Timegate Publishing Agreement

Case 4:09-cv-03958 Document 158-3
Filed in TXSD on 12/12/11 Page 2 of 47
June 15,2007
P u a u S H w AGREEMENT
For
SECTION 8
BY
And
Det,~ecn
Coue Off Dcop, LLC
And
Ttn~cGntc S tudlos, Inc.
tffccttvc
Publishing Apemont Profit S l i m Junc IS,2007
TABLE OF CONTENTS
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13 REV LNUE, AND SUDLlCENSING FEES .o.........e..... . ,, 16 ART :CLE 7 PAYMENTS, REPORTS..., 17 ART :CLE8 MARKETING EPFORTS ART :CLE9 INTELLECTUAL PROPERTY..,,www*w*~-stt***~**w*******u*.-.tu~.*..~*~*~*w~+.** 18 10 SEQUEL,PORTS, ADD-ONS AND TRANSLATIONS , 19 ART :CLE 22 ART .CLE11 MEKCHANDISE, NON-INTERACTIVE MEDIA DERlVATlVES.. 23 ART 'CLE 12 CONFIDENTIAL INRORMATION 24 ART ,CLE 13 REPRESENTATIONS AND WRRANTTES...,.,.. 26 ART 'CLE14 INDEMNIFICATION 28 ART CLE IS DiSCLAlMEWLIMTATION OF LIABILITY 28 ART CLE 16 THIRD PARTY INFRINGEMENT 28 ART CLE 17 TERM CLE 18 DEFAULTA'ERMINATION 28 ART UI~~.UI*..~~..~~***-~*****=*-~*H.~~-..+~~W~~ 32 .~~~~.+~W. ART CLE 19 TECHNICAL SUPPORT ART CLE 20 MISCELLANEOUS W.,....H~..".....*....****.**....*.~.... 32
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.+ , 1 ART iCLE I DEFINlTEONS , , , . , . ,,,, 7 ART [CLE 2 LICENSES ART :CLE 3 GAME DEYELOPMENT, TESTING AND ACCEPTANCE PROCEDUW. 9 ART [CLE4 GOD DEVELOPMENT ASSISTANCEw~v*******+*.w***a*it** ***v * ~ * * n t r r . t * . i r . r * r u ~ * ~ . . . . . . r . I1 ART [CLE5 DELIVERGBlLES*** ,., . * ,...w ..,* ...* * * * , .a * ..* .... , .. 4 , ., ., ...,.. I2 ART [CLE6 ADVANCES, DEVELOPMENT BUDGET, DISTRUBUTlON OF NET
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Publishing A g c ~ l c n t Profit Sharr June IS, 2007
Gone Off Deep, LLC PUBLISHING AGREEMENT

This Agreement ([Iris "Agreementn) is made this isCh day of June, 2007 (the "ERectivc Date*'), by and between Gone O f f Deep, LU= a Dclaware limited iiabitity company, under the DBA of Gamecock Media Group, having its principal place o f business at 109 East 10' Strcct, Austin Tcxas, 78701 (uGODwor uPubllshern),and TimcGote Studios, kc, a Texas corporation having its principal placc of business at t 4140 Southwest Freeway, Suite 400 Sugar Land, Texas 77478 (UDcveloporn).
WHEREAS, GOD is a publisher of intemctivo video games and related products;

WHEREAS, Developer is a developer of interactive video games and refated products;
. WHEREAS, GOD desires to engagc Dcvlelop%r-t~ develop an intiegctive V ~ ~ G game O with a working tide of Section 8, for XBOX 360 and PC Platfom(s) as identified and described on "Exhibit An, and Dcveloper agrees to accept such Gngagemcnt on the tcms and conditions set forth in this Agrecmenl;
NOW, THEREFORE, in consideration of the promises, the mutual covenants and agreemeltts eontaincd llemin and other good and valuable consideration, tho receipt nnd sufficiency of which arc hcreby acknowlcdged., cad of GOD and Developer hcrcby agrccs as follows:
ARTICLE 1 DEFINITIONS
When used in this Agrccmcnt, the terms in this Article I shall bc dcfined as follows:
1.1 KAdd-Onsnsliall mean expansion packs, mission packs, lcvol pach and/or edited Icvcls,
specifically excluding Sequels.

1.2 UAlplta*means a hlly-functioning, full-featured version of Ole Game with complete content (except that up to 30% placeholder audio-visual asscts shall be deemed acceptable), including hnt-end, introductory and end-gamc squences, scrccns, sound cffccts, and music, and which is othenvisc in cornpIiancc with the Specifications, cvcn tllough. known Pmgtani Errors and Bugs may still bc present.
13 "Betan means a hlly functioning, full-featured, substantially error-free (containing no known reproducible Bugs wtiich cause the Garnc to cmh) vcrsion of tho Game with complctc content displaying all levels in compliance with thc Specifications, but not in final form, and not finally tested.
1.4 "Dug" shall mean any deviation f r o m tlre commonly accepted standards for normal products. Suggestions, c~lhanccmont ideas, or new feature operation of computer game ~ofhvare
requests an: not considered Bugs far purposes; of this Agreement
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1.5 uCoofideatiai Information" shall mean any and all information disclosed by Developer and GOD, either directly or indirectly, t o the othcr party and which if written is marked as confidential or, if discloscd oralIy or otherwise, is designated as conftdcntial and confirmed in writing as such within thirty (30) days of such oral or other disclosure. Notwithstanding the foregoing, all source code disclosed l~ertia shall be deemed Confidential Jnfomtion, whether marked or indicated as such, Confidential information shall include all business, financial, technical and other h:eIlectual Property information ofa party, identities of customers, clients or licensees, proprietary software code, progress of development and any other information whether oral or written which is not genera1ly known or available to the public).
1.6 "Cost of Goods Sold" o r UCOGS"shall mean with respect to the G m e (or other products sold pursuant to the t e r n of this Agreement), the aggregate costs of:
a. direct rnanufacIU,n'ng ....-.. psts, and Manel cos,ts; L . -.- ..b. shipping and frcigfit, and in the casc of. sales resulting in Spccial OEM Rev&~&, amounki directly relating to such sales owed to sales person or organization assisting in the
.-
'd. bad credit, replacemtnts not odicnvise rccovct~_frprn die Resave Basket; c. applicable duties, value-addcd lax= and orher bxcs*act&dly incurred by or on behalf of
o dkcounu, markdowns;
GOD as a rcsult of sale, distribution and/or placc;mcnt ofth6Gamt; f. manufacturing 1icense.f~~~ due!to platform m h u f a c t r i r e ~ (i.e., Sony, Microsoit, Nintendo, etc.) i n c u b i by or on behalf ofGOD g, Distribution fees paid. For clarification of this section, if the wholcsalc price is net of .distribution fees, then distribution fees will not bc addcd to COGS as Gross Revcnuc will be bascd on wholesale price; and h. Sales commission fees actually paid to outsourced salcs ot2:anizations.
1.7 uDeliverablesmmeans tho binary code for the Game together with Dcvclopr's notes, plans, artwork and any other documentation (including (i) the Manual Deliverables as set forth in Article 5.3; and (ii) other deliverables as set forth on the Development Schedule), media or other materials developed by or on behalf of DevcIoper, in conjunction with thc Game and which may bc necessary or usehl to GOD in connection with the Usc (as dcfuted herein) of the Game by or on behalf of GOD.
1.8 UDcrivativeWorkwmeans a work that is derived from the Game such that tl~c Usc thereof would infringe upon the intellectual property rights in thc Game;
1.9 uDirect Saiwu means sales to consumers made directly from wcbsite(s) owned or controlled by GOD or Developer, provided that Developer shall only be entitled to makc Dircct Sales soicy pursuant to ArticIs 2.7(c).
1.10 "Developerys Cost of Money" means the sum of Developcr7sDevelopment Funding and Developer's Initial Investment, thc total of which shall be multiplied by .20.
1.11 "DeveIopmeat Budget" means Ten Million Dollars ($10,000,OM1.00 USD).
1.12 HDevclopcrys Developmcat FundingHmeans a rccoupablc, non-refundable Two Million Five Hundred Ttwusand Dollars (%2,500,000.00 USD).
1.W "Developer's initial Investtnonl" means a rccoupablc amount of Fivc Hundred Thousand Dotlars ($500,OQ0.00 USD).
1.14 aDevelopment Schedulen means the planned schedule for the development of the Game and the Delivcrablcs, delivery dates and milestone payments associated therewith, as a g r d upon in writing by GOD and Dcvcloper in accordance with Article 3, and as more specifically outlined on thc Dcvclopment Schedule attached as EXHIBlT'C".
L . 1 5 "Easter Egg" shall mean any accessible but hidden game-play feature or other software element implemented by Developer or its employees or agents - .--...* in the Game . *. other . than at the reqbd3f of the Publisher, or which has bccn previously disclosed in detail in Game specifications-' provided to and approved by Publisher.
"
1.16 UCsmenmans the electronic interactive computer sottware and/or video gamc dcvclopd by or on behalf of Doveloper, as mom fully described on Exhibit's "Aw,"B" and "C" hereto, and any Translations or portions thereofderived there from, and the undcdying intellectual property, including, but not limited to, binary code, source codc, objcct codc, patents, copyrights and trade secrets and licenses. For purposes of this Agreement, in thc event that GOD dcvclaps any Sequel, Ports and/or Add-ons derivcd from the Game in compliance wit11 this Agreement and the Sequel, Ports andfor Add-Ons are published by or on behalf of GOD, sucll Squcl, Port and/or Add-On will be included in lflc delinition of "Game"; provided, however, that in thc event that the terms of this Agreement conflict with the t a m s and conditions set forth in the Devclopmcnt Schedule, marketing plan andlor Marketing Budget for such Scqucl, Port or AddOn, as agreed upon by the parties hereto (collectively, the UNew Plans"), tikc terms and conditions set forth in the New Plans shall control so that this Agtecmcnt and thc New Pians arc read togethcr as onc contract. 1.17 "Game Play" shall mean all player txperienccs during the player's interaction while playing the Gamc, including the primary control and movcment fatwes of the Game, logical cbaacter development and beansgression from beginning to end, all in conformity with the Specifications for the Gamc. 1.18 Yhrne Trademarks" means t d e m r k s , trade names, themes, characters, dcsigns, likenesses and liccnscs for same us& in connection with the Game, including but not limited to, Developer's trademark rights in tbc mark SECTION 8.
1.19 "Game Uuit(s)* means the pbysical media by which the Game, or any Sequel, Ports or Add-ons related lhereto, as the case may be, arc distributed to consumers. Came Units include, but are not limited to, Game cartridges, tapes, CD ROMs, DVD ROMs, or any other medium utilized for a particular Platform now or in the future,
1.20 LcGoSd Master'' shall mean the complete Game finished and in fbll compliance with all Specifications contained in this Agrecmcnt or such specifications that an.subscqucntiy agreed to
PUBL~~HIN AGREEMENT C
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between the parties in writing. The Gold Master shall be a fully h c t i o n a l and operational version of the Game devoid of at least eighty percent (80%) of known Bugs and one hundrcd ptxcnt (tOO%) of Material Bugs and all Eslster Eggs, unless approved in advancc by GOD pursuant to this Agreement.
1.21 "Cross Revenues;" shall m a n with respect t o each Revenue Stream relating to all Game Units and other items sold tlmugh by or on behalf of OOD pursuant to this Agrcunent, tho total invoice amount actually received by GOD from the selling of all Game Units (or otlter items pursuant to this Agreement) sold through or the total license f m for all licenses of the Game (or other items pursuant to this Agreement) or other payments actually rcceived by GOD.
132 uIntcrcst Raten shall mean the amount equaling any past due paymcnts to either party hereunder which shall bear interest fmm the date due until the date paid at the lesser of (i) thc prime lending rate as quoted by Cicibank, N . A . of New York from time to time plus One Pemnt. (1%) of (ii) the maximum ntc penflitti bjiliiK
"'-- '
'1.23 "Late Payments* shall mean the fines i n c d by GOD, dircctiy causcd by and assigned to Developer as outlined in this Agreement for failure to deliver a Dclivcrable on or before tho delivery date specified for such Deliverable, where such specific schedule was approved by
Developer in advance, as is more fully set forth in Article 5.4.

134 uManual Deliverables* shall mean Developer's obligation to provide on a timely basis to GOD all reasonablc and adequate text (unfonnatted) and any supporting pictures, screen shots, requested, from timc to timc by GOD to bc animations and other graphics as may be ~easonably used by or on behalf of GOD to crcate a M a n u a l that will be distributed in conjunction with thc
Game.
1.25 "Manualn sttall n m n a single document delivered in print, electronic form, or otherwise that describcs in English the operation and functions of the Game and contains instructions mlarsd thereto. Thc Manual sltall be written in a style raasonabfycalculatcxl to be understood by an English reading cnd-uscr with reasonablc computet experience and shall contain mdablc information sufticicnt to enable such end-user to use tttc Gitrnc as it was intended to bc used. For further clarification, thc Manual shall not mean other pubiished matcrial produced that dcscribcs stratcgics for the game (Le. strategy guides).
1.26 "Market Dcvclopmcnt Fundn or UMDF' shall mean all in-store marketing, including but not limited to produet placcmcnt, co-op, proprietary advcrtiscment programs and other merchandising efforts, including, design, production and placefncnt o f materials for said programs.
1.27 'Marketing i3udgclwshall have the meaning defined in Miclc 8.1(A).
1.28 "Material Bug" A defect within the Game that causes the program or other systems to crash or hang. Material bug may also include a non-fatal defsct that nonetheless halts furtbicr testing or forward movement in the Game. This may include the following: a defect that causes information to be lost or a defect that setliously impairs the operation, performance and or bctionality of the Game.
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1.29 "Net Reveauesn shall mean Gross Rcvcnucs pertaining to such Revenue Stteam, less the Cost of Goods Sold for such Game Units (or other products sold pursuant to the terms of this Agreement). Cost of Goods shall not include Publisher's Dcvclopment Funding (as defined in Article 6). Publisher Overhead, Marketing Dudget, MDF, AdditionaI Marketing, Developer's Development Funding or Developer's Initial fnveshnent. GOD shall not accept wnsideration other than cash (including but not limited to stock, warrants or stock options) as a form of payment without the written agreement of Developer as to the cash vatue of such consideration, such agreement not to be wvtasonably withheld. 130 uPlatformn shall mean the hardwardsoftware platform device on which M e U n i t s are played, including but not limited to (i) personal computers (with each operating system, including, but not limited to, Linux, Windows, and MacOS, constituting a Platform), and including an onlincAntemet version of the Oame; (ii)game console platform (including, but not limited to Sony, Microsoft; Nintendom'(iii)m a d e .maCIiinG (whether sirind-alone, dedicated or networkcd); and (iv) any method whereby the Game is a c c e d andlor played over the Intcrnct, cable or satellite distribution scnrice. "lairlat Platforms" shall mean Personal Computer (Windows XP, Vista) and the XBOX 360, as those terms arc known in the game industry. Notwithstanding the foregoing, the Game is being developed exclusively for the Cnitial
Platforms.
131 "Port" means a modification of thc Game, predominantly based upon a modification of the Game's source code and existing toots, so that it will run on a Platform other than thc Initial Platform.
1.32 "Publislter's Cost of Money" means tho sum of Publisher's Development Funding, MDF, Marketing Budget, and Publisher Overhead, thc total of which shall be multiplied by .20.
133 "Publisher's Development Fundlng" shall mean a recoupable, non-refundable amount of Seven Million Five Hundred Thousand Dollars ($7J00,000.00USD).
1.34 "Publisher Overhead" shall mean the recoupable sum of Five Hundd Seventy Five Thousand DoIIacs ($575,000.00 USD). This amwnt covers die equivalent of two full-time employees that will be dedicated to the project that are employed by GOD, 1.35 "Reserve Basket" shall mean tirc reasonable reserve out of the Net Revenues that GOD may establish for s caIen&r quarter which shall be used to offset bad dcbts, credits, rehvns and replacements related to Game Unit salcs or distributions for the previous calendar quarter.
1.36 wRevenue Stream@)" shatl mean each of the Alternative Revenues, Co-Publishing Revenues, Special OEM Revenues, Standard Revenues, and Miscellaneous Revcnucs,
a uAlternativc Revenue" shall mean all revenues actually received by GOD as a result of the selling through of Game U n i t s via Direct Sales by GOD, demo Shareware or Shareware sales; specialty mail order catalogs, direct download, online sales; and any advertising included in the Oame. UShareware'* means shareware versions of the Game containing thc "unlockable" encryption (or similar format) of (i) more levels (episodes, zones or similar
Gamc Play delineations) of the Game than are included in demo S b m e or (ii) full versions of the Gold Master of the Game. b. UCo-publishing Revenuev* shall mean revenues actually received by GOD from assignments by which GOD engages with a publisher to release Game(@ in a territory outside of North America Ln order to constitute &-Publishing Revenue any such assignment must reflect that GOD is not financially responsible for marketing and public relations in said territory. ff GOD is substantially financially mponsibte for marketing and publio relations, under such assignment then revenue generated by virtuc of such assignment shall NOT be treated as Co-publishing Revenue hereunder and shall otherwise be considered Standard Revenue. c. "Special OEM Revenue" shall mean sales of Oarno Units through bundling in third party hardware of original equipment manufacturers. d. "Standard Revenueswshall mean revenues actually received by GOD as a result of the oPGame Units the standard retail channels. selling -.-._. through __......-. . - in . -. . e . 'CMlsceihoeous 'Reveaueswshall mean ail tovtnue othcr than ~i&rnative ~even~& Co, publishing revenue, Special OEM Revenues, or Standard Revenues, or Direct Sales by Developer.
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137 'LSequeln means any interactive video game sofhare program which extonds or coutinues the storyline and look and feel of a product, and will include significant enhancements, additional features and improvements ta the Game, along with any conrections, enhancements, modifications and/or updatw thereto or fmign translations thereof, For purposes of clarity, a Squel is not an Add-On, but instead is of similar or larger scow than the base Game and usually has a retail price similar to the initial price of the base Game (taking into account pricing evolution in the vidco gaming industry) and a similar development time-line and development budget.
other Game rclated details contained on Exbibit "'8" to this Ajpernent, and for tho purposes of this Ageerncat, '3pecificationsW shall be inclusive of those game ftaturcs set forth on the
138 "SpeciftcatSonsn shall mean the detailed list OF featwcs, levels, story line, characters, and
Development Schedule attached as Exhibit "Cn to this Agreement.

139 "Termn shall have the meaning set forth in Article 17.
1.40 Territorf' shall m a n the world.
1-41 "Translation" means a modification o f the Oame 1' phy in a language other than English.
1.42 UUnapproved Defiverables" shall have the meaning assigned to such tenn in Article 3.4.
1.43 W s e " shall mean GOD'S cxcrcise or we of any or all of the rights granted to it by Dtvelopor through the licenses granted herein.
PUBLlSEtINC AGREEMENT
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2. LICENSES 2.1 Subjcct to the terms of this Agreement, Dovcloper grants GOD the cxclusivc right and liccnse for the Term in the Territory (including the right to sublicense) to, in object codc fomi, on its behalf or at its direction, rcproducc, manufacturn, package, advertise, publish, market, scll to end-users, wholesalers, and retailers, distribute, bundidOEM sales, and display (publicly or
otherwise) the Game and any Translations thereof on tire Initial Platforms. The foregoing liccnse includes the right and license to distribute thc Game utilizing any Game Unit or via any method of distribution, now known or hereafter devised electronic or otherwise, including, but not limited to dedicated machines, satellite, cable and the internet.
2.2 Subject to the tams of this Agreement, Developer hereby grants to GOD a nonexclusivc, right and license in the Territory (with right to sublicense) to use the Game Trademarks solely in -*. - .- . and distribution of the Oamc and any connection with the packaging, sale, marketing, advertising Sequel, Porti -ii~idl6rXiid~DnS by GOD."GOb agreos that it will package, sell, m&ke( advertise and distribute the Game and any Sequel, Ports andlor Add-ons under the trademark SECTION I). GOD agrees that Ihr; Developer is the cxclu~ive owner of thc Game Trademarks aud ail thc
goodwill attach4 thereto and that the Dcvelopcr shall rctain full rights to the Game Trademarks, all registrations granted thcnon and the goodwill associated thenwith. OOD shall also llavc thc limited right to use the Game Trademarks in association with its own company marketing, provided that such use be reasonable and not misstate any affiliation with Developer or GOD'S rights in the Game Tradematks, GOD shalt havc no rights, other than rights granted herein, to tho Game Tmdemarks or any conbingly similar variation thcrcof. GOD a&rccs, at the rcqucst of the Developer, to execute any and all papers and dacurncnts necessary to prescrve and cxtend the trademark rights relating to the Gamc Tradcmarks, including, without limitation, any documents required by govcmrnentai authorities to show the relationship between thc GOD and thc Developer. GOD agrohs not to seek registration or to claim ownership of any of the Game Tradcmarks or of any conhingly similar trademarks or trade names. GOD shall use the Gamc Tradcmarks in accordance with the licenses granted under this Agreement.
2 3 Subject to the tenns of this Agroemcnt and the provisions of Article 10 hereof, Developer hereby grants to COD the limitd exclusive, right and license for the Term in the Temtory (including tbc right to subIicensc) to reproduce, manufachuc, package, rnarkct, publislt, advertise, sell, distribute and display Ports and Add-ons for, or rcIated to the Gamc
2.4 Subject to tho t e r n of this Agreement, Developer horcby grants to GOD the cxclusive right and liccnse in the T e r r i t o r y (including the tight to sublicense) to develop and rcpmducc, manufacture, package, advertise, publish, rnarkct, sell to cad-users, distribute, bundldOEM sales, and display (publicly or otbcrwise) the Manual Deliverabics, as provided to GOD by or on bcbalf of Dcvclopcr pursuant to Article 5.3, in suclr a way as to create (including layout, printing, etc.) a Manual,or any translation thcreof, provided, however, that Developer slwll have the right to approve the final version of the Manual in advance of mass duplication, such approval not to bc unreasonably withheld.
2.5 Subject to the t e r n of Agreement, Developer hereby grants to GOD the rights to prepare and distribute merchandising, hint books and strategy guides (with right to sublicense) as specifically set forth in Article 1 1.
pUBL1SfnNG AGREEbfENT * Page 7 Profit sharc
2.6 Subject to the terms of this Agrement, and more specifically Article 10, Dcvclopcr hereby grants to GOD the right of first rcfiusal and last matching option for the publishing of one Scqucl.
2.7 Notwithstanding GOD'S rights in Artides 2.1 through 2.6, Developer reserves the following rights, whicli may be oxenrised in Developer's sole discretion, in accordance with the terms of this Apeerncnt:
a, With respect to my Game that contains a lcvel editor, GOD may distribute, in object code form, such lcvel editor only on the mmrr media with the Game as provided or appraved by Developer. GOD shall only authorize and sub-license end-users to create Ievels or Add-ons, noncommcrcially, for a Game using such level editor.
b, No license is granted with rcspccl to the Game cngine by Dcvelopcr oihc_r-than-it1 connation with the reproduction, 'maiufacturc, .oi 3istiibutioE in-obJect cddc form, of the Game,Port, Add-On, or Sequel hereunder.
c Developer retains the right to scil the Game directly from its websites via digital downIoad, subject to Dcvelopw's &ligation to pay GOD the royalty specified in pantgraph 6.9, below. The right contained in tbis subparagraph is not an exclusive right to digital distribution of Games hereunder.
d. Devetopcr retains the right t o promote the product on its website and non-exclusively through traditional and industry public relations channels. Developer shall provide GOD advance notice of its intent to promote the Game and shall use reasonable efforts to keep such promotions inline with OOD's public relations efforts of the Game. Nothing in this section shall limit GOD's rights to promote the Game in industry public relations channels or othcrwisc.
c, Subjcct to the Game Specifications, Developer retains tkc exclusive right of crcativc control of the Game and all Add-ons, Ports and Scqucl and their respective Game Play developed hereunder. Notwithstanding the forgoing, in the event a third party is engaged to dcvclop any Squel, Port, Add-on or finish the Game for the initial platforms, any rclated creative approvals shall not be unreasonably delayed or withheld.
I : Notwithstanding the rights and liccnses granted to W D in Articles 2.1 through 2.6, tflc following limitations apply to GOD's exercise of those rights. GOD my not: i. Disassemble, reverse engineer, decompilc, or mcrge the DeIiverablcs. Preparc derivative works from the Delivcrables; ii, Use any portion of the Deliverabtts as a component or a base for a different game other than the Game; iii. Transfer, sell, assim sublicense or otherwise convey any portion of thc Deliverablcs t o another party exccpt as authorid herein; OR iv. Permit othem to do any of the foregoing.
2.8 No other rights, express or implied, are granted by one party to the other party other than as
specified in this-~greement.
PUBLISHING AGREEMENT
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ptior approval by Developer, such approval shall not be unreasonably withhold.
2 9 GOD'S right to sublicense its rights to the Game for purposcs other than as cxpressly set forth in this Agreement shall be subject to, and no such sublicense shall be vJid except upon,
3, GAME DEVELOPMENT, TESTING AND ACCEPTANCE PROCEDURE

3.1 Developer will develop and finalize the Garno which will operate on the Initial Platforms pursuant to the delivery dates or milcstoncs identificd in tllc Development Schedule. Developer r i t t e n monthly rcport summarizina the status of the Game development shall provide to OOD a w
that shall include information reasonably requested by GOD, including, without Iimitation, a rolling forecast of the dates upon which the m i n i n g milostoncg will be met by or on bchalf of Developer. Developer shaII providc to GOD, at any reasonable time upon GOD's request, --. honstraliotTmatZdals for tllc Ciame t o tie used by or or? behatf of-tYO~for pu-i$oses of Escilitating GOD's Use of the Game pursuant to this Agreement.
3.2 Developer, at its solc cost and expense, sftali be primarily responsible for testing cach version of Games developed pursuant to this agreement. In addition, Developer must mainbin, at its own expense, its own testing team to test for Bugs, Material Bugs, compatibility and over-all Chime Play, with at Ieast two dedicated and experienced &It time persons, DeveIopcr shall provide GOD written reports detailing (a) any Bugs, Malcrial Bugs or problems with dic Game Play found during testing; and (b) features found to bc missing or inoperative h m such version; (c) the number of persons working on testing, the itours spent per person, Developer shall comct at lcast eighty percent (80%) of Bugs found by Developer's tesdng t e a m and/or GOD and one-hundred percent (100%) of Matcrial bugs found by Developer's tcsting team andlor GOD.
33 GOD, at its sole cost and expense, sltall also conduct reasonable industry standard testing for Bugs, Material Bugs and Oamc Play, specifically excluding translation errors, af each version of thc Game. GOD shall conduct reasonable compatibility evaluation of the Game at its solc cost
and wrpensc. GOD shall provide to Developer a written report of (a) any Bugs, Material Bugs or problems with the Game Play found during tcsting; and (b) f a r e s found to be missing or inoperative from such version, No testing by GOD shall operate ta discharge Developer from its responsibility for testing as defined in Section 3.2.
3 . 4 Acceptance and Delivery.
a. ARer delivery to GOD by Dcvcloper of any schcdulcd Deliverable as per the agreed schedule rcflectcd on Exhibit "C hereto, as applicable (coflectively, UUnapproved Delives~bI&"', GOD will have ten (1 0) business days to examine and test such Unapproved Deliverable to determine whether it conforms to its Specifications in GOD'S reasonable judgment, and is complete and free of at teast 80% of known B u g and 100% of Material Bugs. GOD wit1 notify Developer of GOD's acceptance or rejection of the Unapproved Deliverable and, in case of my rejection, will providc Developer with a reasonably detailed list of deficiencies in the Unapproved Dcliverable. If GOD does not provide such written acccptanct or rejection within a ten (10) business day period, such Unapproved Deliverable automatically will bc deemed accepted, and approved for Milatone payment purposes.
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Upon acceptance of a Deliverable hereunder by GOD, to the extent that said acceptance of said Deliverable is the trigger for payments due to Developer by GOD,Developer will send an invoice lo G'OD, GOD shall pay such invoice, subject to the terns 0 tliis Agro~mcnt, within fifteen (15) calendar days of rcccipt of the invoice by GOD. Without diminishing it's obligation to fix 80% of known Bugs and IOWA of Material bugs throughout the dcvelopmtnt pwess, Developer will use its best efforts t o fix all Bugs and Matcriaf Bugs found throughout development period and up to delivery of the Gold Master. Developer will also make commercially reasonable efforts to fix any Material Bugs found aRer Game has shipped b. In the event of a rejection, GOD shall provide to Developer a detaifcd description and its reasoning for such rejection, along with its requirements for GOD to provide approval ("Milestone Rejection Notice"). Upon receipt by Devctopcr of the Milestone Rejection Notice, Developer will use its best good faith efforts to correct the dcficiencics (including, affect Gape Play and/or without limitation, any Material Bugs and defic_ipcie~._thatat CoTnpatiBliG) iiiid*wili&submit such ~ n a p p k v a l Deliverable, as co&bcd, wiihin thirty (30) calendar days of GOD's rcjcction. GOD will either accept or reject the corrected Unapproved Deliverable in accordance with subparasaph 3.4(A). This pmmiurc will continue until GOD either accepts or rcjecis the Unapproved Ddiverablc or elects to terminate this Agreement for a material breach aRer the cure period pursuant to Article 18.1, which right may not be invokcd by GOD until three (3) consecutive rejections of an Unapproved DeIiverabie. Approvals by GOD undcr this section shall not be unreasonably withheld. Zn the event of a termination under this clause, GOD shall have the rights specified in Article 18, provided howcvet that such rights in Article 18.2(a)(B) may only be exercised upon a ruling in GOD's favor pursuant to binding arbitration, solely as t o the reasonableness of the rejections, as set forth in Article 20.3 of this Agreement.
Prior to execution of this Agreement, OOD and Developer shall in good faith negotiate and a p upon thc Development SJtcduIe for the Game that shall set fortl~,among other things, the planncd schedule for the development of llle Oame and the Deliverableti, delivery date and milestones associated therewith. This Developrncnt Schedule is attached heroto as Exhfbit"Cn, and is filly incorporated into this Agreement, as if set fodt herein. The Development Schcdute may only be modified upon agreement in writing by Developer and OOD.
3.5
Notwithstanding anything to the contrary in this Agreement, with respect to thc review and assessment of the Dclivcrables and Developer's complianct with the rnilestoncs sct forth on the Development Schedule GOD shall rtvicw and determine the statudacceptability of the Unapproved Dclivcrables for the Game provided to GOD by Devclopcr, the Alpha version of the Game, the Beta vcasion of the Game and Ute Gold Master version of thc Game, GOD shall review and determine tho statuslacccptability of tile othcr Delivcrablcs and Developer's compliance with thc milestones set forth in the Dtvclopmurt Schcdulc. Notwithstanding anything to the contrary in tlds Agrccn~cnt, any pcrxtn invotvbd in ate rcvicw of the Delivcrables andlor Developer's compliance with milestones set forth in the Devclopment Schedule shall be bound by the confidentiality provisions set forth in this Agreement.
3.5
3.7 GOD may request to modiFy tIic Specifications for the Gamc andlor tbe Devclopment Schedule at any time during the development of the Game by submitting to Developer a written notice of change specifLing the modifications to ate Game Specifications or Development
Schedule. Developer shall evaluate such rroticc of cliango no later than tcn (10) days following receipt thereof. Developcr shall pmnrptly make a reasonable, good faith attempt to accommodate the notice of change at no cost to GOD, However, if such modifications substantialIy or materially increase thc amount or timing of Developer services necessary to accommodate the modified spccifieations or materially accelerate or delay Ihe timing for completion of the Game, Developer and Publisher shall amend this Amement in p o d faith with respect to a revised Devefopment Schodule and additional payments, if any. Further, if Developcr determines illat the notice of change will require additional cost, Developcr shall provide Publisher with a detailed description of the extra resources and casts needed to pwfonn the changts set forth in the notice of change and thc impact, if any, on thc Devclopmcnt Schedule. If the parties cannot reasonably egrec to an amendment modifying the Specifications for the Game and/or the Development Schedule, then the Specifications and Dcvetopmcnt Schedules shall not be modified.
4.1 Subject to Developer's payment of any applicable fee, as described bclow, GOD will make available to Developer, on an as-available basis, use of any sound recording facilities, motion capture studios, CAD tools, test or simulation equipment owncd or operated by or on behalf of GOD. This paragraph shall not operate to q u i r e OOD to acquire such facilities in the event that GOD does not own or operate such facilities at any timc, In the evcnt GOD does not own such facilities at the time of any request under this paragraph, GOD will assist in making mgerncnts for third-party services to be available to Developer.
4.2 Thc fces to be paid by Developcr, if any, for thc assistance provided by ar on bcllalfof GOD pursuant to this Article 4 shall be as set by or on behalf of GOD or such third partics from timc to time and agccd to by Devcloper in writing in advance. In the event that Dcvelopcr fails to
repay GOD or said third party facility for such costs, GOD, at its sole discretion, may, in the case of GOD facilities, dcduct an amount equal to such due and unpaid amount fmm any payments otherwise due Developer pursuant to this Agreement between GOD and Developer. And in the case of Ihird-party service providers, GOD may, in its sole discrction, advance payment for such services. I-Iowcvcr, under such circumstances, Dovclopcr will remain liable to repay GOD for dl such costs, and GOD may deduct an amount equal to such due and unpaid mount from any payments othenvise due Developer pursuant to this Agreement between GOD and Dcvcloper. Notwithstanding the foregoing, thc language in this Swtion 4 2 Specifically excludes the following GOD providcd services, which cost will bc borne cxclusivcly by GOD: (i) Iocalization (is. translation and translation testing), (ii) compatibility testing, (iii) quality assurance testing (as defined in Section 3.3) (iii) technical support for end-users, and (iv) other services which may be needcd, agreed to in writing in advancc by the Parties. These individual costs, once specific costs and dclails are agreed to in writing in advancc by Developcr, shall be recoupable by GOD as Publisher Oveti~ead por Article 6 of this Agreement,
4.3 Developer shall be primarily respoasiblc for and shall indemnifl, defend and hold barmless
GOD and its partners, directors, officers, mployocs, agents and/or contractors from and against any and all costs, damages, liabilities and expenses incurred by or an behalf of GOD and ratting from Developer's use of facilities, other than normal wear and tear, providcd by or on bohalf of GOD pursuant to Article 4.1.
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4.4 Developer's access to the facilitics and assistance listed in Article 4.1 &a11 be subject to the scheduling and reasonable restrictions on access that may be imposed by or on behalf of GOD from time to time. Developer acknowiedgcs that other parties may be contemporaneously utiIizing GOD'S facilities and agrees to cooperate with GOD in the scheduling of access to and use of GOD'S facilities.
5. DELIVERABLES
5.1 Developer shall delivcr to COD all Deliverables pursuant to the Dcveloprnent Schcdute and Game Specifications, and Pursuant to Article 3.4, Developer shall promptly correct at its sole cost and expensc a minimum of eighty percent (80%) of known Bugs and one hundred pcrccnt (100%) of Matctial Bugs identified by the testing of thc Game and shalt conduct at its sole expense any other reasonable Bug fixing requested by or on behalf . - of GO@,and-promptly provide GOD with thede-bugged vcnribli of thi: game,. 5.2 For a period of six (6) months afier first commercial sale of thc Game, Developer shall continuc to diligently fix, at its sole cost and expensc, at least eighty pcrcent (80%) of known Bugs and one Ilundrtd percent (IW!) of Material B u g that affcct tilie Game or Game Play based on a reasonable schedule mutually a g d to by the Parties.
5 3 Developer, at its sole cost and cxpense shall deliver the Manual Delivarables to GOD per the Development Schedule. Additionally, Developer shall have the option, but not the obligation, to create and provide to GOD all of the printed advertising, final packaging of thc Game and materials related thereto as are necessary, as determined by GOD, for GOD to Use thc Game properly; provided, however, that Developer (i) must notify GOD of its election to crcatc and provide all of such materials not less than nine (9) months prior to thc scheduled dclivcry (pursuant to the Dcvclopmcnt Schcdule) of tho Gold M a s t e r version of the Game, and (ii) deliver dte matcrials not less than sixty (60) days thcrcaher. In such case whcre Developer provides these materials, reasonable acaal cost shall be reimbursed from the Marketing Budget upon submitting an invoicc to GOD, along wilh receipts, If Developer docs not timely (x) notify GOD of its intent to create and supply the materials, or (y) supply tho matcrials to GOD putsuant to this krticie, Developcr shall be have deemcd to have declined its option to providc such matcrials and GOD shall have the sole right to provide same, the famat and wntcnt of which shall be subject to the prior approval of Developer, such approval not to bc unreasonably wirhhetd.
5.4 I n the event that Developer fails to deliver a Deliverable referred to in this Agn=crnent to
indemnification, contribution, ctc.) will be punished with a Latc Payment as a rcsult of such late Dclivernble, GOD may, subject to the notification and approval limitations in this paragraph, at its sole discretion, dcduct a n amount equal to the actual Late Payments h m any payments of Net Revenues due to Developer, without exclusion to any other remedies at law or quity as and between GOD and Developer, T h i s Article shall oaIy apply where GOD has presented Developer with a pending commitment relating to Game (such as an in-store promotion, or MDF program)
GOD has entered into an agmement by which GOD, either directly or indirectly (cg,, via
Schedule and GOD, it's sub licensees, contracted sales teams or any othcr party
GOD on or before the delivery date specified for such Deliverable putsuant to the Development
wiUl
whom
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and Developer has approved the program in writing in advance of GOD committing to such pending wmmihcnt, approval not to bc unreasonably withheld. Developcr shall have five (5) business days from receipt of written notification by GOD of such a program to indicate wlaetber it approves or disapproves of such program, and if Developer shall fail to so notify GOD, then after fivc (5) business days, it shall be dcemGd approved. For the purposes of this paragraph, notification of such programs and approvaUdisapprova1 may be transmitted between designated representatives of the partics hereto. GOD must provide Developer written notification of such Late Payments, the specific amount claimed and of its intent to deduct them fiom Net Rcvenuw; as a Cost of Goad Sold. Notwithstanding anything to the contracy in this Article, GOD and Developcr may consent in writing to change the delivery date for a Deliverable and waive any Late Payment deductions from Net Revenues. For firther clarification, Developer cannot be held rcsponsiblc for any Late Payment for which that particular progmm did not have Developer's written approval in writing in advancc of GOD'S commitment.
55 Fbr purpbses of Article 18.1,. failu?e of Devclopcr to deliver a Delive6ble referred to in^this Agreement to GOD on or before the fiAh business day aRcr the delivery date specified for such Deliverable pursuant to the Development Schedule shall be deemed a material breach of this Agrccmcnt. Unless otherwise agrecd ta by thc Parties, in the cvent that Developer faits to initially deliver to 000 a Deliverable on or before a datc that is 45 days after the applicable &re due under the Development Schedule, Developer shall be deemed to be in material brcach of this agrwrnent undcr Article 18.1 without a cure period and GOD slwlll have the rights specified in Article 18.2(a). Nothing in this Article shall be interpreted to limit in any way any other rights or remedies that COD may othcrwisc have pursuant to this Agrtement. For the sake ofclarification, no cure periods for breaches of this Agreement by Developer shall apply to Developer's late submission of a Deliverable if such late delivery has resulted in a Late Payment for GOD as stated in Section 5.4, unless otherwise a p e d to in a separate wdting by both Parties.
Notwithstanding the foregoing, a brcach solely due to a Late Payment being iacuned is not a material breach and cannot thcrefom singly bc grounds for tennination by GOD.
6, ADVANCES, DEVELOPMENT BUDGET, DISTRIBUTION OF NET REVENUE,
AND SUBLICENSING FEES
R Of the total Development Budgct, GOD will pay Devetopcr the Publisher's Development Funding as set forth in the Development Schedule. Developer shall be responsible for the Budget. additional Developer's Development Funding of the Dcv~ioprnent
tt. There may be cases where GOD or Developer wishes to increase the total Dcvelopment
Budget, in wliich case the Partics must mutually a g e . Such ngrecd to increasc will appropriately amend Publisher's Devclopmcnt Funding and Developer's DcveIopmeni Funding.
c, Furthcrmorc, in addition to Developer's Developmcnt Funding, Dcvcloper has already invested Developer's Initial Investment.
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6.2 Distribution of all Nct Revenue. At least once per calendar quarter, but no more tltan 45 days after tho close of the quarter, Publisher sllall distribute all Net Revenue from a c h Rcvcnuc Stncam rtceivcd pursuant to this Agreement in thc following order and manner:
a . First to reirnbursc Publisher's Development Funding and Devciopcr's Development Funding in the same proportion as the amounts that remain unpaid undcr each such caegwy.
b. Next to MDF actually spent, Marketing Budget actually spent, Publisher Overlrcad, Additional Marketing (as defined in AfticIe 8.4) actually spent, and Developer's Initial Investment in the same proportion as the amounts that remain uapaid under each such category.
c. Next Publisher's Cost of Mottey and Developer's Cost of Money in thc same proportion as the amounts that remain unpaid undcr caclt such-category. .__"
+
d. Finally the remaining Net Revenue shall be calculated and distributed in thc lotlowing
manner: i. For all Net Revcnue arising froni the Co-Publishing Revenue Stream, the rcrnaining Net Revenue shall be dividcd and paid equally to GOD and Developer. ii. For all Net Revenue arising from Revenue Stnarns other than Co-Publishing Revenue Stream ("Other Not"), the rcrnaining Net Revenue shall be divided and paid so that GOD receives sixty pcrcent (60%) and Dcveloper receives forty pcrcent (40%) of the Net Rcvcnucs;
63 Notwithstanding anything to tfie contrary in this Agreement, with respect to any itcnr or product sold by or on behalf of GOD pursuant t o Article 1 1, upon written agreement of GOD and Developer, the payment of monies due may bc made in an alternative manner othcr than as set forth herein, Ln such event, the revenues for such item or praduct sirall not be calculated, combined or athenvisc aggregated in to any ci~lculation made pursuant to this Article,
6.4 Unless otherwise;agreed to in writing by thc parties hereto, for each Port and/or Add-On (but not Sequel) relating to the Game and published by or on behalf of GOD pursuant to the tenns of &is Agreement, cach such Port andtor Add-On shall be deemed to be a collatcralizcd product and a part of thc Game for purposes of calculating monies due to the rcspcctivc Parties hereunder, as well as recoupable expenses hereunder, including, but not limited to any sums subltacted fmm Gross Revenues hereunder, whether applicable to Game or any Port or Add-on. Notwithstanding the foreaoing, thc terms (including development budget, devclopmcnt schedule, royalty rates, etc.) for such Port andlor Add-On must first be a p e d to by the Partics in writing as noted in Section 10 of [his Agrecmcnt. God and Dcveloper may recoup all expcnscs listed above in paragraph 6.2 (a), (b) and (c), for the colfateralized garnc(s) in the same mmncr as the Game as if they were originally part of the Game expenses.
GOD shall be entitled to distribute, without cost to the cmd-user, up to onc-thousand (1,000) Game Units on a promotional basis wilhout payment to Dcvcfaper. GOD will kecp ncords of the number of Game Units so distributed and, upon written request, provide such information to Developer as part of any Net Revcnucs report. Furthermore, Dcvcloper shail be givcn t 00 free
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rctail copies of each English SKU and 25 fcee rctail copies of' every other ianyagc SKU for its internal use and promotion.
6.6 GOD may alabiish a Reservc Baskct but in no event shall ilxc ricswve Basket cxcoad F i b e n Percent (tS%) of the Nct Revenue othcrwise due to Developer as a result of Game Units sold through during such previous calendar quarter. At the conclusion of cach calendar quarter, any remaining portion of the funds in the Reserve Dasht Cmm the previous quarter, after
application of funds in the Reserve Basket, shall be added back to the thcn cwrcnt quarter's Net Revenue,
6.7 GOD shall, in consultation with Developer, determine the initial wl~alesalc price at which cach Game Unit shall be sold into retail. For tbe sake of clarity, COD'S consultation with Developer as specified herein shafl not be interpreted lo mean that Dcvelopcr has the ri@t to choose prices in thc event of a disagrccmcnt .- .~- withlOOD, said dpisionbeing-ith,a.t of G0Q in its solr;'diseretion.Vpdnlinitial shipment of tlre Game and for a period of ninety (90) days thereafter, GOD shall not discount or otherwise d u c t the initiaI wholesale price of a Game Unit without the prior written consent of Developer, such consent not to bc unreasonably withheld; provided, however, that such restriction shall not apply to (i)OEMIbundling arrangenicnts including Oame Units or portioas or levels thereof, (ii) Game Units used in marketing mdlor Direct Sales conducted by or on behalf of GOD, or (iii) Game Units distributed pursuant to Direct Sales,
6.8
one price being clllitgcd for two or mom Came Units) with otl~er games. In the event a Oame Unit is bundled with other game units, for the purpose of allocating Gross Revenues and Cost of Goads cdculations, the sales price attributable to such Oamc Unit shall bc the product abtained by multiplying (i) the percentage that GOD's suggested retail price of the Game Unit beam to the aggtegatc suggested retail price of all games in thc bundle by (il) tlre actual sales price of the bundle of games. (By way o l example, if tile suggested retail price of a Game is Twenty Five Perccnt (25%) of the suggcstcd retail price of all games in the bundIe, and the bundle is sold for One Hundred Dollars (S 100), then Wcnty Five Dollars ($25) of suclt $100 shall be attributed to the Game,) The burden of costs of goods sold shall be evenly borne by Ute number of products in the bundle (for example, if costs of goods sold for the bundfc is 1615, and there are three pmduch in tho bundle, cach product will be responsible for $5 of tllc costs of goods sold, rcgardlcss of the thcn retail valuc of tlte rcspcctivo bundlod products). Notwithstanding anytiling clse in this Article, neither GOD nor any person on GOD's behalf may scll or otherwise bundle Game Units with any othcr games witllout [he prior wfittcn consent of Dovclopor, such consent not to be unreasonably withheld.. For purposes of this Article, the term bundle &a11 also include "Gold Edition" or "Deluxe Edition" (as such terms rtre defincd in accordance with prevailing industry standards) of tbc Gamc. For further clatification, if the Oamc is (he only actual product in the bundle, 100% of the Gross Revenue shall be appIicd to tllc Gamc.
6.9 For all Dircct Sales by Developer, Developer shall pay to GOD a royalty of 60% of its net salcs. For the purposes of this paragraph, 'bet sales" shall mean gross revenue from such sales minus only the verifiable transactional cosk, and specifically excluding costs of goods sold or
GOD may scll or have sold on its behalf, Game Units alone or bundled together (i.c, with
any other deduction.
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6.10 Dcveloper shall pay to GOD fiftecn pcrcant (15%) of its nct revenue for any and all exploitation of Excluded Products, as defincd in article 113 of this Agreement. For purposes of this Section 6.10, "net nvenuc" means gross revenue lcss reasonable and actual expenses
incurrcd by Developer for the creation and distribution of said Excluded Products.
7. PAYMENTS, IUPORlS
7.1 GOD shall keep sufficient records of all Gross Revenues, Net Revenues, salcs and promotional distributions of Game Units in such a manrrer that a third party may verify tho correct amounts due to Developer. GOD shall fiunish Developer with a report for each calendar quarter no later than forty-five (45) days following the end of such calendar quarter, setting fodr with reasonable specificity the number of Game Units sold through, the Gross Revenues attributable hereto per territory, f & + , isfuding ." - and a dctaiied listing of all deductions and o COGS.
"
7.2 Any past due payments to be made by eitfter party hereunder shall bear the Interest Ratc fram the date due until the date paid.
73 GOD shall maintain the records upon which each quarterly Net Revenues report is based for at least three (3) years Gom the date of such report, Developcr, at its sole cost, shall have thc right to have an independent accounting f i r m ,not working on a contingency basis, audit such books and records upon reasonable advance notice in writing, but in no event more tlm once per year, and in no event may mom than one audit be performed in rcspect of any one quarter, unless the audit reveals a discrepancy between the amount reported by GOD and the amount actually calculated by auditor. All of the books and records of GOD and tilt information obtained therein a y only be disclosed to shall be hcld by such auditors as Confidential Information of GOD, and m Developer in summary fonn identifying the amount of any undcr- or over-payment. In the event it is dttcnnined that GOD bas underpaid amounts due to Developer, GOD shall promptly remit the unpaid amounts to Devclopcr together with interest hereon at the htercst Rate, In the event it is determined that GOD has overpaid monies to Devclopcr, Devaloper shali promptly remit the overpaid amounts to GOD, If Developer docs not object to the contents of a quarterly reporr and cause its auditors to commence an audit of such report during tho aforementioned three (3) year period, such report shall be deernod final and determinative for all purposes, If an audit initiated by Developer uncovers a variance between the amount actually paid to Developer and thc amount that should have been paid to Developer in an mount gcater than five percent (5%) then GOD shall pay for the entire reasonable cost of the audit.
7.4 For all Direct Sales made by Developer, Developer shall keep sufficient records of all gross revenues, net revenues, and sales of Ciame Units in such a manncr that a third party may verify the correct amounts due to Developer and GOD. For all revenue generated by Dcvelopw's exploitation of Excluded Products, as defined in section 11.3 of this Agreement, Developer shall maintain detailed records of all revenue and expcnses attributable to such exploitation of Excluded products in a manncr that a third p M y may verify the conect amounts due to Developer and GOD, Devcloper shall fiimish GOD with a report for eacit calendar quarter no later than forty-frvc (45) days fallowing the end of such calendar quarter, setting forth with reasonable specificity the number of Game Units sold via D i m t Sales andlor setting forth details
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of all revenue related to Developer exploitation of Excluded Produca, the Gross Revenues attributable thereto per territory, and a detaiied listing of all oppIicable dcductions. The pmvisians of Articles 7.2 and 7.3 shall apply reciprocally to Developer for Iatc payments and audits for its Direct Sales and Exploited Produets revcnue
7.5 Developer shall secure a Letter of Commitment fmm its major shareholders for the Developer Devclopment Funding within one week of the Effective Date,
8. MARKETING EFFORTS
8.1 Marketing.
a. GOD shall use reasonable efforts, In accordance with prevailing industry standards, to market and sell the Game and, in comeclion tttercwith, stlall establish a marketing plan, a -Markitfng'Budgct and a MarK&DevoIopn~crit Fund fo market the Gamc Units'Tor use on the Initial PIatform(s) . The Marketing Budget shall be no less than $1.5 Million Dollars,. The
Marketing Budget shall bc dispensed by GOD at its reasonabb discretion, according to this Agreement and the Marketing Plan, and be used for the direct bcnefit of the Game.
shall be dispensed by GOD at its reasonable discretion, according to this Agrcement and the Marketing Plan, and be used for in-store marketing, including but not limited to product placement, proprietary advertisement program and othcr merchandising efforts all to thc dixect benefit of the Game.
b . The Market Development Fund shall be kept in addition to the Marketing Budget, bc paid for by GOD and bc in an amount not lcss than $600,000.00. The Market Devclopmcnl Fund
c The marketing plan shall contain, among other things, a specific timetable, budgdetails, and strategy for expenditwc of the Marketing Budget and Market Development Fund and the specifics of any then known risk exposure possibilities regarding Late Payments, including associated dam, deliverablcs and amounts. The markcting plan shall also include a detailed public relations plan and schedule, including timelines for initial product and partnership announcements, trade shows, preview toun and the like. The marketing plan and any modifications thercof shall be consistent with Article 2 herein and subject to tfrc prior approval of Developer, such approval not to be unrwonably withfield, Nolwithsknding anything to the contrary in this Article 8.1, the Marketin8 Budget shall only apply to the Game, and for purposcs of this Article 8.1 only, tho tern Gamc shall not include Ports, Additional Platforms, Sequels or Add-Ons. Thc marketing plan ahall be presented to Developer no later than one year prior to the scheduled delivery of the first Gold Master for
Game.
8.2 GOD shall include DcvcIoper's name and approved logo in any advertising, pronlotion and on the cover of all packaging relating to the Game with such usage being approvd by Dcvclopcr in advance. Additionally, Developer shalt be permitted to reasonably incIudc its namc and logo on one of Uie splash screens For thc Game, in a size greater or qua1 to GOD'S name and logo. Unintentional failure of GOD to include Developer's n m e a d o r logo in any advertising, promotion, or packaging relating to the Game sha11 not be a material breach of this Agreement, and upon notification in writing tiom Developer of any related omission, GOD shall use best
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efforts to include Developer's name and/or logo prospectively. Notwithstanding the foregoing, if Developer has already reviewcd and approved an advertiscmcnt, promotion or package design, GOD does not have to consult Developer for hrture uses of materials which an:substantially similar in quaIity, theme, band messaging and trademark usage to already approvcd items.
8 3 h c h Port, Platform, Sequel or Add-on published by GOD shall have its own development schcdufc, marketing plan, marketing budget md market dcvclopment fund, as determined in
accordance with Article 8 and Article 10 of this Agreement.
8.4 Any money spent on marketing o v a the M a r k e t i n g Budget or MDF must be agreed to in writing by both partics and such additional amounts spent shall be considered "Additfond Marketing." With respect to any ScqueI, Add-ons or Ports developed pursuant to Article IO, GOD shall use reasonable efforts, in accordance with prevailing industry standards, and tcnns set forth in rhis Article 8 to market and seIl such items and, in connection therewith, shall establish a -marketingbudgef Ibr each'jiroduct to bc spent &such amanncr as GOD shall deemapprop6gc to market the Game Units Platform(s); provided, however, that the general marketing plans and saatcgics thercforr: employed by or on bchalf of GOD shall havc the prior approval of Developer.
8.5 Nothing in this Agreement will prtvent GOD fiom marketing any other work or product, whettier or not similar to or competitive with the Game, the Manual or any Derivetive Works; provided, however, that such work or product does not infringe upon any intellectual property rights of Developer or the confidentiality agreement made between the Parties.
9, INTELLECTUAL PROPERTY
9.1 Ownership,
a. Developer shall be the owner of all intellectual property rights in the Game, Game Trademarks, Derivative Works and a11 Deliverabtes (including without limitation, merchandising items, logos, ctc.) related thereto created or devcloped by or on bchalF of Developer, including without limitation, all copyrights, trademarks, patents, trade secrets, and other pmprietary rights. The Game, Derivative Works, and the Delivcrables related thcrcto shall not bc considered works made for hirc under the Copyright Act.
b. GOD shall be thc owner of all intelleclual property rights in all marketing and advertising materials directly created by GOD ("Publisher InteIlectud Property"), subject to any undedying rights of Developer. GOD hereby grants to Devebpcr a worldwide, non-
exclusive, royalty-free, and fully paid-up licensc (to the extent sub-licensable) to use Publisher Intellectual Property (olhcr than GOD'S namc or tile namc of Publisher's affiliates) during tho Tenn of tiiis Agreement. If this Agrecmcnt is terminated by GOD during the Tcnn for material breach of Developer, this licenses shall automatically cxpirc. If Dcvcloper wishes to utilize any promotional or marketing maferiaIs, or other works created by or on behalf of GOD (other than those created by Developer) in support o f the Game hereunder (or othmise), Dcvetopcr shall first propose the nature of such use to in writing GOD, and GOD shall have the right of approval of any such use subject to terms to be negotiated by die parties in good faith.
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Dofing thc Term, DtveIoper gnnts to'COD the nonexclusivc right to publicly Use dl of Dcveloper's intellectual property rights in the Oamc (and for Ports, Add-ons and Sequels) and the Dcliverables related thereto, including, witllout limitation, all of Dcveloper's patents, copyrights, and trademarks, in connection with the publication, distribution, marketing, promotion, and advertising of the Game andlor the Deliverables related thereto, as provided in thc liccnscs granted in this Agrcemcnt.
9.2 GOD shall place on cach Game Unit, packaging, and the Manual, notices of all patents, copyrights, and trademarks provided in writing to GOD by or on behalf of Developer on or before the projected delivery date for the Beta version (or earlier, if reasonably requested by Developer) o f the Game as set forth in the Development Schedule. In the event of electronic distribution of the Game, GOD shall place notices of all such patents, copyrights, and trademarks in a manner adequetc t o place third on notice of Derelopcr's Fn~ellcctuaI property rigl~ts. -.. parties ..-9.3 GOD shall include either in the packaging material of the Game, the Manual, and/or as a upop-upn installation menu to be incIuded in the Game, an end-uscr limited license ("EUW] and warranty apjrecment as dccmcd necessary by GOD and Dcvelopcr. Such EULA and
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be widhcld. In the event of electronic distribution of the Gamc, GOD shall include such cnduser limited license and warranty agrccmcnt as a 'popupn insratIation mcnu to be included in thc Game.
warranty agreement must have prior approval by Developer, such approval not to unreasonably
lo. SEQUEL, PORTS, ADD-ONS AND TRANSLATIONS

10.1 Subject to the terns of this Agreement, Developer hereby grants to GOD the right of first n b a l and last matching option for Add-Ons, Ports,and one Sequel.
a. If Bcvelopw dcsbes to devclop an Add-On, Port or Saqucl, Developer shall notify GOD
in writing of its intent to create such product and GOD shall have thirty (30) business days from rcceipt of such written notice either lo i. elect to publish such produc~in which event the Add-On, Port or Sequel. Said negotiations shall reasonably take into account then current markct conditions for game development and scope of work for any suclt Add-On, Port or Scquel; OR ii. Subject to Section tO.l(d), altow Dcvcloper to negotiate witb third patties regarding such product and sign a deal witb such third paities to publish the Add-On, Part or Sequel.
For thc Scquel, GOD'S thirty (30) business day time period L o rcspond to any notice from Developer under this section, shall not begin to accrue until at feast ninety (90) days after
approval of the Gold Mnsttr o f the applicable Gamc hereunder.
b, In the case where GOD initiates discussions regarding devcloprnent of an Add-On, Port, or Scquel, DeveIoper shall have thirty (30) business days from receipt of such written notice to elect one of the foliowing two (2) options:
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i. Decline to develop the Add-On, Port or Squel, in which case GOD shall have the right to develop the Add-On, Po& or Sequel with a third party developer, subject to Developor having a last option to ma& such tennis; OR ii. Elect to develop such Add-On or Fort on its own, ,subject to rhc terms of this
Agreement, with only thc noa-royalty financial t e r n , schedule and marketing budgct to o in writing by the parties. If Dcvclopcr clccts be negotiated in good faith and agrced t lo develop such Sequel ort its own, all terms will be negotiated in good faith betsvcen the Patties at such time, subject to Section lO,l(e) below. Said negotiations shall reasonably take into account then cumnt markct conditions for game developmcnt and scope orwork for such Add-On, Port or Sequel. For thc Sequci, Developer's thirty (30) business day time period to @pond to any notice f r ~ m GOD under this section, shall not begin to accrue until at lcast nindy (90) days after approval of the Gold Master of thc applicable . . '. Game hereunder. *"
c. If GOD develops or has developed an Add-On, Port or Sequel pursuant to this Agrccrncnt, Developer shall be entitled to a Fiftaen percent (15%) royalty of such product's Net Revenuc,
d. ShauId GOD not exercise an option with respect to any Add-On, P o r t or Sequel which GOD has an option to publish and/ar devclop hereunder, or should the parties not bc able to agree in good faith as to t e r n for the devclopment orany Add-On,Port or Sequcl for which an option under this Artiole 10.1, Dcvetoper shall be GOD has indicated a desire to e x e ~ i s e
h e to ncgotiatc with third parties md shall notify GOD in writing in detail of any third party offer to dtvclop such product during the Term. GOD shall then have tire right to match the terms of such third party offer, said rnatcl~ing tight to be exercised within fivc (5) business days of GOD's rcweipt o f said notice fram Devclopcr. Notwithstanding anything to the c o n w in this Apement, ifCOD declincs to publish any Add-Qn, Port or Sequel, GOD's rights to devclop such Add-On, Port or Scqucl shall bc waived, and Developer shall have thc right to develop, publish, distribute, market, promote or otherwise exploit such Add-On, Port or Sequel and any other future Sequel, Add-ons and Ports wilhout any further obligation to
GOD.
e . For any Port or Add-on developed by Developcr under this Agreement, Dcvclopcr shall contribute twenty five percent (25%) of the overall dcvelopmcnt budget as additional Dcvclopcr Dcvelopmtnt Funding. For any Scqucl dcveloped by Dcveiopcr under this Agreement, Developer shall contribute twenty percent (20%) of the overall developntent budget as additional Developcr Development Funding.
10.2 Notwithstanding the language above in t h i s Section 10.1 and for a period of Nine (9) months from the EEective Date ("PS3 Option Pcriod"), GOD shall have the cxctusivc first right of refiw;al to publish the PIayStation 3 port ("PS3 Port") of the Game. If GOD exercises such right, the tcnns for such Port shall be amended to this Agreement and GOD will increase the Publisher Development Funding by an additional one million five-hundred thousand dollars ($1,500,000.00 USD) for devclopment of the PS3 Port, and shall increase Developer Developrncnt Funding by an additional five-ilundrad tbousand dollars ($500,000.00 USD). Should GOD opt to not exercise this PS3 Port option in thc PS3 Option Period, Developer shall
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bc Erct to negotiate with a third party ngarding t l development, ~ publishing and distribution of the PS3 Port of the Game. Prior to executing a dcal with a third-party, Dcvtlopu shall offer a last option to GOD to publish and distribute the PS3 Port under the tcrrns agreed to by Devcloper and the third-party publisher, Such Iwt option shall expire ten (10) business days after Developer's last option notice to GOD. Notwithstanding a n d i n g to the contrary in this Agreement, if OOD dots not opt to wercisc this last option, Dcveloper shall be fk and clear to work with said third party publisher for the development, publishing, distribution, marketing advertising, promoting, or otherwise exploiting such PS3 Port without any fbrthcr obligation to GOD with respect to such PS3 Port.
103 GOD slull be responsible for creating Tramifations of thc Oamc for other markets; provided, however, that Devclopcr a m to support (is. incorporate the Translation into the Game) up to five (5) singlc byte Translations and one (I) double byte Translation, upoa GOD'S
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rqucst, at no additional cost to GOD; provided firther, howcvcr, that Dcvelopcr .. -shall only bc 'responsible for>ypd;jhing TGnsfiiions h ' t&essential to Game-Play and product integrity, For purposcs of this Article 10.2, the tern "essential to Game Play and pmduct integrity shall specifically exclude tcxt that is used in scripting, program interfacing, chcats, game tools (i.c., level editors) and high-level console commands, as the definitions of such terns are generally understood in accordance with prevailing industry standards. Developer shall have thc option, but not the obligation, to support any additional singlc byte or any double byte Translations of the Game. Sf Developer elects not to support such additional single bytc or any double bytc Translations of the Game,GOD may do so directly or have it done by a third party, and the reasonable actual cost of such support shall be included in the Publishet's Overhead. Notwithstanding anything elm in this Article 10.2, GOD shall undertake a11 reasonable and ncressary configuration tcsting for each Translation at GOD'S sole cost. Notwitl~standing anything to the contrary in this Article 10.2, in the event a Translation is underQken for any Game, (i) Developer shall provide all reasonable and necessary access to its intellectual property and other proprietary information for thc sole, limited purpose of enabling such Translation to occur, including, without limitation, imrncdiateIy providing to GOD a complete copy of all source code and documentation (including source code comments, in appropriate format), then in existence; and (ii) such access shall bc granted pursuant and subjcct to ArticIa 12 and shall not comprornisc Developer's rights in such Game. 10.4 In no event shdl a Port or Add-On be developed pursuant to Article IO.l(b)(i) without the prior written agreement of Devcloper and GOD selling forth 0)the terms of the dcveiopment schedule, marketing plan, marketing budgct, development budget pertaining to such Port or Add-On; and (ii) the third party developer then selcctcd to complete such Fort or Add-On. During the development of a Third Party Product, GOD and such third party responsible for tho development of the Third Party Product shall consult with Developer during key stages of development of such product and shall include all reasonable design and tclchnical suggestions made by Developer to such Third Party Product. GOD shall deliver design doouments, the first playable beta version of any such Port or Add-On, and any final vctsion of the T h i r d Party Product to Developer for its approval prior to release and/or development (as applicable) thoreof. developer sball have ten (10) business days to approve or disapprove of (he desilgr documents and/or playable version, and any disappmval must bc made on a good faith basis with an explanation in writing. Failure of Developer to not@ GOD of its approval or disapproval within ten (10) business days shall be deemed an approval. GOD may not relcasc a Third Party Product
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without Developer's prior approval, such approval not to be unreasonably witldteld. If Developer approves the Third Party Product, GOD may use Developer's copyright trademarks, patents or other proprietary information on packaging, advertisements and otlter m a r k e t i ~ materials as pre-approved by Developer. GOD may not incorporato any of Devctoper's copyrights, trademarks, patents or other proprietary Information, at Developer's reasonable requast, so as to create confusion that such Thid Party Product originated with or is dcvclopcd by Developer, but GOD may state that the Third Party Product is an "authorized" product of Developer and GOD. I05 For purposes of this Agreement, clch -Port andlor Add-On shall be treated as a new and separate Game, as defined herein, subjcct t o the terms of this Agreement (including, without limitation, Artick 6; provided, however, that such Game shall bc subjcct to its own marketing plan, marketing bud@ and the subsequent devdopmcnt schedule rcfcrenced above, and specifications as agreed to in writing by Developer and GOD. All expenses related to Ports ---. . "," * -- .-.*. . andidr~dd-Ons shall be cross coljaterali~&for the purpose of calculating Net Revenue due to thc Partiesheteunder.
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11. MERCHANDISE, NON-INTERACTIVE MEDIA DERIVATIVES
shall be consistent with Article 2 herein subject to the prior approval of Developer, such approval not to be unreasonably delayed or withheld. In the event GOD elects to not devclop any of such materials, GOD shall so noti@ Devtlopcr in writing, in which event the rights of GOD to Use such matetials shall revert to-Developer.
11.1 000 ahli have t h r c x c l u s i v e right and licmse (and the tight to sublirmre), but not& the obligation, during the Term, to develop and distribute and hint books, strategy guides, soundprovided, however, that such items tracks, and similar materials for the Game (UMorchandlsem);
certain nan-interactive media (namely, commercials constituting less than one (1) rninutc in length), provided however, that such items shall be consistent with Article 2 herein and subject to the prior written approval of Dcvefoper,such approval not to be unreasonably wifllhcld. In the event that Developer approves such written request, then, subject to Article 9, such items may be developed and Used by or on behaif of GOD solcly in conjunction with the mmarkcting, sale and distribution of the Game pursuant to this Agreement. All such sales initiated by GOD &om exploitation of Merchandise in Section I I shall, unless otherwise a p e d to by thc Parties, bc considered MiscclIaneous Revenues.
11.3 The patties agree that Developer is not granting any rights other than specified in this Agreement. For example, for purposes of clarity, but not of limitation, Developer is not granting GOD a right to sell, license, subliccnse or athcwise exploit the Game,Pons, Add-ons, Sequel or any other Intellectual Property for movies, novels, television shows, or animes (hcreafier "Excluded Pmducts"). For any exploitation of Excluded Products by Developer, Developer shall pay COD a royalty as specified in Article 6.10 of this Agreement with the attendant accounting obligations of Developer in Article 7,2,7.3 and 7,4 of this Agreement.
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11,2 GOD shall have the xclusive right and license (and the right to subliccnse), but not the obligation, during the Term to develop or otherwise Use ccctain Game specific merchandise (including, but not limited to, tec shirts, posters, key chains, cups, frisbees, and clothing) or
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12. CONHDENTlAL INFORMATION
12.1 Thc Parties to this Agreemat ~dcognr'zcthat, in connection with tha pcrfomancc of this Agreement, each of them may disclose to the othcr Confidential bformation. Confidcntial Infomation shall not include any information:
a . that the receiving party can show by documcnory evidence was known to the receiving patty on or prior to the date of its disclosure to the receiving party by the disclosing party; or b, that becomes publicly known, by publication or otherwise, not due to any unauthorized act or omission ofthe receiving p ~or , c that is subsqueatly disclosed by thc disclasing party to any person, firm or corporstion on a non-confidential basis; or d. that the receiving party ~ , - c ~ g c & i y e lshow y by docqp~taryc y j d y q that such -iriTo"iiiii&on wiidevih&&I independent ofany acccss ro thc Cmlidential Information.
12.2 Confidential Information wiII be disclosod krcundcr softly for t f ~ a purpose of dcvcioping the Game and thc Use of the Game Units as autl~orizod under this Apcmont. The receiving party agrees to accept disclosun of thc Confldcntial Information and to cxcreisc the same dcgw of can to maintain the Confidential Information secret and confidential as irs employed by the disclosing party to preserve and safeguard its own materials and Confidential hfonnation.
12.3 Nothing contained herein shall be dccmcd to limit the right of 00D to usc, develop or market ideas or games similar to or competitive with thc Gsmc so long as such action taken by or on M l f of GOD does not infringe upon any copyright, trademark, trader secrets, or patent of Developer or use the Confidential lnfomation of Dcvcloper without Developer's prior written consmt.
12.4 Confidentid Information ghall remain the propcrty of the disclosing p a y ond shtl nat bc disclosed or revealed by the receiving party or to myme else occcpt empioyecs of thc w i v i n g party (or in the case of GOD, m b c r s of its Ooard, employees and o f i m ) who have a m d to know tbc information in connection with devclopmcnt of the Game and the Use of the Game Units, and who have entered into a confidentiality agreement with the receiving party under which sucla employees arc required to keep confidcntial the Confidcntial Information of the disclosing party, and such employes sllall be adviscd by the receiving party of the confidential nature of the information and that tho Information sftall be trcatcd accordingly. The rccoiving party shall be liable for any improper disclosurc or misuse of thc Confidcntial Information by its employees.
12.5 Notwithstanding anything in lbis Ag~ecrncnt to the contrary, it shall not bt o bmch of this A p m e n t for cither party to disclose Confidential Information nquind to be disclosed in connechechon with an admitlistdve, n g u l a t ~ y or judicial ~foctssor pnxding, provided, however, tttat prompt notice to tba party owning tbe Confiddal Infomation is g i m of the possibility of such disclosure and that t k party which may be compelled to disclose shaft use nasonablegood faith efforts to nsist su& disclosure.
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13. REPRESENTATIONS AND WARRANTlES
13.1 Developer represents, warrants, covenants and agrees to GOD that:

a. Except for any materials mated or developed by GOD or a third party on bchalf of GOD, thc Game is the originol work of Dcvclopcr and/or Developer holds full right and title to the Game and the Usc of the Came by or on behalf of GOD will not infringe upon or misappropriate any goodwill, copyright, trade secret, trademark, privacy or publicity or other
proprietary rights of any othcr parties,

b. Developer has not granted nor shall it grant my rights to the Game or any underlying rights to any other parties that conflict with the rights granted to GOD pursuant to this
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c. Nonc of Dcvcloper's equity holders, directors, officers, members, employees,consultan&, contractors or agents llave any rights to the Olwnc or any element thereof tliat have not bccn assigned or Iicenscd to Developer to the cxtent such rights would conflict with the rights granted to GOD pursuant to this Agreement.
d. Developer bas authority to enter into and to become lcgally bound by this Agreement. DeveIoper has obtained all necessary consents to cntcr into this Agreement and to grant the rights and licenses granted and perform its obligations hereunder.
e. This Apement has becn duly and validly authorized by Developer and is a valid and binding commitment of Dcvelopcr enforceable in accordance with its terms.
t Therc are no (nor will there be any) grossly negligent or intcntionnl, acts or omissions by or on bcllalf of Dcvelopcr which ttave caused there to bc any other patcnts, copyrights, trademarks or other proprietary information underlying, utilized in or contained in the Game other than as identified to GOD in writing as of the execution date of this A~rccment. In thc event that any other patents, copyrights, trademarks or other pmprietary information belonging to any third party we utilized or incorporated in the Game following the execution of this Agreement, Dcvelopcr sliall notify GOD in writing before its dclivcry of the Gold Master to use such third party intellectual property, and shall provide GOD with proof of such third party's consent for tlw intellcctml property to be used in the Game. Dcvelopcr, at its sole cost, shall take all actions nccemry to obtain the rights to use such intellectual property in the Game. If Developer notifies GOD of any alleged infiingcmcnt aitcr the delivery of the Game to GOD by or on bcbalf of Developer but prior to the first shipment of the Gamc by or on behalf of GOD, GOD shall have the right, but not the obligation, to (i) terminate this Agreement in accordance with Article 18, (ii) defend itself, Devclopa andor the Game against any claims or procedures arising from or as a result of such alleged infringement, or (iii) act athenvise in accordance with the terms and provisions of this
Agreement.
g. That the Gold Master for the Game:
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i, will operate in accordance with all applicable design specifications set forth in the Specification and Development Schedule exhibits hereto and with commonly accepted standards for operation of such product; ii, if appropriate will pass testing and specilkations demanded by ticcnsors (for exampIc, Sony, Nintcndo, Microsoft) of applicable platfonn(s), provided Developer is given reasonable notice of the date of such submission(s), and shall further hnvo right to approve said dates, not to bc unreasonably withheld. iii. will bc fiee of at least eigbty percent ( 8 M ) of known Bugs and one hundred percent (100%) of Material Bugs. iv. wilt be free from any IZastcr Eggs andlor otflcr hidden or locked content, except as may be approved in writing by GOD upon ten (10) business days prior written notice, and v, will operate and run in a reasonable and efficient buslncss manner as described in Developtr's user and system conliguration documentation . . . that fully - - explains . thc opcntion and desigof tGe%ame.
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In the event Dcvcloper, its cmployccls, agents or reprcsentlttivcs incurpatate an Easter Egg or hidden andfor locked content into the Game, which content has not been pnviously expressly disclosed to GOD in writing, and approved by GOD in writing, that is commercially released, provided that such Easter Egg (or hidden and/or locked content) depicts strong sexual content; or which could mutt in felony criminal charges against GOD or othets; or wl~ichcould be reasonably considered to bc libelous, defamatory or slanderous against any person or entity; or which violates cotifidential or proprietary information, copyrights or trademarks of any party otf~er than Devclopcr, GOD shall have the right to hold all Nct Revenue due to Developer in escrow for payment of any and all fines, judpcnts, reimburscrnonts and other direct costs caused by any such Easter L3gg without being in breach of this A~~recment. Any Royalties remaining in tscrow pursuant to this clause will be retcascd by GOD no sooner than six months aficr the discovery of such Easter Egg and as saon as reasonably practicable afier extinguishing any and all claims and or pymcnls ncccssary as a resuit thereof. Devclopcr shil promptly provide GOD with a patch that removes such Easter Egg(s). This pamgraph is without exclusion to GOD'S other rights and remedies in this agrccrncnt for a material b m c h by Dcveloper.
Notwithstanding the foregoing, GOD'S right to Itold payment of Net Rtvenuc hercundcr shall not be valid in a good faith dispute betwcen GOD and Dcvcloper over whether sornetlling is an Easter Egg or not. Insuch a case, binding arbitration, defined in Section 20.3, shall nsoIve such good faith dispute, pravidcd that GOD may withhold in escrow Net Revenue o t h e ~ i s c due to Devclopcr during the pendancy of such ahitration, and should h e arbitration be resolved in Developer's favor, such funds will be rclwscd with interest at tilt Interest Ratee
k Developer will use its k t efforts t o develop a high quality Game.

13.2 GOD rcprcsents and wanants to Developer as follows:
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a, This Agreement has been duly and validly authorized by GOD and is a valid and binding commitment of GOD enforceable in accordance with its terms.
b. GOD has authority to enter into and to become legilly bound by this Agreement. GOD has obtained all necessary consents to enter into this Agncmcnt and fulfill its obligations
hereunder.
c. GOD will comply with all relcvant laws and regulations in marketing and sclling the
Game to end-uscrs,
d. The execution of this Agreement by OOD does not violate any agreements, rights or obligation existing between GOD and any third party,
ability to discharke its obligations.".*. under. this and shall . .-..e, GOD has the financial .. Agreement , , . . . timely honor i& financial obligations to Developer;
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I. GOD will pay when due (or timely contest in good faith) any and all sales, excise, income or other taxes or tariffs of any nation, state, agency or insbumentality thereof levied upon or o this Agreement. Notwithstanding the foregoing, any taxes or tariffs wliich anc applicable t asscssed to GOD and applicabIo to sales and/or shipping of the Game shall be deducted from Gross Revenue prior to calculating Net Revenue hercunder as a COGS deduction. It is understood that GOD does not, by virtue of this warranty and rcprcsentation assume responsibility for any of Developer's tax conscquenccs for revenue it receives by virtue o f this Agreement.
g. GOD shall use its best efforts to market, promote and cxploit the Game, subject to its right
to terminate for convenience.
b. GOD has no other arrangement or interests that are inconsistent or in conflict with this Agrcemcnt, or that would prevent, limit, or impair, in any way, GOD'S pcrf'cc of any of its covenants or duties herein sct forth.
14. INDEMNIFICATION
Developer's agrecmcnts, rcprcsentations or wartanties hercin. Upon notice h m GOD of any such Claim being advanced or commenced, Developer agrees to adjust, scttlc or defend the same at Devdoper's sole cost, with GOD'S counsel of choice and underGOD1ssole wntrol; provided, however, that no such scttlcment or adjustment shall occur without the prior written consent of GOD,sucl~ cansent not to be unreasonably withheld. Each GOD Indemnitec shalI have the right, but not the obligation, to participate, at its own expense and by its o m counsel, in the dcfcnse of any such Claim, and, in such evcnt, thc parties hereto shall cooperate with each other in the defense of any such action, suit or proceeding horeundor, Developer shall not be obligated to indemniEy the GOD Indcmnitccs to the extent that:
14.1 Dcveloper shall indemnify, defend and hold hm~less GOD, and its partners, officers, members, employees, agenls, successors and assigns Indcmniteesn), against any and all demands, claims, damages, judgmene, costs, (including rcasonablc attorneys' fecs), penalties and liabilities ("Claims") based upon, relating to, or arising out oFa breach or failure of any of
a . tht Claims a n based upon or relate to compliance with GOD'S designs, specifications, or instnrctions or inwrpol-ation of technology, text, graphics or other material provided by GOD;
b. the Claims are based upon the Usc of the Gamc in combination with software, hardware, dab or other materials not supplicd by or on behalf of Developcr (other than the combination theteof with the other programs and equipment required to enable the Game to be used as
reasonably foreseeable by Developer) and but for such combination, the Gamc and its Use wouid be non-infringing;
entity other than Developer or its subcontractors and which modification was not authorized or by . . -. . -.~ - Devclopcr or its s~contmctors;
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c, thc Claims are bascd upon or relate to any modification t o the Game by any person or
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d, the Claims arc bascd on or relatc to the continuing Usc of an allegedly infringing version of the Game by GOD if such alleged infringemcnt could have been reasonably avoided by GOD through its Usc of a different version of the Game made available to GOD by Developer, which differcnt version is substantially similar in form and hction to the
allegedly infringing Game, but which differcnt version is non-infringing.

14,2 GOD s1;lall indemnify, defend and hold hmnicss Developer, and its ofitccrs, employees, agents, publishers, successors and assigns, against any and all Claims bascd upon, relating to, or arising out of a breach or failwe of any of GOD's agrccments, representations or warranties herein. Upon nolice from Developer of any such Claim being advanccd or commenced, GOD agrees to adjust, settle or defend the samc a1 GOD's sole cost; provided, however, that no such settlement or adjustment may occur without he prior written consent of Developer, such consent nor to bc unreasonably withheld. Developer sl~all have the right, but not the obligation, to participate, at its own expense and by its own counsel, in the defense of any such claim, and, in such evcnt, the parties hento shall coopcratc with cach other in the defcnsc of any such action, suit or proceeding hereunder.
I43 Should any Game, Add-On or Port become, or in Dcvdoper's reasonable opinion be likely to become, ~ h subject c of an actual or lhrcatetlod claim of infringement or misappropriation of third party rights, thcn GOD, upon reccipt of written notice from Developer, shall postpone the release or cease further sales of the Gamc and Developer shall, at Developer's option and expense, pcrform any, o r any combination, of the following: (i) procure for GOD the right to continue to Use the Game; (ii) as is practicabIc, immediately replace or modify the Game so that the Game bccomcs non-infringing; or (iii) refund to GOD all costs incurred by or on behalf of GOD relatcd directly thereto and all payments madc by GOD to Developer for such Game hereunder. Dcveloper shdl indemnify GOD for all costs and expenses resulting from any delay in the release of the Game pursuant to this paragraph, except in such instances where the Port or Add On is created by a third party pursuant to this Agreement, and the actual or threatened claim does not relate to Dcvcloper's contribution lo the Game
15. D1SCLAI:MERLtMITATIONOF LIABILITY
I N NO EVENT SHALL ERHER PARTY BO LfABLE TO THE OTHER PARTY UNDER OR M CONNECTION WITH nJIS AGREEMENT FOR ANY LOSS OF PROFIT OR ANY OTHER COMMERClAL DAMAGE INCLUDMO, WITHOUT LIMITATION, WClDENTAL,
CONSEQUEM'lAL, SPECIAL, EXEMPLARY, PUNITME OR OTHER INDIREGT DAMAGES OF ANY NATURE, FOR ANY REASON WHATSOEVER NCLUDMG, WiTHOUT LIMITATION, EITHER PARTY'S BREACH OF THIS AGREEMENT, THE EXPIRATION OR ANY TERMINATION OF THIS AGREEMENT, WHETHER SUCH LIABILITY IS ASSERTED ON TfCE BASIS OF CONTRACT, TORT (INCWDINO NEGLIGENCE OR STRICT LIABILITY) OR OTHERWISE, W E N IF THE PARTY HAS BEEN WARNED OF THE POSSIBILITY OF SUCH DAMAGES,
16. THIRD_-PARTY - INFRINGE-M.ENT
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16.1 In thc event either party becomes aware of an infn'ngcment of the Game, Dcrivativc Work or any component thcrcef by a third party, it will promptly notify the other party in writing. Developer shall have the fitst right to pwuc any infringement action, and 0 0 D hereby grants Developer the right to sue in GOD'S name. Such action shall bo at Devetoper's sole oxpensc. Any recovery resulting from such an action shall be paid f i t t o rccoupment of Developer's expenses with interest thereon at the Interest Rate, and thereafter shall be s h a d between G O D and Developer as follows: Developer sevcnty pcrccnt (70%); OOD thirty percent (30%)
16.2. In the event Developer does not elect to pursue such an inkingemcnt action, GOD shall be cntitled to do so at its sole expense with any ncovcry being applied first to recoupment of GOD'S expenses with interest thercon at thc Intcrest Ratc, and thereafter shared between GOD and Dcvelopcr as follows: Developer thirty pcrccnt (30%); GOD seventy percent (70%)
17. TERM
of any subsequent Port, Add-ons or Scqucts of the Game, whichever is later, unless o t h i s c terminated as provided in Article 18.
17.1 The term of this Agrecmcnt shall be fiom the dato of its execution through the cighlh (8th)anniversary of the date of the first shipment of any Game Units pubtished by or on behalf of O D pwuant to this Agnuncnt, or (ii) the liflh (5') anniyersary of the tint date of shipment
18.1 Termination.
a In the event of a material bmch of this Agreement by Developer snd such material breach is not cured by Developer within thirty (30) days of written notice (the "Cure Period"), then GOD shall have the right to laminate this Agceement. In the event of a material breach of this Agreement by GOD and such material bmch i s not c u d by GOD withiin thirty (30) days of written notice, the Dcvcloper shall have the right to terminate this Agreement. Notwithstanding thc foregoing, the cure period for GOD'S breach due t o late
PUBLtSIlING AGREEMENT Pmst sbate
I r v v It 7 N 7
- Page 28
rniIcstonc payment is ten (10) business days. Nothing contained bcrein sftall in my way limit any notifying, non-breaching party's o h r rigbts and remedies under this Agreement,
b. Without prcjudice to any othicr rights or remedies available to GOD,GOD shall have the right, in Its wle discretion, to h c d i a t a l y terninate this Agtecrncnt upon written notice t o Devclopcr in the event of the occurrcncc oFany onc or more of the following (A) Devetopw discontinues the devetopmcnt of the Gamc for a period of more than five (5) business days, cxccpt for delays or failure of pcrfomanco resulting from acts beyond its reasonable control, including without limitation, acts of Gad, acts of war, governmental regulations, power failures, floods, cadquakes ar other disasters. (B) Developer fails to deliver a miIwtone in accordance with the Deveiopment Schcdule and such failure is not cured within forty five (45) days or (C)Developer maka any assignment for the benofit o f creditors or files a petition in bankntptcy or is adjudged bPnkrupt or becomes insolvent or is placed in the hands of a receiver or if thc equivalent of my of tho pmctdings or acts referrcdjo in th_iiclausg though known and/or dtisigiiitdd by sb%c ottic-r'n&c & icrm i n b y corntry camprising thc TEnitory shalt occur.
c, Prior to Devcfoper's deIivery of the Beta release, GOD shall have be right to terminate this Agreement (and/or the development of any or afl Ports, Sequels andlor Add-on&)) for convenience and without a w e before fino1 acceptance of each Port, Scqucls or Add-On(s) on thirty (30) days prior written notice.
d. Without prejudice to any other rights or remedies available to Dcvcloper, Devetaper shall have the right, in its sole discretion, to immediately tcnninate this Agreement upon written notice to GOD in the event of the occumnce of any one or mom of the following (A) GOD fails to commercially mJcase the Gamc aRer Four (4) months of Dcvcloper's delivery and GOD'S acceptmce (and manufachmrs* acccptnnce) of a final Cotd Master (subject to 18.1(c) bclow); OR (B) GOD makcs any assignment for the bcnetit of crcdiktts or files a petition in bankruptcy or is adjudged bankupt or becomes insolvent or is p l a d in the ltands of a receiver or if the equivalent of any of the proceedings or acts referrtd to in this clause, though known andlos dcsignaled by mmc athcr name or term in any country comprising the
Tcnitory shall occur. Notwithstanding the foregoing, Developcr cannot terminate pursuant to Section t 8,l(d)(A) if such delay in commercial release is (i) directly attributable t o development schedule delays caused by Developer, OR (ii) the Parties mutually a p to change tllc commercial release schedulc due to markct conditions or God's rcleasc schedule (in the event delivery of the Anal gold master is dctayed for any w o n ) , or for any othcr reason, such approval to not be unteat;onably delayed or withheld. In the case of (ii),i new target commercial rtlcase date would be set and Section 18(d)(A) would tlren apply to the; new mutually agrctd to release dab.
e. 18.2
I B Z g h u On Tennination For B & .
a. In the event GOD terminates because of material breach by Dcvclopct, GOD &dlnot be liable to Developer becaw of such termination for any damages or for any amaunts due or payable hereunder. In addition to all af tbe other of GOD'S rights and rcrnodies under this
PUDL~SIIINC AGREEMENT
Profit ahan
Itam*
- Page 29
I < ?M'!
Agreement or at law and equity, if prior to delivery of the Gold Master, GOD clects to terninale this Agreement for material breach in accordance with Sections 3.4(8) or if the Gold Master is not delivered within a period of six (6) months aficr it is due pursuant to the
Development Schodule (and absent a written agocment by the parties to the contmyf, or a brcach of the representations and warranties in Article 13(a) through Article 13(f), GOD shall have thc right to, notwithstanding anything to the contrary in this Agecement, cithcr (A) make othcr arrangements, including but not limitcd to w a g i n g third party developers, to develop the Game or (B) receive immediate repayment of the Publisher Development Funding to the extent the same has becn paid to the DcveiIoper. Upon written notice by GOD of its intention to develop the product in the manrscr aforesaid, Developer shall deliver to GOD all W o r k Product and other materials requested or required by GOD for the sole purpose of continuing the development of the product, including, but not limitcd to, the Intellectual Property, the work product and the source code and the game engine and related and Dcvcloper shall lully coopcrate with any-girt-p-arty ddc,t+oper. In such event -.materials, of continuki developm~t'ofthe produc<%;t Partics shall continuc to have tho right to tccoup any of their respective costs rclatcd to the developmcnt, manufacture or rnarkcting of Games which arc deductable from gross revcnues or otherwise recoupabft undcr this Agrccmcnt prior to any split of Net Revenue and subject to any requirements to pay a portion of Net Revenuc to Developer thereafter pursuant to Article 10, l (c) of this Agreement. For the sakc of clarity, repdlcss of any sublicense of intellectual property pursuant to t h i s paragraph, Developer shall continue to own all its intcllechral property related to thc Game. In the went of a termination pursuant to Scction t8.l(b), ( i ) GOD shall not be b. liable to Developer because of such termination for any damages includins without limitation, compensation, reimbursement, or damages on account of loss of prospective profits or anticipated sales on account of expenditures, investments, leases or commitments in connection with the business or goodwill of Davcloper, or for any othcr rcnson flowing from sucli ternination and (ii) OOD's financial obligalion to Dovefoper for said product shall be for (x) tGcn accmed advances undcr Development Schedulc for my mitestone previously dclived and accepted pursuant to this Agrccmcnt, plus (y) a pmratcd portion of thc next advance (or advances), based on the proportionate time cfapsed untiI the next milcsbne was to bc dclivcred (e.p, if milestone deliverables are 30 days apart, end GOD tcminatcs 15 days after delivery of a prior miIestone deliverable, upon that termination for convenicncc, the GOD would pay for the prior milestone dolivered and onc-half the next milestone,) c. In the event GOD terntinates this agrcemcnt pursuant to Section 18.1(c) with respect to any single Part, Add-on or Sequel, or lo the entire Agreement, and Developer continues to perform pursuant to the remainder of its obligations hereunder, tile limitations in Section 18,2(b)(i) shall apply, and GOD sl~allpay to Developer the amounts set forth in Section 18.2(b)(ii) solely with respect to such single Platform, Console Conversion, andlor Sequcl, plus (y) a portion of the next unpaid milestone(s) identified in Exhibit "8"which has been prorated to pay for one month of development costs f i m the date of termination by GOD for convenience regardless of whether such milestonc(s) has been subxnitted to toOD. In this case, GOD shall have no Auther rights, Interest or obligations as to the applicable Port, Addon or Sequel, or in the case of termination of convenience of the cntire Agreement, the
Game.
PmtcsarNc AGREEMENT Page 30

Profit share
IIVW i l 7M17
h i s Agreement for my reason 183 gvents on Termination. Notwithstanding termination of t (other tban GOD'S tcnnination of the entin agreement for convenience under Article 18.1(C)) GOD shall hnve the exclusive continuing right to market and distribute the Game (including any applicable Port, Add-on or Scqucl, for a period of nine (9) months after the cRective date of such termination.
18.4 Pankruntcy~In the event tliat Developer is subject to a voIuntary or involuntary filing for protection under federal bankruptcy laws, Developer agrees not to attempt to rcject, rescind or terminate this Agrcernent or any of its resptctive obligations hcrcundcr. Tilt parties acknowledge and agree that this Agrcement arc intcndcd to be subjcct to thc t c m and conditions o f Section 365(n) o f the United States Bankruptcy Code and, upon writtcn request from t h GOD, ~ tllc Developer and husrcc shall not interfere with the rights granted herein, including, but not limited to all of the protections nrs a "liccnsce" under this Agreement.
18.5 "h tho iv&t of a mateha1 breach of this Agreement by d0b a d rud'batcr&l br&h is not c u r d by GOD within the Cutc Period, Developer shall have the following rights:
..e*..w---."
a VDpfault occurs prior lo receipt by GOD o/Gold Master, Developer shall havc the option but not the obligation to tcnninate this Agrcement and retain any payments madc by GOD as of the date of termination. In the event of such tcrmination, Developer n a y complete the Game on its own or with another publisher with no further obligation to GOD, Dcvclopcr shall not bc liable to GOD because of such termination for any damage including without limitation, compensation, reimbursement, or damages on account of loss of prospective profits or artticipated sales on account of expenditures, investments, leascs or commitments in connection with the business or goodwill of GOD, or for any other m o n flowing from such termination, GOD shall pay Dcvefoper an amount equal to the monies c u m t l y invoiced and due, plus pro-rated work campleted by Dcvcfopcr(whether or not submitted to GOD) on the dale of termination plus one month per the Development Scltedufc and rnilestonc payment schedule.
b. //Default occurs &r receipl by GOD ofGoldMiW~r, Developer shall havc tlre right, but not the obligation, to do sny single, any combination, or all of the following: (i) terminate this Agrccmcnt complctoly and exploit tho Game on its own or with another publisher with no hrthcr obligation to GOD, (ii) rquirt GOD to refrain from boginning any new or unstarted work relatcd to the Game, (iii) rctain dl monies and development finding paid to Developer, (iv) purchase from GOD,at cost, all work in progress (v) at DcveIoper's option, eithcr (1) purchase from GOD, at cost, any existing inventory of unsold Oamc Unib or (2) rcquirc GOD to cease manufacturing of Game Units, sell all of i t s existing inventory of unsold Gamc Units over a period of three (3) months, and pay to Devclopcr any money owed in accordance w i t b the term of this Agrecment with respecC to such Game Units pursuant to the! terms of this Agreement
PUsLtSInNC AGREEMENT
Profit share
I~mr 1 ( 3M7
- Page 31
t9. TECHNICAL SUPPORT
Direct technical support for end-uscrs st~ll be provided by GOD in accordance with prevailing industry s t a n d 4 provided, howcver, that Developer, upon written request by GOD, shall provide reasanable and timely tccfurical assistance to GOD at Developer's sole expense.
20. MISCELLANEOUS
20.1 Except as limited herein, this Agreement sbalf inure to the bcnefit of, and shall bc binding upon, the suocessors and assigns of each party hereto. If a Party is acquired or sells a majority of its assets to any third party, it may do sa without the quirement ofthe o t l Party's ~ consent, If, at any time during the Tern Developer makes an assignment under this provision and a majority of its Key Pcrsonncl (as defined in Exhibit C) am no longer with Developer, GOD shall have the right to engage other developers to develop -S-q~eI,&r@ - or Add-ons. .to,..& t Game, notwithstanding Dcvelopcr's rights to clkt to develop such additional products, In the event Developer has a material change in management such that tho level of experience and talent in Developer's management team is materially diluted, andlor if Developer (as its parent company) upon purchase or assignment terminates mom than Fifty percent (50%) of its Key Personnel, Developer shall automatically be in matcriai breach of this agreement, and GOD shall have the rights specified in 18.2(a).
20.2 Both parties sitall keep this Agrecmerrt and all of its t e n s and conditions as Confidential Information.
203 Except for a suit seeking injunctive relief with respect lo Confidential Information or infringement of intellectual pmpcrty rights of a party hereto, any dispute hereunder shall be submitted to binding arbitmtion pursuant to the N~CS of the American Arbitration Association (the uAAA*), applying Texas law, willlout rcgard to choice of law provisions, with a single arbitrator appointed by AAA. Any such proceeding shall take place in Austin, Texas. Witnesses residing outside of the State of Tcxas may testify under oath telephonicatly or via such other audiofvisual means as the arbitrator approves. The prevailing panty shall be entitied to an award of its attorneys' fees and costs. A final arbitral award against oither party in any proceeding
not limit the tight of either party to commence any action or proceeding to wmpcl arbitration, t o obtain injunctivc relief pending the appointment of an arbitrator, or to obtain execution of any award rendered in any suclr action or proceeding, In any other appropriatejurisdiction or in any other manner. The parties agree to accept scrvicc of process by mail and waive any jurisdictional or venue defenses avaifable to them. This Agreement may be executed in one or more counterparts, each of which shall be d m e d an original and all of which together shalt constitute one and the same document.
20.4 For the purposes of this Agreement, notices and all other communications providcd for in this Agreement shall be in writing and shall be delivered by hand delivery, facsimile with
arising out of or mlating to this Agecrnent shall bc conclusive. The foregoing provisions shall
wquested, postage prepaid, t o the address of a party as set forth on the signature page hereof, as the same may bc changcd upon written notice to the other party- N o t b shall be deemed rcceivd
PU~LISRINGAGREEMENT
overnight confirmation, reputable overnight delivery service or certified mail, return receipt
Profitshare
- Page 32
by the party to whom it was sent upon the earlier of: (i) confurnation of hand delivery; (ii) three (3) bwincss days after mailing; or (iii) the day of facsimile transmission if sent during thc recipient's normal business hours.
any options undw of this a g m e n t to Developer shall be sent to:
Copies of any notices or othcr communications concxming default or relating to tho exercise of TirneGata Studios, Inc, Attn: PrcsidentlCEO 14140 Southwest Freeway, Suitc 400 Sugar Lsnd, TX 77478 Fax: 28 1-754.4723
Copies ---. .- of any notices or other communications concerning default or retating to the exercise of any optid* undii this QgreeiiiifitliiGOD stlaill be sent via facsimilb"ana'e6iaifI<;:^
kckson & kcksoa LLP
- --
--
Michacl k c Jackson, Esq,
70 West Chippewa, Suite 603 Buffalo, Netv Yo& 14202 Fax: 7 16 362 0246
mj@lawjackson.com
20.5 The expiration of this Agsemcnt shall not impair the rights or obligations of either party
hereto which shall have accnted hereunder prior to such expitation or termination. Without limiting the generality of the preceding sentence, the provisions of Articles 2.7, 6 ( d c ~ y for purposes of calcubifng Net Revenues due b bolh GOD and Oweloper), 7,9, ID. l(c), 12, 13, 14, 15, 16,20 (excluding 20.1) shall survive the expiration or termination of this Agreement. 20.6 Each of the parties hereto agrees to cxocute all such further instruments and documents and to take all such hrther action as the othcr party may reasonably q u i r e in order to cffcctuate the tetms and pufposcs of this Agreerncnt as statcd hcrcin.
20.7 If any provision of this Agrecmcnt sllall bc ltcld or dccmed t o bc invalid, inoperative or unenforceable in any jurisdiction, bocause of a conflict with any constitution, statute, wtc or public policy or for any other reason, such circumstance shall not have thc effect of rendering the provision in question unenforceable in any other jurisdiction or in any other case or circumstance or of rendering any other provisions hcrcin contained unenforceable to the extent that such other provisions are not themselves actually in conflict with such constitution, statute or rule of public policy, but this Agreement shall be reformed and construed in any such jurisdiction or case as if such invalid, inoperative or unenforceable provision had never been contained herein and such provision reformed so that it would be cnforccablc lo the maximum extent pemittcd in such jurisdiction or in such case.
20.8 The headings appearing at the beginning of the several Articles contained in this
Agreement have been inserted for identification and reference purposes only. Neither those
Profit share
~UsustrlNc AGREEMENT Page 33

1 t . w 15 ?Mt
headings, nor their order or placcmenl shall be used in !he construction and interpretation ofthis Agncment
20.9 This Agmmcnt and any cxhibits or addendurns hercto rapresent the complete, full and cxclusivc statement of the agreement between the partics with respect to the subject matter hereof, which supcrsedcs all proposals or prior agreements, om1 or writtcn, snd all other communications between tho partics relating to the subject matter of this Agreement. This Agnement is superior to any and all invoiws or notices or other suob documentation that may be generated after cxecution of this Agreement. In the event any conflict arises between the stipulations of this Agreemcnt and any other documents or writings, the terms and conditions of this Agreemcnt, shall control.
20.10 This Agtetmcnt may onty be changed by written amendment signed by both parties or by their duly autl~orizedagents having authority equal to, or llighcr than, that of the signatories to .-Iht originaf Agreement.
20.11 All of the rights and remedies for each of Ihc partics set forth in this Agrecmcnt shall bc cumulative and shall not intcrfcre with or prevent the exercise of any other right or remedy that may bc available to such party.
20.12 With respect to all trademark licenses granted hereunder t o any party, owner thereof shall have the right to inspect and approve the quality of any goods or serviccs produced in accordance with or subject to the license. Such approval strall not be unreasonably withheld; provided, however, that the quality of the goods or services produced by liccnsco is substantially similar to the quality of the goods and services produced under the s a n e trademark by Iicensor.
20.13 Unless specifically stated otherwise in the applicable Article, in each instance that Developer must &v its prior consent or approval (writtcn or otherwise) to GOD for a certain action, event, transaction or other activity to take placc, such approval or constnt shall (i) not be unreasonably withheld; and (ii) automatically bc dccmcd to have been givcn by Developer ten (10) business days after Dcvetopcr receive a request from or on behalf of GOD for such approval or consent, unless Dcvetoper provides GOD with written notificatian otherwise.
20.14 Devclopcr is an independent contractor, and nothing in h i s Agmcment will be deemed to placc the parries in the relationship OF employer-ixnployce, prhcipat-agent, partners or joint vcnturecs. Developer will be responsible for any withholding taxes, payroll taxes, disability or olher insurance payments, unemployment taxes and otlrcr similar taxcs or charges on any
distribution or other payments rcccived by Dcvclo(lcr hereurrder,
PUELIS~~ING AGREEMENT
Ptont rharc
- Page
34
kmr I < 3M1
IN WITNESS WHEREOF the parties have ucculcd this do67 and is decmcd to be effective as of ~ U W L
Gone Off Deep, LLC
109 East 10" Strect Austin, TX 7870I /
Address:
Timaate Studios. Inc, (Dcvclopcr)

Address: 14 140 Southwest Fmway+Suite 400 S u m Land. TX 77478
(fax) 281-754-4723
By:
PUBLISIEMGAGREEMENT Profit sham rrtw I< 7 ~ 7
- Page35
Dcscrlaiion of Came
GAME TITLE:
Scctlon 8
GENRE: TARGET RATING: PLATFORMS:

GENRE REFERENCES:
"
T for Tccn
First Person Shoolcr
PC: Windows XP, Visla Xbox 360
---
CAME D ~ S C ~ & ? O N : W i o n 8 is a Isrgo-wlc, sci-fi first pmon shobtcr whet@ fat-paced action meets military statcgy in thc fat r w & sof the galaxy. Join the cpic struglc behvccn two waning factions by laking part in ficm squad-boscd combat across dcfailcd alicn workis. Choose thc experience you want to play by customizing your own squjpntcnt loadout and dynamically mipuleling the flow of combat,
*'
---
BaflfcJcld 2192, Stur Wars:Battl~mnt Il, Enerrty Tcrrituty: Quake JYws . ..-.. .. . - * ..
FEATURES: r Fast-Paced Multiplaycr Cornpcte onlinc wilh other players in 8 epic outdoor cnvironrncnts 0 Laadouts - Don't bc lockcd in by cksscs! Ciloosc an existing cquipmcnt tcnrpletc or crate your own custom loadout of wcapons, annor, and gur. r Burn-ln Spawning Drop into the banlcficid fmm 15,000 fccl, and guide your ct~arsctcr while you piummct into &e fucfighl.Spawn camping is a thing of the past. 8 Dynamic Combat Missions- A robust player-drivenobjcctiw: systcm, allowing for dynamically generated missions that iufd mcaning to combat while catering to individual ptay styles, r Dyaamlc Battlefield teavc your mark on the battlefield! Players can requisition asset dcIiverics Crom almost anywircn: on Ihc map. e State-Of-The-Art Arsenal Playcrs will employ high-tech weaponry, vct~icles, and cquipmcnt a s they lay sicgc to enemy cmplaccmcnts and strategic installations.
PUBLISHING AGREEMENT- Page A-1
W
w
E SPECIFICATIONS:
Single-Player o Tutorial Campaign o PC Skirmish 16-32 Bots o Xbox 360 Skinish 16-24 Bots
Multiplilycr o PC Onlinc 32-64 Players o Xbox 360 Online 16-32 Playcrs o PC LAN 32-64 Players
Nore: Exuct bot ... .--. player . . ' and --ntrmbem " . ro &"ddelernrirted
-.
gut~epZay tgfittrg.
FOREIGN TRANSLATIONSAND LOCALIZATION KITS: a. Single-Byte Languages: 5 4

b. Double-Byte Language: 1
EXHIDIT "C
DEVELOPMENT SCIiEDULE and MILESTONE SCHLDULX Develoncr's Key Personnel r bdcl Cltaveleh (Production1 Denis Pam (Technolaevl r Zach Foreher (Creative1 r Brett Norton (Desi~nl Phillin Morales [Art)
PUBLtSlIlNC A C R E E M W Pagt C-J
/U
Milestone 7 Gontracf Execution
Milestone 2 Pre-Production t
Milestone 3 Pre-Production 2
PUBLlSHfNG AGREEMENT Page C-2
Milestone 4 Production 1
Final list of Production defivcrablcs to bc defined as part of'thc Milcstonc 3 submission.
Milestone 5 Produetian 2
To bc dcrincd at Milestone 3.
Milestone 6 Produetjbn 3
T o bc dcfmod at Milcjronc3.
Milestone I Production 4
To bc dcfmcd nt MilWna 3,
Milestone 8 Pruducflon 5
To bc dcficd at Milcstone 3.
MItestone 0 Production 6
T o be dclincd ar Milc~stc~lc 3.
PUBLISHING AGREEMENT Page C-3
Milestone I 0 Productlon 7
To bc defined at Milcsme 3.
MIfestone ? f Production 8
Milestone 72 Production 3 !
To bc dcfincd al Milcslone 3.
To bc dcfincd a1 Milcslonc 3.
Milesfone 74 Production 17
To be dclincd at Milestone 3.
Milestone f 5
- Productlon t
To be defined at Milcstone 3.
Milestone 7 6 Production 73
To bo dcfinad at Milcsfone 3.
Milestone 17 .
Productlon 14
To bc dcfincd at Milestone 3.
To bc dclincd at Milestone 3.
Milestone 19 Productfon 76
To be defined at Milestone 3.
PUBLISHING AGREEMENT Page C-4
Milestone 211 Pmductlon I 7
Milestone 2.t Production 18
Milestone 23 = Production 20
Miiestone 24 Production 21
T o bc dcfincd at Milcstonc 3,
Milestone 25 Production 22 1Pre-Alpha

To be dcfincd at Milcslone 3.
Milestone 26 Alpha I
"Alphan means a hrlly-functioning, Full-fea~cdvcsion of the Game with complete cantent (except that up to 30% placeholder audio-visual assets shall be deemed acceptabfc), incIudinlg front-end, introductory and end-game sequences, screens, sound effeots, and music, and which is otberwisc in compliance with tile Spccificatians, even though ktlown Program Errors and Bugs may still be present.
The Alpha Vcsion shall also contain a full and completc Localization Kit for thl, PrMiuc~
AI thc discretion of LCdavclopcr,Ihc game may also cntcr a " e l d beta" tcst at Ihir Lima,
~ ~ nand t spccifiGaliood s @@red 1 0 tran~1~1k the Ptadua. Thc LocalizationKit must coatain all Tmlalion Mrletiafs and all suppadfig
inforaratioq documcnlationand l i l a
PUBLISJiLNCAGREEMENT %gc C-5
Mllestane 27 Alpha 2
Alpha 2 is a continualion oftbe Alpha process, focushg on thc:continuat dsvcloprncnl aad polish o f d l game fepturu m d assets. Tbe inkpation of ficcdbrck Cnrm quality wumaw testing i s a pivotal mmpnent of this period.
1game manual and possibla slralcgy guidca
Milestone 28 Beta 7
35ctaWmmBs a fitlly,functioning, full-fcilt~d,. substantially-mot-fr~ (mntalnmg no knownteproduciblc Bugs which cause the Game to crash) version of UK C h m with complete content displaying aII levels in compliance with the Spkifimtions, but not ia final form, a d not finally
-
tcstcd.
Product will continuc to nxcive tweaking, tuning, bug iluu'ng, and polisb as a rcsult of ongoing quality assurance
testing.
AI Bcfa I, Ihc game must bc tcady to bc us4 in an "Open Bare". This bclo should bc Wgetcd at playcrs lfral arc not dcvclopcn, publishers, or journalisu.
information,documonfationand filos.
Milestone 29 a Beta 2
tlcb 2 t a continuation o f the beto process. Product veil conhuo to reccivc lwcdthg. tuning, bug ruing, aad polisb as r mutt of ongoing qality assuruux tcsthg, wifb Opw &fa fixdbsclr bdng M b t c g r a lput ofthis pwcr;r.
PUBLISIIINC AGREEMENT Page C-6
H@
Milestone 30 Release Candldafe

Praduct i s lo ba submilled for consideration of final manufacturing.
(For All Regloor)
5 . A ~ i$,~1]
ManuntComponeotr
--
Rcadaae
q R d m e ff lc to be includedon $me help intomwrion
&, llaling last-minuts updnlcs and
Milestone 31 a Gold Master/RTM

Final version of thc product is rclcascd to the manulachmr.
PUBLISliMG AGREEMENT Page C-7

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Case 4:09-cv-03958 Document 158-3

Filed in TXSD on 12/12/11 Page 2 of 47

Coue Off Dcop, LLC

Publishing Apemont Profit S l i m Junc IS,2007

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Publishing A g c ~ l c n t Profit Sharr June IS, 2007

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Gone Off Deep, LLC PUBLISHING AGREEMENT

WHEREAS, GOD is a publisher of intemctivo video games and related products;

specifically excluding Sequels.

requests an: not considered Bugs far purposes; of this Agreement

PUBUSl[lNG AGREEMENT Profil &arc

Case 4:09-cv-03958 Document 158-3

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1.11 "DeveIopmeat Budget" means Ten Million Dollars ($10,000,OM1.00 USD).

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Protit rtran: L ~ r1 r< 7 M 7

Case 4:09-cv-03958 Document 158-3

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Developer in advance, as is more fully set forth in Article 5.4.

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Development Schedule attached as Exhibit "Cn to this Agreement.

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ptior approval by Developer, such approval shall not be unreasonably withhold.

3, GAME DEVELOPMENT, TESTING AND ACCEPTANCE PROCEDURE

PUBUSHTNC AGREEMENT Profit shere

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AND SUBLICENSING FEES

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any other deduction.

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accordance with Article 8 and Article 10 of this Agreement.

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lo. SEQUEL, PORTS, ADD-ONS AND TRANSLATIONS

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