NOTES ON CORRECTIONS TO CINEMAWARE GRANGE CONTRACT. 26 JULY 1989

CLAUSE 2a(ii) add to last line of Page 1

"such format shall cease to be part of the Software Products in Europe
and Europe shall cease to be part of the Teritory for such format in
Exhibit A.

CLAUSE 3c Final 9 lines providing price protection for Vendor in the 
casethat CW do not wish to return stock have been removed. This is not
acceptable. Considering we accept the alteration in the same clause in 
thatwe must pay for stock prior to return by CW, it is not unreasonable 
to request that these lines be returned.

CLAUSE 3d Same as above.

CLAUSE 4a(iii) Deletion of agreement maximum discount

This is a fundemental term of the Agreement. It has been agreed 
throughout that the maximum discount is 60%, unless prior agreement is 
made. I hope it is obvious that if for demonstrable commercial reasons 
the discount had to be lowered, that Level 9 would agree. 

However, to have no control over the discount whatsoever would be 
absurd - and as business people yourselves you must understand why 
the Clause should be reinstated.

Clause 4a(iii) should read:
the Discount structure at the Commencement Date are set out in Exhibit B.
Any increase in the maximum Discount or any change in the suggested list
price will be by agreement between the parties.(Exhibit B has to be
reinstated, also).

Clause 4a(vii)(6)
Here you seem to be committing to a full statement of advertising, 
publicity and promotional costs on a weekly basis - after a lapse of
75 days. 

Likewise you seem to be comitting to the same in 4(b)ii - also in the
quarterly reports licenced and non-licenced sales have been combined.
Surely to know what is owing to us, licenced and non-licenced sales 
shouldbe seperate? What was wrong with the agreed structure?

1) Monthly by format sales reports, by week
2) Fee payments by week made within 75 days of end of those weeks
3) Full accounting at the end of a quarter - as implied in your new 5a

Clause 4b(iii)
The accounting reserve has agreed to be for non-licenced sales only. You
do not hold any stock for licenced sales, therefore a return of stock
provision cannot apply. Insert in your 4b(ii), line 6 "for all non-
licenced sales".

New 4b(iii)
As set out elsewhere, the two of us have to agree to a change in retail
price - and presumably we would do this at a time when inventory was low.
Therefore I cannot see this Clause applying - as we cannot impose a price
change, it is simply not necessary.

Old 4b(iv) Deleted
This had been explicity agreed previously and needs to be reinstated

Old 4c(ii) Deleted
This was agreed, commits CW to nothing and should be replaced.


New 5

Clause a - a single year is clearly an inadequate length of time to 
maintain records - 2 years is the minimum acceptable period - bearing in
mind the licence for Grange could continue for 5 years.
Note we are already executing a confidentiality agreement within this
agreement itself.

Clause b - The first sentence is not acceptable. The second sentence will
have to be altered to a time limit of at least 18 months. The third 
sentence is meaningless.

Old Clause 5d(viii)
Should be reinstated for obvious reasons.

Page 9 New Clause 10b delete extra "and" in penultimate line

Exhibits

Exhibit B needs to be reinstated

New Exhibit B (was C)
Delete item "Product Catalogue"
       also "Other collateral items"

As previously understood, a full and specfic listing for each format 
will be agreed upon prior to manufacture.

Exhibit C (was D)
Limit of $10000 to be reinstated

Exhibit E (was F) (Proposd Brand Name)
It was understood that Grange was to be a Cinemaware product. We would 
not be making the considerable efforts to include arcade sequences if 
this was not the case, an effort that will put the project back at 
least two months. We would not have agreed to the lower guarentees if 
it was not a Cinemawarebranded produce.

This was explicitly not provisional previously - CW were relying on 
Level 9's good record, my own skills and our integrity as a company 
toco-operate and deliver the game to a full Cinemaware standard. That 
remains our intention. To have this branding provisional changes the 
balance and spirit of the agreement.

  

 

 





