Sublicense Agreement [Amendment No. 6] - Funimation Productions Ltd. and Atari Inc.
AMENDMENT SIX
This Amendment (the "Amendment") is entered into as of August 11th, 2003 between
FUNIMATION PRODUCTIONS, LTD., a Texas limited partnership having its registered
office at 6851 NE Loop 820, Suite 247, Forth Worth, Texas 76180 U.S.A.
("Licensor") and ATARI, Inc. (f/k/a Infogrames, Inc.), a Delaware corporation
having its principal offices at 417 Fifth Avenue, New York, NY 10016
("Licensee").
W I T N E S S E T H:
WHEREAS, Licensor and Licensee entered into a Sublicense Agreement dated
October 27, 1999, which was subsequently amended by Amendment One dated April
20, 2002, and by Amendment Two dated June 15, 2002, and by Amendment Three dated
October 15, 2002, and by Amendment Four dated November 13, 2002, and by
Amendment Five dated February 21, 2003 (the Sublicense Agreement as thereby
amended shall hereafter be referred to as the "Agreement", as in full force and
effect as of the date hereof); and
WHEREAS, both Licensee and Licensor are in agreement with respect to the
terms and conditions upon which to enter into this Amendment to amend the
Agreement;
NOW, THEREFORE, in consideration of the promises and agreements set forth
herein, the parties, each intending to be legally bound, do hereby agree as
follows:
1. Subject to the terms and conditions of this Amendment and of the Agreement,
the definition of Licensed Products (as stated in Schedule A, Paragraph 4 of the
Agreement) is hereby expanded to include the following three (3) additional
Licensed Product items based on the Property and/or the Film:
(a) Licensed Products item #13: one (1) interactive "role playing" style
game for the Nintendo Game Boy Advance platform (tentatively titled "Dragon Ball
Z: The Legacy of Goku 3");
(b) Licensed Products item #14: one (1) interactive "fighting" style game
for the Sony Playstation2 platform (titled "Dragon Ball Z: Budokai 2"); and
(c) Licensed Product item #15: one (1) interactive "fighting" style game
for the Nintendo Game Cube platform (titled "Dragon Ball Z: Budokai").
2. The Royalty Rate (as stated in Schedule A, Paragraph 8 of the Agreement) for
each Licensed Product items #13, #14, and #15 shall be:
(a) for total unit sales per any such individual Licensed Product item for
up to five hundred thousand (500,000) units of such individual Licensed Product
item, eight and one half percent (8.5%) of Net Sales, except that with regard to
any of such Licensed Product sold FOB a location outside the Licensed Territory
the Royalty Rate shall be ten and one-half percent (10.5%) of Net Sales; and
(b) for total unit sales per any such individual Licensed Product item in
excess of five hundred thousand (500,000) units of such individual Licensed
Product item, ten percent (10%) of Net Sales, except that with regard to any of
such Licensed Product sold FOB a location outside the Licensed Territory the
Royalty Rate shall be twelve percent (12%) of Net Sales.
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For the purposes of clarity, 2(b) above shall apply only to any given Licensed
Product item covered by this Amendment if sales of such individual Licensed
Product item exceed 500,000 units of that individual Licensed Product item, and
2(b) above shall not apply to sales of any other Licensed Product item covered
by this Amendment until sales of such individual Licensed Product item have
exceeded 500,000 units.
3. With respect to each Licensed Product items #13, #14 and #15, Licensee shall
pay to Licensor a non-refundable advance of two hundred thousand dollars
($200,000) payable as stated herein. The advance for each Licensed Product item
shall be recoupable against future royalties payable to Licensor for sales of
such Licensed Product item. The advance for each Licensed Product item shall be
payable as follows:
(a) For Licensed Product item #13: one hundred thousand dollars ($100,000)
upon execution of this Amendment and one hundred thousand dollars ($100,000) on
the date Licensed Product item #13 is first available for purchase by the public
or on June 29, 2004, whichever occurs, first;
(b) For Licensed Product item #14: one hundred thousand dollars ($100,000)
upon execution of this Amendment and one hundred thousand dollars ($100,000) on
the date Licensed Product item #14 is first available for purchase by the public
or on December 9, 2003, whichever occurs first; and
(c) For Licensed Product item #15: one hundred thousand dollars ($100,000)
upon execution of this Amendment and one hundred thousand dollars ($100,000) on
the date Licensed Product item #15 is first available for purchase by the public
or on October 28, 2003, whichever occurs first.
4. With respect to Licensed Product item #13, the Product Dates (as stated in
Schedule A, Paragraph 11 of the Agreement) shall be:
(a) Design Date: Concept Document
(b) Phase 1 Date: In-game artwork: 3D models, Environment maps & in-game
items.
(c) Phase 2 Date: 06/01/04 - Alpha (as defined in the Agreement.)
(d) Phase 3 Date: 06/15/04 - Beta (as defined in the Agreement.)
(e) Phase 4 Date: 6/29/04 - Gold (as defined in the Agreement.)
5. With respect to Licensed Product item #14, the Product Dates (as stated in
Schedule A, Paragraph 11 of the Agreement) shall be:
(a) Design Date: Concept Document
(b) Phase 1 Date: In-game artwork: 3D models, Environment maps & in-game
items.
(c) Phase 2 Date: 08/15/03 - Alpha (as defined in the Agreement.)
(d) Phase 3 Date: 10/15/03 - Beta (as defined in the Agreement.)
(e) Phase 4 Date: 12/09/03 - Gold (as defined in the Agreement.)
6. With respect to Licensed Product item #15, the Product Dates (as stated in
Schedule A, Paragraph 11 of the Agreement) shall be:
(a) Design Date: Concept Document.
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(b) Phase 1 Date: In-game artwork: 3D models, Environment maps & in-game
items.
(c) Phase 2 Date: 07/30/03 - Alpha (as defined in the Agreement.)
(d) Phase 3 Date: 08/06/03 - Beta (as defined in the Agreement.)
(e) Phase 4 Date: 10/28/03 - Gold (as defined in the Agreement.)
7. Licensee shall have the right to grant Prima the right to produce four (4)
additional print and online strategy guides under the terms of the Sublicense
(hereafter, "Sublicensed Product items #4, #5, #6 & #7" respectively).
(a) Sublicensed Products item #4 shall be based on Licensed Product item
#9, an interactive "fighting" style game for the Game Boy Advance platform
(titled "Dragon Ball Z: Taiketsu");
(b) Sublicensed Product item #5 shall be based on Licensed Product item
#10, an interactive role-playing game for Game Boy Advance platform
(titled "Dragon Ball Z: The Legacy of Goku II");
(c) Sublicensed Product item #6 shall be based on Licensed Product item
#14, an interactive "fighting" style game for the Sony Playstation2
platform (titled "Dragon Ball Z: Budokai 2"); and
(d) Sublicensed Product item #7 shall be based on Licensed Product item
#15, an interactive "fighting" style game for the Nintendo Game cube
platform (titled "Dragon Ball Z: Budokai").
8. The rights granted to Licensee (or to Prima, as applicable) hereunder with
respect to Sublicensed Product items #4, #5, #6 & #7 are granted under the same
terms and conditions applicable to Sublicensed Products under Amendment One,
with the exception of those terms which are inconsistent with the express terms
of this Amendment.
9. With respect to each Sublicensed Product items #4, #5, #6, and #7, Licensee
shall pay to Licensor a non-refundable advance of $40,000, for a total of
$160,000, payable within thirty (30) days of Licensee's receipt of such amount
from Prima, but in no event later than October 15, 2003. The advance for each
Sublicensed Product item shall be recoupable against future royalties payable to
Licensor for sales of such Sublicensed Product item. No other advance payment
with respect to Sublicensed Product items #4, #5, #6 & #7 shall be due or
payable.
10. Licensee and Prima shall use reasonable efforts to make Sublicensed Product
items #4, #5, #6 & #7 available for purchase and delivery to the public on or
before the following dates:
(a) For Sublicensed Product #4: October 14, 2003 or the first day
Licensed Product item #9 is first available for purchases by the
public;
(b) For Sublicensed Product #5: June 17, 2003 or the first day Licensed
Product item #10 is first available for purchase by the public;
(c) For Sublicensed Product #6: December 9, 2003 or the first day
Licensed Product item #14 is first available for purchase by the
public; and
(d) For Sublicensed Product #7: October 14, 2003 or the first day
Licensed Product item #15 is first available for purchase by the
public
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11. With respect to each Sublicensed Product items #4, #5, #6 & #7, Licensee
shall use its commercially reasonable best efforts to cause Prima to insert a
DVD-ROM containing content provided by Licensor and Licensee (the "Limited
DVDs"). For use in such Limited DVDs, Licensor shall provide Prima with a 22
minute episode and/or a 14 minute episode of any program or programs for which
Licensor has the right to grant such use. All content of the Limited DVDs shall
be subject to the approval of Licensor and shall be subject in all other
respects to the terms of the Agreement and the Sublicense Agreement. With
respect to the Limited DVDs, Prima shall be responsible for all of the
following:
(a) All costs associated with the production of the Limited DVD
including authoring, mastering, replication, and insertion of the
Limited DVD into the strategy guide;
(b) The design of the Limited DVD label and menu splash screen; and
(c) Marketing and advertising of the Limited DVD program.
12. (a) Licensee understands and agrees that Licensor shall have the right to
license to G Net Media L.L.C. ("GNet") the exclusive right, at Licensor's sole
discretion, to produce, market, sell, and distribute interactive digital
strategy guides in DVD format based upon Licensed Products and containing
portions of full motion video (each an "iGuide"). Any such license agreement(s)
shall be at arms length and in accordance with industry standard terms and
conditions, without regard to Licensor's status as a distributor of GNet
products. For further clarity, iGuides shall not be made available to consumers
online or via download, internet streaming or any similar technology. If
Licensor elects, in its sole discretion, to license iGuides to GNet, one iGuide
so licensed shall be based on Licensed Product #14. Furthermore, with respect to
each Licensed Product item on which an iGuide is based, Licensee shall make
reasonable efforts to provide all necessary digital assets of such Licensed
Product available to GNet on the earliest date on which such digital assets are
approved by all relevant parties. Such date is deemed to be no later than the
beta stage of development of such Licensed Product.
(b) Licensor shall pay to Licensee fifty percent (50%) of the royalty
revenue actually received by Licensor from GNet with respect to the
license of rights described in subparagraph (a) of this paragraph.
Licensor warrants and represents that the royalty rate payable from
GNet to Licensor with respect to the license of rights described in
subparagraph (a) of this paragraph shall be no less than fifteen
percent (15%) of GNet's "Net Revenue", defined as GNet's gross sales
(or if GNet does not sell the guides directly, the gross sales of
the seller or distributor of the iGuides on GNet's behalf)
calculated at GNet's (or it seller's/distributor's) wholesale list
price, less trade volume discounts, price protection chargebacks and
actual returns. Licensee expressly acknowledges that Licensor will,
under separate agreement, also be acting as distributor for iGuides
and other GNet products, and that Licensee shall not be entitled to
any fees or other revenue earned by Licensor as a result of Licensor
acting in such capacity.
(c) Payments and statements shall be made by Licensor to Licensee in the
same frequency and in the same detail as Licensee is required to
report and account to Licensor pursuant to the Agreement. In
addition, with respect to Licensor's payment obligations under
subparagraph (b) of this paragraph, Licensee shall have the same
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audit rights and remedies Licensor has with respect to Licensee
pursuant to the Agreement, except that the subject matter of any
audit conducted in accordance herewith shall be limited to
Licensor's payment obligations as set forth in this Section 12.
(d) Licensor shall ensure that such iGuide shall be of high quality and
shall be subject to Licensor's normal and customary approval
procedures. Licensor shall ensure that no iGuide, nor any content
thereof, reflects poorly on the Licensed Products, the Property, or
Licensee. Licensor shall, as reasonably requested by Licensee,
provide to Licensee samples of each iGuide during such iGuide's
development process for Licensee's review and comment, provided,
however, that Licensor shall have the final determination with
respect to all creative and quality control matters. Notwithstanding
the foregoing, each iGuide relating to the Licensed Products shall
be subject to the reasonable written approval of Licensee with
respect to the game strategies and the full motion video of the game
play contained in the iGuide. Licensor shall not approve any such
iGuide prior to receiving such approval from Licensee. In the event
Licensee does not disapprove any iGuide within ten business days of
its receipt of such iGuide from Licensor, such iGuide shall be
deemed approved by Licensee.
(e) Licensor shall, at no cost to Licensee, provide Licensee with ten
(10) copies of each iGuide title upon the initial commercial release
of such iGuide.
(f) Licensor shall not authorize GNet to call any iGuide the "Official
Strategy Guide" or the "Official Guide" to the Licensed Product to
which the iGuide relates.
(g) Licensor shall use its commercially reasonable best efforts to cause
GNet to include in each iGuide one (1) splash screen identifying
and/or promoting Licensee's brand as provided by Licensee.
Except as amended herein, all of the other terms and conditions of the Agreement
shall be in full force and effect. In the event of any inconsistency,
incongruity or conflict, the terms and conditions of this document shall
prevail.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have each caused to be affixed hereto its or his/her hand and seal the
day indicated.
LICENSOR:
FUNIMATION PRODUCTIONS, LTD.,
A Texas limited partnership
By: /s/ Robert G. Brennan
--------------------------------------
Name: Robert G. Brennan
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Title: Director of Licensing
LICENSEE:
ATARI, Inc.
A Delaware corporation
By: /s/ Harry M. Rubin
-----------------------------------
Name: Harry Rubin
-----------------------------------
Title: Senior Executive Vice President
-----------------------------------
EG
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