commercially release each PC
Partner Product within *** days of VUG's receipt of the Approved Gold
Master of such PC Partner Product. Solely with respect to Non-PC
Partner Products, VUG shall use commercially reasonable efforts to (i)
commence manufacturing in a timely manner, but in no event later than
*** days (subject to extension for any delays caused by Interplay
and/or the Game Hardware Platform Licensor) following receipt of an
Approved Gold Master, and (ii) release each Non-PC Partner Product in
a timely manner following receipt of substantially all manufactured
units of such Non-PC Partner Product, but in no event later than ***
days of receipt of substantially all manufactured units with respect
to such Non-PC Partner Product. For purposes of the foregoing
sentence, "substantially" shall mean *** percent (***%) or more of the
units ordered for manufacture under a given purchase order.
Notwithstanding the foregoing, if Interplay has (for any reason)
delivered a Gold Candidate or Approved Gold Master after the dates set
forth on EXHIBIT B (or such date as has been agreed upon pursuant to
SECTION 3.1 or extended pursuant to SECTION 4.3 below), then VUG
agrees to: (i) with respect to PC Partner Products, commercially
release such PC Partner Product within *** days of VUG's receipt of
the Approved Gold Master for such PC Partner Product; or (ii) with
respect to Non-PC Partner Products, commence manufacturing in a timely
manner, but in no event later than *** days (subject to extension for
any delays caused either by Interplay, if Interplay is required by the
Game Hardware Platform Licensor to commence manufacturing directly
with the Game Hardware Platform Licensor, and/or the Game Hardware
Platform Licensor) following receipt of an Approved Gold Master and
commercially release each late Non-PC Partner Product no later than
*** days of receipt of substantially all manufactured units with
respect to such Non-PC Partner Product.
3.5 NO MODIFICATIONS OF PARTNER PRODUCT CODE BY VUG. In no event shall VUG
have the right to itself modify the Partner Product code in any
manner, and in no event shall VUG have the right to localize or
require that Interplay localize the Partner Product into any language
(including French for French Canadian End-Users).
4. PROGRAM ERRORS.
4.1 DURING DEVELOPMENT. Interplay shall use diligent good faith efforts to
deliver each Gold Candidate free of material Program Errors, and to
provide Program Error Corrections for any material Program Errors
identified by VUG in writing during VUG's testing of any Gold
Candidate of a PC Partner Product in accordance with SECTION 3 above.
Interplay acknowledges and agrees that Interplay shall bear the sole
cost and expense associated with such Program Error Corrections.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 9
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4.2 FOLLOWING APPROVAL OF GOLD CANDIDATE. Interplay warrants that each
Gold Candidate shall be free from significant Program Errors. At VUG's
request, Interplay shall promptly investigate and use commercially
reasonable efforts to correct all material Program Errors in any
Approved Gold Master PC Partner Product(s) reported in writing by VUG,
and deliver to VUG, at no charge to VUG and as soon as practicable, an
avoidance procedure or work-around to solve or avoid any significant
Program Error until a correction is achieved (if commercially
reasonable). Interplay shall continue to use its commercially
reasonable efforts to develop a Program Error Correction for any such
material Program Error, and when a Program Error Correction is
achieved, Interplay shall deliver to VUG all modifications necessary
to implement such correction.
4.3 *** NON-DELIVERY OF GOLD CANDIDATE. At or prior to the Six Month
Evaluation for a particular Partner Product under development,
Interplay and VUG shall consult in good faith regarding the progress
of Interplay's development of the Partner Product and, at Interplay's
request, attempt to agree upon a reasonable extension of the
applicable Gold Candidate Submission Date and Gold Master Approval
Date set forth in SECTION 3 of EXHIBIT B hereto. In the event the
parties are unable to mutually agree upon the extension requested by
Interplay, however, Interplay shall have the right to extend each such
date *** for a maximum of ***. Thereafter but prior to the then
scheduled date for the Three Month Evaluation date, if,
notwithstanding Interplay's diligent efforts to timely meet its
delivery date obligations, Interplay anticipates it will require
additional extensions, Interplay shall so notify VUG and the parties
shall again in good faith attempt to agree upon a reasonable
additional extension. In the event that a Gold Candidate has not been
received by VUG on or before the respective dates set forth in SECTION
3 of EXHIBIT B (as they may have been extended in accordance with this
SECTION 4.3), VUG shall, in its sole discretion and as its sole
remedies, and until such time as it receives the Gold Candidate, have
the right to either (i) ***, or (ii) ***.
5. RESERVED.
6. MARKETING/MARKETING SUPPORT. As between VUG and Interplay, and subject to
the terms and conditions contained in this Agreement (including SECTIONS
2.6, 2.7 and 2.8), VUG shall ***, at its sole cost and expense, be ***
responsible for all sales, marketing and public relations with respect to
the distribution of the Partner Products via the Authorized Channels within
the Licensed Territories. VUG will use commercially reasonable, good-faith
efforts, but in no event less than efforts substantially equivalent to
those employed by VUG in the marketing and distribution of VUG-published
products of like sales potential and demographic target, to market and
distribute the Partner Products, and solicit and support sales of the
Partner Products, throughout the Licensed Territory. VUG will make all
reasonable, good faith efforts to keep Interplay's sales team apprised of
VUG's sales force efforts and level of success in selling the Partner
Products. VUG acknowledges and agrees that with respect to each Partner
Product it shall spend an amount equal to the final marketing budget as
determined in the Three Month Evaluation; provided that, VUG agrees that
the final marketing budget for each Partner Product shall, at a minimum,
allocate (and VUG shall spend): (i) ***, and (ii) ***. By way of
clarification, Interplay acknowledges that such marketing expenditures and
final strategy committed to by VUG shall include the format, components,
assets and calendar as detailed in the Three Month Evaluation, to be
presented in form and substance as detailed in the attached EXHIBIT D.
Interplay acknowledges and agrees that VUG shall have no obligation to pay
for any
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 10
Video Game Publishing Agreement
marketing expenses incurred directly by Interplay unless such expense has
been explicitly approved in writing by VUG. Notwithstanding the foregoing,
Interplay shall provide VUG with reasonable cooperation and support in
VUG's efforts to market and promote the Partner Products; provided that,
unless expressly specified herein, such support shall not require any
out-of-pocket expenditures by Interplay.
6.1 WEB SITE PROMOTION. With respect to each Partner Product, as long as
the Partner Product is being marketed by VUG, Interplay shall (at its
own cost and expense) include a continuous, prominent promotional
banner on each relevant Interplay web site, with a direct link to
VUG's Partner Product marketing site; and
6.2 ASSETS. Subject to any conditions or restrictions in any applicable
Third Party License and the cooperation of any applicable Third Party
Licensor, Interplay shall provide assets, such as product information,
screen shots, company/employee bios, etc. as reasonably requested by
VUG, for use by VUG in support of VUG's sales, marketing and public
relations efforts related to the Partner Products, no later than ***
days after VUG's request. In the event that Interplay does not
disclose any such conditions or restrictions on or prior to the Three
Month Evaluation, then VUG shall be entitled to deduct any actual
out-of-pocket costs and/or expenses incurred by VUG due to Interplay's
failure to disclose such conditions or restrictions from the Interplay
Proceeds otherwise payable to Interplay with respect to such Partner
Product.
6.3 CONSUMER/TRADE SHOWS. For consumer/trade shows at which VUG decides to
maintain a display booth, VUG shall so notify Interplay promptly after
VUG has made such decision. In the event that Interplay thereafter
gives VUG a timely written request (in no event shall Interplay have
less than *** days after receipt of VUG's notice in which to reply,
unless VUG's initial decision is made within ***days of the scheduled
consumer/trade show) to display the Partner Products at VUG's display
booth, VUG will, at its cost, provide a reasonable amount of space in
its booth for Interplay to display and promote the Partner Products.
All travel, accommodation, equipment, and other expenses incurred by
Interplay will be at Interplay's sole expense. In the event Interplay
does not desire to personally display the Partner Products at the VUG
display booth, VUG shall display and promote the Partner Products as
VUG deems appropriate (but consistent with its handling of
VUG-published products of like sales potential and demographic target)
on a non-dedicated space basis at VUG's expense.
7. PARTNER PRODUCT TESTING. Interplay shall use all commercially reasonable
efforts to ensure that each PC Partner Product runs in the various hardware
and software configurations in which the Partner Product is designed to
run, and with all peripherals with which the PC Partner Product is designed
to work, in a manner that is consistent with: (a) the Partner Product
Requirements Document, (b) the Partner Product Concept and Description
Document, and (c) the Partner Product's documentation prepared by
Interplay. ***.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 11
Video Game Publishing Agreement
8. INSURANCE ***.
8.1 LIABILITY INSURANCE. During the Term, Interplay and VUG each shall at
all times maintain at its own cost at least *** Dollars ($***) of
general liability insurance coverage available to cover claims against
the Partner Products. Each party shall furnish to the other
certificates and/or other reliable information evidencing such
insurance coverage.
8.2 ***
8.3 NO INTENTION TO CREATE A SINGLE REMEDY. The parties agree that VUG and
Interplay may exercise any or all of their available remedies at law,
in equity or pursuant to this Agreement, and that except as otherwise
expressly limited by this Agreement, under no circumstance shall VUG
and Interplay be limited to any single remedy available to it.
9. ANTI-PIRACY EFFORTS. Interplay and VUG shall cooperate in all commercially
reasonable ways in anti-piracy and anti-counterfeiting efforts with respect
to the Partner Products and all intellectual property associated therewith.
Immediately upon discovery of any third-party infringement of such
intellectual property, the discovering party shall notify the other party
of such infringement, and the parties shall cooperate in prosecuting any
action to stop or otherwise mitigate the infringement.
Interplay agrees to cooperate with VUG's anti-piracy and
anti-counterfeiting efforts by: (a) using good faith efforts to obtain
intellectual property registrations to the intellectual property rights
owned by Interplay and relating to the Partner Products, as requested by
VUG , (b) providing to VUG the name of a designated officer of Interplay
who shall serve as Interplay's primary point of contact for cooperating
with VUG in its anti-piracy efforts; and (c) causing such officer of
Interplay to execute such additional documents as may be reasonably
requested by VUG from time to time in connection with VUG's anti-piracy
efforts with respect to the Partner Products.
10. PACKAGING, MARKETING MATERIALS AND LOGOS.
10.1 PRODUCTION OF SALES AND MARKETING MATERIALS. VUG shall be responsible,
at its sole cost and expense, for the production of all sales and
marketing materials and shall use commercially reasonable good faith
efforts to produce such materials of a quality consistent with similar
products published by VUG. Notwithstanding the foregoing, Interplay
shall aid, assist and provide VUG with any necessary documentation and
information reasonably needed for VUG to develop such materials, as
set forth in SECTION 6.
10.2 PLACEMENT OF PROPER LABELS.
(a) COPYRIGHT AND TRADEMARK NOTICE. VUG agrees that it shall cause to
appear on each Partner Product unit label and the Partner Product
packaging, co-op advertising slicks, sell-sheets, and other sales
and marketing materials, the appropriate copyright and trademark
notice provided to VUG by Interplay (which notices shall contain
applicable VUG references, subject to VUG's reasonable approval)
. In the event, because of the size of VUG's marketing materials,
VUG requests an abbreviated notice on such marketing materials
(excluding, however, the Partner Product unit label and
packaging, for which there shall be no such abbreviation),
Interplay shall reasonably approve such request. Interplay shall
further
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 12
Video Game Publishing Agreement
provide VUG with any required Third Party Licensor
credits/artwork to be included with respect to Partner Product
label, packaging and marketing materials.
(b) ESRB LABELS. Interplay shall have the sole right and
responsibility to register the Partner Product(s) with the
Entertainment Software Rating Board ("ESRB"), and Interplay will
provide VUG with a copy of the ESRB's final rating
determinations. VUG shall be required to place the appropriate
ESRB rating on all packaging, marketing and any other materials
for the Partner Product(s) as recommended and/or required by the
ESRB. Notwithstanding the foregoing, VUG shall assist Interplay
in the registration process to the extent reasonably requested by
Interplay.
10.3 PLACEMENT OF VUG LOGO(S). Unless otherwise prohibited or limited by
the applicable Game Hardware Platform Licensor or pre-existing rights
of any applicable Third Party Licensor, Interplay acknowledges and
agrees that in its role as distributor of the Partner Products, VUG
(or any VUG Affiliate, in VUG's discretion) may include its name and
logo (or such name and logo as reasonably indicated by VUG which is
intended to inform customers that VUG is the distributor of the
Partner Products) (i) on the back of the outside packaging of the
Partner Products and (ii) on all Partner Product marketing materials,
in a form and manner reasonably determined by VUG; provided, however
that such VUG name and logo (i) do not obscure the title of the
Partner Product, or Interplay's or its Third Party Licensors' names or
logos, and (ii) are reasonable in size compared to the size of the
packaging, and, in any case, appear less prominently than Interplay's
and/or any required Third Party Licensors' name or logo. VUG will also
be entitled to include the URL of VUG's online store and web site on
the Partner Product packaging and/or marketing materials.
10.4 WARRANTIES. VUG will distribute the Partner Products and manual (and
any other Partner Product documentation) with warranties and
disclaimers intact as provided by Interplay. VUG will not alter,
erase, deface or overprint any notice on any item provided by
Interplay.
10.5 INTERPLAY APPROVALS. Notwithstanding anything to the contrary in this
Agreement, Interplay (and, as applicable, its Third Party Licensors in
accordance with the terms of their respective Third Party Licenses)
shall have the right to review and approve all final Partner Product
labels, packaging, documentation, sales and marketing materials with
respect to all trademark, copyright, ESRB and other credits and
notices, and all warranties and disclaimers.
11. PRICE, PAYMENTS, ROYALTY STATEMENTS AND RISK OF LOSS/BAD DEBT.
11.1 INTERPLAY PROCEEDS AND MINIMUM GUARANTEES. As consideration for the
grant of License and the further obligations of Interplay as described
hereunder, VUG shall pay Interplay the Interplay Proceeds and Minimum
Guarantees defined in EXHIBIT A.
11.2 CURRENCY. All payments rendered hereunder by VUG to Interplay shall be
in United States currency only, and VUG payments shall be made by wire
transfer to Interplay's account.
11.3 NOT-FOR-RESALE COPIES OF THE PARTNER PRODUCT(S). Notwithstanding
anything to the contrary, VUG may manufacture and distribute a
reasonable number of not-for-resale copies of the Partner Product(s)
(not to exceed *** units per SKU without Interplay's advance approval,
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 13
Video Game Publishing Agreement
not to be unreasonably withheld) for promotional purposes only at
VUG's sole expense but with no royalty payment obligation whatsoever
to Interplay resulting from the manufacture or distribution of such
units. Interplay may reasonably request up to *** copies of each
Partner Product for promotional purposes free of charge and on a
royalty-free basis from VUG. In the event that Interplay reasonably
requests more than *** copies of such Partner Product, then Partner
shall pay VUG's actual cost of goods for such units beyond the initial
*** units. Such excess units shall also be on a royalty-free basis.
11.4 PAYMENTS AND STATEMENTS. VUG shall account to Interplay with regard to
the distribution of the Partner Product(s) within *** days following
the conclusion of each VUG accounting month *** hereunder. Each such
accounting ("STATEMENT") shall be in writing and substantially in the
form of the statement attached hereto in EXHIBIT E, and shall contain
the appropriate calculations relating to the computation of Interplay
Proceeds under this Agreement. VUG agrees to include in such
Statements any/all information (including COGS, and
advertising/marketing expenses) which may be necessary for Interplay
to properly calculate royalties owed by Interplay to its Third Party
Licensors and/or developers. Subject to VUG's recoupment of all
Minimum Guarantees (as provided in SECTION 1.3 of EXHIBIT A hereto),
any Interplay Proceeds owed for the corresponding Statement period
shall be remitted and paid to Interplay by wire transfer on or before
the date the Statement is due. VUG agrees to provide Interplay at
least ***-days advance notice of any change in its accounting month.
11.5 BOOKS OF ACCOUNT AND AUDITS. VUG shall keep books of account relating
to this Agreement and the licensing and distribution of the Partner
Product(s) on the same basis and in the same manner and for the same
periods as such records are customarily kept by VUG and reasonably
sufficient for Interplay to verify VUG's Statements and the Interplay
Proceeds due hereunder. Interplay may, upon *** business days' prior
written notice to VUG, audit such records, at VUG's offices and at
Interplay's expense, with respect to such period as Interplay
specifies in its written notice (the "PERIOD"), in order to verify the
accuracy of the applicable Statement(s) rendered hereunder for such
Period. Any such audit *** shall take place only during reasonable
business hours and in a manner so as not to unreasonably interfere
with VUG's normal business activities. In that regard, ***. In no
event (unless unreasonable delay is caused by VUG or its
representatives) shall any audit continue on-site at VUG's offices for
longer than *** consecutive business days nor shall such audit
continue for more than *** days in the aggregate. Audits shall not be
made hereunder more frequently than *** per VUG fiscal year and with a
minimum of *** months between each audit, nor shall the records
supporting any Statement be audited more than ***. Except to the
extent necessary to enforce Interplay's rights hereunder, Interplay
and its auditor shall keep all of the information contained in VUG's
books and records confidential, shall not use such information for any
purpose except verifying the accuracy of the Statements, and shall not
reveal such information to any person other than employees, agents
and/or representatives of Interplay or its auditor who need to know
such information in order for Interplay to verify the accuracy of the
Statements and who have agreed to keep such information confidential
in accordance herewith. Therefore, VUG may require Interplay's auditor
to execute a reasonable non-disclosure agreement before permitting
such auditor access to VUG's records. Interplay shall furnish VUG with
a copy of Interplay's auditor's report within *** days after the
completion of such report. Within *** business days following VUG's
receipt of the auditor's report, VUG shall promptly pay to Interplay
any underpayment of Interplay Proceeds previously payable under this
Agreement, and Interplay
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 14
Video Game Publishing Agreement
shall promptly pay to VUG any overpayment of Interplay Proceeds
previously paid to Interplay under this Agreement. In addition, VUG
shall reimburse Interplay for all reasonable documented costs incurred
by Interplay to its auditor to conduct such examination should an
underpayment by VUG for the Period exceed both of the following
thresholds: (i) *** and (ii) ***.Furthermore, and ***, Interplay shall
be entitled to conduct an additional follow-up audit within the ***
month period following the first audit, without otherwise affecting
Interplay's audit rights for the fiscal year in which the follow-up
audit is conducted. Notwithstanding anything contained herein to the
contrary, the audit rights described in this SECTION 11.5 shall expire
*** following the expiration or termination of this Agreement; except
that in the event of any federal or state tax audit of Interplay
within the *** following the expiration or termination of this
Agreement, Interplay shall be entitled to conduct an audit of VUG only
if and to the extent necessary for purposes of such audit.
11.6 TITLE AND RISK OF LOSS. As between VUG and Interplay, and subject to
Interplay's and any Third Party Licensor's ownership of the IP Rights,
title to all finished goods Partner Product units (except those
purchased and received by Interplay pursuant to SECTION 2.7 above),
and all risk of loss and damage thereto, shall at all times remain
with VUG.
11.7 ***. ***, and, in accordance with its customary business practices and
in its best business judgment, VUG may, following delivery of notice
thereof to Interplay in each instance, ***. Notwithstanding the
foregoing, at the time of the Initial Shipment of each Partner
Product, in order to convey to consumers the high quality of such
Partner Product, VUG will *** interactive entertainment software
products of comparable quality and sales potential.
11.8 COLLECTIONS AND BAD DEBT. By way of clarification, VUG will be
responsible for all risk of collection of amounts owed by VUG's
customers as a result of VUG's activities under this Agreement, and
VUG will not deduct any bad debt expenses or associated write-offs
incurred as a result of its activities under this Agreement.
Similarly, VUG will be entitled to retain 100% of any early payment
discounts allowed by VUG's subcontractors as a result of VUG's
activities under this Agreement, and Interplay will not be entitled to
share in such discounts granted to VUG.
11.9 REPORTS AND FORECASTS. To the extent, and with the frequency, that VUG
routinely compiles or receives sales information reports with respect
to VUG-published products on an account-by-account basis, VUG will
provide Interplay with such reports, to the same extent and frequency,
with respect to each Partner Product. Such reports will provide such
information as VUG's current inventory of each Partner Product, a
summary of all unit sales of each Partner Product sold during the
prior period, and whatever competitive product and market analysis
information as may be available to VUG and which VUG may disclose
without breaching any confidentiality obligation to any third party.
VUG will provide Interplay with weekly sell-through and inventory
reports, to the extent that such reports are routinely compiled by VUG
for VUG-published products. Any reports provided to Interplay
hereunder shall be deemed to be the property of Interplay and
Confidential Information of Interplay (as provided in SECTION 15.1
below); provided, however, that Interplay agrees to abide by any
confidentiality restrictions imposed on VUG by third parties
furnishing any information in such reports, when such restrictions
have been communicated to Interplay. VUG will also provide Interplay
on a monthly basis with a three-month rolling forecast of VUG's sales
of Partner Products.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 15
Video Game Publishing Agreement
12. TERM AND TERMINATION.
12.1 TERM. This Agreement shall become effective on the Effective Date, and
shall expire three (3) years thereafter. Notwithstanding the
foregoing, with respect to each particular Partner Product, this
Agreement shall continue in full force for a period of two (2) years
following VUG's first commercial release of the Partner Product,
regardless of whether such two (2) year period goes beyond the three
(3) year period stated herein. Collectively, such three (3) year
period plus the balance of any applicable two (2) year period
extending beyond such three (3) year period shall be collectively
referred to as the "TERM" with respect to each particular Partner
Product.
12.2 TERMINATION BY EITHER PARTY FOR MATERIAL BREACH. Unless otherwise
specified in this Agreement, this Agreement may be terminated by a
non-breaching party upon ***business days written notice to the
breaching party of the occurrence of a material breach of any of the
material terms, covenants, representations and/or warranties of this
Agreement which breach is not remedied by the breaching party to the
non-breaching party's reasonable satisfaction within such *** business
day notice period; provided, however, that except with respect to a
payment breach hereunder, if the nature of the breach is such that it
cannot reasonably be cured within such ***-business day period, the
breaching party shall have up to *** days to cure such breach (a
"DEFAULT"). No such termination shall be effective unless and until
the party electing to terminate delivers a notice of termination
following expiration of the *** business day (or otherwise herein
specified) cure period, provided the Defaulting party does not cure
such Default prior to receipt of such termination notice. A material
breach under this SECTION 12.2 shall include a party's instituting or
having instituted against it any proceeding in bankruptcy or in
reorganization or for the appointment of a receiver or trustee or any
other proceeding under any law for the relief of debtors or if
Interplay shall make an assignment for the benefit of creditors,
provided, however, that such proceeding is not dismissed within ***
days of its being filed.
12.3 TERMINATION OF AGREEMENT OR PARTNER PRODUCT. Upon any Default, and
unless otherwise expressly provided in this Agreement, the
non-Defaulting party may, in its sole discretion, terminate this
Agreement (i) in its entirety, or (ii) with respect only to the
particular Partner Product(s) associated with the Default.
12.4 EFFECTS OF TERMINATION OR EXPIRATION. Upon any termination or
expiration of this Agreement in its entirety or with respect to a
particular Partner Product:
(a) CONTINUING OBLIGATION TO PAY AMOUNTS DUE. Each party's obligation
to pay the other party any amounts due hereunder, other than then
unpaid Minimum Guarantees with respect to the terminated Partner
Product(s), shall continue (e.g., VUG shall continue to timely
pay Interplay all Minimum Guarantees and Interplay Proceeds due
with respect to any/all Partner Product(s) not so terminated, and
VUG shall continue to pay Interplay all Interplay Proceeds due
during any Sell-Off Period with respect to the terminated Partner
Product(s)).
(b) REFUND OF UNRECOUPED MINIMUM GUARANTEES. In the event this
Agreement (or a particular Partner Product) is terminated due to
Interplay's Default or rejected by Interplay pursuant to the U.S.
Bankruptcy Code, in addition to any rights and remedies available
to VUG, Interplay shall refund to VUG any and all unrecouped
Minimum Guarantees
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 16
Video Game Publishing Agreement
with respect to such terminated Partner Product(s), provided that
VUG is unable to further exploit the particular Partner Product
for which the Minimum Guarantee was paid;
(c) SELL OFF PERIOD. Subject to SECTION 20.1, herein, upon
termination or expiration of this Agreement (or a particular
Partner Product), VUG and VUG's customers shall retain the
non-exclusive right, subject to all the other terms and
conditions hereof, to sell off their remaining inventories of the
Partner Product(s) for a period of one hundred and eighty (180)
days following the expiration or termination of this Agreement
(or the particular Partner Product) (the "SELL-OFF PERIOD");
provided, however, that upon termination of this Agreement (or a
particular Partner Product) by Interplay for a VUG Default, (i)
Interplay shall have the right at any time during the Sell-Off
Period to purchase VUG's existing inventory from VUG at VUG's
actual out-of-pocket cost of goods therefor, which purchase may
be of some or all of such units, in Interplay's sole discretion.
(d) CANCELLATION OR LOSS OF RIGHTS. Subject to VUG's rights under
SECTION 18.3 below, in the event that Interplay cancels and/or
loses the right to grant to VUG the rights to distribute and sell
any Partner Product, such Partner Product shall be deleted from
coverage under this Agreement and VUG's sole remedy shall be to
withhold from the Interplay Proceeds for any Partner Product
VUG's actual unrecouped expenditures, including any unrecouped
Minimum Guarantees, with respect to such cancelled and/or lost
Partner Product(s). Solely by way of clarification, nothing
contained herein or in this Agreement shall be deemed to give
Interplay the unilateral right to cancel VUG's rights granted
herein with respect to any Partner Product that has been
commercially released by VUG. Notwithstanding the foregoing, VUG
acknowledges and agrees that Interplay may be forced to cancel
VUG's rights due to obligations under various Third Party
Licenses. Furthermore, VUG acknowledges and agrees that Interplay
(in its own discretion) may cancel any Partner Product in
development by Interplay prior to delivery to VUG of an Approved
Gold Master. However, in such event, Interplay acknowledges and
agrees that VUG shall be entitled to withhold from the Interplay
Proceeds with respect to any other Partner Products an amount
equal to VUG's actual, out of pocket expenditures with respect to
such cancelled Partner Product. Interplay expressly acknowledges
and agrees that with respect to any Partner Product cancelled by
Interplay, as contemplated in this SECTION 12.4(D), Interplay
shall not publish or commercially release, or authorize any third
party to publish or commercially release such cancelled Partner
Product during the Term of this Agreement; provided, however,
that with respect to a Partner Product cancelled by Interplay
during development, and notwithstanding anything to the contrary
herein, Interplay shall not be prohibited from selling its
ownership rights in the cancelled Partner Product to a third
party.
12.5 INITIAL SHIPMENT MINIMUM UNIT REQUIREMENT. Notwithstanding anything to
the contrary in this Agreement, with respect to each Partner Product
specifically identified in EXHIBIT B attached hereto, if VUG receives
an Approved Gold Master from Interplay, but projects (in its Final
Gross Sales Projection) an Initial Shipment of less than ***units of
that Partner Product, VUG shall notify Interplay of this determination
in writing along with delivery to Interplay of its Final Gross Sales
Projection (such notice, a "DOUBTFUL PRODUCT NOTICE"). Within *** of
receiving a Doubtful Product Notice, Interplay shall have the right,
in its sole discretion, to delete such Partner Product from this
Agreement (as further described below) by giving VUG written notice of
deletion (a "DELETION NOTICE") within such *** following Interplay's
receipt of the corresponding Doubtful Product Notice. For each Partner
Product so deleted, Interplay's sole
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 17
Video Game Publishing Agreement
monetary obligation shall be to reimburse VUG for its actual
unrecouped expenditures with respect to such deleted Partner Product
incurred by or on behalf of VUG through the date of deletion, such
unrecouped expenditures to be payable to VUG within *** following
VUG's receipt of the corresponding Deletion Notice. Further, if
Interplay so deletes *** Partner Products within any consecutive ***
period, then Interplay shall have the right, in its sole discretion,
to terminate this Agreement in its entirety by, delivering to VUG
along with Interplay's third or any subsequent Deletion Notice within
any consecutive *** period, written notice of such termination (a
"TERMINATION NOTICE"). *** In the event Interplay elects to so
terminate the Agreement, Interplay's sole monetary obligation to VUG
shall be to reimburse VUG for its actual unrecouped expenditures
incurred by or on behalf of VUG through the date of termination with
respect to any then-unreleased Partner Products. Deleting a Partner
Product from this Agreement means that VUG shall no longer have the
right to reproduce, manufacture, market and promote, distribute copies
of, and/or sell that particular deleted Partner Product. For purposes
of clarification, Interplay's deletion rights under this SECTION 12.5
shall only apply to Partner Product titles specifically identified in
EXHIBIT B attached hereto; provided, however, that any termination by
Interplay of the Agreement in its entirety pursuant to a Termination
Notice delivered in accordance with this SECTION 12.5 shall apply to
all Partner Products under the Agreement.
13. INTERPLAY TRADEMARKS AND COPYRIGHTS. VUG acknowledges that other than the
licenses and rights set forth in this Agreement, as between VUG and
Interplay, Interplay retains all right, title and interest in and to the
Partner Product(s), and all intellectual property rights embodied therein
(other than VUG logos, copyrights, trademarks and intellectual property
that are included in the Partner Product packaging and/or manual),
including all rights to the titles, names, copyrights, trademarks, trade
names, trade secrets, logos, characters, artwork and code (collectively,
the "IP RIGHTS") and agrees that other than as expressly permitted by this
Agreement VUG shall not at any time during or after the Term of this
Agreement assert or claim any interest in or do anything that may adversely
affect the validity or enforceability of any IP Rights belonging to or
licensed to Interplay with respect to the Partner Products or which
Interplay otherwise has provided to VUG pursuant to this Agreement. VUG
shall not exploit the intellectual property contained in the Partner
Product(s) except as specifically authorized by this Agreement, and VUG
agrees that it will neither apply for nor seek to obtain trademark
registration for the Partner Products. If VUG may be entitled to claim any
ownership interest in the Partner Products or any IP Rights associated
therewith under any applicable law, then VUG hereby assigns and agrees to
assign exclusively to Interplay (or any designee of Interplay), any and all
of VUG's right, title and interest therein. Any assignment of copyright
hereunder includes all rights of paternity, integrity, disclosure and
withdrawal and any other rights that may be known as or referred to as
"moral rights" (collectively "MORAL RIGHTS"). To the extent such Moral
Rights cannot be assigned under applicable law and to the extent the
following is allowed by the laws in the various countries where Moral
Rights exist, VUG hereby waives such Moral Rights and consents to any
action of Interplay (or its designee) that would violate such Moral Rights
in the absence of such consent. Notwithstanding the foregoing, VUG shall
have title to all inventory of Partner Product units and VUG shall retain
title and intellectual property rights to trademarks and trade names of VUG
that are used in connection with the packaging, marketing, promotion and
distribution of the Partner Products.
14. SUPPORT. Interplay shall be responsible for rendering technical support to
End-Users regarding the Partner Product(s). Such support shall be equal to
efforts employed by Interplay to
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confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 18
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support other comparable Interplay products distributed by third parties.
The documentation for each Partner Product will specify Interplay's
customer support phone number and/or Internet site address for technical
support inquiries.
15. CONFIDENTIALITY.
15.1 CONFIDENTIAL INFORMATION. In the course of this Agreement, it is
anticipated that one party (the "RECEIVING PARTY") shall obtain
confidential or proprietary information (the "CONFIDENTIAL
INFORMATION") belonging to the other party (the "DISCLOSING PARTY").
The Receiving Party shall, in accordance with SECTION 15.2 below, keep
confidential and, except for the purpose of fulfilling its obligations
under this Agreement, refrain from using this Confidential Information
and any other information which the Receiving Party may acquire with
respect to the Disclosing Party's business, including, but not limited
to, information developed and relating to new products, pricing,
know-how, trade secrets, processes, and practices, design elements,
character profiles, unpublished copyrighted material, release dates,
marketing, sales and promotional strategies, computer code, data,
manuals, specifications, processes, methods, and the terms and
conditions of this Agreement, unless and until such Confidential
Information: (i) becomes generally known or available by publication,
commercial use or otherwise through no fault of the Receiving Party;
(ii) is known by Receiving Party at the time of disclosure without
violation of any confidentiality restriction and without any
restriction on Receiving Party's further use or disclosure; (iii) is
independently developed by Receiving Party with reasonable
documentation evidencing such development; or (iv) is required to be
disclosed by administrative or judicial/legal action, provided that
the Receiving Party, immediately after receiving notice of such
action, notifies Disclosing Party of such action to give Disclosing
Party the opportunity to seek any other legal remedies to maintain
such confidential information in confidence. Receiving Party shall not
disclose to others, without Disclosing Party's consent, the subject of
this relationship without first providing Disclosing Party with the
opportunity to review and approve the contemplated publication. This
undertaking to restrain from use and keep information confidential
shall survive the expiration or termination of this Agreement.
Receiving Party shall require each of its employees performing
services relating to this Agreement to execute a similar
confidentiality agreement. At the earlier of the expiration or
termination of this Agreement, Receiving Party shall cease all further
use of the Disclosing Party's Confidential Information, and shall, at
the Disclosing Party's option, promptly either return to Disclosing
Party or destroy all Confidential Information that is in tangible
form, including all drawings, specifications, manuals and other
printed or reproduced material (including information stored on
machine readable media) provided by Disclosing Party.
15.2 DUTY TO MAINTAIN CONFIDENTIALITY. Except as expressly approved by the
Disclosing Party, the Receiving Party agrees: (i) to hold the
Disclosing Party's Confidential Information in strict confidence as a
fiduciary, and to take all reasonable precautions to protect such
Confidential Information; (ii) not to divulge any such Confidential
Information or any information derived therefrom to any third person,
other than its directors, officers, employees, affiliates, attorneys,
auditors, financial advisors, consultants, or prospective investors or
lenders, and, in the case of VUG, permitted third-party subcontractors
(collectively, the "REPRESENTATIVES"); provided, that in each case
such Representative shall be given access to the Confidential
Information only on a "need-to-know" basis and shall expressly agree
in writing to retain the Confidential Information in strictest of
confidence; (iii) not to make any use whatsoever at any time of such
Disclosing Party's Confidential Information for the benefit of any
person other than
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confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 19
Video Game Publishing Agreement
the Disclosing Party or as expressly contemplated by the Disclosing
Party, and (iv) not to copy, reproduce or directly or indirectly
reverse engineer all or any part of such Disclosing Party's
Confidential Information. Notwithstanding anything to the contrary
herein, nothing in this SECTION 15 shall (i) prevent either party from
making any disclosure required by a public stock exchange, the
Securities and Exchange Commission or similar governmental or
regulatory body, or (ii) prevent Interplay from disclosing to its
Third Party Licensors such information (e.g., sales figures, COGS and
marketing expenses incurred by VUG) necessary for Interplay to satisfy
its contractual reporting obligations and to remit royalties due its
Third Party Licensors with respect to the Partner Products.
16. COMPETING PRODUCTS. Interplay (subject to VUG's rights under SECTION 5
above) and VUG each understands and agrees that the other may enter into
similar agreements with third parties, including agreements relating to
products that may be deemed competing with the Partner Products. Interplay
and VUG each represents and warrants to the other that no such agreements
shall interfere with or cause such party to violate any of its other
representations, warranties and/or covenants made under this Agreement, and
VUG represents and warrants to Interplay that VUG shall throughout the Term
and any Sell-Off Period treat the Partner Products on at least an equal
basis with such competing products.
17. LIMITATION OF LIABILITY. THE LIABILITY OF EITHER PARTY, IF ANY, FOR DAMAGES
FOR ANY CLAIM OF ANY KIND WHATSOEVER AND REGARDLESS OF THE LEGAL THEORY,
SHALL NOT INCLUDE COMPENSATION, REIMBURSEMENT OR DAMAGES ON ACCOUNT OF THE
LOSS OF PRESENT OR PROSPECTIVE PROFITS, EXPENDITURES, INVESTMENTS OR
COMMITMENTS, WHETHER MADE IN ESTABLISHMENT, DEVELOPMENT OR MAINTENANCE OF
REPUTATION OR GOODWILL OR FOR ANY OTHER REASON WHATSOEVER. IN NO EVENT
SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES, EVEN IF APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING.
18. REPRESENTATIONS, WARRANTIES AND COVENANTS.
18.1 REPRESENTATIONS AND WARRANTIES BY VUG. VUG warrants and represents
that: (a) VUG (and the officers executing on its behalf) has full
right and power to enter into this Agreement; (b) neither the
execution and the delivery of this Agreement, nor the consummation of
the transactions contemplated hereby, will violate any agreement VUG
has with any third party or any constitution, statute, regulation,
rule, injunction, judgment, order, decree ruling, law, charge or other
restriction of any government, governmental agency, or court to which
VUG is subject or any provision of its charter or bylaws; (c) any and
all marketing materials, sales and packaging of the Partner Product(s)
shall not contain any libelous or otherwise unlawful material or
violate or infringe upon any personal or proprietary right of any
person or entity, including any copyright, patent, trademark or other
intellectual property rights (and VUG hereby acknowledges that no
approval by Interplay of the product packaging and related marketing
materials shall constitute an approval of any such infringement); (d)
VUG shall not distribute Partner Product(s) other than as specifically
provided herein; (e) VUG shall comply with all applicable laws,
statutes, regulations and rules related to its performance hereunder
(including product safety and advertising laws); (f) so long as this
Agreement remains in effect, and subject to SECTION 16 above, VUG
shall not commit any act or enter into any agreement with any
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confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 20
Video Game Publishing Agreement
third party which is inconsistent or in conflict with this Agreement;
and (g) with the exception of *** VUG's inventory of the Partner
Products, VUG will not cause or allow any liens or encumbrances to be
placed against, nor grant any security interest in, the Partner
Products.
18.2 REPRESENTATIONS AND WARRANTIES BY INTERPLAY. Interplay warrants and
represents that: (a) Subject to SECTION 20.13, Interplay (and the
officers executing on its behalf) has full right and power to enter
into this Agreement; (b) neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will violate any agreement Interplay has with any third party
or any constitution, statute, regulation, rule, injunction, judgment,
order, decree ruling, law, charge or other restriction of any
government, governmental agency, or court to which Interplay is
subject or any provision of its charter or bylaws; (c) so long as this
Agreement remains in effect, and subject to SECTION 16 above,
Interplay shall not commit any act or enter into any agreement with
any third party which is inconsistent or in conflict with this
Agreement; (c) the Partner Product(s) and any and all other materials
delivered by Interplay to VUG shall be original or under a valid
license to Interplay with right to provide the exclusive License as
set forth herein to VUG; (d) neither the execution and performance of
this Agreement by Interplay nor the Interplay transactions
contemplated herein, infringes, misuses, misappropriates or conflicts
with the rights, including copyright, patent and other intellectual
property rights or contract rights, licensed to or from, or owned by,
a party other than Interplay; (e) the Partner Product(s) and other
materials delivered by Interplay to VUG shall not contain any libelous
or otherwise unlawful material or violate any commercial rights to
one's name and likeness, or any privacy or personal rights of any
third party; and (f) Interplay shall comply with all applicable laws
(including product safety laws, but only with respect to the Partner
Product game code and associated gameplay), statutes, regulations and
rules related to its performance hereunder.
18.3 ADDITIONAL COVENANTS BY INTERPLAY. Interplay represents and warrants
to VUG that it is capable of and intends to be the developer (whether
such development is done in-house or by Third Party Licensors or
subcontractors) of the Partner Product(s), and that Interplay is
responsible for all obligations attendant upon such role. Accordingly,
and subject to the terms of this Agreement:
(a) COVENANT TO COMPETENTLY COMPLETE AND DELIVER PARTNER PRODUCT(S).
Interplay covenants and agrees the Partner Product(s): (i) shall
upon completion be marketable and have been prepared and
developed with reasonable diligence and skill; (ii) shall upon
completion be of high quality in all material respects; (iii)
shall upon completion, and in accordance with SECTION 3 above,
comply in all material respects to the Partner Product
Requirements Documents, the Partner Product Concept and
Description Documents, and other specifications and descriptions
contained in the written materials accompanying them that have
been provided by Interplay; (iv) would not receive a rating of
"AO" if submitted to the Entertainment Software Rating Board for
evaluation and rating and (v) subject to SECTION 4.3 above, shall
be delivered in accordance with all milestones, schedules or
timelines and that Interplay shall immediately notify VUG in the
event that Interplay has reason to believe that any Partner
Product is not likely not to be in compliance with all schedules
or timelines, or is not likely to be compliant with the agreed
upon specifications;
(b) BREACH OF THIRD PARTY AGREEMENTS. Interplay further represents,
covenants and agrees that it shall not become in default of, and
shall promptly provide VUG with written
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confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 21
Video Game Publishing Agreement
notice should Interplay discover that it is or it anticipates or
it has been noticed to be in breach or in default of, any of its
contracts, agreements or obligations to which its Partner Product
assets are bound or with any of its Third Party Licensors
relating to the licensing of any know-how, intellectual property,
component, tool, software, technology or documentation required
to develop the Partner Product(s). In the event Interplay becomes
in default (beyond any applicable cure period) under any such
third party agreement (thereby breaching this representation,
warranty and covenent) and loses distribution rights to the
applicable Partner Product as a result thereof (thereby causing
VUG to lose its rights to the Partner Product), then VUG's sole
remedy shall be to recover from Interplay an amount equal to (and
VUG shall have the option to withhold from all Interplay Proceeds
otherwise due to Interplay under this Agreement an amount equal
to) VUG's actual unrecouped expenditures and unrecouped Minimum
Guarantees (including Initial Minimum Guarantees and Secondary
Minimum Guarantees) owed to VUG solely with respect to such lost
Partner Product; in no event, however, shall VUG have the right
to terminate this Agreement as a result of Interplay's breach of
its representation, warranty or covenant made under this SECTION
18.3(B). In the event that Interplay, in its sole discretion,
requests VUG to cure any such breach or default of a third party
agreement described in this SECTION 18.3(B), and, in the event
VUG, in its sole discretion and upon advance notification to
Interplay, thereafter agrees to attempt to cure such breach or
default on behalf of Interplay, then (i) any such attempt by VUG
to cure such breach or default shall not release Interplay from
any liability to VUG under this Agreement, and (ii) Interplay
shall repay to VUG, within *** days following VUG's payment
thereof, VUG's costs and expenses related to the cure by VUG of
such breach or default in accordance with this SECTION 18.3(B),
and in the event Interplay fails to timely do so, VUG shall have
the right to pursue collection of such amount from Interplay (and
VUG shall have the option to withhold from all Interplay Proceeds
otherwise due to Interplay under this Agreement an amount equal
to VUG's costs and expenses related to the cure by VUG of such
breach or default).
18.4 LIMITATION. EXCEPT FOR ANY WARRANTIES EXPRESSLY PROVIDED IN THIS
AGREEMENT, THE WARRANTIES STATED IN THIS SECTION 18 ARE THE SOLE AND
EXCLUSIVE WARRANTIES OF THE PARTIES HERETO, AND EACH PARTY HEREBY
DISCLAIMS ANY OTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A
PARTICULAR PURPOSE.
19. INDEMNIFICATION.
19.1 INDEMNITY. VUG and Interplay each shall defend, indemnify and hold
harmless the other, its parent, affiliated companies and partners and
their respective officers, directors, employees and agents from and
against any and all liabilities, damages costs and fees (including
reasonable attorney's fees) for any third party claims or actions
arising out of or relating to any breach of its representations,
warranties and covenants made hereunder.
19.2 ENJOINED DISTRIBUTION. In the event that VUG is enjoined from
manufacturing and/or distributing any Partner Product(s) due to a
claim for which Interplay is obligated to indemnify VUG pursuant to
this Section, Interplay shall, at Interplay's option: (i) ***; (ii)
***; or (iii) ***; or (iv) ***.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 22
Video Game Publishing Agreement
19.3 INDEMNIFIED ACTIONS. If any action shall be brought against one of the
parties hereto in respect to which indemnity may be sought against the
other party (the "INDEMNIFYING PARTY") pursuant to SECTION 19.1, the
Indemnifying Party's obligation to provide such indemnification shall
be conditioned on prompt notice of such claim (including the nature of
the claim and the amount of damages and nature of other relief sought)
being provided to the Indemnifying Party by the party against which
such action is brought (the "INDEMNIFIED PARTY"). The Indemnified
Party shall cooperate with the Indemnifying Party in all reasonable
respects in connection with the defense of any such action at the
expense of the Indemnifying Party. The Indemnifying Party may, upon
written notice to the Indemnified Party, undertake to conduct all
proceedings or negotiations in connection with the action, assume the
defense thereof, including settlement negotiations in connection with
the action, and shall be responsible for the costs of such defense,
negotiations and proceedings. The Indemnifying Party shall have sole
control of the defense and settlement of any claims for which it
provides indemnification hereunder, provided that the Indemnifying
Party shall not enter into any settlement of such claim without the
prior approval of the Indemnified Party, which approval shall not be
unreasonably withheld. The Indemnified Party shall have the right to
retain separate counsel and participate in the defense of the action
or claim at its own expense. In the event that the Indemnifying Party
refuses or does not promptly agree to assume control of the defense
and settlement of any claim for which it must provide indemnification
hereunder, then the Indemnified Party shall have sole control of the
defense and settlement of such claim, and shall have the right to
enter into any settlement of such claim without the prior approval of
the Indemnifying Party.
20. GENERAL PROVISIONS.
20.1 ASSIGNMENT. This Agreement is personal to Interplay and VUG. Neither
Interplay nor VUG may assign its rights or obligations under this
Agreement, by operation of law or otherwise, without the express
written consent of the other, which shall not be unreasonably
withheld. Notwithstanding the foregoing, either party may transfer or
assign its rights and obligations hereunder to any person acquiring
such party by merger or acquiring all or substantially all of such
party's assets, without requiring the consent of the other party;
provided, however, that in the event of any such transfer or
assignment, ***, either party may, in their sole discretion, ***. ***,
both parties acknowledge and agree that in the event that***. Any
attempted assignment except as allowed in this paragraph shall be null
and void. Subject to the foregoing, this Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the
parties hereto.
20.2 DELEGATION OF DUTIES. Subject to SECTION 20.1, VUG may delegate any or
all of its duties to one or more of its VUG Affiliates or
sub-contractors; provided that in each case such VUG Affiliates and
sub-contractors shall be acting on VUG's behalf and VUG shall remain
primarily responsible for its duties delegated under this Agreement.
20.3 INDEPENDENT CONTRACTOR. Nothing herein contained shall be deemed to
establish or otherwise create a relationship of partnership or joint
venture between Interplay and VUG (and/or its sub-contractors); it is
understood that both parties are independent contractors who cannot
and shall not be deemed an agent of the other party for any purpose
whatsoever, and neither party nor any of its agents or employees shall
have any right or authority to assume or create obligations of any
kind, whether express or implied, on behalf of the other party.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 23
Video Game Publishing Agreement
20.4 GOVERNING LAW. This Agreement shall be construed in accordance with
the substantive law of the State of California without regard to its
conflicts of law principles. The parties agree that any disputes
arising out of this agreement shall be resolved in the state or
federal courts located within Los Angeles County and the parties
expressly consent to the personal jurisdiction thereof.
20.5 NOTICES. All notices required or permitted under this Agreement shall
be in writing, shall reference this Agreement and shall be deemed
given: (i) when sent by facsimile to the facsimile number set forth
below and confirmed by machine printed receipt with a copy of the
notice sent by registered or certified mail; (ii) five (5) working
days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or (iii) one (1) working day after
deposit with a commercial overnight carrier, with written verification
of receipt. All communications shall be sent to the address set forth
below, or to such other address as may be designated by a party by
giving written notice to the other party pursuant to this SECTION
20.5:
IF TO INTERPLAY: WITH A COPY TO:
Interplay Entertainment Corp. Interplay Entertainment Corp.
Attention: Chief Executive Officer Attention: Legal Dept.
16815 Xxx Xxxxxx Avenue 00000 Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
IF TO UNIVERSAL: WITH A COPY TO:
Vivendi Universal Games, Inc. Vivendi Universal Games, Inc.
Attention: Chief Operating Officer Attention: Senior Counsel
0000 Xxxxxx Xxxxx 0000 Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx, 00000 Xxx Xxxxxxx, Xxxxxxxxxx, 00000
Telephone: 000-000-0000 Telephone: 000-000-0000
Facsimile: 000-000-0000 Facsimile: 000-000-0000
20.6 SURVIVAL. The rights and obligations set forth in Sections 1, 11.5,
12, 13, 15, 17, 19, and 20 shall survive the termination or expiration
of this Agreement or any determination that this Agreement or any
portion hereof or exhibit hereto is void or voidable.
20.7 FORCE MAJEURE. Neither party shall be liable for any delay in any of
its obligations pursuant to this Agreement resulting from any cause
beyond its reasonable control or caused by acts of God, fire,
sabotage, terrorism, acts of civil or military authorities,
priorities, fires, strikes, floods, epidemics, governmental action,
rules or regulations, war, riot, delays in transportation or
shortages.
20.8 WAIVER. No waiver of any default or breach of this Agreement by either
party shall be deemed a continuing waiver or a waiver of any other
breach or default, no matter how similar.
20.9 SEVERABILITY. If a provision herein contained shall be held by any
court of competent jurisdiction to be illegal, void or unenforceable,
the parties shall first request that such court "blue line" such
provision to make it enforceable and carry out the parties' intent. If
such remedy is not available, such provision shall be of no force or
effect while such infirmity shall exist, but such infirmity shall have
no effect whatsoever upon the binding force or effectiveness of any of
the other provisions hereof, it being the intention of the parties
hereto that had they, or
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confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 24
Video Game Publishing Agreement
either of them, known of such infirmity, they would have entered into
a contract, each with the other, containing all of the other
provisions hereof. In the event the infirmed provision causes the
contract to fail of its essential purpose, then the entire Agreement
shall fail and become void.
20.10 PARAGRAPH HEADINGS; INTERPRETATION. The headings in this Agreement
are inserted for convenience only and are not deemed a part of this
Agreement and shall not be considered in interpreting this Agreement.
The word "include" or "including" used in this Agreement shall
describe examples of the antecedent clause, and shall not be construed
to limit the scope of such clause. Unless specifically stated
otherwise, any reference to a particular period of days herein shall
be interpreted as reference to calendar days; provided, however, that
if such period would otherwise end on a Saturday, Sunday or generally
recognized U.S. public holiday, then the period shall be deemed to end
on the next business day. Whenever reference is made herein to a
particular Section of this Agreement, it shall mean and include all
subsections and subparts thereof.
20.11 ATTORNEY'S FEES. In the event of any litigation between the parties
hereto, the prevailing party shall be entitled to recover reasonable
attorney's fees in addition to other relief as the court may award.
20.12 EQUITABLE RELIEF. The parties acknowledge that each party's
performance of its respective obligations hereunder, the Partner
Product(s) and the intellectual property comprising such Partner
Product(s), and the rights and licenses granted to VUG hereunder are
of a unique, unusual, extraordinary and intellectual character which
gives them a special value, the loss of and/or damage to which may not
be reasonably or adequately compensated in damages in an action at
law, that a material breach by either party of this Agreement may
cause the non-breaching party great and irreparable injury and damage
and, therefore, that the non-breaching party shall be entitled to seek
injunctive relief to prevent such injury or damage.
20.13 BOARD APPROVAL. Interplay and VUG acknowledge and agree that a
condition precedent to the effectiveness of this Agreement is the
approval and ratification of this Agreement by Interplay's Board of
Directors. Such board approval (or rejection, as applicable) shall be
provided to VUG on or before August 9, 2002.
20.14 NO OFFSET. Except as otherwise expressly provided in this Agreement,
any amounts due under this Agreement shall be paid with no right of
offset against any other amounts due under this Agreement. In no event
shall any amounts due under this Agreement be paid by offset against
any amounts due under any other agreements which may exist between the
parties.
20.15 REQUESTS, CONSENTS AND APPROVALS. Unless otherwise expressly provided
in this Agreement, any consents and/or approvals requested of either
party pursuant to this Agreement shall not be unreasonably withheld,
conditioned or delayed. Without limitation, VUG acknowledges and
agrees that it shall be deemed "reasonable" for Interplay to withhold,
condition and/or delay its consent and/or approval as and when
necessary for Interplay to comply with the terms of any Third Party
Licenses.
20.16 NO THIRD PARTY BENEFICIARIES. No person other than the parties hereto
and their permitted successors and assigns shall receive any benefits
of this Agreement.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 25
Video Game Publishing Agreement
20.17 ENTIRE AGREEMENT. This Agreement, including all Exhibits, constitutes
and contains the entire agreement between the parties with respect to
the subject matter hereof and supersedes any prior oral or written
agreements with respect to the subject matter hereof (for purposes of
clarification, this Agreement shall have no affect on the Existing
Distribution Agreement, which shall remain in full force and effect in
accordance with its terms). Nothing herein contained shall be binding
upon the parties until this Agreement has been executed by each and
has been delivered to the parties. This Agreement may not be changed,
modified, amended or supplemented, except in writing signed by all
parties to this Agreement. Each of the parties acknowledges and agrees
that the other has not made any representations, warranties or
agreements of any kind, except as may be expressly set forth herein.
This Agreement may be executed in counterparts and delivered by
facsimile.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
VIVENDI UNIVERSAL GAMES, INC. INTERPLAY ENTERTAINMENT CORP.
BY: /s/ Xxxx X'Xxxx BY: /s/ Herve Caen
-------------------- --------------------
NAME: Xxxx X'Xxxx NAME: Herve Caen
TITLE: President, PPG TITLE: CEO & President
DATE: 8/9/02 DATE: 8/9/02
ACCOUNTING ACCOUNTING
CONTACT CONTACT
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 26
Video Game Publishing Agreement
EXHIBIT A
INTERPLAY PROCEEDS AND MINIMUM GUARANTEES
1. MINIMUM GUARANTEE.
1.1 PAYMENT. With respect to each Partner Product, VUG shall pay Interplay
recoupable (solely in accordance with SECTION 1.1(ii) immediately
hereinbelow), but non-refundable (unless otherwise expressly provided
in this Agreement), minimum guarantee payment(s) (the "MINIMUM
GUARANTEE(S)") (on a per title basis) against future Interplay
Proceeds otherwise due to Interplay, as follows:
(i) within *** business days of receipt of an Approved Gold Master,
VUG shall pay to Interplay an amount equal to the product of ***
of (i) *** (with respect to Non-PC Partner Products) or (ii) ***
(with respect to PC Partner Products). *** of VUG's Final Gross
Sales Projection (as determined by VUG upon delivery of an
Approved Gold Master and in accordance with SECTION 1.2 of this
EXHIBIT A) for such Partner Product, multiplied by *** (as set
forth in SECTION 2.1 of this EXHIBIT A) (the "INITIAL MINIMUM
GUARANTEE"); and
(ii) within *** business days after the Initial Shipment of a Partner
Product, and in the event that the product of ***(with respect to
Non-PC Partner Products) or ***(with respect to PC Partner
Products) of VUG's actual Gross Sales Revenue on Initial Shipment
of the Partner Product, multiplied by *** (as set forth in
SECTION 2.1 of this EXHIBIT A), exceeds the Initial Minimum
Guarantee paid for such Partner Product, then VUG shall pay to
Interplay such difference (the "SECONDARY MINIMUM Guarantee").
1.2 PROJECTED GROSS SALES REVENUE. Interplay acknowledges and agrees that,
subject to SECTION 11.7 of the Agreement and the terms below in this
SECTION 1.2 of EXHIBIT A, final projected Gross Sales Revenues at
Initial Shipment (the "FINAL GROSS SALES PROJECTION") will be
determined *** upon receipt from Interplay of the Approved Gold
Master. Notwithstanding the foregoing, VUG will use good faith efforts
in determining the Final Gross Sales Projection for each Partner
Product and will consult with Interplay in making such projection(s).
Projected Gross Sales Revenue for a Partner Product shall be initially
determined by VUG at the Six Month Evaluation. Following the Six Month
Evaluation, VUG shall at the Three Month Evaluation make a subsequent
determination of the projected Gross Sales Revenues at Initial
Shipment (the "THREE MONTH GROSS SALES PROJECTION"). VUG's Three Month
Gross Sales Projection shall be based on the anticipated marketing
spend and strategy for the Partner Product, VUG's assessment of the
sales potential of that Partner Product (based on the Beta Version),
pricing in accordance with SECTION 11.7 of the Agreement, prevailing
market conditions and other relevant considerations which might
reasonably and customarily affect VUG's projected sales with respect
to a Partner Product. ***.
1.3 RECOUPMENT. The Minimum Guarantee for a particular Partner Product
shall be recoupable by VUG as follows: unless and until VUG recoups
the Minimum
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 27
Video Game Publishing Agreement
Guarantee, VUG shall be entitled to deduct *** from the Interplay
Proceeds with respect to such Partner Product. The parties agree that
(i) such recoupment is not to be construed as a set-off, and that (ii)
except as expressly provided in this agreement, the Minimum
Guarantee(s) for one Partner Product shall not be recoupable against
Interplay Proceeds accrued for any/all other Partner Products (i.e.,
there shall be no cross-collateralization).
2. DISTRIBUTION FEE.
2.1 PERCENT OF NET SALES PER PARTNER PRODUCT UNIT. Subject to VUG's right
of recoupment of all Minimum Guarantees paid by VUG to Interplay, as
set forth in SECTION 1.3 of EXHIBIT A, VUG shall pay Interplay the
"Interplay Proceeds." For the purposes of this agreement, the
"Interplay Proceeds" shall be defined as the Gross Sales Revenues less
the General Reserve, less the following distribution fee (which VUG
shall be deemed to have earned as compensation for the services
provided herein (the "DISTRIBUTION Fee"))* from Net Sales of Partner
Products distributed to third parties as provided herein:
TITLE PLATFORM DISTRIBUTION FEE
------------------------- ----------------- ----------------------
1. PC ***
------------------------- ----------------- ----------------------
2. Non-PC ***
* Solely with respect to distribution of Partner Products via rental channels
(i.e., Blockbuster, Hollywood Video, etc.), VUG shall pay Interplay *** of gross
proceeds received by VUG. For purposes of clarification, there shall be no
General Reserve taken by VUG in calculating Interplay Proceeds on rental
revenues.
2.2 DEFINITION OF NET SALES. For the purposes of this Agreement, "NET
SALES" shall be defined as Gross Sales Revenues from the Partner
Product(s), less the General Reserve (as defined in SECTION 3 of this
EXHIBIT A).
3. GENERAL RESERVE. VUG will deduct the following amounts (the "GENERAL
RESERVE") against (i) returns, (ii) price protections, and (iii) post-sale
markdowns extended by VUG to its customers in the normal course
(collectively (i), (ii) and (iii), the "AUTHORIZED DEDUCTIONS") in the
amount of *** of Gross Sales Revenues with respect to all Non-PC Partner
Products and *** with respect to all PC Partner Products. ***. ***. ***.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 28
Video Game Publishing Agreement
EXHIBIT B
1. AUTHORIZED CHANNEL(S):
1.1 Retail (including all rental revenue); and
1.2 Direct-to-consumer (including receiving orders over the Internet, but
delivering on a physical, packed-goods basis).
2. LICENSED TERRITORY: United States and Canada.
3. PARTNER PRODUCTS/DELIVERY DATES:
Submission Date(s) Approved Gold
TITLE Platform: for delivery of Master Delivery
the Gold Candidate: Date:
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+
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 29
Video Game Publishing Agreement
EXHIBIT C
[RESERVED]
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 30
Video Game Publishing Agreement
EXHIBIT D
FORM OF VUG FINAL MARKETING STRATEGY STATEMENT
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 31
Video Game Publishing Agreement
EXHIBIT E
SAMPLE ROYALTY STATEMENT
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 32
Video Game Publishing Agreement
EXHIBIT F
SAMPLE MINIMUM GUARANTEE CALCULATIONS
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Vivendi Universal Games, Inc. Page 33
Video Game Publishing Agreement
