Master Option and License Agreement [Amendment No. 2] - WMS Industries Iinc., Williams Electronics Games Inc., Midway Manufacturing Co. and Williams Entertainment Inc. and GT Interactive Software Corp.
SECOND AMENDMENT TO
-------------------
GTIS MASTER OPTION AND LICENSE AGREEMENT
----------------------------------------
This second amendment agreement (the "Second Amendment") is made and
entered into the 27th day of March, 1996, by and among WMS INDUSTRIES INC.
("WMS"), WILLIAMS ELECTRONICS GAMES, INC. ("WEG"), MIDWAY MANUFACTURING
COMPANY ("Midway") and WILLIAMS ENTERTAINMENT INC. ("WEI"), each being Delaware
corporations with offices at 3401 North California Avenue, Chicago, Illinois
60618, and GT INTERACTIVE SOFTWARE CORP. ("GTIS"), a Delaware corporation with
offices at 16 East 40th Street, New York, New York 10016.
WITNESSETH:
-----------
WHEREAS, on December 28, 1994 WMS, WEG, Midway, WEI and GTIS entered
into the GTIS Master Option and License Agreement (the "GTIS Master PC
Agreement") pursuant to which the WMS Group granted to GTIS certain rights with
respect to the manufacture, distribution and sale of versions of Games for use
on Designated Multipurpose Computer Platforms; and
WHEREAS, on March 31, 1995, WMS, Midway, WEI and GTIS entered into an
Amendment to the GTIS Master PC Agreement (the "First Amendment"); and
WHEREAS, WMS, WEG, Midway, WEI and GTIS desire to further amend the
GTIS Master PC Agreement as provided for in this Second Amendment.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the parties hereto
agree as follows:
<PAGE>
1. Capitalized terms used, but not defined or revised herein, shall
have the meaning ascribed to such terms in the GTIS Master PC Agreement or the
form of Home Computer Software Distribution and License Agreement annexed to the
GTIS Master PC Agreement as Exhibit A.
2. This Second Amendment shall become effective on the date WII closes
the acquisition of AGC pursuant to the Stock Purchase Agreement (the "Effective
Date"). WMS will give GTIS prompt written notice of such closing. If such
acquisition does not close by June 30, 1996, this Second Amendment shall be null
and void and of no force and effect. The capitalized terms used in this
paragraph are defined in paragraph 3 of this Second Amendment. GTIS' rights, if
any, under the GTIS Master PC Agreement and form of Home Computer Software
Distribution and License Agreement with respect to any games acquired pursuant
to the Stock Purchase Agreement, and any subsequent sequels, adaptations or
other versions thereof, shall be subject to all third party rights pursuant to
agreements made by the Atari Group existing at the Effective Date. All such
rights, to the extent known by WMS, are set forth on a schedule to a letter
dated the date hereof and signed by WMS and GTIS.
3. Section 1 of the GTIS Master PC Agreement shall be amended to add
or replace definitions as follows:
1.1(a) "AGC" shall mean Atari Games Corporation, a California
corporation, which is currently a wholly-owned subsidiary of Warner
Communications Inc., and which is to be sold to WII pursuant to the
Stock Purchase Agreement.
2
<PAGE>
THE INFORMATION BELOW MARKED BY * HAS BEEN
OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.
1.1(b) "Atari Advance" shall mean the aggregate *
Dollars advance by GTIS to WMS pursuant to the Atari
Agreements.
1.1(c) "Atari Agreements" shall mean the Master Option and
License Agreement for Atari PC Games and the Master Option and License
Agreement for Atari Home Video Games entered into by WMS and GTIS dated
March 27, 1996."
1.l(d) "Atari Game" shall mean (i) any game developed or acquired
by or on behalf of AGC or entities which were affiliates of AGC prior
to AGC being acquired by WII pursuant to the Stock Purchase Agreement,
including, without limitation, those games listed on Schedule I to this
Second Amendment, and any adaptations of such games for other
platforms, and (ii) any game currently in development or developed
subsequent to such acquisition by or on behalf of AGC or a member of
the Atari Group, or developed, in whole or in substantial part, by any
person or persons who were employees of AGC or a member of the Atari
Group as of the closing date of such acquisition and who are employees
of any member of the WMS Group at the time of such development, and any
adaptations of such games for other platforms. For purposes of this
Section, employees shall be deemed to include independent contractors
who work a substantial
3
<PAGE>
portion of their time at the facilities of any member of the WMS Group.
1.1(e) "Atari Group" shall mean AGC, or any entity, a majority of
whose capital stock is owned, directly or indirectly, by AGC or with
respect to which during the term of this Agreement, AGC, directly or
indirectly, has the legal power, without the consent of any third
party, to direct the acquisition of rights to or exploitation of Games
on Designated Multipurpose Computer Platforms.
1.1(f) "Business Day" shall mean any day other than a
Saturday, Sunday or Federal holiday.
1.2(a) "Early Termination Event" shall mean AGC ceasing to be at
least 50.1% owned by a member of the WMS Group, or the Atari Group
transferring a majority of its intellectual property assets and
licenses to a person or entity who is not a member of the WMS Group.
1.4 "Game" shall mean any coin-operated video game (including
kits), any home video game and any on-line game, released or intended
to be released, by any member of the WMS Group for sale in commercial
quantities in the normal course of business; provided, however, that
Game shall not include any Atari Game. Home video games shall include
games designed for play
4
<PAGE>
on dedicated home systems, such as those marketed by Nintendo, Sega,
Atari, Sony, etc. as well as on multipurpose home computers, such as
those marketed by IBM and Apple.
1.7(a) "Milestones" shall mean the defined tasks in the process of
the development of a Technically Acceptable Master Disk as are deemed
sufficiently important such that the achievement of such tasks will
entitle the developer to receive a payment, the amount of such payment,
the standards for approval which will entitle that developer to receive
such payment and the circumstances under which the development
arrangement may be terminated prior to completion.
1.9(a) "PC Option Expiration Date" shall have the meaning ascribed
in Section 2.1 hereof.
1.9(b) "PC Extended Expiration Date" shall have the meaning
ascribed in Section 2.1 hereof.
1.9(c) "Pirate" shall mean an individual or entity which
counterfeits a game or sells counterfeit games.
1.10(a) "Stock Purchase Agreement" shall mean the Stock Purchase
Agreement dated February 23, 1996, between Warner Communications Inc.
and WII pursuant to which Warner Communications Inc. has agreed to sell
and WII has agreed to purchase all of the outstanding stock of AGC.
5
<PAGE>
1.11(a) "WII" shall mean Williams Interactive Inc., a wholly-owned
subsidiary of WMS.
4. The GTIS Master PC Agreement shall be amended to add at the end of
Section 2.1 thereof, the following:
If the Atari Advance has not been fully recouped by the expiration
date (determined after giving effect to all Extension Events) of GTIS'
first option to acquire licenses under this Section 2.1 (the "PC Option
Expiration Date"), such expiration date shall be extended to a date
which is the earlier to occur of (i) two years from the PC Option
Expiration Date, or (ii) the date on which the Atari Advance is fully
recouped. Such new expiration date is hereafter referred to as the "PC
Extended Expiration Date." In determining whether the Atari Advance
has been fully recouped for all purposes under this Agreement, amounts
owed by GTIS but not yet reported, paid or credited to the Licensor
shall be deemed recouped by GTIS. The expiration date may be further
extended under the following circumstances. If (a) an Early
Termination Event occurs more than one year prior to the PC Extended
Expiration Date, and (b) GTIS shall not have fully recouped the Atari
Advance by the PC Extended Expiration Date (as such date may be
extended from time to time by future amendments or extensions of GTIS'
first option other than by reason of this
6
<PAGE>
sentence), then the expiration date shall be further extended to a date
which is the earlier to occur of (x) the date on which the Atari
Advance is fully recouped or (y) the date, to the nearest calendar
quarter end, determined by adding to the PC Option Expiration Date the
number of days between the date of the Early Termination Event and the
PC Option Expiration Date.
5. Section 2.7 of the GTIS Master PC Agreement shall be amended as
follows:
5.1. Section 2.7.1 shall be amended by adding the following to the
first sentence "; provided, that this Section 2.7.1 shall not apply to Accepted
Games as to which GTIS has exercised its rights of review and approval under
Section 2.11 hereof. "
5.2. Section 2.7.2 shall be amended by adding the following to the
first sentence "; provided that this Section 2.7.2 shall not apply to Accepted
Games as to which GTIS has exercised its rights of review and approval under
Section 2.11 hereof."
5.3. Former Section 2.7.3 shall be renumbered as "2.7.4" and any
references within that Section and in the GTIS Master PC Agreement to Section
2.7.3 shall be deemed as amended to read "Section 2.7.4." A new sentence shall
be added after the first sentence of new Section 2.7.4 which shall read as
follows: "If GTIS fails to respond in writing to WMS' notice within ten (10)
Business Days after receipt thereof by GTIS, GTIS shall be deemed to have
consented to WMS' election to terminate development."
5.4. A new Section 2.7.3 shall be added which shall read as
follows:
7
<PAGE>
"2.7.3. Subject to the provisions of 2.11 hereof, GTIS shall
bear 50% of the actual costs of development of any Section 2.4 Game or Section
2.5 Game as to which GTIS has exercised its rights of review and approval under
Section 2.11."
6. The GTIS Master PC Agreement shall be amended to add a new Section
2.11 which shall read as follows:
Anything in Sections 2.4 or 2.5 to the contrary notwithstanding, in
the event that after March 31, 1996 the WMS Group desires to hire a
third party developer to develop a Technically Acceptable Master Disk
for an Accepted Game, GTIS shall have the right to review and approve
(such approval not to be unreasonably withheld) the proposed Milestones
prior to the WMS Group entering into a binding agreement with such
developer (such right of review and approval shall not extend to any
terms of the developer agreement other than the Milestones). The WMS
Group shall notify GTIS in writing of its intention to hire such third
party developer and GTIS shall notify WMS in writing within five (5)
Business Days after receipt of the WMS Group notice that GTIS desires
to exercise its right of review and approval of Milestones. GTIS'
failure to timely notify WMS shall be deemed its election not to
exercise such right of review and approval. If GTIS shall exercise
such right, GTIS and WMS shall negotiate in good faith to reach
agreement with respect to the proposed Milestones as
8
<PAGE>
THE INFORMATION BELOW MARKED BY * HAS BEEN
OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.
promptly as practicable. If such agreement is not reached within ten
(10) Business Days after receipt by WMS of GTIS' aforesaid notice, then
WMS may notify GTIS of Milestones which are acceptable to WMS and GTIS
shall have three (3) Business Days after receipt of such notice to
accept such Milestones. If GTIS does not accept such Milestones within
such three (3) Business Day period, WMS may proceed to enter into an
agreement with such developer as if GTIS had elected not to exercise
its right of review and approval. If a developer agreement is signed
following acceptance by GTIS of the Milestones as aforesaid, upon
approval by GTIS and WMS of the material delivered or other
requirements of each of such Milestones, GTIS shall pay to WMS * % of
the Milestone payment within five (5) Business Days after GTIS receives
WMS' invoice therefor. Such payment shall be credited against the
obligations of GTIS to pay WMS * % of the actual costs of code
development simultaneously with the receipt of a Technically Acceptable
Master Disk set forth in Sections 2.4 and 2.5. With respect to any
Technically Acceptable Master Disk for which GTIS is obligated to
fund * % of the Milestone payments, if WMS exercises its rights in
Section 2.7.4 to terminate development, the following shall apply: (i)
if GTIS consents to such termination, neither WMS nor GTIS shall be
entitled to any
9
<PAGE>
THE INFORMATION BELOW MARKED BY * HAS BEEN
OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.
reimbursement of the Milestone payments previously made by the other,
or (ii) if GTIS withholds its consent to such termination, if permitted
by the developer agreement, GTIS may take over the responsibility for
development of a Technically Acceptable Master Disk with the developer
and fund the balance of the development costs. Upon receipt by WMS of a
notice from GTIS that GTIS has received a Technically Acceptable Master
Disk with respect to the Game, WMS shall pay to GTIS, the amount, if
any, by which * % of the original development budget approved by WMS
exceeds the Milestone payments previously made by WMS. If GTIS has
fully funded its obligations to make Milestone payments theretofore
due, GTIS may elect to terminate its obligations to make Milestone
payments with respect to future Milestones on which the developer has
not yet commenced work; provided that GTIS may not so elect unless the
agreement with the developer permits WMS to terminate its obligations
to the developer by making payments only for Milestones previously
achieved or in work or GTIS agrees to pay * % of any actual costs of
terminating the developer agreement. If GTIS properly elects to
terminate its obligation to make Milestone payments, (i) if WMS agrees
to such termination and also terminates the developer agreement,
neither WMS nor GTIS shall be entitled to any
10
<PAGE>
THE INFORMATION BELOW MARKED BY * HAS BEEN
OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.
reimbursement of the Milestone payments previously made by the other,
or (ii) if WMS elects to continue development of the Technically
Acceptable Master Disk, GTIS shall be entitled to reimbursement of the
Milestone payments previously made by it upon completion by WMS of the
Technically Acceptable Master Disk, but GTIS shall be deemed to have
waived any future rights to distribute or license the version of the
Game embodied in the Technically Acceptable Master Disk. GTIS shall
hold WMS harmless for any claims by developers against the WMS Group by
reason of GTIS' failures to make timely Milestone payments as required
under this Section. WMS shall use all reasonable efforts to cause
agreements with developers entered into after March 31, 1996 which
relate to Technically Acceptable Master Disks for which GTIS is making
* % of the Milestone payments to provide for GTIS to have the right to
assume the rights and obligations under that agreement should WMS elect
to terminate the agreement and GTIS elect to continue it. If both WMS
and GTIS elect to terminate a developer agreement and any proceeds are
subsequently generated from the abandoned project, the proceeds shall
be shared by WMS and GTIS in proportion to their Milestone payments
made with respect to such abandoned project. All ownership and rights
in software, artwork, literary text, designs
11
<PAGE>
and other works, and all intellectual property relating thereto, which
would have vested in a member of the WMS Group but for such termination
shall vest in such member of the WMS Group, not GTIS, even if GTIS
assumes the developer agreement, and the WMS Group shall remain
entitled to all of the benefits of the representations and warranties,
indemnifications, confidentiality provisions, restrictions, covenants
and other obligations of the developer which would survive termination
of such agreement. The provisions of tlus Section 2.11 are in all
cases subject to the provisions of Section 2.12. For developer
agreements in respect of which GTIS has agreed to make Milestone
payments, the WMS Group shall provide GTIS a copy of the final version
of the developer agreement within ten (10) Business Days after the same
is signed; provided, however, that the WMS Group shall have the right
to redact any information in that agreement relating to third parties
which does not affect GTIS' rights or obligations.
7. The GTIS Master PC Agreement shall be amended to add a new Section
2.12 which shall read as follows:
2.12 If permitted under existing agreements with third parties,
WMS agrees to submit its choice of third party developers to be
selected under Sections 2.4 and 2.5 of this Agreement to GTIS for GTIS'
approval, such approval not to be unreasonably
12
<PAGE>
withheld, and, GTIS shall notify WMS of its decision with respect to
such developer within five (5) Business Days after receipt by GTIS of
WMS' notice. If the Technically Acceptable Master Disk being developed
is based upon a coin-operated game which has been released within the
24 month period preceding WMS' request for GTIS' approval of the
developer, or is released after such request for approval but prior to
the release of the home version of such Game, WMS shall have the final
decision in selecting the developer if a representative of WMS' coin-
operated game development group advises GTIS in writing that the
selection of a particular developer is important to such group. In all
other circumstances, if GTIS reasonably disapproves of the developer
suggested by WMS, that developer shall not be used and a new developer
shall be selected by WMS subject to GTIS' right of approval as provided
above in this Section 2.12.
8. The GTIS Master PC Agreement shall be amended to add a new Section
2.13 which shall read as follows:
Royalties payable to WMS pursuant to Schedule B of the Home
Computer Software Distribution and License Agreement are measured by
the wholesale prices of Licensed Product. Accordingly, reasonably in
advance of WMS' decision to enter into a developer contract and
reasonably in advance of GTIS'
13
<PAGE>
initial release of the Licensed Product, GTIS shall advise WMS, at WMS'
request, of GTIS' expected pricing strategy and the reasons therefor.
Nothing herein shall be deemed to restrict GTIS' freedom in selecting
wholesale sales prices it considers appropriate, which shall be in
GTIS' sole discretion.
9. The GTIS Master PC Agreement shall be amended to add a new Section
2.14 which shall read as follows:
If, under Section 2.1 of any Home Computer Software Distribution
and License Agreement entered into under this Agreement, Licensor has
granted written approval (which shall not be unreasonably withheld) to
Licensee of a specific sublicensee for the Licensed Property, such
approval shall apply to the sublicensing by that sublicensee of all
Licensed Properties licensed to Licensee under Home Computer Software
Distribution and License Agreements entered into under this Agreement,
subject to the following: (i) the sublicense agreements shall contain
provisions with respect to quality of Licensed Product, trademarks,
copyrights, materials, other intellectual property rights, rights of
additional sublicensing or assignment, termination rights,
confidentiality, accounting, auditing, reporting and payment procedures
in form agreed to by GTIS and WMS, and the form as so agreed to may be
used by all approved sublicensees described
14
<PAGE>
THE INFORMATION BELOW MARKED BY * HAS BEEN
OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.
in clause (iii) below; provided that if such form is not so used, any
other form to be used shall be subject to prior approval as provided in
this subsection (i); (ii) no such blanket approval shall be deemed
given with respect to Licensed Properties as to which approval
requirements imposed by third parties, such as the NFL and NBA, apply,
(iii) if the sublicense is for a Marketing Area other than those
designated as Key Marketing Areas in such Home Computer Software
Distribution and License Agreement and if the expected sales volume in
such Marketing Area, in GTIS' good faith judgment, is an average of *
units or less per SKU per year, Licensee will not be required to obtain
Licensor's prior written approval of the terms of such license but
Licensee will be required to provide a copy of each sublicense to
Licensor within ten (10) Business Days after GTIS enters into such
sublicense; and (iv) if the Marketing Area is designated as a Key
Marketing Area or if, in GTIS' good faith judgment, the expected sales
volume for such Marketing Area is more than an average of * units per
SKU per year, Licensee will be required to obtain Licensor's prior
written approval, which Licensor will not unreasonably withhold, of the
terms of a sublicense for such Marketing Area even if the identity of
the sublicensee has been previously approved; provided, however, if a
sublicense is for multiple platforms and multiple
15
<PAGE>
games, the approval of the sublicense will be deemed to be approval for
all Games distributed under that sublicense (subject to clause (ii)).
Anything to the contrary notwithstanding, (x) if a previously approved
sublicensee becomes an Exporter (as such term is defined in Exhibit A
to the GTIS Master Option and License Agreement (Home Video) dated
March 31, 1995) or a Pirate, Licensee will immediately upon becoming
aware thereof notify Licensor of the identity of such Exporter or
Pirate and as soon as practicable terminate the sublicense upon request
by Licensor, and (y) Licensor and Licensee will review every two years
the identity of sublicensees, and those sublicensees who previously
received blanket approval as provided in the first sentence of this
Section and who are no longer considered acceptable by Licensor, in the
exercise of Licensor's reasonable judgment, will no longer have such
blanket approval and will be subject to Licensor's prior approval with
respect to all future sublicenses in accordance with the approval
procedures set forth above. Licensee shall use all reasonable efforts
to cause each agreement with its sublicensees to permit Licensee to
terminate such agreement immediately if such sublicensee shall be or
become an Exporter or a Pirate.
16
<PAGE>
10. Section 7 of the GTIS Master PC Agreement shall be amended to add
at the end thereof, the following:
With respect to this Agreement and all Home Computer Software
Distribution and License Agreements entered into in connection
herewith, each of WMS Group and GTIS agree to use reasonable efforts to
ensure that either of them may disclose the proprietary information of
the other (including, without limitation, the software source code and
tools relating to any Game), only to those persons within their
organizations who have a need to know such information in order to
perform its obligations under this Agreement and the Home Computer
Software Distribution and License Agreements and any such disclosure
shall be limited to the information which needs to be known. Further,
neither the WMS Group nor GTIS shall use any such proprietary
information for purposes other than the performance of its obligations
under this Agreement and the Home Computer Software Distribution and
License Agreements.
11. Paragraph 5 of the First Amendment shall be amended to provide that
Section 10.1 of the GTIS Master PC Agreement shall be amended to delete the
parenthetical language "(including its sublicenses and affiliates as one party)"
in the last sentence of such Section and by replacing the words "as long as that
party remains fully liable for its obligations
17
<PAGE>
THE INFORMATION BELOW MARKED BY * HAS BEEN
OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.
hereunder" at the end of the second sentence of such Section 10.1 with the
words "as long as both the assignee and the assignor remain fully liable for
assignor's obligations hereunder."
12. For purposes of the last paragraph of Paragraph 13 of the First
Amendment (i) distribution of a coin-operated video or pinball game by any
member of the Atari Group or a former affiliate of any member of the Atari Group
shall be deemed distribution by Licensor or its affiliates; and (ii) all
references to "Licensor or any of its affiliates" shall be amended to read,
"Licensor or any entity which at any time was or is an affiliate of any member
of the WMS Group or the Atari Group." The following shall be added immediately
preceding such last paragraph:
Anything in the foregoing paragraphs to the contrary
notwithstanding, where the Licensed Property has not been embodied in
a coin-operated video or pinball game, whether distributed by Licensor
or any entity which at any time was an afffliate of any member of the
WMS Group or the Atari Group, Licensee may elect to pay an alternative
royalty therefor. The alternative royalty shall equal the sum of the
royalty percentage payable in accordance with the table set forth in
Schedule B plus the Licensee's share of Third Party Fees and
Royalties, but in no event shall the alternative royalty exceed * % of
the actual Net Wholesale Sales Price of the Licensed Product;
provided, however, that anything in the foregoing paragraphs or this
paragraph to the contrary notwithstanding, under no circumstances
18
<PAGE>
THE INFORMATION BELOW MARKED BY * HAS BEEN
OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.
shall royalties, whether regular royalties, Substitute Royalties or
alternative royalties, be less than * of the Third Party Fees and
Royalties payable with respect to the sale of Licensed Products.
12.1. Section 1 of the Home Computer Software Distribution and
License Agreement shall be amended by adding at the end thereof, the following:
Capitalized terms used, but not defined herein, shall have the
meaning ascribed to such terms in the GTIS Master Agreement.
12.2. Section 3.2 of the Home Computer Software Distribution and
License Agreement shall be amended to add as the first clause thereof, the
following:
After the end of the Japan Territory Period, as defined in the
letter between WMS and GTIS dated March 27, 1996, captioned "Japan
Territory."
13. Schedule B to the Home Computer Software Distribution and License
Agreement shall be amended as follows:
13.1. Paragraph 2 under the heading "Adjustment to Royalties" shall
be amended by adding at the end thereof, the following which shall be deemed a
clarification of the practice currently being followed by Licensee and Licensor:
In cases where Licensed Products are bundled, net proceeds from
bundling shall be treated in the same manner as net proceeds from
sublicensees; provided, however, that if Licensee is also the
19
<PAGE>
THE INFORMATION BELOW MARKED BY * HAS BEEN
OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.
manufacturer of products for bundling, the fee to Licensee shall
equal * % rather than * % of net proceeds.
13.2. A new Paragraph 4 shall be added after paragraph 3 under the
heading "Adjustment to Royalties" which shall read as follows:
4. For purposes of Paragraphs 1 and 2 above, the fees, royalties
or other participations referred to in clause 3 of Section
1.9 shall not be excluded in determining "Third Parties Fees and
Royalties." For avoidance of doubt, advances payable to developers
shall continue to be excluded.
13.3. The paragraph under the heading "Recoupment" shall be amended
to replace the word "paid" on the first line of such paragraph by the words
"applied or accrued" and to insert the words "applied or accrued by Licensee"
between the words "Recoupable Amounts" and "under" on line 6 of such paragraph.
13.4. A new paragraph shall be added at the end of the paragraph
under the heading "Recoupment" which shall read as follows:
"If the Atari Advance has not been fully recouped by GTIS on the
date on which the total of recoupable amounts under this Agreement and
other Home Computer Software Distribution and License Agreements
entered into pursuant to the GTIS Master Agreement equals the *
Dollars Option and Advance Fee and Guaranty paid by the Licensee under
the GTIS Master Agreement, then royalties otherwise payable
20
<PAGE>
under this Agreement shall be recoupable against the Atari Advance in
the manner set forth in this Schedule B until the Atari Advance shall
be fully recouped. In determining whether the Atari Advance has been
fully recouped, amounts owed by GTIS but not yet reported, paid or
credited to the Licensor shall be deemed recouped by GTIS. If in
respect of any royalty payment period royalties are available for
recoupment of the Atari Advance under any one or more of the
distribution and license agreements entered into under the Atari
Agreements, the GTIS Master Agreement and the GTIS Master Option and
License Agreement (Home Video Games) dated March 31, 1995, (the "GTIS
Master Home Video Agreement"), the Atari Advance shall be recouped from
royalties in the following order: (i) royalties payable under
distribution and license agreements entered into under the Atari
Agreements; (ii) royalties payable under distribution and license
agreements entered into under the GTIS Master Agreement; and (iii)
royalties payable under distribution and license agreements entered
into under the GTIS Master Home Video Agreement.
14. WMS hereby confirms to GTIS that it is WMS' present intention that
it will maintain a separate Atari Group games design organization and that any
member of the design teams working for that organization will work solely on the
creation of Atari Games.
21
<PAGE>
WMS further confirms that it will use all reasonable effort to maintain such
separate organization.
15. In the event of conflicts between the provisions of the GTIS
Master Agreement and the Home Computer Software Distribution and License
Agreement, the provisions of the GTIS Master Agreement shall prevail.
22
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Second Amendment as
of the day and year first above written.
WMS INDUSTIES INC.
By: /s/ NEIL NICASTRO
----------------------------------------
Neil Nicastro
WILLIAMS ELECTRONICS GAMES, INC.
By: /s/ NEIL NICASTRO
----------------------------------------
Neil Nicastro
MIDWAY MANUFACTURING COMPANY
By: /s/ NEIL NICASTRO
----------------------------------------
Neil Nicastro
WILLIAMS ENTERTAINMENT INC.
By: /s/
----------------------------------------
GT INTERACTIVE SOFTWARE CORP.
By: /s/ RONALD CHAIMOWITZ
----------------------------------------
Ronald Chaimowitz
23
<PAGE>
IN WITNESS WHEREOFF, the parties have executed this Second Amendment as
of the day and year first above written.
WMS INDUSTRIES INC.
By: /s/
----------------------------------------
WILLIAMS ELECTRONICS GAMES, INC.
By: /s/
----------------------------------------
MIDWAY MANUFACTURING COMPANY
By: /s/
----------------------------------------
WILLIAMS ENTERTAINMENT INC.
By: /s/ BRIAN COOK
----------------------------------------
Brian Cook
GT INTERACTIVE SOFTWARE CORP.
By: /s/ RONALD CHAIMOWITZ
----------------------------------------
Ronald Chaimowitz
23
<PAGE>
SCHEDULE 1
----------
ATARI LIBRARY
-------------
(Not including Projects in Process)
-----------------------------------
RELEASED COIN-OP TITLES
DATE PRODUCT
Nov - 72 Pong
Jul - 83 Space Race
Sep - 73 Pong Doubles
Oct - 73 Gotcha Color
Oct - 73 Gotcha
Oct - 73 Elimination (KEE)
Feb - 74 Super Pong
Feb - 74 Rebound
Mar - 74 Spike (Kee)
Mar - 74 Quadrapong
Mar - 74 Gran Track 10
Apr - 74 Formula K (Kee)
Apr - 74 world Cup
Apr - 74 World Cup CKT
May - 74 Pong CKT
Jun - 74 Touch Me
Jul - 74 Twin Racer (Kee)
Jul - 74 Trak 10
Aug - 74 Gran Trak 20
Aug - 74 Puppy Pong
Aug - 74 Trak 20
Sep - 74 Dr. Pong
Oct - 74 Pin Pong
Nov - 74 Tank
Nov - 74 Qwak
Jan - 75 Dodgeball
Jan - 75 Pursuit
Apr - 75 Indy 800 (KEE)
Apr - 75 Highway
May - 75 Crossfire (KEE)
May - 75 Tank II (KEE)
Jun - 75 Anti Aircraft
Jul - 75 Goal IV
Sep - 75 Jaws
Oct - 75 Steeplechase
Oct - 75 Crash N Score
Oct - 75 Jet Fighter
Dec - 75 Jet Fighter CKT
Jan - 76 Stunt Cycle
Mar - 76 Outlaw
Apr - 76 Tank 8 (KEE)
Apr - 76 Quiz Show (KEE)
Apr - 76 Breakout
May - 76 Indy 4
Jul - 76 Breakout CKT
<PAGE>
Jul - 76 Cops N Robbers
Jul - 76 Fly Ball (KEE)
Aug - 76 Lemans
Oct - 76 Night Driver
Nov - 76 Sprint II (KEE)
Nov - 76 F-I
Nov - 76 The Atarians Pin
Jan - 77 Dominos
Feb - 77 Dominos CKT
Apr - 77 Triple Hunt
Apr - 77 Triple Hunt Single
Apr - 77 Night Driver SD
May - 77 Sprint 8 (KEE)
Jun - 77 Time 2000 Pin
Jun - 77 Pool Shark
Jun - 77 Drag Race (KEE)
Jul - 77 Starship
Sep - 77 Super Bug (KEE)
Sep - 77 Two Game Module
Sep - 77 Airborne Avenger Pin
Oct - 77 Destroyer
Nov - 77 Canyon Bomber
Dec - 77 Sprint 4
Jan - 78 Sprint 1
Feb - 78 Ultra Tank (KEE)
Feb - 78 Middle Earth Pin
Mar - 78 Sky Raider
Mar - 78 Tournament Table
Apr - 78 Avalanche
Jun - 78 Fire Truck
Jun - 78 Sky Diver
Jul - 78 Smokey Joe
Sep - 78 Super Breakout
Sep - 78 Space Rider Pin
Oct - 78 Atari Football
Nov - 78 Orbit
Feb - 79 Video Pinball
Mar - 79 Superman Pin
Apr - 79 Hercules Pin
May - 79 Basketball
May - 79 Subs
Jun - 79 Baseball
Aug - 79 Lunar Lander
Apr - 79 4PL Atari Football
Nov - 79 Asteroids
Apr - 80 Asteroids CKT
Apr - 80 Soccer
Apr - 80 Monte Carlo
Jun - 80 Asteroics Cabaret
Jun - 80 Missile Command
<PAGE>
Aug - 80 Missile Command CKT
Sep - 80 Missile Command Cabaret
Sep - 80 Missile Command SD
Nov - 80 Battle Zone
Dec - 80 Battle Zone Cabaret
Apr - 81 Asteroids Deluxe Cabaret
Apr - 81 Warlords
Apr - 81 Warlords CKT
May - 81 Asteroids Deluxe
May - 81 Asteroids Deluxe CKT
May - 81 Red Baron SD
Jun - 81 Centipede
Jun - 81 Red Baron
Jun - 81 Battle Zone Open Face
Jul - 81 Centipede CKT 13"
Jul - 81 Centipede CAB
Sep - 81 Centipede CKT 19"
Oct - 81 Tempest
Dec - 81 Tempest CKT
Dec - 81 Tempest Cabaret
Feb - 82 Space Duel
Apr - 82 Dig Dug
Apr - 82 Space Duel CKT
Jun - 82 Kangaroo
Jun - 82 Dig Dug CKT
Jun - 82 Dig Dug CAB
Jun - 82 Gravitar
Nov - 82 Millipede
Nov - 82 Liberator
Nov - 82 Quantum
Nov - 82 Pole Position
Nov - 82 Pole Position SD
Feb - 83 Xevious
Feb - 83 Black widow
Feb - 83 Milipede CKT
Mar - 83 Food Fight
May - 83 Arabian
May - 83 Star Wars
May - 83 Star Wars SD
May - 83 Food Fight CKT
Jul - 83 Crystal Castles
Nov - 83 Major Havoc
Nov - 83 Pole Position II
Nov - 83 Crystal Castles CKT
Jan - 84 Firefox
Feb - 84 Firefox SD
Mar - 84 TX-1 SD
Jun - 84 I, Robot
Sep - 84 Return of the Jedi
Dec - 84 Marble Madness SYS 1
<PAGE>
Mar - 85 Empire Kit
Apr - 85 Paperboy SYS 2
Jul - 85 Pack Rat SYS 1
Jul - 85 Pack Rat (KIT)
Jul - 85 Temple of Doom SYS 1
Jul - 85 Temple of Doom Kit
Oct - 85 Gauntlet
Apr - 86 Super Sprint
May - 86 Gauntlet 2 Player
Jul - 86 Road Runner SYS 1
Jul - 86 Road Runner Kit
Aug - 86 Gauntlet II
Aug - 86 Guantlet II 4 player kit
Aug - 86 Gauntlet II 2 player kit
Sep - 86 Champ Sprint SYS 2
Sep - 86 Champ Sprint Kit
Dec - 86 720
Feb - 87 Rolling Thunder
Mar - 87 Road Blaster SYS 1
Mar - 87 Road Blaster Kit
Mar - 87 Road Blaster SD
May - 87 Dunk Shot
Jul - 87 A.P.B.
Jul - 87 Dragon Spirit
Sep - 87 RBI Baseball Kit
Nov - 87 Xybots
Dec - 87 Pacmania
Feb - 88 Blasteroids
Apr - 88 Galaga '88
Apr - 88 Galaga '88 Kit
Apr - 88 Vindicators
May - 88 Pot Shot
May - 88 Final Lap SD
Jun - 88 Toobin
Aug - 88 Assault
Sep - 88 Cyberball
Oct - 88 Final Lap UR
Feb - 89 Tetris Kit
Feb - 89 Hard Drivin SD
Feb - 89 Splatterhouse PCB
Feb - 89 Vindicator Kits
Jun - 89 Hard Drivin Compact
Jun - 89 Escape
Jun - 89 Escape Kit
Aug - 89 Cyberball 2072 4 player
Sep - 89 Cyberball 2072 2 player
Sep - 89 Stunrunner
Oct - 89 Cyberball 2072 Conv. Kit
Nov - 89 Cyberball 2 PL Univ. Kit
Nov - 89 Skull & Crossbones
<PAGE>
Nov - 89 Skull & Crossbones Kit
Dec - 89 4 Trax Moving
Jan - 90 Badlands
Jan - 90 Badlands Kit
Jan - 90 Cyberball vs. Kit
Feb - 90 Klax
Feb - 90 Klax Cabaret
Feb - 90 Klax Kits (Incl. Japan)
Apr - 90 4 Trax Stationary
Jun - 90 Gumball Rally
Jun - 90 Hydra
Jun - 90 Hydra Kits
Jul - 90 ThunderJaws Kits
Aug - 90 Pitfighter
Aug - 90 Race Drivin SD
Oct - 90 Race Drivin SD Conv. Kits
Nov - 90 Tetris Cabaret
Nov - 90 Shuuz
Nov - 90 Shuuz Kits
Dec - 90 Race Drivin Compact
Feb - 91 Rampart
Mar - 91 Pitfighter 2 PL Kits
Apr - 91 Batman Kits
Apr - 91 Rampart Kits Incl. Japan
Apr - 91 Race Drivin UR Conv. Kits
Apr - 91 Race Drivin Intl. Kits
May - 91 Race Drivin Panorama
Jun - 91 Road Riot
Sep - 91 Steel Talons
Oct - 91 Off the Wall Kit
Apr - 92 Relief Pitcher Game
May - 92 Relief Pitcher Kit
Jun - 92 Guardians of the Hood
Jul - 92 Guardians of the Hood Kit
Jul - 92 Moto Frenzy Deluxe
Sep - 92 Moto Frenzy Mini
Nov - 92 Space Lords
Mar - 93 Knuckle Bash Kit
Jun - 93 World Rally Kits
Oct - 93 Showcase '33
Jul - 94 T-MEK
Aug - 94 Primal Rage Showcase 33
Sep - 94 Primal Rage Family Cabinet
Oct - 94 Cops
Sep - 95 Hoop It Up
Nov - 95 Area 51 33" Showcase
Nov - 95 Area 51 25"
<PAGE>
RELEASED CONSUMER TITLES
DATE TITLE FORMAT
After Burner NES
Alien Syndrome NES
Fantasy Zone NES
88 Gauntlet NES
Klax NES
Ms. Pacman NES
88 Pacman NES
Pacmania NES
88 RBI Baseball NES
RBI 2 Baseball NES
RBI 3 Baseball NES
Road Runner NES
Rolling Thunder NES
Shinobi NES
Skull & Crossbones NES
Super Sprint NES
May - 89 Tetris NES
Temple of Doom NES
Toobin NES
Vindicators NES
Jun - 95 RBI 95 32X
Oct - 94 Battlecorps Sega CD AFL
Feb - 95 BC Racers Sega CD AFL
<PAGE>
Nov - 94 Lawnmowerman Sega CD AFL
Dec - 94 Soulstar Sega CD AFL
Dec - 95 Wayne Gretsky PC CD ROM
Sep - 95 Primal Rage PC CD ROM
Nov - 94 Rise of the Robots PC CD ROM
Nov - 94 Rise of the Robots PC Floppy Disk
Jun - 95 Striker Europe CD ROM
Nov - 94 Rise of the Robots Europe CD ROM
Sep - 95 Primal Rage Europe CD ROM
Jun - 95 Striker Europe Disk
Jun - 95 Rise of the Robots Europe Disk
Jun - 95 Rise of the Robots Amiga-Europe
PGA Tour Golf Europe Game Gear
KLAX Europe Game Gear
Marble Madness Europe Game Gear
Paperboy Europe Game Gear
Popils Europe Game Gear
Dec - 94 PGA Tour II Europe Game Gear
Jun - 95 Rise of the Robots Europe Game Gear
World Cup Soccer Europe Game Gear
Aug - 95 Primal Rage Gameboy
Mar - 95 Kawasaki Superbike Game Gear AFL
Dec - 93 Desert Strike Game Gear AFL
Dec - 93 Formula 1 Game Gear AFL
Prince of Persia Game Gear AFL
<PAGE>
Super Space Game Gear AFL
Invaders
Mar - 95 Kawasaki Superbike Genesis
Davis Cup Tennis Genesis
Dragon's Fury Genesis
Dick Vitale Genesis
Basketball
Dec - 93 Dragon's Revenge Genesis
Nov - 93 Gauntlet 4 Genesis
Nov - 94 Generations Lost Genesis
Grindstormer Genesis
Hard Drivin Genesis
Klax Genesis
Nov - 94 Lawnmowerman Genesis
Ms. Pacman Genesis
Paperboy 2 Genesis
Paperboy Genesis
Pitfighter Genesis
Pacmania Genesis
Nov - 93 Awesome Possum Genesis
Prince of Persia Genesis
Dec - 93 Race Drivin Genesis
Aug - 95 Primal Rage Genesis
Rampart Genesis
RBI 93 Genesis
RBI 94 Genesis
<PAGE>
RBI 3 Basketball Genesis
RBI 4 Genesis
Road Blasters Genesis
Nov - 94 Red Zone Genesis
Sylvester & Tweety Genesis
Steel Talons Genesis
Jun - 95 Wayne Gretzky Genesis
Bubba N' Stix Genesis AFL
Nov - 93 Formula 1 Genesis AFL
James Bond Genesis AFL
Nov - 4 Marko & His Magic Genesis AFL
Soccer Ball
MIG 29 Genesis AFL
Chuck Rock II Game Gear
Dec - 93 PGA Tour Golf Game Gear
Klax Game Gear
Marble Madness Game Gear
Paperboy 2 Game Gear
Paperboy Game Gear
Nov - 94 PGA Tour II Game Gear
Popils Game Gear
Aug - 95 Primal Rage Game Gear
Nov - 94 RBI 94 Game Gear
Dec - 94 Rise of the Robots Game Gear
World Cup Soccer Game Gear
Oct - 95 Power Drive Rally Jaguar
<PAGE>
Dec 95 Primal Rage Jaguar CD
Davis Cup Tennis Mega Drive-Europe
Dragon's Fury Mega Drive-Europe
Dick Vitale Mega Drive-Europe
Basketball
Dragon's Revenge Mega Drive-Europe
Gauntlet 4 Mega Drive-Europe
Hard Drivin Mega Drive-Europe
Kawasaki Superbike Mega Drive-Europe
Klax Mega Drive-Europe
Lawnmowerman Mega Drive-Europe
Paperboy Mega Drive-Europe
Paperboy 2 Mega Drive-Europe
Pitfighter Mega Drive-Europe
Pacmania Mega Drive-Europe
Rampart Mega Drive-Europe
RBI 94 Mega Drive-Europe
Nov - 94 Red Zone Mega Drive-Europe
Aug - 94 Sylvester & Tweety Mega Drive-Europe
Steel Talons Mega Drive-Europe
Mar - 95 Mega Swiv Mega Drive-Europe
A.C. Adapter Gameboy
A.C. Adapter Genesis
A.C. Adapter SNES
A.C. Adapter Game Gear
Control Pad Genesis
<PAGE>
Control Pad NES
Control Pad SNES
Hi-Freq Control Genesis
Pad
Hi-Freq Control NES
Pad
Hi-Freq Control SNES
Pad
Hi-Freq Magnifier Game Gear
Hi-Freq Night Gameboy
Sight
Hi-Freq Power Clip Gameboy
w/adaptor
Hi-Freq Power Clip Game Gear
R.F. Switch All
Night Sight Gameboy
Power Clip w/A.C. Gameboy
adaptor
Power Clip Gameboy
Wayne Gretzky Kit Rest of World
Wayne Gretzky Mega Drive-Rest of
World
Kawasaki Superbike SNES-Rest of World
Primal Rage Kit Rest of World
Sep - 95 Primal Rage PC CD ROM-Rest of
World
Sep - 95 Primal Rage Gameboy-Rest of
World
Aug - 95 Primal Rage SNES-Rest of World
<PAGE>
Sep - 95 Primal Rage Mega Drive-Rest of
World
Jul - 95 Striker Spindle PC CD ROM-
REST of World
Virtua Racing Saturn-Rest of
World
Dec - 95 Last Gladiators Saturn
Nov - 95 Virtua Racing Saturn
Sep - 93 Robo Aleste Sega CD
PGA Tour Golf Master System-
Europe
Klax Master System-
Europe
Ms. Pacman Master System-
Europe
Rampart Master System-
Europe
Dec - 95 Wayne Gretzky SNES
Dec - 95 Kawasaki Superbike SNES
Aug - 95 Primal Rage SNES
Jun - 95 Super RBI SNES
Blasteroids Computer Software
Rolling Thunder Computer Software
Dec - 95 Primal Rage Sony PSX
Dec - 95 Zero Divide Sony PSX
Klax NEC Turbografix
Return Fire Sony PSX
Constructor Sony PSX
T-MEK Sony PSX
<PAGE>
Area 51 Sony PSX
Wayne Gretzky II Sony PSX
Wheels Sony PSX
<PAGE>
SCHEDULE 1
----------
Projects in Process
-------------------
(Atari PC Games)
----------------
Title Platform
----- --------
Area 51 CD-ROM
Constructor Win '95/Mac-CD
Crisis Win '95
Dark Hermetic Order PC CD-ROM
Gretzky Hockey PC CD-ROM
Gretzky II Win '95
Primal Rage Mac-CD
RBI 96 IBM PC; CD-ROM
Return Fire CD-ROM
T-Mek PC; CD-ROM
<PAGE>
SCHEDULE 2
------------
PROJECTS IN PROCESS
-------------------
(HOME VIDEO GAMES)
------------------
TITLE PLATFORM
----- --------
Area 51 Saturn; PSX
Constructor PSX
Gretzky II PSX
Gretzky Arcade Ultra 64
Last Gladiators Saturn
Power Drive Jaguar
Primal Rage Saturn; PSX
Return Fire PSX; Saturn
T-Mek PSX
Toonfighter PSX
Virtua Racing Saturn
Wheels (Driver) PSX
Zero Divide PSX