EXHIBIT 10.52
CONFIDENTIAL
EXHIBIT 10.52
Confidential information omitted where indicated by "[*]" and filed separately
with the Securities Exchange Commission pursuant to a request for confidential
treatment under Rule 406 of the Securities Act of 1933.
MICROSOFT LICENSING, INC.
XBOX(TM) PUBLISHER LICENSE AGREEMENT
This License Agreement (the "Agreement") is entered into and effective as of
July 22, 2002 (the "Effective Date") by and between MICROSOFT LICENSING, INC., a
Nevada corporation ("Microsoft"), and THE 3DO COMPANY, a California corporation
("Licensee").
RECITALS
A. Whereas, Microsoft and its affiliated companies develop and license
a computer game system, known as the Xbox(TM) game system; and
B. Whereas, Licensee is an experienced publisher of software products
that wishes to develop and/or publish one or more software products running on
the Xbox game system, and to license proprietary materials from Microsoft, on
the terms and conditions set forth herein.
C. Accordingly, for and in consideration of the mutual covenants and
conditions contained herein, and for other good and valuable consideration,
receipt of which each party hereby acknowledges, Microsoft and Licensee agree as
follows:
1. DEFINITIONS
For the purposes of this Agreement, the following terms will have the respective
indicated meanings:
1.1 "Authorized Replicator" shall mean a software replicator certified
and approved by Microsoft for replication of Finished Product Units that run on
Xbox.
1.2 "Branding Specifications" shall mean the specifications and such
other design specifications as Microsoft may hereafter provide from time to
time, for using the Licensed Trademarks on a Software Title and/or on Marketing
Materials as set forth in the Xbox Guide.
1.3 "Break The Seal" or "BTS" shall mean a Microsoft designed sticker
that will be issued to the Authorized Replicator for placement on the Packaging
Materials as specified in the Xbox Guide. A BTS shall be assigned to each
Finished Product Unit that has been manufactured by an Authorized Replicator.
1.4 "Certification" shall mean the final stage of the approval process
following Pre-Certification wherein Licensee shall deliver its proposed final
version of the Software Title and Microsoft shall approve or disapprove of such
Software Title for distribution. Certification is further defined in this
Agreement and the Xbox Guide.
1.5 "Commercial Release" shall mean (a) with respect to Xbox, the first
distribution of an Xbox in the United States to the public for payment, and (b)
with respect to a Software Title, the earlier of the first distribution of the
Software Title for payment or distribution of Finished Product Units that are
not designated as beta or prerelease versions.
1.6 "Concept" shall mean the details of Licensee's proposed Software
Title including content and technical characteristics, target market, proposed
release date and development schedule. Concept is further defined in this
Agreement and the Xbox Guide.
1.7 "Demo Versions" shall mean a small portion of an applicable
Software Title that is provided to end users to advertise or promote a Software
Title. Subject to the terms of the Xbox Guide, a Demo Version(s) may be
distributed on FPU for other Software Titles. Additionally a Demo Version may be
placed on a single FPU either as a stand-alone or with
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other Demo Versions for distribution to end users, provided that Microsoft shall
have prior approval over the number of units manufactured and the price of such
units shall be free or at a suggested retail price not to exceed [*].
1.8 "Finished Product Unit" or "FPU" shall mean a Software Title in
object code form that has been affixed to a DVD disk, has passed Certification,
and has been approved for distribution by Microsoft. Once the BTS has been
assigned or affixed to a FPU or its packaging, the FPU shall also include its
accompanying BTS.
1.9 "Licensed Trademarks" shall mean the Microsoft trademarks
identified in the Xbox Guide (that Microsoft unilaterally may modify from time
to time during the Term of this Agreement upon written notice to Licensee).
1.10 "Marketing Materials" shall collectively mean the Packaging
Materials and the Promotional Materials.
1.11 "Packaging Materials" shall mean art and mechanical formats for a
Software Title including the retail packaging, end user instruction manual with
end user license agreement and warranties, end user warnings, Finished Product
Unit media label, and any promotional inserts and other materials that are to be
included in the retail packaging.
1.12 "Promotional Materials" shall mean press releases, marketing,
advertising or promotional materials related to the Software Title and/or
Finished Product Units (including without limitation web advertising and
Licensee's web pages to the extent they refer to the Software Title(s) or the
Finished Product Units) that will be used by Licensee in the marketing of the
Software Titles or FPU.
1.13 "Pre-Certification" shall mean the first required stage of the
approval process wherein Microsoft conducts gameplay and technical screen tests
to provide feedback and/or identify any issues that may prevent the Software
Title from being approved during the Certification phase. Pre-Certification is
further defined in this Agreement and the Xbox Guide.
1.14 "Software Title" shall mean the single software product as
described in the applicable Concept submission form that Licensee proposes to
publish for use on Xbox. A Software Title shall include the improvements and
patches thereto (if and to the extent approved by Microsoft), but shall not
include any "prequel" or "sequel." If Microsoft approves one or more additional
Concept(s) for another single software product proposed by Licensee to run on
Xbox, this Agreement, and the term "Software Title," shall be broadened
automatically to cover the respective new software product as an additional
Software Title under this Agreement.
1.15 "Territory" shall be determined on a Software Title-by-Software
Title basis, and shall mean such geographic region(s) as may be specified in
writing by Microsoft when the Concept of the applicable Software Title is
approved.
1.16 "Xbox" shall mean the first version (as of the Commercial Release)
of Microsoft's Xbox game system, including operating system software and
hardware design specifications.
1.17 "Xbox Guide" shall mean a document (in physical, electronic or
website form) created by Microsoft that supplements this Agreement and provides
detailed requirements regarding: the approval process, Branding Specifications,
replication requirements, royalty payment process, marketing guidelines,
technical specifications, Demo Version requirements and packaging requirements.
Microsoft may supplement, update and amend the Xbox Guide from time to time in
its reasonable discretion as set forth in this Agreement.
2. DEVELOPMENT; DELIVERY; APPROVAL
2.1 Xbox Development Kit License. Contemporaneous with the execution of
this Agreement, Licensee shall enter into one or more development kit license(s)
(each an "XDK License") pursuant to which Microsoft or its affiliate may license
to Licensee software development tools and hardware to assist Licensee in the
development of Software Titles, including redistributable code that Licensee
shall incorporate into Software Titles, on such terms and conditions as are
contained in the XDK License. The terms of the XDK License are incorporated
herein by reference.
2.2 Xbox Guide. Licensee agrees to be bound by all provisions contained
in the then-applicable version of the "Xbox Guide," the current version of which
Microsoft or its affiliate will deliver to Licensee upon its completion.
Licensee understands and agrees that Microsoft may, in its discretion,
supplement, revise and update the Xbox Guide from time to time and that upon
Licensee's receipt of the applicable supplement, revision or updated version,
and subject to Section 2.4.4, Licensee automatically shall be bound by all
provisions of the then-current Xbox Guide; Microsoft will specify in each such
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CONFIDENTIAL
supplement, revision or updated version a reasonable effective date of each
change if such change or revision is not required to be effective immediately.
2.3 Approval Process. The approval process is divided into four phases
comprised of Concept approval, Pre-Certification, Certification and Marketing
Materials approval. Licensee is required to submit its Software Title to
Microsoft for evaluation of all four phases. Each phase is identified below and
further defined in the Xbox Guide.
2.3.1 Concept. Licensee shall deliver to Microsoft a completed
Concept submission form (in the form provided by Microsoft to Licensee) that
describes the Software Title. Evaluation of the proposed Software Title design
will be based on criteria including, but not limited to, the following: (i)
originality; (ii) play breadth and depth; (iii) playability; (iv) replayability
and long-term interest; (v) theme, characters, storyline (vi) suitability to the
target demographic; (vii) release date; and (viii) overall fit with the Xbox
product portfolio.
2.3.1.1 If acceptable to Microsoft, following evaluation,
Microsoft shall provide Licensee with a "Concept Summary" that
describes the approved Concept. The parties shall execute the Concept
Summary to signify agreement with the description of the Concept. The
Concept Summary shall be incorporated herein by reference and adherence
to its terms shall be one of the bases for the grant of Certification.
2.3.2 Pre-Certification Version. At the Pre-Certification
submission, Licensee shall deliver to Microsoft a version of the Software Title,
that includes all current features of the Software Title and such other content
as may be required under the Xbox Guide. Upon receipt, Microsoft shall conduct
technical screen and/or other testing consistent with the Xbox Guide and will
subsequently provide Licensee with advisory feedback regarding such testing.
Licensee acknowledges that the Pre-Certification and Certification submissions
evaluate different aspects of the Software Title and therefore satisfactory
feedback regarding Pre-Certification is not an indication that the Software
Title will be approved following the Certification submission.
2.3.3 Certification. Licensee shall deliver to Microsoft
Licensee's proposed final release version of the applicable Software Title that
is complete and ready for manufacture and commercial distribution. Such version
shall provide the final content rating certification (e.g. ESRB, ELSPA) with
identified program errors corrected, and with any and all changes previously
requested by Microsoft implemented. Microsoft shall conduct compliance,
compatibility, functional and other testing consistent with the Xbox Guide
("Certification Testing") and shall subsequently provide Licensee with the
results of such testing.
2.3.3.1 Certification for a Software Title may be granted
based upon (1) successful completion of the Certification Testing; (2)
conformance with the approved Concept as identified in the Concept
Summary; (3) consistency with the goals and objectives of the Xbox
console platform; and (4) compliance with other requirements as set
forth in this Agreement.
2.3.3.2 Resubmissions. If warranted on the basis of its tests,
Microsoft shall make reasonable efforts to provide Licensee with
feedback regarding the Software Title and modifications that must be
made prior to approval of the Certification submission. Provided that
Licensee has made good faith efforts to address issues raised by
Microsoft, Licensee shall be given the opportunity to resubmit Software
Titles that fail the Certification approval process. In Microsoft's
discretion, Licensee may be charged a reasonable fee designed to offset
the costs associated with the testing of Software Titles upon
resubmission. In the event of a second submission, Microsoft reserves
the right to assign a new release date for the Software Title.
2.3.3.3 Licensee shall not distribute the Software Title, nor
manufacture any FPU intended for distribution, unless and until
Microsoft shall have given its approval of the Certification version of
the Software Title and both parties have approved of the FPU as set
forth in Section 5 of this Agreement.
2.3.4 Marketing Materials Approval. Licensee shall submit all
Packaging Materials and Marketing Materials to Microsoft, and Licensee shall not
distribute such Marketing Materials (as a component of the Software Title,
Finished Product Unit or otherwise) unless and until Microsoft has approved them
in writing. Prior to publication of any Marketing Materials, Licensee agrees to
incorporate all changes relating to use of the Licensed Trademarks that
Microsoft may reasonably request, and will use its commercially reasonable
efforts to incorporate other changes reasonably suggested by Microsoft
(provided, however, that Licensee shall at all times comply with the
requirements set forth in the Xbox Guide).
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2.4 Other Approval Considerations.
2.4.1 Other Versions. The parties may mutually agree that
Licensee submit versions of the Software Title at stages of development other
than as identified above for review and feedback by Microsoft. Such review shall
be within the discretion of Microsoft and may require the payment of processing
fees by Licensee to offset the costs associated with the review of such Software
Titles.
2.4.2 Content Rating. For those Territories that utilize a
content rating system, Microsoft will not grant final Certification approval to
a Software Title unless and until Licensee shall have obtained, at Licensee's
sole cost, a rating not higher than "Mature (17+)" or its equivalent from the
appropriate rating bodies for the applicable Territory (such as, ESRB, ELSPA,
etc.) and/or any and all other independent content rating authority/authorities
reasonably designated by Microsoft. Licensee shall make any changes to the
Software Title required to obtain a rating not higher than "Mature (17+)" (or
its equivalent). In no event shall Licensee distribute any Software Title under
an "Adults Only" or higher (or equivalent) rating. Licensee shall include the
applicable rating(s) prominently on Finished Product Units, in accordance with
the applicable rating body guidelines. For those Territories that do not utilize
a content rating system (e.g. Japan), Microsoft shall not approve any Software
Title that, in its opinion, contains excessive sexual content or violence,
inappropriate language or other elements deemed unsuitable for the Xbox console
platform.
2.4.3 Demo Versions. Unless separately addressed in the Xbox
Guide, all rights, obligations and approvals set forth in this Agreement as
applying to Software Titles shall separately apply to its Demo Version. Demo
Versions may not be distributed by Licensee until granted Certification approval
by Microsoft.
2.4.4 Changes of Requirements by Microsoft. Licensee
acknowledges that the Xbox Guide is an evolving document and subject to change
during the Term of this Agreement. Notwithstanding the prospect of such change,
Microsoft agrees that except in circumstances where (a) such change is deemed
vitally important to the success of the Xbox platform (e.g. changes due to
piracy, technical failure) or (b) such change will not add significant expense
to the Software Title's development, then (i) after completion of the
Pre-Certification by Microsoft, Licensee will not be obligated to comply, with
respect to such Software Title only, with any subsequent changes made by
Microsoft to the technical or content requirements for Software Titles in the
Xbox Guide; and (ii) subject to the immediately preceding clause any changes
made by Microsoft in Branding Specifications or other Marketing Materials
requirements after final Certification of a Software Title by Microsoft will be
effective as to such Software Title only on a "going forward" basis (i.e., only
to such Marketing Materials and/or Finished Product Units as are manufactured
after Microsoft notifies Licensee of the change).
2.4.4.1 Notwithstanding the foregoing (i) and (ii), Licensee
shall comply with such changes to the Xbox Guide in the event Microsoft
agrees to pay for Licensee's direct, out-of-pocket expenses necessarily
incurred as a result of its retrospective compliance with the change.
2.4.5 Notwithstanding Microsoft's Certification of a Software
Title, nothing herein shall be deemed to relieve Licensee of its obligation to
correct material program bugs and errors in conformance with the Xbox Guide,
whenever discovered (including without limitation after Commercial Release), and
Licensee agrees to correct such material bugs and errors as soon as possible
after discovery (provided that, with respect to bugs or errors discovered after
Commercial Release of the applicable Software Title, Licensee will use
commercially reasonable efforts to correct the bug/error in all Finished Product
Units manufactured after discovery). Licensee shall perform its own testing of
the Software Title and Finished Product Units and shall keep written or
electronic records of such testing during the Term of this Agreement and for no
less than two (2) years thereafter ("Test Records"). Upon Microsoft's request,
Licensee shall provide Microsoft with copies of or reasonable access to inspect
the Test Records, Finished Product Units and Software Title (either in
pre-release or commercial release versions, as Microsoft may request).
2.4.6 Compliance With Xbox Guide. In the event that Microsoft
determines, at any time prior to the Commercial Release of a Software Title,
that such Software Title does not materially comply with the requirements set
forth in the Xbox Guide, then Microsoft will have the right to terminate this
Agreement (subject to any applicable cure provisions contained herein), without
cost or penalty, upon written notice to Licensee solely with respect to such
Software Title, in Microsoft's sole discretion and notwithstanding any prior
approvals given by Microsoft pursuant to this Section.
3. GRANT OF DISTRIBUTION LICENSE, LIMITATIONS
3.1 Distribution License.
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3.1.1 Upon Certification of the Software Title, approval of
the Marketing Materials and the FPU test version of the Software Title (as
hereafter described) by Microsoft and subject to the terms and conditions
contained within this Agreement and the XDK License, Microsoft grants Licensee a
non-exclusive, non-transferable, license to distribute Software Titles
containing Redistributable and Sample Code (as defined in the XDK License) and
Security Technology (as hereafter defined) within the Territory in FPU form to
third parties for distribution to end users and/or directly to end users.
3.1.2 The license to distribute the Software Product is
personal to Licensee and except for transfers of FPU through normal channels of
distribution (e.g. wholesalers, retailers) who will in turn transfer such
product to end users, absent the written approval of Microsoft, Licensee may not
sublicense or assign its rights under this license to other parties. For the
avoidance of doubt, without the written approval of Microsoft, Licensee may not
sublicense, transfer or assign its right to distribute Software Titles or FPU to
another entity that will brand, co-brand or otherwise assume control over such
products as a "publisher" as that concept is typically understood in the console
game industry, except under the following conditions: (1) the Sub-publisher has
signed a PLA and both Licensee and Sub-publisher are and remain at all times in
good standing under each of their respective PLAs; (2) each Software Title over
which Sub-publisher acquires publishing rights shall be deemed a "Software
Title" for purposes of both Licensee's and Sub-publisher's PLAs, and Microsoft
shall have full right and authority to enforce its rights with respect to the
Software Title(s) against either or both Licensee and Sub-publisher; (3)
Licensee shall be responsible for making applicable royalty payments for the
FPUs for which it places manufacturing orders, and Sub-publisher shall be
responsible for making royalty payments for the FPUs for which it places
manufacturing orders; provided that Licensee shall be liable to Microsoft for
any failure by Sub-publisher to make royalty payments or otherwise comply with
the duties and obligations under the PLA; (4) the royalty table set forth in
Section 6.1 of the PLA shall apply to FPUs on an aggregate basis, regardless of
whether Licensee or Sub-publisher is responsible for the manufacturing and
royalty payments therefore, and Microsoft shall be entitled to share
manufacturing information relating to the Software Title(s) among both Licensee
and Sub-publisher in furtherance of this subsection (4); and (5) Microsoft's
receipt, upon the earlier of (i) the effective date of the agreement between
Licensee and Sub-publisher, or (ii) sixty (60) days prior to authorizing
Sub-publisher to manufacture any Software Title(s), of written notice of the
sub-publishing relationship, which notice shall also include confirmation by
Licensee that the foregoing conditions have been met, along with a summary of
the scope and nature of the sub-publishing relationship with Sub-publisher
including, without limitation, as between Licensee and Sub-publisher, which
party will be responsible for Certification of the Software Title(s), a list of
the Software Title(s) for which Sub-publisher has acquired publishing rights,
the Territory(ies) for which such rights were granted, and the term of
Licensee's agreement with Sub-publisher.
3.2 XXXX and End User Rights. As set forth in the Xbox Guide, Microsoft
may require that Licensee distribute (directly or indirectly) the Software Title
to end users subject to an end user license agreement ("XXXX") in a form to be
approved by Microsoft. Microsoft will have the right to modify its requirements
for the XXXX at any time, in its discretion and Licensee shall implement, at its
sole cost, all such new requirements as soon as reasonably possible after
receiving written notice from Microsoft of such required modifications. Licensee
may only grant end users the right to make personal, non-commercial use of
Software Titles. Provided that Microsoft has approved of private network play in
the Concept Summary, Licensee may grant end users the right to use Software
Titles over a private network utilizing a Microsoft licensed "System Link Cable"
that connects multiple Xbox's provided that each end user is the lawful
possessor of a lawfully made copy of the Software Title, the use is
noncommercial in nature and otherwise complies with requirements found in the
Xbox Guide.
3.3 No Electronic Transmission; No Online Activities. As of the
Effective Date, Microsoft is exploring several options for the use of Xbox for
online gameplay. Until such time as Microsoft grants Licensee online rights by a
separate license agreement, Licensee may not broadcast, transmit, allow users to
access, or otherwise distribute Software Titles by any means of electronic
transmission, including, but not limited to, online gameplay or multiplayer.
3.4 No Distribution Outside the Territory. Licensee shall distribute
Finished Product Units only in the Territory. Licensee shall not directly or
indirectly export any Finished Product Units from the Territory nor shall
Licensee knowingly permit or assist any third party in doing so, nor shall
Licensee distribute Finished Product Units to any person or entity that it has
reason to believe may re-distribute or sell such Finished Product Units outside
the Territory.
3.5 No Reproduction of Finished Product Units Except by Microsoft or
Authorized Replicators. Licensee acknowledges that this Agreement does not grant
Licensee the right to reproduce or otherwise manufacture Finished Product Units
itself, or on its behalf, other than through Microsoft or an Authorized
Replicator. Licensee must use Microsoft or an Authorized Replicator to produce
Finished Product Units, pursuant to Section 5.
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3.6 No Reverse Engineering. Licensee may utilize and study the design,
performance and operation of Xbox solely for the purposes of developing the
Software Title. Notwithstanding the foregoing, Licensee shall not, directly or
indirectly, reverse engineer or aid or assist in the reverse engineering of all
or any part of Xbox except and only to the extent that such activity is
expressly permitted by applicable law notwithstanding this limitation. In the
event applicable law grants Licensee the right to reverse engineer the Xbox
notwithstanding this limitation, Licensee shall provide Microsoft with written
notice prior to such reverse engineering activity, information sufficient
regarding Licensee's intended method of reverse engineering, its purpose and the
legal authority for such activity and shall afford Microsoft a reasonable period
of time before initiating such activity in order to evaluate the activity and/or
challenge the reverse engineering activity with the appropriate legal
authorities. Licensee shall refrain from such reverse engineering activity until
such time as any legal challenge is resolved in Licensee's favor. Reverse
engineering includes, without limitation, decompiling, disassembly, sniffing,
peeling semiconductor components, or otherwise deriving source code. In addition
to any other rights and remedies that Microsoft may have under the
circumstances, Licensee shall be required in all cases to pay royalties to
Microsoft in accordance with Section 7 below with respect to any games or other
products that are developed, marketed or distributed by Licensee, and derived in
whole or in part from the reverse engineering of Xbox or any Microsoft data,
code or other material.
3.7 Reservation of Rights. Microsoft reserves all rights not explicitly
granted herein.
3.8 Ownership of the Software Titles. Except for the intellectual
property supplied by Microsoft to Licensee (including without limitation the
licenses in the Licensed Trademarks hereunder and the licenses in certain
software and hardware granted by an XDK License), ownership of which is retained
by Microsoft, insofar as Microsoft is concerned, Licensee will own all rights in
and to the Software Titles.
3.9 Use of Identified Software. Licensee's rights set forth in this
Agreement are conditioned upon Licensee (a) not incorporating Identified
Software (as defined below) into or combining Identified Software with the
Software Title; (b) not distributing Identified Software in conjunction with the
Software Title; and (c) not using Identified Software in the development of the
Software Title. "Identified Software" means software which is licensed pursuant
to terms that (i) create, or purport to create, obligations for Microsoft with
respect to the Software Title or (ii) grant, or purport to grant, to any third
party any rights or immunities under Microsoft's intellectual property or
proprietary rights in the Software Title. Identified Software includes, without
limitation, any software that requires as a condition of use, modification
and/or distribution of such software that other software incorporated into,
derived from or distributed with such software be (a) disclosed or distributed
in source code form; (b) be licensed for the purpose of making derivative works;
or (c) be redistributable at no charge.
4. RIGHTS AND RESTRICTIONS
4.1 Trademarks.
4.1.1 License. In each Software Title, FPU and Marketing
Materials, Licensee shall incorporate the Licensed Trademarks and include credit
and acknowledgement to Microsoft as set forth in the Xbox Guide. Microsoft
grants to Licensee a non-exclusive, non-transferable, personal license to use
the Licensed Trademarks on Software Title(s), FPU, and Marketing Materials
according to the Xbox Guide and other conditions herein, and solely in
connection with marketing, sale, and distribution in the Territory.
4.1.2 Limitations. Licensee is granted no right, and shall not
purport, to permit any third party to use the Licensed Trademarks in any manner
without Microsoft's prior written consent. Licensee's license to use Licensed
Trademarks in connection with the Software Title and Finished Product Units
shall not extend to the merchandising or sale of related or promotional products
under the Licensed Trademarks.
4.1.3 Branding Specifications. Licensee's use of the Licensed
Trademarks (including without limitation in Finished Product Units and Marketing
Materials) shall comply with the Branding Specifications set forth in the Xbox
Guide. Licensee shall not use Licensed Trademarks in association with any third
party trademarks in a manner that might suggest co-branding or otherwise create
potential confusion as to source or sponsorship of the Software Title or
Finished Product Units or ownership of the Licensed Trademarks. Upon notice or
other discovery of any non-conformance with the requirements or prohibitions of
this section, Licensee shall promptly remedy such non-conformance and notify
Microsoft of the non-conformance and remedial steps taken.
4.1.4 Protection of Licensed Trademarks. Licensee shall
cooperate and assist Microsoft, at Microsoft's reasonable expense in protecting
and maintaining Microsoft's rights in the Licensed Trademarks, including
preparation and execution of documents necessary to register the Licensed
Trademarks or record this Agreement, and giving
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immediate notice to Microsoft of potential infringement of the Licensed
Trademarks. Microsoft shall have the sole right to and in its sole discretion
may, commence, prosecute or defend, and control any action concerning the
Licensed Trademarks. Licensee shall not during the Term of this Agreement
contest the validity of, by act or omission jeopardize, or take any action
inconsistent with, Microsoft's rights or goodwill in the Licensed Trademarks in
any country, including attempted registration of any Licensed Trademark, or use
or attempted registration of any xxxx confusingly similar thereto.
4.1.5 Ownership. Licensee acknowledges Microsoft's ownership
of all Licensed Trademarks, and all goodwill associated with the Licensed
Trademarks. Use of the Licensed Trademarks shall not create any right, title or
interest therein in Licensee's favor. Licensee's use of the Licensed Trademarks
shall inure solely to the benefit of Microsoft.
4.1.6 No Bundling with Unapproved Peripherals, Products or
Software. Licensee shall not market or distribute FPU bundled with any product
or service, nor shall Licensee knowingly permit or assist any third party in
such bundling, without Microsoft's prior written consent. Notwithstanding the
foregoing, Licensee may market or distribute a) FPU bundled with a Software
Title(s) that has been previously certified for distribution by Microsoft; or b)
FPU bundled with a peripheral product (e.g. game pads) that has been previously
licensed as an "Xbox Licensed Peripheral" by Microsoft, without obtaining the
written permission of Microsoft.
5. MANUFACTURING
5.1 Approved Replicators. Licensee shall retain only an Authorized
Replicator(s) to manufacture all Finished Product Units.
5.2 Terms of Use of Authorized Replicator. Licensee will notify
Microsoft in writing of the identity of the applicable Authorized Replicator and
unless Microsoft agrees otherwise, the agreement for such
manufacturing/replication services shall be as negotiated by Licensee and the
applicable Authorized Replicator, subject to the following requirements:
(a) Microsoft, and not Licensee, will provide to the single
applicable Authorized Replicator the final release version of the Software Title
and all specifications required by Microsoft for the manufacture of the Finished
Product Units including, without limitation, the Security Technology (as defined
in Section 5.4 below); Licensee will be responsible for preparing and delivering
to the Authorized Replicator all other items required for manufacturing Finished
Product Units including Packaging Materials associated with the Finished Product
Units;
(b) Licensee shall cause the Authorized Replicator to create
several test versions of FPU ("Verification Version(s)") that shall be provided
to both Microsoft and Licensee for evaluation. Prior to full manufacture of FPU
by the Authorized Replicator, both parties shall have approved of the
Verification Version. Microsoft's approval shall be a condition precedent to
manufacture, however Licensee shall grant the final approval and shall work
directly with the Authorized Replicator regarding the production run. Licensee
agrees that all Finished Product Units must be replicated in conformity with all
of the quality standards and manufacturing specifications, policies and
procedures that Microsoft requires of its Authorized Replicators, and that all
so-called "adders" must be approved by Microsoft prior to packaging (in
accordance with Section 2.3.4 above);
(c) Throughout the manufacturing process and upon the request
of Microsoft, Licensee shall cause the Authorized Replicator to provide
additional Verification Versions of the FPU for evaluation by Microsoft;
(d) Licensee is required to use an Authorized Replicator for
manufacture of FPU but may, solely with respect to Finished Product Units
manufactured for publication in the Territory comprising Europe, utilize a
different process or company for the combination of FPU with Packaging Materials
provided that such packaging process incorporates the BTS and otherwise complies
with the Xbox Guide. Licensee shall notify Microsoft regarding its use of such
process or company so that the parties may properly coordinate their activities
and approvals. To the extent that Microsoft is unable to accommodate such
processes or company, Licensee shall modify its operations to comply with
Microsoft's requirements;
(e) As soon as possible following its request, Licensee shall
provide Microsoft with up to fifty (50) Finished Product Units and accompanying
Marketing Materials at Licensee's cost. Such units may be used in marketing, as
product samples and for archival purposes;
(f) The initial manufacturing order for Finished Product Units
of each Software Title may not be less than a number specified by Microsoft in
the Xbox Guide; although such number may change from time to time during the
Term of this Agreement, initially it will be [*];
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(g) For purposes of assisting in the scheduling of
manufacturing resources, monthly, or as otherwise requested by Microsoft in its
reasonable discretion, Licensee shall provided Microsoft with monthly sales
forecasts showing sales projections twelve to eighteen months out for FPU;
(h) Microsoft shall have no responsibility for ensuring that
Finished Product Units are free of all defects;
(i) Licensee will use commercially reasonable efforts to cause
the Authorized Replicator to deliver to Microsoft true and accurate monthly
statements of Finished Product Units manufactured in each calendar month, on a
Software Title-by-Software Title basis and in sufficient detail to satisfy
Microsoft, within fifteen (15) days after the end of the applicable month, and
Microsoft will have reasonable audit rights to examine the records of the
Authorized Replicator regarding the number of Finished Product Units
manufactured;
(j) Subject to the approval of Licensee that shall not be
unreasonably withheld, Microsoft shall have the right to have included in the
packaging of Finished Product Units such promotional materials for Xbox and/or
other Xbox products or services as Microsoft may determine in its reasonable
discretion. Microsoft will be responsible for delivering to the Authorized
Replicator all such promotional materials as it desires to include with Finished
Product Units, and any incremental insertion costs relating to such marketing
materials will be borne by Microsoft;
(k) Microsoft does not guarantee any level of performance by
the Authorized Replicators, and Microsoft will have no liability to Licensee for
any Authorized Replicator's failure to perform its obligations under any
applicable agreement between Microsoft and such Authorized Replicator and/or
between Licensee and such Authorized Replicator;
(l) Prior to placing an order with a replicator/manufacturer
for Finished Product Units, Licensee shall confirm with Microsoft that such
entity is an Authorized Replicator; Microsoft will endeavor to keep an
up-to-date list of Authorized Replicators in the Xbox Guide. Licensee will not
place any order for Finished Product Units with any entity that is not at such
time an Authorized Replicator;
(m) Licensee acknowledges that Microsoft may charge the
Authorized Replicator fees for rights, services or products associated with the
manufacture of FPU and that the agreement with the Authorized Replicator grants
Microsoft the right to instruct the Authorized Replicator to cease the
manufacture of FPU and/or prohibit the release of FPU to Licensee or its agents
in the event Licensee is in breach of this Agreement or any credit agreement
(the "Credit Agreement") entered into by Licensee and Microsoft.
5.3 Approval of New Authorized Replicator. If Licensee requests that
Microsoft certify and approve a third party replicator that is not then an
Authorized Replicator, Microsoft will consider such request in good faith.
Licensee acknowledges and agrees that Microsoft may condition certification and
approval of such third party on the execution of an agreement in a form
satisfactory to Microsoft pursuant to which such third party agrees to strict
quality standards, non-disclosure requirements, license fees for use of
Microsoft intellectual property and trade secrets, and procedures to protect
Microsoft's intellectual property and trade secrets. Notwithstanding anything
contained herein, Licensee acknowledges that Microsoft is not required to
certify, maintain the certification or approve any particular third party as an
Authorized Replicator, and that the certification and approval process may be
time-consuming.
5.4 Security. Microsoft will have the right to add to the final release
version of the Software Title delivered by Licensee to Microsoft, and to all
Finished Product Units, such digital signature technology and other security
technology and copyright management information (collectively, "Security
Technology") as Microsoft may determine to be necessary, and/or Microsoft may
modify the signature included in any Security Technology included in the
Software Title by Licensee at Microsoft's discretion. Additionally, Microsoft
may add Security Technology that prohibits the play of Software Titles on Xbox
units manufactured in a region or country different from the location of
manufacture of the respective Finished Product Units.
* Confidential portion omitted and filed separately with the Commission.
8
CONFIDENTIAL
6. MARKETING, SALES AND SUPPORT
6.1 Licensee Responsible. As between Microsoft and Licensee, Licensee
shall be solely responsible for marketing and sales of the Software Title, and
for providing technical and all other support to the end users of the Finished
Product Units. Licensee will provide all end users of Software Titles contact
information (including without limitation Licensee's street address and
telephone number, and the applicable individual/group responsible for customer
support). Such end user support will be consistent with the then-applicable
console game industry standards and guidelines set forth in the Xbox Guide.
Licensee acknowledges and agrees that Microsoft will have no support
responsibilities whatsoever to end users of the Software Title or with respect
to Finished Product Units.
6.2 Warranty. Licensee shall provide the original end user of any
Finished Product Unit a minimum ninety (90) day limited warranty that the
Finished Product Unit will perform in accordance with its user documentation or
Licensee will refund the purchase price or provide a replacement Finished
Product Unit at no charge. Licensee may offer additional warranty coverage
consistent with the traditions and practices of console publishers within the
Territory or as otherwise required by local law.
6.3 Recall. Notwithstanding anything to the contrary contained in this
Agreement, in the event of a material defect in a Software Title and/or any
Finished Product Units, which defect in the reasonable judgment of Microsoft
would significantly impair the ability of an end user to play such Software
Title or Finished Product Unit or would adversely affect the gameplay of the
Xbox, Microsoft may require Licensee to recall Finished Product Units and
undertake prompt repair or replacement of such Software Title and/or Finished
Product Units.
6.4 Software Title License. The parties shall mutually agree to a
pre-approval process pursuant to which Licensee shall grant Microsoft a
fully-paid, royalty-free, non-exclusive license (i) to publicly perform the
Software Titles at conventions, events, trade shows, press briefings, and the
like; (ii) to use the title of the Software Title, and screen shots from the
Software Title, in advertising and promotional material relating to Xbox and
related Microsoft products and services, as Microsoft may reasonably deem
appropriate; and (iii) distribute Demo Versions with the official Xbox magazine
or other marketing opportunities. Nothing herein shall be deemed to require
Microsoft to obtain approval for uses of Licensee Software Titles when such uses
are "referential" or "fair use" as determined by applicable law.
7. PAYMENTS
7.1 Royalties. Licensee shall pay Microsoft nonrefundable royalties, on
a Software Title-by-Software Title basis, for each Finished Product Unit
manufactured during the term, in accordance with the following table:
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
Notwithstanding the foregoing, no royalties will be payable hereunder with
respect to any Demo Versions.
7.2 Royalty Payments. Licensee shall have the option of paying the
above royalties in US Dollars, Japanese Yen or Euros, according to the terms of
this Section. By designating the appropriate box below, Licensee may choose to
pay royalties on either a "Worldwide" or "Regional" basis. Such designation
shall be binding throughout the Term of this
* Confidential portion omitted and filed separately with the Commission.
9
CONFIDENTIAL
Agreement for all of Licensee's Software Titles. If Licensee elects to pay on a
Worldwide basis, it shall pay royalties in US Dollars regardless of where the
Finished Product Units are distributed or manufactured. If Licensee elects to
pay on a Regional basis, it shall pay royalties in US Dollars, Japanese Yen or
Euros in accordance with the table set forth in Section 7.1 but subject to the
rest of this Section 7.2.
7.2.1 If the Authorized Replicator manufacturing the Finished
Product Units is located in Japan, Singapore, Malaysia or Taiwan, Licensee shall
pay its royalty denominated in Japanese Yen for such Finished Product Units.
7.2.2 If the Authorized Replicator manufacturing the Finished
Product Units is located within Europe, Licensee shall pay its royalty
denominated in Euros for such Finished Product Units.
7.2.3 If the Authorized Replicator manufacturing the Finished
Product Units is located in any other country or region of the world, Licensee
shall pay its royalty denominated in US Dollars for such Finished Product Units.
7.2.4 Notwithstanding the foregoing, in the event the
conversion ratio for either Yen or Euros to Dollars, as described by the Reuters
news service as set forth on "Xxxxxxx.xxx" (as of 4:00 p.m. London, England
time), falls outside the foreign exchange trading range as set forth in the
chart below, for a period of time greater than thirty (30) consecutive days,
Microsoft may then readjust the royalty amounts set forth in Section 7.1 for
that currency. Such readjustments shall be made in Microsoft's good faith
discretion according to its normal practices.
[*]
[*] [*]
[*] [*] [*]
[*] [*] [*]
Worldwide _____________ (initials)
Regional _____________ (initials)
Choose only one of the above
7.3 Payment Process. Licensee shall be required to pre-pay all
royalties owed to Microsoft for the planned manufacture of Finished Product
Units by its Authorized Replicator. Licensee shall not authorize its Authorized
Replicators to begin production until such time as Microsoft has verified with
the Authorized Replicator and Licensee that such funds have been received and
deposited. Depending upon Licensee's credit worthiness, Microsoft may, but shall
not be obligated to, offer Licensee net thirty (30) credit terms for the payment
of royalties due under this Agreement. All payments shall be made by wire
transfer only, in accordance with the payment instructions set forth in the Xbox
Guide.
7.3.1 Billing Address. Licensee's billing address (or
Territory-specific addresses, as the case may be) is as follows:
Territory comprising United States:
Name: The 3DO Company
Address: 000 Xxxxxxxx Xxx
Xxxxxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Email address: xxxx.xxxxxxxx@0xx.xxx
Fax: 000 000 0000
Phone: 000 000 0000
Territory comprising Europe (if different):
Name: ______________________
* Confidential portion omitted and filed separately with the Commission.
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CONFIDENTIAL
Address: ______________________
______________________
______________________
Attention: _______________________
Email address: _______________________
Fax: _______________________
Phone: _______________________
Territory comprising Japan (if different):
Name: ______________________
Address: ______________________
______________________
______________________
Attention: _______________________
Email address: _______________________
Fax: _______________________
Phone: _______________________
7.4 Audit. During the Term of this Agreement and for three years
thereafter Licensee shall keep all usual and proper records related to its
performance (and any Authorized Replicators/subcontractor's performance) under
this Agreement, including but not limited to audited financial statements and
support for all transactions related to the ordering, production, inventory,
distribution and billing/invoicing information. Such records, books of account,
and entries shall be kept in accordance with generally accepted accounting
principles. Microsoft may audit and/or inspect the Licensee's records and
facilities in order to verify Licensee's compliance with the terms of this
Agreement. Microsoft reserves the right, upon twenty-four (24) hours' notice, to
audit Licensee's records and consult with Licensee's accountants for the purpose
of verifying Licensee's compliance with the terms of this Agreement and for a
period of two (2) years thereafter. Any such audit shall be made by Microsoft's
internal audit team or any Microsoft designee, and shall be conducted during
regular business hours at the Licensee's (or any applicable Authorized
Replicator's/subcontractor's) offices with notice. Any such audit shall be paid
for by Microsoft unless material discrepancies are disclosed. "Material" shall
mean the lesser of [*] or [*] percent [*] of the royalties due to Microsoft
within the audit period. If material discrepancies are disclosed, Licensee
agrees to pay Microsoft for the reasonable costs associated with the audit, as
well as reimburse Microsoft for all under-reported amounts, plus interest at a
rate of [*] per annum.
7.5 Taxes.
7.5.1 The royalties to be paid by Licensee to Microsoft herein
do not include any foreign, U.S. federal, state, local, municipal or other
governmental taxes, customs and other duties, levies, fees, excises or tariffs,
arising as a result of or in connection with the transactions contemplated under
this Agreement including, without limitation, any state or local sales or use
taxes or consumption tax or any value added tax or business transfer tax now or
hereafter imposed on the provision of goods and services to Licensee by
Microsoft under this Agreement, regardless of whether the same are separately
stated by Microsoft (all such taxes and other charges being referred to herein
as "Taxes"). All Taxes (and any penalties, interest, or other additions to any
Taxes), with the exception of taxes imposed on Microsoft's net income or with
respect to Microsoft's property ownership, shall be the financial responsibility
of Licensee. Licensee agrees to indemnify, defend and hold Microsoft harmless
from any such Taxes or claims, causes of action, costs (including, without
limitation, reasonable attorneys' fees) and any other liabilities of any nature
whatsoever related to such Taxes.
7.5.2 Licensee will pay all applicable value added, sales and
use taxes and other taxes levied on it by a duly constituted and authorized
taxing authority payments made to Microsoft by Licensee under this Agreement or
any transaction related thereto in each country in which the services and/or
property are being provided or in which the transactions contemplated hereunder
are otherwise subject to tax, regardless of the method of delivery. Any taxes
that are owed by Licensee, (i) as a result of entering into this Agreement and
the payment of the fees hereunder, (ii) are required or permitted to be
collected from Licensee by Microsoft under applicable law, and (iii) are based
upon the amounts payable under this Agreement (such taxes described in (i),
(ii), and (iii) above the "Collected Taxes"), shall be remitted by Licensee to
Microsoft, whereupon, upon request, Microsoft shall provide to Licensee tax
receipts or other evidence indicating that such Collected Taxes have been
collected by Microsoft and remitted to the appropriate taxing authority.
Licensee may provide to
* Confidential portion omitted and filed separately with the Commission.
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CONFIDENTIAL
Microsoft an exemption certificate acceptable to Microsoft and to the relevant
taxing authority (including without limitation a resale certificate) in which
case, after the date upon which such certificate is received in proper form,
Microsoft shall not collect the taxes covered by such certificate.
7.5.3 If, after a determination by foreign tax authorities,
any taxes are required to be withheld, on payments made by Licensee to
Microsoft, Licensee may deduct such taxes from the amount owed Microsoft and pay
them to the appropriate taxing authority; provided however, that Licensee shall
promptly secure and deliver to Microsoft an official receipt for any such taxes
withheld or other documents necessary to enable Microsoft to claim a U.S.
Foreign Tax Credit. Licensee will make certain that any taxes withheld are
minimized to the extent possible under applicable law.
7.5.4 This Section 7.5 shall govern the treatment of all taxes
arising as a result of or in connection with this Agreement notwithstanding any
other section of this Agreement.
8. NON-DISCLOSURE; ANNOUNCEMENTS
8.1 Non-Disclosure Agreement. The information, materials and software
exchanged by the parties hereunder or under an XDK License, including the terms
and conditions hereof and of the XDK License, shall be subject to the
Non-Disclosure Agreement dated March 20, 2002 (the "Non-Disclosure Agreement")
between the parties, which is incorporated herein by reference; provided,
however, that for purposes of the foregoing Section 2(a)(i) of the
Non-Disclosure Agreement shall hereinafter read, "[The Receiving Party shall;
(i)] Refrain from disclosing Confidential Information of the Disclosing Party to
any third parties for as long as such remains undisclosed under 1(b) above
except as expressly provided in Sections 2(b) and 2(c) of this [Non-Disclosure]
Agreement." In this way, all Confidential Information provided hereunder or by
way of the XDK License in whatever form (e.g. information, materials, tools
and/or software exchanged by the parties hereunder or under an XDK License),
including the terms and conditions hereof and of the XDK License, unless
otherwise specifically stated, shall be protected from disclosure for as long as
it remains Confidential.
8.2 Public Announcements. The parties contemplate that they will
coordinate the issuance of initial press releases, or a joint press release,
announcing the relationship established by the execution of this Agreement.
However, neither party shall issue any such press release or make any such
public announcement(s) without the express prior consent of the other party,
which consent will not be unreasonably withheld or delayed. Furthermore, the
parties agree to use their commercially reasonable efforts to coordinate in the
same manner any subsequent press releases and public announcements relating to
their relationship hereunder prior to the issuance of the same. Nothing
contained in this Section 8.2 will relieve Licensee of any other obligations it
may have under this Agreement, including without limitation its obligations to
seek and obtain Microsoft approval of the Marketing Materials.
8.3 Required Public Filings. Notwithstanding Sections 8.1 and 8.2, the
parties acknowledge that this Agreement, or portions thereof, may be required
under applicable law to be disclosed, as part of or an exhibit to a party's
required public disclosure documents. If either party is advised by its legal
counsel that such disclosure is required, it will notify the other in writing
and the parties will jointly seek confidential treatment of this Agreement to
the maximum extent reasonably possible, in documents approved by both parties
and filed with the applicable governmental or regulatory authorities.
9. TERM AND TERMINATION
9.1 Term. The Term of this Agreement shall commence on the Effective
Date and unless terminated earlier as provided herein, shall continue until [*].
9.2 Termination for Breach. In the event either party shall materially
fail to perform or comply with this Agreement or any provision thereof, and fail
to remedy the default within fifteen (15) days after the receipt of notice to
that effect, then the other party shall have the right, at its sole option and
upon written notice to the defaulting party, to terminate this Agreement upon
written notice. Any notice of default hereunder shall be prominently labeled
"NOTICE OF DEFAULT"; provided, however, that if the default is of Sections 3, 4,
7.1, 7.2 or 7.3 above, the Non-Disclosure Agreement, or an XDK License, then the
non-defaulting party may terminate this Agreement immediately upon written
notice, without being obligated to provide a fifteen (15) day cure period. The
rights and remedies provided in this Section shall not be exclusive and are in
addition to any other rights and remedies provided by law or this Agreement. If
the uncured default is related to a particular Software Title, then the party
not in default will have the right, in its discretion, to terminate this
Agreement in its entirety or with respect to the applicable Software Title.
* Confidential portion omitted and filed separately with the Commission.
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CONFIDENTIAL
9.3 Effect of Termination; Sell-off Rights. Upon termination or
expiration of this Agreement, Licensee shall have no further right to exercise
the rights licensed hereunder or within the XDK License and shall promptly cease
all manufacturing of FPU through its Authorized Replicators and, other than as
provided below, cease use of the Licensed Trademarks. Licensee shall have a
period of [*] following expiration of this Agreement, or termination for a
reason other than Licensee's breach, to sell-off its inventory of Finished
Product Units existing as of the date of termination or expiration, after which
sell-off period Licensee shall immediately return all FPU to an Authorized
Replicator for destruction. Licensee shall cause the Authorized Replicator to
destroy all FPU and issue a Certificate of Destruction to Microsoft. All of
Licensee's obligations under this Agreement shall continue to apply during such
six-month sell-off period. If this Agreement is terminated due to Licensee's
breach, Licensee shall immediately destroy all Finished Product Units not yet
distributed to Licensee's distributors, dealers and/or end users and shall
require all those distributing the FPU over which it has control to cease
distribution. If requested by Microsoft in writing, Licensee will deliver to
Microsoft the written certification by an officer of Licensee confirming the
destruction of Finished Product Units required hereunder.
9.4 Survival. The following provisions shall survive expiration or
termination of this Agreement: 1, 3.6, 6.1, 6.2, 6.3, 7, 9.3, 9.4, 10, 11 and
13.
10. WARRANTIES
10.1 Licensee. Licensee warrants and represents that:
10.1.1 It has the full power to enter into this Agreement;
10.1.2 It has not previously and will not grant any rights to
any third party that are inconsistent with the rights granted to Microsoft
herein; and
10.1.3 The Software Title, Finished Product Units, Marketing
Materials (excluding those portions that consist of the Licensed Trademarks,
Security Technology and redistributable components of the so-called "XDK" in the
form as delivered to Licensee by Microsoft pursuant to an XDK License) do not
and will not infringe upon or misappropriate any third party trade secrets,
copyrights, trademarks, patents, publicity, privacy or other proprietary rights.
10.1.4 Licensee warrants that it shall maintain sufficient
insurance coverage to enable it to meet its obligations created by this
Agreement and by law. During the Term of this Agreement, and unless the parties
mutually agree otherwise, Licensee agrees to maintain no less insurance coverage
than Licensee's insurance coverage as of the Effective Date of this Agreement.
10.1.5 It shall not (a) incorporate Identified Software (as
defined in 3.9) into or combine Identified Software with the Software Title; (b)
distribute Identified Software in conjunction with the Software Title; and (c)
use Identified Software in the development of the Software Title.
10.2 Microsoft. Microsoft warrants and represents that:
10.2.1 It has the full power to enter into this Agreement; and
10.2.2 It has not previously and will not grant any rights to
any third party that are inconsistent with the rights granted to Licensee
herein.
10.3 DISCLAIMER. EXCEPT AS EXPRESSLY STATED IN THIS SECTION 10,
MICROSOFT PROVIDES ALL MATERIALS (INCLUDING WITHOUT LIMITATION THE SECURITY
TECHNOLOGY) AND SERVICES HEREUNDER ON AN "AS IS" BASIS, AND MICROSOFT DISCLAIMS
ALL OTHER WARRANTIES UNDER THE APPLICABLE LAWS OF ANY COUNTRY, EXPRESS OR
IMPLIED, REGARDING THE MATERIALS AND SERVICES IT PROVIDES HEREUNDER, INCLUDING
ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
WARRANTY OF FREEDOM FROM COMPUTER VIRUSES. WITHOUT LIMITATION, MICROSOFT
PROVIDES NO WARRANTY OF NON-INFRINGEMENT.
10.4 EXCLUSION OF INCIDENTAL, CONSEQUENTIAL AND CERTAIN OTHER DAMAGES.
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL MICROSOFT,
ITS AFFILIATES, LICENSORS OR ITS SUPPLIERS BE LIABLE FOR ANY SPECIAL,
INCIDENTAL, PUNITIVE OR
* Confidential portion omitted and filed separately with the Commission.
13
CONFIDENTIAL
CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER, RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING WITHOUT LIMITATION,
LOST PROFITS OR LOST GOODWILL AND WHETHER BASED ON BREACH OF ANY EXPRESS OR
IMPLIED WARRANTY, BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR STRICT
LIABILITY, REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGE OR IF SUCH DAMAGE COULD HAVE BEEN REASONABLY FORESEEN.
10.5 LIMITATION OF LIABILITY. THE MAXIMUM LIABILTY OF MICROSOFT TO
LICENSEE OR ANY THIRD PARTY ARISING OUT OF THIS AGREEMENT SHALL BE THE LESSER OF
TOTAL THE AMOUNTS RECEIVED BY MICROSOFT HEREUNDER OR FIVE MILLION DOLLARS
($5,000,000). FURTHERMORE, UNDER NO CIRCUMSTANCES SHALL MICROSOFT BE LIABLE TO
LICENSEE FOR ANY DAMAGES WHATSOEVER WITH RESPECT TO ANY CLAIMS RELATING TO THE
SECURITY TECHNOLOGY AND/OR ITS AFFECT ON ANY SOFTWARE TITLE.
11. INDEMNITY
11.1 Indemnification. A claim for which indemnity may be sought
hereunder shall be referred to as a "Claim."
11.1.1 Mutual Indemnification. Subject to Sections 10.3, 10.4
and 10.5, each party hereby agrees to indemnify, defend, and hold the other
party harmless from any and all claims, demands, costs, liabilities, losses,
expenses and damages (including reasonable attorneys' fees, costs, and expert
witnesses' fees) arising out of or in connection with any claim that, taking the
claimant's allegations to be true, would result in a breach by the indemnifying
party of any of its warranties and covenants set forth in Section 10.
11.1.2 Additional Licensee Indemnification Obligation.
Licensee further agrees to indemnify, defend, and hold Microsoft harmless from
any and all claims, demands, costs, liabilities, losses, expenses and damages
(including reasonable attorneys' fees, costs, and expert witnesses' fees)
arising out of or in connection with any claim regarding any Software Title or
Finished Product Unit, including without limitation any claim relating to
quality, performance, safety or conformance with the software title approval
process, or arising out of Licensee's use of the Licensed Trademarks in breach
of this Agreement.
11.2 Notice and Assistance. The indemnified party shall: (i) provide
the indemnifying party reasonably prompt notice in writing of any Claim and
permit the indemnifying party to answer and defend such Claim through counsel
chosen and paid by the indemnifying party; and (ii) provide information,
assistance and authority to help the indemnifying party defend such Claim. The
indemnified party may participate in the defense of any Claim at its own
expense. The indemnifying party will not be responsible for any settlement made
by the indemnified party without the indemnifying party's written permission,
which will not be unreasonably withheld or delayed. In the event the
indemnifying party and the indemnified party agree to settle a Claim, the
indemnified party agrees not to publicize the settlement without first obtaining
the indemnifying party's written permission.
12. PROTECTION OF PROPRIETARY RIGHTS
12.1 Microsoft Intellectual Property. In the event Licensee learns of
any infringement or imitation of the Licensed Trademarks, the Software Title or
the Finished Product Units, or the proprietary rights in or related to any of
them, it will promptly notify Microsoft thereof. Microsoft may take such action
as it deems advisable for the protection of its rights in and to such
proprietary rights, and Licensee shall, if requested by Microsoft, cooperate in
all reasonable respects therein at Microsoft's expense. In no event, however,
shall Microsoft be required to take any action if it deems it inadvisable to do
so. Microsoft will have the right to retain all proceeds it may derive from any
recovery in connection with such actions.
12.2 Licensee Intellectual Property. Licensee, without the express
written permission of Microsoft, may bring any action or proceeding relating to
this infringement or potential infringement, to the extent such infringement
involves any proprietary rights of Licensee (provided that Licensee will not
have the right to bring any such action or proceeding involving Microsoft's
intellectual property). Licensee shall make reasonable efforts to inform
Microsoft regarding such actions in a timely manner. Licensee will have the
right to retain all proceeds it may derive from any recovery in connection with
such actions.
* Confidential portion omitted and filed separately with the Commission.
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CONFIDENTIAL
12.3 Joint Actions. Licensee and Microsoft may agree to jointly pursue
cases of infringement involving the Software Titles (since such products will
contain intellectual property owned by each of them). Unless the parties
otherwise agree, or unless the recovery is expressly allocated between them by
the court (in which case the terms of Sections 12.1 and 12.2 will apply), in the
event Licensee and Microsoft jointly prosecute an infringement lawsuit under
this provision, any recovery shall be used first to reimburse Licensee and
Microsoft for their respective reasonable attorneys' fees and expenses, pro
rata, and any remaining recovery shall also be given to Licensee and Microsoft
pro rata based upon the fees and expenses incurred in bringing such action.
13. GENERAL
13.1 Governing Law; Venue; Attorneys Fees. This Agreement shall be
construed and controlled by the laws of the State of Washington, U.S.A., and
Licensee consents to exclusive jurisdiction and venue in the federal courts
sitting in King County, Washington, U.S.A., unless no federal jurisdiction
exists, in which case Licensee consents to exclusive jurisdiction and venue in
the Superior Court of King County, Washington, U.S.A. Licensee waives all
defenses of lack of personal jurisdiction and forum non conveniens. Process may
be served on either party in the manner authorized by applicable law or court
rule. If either party employs attorneys to enforce any rights arising out of or
relating to this Agreement, the prevailing party shall be entitled to recover
its reasonable attorneys' fees, costs and other expenses. This choice of
jurisdiction provision does not prevent either Licensee or Microsoft from
seeking injunctive relief with respect to a violation of intellectual property
rights or confidentiality obligations in any appropriate jurisdiction.
13.2 Notices; Requests. All notices and requests in connection with
this Agreement shall be deemed given on the third day after they are deposited
in the U.S. mails, postage prepaid, certified or registered, return receipt
requested; or the day after they are sent by overnight courier, charges prepaid,
with a confirming fax; and addressed as follows:
Licensee: The 3DO Company
000 Xxxxxxxx Xxx
Xxxxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxx Xxxx
Fax: 000 000 0000
Phone: 000 000 0000
Email: xxxxx.xxxx@0xx.xxx
Microsoft: MICROSOFT LICENSING INC.
_____________________________
_____________________________
Attention: _________________________
with a cc to: MICROSOFT CORPORATION
Xxx Xxxxxxxxx Xxx
Xxxxxxx, XX 00000-0000
Attention: Law & Corporate Affairs Department
Product Development & Marketing
Fax: (000) 000-0000
or to such other address as the party to receive the notice or request so
designates by written notice to the other.
13.3 Assignment. Licensee may not assign this Agreement or any portion
thereof, to any third party unless Microsoft expressly consents to such
assignment in writing. Microsoft will have the right to assign this Agreement
and/or any portion thereof as Microsoft may deem appropriate and/or authorize
its affiliates or partners to perform this Agreement in whole or part on its
behalf. For the purposes of this Agreement, a merger, consolidation, or other
corporate reorganization, or a transfer or sale of a controlling interest in a
party's stock, or of all or substantially all of its assets shall be deemed to
be an assignment. This Agreement will inure to the benefit of and be binding
upon the parties, their successors, administrators, heirs, and permitted
assigns.
* Confidential portion omitted and filed separately with the Commission.
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13.4 No Partnership. Microsoft and Licensee are entering into a license
pursuant to this Agreement and nothing in this Agreement shall be construed as
creating an employer-employee relationship, a partnership, or a joint venture
between the parties.
13.5 Severability. In the event that any provision of this Agreement is
found invalid or unenforceable pursuant to judicial decree or decision, the
remainder of this Agreement shall remain valid and enforceable according to its
terms. The parties intend that the provisions of this Agreement be enforced to
the fullest extent permitted by applicable law. Accordingly, the parties agree
that if any provisions are deemed not enforceable, they shall be deemed modified
to the extent necessary to make them enforceable in a manner consistent with the
stated intentions of the parties (if and to the extent possible).
13.6 Injunctive Relief. The parties agree that Licensee's threatened or
actual unauthorized use of the Licensed Trademarks whether in whole or in part,
may result in immediate and irreparable damage to Microsoft for which there is
no adequate remedy at law, and that either party's threatened or actual breach
of the confidentiality provisions may cause like damage to the non-breaching
party, and in such event the non-breaching party shall be entitled to
appropriate injunctive relief, without the necessity of posting bond or other
security.
13.7 Entire Agreement; Modification; No Offer. The parties hereto agree
that this Agreement (including the Concept Summary, the Non-Disclosure
Agreement, the Xbox Guide, and other incorporated documents) constitute the
entire agreement between the parties with respect to the subject matter hereof
and merges all prior and contemporaneous communications. It shall not be
modified except by a written agreement dated subsequent hereto signed on behalf
of Licensee and Microsoft by their duly authorized representatives. Neither this
Agreement nor any written or oral statements related hereto constitute an offer,
and this Agreement shall not be legally binding until executed by both parties
hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date on the dates indicated below.
MICROSOFT LICENSING, INC. THE 3DO COMPANY
/s/ Xxxxxx Xxxxxxx /s/ Xxxxx Xxxx Xxxx
----------------------------------- -----------------------------------
By (sign) By (sign)
Xxxxxx Xxxxxxx Xxxxx Xxxx Xxxx
----------------------------------- -----------------------------------
Name (Print) Name (Print)
OEM Accounting Manager Exec. Vice President
----------------------------------- -----------------------------------
Title Title
July 22, 2002 July 8, 2002
----------------------------------- -----------------------------------
Date Date
* Confidential portion omitted and filed separately with the Commission.
16
