EXHIBIT 10.48
December 17, 2004
Majorem Ltd:
6 Maklef st., Holon 58672
Israel
Gentlemen:
This letter agreement shall represent a legally binding agreement (the
"Agreement") by and between Majorem Ltd ("Majorem") and Interplay Entertainment
Corporation ("Interplay") pursuant to which Majorem hereby grants to Interplay
the sole and exclusive worldwide right, outside of the country of Taiwan, to
publish, promote, distribute and otherwise exploit the interactive software game
known as "Ballerium" (the "Game") on the PC. Interplay shall also have
prequel/sequel rights. The term of this Agreement shall commence on the date of
the full execution of this Agreement and shall continue for the economic life of
the product. Majorem shall have audit rights customary in the industry, upon ten
days written notice and limited to one audit per fiscal year with at least
twelve months between each audit. Interplay may sublicense or assign its rights
to a third party without the express written consent of Majorem and Majorem
hereby consents to such sublicenses and assignments. All rights not expressly
granted to Interplay under this agreement are reserved to Majorem and/or its
respective licensors.
In consideration of the grant of rights described above, Interplay
shall pay to Majorem a fully recoupable advance in the amount of $300,000 (the
"Advance") in United States currency as set forth below. Interplay shall pay to
Majorem $300,000 within 90 days of signing this Agreement (the "Initial option
period").
Interplay shall, at its own discretion, pay the Advance in twice a
month installments of no less than $20,000 (the "Installment") each. The Initial
option period shall be extended by 15 days upon receipt by Majorem of each
Installment payment. The first $20,000 Installment will be made within 45 days
from signing this Agreement.
Upon payment of the first Installment, Majorem will resume development
of the Game and reinstate the online Beta testing allowing consumers to download
the game and play it by accessing beta testing servers provided by Majorem.
If Interplay fails to pay the full $300,000 advance as prescribed, then
all rights granted to Interplay under this agreement shall revert to Majorem
and/or its respective licensors, at which time Interplay will only retain an
interest in the Game up to the amount of all Installments it will have paid.
Interplay will provide the commercial servers, hosting allowing online
access to the game, billing and access customer service while Majorem will
provide all game content and in-game customer service. Interplay agrees that
Majorem's name will be used in all publications made in conjunction to the
product, including prompt labeling of any media carrying the product.
Following payment by Interplay of the Advance, Majorem shall receive
the following additional royalty payments (the "Royalties") associated with the
exploitation of the game:
Twenty percent (20 %) of Interplay's Net Retail Receipts (as defined
below) from all sales and distribution licenses of the Game. For purposes of
this Agreement, "Net Retail Receipts" shall mean the gross receipts actually
received and earned by Interplay from sales or distribution licenses of the
Game, less the following amounts:
(i) Any applicable taxes on the sale or license of the Game;
(ii) Amounts reimbursed by customers such as insurance or shipping;
(iii) Any cash discounts, freight discounts, mark down allowances or
marketing funds required from customers;
(iv) Any commissions and/or distribution fees that must be paid in
conjunction with the sale or license of the Game;
(v) Amounts for returns, such as credits or refunds;
(vi) Currency exchange fees incurred by Interplay;
(vii) No royalties to be paid on Product furnished by Interplay on a
so called "no charge" basis as demos to dealers or
journalists;
(viii) With respect to direct sales, all out of pocket costs, such as
telephone charges and fulfillment costs;
(ix) A marketing allowance not to exceed 15% of gross sales; and,
(x) Cost of goods.
Fifty percent (50%) of Interplay's Net Online Receipts (as defined
below) from all online subscriptions giving access to the Game. For purposes of
this Agreement, "Net Online Receipts" shall mean the gross receipts actually
received and earned by Interplay from sales of online subscriptions giving
access to the Game, less the following amounts:
(i) Any applicable taxes on the sale of subscriptions to the Game;
(ii) Credit card chargebacks;
(iii) Any third party hosting fees that must be paid in conjunction
with the maintenance of servers allowing online access to the
Game;
(iv) Any third party customer service fees that must be paid in
conjunction with the subscriptions giving access to the game;
(v) Any third party billing fees that must be paid in conjunction
with the processing of subscriptions giving access to the
game;
(vi) Amounts for credits or refunds;
(vii) Currency exchange fees;
(viii) No royalties to be paid on accesses furnished by Interplay on
a so called "no charge" basis as demos to dealers or
journalists;
(ix) Any expenses that must be independently paid to Majorem in
conjunction with in-game customer service it is required to
supply.
Any deductible expenses that are made to parties related to Interplay (Such as
subsidiaries, Major shareholders and others) will require Majorem's approval in
advance.
Following full recoupment by Interplay of the Advance, such Royalties shall be
paid within sixty days after the end of each of Interplay's fiscal quarters
(January, April, July, October). In-game customer-service expenses will be paid
in advance, according to a quarterly plan submitted by Majorem and approved by
Interplay at the product launch and then by the first day of each of Interplay's
fiscal quarters.
Majorem represents, warrants and covenants from the date hereof and
throughout the term of this Agreement to Interplay, its successors, sublicensees
and assigns that the Game is or will be original to Majorem and/or exclusively
owned or licensed by Majorem outside Taiwan; that the Game does not violate or
infringe upon any rights (intellectual property or other) of any third parties,
that Majorem has full legal right and authority to enter into this Agreement;
and that the execution and delivery of this Agreement by Majorem will not
violate or cause a breach of any other agreement to which it is a party.
A party hereto shall be deemed to be in default of this Agreement in
the event that party breaches any covenant, representation or warranty it makes
in this Agreement or if any representation or warranty is or becomes untrue, and
such breach or untruth is material and not cured within thirty (30) days after
receipt of written notice from the non-breaching party. Unless otherwise
specified in this Agreement, this Agreement may be terminated in its entirety:
(i) if the breaching party breaches any of the material terms,
covenants, representations and/or warranties of this Agreement
(other than a royalty advance obligation hereunder) and such
breach is not cured by the breaching party to the
non-breaching party's reasonable satisfaction within thirty
(30) days after receipt of written notice from the
non-breaching party; or
(ii) if the breaching party breaches a royalty advance obligation
under this Agreement, and such breach is not cured by the
breaching party to the non-breaching party's reasonable
satisfaction within thirty (30) business days after receipt of
written notice from the non-breaching party; or
(iii) In the event either party to this Agreement files a petition
in bankruptcy or is adjudged a bankruptcy.
Any termination of this Agreement will not cause waiver of rights for
Royalties, future past or present, and shall keep the Non-Disclosure part of
this Agreement intact.
Each party hereby agrees to indemnify and hold harmless the other and
each of the other's affiliates, successors, and assigns from and against any and
all liabilities, damages, claims, reasonable costs and (including reasonable
attorney's fees) for third party claims arising out of any breach or alleged
breach of the representations, warranties, covenants and agreements contained in
the Agreement.
EXCEPT AS PROVIDED HEREIN, THE LIABILITY OF EITHER PARTY, IF
ANY, FOR DAMAGES FOR ANY CLAIM OF ANY KIND WHATSOEVER AND REGARDLESS OF THE
LEGAL THEORY, SHALL NOT INCLUDE COMPENSATION OR DAMAGES ON ACCOUNT OF THE LOSS
OF PROSPECTIVE PROFITS, EXPENDITURES, INVESTMENTS OR COMMITMENTS, WHETHER MADE
IN ESTABLISHMENT, DEVELOPMENT OR MAINTENANCE OF GOODWILL OR REPUTATION OR FOR
ANY OTHER REASON WHATSOEVER. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, EVEN IF APPRISED OF THE
LIKELIHOOD OF SUCH DAMAGES OCCURRING.
Non-Disclosure:
a. PROPRIETARY INFORMATION. Each party acknowledges and agrees
that certain information which it may receive from the other
party will be Proprietary Information to the disclosing party.
"Proprietary Information" shall mean: (i) the fact that the
disclosing party intends to develop or have developed any
particular software or other product; (ii) any information
concerning or related to the Products; (iii) any information
concerning the terms and conditions of this Agreement, except
without the prior written consent of the other party, which
shall not be unreasonably withheld; (iv) nonpublic information
concerning the business or finances of the disclosing party;
and (v) any other information which if disclosed to a third
party could adversely affect a competitive advantage of the
disclosing party.
b. PROTECTION. Each party agrees, both during and after the term
of this Agreement, to use the Proprietary Information of the
other party only in connection with its rights and obligations
under this Agreement, and not to, directly or indirectly,
reproduce such Proprietary Information or distribute or
disclose such Proprietary Information, except to employees,
prospected investors and strategic partners or consultants who
have a need to know such Proprietary Information in connection
with the performance of the obligations and exercise of the
rights under this Agreement, and to hold in confidence all
Proprietary information of the other party and to use is best
efforts to prevent the unauthorized copying, use and/or
disclosure of the other party's Proprietary Information.
c. NO NONDISCLOSURE OBLIGATION. Each party's respective
obligation to hold the other party's Proprietary Information
in strict confidence shall not apply to any information that:
(i) becomes known to the general public without a breach of
the nondisclosure obligations of this Agreement; (ii) is
disclosed by the owner of the Proprietary Information to
others without restriction on disclosure; (iii) is obtained
from a third party without breach of a nondisclosure
obligation; or (iv) must be disclosed in connection with any
suit, action or other dispute related to this Agreement or is
otherwise required to be disclosed by law.
d. CONFIDENTIALITY OF AGREEMENT. Both parties agree that the
terms and conditions of this Agreement shall be treated as
Confidential Information and that no reference to the terms
and conditions of this Agreement or to activities pertaining
thereto can be made in any form without the prior written
consent of the other party; provided, however, that the
existence of this Agreement shall not be treated as
Confidential Information and that either party may disclose
the terms and conditions of this Agreement:
1. as required by any court or other governmental body;
2. as otherwise required by law;
3. to legal counsel of the parties;
4. in confidence, to accountants, banks, proposed
investors, and financing sources and their advisors;
5. in confidence, in connection with the enforcement of
this Agreement or rights under this Agreement; or
6. in confidence, in connection with a merger or
acquisition or proposed merger or acquisition, or the
like.
e. IRREPARABLE HARM. Each party agrees that the unauthorized use
or disclosure of the disclosing party's Proprietary
Information may cause irreparable injury to the disclosing
party. Accordingly, both parties agree that the remedy at law
for any breach of this Section may be inadequate and, in
recognition thereof, agree that the party suffering from the
unauthorized use or disclosure shall be entitled to ex party
injunctive relief to prevent any such breach or the threat of
such a breach.
The parties hereto agree that all of the material terms of the
agreement between the parties with respect to this transaction are set forth in
this Agreement.
This Agreement shall be governed by the laws of the State of
California, and the parties agree that all disputes related to the subject
matter of this Agreement shall be heard by a court of competent jurisdiction
located in the State of California. Nevertheless, any dispute or controversy
arising under this Agreement, including without limiting the generality of the
foregoing, any dispute concerning the scope of this Section, shall be
conclusively settled by arbitration in the State of New York, U.S.A., in
accordance with the rules of the International Chamber of Commerce. Judgment
upon the award rendered by the arbitrators shall be final, conclusive and
binding on the Parties and may be entered in and enforced to the fullest extent
of the law by any court having jurisdiction thereof, and the Parties hereby
irrevocably consent and submit to the jurisdiction of the applicable courts for
this purpose. No amendment or modification of this Agreement shall be valid
unless made in a writing executed by all parties.
Each party shall execute and deliver all such further instruments, documents and
papers, and shall perform any and all acts, necessary to give full force and
effect to all the terms and provisions of this Agreement. Unless otherwise
specified herein, any consents and/or approvals requested of either party
pursuant to this Agreement shall not be unreasonably withheld, conditioned or
delayed. Without limitation, both parties acknowledge and agree that it shall be
deemed "reasonable" for either party to withhold its consent and/or approval
where necessary in order for said party to comply with the terms of any third
party licenses applicable to the Game. No uncertainty or ambiguity herein shall
be construed or resolved against any party, whether under any rule of
construction or otherwise; on the contrary, this Agreement has been negotiated
by all parties and shall be construed and interpreted according to the ordinary
meaning of the words used so as to fairly accomplish the purposes and intentions
of the parties. Unless specifically stated otherwise, any reference to a
particular period of days herein shall be interpreted as reference to calendar
days; provided, however, that if such period would otherwise end on a Saturday,
Sunday or generally recognized U.S. public holiday, then the period shall be
deemed to end on the next business day. The losing party to any litigation
between the parties hereto shall pay to the prevailing party all expenses, costs
and fees (including attorney's fees) incurred by such prevailing party in such
litigation. This Agreement does not create partnership or joint venture between
the parties and shall not be construed as doing so. Any provision of this
Agreement that is found by a court of competent jurisdiction to be void, invalid
or unenforceable shall be curtailed and limited only to the extent necessary to
bring such provision within the requirements of the law, and such finding and
curtailment shall not affect the validity or enforceability of any other
provision of this Agreement. Any waiver of the provisions of this Agreement or
of a party's rights or remedies under this Agreement must be in writing to be
effective. Failure, neglect, or delay by a party to enforce the provisions of
this Agreement or its rights or remedies at any time will not be construed and
will not be deemed to be a waiver of such party's rights under this Agreement
and will not in any way affect the validity of the whole or any part of this
Agreement or prejudice such party's right to take subsequent action.
Interplay hereby declares that it has reached Majorem through implementation of
in-house efforts alone, and that no agent has been used in the process of making
this Agreement.
This Agreement may be executed in counterparts and delivered by
facsimile.
Interplay Entertainment Corporation
By: /s/ Herve Caen
-----------------------------
Name: Herve Caen
Title: CEO
Agreed:
Majorem Technology at Play Ltd
By: /s/ Eyal Netanel
------------------------
Name: Eyal Netanel
Title: CEO