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parallaxscroll
06-24-2013, 07:08 PM
I followed the development of Dreamcast very closely, beginning with Next Generation Online's first report on 'Black Belt' on March 13th, 1997.

It was fascinating to understand how Sega developed this console.

'Black Belt' & 'Dural' were actually not *the* beginning of Sega's road to finding a successor to the Saturn. That actually started before the November 1994 launch of Saturn in Japan. However Sega's earliest efforts in 1994-1995 were something else, something other than Dreamcast.

The actual console that became Dreamcast went into development sometime in 1996. By early 1997, the press began reporting on it, starting with NGO.




Codename: Black Belt

Next Generation Online has received impressive first insights into Sega's next game machine - codenamed Black Belt.

March 13, 1997

Developers are now hearing the first details of Sega's next machine which is supposedly based upon two key technological elements. The first element is the inexpensive Videologic/PowerVR PCX2 chipset which is expected to cost manufacturers less than $30 in lots of 10,000 units. NEC has previously confirmed that they have spoken with Sega about the use of the PowerVR hardware in future systems. Such a system would provide hardware support for anti-aliasing, mip-mapping, z-buffering (albeit not a standard method), texture filtering and alpha-channeling.

The system is also expected to sport some as yet to be named 64-bit CPU (rumored to be a PowerPC of some variety) as well as utilizing a CD format. There is still no word on the polygon handling capacity of the unit.

The second major component of the system is said to be the Microsoft Arcade Operating System. Yu Suzuki has been rumored to have been in Redmond, visiting Microsoft a little less than a year ago investigating the OS. Such a system allows for easier development with more standardized tools. Furthermore, arcade games developed to use the OS could relatively easily be ported to the new system.

Currrently Sega and SegaSoft are said to be working with the hardware in its current form. Some developers should be receiving development kits as early as this Christmas, with a system release possibly as early as Christmas '98.

While the developers that Next Generation Online spoke to were unaware of the Black Belt's expected price point, all of them said that it should provide a much needed boost in performance and ease of development.


http://web.archive.org/web/19970606025100/http://www.next-generation.com/news/031397a.chtml




Black Belt: More Details

Next Generation Online has learned more details concerning Sega's next home console.

March 15, 1997

A Videologic source has confirmed that Black Belt will feature a PowerVR based architecture. As yet, the number and variety of CPUs is unknown as is the number of Image Synthesis Processors which are the basic unit of the PowerVR architecture.

PowerVR is a chipset designed by Videologic and manufactured by NEC which is currently used in a variety of PC boards including Apocalypse. More manufacturers are signing on to manufacture these boards in the coming months.

The Sega chipset will differ from that used in current PC boards in that it will most likely feature the equivalent of the PX2 chip. Current boards are PCX1 based. Future boards (and the Sega version) will therefore be able to handle mip-mapping and texture-filtering. The Saturn cannot currently handle such operations.

Executives from Sega of Japan are currently meeting with Microsoft in Seattle and are negotiating for the rights to also use the Microsoft Arcade Operating System which will soon be available to arcade developers. However, Next Generation understands that the Microsoft deal is by no means signed. That aspect of the machine's future is still yet to be confirmed.

Games under development at present include a basketball title, a soccer game and Virtua Fighter 3. Sega is aiming for a Japanese launch in late 1998 with a US introduction in 1999. This should mean that the machine will be shown behind closed doors at E3 this summer.

Yet to be established are such issues s technical performance, third party support, price and market-positioning.

http://web.archive.org/web/19970606024908/http://www.next-generation.com/news/031597a.chtml




Massive RAM for Black Belt

Still more details are coming to light regarding Sega's Black Belt system.

March 19, 1997

According to sources close to Sega, the design of the Black Belt system is still not complete. But developers are being quoted that the unit will include:

16MB General RAM
2-8MB RAM for textures and audio
An as yet undisclosed PPC CPU.

Furthermore the timeline for launch is likely to be particularly strained because development tools aren't due to be in circulation until next spring. Such a move would only allow six to nine months for development before the system's tentative release in Japan for Christmas '98.

Microsoft has declined to comment on any dealings it has had with Sega over the system, but has admitted to speaking to the game company for purposes of promoting its 'Arcade Initiative'. It would seem also that the deal for the graphics subsystem is not yet written in stone, as conversations with 3Dfx are also said to be in the works.

http://web.archive.org/web/19970605180459/http://www.next-generation.com/news/031997a.chtml





Sega to Unveil Black Belt

Sega is planning to officially announce the Black Belt on April 3rd, Next Generation Online can reveal.

March 27, 1997

Well-placed sources at Microsoft say that Sega of Japan will be making a joint announcement with Microsoft regarding the details of its next system, Black Belt.

Microsoft's involvement with the system is expected to be in the operating system arena, which is similar to that being used in its arcade initiative.

Details of the hardware are still unclear and the exact specs of Black Belt appear to be in a state of flux. According to sources, the new front-runner for the graphics subsystem is likely to be some variant of the 3Dfx Voodoo graphics chipset. The system itself is being designed in the US but has no involvement with long-time hardware partner, Lockheed Martin.

As reported previously on Next Generation Online, the system will have 16MB RAM general RAM and 2-8MB Texture RAM. The CPU is still unknown but is expected to be a Power PC of some variety.

The timing of this official announcement is nothing short of astounding. But Sega is furious that information regarding the system has leaked out prematurely, and may feel that its hand has been forced.

The announcement is likely to be an effort to raise awareness in the development community and to curb unofficial leaks. It sets the stage for future developer solicitation at E3 in June. With the system specs still being in transition, it is also possible Sega is seeking developer feedback upon its proposed system.

http://web.archive.org/web/19970605174844/http://www.next-generation.com/news/032797a.chtml




Sega Withholds Black Belt Announcement

Sega has decided against showing its new hardware hand this early in the game.

April 5, 1997

While both Microsoft and Sega were expected to make announcements regarding their roles in a new system, Black Belt, Sega has decided to hold back its announcement.

Both companies know that leaks have revealed much of what current plans are, but Sega and Microsoft will be waiting before officially admitting the existence of the top secret hardware. It seems that the majority of Saturn owners are not pleased at the prospect of new hardware and the announcement of such a system is likely to `spook the horses' in terms of future Saturn sales.

To recap what is currently known of the system (which is still being designed), it will have:

A 3DFx-based graphics sub-system
16MB general RAM
2-8MB texture RAM
A Microsoft OS likely to be some form of DirectX as a part of its `arcade initiative'

The hardware design is being conducted in the US by both Sega and SegaSoft and does not include perennial hardware partner Lockheed Martin. Internal teams are already working on three games including Virtua Fighter 3, a soccer game and a basketball game. Third parties should be receiving development kits as early is the first quarter of 1998, with an ambitious Japanese release scheduled for Christmas 1998. The US isn't expected to see the system until mid-1999.

http://web.archive.org/web/19970605173526/http://www.next-generation.com/news/040597f.chtml




3Dfx Confirms Black Belt and Banshee

In a report to the SEC, 3Dfx confirms its role in the development of Sega's next console as well as the existence of its Banshee chipset.

April 19, 1997


According to its report to the SEC, 3Dfx filed for an initial public offering (IPO) yesterday, confirming the existence of both Sega's Black Belt and its own Banshee chipset which Next Generation Online has been reporting on for nearly a month.
The document filed with the Security and Exchange Commission confirms that 3Dfx will be using its Voodoo Graphics architecture to develop a graphics subsystem for a new Sega game console. It would also seem that Sega is expected to invest heavily in 3Dfx, acquiring 700,000 of the initial 4.2 million shares that 3Dfx is offering. Furthermore, the agreement grants Sega the exclusive rights to the architecture for the next three years with regard to use in home consoles. Finally the report also confirms the existence of its Banshee board project that it so adamantly denied existed not more than a month ago when Next Generation Online first exposed the project.

With regard to the Black Belt, the report itself states: "Voodoo Graphics technology is also the graphics architecture for the 3D media processor chipset that the company is developing for license to Sega Enterprises, Ltd. ("Sega") for use in Sega's next generation consumer home game console. "

The Banshee project is clearly revealed with the report states: " The company has commenced development of Banshee, which is intended to be a high performance, fully-featured single chip, 3D/2D media processor for the PC and coin-op arcade markets. The company expects to begin commercial shipments of Banshee in the first quarter of 1998. All of the Company's products are manufactured, assembled, tested and packaged by third-party suppliers."

It is somewhat surprising that 3Dfx has so boldly exposed Sega's hand as well as its own secret projects, but during a public offering a company must show what it believes to be its best opportunities. In doing so, an IPO is likely to be more successful in garnering investors.

At press time neither Sega nor 3Dfx could be reached for comment.


http://web.archive.org/web/19970605161629/http://www.next-generation.com/news/041997aa.chtml





Sega Buries Head in Sand

To nobody's great surprise, Sega has point-blank refused to comment on any of its dealings with 3Dfx.

April 23, 1997


Sega's official line upon its dealings with 3Dfx has been one of near silence. Said a spokesperson for Sega: "Sega hasn't announced any information about future platforms, plans or partners."
While it's not surprising that Sega has decided to act like the ostrich burying its head in the sand, there is now so much information circulating regarding Black Belt, that its own confirmation is nearly irrelevant. At this point in time, Sega should be thinking about approaching more developers (which it is in the process of doing) by setting up appointments at E3.

While it certainly won't be a part of Sega's E3 booth, it is a safe bet that many of the behind the scenes meetings happening there will concern the development future of the elusive system.

http://web.archive.org/web/19970605170718/http://www.next-generation.com/news/042397c.chtml




Developers Debate Black Belt

In Next Generation Online's continuing series of discussions with developers regarding the potential of Sega's Black Belt, Climax's Chris Bergstresser expresses his thoughts about the system's ease of development.

April 23, 1997



Yesterday's interview with Shiny's Dave Perry touched upon the corporate profiles of both Sega, 3Dfx and of course, Microsoft. Today's interview with the vice-president of Climax Entertainment, Chris Bergstresser enters new territory.
"Considering the way Sega is looking to setup the Black Belt system and the proposed operating system, Sega has made a good move." says Bergstresser. "Judging from the proposed plans, development for the system is going to be incredibly easy and development cycles will be considerably shorter than typical titles now."

Bergstresser went on to comment that if Sega is going to use the same Microsoft arcade OS that machines will be using in the arcade, "the process of porting games is going amazingly simple. All developers will have to do is sneeze and a game will pop out."

Because of the short amount of time it will take to do PC or even arcade ports, developers will be forced to make original titles instead of cashing in on ports to the hardware. "In a sense I like this situation better, because it's more interesting and more of a challenge to do original titles," says Bergstresser.

Expanding upon the ramifications of simple development, Bergstresser continues: "Because games will be so easy and fast (and thus cheap) to port to or even develop unique titles for, we may even see the retail price of games drop slightly." Berstresser qualified this statement: "Then again, we may see prices stay the same for a while as publishers recoup the losses they've been taking for the last few years [laughs]."

With regard to Microsoft's involvement with the project, Bergstresser voiced some concern over how much of the system's RAM is going to be occupied by the operating system. "While it's cool that there is going to be a more standard OS that makes it simple to jump between platforms, it is going to be something that has to be adhered to. We still don't know exactly how good the OS is going to be for gaming and it may be an anchor weighing down system's performance." says Bergstresser. "The lazy developer will be thrilled that he doesn't have to work hard to get his game running, but until we know exactly how the OS will work, it's impossible to say that it's going to allow for new heights in gaming excellence."

Tomorrow, Next Generation Online will be speaking with the president of High Voltage Software, Kerry Ganofsky about his thoughts upon Sega's proposed system.

http://web.archive.org/web/19970605170710/http://www.next-generation.com/news/042397b.chtml




High Voltage on Black Belt

High Voltage's vice-president of development, Scott Corley talks about operating system restrictions and potential system power for Black Belt.

April 24, 1997


As a number of hardware manufactures have learned in the past, a system is only as good as the software on it. To this end, developer support has been a major factor in a system's success or failure.
As a part of our continuing series of discussions with developers regarding their current thoughts on the Black Belt, Scott Corley of High Voltage Software lends his insights.

"With the Black Belt system, Sega could be in a really good position if they give it some time and look to release it in about two years." says Corley. "Sega needs to develop a system that's going to be competitive with Sony's and Nintendo's next systems."

Corley also doesn't believe that there is necessarily the right technology to provide a major leap forward in gaming right now. "It doesn't seem like a system that is expected in the next year and a half is going to impress anybody." Referring back to the leap in game quality that the PlayStation provided when it was first shown in 1994, Corley says that Sony is likely to be investing a lot of R&D in providing a similar leap for its next system. "If Sega doesn't make that sort of leap and people can't distinguish the Black Belt from the Nintendo 64 or PlayStation, they're going to be in trouble."

Returning to the software side of discussion, Corley feels that while Virtua Fighter 3 is a no-brainer title for the system it "won't blow anyone away or be a huge leap in gaming".

Having worked with a number of systems that have attempted higher level interfaces with hardware, Corley feels much like Dave Perry did on the matter. "If Microsoft supplies services that are reliable and efficient then great. But if they are trying to 'hide' elements of the system than it won't be worth it."

To sum up, Corley said "If Sega can get passed all these hurdles and given enough time, the system does have the potential to be excellent."

http://web.archive.org/web/19970605170523/http://www.next-generation.com/news/042497b.chtml





Black Belt from a Lockheed Perspective

Two former Lockheed Martin employees, N-Space's Erick Dyke and Dan O'Leary voice their views on Sega's move to use 3Dfx instead of a Lockheed Martin solution.

April 29, 1997


With experience in developing for Model 2 (Desert Tank) and having helped develop the Model 3 hardware while at Lockheed Martin, Erick Dyke and Dan O'Leary have indicated that it would have been difficult for Sega to make a better decision in terms of a graphics subsystem.

"3Dfx has proven itself. Just look downstairs (at CGDC). Nearly every major demo at every booth is running off of some form of the Voodoo graphics chipset," said O'Leary. While consumers have yet to establish a standard in 3D acceleration, most of the developers projects and demos were using Voodoo as their target platform.

Commenting upon the strengths of the proposed Black Belt Dyke said: "Not only is Sega getting the hottest chipset around, but with Microsoft in its corner it will be getting useful libraries; something the Saturn desperately lacked."

The major question facing the duo was why did Sega neglect its long-term hardware partner Lockheed Martin when designing the hardware? O'Leary stepped up to the plate answering: "Sega has to find the cheapest but most powerful hardware it can. Lockheed Martin is still trying to figure out how it fits into the consumer space seeing as it has traditionally worked in the simulation arena. 3Dfx on the other hand was created from the ground up to be a consumer level product. It isn't at all surprising that Sega has gone this route."

When comparing Lockheed's Model 2 and Model 3 hardware to the proposed Black Belt specification, both O'Leary and Dyke felt that that Black Belt would be far more similar to developing for the Model 2 than Model 3. "The Model 2 is a beautiful board that is simple to get right to the metal, " said Dyke. "The Model 3 was designed around more of a traditional simulator model with a host and GPU arrangement where the database runs the entire game."

While Dyke mentions getting to the metal easily, some developers such as Scott Corley and Dave Perry both voiced some concern over Microsoft's OS getting in the way. "Good developers will cut through the OS to get to the metal as they need it." says Dyke. "As long as Microsoft doesn't force the OS upon the developers it should be fine."

With the ease of development that is expected to go along with the system, and the double-edged sword that this situation can present, Dyke said that Sega's quality assurance program should help to weed out games from developers that are relying too much upon the base libraries or that are quick ports of substandard PC titles.

Both Dyke and O'Leary also pointed to one non-technical element that is different at Sega presently than it was at the launch of the Saturn: executive personnel. Both men cited the fact that Bernie Stollar was a major factor for the third party support that PlayStation enjoys and the fact that Stollar is now responsible for generating that same third party support for Sega. "They've assembled a really good team at Sega now and it's going to be interesting to see what the next generation brings." said Dyke.

http://web.archive.org/web/19970605161903/http://www.next-generation.com/news/042997b.chtml





Black Belt CPU Comparison
There are currently two processors being considered for the CPU of Black Belt. Next Generation Online explores the cababilities of both.

May 2, 1997


The PowerPC 603e and the Hitachi SH4 are currently the two processors under consideration by Sega for use in Black Belt. Both processors are extremely good at floating point calculations.

PowerPC 603e

Specifications
16-Kbyte instruction and 16-Kbyte data caches
Superscalar--3 instructions per clock cycle
On-chip power management
32/64-bit data bus mode
Fully JTAG-compliant

Performance

166 MHz
SPECint95* 3.9 (1) - 4.5 (2)
SPECfp95* 2.5 (1) - 3.3 (2)

200 MHz
SPECint95* 4.4 (1) - 5.1 (3)
SPECfp95* 2.8 (1) - 3.7 (3)

240 MHz
SPECint95* 4.9 (1) - 6.3 (3)
SPECfp95* 3.1 (1) - 4.6 (3)

*Estimated performance.
(1) 66 MHz Bus, L2 - 512 KB, 70 ns DRAM
(2) 66 MHz Bus, L2 - 1 MB, 60 ns DRAM
(3) 66 MHz Bus, L2 - 1 MB, SDRAM



Hitachi SH-4

While the SH-4 is not yet in production, it was initially announced at the Microprocessor Forum in October of 1996. Hitachi announced that it would have first silicon in the first quarter of 1997 with production beginning late in the second quarter of 1997.

The design of the SH-4 itself lends itself well to generation of 3D graphics. Current specifications are:

200MHz
360 Dhrystone v1.1 MIPS
2-way superscalar
32-bit integer, 64-bit floating point
8Kbyte instruction cache, 16Kbyte data cache
5 stage pipeline
floating-point unit that can do the following:
scalar product in 3 cycles, fully pipelined (single-precision floating point) using just 1 instruction
matrix transform in 7 cycles, partially pipelined, single- precision floating point, using 1 instruction. That's 16 multiplies and 12 additions, all single-precision fp, in 1 instruction.
208 or 256-pin package
1.8 Watts worst-case power consumption

Even at the processor's initial announcement last October, certain magazines were already considering the possibility of its use in the next Sega console. According to the October 28th issue of Microprocessor Report: "The new core seems likely to appear in videogames, possibly from Sega, but it may not debut until 1998." Such predictions are looking more and more possible considering the proposed timing of Black Belt.

Prices have not yet been announced for the Hitachi chip yet, but it is expected to be the cheaper of the two possible solutions before Sega right now. As it stands now, Sega has still not made a decision as yet upon which processor to use as its CPU.

http://web.archive.org/web/19970605165511/http://www.next-generation.com/news/050297b.chtml






Black Belt Recap

May 29, 1997

Today's special include ten facts that everyone should know about Sega's next system, Black Belt.


3Dfx has been contracted to provide the 3D sub-system for the unit. It will be some variant of its Voodoo graphics architecture but exactly how many texelfx and pixelfx units will be included or exactly what sort are as yet unknown. Because of this it is impossible to determine exactly what the capabilities of the system will be. As a side note, Sega will be purchasing approximately 17 percent of 3Dfx when it goes public in a few weeks. 3Dfx's involvement with the project was confirmed via a report it made to the SEC in trying to go public.

In determining which 3D hardware to use, Videologic and NEC were approached by Sega to do work on the project using their PowerVR architecture.

The unit will have at least 16MB general RAM in addition to 2-8MB dedicated texture and audio memory.

Sega will be creating a lower level abstraction layer for the main OS for the unit, but Microsoft will also be providing higher level tools very similar to its DirectX APIs. Microsoft's involvement is expected to allow developers currently using DirectX on the PC and arcade to do easy and cheap conversions to the new Sega hardware.

The name 'Black Belt' is the original project name. Members of the project in the US still use this name, while Sega of Japan is referring to the same project now as 'Dural'. Early on, Sega was contemplating a name change for the project and it appears to have done so.

Games currently known to be under development for the system in the US and Japan are two sports titles (basketball and soccer) as well as Virtua Fighter 3.

Sega still denies all knowledge of the project stating "Sega hasn't announced any information about future platforms, plans or partners."

Developers will be solicited at this year's E3 behind closed doors to develop for the system. A number of traditional Sega supporters are already privy to many of the details surrounding the system.

Developers Next Generation Online has spoken to have unanimously agreed that Sega's proposed hardware is indeed a step in the right direction with regards to ease of development, potential power and partners (3Dfx and Microsoft).

Development kits will be available for third party licensees in April of 1998. The system is currently slated for release in Japan in late 1998 but this is a very aggressive timeline given length of development cycles. A US release is expected the following Fall ('99).

A target price point for the system are currently unknown.

http://web.archive.org/web/19970605150448/http://www.next-generation.com/specials/052997.chtml




3Dfx Loses Sega Contract

July 23, 1997

Just prior to press time, Next Generation Online received official word that Sega has terminated its development contract with 3Dfx.

While earlier reports from some trade magazines and web sites had
indicated 3Dfx had already lost its contract, the official decision
was only made final this morning. 3Dfx itself issued a release
regarding its situation.

As first uncovered by Next Generation Online back in April, 3Dfx has been working under contract with Sega to create the 3D sub-system for its next console. During that period, Sega had funded the development to date for the new chipset and even had made an equity investment of nearly $2 million into 3Dfx.

"We are disappointed with this notification and believe that it is without legal justification," said Greg Ballard, president and CEO of 3Dfx. "However it is important to remember that Sega is only a fraction of our business, representing less than ten percent of our projected 1998 revenue. Our base business of selling 3D accelerator chips into the PC market remains strong and is even strengthening. We will release our earnings after the market closes on Thursday, July 24, and anticipate that they will be consistent with analysts' expectations. In addition, the rest of 1997 already looks to be very positive."

3Dfx believes that under the terms of its contract with Sega that the company will be explore its options including legal recourse.

The other potential candidate for the contract was rival chipset company, PowerVR, whose Highlander technology (or some derivative thereof) is now expected to be in use. According to sources, Sega will have preliminary development kits in developers' hands by the end of this quarter. In the mean time the company has been encouraging developers to begin working with the PowerVR SDK for PC.

With the termination of the Sega contract, it is expected that the three year exclusive rights to console applications of the Voodoo technology will revert back to 3Dfx. As a result, the company should be able to pursue other console vendors for similar opportunities.

http://www.siliconinvestor.com/readmsgs.aspx?subjectid=2513&msgnum=2650&batchsize=10&batchtype=Next

MrSega
06-24-2013, 09:33 PM
"Dural" or "Saturn 2" was actually a Model 3 based design SEGA had on the table during 1995. They moved on to Black Belt which CPU was a modified Pentium II Kalmath design from Motorola. ala Mega Drive )in September 1996 and finally decided to go fully with "Katana"(SH-4 and NEC/Image Tec Power VR 2) in September 1997.

Sega Amusements USA(who supervised the Mars/32X design and developed Pico and Nomad) implemented the Black Belt build. But Sega of Japan's "Away-27" had the final say with specific orders from Soichiro Iwajiri to scrap the $300($150 BOM) planned BB for the $200 budgetary Katana.($50 BOM)

Sega and 3Dfx were fairly close to a deal by May 1997, but Iwajiri liked Imagination Tech's budgetary GPU more and was concerned that developers wouldn't adapt quickly to DVD ROM and thus find the console a bit too complex to code like Saturn. Also, CSK's revenue and SEGA's financial state had begun to weaken at the time, the BB simply was a bit too risky.

Saturn Fan
06-24-2013, 10:21 PM
Eh didn't really care that much about the dreamcast. It was a good system with good games, but my Sega heart was with the Genesis, Sega CD and fuggin' Saturn!

http://www.8-bitcentral.com/images/sega/saturn/mainImage.jpg

I guess after the Saturn's untimely demise, my faith in Sega kinda went down and that skepticism carried onto the Dreamcast. Even though i bought one at launch and loved titles like House of the Dead 2 and Soul Calibur, i just wasn't THAT into it.

parallaxscroll
06-24-2013, 10:32 PM
"Dural" or "Saturn 2" was actually a Model 3 based design SEGA had on the table during 1995. They moved on to Black Belt which CPU was a modified Pentium II Kalmath design from Motorola. ala Mega Drive )in September 1996 and finally decided to go fully with "Katana"(SH-4 and NEC/Image Tec Power VR 2) in September 1997.

Sega Amusements USA(who supervised the Mars/32X design and developed Pico and Nomad) implemented the Black Belt build. But Sega of Japan's "Away-27" had the final say with specific orders from Soichiro Iwajiri to scrap the $300($150 BOM) planned BB for the $200 budgetary Katana.($50 BOM)

Sega and 3Dfx were fairly close to a deal by May 1997, but Iwajiri liked Imagination Tech's budgetary GPU more and was concerned that developers wouldn't adapt quickly to DVD ROM and thus find the console a bit too complex to code like Saturn. Also, CSK's revenue and SEGA's financial state had begun to weaken at the time, the BB simply was a bit too risky.

This is all pure rubbish.

KitsuneNight
06-24-2013, 10:48 PM
^and that load of rubbish surprises you ?

MrSega
06-24-2013, 11:20 PM
This is all pure rubbish.

Black Belt was American designed. Katana(Who's SH-4 ARM32 CPU was originally designed by Hitachi for Hybrid cars) was Japanese designed. By 3rd Quarter of 1997, the Katana chipset was cut and dry, with the Dreamcast prototype already ready for Taping in December. By the time Dreamcast was unveiled in May 1998, SEGA had completely moved full time into Katana and unleashed its Arcade twin "NAOMI" the first Arcade board who's silicon was a spot on match to its home counterpart since SG-1000.

SEGA of Japan scrapped the BB design, because it was more financially feasible to do so. They just weren't willing to risk any more damage to their PR or weakening financial state. A $300 priced console for 1999 just seemed too much of a stretch to them.

MrSega
06-24-2013, 11:25 PM
This is all pure rubbish.


Eh didn't really care that much about the dreamcast. It was a good system with good games, but my Sega heart was with the Genesis, Sega CD and fuggin' Saturn!

http://www.8-bitcentral.com/images/sega/saturn/mainImage.jpg

I guess after the Saturn's untimely demise, my faith in Sega kinda went down and that skepticism carried onto the Dreamcast. Even though i bought one at launch and loved titles like House of the Dead 2 and Soul Calibur, i just wasn't THAT into it.


I do agree on one thing though, SEGA should HAVE went with the Black Belt design. It not only would have made Dreamcast stronger, it also would have made short work of the PS2.

Saturn Fan
06-24-2013, 11:44 PM
I do agree on one thing though, SEGA should HAVE went with the Black Belt design. It not only would have made Dreamcast stronger, it also would have made short work of the PS2.


Not gonna happen. Sega too broke by then + no DVD-Rom.

gamevet
06-24-2013, 11:51 PM
This is all pure rubbish.

Pretty much everything he comes up with is pure rubbish. His fake NES test market crap was beyond pure bullshit.

sheath
06-24-2013, 11:54 PM
I haven't seen anything about the proposed 3DFX Black Belt design that implied it could keep up with the real world Dreamcast. The PVR2-DC plus SH4+FPU had too many advantages over 3Dfx.

parallaxscroll
06-25-2013, 12:03 AM
Black Belt was American designed. Katana(Who's SH-4 ARM32 CPU was originally designed by Hitachi for Hybrid cars) was Japanese designed.

Hitachi's SH-4 was SuperH architecture, not AMR32. The Hitachi designed SH-4 was primarily for Sega, with Sega asking for a certain specification for their next-gen console, as far back as 1996.




SEGA of Japan scrapped the BB design, because it was more financially feasible to do so. They just weren't willing to risk any more damage to their PR or weakening financial state. A $300 priced console for 1999 just seemed too much of a stretch to them.

Sega of Japan cut a deal with NEC for the manufacturing of the Videologic/Imagination Technologies designed PowerVR2DC (CLX2) graphics chip mainly because 3Dfx leaked the existence of Sega's next-gen console, and possibly some of the spec, in their IPO (Initial Public Offering) to the SEC in April 1997. This infuriated Sega to no end. And addition reason is probably because PowerVR2 offered a better feature-set/capabilities and a better performance/cost ratio.


A $300 pricepoint for the 3Dfx-based Black Belt may have been possible. The exact make-up of the 3Dfx chip for Sega is unknown, but it's been said that it was a derivative of either Voodoo 2 or Banshee.

MrSega
06-25-2013, 12:07 AM
This is all pure rubbish.


Not gonna happen. Sega too broke by then + no DVD-Rom.

Which is why in late '97 they went for broke and went with "Katana".

Sad thing is, had SEGA NEVER invested in "GameWorks SKG" the Dreamcast would have been able to have certainly survived past 2002. They are pretty much the main thing that cut off funding for DC in the first place. Why Okawa didn't just kill the whole GameWorks thing and ask investors and partners to use the funding for Dreamcast and its collapsing Arcade market($2 billion would have been enough to SAVE both of them) is beyond me.

sheath
06-25-2013, 12:19 AM
Anything short of a Voodoo 3 with hardware T&L would have failed to be better in any significant way from the existing Dreamcast. Also, according to wikipedia anyway, one of 3dfx's major failings was to support DirectX as well as Glide and OpenGL. Sega had been in negotiation with Microsoft, and therefore would have favored DirectX support, since Windows 95 was released.

MrSega
06-25-2013, 12:20 AM
This is all pure rubbish.


Hitachi's SH-4 was SuperH architecture, not AMR32. The Hitachi designed SH-4 was primarily for Sega, with Sega asking for a certain specification for their next-gen console, as far back as 1996.




Sega of Japan cut a deal with NEC for the manufacturing of the Videologic/Imagination Technologies designed PowerVR2DC (CLX2) graphics chip mainly because 3Dfx leaked the existence of Sega's next-gen console, and possibly some of the spec, in their IPO (Initial Public Offering) to the SEC in April 1997. This infuriated Sega to no end. And addition reason is probably because PowerVR2 offered a better feature-set/capabilities and a better performance/cost ratio.


A $300 pricepoint for the 3Dfx-based Black Belt may have been possible. The exact make-up of the 3Dfx chip for Sega is unknown, but it's been said that it was a derivative of either Voodoo 2 or Banshee.


1996 is where Dreamcast's orgins date all the way back to. Believe or not, DC's development was actually only a year and half making it the shortest console project in Sega's history. Sega console projects normally lasted 26 months.(Mega Drive 1986-87, Mega CD 1989-90, Saturn 1992-1993) Dreamcast was from mid 1996 to late '97. As for 3Dfx's leaks, well the Saturn had been kept top secret until 1994, SEGA probably panicked when they saw all the game magazines and websites leaking all those spec sheets throughout the summer of 1997.


As for SH-4, I thought all SH CPUs have ARM instruction sets with RISC(Reduced Instruction Set Computing) implementation.

After all, ARM has been around since the mid 80s and that the ISA became very popular in Japan during the early/mid 1990s.

MrSega
06-25-2013, 12:24 AM
This is all pure rubbish.


Anything short of a Voodoo 3 with hardware T&L would have failed to be better in any significant way from the existing Dreamcast. Also, according to wikipedia anyway, one of 3dfx's major failings was to support DirectX as well as Glide and OpenGL. Sega had been in negotiation with Microsoft, and therefore would have favored DirectX support, since Windows 95 was released.

How well do you think Voodoo 2 would have ran on Windows CE without DirectX?

sheath
06-25-2013, 12:28 AM
Windows CE was already a resource intensive way to develop for the Dreamcast, I can't think of any WinCE developed games that didn't suffer from massive framerate issues, low polycounts and relatively poor texture mapping.

On PC, a card that only supported Open GL or Direct X but not the other ran well in one and like a slideshow in the other.

-edit-

I guess I never looked at all of the WinCE developed games. Bang! Gunship Elite and StarLancer are relatively well made Dreamcast games, the textures aren't great but everything else seems solid. Not sure about the framerate though.

parallaxscroll
06-25-2013, 01:13 AM
Massive post(s) incoming.

The Sega-related parts of 3Dfx's Initial Public Offering. You think this is long? Try reading the entire IPO.


Voodoo Graphics technology is also the graphics architecture for the 3D media processor chipset that the Company is developing for license to Sega Enterprises, Ltd. ("Sega") for use in Sega's next generation consumer home game console.


DEPENDENCE ON RELATIONSHIP WITH SEGA

In March 1997, the Company entered into a Technology Development and License Agreement with Sega (the "Sega Agreement"), under which the Company will develop and license to Sega the technology for a 3D media processor chipset (the "Sega/3Dfx Chipset") for use in Sega's next generation home game console product (the "New Sega Game Console"). The Sega Agreement grants Sega the exclusive right for three years to the Company's architecture solely for use in home game consoles. Through the end of 1998, the Company expects to earn development contract revenues and certain development bonuses provided that certain milestones set forth in the Sega Agreement are met. The Company will derive royalty revenue for each Sega/3Dfx Chipset incorporated into products sold by Sega. Therefore, the timely development of the Sega/3Dfx Chipset by the Company and the successful introduction and sale of the New Sega Game Console by Sega will be critical factors affecting the Company's future business, financial condition and results of operations. The Company has not yet completed development of the Sega/3Dfx Chipset, and there can be no assurance that the Company will successfully complete such development or, if such development is completed, that the Sega/3Dfx Chipset will perform as expected. Despite pre-release testing of the Sega/3Dfx chipset by the Company, there can be no assurance that, once the Sega/3Dfx Chipset is made available to Sega, performance errors and deficiencies will not be found, or if discovered, that the Company will be able to successfully correct such performance errors and deficiencies in a timely manner, if at all. If the Company is unable to complete
the development of the Sega/3Dfx Chipset or successfully deliver it to Sega, the Company's business, financial condition and results of operations would be materially adversely affected.

There can be no assurance that Sega will ever introduce the New Sega Game Console. Published reports in the financial press have indicated that Sega may discontinue the manufacture and marketing of its home game console hardware. The Company's business, financial condition and results of operations would be materially adversely affected if Sega does not introduce the New Sega Game Console. If introduced, there can be no assurance that the New Sega Game Console will achieve market acceptance. The home game console industry has been characterized by unpredictable and sometimes rapid shifts in the popularity of products, by severe price competition and by frequent introductions of new technology and new products. Only a small number of products have achieved broad market acceptance. Such market acceptance has often followed intense competition between competing formats, such as those of Nintendo Company, Ltd. ("Nintendo") and Sony Corporation ("Sony"). Any competitive, technological or other factor adversely affecting the introduction or sales of the New Sega Game Console or related software titles would have a material adverse effect on the Company. Further, there can be no assurance that Sega will successfully manage the introduction of the New Sega Game Console. As is typical with any new product introduction, quality and reliability problems may arise and any such problems may result in reduced orders, manufacturing rework costs, delays in collecting accounts receivable, additional service and warranty costs and a decline in Sega's competitive position. Further, Sega will not manufacture all major subassemblies and will be dependent on several vendors as manufacturers of such subassemblies. There can be no assurance that such vendors will manufacture such subassemblies on a timely basis and with acceptable quality, or, if demand for the New Sega Game Console increases, that such vendors will be able to accelerate production of the subassemblies to meet demand for such increases. Even if the New Sega Game Console is successfully introduced and does gain initial market acceptance, competitive products with comparable price and performance characteristics are likely to be introduced by competitors. This competition may reduce future market acceptance for the New Sega Game Console and result in decreased royalty revenues arising from the Sega/3Dfx Chipset. The failure of the Company to successfully develop and deliver the Sega/3Dfx Chipset or Sega's failure to successfully introduce and market the New Sega Game Console or its failure to achieve market acceptance would have a material adverse effect on the Company's business, financial condition and results of operations. See "Management's Discussion and Analysis of Financial Condition and Result of Operations -- Overview" and "Business -- Products, Products Under Development and Technology License -- Strategic Relationship with Sega."



POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS

The Company believes that, even if it does achieve significant sales of its products, quarterly and annual results of operations will be affected by a variety of factors that could materially adversely affect revenues, gross profit and income from operations. These factors include, among others, demand and market acceptance for the Company's products; changes in product or customer mix; the successful development of the Sega/3Dfx Chipset; the success of the New Sega Game Console; unanticipated delays or problems in the introduction or performance of the Company's next generation of products; unanticipated delays or problems experienced by the Company's product development partners; fluctuations in the level and timing of royalty revenues and development contract revenues under the Sega Agreement; market acceptance of the products of the Company's customers; new product announcements or product introductions by the Company's competitors; the Company's ability to introduce new products in accordance with OEM design requirements and design cycles; changes in the timing of product orders due to unexpected delays in the introduction of products of the Company's customers or due to the life cycles of such customers' products ending earlier than anticipated; fluctuations in manufacturing capacity; competitive pressures resulting in lower average selling prices; the volume of orders that are received and can be fulfilled in a quarter; the rescheduling or cancellation of customer orders; supply constraints for the other components incorporated into its customers' products; the unanticipated loss of any strategic relationship; seasonal fluctuations associated with the tendency of PC sales to increase in the second half of each calendar year; seasonal fluctuations associated with sales of home game consoles; the level of expenditures for research and development and sales, general and administrative functions of the Company; costs associated with protecting the Company's intellectual property; and foreign exchange rate fluctuations. Any one or more of these factors could result in the Company failing to achieve its expectations as to future revenues.



INVESTMENT BY SEGA

It is currently anticipated that Sega will purchase a portion of the shares of Common Stock offered hereby upon the same terms and conditions as the other investors in this offering, except that the per share purchase price paid by Sega will equal the per share "Proceeds to Company" price as indicated on the cover page of this Prospectus. The total investment by Sega will be approximately $ million if Sega completes the purchase. Assuming a per share Proceeds to Company price of $ , Sega would purchase approximately 700,000 shares and would own approximately 3% of the outstanding Common Stock following the offering.

The Company is developing a 3D media processor chipset for Sega's next generation home game console pursuant to the Sega Agreement. During the three months ended March 31, 1997, the Company recognized development contract revenues of $750,000 under the Sega Agreement representing a non-refundable amount due for the delivery of certain engineering designs to Sega. Future development contract revenues under the Sega Agreement will be recognized by the Company under the percentage of completion method of accounting based upon costs incurred relative to total contract costs. Development contract revenues recognized under the Sega Agreement represented 14.3% of total revenues during the three months ended March 31, 1997. The Company may earn additional development contract revenue and certain development bonuses provided that milestones set forth in the Sega Agreement are met. Under the Sega Agreement, the Company will also derive royalty revenue for each Sega/3Dfx Chipset incorporated into products sold by Sega. The timely development and availability for shipment of the Sega/3Dfx Chipset by the Company and the successful introduction and sale of the New Sega Game Console will be critical factors affecting the Company's future results of operations and financial condition. See "Risk Factors -- Dependence on Relationship with Sega" and "Business -- Products, Products Under Development and Technology License -- Strategic Relationship with Sega" for a description of the Sega Agreement.

Development contract revenues of $750,000 were recognized in the three months ended March 31, 1997 representing a non-refundable amount due for the delivery of certain engineering designs to Sega. Development contract revenues are billable by the Company to Sega based on a schedule of set forth in the Sega Agreement. Development contract revenues in future quarters will be recognized under the percentage of completion method of accounting as costs are incurred relative to total contract costs and will fluctuate from quarter to quarter. These fluctuations in development contract revenues will cause fluctuations in the Company's total revenues, gross margins and results of operations. See "Risk Factors -- Potential Fluctuations in Operating Results," "-- Overview" and "Business -- Products, Products Under Development and Technology License -- Strategic Relationship with Sega."

Gross Profit. Gross profit consists of total revenues less cost of product revenues. Cost of product revenues consists primarily of costs associated with the purchase of components, the procurement of semiconductors and printed circuit board assemblies from the Company's contract manufacturers, labor and overhead associated with such procurement and warehousing, shipping and warranty costs. Cost of product revenues does not include expenses related to development contract revenues. Gross profit was $2.7 million in the three months ended March 31, 1997. Cost of product revenues was $2.6 million in the three months ended March 31, 1997. Gross profit as a percentage of total revenues was 50.8% in the three months ended March 31, 1997. However, given the Company's limited operating history and limited history of product shipments, the Company believes that analysis of gross profit as a percentage of total revenues is not meaningful. The Company's future gross profit will be affected by the overall level of sales; the mix of products sold in a period; the mix of revenues between product revenues, development contract revenues associated with the Sega Agreement and licensing revenues in a period; manufacturing yields; and the Company's ability to reduce product procurement costs.



Strategic Relationship with Sega

In March 1997, the Company entered into the Sega Agreement, under which the Company will develop and license to Sega the Sega/3Dfx Chipset for use in the New Sega Game Console. During the three months ended March 31, 1997, the Company
recognized development contract revenues of $750,000 under the Sega Agreement representing a non-refundable amount due for the delivery of certain engineering designs to Sega. Development contract revenues recognized under the Sega Agreement represented 14.3% of total revenues, during the three months ended March 31, 1997. Through the end of 1998, the Company may earn additional development contract revenues and certain development bonuses provided that certain milestones set forth in the Sega Agreement are met. The Company will also derive royalty revenue for each Sega/3Dfx Chipset incorporated into products sold by Sega.

Pursuant to the Sega Agreement, the Company shall maintain ownership of the Sega/3Dfx Chipset intellectual property. The Company granted Sega a royalty-bearing, worldwide license (i) to use the technology covered by the Sega Agreement for the manufacture of the Sega/3Dfx Chipset, to perform engineering, development, testing and integration of the Sega/3Dfx Chipset within the console and to distribute the Sega/3Dfx Chipset as integrated into such console; and (ii) to use the Sega/3Dfx Chipset solely for Sega's internal engineering, development, testing, support and other purposes in connection with the incorporation of the Sega/3Dfx Chipset into other potential Sega products. The license rights to manufacture and distribute the Sega/3Dfx Chipset are exclusive to Sega, solely with respect to home game consoles, for a period of three years commencing on Sega's acceptance of the version of the Sega/3Dfx Chipset intended for production in commercial volume. In addition to the chipset license, the Company granted Sega a royalty-free license for certain software, including Glide, subject to limitation.

The Sega Agreement will remain in full force and effect unless terminated in accordance with its terms. Sega may terminate the Sega Agreement during the development phase, if the Company defaults on the development schedule. Either party may terminate the Sega Agreement, with limitations, upon the material breach by the other party or in the event of the other party's bankruptcy, dissolution or liquidation, assignment for the benefit of creditors, or the appointment of a receiver or trustee or custodian for all or part of the assets of such party.

Coin-op Arcade and Console Segments. The market for electronic arcade entertainment is comprised of a small number of companies, including Acclaim, Midway, Namco, Sega, Taito and Williams. The home game console segment is dominated by three companies, Nintendo, Sega and Sony. In each of the coin-op and home game console segments, the Company primarily faces competition from in-house divisions of the companies which currently comprise such markets. The Company has formed a strategic relationship with Sega in order to compete effectively in the console segment but there can be no assurance that Sega will manufacture its next generation of home game consoles or, that if it does, that it will be able to compete against Nintendo and Sony successfully. See "Products, Products Under Development and Technology License -- Strategic Relationship with Sega." In addition, there can be no assurance that any of the companies which currently compete in the 3D PC market will not enter the coin-op arcade market, or if they do, that the Company will be able to compete against them successfully.



TECHNOLOGY DEVELOPMENT AND LICENSE AGREEMENT

This Technology Development and License Agreement (the "AGREEMENT") is made and entered into as of February 28, 1997 (the "EFFECTIVE DATE"), by and between Sega Enterprises, Ltd., a Japanese corporation having its principal place of business at 212, Haneda 1-Chome, Ohta-ku, Tokyo 194, Japan ("SEGA") and 3Dfx Interactive, Inc. ("3DFX"), a California corporation having its principal place of business at 4435 Fortran Drive, San Jose, California 95134.


WHEREAS, Sega is in the business of developing, marketing, and distributing video games for both coin-operated arcade and consumer markets, video game consoles, peripherals and various other products and services, throughout the world;

WHEREAS, 3Dfx is in the business of creating advanced 3D graphics accelerators, including semiconductor chips, hardware, and software, for both coin-operated arcade and consumer video game markets throughout the world;

WHEREAS, Sega desires that 3Dfx develop for Sega a semiconductor 3D graphics accelerator , and that 3Dfx license to Sega on a limited exclusive basis the manufacturing rights thereto, including without limitation for Sega's use with, and distribution in, Sega's forthcoming consumer video game console product,

WHEREAS, 3Dfx is willing to promote the Console video game architecture in connection with 3Dfx's 3D graphics technology;

WHEREAS, Sega desires that 3Dfx provide assistance to qualify 3Dfx and Sega designated foundries to produce the 3D accelerator in commercial quantities;

WHEREAS, Sega desires to obtain certain licenses from 3Dfx for certain interface software for the 3Dfx graphic accelerator and certain hardware to enable manufacturing and support; and

WHEREAS, 3Dfx is willing to perform the development, grant the licenses, and provide the other assistance required by Sega in connection with such 3Dfx graphics accelerator :




http://www.sec.gov/Archives/edgar/data/1010026/0000891618-97-001792.txt

parallaxscroll
06-25-2013, 01:29 AM
(continued)



*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.



IT IS THEREFORE AGREED AS FOLLOWS:

1. DEFINITIONS

Unless otherwise defined or stated, "days" shall mean calendars days,
"including" shall mean "including without limitation", and the following terms
shall have the meanings stated below:

1.1 "ALPHA VERSION " means a preliminary version of the
Graphics with functionality sufficiently complete and usable to enable
hardware and software engineers to operate, test and evaluate for further
production, and integration, as further set forth in the Specifications.

1.2 "ARCADE TOOL BOX" means 3Dfx's proprietary arcade game
developer software toolbox.

1.4 "BETA VERSION " means a preliminary version of the
Graphics with functionality complete and usable in all material
respects, but which is not in a form intended for production in commercial
volumes, as further set forth in the Specifications.



1.6 " GRAPHICS " means the 3D graphic accelerator
as provided to Sega for use in the Console, as set forth in the
Specifications,

1.7 " GRAPHICS TECHNOLOGY" means any and all
inventions, works of authorship, technology, know-how, algorithms, methods,
processes, procedures, work-arounds and Intellectual Property Rights relating
to the Graphics , exclusive of the Sega Deliverables, Sega Foundry
Deliverables, the Console Technology, and all associated documentation
and all related modifications and derivative works and all Intellectual
Property Rights related thereto.


1.8 " MASK DATA SET" means the manufacturing database and mask
level information to be delivered by 3Dfx to a Sega Foundry or the 3Dfx Foundry
to allow such foundry to manufacture the Graphics , as further set
forth in Schedule 1.8.

1.10 "DELIVERABLES" means the deliverable items specified for each
Milestone on the Development Schedule.

1.11 "DEVELOPMENT SCHEDULE" means the schedule for the completion
of the Milestones and acceptance of Deliverables as set forth in Schedule 1.10.

1.13 " CONSOLE" means a video game console code-named ,
under development by Sega, including all components, enhancements, plug-ins,
attachments, controllers, input and output devices, cables, connectors,
peripherals and upgrades as further defined in Schedule 1.12.

1.14 " CONSOLE TECHNOLOGY" means any and all inventions, works
of authorship, technology, know-how, algorithms, methods, processes,
procedures, work-arounds and Intellectual Property Rights relating to the
Console.

1.15 " CONSOLE UNIT" means each Graphics purchased
by Sega from the 3Dfx Foundry or a Sega Foundry for use by Sega in a
Console,

1.16 "FOUR CORNER MANUFACTURING PROCESS TEST" means the industry
standard four corner testing process to be used to test the Production Version
produced by the Sega Foundry as further specified in Schedule 1.15.

1.17 "INTELLECTUAL PROPERTY RIGHTS" means any and all rights
existing now or in the future under patent law, copyright law, industrial
design rights law, semiconductor chip and mask work protection law, moral
rights law, trade secret law, trademark law, unfair competition law, publicity
rights law, privacy rights law, and any and all similar proprietary rights, and
any and all renewals, extensions, and restorations thereof, now or hereafter
in force and effect worldwide, including, without limitation, in the
United States and Japan.

1.18 "MILESTONE" means an individual task or set of tasks to be
completed by a certain date as described in the Development Schedule.

1.19 "NET ROYALTIES" means: (i) with respect to per unit royalties,
nondefective per unit amounts reduced by two percent (2%) to take into account
demonstration, internal use, free or sample products, any defective products,
returns, credits, costs of collection; and (ii) with respect to royalties based
on Reference Cost, per unit royalties, net of any royalties which would be due
on (A) a reasonable number of demonstration, free, or sample products, and (B)
returns of defective products; all of the foregoing net of Japanese or other
withholding taxes.



1.21 "PRODUCTION VERSION " means the Graphics in
the form intended for production in commercial volume by a 3Dfx Foundry or by a
Sega Foundry utilizing the Mask Data Set provided by 3Dfx.

1.22 "SEGA ACCEPTANCE DATE" means the date that Sega first accepts
the Production Version manufactured by the initial Sega Foundry
pursuant to Section 2.3(a)(iii).

parallaxscroll
06-25-2013, 01:34 AM
(continued)



1.23 "SEGA FOUNDRY" means a Sega-designated semiconductor
manufacturing foundry approved by the parties to manufacture the Graphics
in commercial volume in accordance with the provisions of Section 2.3.

1.24 "SEGA FOUNDRY CELL LIBRARIES" means the cell libraries and
other design information of a proposed Sega Foundry, required by 3Dfx to
qualify the fabrication process used at a proposed Sega Foundry and to create
the 3Dfx Mask Data Set to be provided to such Sega Foundry, as further set
forth in Schedule 1.24. The Sega Foundry Cell Libraries must relate to a
fabrication process sufficiently advanced and sophisticated to manufacture the
Graphics .

1.25 "SEGA FOUNDRY DELIVERABLES" means, collectively, the Sega
Foundry Design Rules and Sega Foundry Cell Libraries.

1.26 "SEGA FOUNDRY DESIGN RULES" means the specifications,
including (but not limited to) design rules, spice models, and process
parameters of a proposed Sega Foundry, reasonably required by 3Dfx pursuant to
Section 2.3 below, to qualify the

fabrication process used at a proposed Sega Foundry and to create the 3Dfx Mask
Data Set, as further set forth in Schedule 1.26. The Sega Foundry Design Rules
must relate to a fabrication process sufficiently advanced and sophisticated to
manufacture the Graphics .



1.28 "SOURCE CODE" means computer programs, instructions and
related material written in a human-readable source language in form capable of
serving as the input to a compiler or assembler program, and in form capable of
being modified, supported and enhanced by programmers reasonably familiar with
the source language.

1.29 "SPECIFICATIONS" or "PRO FORMA SPECIFICATIONS" means the
descriptions of the technical requirements, component parts, features,
functionality, performance criteria, operating conditions, interfaces, data
transfer, processing parameters, and protocols, associated with the
Graphics , as set forth in Schedule 1.29.

1.30 "TEST VECTORS" means the test vectors to be supplied by 3Dfx
and approved by Sega (such approval not to be withheld unreasonably) and used
to test specific functionality of the Alpha, Beta, and Production Version
s, as set forth in the Specifications, Schedule 1.30.

1.31. "VERIFICATION TEST GAMES" means the sample games used to test
the Alpha, Beta, and Production Version , as set forth in the
Specifications, Schedule 1.31.

1.32 "3DFX FOUNDRY" means the semiconductor manufacturing facility
designated by 3Dfx in Schedule 1.32 to manufacture the Graphics
under this Agreement.

1.32 "3DFX GLIDE API" means 3Dfx's proprietary graphics accelerator
API, as set forth on Schedule 1.33.

1.33 "3DFX GLIDE INTERNALS" means the 3Dfx Glide Software exclusive
of the 3Dfx Glide API.

1.34 "3DFX GLIDE SOFTWARE" means 3Dfx's graphics accelerator driver
software, together with all associated documentation provided by 3Dfx
including, but not limited to, the Glide Programming Manual.


2. DEVELOPMENT AND PROCESS QUALIFICATION PHASE

2.1 DEVELOPMENT. In accordance with the terms of this Section 2,
3Dfx shall develop the Graphics for manufacture in commercial
volume by the 3Dfx Foundry and the Sega Foundry on Sega's behalf, and to
complete all Milestones specified in the Development Schedule. Subject to 3Dfx
completing the Milestones set forth in the Development Schedule, and Sega's
acceptance thereof, Sega shall pay 3Dfx the engineering services charges as
provided in Section 2.8.

2.2 GRAPHICS MANUFACTURED BY THE 3DFX FOUNDRY.

(a) DELIVERY OF MILESTONE DELIVERABLES. 3Dfx shall
complete and deliver to Sega, in accordance with the Development Schedule, the
Alpha Version , the Beta Version and the Production Version
, all manufactured by the 3Dfx Foundry under the direction of 3Dfx, for
Sega's acceptance testing in accordance with the acceptance procedure set forth
in Section 2.2(b) below. Prior to each delivery, 3Dfx shall have completed all
required testing applicable to such Deliverables to ensure material compliance
with all applicable Specifications.



(i) ACCEPTANCE STANDARDS. Following receipt of
the Deliverables for each Milestone, Sega shall have twenty-one (21) calendar
days (the "VERIFICATION PERIOD") in which to use commercially reasonable
efforts to review, examine and verify such Deliverables and notify 3Dfx of any
material failure thereof to meet the applicable Specifications (a "DELIVERABLE
FAILURE").

(A) ALPHA AND BETA VERSION ACCEPTANCE
STANDARDS. The Alpha and Beta Version s will each be deemed to have met
the applicable Specifications and be accepted by Sega if (i) the Verification
Test Games run successfully with each of the Alpha and the Beta Version
s in a Sega-approved personal computer test environment, , which
shall be tested on the Console; and (ii) the applicable set of the Test
Vectors runs successfully with each of the Alpha and the Beta Version s.

(B) PRODUCTION VERSION ACCEPTANCE
STANDARDS. The Production Version will be deemed to have met the applicable
Specifications and be accepted by Sega if it satisfies the Beta Version
Acceptance Standard set forth above and performs in accordance with the
Specifications as verified by the Four Corner Manufacturing Process Test.


(ii) ACCEPTANCE PROCEDURE. Sega agrees to use
commercially reasonable efforts to detect any Deliverable Failure during the
Verification Period, and if Sega discovers any Deliverable Failure, it shall
promptly provide 3Dfx with written notice of such Deliverable Failure,
including all information reasonably available regarding such Deliverable
Failure. Upon receipt of such notice, 3Dfx shall use best efforts, at 3Dfx's
sole cost and expense, to correct any such Deliverable Failure and to resubmit
the corrected applicable Deliverables to Sega as soon as commercially and
technically practicable, but in all cases within one hundred (100) days
following Sega's notification of a Deliverable Failure. If Sega does not
provide 3Dfx with notice of a Deliverable Failure within the Verification
Period, the applicable Deliverable shall be deemed accepted by Sega. Subject to
Sections 2.2(b)(iii) and 2.2(b)(iv) below, 3Dfx shall repeat the process of
correction and resubmission of an applicable Deliverable, subject to additional
Verification Periods, until Sega's acceptance. The parties agree that any
failure by Sega to discover and notify 3Dfx of defects within any Verification
Period shall not negate any of 3Dfx's representations or warranties, nor waive
any of Sega's rights or remedies.

(iii) EXCLUSIVE REMEDIES FOR ALPHA VERSION
DELAY.

(A) PLACEMENT OF SEGA ENGINEERS. In the
event that (1) 3Dfx fails to deliver the Alpha Version (the "ALPHA DELIVERY
DATE" as scheduled in accordance with the Development Schedule) and has not
shipped the Mask Data Set for the Alpha Version to the 3Dfx Foundry
within sixty (60) days of the Alpha Delivery Date, or (2) 3Dfx delivers the
Alpha Version on or before the Alpha Delivery Date, Sega has informed 3Dfx
of a Deliverable Failure, and 3Dfx has not shipped the Mask Data Set for the
corrected Alpha Version to the 3Dfx Foundry within sixty (60) days of such
notification, then Sega may require 3Dfx to allow a team of Sega engineers to
assist the 3Dfx * Graphics design team. 3Dfx will, however, retain the
control of the management of the development obligations under this Agreement.
Sega engineers may be placed on-site at the development team location
(the "3DFX FACILITIES") until the Production Version for the Sega Foundry is
accepted by Sega in accordance with Section 2.3(a)(iii), unless otherwise
requested by 3Dfx and agreed to by Sega. 3Dfx shall cooperate regarding the
placement of Sega engineers at the 3Dfx Facilities, including, but not limited
to, the provision at 3Dfx's expense of sufficient office and lab facilities,
personal computers, and workstations. Sega shall be responsible for salary or
other compensation of such Sega engineers.

(B) 3DFX HOUSE RULES. While working at
the 3Dfx Facilities, all Sega engineers and other personnel shall: (i) at all
times comply with all of 3Dfx's safety, security and mutually agreed
confidentiality policies and procedures; and

(ii) limit their activities solely to assisting 3Dfx in the development of the
Graphics . Sega will maintain its standard general liability
insurance to protect against covered damages, costs or fees (including
reasonable attorney's fees) arising out of or relating to any property damage,
bodily injury, sickness, disease or death, caused directly by any negligent act
or omission of any Sega personnel while on premises at the 3Dfx Facility, and
will name 3Dfx as an additional insured under such issuance. All such Sega
personnel shall execute confidentiality agreements reasonably acceptable to
Sega and 3Dfx.

(C) ALPHA TERMINATION REMEDY. In the
event that 3Dfx fails to deliver the Alpha Version , in compliance with
the Specifications and acceptance criteria thereof, within one hundred (100)
days of the Alpha Delivery Date, then Sega in its sole discretion may: (i)
terminate the requirement that 3Dfx develop the Alpha Version ; or (ii)
determine that 3Dfx should continue its efforts to correct the Alpha Version
by a date determined by Sega. In the event that Sega elects to
terminate the Alpha Version development as provided above, . Provided that
throughout the Alpha Version development, until completed or terminated
as provided above, 3Dfx provides commercially reasonable efforts to complete
such development, the remedies set forth in this Section 2(b)(iii) shall be
Sega's exclusive remedy for delays in Alpha Version development.

(iv) ADDITIONAL REMEDIES: BETA VERSION . If
Sega does not accept the Beta Version pursuant to the procedure set
forth in Section 2.2(b)(ii) by then Sega shall have additional remedies
as follows:

(A) RECOUPMENT OF EXPENSES. Sega may
recoup out of any advances or royalties owed to 3Dfx Sega's expenses incurred
in relation to 2.2(b)(iii)(A); and

(B) REDUCTION OF MANUFACTURING ROYALTY.
Sega may reduce the Manufacturing Royalty to be paid by Sega to 3Dfx for the
first Console Units under Section 4.1 hereof, such reduction to be in
the amount of U.S. for each Console Unit; and

(C) FREE COST REDUCTION PROJECT. Sega
may require 3Dfx to perform, at no cost or expense to Sega, the work necessary
to complete the first "Cost Reduction Project", as defined in Section 2.4
hereof; and


(D) PLACEMENT OF SEGA ENGINEERS. Subject
to the conditions of Section 2.2(b)(iii)(B), Sega may require 3Dfx to allow a
team of Sega engineers to assist the design team,
whether or not Sega has done so previously pursuant to Section 2.2(b)(iii).
3Dfx will, however, retain the control of the management of the development
obligations under this Agreement. such Sega engineers may be placed
on-site at the Facilities until the Production Version for the
Sega Foundry is accepted by Sega in accordance with Section 2.3(a)(iii), unless
otherwise requested by 3Dfx and agreed to by Sega. 3Dfx shall cooperate
regarding the placement of Sega engineers at the 3Dfx Facilities, including,
but not limited to, the provision at 3Dfx's expense of sufficient office and
lab facilities, personal computers, and workstations. Sega shall be responsible
for salary or other compensation of such Sega engineers.

(E) TERMINATION FOR BETA DELAY. In the
event that Sega has not accepted the Beta Version by ,
then Sega may terminate the Agreement without obligation to make any further
payments of any kind to 3Dfx and seek recovery of damages caused to Sega by the
delay in the delivery of the Beta Version , provided, however, that any
term of this Agreement notwithstanding, 3Dfx's liability to Sega for such
damages shall not exceed the engineering services charges paid by Sega to
3Dfx under this Agreement. In addition, if Sega terminates the Agreement as
provided above, Sega may exercise the rights described in Section 3.2(e).
Provided that throughout the Beta Version development, until completed
or terminated as provided above, 3Dfx provides commercially reasonable efforts,
including without limitation, that 3Dfx makes no reductions in staffing or
other resources, to complete such development, the remedies set forth in this
Section 2.2(b)(iv) shall be Sega's exclusive remedy for delays in Beta version
development. In the event that 3Dfx does not provide commercially
reasonable efforts, by (for example) reducing staffing or other resources, or
otherwise, to complete such development, the remedies set forth in this Section
2.2(b)(iv) shall cease to be exclusive.

2.3 DEVELOPMENT TARGETED FOR SEGA FOUNDRY.

(a) SEGA FOUNDRY QUALIFICATION. Sega shall have the right
to designate a Sega Foundry to manufacture the Graphics , subject
only to such Sega Foundry satisfying reasonable requirements for qualification
to manufacture. As set forth in this Section 2.3, 3Dfx shall timely evaluate,
in accordance with the Development Schedule, or as otherwise agreed in writing
by the parties, the reasonable requirements for the proposed Sega Foundry to
manufacture the Graphics on a commercial basis, and, 3Dfx will
promptly review and reasonably qualify the Sega Foundry to manufacture the
Graphics .

(i) EVALUATION OF PROPOSED SEGA FOUNDRY DELIVERABLES

Within a reasonable time after the Effective Date, Sega shall cause the proposed
Sega Foundry to deliver to 3Dfx the Sega Foundry Deliverables. Within a
reasonable time of receipt thereof, subject to the Development Schedule, 3Dfx
shall commence evaluating the fabrication process set forth in the Sega Foundry
Design Rules to determine whether such process is adequate to manufacture the
Graphics in a form that functions in conformance with the
Specifications. 3Dfx shall complete the evaluation of the fabrication and
quality assurance process provided that 3Dfx receives reasonable cooperation
from the proposed Sega Foundry. As part of such evaluation process, 3Dfx may
require, at 3Dfx's expense, (A) that the proposed Sega Foundry allow 3Dfx to
send its personnel to visit the proposed Sega Foundry facilities (subject to
3Dfx's agreement to reasonable confidentiality and security procedures), and (B)
that the proposed Sega Foundry manufacture and provide to 3Dfx for evaluation
certain 3Dfx specified semiconductor chips. If qualification of the proposed
Sega Foundry is feasible, 3Dfx shall use reasonable efforts to assist the
proposed Sega Foundry achieving qualification. If qualification of the proposed
Sega Foundry is not feasible, Sega shall propose an alternative Sega Foundry,
and the parties shall repeat the foregoing evaluation process (including, if
necessary Sega's proposal of additional Sega Foundries), until, with 3Dfx's
reasonable assistance, a proposed Sega Foundry is deemed qualified.

(ii) PORT OF GRAPHICS TO PROPOSED SEGA
FOUNDRY. Within a reasonable time of 3Dfx providing written notice to Sega that
it is probable that the proposed Sega Foundry will be able to manufacture the
Graphics in a form that functions in conformance with the
Specifications, 3Dfx shall commence porting the Graphics to the
manufacturing process specified in the Sega Foundry Design Rules for the
proposed Sega Foundry. Such porting may include 3Dfx, at its sole discretion,
incorporating the Sega Foundry Cell Libraries into the * Mask Data Set to be
used by the proposed Sega Foundry.

(iii) ACCEPTANCE OF PRODUCTION VERSION. Upon
completion of such port, 3Dfx shall deliver the Mask Data Set directly to
the proposed Sega Foundry for the sole purpose of allowing such proposed Sega
Foundry to fabricate the Production Version on a trial basis. No
Mask Data Set will be provided to Sega. Sega will use commercially reasonable
efforts to cause the proposed Sega Foundry to provide samples of the Production
Version to 3Dfx no later than the date specified in the Development
Schedule for the Production Version acceptance testing in accordance with
Section 2.2(b) above. Upon Sega's providing written notice to 3Dfx of Sega's
acceptance of such Production Version manufactured by such proposed
Sega Foundry, the proposed Sega Foundry shall be deemed a Sega Foundry.

(iv) FOUNDRY AGREEMENT. As part of the
qualification process, 3Dfx will require and Sega will cause each proposed Sega
Foundry to execute confidentiality and/or foundry manufacturing agreements in a
form to be negotiated in good faith between Sega and 3Dfx, covering the
proposed Sega Foundry's use of the


Mask Data Set and other 3Dfx Confidential Information, and the
manufacturing of the Graphics . Such agreements shall contain terms
at least as protective of 3Dfx's Intellectual Property Rights as the terms and
conditions of this Agreement, and shall include a term allowing 3Dfx reasonable
rights to audit the Sega Foundry's records of units of the Graphics
shipped to Sega.

(e) PROPOSED SEGA FOUNDRY DELAYS.
Any delay, except for delays caused by 3Dfx, in a proposed Sega Foundry delivering
the Sega Foundry Deliverables or other evaluation materials, or the Production Version s,
to 3Dfx, shall, at 3Dfx's discretion and upon written notice to Sega, result in
an extension of all directly affected Milestone completion dates set forth on
the Development Schedule by a period of time less than or equal to such delay.

(f) ADDITIONAL SEGA FOUNDRY OR PROCESS QUALIFICATION.

(i) SEGA REQUEST, PAYMENT AND PERFORMANCE. Sega
may request in writing that the parties arrange for Sega Foundry
to manufacture the Graphics . In such event, Sega shall pay 3Dfx an
engineering services charge, to be negotiated in good faith by the parties, for
3Dfx to perform an evaluation and qualification of such proposed Sega Foundry
(such engineering services charge to be at least as favorable to Sega as the
lowest amount charged by 3Dfx for similar work, and not to exceed a reasonable
price). All such evaluation and qualification work shall be performed in
accordance with the provisions of this Section 2.3.

(ii) QUALIFICATION OF NEW PROCESS AS A COST
REDUCTION PROJECT. If the manufacturing process set for the in the Sega Foundry
Design Rules for the proposed Sega Foundry is reasonably considered by 3Dfx to
be a new process generation from either (A) the current fabrication process in
use at the 3Dfx Foundry for the manufacture of the Graphics s, or
(B) the fabrication process described in the Sega Foundry Design Rules for the
initial Sega Foundry, then any such additional evaluation and qualification
work performed by 3Dfx under this subsection (f) shall be counted as a Cost
Reduction Project under Section 2.4 below.

parallaxscroll
06-25-2013, 01:36 AM
(continued)


2.4 COST REDUCTION DESIGN EFFORTS.


2.5 DOCUMENTATION FOR GRAPHICS CHIPSET. 3Dfx hereby agrees to
prepare and deliver to Sega, in accordance with Schedule 2.5 ("Documentation
Requirements") and the Milestones set forth on the Development Schedule for
3Dfx's draft and final versions of the Glide Programming Reference Manual.
3Dfx shall be responsible and bear all costs for translating the Glide
Programming Reference Manual from English to Japanese. 3Dfx shall deliver the
final English version of the Glide Programming Reference Manual
simultaneously to both Sega and 3Dfx's Japanese translator. Sega shall be
responsible for the English to Japanese tranlsations of all other documents
(including the Specifications) that 3Dfx is obligated to deliver to Sega under
this Agreement. At no additional cost to Sega, 3Dfx shall review for accuracy
the first version of the first Japanese translation Sega prepares of the
Specifications, and 3Dfx shall make timely, written recommendations to Sega
regarding changes and corrections to be made thereto. Subject to the licenses
granted by 3Dfx to Sega, 3Dfx shall be the owner of all such derivative works
of all documents provided to Sega under this Agreement (including the Glide
Programming Reference Manual and the Specifications), including any such
derivative works prepared by Sega. For the duration of the license granted to
Sega in Section 3.2, 3Dfx grants a non-exclusive, royalty-free license to Sega
(i) to use, reproduce, modify, and create derivative works of the Glide
Programming Reference Manual and Specifications for all permitted uses under
this Agreement in connection with the licenses granted to Sega under Section 3,
and (ii) to distribute with Sega Products the Glide Programming Reference
Manual and derivative works thereof prepared by Sega. Sega herby assigns to
3Dfx all right, title, and interest in and to any derivative works prepared by Sega of the Glide
Programming Reference Manual and the Specifications, and agrees to execute all
documents and assist 3Dfx in all actions necessary to implement such
assignment.

2.6 DEVELOPMENT BOARDS. Upon Sega's order and request, and
subject to 3Dfx's standard sales terms and conditions, 3Dfx shall supply Sega,
within sixty (60) days of Sega's order, up to at a cost of the lesser of:
(i) per board or (ii) the lowest 3Dfx customer price irrespective of volume.
All such shall contain and shall otherwise meet or exceed the
specifications listed in Schedule 2.6.

2.7 SPECIFICATIONS AND DESIGN REVIEW. The Pro Forma Specifications
shall be attached hereto as Schedule 1.29 as of the Effective Date of this
Agreement. Within five (5) days following the Effective Date, 3Dfx shall deliver
to Sega the Specifications, which shall in all material respects be consistent
with the Pro Forma Specifications. No changes to the Specifications shall be
made unless agreed to in writing by the parties. On or before , the parties
shall meet to discuss any proposed changes to the Specifications for Beta
Version production (the "BETA DESIGN REVIEW"). During the Beta Design Review and
for seven (7) days thereafter, the parties agree to negotiate in good faith any
changes to be made to the Specifications which would not reasonably cause any
material increase in the cost or difficulty of, or the time required to
complete, 3Dfx's development effort; and (iii) 3Dfx and Sega shall negotiate in
good faith to reach agreement regarding any increase in cost (based upon
most-favored pricing) or schedule (based upon commercial best efforts) arising
from changes not covered by Subsection (ii) above.

2.8 PAYMENT OF ENGINEERING SERVICES CHARGES FOR DEVELOPMENT PHASE.
As full and complete consideration (except for any contingent payments under
Section 2.9) for the development by 3Dfx of the Graphics ,
completion by 3Dfx of all of its development tasks and obligations under this
Agreement, Sega shall pay to 3Dfx interim payments totaling the sum of in
engineering services charges according to the following Milestone schedule:




INTERIM PAYMENT
Signing of Agreement between Sega and 3Dfx $ 1,550,000 U.S.



All interim payments above shall be due within twenty-one (21) days following
the date of Sega's acceptance of each Milestone. Sega and 3Dfx agree that the
above payments include full compensation to 3Dfx for the production and delivery
to Sega, both at 3Dfx's expense, following Sega's acceptance of the relevant
Deliverables, of all Alpha, Beta, and Production Version samples,
The Alpha, Beta, and Production Version Samples may be manufactured by
either the Sega or 3Dfx Foundry and shall be delivered according to the
development Schedule. Sega may order additional Alpha, Beta, or Production
Version samples from any remaining prototype wafers, at a cost not to
exceed 3Dfx's actual costs.

2.9 ON-TIME DELIVERY BONUS. With respect to each of the specified
versions of the Graphics listed below, Sega shall pay 3Dfx a bonus
for on-time delivery ("On-Time Delivery Bonus"), in the amounts listed below,
provided that: (a) 3Dfx delivers all Deliverables relating to such versions in
acceptable form on or before the Milestone delivery data specified in the
Development Schedule; and (b) Sega accepts such Deliverables upon the initial
submission and testing of such Deliverables under Section 2.2.


DELIVERABLE ON-TIME DELIVERY BONUS

Any On-Time delivery Bonuses earned by 3Dfx shall be paid to 3Dfx within
twenty-one (21) days of Sega's acceptance of each Deliverable.

3. LICENSES TO GRAPHICS CHIPSET AND RELATED SOFTWARE

3.1 OWNERSHIP. As between the parties hereto, and subject to the
licenses granted to Sega herein, 3Dfx shall retain ownership of all of its
existing 3D graphics technology, the 3Dfx Glide Software, , and the Arcade
Toolbox, in existence as of the Effective Date of this Agreement, the
Graphics Technology, the Alpha, Beta, and Production Versions, the
Graphics Technology, the Alpha, Beta, and Production Versions, the
Graphics , the Specifications, the Mask Data Set (exclusive of the Sega
Foundry Deliverables), and all associated documentation and all related
modifications and derivative works, and all Intellectual Property Rights related
thereto (the "3Dfx Technology"). Subject to 3Dfx's rights to the 3Dfx
Technology, Sega shall retain all rights to the Console Technology, the Sega
Deliverables (as defined in Section 3.4(a)), and all associated documentation
and all related modifications and derivative works, and all Intellectual
Property Rights related thereto. Sega grants 3Dfx no license of any kind in or
to the Console Technology.

3.2 GRAPHICS LICENSE

(a) GRANT OF LICENSE. 3Dfx hereby grants to Sega, and
Sega hereby accepts, a royalty-bearing, worldwide license, including a license
under, all Intellectual Property Rights owned or licensable by 3Dfx;

(b) LIMITATIONS AND RESERVATION OF RIGHTS. Sega shall
not, and shall not cause or authorize any third party, including but not
limited to a Sega Foundry, to sell, lease, license, sublicense, or otherwise
provide the Graphics as stand-alone components. Sega shall not reverse engineer, nor authorize a third party
to reverse engineer, the Graphics or * Mask Data Set to determine
the internal functioning of the Graphics . No license or right is
VERIFICATION TEST GAMESgranted, by implication or otherwise to Sega, under any Intellectual Property
Rights now or hereafter owned or controlled by 3Dfx except for licenses and
rights expressly granted in this Agreement.

(d) LIMITED EXCLUSIVITY CONFERRED ON 3DFX. Sega hereby
agrees that, for a period of three (3) years following the Sega Acceptance
Date, provided that 3Dfx is not in breach of its obligations under this
Agreement, Sega will not incorporate any 3D video graphics accelerator other
than the Graphics into the Console.

(i) COVENANT. 3Dfx will not assert against Sega
any claim of infringement or misappropriation of its Intellectual Property
Rights embodied in the technical information concerning how the Graphics
communicates with the Console or other Sega products, such as
external communications protocols or bus specifications,

(ii) LIMITATION. Without limitation of the
licenses granted by 3Dfx to Sega, and as provided under this Section 3.2(e),
3Dfx reserves and retains the right to assert against Sega claims of
infringement or misappropriation of any of 3Dfx's Intellectual Property Rights
(including Intellectual Property Rights in the Interface


*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

The covenant of non-assertion set forth in this Section 3.2(e)
does not constitute a license to Sega or any third party of any 3Dfx
Intellectual Property Rights in the Graphics or the individual or
, except as otherwise provided in this Section 3.2.



(i) LICENSE GRANTS BY 3DFX.

3Dfx hereby grants to Sega, and Sega hereby accepts, a nonexclusive, royalty-free, worldwide license
including a license under all Intellectual Property Rights owned or licensable
by 3Dfx: (i) to use and copy the Source Code of the 3Dfx Glide Software and
for internal use solely in the development, manufacture and support of Sega
Products, (ii) to use, copy, distribute, and sublicense to third parties, under
a standard form software license agreement at least as protective of 3Dfx's
rights in the Driver Software as the terms and conditions of this Agreement, the
rights to use, copy, and distribute the Driver Software in binary form solely
for use in connection with Sega Products; and (iii) to adapt, modify, customize,
or otherwise transform the 3Dfx Glide Internals solely for use with Sega
Products; provided that (A) no such adaptations, customizations, modifications
or transformations alter, change, modify, or otherwise affect the operation or
functioning of the 3Dfx Glide API, and (B) that Sega agrees to make such
adaptations, customizations, modifications and transformations available to 3Dfx
as provided under subsection (ii)(C) below.

(

(A) Sega may not use, and may not
authorize a third party to use, the Source Code of the 3Dfx Glide Software to
reverse engineer the Graphics ;

(B) Sega shall have no right to
transfer, sublicense or otherwise convey the Source Code of the 3Dfx Glide
Software to any third party; and

(C) Sega agrees that, provided 3Dfx is
not in breach of this Agreement, Sega shall deliver to 3Dfx on an "as is" basis
copies of Source Code for all adaptations, customization, modifications,
transformations, or derivative works of the 3Dfx Glide API developed by Sega
with 3Dfx's consent; and Sega grants, and 3Dfx hereby accepts, a nonexclusive,
nontransferable, license to use, copy, modify, distribute and make derivative
works from any adaptations, modifications, or other changes to the 3Dfx Glide
API, made by Sega. The parties agree to negotiate in good faith regarding the
possibility of delivery by Sega and licensing to 3Dfx of any adaptations,
modifications, or other changes to the 3Dfx Glide Internals, made by Sega.

(b) ARCADE TOOL BOX. 3Dfx hereby grants to Sega, and Sega
hereby accepts, a nonexclusive, royalty-free, unrestricted, worldwide license
to adapt, modify, customize, or otherwise transform, and to distribute and
sublicense the Arcade Tool Box, including without limitation, the Source Code
thereof. Except as otherwise agreed in writing, 3Dfx will have no obligation to
provide Sega or any sublicensee of Sega with support for the Arcade Tool Box or
any enhancements, improvements or modifications to the Arcade Tool Box.

(c) EVALUATION OF 3DFX GLIDE API FOR CONSOLE. Sega
agrees to promptly evaluate the 3Dfx Glide API after delivery thereof for use
as a standard graphics API for use with the Graphics in the
Console. Sega shall advise 3Dfx of its decision regarding the Glide API no
latter than the date specified on the Development Schedule.


(d) DRIVER SOFTWARE SUPPORT. For a period
Sega's acceptance of the Production Version, 3Dfx, at no
additional cost to Sega, will provide Sega with maintenance and technical
support for the unmodified Driver Software to enable Sega to support its
Console customers in accordance with the Driver Software Support Profile
attached as Schedule 3.3(d). Such maintenance and support shall include: all
changes, upgrades, or enhancements to the Driver Software developed and made
available in the ordinary course of business by 3Dfx and 3Dfx's prompt
correction of all material errors known by 3Dfx or brought to its attention by
Sega or third parties. 3Dfx shall have no obligation to support Sega customers
directly.

3.4 SEGA DELIVERABLES AND SEGA FOUNDRY DELIVERABLES.

(a) OWNERSHIP AND LICENSE TO SEGA DELIVERABLES. As
between the parties hereto, Sega shall retain ownership of all Sega technology,
designs, specifications, code, interfaces and protocols (collectively, "SEGA
DELIVERABLES") it supplies to 3Dfx for development of the Graphics ,
including all Intellectual Property Rights related thereto, whether or not
embodied in the Console, Console Technology, or Sega Foundry
Deliverables. Sega grants, and 3Dfx accepts, a limited, non-exclusive license
solely during the term of this Agreement, to use internally the Sega
Deliverables solely to develop and support the Graphics for Sega,
and otherwise perform its obligations hereunder.

(b) SEGA FOUNDRY DELIVERABLE LICENSE. Subject to the
terms and conditions of this Agreement and a Foundry Agreement as specified in
Section 2.3(a)(iv), Sega agrees to cause the Sega Foundry to grant 3Dfx a
worldwide, non-exclusive, non-transferable, royalty-free license to (i) use the
Sega Foundry Deliverables solely to qualify the Sega Foundry under Section 2.3,
and (ii) incorporate the Sega Foundry Deliverables into the Graphics
and resulting Mask Data set solely to provide same to the Sega
Foundry to manufacture such Graphics on behalf of Sega.

(c) LICENSE RELATING TO SEGA ENGINEERS. With respect to
any developments, improvements, inventions, enhancements or discoveries
("FIXES") made by Sega engineers at the 3Dfx Facilities pursuant to Section
2.2(b)(iii)(A) or Section 2.2(b)(iv)(D), which are provided to 3Dfx and reduced
to a writing, Sega hereby grants to 3Dfx a limited, non-exclusive, worldwide,
royalty-free, perpetual, irrevocable license including a license under all
Intellectual Property Rights owned by Sega and embodied in the Fixes (i) to
use, reproduce, modify, and make derivative works of such Fixes, (ii) subject
to the restrictions of this Agreement, to manufacture, have manufactured,
distribute, and sublicense the Fixes, and derivatives thereof, as embodied in
the * Graphics or derivatives thereof; and (iii) the unlimited right
to sublicense to third parties (with the right to further sublicense to any
level of tiers) all of the rights set forth in subsections (i) and (ii)
immediately above.

3.5 PROPRIETARY MARKS AND MARKING REQUIREMENTS. Subject to Sega's
prior written approval as to form, size and location, which approval shall not
be unreasonably withheld, Sega will not delete or alter in any material manner
the Intellectual Property Rights markings of 3Dfx, and its suppliers, if any,
appearing on or in any 3Dfx product delivered to Sega. Sega agrees to (i)
reproduce and display such markings on each copy it makes of any 3Dfx product, and (ii) place in the documentation accompanying the
Console the phrase: "3D graphics accelerated by 3Dfx."



4.1 CONSOLE MANUFACTURING ROYALTIES. As consideration for
the license to manufacture and distribute the Graphics as a
component of the Console, Sega shall pay Net Royalties to 3Dfx, based
upon the cumulative volume of Units ("MANUFACTURING ROYALTIES"),
according to the following schedule:



4.2 CONSOLE ROYALTY PREPAYMENT. Within thirty (30) days
following the Sega Acceptance Date, Sega shall pay to 3Dfx a royalty advance in
the amount of U.S. (the "FIRST ADVANCE"), to be credited against the
Manufacturing Royalties due in the aggregate under Sections 4.1 and 4.4.
Thereafter, on the first anniversary of the Sega Acceptance Date, if the
aggregate amount of the First Advance plus all additional Manufacturing
Royalties payable by Sega to 3Dfx under Sections 4.1 and 4.4 combined is less
than a total of U.S., then Sega shall pay 3Dfx an additional royalty
advance (the "SECOND ADVANCE") in an amount such that the total of the First
Advance, the Manufacturing Royalties paid as of the first anniversary of the
Sega Acceptance Date, and the Second Advance is equal to U.S. If the
applicable per unit Manufacturing Royalty is reduced pursuant to Section
2.2(b)(iv) for late delivery by 3Dfx of the Beta Version, then the First
Advance required under this Section 4.2 shall be reduced to U.S., and the
threshold amount for purposes of any Second Advance shall be reduced to
U.S.

4.3 3DFX REFERENCE COSTS. 3Dfx shall publish, not less than once
each calendar quarter, a reference cost such reference cost to be based on
the then-current lowest purchase price that 3Dfx pays to the 3Dfx Foundry or
that 3Dfx is quoted from the Sega Foundry (the "REFERENCE COST"). For a period
of three (3) years from the date of Sega's acceptance of the Production Version


, 3Dfx shall establish the Reference Cost once each calendar quarter,
based upon the lowest purchase price paid by any third party to 3Dfx


(i) CONSOLE ROYALTIES. Sega shall make all
payments due to 3Dfx under Section 4.1 within forty-five (45) days of the end
of each calendar quarter based on the number of Units purchased and
accepted by Sega during each calendar quarter.



(iii) INTEREST. Payments made after the due date
shall bear interest at one percent (1%) over the prime rate offered by the Bank
of America.

(b) PAYMENT REPORTS AND RECORDS. Within forty-five (45)
days after the close of each quarter ending March 31, June 30, September 30 and
December 31, Sega will deliver to 3Dfx a report which will provide all
information reasonably necessary for computation and/or confirmation of (i) the
payments, if any, due or credited to 3Dfx for such quarterly period, and (ii)
the number of Consoles manufactured in such quarterly period and the
number of Graphics s incorporated into Games. Sega will
maintain reasonable records to support payments required under this Agreement,
regarding purchases of the Units and manufacture of Consoles and
the use of Graphics s in Games.

(c) AUDIT. At 3Dfx's sole cost and expense (except as
provided below), an internationally recognized independent certified public
accounting firm selected by 3Dfx, subject to Sega's reasonable approval and
consent and execution of a confidentiality agreement acceptable to Sega, may,
upon reasonable notice and during normal business hours, inspect the records of
Sega on which such reports are based no more than once annually during this
Agreement to determine any over payments or underpayments. If, upon performing
such audit, it is determined that Sega has underpaid 3Dfx by an amount greater
than five percent (5%) of the payments due 3Dfx in the period being audited,
Sega will bear all reasonable expenses and costs of such audit and shall
immediately make full payment of the shortfall, plus interest at one percent
(1%) over the prime rate offered by the Bank of America. Sega shall be entitled
to all reports and work papers of the auditor and any overpayment shall be
corrected promptly via a refund by 3Dfx, or at Sega's sole option, via a credit
against future Sega payments.

5. LICENSES TO SEGA GAMES

5.1 PORTING OF SEGA GAMES. Sega and 3Dfx agree to the terms and
conditions of this Section 5 regarding the possible porting to the 3Dfx Glide
API, and the possible bundling by 3Dfx with 3Dfx hardware, of certain
coin-operated arcade or consumer console video game software, which is owned or
licensable by Sega and not subject to any conflicting grant of rights in favor
of any third parties ("SEGA GAMES"), for distribution by 3Dfx solely as bundled
product in the personal computer (" ") market. 3Dfx hereby acknowledges that
Sega has previously granted to Sega Entertainment the right of first refusal to
port certain Sega video games for use on hardware.

(a) GRANT OF LICENSE.
Provided that 3Dfx maintains its 3D technology graphics product at performance levels equal
to or exceeding the performance of competitive products, Sega agrees to offer 3Dfx a nonexclusive,
nontransferable, royalty-free license, to be exercised by 3Dfx in its sole
discretion at its sole expense, to port up to Sega Games each year for a
period of three years from the date of this Agreement (the "PORTABLE SEGA
GAMES"), solely to port such Portable Sega Games to the then-current 3Dfx Glide
API solely for release as bundled, retail software products bundled with
3Dfx -based graphics hardware products. Sega shall consider in good faith any
selection request of 3Dfx as to the Portable Sega Games to be ported, provided
that the final decision with respect to such selection shall be Sega's, in its
sole discretion. Sega may, in its sole discretion and in lieu of the foregoing
license to 3Dfx, port up to Portable Sega Games per year, porting them to
the then-current 3Dfx Glide API for release by 3Dfx solely as bundled retail
Software products bundled with 3Dfx -based graphics hardware products.


(b) OPTIMIZATION EFFORTS. U.S. Each party agrees that
whenever it is the party undertaking the porting of Portable Sega Games under
this Section 5, it shall use diligent efforts to optimize the ported Portable
Sega Games for advanced features of the 3Dfx graphics product, and to
maintain optimizations or functions specific to the * Graphics
provided that such functions are supported in the then-current 3Dfx graphics
product.

5.2 BUNDLING RIGHTS. During the term of the rights granted under
this Section 5, Sega shall offer 3Dfx a right of first negotiation for the
rights to bundle Sega Games other than the Portable Sega Games with 3Dfx
graphics hardware. The Sega Games covered by this Section 5.2 shall be limited
to Sega Games that Sega has the right to port to hardware and bundle, and as
to which the right of negotiation hereunder does not conflict with any other
rights granted by Sega to third parties.

(a) With respect to any covered Sega Products, 3Dfx's
right of first negotiation shall commence upon the earlier of Sega's public
announcement, which shall be copied to 3Dfx, or notice to 3Dfx, of its
intention to release such Sega Game for the market. The parties agree to
negotiate in good faith for thirty (30) days following Sega's announcement
notice, provided that if the parties are unable to reach agreement during such
thirty-day period, Sega may negotiate with and contract with any other party
for bundling of the applicable Sega Game. Sega's obligation to negotiate during
the thirty-day period is conditioned upon 3Dfx providing Sega with an
acknowledgment of interest within seven (7) days after 3Dfx's receipt of Sega's
announcement or notice.

(b) If, within six (6) months after Sega's announcement
or notice as to any covered Sega Game (and provided that 3Dfx gave Sega notice
of its interest pursuant to Section 5.2(a)), Sega has not contracted for the
bundling of such Sega Game, and Sega it not under any conflicting obligations
to any third party, and Sega receives an offer from a third party to bundle
such Sega Game with hardware utilizing 3Dfx graphics products, Sega will
(unless prohibited by the terms of the pending offer or any other obligations)
allow 3Dfx the opportunity to meet or better the pending offer and negotiate
with Sega for fifteen (15) days to reach agreement. If the parties do not reach
agreement within 15 days, Sega shall have no further obligation to negotiate
with 3Dfx as to such Sega Game.

parallaxscroll
06-25-2013, 01:39 AM
(continued)



5.4 TERMS OF LICENSE. The rights granted under this Section 5
shall commence upon the Sega Acceptance Date and shall continue, subject to the
terms hereof, for three years.

5.6 INDEPENDENT OBLIGATIONS. Each party acknowledges that this
Section 5 is intended as an independent agreement and in no event will the
performance or breach of


*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

this Section 5 affect in any way the parties' performance or obligations under
the other terms of this Agreement. In the event of a breach of this Section 5,
the non-breaching party's right to terminate shall only operate to terminate
this Section 5 without any effect on the other terms of this Agreement. Any
claim for damages for breach under this Section 5 shall be limited by Section
8.5.2.

6. DESIGN INTEGRATION, 3DFX TECHNICAL SUPPORT, AND UPDATES.

6.1 CONSOLE DESIGN INTEGRATION. 3Dfx shall provide reasonable
consultation and assistance to Sega, and Sega's third-party component
developers, at no charge, for the integration of the Graphics into
the Console. The scope of such consultation and assistance shall include,
upon Sega's request, periodic telephonic, e-mail, and written consultation, and
engineering assistance at locations designated by Sega. Sega agrees to pay
3Dfx's reasonable travel and accommodation expenses for on-site assistance, and
3Dfx's engineering services charges at 3Dfx's most-favored customer rates for
engineering assistance .

6.2 TECHNICAL SUPPORT. For after Sega's acceptance
of the Production Version , 3Dfx shall provide technical, quality
assurance, and engineering assistance to Sega with respect to the Graphics
in accordance with the 3Dfx Support Profile to be negotiated in
good faith between the parties, in connection with supporting Sega's
Console customers; provided, however, that 3Dfx has no obligation to provide
any support for additional terms for a fee to be negotiated in
good faith, provided that Sega is then continuing to ship substantial
commercial quantities of Sega Products which incorporate the Graphics
.

6.3 FOUNDRY SUPPORT. 3Dfx shall use commercially reasonable
efforts to provide assistance to the 3Dfx Foundry and Sega Foundries to enable
the 3Dfx Foundry and Sega Foundries to meet the cost and yield targets defined
in Schedule 6.3.

6.4 NO UPDATES. Without limiting 3Dfx's warranty, support and
other obligations under this Agreement, 3Dfx has no obligation to deliver to
Sega updates, improvements, modifications, or further developments relating to
the Graphics unless pursuant to a Cost Reduction Project or as
otherwise agreed by the parties in writing.


7. PURCHASING

Sega shall purchase all units of the Graphics required to
manufacture the Console from the Sega Foundries or the 3Dfx Foundry.
3Dfx makes no warranty or representation as to the price per unit quantity of
units available, or quality of manufacture, of Graphics manufactured by
the Sega Foundries or the 3Dfx Foundry. All purchases by Sega of units of the
Graphics shall be subject to the terms and conditions of separate
agreements reached by and between Sega and the foundries; provided, however,
that 3Dfx will take all steps required to authorize the 3Dfx Foundry and
qualified Sega Foundries to sell units of the Graphics to Sega.


8.1 REPRESENTATIONS AND WARRANTIES OF 3DFX. 3Dfx covenants,
represents and warrants all of the following:

8.1.1 Beginning on the date of Sega's acceptance of the Production
Version , continuing (the "WARRANTY PERIOD"), the Graphics , and
all Deliverables, portions or components related thereto shall be free of
material defects and operate in all material respects in conformance with the
Specifications and other requirements of this Agreement (any failure thereof, a
"DESIGN DEFECT"). In the event that Sega notifies 3Dfx of any Design Defects,
3Dfx shall use best efforts to diligently correct any such nonconformities by
(i) revising the Mask Data Set and providing such revised Mask Data Set
to the 3Dfx Foundry and the Sega Foundries, and (ii) providing to Sega software
work-arounds or patches for existing defective Graphics s. If, as a
result of Design Defects, Sega replaces defective , whether in Sega's
possession or by recall, 3Dfx shall pay the 3Dfx Foundry or Sega Foundries for
all manufacturing and shipping costs in order to deliver to Sega royalty-free,
corrected replacements for such ; provided, however, that 3Dfx shall have no
replacement liability with regard to Design Defects which Sega detected during
its testing of the Console internally or by independent prospective and
actual software developers for the Console, and which Sega did not report to
3Dfx upon detection. Except as provided above, 3Dfx shall not be responsible for
the cost of any product recall, for replacement of defective Graphics s
or components thereof, nor for a refund of any royalties paid by Sega. 3Dfx
shall not be liable to Sega for manufacturing defects caused by the 3Dfx Foundry
or Sega Foundries, nor the costs for any product recall or replacement of any
Graphics resulting therefrom. The remedies set forth in this Section
shall be Sega's sole and exclusive remedy for Design Defects.


8.1.2 The Graphics will conform to the Specifications,
and all components of the * Graphics will operate together as an
integrated subsystem.

8.1.3 The Graphics as provided by 3Dfx will not contain
any undocumented material features of any kind whatsoever.

8.1.4 All services rendered by 3Dfx in connection with this
Agreement shall be provided in a timely manner in accordance with the highest
professional standards and practices, and 3Dfx's personnel performing such work
shall have the requisite expertise and ability to perform the tasks assigned to
them.

8.1.5 3Dfx has full authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby, and this Agreement will
not violate any other agreement to which 3Dfx is or becomes a party nor any
law, court order or decree to which 3Dfx is subject.

8.1.6 The Graphics shall not infringe the Intellectual
Property Rights, exclusive of patent rights, of any third party as may now or
in the future exist, and 3Dfx has the right to grant all of the licenses to
Sega hereunder, free from all claims, liens, security interests or other
encumbrances. To the best of 3Dfx's knowledge, the Graphics shall
not infringe the patent rights of any third party as may now or in the future
exist. 3Dfx shall not place on any of such software any liens, security
interests or other encumbrances that would in any manner affect Sega's licenses
under this Agreement.

8.1.7 Neither the Graphics , nor the Driver Software (nor
any portion thereof) contains or shall contain, at the time of installation,
any timer, clock, counter, or other limiting design or routine, nor (to the
best of 3Dfx's knowledge) any virus, that causes or could cause any Sega
Product (or any portion thereof) to become erased, inoperable, impaired, or
otherwise incapable of being used in the full manner for which it was designed
and licensed (including, without limitation, any design or routine that would
impede copying thereof) after being used or copied a certain number of times,
or after the lapse of a certain period of time, or after the occurrence or
lapse of any similar triggering factor or event. Furthermore, neither the
Graphics nor Driver Software contains or shall contain, any virus,
limiting design, or routine that causes or could cause them or any of them to become erased, inoperable, impaired, or
otherwise incapable of being used in the full manner for which it was designed
and licensed pursuant to this Agreement solely because it has been installed on
or moved to a hardware unit or system that has a serial number, model number,
or other identification different from the identification of the one on which
it was originally installed.


8.1.8 The Graphics and Driver Software developed by 3Dfx
will not abruptly end or provide invalid or incorrect results during operation
prior to, on or after January 1, 2000, or when given a valid date containing
century, year, month, and day. For purposes hereof, a failure to "operate
accurately" exists if any one or more of the following properties or
capabilities is lacking: (i) execution of calculations using dates with a
four-digit year; (ii) functionality (including both on-line and batch)
including, but not limited to, entry, inquiry, maintenance, and update, to
support four-digit year processing; (iii) interfaces and reports that support
four-digit year processing; (iv) successful transition, without human
intervention, into the year 2000 using the correct system date (e.g.,
01104/2000); (v) after transition to the year 2000, continued processing with a
four-digit year without human intervention; (vi) calculation of leap year
correctly; and (vii) provision of correct results in forward and backward data
calculation spanning century boundaries, including the conversion of previous
years currently stored as two digits.

8.1.9 Except for any license or other payments to be made by 3Dfx
for certain inbound elements of the 3Dfx Technology, no fees, licenses or
commissions are due or payable to any broker, finder, or other third party in
connection with this Agreement.

8.2 REPRESENTATIONS AND WARRANTIES OF SEGA. Sega convenants,
represents and warrants all of the following:

8.2.1 Sega has full corporate authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby,
and this Agreement will not violate any other agreement to which Sega is or
becomes a party nor any law, court order or decree to which Sega is subject.

8.2.2 All technology, designs, specifications, code,
interfaces and protocols developed internally by Sega, licensed by Sega to 3Dfx
hereunder, and which are incorporated into Graphics , do not
infringe the Intellectual Property Rights, exclusive of patent rights, of any
third party when incorporated into Sega Products, and Sega has the right to
grant all of the licenses to 3Dfx hereunder, free from all claims, liens,
security interests or other encumbrances. To the best of Sega's knowledge, all
technology, designs, specifications, code, interfaces and protocols developed
internally by Sega, licensed by Sega to 3Dfx hereunder, and which are incorporated into Graphics , do not infringe the patent rights of any third party when incorporated into Sega Products.

8.3 GENERAL COVENANTS. Neither party shall make representations,
warranties, or guarantees to anyone with respect to the specifications,
features, capabilities or operations of the other's products or services that
are inconsistent with or in addition to this Agreement and such other party's
published literature. Neither party shall make modifications, enhancements or
changes to the other's products except as permitted hereunder nor shall it
permit any of its respective agents, employees, or representatives to make any
such modifications, enhancements or changes without the other's prior written
consent. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES
ANY REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NONINFRINGEMENT.

8.4 LIMITATIONS OF LIABILITY.

8.4.1 EXCEPT AS OTHERWISE SPECIFIED IN THIS AGREEMENT,
NEITHER PARTY SHALL, UNDER ANY CIRCUMSTANCES, BE LIABLE TO THE OTHER PARTY FOR
ANY CONSEQUENTIAL, INDIRECT, SPECIAL, INCIDENTAL, OR EXEMPLARY DAMAGES
(INCLUDING WITHOUT LIMITATION, LOST PROFITS, LOSS OF ANTICIPATED BUSINESS, LOSS
OF DATA, OR BUSINESS LOSSES) EVEN IF SUCH DAMAGES ARE FORESEEABLE, AND EVEN IF
THE BREACHING PARTY HAS BEEN APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES
OCCURRING. THE LIMITS OF THIS SECTION 8.4.1 SHALL NOT PRECLUDE CLAIMS FOR
ACTUAL AND DIRECT DAMAGES, INCLUDING WITHOUT LIMITATION EXPENSES AND CHARGES
INCURRED BY A PARTY AS A RESULT OF THE OTHER PARTY'S BREACH AND EXPENSES AND
CHARGES TO MITIGATE DAMAGES RESULTING FROM THE OTHER PARTY'S BREACH.

8.4.2 SUBJECT TO THE LIMITATIONS OF SECTION 8.4.1 ABOVE,
AND EXCEPT WITH RESPECT TO INDEMNIFICATION UNDER SECTIONS 9.1 AND 9.2, CLAIMS
ARISING FROM INTENTIONAL BREACH, WILLFUL OR INTENTIONAL MISCONDUCT OR GROSS
NEGLIGENCE, EACH PARTY'S LIABILITY TO THE OTHER FOR DAMAGES CLAIMS SHALL BE
LIMITED TO .



9. INDEMNIFICATION AND INSURANCE

9.1 INDEMNIFICATION BY 3DFX. Subject to the terms of Section 9.3
below, 3Dfx shall defend, indemnify and hold Sega harmless from and against any
and all losses, damages, liability, and reasonable attorneys', expert witness,
or court fees and costs, and any other reasonable costs and expenses arising
from any claims, demands, suits, causes of action, or any other action brought
by any third party alleging infringement of any Intellectual Property Right. In
the defense or settlement of any claim for Intellectual Property Rights
infringement, 3Dfx may obtain for Sega and all customers and users of affected
Sega Products the right to continue using and licensing the allegedly
infringing materials, or replace or modify same so that they become
non-infringing, provided that 3Dfx pays all costs incurred by Sega associated
with such replacement or modification and any modifications required to other
components.

9.2 INDEMNIFICATION BY SEGA. Subject to the terms of Section 9.3
below, Sega shall indemnify and hold 3Dfx harmless from and against any and all
losses, damages, liability, reasonable attorneys', expert witness, or court
fees and costs, and any other reasonable costs and expenses arising from any
claims, demands, suits, causes of action, or any other action brought by any
third party alleging infringement of any Intellectual Property Right other than
as a result of 3Dfx's exercise of its rights under the license granted under
Section 3.4(c), but excluding any claim which is covered by 3Dfx's
indemnification of Sega in Section 9.1. In the defense or settlement of any
claim for Intellectual Property Rights infringement, Sega may obtain for 3Dfx
the right to continue using and licensing the allegedly infringing materials,
or replace or modify same so that they become non-infringing. Notwithstanding
any provision in this Agreement to the contrary, Sega shall have no liability
or obligation to 3Dfx with respect to a court judgment that an exploitation or
use of anything provided by Sega to 3Dfx hereunder, in combination with any
3Dfx Technology, infringes any Intellectual Property Rights of any third party,
provided that such exploitation or use alone (not in combination with any 3Dfx
Technology) would not infringe such third party's Intellectual Property Rights.

9.3 INDEMNIFICATION PROCEDURES. Neither party will have any
obligation to indemnify the other party under Section 9.1 or 9.2, as the case
may be, unless: (A) the indemnifying party is promptly notified of a potential
claim by the party seeking indemnification; (B) the indemnifying party has sole
control of the defense and settlement (subject to reasonable consent of the
indemnified party) of the claims sought to be indemnified; and (C) the party
seeking indemnification provides the indemnifying party with reasonable
assistance, at the indemnifying party's expense, in the defense and settlement
of the claim sought to be indemnified. Each party shall have the right to
participate in the defense and/or settlement of such actions or proceedings at
their own expense with counsel of their own choosing.

INSURANCE OBLIGATIONS. Throughout the term of this Agreement
and for two (2) years thereafter, 3Dfx shall purchase and maintain (and shall
pay all premiums and deductibles related to) commercial liability insurance,
including errors and omissions insurance, and products liability (with a
vendor's endorsement in favor of Sega) naming Sega as an additional insured and
stipulating that the coverage afforded additional insureds is primary and any
insurance maintained by additional insureds shall be excess only and
non-contributing with the coverage provided under that policy. Sega agrees it
shall maintain product liability coverage with respect to its distribution of
Units.

10. TERM AND TERMINATION

10.1 TERM. the terms of this Agreement shall commence upon the
Effective Date and shall continue in full force and effect until terminated as
provided in Section 10.2 below.

10.2 TERMINATION. The parties shall have the right to terminate
this Agreement in whole or in part as follows:

10.2.1 Provided that, during the Development Phase, 3Dfx
provides commercially reasonable efforts, including without limitation that
3Dfx makes no reductions in staffing or other resources, to complete such
development. Sega may terminate this Agreement in whole or in part based upon a
development failure by 3Dfx only as provided in Section 2;

10.2.2 Sega may terminate if 3Dfx materially breaches any of
its other obligations under this Agreement (except with respect to Section 5
and except as otherwise provided in Section 2) and 3Dfx may terminate if Sega
materially breaches any of its obligations under this Agreement (except with
respect to Section 5) and such breach shall continue uncured for a period of
forty-five (45) days after the breaching party's receipt of written notice from
the non-breaching party;

10.2.3 Either party may terminate in the event of the filing
by or against the other party of a proceeding under any bankruptcy or similar
law, unless such proceeding is dismissed, within forty-five (45) days from the
date of filing; the making by the other party of a proceeding for dissolution
or liquidation, unless such proceeding is dismissed within forty-five (45) days
from the date of filing; the appointment of a receiver, trustee or custodian
for all or part of the assets of the other party, unless such appointment or
application is revoked or dismissed within forty-five (45)days from the date
thereof; the attempt by the other party to make any adjustment, settlement or
extension of its debts with its creditors generally; or the insolvency of the
other party.

10.2.4 Under no circumstances, including the pendency of any
dispute, may 3Dfx terminate, suspend or limit its performance hereunder or
withhold or disable any Deliverables unless and until Sega has agreed in
writing to such termination, suspension or limitation or until a court of
competent jurisdiction orders otherwise; provided, however, that during that
time, Sega continues to pay any undisputed charges required to be paid under
Section 2 of this Agreement.



10.3.1 EFFECT OF TERMINATION FOR DEVELOPMENT FAILURE. Upon
termination of this Agreement under Section 10.2.1, all rights and obligations
of the parties under this Agreement, including all licenses granted to either
party hereunder, shall terminate, except for the rights and obligations of the
parties under Sections 3.2(f) (Limited Covenant of Nonassertion), 10 (Term and
Termination), and 12 (Confidentiality) which shall survive the termination of
this Agreement. Except as necessary to fulfill the surviving terms, each party
shall immediately return to the other all Confidential Information,
Deliverables and technology, including without limitation the Sega Technology
and 3Dfx Technology.



(a) SEGA'S BREACH. Upon any termination of this
Agreement under Sections 10.2.2 or 10.2.3 for Sega's breach, all licenses
granted to Sega under Section 3 (Licenses) shall terminate as provided in
subsection (b) below and each party shall immediately return to the other all
Confidential Information, Deliverables and technology, including without
limitation the Sega Technology and 3Dfx Technology. All licenses granted by
Sega to third parties shall survive according to their terms, and any licenses
granted to 3Dfx under Section 5.2 (License to Bundle Sega Games, if any)
shall survive according to their terms.

(b) SEGA TRANSITION PROCEDURE. After termination
due to Sega's breach:

(i) Sega can continue to utilize
in its inventory to manufacture Consoles, and distribute until
its inventory of and such finished products is exhausted, provided that
Sega has paid all undisputed royalty amounts owed in relation to such chips
and products;

(ii) The licensee in Section 3.2(a) to
the Graphics will terminate on the later of (a) Sega's receipt of
all orders for placed prior to the effective date of termination of this Agreement, or (b)
Sega's receipt of one final order of within one month of the effective date
of termination of this Agreement, provided, however that Sega pays all
undisputed royalties owed in relation to such chips and provided that Sega can
utilize the chips in the manufacture of Consoles, , utilizing such
chips until its inventory of and s and such finished products is
exhausted, provided that Sega has paid all undisputed royalty amounts owed in
relation to such chips and products.

(iv) The license in Section 3.3 to the
3Dfx Glide and will terminate after Sega's last shipment of
Consoles, . Any sublicenses granted to third parties will continue
indefinitely provided that the third parties are in compliance with the
terms of the sublicense.

(c) 3DFX'S BREACH. Upon any termination of this
Agreement under Sections 10.2.2 or 10.2.3 for 3Dfx's breach or 3Dfx's financial
condition, all licenses granted to Sega under Section 3 (Licenses) shall
survive according to their terms; provided, however, that the limited
exclusivity granted to 3Dfx under Subsection 3.2(e) shall terminate
immediately. The limited exclusivity in favor of Sega under Subsection 3.2(d)
shall survive such termination provided Sega is distributing Graphics
s, and only as long as Sega is distributing Graphics s in
commercial quantities.

(d) SURVIVALS. Upon any termination of this
Agreement under Section 10.2.2 or 10.2.23, the rights and obligations of the
parties under Sections 4 ( Manufacturing Royalties), 8 (Warranties,
General Covenants and Limitations of Liability), 9 (Indemnification and
Insurance), 10 (Term and Termination), 12 (Confidentiality), and 13 (General
Provisions), shall survive such termination, provided that in the event of
termination resulting from 3Dfx's breach, Sega shall be entitled to offset
against any Manufacturing Royalties all of its damages arising directly from
such breach.

11. TAX, DUTIES AND OTHER CHARGES

Sega shall be solely responsible for any sales, use, gross receipts,
value-added, excise, property or other tax, tariff, duty or assessment and
income taxes and related interest and penalties collected, levied or imposed by
national governments, state or provincial governments, local governments, or
any subdivision of the foregoing and arising out of or related to the amounts
paid to 3Dfx by Sega hereunder with the exception of taxes on 3Dfx's net
income.

12. CONFIDENTIALITY

12.1 PRIORITY OVER PRIOR NDA. The terms of this Agreement shall
supersede and replace control in the event of any conflict between any and all
terms or provisions of a previously executed non-disclosure agreement between
the parties with respect to the subject matter of this Agreement.

12.2 DEFINITION. 3Dfx and Sega acknowledge that, in the course of
performing their respective obligations hereunder, each may obtain information
relating to the other and the other's products that is of a confidential and
proprietary nature to such other party ("CONFIDENTIAL INFORMATION"). Such
Confidential Information includes without limitation the Graphics
Technology, the Source Code of the Driver Software, the Sega Deliverables,
Fixes, Console Technology, the Sega Foundry Deliverables, trade secrets,
know-how, formulas, compositions of matter, inventions, techniques, processes,
programs, diagrams, schematics, technical information, customer and financial
information, sales and marketing plans and the terms of this Agreement.

12.3 CONFIDENTIALITY OBLIGATION. Each of Sega and 3Dfx agrees, that
it will (a) use the other party's Confidential Information only in connection
with fulfilling its obligations and exercising its rights and licenses under
this Agreement; (b) hold the other party's Confidential Information in strict
confidence and exercise due care with respect to its handling and protection,
consistent with its own policies concerning protection of its care, (c) not
disclose, divulge, or publish the other party's Confidential Information except
to such of its responsible employees, subcontractors, sublicenses and
consultants (collectively, "PERSONNEL") who have a bona fide need to know to
the extent necessary to fulfill such party's obligations under this Agreement;
and (d) instruct all such Personnel not to disclose the other party's
Confidential Information to third parties, without the prior written permission
of the other party. Each party shall require all Personnel who shall come into
contact with the Confidential Information of the other party to execute a
confidentiality agreement at least as protective of the rights in such
Confidential Information as the terms and conditions of this Agreement, prior
to such Personnel being given access to any Confidential Information.

12.4 EXCEPTIONS. The obligations set forth in Section 12.3 above
will not apply to either party's Confidential Information which (i) is or
becomes public knowledge without the fault or action of the recipient party, or
the breach of any confidentiality obligation; (ii) the recipient party can
document was independently developed by it without use of Confidential
Information of the other party; or (iii) the recipient party can document was
already known to it prior to the receipt of the other party's Confidential
Information.

12.5 DISCLOSURE UNDER THE LAW. If either party is required to
disclose any Confidential Information pursuant to an order under law, it shall
use its reasonable efforts to give the party owning the Confidential
Information sufficient notice of such required disclosure to allow the party
owning the Confidential Information reasonable opportunity to object to and
take necessary legal action to prevent such disclosure.

13. GENERAL PROVISIONS

13.1 JOINT PRESS RELEASE. The parties agree to issue a joint press
release regarding the relationship contemplated by this Agreement, and shall
mutually agree on the contact and timing thereof.

13.2 NON-SOLICITATION OF EMPLOYEES. During the term of this
Agreement and for a period of one (1) year after any expiration or termination
of this Agreement for any reason other than 3Dfx's breach, both parties'
agreement not to directly solicit for employment any employee or independent
contractor of the other party involved in the development, sale or marketing of
the subject matter of this Agreement. Such prohibition shall not extend to
advertisements customarily placed in media circulated to the public.

13.3 ASSIGNMENT. Neither party shall assign or otherwise transfer
this Agreement in whole or in part, or any of the rights and obligations
hereunder, either voluntarily or by operation of law, except to its
subsidiaries or affiliates in which such party has at least a fifty percent
(50%) equity interest or voting control, while the party has such equity
interest or voting control, without the prior written consent of the other,
which consent shall not be withheld unreasonably. In the event that either
party merges with another corporation, the merging party shall cause the
corporation resulting from such merger to be bound by, and assume the
obligations of, this Agreement.

13.4 FORCE MAJEURE. Neither Sega nor 3Dfx shall be deemed to be in
default or have breached any provision of this Agreement solely as a result of
any delay, failure in performance or interruption of service resulting directly
or indirectly from any act of God, civil or military authority, civil
disturbance, war, laws, regulations, acts or orders of any government or agency
or official thereof, or any other occurrences beyond the party's reasonable
control.

13.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

13.6 WAIVER. No waiver of any provision of this Agreement or of any
rights or obligations of either party hereunder shall be effective unless in
writing and signed by the party or parties waiving compliance, and any such waiver shall be effective
only in the specific instance and for the specific purpose stated in such
writing.

13.7 NOTICES. Except as otherwise specified herein, all notices,
requests, demands or communications required hereunder shall be in writing,
delivered personally, or sent by first class mail, postage prepaid, or by
completed facsimile or e-mail transmission to the parties at their respective
addresses first set forth in this Agreement (or at such other address as shall
be given in writing by either of the parties to the other in accordance with
this Section 13.7). All notices, requests, demands, orders or communications
shall be deemed effective upon receipt in accordance with this Section 13.7.

13.8 NO JOINT VENTURE. The execution and delivery of this Agreement
shall not be deemed to confer any rights or remedies upon, nor obligate any of
the parties hereto, to any person or entity other than such parties. Nothing in
this Agreement shall cause or be deemed to cause the parties to be partners or
joint venturers with, or agent or employees of, each other. The parties are
independent contractors, and neither party shall have any right or power to
create any obligation or responsibility on behalf of the other party.

13.9 GOVERNING LAW. This Agreement and the rights and obligations
of the parties hereunder shall not be governed by the United Nations Convention
on Contracts for the International Sale of Goods, the application of which is
expressly excluded by the parties hereto. This Agreement shall be governed by,
and construed and enforced in accordance with the laws of the State of
California regardless of the choice of law rules of such state or any other
jurisdiction. All disputes arising out of this Agreement shall be subject to
the exclusive jurisdiction of either the state or federal courts located in San
Jose, California, and the parties agree and submit to the personal and
exclusive jurisdiction and venue of these courts.

13.10 ENTIRE AGREEMENT. No representations, warranties or
agreements, oral or written, express or implied, have been made to any party
hereto, except as expressly provided herein. This Agreement shall be binding
upon the respective parties hereto and their permitted successors and permitted
assigns. In the event that any provision hereof is found invalid or
unenforceable pursuant to judicial decree or decision, the remainder of this
Agreement shall remain valid and enforceable according to its terms. This
Agreement constitutes the entire understanding and agreement between the
parties regarding the subject matter of this Agreement, and supersedes all
other prior written and oral communications regarding this transaction, and may
not be altered, modified or amended except by a written amendment executed by
both parties.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute this Agreement as of the date set forth below.

SEGA ENTERPRISES LTD.


DRIVER SOFTWARE SUPPORT PROFILE

3Dfx shall provide technical support to Sega for the Driver Software, including
that 3Dfx shall use its best efforts to provide prompt response to and
correction of all reported bugs, errors or defects. Bugs, errors and defects
will be classified and corrected as follows:

"Severity 1" means bugs or errors in the Driver Software which
may cause loss of data or system crashes. 3Dfx shall commence
investigation and correction of each Severity 1 bug or error
within one (1) business day after receipt from Sega of a
report of such bug or error (or if 3Dfx otherwise becomes
aware of same) and shall continuously devote available
resources of not less than one full time individual (including
extended hours) every day until such bug or error is
corrected.

"Severity 2" means bugs or errors which impair the operation
of a major feature. 3Dfx shall commence investigation or
correction of such Severity 2 bug or error (or if 3Dfx
otherwise becomes aware of same) and shall devote available
business hours of not less than one Project Personnel full
time during normal business hours to correct such bug or error
or provide a work-around as soon as possible.

"Severity 3" means bugs or errors which impair the operation
of a minor feature or cause inconvenience or annoyance. 3Dfx
shall correct same or provide a work-around within fourteen
(14) calendar days following receipt from Sega of such bugs or
errors.

3Dfx shall give Sega prompt notice of any bugs, errors or
defects of which 3Dfx becomes aware.




(please excuse the wall of text, the full IPO is 10x ~ 100x more than this. This just shows how deeply commited 3Dfx was to Sega, but that wasn't a 2-way street)

sheath
06-25-2013, 01:48 AM
Have you actually read all of this?

http://i366.photobucket.com/albums/oo104/henri028/JOKER.gif

Can you summarize? If so, how dedicated was 3dfx in comparison to NEC Videologic?

parallaxscroll
06-26-2013, 01:08 AM
Have you actually read all of this?

I skimmed through the entire IPO. I read most of the Sega-related stuff.

3Dfx obviously depended heavily on the Sega deal as they comprehensively detailed every aspect of it, including the possibility of failure. I feel that the loss of the Sega contract in July 1997 was the beginning of the end of 3Dfx. Had the deal gone through, and assuming the Sega chip was closer to the released Avenger chip (Voodoo 3 of 1999), I think 3Dfx may have released a more powerful Banshee in 1998 (more like Avenger). Then a more competitive twin pixel piped Voodoo 3 in 1999 that would've beaten Nvidia TNT2 and TNT2 Ultra (but not GeForce 256).

Finally, instead of Voodoo 4/5 they could've hung on until Rampage was ready, beating GeForce 2 GTS and Ultra as well as the original ATI Radeon.

I'm kind of glad 3Dfx didn't prevail however, I liked Videologic/Img Tech PowerVR2 better. It was cheaper, more feature-rich, beating both Voodoo 2 and Banshee in performance, although not as fast as Voodoo 3.



Can you summarize? If so, how dedicated was 3dfx in comparison to NEC Videologic?

I cannot compare how dedicated NEC/Videologic were since they never released anything that was meant to have been kept quiet.