LICENSE AGREEMENT
This License Agreement (this "Agreement") is entered into effective as
of the 30th day of June, 2000 (the "Effective Date") by and between Activision
Publishing, Inc., a Delaware corporation with offices at 0000 Xxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx 00000 ("Activision"), and Majesco Sales,
Inc. with offices at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000 ("Licensee").
RECITALS
A. Activision is engaged in the business of developing, publishing,
licensing and distributing entertainment software products, and owns and holds
the rights to develop, manufacture, publish, and distribute an entertainment
software product known as Soldier of Fortune, the description of which is set
forth on Schedule A attached hereto (the "Activision Property").
B. Licensee is engaged in the business of developing, producing,
manufacturing, distributing and selling video games and entertainment software
products.
C. Licensee desires to convert the Activision Property to a format for
use with the Sony Play Station 2 console platform, and to develop, produce,
manufacture, advertise, promote and distribute such converted Activision
Property, on the terms and conditions set forth herein.
NOW, THEREFORE, the parties do hereby agree as follows:
1. GRANT OF RIGHTS:
1.1 Activision grants to Licensee a limited, exclusive
non-transferable right and license to: (a) convert the
Activision Property to a format for use solely with the Sony
PlayStation 2 operating system (collectively, the "Converted
Platform") (such converted version of the Activision Property
for use with the Converted Platform being hereinafter referred
to collectively as the "Product"); and (b) develop, produce,
manufacture and have manufactured by a third party, advertise,
promote and distribute the Product (i) in the Territory (as
defined in Section 3.1), (ii) throughout the Term (as defined
in Section 4.1), (iii) only for use on the Converted Platform
set forth above, (iv) for sale solely in retail channels
(i.e., to retailers or end users via retail outlets, or to
subdistributors who will then sell the Product solely to
retailers or end users via retail outlets), and (v) only
pursuant to one or more end-user license agreements approved
in advance by Activision. Activision also grants to Licensee a
limited, non-exclusive, non-transferable right and license to
use Activision's trademarks and logo in accordance with the
terms and conditions of Section 9.1.
1.2 Licensee shall not have the right to: (a) license or
sublicense the Activision Property or the Product, except for
sublicensing of the Product which is required in conjunction
with the retail distribution of the Product in those parts of
the
Territory where sublicensing is appropriate; (b) enter into an
agreement for the bundling of the Product with an OEM
manufacturer; (c) disclose or reverse engineer the Activision
Property or any part thereof, or authorize or permit any of
its customers to do so; or (d) except as otherwise provided in
this Agreement in connection with the development of the
Product, copy or modify the distribute or sell any other
products or version of products based on the Activision
Property. Activision expressly reserves and retains any and
all rights that are expressly excluded from or not
specifically granted to Licensee pursuant to this Agreement.
1.3 Activision (or as applicable, its licensor in connection with
the Activision Property) has and shall retain all rights,
title and ownership interest in and to the Activision
Property, any and all modifications, enhancements and, subject
to the provisions of Section 8.3, derivative works thereof and
all Intellectual Property Rights (as defined in Section 8.l)
embodied therein and related thereto. Licensee shall not by
any act, or omission to act impair or prejudice the
Intellectual Property Rights of Activision (or, as applicable,
its licensor) in the Activision Property or violate any moral
rights or deal with the Activision Property so that any third
party might obtain any lien or other right of whatever nature
incompatible with the Intellectual Property Rights of
Activision (or, as applicable, its licensor). Licensee agrees
to notify Activision of any known or suspected violation or
infringement of Activision's Intellectual Property Rights in
the Activision Property that comes to Licensee's attention and
to assist Activision at Activision's expense, in the
prosecution of any such infringement claims.
2. DEVELOPMENT OF THE PRODUCT:
2.1 Licensee agrees to create the product at its sole cost and
expense pursuant to the terms and conditions of this
Agreement. Subject to Activision's approval rights set forth
in Section 2 hereof, Licensee shall assume full responsibility
for the creation and development of the Product. Activision
agrees to cooperate with and assist Licensee in the
development of the Product by providing Licensee, to the
extent necessary, with audio and visual assets and computer
code for the Activision Property solely to assist Licensee in
developing the Product.
2.2 Licensee agrees that it shall treat all information received
hereunder as confidential in accordance with Section 12 of
this Agreement. Licensee represents that it has caused or will
cause each of its employees having access to Activision's
information and materials hereunder to execute a
non-disclosure/con-fidentiality agreement sufficient to
protect Activision's confidential information. Licensee also
shall require all independent contractors having access to any
Activision information and materials in connection herewith to
become subject to and be bound by the confidentiality
provisions of this Agreement and to execute a confidentiality
agreement, the form of which is set forth on Schedule E
attached hereto. In. the event that any employee or
independent contractor of Licensee breaches its
confidentiality obligations with respect to Activision's
information and materials hereunder, Licensee will not be
deemed to be in breach of its obligations under this
Agreement, provided that Licensee timely proceeds to
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enforce such confidentiality obligations against the employee
or independent contractor. Licensee agrees that in the event
any employee or contractor of License having access to any
Activision information and materials in connection herewith
breaches confidentiality obligations undertaken by Licensee
pursuant to this Agreement, and Licensee does not timely
commence an action to prevent the unauthorized dissemination
of confidential information, Activision shall have the right
to proceed on behalf of Licensee against the party engaged in
such unauthorized disclosure of information, including,
without limitation, the right to seek injunctive and other
equitable relief. In connection therewith, Licensee agrees to
assign to Activision its legal right to proceed against the
party engaged in such unauthorized disclosure of information,
and will execute any documents reasonably required by
Activision to evidence such assignment.
2.3 Licensee agrees to develop the Product in conformance with
commonly accepted standards for high-quality computer and
video game software. Licensee and Activision acknowledge and
agree that the conversion of the Activision Property may
require certain modifications to the gameplay of the
Activision Property to accommodate the features arid
limitations of the Converted Platform, which modifications
shall be subject to the prior written approval of Activision,
which shall not be unreasonably withheld. Licensee will
perform all development and other services required hereunder
at its offices. Licensee's development team assigned to the
development of the Product will consist of fully-qualified
employees of Licensee, who will devote such time to the
development of the Product as is necessary to complete such
Product on time and in a manner which conforms to the
standards required by this Agreement. In the event Licensee
wishes to utilize the services of a third party developer
("Outside Developer") in connection with the development of
the Product, then the following shall apply: (a) such Outside
Developer shall be subject to the prior written approval of
Activision, which shall not be unreasonably withheld; (b)
Licensee's engagement of such Outside Developer shall be
subject to all terms and conditions of this Agreement and (c)
Licensee shall remain primarily liable to Activision at all
times for Outside Developer's conduct and for the completion
of the development of the Product.
2.4 Licensee agrees to use its commercially reasonable efforts to
complete the Product promptly following the execution of this
Agreement, but will complete the Product by no later than
(****) following the Effective Date in any event, provided
that this (****) deadline shall be subject to the timely
fulfillment by Activision of its obligations relating to
cooperation, assistance and approvals as specifically set
forth in this Agreement. For the purpose of facilitating
Activision's approval of the Product as set forth in Section
2.5 below, Licensee shall submit process reports as may be
reasonably requested by Activision during the development and
production of the Product, and shall submit for Activision's
review and approval current "builds" (as such term is commonly
understood in
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the entertainment software industry) of the Product as set
forth in Section 7. Licensee shall incorporate any changes
requested by Activision after review of such "builds" into the
Product, provided however that Activision shall not request
changes which are inconsistent with the design document which
is approved by Activision pursuant to Section 2.5. All
progress reports, "builds" and other material and information
submitted to Activision by Licensee under this Section 2.4
shall constitute confidential information of Licensee subject
to the provisions of Section 12.
2.5 Licensee agrees that the Product shall be of the standard
customary to high-quality products in the entertainment
software industry and of such style, appearance and quality as
shall, in the judgment of Activision, be adequate and suited
to its exploitation to the best advantage and to the
protection and enhancement of the Activision Property and the
goodwill pertaining thereto; that the Product shall be
manufactured, packaged, sold, distributed, advertised and
serviced in accordance with all applicable laws; that the
policy of sale, distribution, and/or exploitation by Licensee
shall be of the equivalent standard customary to high-quality
products in the entertainment industry; and that the same
shall in no manner reflect adversely upon the Activision
Property or Activision. Licensee further agrees that all
rights granted herein shall be exploited or exercised so as
not to interfere with, detract from, or alter in any respect
the concepts used by Activision or known to the public in
connection with the Activision Property, and that Licensee
shall use its best efforts to preserve such concepts therein.
Accordingly, Licensee agrees to submit the Product, all
associated packaging and documentation, and all marketing
materials to be utilized in connection with the advertising,
marketing and promotion of the Product to Activision for
Activision's prior approval or disapproval. Licensee shall
submit "builds" of the Product for Activision's approva1 at:
(a) the initial concept and design document stage (it being
understood that at such stage, Activision shall have the right
to approve such concept and the final design document); (b)
upon implementation of the art constituting the main gameplay
elements of the Product; (c) Licensee's alpha and beta
development stages; and (d) at its final pre-gold master stage
(as such terms &c commonly understood in the entertainment
software industry). Any version of the Product created by
Licensee shall not be distributed or otherwise utilized by
Licensee without first obtaining the written approval of
Activision (and, as necessary, the third parties set forth in
Section 2.6 as to the final form, content and quality of the
Product and all associated packaging and documentation
therefor as well as the title to be used by Licensee in
connection with the distribution of the Product. Activision
shall use reasonable efforts to approve materials submitted by
Licensee within (****) business days alter receipt, which
approval shall not be unreasonably withheld. Licensee agrees
to make such changes as will be reasonably required to correct
any deficiencies noted by Activision promptly upon receipt of
such notice. This
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procedure will be repeated with each submission until
Activision determines that its request for changes has been
met.
2.6 Activision and Licensee acknowledge and agree that the
Product, including any packaging and marketing materials
created by Licensee to be used in connection with the Product,
shall also be subject to the approval of Sony Electronic
Publishing Co. and/or any of its affiliates, parent companies,
or subsidiaries (collectively "Sony") and NNP, Inc. and/or its
affiliates, parent companies, licensors or subsidiaries
("NNP"), Activision's licensor of the "Soldier of Fortune"
property on which the Activision Property is based, and
Licensee agrees to make and/or implement any and all changes
to the Product that may be required by Sony and NNP. Licensee
further agrees that all materials relating to the Product
requiring NNP's approval will be processed solely through
Activision for submission to NNP, rather than directly from
Licensee to NNP.
2.7 The packaging and the written documentation for the Product
shall contain a notice indicating that the Product is produced
by Licensee under license from Activision and shall contain
proper legal notices approved by Activision indicating
Activision's ownership of the Intellectual Property Rights in
and to the Product
2.8 Promptly upon Licensee's receipt of its initial shipment of
the Product, Licensee shall provide to Activision (****)
units of the Product for its internal use.
3. TERRITORY:
3.1 Licensee shall be entitled to exercise the rights granted
hereunder only in the territory described in Schedule B
attached hereto (the "Territory").
4. TERM:
4.1 The rights granted hereunder shall be effective as of the
Effective Date and shall expire as of the date specified in
Schedule C attached hereto, unless sooner terminated in
accordance with the terms and conditions hereof (the "Term")
5. ROYALTIES:
5.1 In consideration of the rights granted to Licensee pursuant to
this Agreement, Licensee shall pay to Activision the Advance
(as defined below) and Royalties (as defined below) as set
forth in this Section 5. Activision shall be solely
responsible for any payments that may become due and payable
to any of Activision's licensors of the Activision Property
(if any) in connection with Licensee's exploitation of its
rights granted in this Agreement
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5.2 Licensee shall pay to Activision a non-refundable advance (the
"Advance") in the amount set forth on Schedule D attached
hereto immediately upon execution of this Agreement by both
parties, which Advance shall be fully recoupable from the
Royalties payable to Activision pursuant to Section 5.3 below.
5.3 Licensee shall pay Activision the respective per unit royalty
amounts for each unit of the Product sold or licensed by
Licensee hereunder ("Royalty" or "Royalties") according to
Schedule D attached hereto. A unit of the Product shall be
considered "sold" or "licensed" when the payment for such unit
of the Product is paid or credited to Licensee's account,
whichever occurs first.
5.4 Payments of the Advance and all Royalties for all units of the
Product distributed by Licensee shall be made in United States
Dollars solely by wire transfer to a bank account designated
by Activision. Payment of the Advance and all Royalties to
Activision shall be made without deduction, reduction or
set-off of any kind whatsoever, except solely that Licensee
shall be entitled to deduct any unrecouped portion of the
Advance from Royalties which may be due at the time such
Royalties are otherwise due and payable to Activision.
5.5 Within (****) days after the end of each calendar quarter
during the Term of this Agreement, commencing with the
calendar quarter during which the first unit of the Product is
shipped by Licensee, Licensee shall furnish Activision with an
accounting statement of the Royalties earned and an account of
the manufacture and sale of the Product hereunder, together
with payment for any amount shown thereby to be due to
Activision. The Royalty statement shall be based upon
distribution of units of the Product during the calendar
quarter then ended, and shall be sufficient to discern how the
Royalties, if any, due to Activision were computed.
5.6 For the avoidance of doubt the parties acknowledge and agree
that Licensee shall not be entitled to withhold any portion of
the Royalties as a reserve.
5.7 All payments of the Royalties to Activision will be made
without deduction or withholding for any foreign, national,
state or local sales, use, value added, withholding or other
taxes, custom duties, or similar tariffs and fees. Should any
tax or levy be made in connection therewith, Licensee agrees
to pay such tax or levy and indemnify Activision for any claim
for such tax or levy demanded.
5.8 Activision will have the right at least twice annually during
the term of this Agreement to have independent auditors
examine Licensee's books, records and accounts for the purpose
of verifying payment to Activision hereunder. Each such
examination will be upon at least five (5) business days prior
written notice to Licensee and will not unreasonably interfere
with Licensee's business. If any examination discloses a
shortfall in any Royalty payment due Activision of more than
(****), Licensee will pay the fee of the auditors for that
examination, in
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addition to the payment of such shortfall, and Activision will
be entitled to perform an additional examination
within (****) from the date of the examination that disclosed
such shortfall. All information (other than information
pertaining to Royalties due to Activision) learned by, or
disclosed to, Activision or its agent as a result of any such
audit shall constitute Licensee's confidential information,
and any person who conducts such audit will therefore, be
required to execute a non-disclosure agreement reasonably
satisfactory to Licensee, that prohibits the unauthorized use
or disclosure to third parties of Licensee's confidential
information.
6. CUSTOMER SUPPORT AND MARKETING COMMITMENTS:
6.1 Licensee shall commence marketing and public distribution of
the Product immediately following the final approval thereof
by Activision in accordance with the terms of this Agreement.
6.2 Licensee shall use diligent, good faith efforts to market and
promote the distribution of the Product in the Territory.
Subject to Activision's approval rights in connection with
marketing materials set forth in Section 2.5, Licensee shall
consult with Activision regarding the marketing and promotion
of the Product. Licensee shall not distribute the Product as a
premium or giveaway or in connection with the sale or
promotion of any other products or services.
6.3 Activision will provide Licensee with a reasonable amount of
artwork from the packaging and promotional materials utilized
by Activision in connection with the Activision Property for
Licensee's use in the creation of packaging and promotional
materials for the Product, subject to Activision's approval
rights of such materials as set forth in Section 2.5 of this
Agreement.
6.4 Licensee will be responsible for determining the suggested
retail price at which the Product will be offered for sale to
the general public.
6.5 Licensee shall provide technical support to all dealers and
customers in the Territory who obtain the Product, the
standard of such support to be commensurate with the generally
accepted highest level of support in the entertainment
software industry in the Territory, including without
limitation telephone and fax support to be provided by
Licensee via telephone numbers to which customers may call
during Licensee's normal business hours or fax in order to
have their technical questions about the Product answered.
ACTIVISION SHALL NOT BE RESPONSIBLE FOR, NOR SHALL ACTIVISION
PROVIDE, CUSTOMER SUPPORT OF ANY KIND IN CONNECTION WITH THE
PRODUCT. Activision shall refer any and all technical support
requests in connection with the Product to Licensee, and
Licensee shall reimburse Activision for any reasonable, actual
costs incurred by Activision in connection with any
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technical support of the Product by Activision necessitated by
Licensee's failure to provide adequate customer support.
6.6 Licensee shall bear the costs of submitting the Product to any
rating authorities of the Territory, along with any rating,
fees or administrative payments that become due.
7. CONVERSION OF THE PRODUCT TO OTHER PLATFORMS:
7.1 Notwithstanding anything to the contrary contained herein,
Activision shall have during and after the Term of this
Agreement the unlimited right to convert, or license to third
parties the right to convert, the Activision Property and any
gameplay elements of the Product for use on any and all
operating systems and platforms other than the Converted
Platform and to produce, develop, manufacture, advertise,
promote and distribute such converted product in any and all
portions of the Territory without any obligation to Licensee
whatsoever; provided, however, Activision will not be
permitted to utilize any of information in furtherance of or
in connection with, such activities.
8. INTELLECTUAL PROPERTY RIGHTS:
8.1 For purposes of this Agreement, the term "Intellectual
Property Rights" means patent rights, inventions, know-how,
and registrations and applications, renewals and extensions
therefor, all works of authorship, copyrights and
copyrightable work product or elements (including, but not
limited to, all titles, computer code, themes, objects,
characters, character names, stories, dialog, catch phrases,
locations, concepts, artwork, animation, designs, sounds,
musical compositions, audio-visual effects and methods of
operation and play, moral rights and related documentation),
copyright registrations and applications, renewals and
extensions therefor, trademark registrations and applications,
renewals and extensions therefor, rights in trade dress and
packaging, goodwill, trade and other intellectual property and
other proprietary rights recognized by the US laws, laws in
the Territory, and other applicable foreign and international
laws, treaties and conventions.
8.2 Notwithstanding anything to the contrary set forth in this
Agreement Activision or, as applicable, its licensor shall at
all times be and remain the sole and exclusive owner of the
Activision Property and all Intellectual Property Rights
pertaining thereto. Without limiting the generality of the
foregoing, nothing in this Agreement shall be deemed to grant
Licensee any proprietary or ownership interest or Intellectual
Property Rights in or to the Activision Property.
8.3 Notwithstanding the foregoing, Activision acknowledges and
agrees that it has no right, title and/or interest in and to
the work undertaken by Licensee to develop the Product,
including, without limitation, (a) computer software, code,
routines, tools, algorithms and the like which generate any of
the audio-visual assets or other gameplay elements contained
in the Product, (b) all originally created art,
8
sound, music, and other assets and designs embodied in the
Product, or any reproduction thereof, (a) the technical and/or
maintenance documentation of or concerning the Product, and
(d) the related instruction manuals and packaging for the
Product, including all protectable trade dress contained in
such packaging (collectively, the "Work Product"), to the
extent the Work Product does not include any portion of the
Activision Property or any artwork, assets or other materials
supplied by Activision (collectively, "Activision Materials").
The Work Product shall be owned by Licensee to the extent such
does not include any of the Activision Materials, all right,
title and interest to which shall be owned exclusively by
Activision or, as applicable, its licensor. Subject to
Activision's or its licensor's ownership of the Activision
Materials, Licensee shall have all rights, title and interests
in and to the Product and the Work Product, and all
Intellectual Property Rights pertaining thereto.
8.4 The Activision Property is licensed, not sold, by Activision
to Licensee, and nothing in this Agreement will be interpreted
or construed as a sale or purchase of any copy of the
Activision Property, including but not limited to any use of a
"purchase order" by Licensee in connection with the
transactions contemplated hereunder. Furthermore, any
distribution or delivery of the Product by Licensee to any
sublicensee (including, without limitation, subdistributors
and end-users) will be by license and not by sale.
Accordingly, Licensee acknowledges that the "First Sale
Doctrine" (as embodied in 17 U.S.C., Section 109 of the United
States Copyright Act of 1976, as amended, or the equivalent
law or statute in the Territory) does not apply to Licensee's
acquisition of rights in and to the Activision Property
hereunder or to any sublicensee's acquisition of rights in and
to the Product under any agreement between Licensee and a
sublicensee.
9. TRADEMARKS AND COPYRIGHTS: ACTIVISION'S TITLE AND GOODWILL:
9.1 Licensee agrees to place in the Product, on the packaging and
related documentation and marketing materials all copyright
notices, logos and designations in the form and manner
directed by Activision. Activision's logo shall be at least
equal in size to other logos featured in the Product,
documentation and marketing materials, including Licensee's
logo. Without limiting Activision's other approval rights set
forth in this Agreement, Activision's specific approval is
required on the placement of Activision's logo, copyright
notices and designations. Except as provided in Section 8.3,
all copyrights, trademarks and service marks relating to the
subject matter of this Agreement are, will be and shall remain
the sole property of Activision (or, if applicable, its
Licensor and other contractors). Licensee shall create,
execute and deliver to Activision all documents and
instruments required by Activision for the protection of or
otherwise in connection with the copyrights, trademarks and
service marks of Activision (or, if applicable, its licensor
and other contractors). Licensee shall not have the right to
use Activision's (or, if applicable, its licensor's and other
contractors') trademarks or trade names except in connection
9
with the promotion and distribution of the Product in the
Territory in accordance with the terms of this Agreement.
9.2 Licensee acknowledges that Activision or, as applicable, its
licensor, is the owner of all right, title and interest in and
to the Activision Property, and further acknowledges the great
value of the goodwill associated with the Activision Property
and that the Activision Property has acquired secondary
meaning in the mind of the public and that the trademarks and
copyrights included in the Activision Property, and the
registrations therefor, are valid and subsisting, and further
agrees that it shall not during the Term of this Agreement or
at any time thereafter do or cause to be done any act which in
any way may impair, harm or bring into disrepute Activision's
or its licensor's exclusive rights and title to the Activision
Property, as well as any properties owned by Activision which
are not licensed hereunder, or the validity thereof or the
validity of this Agreement, and shall not assist others in so
doing.
9.3 Licensee shall not in any manner represent that it has any
ownership in the Activision Property, or in any trademarks or
copyrights included in the Activision Property (or
registrations therefor), but may, only during the Term of this
Agreement, and only if Licensee has complied with any and all
applicable laws and registration requirements within the
Territory for so doing, represent that it is a "licensee" or
"official licensee" hereunder. Licensee shall not register or
attempt to register any copyright or trademark in the
Activision Property, in its own name or that of any third
party, nor shall it assist any third party in doing so.
10. REPRESENTATIONS, WARRANTIES AND COVENANTS:
10.1 Licensee hereby warrants arid represents that Licensee has the
right and power and is free to enter into and fully perform
this Agreement, without approval from any governmental entity
or third party other than as has been or, if later imposed,
will be obtained.
10.2 Licensee further warrants and represents that any information
or materials developed in connection with the development of
the Product hereunder shall not rely, or in any way be based
upon, proprietary information or Intellectual Property Rights
obtained or derived by Licensee from sources other than
Activision, unless Licensee has received specific
authorization or license in writing from any such source to
use such information or rights in connection with the
development of the Product.
10.3 Licensee further warrants and represents that any materials
developed by Licensee pursuant to this Agreement will not
infringe upon or misappropriate the Intellectual Property
Rights (with respect to patent rights, Licensee's
representation herein shall be limited to Licensee's best
knowledge) or any other legal rights of any third party
through any act or omission to act of Licensee hereunder.
Should any aspect of the Product become, or, in Activision's
opinion, is likely to become, the object of any infringement
or misappropriation claim or
10
suit arising out of any act or omission to act of Licensee,
Licensee will procure, at Licensee's expense, the right to use
the Product in all respects, or will replace or modify the
affected Product to make it non-infringing.
10.4 Licensee hereby covenants to put forth its commercially
reasonable efforts to diligently market, distribute and
promote the Product at Licensee's sole cost and expense.
10.5 Licensee hereby further covenants not to sell the Product to
any party who it knows, or reasonably should know, will
infringe Activision's Intellectual Property Rights in the
Product.
10.6 Licensee hereby further covenants to: (a) conduct its business
in a manner that reflects favorably at all times on the
Activision Property, the Product and the good name, goodwill
and reputation of Activision; (b) avoid deceptive, misleading
or unethical practices, that are or might be detrimental to
Activision, the Activision Property, the Product or the
public; (c) avoid making disparaging, false or misleading
statements or representations with regard to Activision, the
Activision Property or the Product; (d) not employ or
cooperate in the employment of any deceptive or misleading
advertising material with regard to Activision, the Activision
Property or the Product; and (e) make no representations,
warranties or guarantees to customers or to the trade with
respect to the specifications, features or capabilities of the
Product that are inconsistent with the warranties and
disclaimers included in or with the Product.
10.7 Licensee hereby further covenants that it will comply with all
applicable international, national, regional, and local laws
in performing its duties hereunder and in any of its dealings
with respect to the Product.
10.8 If any approval with respect to this Agreement, or the
notification or registration thereof; will be required at any
time during the Term, with respect to giving legal effect to
this Agreement in the Territory, or with respect to compliance
with exchange regulations or other requirements. Licensee will
immediately take whatever commercially reasonable steps may be
necessary in this respect, and any charges incurred in
connection therewith will be for the account of Licensee.
Licensee shall keep Activision currently informed of its
efforts in this regard. Activision shall be under no
obligation to provide the Product to Licensee hereunder for
the relevant portions of the Territory until Licensee has
provided Activision with satisfactory evidence that such
approval has been obtained, or that no such approvals are
required.
10.9 Licensee hereby further covenants that it will not distribute
more than (****) promotional copies of the Product.
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10.10 Activision hereby represents and warrants that it has the
right and power to enter into and grant the rights described
herein, that it is free to enter into this Agreement, and that
the rights granted herein will not infringe upon the rights of
any other person or entity.
10.11 THE ACTIVISION PROPERTY IS PROVIDED TO LICENSEE "AS IS."
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, ACTIVISION
MAKES NO REPRESENTATIONS OR WARRANTS WITH RESPECT TO THE
ACTIVISION PROPERTY OR THE PRODUCT, AND ALL IMPLIED WARRANTIES
OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A
PARTICULAR PURPOSE ARE HEREBY SPECIFICALLY EXCLUDED.
ACTIVISION DOES NOT REPRESENT THAT THE ACTIVISION PROPERTY OR
THE PRODUCT WILL BE ERROR FREE OR OPERATE WITHOUT
INTERRUPTION.
11. TERMINATION:
11.1 This Agreement shall continue in effect throughout the Term
unless terminated by either party for the reason stated below:
11.1.1. If, after notifying the other party in writing of a
breach of this Agreement, the breaching party does
not fully cure such breach within (****) of receipt
of such notice. Such termination shall be effected by
giving the breaching party written notice of the
termination.
11.1.2. If either party fails to pay its debts as its debts
became due, becomes insolvent, files or has filed
against it a petition under any bankruptcy law
(which, if involuntary, is unresolved after (****)),
proposes any dissolution, liquidation, composition,
financial reorganization, or recapitalization with
creditors, makes an assignment or trust mortgage for
the benefit of the creditors, or a receiver trustee,
custodian, or similar agent is appointed or takes
possession with respect to any property or business
of Licensee.
11.1.3. In the event a third party, who is in the primary
business of developing, publishing, licensing or
distributing video games or entertainment software
products, acquires more than a (****) equity
ownership interest in Licensee, acquires all or a
substantial portion of Licensee's assets, or succeeds
to the business of Licensee by operation of law or
otherwise, Activision shall have the right to
terminate this Agreement immediately upon notice
thereof. In the event of termination by Activision
pursuant to this Section 11.1.3, Activision shall:
(a) pay to Licensee the amount by which all actual
documented development costs of the Product spent by
Licensee as of the date of such termination
(including any unrecouped portion of the Advance paid
by Licensee to Activision as of
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(*) Confidential portion omitted and filed separately with the Securities
Exchange Commission.
12
such date) exceeds Licensee's net revenues (after
deduction of actual, documented marketing and sales
expenses) of the. Product; (b) purchase from Licensee
all of Licensee's existing inventory of the Product
at Licensee's actual cost therefor; (c) have the
right to manufacture, distribute, market, advertise,
promote and sell the Product in exchange for payment
of a royalty to Licensee, which such royalty to
Licensee may be used to recoup all sums paid by
Activision to Licensee pursuant to Section 11.1.3(a)
(payable on the same basis, including without
limitation the royalty rate payable, as the Royalty
is paid to Activision pursuant to the terms of this
Agreement); and (d) further assume any obligation on
the part of Licensee to pay advances to any Outside
Developer in connection with the Product (provided
that Licensee provides Activision with written
documentation of such royalty obligations). Upon such
termination by Activision, all of Licensee's rights
in and to the Product shall terminate and be deemed
immediately transferred to Activision, and Licensee
will deliver to Activision a complete asset package
for the Product and all associated packaging and
documentation, including without limitation, source
code for the Product.
11.1.4. Activision shall have the right to terminate this
Agreement immediately after (****) prior notice to
Licensee in the event Licensee (a) fails to pay any
portion of the Advance when due, (b) fails to pay
Royalties and/or make Royalty accountings to
Activision in accordance with the terms of this
Agreement, or (c) has underpaid Royalties owing to
Activision by more than (****), any event of which
shall be deemed a material breach of this Agreement
by Licensee, and Licensee fails to cure the material
breach within such (****) notice period.
11.2 The right to terminate this Agreement as set forth above shall
be in addition to and not in limitation of any other remedy,
right, undertaking, obligation or agreement of either party.
No waiver by either party of any breach of this Agreement
shall be deemed a waiver of any preceding or succeeding breach
hereof.
11.3 The parties agree that if as of the expiration of the Term or
as of the date this Agreement is terminated due to Licensee's
uncured breach or otherwise pursuant to Section 11.1, Licensee
has failed to pay any portion of the Advance to Activision, or
any Royalties have accrued to Activision, then without
limiting Activision's other rights and remedies, Licensee
shall promptly pay Activision the remaining balance of such
Advance or such Royalties in full.
11.4 The parties agree that in case of expiration or early
termination of this Agreement, all Licensee's rights related
to the Activision Property shall cease as of the date of such
expiration or termination, any and all other rights granted to
Licensee
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(*) Confidential portion omitted and filed separately with the Securities
Exchange Commission.
13
pursuant to this Agreement shall immediately and automatically
terminate without prejudice to any rights or claims Activision
may have, and all rights granted to Licensee in this Agreement
shall immediately revert to and be vested in Activision except
that Licensee, for a period of (****) only. may distribute
such units of the Product in Licensee's possession, provided
that such termination is not the result of Licensee's breach
and Licensee continues to promptly provide full accountings
and make full payments to Activision with respect to all
Royalties then due and in connection with such additional
sales. Licensee agrees not to stockpile units of the Product
or manufacture units of the Product in excess of reasonable
market demand in anticipation of such expiration or early
termination.
11.5 Upon expiration or early termination of this Agreement,
Licensee shall promptly and automatically return to Activision
any property of Activision then in its possession or under its
control.
11.6 No termination or cancellation of this Agreement by either
party shall in any way affect or impair Activision's rights to
develop, publish, manufacture, and distribute the Activision
Property or any derivative work or other version of the
Activision Property in the Territory, provided that such
derivative work or other version of the Activision Property
does not utilize any of Licensee's Work Product.
11.7 Licensee acknowledges and agrees that if Activision terminates
this Agreement for a material breach, Activision shall have
the right to terminate any other Agreement with Licensee. In
addition, Licensee acknowledges that if Activision terminates
for material breach any other Agreement between Activision and
Licensee, or if Licensee uses the Activision Property or any
part thereof beyond the scope of the license granted herein or
uses any properties owned by Activision which are not licensed
to Licensee, Activision shall have the right to terminate this
Agreement. In either event, Activision's right, to terminate
shall be effective upon written notice to Licensee.
12. CONFIDENTIAL INFORMATION:
12.1 Each party agrees to use reasonable efforts and at least the
same care that it uses to protect its own confidential
information of like importance, to prevent unauthorized
dissemination and disclosure of the other party's confidential
information during and for a period of (****) after the Term.
These obligations will be subject to the following terms and
conditions:
12.1.1. Confidential information includes, but is not limited
to, the following: (a) the design, technology and
know-how related to the Product and the Activision
Property; (b) the computer object and source code of
the Product and the Activision Property; (c)
non-public information
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(*) Confidential portion omitted and filed separately with the Securities
Exchange Commission.
14
concerning either party's financing, financial
status, research and development, proposed new
products, marketing plans and pricing, unless and
until publicly announced; and (d) any information
designated by either party as confidential or
proprietary in writing;
12.1.2. The foregoing obligations will not apply to any
information that: (a) becomes known to the general
public without fault or breach on the part of the
receiving party; (b) the receiving party receives
from a third party without breach of a nondisclosure
obligation and without restriction on disclosure; (c)
was in the possession of the receiving party prior to
disclosure by the other; (d) is independently
developed by the receiving party's personnel having
no access to similar confidential information
obtained from the other; or (e) is required to be
disclosed by Licensee in order to obtain any
entertainment software ratings board approval in
fulfillment of Licensee's obligations pursuant to
this Agreement; and
12.1.3. Nothing in this Agreement will affect any obligation
of either party to maintain the confidentiality of a
third party's confidential information.
13. INDEMNIFICATION:
13.1 Licensee shall indemnify, defend and hold harmless Activision
and its officers, directors, agents and employees from claims,
suits, losses, liabilities, damages or expenses (including
costs of suit and attorneys' fees) (collectively, "Claims")
arising out of Licensee's breach of this Agreement or any
representations or warranties contained herein.
13.2 Activision shall indemnify, defend and hold harmless Licensee
and its officers, directors, agents and employees from and
against any Claims arising out of Activision's breach of this
Agreement or any representations or warranties contained
herein.
13.3 If a party requests to be indemnified pursuant to this Section
("requesting party"), it must give prompt notice of the Claim
to the other party ("requested party") specifying all details
relevant thereto. The requested party may, at its option,
assume the defense of a Claim, in which event the requesting
party will cooperate fully in such defense and may participate
in such defense with counsel of its own choice, provided that
the requesting party will be responsible for all expenses
relating to such separate counsel. If the requested party
assumes the defense of a Claim, its obligation will be limited
to paying the attorneys' fees, costs and expenses associated
with such defense (except as otherwise expressly provided
herein) and holding harmless the requesting party from and
against any judgment paid on account of such Claim or monetary
settlement the requested party has made (with the requesting
party's approval, not to be unreasonably withheld) or
approved. The requesting party may, if necessary or desirable,
join the requested party as a party in any litigation in
respect of a Claim for which indemnity is requested. No
settlement may be made by the requesting party without the
15
requested party's prior approval. If either party fails to
fulfill any of its material obligations hereunder, the other
party will be deemed excused from its obligations pursuant to
this Section.
14. M1SCELLANEOUS:
14.1 No amendment or modification of this Agreement will be made
except by an instrument in writing signed by both parties.
14.2 This Agreement shall be deemed entered into in Los Angeles
County, California and shall be governed by and interpreted in
accordance with the substantive laws of the State of
California and, if applicable, United States Federal Law. The
parties agree that any dispute arising under this Agreement
shall be resolved exclusively in the state or federal courts
within Los Angeles County, State of California and expressly
consent to jurisdiction therein. The parties agree that
process may be served upon it by mailing such process to its
address for notices as provided in this Agreement. Licensee
irrevocably waives objection to venue or forum in any such
court in California
14.3 Should any provision of this Agreement be held to be void,
invalid or inoperative, such provision shall be enforced to
the extent possible and the remaining provisions of this
Agreement shall not be affected.
14.4 The headings of the Sections of this Agreement are for
convenience only and shall not be of any effect in construing
the meanings of the Sections.
14.5 Licensee's relationship with Activision during the term of
this Agreement shall be that of an independent contractor.
Licensee shall not have, and shall not represent that it has,
any power; right or authority to bind Activision, or to assume
or create any obligation or responsibility, express or
implied, on behalf of Activision or in Activision's name,
except as herein expressly provided. Nothing stated in this
Agreement shall be construed as constituting Licensee and
Activision as partners or as creating the relationships of
employer/employee, franchisor/franchisee, or principal/agent
between the parties. Licensee shall not, without Activision's
prior written consent, register as Activision's distributor or
agent in the Territory.
14.6 The following Sections shall survive the expiration or
termination of this Agreement 1.3, 8.2, 10, 11.3, 11.4,11.5,
11.6, 11.7, 12,13 and 14.
14.7 This Agreement, including Schedules A, B, C, D and E, which
are incorporated into this Agreement by this reference,
constitutes the entire understanding between the parties with
respect to the subject matter hereof, superseding all prior
negotiations, preliminary agreements, correspondence or
understandings, written or oral.
14.8 No waiver of any obligation by any party hereto under this
Agreement shall be effective unless in writing, specifying
such waiver, executed by the party making such waiver. A
waiver by a party hereto of any of its rights or remedies
under this
16
Agreement on any occasion shall not be a bar to the exercise
of the same right of remedy on any subsequent occasion or of
any other right of remedy at any time.
14.9 This Agreement may be executed in counterparts, each of which
shall be deemed an original Agreement for all purposes,
including the judicial proof of any of the terms hereof,
provided, however that all such counterparts shall constitute
one and the same Agreement
14.10 Because the parties hereto have participated in drafting and
negotiating this Agreement, there shall be no presumption
against any party on the ground that such party was
responsible for preparing this Agreement or any part of it.
14.11 Unless expressly set forth to the contrary, either party's
election of any remedies provided for in this Agreement shall
not be exclusive of any other remedies available hereunder or
otherwise at law or in equity, and all such remedies shall be
deemed to be cumulative.
14.12 Neither party shall be liable to the other party for any
incidental, consequential, special or punitive damages arising
out of this Agreement or its termination, or the breach of any
of its provisions, whether liability is asserted in contract
or tort (including negligence and strict product liability),
and irrespective of whether the parties have been advised or
been advised of the possibility of any such loss or damage.
14.13 Should any litigation be commenced among the parties in
relation to this Agreement, the party prevailing in such
litigation shall be entitled, in addition to such other relief
as may be granted, to a reasonable sum for attorneys fees in
connection with such litigation or in a separate action
brought for that purpose.
14.14 This Agreement may not be assigned in whole or in part by
either party without consent of the other, which consent will
not be unreasonably withheld, and Activision and Licensee may
assign (subject to any rights of the other party) any or all
of such party's rights (but not delegate its obligations)
under this Agreement to any subsidiary or affiliate of such
party. As used in this Section "Subsidiary" means any company
which is controlled, directly or indirectly, by the relevant
party, and "affiliate" means any company which controls, is
controlled by or is under common control with the party, where
"control" means possession of more than (****) of the equity
interest and voting power of such party. Furthermore, subject
to the provisions of Section 11.1.3, either party may assign
this Agreement to any third party which succeeds by operation
of law to, purchases or otherwise acquires substantially all
of the assets of such party and assumes such party's
obligations under this Agreement.
14.15 Licensee agrees that any material breach or attempted or
threatened breach of this Agreement could result in
irreparable injury to Activision for which there would
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(*) Confidential portion omitted and filed separately with the Securities
Exchange Commission.
17
be no adequate remedy at law and consents to injunctive relief
without limiting the applicability of any other remedies.
14.16 Unless otherwise stated, time shall be of the essence for the
purpose of the performance by Licensee under this Agreement.
15. NOTICES:
15.1 All notices, statements and payments to Licensee shall be
delivered to it at the address specified on the first page of
this Agreement, or at such other address as it shall designate
in writing by notice given in accordance with this Section
from time to time. All notices, statements and payments to be
given to Activision shall be delivered to the undersigned at
the address specified on the first page of this Agreement, to
the attention of the Royalty Manager/Contract Administrator,
with a copy to Senior Vice President and General Counsel, or
at such other address as it shall designate in writing, by
notice given in accordance with this Section from time to
time. All notices shall be in writing and shall either be
served by personal delivery, certified mail return receipt
requested, or internationally recognized overnight courier
service, all charges prepaid. Except as otherwise provided
herein, such notices shall be effective only after the actual
receipt thereof.
18
ACCEPTED AND AGREED TO:
ACTIVISION: LICENSEE:
Activision Publishing, Inc. Majesco Sales, Inc.
SCHEDULE A
"Activision Property" is herein defined as the Windows 95/98 PC CD-ROM English
language version and any localized versions Activision has created, of the
entertainment software product entitled Soldier of Fortune, including its title,
characters, artwork, music, copyrights, designs, animation, sounds, locations,
catch phrases, dialogues, stories, storyline, software program, audio-visual
display, concept, tradename, trademarks, logos and any other creative elements,
subject to the following limitations:
(1) The Product shall constitute for purposes of this Agreement a direct port
(as defined below) of the original version of the Activision Property. "Direct
port" of the Activision Property shall mean that the Product (a) is to be
marketed under substantially the same title as the Activision Property, (b)
shall contain materially the same basic story lines and concepts as the
Activision Property, (c) not require any additional production services from
Activision, and (d) the changes made to the original version of the Activision
Property and the conversion thereof are such as only are reasonably required to
accommodate the capabilities and requirements of the Sony PlayStation 2 console
platform.
(2) The Product will be in an action/adventure genre, which may contain elements
of combat, strategy, fighting, shooting and use of other weapons and various
simulations. The parties agree that; while Activision reserves the final right
to determine, among other matters, the elements of the Product, the central
characters of the Product will not be portrayed in the manner of a parody or
satire.
(3) Licensee shall not use any of the following names as names of any characters
in the Product: Caristo, Carter, Xxxxxxxxxx, Xxxxxxx and Xxxxxx.
SCHEDULE B
The "Territory" is herein defined as worldwide.
SCHEDULE C
The Term shall commence on the Effective Date and will terminate as of the date
which is two (2) years following the Effective Date,
SCHEDULE D
Advance:
(****), payable as follows: (a) (****) immediately upon execution of this
Agreement, but in no event later than June 30, 2000; (b) (****) within (****)
following the Effective Date; and (c) (****) within (****) following the
Effective Date.
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(*) Confidential portion omitted and filed separately with the Securities
Exchange Commission.
Royalties
Royalties payable to Activision shall be calculated as a percentage of
Licensee's Net Receipts (as defined below) as follows: (a) (****) with respect
to the first (****) of the Product sold or licensed by Licensee, but in no event
shall the Royalty payable to Activision be less than (****) per unit,
irrespective of the wholesale price of the Product or any deductions from gross
receipts; (b) (****) with respect to (****) units of the Product sold or
licensed by Licensee, but in no event shall the Royalty payable to Activision be
less than (****) per unit, irrespective of the wholesale price of the Product or
any deductions from gross receipts; and (c) (****) with respect to units above
(****) sold or licensed by Licensee.
Definition of "Net Receipts"
For purposes of this Schedule D, "Net Receipts" means the gross receipts
actually received by Licensee from all sales and licenses of the Product, less
actual amounts paid by Licensee for taxes on sales or licenses of the Product,
such as sales, use, excise and other taxes.
SCHEDULE E
CONFIDENTIALITY AGREEMENT
I have been engaged to work on the conversion of Activision Publishing, Inc.'s
("Activision") Windows 95-98-based entertainment software product titled Soldier
of Fortune, to be converted for use with the Sony PlayStation 2 operating system
(such conversion being hereinafter referred to as the "Product"). I acknowledge
that I may have access to confidential information relating to the products and
business activities of Activision. I understand that disclosure of that
information to third parties would cause substantial detriment to Activision's
on-going business.
I agree that I will not at any time for my own benefit or, for the benefit of a
third party or disclose to any third party (except as necessary in the ordinary
course of my duties in developing the Product), any of the following
information: (1) trade secrets of confidential information relating to
Activision's products, processes, know-how, machines designs, drawings,
software, formulas, test data, marketing data, business plan, business
strategies, employees, negotiations, contracts, patents or patent applications
(including the status of their prosecution), and (2) any other confidential
information relating to any of Activision's clients, customers, consultants,
licensees or affiliates.
I acknowledge that all of the foregoing information is proprietary to Activision
and that it is a valuable and unique asset of Activision. I understand, however,
that any information that is already public knowledge or that was known to me
before I signed this Confidentiality Agreement is not covered by this
Confidentiality Agreement.
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Signature Date
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Name (printed or typed)
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