EXHIBIT 10.39
MICROSOFT CORPORATION
XBOX PUBLISHER LICENSE AGREEMENT
This License Agreement (the "Agreement") is entered into and effective as of
October 12, 2000 (the "Effective Date") by and between Microsoft Corporation, a
Washington corporation ("Microsoft"), and INTERPLAY ENTERTAINMENT CORP.
("Licensee").
A. Whereas, Microsoft develops and licenses a computer game system, known
as the Xbox 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.
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 "Art & Marketing 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, Finished Product Unit media
label, and any promotional inserts and other materials that are to be included
in the retail packaging, as well as all 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).
1.2 "Authorized Replicator" shall mean a software replicator certified and
approved by Microsoft for replication of games that run on Xbox. Upon
Licensee's written request, Microsoft will provide Licensee with a copy of the
then-current list of Authorized Replicators, but the status of a particular
replicator and such list may change from time to time in Microsoft's sole and
absolute discretion.
1.3 "Branding Specifications" shall mean the specifications in Exhibit C,
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
related product packaging, documentation, and other materials.
1.4 "Commercial Release" shall mean (a) with respect to Xbox, the first
distribution of an Xbox 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.
1.5 "Finished Product Unit" shall mean a DVD-9 copy, in software object
code only, of a Software Title, in whole or in part.
1.6 "Licensed Trademarks" shall mean the Microsoft trademarks depicted in
Exhibit B (which Microsoft unilaterally may modify from time to time during the
term of this Agreement upon written notice to Licensee).
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1.7 "Software Title" shall mean the single software product as described
in the applicable Exhibit A (i.e., Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, or Exhibit A-n, as
the case may be), developed by Licensee, and running 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," "sequel," or add-on
pack. If Microsoft approves one or more additional concept(s) for another
single software product proposed by Licensee to run on Xbox (including, without
limitation, new software titles or prequels, sequels, or add-on packs to
previously approved Software Titles), pursuant to the procedure set forth in
Section 2.1.1 below and the Xbox Guide (as defined in Section 2.1), then upon
Microsoft's written approval of such concept, this Agreement, and the term
"Software Title," shall be broadened automatically to cover the respective new
software product and the parties will prepare, initial and append to this
Agreement a new Exhibit A-n for each such additional new software product.
1.8 "Certification Requirements" shall mean the requirements specified in
this Agreement (including without limitation the Xbox Guide) for quality,
compatibility, and/or performance of a Software Title, and, to the extent not
inconsistent with the foregoing standards, the standards of quality and
performance generally accepted in the console game industry.
1.9 "Territory" shall be determined on a Software Title-by-Software Title
basis, and shall mean such countries as may be specified in writing by Microsoft
when the concept of the applicable Software Title is approved pursuant to
Section 2.1.1 below.
1.10 "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.
2. DEVELOPMENT; DELIVERY; APPROVAL
2.1 Software Title Development. Licensee's development activities with
respect to each Software Title shall be in accordance with the development
schedule set forth in the applicable Exhibit A-n. Furthermore, 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 when it is completed, after the execution of this Agreement.
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,
Licensee automatically shall be bound by all provisions of the then-current Xbox
Guide; Microsoft will specify in each such supplement, revision or updated
version a reasonable effective date of each change if such change or revision is
not required to be effective immediately. If Licensee proceeds with the
development of a Software Title, Licensee shall deliver each milestone (i.e.,
Concept milestone as described in Section 2.1.1, optional Preliminary Version
milestones(s) as described in Section 2.1.2, Feature-Complete Version milestone
as described in Section 2.1.3, and Final Release Version milestone as described
in Section 2.1.4) to Microsoft for approval in writing, and Microsoft agrees to
use good faith efforts to promptly review each milestone and render its
approvals or rejections thereof within a reasonable period of time. All
certification and playtesting (and applicable fees therefor, if any) will be in
accordance with the then-applicable version of the Xbox Guide. If Microsoft
does not approve Licensee's submission for a given milestone then Licensee shall
either correct the problems that contributed to the lack of approval or, if
Microsoft gives Licensee written notice to cease development, Licensee shall
immediately cease all development activities for the applicable Software Title's
subsequent milestones. Each successive milestone shall comply in all material
respects with the characteristics of previously approved milestones. Each
software milestone shall be delivered in compiled object code form.
2.1.1 Concept. Licensee shall deliver to Microsoft a written and
completed concept submission form (in the form provided by Microsoft to
Licensee), including without limitation: (a) a detailed description of the
Software Title, including but not limited to (to the extent applicable) title,
theme, plot, characters, play elements, and technical specifications; (b) the
identities of any proposed subcontractors, and general information about the
principal team of individual developers, and (c) an
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explanation of the design, technical and marketing suitability of the Software
Title. Evaluation of the proposed design will be based on criteria including,
but not necessarily limited to, the following: (i) originality; (ii) play
breadth and depth; (iii) playability; (iv) replayability and long-term interest;
and (v) theme, characters and storyline. Technical evaluation of the concept
will be based on criteria including, but not necessarily limited to, feasibility
of execution and usage of system capabilities (such as graphics, audio, hard
drive, play control, online capabilities and peripherals). Marketing suitability
will be evaluated based on criteria including, but not necessarily limited to,
the following: (i) market viability; (ii) Licensee's marketing commitment (if
any); (iii) suitability to the target demographic; and (iv) overall fit with the
Xbox certified software products portfolio.
2.1.2 Preliminary Versions. Licensee may, but will not be required to,
deliver to Microsoft certain preliminary versions of the Software Title, as
addressed in the Xbox Guide.
2.1.3 Feature-Complete Version. Licensee shall deliver to Microsoft a
feature-complete version of the Software Title (the "Beta Version"), which
includes all features of the Software Title and such other content as may be
required under the Xbox Guide. Concurrently with delivery of the Beta Version,
Licensee will disclose in writing to Microsoft the details about any and all so-
called "hidden characters," "cheats," "easter eggs," "bonus video and/or audio,"
and similar elements included in the Beta Version and/or intended to be included
in the final release version of the Software Title.
2.1.4 Final Release Version. 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, with the
final content rating certification, with identified program errors corrected,
and with any and all changes previously requested by Microsoft implemented.
However, nothing herein will be deemed to relieve Licensee of its obligation to
correct program bugs and errors, whenever discovered (including without
limitation after Commercial Release), and Licensee agrees to correct such 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, the parties will mutually agree to an appropriate fix and timetable for
the correction of the bug/error in all Finished Product Units manufactured after
discovery). In addition, Licensee will comply with all certification
procedures, guidelines and standards set forth in the then-applicable version of
the Xbox Guide. Licensee shall not distribute the Software Title, nor
manufacture any Finished Product Units intended for distribution, unless and
until Microsoft shall have given its final certification and approval of the
final release version of the Software Title, and Microsoft shall have provided
the code for the final release version to the applicable Authorized
Replicator(s).
2.1.5 Playtesting. Microsoft will playtest the Beta Version and proposed
final release version of each Software Title; if Licensee delivers preliminary
versions of a Software Title, Microsoft may (but will not be obligated to)
playtest such versions. Microsoft will provide written comments to Licensee
regarding the results of its playtest results, and Licensee shall comply with
any reasonable requests made by Microsoft to improve the applicable Software
Title based on such playtest results. Licensee acknowledges that,
notwithstanding its receipt of approvals from Microsoft for prior milestones or
versions during the development process, Licensee's proposed final release
version of each Software Title must be approved by Microsoft, as set forth in
the Xbox Guide. In addition to conforming with the approved concept, with all
technical specifications, and with all other requirements set by Microsoft
during the development and approval process, each Software Title must achieve a
satisfactory rating in final playtesting. Notwithstanding anything to the
contrary contained herein, Licensee acknowledges and understands that, in part,
the results of playtesting will be subjective, that Microsoft will have the
right to deny final approval based on its determination, and that Licensee has
and will have no expectation of final approval of any Software Title regardless
of any approvals or assessments given or made by Microsoft, informally or
formally, at any time.
2.1.6 Art & Marketing Materials. Licensee shall deliver to Microsoft for
approval all Art & Marketing Materials as and when developed, whether during
development activities or thereafter.
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Licensee shall not distribute any specific Art & Marketing Materials unless and
until Microsoft shall have given its final certification and approval of the
specific item. Microsoft agrees to use good faith efforts to promptly review
each submission and render its approvals or rejections thereof within a
reasonable period of time. Microsoft further agrees that if it approves any
particular Art & Marketing Materials, then subsequent uses of substantially
similar Art & Marketing Materials in substantially similar contexts shall
require no additional approvals.
2.2 Content Rating. Licensee understands and agrees that, without
limitation, Microsoft will not give final certification and approval of a
Software Title unless and until Licensee shall have obtained, at Licensee's sole
cost, a rating of no 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 of no higher than "Mature (17+)" (or
its equivalent). In no event shall Licensee distribute any Software Title under
an "Adults Only" or higher rating (or equivalent rating). Licensee shall
include the applicable rating(s) prominently on Finished Product Units, in
accordance with the applicable rating body guidelines.
2.3 Development Kit License. Microsoft or its affiliate will offer to
Licensee the opportunity to enter into one or more development kit license(s)
(each an "XDK License") pursuant to which Microsoft would license to Licensee
software development tools and hardware to assist Licensee in the development of
Software Titles, including without limitation certain sample code and other
redistributable code which Licensee could incorporate into Software Titles, on
such terms and conditions as are contained in the XDK License.
2.4 Subcontractors. Licensee shall not use any subcontractors or any
other third parties to perform software development work in connection with a
Software Title unless and until (i) the proposed subcontractor or other third
party and (ii) Microsoft shall have executed an XDK license; provided that
nothing contained herein will be deemed to require Microsoft or its affiliate to
execute an XDK License with any particular person or entity if Microsoft or its
affiliate determines that it is not appropriate to execute such an XDK License.
2.5 Changes of Requirements by Microsoft. Unless otherwise reasonably
specified by Microsoft at the respective time: (a) after approval by Microsoft
of the Beta Version of a Software Title, 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
generally in the Xbox Guide; and (b) subject to the immediately preceding clause
(a), any changes made by Microsoft in Branding Specifications or other
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 Art & Marketing Materials and/or Finished Product Units as are
manufactured after Microsoft notifies Licensee of the change), unless (i) the
change can be accommodated by Licensee with insignificant added expense, or (ii)
Microsoft pays for Licensee's direct, out-of-pocket expenses necessarily
incurred as a result of its retrospective compliance with the change.
3. RIGHTS AND RESTRICTIONS
3.1 Trademarks.
3.1.1 License. In each Software Title, and on each Finished Product Unit
(and the packaging therefor), Licensee shall incorporate the Licensed Trademarks
and include credit and acknowledgement to Microsoft as set forth in the Branding
Specifications and the Xbox Guide. Microsoft grants to Licensee a non-
exclusive, non-transferable, personal license to use the Licensed Trademarks,
according to the Branding Specifications and other conditions herein, and solely
in connection with marketing, sale, and distribution in the Territory of
Finished Product Units that meet the Certification Requirements.
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3.1.2 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.
3.1.3 Branding Specifications. Licensee's use of the Licensed Trademarks
(including without limitation in Finished Product Unit and Art & Marketing
Materials) shall comply with the Branding Specifications in Exhibit C. 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.
3.1.4 Certification Requirements. Licensee may use the Licensed
Trademarks only in connection with the copies of the Software Title that meet
the Certification Requirements. Licensee shall test the Software Title and
Finished Product Units for conformance with the Certification Requirements
according to generally accepted and best industry practices, 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). Upon notice or other discovery of any non-conformance
with the Certification Requirements, Licensee shall promptly remedy such non-
conformance in all Finished Product Units wherever in the chain of distribution
(subject to Sections 2.1.4 and 2.5 above), and shall notify Microsoft of the
non-conformance and remedial steps taken.
3.1.5 Protection of Licensed Trademarks. Licensee shall assist Microsoft
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 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, either in its
own name or by joining Licensee as a party thereto. 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 ▇▇▇▇ confusingly
similar thereto.
3.1.6 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.
3.1.7 No Bundling with Unapproved Peripherals, Products or Software.
Licensee shall not market or distribute any Finished Product Unit bundled with a
peripheral product software or other products which Microsoft has not already
approved for commercial distribution as part of the Xbox program, nor shall
Licensee knowingly permit or assist any third party in such bundling, without
Microsoft's prior written consent. For avoidance of doubt, Licensee may market
and distribute any Finished Product unit bundled with Microsoft-approved Xbox
peripheral product software or other products, so long as Licensee provides
Microsoft with written notice of its intention to do so within a reasonable
period of time in advance of any marketing or distribution thereof.
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3.2 ▇▇▇▇. Licensee shall distribute (directly or indirectly) the Software
Title to end users subject to an end user license agreement ("▇▇▇▇") in a form
to be approved by Microsoft prior to any distribution of the Software Title;
provided that, in any event, Licensee's ▇▇▇▇ for the Software Title shall (a)
name Microsoft as a third party beneficiary, with the right to enforce the
agreement, (b) grant the end user the right to use the Software Title on only
one Xbox console at a time, and (c) forbid the end user from reverse engineering
or decompiling the Software Title or Xbox. Microsoft will have the right to
modify its requirements for the ▇▇▇▇ 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.
3.3 No Electronic Transmission; No Online Activities. Licensee shall
distribute the Software Title only as embodied in Finished Product Units;
specifically, but without limitation, Licensee shall not distribute the Software
Title by any means of electronic transmission without the prior written approval
of Microsoft, which Microsoft may grant or withhold in its discretion.
Furthermore, Licensee will not authorize or permit any online activities
involving the Software Title, including without limitation multiplayer, peer-to-
peer and/or online play, without the prior written approval of Microsoft, which
Microsoft may grant or withhold in its discretion.
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 with Microsoft or an Authorized
Replicator. Licensee must use Microsoft or an Authorized Replicator to produce
Finished Product Units, pursuant to Section 4.
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. 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 6 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.
4. MANUFACTURING
4.1 Approved Replicators. Licensee shall retain only an Authorized
Replicator to manufacture all Finished Product Units.
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4.2 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:
4.2.1 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 4.4 below); Licensee will be responsible for preparing and delivering to
the Authorized Replicator all other items required for manufacturing Finished
Product Units; and 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 2.1.6 above);
4.2.2 Microsoft will have the right, but not the obligation, to be
supplied with up to fifty (50) Finished Product Units (including pre-production
samples and random units manufactured during production runs) at Licensee's cost
but without royalties, for quality assurance and archival purposes;
4.2.3 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 35,000;
4.2.4 as between Licensee and Microsoft, Licensee shall be responsible for
ensuring that all Finished Product Units are free of all defects;
4.2.5 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;
4.2.6 Microsoft will have the right to have included in the packaging of
Finished Product Units such marketing 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 marketing 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;
4.2.7 Microsoft does not guarantee any level of performance by its
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;
4.2.8 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.
4.3 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
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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 or approve any particular third party as an Authorized Replicator,
and that the certification and approval process may be time-consuming.
4.4 Security. Microsoft will have the right to add, at its own cost, 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 direction.
Additionally, Microsoft may add, at its own cost, 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.
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5. MARKETING, SALES AND SUPPORT
5.1 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. 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.
5.2 Art & Marketing Materials. In accordance with Section 2.1.6 above,
Licensee shall submit all Art & Marketing Materials to Microsoft, and Licensee
shall not distribute such Art & Marketing Materials unless and until Microsoft
has approved them in writing. Prior to publication of any Art & Marketing
Materials, Licensee agrees to incorporate all changes relating to use of the
Licensed Trademarks that Microsoft may 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 Branding Specifications and/or the Xbox Guide).
5.3 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 provide a replacement Finished Product Unit at no charge.
5.4 Recall. Notwithstanding anything to the contrary contained in this
Agreement (including without limitation Section 2.1.4), in the event of a
material defect in a Software Title and/or any Finished Product Units, which
defect in the reasonable judgement of Microsoft would significantly impair the
ability of an end user to play such Software Title or Finished Product Unit,
Microsoft may require Licensee to recall Finished Product Units and undertake
prompt repair or replacement of such Software Title and/or Finished Product
Units.
5.5 Software Title License. Subject to third party rights of which
Licensee shall have informed Microsoft in writing at the time of delivery of the
feature-complete version of the applicable Software Title, Licensee hereby
grants to 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; and (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. The parties agree to discuss in good faith a
variety of scenarios and contexts for which Licensee approves such public
performances and uses of the title of the Software Title and screenshots
therefrom, provided that nothing shall prevent or restrict Microsoft at any time
from making informational references to Licensee and its Software Title(s).
6. PAYMENTS
6.1 Royalties. Licensee shall pay Microsoft royalties, on a Software
Title-by-Software Title basis, for each Finished Product Unit manufactured, in
accordance with the following table:
Finished Product Units Manufactured Royalty per Applicable Finished Product Unit
--------------------------------------- -----------------------------------------------
US Dollars
----------
Yen
---
Euros
-----
Units 1 - 500,000 7.00
750
7.70
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Finished Product Units Manufactured Royalty per Applicable Finished Product Unit
--------------------------------------- -----------------------------------------------
US Dollars
----------
Yen
---
Euros
-----
Units 500,001 - 1,000,000 6.50
700
7.15
Units 1,000,001 - 2,000,000 6.00
640
6.60
Units 2,000,001 and above 5.00
540
5.50
Notwithstanding the foregoing, no royalties will be payable hereunder with
respect to any Demo Finished Product Units. For the purposes hereof, a "Demo
Finished Product Unit" will mean a Finished Product Unit that (i) contains only
a small portion of the applicable Software Title, (ii) is provided to end users
only to advertise or promote the applicable Software Title (although it may
include demonstration versions of other games for Xbox published by Licensee),
(iii) is manufactured in a number of units that has been approved in advance by
Microsoft, which approval Microsoft agrees not to unreasonably withhold, and
(iv) is distributed free or with a suggested retail price of not more than
US$5.00.
6.2 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 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 6.1 but subject to the rest of this Section 6.2:
(i) 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.
(ii) If the Authorized Replicator manufacturing the Finished Product Units
is located in a member country of the European Union, Licensee shall pay its
royalty denominated in Euros for such Finished Product Units.
(iii) 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.
Notwithstanding the foregoing, in the event the conversion ratio for either Yen
or Euros to Dollars, as described in the US edition of the Wall Street Journal,
falls outside the foreign exchange trading range as set forth in the chart
below, for a period of time greater than 30 consecutive days, Microsoft may then
10
readjust the royalty amounts set forth in Section 6.1 for that currency. Such
readjustments shall be made in Microsoft's good faith discretion according to
its normal practices.
Yen/Euro to US Dollar Trading Range
-----------------------------------
Minimum Maximum
----------- -----------
Yen 97.000 119.000
Euros 0.885 1.150
Worldwide (initials)
--------
Regional (initials)
--------
6.3 Payment Process. After its receipt from the applicable Authorized
Replicator(s) of each monthly statement of Finished Product Units manufactured,
Microsoft will invoice Licensee for the amount owed to Microsoft pursuant to
Section 6.1 above based upon the applicable statement. Licensee shall pay to
Microsoft the full amount invoiced within thirty (30) calendar days after the
date of the respective invoice. Payment will be made by wire transfer, in
immediately available funds, to an account, and in accordance with a reasonable
procedure, to be specified in writing by Microsoft.
6.4 Audit. Licensee shall keep all usual and proper records related to its
performance (and any subcontractor's performance) under this Agreement,
including support for any cost borne by or income due to Microsoft, for a
minimum period of three (3) years from the date they are created. Such records,
books of account, and entries shall be kept in accordance with generally
accepted accounting principles. 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 subcontractor's) offices. Any such audit shall be paid for by
Microsoft unless material discrepancies are disclosed. "Material" shall mean
five percent (5%) of the royalties due to Microsoft within the audit period. If
material discrepancies are disclosed, Licensee agrees to pay Microsoft for the
costs associated with the audit, as well as reimburse Microsoft for all over-
charged amounts, plus interest at a rate of 12% per annum.
6.5 Taxes.
6.5.1 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.
6.5.2 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 on the XDKs 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.
11
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 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.
6.5.3 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.
6.5.4 This tax Section 6.5 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.
7. NON-DISCLOSURE; ANNOUNCEMENTS
7.1 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 between the parties attached hereto and incorporated herein
by reference as Exhibit D.
7.2 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 7.2 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 Art & Marketing Materials.
7.3 Required Public Filings. Notwithstanding Sections 7.1 and 7.2, 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, and/or
Microsoft will prepare a redacted version of this Agreement for filing.
8. TERM AND TERMINATION
8.1 Term. The term of this Agreement shall commence on the Effective Date
and unless terminated earlier as provided herein, shall continue until three (3)
years after Commercial Release of Xbox.
8.2 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
12
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 Section 3 or
7.1 above, or an XDK License, then the non-defaulting party may terminate this
Agreement immediately upon written notice, without being obligated to provide a
fifteen-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.
8.3 Termination for Creative Reasons. In the event that Microsoft
determines, at any time prior to the Commercial Release of a Software Title,
that such Software Title does not comply with the requirements set forth in the
Xbox Guide, then Microsoft will have the right to terminate this Agreement,
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 Section 2 above.
8.4 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 otherwise acquired in relation to this
Agreement and shall promptly return any and all copies of the Licensed
Trademarks. Licensee shall have a period of six (6) months 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 immediately
shall destroy all Finished Product Units then in its possession or under its
control. 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. 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.
8.5 Survival. The following provisions shall survive termination of this
Agreement: 1, 3.6, 5.1, 5.3, 5.4, 6, 7, 8.4, 8.5, 9, 10, 11 and 12.
9. WARRANTIES
9.1 Licensee. Licensee warrants and represents that:
9.1.1 It has the full power to enter into this Agreement;
9.1.2 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
9.1.3 The Software Title, Finished Product Units, Art & Marketing
Materials (excluding those portions that consist of the Licensed Material,
Licensed Trademarks, 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.
9.2 Microsoft. Microsoft warrants and represents that:
9.2.1 It has the full power to enter into this Agreement; and
9.2.2 It has not previously and will not grant any rights to any third
party that are inconsistent with the rights granted to Licensee herein.
13
9.3 DISCLAIMER. EXCEPT AS EXPRESSLY STATED IN THIS SECTION 9, 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.
9.4 LIMITATION OF LIABILITY. THE MAXIMUM LIABILTY OF MICROSOFT TO LICENSEE
OR ANY THIRD PARTY ARISING OUT OF THIS AGREEMENT SHALL BE THE TOTAL AMOUNTS
RECEIVED BY MICROSOFT HEREUNDER. 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.
10. INDEMNITY
10.1 Indemnification. A claim for which indemnity may be sought hereunder
shall be referred to as a "Claim."
10.1.1 Mutual Indemnification. 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 9.
10.1.2 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 Certification Requirements, or arising out of
Licensee's use of the Licensed Trademarks in breach of this Agreement.
10.2 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.
10.3 Insurance. Prior to distribution of any Software Title, Licensee at
its sole cost and expense shall have endorsed Microsoft as an additional insured
on Licensee's media perils errors and omissions liability policy for claims
arising in connection with production, development and distribution of each
Software Title in an amount no less than $2,000,000 on a per occurrence or per
incident basis. Coverage provided to Microsoft under the policy shall be
primary to and not contributory with any insurance maintained by Microsoft.
Upon request, Licensee agrees to furnish copies of the additional insured
endorsement and/or a certificate of insurance evidencing compliance with this
requirement.
14
11. PROTECTION OF PROPRIETARY RIGHTS
11.1 Microsoft Intellectual Property. In the event Licensee learns of any
infringement or imitation of the Licensed Trademarks, or Microsoft's proprietary
rights in or related to the Software Title or the Finished Product Units, 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.
11.2 Licensee Intellectual Property. Licensee, without the express
written permission of Microsoft, may bring any action or proceeding relating to
any infringement of its own proprietary rights in or relating to the Software
Title or the Finished Product Units (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.
Licensee agrees to use all commercially reasonable efforts to protect and
enforce its proprietary rights in the Software Title.
11.3 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 11.1 and 11.2 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.
12. GENERAL
12.1 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, but excluding the
prevailing party's in-house counsel costs and expenses. This choice of
jurisdiction provision does not prevent Microsoft from seeking injunctive relief
with respect to a violation of intellectual property rights or confidentiality
obligations in any appropriate jurisdiction.
12.2 Notices; Requests. All notices and requests in connection with this
Agreement shall be deemed given as of the day they are (i) received in the U.S.
mails, postage prepaid, certified or registered, return receipt requested; or
(ii) sent by overnight courier, charges prepaid, with a confirming fax; and
addressed as follows:
15
Licensee: Interplay Entertainment Corp.
-----------------------------
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------
Attention: Chief Executive Officer
-----------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
--------------
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
--------------
Microsoft: MICROSOFT CORPORATION
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Xbox Business Development
with a cc to: MICROSOFT CORPORATION
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Law & Corporate Affairs Department
Product Development & Marketing
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the party to receive the notice or request so
designates by written notice to the other.
12.3 Assignment. Licensee may not assign this Agreement or any portion
thereof, to any third party unless Microsoft expressly consents to such
assignment in writing. Notwithstanding the foregoing, Licensee may assign this
Agreement to a third party without obtaining the written consent of Microsoft if
such third party acquires substantially all of the stock or assets of Licensee.
In such event, Licensee agrees to provide Microsoft with advance written notice
of any bone fide proposed assignments of this Agreement. Microsoft will have
the right to assign this Agreement and/or any portion thereof as Microsoft may
deem appropriate. 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.
12.4 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.
12.5 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.
12.6 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 nonbreaching
party, and in such event the nonbreaching party shall be entitled to appropriate
injunctive relief, without the necessity of posting bond or other security.
16
12.7 Entire Agreement; Modification; No Offer. The parties hereto agree
that this Agreement (including all Exhibits hereto, and the Microsoft Non-
Disclosure Agreement to the extent incorporated herein) and the Xbox Guide (as
applicable from time to time) 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 CORPORATION Interplay Entertainment Corp.
/s/ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
____________________________________ ____________________________________
By (sign) By (sign)
▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
____________________________________ ____________________________________
Name (Print) Name (Print)
General Manager Chief Executive Officer
____________________________________ ____________________________________
Title Title
10/26/00 October 16, 2000
____________________________________ ____________________________________
Date Date
17
EXHIBIT A-1
DESCRIPTION OF SOFTWARE TITLE
18
EXHIBIT B
LICENSED TRADEMARKS
[insert Xbox design here]
19
EXHIBIT C
BRANDING SPECIFICATIONS
The following guidelines apply whenever Licensee places a copy of any Licensed
Trademark on the Software Title, or related collateral materials.
. Licensee may use the Licensed Trademarks solely on the retail box,
documentation, and Art & Marketing Materials for the Software Title,
and in no other manner.
. Licensee's name, logo, or trademark must appear on any materials where
the Licensed Trademarks are used, and must be larger and more prominent
than the Licensed Trademarks.
. The Licensed Trademarks may not be used in any manner that expresses or
might imply Microsoft's affiliation, sponsorship, endorsement,
certification, or approval, other than as contemplated by this
Agreement.
. The Licensed Trademarks may not be included in any non-Microsoft trade
name, business name, domain name, product or service name, logo, trade
dress, design, slogan, or other trademark.
. Licensee may use the Licensed Trademarks only as provided by Microsoft
electronically or in hard copy form. Except for size subject to the
restrictions herein, the Licensed Trademarks may not be altered in any
manner, including proportions, colors, elements, etc., or animated,
morphed, or otherwise distorted in perspective or dimensional
appearance.
. The Licensed Trademarks may not be combined with any other symbols,
including words, logos, icons, graphics, photos, slogans, numbers, or
other design elements.
. The Licensed Trademarks (including but not limited to Microsoft's logos,
logotypes, trade dress, and other elements of product packaging and web
sites) may not be imitated.
. The Licensed Trademarks may not be used as a design feature in any
materials.
. The Licensed Trademarks must stand alone. A minimum amount of empty
space must surround the Licensed Trademarks separating it from any other
object, such as type, photography, borders, edges, and so on. The
required area of empty space around the Licensed Trademarks must be
1/2x, where x equals the height of the Licensed Trademarks.
. Each use of the Licensed Trademarks must include the notice: "Xbox is a
trademark of Microsoft Corporation in the United States and/or other
countries and is used under license from Microsoft".
Additional guidelines for proper use of the "Xbox" word ▇▇▇▇:
. Use the trademark symbol ("(TM)") at the upper right corner or baseline
immediately following the name "Xbox". This symbol should be used at the
first or most prominent mention. Please be sure to spell Xbox as one
word, with no hyphen and with no space between "X" and "box".
. Include the following notice on materials referencing Xbox:
"Xbox is a trademark of Microsoft Corporation."
. Trademarks identify a company's goods or services. Xbox is not a generic
thing, but rather a brand of game system from Microsoft. A trademark is
a proper adjective that modifies the generic name or descriptor of a
product or service. The descriptor for Xbox is "game system," i.e.,
"Xbox(TM) game system." Use the descriptor immediately after mention of
"Xbox". You should not combine the Xbox trademark with an improper
generic name or descriptor. For example, game programs designed to run
on the Xbox game system are not "Xbox games," but rather "games for the
---
Xbox system" or "Xbox certified games."
. The Xbox trademark may never be abbreviated. Do not use "X" by
itself to represent "Xbox."
20
EXHIBIT D
NON-DISCLOSURE AGREEMENT
21
SUPPLEMENTAL AGREEMENT
TO THE
MICROSOFT CORPORATION XBOX(TM) PUBLISHER LICENSE AGREEMENT
This Supplemental Agreement ("Agreement") is entered into on this 27th day of
March 2001 (the "Effective Date") by and between Microsoft Corporation
("Microsoft") and Interplay Entertainment Corp. ("Licensee") and supplements
that certain Xbox(TM) Publisher License Agreement dated October 12, 2000 (the
"Publisher Agreement").
Microsoft and Licensee hereby supplement the Publisher Agreement as follows:
1. Definitions; Interpretation.
---------------------------
1.1 Except as expressly provided otherwise in this Supplemental Agreement
("Agreement"), capitalized terms shall have the same meanings ascribed to them
in the Publisher Agreement.
1.2 "Products" shall mean the following Software Titles, as further
described in Exhibit ▇-▇▇, ▇-▇▇, ▇-▇▇, and A-n4 to the Publisher Agreement
(currently anticipated to be those Software Titles currently known as Giants,
Sacrifice, Hunter and Galleon), or such other substitute Software Titles as the
parties may mutually agree at any time.
1.3 "Matrix" shall be the Software Title known as the Matrix, and based on
the motion picture known as "The Matrix" (and/or sequels thereto) and as further
described in Exhibit A-n to the Publisher Agreement.
1.4 If and to the extent that anything contained in this Agreement is
inconsistent with the Publisher Agreement, the terms of this Agreement shall be
deemed to govern.
2. Advance. On or before March 27, 2001, Microsoft shall pay Interplay an
-------
advance payment (the "Advance") in the amount of Five Million Dollars
(US$5,000,000). Microsoft shall recoup the advance in the manner described
below.
3. Recoupment. Licensee shall make payments ("Recoupment Payments") to
----------
Microsoft in the time and manner set forth below in this Section 3.
3.1 Licensee shall pay Microsoft One Million Dollars ($1,000,000) out of
the proceeds from each of the Products, payable in quarterly increments equal to
Twenty Dollars ($20.00) per Finished Product Unit of the Product sold by
Licensee in the Territory (as such term is defined in the Publisher Agreement)
encompassing the US and Canada (the "NA Territory") during the applicable
Statement Period (as defined below). For the purposes of this Agreement, the
number of Finished Product Units sold shall be calculated as the gross number of
Finished Product Units distributed less the number of Finished Product Units
returned.
3.2 Licensee shall pay Microsoft $1,000,000 out of the proceeds from
Matrix ("Matrix"), payable in quarterly increments equal to $20.00 per Finished
Product Unit of Matrix sold in the NA Territory during the applicable Statement
Period. However, if after Licensee pays $1,000,000 out of the proceeds from
Matrix, the aggregate Recoupment Payments received by
1
Microsoft is less than $5,000,000, Licensee shall continue to pay $20.00 per
Finished Product Unit of Matrix sold by Licensee worldwide calculated
retroactively to the first Finished Product Unit sold until Microsoft shall have
received an amount equal to $5,000,000.
3.3 If, as of June 30, 2003, Microsoft has not received an aggregate
total of $5,000,000 in Recoupment Payments, Licensee shall pay by July 15, 2003
the difference between $5,000,000 and the Recoupment Payments actually received
by Microsoft as of such date, plus accrued interest at the prime lending rate
plus one percent (1%), calculated as if the $5,000,000 had been due as of the
Effective Date of this Agreement.
3.4 If any of the following events occur prior to June 30, 2003, Licensee
shall pay the difference between $5,000,000 and the Recoupment Payments then
actually received by Microsoft plus accrued interest at the prime lending rate
plus one percent (1%), calculated as if the $5,000,000 had been due as of the
Effective Date of this Agreement: (a) Licensee ceases development of Matrix at
any time; (b) Matrix fails for any reason to be approved for publication and
distribution pursuant to the Publisher Agreement (provided that Microsoft's
approval or non-approval thereof shall be made in good faith); (c) Licensee
fails to Commercially Release Matrix in the NA Territory within three months
following the commercial theater release of the motion picture tentatively
titled "Matrix 2" or Licensee Commercially Releases Matrix later than the
Playstation 2 version thereof; or (d) if, at any stage in the Matrix development
process (but in no event earlier than June 1, 2002) Microsoft, in its reasonable
judgment, determines that any of the events as described in (a), (b) or (c)
herein is likely to occur. Payment shall be made within fifteen (15) business
days following the date of any such event.
3.5 If at any time prior to the repayment of the Advance Licensee's
aggregate balance outstanding on (i) its line of credit from La Salle Business
Credit, Inc., (ii) its line of credit from ▇▇▇▇▇ Interactive S.A. ("▇▇▇▇▇), and
(iii) repayment of the Advance to Microsoft, exceeds $25,000,000 (the first
"Debt Threshold"), Licensee shall immediately notify Microsoft in writing and
pay Microsoft $1,000,000, within ten (10) business days following the occurrence
of the first Debt Threshold. Licensee shall make additional $1,000,000 payments
at each subsequent Debt Threshold, which shall occur at each $5,000,000
increment above the first Debt Threshold until such time Licensee has paid an
aggregate total of $5,000,000 in Recoupment Payments to Microsoft. All payments
hereunder shall be made within fifteen (15) business days following the date
upon which the payments are due.
3.6 Interplay agrees that it will at no time prior to Microsoft's
recoupment of the Advance be indebted to ▇▇▇▇▇ for an amount exceeding
$5,000,000, unless ▇▇▇▇▇' security interest in connection with any debt
exceeding $5,000,000 is subordinate to Microsoft's security interest as further
described in Section 6 and the Security Agreement.
3.7 If prior to the earlier of (x) June 30, 2003 and (y) the occurrence
of (i) any event described in Section 3.4 above or (ii) an Event of Default
under the Security Agreement (defined herein), Licensee has paid an aggregate
total of Five Million Dollars in Recoupment Payments, Licensee shall have no
obligation to pay Microsoft any additional Recoupment Payments.
3.8 Payment Process. Licensee shall deliver to Microsoft true and
---------------
accurate statements ("Statements") of Finished Product Units of each Product and
Matrix distributed in each calendar quarter (each quarter, a "Statement Period")
within thirty days following the end of each respective Statement Period, along
with the payment due for such calendar quarter. Each Statement shall
2
be a statement of Licensee's accounts and activities with respect to the
distribution of the Product for the corresponding Statement period, setting
forth information necessary for the calculation of the Recoupment Payments
payable for that Statement period, including, without limitation, Finished
Product Unit prices and units sold, gross receipts and returns. Payment shall be
made by wire transfer, in immediately available funds, to an account and in
accordance with a reasonable procedure, to be specified in writing by Microsoft.
Licensee shall keep all usual and proper records related to its performance
under this Agreement for a minimum period of three (3) years from the date they
are created, and Microsoft shall have the right to audit such records as set
forth in Section 6.4 of the Publisher Agreement. Payments pursuant to this
Agreement shall be in addition to any and all other payment obligations set
forth in the Publisher Agreement. Except as otherwise set forth herein, payments
set forth in this Section 3 shall be in accordance with Sections 6.4 and 6.5 of
the Publisher Agreement. Notwithstanding anything to the contrary in this
Agreement or the Publisher Agreement, all payments pursuant to this Section 3
shall be in U.S. dollars.
4. Supplemental Royalties.
----------------------
4.1 In addition to any and all other royalties payable by Licensee to
Microsoft pursuant to Section 6 of the Publisher Agreement, Licensee shall pay
to Microsoft a supplemental royalty in the amount of $2.00 for each Finished
Product Unit of Matrix distributed by Interplay in the NA Territory and the
Territory encompassing Europe (the "Europe Territory"); provided this payment
obligation shall only commence, if at all, upon manufacture of the 750,001st
Finished Product Unit, and shall continue until the 1,250,000th Finished Product
Unit is manufactured (i.e., until such time as Microsoft has received a total of
$1,000,000 in supplemental royalties).
4.2 Payment of the supplemental royalties set forth in this Section 4
shall be in accordance with Sections 6.3, 6.4 and 6.5 of the Publisher
Agreement. Notwithstanding anything to the contrary in this Agreement or the
Publisher Agreement, all payments pursuant to this Section 4 shall be in U.S.
dollars.
5. Other Licensee Obligations.
--------------------------
5.1 Product Development. Licensee shall design and develop Matrix so as
-------------------
to take advantage of the superior hardware capabilities of Xbox. Attached hereto
as Exhibit A, and incorporated herein by this reference, are specific guidelines
for differentiation of the Xbox version of Matrix as compared to other versions
of such game intended for play on game consoles other than Xbox, and the
differentiation implemented by Licensee for Matrix shall be generally consistent
with this Exhibit A, or as otherwise determined by the parties in good faith and
by mutual agreement.
5.1.1 In addition to the foregoing and other development requirements
applicable to the Product pursuant to the Publisher Agreement, Licensee agrees
that Matrix shall include online gameplay, and Licensee further agrees that it
shall spend at least Five Hundred Thousand Dollars (US$500,000) on the
development of online content, features and functionality for the Product (the
"Online Content"), which Online Content shall be determined by the parties in
good faith and by mutual agreement. Licensee shall supply documentation as
reasonably requested by Microsoft from time to time evidencing its expenditures
relating to such Online Content.
5.2 Product Release. Licensee shall Commercially Release Matrix in each
---------------
country no later than its release of the Playstation 2 version thereof in that
country, and in no event later than three months following the commercial
theater release of the "Matrix 2" motion picture in that country.
3
5.3 Exclusivity. Licensee agrees that only Matrix for Xbox, and no other
-----------
platform version thereof, including without limitation any Playstation 2 version
thereof, shall include any online gameplay capability. Licensee further agrees
that for a period of six months after the first Commercial Release of Matrix,
Licensee shall not release in any Territory any interactive entertainment
software product based on or related to Matrix and/or "The Matrix" or "Matrix 2"
motion pictures (or further sequels to or derivative works thereof) as for any
platform now known or hereafter developed, unless such product is an add-on or
sequel to Matrix for the Xbox platform and approved pursuant to the terms of the
Publisher Agreement.
5.4 Nothing in this Agreement shall alter Licensee's responsibility for
performance of its obligations under this Agreement or the Publisher Agreement
(including without limitation Licensee's indemnity obligations to Microsoft for
the Product as set forth in the Publisher Agreement), and nothing in this
Agreement shall obligate Microsoft to approve the Product for Commercial Release
or exercise any of its rights pursuant to Product Assignment.
6. Condition Precedent. Licensee agrees to grant Microsoft a general security
-------------------
interest in all of Licensee's assets. Licensee agrees to execute and deliver to
Microsoft a Security Agreement granting a lien on and security interest in such
assets dated as of even date herewith (the "Security Agreement") and
intellectual property security agreements related thereto. The Security
Agreement will contain a clause subordinating the liens granted thereunder to
LaSalle Business Credit Inc. and ▇▇▇▇▇ Interactive SA executed within thirty
(30) days of the date hereof. Licensee authorizes Microsoft to (i) file against
Licensee any documents required to perfect Microsoft's security interest, and
(ii) notify any other secured party of Licensee that has a security interest in
the same assets of Microsoft's security interest therein. Licensee agrees to
sign and deliver any documents required by the Security Agreement, which shall
be a condition precedent to the execution of this Agreement. In order to
accommodate Licensee's other lenders, Microsoft will refrain from filing
financing statements and the Intellectual Property Security Agreements until
April 5, 2001; provided, however, that upon Interplay's written consent,
Microsoft may effect such filings earlier. ORAL AGREEMENTS OR ORAL COMMITMENTS
TO LOAN MONEY, EXTEND CREDIT, MODIFY LOAN TERMS, OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
7. Warranty. In addition to warranties set forth in the Publisher Agreement,
--------
Licensee warrants and represents that it has all necessary rights in and the
Products and Matrix to agree to the terms and conditions set forth in this
Agreement, and that it has not previously granted and will not grant any rights
to any third party (including without limitation any sublicenses of any or all
of the Products' and Matrix's distribution rights and/or the right to sublicense
to further third parties) that are inconsistent with such terms.
8. Incorporation of Certain Clauses. Sections 7 and 12 of the Publisher
--------------------------------
Agreement are incorporated into this Agreement by this reference, mutatis
mutandis.
9. Effect on Other Agreements.
--------------------------
9.1 Except and to the extent expressly modified by this Agreement,
Publisher Agreement shall remain in full force and effect and are hereby
ratified and confirmed.
9.2 The breach by Licensee of any of this Agreement or the Publisher
Agreement shall constitute a breach by Licensee of each of this Agreement and
the Publisher Agreement.
4
Executed as of the later of the two signature dates below.
MICROSOFT CORPORATION INTERPLAY ENTERTAINMENT CORP.
/s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
________________________________ _________________________________
By (sign) By (sign)
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
________________________________ _________________________________
Name (Print) Name (Print)
Sr. V.P. Home & Retail Division Chief Executive Officer
________________________________ _________________________________
Title Title
3/26/01 3/26/01
________________________________ _________________________________
Date Date
5
EXHIBIT A
(1) New (extra) characters
(2) Extra gameplay (extending a movie beat)
(3) More dialog (including dialog with the Hollywood actors)
(4) More special stunt moves for in-game fighting using Woo Ping choreography.
(5) More (different) vehicles in driving section
(6) Better speech AI (more VO)
(7) More motion capture for characters emotions
(8) New weapons / Extra pyrotechnics
(9) Extra sound tracks from the Hollywood composer
(10) More hidden video (maybe even license the original movie for the DVD?)
6
SECURITY AGREEMENT
THIS SECURITY AGREEMENT dated as of March 27, 2001, is between INTERPLAY
ENTERTAINMENT CORP., a Delaware corporation, ("Debtor") and MICROSOFT
------
CORPORATION ("Secured Party").
-------------
W I T N E S S E T H:
WHEREAS, Secured Party is extending credit to Debtor as contemplated in
that certain Supplemental Agreement dated as of even date herewith (the
"Supplemental Agreement").
----------------------
WHEREAS, to induce Secured Party to extend such credit, Debtor has agreed
to pledge and grant a security interest in the Collateral (as hereinafter
defined) as security for the Liabilities (as hereinafter defined);
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used herein without definition
-----------
and defined in the Supplemental Agreement are used herein as defined therein.
In addition, as used herein:
"Accounts" means any "account," as such term is defined in the Uniform
--------
Commercial Code, and, in any event, shall include, without limitation,
"health-care-insurance receivables," as such term is defined in Revised
Article 9.
"Chattel Paper" means any "chattel paper," as such term is defined in
-------------
the Uniform Commercial Code, including but not limited to Electronic
Chattel Paper.
"Collateral" shall have the meaning ascribed thereto in Section 3
----------
hereof.
"Contracts" means all contracts, undertakings, or other agreements
---------
(other than rights evidenced by Chattel Paper, Documents or Instruments) in
or under which Debtor may now or hereafter have any right, title or
interest, including, without limitation, with respect to an Account, any
agreement relating to the terms of payment or the terms of performance
thereof.
"Copyrights" means any copyrights, rights and interests in copyrights,
----------
works protectable by copyrights, copyright registrations and copyright
applications, including, without limitation, the copyright registrations
and applications listed on Schedule III attached hereto, and all renewals
------------
of any of the foregoing, all income, royalties, damages and payments now
and hereafter due and/or payable under or with respect to any of the
foregoing, including, without limitation, damages and payments for past,
present and future infringements of any of the foregoing and the right to
▇▇▇ for past, present and future infringements of any of the foregoing.
"Documents" means any "documents," as such term is defined in the
---------
Uniform Commercial Code.
"Equipment" means any "equipment," as such term is defined in the
---------
Uniform Commercial Code.
"Event of Default" means any one or more of the following::
----------------
(a) default in the payment when due (whether by lapse of time,
acceleration or otherwise) of any amount under the Supplemental Agreement
or other obligation payable by Debtor hereunder or under any other Related
Document; or
(b) default in the observance or performance of any other provision
hereof or of any other Related Document which is not remedied within ten
(10) days after written notice thereof to Debtor by Secured Party; or
(c) any representation or warranty made by Debtor herein or in any
other Related Document proves untrue in any material respect; or
(d) any event occurs or condition exists (other than those described
in clauses (a) through (c) above) which is specified as an event of default
under any of the other Related Documents, or any of the Related Documents
shall for any reason not be or shall cease to be in full force and effect,
or any of the Related Documents is declared to be null and void, or this
Agreement shall for any reason fail to create a valid and perfected lien in
favor of Secured Party in any Collateral purported to be covered thereby
except as expressly permitted by the terms hereof; or
(e) default shall occur under any evidence of indebtedness for
borrowed money issued, assumed, or guaranteed by Debtor or under any
indenture, agreement or other instrument under which the same may be
issued, and such default shall continue for a period of time sufficient to
permit the acceleration of the maturity of any such indebtedness for
borrowed money (whether or not such maturity is in fact accelerated) or any
such indebtedness for borrowed money shall not be paid when due (whether
by lapse of time, acceleration or otherwise); or
(f) Debtor shall (i) have entered involuntarily against it an order
for relief under the United States Bankruptcy Code, as amended, (ii) not
pay, or admit in writing its inability to pay, its debts generally as they
become due, (iii) make an assignment for the benefit of creditors, (iv)
apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for
it or any substantial part of its Property, (v) institute any proceeding
seeking to have entered against it an order for relief under the United
States Bankruptcy Code as amended, to adjudicate it insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to
file an answer or other pleading denying the material allegations of any
such proceeding filed against it, or (vi) fail to contest in good faith any
appointment or proceeding described in clause (g) below; or
(g) a custodian, receiver, trustee, examiner, liquidator or similar
official shall be appointed for Debtor or any substantial part of any of
its Property, or a proceeding described in clause (f)(v) above shall be
instituted against Debtor, and such appointment continues undischarged or
such proceeding continues undismissed or unstayed for a period of forty-
five (45) days.
2
"Fixtures" means all of the following now owned or hereafter acquired
--------
by Debtor: plant fixtures; business fixtures; other fixtures and storage
facilities, wherever located; and all additions and accessions thereto and
replacements therefor.
"General Intangibles" means any "general intangibles," as such term is
-------------------
defined in the Uniform Commercial Code, and, in any event, shall include,
without limitation, all right, title and interest in or under any Contract,
models, drawings, materials and records, claims, literary rights, goodwill,
rights of performance, Copyrights, Trademarks, Patents, warranties, rights
under insurance policies and rights of indemnification, and shall also
include Payment Intangibles.
"Goods" means any "goods", as such term is defined in the Uniform
-----
Commercial Code.
"Instruments" means any "instrument," as such term is defined in the
-----------
Uniform Commercial Code, and shall include, without limitation, promissory
notes, drafts, bills of exchange, trade acceptances, letters of credit, and
Chattel Paper.
"Inventory" means any "inventory," as such term is defined in the
---------
Uniform Commercial Code, and, in any event, shall include, without
limitation, all Inventory as defined in the Supplemental Agreement.
"Investment Property" means any "investment property," as such term is
-------------------
defined in the Uniform Commercial Code.
"Liabilities" shall mean all obligations and liabilities of Debtor
-----------
under or in respect of the Supplemental Agreement, this Agreement and the
other Related Documents, together with all indebtedness, obligations and
liabilities of Debtor to Secured Party from time to time.
"Patents" means any patents and patent applications, including,
-------
without limitation, the inventions and improvements described and claimed
therein, all patentable inventions and those patents and patent
applications listed on Schedule IV attached hereto, and the reissues,
-----------
divisions, continuations, renewals, extensions and continuations-in-part of
any of the foregoing, and all income, royalties, damages and payments now
or hereafter due and/or payable under or with respect to any of the
foregoing, including, without limitation, damages and payments for past,
present and future infringements of any of the foregoing and the right to
▇▇▇ for past, present and future infringements of any of the foregoing.
"Payment Intangibles" means any "payment intangibles," as such term is
-------------------
defined in Revised Article 9.
"Permitted Liens" means those liens and encumbrances described on
---------------
Schedule VII attached hereto.
------------
"Person" means any natural person, corporation, partnership, trust,
------
limited liability company, association, governmental authority or unit, or
any other entity, whether acting in an individual, fiduciary or other
capacity.
3
"Proceeds" means "proceeds," as such term is defined in the Uniform
--------
Commercial Code and, in any event, includes, without limitation, (a) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable
with respect to any of the Collateral, (b) any and all payments (in any
form whatsoever) made or due and payable from time to time in connection
with any requisition, confiscation, condemnation, seizure or forfeiture of
all or any part of the Collateral by any governmental body, authority,
bureau or agency (or any person acting under color of governmental
authority), and (c) any and all other amounts from time to time paid or
payable under, in respect of or in connection with any of the Collateral.
"Related Documents" means the Publisher Agreement and all documents
-----------------
executed by Debtor in connection therewith.
"Representative" means any Person acting as agent, representative or
--------------
trustee on behalf of Secured Party from time to time.
"Trademarks" means any trademarks, trade names, corporate names,
----------
company names, business names, fictitious business names, trade styles,
service marks, logos, other business identifiers, prints and labels on
which any of the foregoing have appeared or appear, all registrations and
recordings thereof, and all applications in connection therewith,
including, without limitation, the trademarks and applications listed in
Schedule V attached hereto and renewals thereof, and all income, royalties,
----------
damages and payments now or hereafter due and/or payable under or with
respect to any of the foregoing, including, without limitation, damages and
payments for past, present and future infringements of any of the foregoing
and the right to ▇▇▇ for past, present and future infringements of any of
the foregoing.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
-----------------------
effect from time to time in the State of Washington.
Section 2. Representations, Warranties and Covenants of Debtor. Debtor
---------------------------------------------------
represents and warrants to, and covenants with, Secured Party as follows:
(a) Debtor is the owner of the Collateral in which it purports to
grant a security interest pursuant to Section 3 hereof (subject, with
respect to after acquired Collateral, to Debtor acquiring the same) and no
lien other than Permitted Liens exists or will exist upon such Collateral
at any time;
(b) all of the Equipment, Inventory and Goods owned by Debtor is
located at the places as specified on Schedule I attached hereto. Except
----------
as disclosed on Schedule I, none of the Collateral is in the possession of
----------
any bailee, warehousemen, processor or consignee. The chief place of
business, chief executive office and the office where Debtor keeps its
books and records are located at the place as specified on Schedule I.
----------
Debtor (including any Person acquired by Debtor) does not do business and
has not done business during the past five (5) years under any trade name
or fictitious business name except as disclosed on Schedule II attached
-----------
hereto;
(c) no Copyrights, Patents or Trademarks listed on Schedules III, IV
-----------------
and V, respectively, if any, have been adjudged invalid or enforceable or
-----
have been canceled, in whole or in part, or are not presently subsisting.
Each of such Copyrights, Patents and Trademarks is valid and enforceable.
Debtor is the sole and exclusive owner of the entire and unencumbered
right, title and
4
interest in and to each of such Copyrights, Patents and Trademarks,
identified on Schedules III, IV and V, as applicable, as being owned by
-----------------------
Debtor, free and clear of any liens, charges and encumbrances, including
without limitation licenses, shop rights and covenants by Debtor not to ▇▇▇
third persons. Debtor has adopted, used and is currently using, or has a
current bona fide intention to use, all of such Trademarks and Copyrights.
Debtor has no notice of any suits or actions commenced or threatened with
reference to the Copyrights, Patents or Trademarks owned by it.
(d) Debtor agrees to deliver to Secured Party an updated Schedule I,
-----------
II, III, IV, V and/or VII within five (5) days of any change thereto.
-------------------------
(e) Debtor's Federal Employer Identification Number is listed below
its signature on the signature pages hereto.
Section 3. Collateral. As collateral security for the prompt payment in
----------
full when due (whether at stated maturity, by acceleration or otherwise) of the
Liabilities, Debtor hereby pledges and grants to Secured Party, a lien on and
security interest in and to all of Debtor's right, title and interest in the
following property and interests in property, whether now owned by Debtor or
hereafter acquired and whether now existing or hereafter coming into existence
and wherever located (all being collectively referred to herein as
"Collateral"):
----------
(a) the Instruments of Debtor, together with all payments thereon or
thereunder;
(b) all Accounts;
(c) all Inventory;
(d) all General Intangibles;
(e) all Equipment;
(f) all Documents;
(g) all Contracts;
(h) all Goods;
(i) all Investment Property;
(j) all Fixtures; and
(k) all other tangible and intangible property of Debtor, including,
without limitation, all Proceeds, products, accessions, rents, profits,
income, benefits, substitutions, additions and replacements of and to any
of the property of Debtor described in the preceding clauses of this
Section 3 (including, without limitation, any proceeds of insurance thereon
and all rights, claims and benefits against any Person relating thereto).
Debtor and Secured Party acknowledge that revised Article 9 of the UCC, in
the form or substantially in the form approved in 1998 by the American Law
Institute and the National Conference of Commissioners on Uniform State Law
("Revised Article 9"), has been adopted in the State of Washington. Grantor and
Secured Party hereby agree that upon the effective date in Washington of Revised
Article 9 to the transactions contemplated hereby, all references in this
Agreement to sections of the UCC shall be deemed to refer to the equivalent
corresponding sections of Revised Article 9.
Section 4. Covenants; Remedies. In furtherance of the grant of the pledge
-------------------
and security interest pursuant to Section 3 hereof, Debtor hereby agrees with
Secured Party as follows:
4.1. Delivery and Other Perfection; Maintenance, etc.
-----------------------------------------------
5
(a) Other Documents and Actions. Debtor shall give, execute, deliver,
---------------------------
file and/or record any financing statement, notice, instrument, document,
agreement or other papers that may be necessary or desirable (in the
reasonable judgment of Secured Party or its Representative) to create,
preserve, perfect or validate the security interest granted pursuant hereto
or to enable Secured Party or its Representative to exercise and enforce
the rights of Secured Party hereunder with respect to such pledge and
security interest, provided that notices to account debtors in respect of
--------
any Accounts, Payment Intangibles or Instruments shall be subject to the
provisions of clause (b) below.
(b) Books and Records. Debtor shall permit any representative of
-----------------
Secured Party to inspect such books and records at any time during
reasonable business hours and will provide photocopies thereof at Debtor's
expense to Secured Party upon request of Secured Party.
(c) Notice to Account Debtor; Verification. (i) Upon the occurrence
--------------------------------------
and during the continuance of any Event of Default, upon request of Secured
Party or its Representative, Debtor shall promptly notify (and Debtor
hereby authorizes Secured Party and its Representative so to notify) each
account debtor in respect of any Accounts, Payment Intangibles or
Instruments that such Collateral has been assigned to Secured Party
hereunder, and that any payments due or to become due in respect of such
Collateral are to be made directly to Secured Party, and (ii) Secured Party
and its Representative shall have the right at any time or times to make
direct verification with the account debtors of any and all of the Accounts
and Payment Intangibles.
(d) Intellectual Property. Debtor represents and warrants that the
---------------------
Copyrights, Patents and Trademarks listed on Schedules III, IV and V,
-----------------------
respectively, constitute all of the registered Copyrights and all of the
Patents and Trademarks now owned by Debtor. If Debtor shall (i) obtain
rights to any new patentable inventions, any registered Copyrights or any
Patents or Trademarks, or (ii) become entitled to the benefit of any
registered Copyrights or any Patents or Trademarks or any improvement on
any Patent, the provisions of this Agreement above shall automatically
apply thereto and Debtor shall give to Secured Party prompt written notice
thereof. Debtor hereby authorizes Secured Party to modify this Agreement
by amending Schedules III, IV and V, as applicable, to include any such
-----------------------
registered Copyrights or any such Patents and Trademarks.
(e) Compliance with Related Documents. Debtor shall comply with the
---------------------------------
provisions of the Related Documents applicable thereto.
4.2 Other Liens. Debtor will not create, permit or suffer to exist, and
-----------
will defend the Collateral against and take such other action as is necessary to
remove, any lien or other encumbrance on the Collateral except Permitted Liens,
and will defend the right, title and interest of Secured Party in and to the
Collateral and in and to all Proceeds thereof against the claims and demands of
all Persons whatsoever.
4.3 Preservation of Rights. Whether or not any Event of Default has
----------------------
occurred or is continuing, Secured Party and its Representative may, but shall
not be required to, take any steps Secured Party or its Representative deems
necessary or appropriate to preserve any Collateral or any rights against third
parties to any of the Collateral, including obtaining insurance of Collateral at
any time when Debtor has failed to do so, and Debtor shall promptly pay, or
reimburse Secured Party for, all expenses incurred in connection therewith.
4.4 Name Change; Location; Bailees.
------------------------------
6
(a) Debtor will notify Secured Party promptly in writing prior to any
change in Debtor's name, identity or corporate structure, or the proposed
use by Debtor of any tradename or fictitious business name other than any
such name set forth on Schedule II attached hereto.
-----------
(b) Except for the sale of Inventory in the ordinary course of
business, Debtor will keep the Collateral at the locations specified in
Schedule I applicable to Debtor. Debtor will give Secured Party thirty (30)
----------
day's prior written notice of any change in Debtor's chief place of
business, state of organization or of any new location for any of the
Collateral.
(c) If any Collateral is at any time in the possession or control of
any warehousemen, bailee, consignee or processor, Debtor shall, upon the
request of Secured Party or its Representative, notify such warehousemen,
bailee, consignee or processor of the lien and security interest created
hereby and shall instruct such Person to hold all such Collateral for
Secured Party's account subject to Secured Party's instructions.
4.5 Events of Default, Etc. During the period during which an Event of
----------------------
Default shall have occurred and be continuing:
(a) Debtor shall, at the request of Secured Party or its
Representative, assemble the Collateral at such place or places as may be
reasonably designated by Secured Party or its Representative;
(b) Secured Party or its Representative may make any reasonable
compromise or settlement deemed desirable with respect to any of the
Collateral and may extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, any of the Collateral;
(c) Secured Party shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform Commercial
Code (whether or not said Uniform Commercial Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled under
the laws in effect in any jurisdiction where any rights and remedies
hereunder may be asserted, including, without limitation, the right, to the
maximum extent permitted by law, to exercise all voting, consensual and
other powers of ownership pertaining to the Collateral as if Secured Party
were the sole and absolute owner thereof (and Debtor agrees to take all
such action as may be appropriate to give effect to such right);
(d) Secured Party or its Representative in their discretion may, in
the name of Secured Party or in the name of Debtor or otherwise, demand,
▇▇▇ for, collect or receive any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral, but
shall be under no obligation to do so;
(e) Secured Party or its Representative may take immediate possession
and occupancy of any premises owned, used or leased by Debtor and exercise
all other rights and remedies of an assignee which may be available to
Secured Party; and
7
(f) Secured Party may, upon ten (10) business days' prior written
notice to Debtor of the time and place (which notice Debtor hereby agrees
is commercially reasonable notification for purposes hereof), with respect
to the Collateral or any part thereof which shall then be or shall
thereafter come into the possession, custody or control of Secured Party or
its Representative, sell, lease, assign or otherwise dispose of all or any
part of such Collateral, at such place or places as Secured Party deems
best, and for cash or for credit or for future delivery (without thereby
assuming any credit risk), at public or private sale, without demand of
performance or notice of intention to effect any such disposition or of the
time or place thereof (except such notice as is required above or by
applicable statute and cannot be waived), and Secured Party or anyone else
may be the purchaser, lessee, assignee or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the extent permitted
by law, at any private sale) and thereafter hold the same absolutely, free
from any claim or right of whatsoever kind, including any right or equity
of redemption (statutory or otherwise), of Debtor, any such demand, notice
and right or equity being hereby expressly waived and released. Secured
Party may, without notice or publication, adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at
the time and place fixed for the sale, and such sale may be made at any
time or place to which the sale may be so adjourned.
The proceeds of each collection, sale or other disposition under this Section
4.6 shall be applied in accordance with Section 4.9 hereof.
4.6 Deficiency. If the proceeds of sale, collection or other realization
----------
of or upon the Collateral are insufficient to cover the costs and expenses of
such realization and the payment in full of the Liabilities, Debtor shall remain
liable for any deficiency.
4.7 Application of Proceeds. The proceeds of any collection, sale or
-----------------------
other realization of all or any part of the Collateral, and any other cash at
the time held by Secured Party under this Agreement, shall be applied:
first, to payment of all expenses payable or reimbursable under this
-----
Agreement and the other Related Documents executed by Debtor;
second, to payment of all accrued unpaid interest on the Liabilities;
------
third, to payment of principal of the Liabilities;
-----
fourth, to payment of any other amounts owing constituting
------
Liabilities; and
last, any remainder shall be for the account of and paid to Debtor.
----
4.8 Attorney-in-Fact. Debtor hereby irrevocably constitutes and appoints
----------------
Secured Party, with full power of substitution, as its true and lawful attorney-
in-fact with full irrevocable power and authority in the place and stead of
Debtor and in the name of Debtor or in its own name, from time to time in the
discretion of Secured Party, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute and deliver any
and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement and, without limiting the generality
of the foregoing, hereby gives Secured Party the power and right, on behalf of
Debtor, without notice to or assent by Debtor, to do the following upon the
occurrence and during the continuation of any Event of Default:
8
(a) to ask, demand, collect, receive and give acquittance and receipts
for any and all moneys due and to become due under any Collateral and, in
the name of Debtor or its own name or otherwise, to take possession of and
endorse and collect any checks, drafts, notes, acceptances or other
Instruments for the payment of moneys due under any Collateral and to file
any claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by Secured Party for the purpose of
collecting any and all such moneys due under any Collateral whenever
payable and to file any claim or to take any other action or proceeding in
any court of law or equity or otherwise deemed appropriate by Secured Party
for the purpose of collecting any and all such moneys due under any
Collateral whenever payable;
(b) to pay or discharge charges or liens levied or placed on or
threatened against the Collateral other than the Permitted Liens, to effect
any insurance called for by the terms of this Agreement and to pay all or
any part of the premiums therefor;
(c) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due, and to become due
thereunder, directly to Secured Party or as Secured Party shall direct, and
to receive payment of and receipt for any and all moneys, claims and other
amounts due, and to become due at any time, in respect of or arising out of
any Collateral;
(d) to sign and indorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with accounts and
other documents constituting or relating to the Collateral;
(e) to commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the
Collateral or any part thereof and to enforce any other right in respect of
any Collateral;
(f) to defend any suit, action or proceeding brought against Debtor
with respect to any Collateral;
(g) to settle, compromise or adjust any suit, action or proceeding
described above and, in connection therewith, to give such discharges or
releases as Secured Party may deem appropriate; and
(h) generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though Secured Party were the absolute owners thereof for all
purposes, and to do, at Secured Party's option and at Debtor's expense, at
any time, or from time to time, all acts and things which Secured Party
reasonably deems necessary to protect, preserve or realize upon the
Collateral and Secured Party's lien therein, in order to effect the intent
of this Agreement, all as fully and effectively as Debtor might do.
Debtor hereby ratifies, to the extent permitted by law, all that such
attorneys lawfully do or cause to be done by virtue hereof. The power of
attorney granted hereunder is a power coupled with an interest and shall be
irrevocable until the Liabilities are indefeasibly paid in full.
9
Debtor also authorizes Secured Party, at any time from and after the
occurrence and during the continuation of any Event of Default, (x) to
communicate in its own name with any party to any Contract with regard to the
assignment of the right, title and interest of Debtor in and under the Contracts
hereunder and other matters relating thereto and (y) to execute, in connection
with any sale of Collateral provided for in Section 4.5 hereof, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
4.9 Perfection. No earlier than April 5, 2001, Debtor shall file such
----------
financing statements, assignments for security and other documents in such
offices as may be necessary or as Secured Party or the Representative may
request to perfect the security interests granted by Section 3 of this
Agreement. Debtor hereby authorizes Secured Party to file a financing statement
describing the Collateral
4.10 Termination. This Agreement and the liens and security interests
-----------
granted hereunder shall not terminate until the complete performance and
indefeasible satisfaction of all the Liabilities, whereupon Secured Party shall
forthwith cause to be assigned, transferred and delivered, against receipt but
without any recourse, warranty or representation whatsoever, any remaining
Collateral to or on the order of Debtor.
4.11 Further Assurances. At any time and from time to time, upon the
------------------
written request of Secured Party or its Representative, and at the sole expense
of Debtor, Debtor will promptly and duly execute and deliver any and all such
further instruments, documents and agreements and take such further actions as
Secured Party or its Representative may reasonably require in order for Secured
Party to obtain the full benefits of this Agreement and of the rights and powers
herein granted in favor of Secured Party.
4.12 Limitation on Duty of Secured Party. The powers conferred on Secured
-----------------------------------
Party under this Agreement are solely to protect Secured Party's interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Secured Party shall be accountable only for amounts that it actually receives as
a result of the exercise of such powers and neither Secured Party nor its
Representative nor any of their respective officers, directors, employees or
agents shall be responsible to Debtor for any act or failure to act, except for
willful misconduct. Without limiting the foregoing, Secured Party and any
Representative shall be deemed to have exercised reasonable care in the custody
and preservation of the Collateral in their possession if such Collateral is
accorded treatment substantially equivalent to that which the relevant Secured
Party or any Representative, in its individual capacity, accords its own
property consisting of the type of Collateral involved, it being understood and
agreed that neither Secured Party nor any Representative shall have any
responsibility for taking any necessary steps (other than steps taken in
accordance with the standard of care set forth above) to preserve rights against
any person with respect to any Collateral.
Also without limiting the generality of the foregoing, neither Secured
Party nor any Representative shall have any obligation or liability under any
Contract or license by reason of or arising out of this Agreement or the
granting to Secured Party of a security interest therein or assignment thereof
or the receipt by Secured Party or any Representative of any payment relating to
any Contract or license pursuant hereto, nor shall Secured Party or any
Representative be required or obligated in any manner to perform or fulfill any
of the obligations of Debtor under or pursuant to any Contract or license, or to
make any payment, or to make any inquiry as to the nature or the sufficiency of
any payment received by it or the sufficiency of any performance by any party
under any Contract or license, or to present or file any claim, or to take any
action to collect or enforce any performance or the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
10
Section 5. Miscellaneous.
-------------
5.1 No Waiver. No failure on the part of Secured Party or any of its
---------
Representatives to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by Secured Party or any
of its Representatives of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The rights and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law.
5.2 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the internal laws and decisions of the State of Washington,
without regard to conflict of law principles thereof.
5.3 Notices. All notices, approvals, requests, demands and other
-------
communications hereunder shall be in writing and delivered by hand or by
nationally recognized overnight courier, or sent by first class mail or sent by
telecopy (with such telecopy to be confirmed promptly in writing sent by first
class mail), sent:
(a) if to Debtor, to: Interplay Entertainment Corp.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Secured Party, to: Microsoft Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Law & Corporate Affairs/Xbox
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or addresses or telecopy number or numbers as any party
hereto may most recently have designated in writing to the other party by such
notice. All such communications shall be deemed to have been given or made (i)
if delivered in person, when delivered, (ii) if delivered by telecopy, on the
date of transmission if transmitted on a business day before 4:00 p.m. Seattle
time, otherwise on the next business day, (iii) if delivered by overnight
courier, one (1) business day after delivery to the courier properly addressed
and (iv) if mailed, three (3) business days after deposited in the United States
mail, certified or registered.
5.4 Amendments, Etc. The terms of this Agreement may be waived, altered
---------------
or amended only by an instrument in writing duly executed by Debtor sought to be
charged or benefited thereby and Secured Party. Any such amendment or waiver
shall be binding upon Secured Party and Debtor sought to be charged or benefited
thereby and their respective successors and assigns.
5.5 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the respective successors and assigns of each of the
parties hereto, provided, that Debtor shall not assign or transfer its rights
--------
hereunder without the prior written consent of Secured Party.
11
5.6 Counterparts; Headings. This Agreement may be executed in any number
----------------------
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. The headings in this Agreement are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof.
5.7 Severability. If any provision hereof is invalid and unenforceable in
------------
any jurisdiction, then, to the fullest extent permitted by law, (a) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of Secured Party and its Representative in
order to carry out the intentions of the parties hereto as nearly as may be
possible and (b) the invalidity or unenforceability of any provision hereof in
any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
5.8 Other Loan Documents. This Agreement supplements the other
--------------------
Transaction Documents and nothing in this Agreement shall be deemed to limit or
supersede the rights granted to Secured Party in any other Related Document. In
the event of any conflict between this Agreement and Supplemental Agreement, the
provisions of the Supplemental Agreement shall govern.
5.9. Subordination to LaSalle Business Credit. The lien and security
----------------------------------------
interest granted under this Agreement shall be subordinate to any lien granted
to (i) LaSalle Business Credit, Inc. ("LaSalle") pursuant to any document or
agreement executed by Debtor within thirty (30) days of the date hereof
(collectively, the "LaSalle Documents") and (ii) ▇▇▇▇▇ Interactive SA ("▇▇▇▇▇")
-----------------
pursuant to the Secured Revolving Note dated April 14, 2000 and documents
ancillary thereto (collectively, the "▇▇▇▇▇ Documents"). Debtor shall be
---------------
relieved of any obligation under this Agreement relating to the control or
delivery of Collateral to the extent LaSalle or ▇▇▇▇▇ has exercised its rights
in the Collateral pursuant to the LaSalle Documents or ▇▇▇▇▇ Documents,
respectively.
12
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed and delivered as of the day and year first above written.
DEBTOR:
------
INTERPLAY ENTERTAINMENT CORP., a Delaware
corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇
Title: Director of Corporate Affairs
FEIN: ▇▇-▇▇▇▇▇▇▇
MICROSOFT CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Sr. V.P. Home & Retail Division
13
SCHEDULE I
Locations of Equipment and Inventory
Interplay Entertainment Corp. Advance Paper Box Company
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Ditan Distribution/Hayward Ditan Distribution/Indiana
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ditan Distribution/Atlanta Tech Pacific Australia PTY, Ltd.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇. 3 Millennium Court
▇▇▇▇▇▇▇ ▇▇▇▇, GA ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
Digital River Future Media Productions
▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
JVC Disc America Maxell Corporation
#2 JVC Road ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Sony Disc Manufacturing Virgin Interactive Entertainment
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇. 74A Charlotte Street
Terra Haute, IN 47804 ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Activision US and UK
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
14
SCHEDULE II
Trade or Fictitious Business Names
VR Sports
MacPlay
Digital Voodoo
Brainstorm
Tribal Dreams
Interplay Films
Tantrum
Flat Cat
Black Isle Studios
Interplay Sports
Interplay Productions
15
SCHEDULE III
Copyright Applications and Registrations
--------------------------------------------------------------------------
Work Registration No.
--------------------------------------------------------------------------
American Deer Hunter 2000 PA 965-506
--------------------------------------------------------------------------
Battle Chess TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
Caesars Palace Imperial Slots TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
Caesars Palace VIP Blackjack TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
Caesars Palace VIP Craps TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
Caesars Palace VIP Video Poker TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
Clay Fighter 63 1/3 PA 885-156
--------------------------------------------------------------------------
Conquest of the New World PA 817-439
--------------------------------------------------------------------------
Descent PA 760-299
--------------------------------------------------------------------------
Descent (Shareware) PA 760-298
--------------------------------------------------------------------------
Descent II PA 817-438
--------------------------------------------------------------------------
Descent Shareware PA 760-298
--------------------------------------------------------------------------
Die By The Sword PA 915-817
--------------------------------------------------------------------------
Fallout PA 886-144
--------------------------------------------------------------------------
Fallout 2 PA 931-744
--------------------------------------------------------------------------
Freespace 2 PA 976-087
--------------------------------------------------------------------------
Invictus PA 993-475
--------------------------------------------------------------------------
Jetfighter III PA 857-025
--------------------------------------------------------------------------
Loaded PA 840-868
--------------------------------------------------------------------------
M.A.X. PA 829-450
--------------------------------------------------------------------------
M.A.X. 2 PA 915-304
--------------------------------------------------------------------------
MDK PA 808-315
--------------------------------------------------------------------------
PlaneScape Torment TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
Poker Night with ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ PA 967-766
--------------------------------------------------------------------------
Realms of the Haunting PA 885-847
--------------------------------------------------------------------------
Redneck Rampage PA 844-404
--------------------------------------------------------------------------
ReLoaded PA 840-862
--------------------------------------------------------------------------
Renegade Racers PA ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
Shattered Steel PA 807-946
--------------------------------------------------------------------------
Star Trek: New Worlds (Interplay & Paramount) TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
Star Trek: Star Fleet Academy (Interplay & Paramount) TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
Star Trek: Starfleet Command (Interplay & Paramount) TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
Stonekeep PA 826-716
--------------------------------------------------------------------------
U.S.C.F. Chess TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
VR Baseball '97 (software only) TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
16
--------------------------------------------------------------------------
VR Baseball 2000 TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
VR Baseball '97 TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
VR Baseball '99 TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
Waterworld (software only) TX ▇-▇▇▇-▇▇▇
--------------------------------------------------------------------------
17
SCHEDULE IV
Patent Applications
"Saxs Video Object Generation Engine"
18
SCHEDULE V
Trademark Applications and Registrations
Serial No. Registration No. ▇▇▇▇
73805706 1596613 BATTLE CHESS
74126489 1737704 CASTLES
74384474 1832342 CLAY FIGHTER
74305151 1834758 ROCK N ROLL RACING
74341937 1836284 LOST VIKINGS
74350629 1836291 RAGS TO RICHES
74248644 1854242 CLAYMATES
74387623 1858703 MACPLAY
74384475 1941851 CINEMATIC MULTIMEDIA
74527218 1949638 DESCENT
74582371 ▇▇▇▇▇▇▇ STAR REACH
▇▇▇▇▇▇▇▇ 1959285 BOOGERMAN
74350642 1962181 STONEKEEP
74544431 1962436 BLACKTHORNE
74629069 1981729 POWER ▇▇▇▇
74627463 2009067 CONQUEST OF THE NEW WORLD
75975488 2021481 STONEKEEP
74514923 2026258 BAD MISTER FROSTY
74736092 2034565 WHIPLASH
75030060 2049995 THE DIFFERENCE IS REAL
74735727 2051576 CHESS MATES
75024330 2056335 MUMMY TOMB OF THE PHARAOH
75060661 2070846 SHATTERED STEEL
75098187 2070881 RELOADED
75091419 2072876 M.A.X. MECHANIZED ASSAULT & EXPLORATION
75176673 2077705 BRAIN STORM
75179798 2077709 INTERPLAY
75078519 2078130 NORMALITY
74729636 2079986 VR SPORTS
75098235 2080326 FRAGILE ALLEGIANCE
75055638 2084915 SIGNATURE SERIES
75976194 2085039 REALMS OF THE HAUNTING
75084004 2102234 REALMS OF THE HAUNTING
74618388 2103798 FRANKENSTEIN: THROUGH THE EYES OF THE MONSTER
19
75011372 2141294 LOADED
75209353 2141610 NORSE BY NORSEWEST
75133820 2145377 DRAWING DISCOVERIES
75086538 2162545 RED ASPHALT
75171840 2165169 BY GAMERS. FOR GAMERS.
75240097 2175708 TRIBAL DREAMS
75237550 2182958 CLAY FIGHTER 63 1/3
75149240 2186477 DIE BY THE SWORD
75060884 2204227 ENGAGE GAMES ONLINE
75237327 2204425 DESCENT MAXIMUM
75333285 2224808 EARTH 2140
75295950 2231196 CRIME KILLER
74628745 2232471 OF LIGHT AND DARKNESS
75078985 2239173 HARDWAR
75103875 2239195 ROLEMASTER: MAGESTORM
75103887 2239196 SPLATTERBALL
75475413 2249634 OF LIGHT AND DARKNESS THE PROPHECY
75383140 2261601 REDNECK RAMPAGE SUCKIN' GRITS ON ROUTE 66
75421395 2269851 REDNECK RAMPAGE RIDES AGAIN
75030055 2272527 VIRTUAL FIELDVISION
74535687 2279561 INTERPLAY
75390434 2314929 DESCENT: FREESPACE THE GREAT WAR
75397533 2364989 KINGPIN
75727695 2432924 FREESPACE
75397850 Pending R/C STUNT COPTER
75474398 Pending GIANTS
75532773 Pending REDNECK RAMPAGE
75605979 Pending GIANTS CITIZEN KABUTO
75708993 Pending TEAM EGO
75771631 Pending INVICTUS
75847494 Pending REDNECK
75931058 Pending GALLEON
76025037 Pending DIGITAL MAYHEM
76026377 Pending PLANESCAPE: TORMENT
76026378 Pending SEPTERRA CORE
76036459 Pending MOTOR MADNESS
78031290 Pending SUNDERING: WORLD'S END
78031292 Pending SUNDERING
78035635 Pending DYNAVERSE 2
78050716 Pending BALDUR'S GATE DARK ALLIANCE
20
SCHEDULE VI
[intentionally omitted]
21
SCHEDULE VII
Permitted Liens
Liens described in Section 5.9 of this Agreement.
22