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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 2
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______.
Commission file number 0-21336
THE 3DO COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 94-3177293
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 GALVESTON DRIVE,
REDWOOD CITY, CALIFORNIA 94063
(Address of principal executive offices, including zip code)
(415) 261-3000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Number of shares of registrant's common stock outstanding as of January 31,
1996: 25,710,614
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 10-Q/A
(a) The following exhibit has been filed with this report:
10.43 Technology Licensing Agreement between the Registrant
and Matsushita Electric Industrial Co., Ltd., dated
December 7, 1995 (1)
(1) Confidential treatment has been requested
with respect to certain portions of this
document.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE 3DO COMPANY
Dated: June 5, 1996 /s/ PAUL J. MILLEY
------------------
PAUL J. MILLEY
Vice President of Finance and
Principal Accounting Officer
(Duly authorized officer)
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TECHNOLOGY LICENSING AGREEMENT
This Technology Licensing Agreement (the "Agreement") is entered into and
rendered effective as of the 7th day of December, 1995, by and between THE 3DO
COMPANY, a California corporation with principal offices at 600 Galveston Drive,
Redwood City, California, 94063, U.S.A. ("3DO") and MATSUSHITA ELECTRIC
INDUSTRIAL CO., LTD., a Japanese corporation with principal offices at 1006,
Kadoma, Osaka, 571, Japan ("MEI").
Whereas, 3DO and MEI entered into that certain Memorandum of Understanding,
dated October 13, 1995 (the "MOU") regarding, among other things, the principal
terms and conditions upon which 3DO is willing to grant an exclusive license to
MEI, and MEI is willing to accept an exclusive license from 3DO, concerning
3DO's proprietary, interactive technology familiarly known to the parties as the
"M2" technology.
Whereas, 3DO and MEI agreed that they would use diligent, good faith efforts to
incorporate the provisions of the MOU, and such additional provisions as may be
mutually agreed upon by the parties, into a more definitive agreement regarding
the M2 Technology;
Now therefor, in consideration of the mutual representations, warranties and
covenants contained herein, and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, 3DO and MEI hereby agree as
follows:
1. DEFINITIONS.
1.1 "Adaptation" means any modification of the Licensed Technology that
is required in order for any class or type of M2 Hardware Product to be used in
another class or type of M2 Hardware Product (e.g., modification of a consumer
M2 CD-ROM system for development of an M2 car navigation product, etc.).
1.2 "Chipsets" means the 3DO-proprietary semiconductor devices that are
required to be included in M2 Hardware Products and that are necessary for any
such hardware products to be able to execute or otherwise operate with M2
Software Products, which semiconductor devices are referenced in Section 1 of
Exhibit B, attached hereto. Due to local technology differences, the Chipsets
may vary depending on the specific countries in which they are intended to be
used.
1.3 "Confidential Information" of 3DO and MEI, respectively, shall have
the meanings set forth in Section 25, below.
1.4 "Improvement" means any modification of the Licensed Technology
that increases the design efficiency and/or manufacturing efficiency, while
preserving compatibility and reducing the cost of any M2 Hardware Product.
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1.5 "Intellectual Property Rights" means all current and future
worldwide patents, copyrights, mask work rights and trade secret rights, and the
equivalents of the foregoing under the laws of any jurisdiction, in and to the
Licensed Technology and any Adaptations or Improvements thereof, which 3DO owns
or to which 3DO has the right to grant licenses of the scope granted herein.
1.6 "Licensed Technology" means all technical data, methods, processes,
formulae, inventions, discoveries, software source and object code in all stages
of development, technology, and other technical information regarding the M2
Technology that 3DO has developed as of the date hereof (including any
work-in-process) and/or is required to develop under this Agreement, whether or
not patentable, that is necessary for the development, manufacture, sale or use
of any of the M2 System Designs and/or any M2 Software Products, and which 3DO
owns or to which 3DO has the right to grant licenses of the scope granted
herein, as set forth in Exhibits A and B, attached hereto. Without limiting the
generality of the foregoing, but subject to the requirements thereof, the
"Licensed Technology" includes the M2 System Designs, the Chipsets, the ROM
Software, the Operating System Kernel, and the Specifications.
1.7 "M2 Hardware Product" means any hardware product, device or system
(whether or not designed for any consumer and/or commercial application) that
satisfies all of the following criteria: (i) is developed and distributed, now
or in the future, by or for MEI or any authorized hardware sublicensee of MEI
(including 3DO, as applicable, in its capacity as a hardware sublicensee of MEI
hereunder); (ii) incorporates the Licensed Technology or any Improvements or
Adaptations thereof (or any portion of any of the foregoing) or is developed
with the use of the Licensed Technology or any Improvements or Adaptations
thereof (or any portion of any of the foregoing) or is subject to any of the
Intellectual Property Rights; and (iii) if capable of executing or otherwise
operating with interactive applications software products (except to the extent
designed to comply with industry recognized standards that are not video game
standards, such as VCD 2.0), only executes or otherwise operates M2 Software
Products with respect to which 3DO shall be paid royalties in accordance with
the provisions of Section 8, below, and cannot execute or otherwise operate with
any other interactive applications software (except that, notwithstanding clause
(iii) of this Section, a dedicated purpose M2 Hardware Product may include
interactive applications software embedded in the read-only memory semiconductor
device permanently affixed within such an M2 Hardware Product). Without limiting
the generality of the foregoing, but subject to the requirements thereof, the
definition of "M2 Hardware Product" includes player products (whether consumer,
commercial, or coin-operated), M2 Peripheral Products, the Chipsets, M2 Arcade
Devices, Computing Devices, and M2 Authoring Systems, subject to the conditions
of clauses (i), (ii) and (iii) of this Section 1.7.
1.8 "M2 Software Product" means any software product (whether or not
designed for any consumer and/or commercial application) that satisfies all of
the following criteria: (i) is developed and distributed, now or in the future,
by or for MEI or any authorized software sublicensee of MEI (including 3DO, as
applicable, in its capacity as a software sublicensee of MEI hereunder); (ii) is
compatible with any M2 Hardware Product; and (iii) incorporates the Licensed
Technology or any Improvements or Adaptations
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thereof (or any portion of any of the foregoing) or is developed with the use of
the Licensed Technology or any Improvements or Adaptations thereof (or any
portion of any of the foregoing) or is subject to any of the Intellectual
Property Rights.
1.9 "M2 System Designs" means that portion of the technology and system
designs that 3DO will develop in accordance with the Specifications for the
specific M2 Hardware Products referenced in Section 2 of Exhibit B, attached
hereto.
1.10 "M2 Technology" means 3DO's proprietary, interactive multimedia
hardware system and related interactive software platform (including, without
limitation, 3-D graphics, MPEG decoder and digital audio processing) which
operates in connection with the central processing unit ("CPU") called the
"Power PC 602" and a 64-bit bus architecture
1.11 "Operating System Kernel" means the 3DO-proprietary operating
system kernel for the M2 System Designs and such software and libraries
developed and/or supplied by 3DO with which the M2 Software Products executes in
order to operate or otherwise be playable on an M2 Hardware Product. Due to
local technology differences, the Operating System Kernel may vary depending on
the specific countries in which it is intended to be used.
1.12 "ROM Software" means all or any portion of the Operating System
Kernel and other such software developed and/or supplied by 3DO that is intended
to be included in the permanently affixed, read-only memory ("ROM") of the M2
System Designs, including, without limitation, the ROM applications and boot
ROMs for the M2 System Designs.
1.13 "Specifications" means the specifications for the M2 System
Designs set forth in Exhibit E, attached hereto.
1.14 "Trademarks" means the trademarks and logos of 3DO that are set
forth in Exhibit C, attached hereto.
2. LICENSE GRANTS.
2.1 Licensed Technology. 3DO hereby grants to MEI, subject to the terms
and conditions of this Agreement, and MEI hereby accepts from 3DO, an exclusive,
worldwide, perpetual license (with rights of sublicense) to: (i) use, modify,
create derivative works, and otherwise exploit the Licensed Technology,
including any Improvements and Adaptations thereof that are developed by or for
3DO at its discretion and expense, in connection with the development,
manufacture, sale, distribution and exploitation of M2 Hardware Products and M2
Software Products, which hardware and software products may be designed and
intended for entertainment and/or for any other applications; and (ii) practice
and otherwise exploit the Intellectual Property Rights in connection with the
development, manufacture, sale, distribution and exploitation of M2 Hardware
Products and M2 Software Products. Without limiting the generality of the
foregoing, the licenses granted by 3DO to MEI include, and are subject to the
requirements of, the following:
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(a) ROM Software. 3DO hereby grants to MEI, subject to the
terms and conditions of this Agreement, and MEI hereby accepts from 3DO, an
exclusive, worldwide, perpetual license (with rights of sublicense) under the
Intellectual Property Rights: to (i) copy, modify and create derivative works of
the source code form of the ROM Software as reasonably necessary to develop M2
Hardware Products, any or all of which actions shall only be undertaken
internally at the facilities of MEI and/or its authorized sublicensees; and (ii)
reproduce (or have reproduced) and distribute the ROM Software and/or its
derivative works only in object code form to be encoded in the
semiconductor-based ROM of any M2 Hardware Product. Due to local language and
technology differences, there may be different ROM Software for different
countries, such that specific M2 Hardware Products and M2 Software Products
marketed for use in one country may not be interchangeable with the M2 Hardware
Products and M2 Software Products marketed for use in another country.
(b) Chipsets. 3DO hereby grants to MEI, subject to the terms
and conditions of this Agreement, and MEI hereby accepts from 3DO, an exclusive,
worldwide, perpetual license (with rights of sublicense) under the Intellectual
Property Rights to make (or have made), modify, use and sell the Chipsets solely
for use as integral components of any M2 Hardware Products of MEI or its
authorized sublicensees.
(c) Operating System Kernel. 3DO hereby grants to MEI, subject
to the terms and conditions of this Agreement, and MEI hereby accepts from 3DO,
an exclusive, worldwide, perpetual license (with rights of sublicense) under the
Intellectual Property Rights to: (i) copy, modify, use and create derivative
works of the source code form of the Operating System Kernel as reasonably
necessary to develop M2 Software Product, any or all of which actions shall only
be undertaken internally at the facilities of MEI and/or its authorized
sublicensees, (ii) reproduce (or have reproduced) the object code version of the
Operating System Kernel and/or its derivative works only in combination with M2
Software Products, and (iii) distribute the object code version of the Operating
System Kernel, but only when and as combined with M2 Software Products.
2.2 Trademarks. 3DO hereby grants to MEI, subject to the terms and
conditions of this Agreement, a non-exclusive, worldwide, perpetual,
royalty-free license (with rights of sublicense) to use the Trademarks for any
purpose expressly authorized herein, and MEI hereby accepts such a license and
agrees to use the Trademarks, and cause its sublicensees to use the Trademarks,
in accordance with the provisions of Section 26, below.
2.3 License of Supplemental Technology. 3DO hereby grants to MEI,
subject to the terms and conditions of this Agreement, and MEI hereby accepts
from 3DO, a non-exclusive, worldwide, perpetual license (with rights of
sublicense) to use, modify, create derivative works, and otherwise exploit those
certain software deliverable items identified as the "Supplemental Technology"
in Section 6 of Exhibit A and Section 11 of Exhibit B, attached hereto, in
connection with MEI's exercise of any of the other licenses and related rights
expressly granted by 3DO hereunder. Such license shall be without additional
compensation to 3DO other than as set forth herein. MEI acknowledges and agrees
that the Supplemental Technology is licensed on an "as is" basis without any
warranties of any kind, and that 3DO shall have no
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obligation to provide any support of any kind to MEI or to any third party
regarding any of the Supplemental Technology.
2.4 Cooperation in Filings. To the extent it is necessary under the
laws of any particular countries to permit MEI to have the right to bring
actions against third parties for infringement of the Intellectual Property
Rights with respect to which MEI is granted an exclusive license hereunder, 3DO
shall, at MEI's reasonable request and expense, cooperate with MEI in making
appropriate filings with the competent governmental agencies of such countries.
2.5 Cooperation In Infringement Actions. MEI shall have the right to
bring causes of action against third parties (other than any licensees,
sublicensees, customers or suppliers of 3DO acting, directly or indirectly,
under agreements entered into with 3DO) for infringement of any Intellectual
Property Rights to the extent (but only to the extent) that such Intellectual
Property Rights are licensed exclusively to MEI hereunder. 3DO shall, at MEI's
request and expense, cooperate with MEI with respect to MEI bringing any such
cause of action, including (if mutually agreed in writing by the parties),
joining in such cause of action, provided that (i) MEI shall notify 3DO promptly
of any basis for bringing any such cause of action, and (ii) any amount
recovered in any such cause of action (whether recovered through judgment,
settlement or otherwise), less reasonable attorneys' fees and court costs
incurred by MEI in connection with such action, shall be allocated to the
parties in proportion to the amount the parties would have received had such
Intellectual Property Rights been licensed to such third party by MEI in
furtherance of this Agreement. Neither party may settle any such cause of
action, or claim that would be the basis for any such cause of action, without
the consent of the other party (which consent shall not be unreasonably withheld
or delayed).
3. FIRST RIGHT OF NEGOTIATION.
In the event that 3DO develops any Derivative Technology (as defined in
Section 5.1, below) designed for incorporation into an advanced, interactive
video game platform, including, without limitation, any successor technology to
the M2 Technology that is designed for incorporation into an advanced,
interactive video game platform (a "Successor Technology"), MEI shall have the
first right to evaluate the intended performance of such Derivative Technology
and to negotiate with 3DO regarding the opportunity to license such technology
exclusively to MEI. For a period of ninety (90) days after MEI's receipt of
written notice of such Derivative Technology, 3DO and MEI shall negotiate in
good faith and endeavor to reach an agreement regarding the potential licensing
of such Derivative Technology to MEI. If no agreement is reached by the parties
and confirmed in writing within such period, MEI acknowledges and agrees that
3DO shall be freely entitled to exploit any such Derivative Technology itself
and/or to negotiate and conclude separate agreements with third parties
regarding the exploitation of any such Derivative Technology. MEI's rights of
first negotiation under this Section 3 shall remain in effect for a period of
seven (7) years from the date of this Agreement.
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4. M2 TECHNICAL INFORMATION AND DELIVERABLES.
4.1 Technical Disclosures. In order to support MEI's ability to
exercise the licensed rights granted in Section 2, above:
(a) 3DO shall disclose to MEI the specific information and
materials of or concerning the Licensed Technology set forth in Exhibit A,
attached hereto, and, if mutually agreed upon by 3DO and MEI, such other
information and materials regarding the Licensed Technology as is reasonably
necessary for MEI to use and exploit the Licensed Technology under the license
grants referenced in Section 2, above. 3DO shall provide MEI with the referenced
technical disclosures promptly following the execution of this Agreement and
3DO's completion of the development, respectively, of any such information
and/or materials required by this Agreement.
(b) At MEI's written request during the first twelve (12)
months of this Agreement, 3DO shall provide technical training for a mutually
agreed number of MEI engineers, free of charge, at 3DO's facilities in Redwood
City, California, regarding the Licensed Technology, including the Operating
System Kernel, ROM Software, and the M2 software development tools. Any and all
transportation expenses, living expenses, salaries, benefits, and out-of-pocket
expenses for such MEI engineers shall be the sole obligation and liability of
MEI. In addition, at MEI's request and expense, 3DO shall send a mutually agreed
number of 3DO engineers to MEI's facilities in Osaka, Japan to provide such
technical training. In either situation, arrangements for such engineers shall
be subject to reasonable agreement of the parties on scheduling, availability of
resources and similar matters.
(c) At MEI's written request, 3DO shall make its personnel
available from time to time by telephone, and for an in-person meeting at 3DO's
facilities in Redwood City, California, to consult with MEI regarding the
opportunity for MEI or its subsidiaries to become a second-source foundry of the
Chipsets.
4.2 Deliverable Items.
(a) 3DO shall provide MEI with the specific deliverable items
referenced in Exhibit B, attached hereto, and shall use diligent, good faith
efforts to complete development of any such items that do not currently exist in
accordance with such development schedule as will be mutually agreed upon by the
parties. In the event that the deliverable items constituting the core M2
Technology (i.e., [CONFIDENTIAL TREATMENT REQUESTED] - Version 2.0, CDE -
Version 2.0, the M2 System ROM - Version 2.0, and the CD OS - Version 2.0) and
M2 software development tools (in such condition and at such revision levels as
are then in existence) are not provided to MEI by the due date for MEI's payment
of the second installment of the license fees due 3DO hereunder, MEI shall not
be obliged to pay the US $40,000,000 balance of the license fee referenced in
Section 6, below, until such deliverables are, in fact, provided to MEI.
(b) Within sixty (60) days following the execution of this
Agreement, representatives of 3DO and MEI shall jointly, diligently and in good
faith develop and mutually agree upon a reasonable schedule for the completion
and delivery of the deliverable items referenced in Exhibit B,
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attached hereto. 3DO acknowledges and agrees that it shall use diligent, good
faith efforts to fulfill its development obligations hereunder in accordance
with such mutually agreed schedule. In the event that it should become
foreseeable to 3DO that it may not be able to timely complete the development of
any particular deliverable item, 3DO shall consult with MEI regarding such
matter and the parties shall endeavor in good faith to determine whether they
can mutually agree upon an alternative development schedule with respect to the
affected deliverable item. MEI acknowledges and agrees that before 3DO shall be
in breach of its development obligations hereunder, 3DO shall have a reasonable
opportunity to cure any inability (through no fault of MEI) to timely complete
the development of any particular deliverable item required hereunder.
4.3 Engineering Support.
(a) During the course of MEI's development of its initial
[CONFIDENTIAL TREATMENT REQUESTED] M2 Hardware Product, and for a period of
twelve (12) months after the commercial launch of such M2 Hardware Product (but
not beyond December 31, 1997 unless the parties otherwise specifically agree in
writing), 3DO agrees that it shall use its best efforts to cure any material
problems, defects and/or bugs in such M2 Hardware Product which adversely affect
such product's function and performance, are demonstrated to exist and are
attributable to any of 3DO's engineering designs regarding the Licensed
Technology. In addition, during the course of MEI's development of its initial
[CONFIDENTIAL TREATMENT REQUESTED] M2 Hardware Product, and for a period of
twelve (12) months after the commercial launch of such M2 Hardware Product (but
not beyond June 30, 1998 unless the parties otherwise specifically agree in
writing), 3DO agrees that it shall use its best efforts to cure any material
problems, defects and/or bugs in such M2 Hardware Product which adversely affect
such product's function and performance, are demonstrated to exist and are
attributable to any of 3DO's engineering designs regarding the Licensed
Technology. 3DO's sole obligation with respect to any such confirmed problem,
defect and/or bug in any of the Chipsets shall be to take diligent good faith
steps, up until first commercial production of the Chipsets, to revise and
correct the verilog design of any affected semiconductor device and to complete
any such design revisions and corrections prior to layout. Such engineering
support as provided by 3DO to MEI under this Section 4.3(a) shall be without
additional compensation to 3DO other than as set forth herein.
(b) During the course of MEI's development of its initial M2
Software Product for any [CONFIDENTIAL TREATMENT REQUESTED] M2 Hardware Product
and for a period of six (6) months after the commercial launch of such M2
Software Product (but not beyond December 31, 1997 unless the parties otherwise
specifically agree in writing), 3DO agrees that it shall use its best efforts to
cure any problems, defects and/or bugs that are demonstrated to exist in the
Operating System Kernel and/or M2 software development tools supplied by 3DO
hereunder for use in connection with the development of such M2 Software
Products, respectively, which problems, defects and/or bugs adversely affect the
function and performance of such Operating System Kernel and/or M2 software
development tools, and are attributable to 3DO's designs and/or development of
any such deliverable items. In addition, for a period of six (6) months after
the commercial launch of the first M2 Software Product for any [CONFIDENTIAL
TREATMENT REQUESTED] M2 Hardware Product
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(but not beyond June 30, 1998 unless the parties otherwise specifically agree in
writing), 3DO agrees that it shall use its best efforts to cure any material
problems, defects and/or bugs in the Operating System Kernel and/or M2 software
development tools supplied by 3DO hereunder for use in connection with the
development of such M2 Software Products, respectively, which problems, defects
and/or bugs adversely affect the function and performance of such Operating
System Kernel and/or M2 software development tools, are demonstrated to exist
and are attributable to 3DO's designs and/or development of any such deliverable
items. 3DO's sole obligation with respect to any problem, defect and/or bug in
any Operating System Kernel and/or software development tools shall be to take
diligent, good faith steps to modify such affected item(s) so as to resolve the
problem, defect or bug, and thereupon provide the revised and corrected version
of such affected item(s) to MEI. Such engineering support as provided by 3DO to
MEI under this Section 4.3(b) shall be without additional compensation to 3DO
other than as set forth herein.
(c) Upon request by MEI and at MEI's expense, 3DO shall use
commercially reasonable efforts to assist MEI in its efforts to cure other
problems, defects and/or bugs that are determined to exist in the initial
[CONFIDENTIAL TREATMENT REQUESTED] M2 Hardware Product and/or the initial
[CONFIDENTIAL TREATMENT REQUESTED] M2 Hardware Product.
(d) The parties acknowledge and agree that MEI and its
sublicensees of the Licensed Technology, respectively, shall have the discretion
to determine the level of end user support that shall be provided for M2
Hardware Products and M2 Software Products. MEI acknowledges and agrees that 3DO
shall not be responsible for providing any engineering support or any other form
of technical support to any of MEI's sublicensees of the Licensed Technology or
to any end users of any M2 Hardware Products or M2 Software Products that do not
originate with 3DO, subject to 3DO's obligation to provide technical support to
M2 software licensees in the United States of America specified in Section 9.1,
below.
5. OWNERSHIP INTERESTS.
5.1 3DO's Ownership. 3DO shall be and remain the sole and exclusive
owner of the Licensed Technology and of any Improvements and Adaptations of the
Licensed Technology that are developed by 3DO at its discretion and of the
Intellectual Property Rights. 3DO shall also be the sole and exclusive owner of
any of its subsequently developed or derivative technical data, methods,
processes, formulae, inventions, discoveries, and other technology and technical
information developed by or for 3DO, but not constituting Improvements or
Adaptations, including, without limitation, any Successor Technology
(collectively, the "Derivative Technology"), and any patents, copyrights, mask
work rights, trade secret rights and other intellectual property rights with
respect thereto (collectively, "Derivative Intellectual Property Rights").
5.2 Exclusivity of MEI's Rights. Notwithstanding the exclusivity of
MEI's licenses and rights under this Agreement, 3DO retains (and the exclusivity
of MEI's licenses and rights hereunder shall not apply to) the rights: (i) to
complete development of the Licensed Technology and make any Improvements and
Adaptations thereof that 3DO may elect to create, which Improvements and
Adaptations shall be subject to the exclusive licenses
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herein granted to MEI; (ii) subject to the provisions of Section 3, above, to
develop Derivative Technology and to use, modify, create derivative works based
on, and otherwise exploit such Derivative Technology, and develop, manufacture,
copy, use, sell, distribute and otherwise exploit products (including hardware
and software products) based thereon or subject thereto; (iii) subject to the
provisions of Section 3, above, to practice and/or exploit the Derivative
Intellectual Property Rights in connection with such development, use,
modification, creation of derivative works, manufacture, copying, sale,
distribution and other such exploitation; (iv) to develop, manu-facture, copy,
use, sell, distribute and/or otherwise exploit 3DO's 32-bit "Opera" technology
and products based thereon or subject thereto, and (v) to provide engineering
services to or for the benefit of any third party, provided that such
engineering services are provided within the scope of rights herein granted to
or retained by 3DO, or rights subsequently granted by MEI in writing to 3DO or
any such third party. In addition, 3DO shall also have the other licenses and
rights with respect to the Licensed Technology and Intellectual Property Rights
as are expressly granted to 3DO herein and/or as are otherwise agreed by the
parties in writing.
5.3 Engineering Services. In the event 3DO provides any engineering
services pursuant to a separate agreement with any third party, which
engineering services are provided within the scope of rights herein granted to
or retained by 3DO or rights subsequently granted by MEI in writing to 3DO or to
such third party, any resulting work product shall not be deemed an Improvement
or Adaptation and shall not be automatically included within the licenses
granted to MEI pursuant to Section 2, above, unless the written consent of the
entity funding and/or owning the work product of such engineering services is
first obtained. 3DO will give MEI written notice of any such separate agreement
between 3DO and any such third party, including identification of the intended
work product, in such manner and scope as shall be consistent with 3DO's
confidentiality obligations and preservation of attorney-client, work product
and other privileges.
5.4 MEI's Improvements and Adaptations. Subject to 3DO's ownership
interests as described in Section 5.1, above, MEI shall be the owner of any
Improvements and Adaptations of, and any modifications to, the Licensed
Technology that are developed by or for MEI in furtherance of this Agreement.
5.5 No Implied Rights. This Agreement does not grant to either party
any right or license under any of the other party's intellectual property rights
or otherwise, except as expressly provided herein, and no other right or license
is to be implied by or inferred from any provision hereof or the conduct of
either of the parties in furtherance of this Agreement.
5.6 Restrictions On Competitive Products.
(a) Notwithstanding anything to the contrary contained herein,
MEI acknowledges and agrees that it shall not, during the first seven (7) years
following the date of this Agreement, use, modify, create derivative works or
otherwise exploit the Licensed Technology or any Improvement or Adaptation
thereof developed by or for 3DO (or any portion of any of the foregoing), or
practice or otherwise exploit the Intellectual Property Rights (or any portion
thereof) in any application or product configuration which is
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competitive with the M2 platform. As used herein, the term "competitive with the
M2 platform" refers to (i) any application or product configuration that permits
the execution and/or operation of any interactive applications software product
that is not developed using the M2 applications programming interface (the "M2
API"), or (ii) any application or product configuration that does not
incorporate both the semiconductor device known to the parties as [CONFIDENTIAL
TREATMENT REQUESTED], which semiconductor device is defined for purposes of this
Section by its verilog description at the time of its first commercialized
introduction in an M2 Hardware Product (or the semiconductor device known to the
parties as [CONFIDENTIAL TREATMENT REQUESTED], which semiconductor device is
understood by the parties to mean [CONFIDENTIAL TREATMENT REQUESTED] under
Exhibit A, attached hereto) and the central processing unit known as "PowerPC
602", which central processing unit is defined for purposes of this Section as
the PowerPC 602 design as it exists in its incorporation into the first
commercialized M2 Hardware Product (collectively, "Competing Hardware and
Software Products"), without the mutual written consent of the parties;
provided, however, such competitive restrictions (A) shall not apply with
respect to (1) industry-recognized standards that are not video game standards,
such as VCD 2.0 and Kodak Photo CD, (2) M2 Arcade Devices (as defined in
~Section 13.1, below) and software products for M2 Arcade Devices, or (3)
Computing Devices (as defined in Section 17.1, below) and software products for
Computing Devices, and (B) shall not preclude MEI from increasing the clock
speed of the [CONFIDENTIAL TREATMENT REQUESTED] semiconductor device(s) or the
"PowerPC 602" central processing unit, , or from increasing the main memory
capacity or storage drive performance of any M2 Hardware Product.
(b) Notwithstanding the competitive restrictions set forth in
this Section 5.6, 3DO acknowledges and agrees that MEI shall be entitled to use,
modify, and create derivative works of the Licensed Technology and any
Improvements and Adaptations thereof developed by or for 3DO (or any portion of
any of the foregoing), and practice the Intellectual Property Rights (or any
portion thereof) in connection with MEI's internal research and development
efforts, including, without limitation, the development of Competing Hardware
and Software Products; provided, however, MEI shall not be entitled to
manufacture, sell, distribute or otherwise exploit, directly or indirectly, any
such Competing Hardware and Software Products that incorporate or are developed
with use of the Licensed Technology or any Improvements or Adaptations thereof
developed by or for 3DO (or any portion of any of the foregoing), or are subject
to any of the Intellectual Property Rights, except as expressly permitted (i) in
accordance with the provisions of Sections 5.6(a), above, in which case the
applicable royalty rate(s) shall be the same as those specified in Section 8,
below, and/or (ii) in accordance with the provisions of Section 5.6(c), below,
in which case the applicable royalty rate(s) shall be determined in accordance
with paragraph (2) of such Section 5.6(c).
(c) Notwithstanding the competitive restrictions set forth in
~this Section 5.6, commencing January 1, 1999 if 3DO has not, as of such date,
offered to MEI a license of 3DO's [CONFIDENTIAL TREATMENT REQUESTED] on terms
and conditions no less favorable to MEI than those set forth in this Agreement
regarding the Licensed Technology, or seven (7) years from the date of this
Agreement, whichever is earlier, and continuing in perpetuity thereafter, MEI
shall have, subject to the terms and conditions of this
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<PAGE> 11
Agreement, an exclusive, worldwide, perpetual license (with rights of
sublicense) to: (i) use, modify, create derivative works, and otherwise exploit
the Licensed Technology and any Improvements and Adaptations thereof that are
developed by or for 3DO (or any portion of any of the foregoing) in connection
with the development, manufacture, sale, distribution and exploitation of
Competing Hardware and Software Products; and (ii) practice and otherwise
exploit the Intellectual Property Rights (or any portion thereof) in connection
with the development, manufacture, sale, distribution and exploitation of
Competing Hardware and Software Products.
(1) The licensed rights regarding MEI's development,
manufacture, distribution and exploitation of Competing Hardware Products shall
be deemed to be fully paid-up and no royalties shall be due or be payable to 3DO
by MEI as specified in Section 7, below, with respect to any such licensed
hardware products (including any Competing Hardware Products that have a
Competing Software Product embedded within them in a read-only memory
semiconductor device).
(2) The applicable royalty rate(s) to be paid by MEI
to 3DO with respect to the manufacture and distribution of any Competing
Software Products that incorporate the Licensed Technology or any Improvements
or Adaptations thereof (or any portion of any of the foregoing), or are
developed with the use of the Licensed Technology or any Improvements or
Adaptations thereof developed by or for 3DO (or any portion of any of the
foregoing), or are subject to any of the Intellectual Property Rights, shall be
negotiated in good faith and reasonably agreed upon by MEI and 3DO prior to the
commencement of distribution of any units of any such Competing Software
Product.
(3) MEI acknowledges and agrees that 3DO shall have
the non-exclusive, worldwide, perpetual license (without rights of sublicense)
to develop, manufacture, sell, distribute and otherwise exploit, under 3DO's
trade names and trademarks, peripheral products that are compatible with any
Competing Hardware Product that MEI elects to develop and distribute hereunder,
and that 3DO shall only be required to provide a total payment to MEI of
[CONFIDENTIAL TREATMENT REQUESTED] (US [CONFIDENTIAL TREATMENT REQUESTED]) with
respect to each such peripheral product unit manufactured by or for 3DO
hereunder, which sum includes all peripheral royalties, withholding taxes,
manufacturing surcharges, compatibility testing fees and other such charges
imposed directly or indirectly by MEI, but specifically excludes encryption fees
(if 3DO, at its option, elects to hire MEI to provide encryption services),
royalties for industry-recognized standards that are not video game standards
(such as VCD 2.0), and royalties imposed generally on third parties by MEI for
the practice of MEI intellectual property rights (except for rights referenced
in Section 18.1, below).
(4) MEI acknowledges and agrees that 3DO shall have
the non-exclusive, worldwide, perpetual license (without rights of sublicense)
to develop, manufacture (or have manufactured), sell, distribute and otherwise
exploit Competing Software Products that are compatible with any Competing
Hardware Product that MEI elects to develop and distribute hereunder, and that
3DO shall only be required to provide a total payment to MEI of [CONFIDENTIAL
TREATMENT REQUESTED] (US [CONFIDENTIAL TREATMENT REQUESTED]) with respect to
each Competing Software Product unit published by 3DO hereunder
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(but specifically excluding any third-party title for which 3DO merely serves as
a distributor), which sum includes all software royalties, withholding taxes,
pressing royalties, manufacturing surcharges, compatibility testing fees and
other such charges imposed directly or indirectly by MEI, but specifically
excludes encryption fees (if 3DO, at its option, elects to hire MEI to provide
encryption services), royalties for industry-recognized standards that are not
video game standards (such as VCD 2.0), and royalties imposed generally on third
parties by MEI for the practice of MEI intellectual property rights (except for
rights referenced in Section 18.1, below).
(5) The parties acknowledge and agree that the
provisions of Sections 12.2, 12.3, 12.4, and 12.5, below, shall apply mutatis
mutandis with respect to the peripheral products that 3DO elects to develop and
distribute hereunder that are compatible with any Competing Hardware Product.
(6) The parties acknowledge and agree that the
provisions of Sections 14.2, 14.3, 14.4, 14.5, 14.6, and 14.7, below, shall
apply mutatis mutandis with respect to the Competing Software Products that 3DO
elects to publish hereunder that are compatible with any Competing Hardware
Product.
5.7 Reservation of Rights. All rights with respect to the Licensed
Technology, the Supplemental Technology and/or the Trademarks not specifically
granted herein to MEI are expressly reserved by 3DO.
6. LICENSING FEES.
In consideration for 3DO's grant of the various licensed rights
regarding the Licensed Technology, the Improvements and Adaptations developed by
or for 3DO, the Supplemental Technology and the Trademarks set forth in Section
2, above, MEI shall pay 3DO the non-refundable sum of one hundred million
dollars (US $100,000,000), which sum shall include applicable Japanese
withholding taxes (if any) pursuant to the application of Article 14 [Royalties]
and Article 6 [Source of Income] of the Income Tax Treaty between Japan and the
United States, and be payable to 3DO in accordance with the following schedule:
<TABLE>
<CAPTION>
Payment Amount Payment Date
-------------- ------------
<S> <C>
$60,000,000 Within ten (10) business days after
the effective date of this Agreement
$40,000,000 June 30, 1996 or such other date as
provided under Section 4.2, above,
whichever is later
</TABLE>
7. NO ROYALTIES WITH RESPECT TO M2 HARDWARE PRODUCTS.
7.1 The licensed rights regarding the development, manufacture, sale
and distribution of M2 Hardware Products shall be deemed to be fully paid-up and
no royalties shall be due or be payable to 3DO by MEI or any hardware
sublicensee of MEI with respect to any such licensed hardware products
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<PAGE> 13
(including any M2 Hardware Products that have an M2 Software Product embedded
within them in a read-only memory semiconductor device).
7.2 3DO acknowledges and agrees that MEI and its various hardware
sublicensees shall be entitled, [CONFIDENTIAL TREATMENT REQUESTED], to bundle
[CONFIDENTIAL TREATMENT REQUESTED] of any M2 Software Product title inside of
the consumer packaging for each M2 Hardware Product, or to provide a coupon
inside such packaging, entitling the original consumer purchaser of a particular
M2 Hardware Product to receive [CONFIDENTIAL TREATMENT REQUESTED] in connection
with such purchase. Any and all such [CONFIDENTIAL TREATMENT REQUESTED] units of
M2 Software Products shall be subject to audit by 3DO or its designee (but not
more often than twice per year). In the event that any M2 Software Products
published or distributed by 3DO are to be bundled with any M2 Hardware Products
distributed by MEI or any hardware sublicensee, or are otherwise provided to any
consumer purchasers of a particular M2 Hardware Product pursuant to a coupon
offered by MEI or any hardware sublicensee, [CONFIDENTIAL TREATMENT REQUESTED]
shall be owed to MEI or to any third party with respect to any such M2 Software
Products.
8. ROYALTIES WITH RESPECT TO M2 SOFTWARE PRODUCTS.
8.1 No Royalties For 1996 and 1997. No royalties shall accrue, and
neither MEI nor any software sublicensee of MEI, shall be obliged to pay
royalties to 3DO with respect to any and all M2 Software Products that are
manufactured prior to January 1, 1998.
8.2 Ongoing Royalties. Commencing January 1, 1998, MEI shall pay 3DO,
on a calendar quarterly basis, royalties with respect to any and all M2 Software
Products manufactured by or for MEI, or by or for any sublicensee of MEI (other
than 3DO), on or after such date as follows:
(a) A royalty of [CONFIDENTIAL TREATMENT REQUESTED] (US
[CONFIDENTIAL TREATMENT REQUESTED]), including applicable withholding taxes (if
any) pursuant to the application of Article 14 [Royalties] and Article 6 [Source
of Income] of the Income Tax Treaty between Japan and the United States, for
each unit of any M2 Software Product manufactured until the cumulative installed
base exceeds [CONFIDENTIAL TREATMENT REQUESTED] consumer M2 Hardware Products
that play M2 Software Products [CONFIDENTIAL TREATMENT REQUESTED], as confirmed
through audit by 3DO or its designee; and then
(b) A royalty of [CONFIDENTIAL TREATMENT REQUESTED] (US
[CONFIDENTIAL TREATMENT REQUESTED]), including applicable withholding taxes (if
any) pursuant to the application of Article 14 [Royalties] and Article 6 [Source
of Income] of the Income Tax Treaty between Japan and the United States, for
each unit of any M2 Software Product manufactured until the cumulative installed
base exceeds [CONFIDENTIAL TREATMENT REQUESTED] consumer M2 Hardware Products
that play M2 Software Products (including [CONFIDENTIAL TREATMENT REQUESTED]),
as confirmed through audit by 3DO or its designee; and then
(c) A royalty of [CONFIDENTIAL TREATMENT REQUESTED] (US
[CONFIDENTIAL TREATMENT REQUESTED]), including applicable withholding
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<PAGE> 14
taxes (if any) pursuant to the application of Article 14 [Royalties] and Article
6 [Source of Income] of the Income Tax Treaty between Japan and the United
States, for each unit of any M2 Software Product manufactured thereafter.
8.3 Special Royalties for Internally-Developed Products and Promotional
Units. In lieu of the royalties set forth in Section 8.2, above, MEI shall pay
3DO a royalty of [CONFIDENTIAL TREATMENT REQUESTED] (US [CONFIDENTIAL TREATMENT
REQUESTED]), including applicable withholding taxes (if any) pursuant to the
application of Article 14 [Royalties] and Article 6 [Source of Income] of the
Income Tax Treaty between Japan and the United States, for each unit of any M2
Software Products that are developed by or under subcontract for MEI or any of
its subsidiaries, and that are manufactured by or for MEI or any such subsidiary
at any time from January 1, 1998 through and including June 30, 1998. In
addition, 3DO acknowledges and agrees that during each calendar year throughout
the term of this Agreement MEI may distribute, and may authorize its M2 software
sublicensees to distribute, solely for marketing and promotional purposes
(without consideration other than, at such entity's option, reimbursement of
reasonable expenses incurred, such as shipping and handling charges), on a
[CONFIDENTIAL TREATMENT REQUESTED] basis, up to [CONFIDENTIAL TREATMENT
REQUESTED] percent [CONFIDENTIAL TREATMENT REQUESTED] of the annual quantity of
M2 Software Products manufactured by or for MEI or its M2 software sublicensees
during each respective calendar year; provided, however, if MEI (or any of its
M2 software sublicensees, as applicable) actually distributes less than
[CONFIDENTIAL TREATMENT REQUESTED] percent [CONFIDENTIAL TREATMENT REQUESTED] of
the annual quantity of M2 Software Products manufactured by or for MEI (or any
of its M2 software sublicensees, as applicable) in any particular calendar year,
the unused portion may not be carried forward for use in any subsequent year.
MEI acknowledge and agrees that 3DO shall also be entitled to distribute solely
for marketing and promotional purposes (without consideration other than, at
such entity's option, reimbursement of reasonable expenses incurred, such as
shipping and handling charges), on a [CONFIDENTIAL TREATMENT REQUESTED] basis,
up to [CONFIDENTIAL TREATMENT REQUESTED] percent [CONFIDENTIAL TREATMENT
REQUESTED] of the annual quantity of M2 Software Products that are manufactured
by or for 3DO during each respective calendar year of this Agreement; provided,
however, if 3DO actually distributes less than [CONFIDENTIAL TREATMENT
REQUESTED] percent [CONFIDENTIAL TREATMENT REQUESTED] of the annual quantity of
M2 Software Products manufactured by or for 3DO in any particular calendar year,
the unused portion may not be carried forward for use in any subsequent year.
Any and all [CONFIDENTIAL TREATMENT REQUESTED] quantities of promotional M2
Software Products distributed by a party shall be subject to audit by the other
party or its designee (but not more often than twice per year).
8.4 Potential Royalty Reduction. Notwithstanding the provisions of
Sections 8.2 and 8.3, above, the per unit royalties described in said Sections
shall be reduced to [CONFIDENTIAL TREATMENT REQUESTED] (US [CONFIDENTIAL
TREATMENT REQUESTED]) per unit, including applicable withholding taxes (if any)
pursuant to the application of Article 14 [Royalties] and Article 6 [Source of
Income] of the Income Tax Treaty between Japan and the United States, if the
standard M2 software program fees (consisting of software royalties, pressing
royalties, manufacturing surcharges, compatibility testing fees, and other such
charges imposed directly or indirectly by MEI, but specifically
14
<PAGE> 15
excluding encryption fees and royalties imposed by and paid to third parties or
consortia in order to practice any industry recognized standards that are not
video game standards, such as VCD 2.0) assessed by MEI (as the administrator of
the M2 software development program) to unrelated sublicensees falls below
[CONFIDENTIAL TREATMENT REQUESTED] (US [CONFIDENTIAL TREATMENT REQUESTED]) per
unit, including any applicable withholding taxes, and provided that no such
sublicensees are required to pay M2 software program fees greater than
[CONFIDENTIAL TREATMENT REQUESTED] (US [CONFIDENTIAL TREATMENT REQUESTED]) per
unit, including any applicable withholding taxes.
8.5 Royalties For Networked Software. Without limiting the generality
of Section 2, above, the licenses granted to MEI in Section 2, above, and the
sublicense granted to 3DO in Section 14, below, respectively, include the right
for MEI to develop, manufacture, copy and distribute network-compatible M2
Hardware Products and network-ready M2 Software Products, and for 3DO to
develop, manufacture, copy and distribute network-ready M2 Software Products.
The applicable royalty rate(s) to be paid by one party to the other party with
respect to the manufacture and distribution of any software product(s) that
incorporate the Licensed Technology or any Improvements or Adaptations thereof
(or any portion of any of the foregoing), or are developed with the use of the
Licensed Technology or any Improvements or Adaptations thereof (or any portion
of any of the foregoing) or are subject to any of the Intellectual Property
Rights, but that are not distributed in any individually distinct, physical
media or format (e.g., CD-ROM, digital video disc, ROM cartridge, etc.),
including, without limitation, any network-ready version of any such
applications software product(s), any network-ready version of the Operating
System Kernel, and/or any network-ready version of any such software tools or
utilities, shall be negotiated in good faith by MEI and 3DO prior to the
commencement of distribution of any such network-ready software product(s).
8.6 Royalty Reports.
(a) Within thirty (30) days after the end of each calendar
month during the term of this Agreement (commencing with respect to the first
calendar month of 1998), MEI shall provide 3DO with a written royalty estimate
specifying: (i) the gross number of units of M2 Software Products manufactured
during such calendar month (itemized on a title-by-title basis and indicating
the country where manufactured); (ii) the total number of M2 Software Products
that were developed by or under subcontract for MEI or any of its subsidiaries
(itemized on a title-by-title basis and indicating the country where
manufactured); (iii) the total number of units of M2 Software Products
distributed on a [CONFIDENTIAL TREATMENT REQUESTED] basis pursuant to Sections
7.2 and 8.3, above (itemized on a title-by-title basis and indicating the
country where manufactured); (iv) the total number of [CONFIDENTIAL TREATMENT
REQUESTED] units of M2 Software Products (including, without limitation, those
of MEI's sublicensees) manufactured during such calendar month (itemized on a
title-by-title basis and indicating the country where manufactured); and (v) the
total royalties determined to be due to 3DO hereunder with respect to such
calendar month.
(b) Within thirty (30) days after the end of each calendar
quarter during the term of this Agreement (commencing with respect to the first
calendar quarter of 1998), MEI shall provide 3DO with a written royalty
15
<PAGE> 16
report, certified to be accurate by an officer of MEI, specifying: (i) the gross
number of units of M2 Software Products manufactured during such calendar
quarter (itemized on a title-by-title basis and indicating the country and
pressing facility where manufactured); (ii) the total number of M2 Software
Products that were developed by or under subcontract for MEI or any of its
subsidiaries (itemized on a title-by-title basis and indicating the country and
pressing facility where manufactured); (iii) the total number of units of M2
Software Products distributed on a [CONFIDENTIAL TREATMENT REQUESTED] basis
pursuant to Sections 7.2 and 8.3, above (itemized on a title-by-title basis and
indicating the country and pressing facility where manufactured); (iv) the total
number of [CONFIDENTIAL TREATMENT REQUESTED] units of M2 Software Products
(including, without limitation, those of MEI's sublicensees) manufactured during
such calendar quarter (itemized on a title-by-title basis and indicating the
country and pressing facility where manufactured; and (v) the total royalties
determined to be due to 3DO hereunder with respect to such calendar quarter.
(c) Pursuant to Section 7.1, above, the licensed rights
regarding the development, manufacture, sale and distribution of M2 Hardware
Products shall be deemed to be fully paid-up and no royalties shall be due or
payable to 3DO by MEI or any M2 hardware sublicensee of MEI with respect to such
licensed hardware products. In satisfaction of MEI's responsibility to withhold
applicable withholding taxes as provided under Section 6, above, and as impacted
by Article 6 [Source of Income] and Article 14 [Royalties] of the Income Tax
Treaty between Japan and the United States, it is understood that less than one
hundred percent (100%) of the licensed rights will be used in Japan.
8.7 Royalty Payments. Within forty-five (45) days after the end of each
calendar quarter, MEI shall provide 3DO with the royalty payment due to 3DO with
respect to the total number of royalty-bearing units of M2 Software Products
manufactured during such calendar quarter. All sums to be paid to 3DO hereunder
shall be remitted by wire transfer on or before the applicable due date to such
bank account as shall be designated by 3DO for such purpose. The acceptance by
3DO of any royalty report, or the receipt and deposit by 3DO of any royalty
payment tendered by or on behalf of MEI, or the exercise by 3DO of its rights to
inspect and/or audit MEI's books and records of accounts, shall be without
prejudice to any rights or remedies of 3DO and shall not restrict or prevent 3DO
from thereafter disputing the accuracy of any of MEI's royalty reports or
payments hereunder. Any incorrect or revised royalty report indicating that an
overpayment of royalties has occurred shall not require a repayment by 3DO to
MEI, but shall instead be treated as an advance payment of any subsequent
royalties otherwise due from MEI hereunder.
8.8 Audit Rights. MEI shall retain at its principal place of business
for a period of five (5) years after making any royalty report, all of the
files, records and books of account prepared in the normal course of business
which contain data reasonably required for the computation and verification of
the information to be provided to 3DO and of the amounts to be paid by MEI with
respect to any royalty report required hereunder. MEI shall permit a certified
public accounting firm ("CPA") retained by 3DO, to inspect and/or audit at any
reasonable times (but not more often than twice per year) all such files,
records and books of account and to take extracts therefrom or make copies
thereof for the purpose of verifying the correctness of the royalty reports and
16
<PAGE> 17
payments provided by MEI hereunder. MEI shall give 3DO's retained CPA such other
information as may be necessary and/or proper in order to enable the royalty
payments due to 3DO hereunder to be accurately ascertained. All information
obtained by 3DO's CPA under this Section 8.8 and subsequently disclosed to 3DO
shall be maintained in strict confidence in accordance with the provisions of
Section 25, below. In addition to promptly paying 3DO any and all sums that are
identified by any inspection and/or audit as being owed to 3DO and yet unpaid by
MEI, in the event any such inspection and/or audit reveals that MEI has
underpaid 3DO by [CONFIDENTIAL TREATMENT REQUESTED] percent [CONFIDENTIAL
TREATMENT REQUESTED] or more with respect to the period which is the subject of
such inspection and/or audit, MEI shall reimburse 3DO, promptly upon demand, for
the reasonable costs and expenses incurred by 3DO with respect to such
inspection and/or audit.
8.9 Taxes. Each party (as a "paying party") may withhold from any and
all amounts due to the other party (as a "receiving party") under this Agreement
any income tax or other tax of a similar nature required to be withheld by the
government of the country in which the paying party has its principal place of
business and as provided for under applicable tax laws. If any such withholding
occurs, the paying party shall furnish the receiving party with official tax
receipts or other documentary evidence of such withholdings and payments in
order to assist the receiving party in seeking an appropriate credit against the
receiving party's tax obligations. Each party agrees to indemnify and hold the
other party harmless from and against any claims, losses, liabilities, damages,
expenses and costs (including reasonable fees for attorneys and court costs),
which result from its failure to timely pay any applicable withholding taxes or
other such assessments, and/or which are incurred in the settlement or avoidance
of any such claim. Each party shall agree to extend its respective reasonable
best efforts to the other party so as to mitigate and lessen the incidence of
withholding taxes incurred pursuant to the applicable income tax treaty. Both
parties will work together, in good faith, to reach mutual agreement as to how
to mitigate any applicable withholding taxes as permitted by applicable law.
8.10 Interest. MEI acknowledges and agrees that all sums owed or
payable to 3DO hereunder shall bear interest at the rate of one and one-quarter
percent (1-1/4%) per month, or such lower rate as may be the maximum rate
permitted under applicable law, from the date upon which payment of the same
shall first become due up to and including the date of payment thereof whether
before or after judgment, and that MEI shall be additionally liable for all
costs and expenses of collection, including, without limitation, reasonable fees
for attorneys and court costs. Notwithstanding the foregoing, such specified
rate of interest shall not excuse or be construed as a waiver of MEI's
obligation to timely provide any and all payments due to 3DO hereunder.
9. MANAGEMENT OF M2 HARDWARE AND SOFTWARE PROGRAMS.
9.1 M2 Software Program. The licenses granted to MEI in Section 2,
above, include the exclusive right to create, implement and manage the
third-party software development and publishing programs regarding M2 Software
Products, including, without limitation, the solicitation of third-party
developers and publishers, the decision as to whether any particular third-party
becomes an M2 software sublicensee, the form of agreement to be
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<PAGE> 18
offered to any prospective third-party M2 software sublicensee, and the
provision of software development support and encryption services for any such
third parties. Notwithstanding the foregoing, 3DO agrees that it shall continue
to provide technical support to any M2 software sublicensees located in the
United States, at no cost to MEI, through March 31, 1996.
9.2 M2 Hardware Program. The licenses granted to MEI in Section 2,
above, include the exclusive right to create, implement and manage the
third-party hardware development and manufacturing programs regarding M2
Hardware Products, including, without limitation, the solicitation of
third-party manufacturers, the decision as to whether any particular third-party
becomes an M2 hardware sublicensee, the form of agreement to be offered to any
prospective third-party M2 hardware sublicensee, and the provision of hardware
development support and encryption services for any such third parties.
10. MANAGEMENT OF M2 CHIPSET PROGRAM.
10.1 MEI shall have the exclusive right to manage the custom chipset
development programs with [CONFIDENTIAL TREATMENT REQUESTED] and [CONFIDENTIAL
TREATMENT REQUESTED] and other semiconductor manufacturers relating to the
semiconductor devices familiarly known to the parties as [CONFIDENTIAL TREATMENT
REQUESTED] and [CONFIDENTIAL TREATMENT REQUESTED]. MEI shall be solely liable
for any and all non-recurring engineering ("NRE") charges for chip development
described in clauses (i), (ii) and (iii) of this Section 10 which may be imposed
or otherwise assessed by [CONFIDENTIAL TREATMENT REQUESTED] Matsushita
Electronics Corporation ("MEC") or any other semiconductor manufacturer. 3DO
agrees that it shall provide engineering support, at no expense to MEI, with
respect to the following semiconductor device development programs: (i)
[CONFIDENTIAL TREATMENT REQUESTED]; (ii) [CONFIDENTIAL TREATMENT REQUESTED]; and
(iii) [CONFIDENTIAL TREATMENT REQUESTED]. MEI agrees to provide 3DO, at no
expense to 3DO, with the following engineering samples and production units of
each version of the semiconductor devices referenced in clauses (i), (ii) and
(iii) hereof:
(a) [CONFIDENTIAL TREATMENT REQUESTED]:Fifty (50) engineering
samples from the first wafer lot of each version of such device.
(b) [CONFIDENTIAL TREATMENT REQUESTED]:Fifty (50) engineering
samples from the first wafer lot of each version of such device; plus a total of
four hundred fifty (450) units of the final, mass production version of such
device, which units shall be provided to 3DO concurrently with the timing of the
initial delivery of such device to MEI.
(c) [CONFIDENTIAL TREATMENT REQUESTED]:Fifty (50) engineering
samples from the first wafer lot of each version of such device; plus a total of
four hundred fifty (450) units of the final, mass production version of such
device, which units shall be provided to 3DO concurrently with the timing of the
initial delivery of such device to MEI.
10.2 MEI acknowledges and agrees that 3DO shall be entitled to purchase
any and all of the Chipsets, including, without limitation, [CONFIDENTIAL
TREATMENT REQUESTED] and [CONFIDENTIAL TREATMENT
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REQUESTED] chips, from any and all then-available sources of production at such
prices as 3DO is able to negotiate (including chipset royalties to be paid by
chipset licensees to MEI in an amount not in excess of [CONFIDENTIAL TREATMENT
REQUESTED] (US [CONFIDENTIAL TREATMENT REQUESTED]) per chip for such chips
purchased by 3DO), which chips may only be used for 3DO's internal purposes
and/or for incorporation into such types of hardware products as 3DO is entitled
to develop and distribute, and/or into such types of hardware products as 3DO is
entitled to authorize third parties to develop and distribute, consistent with
the exclusivity of the licensed rights granted to MEI in Section 2, above.
10.3 3DO shall be freely entitled to contract with [CONFIDENTIAL
TREATMENT REQUESTED] and any other semiconductor manufacturer regarding, among
other things, the provision of engineering services relating to the exercise of
3DO's various rights and licenses regarding the Licensed Technology and/or any
Derivative Technology, subject to the rights of first negotiation of MEI as
described in Section 3, above. MEI acknowledges and agrees that, in the course
of negotiating pricing for the Chipsets which MEI desires to purchase from
[CONFIDENTIAL TREATMENT REQUESTED] and/or [CONFIDENTIAL TREATMENT REQUESTED], it
shall use good faith efforts to obtain the opportunity for 3DO to purchase such
Chipsets for the same FOB U.S. pricing that is offered to MEI by such foundries,
plus the per unit chipset royalties referenced hereinabove.
11. M2 AUTHORING SYSTEMS.
11.1 Without limiting the generality of Section 2, above, the licenses
granted to MEI in Section 2, above, include the exclusive, worldwide, perpetual
and royalty-free right (with rights of sublicense) for MEI to use, modify,
create derivative works and otherwise exploit the Licensed Technology and any
Improvements and Adaptations thereof that are developed by or for 3DO (or any
portion of any of the foregoing) and to practice and otherwise exploit the
Intellectual Property Rights in connection with the development, manufacture,
sale, lease, license, distribution and/or exploitation of development and
authoring systems (including development and authoring software, tools and
utilities) that are designed and intended for the development of M2 Hardware
Products and/or M2 Software Products (collectively, "M2 Authoring Systems").
Notwithstanding the foregoing, MEI hereby grants 3DO, and 3DO hereby accepts
from MEI, a non-exclusive, royalty-free, perpetual license (without rights of
sublicense), to the full extent of the exclusive rights granted by 3DO to MEI
hereunder, to: (i) use, modify, create derivative works, and otherwise exploit
the Licensed Technology and any Improvements and Adaptations thereof that are
developed by or for 3DO (or any portion of any of the foregoing) in connection
with the development, manufacture, sale, lease, license for use, distribution,
and/or exploitation of any M2 Authoring Systems to MEI's authorized sublicensees
outside of Japan; and (ii) practice and otherwise exploit the Intellectual
Property Rights (or any portion thereof) in connection with the development,
manufacture, sale, lease, license for use, distribution, and/or exploitation of
any M2 Authoring Systems to MEI's authorized sublicensees outside of Japan.
Without limiting the generality of the license granted by MEI to 3DO in this
Section 11.1, MEI acknowledges and agrees that such license includes the
non-exclusive rights for 3DO to develop, manufacture (or have manufactured),
sell
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and distribute M2 Authoring Systems to MEI's authorized sublicensees outside of
Japan.
11.2 In addition, MEI hereby grants 3DO, and 3DO hereby accepts from
MEI, a non-exclusive, worldwide, royalty-free, perpetual license (with rights of
sublicense), to the full extent of the exclusive rights granted by 3DO to MEI
hereunder, to: (i) use, modify, create derivative works, and otherwise exploit
the Licensed Technology and any Improvements and Adaptations thereof that are
developed by or for 3DO (or any portion of any of the foregoing) in connection
with the development, manufacture, sale, lease, license, distribution and/or
exploitation of any development and authoring systems (including development and
authoring software, tools and utilities) that are designed and intended for the
development of hardware products that are not M2 Hardware Products and/or the
development of software products that are not M2 Software Products
(collectively, "Non-M2 Authoring Systems"); and (ii) practice and otherwise
exploit the Intellectual Property Rights (or any portion thereof) in connection
with the development, manufacture, sale, lease, license, distribution and/or
exploitation of any Non-M2 Authoring Systems. Without limiting the generality of
the license granted by MEI to 3DO in this Section 11.2, MEI acknowledges and
agrees that such license includes the rights for 3DO to develop, manufacture (or
have manufactured), sell and distribute Non-M2 Authoring Systems.
11.3 MEI acknowledges and agrees that, notwithstanding anything to the
contrary contained in this Agreement, any enhancement or other such modification
to the Licensed Technology that is created by or for 3DO and incorporated in any
M2 Authoring Systems or any Non-M2 Authoring Systems, or in any development or
authoring software, tools or utilities, shall not be deemed an Improvement or
Adaptation, and shall not be automatically included within the licenses granted
to MEI in Section 2, above.
11.4 There shall be no restrictions upon the number or types of M2
Authoring Systems (including development and authoring software, tools and
utilities) or Non-M2 Authoring Systems (including development and authoring
software, tools and utilities) that 3DO is entitled to develop and distribute
hereunder, nor shall MEI have any approval rights regarding the design or
subjective quality of any such products.
12. M2 PERIPHERAL PRODUCTS.
12.1 Without limiting the generality of Section 2, above, the licenses
granted to MEI in Section 2, above, include the exclusive, worldwide, perpetual
and royalty-free right (with rights of sublicense) for MEI to use, modify,
create derivative works, and otherwise exploit the Licensed Technology and any
Improvements and Adaptations thereof developed by or for 3DO (or any portion of
any of the foregoing) and to practice and otherwise exploit the Intellectual
Property Rights in connection with the development, manufacture, sale and
distribution of peripheral products (including utility firmware) which are
compatible with any M2 Hardware Products (collectively, "M2 Peripheral
Products"). Notwithstanding the foregoing, MEI hereby grants 3DO, and 3DO hereby
accepts from MEI, a non-exclusive, worldwide, perpetual license (without rights
of sublicense), to the full extent of the exclusive rights granted by 3DO to MEI
hereunder, to: (i) use, modify, create derivative works, and otherwise exploit
the Licensed Technology and any Improvements and
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Adaptations thereof that are developed by or for 3DO (or any portion of any of
the foregoing) in connection with the development, manufacture, sale,
distribution and/or exploitation of any M2 Peripheral Products; and (ii)
practice and otherwise exploit the Intellectual Property Rights (or any portion
thereof) in connection with the development, manufacture, sale, distribution
and/or exploitation of any M2 Peripheral Products. Without limiting the
generality of the license granted by MEI to 3DO in this Section 12.1, MEI
acknowledges and agrees that such license includes the non-exclusive rights for
3DO to develop, manufacture (or have manufactured), sell and distribute M2
Peripheral Products throughout the world.
(a) MEI acknowledges and agrees that 3DO shall only be
required to provide MEI with a total payment of [CONFIDENTIAL TREATMENT
REQUESTED] (US [CONFIDENTIAL TREATMENT REQUESTED]) with respect to each M2
Peripheral Product unit manufactured by or for 3DO hereunder, which sum includes
all peripheral royalties, withholding taxes, manufacturing surcharges,
compatibility testing fees and other such charges imposed directly or indirectly
by MEI, but specifically excludes encryption fees (if 3DO, at its option, elects
to hire MEI to provide encryption services), royalties for industry-recognized
standards that are not video game standards (such as VCD 2.0), and royalties
imposed generally on third parties by MEI for the practice of MEI intellectual
property rights (except for rights referenced in Section 18.1, below).
(b) 3DO hereby acknowledges that the license granted to it in
this Section does not authorize it to develop, manufacture (or have
manufactured), sell and/or distribute a dedicated consumer video game system
compatible with software products developed using the M2 API.
12.2 There shall be no restrictions upon the number or types of M2
Peripheral Products that 3DO is entitled to develop and distribute, nor shall
MEI have any approval rights regarding the design or subjective quality of any
such products.
12.3 MEI acknowledges and agrees that 3DO shall be entitled, pursuant
to the license granted by MEI in this Section, to reproduce at 3DO's facilities
in the United States and incorporate, in any and all M2 Peripheral Products that
3DO elects to develop and distribute, any required peripheral authentication or
other such peripheral security process or device (e.g., encryption techniques)
that is/are required to be combined with any M2 Peripheral Products in order for
such peripheral products to execute and otherwise be operable with any M2
Hardware Products; provided, however, 3DO's rights with respect to such
peripheral authentication and/or other such peripheral security systems shall
not extend to any third-party peripherals for which 3DO merely serves as a
distributor.
12.4 The royalty reporting and payment provisions of Sections 8.6, 8.7,
8.8, 8.9, and 8.10, above, shall apply mutatis mutandis with respect to 3DO's
obligations to pay royalties to MEI for any M2 Peripheral Products manufactured
by or for 3DO hereunder.
12.5 The parties acknowledge and agree that the provisions of Section
19, below, or such less restrictive provisions as are mutually agreed by MEI and
any third-party sublicensees hereunder, shall apply with respect to any
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M2 Peripheral Products that are manufactured and distributed by or for 3DO
hereunder.
13. M2 ARCADE DEVICES.
13.1 Without limiting the generality of Section 2, above, the licenses
granted to MEI in Section 2, above, include the exclusive, worldwide, perpetual
and royalty-free right (with rights of sublicense) for MEI to use, modify,
create derivative works and otherwise exploit the Licensed Technology and any
Improvements and Adaptations thereof that are developed by or for 3DO (or any
portion of any of the foregoing) and to practice and otherwise exploit the
Intellectual Property Rights (or any portion thereof) in connection with the
development, manufacture, sale, distribution and/or exploitation of arcade and
location-based entertainment devices (collectively, "M2 Arcade Devices"), which
hardware products may be compatible with applications software developed using
the M2 API or with any other API. Notwithstanding the foregoing, MEI hereby
grants 3DO, and 3DO hereby accepts from MEI, a non-exclusive, royalty-free,
perpetual license (including rights of sublicense to entities outside of Japan),
to the full extent of the exclusive rights granted by 3DO to MEI hereunder, to:
(i) use, modify, create derivative works, and otherwise exploit the Licensed
Technology and any Improvements and Adaptations thereof that are developed by or
for 3DO (or any portion of any of the foregoing) in connection with the
development, manufacture, sale, distribution and/or exploitation of any M2
Arcade Devices (including integrated utility firmware), and in connection with
the development, manufacture, sale, distribution and/or exploitation of
applications software products, which software products are intended for use
with any M2 Arcade Devices and are developed using an API other than the M2 API;
and (ii) practice and otherwise exploit the Intellectual Property Rights (or any
portion thereof) in connection with the development, manufacture, sale,
distribution and/or exploitation of any M2 Arcade Devices, and in connection
with the development, manufacture, sale, distribution and/or exploitation of
applications software products, which software products are intended for use
with any M2 Arcade Devices and are developed using an API other than the M2 API.
13.2 To the extent of the licenses and related rights granted to 3DO in
Section 13.1, above, no royalties shall accrue or otherwise be payable by 3DO to
MEI with respect to any M2 Arcade Devices and/or any related applications
software products that are developed using an API other than the M2 API and that
are distributed by or for 3DO, or by or for any sublicensee of 3DO. To the
extent of the licenses and related rights granted to MEI in Section 2, above, no
royalties shall accrue or otherwise be payable by MEI to 3DO with respect to any
M2 Arcade Devices and/or any related applications software products that are
developed using an API other than the M2 API and that are distributed by or for
MEI, or by or for any sublicensee of MEI.
13.3 There shall be no restrictions upon the number or types of M2
Arcade Devices or related applications software products that 3DO is entitled to
develop and distribute, and/or authorize others to develop and distribute as
expressly permitted hereunder, nor shall MEI have any approval rights regarding
the design or subjective quality of any such products.
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13.4 MEI acknowledges and agrees that, notwithstanding anything to the
contrary contained in this Agreement, any enhancement or other such modification
to the Licensed Technology that is created by or for 3DO and incorporated in any
M2 Arcade Device shall not be deemed an Improvement or Adaptation, and shall not
be automatically included within the licenses granted to MEI in Section 2,
above.
13.5 Without limiting the generality of the license granted by MEI to
3DO in this Section 13.1, which license includes the non-exclusive rights for
3DO to develop, manufacture (or have manufactured), sell and distribute M2
Arcade Products throughout the world, 3DO agrees that in the event it desires to
license the Japanese distribution rights owned or otherwise held by 3DO with
respect to any M2 Arcade Device developed by 3DO, 3DO shall first offer such
distribution opportunity to MEI and shall negotiate in good faith with MEI for a
period of thirty (30) days regarding the potential license to MEI of the
Japanese distribution rights with respect to any such M2 Arcade Device.
13.6 For purposes of clarification, the parties acknowledge and agree
that the non-exclusive license granted by MEI to 3DO in Section 14, below,
includes a license with respect to application software products intended for
use with M2 Arcade Devices, which software products are developed using the M2
API.
14. M2 SOFTWARE PUBLISHING.
14.1 Without limiting the generality of Section 2, above, the licenses
granted to MEI in Section 2, above, include the exclusive, worldwide, perpetual
right (with rights of sublicense) for MEI to use, modify, create derivative
works and otherwise exploit the Licensed Technology and any Improvements and
Adaptations thereof that are developed by or for 3DO (or any portion of any of
the foregoing) and to practice and otherwise exploit the Intellectual Property
Rights (or any portion thereof) in connection with the development, manufacture,
sale and distribution of M2 Software Products. Notwithstanding the foregoing,
MEI hereby grants 3DO, and 3DO hereby accepts from MEI, a non-exclusive,
worldwide, perpetual license (without rights of sublicense), to the full extent
of the exclusive rights granted by 3DO to MEI hereunder, to: (i) use, modify,
create derivative works, and otherwise exploit the Licensed Technology and any
Improvements and Adaptations thereof that are developed by or for 3DO (or any
portion of any of the foregoing) in connection with the development,
manufacture, sale, distribution and/or exploitation of any M2 Software Products;
and (ii) practice and otherwise exploit the Intellectual Property Rights (or any
portion thereof) in connection with the development, manufacture, sale,
distribution and/or exploitation of any M2 Software Products. MEI acknowledges
and agrees that 3DO shall only be required to provide a total payment to MEI of
[CONFIDENTIAL TREATMENT REQUESTED] (US [CONFIDENTIAL TREATMENT REQUESTED]) for
each M2 Software Product unit published by 3DO hereunder (but specifically
excluding any third-party title for which 3DO merely serves as a distributor),
which sum includes all software royalties, withholding taxes, manufacturing
surcharges, compatibility testing fees and other such charges imposed directly
or indirectly by MEI, but specifically excludes encryption fees (if 3DO, at its
option, elects to hire MEI to provide encryption services), royalties for
industry-recognized standards that are not video game standards (such as VCD
2.0), and royalties imposed
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generally on third parties by MEI for the practice of MEI intellectual property
rights (except for rights referenced in Section 18.1, below).
14.2 Notwithstanding anything to the contrary contained in this
Agreement, 3DO acknowledges and agrees that no royalties shall be paid by MEI to
3DO pursuant to the provisions of Section 8, above, for any of the M2 Software
Products that are published by 3DO.
14.3 There shall be no restrictions upon the number or types of M2
Software Products that 3DO is entitled to publish, nor shall MEI have any
approval rights regarding the design or subjective quality of 3DO's M2 Software
Products.
14.4 Notwithstanding the provisions of Section 9, above, MEI
acknowledges and agrees that 3DO shall be entitled, pursuant to the license
granted by MEI in this Section 14, to reproduce at 3DO's facilities in the
United States and incorporate, in any and all M2 Software Products that 3DO
elects to publish, any required software authentication or other such software
security process or device (e.g., encryption techniques) that is/are required to
be combined with any M2 Software Products in order for such software products to
execute and otherwise be operable with any M2 Hardware Products; provided,
however, 3DO's rights with respect to any such software authentication and/or
other such software security systems shall not extend to any third-party titles
for which 3DO merely serves as a distributor.
14.5 Without limiting the generality of the license granted to 3DO by
MEI in Section 14.1, above, which license includes the non-exclusive rights for
3DO to develop, manufacture (or have manufactured) and publish M2 Software
Products throughout the world, in addition 3DO shall be entitled to have its M2
Software Products manufactured outside of Japan by pressing facilities that are
not subsidiaries of MEI or otherwise affiliated with MEI and which, although
licensed by MEI, shall not have any obligation to pay any pressing royalties or
manufacturing surcharges to MEI with respect to the M2 Software Products that
3DO elects to publish. MEI acknowledges and agrees that it shall grant pressing
licenses to at least two (2) such pressing facilities in the U.S.A. and at least
one (1) such pressing facility in Europe, which facilities shall be selected by
MEI at its discretion. Upon 3DO's written request, MEI shall use its best
efforts to ensure that any and all pressing facilities and manufacturing
facilities that are licensed or controlled by MEI provide 3DO with a reasonable
opportunity to purchase M2 Software Products on non-discriminatory terms.
14.6 3DO agrees that it shall provide MEI, at no expense to MEI, with
up to two hundred (200) copies of each M2 Software Product title published by
3DO hereunder (but specifically excluding any third-party title for which 3DO
merely serves as a distributor), which M2 Software Product units may only be
used by MEI for protection of MEI's trademark rights with respect to the M2
Platform Trademark and/or for marketing and promotional purposes, including
demonstration at trade shows and press conferences. MEI acknowledges and agrees
that it shall waive the software royalties that would otherwise be owed by 3DO
hereunder with respect to any and all such M2 Software Products units as are
provided by 3DO to MEI pursuant to the provisions of this Section 14.6.
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14.7 The royalty reporting and payment provisions of Sections 8.6, 8.7,
8.8, 8.9, and 8.10, above, shall apply mutatis mutandis with respect to 3DO's
obligations to pay royalties to MEI for any M2 Software Products manufactured by
or for 3DO hereunder.
14.8 The parties acknowledge and agree that the provisions of Section
19, below, or such less restrictive provisions as are mutually agreed by MEI and
any third-party sublicensees hereunder, shall apply with respect to any M2
Software Products that are manufactured and distributed by or for 3DO hereunder.
15. THE M2 ACCELERATOR.
In the event that MEI fails to commercially release any version of that
certain product conforming to Section II of Exhibit E, attached hereto (the "M2
Accelerator Product") in North America by September 30, 1996, MEI shall grant
3DO a non-exclusive, worldwide, perpetual and royalty-free license (without
rights of sublicense), to the full extent of the exclusive rights granted by 3DO
to MEI hereunder, to: (i) use, modify, create derivative works, and otherwise
exploit the Licensed Technology and any Improvements and Adaptations thereof
that are developed by or for 3DO (or any portion of any of the foregoing), in
connection with the development, manufacture, sale, distribution and/or
exploitation of units of the M2 Accelerator Product; and (ii) practice and
otherwise exploit the Intellectual Property Rights (or any portion thereof) in
connection with the development, manufacture, sale, distribution and/or
exploitation of units of the M2 Accelerator Product.
16. SOFTWARE PUBLISHING ON FUTURE MEI PLATFORMS.
16.1 MEI hereby grants 3DO, and 3DO hereby accepts from MEI, a
non-exclusive, worldwide, perpetual license (without rights of sublicense), to
the full extent of the exclusive rights granted by 3DO to MEI hereunder, to
develop, manufacture (or, at 3DO's option, have manufactured), sell, distribute,
and/or otherwise exploit software products for any future interactive platforms
(other than M2 Hardware Products and specifically excluding any interactive
platforms that constitute an embodiment of an industry recognized interactive
standard that is not a video game standard, such as VCD 2.0) that are designed,
developed and commercially launched by or for MEI at any time within twenty-five
(25) years following the execution of this Agreement. The license granted to 3DO
pursuant to this Section 16 includes the right to practice and otherwise exploit
such intellectual property rights of MEI as are required in order for 3DO to be
able to develop, manufacture (or have manufactured), use, sell, distribute,
and/or otherwise exploit software products compatible with such future
interactive platforms as are developed and distributed by or for MEI, but
specifically excluding such intellectual property rights of MEI as are the
subject of any industry recognized standard that is not a video game standard.
The expiration of the referenced twenty-five (25) year period shall only affect
3DO's right to develop and publish software products for interactive platforms
that are designed, developed and commercially launched by or for MEI subsequent
to the expiration of such twenty-five (25) year period, and shall not affect in
any manner 3DO's right to continue to develop and publish software products
compatible with any such interactive platforms that are designed, developed and
commercially launched by or for MEI prior to the expiration of such period.
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16.2 3DO shall pay MEI a total payment of [CONFIDENTIAL TREATMENT
REQUESTED] (US [CONFIDENTIAL TREATMENT REQUESTED]) for each such product unit
published by 3DO hereunder (but specifically excluding any third-party title for
which 3DO merely serves as a distributor), which sum includes all software
royalties, withholding taxes, manufacturing surcharges, compatibility testing
fees and other such charges imposed directly or indirectly by MEI, but
specifically excludes encryption fees, royalties for industry-recognized
standards that are not video game standards (such as VCD 2.0), and royalties
imposed generally on third parties by MEI for the practice of MEI intellectual
property rights (except for rights referenced in Section 18.1, below).
16.3 Notwithstanding the foregoing, 3DO acknowledges and agrees that it
shall not be entitled to such favorable royalty rate unless 3DO starts
development of at least [CONFIDENTIAL TREATMENT REQUESTED] titles of 3DO's
choosing for any such future MEI interactive platform at least [CONFIDENTIAL
TREATMENT REQUESTED] year before the scheduled launch date of such platform, or
promptly following the date that any required development systems and/or
authoring software are made available by MEI to 3DO (if any such development
systems and/or authoring software are not available at least [CONFIDENTIAL
TREATMENT REQUESTED] year prior to such scheduled launch date), whichever is
later. 3DO agrees that, if 3DO seeks to obtain such favorable rate and such
development systems and/or authoring software are made available by MEI to 3DO
prior to such [CONFIDENTIAL TREATMENT REQUESTED] period, any such complement of
[CONFIDENTIAL TREATMENT REQUESTED] titles for any such future MEI interactive
platform shall not be released on any [CONFIDENTIAL TREATMENT REQUESTED]
interactive platforms by 3DO or any of its subsidiaries within [CONFIDENTIAL
TREATMENT REQUESTED] from the date of commercial launch of each of such 3DO
software products, respectively.
16.4 There shall be no restrictions upon the number or types of
software products that 3DO is entitled to publish for any such future MEI
interactive platforms. Neither MEI nor any third party shall have any approval
rights regarding the design or subjective quality of any such software products
published by 3DO. MEI shall have the right, however, to test compatibility and
to inspect 3DO's use on any such software products that are published by or for
3DO of any applicable format trademark that is owned or otherwise controlled by
MEI, and 3DO shall use diligent, good faith efforts to remedy any
incompatibility or improper trademark usage reported by MEI.
16.5 MEI shall cause any required security process or device (e.g.,
encryption techniques) that is owned by MEI or otherwise within MEI's control to
be incorporated into reproducible masters of each of the software products that
3DO desires to publish in accordance with a schedule and on other terms and
conditions that are nondiscriminatory and no less favorable to 3DO than the
schedule and other terms and conditions made available to any third party. Upon
3DO's written request, MEI shall use its best efforts to ensure that any and all
pressing facilities and manufacturing facilities that are licensed or otherwise
controlled by MEI provide 3DO with a reasonable opportunity to purchase software
products for any such future MEI interactive products on non-discriminatory
terms.
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16.6 The royalty reporting and payment provisions of Sections 8.6, 8.7,
8.8, 8.9, and 8.10, above, shall apply mutatis mutandis with respect to 3DO's
obligations to pay royalties to MEI for any such software products manufactured
by or for 3DO hereunder.
16.7 The parties acknowledge and agree that the provisions of Section
19, below, or such less restrictive provisions as are mutually agreed by MEI and
any third-party licensed to develop and publish software products compatible
with any such future MEI interactive platform(s), shall apply with respect to
any such software products that are developed and published by or for 3DO
hereunder.
17. COMPUTING DEVICES.
17.1 Without limiting the generality of Section 2, above, the licenses
granted to MEI in Section 2, above, include the exclusive, worldwide, perpetual
and royalty-free right (with rights of sublicense) for MEI to use, modify,
create derivative works, and otherwise exploit the Licensed Technology and any
Improvements and Adaptations thereof that are developed by or for 3DO (or any
portion of any of the foregoing) and practice and otherwise exploit the
Intellectual Property Rights (or any portion thereof) in connection with the
development, manufacture, sale, distribution and/or exploitation of any hardware
products and/or devices (e.g., semiconductor devices and board level products),
including integrated utility firmware, that are designed and intended for use in
the computer field (collectively, "Computing Devices"), which hardware products
may be compatible with applications software developed with the M2 API or with
any other API. Notwithstanding the foregoing, MEI hereby grants 3DO, and 3DO
hereby accepts from MEI, a non-exclusive, worldwide, royalty-free, perpetual
license (with rights of sublicense), to the full extent of the exclusive rights
granted by 3DO to MEI hereunder, to: (i) use, modify, create derivative works,
and otherwise exploit the Licensed Technology and any Improvements and
Adaptations thereof that are developed by or for 3DO (or any portion of any of
the foregoing) in connection with the development, manufacture, sale,
distribution and/or exploitation of any Computing Devices, and in connection
with the development, manufacture, sale and/or distribution of applications
software products developed using an API other than the M2 API, which software
products are designed and intended for use with any Computing Devices; and (ii)
practice and otherwise exploit the Intellectual Property Rights (or any portion
thereof) in connection with the development, manufacture, sale, distribution
and/or exploitation of any Computing Devices, and in connection with the
development, manufacture, sale and/or distribution of applications software
products developed using an API other than the M2 API, which software products
are designed and intended for use with any Computing Devices.
(a) MEI acknowledges and agrees that, notwithstanding anything
to the contrary contained herein, any enhancement to or other such modification
of the Licensed Technology or any Improvement or Adaptation thereof (or any
portion of any of the foregoing) that is created by or for 3DO in connection
with the development of any Computing Device and/or any related applications
software product shall not be deemed an Improvement or Adaptation, and shall not
be automatically included within the licenses granted to MEI to Section 2,
above.
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(b) To the extent of the licenses and related rights granted
by MEI to 3DO in this Section 17.1, no royalties shall accrue or otherwise be
payable by 3DO to MEI with respect to any Computing Devices and/or any related
applications software products that are developed using an API other than the M2
API and that are distributed by or for 3DO, or by or for any sublicensee of 3DO.
To the extent of the licenses and related rights granted by 3DO to MEI in this
Section 2, above, no royalties shall accrue or otherwise be payable by MEI to
3DO with respect to any Computing Devices and/or any related applications
software products that are developed using an API other than the M2 API and that
are distributed by or for MEI, or by or for any sublicensee of MEI.
(c) There shall be no restrictions upon the number or types of
Computing Devices and/or related applications software products that 3DO shall
be entitled to develop and distribute, and/or authorize third parties to develop
and distribute as expressly permitted hereunder, nor shall MEI have any approval
rights regarding the design or subjective quality of any of the Computing
Devices and/or related applications software products developed by 3DO or by any
sublicensee of 3DO.
17.2 3DO hereby acknowledges and agrees that the license granted to it
in this Section does not authorize 3DO to develop, manufacture (or have
manufactured), sell and/or distribute, or to authorize any third party to
develop, manufacture (or have manufactured), sell and/or distribute, a dedicated
consumer video game system, nor to sublicense third parties to develop
applications software products using the M2 API. Similarly, MEI acknowledges and
agrees that its license to develop and distribute hardware products designed and
intended for use in the computer field does not authorize MEI or any of its
hardware sublicensees to develop, manufacture (or have manufactured), sell
and/or distribute any dedicated consumer video game system that is competitive
with the M2 platform, as set forth in Section 5.6, above.
18. NOTICE OF MODIFICATIONS, OTHER RIGHTS.
18.1 To the extent that MEI from time to time makes (or has made) any
modifications to the Licensed Technology or any Improvement or Adaptation
thereof (or any portion of any of the foregoing) that affect compatibility with
M2 Hardware Products or otherwise affect 3DO's ability to maintain such
compatibility in connection with the exercise of the licensed rights herein
granted by MEI to 3DO (or the rights of any of 3DO's sublicensees, as expressly
permitted hereunder), then, without the payment of any additional compensation
(i) MEI shall provide 3DO with written notice of such modifications at least
ninety (90) days before any implementation thereof, (ii) the rights and licenses
granted by MEI to 3DO pursuant to the provisions of this Section 18.1 shall be
deemed to include (but be limited to) such modifications, and any intellectual
property rights of MEI in respect thereof, solely for purposes of maintaining
compatibility with the applicable M2 Hardware Products, and (iii) MEI shall
promptly deliver to 3DO any materials (including, without limitation, any
revised specifications or encryption information, if applicable) required for
the exercise of such rights and licenses.
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18.2 To the extent that MEI may have intellectual property rights (in
addition to those referenced in Section 18.1, above) that affect compatibility
with M2 Hardware Products or otherwise affect 3DO's ability to maintain such
compatibility in connection with the exercise of the licensed rights herein
granted by MEI to 3DO (or the rights of any of 3DO's sublicensees, as expressly
permitted hereunder), then MEI shall grant to 3DO, at 3DO's request, a
non-exclusive, worldwide license of such intellectual property rights solely for
use in maintaining such compatibility. Such license shall be on terms and
conditions that are nondiscriminatory and that are no less favorable to 3DO than
those made available to any third party under comparable circumstances.
18.3 The licenses of Sections 18.1 and 18.2 shall not extend to the
development, manufacture, sale or distribution of any Competing Hardware and/or
Software Products, unless the parties otherwise mutually agree in writing.
19. FORMAT NAME.
19.1 M2 Platform Trademark. MEI shall be entitled to choose the format
name for the M2 platform and shall own the trademark(s) used to identify such
format (the "M2 Platform Trademark"). MEI hereby grants to 3DO and its
sublicensees, respectively, subject to the terms and conditions of this
Agreement, and 3DO hereby accepts from MEI and agrees to use and/or cause 3DO's
sublicensees to use, as applicable, a non-exclusive, worldwide, royalty-free,
perpetual license to use the M2 Platform Trademark in connection with the
manufacture, marketing, sale, distribution and/or exploitation of M2 Authoring
Systems, M2 Peripheral Products for M2 Hardware Products that are compatible
with software products developed using the M2 API, M2 Arcade Devices that are
compatible with software products developed using the M2 API, M2 Software
Products developed using the M2 API, and Computing Devices that are compatible
with software products developed using the M2 API ("M2 Platform Products").
19.2 MEI Guidelines. In order for MEI to maintain its interest in the
M2 Platform Trademark, 3DO agrees that it (and its sublicensees, as applicable)
shall be subject to the following:
(a) MEI shall provide 3DO with reasonable written guidelines
(the "MEI Guidelines") regarding the reproduction and display of the M2 Platform
Trademark, which directives shall be set forth in Exhibit D, to be attached
hereto, and which shall not be any more burdensome or restrictive than the
applicable trademark guidelines regarding the M2 Platform Trademark that MEI
gives to any third-party sublicensee hereunder. The MEI Guidelines shall be
subject to reasonable updating and modification upon not less than (90) days
prior written notice. Nothing herein shall restrict 3DO from using its own
trademarks and logos in connection with any M2 Platform Products.
(b) MEI shall have the right to test compatibility and to
inspect 3DO's use of the M2 Platform Trademark in connection with the M2
Platform Products that are manufactured by or for 3DO, and 3DO shall use
commercially reasonable efforts to resolve and to prospectively correct any
incompatibility and/or improper trademark usage reported by MEI.
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19.3 MEI Trademark Rights.
(a) The M2 Platform Trademark and the goodwill associated
therewith are the exclusive property of MEI and nothing in this Agreement grants
3DO any right, title or interest therein, except for the license expressly
granted to use the M2 Platform Trademark in accordance with the terms and
subject to the conditions set forth in this Agreement.
(b) All uses of the M2 Platform Trademark by 3DO (and its
sublicensees, as applicable) hereunder and all goodwill arising therefrom shall
inure solely to the benefit of MEI. 3DO represents and warrants that it shall
not contest the validity of the M2 Platform Trademark or registrations thereof
or applications with respect thereto, or MEI's exclusive ownership of the M2
Platform Trademark or its associated goodwill.
(c) 3DO agrees to make available to MEI, upon request, copies
of 3DO's records and such other documentary evidence as is/are retained in the
ordinary course of business regarding its use of the M2 Platform Trademark. Such
records shall include samples of prior and contemporaneous uses of the M2
Platform Trademark in connection with any M2 Platform Products, and information
regarding first use of the M2 Platform Trademark in each country.
(d) Upon MEI's request, 3DO shall deliver to MEI free of cost
samples of use of the M2 Platform Trademark for trademark registration purposes
in compliance with applicable laws. 3DO shall assist MEI, at MEI's expense, in
its efforts to procure and maintain protection of the M2 Platform Trademark,
including trademark registration in MEI's name and at MEI's expense. Upon
request, 3DO shall execute registered user agreements regarding the M2 Platform
Trademark. Notwithstanding the foregoing, MEI shall be under no obligation to
procure or maintain any particular trademark registration.
19.4 Collateral Products. No right, license or privilege has been
granted to 3DO hereunder concerning the development of any collateral product or
other such after-market use or purpose which displays or depicts the M2 Platform
Trademark. No promotional or novelty items or premium products (e.g., T-shirts,
baseball caps, coffee mugs, stickers, etc.) displaying or depicting the M2
Platform Trademark shall be developed, manufactured, marketed, sold, and/or
distributed by 3DO or in its behalf without the prior written consent of MEI.
19.5 Litigation Involving the M2 Platform Trademark.
(a) If 3DO's legal department or personnel responsible for the
relationship with MEI become aware that any third party is or may be infringing
the M2 Platform Trademark, 3DO shall promptly provide written notice thereof to
MEI.
(b) 3DO shall promptly inform MEI of any actual or threatened
litigation (a "Claim") against 3DO which arises out of the authorized use of the
M2 Platform Trademark. In the event of a Claim, MEI shall, at its option, either
(i) select an alternative (whether new or existing) non-infringing mark, or (ii)
assume the defense and/or settlement of the Claim and indemnify 3DO for
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any monetary judgment resulting from 3DO's authorized use, from and after the
date on which MEI is notified in writing of the Claim, of the M2 Platform
Trademark that is the subject of the Claim. Except as otherwise provided in
Section 23, below, in no event shall MEI have any liability to 3DO or any third
party for any use of the M2 Platform Trademark prior to the date of a Claim or
for any use in a manner that is inconsistent with the MEI Guidelines or in the
event 3DO or any of its sublicensees modifies or alters the M2 Platform
Trademark.
19.6 No Rights to Existing 3DO Marks. Nothing in this Section 19 will
imply any right of MEI to choose as the M2 Platform Trademark, or to own, any
existing trademark of 3DO, including, without limitation, the Trademarks and any
other trademarks confusingly similar thereto, or otherwise imply any license or
right with respect to any such Trademarks or other trademark(s) except as
otherwise set forth in this Agreement.
20. NO GUARANTEES.
3DO acknowledges and agrees that there is no assurance whatsoever that
MEI shall undertake any specific efforts or level of efforts, or achieve any
specific results or level of sales by reason of any promotion, marketing,
distribution or sublicensing efforts, in furtherance of the licenses granted to
it in Section 2, above.
21. LIMITED WARRANTIES OF 3DO.
21.1 3DO's Limited Warranties.
(a) Non-Infringement. 3DO warrants solely for the benefit of
MEI that (i) as of the effective date of this Agreement, 3DO has no actual
knowledge that the Licensed Technology infringes upon any validly issued and
currently effective patents of any third party, (ii) as of the effective date of
this Agreement, 3DO has no actual knowledge that any of the Trademarks infringe
upon any validly registered and currently effective trademarks of any third
party, and (iii) 3DO has the right to grant the licenses set forth in Section 2,
above.
(b) Technical Disclosure. 3DO warrants solely for the benefit
of MEI that, to the best of 3DO's knowledge and belief, the Technical Disclosure
Information and Materials listed in Exhibit A, attached hereto, and the
Deliverables listed in Exhibit B, attached hereto, constitute all of the
Licensed Technology and are sufficient to permit a skilled and experienced
designer and manufacturer of interactive platforms to use and exploit the
licensed rights set forth in this Agreement.
(c) Marketing and Distribution. 3DO warrants solely for the
benefit of MEI that the M2 Hardware Products and M2 Software Products developed
and distributed by or for 3DO hereunder shall be manufactured, marketed,
advertised, promoted, merchandised, sold, and distributed in accordance with any
and all laws, statutes, regulations and ordinances that are applicable in the
countries and territories within which such products are to be distributed by
3DO and/or its sublicensees hereunder.
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(d) General Warranties. 3DO warrants solely for the benefit
of MEI that:
(1) 3DO has the right, power and authority to enter into this
Agreement and to fully perform its obligations hereunder;
(2) 3DO owns and/or has the right to grant the licenses set
forth in Section 2, above, with respect to the Licensed Technology except as
otherwise noted in Exhibit F, attached hereto, which exhibit sets forth all
material elements of the technology described in Exhibits A and B, attached
hereto, that, to the best of 3DO's knowledge and belief, 3DO neither owns nor
has the right to grant sublicenses;
(3) the Licensed Technology performs and conforms in
accordance with the Specifications;
(4) Throughout the term of this Agreement, 3DO shall not make
any separate agreement with any third-party that is inconsistent with any of the
provisions of this Agreement; and
(5) 3DO shall comply with all applicable laws, statutes,
regulations and ordinances applicable to its activities under this Agreement,
and shall require its sublicensees to comply with all applicable laws, statutes,
regulations and ordinances.
(e) No Other Warranties. 3DO MAKES, AND MEI RECEIVES, NO WARRANTIES OR
CONDITIONS (EXPRESSED, IMPLIED, STATUTORY OR OTHERWISE), OTHER THAN AS EXPRESSLY
SET FORTH IN THIS SECTION 21.1, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE, AND THEIR
EQUIVALENTS UNDER THE LAWS OF ANY JURISDICTION. 3DO does not warrant that use of
the Licensed Technology will not infringe any patents or patent rights owned or
controlled by any third parties. Without limiting the generality of the
foregoing, MEI acknowledges and agrees that 3DO makes no warranties whatsoever
that the manufacture, use or sale of M2 Hardware Products and/or M2 Software
Products will not infringe any patents or patent rights of any third parties.
21.2 MEI's Limited Warranties.
(a) Compliance With Agreement. MEI warrants solely for the
benefit of 3DO that: (i) MEI shall not make use of the Licensed Technology (or
any portion thereof) or any of the Trademarks licensed hereunder except in
strict compliance with the provisions of this Agreement or as may be otherwise
expressly authorized in writing by 3DO; (ii) MEI shall not use the Licensed
Technology (or any portion thereof), directly or indirectly, to develop,
manufacture and/or otherwise produce any article of merchandise other than the
specific types of products expressly authorized herein; and (iii) MEI shall not
use any of the Trademarks, directly or indirectly, to market and/or otherwise
promote the sale or distribution of any third-party products or services (except
for the M2 Hardware Products and M2 Software Products developed and distributed
by or for its third-party sublicensees hereunder).
(b) Marketing and Distribution. MEI warrants solely for the
benefit of 3DO that the M2 Hardware Products and M2 Software Products (excluding
any such products as are developed and distributed by or for 3DO)
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shall be manufactured, marketed, advertised, promoted, merchandised, sold, and
distributed in accordance with any and all laws, statutes, regulations and
ordinances that are applicable in the countries and territories within which
such products are to be distributed by MEI and/or its sublicensees hereunder.
(c) General Warranties. MEI warrants solely for the benefit of
3DO that:
(1) MEI has the right, power and authority to enter
into this Agreement and to fully perform its obligations hereunder; and
(2) Throughout the term of this Agreement, MEI shall
not make any separate agreement with any third-party that is inconsistent with
any of the provisions of this Agreement; and
(3) MEI shall comply with all applicable laws,
statutes, regulations and ordinances applicable to its activities under this
Agreement, and shall require its sublicensees to comply with all applicable
laws, statutes, regulations and ordinances.
22. 3DO'S INDEMNITY.
3DO agrees to indemnify and hold MEI harmless from and against any
legal costs and expenses (including reasonable attorneys' fees and court costs),
as well as monetary damages, incurred by MEI based upon, arising out of or in
respect of: (i) any third-party claim asserting that the licenses granted by 3DO
to MEI hereunder are invalid or unenforceable; (ii) any third-party claim
arising as a result of any breach by 3DO of its limited warranties set forth in
Sections 21.1(a), 21.1(d)(1), 21.1(d)(2), 21.1(d)(4) and/or 21.1(d)(5); (iii)
any third-party claim asserting that MEI's use of the Licensed Technology (or
any Improvements or Adaptations thereof that are developed by or for 3DO) or
Trademarks in accordance with the licensed rights granted by 3DO in Section 2,
above, infringes upon the copyrights, trade secrets and/or trademark rights
owned by any third party; and/or (iv) any third-party claim with respect to the
development, manufacture, marketing, sale, distribution and/or use of any M2
Authoring System, Non-M2 Authoring System, M2 Peripheral Product, M2 Arcade
Device, M2 Software Product, or Computing Device by 3DO or any of its
subsidiaries, including, without limitation, any claim alleging infringement or
misappropriation of intellectual property rights, or alleging any product
liability, or alleging breach of any warranty or support obligations. 3DO shall
be relieved of such indemnity obligation if MEI fails to give 3DO prompt written
notice of the assertion of any such claim, or fails to provide 3DO with
reasonable cooperation and assistance (consistent with MEI's confidentiality
obligations and preservation of attorney-client, work product and other such
privileges) with respect to such claim, or fails to offer 3DO the right to
select counsel and to control the defense and/or settlement of any such claim.
If 3DO elects to control the defense and/or settlement of any such claim, MEI
shall have the right to participate in any such action or proceeding at its own
expense with counsel of its own choosing. MEI covenants that it shall not agree
to the settlement of any such claim, action or proceeding without 3DO's prior
written consent (which consent shall not be unreasonably withheld or delayed).
THIS SECTION 22 STATES 3DO'S ENTIRE OBLIGATION AND LIABILITY TO MEI WITH RESPECT
TO ANY CLAIM REGARDING ALLEGED INFRINGEMENT OR MISAPPROPRIATION OF THE
INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY.
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23. MEI'S INDEMNITY.
Except to the extent that 3DO is responsible for a claim under Section
22, above, MEI shall indemnify and hold 3DO harmless from and against any legal
costs and expenses (including reasonable attorneys' fees and court costs), as
well as monetary damages, incurred by 3DO based upon, arising out of or in
respect of: (i) any third-party claim asserting that the licenses and
sublicenses granted by MEI to 3DO hereunder are invalid or unenforceable; (ii)
any third-party claim arising as a result of any breach by MEI of its limited
warranties set forth in Sections 21.2(c)(1), 21.2(c)(2), and/or 21.2(c)(3);
(iii) any third-party claim asserting that 3DO's use of any modifications and/or
additions to the Licensed Technology made by or for MEI (other than by 3DO), or
use of the M2 Platform Trademark in accordance with the licensed rights granted
by MEI hereunder, infringes upon the copyrights, trade secrets and/or trademark
rights owned by any third party; and/or (iv) any third-party claim with respect
to the development, manufacture, marketing, sale, distribution and/or use of any
M2 Hardware Product or M2 Software Product by MEI or any of its subsidiaries,
including, without limitation, any claim alleging infringement or
misappropriation of intellectual property rights, or alleging any product
liability, or alleging breach of any warranty or support obligations. MEI shall
be relieved of such indemnity obligation if 3DO fails to give MEI prompt written
notice of the assertion of any such claim, or fails to provide MEI with
reasonable cooperation and assistance (consistent with 3DO's confidentiality
obligations and preservation of attorney-client, work product and other such
privileges) with respect to such claim, or fails to offer MEI the right to
select counsel and to control the defense and/or settlement of any such claim.
If MEI elects to control the defense and/or settlement of any such claim, 3DO
shall have the right to participate in any such action or proceeding at its own
expense with counsel of its own choosing. 3DO covenants that it shall not agree
to the settlement of any such claim, action or proceeding without MEI's prior
written consent (which consent shall not be unreasonably withheld or delayed).
Except as set forth in this Section 23, MEI shall have no obligation to
indemnify or hold 3DO harmless with respect to any claim of infringement of the
intellectual property rights of any third party. THIS SECTION 23 STATES MEI'S
ENTIRE OBLIGATION AND LIABILITY TO 3DO WITH RESPECT TO ANY CLAIM REGARDING
ALLEGED INFRINGEMENT OR MISAPPROPRIATION OF THE INTELLECTUAL PROPERTY RIGHTS OF
ANY THIRD PARTY.
24. THIRD-PARTY CLAIMS.
In the event that any third party claims that either party's use of the
Licensed Technology or Improvements or Adaptations thereof, or use of any of the
Trademarks or the M2 Platform Trademark, as the case may be, infringes upon any
patent, copyright and/or any other intellectual property right of such third
party, or in the event that either party undertakes a review of third-party
patents or other intellectual property rights relating to any products that
incorporate the Licensed Technology or any Improvements, Adaptations,
modifications and/or additions thereto, then upon request by the other party,
each party shall reasonably cooperate and consult with the other party, in a
manner consistent with such party's confidentiality obligations and preservation
of attorney-client, work product and other privileges, regarding the other
party's review of such claim and/or efforts to resolve
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such matter. It is understood that each party's obligations under this Section
are in addition to, and neither expand or limit, either party's respective
indemnity obligations set forth in Sections 22 and 23, above, as the case may
be.
25. CONFIDENTIALITY.
25.1 Description of Confidential Information. The parties acknowledge
and agree that certain information that either party (as a "Receiving Party")
shall receive from the other party (as a "Disclosing Party") shall be deemed to
be Confidential Information and shall be subject to the restrictions on
disclosure and use as set forth in this Section.
(a) The Confidential Information of 3DO means: (i) the M2
System Designs, Chipsets, ROM Software, Operating System Kernel, Specifications
and the other Licensed Technology, as well as any Improvements and Adaptations
to the Licensed Technology (or any portion thereof), created by or for 3DO; (ii)
the fact that 3DO is developing or intends to develop any particular hardware,
software or other product; (iii) all documentation materials and technical
information relating to any of the foregoing (other than documentation and
information expressly intended for release to end users or the general public);
(iv) any non-public information concerning the business or finances of 3DO; and
(v) any other information provided by 3DO to MEI hereunder which is designated
in writing by 3DO prior to disclosure as being proprietary to 3DO.
(b) The Confidential Information of MEI means: (i) the
Improvements and Adaptations to the Licensed Technology (or any portion thereof)
or other technology created by or for MEI (other than by 3DO) and provided by
MEI to 3DO under this Agreement; (ii) the fact that MEI is developing or intends
to develop any particular hardware, software or other product; (iii) all
documentation materials and technical information relating to any of the
foregoing (other than documentation and information expressly intended for
release to end users or the general public); (iv) any non-public information
concerning the business or finances of MEI; and (v) any other information
provided by MEI to 3DO hereunder which is designated in writing by MEI prior to
disclosure as being proprietary to MEI.
25.2 Types of Information Excluded. Notwithstanding the foregoing,
Confidential Information shall not include any information which: (i) becomes
generally known or part of the public domain through no default hereunder on the
part of the Receiving Party; (ii) was known to the Receiving Party prior to the
disclosure thereof by the original Disclosing Party, as established by
documentary evidence; (iii) is lawfully received by the Receiving Party from a
third party who provided such information without breach of any separate
confidentiality obligation and without restriction on subsequent disclosure;
(iv) is disclosed by the original Disclosing Party to third parties without
restriction on disclosure; (v) is independently developed provided that the
employee(s) undertaking such independent development have not been provided with
or otherwise used the other party's Confidential Information; or (vi) is of a
non-technical nature and more than five (5) years have elapsed since the date
upon which such information was originally disclosed. In addition, Confidential
Information may be disclosed to the extent required by court order or as
otherwise required by applicable law, provided
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that the party required to make any such disclosure notifies the other party
promptly upon learning of the possibility of any such requirement and has given
the other party a reasonable opportunity (and cooperated with the other party)
to contest or limit the scope of such required disclosure (including application
for a protective order).
25.3 Preservation of Confidentiality. For a period of twenty-five (25)
years from the respective dates of receipt of any particular Confidential
Information in furtherance of this Agreement, each party (as a Receiving Party),
agrees that it shall: (i) maintain the confidentiality of the Confidential
Information of the other party, as a Disclosing Party; (ii) employ efforts to
maintain the confidentiality of such information that are at least equal to the
efforts such party employs to protect the confidentiality of its own information
that it considers proprietary and trade secret; and (iii) use such information
only for any reason or purpose granted herein or otherwise permitted hereunder.
Notwithstanding the foregoing, the obligations of each party to maintain the
confidentiality of source code developed by or for the other party hereunder and
provided to such party (as a Receiving Party) in furtherance of this Agreement
shall, subject to the provisions of Section 25.2, above, continue in effect in
perpetuity.
25.4 Restrictions on Disclosure. Each party (as a Receiving Party),
shall use its reasonable best efforts by contract, instruction or otherwise to
ensure that its officers, directors, employees, contractors, lessees,
sublicensees, agents and representatives comply with such party's obligations
under this Section 25, and to ensure that no Confidential Information of the
other party shall be disclosed or made available to any such officers,
directors, employees, contractors, lessees, sublicensees, agents and
representatives of the Receiving Party unless such persons or third parties have
a need-to-know such information for the purposes of this Agreement, and only to
the extent necessary for such purposes.
25.5 Protection of Trade Secrets. Each party (as a Receiving Party),
acknowledges that the Disclosing Party considers its Confidential Information to
contain trade secrets of the Disclosing Party and that any unauthorized copying,
use, or disclosure of such information would cause the Disclosing Party
irreparable and irremediable harm for which its remedies at law will be
inadequate. Accordingly, each party acknowledges and agrees that the Disclosing
Party shall be entitled, in addition to any other remedies available to it at
law or in equity, to the issuance of injunctive relief, without bond, enjoining
any breach or threatened breach of the Receiving Party's obligations hereunder
with respect to the Confidential Information of the Disclosing Party, and such
further relief as any court of competent jurisdiction may deem just and proper.
25.6 Return of Confidential Information. Upon the expiration or earlier
termination of this Agreement, each party (as a Receiving Party), shall
immediately return to the Disclosing Party all Confidential Information of the
Disclosing Party recorded in tangible form, or, at the option of the Disclosing
Party, certify in writing to the Disclosing Party that all such recorded
Confidential Information has been destroyed, and the Receiving Party shall make
no further use of such Confidential Information.
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25.7 Disclosure of Terms of Agreement. Each party agrees that the terms
and conditions of this Agreement shall be treated as Confidential Information;
provided that each party may disclose the terms and conditions of this
Agreement: (i) as required by any court or other governmental body or as
otherwise required by law; provided that such party has notified the other party
immediately upon learning of the possibility of any such requirement and has
given the other party a reasonable opportunity (and cooperated with the other
party) to contest or limit the scope of such required disclosure (including
application for a protective order); (ii) as required by the applicable
securities laws, including, without limitation, requirements to file a copy of
this Agreement (redacted to the extent reasonably permitted by applicable law)
or to disclose information regarding the provisions hereof or performance
hereunder; (iii) to legal counsel; (iv) in confidence, to accountants, banks,
and financing sources and their advisors; and (v) in confidence, in connection
with the enforcement of this Agreement or any rights hereunder.
26. VARIOUS INTELLECTUAL PROPERTY MATTERS.
26.1 Notices. MEI shall ensure that appropriate patent, copyright,
trademark and other markings are appropriately referenced in connection with all
M2 Hardware Products and M2 Software Products developed and distributed
hereunder in accordance with instructions reasonably issued by 3DO from time to
time during the term of this Agreement. MEI shall not remove or cause to be
removed any copyright notices on or other proprietary legends that are contained
on or within the Chipsets, the ROM Software, the Operating System Kernel, or the
Specifications, and MEI shall reproduce all such notices and legends on all
copies of the Chipsets, the ROM Software, the Operating System Kernel and the
Specifications.
26.2 3DO Trademarks. MEI acknowledges and agrees that, in addition to
any display or depiction of the M2 Platform Trademark, one of the Trademarks (as
designated by 3DO) shall conspicuously and legibly appear: (i) on the front of
each M2 Hardware Product that both (A) incorporates the semiconductor device
known to the parties as [CONFIDENTIAL TREATMENT REQUESTED], or any derivative
thereof, and the central processing unit known as "PowerPC 602," or any
derivative thereof, and (B) is compatible with M2 Software Products developed
using the M2 API, on the related packaging materials for such products, and in
the accompanying end user documentation materials for such products; (ii) in the
Operating System "boot" ROM of such products, and (iii) on the front of the
packaging materials, and in the accompanying end user documentation materials,
for each M2 Software Product developed using the M2 API (collectively, the
"Trademarked Products"). 3DO acknowledges and agrees that MEI does not need to
display or depict the Trademarks so designated by 3DO in any marketing materials
that relate to any M2 Hardware Products or M2 Software Products. In addition,
3DO agrees that if it ever elects to publish any software products compatible
with any [CONFIDENTIAL TREATMENT REQUESTED] becomes a sublicensee of any of the
licensed rights herein granted to MEI) or [CONFIDENTIAL TREATMENT REQUESTED]
platforms, such software products shall be identified with a new and different
trademark or trade name that shall not include the "3DO" word mark.
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26.3 3DO Guidelines. In order for 3DO to maintain its interest in the
Trademarks, MEI agrees that it and its sublicensees shall be subject to the
following:
(a) 3DO shall provide MEI with reasonable written guidelines
(the "3DO Guidelines") regarding the reproduction and display of the Trademarks,
which directives shall be set forth in Exhibit C, to be attached hereto, and
which shall not be unreasonably burdensome or restrictive. The 3DO Guidelines
shall be subject to reasonable updating and modification upon not less than (90)
days prior written notice. Nothing herein shall restrict MEI or any sublicensee
from using its/their own trademarks and logos in connection with any M2 Hardware
Products and/or M2 Software Products.
(b) 3DO shall have the right to test the Trademarked Products
that are manufactured by or for MEI and to inspect MEI's use of the Trademarks
in connection therewith, and MEI shall use commercially reasonable efforts to
resolve and to prospectively correct any deficiencies or improper trademark
usage reported by 3DO.
26.4 3DO Trademark Rights.
(a) The Trademarks and the goodwill associated therewith are
the exclusive property of 3DO and nothing in this Agreement grants MEI or any
third party any right, title or interest therein, except for the license
expressly granted to use the Trademarks in accordance with the terms and subject
to the conditions set forth in this Agreement.
(b) All uses of the Trademarks by MEI and any of its
sublicensees hereunder and all goodwill arising therefrom shall inure solely to
the benefit of 3DO. MEI represents and warrants that it shall not contest the
validity of any of the Trademarks or registrations thereof or applications with
respect thereto, or 3DO's exclusive ownership of the Trademarks or their
associated goodwill.
(c) MEI agrees to make available to 3DO, upon request, copies
of MEI's records and such other documentary evidence as is/are retained in the
ordinary course of business regarding its use of the Trademarks. Such records
shall include samples of prior and contemporaneous uses of the Trademarks in
connection with any M2 Hardware Products and/or M2 Software Products, and
information regarding first use of the Trademarks in each country.
(d) Upon 3DO's request, MEI shall deliver to 3DO free of cost
samples of use of the Trademarks for trademark registration purposes in
compliance with applicable laws. MEI shall assist 3DO in its efforts to procure
and maintain protection of the Trademarks, including trademark registration in
3DO's name and at 3DO's expense. Upon request, MEI shall execute registered user
agreements regarding the Trademarks. Notwithstanding the foregoing, 3DO shall be
under no obligation to procure or maintain any particular trademark
registration.
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26.5 Litigation Involving The Trademarks.
(a) If MEI's legal department or personnel responsible for the
relationship with 3DO become aware that any third party is or may be infringing
any of the Trademarks, MEI shall promptly provide written notice thereof to 3DO.
(b) MEI shall promptly inform 3DO of any actual or threatened
litigation (a "Claim") against MEI which arises out of the authorized use of the
Trademarks. In the event of a Claim, 3DO shall, at its option, either (i) select
an alternative (whether new or existing) non-infringing mark, or (ii) assume the
defense and/or settlement of the Claim and indemnify MEI for any monetary
judgment resulting from MEI's use, from and after the date on which 3DO was
notified in writing of the Claim, of the Trademark(s) that are the subject of
such Claim. Except as otherwise provided in Section 22, above, in no event shall
3DO have any liability to MEI or any third party for any use of the Trademarks
prior to the date of a Claim or for any use in a manner that is inconsistent
with the 3DO Guidelines or in the event MEI or any of its sublicensees modifies
or alters any of the Trademarks.
26.6 Collateral Products. No right, license or privilege has been
granted to MEI hereunder concerning the development of any collateral product or
other such after-market use or purpose which displays or depicts any of the
Trademarks. No promotional or novelty items or premium products (e.g., T-shirts,
baseball caps, coffee mugs, stickers, etc.) displaying or depicting any of the
Trademarks shall be developed, manufactured, marketed, sold, and/or distributed
by MEI or in its behalf without the prior written consent of 3DO.
27. TERM AND RELATED MATTERS.
27.1 Term. This Agreement shall commence upon the date first set forth
above and continue in full force and effect unless and until it is terminated by
mutual written agreement of the parties
27.2 Effects of Default.
(a) Neither party shall permit any of its sublicensees to
remain in default in the performance of any material provision of this Agreement
for any period longer than ninety (90) days after receipt of written notice from
one party to the other, unless the parties otherwise mutually consent in writing
(which consent shall not be unreasonably withheld). In the event that any
default which is the subject of such notice is not wholly cured within such
ninety (90) day period (or such longer period as may be reasonably agreed upon
by the parties), the sublicensed rights granted to such person or entity shall
terminate upon the expiration of such cure period.
(b) If either party defaults in the performance of any
material provision of this Agreement, and such default is not cured within
ninety (90) days of receipt of written notice thereof from the non-defaulting
party, then the non-defaulting party shall be entitled to initiate legal action
and pursue its remedies available at law or in equity, provided that such
remedies shall not
39
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include the termination of this Agreement or any of the licenses or sublicenses
contained herein.
27.3 Rights in Bankruptcy.
All rights and licenses granted under this Agreement by either
party to the other party are, and shall be deemed to be for the purpose of
Section 365(n) of Title 11 of the United States Code (collectively, the
"Bankruptcy Code"), licenses of rights to "intellectual property," as defined
under Section 101 of the Bankruptcy Code. The parties agree that: (i) each
party, as licensee or sublicensee under this Agreement, shall retain and may
fully exercise all of its rights and elections under the Bankruptcy Code,
including, without limitation, any and all rights to use and exploit the
Intellectual Property Rights relating to the Licensed Technology and any
Improvements and Adaptations thereof in accordance with the provisions of this
Agreement, to the extent that the Licensed Technology or Improvements or
Adaptations exist prior to the commencement of a case under the Bankruptcy Code
involving the other party (as debtor) and regardless of when a patent
application, continuation application or any other application or registration
with respect to the Licensed Technology or any Improvements or Adaptations
thereof is filed; and (ii) all rights to use and exploit any and all
Intellectual Property Rights relating to the Licensed Technology and any
Improvements and Adaptations thereof in accordance with the provisions of this
Agreement, shall be deemed to exist immediately prior to the commencement of
such a case under the Bankruptcy Code, regardless of when the Licensed
Technology, Improvements or Adaptations arise.
28. GOVERNMENTAL APPROVALS. Each party shall use its best efforts, and shall
cooperate with the other party in taking all steps reasonably necessary to
obtain, as soon as practicable, any consent, approval or authorization of any
U.S. and/or Japanese governmental body, as the case may be, that may be required
by applicable law. Each of the parties shall cooperate with one another with
respect to any and all filings submitted on behalf of the parties under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR").
MEI represents and warrants that no approvals or authorizations of any Japanese
governmental authority are required in connection with the valid execution,
delivery and effectiveness of this Agreement. 3DO shall obtain any approvals
and/or licenses which are required under applicable U.S. Export Regulations in
order to provide MEI in Japan with the technical information and materials
provided by 3DO, and the rights and licenses granted by 3DO, to MEI hereunder,
and MEI shall assist 3DO (at no expense to 3DO) in its efforts to obtain such
necessary approvals and/or licenses.
29. MISCELLANEOUS.
29.1 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent by
internationally-recognized courier service (e.g., DHL, Federal Express), with
all delivery charges prepaid, or may be sent via facsimile or telex, subject to
confirmation via internationally-recognized courier service, and shall be
addressed to the parties at their addresses first set forth above or to such
other address(es) as may be furnished by written notice in the manner set forth
herein. Notices shall be deemed to have been served when delivered or, if
delivery is not accomplished by reason of some fault of the addressee, when
tendered. Any
40
<PAGE> 41
notice alleging that 3DO is in breach or default of this Agreement must be sent
to the attention of: James Alan Cook, Senior VP Business Affairs & General
Counsel of 3DO, or to such other person as may be designated by 3DO.
29.2 Disclaimer of Agency. This Agreement shall not be construed as
creating an agency, partnership or any other form of legal association between
the parties other than as expressly set forth herein. Neither party shall have
any right or authority to assume or create any obligation of any kind or to make
any representation or warranty on behalf of the other party, whether express or
implied, or to bind the other party in any respect whatsoever.
29.3 Assignment. Each of the parties acknowledges and agrees,
respectively, that it may not assign this Agreement or any of its rights
hereunder (whether voluntarily, by operation of law or otherwise), or delegate
any of its obligations hereunder, except as part of a merger or sale of all or
substantially all its assets, unless the written consent of the other party
shall first have been obtained, which consent will not be unreasonably withheld
or delayed. Any attempted assignment or delegation without such required consent
shall be void and a breach of this Agreement. Subject to the foregoing, this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and permitted assigns.
29.4 Force Majeure. Except for the obligation to pay money, neither
party shall be liable to the other party for any failure or delay in performance
caused by any acts of God or other natural disasters or by other reasons beyond
such party's reasonable control.
29.5 Semi-Annual Meetings. Authorized representative(s) designated by
each of 3DO and MEI (collectively, the "Representatives") shall, at each party's
own expense, meet twice each year (or more often as may be mutually agreed upon)
to discuss the status, progress and other issues relating to the performance of
this Agreement. Such meetings shall be held at alternating locations in the
Osaka area of Japan and the San Francisco Bay area of California (or such other
locations as may be mutually agreed upon).
29.6 Dispute Resolution. In the event that 3DO and MEI have any
problems or disputes relating to this Agreement, such problems or disputes shall
first be submitted to the parties' designated Representatives for discussion in
an effort to determine whether an amicable resolution regarding any such matter
may be achieved prior to initiating any legal action or administrative
proceeding with any court or government agency or otherwise pursuing its
remedies under this Agreement.
29.7 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, U.S.A., without
reference to conflicts of law principles except to the extent that United States
federal law preempts California law in which case United States federal law
(including without limitation copyright, patent and federal trademark law) shall
apply, without reference to conflicts of law principles.
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<PAGE> 42
29.8 Litigation Forum and Venue.
(a) Each party irrevocably consents to and submits itself to
the exclusive jurisdiction, as applicable, of either the United States District
Court for the Northern District of California for any federal law action or the
Superior Court for the City and County of San Francisco for any state law claim
that cannot be asserted in federal court for the purposes of any suit, action or
other proceeding in connection with any controversy, claim or dispute relating
to this Agreement or to enforce any resolution, settlement, order or award made
with respect to any such matter. Each party irrevocably waives and agrees not to
assert (by way of motion, as a defense or otherwise) in any such suit, action or
proceeding, any claim that (i) it is not personally subject to the jurisdiction
of such court, (ii) the suit, action or proceeding is brought in an inconvenient
forum, or (iii) the venue of the suit, action or proceeding is improper. Each
party hereby agrees to the entry of an order and to the confession of judgment
to enforce a resolution, settlement, order or award made pursuant to this
Section 29.8(a) by the above-referenced Courts and in connection therewith
hereby waives, and agrees not to assert (by way of motion, as a defense or
otherwise) any claim that such resolution, settlement, order or award is
inconsistent with or violates any laws or public policy.
(b) Each party irrevocably consents to service of process in
any action, suit or proceeding by personal service or by the transmittal of
copies thereof in accordance with the provisions of Section 29.1, above,
provided that a reasonable period for appearance is allowed. The foregoing,
however, shall not limit the right of either party to serve process in any other
manner permitted by law. Any judgment against a party or the assets of a party
in any action, suit or proceeding for which such party has no further right of
appeal shall be conclusive, and may be enforced in other jurisdictions by suit
on the judgment in accordance with Section 29.8(a), above. A certified or true
copy of any such judgment shall be conclusive evidence of the fact and of the
amount of any indebtedness or liability of such party therein described;
provided, however, that a party seeking to enforce a judgment may at its option
bring suit, or institute other judicial proceedings, against the other party or
any of its assets in the courts of any country or place where such other party
engages in business or such assets may be found.
29.9 Attorney's Fees. If either party commences any action or
proceeding against the other party to enforce this Agreement or any of its
rights hereunder, the prevailing party in such action or proceeding shall be
entitled to recover from the other party the reasonable attorneys' fees and all
related costs and expenses incurred by such prevailing party in connection with
such action or proceeding and in connection with enforcing any judgment or order
thereby obtained.
29.10 Limitation of Liability. Neither party shall be liable to the
other party for any incidental, consequential, special, or punitive damages
arising out of this Agreement, or the breach of any of its provisions, whether
for breach of warranty or any obligation arising therefrom or otherwise, whether
liability is asserted in contract or tort (including negligence and strict
product liability), and irrespective of whether the parties have advised or been
advised of the possibility of any such loss or damage.
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<PAGE> 43
29.11 Remedies. Unless expressly set forth to the contrary, either
party's election of any remedies provided for in this Agreement shall not be
exclusive of any other remedies available hereunder or otherwise at law or in
equity, and all such remedies shall be deemed to be cumulative. MEI acknowledges
that a breach of any of the provisions of Sections 5.6, 5.7, 11, 12, 13, 14, 16,
17, 18, 21.2(a), and 25, above, would cause irreparable and irremediable harm to
3DO for which its remedies at law will be inadequate. Similarly, 3DO
acknowledges that its breach of any of the provisions of Sections 2, 4, 5.3,
5.4, 9, 10, 21.1(b), and 25, above, would cause irreparable and irremediable
harm to MEI for which its remedies at law will be inadequate. Accordingly, each
party agrees that the other party hereto shall be entitled, in addition to any
other remedies available to it at law or in equity, to the issuance of
injunctive relief, without bond, enjoining any breach or threatened breach by
the other party or any of its sublicensees, respectively, of any of the
applicable provisions set forth in this Section 29.11, and such further relief
as any court of competent jurisdiction may deem just and proper.
29.12 Waivers. No failure or delay by either party in exercising any
right, power, or remedy under this Agreement shall operate as a waiver of any
such right, power, or remedy. No waiver of any provision of this Agreement shall
be effective unless in writing and signed by the party against whom such waiver
is sought to be enforced. Any waiver by either party of any provision of this
Agreement shall not be construed as a waiver of any other provision of this
Agreement, nor shall such waiver operate as or be construed as a waiver of such
provision respecting any future event or circumstance.
29.13 Modifications. No amendment to or modification of this Agreement
shall be binding unless in writing and signed by a duly authorized
representative of each of the parties, except that certain exhibits to this
Agreement may be modified by 3DO or MEI, as expressly set forth herein, subject
to the applicable notice requirements referenced in this Agreement.
29.14 Severability. In the event that any provision of this Agreement
(or any portion hereof) is determined by a court of competent jurisdiction to be
illegal, invalid or otherwise unenforceable, such provision (or part thereof)
shall be enforced to the extent possible consistent with the stated intention of
the parties, or, if incapable of such enforcement, shall be deemed to be deleted
from this Agreement, while the remainder of this Agreement shall continue in
full force and remain in effect according to its stated terms and conditions.
The parties shall use reasonable good faith efforts to draft an enforceable
substitute provision that most nearly reflects the stated intentions of the
parties as depicted in the original wording of any unenforceable portion of this
Agreement.
29.15 United States Dollars. All amounts due under this Agreement are
quoted and are to be paid in United States Dollars.
29.16 Absence of Third Party Beneficiaries. No provisions of this
Agreement, whether expressed or implied, are intended or shall be construed to
confer upon or give to any person or entity other than the specific parties
hereto any rights, remedies or other benefits under or by reason of this
Agreement unless expressly provided otherwise herein.
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29.17 Language. This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions hereof in any
other language shall be for accommodation only and shall not be binding upon the
parties hereto. All communications and notices to be made or given pursuant to
this Agreement, and all documentation and support to be provided hereunder,
unless otherwise provided for herein, shall be in the English language.
29.18 Headings. The section headings used in this Agreement are
intended primarily for reference and shall not by themselves determine the
construction or interpretation of this Agreement or any portion hereof.
29.19 Entire Agreement. This Agreement, including all Exhibits hereto,
constitutes the entire agreement and understanding of the parties with respect
to the subject matter hereof, and supersedes all prior and contemporaneous
correspondence, negotiations, agreements and under-standings between the
parties, both oral and written, regarding such subject matter. No provisions of
any separate document or printed form that originates by MEI shall be deemed to
add to, delete from, or otherwise modify the terms and conditions of this
Agreement. The parties acknowledge and agree that this Agreement supersedes and
terminates the Memorandum of Understanding (except Sections 29 and 31 thereof
which shall remain in effect) and the Confidentiality and Standstill Agreement,
both of which documents were executed by the parties on or about October 13,
1995.
29.20 Counterparts. All signed copies of this document shall be deemed
to be originals of this Agreement.
29.21 Construction. This Agreement shall be fairly interpreted in
accordance with its terms and without any strict construction in favor of or
against either of the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
THE 3DO COMPANY MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD.
By: By:
------------------------------- ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
---------------------------- ------------------------------
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TECHNICAL DISCLOSURE INFORMATION AND MATERIALS
1.0 Semiconductor Disclosure Materials
For each semiconductor device deliverable, some part of the following
information will be transferred to MEI. The applicable parts for each device are
listed in sec. 2.0. The three levels of information are defined as:
- High level design information
Verilog RTL source code
Verilog RTL library and macro description
Models for commodity chips to the extent they exist
- Middle and lower level design information
[CONFIDENTIAL TREATMENT REQUESTED] and timing constraint files
[CONFIDENTIAL TREATMENT REQUESTED] timing files to the extent that
they exist
Gate source Layout information to the extent it exists
- Test and evaluation information
Manufacturing test patterns
ES chip evaluation and test software as is
The semiconductor device technology that will be transferred and the disclosure
materials that will be provided for each device are:
1.1 [CONFIDENTIAL TREATMENT REQUESTED]
High level design information
Middle and lower level design information
Test and evaluation information
1.2 [CONFIDENTIAL TREATMENT REQUESTED]
High level design information
Middle and lower level design information
Test and evaluation information
1.3 [CONFIDENTIAL TREATMENT REQUESTED]
High level design information
Middle and lower level design information
Test and evaluation information
1.4 [CONFIDENTIAL TREATMENT REQUESTED]
High level design information
Middle and lower level design information
Test and evaluation information
1.5 Bridgit (including Nubus Interface)
High level design information
Middle and lower level design information (minus layout info)
Test and evaluation information
1.6 Babette
High level design information
Middle and lower level design information (minus layout info)
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Test and evaluation information
1.7 DENC
High level design information
Middle and lower level design information (minus layout info)
Test and evaluation information
1.8 Splitter Jr.
High level design information
Middle and lower level design information (minus layout info)
Test and evaluation information
1.9 Venturi
High level design information
Middle and lower level design information (minus layout info)
Test and evaluation information
1.10 VisaLite
High level design information
Middle and lower level design information (minus layout info)
Test and evaluation information
1.11 Visa
High level design information as is
Middle and lower level design information as is (minus layout info)
Test and evaluation information as available
1.12 Splitter
High level design information as is
Middle and lower level design information as is
Test and evaluation information as available
2.0 System Disclosure Materials
For each System technology deliverable, the following information will be
transferred to MEI:
- System schematics with component library in [CONFIDENTIAL TREATMENT
REQUESTED] form
- Models and test data for system level simulation
[CONFIDENTIAL TREATMENT REQUESTED] and [CONFIDENTIAL TREATMENT
REQUESTED] timing files if they exist
Data converter and tools to the extent they exist
- PCB artwork with parts library to the extent that they exist
- Mechanical drawings to the extent they exist
- Manufacturing documentation to the extent it exists
- ROM source and object code where applicable
- Diagnostics source code to the extent it exists
The System technologies that will be transferred are:
2.1 [CONFIDENTIAL TREATMENT REQUESTED] (NTSC/PAL)
2.2 [CONFIDENTIAL TREATMENT REQUESTED] (NTSC/PAL)
2.3 [CONFIDENTIAL TREATMENT REQUESTED] (NTSC/PAL)
2.4 Mac NuBus Development System (NTSC/PAL)
2.5 [CONFIDENTIAL TREATMENT REQUESTED]
2.6 [CONFIDENTIAL TREATMENT REQUESTED]
3.0 Peripheral Disclosure Materials
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The following Peripheral technologies will be transferred with the listed
materials:
3.1 Standard controller
System deliverables
Driver software if applicable
Compatibility test suite as it exists
3.2 M2 extended controller
System deliverables
Driver software if applicable
Compatibility test suite as it exists
3.3 Mouse
System deliverables
Driver software if applicable
Compatibility test suite as it exists
3.4 Splitter
System deliverables
Driver software if applicable
Compatibility test suite as it exists
3.5 [CONFIDENTIAL TREATMENT REQUESTED]
System deliverables
Driver software if applicable
Compatibility test suite as it exists
3.6 [CONFIDENTIAL TREATMENT REQUESTED]
System deliverables
Driver software if applicable
Compatibility test suite as it exists
3.7 [CONFIDENTIAL TREATMENT REQUESTED]
System deliverables
Driver software if applicable
Compatibility test suite as it exists
4.0 For each software system deliverable, the following information will be
transferred to MEI:
- Interface description
- Source code
- Object code
4.1 System ROMs
The following System ROM technology will be transferred in both encrypted
and un-encrypted versions:
Boot code
[CONFIDENTIAL TREATMENT REQUESTED]
ROM-OS
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED] with [CONFIDENTIAL TREATMENT
REQUESTED] application
[CONFIDENTIAL TREATMENT REQUESTED] application
[CONFIDENTIAL TREATMENT REQUESTED] application
[CONFIDENTIAL TREATMENT REQUESTED] application
Storage manager application
No-Disc application
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System menu application
4.2 System Software
The following System Software technology will be transferred:
[CONFIDENTIAL TREATMENT REQUESTED] for removable media
Kernel including [CONFIDENTIAL TREATMENT REQUESTED] architecture
User-level exception handing
[CONFIDENTIAL TREATMENT REQUESTED] (includes [CONFIDENTIAL
TREATMENT REQUESTED] technology)
I/O System with support for [CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED] system
Shell
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED] as needed for supported
devices
MemDebug
LumberJack
Drivers
[CONFIDENTIAL TREATMENT REQUESTED] driver
[CONFIDENTIAL TREATMENT REQUESTED] driver
Timer driver
[CONFIDENTIAL TREATMENT REQUESTED] driver
[CONFIDENTIAL TREATMENT REQUESTED] driver
Microslot driver
StorageCard driver
Proxy driver
HostFS driver
HostConsole driver
HostCD driver
[CONFIDENTIAL TREATMENT REQUESTED] driver (including
[CONFIDENTIAL TREATMENT REQUESTED])
Serial port driver
Folios
Audio Folio
Beep Folio
FSUtilities Folio
Icon Folio
IFF Folio
Script Folio
International folio
JString folio
Compression folio
Requestor folio
Font folio
Graphics
Display Manager (including [CONFIDENTIAL TREATMENT REQUESTED]
interface)
4.3 Development System Tools
The following Development System Tools technology will be transferred.
[CONFIDENTIAL TREATMENT REQUESTED] (no source code)
Compiler (C/C++)
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Assembler
Link3DO/Dump3DO
Comm3DO for Mac to dev card communications
Debugger (no source code)
System interface header files
Libraries
Graphics
Command List Toolkit
Graphic framework library (including BSDF)
3D pipeline library
2D graphics library
Data Streaming
Data Streaming library w/ branching
[CONFIDENTIAL TREATMENT REQUESTED] support
[CONFIDENTIAL TREATMENT REQUESTED] interface
Data subscriber
[CONFIDENTIAL TREATMENT REQUESTED] subscriber
[CONFIDENTIAL TREATMENT REQUESTED] decoder
[CONFIDENTIAL TREATMENT REQUESTED] subscriber
Audio subscriber
Music library
I/O library
Font library
[CONFIDENTIAL TREATMENT REQUESTED]
CreateM2Make
[CONFIDENTIAL TREATMENT REQUESTED]
User Startup 3DO
Graphics tools
Converters
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
Texture and UTF tools
Texture Library
Data Streaming tools
Audio tools
Sound Hack (no source code)
SquashSound
AIFF sample set
PatchMaker
Video Tools
[CONFIDENTIAL TREATMENT REQUESTED]
Font Builder
KFontViewer
[CONFIDENTIAL TREATMENT REQUESTED]
4.4 Build Tools and Utilities
The following Build Tools and Utilities technology will be transferred:
ROM build tools
OS build tools
CD relocation tool: Laytool
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<PAGE> 50
[CONFIDENTIAL TREATMENT REQUESTED] utilities
Online help tool(s)
4.5 Engineering tools
The following Engineering tools technology will be transferred.
[CONFIDENTIAL TREATMENT REQUESTED] ("as is")
4.6 Hardware Diagnostics
The following Hardware Diagnostics technology will be transferred as
available.
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
ControlPad
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
Serial Interface
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
5.0 Documentation
The following Documentation will be transferred.
5.1 Developer documentation in electronic form (English version)
5.2 One set Developer documentation hard copy (English version)
6.0 Supplemental Technology to be Transferred
For each deliverable the following information will be transferred to MEI.
- Interface description
- Source code
- Object code
The following Supplemental Technology will be transferred.
6.1 EZ Flix Library (decode)
6.2 EZ Flix Encoder
6.3 EZ Flix Subscriber
6.4 PostPro
6.5 [CONFIDENTIAL TREATMENT REQUESTED] ("as is")
6.6 [CONFIDENTIAL TREATMENT REQUESTED] ("as is")
6.7 [CONFIDENTIAL TREATMENT REQUESTED]
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6.8 PI Map Utilities
6.9 DumpMF
6.10 [CONFIDENTIAL TREATMENT REQUESTED]
6.11 [CONFIDENTIAL TREATMENT REQUESTED]
6.12 [CONFIDENTIAL TREATMENT REQUESTED]
6.13 Test Tools for OS, Libraries and Tools
7.0 Others
7.1 [CONFIDENTIAL TREATMENT REQUESTED]
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Exhibit B
3DO DELIVERABLES
1.0 ASICs
1.1 [CONFIDENTIAL TREATMENT REQUESTED]
1.2 [CONFIDENTIAL TREATMENT REQUESTED]
1.3 [CONFIDENTIAL TREATMENT REQUESTED]
1.4 [CONFIDENTIAL TREATMENT REQUESTED]
1.5 Bridgit (including Nubus Interface)
1.6 Babette
1.7 DENC
1.8 Splitter Jr.
1.9 Venturi
1.10 VisaLite
1.11 Visa
1.12 Splitter
2.0 Systems
2.1 [CONFIDENTIAL TREATMENT REQUESTED] (NTSC/PAL)
2.2 [CONFIDENTIAL TREATMENT REQUESTED] (NTSC/PAL)
2.3 [CONFIDENTIAL TREATMENT REQUESTED] (NTSC/PAL)
2.4 Mac NuBus Development System (NTSC/PAL)
2.5 [CONFIDENTIAL TREATMENT REQUESTED] System
2.6 [CONFIDENTIAL TREATMENT REQUESTED]
3.0 Peripherals
3.1 Standard controller
3.2 M2 extended controller
3.3 Mouse
3.4 Splitter
3.5 [CONFIDENTIAL TREATMENT REQUESTED]
3.6 [CONFIDENTIAL TREATMENT REQUESTED]
3.7 [CONFIDENTIAL TREATMENT REQUESTED]
4.0 System ROM Technology
Boot code
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED] application
[CONFIDENTIAL TREATMENT REQUESTED] application
[CONFIDENTIAL TREATMENT REQUESTED] application
[CONFIDENTIAL TREATMENT REQUESTED] application
Storage manager application
No-Disc application
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System menu application
5.0 System Software
[CONFIDENTIAL TREATMENT REQUESTED] for removable media
Kernel including [CONFIDENTIAL TREATMENT REQUESTED] architecture
User-level exception handing
[CONFIDENTIAL TREATMENT REQUESTED] driver (includes [CONFIDENTIAL
TREATMENT REQUESTED] technology)
I/O System with support for [CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED] system
Shell
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED] as needed for supported
devices
MemDebug
LumberJack
Drivers
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
Timer driver
[CONFIDENTIAL TREATMENT REQUESTED] driver
[CONFIDENTIAL TREATMENT REQUESTED] driver
Microslot driver
StorageCard driver
Proxy driver
HostFS driver
HostConsole driver
HostCD driver
[CONFIDENTIAL TREATMENT REQUESTED] driver
[CONFIDENTIAL TREATMENT REQUESTED] driver (including
[CONFIDENTIAL TREATMENT REQUESTED])
Serial port driver
Folios
Audio Folio
Beep Folio
FSUtilities Folio
Icon Folio
IFF Folio
Script Folio
International folio
JString folio
Compression folio
Requestor folio
Font folio
Graphics
Display Manager (including [CONFIDENTIAL TREATMENT REQUESTED]
Interface)
6.0 Development System Tools
[CONFIDENTIAL TREATMENT REQUESTED] (no source code)
Compiler (C/C++)
Assembler
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Link3DO/Dump3DO
Comm3DO for Mac to dev card communications
Debugger (no source code)
System Interface header files
Libraries
Graphics
Command List Toolkit
Graphic framework library (including BSDF)
3D pipeline library
2D graphics library
Data Streaming
Data Streaming library w/ branching
[CONFIDENTIAL TREATMENT REQUESTED] support
[CONFIDENTIAL TREATMENT REQUESTED] interface
Data subscriber
[CONFIDENTIAL TREATMENT REQUESTED] subscriber
[CONFIDENTIAL TREATMENT REQUESTED] decoder
[CONFIDENTIAL TREATMENT REQUESTED] subscriber
Audio subscriber
Music library
I/O library
Font library
[CONFIDENTIAL TREATMENT REQUESTED]
CreateM2Make
[CONFIDENTIAL TREATMENT REQUESTED]
User Startup 3DO
Graphics tools
Converters
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
Texture and UTF tools
Texture Library
Data Streaming tools
Audio tools
Sound Hack (no source code)
SquashSound
AIFF sample set
PatchMaker
Video Tools
[CONFIDENTIAL TREATMENT REQUESTED]
Font Builder
KFontViewer
[CONFIDENTIAL TREATMENT REQUESTED]
7.0 Build Tools and Utilities
ROM build tools
OS build tools
CD relocation tool: Laytool
[CONFIDENTIAL TREATMENT REQUESTED] utilities
Online help tool(s)
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8.0 Engineering tools
[CONFIDENTIAL TREATMENT REQUESTED]
9.0 Hardware Diagnostics (as available)
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
ControlPad
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
Serial Interface
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
10.0 Developer Documentation (English version)
11.0 Supplemental Technology
11.1 EZ Flix decode library (no source code)
11.2 EZ Flix encoder (no source code)
11.3 EZ Flix Subscriber
11.4 Post Pro
11.5 [CONFIDENTIAL TREATMENT REQUESTED]
11.6 [CONFIDENTIAL TREATMENT REQUESTED]
11.7 [CONFIDENTIAL TREATMENT REQUESTED]
11.8 PI Map Utilities
11.9 DumpMF
11.10 [CONFIDENTIAL TREATMENT REQUESTED]
11.11 [CONFIDENTIAL TREATMENT REQUESTED]
11.12 [CONFIDENTIAL TREATMENT REQUESTED]
11.13 Test Tools for OS, Libraries and Tools
12.0 Others
12.1 [CONFIDENTIAL TREATMENT REQUESTED] tool
55
<PAGE> 56
Exhibit C
TRADEMARKS AND 3DO GUIDELINES
[ To be added by 3DO as soon as practicable. ]
56
<PAGE> 57
Exhibit D
M2 FORMAT TRADEMARK AND MEI GUIDELINES
[ To be added by MEI as soon as practicable. ]
57
<PAGE> 58
Exhibit E
M2 SYSTEM DESIGN SPECIFICATIONS
I. CD-ROM System
1.0 Graphics
1.1 Features
The M2 graphics system supports [CONFIDENTIAL TREATMENT REQUESTED] and
[CONFIDENTIAL TREATMENT REQUESTED] of [CONFIDENTIAL TREATMENT
REQUESTED]. Textures are [CONFIDENTIAL TREATMENT REQUESTED] with
[CONFIDENTIAL TREATMENT REQUESTED] using [CONFIDENTIAL TREATMENT
REQUESTED] or [CONFIDENTIAL TREATMENT REQUESTED] maps. [CONFIDENTIAL
TREATMENT REQUESTED] and [CONFIDENTIAL TREATMENT REQUESTED] modes are
supported for texture application with [CONFIDENTIAL TREATMENT
REQUESTED]. Additionally, [CONFIDENTIAL TREATMENT REQUESTED] with the
[CONFIDENTIAL TREATMENT REQUESTED] is optionally supported.
A [CONFIDENTIAL TREATMENT REQUESTED] buffer is optionally used to
maintain proper [CONFIDENTIAL TREATMENT REQUESTED] of pixels being
rendered.
1.2 [CONFIDENTIAL TREATMENT REQUESTED]
The M2 system delivers varying levels of [CONFIDENTIAL TREATMENT
REQUESTED] depending on the interactions of the [CONFIDENTIAL TREATMENT
REQUESTED], the core [CONFIDENTIAL TREATMENT REQUESTED] as embodied in
[CONFIDENTIAL TREATMENT REQUESTED] and [CONFIDENTIAL TREATMENT
REQUESTED] constraints caused by different [CONFIDENTIAL TREATMENT
REQUESTED] competing for the fixed amount of memory bandwidth. Actual
[CONFIDENTIAL TREATMENT REQUESTED] for a particular application may
only really be determined through [CONFIDENTIAL TREATMENT REQUESTED] or
actual [CONFIDENTIAL TREATMENT REQUESTED] of the program.
[CONFIDENTIAL TREATMENT REQUESTED] are [CONFIDENTIAL TREATMENT
REQUESTED] from memory and processed by the [CONFIDENTIAL TREATMENT
REQUESTED]. For [CONFIDENTIAL TREATMENT REQUESTED], the maximum rate of
processing by the [CONFIDENTIAL TREATMENT REQUESTED] is [CONFIDENTIAL
TREATMENT REQUESTED] per second for [CONFIDENTIAL TREATMENT REQUESTED].
For [CONFIDENTIAL TREATMENT REQUESTED], the maximum rate is
[CONFIDENTIAL TREATMENT REQUESTED] per second for [CONFIDENTIAL
TREATMENT REQUESTED]. Actual [CONFIDENTIAL TREATMENT REQUESTED] may be
[CONFIDENTIAL TREATMENT REQUESTED] than these rates depending on
[CONFIDENTIAL TREATMENT REQUESTED] and other parameters.
The [CONFIDENTIAL TREATMENT REQUESTED] process is primarily
[CONFIDENTIAL TREATMENT REQUESTED] both to the [CONFIDENTIAL TREATMENT
REQUESTED] and to the on [CONFIDENTIAL TREATMENT REQUESTED] can be read
from the [CONFIDENTIAL TREATMENT
58
<PAGE> 59
REQUESTED] on each [CONFIDENTIAL TREATMENT REQUESTED], except for
textures which are [CONFIDENTIAL TREATMENT REQUESTED] because these
textures are [CONFIDENTIAL TREATMENT REQUESTED] depending on
[CONFIDENTIAL TREATMENT REQUESTED]. For [CONFIDENTIAL TREATMENT
REQUESTED], this translates to a peak rendering rate of [CONFIDENTIAL
TREATMENT REQUESTED]. For [CONFIDENTIAL TREATMENT REQUESTED], the peak
rate is [CONFIDENTIAL TREATMENT REQUESTED]. For [CONFIDENTIAL TREATMENT
REQUESTED] are required from the [CONFIDENTIAL TREATMENT REQUESTED]
resulting in a peak rate of [CONFIDENTIAL TREATMENT REQUESTED]. For
[CONFIDENTIAL TREATMENT REQUESTED] requires [CONFIDENTIAL TREATMENT
REQUESTED] for[CONFIDENTIAL TREATMENT REQUESTED] (i.e. the
[CONFIDENTIAL TREATMENT REQUESTED]). These limitations are imposed by
the [CONFIDENTIAL TREATMENT REQUESTED] of the [CONFIDENTIAL TREATMENT
REQUESTED] and of the [CONFIDENTIAL TREATMENT REQUESTED] logic.
Additionally, the limits on the available [CONFIDENTIAL TREATMENT
REQUESTED] of the system must be considered in calculating
[CONFIDENTIAL TREATMENT REQUESTED].
From a single group of memory, a peak of [CONFIDENTIAL TREATMENT
REQUESTED] per second can be achieved. The M2 [CONFIDENTIAL TREATMENT
REQUESTED] consists of [CONFIDENTIAL TREATMENT REQUESTED] groups of
memory [CONFIDENTIAL TREATMENT REQUESTED] on [CONFIDENTIAL TREATMENT
REQUESTED]. This [CONFIDENTIAL TREATMENT REQUESTED] is used for
[CONFIDENTIAL TREATMENT REQUESTED] and [CONFIDENTIAL TREATMENT
REQUESTED] as well as other possible non-graphics uses such as
[CONFIDENTIAL TREATMENT REQUESTED] etc.
1.2.1 Graphics [CONFIDENTIAL TREATMENT REQUESTED]
An example [CONFIDENTIAL TREATMENT REQUESTED] that the M2 system
can achieve is the [CONFIDENTIAL TREATMENT REQUESTED] and
[CONFIDENTIAL TREATMENT REQUESTED]. For purposes of this
[CONFIDENTIAL TREATMENT REQUESTED], the [CONFIDENTIAL TREATMENT
REQUESTED] are [CONFIDENTIAL TREATMENT REQUESTED], the
[CONFIDENTIAL TREATMENT REQUESTED], and there are [CONFIDENTIAL
TREATMENT REQUESTED].
1.2.2 Audio Benchmark
An example audio benchmark that the M2 system can achieve is the
[CONFIDENTIAL TREATMENT REQUESTED] of [CONFIDENTIAL TREATMENT
REQUESTED] of [CONFIDENTIAL TREATMENT REQUESTED] with
[CONFIDENTIAL TREATMENT REQUESTED] quality.
2.0 [CONFIDENTIAL TREATMENT REQUESTED]
The M2 CD-ROM system is capable of [CONFIDENTIAL TREATMENT REQUESTED].
Additionally, the core M2 CD-ROM hardware is capable of processing more
than the [CONFIDENTIAL TREATMENT REQUESTED] required for [CONFIDENTIAL
TREATMENT REQUESTED] playback. The decoded [CONFIDENTIAL TREATMENT
REQUESTED] can be used as an [CONFIDENTIAL TREATMENT REQUESTED] for the
[CONFIDENTIAL TREATMENT REQUESTED] thus enabling effects involving video
[CONFIDENTIAL TREATMENT REQUESTED].
59
<PAGE> 60
3.0 Audio
The [CONFIDENTIAL TREATMENT REQUESTED] is an extension of the [CONFIDENTIAL
TREATMENT REQUESTED] found in Opera. Important differences are the addition
of [CONFIDENTIAL TREATMENT REQUESTED] on all [CONFIDENTIAL TREATMENT
REQUESTED] channels, the addition of [CONFIDENTIAL TREATMENT REQUESTED] on
[CONFIDENTIAL TREATMENT REQUESTED], the increase in the number of
[CONFIDENTIAL TREATMENT REQUESTED] supported to [CONFIDENTIAL TREATMENT
REQUESTED], the increase in the number of [CONFIDENTIAL TREATMENT
REQUESTED] the increase of the [Confidential Treatment Granted of] most
instructions by at least a [CONFIDENTIAL TREATMENT REQUESTED].
4.0 [CONFIDENTIAL TREATMENT REQUESTED]
The M2 system shall employ the PowerPC 602 [CONFIDENTIAL TREATMENT
REQUESTED] operating at a [CONFIDENTIAL TREATMENT REQUESTED] from
[CONFIDENTIAL TREATMENT REQUESTED] as its core microprocessor.
5.0 [CONFIDENTIAL TREATMENT REQUESTED]
The M2 system shall employ the [CONFIDENTIAL TREATMENT REQUESTED] operating
at a [CONFIDENTIAL TREATMENT REQUESTED] of [CONFIDENTIAL TREATMENT
REQUESTED].
6.0 Memory
The M2 memory subsystem supports memory sizes from [CONFIDENTIAL TREATMENT
REQUESTED] and can achieve peak data rates in excess of [CONFIDENTIAL
TREATMENT REQUESTED]. The memory controller is configurable to handle many
possible [CONFIDENTIAL TREATMENT REQUESTED] and [CONFIDENTIAL TREATMENT
REQUESTED]. The memory is organized into two [CONFIDENTIAL TREATMENT
REQUESTED] which are interleaved on [CONFIDENTIAL TREATMENT REQUESTED].
7.0 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] interface is similar in protocol and
identical in form factor to the [CONFIDENTIAL TREATMENT REQUESTED]
standard. [CONFIDENTIAL TREATMENT REQUESTED] to the protocol have been made
to allow for [CONFIDENTIAL TREATMENT REQUESTED] and high performance
[CONFIDENTIAL TREATMENT REQUESTED]. Some features specific to [CONFIDENTIAL
TREATMENT REQUESTED] have been [CONFIDENTIAL TREATMENT REQUESTED].
8.0 [CONFIDENTIAL TREATMENT REQUESTED]
This [CONFIDENTIAL TREATMENT REQUESTED] interface is a medium speed
[CONFIDENTIAL TREATMENT REQUESTED] designed to support [CONFIDENTIAL
TREATMENT REQUESTED] such as [CONFIDENTIAL TREATMENT REQUESTED].
9.0 [CONFIDENTIAL TREATMENT REQUESTED]
M2 supports the [CONFIDENTIAL TREATMENT REQUESTED] interface found on
[CONFIDENTIAL TREATMENT REQUESTED] generation machines.
10.0 Mass Storage The [CONFIDENTIAL TREATMENT REQUESTED] supports
[CONFIDENTIAL TREATMENT REQUESTED] drives.
60
<PAGE> 61
11.0 System ROM
The M2 system ROM is similar in concept and construction to the Opera
system ROM. The ROM is divided into two parts: a [CONFIDENTIAL TREATMENT
REQUESTED] and a [CONFIDENTIAL TREATMENT REQUESTED]. The ROM size is
determined by the features that are integrated into the ROM. The minimum
ROM size expected is [CONFIDENTIAL TREATMENT REQUESTED].
11.1 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] contains only those pieces
required to [CONFIDENTIAL TREATMENT REQUESTED] the [CONFIDENTIAL
TREATMENT REQUESTED] and [CONFIDENTIAL TREATMENT REQUESTED].
11.1.1 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] consists of the code
required to [CONFIDENTIAL TREATMENT REQUESTED] and to allow the
[CONFIDENTIAL TREATMENT REQUESTED]. This includes a [CONFIDENTIAL
TREATMENT REQUESTED] which [CONFIDENTIAL TREATMENT REQUESTED]
system [CONFIDENTIAL TREATMENT REQUESTED], a [CONFIDENTIAL
TREATMENT REQUESTED] and code to display the [CONFIDENTIAL
TREATMENT REQUESTED].
11.2 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] contains the [CONFIDENTIAL
TREATMENT REQUESTED], the [CONFIDENTIAL TREATMENT REQUESTED] to be
loaded to support ROM-resident [CONFIDENTIAL TREATMENT REQUESTED],
those [CONFIDENTIAL TREATMENT REQUESTED], and [CONFIDENTIAL TREATMENT
REQUESTED] necessary for those [CONFIDENTIAL TREATMENT REQUESTED].
11.2.1 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] provides mechanisms to run
applications contained in [CONFIDENTIAL TREATMENT REQUESTED] to
[CONFIDENTIAL TREATMENT REQUESTED] the data of specific CD-ROM
formats or to [CONFIDENTIAL TREATMENT REQUESTED]. In addition this
code includes the [CONFIDENTIAL TREATMENT REQUESTED] such as the
[CONFIDENTIAL TREATMENT REQUESTED], or [CONFIDENTIAL TREATMENT
REQUESTED]. The [CONFIDENTIAL TREATMENT REQUESTED] examines the
[CONFIDENTIAL TREATMENT REQUESTED] installed and implements policy
decisions which determine whether a [CONFIDENTIAL TREATMENT
REQUESTED] is to be run or whether a [CONFIDENTIAL TREATMENT
REQUESTED] is to be run. In the case where a [CONFIDENTIAL
TREATMENT REQUESTED] is to be run, the [CONFIDENTIAL TREATMENT
REQUESTED] displays the [CONFIDENTIAL TREATMENT REQUESTED] while
the title loads and initializes.
11.2.2 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] includes those features
necessary to run the [CONFIDENTIAL TREATMENT REQUESTED] that are
included in the ROM. Features include:
- Low-Cost [CONFIDENTIAL TREATMENT REQUESTED]
- [CONFIDENTIAL TREATMENT REQUESTED] to load applications
from a [CONFIDENTIAL TREATMENT REQUESTED]
61
<PAGE> 62
- [CONFIDENTIAL TREATMENT REQUESTED] (optional- used for
[CONFIDENTIAL TREATMENT REQUESTED] player application)
- Any other [CONFIDENTIAL TREATMENT REQUESTED] required to
run the ROM applications
11.2.3 ROM Applications
Applications that must be included in ROM include:
- [CONFIDENTIAL TREATMENT REQUESTED]
- [CONFIDENTIAL TREATMENT REQUESTED]
Applications that can be provided in ROM include:
- [CONFIDENTIAL TREATMENT REQUESTED]
- [CONFIDENTIAL TREATMENT REQUESTED]
- [CONFIDENTIAL TREATMENT REQUESTED]
- [CONFIDENTIAL TREATMENT REQUESTED]
II. [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] has the same specification as the
[CONFIDENTIAL TREATMENT REQUESTED] with the following modifications:
1.0 Hardware Modifications
1.1 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] has a connector and cable,
[CONFIDENTIAL TREATMENT REQUESTED], designed to connect to the
[CONFIDENTIAL TREATMENT REQUESTED] to be [CONFIDENTIAL TREATMENT
REQUESTED].
1.2 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] has [CONFIDENTIAL TREATMENT
REQUESTED] connectors to allow connection to the [CONFIDENTIAL
TREATMENT REQUESTED] of the [CONFIDENTIAL TREATMENT REQUESTED] to be
[CONFIDENTIAL TREATMENT REQUESTED].
1.3 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] has [CONFIDENTIAL TREATMENT
REQUESTED] to allow the [CONFIDENTIAL TREATMENT REQUESTED] and
[CONFIDENTIAL TREATMENT REQUESTED] of the [CONFIDENTIAL TREATMENT
REQUESTED] to be sourced from either the [CONFIDENTIAL TREATMENT
REQUESTED] or the connected [CONFIDENTIAL TREATMENT REQUESTED].
2.0 [CONFIDENTIAL TREATMENT REQUESTED]
2.1 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] has additional software in the
[CONFIDENTIAL TREATMENT REQUESTED] that checks to see if an Opera
system is connected via the [CONFIDENTIAL TREATMENT REQUESTED].
2.2 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] has additional software in the
[CONFIDENTIAL TREATMENT REQUESTED] that controls the [CONFIDENTIAL
TREATMENT REQUESTED]. This modified [CONFIDENTIAL
62
<PAGE> 63
TREATMENT REQUESTED] implements [CONFIDENTIAL TREATMENT REQUESTED]
which determine which system is to supply the [CONFIDENTIAL TREATMENT
REQUESTED] to the [CONFIDENTIAL TREATMENT REQUESTED] of the
[CONFIDENTIAL TREATMENT REQUESTED].
III. [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] has the same specification as the
[CONFIDENTIAL TREATMENT REQUESTED] with the following modifications:
1.0 Hardware Modifications
1.1 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] is capable of decoding
[CONFIDENTIAL TREATMENT REQUESTED] with the same additional
functionality as the [CONFIDENTIAL TREATMENT REQUESTED].
1.2 [CONFIDENTIAL TREATMENT REQUESTED]
In the [CONFIDENTIAL TREATMENT REQUESTED] the [CONFIDENTIAL TREATMENT
REQUESTED] is replaced with [CONFIDENTIAL TREATMENT REQUESTED] is the
combination of [CONFIDENTIAL TREATMENT REQUESTED].
1.3 Mass Storage
The [CONFIDENTIAL TREATMENT REQUESTED] supports [CONFIDENTIAL
TREATMENT REQUESTED].
2.0 [CONFIDENTIAL TREATMENT REQUESTED]
2.1 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] is modified to use an
[CONFIDENTIAL TREATMENT REQUESTED].
2.2 [CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] in the system ROM is modified to
support the additional features necessary to run the [CONFIDENTIAL
TREATMENT REQUESTED] applications that are included in the ROM.
Additional features include:
- [CONFIDENTIAL TREATMENT REQUESTED]
- [CONFIDENTIAL TREATMENT REQUESTED] and [CONFIDENTIAL
TREATMENT REQUESTED] (optional-used for [CONFIDENTIAL
TREATMENT REQUESTED] application).
2.3 [CONFIDENTIAL TREATMENT REQUESTED]
A [CONFIDENTIAL TREATMENT REQUESTED] is an additional optional application
that is available.
63
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Exhibit F
LIST OF SOFTWARE EXCEPTIONS
3DO does not own and does not have sublicense rights with respect to the
following items:
Program Licensed From
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
64
