Licence Agreement - Gizmondo Europe Ltd. and SCi Games Ltd.
LICENCE AGREEMENT
-----------------
THIS Licence AGREEMENT (the "Agreement") is entered into as of this [
], 2004 (the "Effective Date"), by and between GIZMONDO EUROPE LTD. , its
principal office located at:- Gizmondo Europe Ltd, 1 Meadow Gate Avenue,
Farnborough Business, Farnborough, Hants, GU14 6FG ENGLAND ("Gizmondo") and SCi
Games Limited of 14 Ivory House, Plantation Wharf, London, SW11 3TN ("SCi"),
with reference to the following facts:
RECITALS
--------
WHEREAS, SCi owns or controls the rights in and to certain interactive
software products and other intellectual property related thereto, and
WHEREAS, Gizmondo is engaged in the business of, among other things,
publishing, developing, marketing, distributing and selling wireless interactive
entertainment software products; and
WHEREAS, Gizmondo desires to obtain certain rights in and to the SCi
Materials (as defined below in Section 1 hereof) and SCi desires to grant
Gizmondo such rights on the terms set forth in this Agreement.
NOW, THEREFORE, the parties do hereby agree as follows:
1. CERTAIN DEFINITIONS.
1.1 "Games" shall mean those English language entertainment video games
that have been published or will be published by SCi for use on
Microsoft's Xbox video game system ("Xbox") and Windows based Personal
Computers set out in Clause 6.2 and described in the Game Exhibit(s)
(defined below).
1.2 "Product" shall mean an application program created by Gizmondo in
accordance with this agreement or adapted or modified by Gizmondo so as
to enable the same to operate as a handheld version which is to be
published by Gizmondo for operation on the Devices pursuant to the
terms of this Agreement.
1.3 "Game Exhibit" shall mean an addendum to this Agreement that is (and
shall be for future Games, as amended) attached hereto and incorporated
herein for each Game licensed to Gizmondo for development of the
corresponding Product pursuant to the terms of this Agreement and such
Game Exhibit. The format of the Game Exhibit is attached to this
Agreement as Exhibit A. SCi may change the format of the Game Exhibits
at any time, but not so as to increase the scope of Gizmondo's
obligations under this Agreement. The Game Exhibit includes, but is not
limited to, intellectual property information, development schedule,
and any additional requirements or limitations on development or
publication of the applicable Product.
1.4 "Game Developer/Licensor" shall mean a third party developer or
licensor that developed the Game on SCi's behalf or licensed the Game
or its elements to SCi and who retains rights in the Game.
1.5 "Game Content" shall mean without limitation those copyrightable
aspects of the particular Game that may be perceived by the user,
including, without limitation, artwork; sound; graphic and/or music
files; audio visual elements and displays; user interface, logos,
trademarks, characters and names; dialog; story line; plot and data.
1.6 "SCi Materials" shall mean collectively Games, Game Content,
Documentation, and any other materials owned or licensed by SCi
provided to Gizmondo under this Agreement.
<PAGE>
1.7 "Minimum Product Skus" shall mean the WinCE.net Gizmondo versions of
each Product.
1.8 "Territory" shall mean the entire world for all of the Products on the
Devices.
1.9 "Distribution Channel(s)" shall mean the following means of
distributing software designed to operate in the wireless environment:
over the air provisioning via Wireless Networks; merchants, including
carrier online or wireless mobile shops, storefronts or portals
(whether operated by the carrier itself or on the carrier's behalf by a
third party service provider) retailers; carrier retail locations;
other retail locations where Devices are generally sold; OEM methods of
distribution, including embedded or bundling transactions (subject to
clause 2.4); and through the use or sale of SD, MMC cards, memory stick
or other similar physical media that enable the delivery of such
wireless products to the Devices.
1.10 "Distribution Partner" shall mean any third party, not including
Gizmondo Affiliates, who sub-licenses any of the rights granted to
Gizmondo pursuant to this Agreement for the purpose of distributing the
Products to End-Users subject to clause 2.4 (4).
1.11 "Documentation" shall mean the user documentation, manuals and/or
written product specifications for a Game or Product, as applicable.
1.12 "Devices" shall mean the "Gizmondo" handheld portable entertainment
device, and licensed or re-branded variants of the Devices, under
manufacture or licensed from Tiger Telematics Gizmondo subject to any
licensing or rebranding being subject to SCi's prior written approval
(not to be unreasonably withheld or delayed).
1.13 "Gizmondo Affiliates" shall mean the parent and those subsidiaries of
Gizmondo as specified in Exhibit E.
1.14 "Gold disc" means a finished version of any of the Games in an
appropriate format which is ready for publishing by SCi.
1.15 "Intellectual Property Rights" shall mean patent rights and
registrations and applications, renewals and extensions thereof ,
copyright (including, but not limited to, ownership rights in all
titles, computer code, themes, objects, characters, character names,
stories, dialog, catch phrases, locations, concepts, artwork,
animation, sounds, musical compositions, audio-visual effects and
methods of operation, moral rights and any related documentation),
copyright registrations and applications, renewals and extensions
therefore, trademark registrations and applications, renewals and
extensions therefore, rights in trade dress and packaging, trade
secrets and all other intellectual property rights recognized by
English and U.S. laws and applicable foreign and international laws,
treaties and conventions.
1.16 "Platform(s)" shall mean the underlying computer systems or
technologies on which Products and other application program(s), are
operated in conjunction with Devices, expressly limited to short
message service, Multi-Media Messaging and WinCe.net.
1.17 "Term" shall mean two years from the delivery to Gizmondo of the Gold
Disc and subject to any variations set out in any Game Exhibit.
1.18 "End-User (s)" shall mean a person or entity that purchases or licenses
for its use a Product pursuant to a signed purchase order, end-user
license agreement or other similar agreement.
1.19 "Wireless Network(s)" shall mean a network that allows users of Devices
to connect to and receive telecommunication transmission services in
the Territory.
1.20 "Wireless Network Operator(s)" shall mean any person or entity that
offers telecommunication transmission services to users of a Device in
the Territory over a Wireless Network operated by such person or
entity.
1.21 "Licensed Marks" shall mean those SCI trademarks specified under
"Licensed Marks" in each Game Exhibit.
<PAGE>
1.22 "Net Receipts" shall mean with respect to a particular Product all
monies actually received by Gizmondo from the license, sale or other
exploitation of such Product, after deducting the following: (1) any
amounts payable to any Wireless Network Operator, Platform owner,
including deductions made by the Wireless Network Operator or Device
manufacturer; (2) the actual returns attributable to such Product; and
(3) taxes and other governmental charges actually paid or incurred in
connection with the sale of such Product (other than the income tax of
Gizmondo). For the avoidance of doubt, Gizmondo Net Receipts shall not
be deemed to include monies derived or collected from the distribution
of the Product to End-Users by any third parties, but shall refer only
to those monies actually received by Gizmondo from such third parties
after such third parties have retained or withheld any markups, revenue
share amounts, or license or other fees due to them pursuant to the
terms of Gizmondo's agreements with such third parties.
1.23 Minimum Guarantee" shall mean the non-refundable, fully recoupable
against Earned Royalties guarantee payable by Gizmondo to SCi under
clause 6.2.
2. LICENSE.
2.1 Grant of Rights. Subject to the terms and conditions of this Agreement
SCi grants to Gizmondo the non-transferable, terminable, exclusive
right and license during the Term for each of the Games specified in
the Game Exhibit (the "License") to:
(a) develop and produce Products based on the Game and Game Content for
use solely on Devices running on the Platform; and
(b) Adapt or convert (port) the version of the Game supplied by SCi (on
Gold Disc) to operate on the Gizmondo platform and to make such changes
adaptations and adjustments as may be required to render the game
operable and attractive on the Gizmondo handheld subject to the prior
written consent of SCi or its Game Licensors.
(c) advertise, promote, market, distribute and sub-distribute, sell,
license and sub-license such Products
(i) in the applicable Territory
(ii) either directly or through any Distribution Channel; and
(iii) solely to End-Users, Distribution Partners or Wireless
Network Operators,
provided that
(1) all such Distribution Partners are subject to SCi's prior
written approval (not to be unreasonably withheld or delayed),
(2) sub-licenses to Distribution Partners shall be only as
necessary to allow Distribution Partners to distribute and
sell the Products to End-Users in the Territory,
(3) Gizmondo's agreements with such Distribution Partners shall
contain terms that are at least as protective of SCi's (and
its Game Licensors') rights (including, without limitation,
its approval rights) as those contained in this Agreement, and
(4) Gizmondo shall at all times remain primarily liable under the
terms of this Agreement for any actions or omissions on the
part of such Distribution Partners. In converting the Games to
Products, Gizmondo may make such changes to the Games as are
required to accommodate the capabilities and requirements of
the Devices, Platforms and Wireless Networks.
In connection with the foregoing License, SCi further grants to
Gizmondo the limited right and license to the applicable Intellectual
Property Rights in the Games or the Games Content to carry out the
purpose and intent thereof.
Notwithstanding anything to the contrary, for purposes of this Section,
nothing herein shall prevent SCi from publishing the Game on other
video games, computer systems, hand held devices, mobile devices or
technologies or from publishing any SCi game products other than the
Games licensed to Gizmondo hereunder on the Platforms.
<PAGE>
2.2 Retained Rights. For the avoidance of any doubt, the rights granted to
Gizmondo in Section 2.1 shall be specifically limited to the Platforms
and shall not extend to any other platform including, but not limited
to, any of the following: (a) traditional entertainment software
console platforms, such as Sony PlayStation, PlayStation 2, Sony PSP,
Microsoft Xbox, and Nintendo GameCube, and all successors to such
products; (b) desktop, laptop computer systems, such as PC Windows,
Macintosh, Linux or Lindows operating systems including multiplayer
online; (c) other hand-held electronic dedicated gaming devices, such
as Nintendo Game Boy Color and Game Boy Advance, Nintendo DS, Tiger
Electronic hand-held games and mobile phones; (d) pay-per-play arcade
systems and other forms of location-based entertainment; (e)
interactive toys; (f) television, whether via cable, satellite, set-top
boxes or other on-demand service and (g) any other device whether now
known or subsequently developed .
2.3 Limited Publication Rights. Parties agree that Gizmondo has the right
to publish on the Devices only. Distribution rights for any and all
future personal media players are subject to mutual approval and good
faith negotiations on the parts of both parties
2.4 OEM's. Subject to SCi's prior written approval Gizmondo may install,
pre-load or embed Products on the Device prior to sale, subject to SCi
receiving an equivalent Earned Royalty as it would have had the Game
been sold at retail at full retail price.
2.5 SCi hereby grants to Gizmondo a non-exclusive, non-transferable,
royalty-free, personal license to use the Licensed Marks and a
sublicense or the applicable third party game studio logos as specified
in the Game Exhibits during the Term, according to the branding
specifications in Exhibit C and other conditions herein, and solely in
connection with the development and distribution of the Products based
on the Games. Subject to compliance by SCi with its warranties in this
Agreement relating to the quality of the SCi Materials, Gizmondo agrees
to maintain the quality of Product at a level that meets or exceeds
standards of quality and performance generally accepted in the wireless
gaming industry, and that is at least commensurate with the quality set
forth in Section 4.5 and Exhibit B to this Agreement. Gizmondo agrees
to fully correct and remedy any deficiencies in its use of the SCi
Licensed Marks or the Product within a reasonable time upon receipt of
notice from SCi. Gizmondo shall cease any further use of the SCi
Licensed Marks upon expiration or termination of this Agreement.
2.6 All rights to the SCi Licensed Marks not expressly granted herein are
reserved by SCi. Gizmondo acknowledges SCi's sole ownership of the SCi
Licensed Marks, and all associated goodwill, and that SCi retains all
right, title, and interest in such Licensed Marks. All goodwill arising
from use of such Licensed Marks by Gizmondo will inure to the sole
benefit of SCi. Gizmondo will not use the SCi Licensed Marks in any
manner that will diminish or otherwise damage SCi's goodwill in such
Licensed Marks. Gizmondo will not adopt, use, or register any corporate
name, trade name, trademark, domain name, service mark or certification
mark, or other designation that violates SCi's rights in such Licensed
Marks. SCi shall have the sole right to, and in its sole discretion may
control any action concerning the SCi Licensed Marks.
3. OWNERSHIP OF INTELLECTUAL PROPERTY.
3.1 Ownership of Games and Related Rights. Subject to the terms of this
Agreement, SCi (or as applicable, its Game Licensors), shall at all
times be and remain the sole and exclusive owner of the Games and all
Intellectual Property Rights pertaining thereto. Without limiting the
generality of the foregoing, nothing in this Agreement shall be deemed
to grant or assign to Gizmondo any proprietary or ownership interest or
Intellectual Property Rights in or to the Games other than the license
rights set forth herein.
3.2 Gizmondo Ownership of Products and Related Rights. Notwithstanding
Section 2 hereof, SCi acknowledges and agrees that it has no right,
title and/or interest in and to the Products and in and to the work
product and other materials originally developed or created by Gizmondo
either before or pursuant to this Agreement to develop and produce the
Products, which do not involve, include, embody or constitute a
derivative work of, and are not otherwise based on, any portion of the
<PAGE>
software code compromising the Games, including (a) all originally
created or licensed computer software, code, routines, tools,
algorithms and other technology contained in or used in the development
of the Products, (b) all originally created art, sound, music,
graphics, and other assets and designs embodied in the Products, (c)
the technical and/or maintenance documentation, if any, of or
concerning the Products, and (d) the related instruction manuals and
packaging, if any, for the Products (collectively, the "Gizmondo
Materials"). Gizmondo (or as applicable, its licensors) shall own all
rights, title and interest, including all Intellectual Property Rights,
in and to the Gizmondo Materials, to the extent the Gizmondo Materials
do not involve, include, embody or constitute a derivative work of, and
are not otherwise based on, any portion of the SCi Materials.
3.3 No Reverse Engineering. Versions of the Game(s) provided to Gizmondo,
unless otherwise specified in the applicable Game Exhibit, shall be in
their compiled object code format and Gizmondo shall make no effort to
discover or otherwise learn the source code for each Game. On a case by
case basis, SCi may provide Gizmondo with source code for a Game in the
event Gizmondo demonstrates a good cause reason to require source code
to complete a Product, however, prior to any delivery of source code
(at such time as mutually agreed upon by the parties), if the Product
is based on a Game developed by a third party, Gizmondo shall be
required to execute such Game Developer's nondisclosure agreement
and/or license agreements (the "Game Developer Documents") as requested
by such Game Developer. Gizmondo may utilize and study the design,
performance and operation of the Games solely for the purposes of
developing a Product. Notwithstanding the foregoing, Gizmondo shall
not, directly or indirectly, reverse engineer or aid or assist in the
reverse engineering of all or any part of the Games except and only to
the extent that such activity is expressly permitted by applicable law
notwithstanding this limitation. In the event applicable law grants
Gizmondo the right to reverse engineer the Games notwithstanding this
limitation, Gizmondo shall provide SCi with written notice prior to
such reverse engineering activity, information sufficient regarding
Gizmondo's intended method of reverse engineering, its purpose and the
legal authority for such activity and shall afford SCi a reasonable
period of time before initiating such activity in order to evaluate the
activity and/or challenge the reverse engineering activity with the
appropriate legal authorities. Gizmondo shall refrain from such reverse
engineering activity until such time as any legal challenge is resolved
in Gizmondo's favor. Notwithstanding anything to the contrary, in the
event Gizmondo chooses to reverse engineer any Game without SCi
consent, SCi may immediately terminate this Agreement with no further
obligation to Gizmondo. Reverse engineering includes, without
limitation, decompiling, disassembly, sniffing, peeling semiconductor
components, or otherwise deriving source code.
4. DEVELOPMENT OF THE PRODUCTS.
4.1 SCi agrees to use its reasonable endeavors to complete the development
of the Games by the dates set out at Schedule F and to deliver to
Gizmondo all appropriate materials to support porting of the Games to
the Devices, provided that SCi shall not be obliged to deliver any
assets where such delivery is prohibited under the terms of any third
party agreement.
4.2 In the event that SCi fails or is unable for any reason to deliver the
Gold Disc in relation to any of the Games then SCi and Gizmondo shall
agree to substitute such Game with another game in the SCi current or
forthcoming publication catalogue.
4.3 At its discretion but subject to the approval of SCi and its Game
Licensors as set out in this Agreement, Gizmondo shall be entitled to
port the Games to the Device or to develop the Products in either event
at its sole cost and expense, pursuant to the terms and conditions of
this Agreement. Except as expressly provided in this Agreement Gizmondo
shall assume full responsibility for the creation, development
adaptation and production of the Products, which shall include, without
limitation, (a) designing creating adapting or modifying the technical
specifications for the Products, (b) creating modifying adapting or
emulating all computer code for the Products, (c) creating adapting or
modifying all audio and visual assets for the Products except for such
assets as may be reused and as are contained in the SCi Materials, (d)
acquiring and/or licensing any and all other technology, software and
hardware needed for purposes of creating adapting modifying emulating
and distributing the Products, and (e) conducting quality assurance
testing of the Products.
<PAGE>
4.4 Third Party Development. In the event that Gizmondo seeks to hire a
third party developer to develop a Product as specified herein ("Third
Party Developer"), Gizmondo shall, subject to SCi approval as specified
herein, enter into written agreements with such Third Party Developers
that contain language substantially equivalent to Section 3 and in any
event are as protective of SCi's Intellectual Property Rights as the
terms of this Agreement. Gizmondo shall cause all Third Party
Developers to execute SCi's and/or the Game Developer/Licensor's
Nondisclosure Agreement (and other relevant documents, if requested).
Any act or omission by any Third Party Developer shall be deemed that
of Gizmondo for the purposes of this Agreement and Gizmondo shall be
jointly and severally liable for such acts or omissions. SCi must
approve in writing all Third Party Developers and development work on
any Product by such Third Party Developer as shall not begin until such
written approval has been provided.
4.5 Completion of Products. Gizmondo agrees to use its commercially
reasonable efforts to complete the Products within a reasonable time
after being supplied with the Gold Discs for each of the Games.
4.6 Progress Reports. For the purpose of facilitating SCi's approval of the
Products as set forth in Section 4.6, Gizmondo shall submit progress
reports in connection with each "build" of the Product. Gizmondo shall
submit for SCi's review and approval the final builds (as such term is
commonly understood in the entertainment software industry) of the each
Product. Sci shall consider all such reports in good faith and shall
provide reasonable assistance to Gizmondo in relation to the compliance
with the reasonable quality standards of Sci.
4.7 Standard of Development. Gizmondo agrees that: (a) the Products shall
be of the standard customary to high-quality entertainment software
products in the wireless/handheld industry, and of such style,
appearance, and according to the Quality Standards listed in Exhibit B;
(b) the Products shall be developed, produced, distributed, sold,
licensed, advertised and serviced in accordance with all applicable
laws; and (c) the policy of sale, distribution, and/or exploitation by
Gizmondo shall be of the equivalent standard customary to high-quality
entertainment software products in the Wireless/Handheld industry.
4.8 Approvals.
----------
4.8.1 Gizmondo agrees to submit the Products and all marketing
materials to be utilized in connection with the advertising,
marketing and promotion of the Products, to SCi for SCi's (and
its Game Licensors') prior approval or disapproval for the
purpose of SCi or it's Game Licensors determining whether such
"Products" and all marketing materials maintain the
agreed-upon design specifications and quality standards
applicable for such items. Gizmondo will comply with the
obligations required by SCi's Game Licensors with regard to
the Products and marketing materials and will not release any
Product or marketing materials without SCi's or its Game
Licensors' prior written consent.
4.8.2 Gizmondo shall submit "builds" of each Product for SCi's
approval at the following stages:
(i) Prototype Design Document: Outline of the planned
deliverables and expectations for a Prototype of the
Product. This may be preceded by a "high concept"
document submitted for approval
(ii) Prototype Phase: as defined in Section 4.6.3 below
(iii) Full Product Design document: Detailed description of
game concept and level design for each Platform
(iv) First playable version: First indication of what the
end user experience will be;
(v) Code Complete version: All features implemented. All
future software work dedicated to fixing bugs;
(vi) Release Candidate version: Version submitted to SCi
of Product for release approval;
<PAGE>
(vii) Commercial Release version: Final version that is
actually published.
4.8.3 Prototype. The Prototype should feature a playable experience
that can be used with a relatively high degree of accuracy to
make predictions about the viability of the actual Product.
The deliverables as outlined below should be of sufficient
quality and depth to achieve this purpose and inclusive of the
following at a minimum:
(i) Prototype Binary
- Primary gameplay and display engine for a target
Platform agreed to by SCi (WinCe.net) is viewable.
Performance optimizations have not been performed.
- Primary gameplay elements are playable (e.g., drive
the car, place a unit, move the character). No
tuning has been performed. Secondary functionalities
(e.g., extra vehicle behavior, extensive character
moves) are not inclusive.
- Key Playable Experience: Binary able to demonstrate
the core mechanic or primary feature of the game.
- Binary is sufficiently stable to review the above
described elements.
- Realized character art that is representative of
what will be seen in the final Product, which covers
at least the main character. The art is to be shown
in WinCe.net format.
(ii) Initial Design Document (GDD)
- Core gameplay functionality described sufficient to
understand the primary gameplay elements and their
gameplay interactions. Competitive features and
player proxy are also described.
- Projected list of platform feature differences.
- Projected list of tools and technologies needed to
realize the game as described.
- Mitigated Risks: Gizmondo's perceived risks in
taking this particular approach and thus not being
able to deliver in terms of originality, fun, etc.
(iii) Additional Documentation including a description of
Prototype's features; what works and what doesn't.
4.8.4 Once SCi gives an approval for submitted materials and
information about the proposed Product, it cannot retract or
modify that approval and Gizmondo will have the right to rely
on such approval in proceeding to the subsequent development
stages based on the approved materials and information,
provided there are no material deviations, modifications or
other changes from the submitted materials and information.
4.8.5 SCi shall use reasonable efforts to approve, and to procure
that SCi's Game Licensor's approve, "builds" and other
submissions submitted by Gizmondo within fifteen (15) business
days after receipt, which approval shall not be unreasonably
withheld, provided such "builds" and other submissions
maintain the agreed-upon design specifications and quality
standards applicable for such items. In the event SCi or its
Game Licensors neither approves nor disapproves the submitted
material within such fifteen (15) business day period,
Gizmondo shall provide written notice to SCi and SCi and its
Game Licensors shall have an additional five (5) business days
to approve or disapprove the submitted material. In the event
SCi and/or its Game Licensors fail to approve or disapprove
within such five (5) business days, the submitted material
shall be deemed approved unless SCi notifies Gizmondo in
writing during such period that it has not received approval
from one or more of its Game Licensors in which case the
submitted material will not be approved until such Game
Licensor has given its approval and all applicable time limits
<PAGE>
in this Agreement shall be correspondingly extended. The
commercial release version of the Product and all marketing
materials must be approved by the written signature of the
person(s) designated by SCi in the Game Exhibit. In the event
SCi and/or its Game Licensors disapprove of a deliverable, SCi
shall provide Gizmondo with sufficient information in which to
discern the nature of the disapproval and Gizmondo shall
modify the deliverable prior to resubmission. Gizmondo agrees
to make such changes as will be reasonably required to correct
any deficiencies noted by SCi or its Game Licensors promptly
upon receipt of such notice. This procedure will be repeated
with each submission until SCi determines that its request(s)
for changes has been met. No distribution of any Products or
related materials may occur without SCi's and its Game
Licensors' prior written approval. Once approved, the Products
and related materials shall not deviate from the form in which
such items were approved.
4.9 Hardware. Gizmondo shall provide such hardware and carrier service,
and/or comparable method of access to the Products as is necessary to
facilitate SCi's review and approval of the Products.
4.10 Defects Correction. Gizmondo shall be responsible for correcting all
bugs and errors found in the Products as needed to have the Products
approved by SCi as specified herein and deemed ready for "code release"
(i.e., the Product is in final form, without any significant bugs or
errors, and is ready to be reproduced into units for sale in the
Territory).
4.11 SCi Materials. For each Game, SCi agrees to deliver to Gizmondo the SCi
Materials as may be specified in the Game Exhibit for such Game.
4.12 Copyright Acknowledgment. Gizmondo shall include the appropriate
copyright and trademark acknowledgement in the credit screen, package,
manual, marketing and promotional materials and paid advertisements for
the Product as identified on the Game Exhibit.
4.13 Gizmondo will display and not remove or alter any trademarks,
copyrights or notices pertaining to the Games as provided by SCi, and
reproduce such trademarks, copyrights and notices in all applicable
advertising and marketing materials for the Products, including but not
limited to applicable ratings symbols for each Products. Gizmondo will
comply with all Entertainment Software Ratings Board ("ESRB")
requirements and procedures, and equivalent applicable requirements and
procedures of similar ratings organizations in other countries, in
connection with its distribution and marketing of the Products. The
content and game play of the Product shall not materially differ from
the applicable Game such that the Product would receive a different
content rating than the Game in any jurisdiction.
4.14 Credit.
------
4.14.1 Each Product shall be co-branded equally with the SCi and
Gizmondo brands and the Game developer and SCi's Game
Licensor(s) (if applicable), and bear the same title as the
Game. Use of SCi brands and logos will conform to the Branding
Specifications attached hereto as Exhibit C.
4.14.2 Subject to the limitations stated in Sections 4.6 and 11, the
parties shall mutually agree to a press release concerning
Gizmondo's publication of the Products that shall identify SCi
as the original publisher of each of the Games, the Game
Developer/Licensor of each applicable Game, and Gizmondo as
the publisher of the Products. The press releases shall also
be subject to SCi's Game Licensor's approval where relevant.
4.14.3 Subject to the approval of SCi and its Game Licensors as to
all aspects of the display or presentation of the Licensed
Marks, Gizmondo shall provide SCi with the trademark
attribution supplied to Gizmondo by SCi and give credit to SCi
and any Game Licensors on the back of the Product packaging
and within the Products in all areas where credit is given to
Gizmondo. Examples of such "in-game" credit include SCi's name
and logo in the splash screen upon "boot-up", within the game
manual, and in the credit section of each Product. Gizmondo
shall also include SCi's and any Game Licensor's name and logo
on all marketing and promotional materials and paid
<PAGE>
advertisements in a manner that clearly identifies SCi as the
publisher of the Game. Trademark attribution for each Product
shall be included in each Game Exhibit or as provided by SCi
from time to time under this Agreement. In addition, Gizmondo
shall grant credit to Game Developer/Licensor as follows or as
otherwise instructed by SCi on the Game Exhibit:
o Game Developer/Licensor's name and logo within the manual
for the Product
o Game Developer/Licensor's name within the credit section
of the Product
4.14.4 The Products shall reference all credit and copyright
information found in the original Games with the exception of
additions or deletions agreed to in writing by SCi.
Notwithstanding the foregoing, Gizmondo shall have the right
to credit the Third Party Developers of the Products or third
parties who assist in the development or distribution of the
Products provided that such credit is consistent with the
presentation of credits contained in the applicable Game.
5. CERTIFICATION; TESTING.
5.1 Certification And Testing. Gizmondo shall, as required, submit each
Product for testing and certification by an appropriate testing
facility, in-house Quality Assurance department or Gizmondo
certification department. All testing fees shall be paid by Gizmondo.
In the event any Product is not certified due to its failure to meet
applicable standards set-forth by the certifying entity or body,
Gizmondo shall at its sole expense, make such revisions and further
modifications until such time as the Product is certified.
5.2 Technical Support. Gizmondo or a party designated by Gizmondo shall be
responsible for all customer support for the Product. SCi acknowledges
that Gizmondo may rely on its Wireless Network Operators and
Distribution Partners to provide support, subject to the terms of this
Agreement. Gizmondo will, through clear and conspicuous language in the
Product and on the packaging and documentation for the Product, notify
users of Products how to obtain technical support for the Product and
that SCi is not responsible for providing support for such Product. SCi
shall, however, at its own expense use reasonable commercial endeavours
to provide Gizmondo with such support in relation to the SCi Materials
as Gizmondo may reasonably require for the purpose of performing its
obligations under this Clause provided that the information required by
Gizmondo is readily available to SCi and/or its Game Developers.
6. FINANCIAL TERMS.
6.1 Product Price. Gizmondo shall promptly inform SCi of all prices
applicable to the distribution and sale of the Products (the "Product
Price") provided that the Product Price is substantially the same as
similar quality products and subject to SCi's prior written approval,
not to be unreasonably withheld. In addition, Gizmondo, a hardware
manufacturer, Merchant or a Distribution Partner shall have the right
subject to any approval rights of Gizmondo, if any, to reduce the
Product Price or offer discounts to third parties.
6.2 Minimum Guarantee. Gizmondo shall pay SCi a Minimum Guarantee totaling
seven hundred and fifty thousand pounds (750,000 GBP) allocated by
Product as follows:
Game Title Minimum Guarantee
---------- -----------------
The Great Escape 40,000 GBP
Conflict 1 94,000 GBP
Conflict 2 94,000 GBP
Conflict 3 94,000 GBP
Conflict 4 94,000 GBP
Highlander 40,000 GBP
Richard Burns Rally 40,000 GBP
Carmageddon TDR 2000 40,000 GBP
Carmageddon TV 94,000 GBP
Midway 40,000 GBP
Reservoir Dogs 40,000 GBP
Roll Call 40,000 GBP
<PAGE>
The Minimum Guarantee shall be paid to SCi on the Effective Date.
Subject to the provisions of this Agreement, the Minimum Guarantee for
each Product shall be non-refundable but fully recoupable against
Earned Royalties for each Product.
6.4 With respect to each Product, Gizmondo agrees to pay to SCi an earned
royalty (the "Earned Royalty or Royalties") of 50% of Net Receipts.
6.5 Royalty Statements. Gizmondo will provide royalty statements including
quarterly unit sales and revenue reporting of sell-in to Sci with
detail by stock-keeping unit (SKU), for each geographic region in the
Territory, with such reports delivered to Sci within forty five (45)
days after the end of each fiscal quarter after the commercial launch
of any Product with Earned Royalties shown thereby to be due to Sci.
Payment of Earned Royalties shall be in pounds sterling within fifteen
(15) business days of receipt of corresponding invoice and shall be
paid according to the procedure identified in the attached Exhibit D.
The royalty statement shall be based upon units distributed and not
returned for the quarter then ended, and shall contain information
sufficient to discern how the royalty payment was computed. Earned
Royalties are payable on the number of physical copies or downloads of
the Products sold less the number of returns. Gizmondo may maintain and
withhold from payment Earned Royalties shown to have accrued on any
statement reasonable reserves (not exceeding 15%) of the Earned Royalty
payable in respect of each fiscal quarter in respect of Products which
may be returned ("Returns") and will subsequently make adjustments
based on the number of Products actually returned, provided that any
unused reserve shall be released within the second fiscal quarter
following that in which it was first maintained
6.6 Audits. For at least two years after the Term, Gizmondo will maintain
accurate books and records that report the sales of each Product. Sci
shall have the right to designate an independent certified public
accountant on Sci's behalf (who shall not be compensated on a
contingent fee basis), at Sci's own expense, to examine those books and
records solely for the purpose of verifying the accuracy of royalty
statements rendered by Gizmondo hereunder. Sci's accountant may only
make such examination during regular business hours and upon reasonable
notice and in a manner that is not unreasonably disruptive to
Gizmondo's business. Each examination will take place at the place
Gizmondo normally keeps the books and records to be examined. Sci shall
be limited to one (1) such examination each twelve (12) months while
the applicable Product is being commercially exploited by Gizmondo and
for 12 months thereafter. Gizmondo shall have no obligation to permit
Sci, nor shall Sci have any right, to examine Gizmondo `s books or
records relating to any particular statement more than once unless
there is an unresolved issue. Sci acknowledges that Gizmondo claims
that Gizmondo's books and records contain confidential trade secret
information. Neither Sci nor Sci's independent certified public
accountant or other representatives shall communicate at any time or
use on behalf of any other person, firm or corporation other than
representatives of Sci any facts or information obtained as a result of
any such examination of Gizmondo's books and records. Further, prior to
the commencement of any examination of Gizmondo's books and records in
accordance with the provisions of this Section, Sci shall cause the
independent certified public accountant engaged by Sci to sign a letter
and/or agreement in a form approved by Gizmondo which acknowledges his
or her agreement (and the agreement of his or her firm) to be bound by
the foregoing. The rights granted to Sci in this Section shall
constitute Sci's sole and exclusive right to examine Gizmondo `s books
and records. If Sci establishes as a result of an audit conducted by
Sci that there is an underpayment in the royalty payments due to Sci of
five per cent (5%) or more for the period covered by the audit, then
Gizmondo shall pay to Sci, upon settlement of the audit, Sci's
accountable auditor's fees actually paid together with the
underpayment.
<PAGE>
6.7 In the event that Gizmondo is late in making any payment or if Sci
establishes as a result of an audit conducted by Sci that there is an
underpayment in the royalty payments due to Sci of five percent (5%) or
more for the period covered by the audit, then Gizmondo shall pay to
Sci interest from the due date of such monies until the day payment is
received at the rate of 8% such interest to run from day to day and to
accrue after as well as before any judgment.
7. MARKETING AND DISTRIBUTION
7.1 At Gizmondo's sole expense and subject to Sci's approvals as set forth
in Section 4, Gizmondo shall prepare and execute a marketing plan in
support of the sales effort for the Products. Gizmondo shall spend on
its marketing, and promotional efforts for each Product, an amount
commensurate with amounts spent by Gizmondo on its other top-tier
products. Gizmondo shall use commercially reasonable efforts to market,
promote and distribute the Window's mobile versions of the Products in
the Territory on no less favorable terms as Gizmondo markets, promotes
and distributes other interactive games distributed by Gizmondo. Sci
shall have approval of the marketing plan, to be obtained prior to, and
as a condition of, a Product being certified by Sci as ready for
release to manufacturing.
7.2 EULA. Gizmondo shall include an End User License Agreement (EULA) with
the Products in paper or electronic form. The EULA shall indicate that
Gizmondo is the licensor of the Product and the supplier of Product
warranties and support. The Products shall be licensed to End Users
under terms as protective of Sci's Intellectual Property Rights as the
terms specified herein, except in no event will the EULA grant any
rights to End Users beyond the right to use the Product as a game.
Product support information shall include, at a minimum Gizmondo's or
other designated partner or operator web site and e-mail address for
end users to use to obtain support for the Product. Sci must approve
any material changes to the EULA in writing that may affect Sci's
rights under this Agreement.
7.3 Undertaking Penetration in Distribution Channels. Gizmondo shall use
its commercially reasonable efforts to cause the Products to be
distributed in at least ninety percent (90%) of the Distribution
Channel in which Gizmondo normally distributes consumer software
products in the applicable Territory
7.4 Gizmondo grants to Sci the unlimited right to copy, use during the Term
and distribute to Sci employees and contractors the Gizmondo versions
of Products for reference, promotions and the like but not for resale
or commercial exploitation
7.5 Gizmondo shall provide to Sci at least (i) thirty (30) free copies of
each retail version of a Product for each Platform from the first
manufacturing run of such Product; and (ii) thirty (30) free simulators
to be able to play non retail versions of a Product for each platform
upon commercial release. Sci shall notify Gizmondo regarding any
commitment it may have to provide copies to any Game Licensor and
Gizmondo shall provide Sci with such copies.
7.6 Gizmondo will provide Sci with three (3) pre-production units of the
Device and fifteen (15) commercial retail versions of the Device when
each such Device first becomes available.
7.7 Gizmondo shall include on its website or webpage for a Product a link
to the applicable Game website or webpage as designated by Sci.
7.8 Sci shall use commercially reasonable efforts in its discretion to
cross promote the Products based on the Games.
8. TERMINATION.
8.1 Term. This Agreement will continue in full force and effect for the
Term unless terminated earlier as set forth below.
<PAGE>
8.2 Termination for Cause. A party hereto which is not in default or breach
of this Agreement may terminate this Agreement as it relates to a given
Game licensed hereunder by written notice to the other party at any
time prior to its original expiration date (as may be extended) upon
the occurrence of any of the following events (each an "Event of
Default"):
27 The breach or default of any material term, agreement,
representation, warranty, covenant or obligation set forth in this
Agreement as to such Game, related materials or Products and such
breach or default continues uncured for a period of thirty (30)
calendar days following the receipt by the breaching party of a
written notice thereof; or
(ii) If either party becomes insolvent, files or has filed against
it a petition under any bankruptcy law (which, if involuntary,
is unresolved after sixty (60) calendar days), proposes any
dissolution, liquidation, composition, financial
reorganization, or recapitalization with creditors, makes an
assignment or trust mortgage for the benefit of the creditors,
or a receiver trustee, custodian, or similar agent is
appointed or takes possession with respect to any property or
business of such party
Notwithstanding the foregoing, the parties agree that a good faith
disagreement as to the amount of any payments due under this Agreement
will not be considered a breach of this Agreement.
8.3 Partial Termination for Loss of Product Distribution Rights. In the
event Sci loses the right to grant to Gizmondo the rights with respect
to any Sci Materials, Sci may immediately terminate the rights granted
to Gizmondo for such Sci Materials and the associated Product(s)
without effect on the rights related to other Sci Materials and
associated Product(s), and, if so indicated by Sci due to its loss of
rights, without a Sell Off Period for such affected Product(s) as
specified in Section 8.5. If any Minimum Guarantees for the affected
Product(s) have yet to be fully recouped by Gizmondo, Sci will replace
the affected Product(s) with comparable product(s) acceptable to
Gizmondo.
8.4 Enforcement Right Without Termination. Without limiting the foregoing
or anything to the contrary contained herein, SCI's breach of this
Agreement shall not cause this Agreement and the rights hereunder to
terminate unless Gizmondo specifically elects in writing to terminate
the Agreement. Without limiting the foregoing or anything to the
contrary contained herein, Gizmondo's breach of this Agreement shall
not cause this Agreement and the rights hereunder to terminate unless
Sci specifically elects in writing to terminate the Agreement.
8.5 Effect of Expiration or Termination. The parties agree that in case of
expiration or early termination of this Agreement, except if such
termination is due to a breach of this Agreement by Gizmondo:
27 Gizmondo shall have (i) one hundred eighty (180) days from the
date of expiration or termination to sell packaged retail versions
of the Product already in inventory prior to the date of
termination; and (ii) ninety (90) days from the date of expiration
or termination to continue to offer download versions of the
Product via electronic distribution (each period collectively, the
"Sell Off Period");
(ii) Except as otherwise set forth in this Agreement, the parties
shall have no further obligations to one another under this
Agreement.
8.6 Survival of Certain Obligations. Subject to the terms of this Agreement
to the contrary, Sections 2.7, 3, 6.6 and 9 through 14 shall survive
the termination or expiration of this Agreement.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS.
9.1 Representations, Warranties and Covenants of Sci. Sci represents,
warrants and covenants that: (i) Sci is duly incorporated, validly
existing and in good standing under the laws of the jurisdiction in
which it is incorporated, and that it has the full rights, power, legal
capacity and authority to enter into this Agreement, and to carry out
<PAGE>
the terms hereof; (ii) this Agreement has been executed by its duly
authorized representative and is a valid, legally binding and
enforceable obligation of Sci; (iii) Sci is either the owner of the
Games, the Sci Materials including the Game Content, the Licensed Marks
(in countries of the Territory in which such Licensed Marks are
registered, as specified in the applicable Game Exhibit) and all
Intellectual Property Rights therein or has procured all necessary
rights and licenses from the owners of such rights to enter into and
carry out the terms of this Agreement; (iv) the Games and Game Content
have not been sold, assigned, leased, licensed or in any other way
disposed of by Sci or mortgaged, pledged or encumbered by Sci in a
manner that would violate the exclusive license granted to Gizmondo
hereunder; and (v) Sci will comply in all material respects with all
applicable laws, statutes and regulations in performing its obligations
under this Agreement.
9.2 Representations and Warranties of Gizmondo. Gizmondo represents,
warrants and covenants that:
(i) It is duly incorporated, validly existing and in good standing
under the laws of the jurisdiction in which it is
incorporated, and that it has the full rights, power, legal
capacity and authority to enter into this Agreement, and to
carry out the terms hereof;
(ii) this Agreement has been executed by its duly authorized
representative and is a valid, legally binding and enforceable
obligation of Gizmondo;
(iii) Gizmondo has the full rights, power, legal capacity and
authority to enter into this Agreement, and to carry out the
terms hereof; and materials furnished by Gizmondo, if any,
under this Agreement, do not or will not infringe upon or
otherwise violate the rights of any third party;
(iv) Gizmondo will comply in all material respects with all
applicable laws, statutes and regulations in distributing the
Products under this Agreement;
(v) Gizmondo has full power and authority to enter into and
perform this Agreement without approval from any governmental
entity or third party, and that such ability is not limited or
restricted by any agreements or understanding between Gizmondo
and any other person or company;
(vi) Gizmondo and its affiliated companies have the know-how and
experience to develop the Products and are otherwise fully
capable of performing the obligations under this Agreement, or
will engage Third Party Developers approved by Sci who have
such know-how, experience and capability;
(vii) Gizmondo shall maintain sufficient insurance coverage to
enable it to meet its obligations created by this Agreement
and by law. Without limiting the foregoing, Gizmondo warrants
that such insurance shall include the following lines of
coverage to the extent the Agreement creates exposures
generally covered by these insurance policies: Commercial
General Liability, product liability and Employer's Liability.
(viii) The Products, computer code, technology, information and
materials created, developed or used by Gizmondo pursuant to
this Agreement, other than the Game Content, will not infringe
upon or misappropriate the Intellectual Property Rights or any
other legal rights of any third party, and should any aspect
of thereof, or such other computer code, technology,
information or materials created or developed by Gizmondo
pursuant to this Agreement, become, or, in Sci's reasonable
opinion, is likely to become, the object of any infringement
or misappropriation claim or suit, Gizmondo will use its best
efforts to procure, at Gizmondo's expense, the right to use
such computer code, technology, information or materials in
all respects, or to replace or modify the affected material to
make it non-infringing, and if it is unable to do so at
reasonable expense, it shall be entitled to surrender its
rights under this Agreement with respect to the Product or
Products in question.
<PAGE>
10. INDEMNIFICATION.
10.1 Indemnification by Sci. Sci hereby agrees to indemnify, defend and hold
harmless Gizmondo from and against any and all suits, losses,
liabilities, damages, awards, claims, settlements, costs and expenses,
including reasonable attorneys' fees, arising out of or otherwise
relating to a breach by Sci of its warranties, representations and
covenants contained in this Agreement.
10.2 Indemnification by Gizmondo. Gizmondo hereby agrees to indemnify,
defend and hold harmless Sci against any and all suits, losses,
liabilities, damages, awards, claims, settlements, costs and expenses,
including reasonable attorneys' fees, arising out of or otherwise
relating to a breach by Gizmondo of its warranties, representations and
covenants contained in this Agreement.
10.3 Limitation On Indemnification. Notwithstanding this Section 10, neither
party shall have obligation to indemnify the other if the Claim for
which indemnification is sought arises out of a breach of this
Agreement or of a representation, warranty or covenant made by the
party seeking indemnification.
10.4 Notice of Claim. In the event either party wishes to assert a claim for
indemnification hereunder (the "Indemnified Party"), it shall deliver
written notice (a "Claims Notice") to the other party (the
"Indemnifying Party"), specifying the facts constituting the basis for,
and the amount (if known) of the claim asserted.
10.5 Right to Contest Claims of Third Parties.
10.5.1 If an Indemnified Party asserts, or may in the future seek to
assert, a claim for indemnification hereunder because of any
action, cause of action or suit brought by any person not a
party to this Agreement (a "Third Party Claimant") that may
result in a loss with respect to which the Indemnified Party
would be entitled to indemnification pursuant to this Section
(an "Asserted Liability"), the Indemnified Party shall deliver
to the Indemnifying Party a Claims Notice with respect
thereto, which Claims Notice shall, in accordance with the
provisions of Section 10.4 hereof, be delivered as promptly as
practicable after an action in connection with such Asserted
Liability is commenced against the Indemnified Party.
10.5.2 The Indemnifying Party shall have the right, upon written
notice to the Indemnified Party, to investigate, contest,
defend or settle any Asserted Liability that may result in a
loss with respect to which the Indemnified Party is entitled
to indemnification pursuant to this Section; provided that the
Indemnified Party may, at its option and at its own expense,
participate in the investigation, contesting, defense or
settlement of any such Asserted Liability through
representatives and counsel of its own; and, provided further,
that the Indemnifying Party shall not settle any Asserted
Liability unless such settlement provides as an unconditional
term an immediate release of the Indemnified Party for all
liability with respect to such Asserted Liability, and the
Indemnified Party has consented to the other terms of such
settlement. If requested by the Indemnifying Party, the
Indemnified Party will, at the sole cost and expense of the
Indemnifying Party, cooperate with reasonable requests of the
Indemnifying Party and its counsel in contesting any Asserted
Liability, including, if appropriate and related to the
Asserted Liability in question, in making any counterclaim
against the Third Party Claimant, or any cross-complaint
against any Person (other than the Indemnified Party or its
Affiliates). If the Indemnifying Party fails to undertake the
defense of the Asserted Liability reasonably promptly, the
Indemnified Party may, at its option and at the Indemnifying
Party's expense, to do so in such manner as it deems
appropriate; provided, however, that the Indemnified Party
shall not settle or compromise any Asserted Liability for
which it seeks indemnification hereunder without the prior
written consent of the Indemnifying Party (which shall not be
unreasonably withheld or delayed).
<PAGE>
10.5.3 The Indemnifying Party may participate in (but not control)
the defense of any Asserted Liability that it has not elected
to defend with its own counsel and at its own expense.
10.5.4 The Indemnifying Party and the Indemnified Party shall make
mutually available to each other all relevant information in
their possession not protected under confidentiality
agreements relating to any Asserted Liability (except to the
extent that such action would result in a loss of
attorney-client privilege or would violate any applicable law)
and shall cooperate with each other in the defense thereof.
10.6 EXCEPT FOR THE PARTIES' INDEMNIFICATION OBLIGATIONS SET FORTH IN
SECTION 10, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INCIDENTAL,
EXEMPLARY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND OR
THE LOSS OF ANTICIPATED PROFITS INCURRED OR SUFFERED BY THE OTHER PARTY
ARISING FROM ANY BREACH OF THIS AGREEMENT. IN NO EVENT WILL SCI'S
AGGREGATE LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNT OF FEES PAID
TO SCI HEREUNDER. NOTHING IN THIS EXCLUSION SHALL EXCLUDE LIABIILITY
FOR FRAUD.
11. CONFIDENTIALITY.
11.1 The parties to this Agreement recognize that, in connection with the
performance of this Agreement, each of them may disclose to the other
information about the disclosing party's business or activities which
the disclosing party considers proprietary and confidential. All of
such proprietary and confidential information of the disclosing party
(which shall include, without limitation, this Agreement, all business,
financial and technical information of a party, identities of
customers, clients or licensees, proprietary software code and any
other information whether oral or written which is not generally known
or available to the public) is hereinafter referred to as "Confidential
Information."
11.2 The party who receives any Confidential Information agrees to maintain
the confidential status for such Confidential Information, not to use
any such Confidential Information for any purpose other than the
purpose for which it was originally disclosed to the receiving party,
and not to disclose any of such Confidential Information to any third
party.
11.3 All terms and conditions of this Agreement shall be deemed Confidential
Information as defined herein. In the event Gizmondo transfers
Confidential Information to other parties (e.g., Third Party
Developers) as allowed under this Agreement, that party shall enter
into agreements with such parties which protect the Confidential
Information of Sci to no less a degree than it is protected herein.
Without limiting the foregoing, all terms and conditions of this
Agreement shall be considered confidential and shall not be disclosed
(except to either party's attorneys or accountants on a need-to-know
basis) without the prior written consent of the other party.
11.2 Press-Release. The parties shall issue a press release announcing this
relationship provided that such press release shall be subject to their
mutual approval
11.3 Injunctive Relief. Each party further acknowledges and agrees that, in
the event of a breach or threatened breach of this Section, the other
party may have no adequate remedy in money or damages and, accordingly,
shall be entitled to seek preliminary, permanent and other injunctive
relief.
11.4 Non-Impairment. Nothing in this Agreement will affect any obligation of
either party to maintain the confidentiality of a third party's
confidential information. Nothing in this Agreement will impair the
right of either party to use, develop or market technologies, ideas or
products similar to those of the other party so long as such use,
development or marketing does not infringe on the Intellectual Property
Rights of the other party.
<PAGE>
12. PROTECTION OF PROPRIETARY RIGHTS.
12.1 Third Party Infringement. If either party hereto becomes aware that any
Product or Game Content governed by this Agreement has been or will be
infringed, such party shall promptly notify the other thereof in
writing and the parties shall promptly seek to mutually determine a
joint course of action with respect to said infringement. If joint
action is undertaken, the expenses incurred by each party will be paid
off the top from any recovery received in connection with such action
and the remainder of such recovery shall then be split by the parties
in proportion to their expenses for such action. If, however, no
mutually acceptable basis for joint action is agreed upon within a
reasonable period of time and Gizmondo reasonably believes that action
is required to protect its rights, Gizmondo may take action in its own
name and Sci shall cooperate, including with respect to the issues of
standing and venue, with Gizmondo in connection with the prosecution of
such action at Sci's expense and reasonable request. If, however, no
mutually acceptable basis for joint action is agreed upon within a
reasonable period of time and Gizmondo fails to take action in a
reasonable amount of time thereafter, Sci may take action in its own
name, and Gizmondo shall cooperate, including with respect to issues of
standing and venue, with Sci in connection with the prosecution of such
action at Sci's expense and reasonable request. The party who commences
any such unilateral action shall be entitled to recover its actual out
of pocket costs and expenses associated with such action with the
balance retained by Gizmondo and deemed Net Receipts.
12.2 Third Party Claims. Gizmondo will promptly notify Sci in writing of any
legal proceeding instituted, or written claim or demand asserted by,
any third party against Gizmondo with respect to the infringement of
any Intellectual Property Right, which is alleged to result from the
license, sale or use of the Game Content by Gizmondo. Such a claim
shall be deemed a breach of Sci's representations and warranties.
13. MISCELLANEOUS.
13.1 Public Announcements. Neither party will make any public announcement
in relation to this Agreement without the express written consent of
the other.
13.2 Assignment. Gizmondo may not assign this Agreement or any portion
thereof, to any third party other than Gizmondo Affiliates unless Sci
expressly consents to such assignment in writing, such consent shall
not be unreasonably withheld.
13.3 Force Majeure. Neither party will be responsible for any failure to
perform its respective obligations under this Agreement due to causes
beyond its reasonable control (each a "Force Majeure Event"),
including, but not limited to, strikes, riots, embargoes, war, acts of
terrorism, acts of civil or military authorities, fire, floods,
explosion, earthquakes, accidents, network catastrophes, acts of God,
and all other delays beyond the party's reasonable control, provided
that such party gives prompt written notice of such Force Majeure Event
to the other party within five (5) business days. The time for
performance will be extended for a period equal to the duration of the
Force Majeure Event, but in no case longer than thirty (30) days.
13.4 Severability. In the event that any provision in this Agreement will be
subject to an interpretation under which it would be void or
unenforceable, such provisions will be construed so as to constitute it
a valid and enforceable provision to the fullest extent possible, and
in the event that it cannot be so construed, it will, to that extent,
be deemed deleted and separable from the other provisions of this
Agreement, which will remain in full force and effect and will be
construed to effectuate its purposes to the maximum legal extent.
13.5 Notice. Any notice herein required or permitted to be given will be
given in writing and may be delivered personally to any officer of Sci
or Gizmondo, or as appropriate, by express courier, registered or
certified mail (postage and fees prepaid, with return receipt
requested), or by facsimile transmission to the address set forth
below. Either party may from time to time specify or change the address
for such notice by giving written notice thereof to the other party in
the manner provided in this Section. A notice will be deemed given
three (3) days after deposit if by express courier, five (5) days after
<PAGE>
deposit if by regular mail, or upon transmission if by facsimile.
If to Gizmondo:
With a copy to: Gizmondo Europe Ltd
1 Meadow Gate Avenue
Farnborough Business Park
Farnborough
Hants
GU14 6FG
ENGLAND
Attention: Global Operations Manager, Gizmondo Ltd.
If to Sci: Sci Games Limited
11 Ivory House
Plantation Wharf
London SW11 3TN
Fax No: 020 7924 3419
Attn: Head of Legal
13.6 Independent Contractors. The parties hereto are independent
contractors. Sci will not be entitled to any compensation except as
provided in the Agreement. Each party shall be responsible for payment
of its employees' compensation, disability benefits, unemployment
insurance, and for withholding income taxes and social security.
Neither party shall be entitled to receive any benefits provided by the
other party to such party's employees. Neither Gizmondo nor Sci shall
be deemed to be partners or agents of the other. In addition to the
parties' other indemnification obligations set forth herein, each party
agrees to indemnify and hold the other and its directors, officers and
employees harmless from and against any claims, liabilities or
obligations asserted against any of them for not withholding taxes or
making unemployment and worker compensation payments and the like, as a
result of such party's independent contractor status. Such
indemnification shall include any penalties and interest assessed
thereon as well as the payment of reasonable attorneys' fees.
13.7 Governing Law and Venue. This Agreement shall be construed and
controlled by English law and the parties shall be subject to the
non-exclusive jurisdiction of the English Courts. In any action or suit
to enforce any right or remedy under this Agreement or to interpret any
provision of this Agreement, the prevailing party shall be entitled to
recover its reasonable attorney's fees, costs and other expenses
13.8 Headings and Presumptions. The headings of the sections and
sub-sections of this Agreement are provided for convenience only and
will not be used to limit or construe the contents of this Agreement.
As this Agreement is a negotiated agreement reviewed by each party's
legal counsel and there will be no presumption for or against one party
on the ground that the other party was responsible for preparing this
Agreement or any part of it.
13.9 Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed an original Agreement for all purposes and which
collectively will constitute one and the same Agreement.
13.10 Remedies. Unless expressly set forth to the contrary, either party's
election of any remedies provided for in this Agreement will not be
exclusive of any other remedies available hereunder or otherwise at law
or in equity.
13.11 Complete Agreement, Waiver, and Modification. This Agreement and the
Schedule attached hereto constitutes the complete and exclusive
understanding between the parties with respect to the subject matter
hereof, superseding all prior negotiations, preliminary agreements,
correspondence, proposals or understandings, both written or oral. No
waiver or modification of any provision of this Agreement will be
<PAGE>
binding unless it is in writing and signed by authorized
representatives of each of the parties. No waiver of a breach hereof
will be deemed to constitute a waiver of a further breach, whether of a
similar or dissimilar nature.
<PAGE>
ACCEPTED AND AGREED TO:
FOR AND ON BEHALF OF FOR AND ON BEHALF OF
GIZMONDO EUROPE LTD. SCI GAMES LIMITED
By: _________________________ By: _________________________
Its: _________________________ Its: _________________________
Date: ________________________ Date: ________________________
<PAGE>
EXHIBIT A
---------
GAME EXHIBIT FORMAT
-------------------
Game Title and Version:
Developer:
Product:
Platform:
U.K. Release Date:
U.S Release Date:
Projected Sales Figures:
Countries of Licensed Mark Registration:
Rights Restrictions:
Third Party Approvals:
Content provided to Gizmondo (code, third party content, music, etc):
Licensed Marks:
Game Title Presentation
Studio Logo
Sci Attributions:
Third Party Credit Obligations:
Development Schedule:
<PAGE>
EXHIBIT B
---------
QUALITY STANDARDS
-----------------
(1) The Product shall appear, operate and perform in all substantial
respects consistent with the final design specifications approved by
Sci for the Product.
(2) The Product shall be of similar quality and playability to that of
other games published by Gizmondo on the same platform.
(3) The Product shall qualify for an ESRB rating or equivalent content
rating no more restrictive than the rating designated for the Game.
(4) In developing the Product, Gizmondo shall ensure that the Product runs
on and is fully compatible with the latest version of the applicable
Platform, and Gizmondo shall comply with Sci's logo certification
requirements for applications through the Designed for Windows for
WinCe.net logo programs.
<PAGE>
EXHIBIT C
BRANDING SPECIFICATIONS
-----------------------
Branding Specifications:
1. Gizmondo may use the Licensed Marks only on Product packaging,
documentation and marketing materials in accordance with the Agreement
and specifications below.
2. Gizmondo may use the Licensed Marks in the manner set forth on each
game exhibit showing the specific artwork used in relation to that
title. Artwork for each title is listed under "Game Title Presentation"
and artwork for the Studio is listed under "Studio Logo."
3. Gizmondo's name, logo or trademark must appear on any materials where
the Licensed Marks are used and must clearly identify the source of the
Products as Gizmondo.
4. Licensed Marks may not be used in any manner that expresses or might
imply Sci's affiliation, sponsorship, endorsement, certification, or
approval, other than as contemplated by the Agreement.
5. Except as expressly licensed in the Agreement, Licensed Marks may not
be included in any non-Sci trade or business name, domain name, product
or service name, logo, trade dress, design, slogan, or other
trademarks.
6. The Licensed Marks may not be combined with any other symbols,
including words, logos, icons, graphics, photos, slogans, numbers or
other design elements.
7. Gizmondo shall mark the first and most prominent use of the Licensed
Marks in the Product, including on packaging and in advertising and
marketing materials, with the trademark symbols provided by Sci on each
Game Exhibit or other appropriate trademark designations set forth from
time to time by Sci.
Additional specifications for use of the logos:
1. To properly state the logos, a minimum clearance between the logos and
other elements must be maintained. 1/8 inch of minimum clearance should
be kept between each logo and other elements on all sides of the logos.
The logo may not be used as a feature or design element in any
materials.
2. Gizmondo may use the logos only as provided by Sci. Except for size,
Gizmondo may not alter the logos in any manner, including proportions,
colors, elements, etc., or animate, morph or otherwise distort its
perspective or two-dimensional appearance.
3. The logos may not be combined with any other symbols, including words,
logos, icons, graphics, photos, slogans, numbers, or other design
elements.
4. Use only approved Sci logo artwork.
5 The logos must always be accompanied by the applicable trademark symbol
((TM)or(R)).
6 The logos must only appear in a horizontal position.
7 Sci shall notify to Gizmondo any other requirements specified by its
Game Licensors.
<PAGE>
EXHIBIT D
---------
FINANCIAL REPORTING AND CONTACT INFORMATION
-------------------------------------------
Gizmondo Information SCI Information
----------------------------------------- --------------------------------------
Name: Name:
Gizmondo Ltd. Sci Games Limited
----------------------------------------- --------------------------------------
Street Address and/or post office box: Street Address and/or post office box:
1 Meadow Gate Avenue, Farnborough 11 Ivory House, Plantation Wharf
Business Park
----------------------------------------- --------------------------------------
City and State / Province: City and State / Province:
Farnborough ,Hants London
----------------------------------------- --------------------------------------
Country and Postal Code: Postal Code:
GU14 6FG, ENGLAND SW11 3TN
----------------------------------------- --------------------------------------
Accounting Contact Name and title: Attention:
Balbinder Singh Callum Jay
Global Operations Manager Financial Controller
----------------------------------------- --------------------------------------
Phone Number: Phone Number:
(01)0252 557 100 020 7350 5240
----------------------------------------- --------------------------------------
Fax Number: Fax Number:
(01) 0252 557 101 020 7924 3419
----------------------------------------- --------------------------------------
E-Mail Address: E-Mail Address (if applicable):
bally@tigertelematics.com callumj@sci.co.uk
----------------------------------------- --------------------------------------
Additional Contact Name and title: With a Copy of the Notice To:
Gizmondo Europe Ltd Rob Murphy
1 Meadow Gate Avenue Sci Games Limited
Farnborough Business 11 Ivory House
Farnborough Plantation Wharf
Hants London
GU14 6FG SW11 3TN
Attention:
Steve.Carrol@tigertelematics.com;
Paul.Hilton@tigertelematics.com
----------------------------------------- --------------------------------------
Additional Contact Phone Number: Additional Contact Phone Number:
(01)0252 557 100 020 7350 5240
----------------------------------------- --------------------------------------
Additional Contact Fax Number: Additional Contact Fax Number:
(01) 0252 557 101
020 7924 3419
----------------------------------------- --------------------------------------
Additional Contact E-Mail Address: Additional Contact E-Mail Address:
robm@sci.co.uk
----------------------------------------- --------------------------------------
Accounts Payable Contact Name:
----------------------------------------- --------------------------------------
Gizmondo shall remit payment to the following account (or such other account(s)
as Sci may specify in writing):
<PAGE>
Barclays Bank
27 Soho Square
London
W1D 3QR
Account no. 20805319
Sort code. 20 - 78 - 98
IBAN: GB90BARC207898 20805319
SWIFT: BARCGB22
Remittance detail for wire transfers must also be sent either by fax or e-mail:
<PAGE>
EXHIBIT E
---------
GIZMONDO'S AFFILIATES
---------------------
<PAGE>
SCHEDULE F
----------
GAME COMPLETION DATES
---------------------
--------------------------------------- ----------------------------------------
GAME DATE OF RELEASE OF GAME BY SCI
--------------------------------------- ----------------------------------------
--------------------------------------- ----------------------------------------
The Great Escape Released
--------------------------------------- ----------------------------------------
Conflict 1 Released
--------------------------------------- ----------------------------------------
Conflict 2 Released
--------------------------------------- ----------------------------------------
Conflict 3 Released
--------------------------------------- ----------------------------------------
Conflict 4 November 2005
--------------------------------------- ----------------------------------------
Highlander TBC
--------------------------------------- ----------------------------------------
Richard Burns Rally Released
--------------------------------------- ----------------------------------------
Carmageddon TDR 2000 Released
--------------------------------------- ----------------------------------------
Carmageddon TV October 2005
--------------------------------------- ----------------------------------------
Midway June 2005
--------------------------------------- ----------------------------------------
Reservoir Dogs March 2006
--------------------------------------- ----------------------------------------
Roll Call October 2005
--------------------------------------- ----------------------------------------