CONFIDENTIAL LICENSE AGREEMENT FOR GAME BOY ADVANCE (Western Hemisphere)
"[*]” denotes confidential information omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment under Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
Exhibit 10.1
THIS LICENSE AGREEMENT (“Agreement”) is entered into between NINTENDO OF AMERICA INC. (“NOA”),
at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: General Counsel (Fax: ▇▇▇-▇▇▇-▇▇▇▇) and Midway
Home Entertainment, Inc., (“LICENSEE”) at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇
▇▇▇▇▇ (Fax: (▇▇▇) ▇▇▇-▇▇▇▇). NOA and LICENSEE agree as follows:
1. RECITALS
1.1 NOA markets and sells advanced design, high-quality video game systems, including the GAME
BOY® ADVANCE system.
1.2
LICENSEE desires a license to use highly proprietary programming specifications,
development tools, trademarks and other valuable intellectual property rights of NOA and its parent
company, Nintendo Co., Ltd. (collectively “Nintendo”), to develop, have manufactured, advertise,
market and sell video game software for play on the GAME BOY ADVANCE system.
1.3 NOA is willing to grant a license to LICENSEE on the terms and conditions set forth in
this Agreement.
2. DEFINITIONS
2.1 “Artwork” means the design specifications for the Game Cartridge label and Printed
Materials in the format specified by NOA in the Guidelines.
2.2 “Development Tools” means the development kits, programming tools, emulators, and
other
materials that may be used in the development of Games under this Agreement.
2.3 “Effective Date” means the last date on which all parties shall have signed this
Agreement.
2.4 “Finished Product(s)” means the fully assembled and shrink-wrapped Licensed Products,
each
including a Game Cartridge, Game Cartridge label and Printed Materials.
2.5 “Game Cartridges(s)” means custom cartridges specifically manufactured under the terms
of
this Agreement for play on the GAME BOY ADVANCE system, incorporating semiconductor components in
which a Game has been stored.
2.6 “Game(s)” means interactive video game programs (including source and object/binary
code)
developed for play on the GAME BOY ADVANCE system.
2.7 “Guidelines” means the current version or any future revision of the “Game Boy
Packaging
Guidelines”, “Nintendo Trademark Guidelines”, “Game Boy Advance Development Manual” and related
guidelines.
2.8 “Independent Contractor” means any individual or entity that is not an employee of
LICENSEE, including any independent programmer, consultant, contractor, board member or advisor.
2.9 “Intellectual Property Rights” means individually, collectively or in any combination,
Proprietary Rights owned, licensed or otherwise held by Nintendo that are associated with the
development, manufacturing, advertising, marketing or sale of the Licensed Products, including,
without limitation, (a) registered and unregistered trademarks and trademark applications used in
connection with video games for play on the GAME BOY ADVANCE system including “Nintendo®”, “GAME
BOY® ADVANCE,” “AGB and the “Official Nintendo Seal of Quality®”, (b) select trade dress
associated with the
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GAME BOY ADVANCE system and licensed video games for play thereon, (c) Proprietary Rights in the
Security Technology incorporated into the Game Cartridges, (d) rights in the Development Tools for
use in developing the Games, (e) patents or design registrations associated with the Game
Cartridges, (f) copyrights in the Guidelines, and (g) other Proprietary Rights of Nintendo in
Confidential Information.
2.10 “Licensed Products” means (a) Finished Products, or (b) Stripped Products
when fully
assembled and shrink-wrapped with the Printed Materials.
2.11 “Marketing Materials” means marketing, advertising or promotional materials developed
by
or for LICENSEE (or subject to LICENSEE’S approval) to promote the sale of the Licensed Products,
including, but not limited to, television, radio and on-line advertising, point-of-sale materials
(e.g. posters, counter-cards), package advertising and print media or materials.
2.12 “NDA” means the non-disclosure agreement providing for the protection of Confidential
Information related to the GAME BOY ADVANCE system previously entered into between NOA and
LICENSEE.
2.13 “Notice” means any notice permitted or required under this Agreement. All notices
shall
be sufficiently given when (a) personally served or delivered, or (b) transmitted by facsimile,
with an original sent concurrently by first class U.S. mail, or (c) deposited, postage prepaid,
with a guaranteed air courier service, in each case addressed as stated herein, or addressed to
such other person or address either party may designate in a Notice. All Notices to LICENSEE shall
include a copy to: Vice President and General Counsel, Midway Games Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile (▇▇▇) ▇▇▇-▇▇▇▇. Notice shall be deemed effective upon
the earlier of actual receipt or two (2) business days after transmittal.
2.14 “Price Schedule” means the current version or any future revision of NOA’s
schedule of
purchase prices and minimum order quantities for the Licensed Products.
2.15 “Printed Materials” means the box, user instruction booklet, poster, warranty card
and
LICENSEE inserts incorporating the Artwork, together with a precautions booklet as specified by
NOA.
2.16 “Proprietary Rights” means any rights or applications for rights owned, licensed or
otherwise held in patents, trademarks, service marks, copyrights, mask works, trade secrets, trade
dress, moral rights and publicity rights, together with all inventions, discoveries, ideas,
technology, know-how, data, information, processes, formulas, drawings and designs, licenses,
computer programs, software source code and object code, and all amendments, modifications, and
improvements thereto for which such patent, trademark, service ▇▇▇▇, copyright, mask work, trade
secrets, trade dress, moral rights or publicity rights may exist or may be sought and obtained in
the future.
2.17 “Reverse Engineer(ing)” means, without limitation, (a) the x-ray, electronic
scanning or
physical or chemical stripping of semiconductor components, (b) the disassembly, decompilation,
decryption or simulation of object code or executable code, or (c) any other technique designed to
extract source code or facilitate the duplication of a program or product.
2.18 “Security Technology” means, without limitation, any security signature, bios, data
scrambling, password, hardware security apparatus, watermark, hologram, copyright management
information system or any feature which facilitates or limits compatibility with other hardware or
software outside of the Territory or on a different video game system.
2.19 “Stripped Product(s)” means the Game Cartridges with Game Cartridge labels affixed.
2.20 “Term” means three (3) years from the Effective Date.
2.21 “Territory” means all countries within the Western Hemisphere and their respective
territories and possessions.
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3. GRANT OF LICENSE: LICENSEE RESTRICTIONS
3.1 Limited License Grant. For the Term and for the Territory, NOA grants to LICENSEE
a nonexclusive, nontransferable, limited license to use the Intellectual Property Rights to develop
Games for manufacture, advertising, marketing and sale as Licensed Products, subject to the terms
and conditions of this Agreement. Except as permitted under a separate written authorization from
Nintendo, LICENSEE shall not use the Intellectual Property Rights for any other purpose.
3.2 LICENSEE Acknowledgement. LICENSEE acknowledges (a) the value of the Intellectual
Property Rights, (b) the right, title, and interest of Nintendo in and to the Intellectual Property
Rights, and (c) the right, title and interest of Nintendo in and to the Proprietary Rights
associated with all aspects of the GAME BOY ADVANCE system. LICENSEE recognizes that the Games,
Game Cartridges and Licensed Products will embody valuable rights of Nintendo and Nintendo’s
licensors. LICENSEE represents and warrants that it will not undertake any act or thing which in
any way impairs or is intended to impair any part of the right, title, interest or goodwill of
Nintendo in the Intellectual Property Rights. LICENSEE’S use of the Intellectual
Property Rights shall not create any right, title or interest of LICENSEE therein.
3.3 LICENSEE Restrictions and Prohibitions. LICENSEE represents and warrants
that it will not at any time, directly or indirectly, do or cause to be done any of the following:
(a) grant access to, distribute,
transmit or broadcast a Game by electronic means or by any
other means known or hereafter devised, including, without limitation, by wireless, cable, fiber
optic, telephone lines, microwave, radiowave, computer or other device network; provided, however,
that limited transmissions may be made for the sole purpose of facilitating development under the
terms of this Agreement, but no right of retransmission shall attach to any such authorized
transmission and, reasonable security measures, customary within the high technology industry,
shall be. utilized to reduce the risk of unauthorized interception or retransmission of any such
authorized transmission,
(b) authorize or permit any online
activities involving a Game, including, without limitation,
multiplayer, peer-to-peer or online play,
(c) modify, install or operate a
Game on any server or computing device for the purpose of or
resulting in the rental, lease, loan or other grant of remote access to the Game,
(d) emulate, interoperate,
interface or link a Game for operation or use with any hardware or
software platform, accessory, computer language, computer environment, chip instruction set,
consumer electronics device or device other than the GAME BOY ADVANCE system or the Development
Tools,
(e) embed, incorporate, or store a
Game in any media or format except the cartridge format
utilized by the GAME BOY ADVANCE system, except as may be necessary as a part of the Game
development process under this Agreement,
(f) design, implement or undertake
any process, procedure, program or act designed to
circumvent the Security Technology,
(g) utilize the Intellectual
Property Rights to design or develop any interactive video game
program, except as authorized under this Agreement,
(h) manufacture or reproduce a Game
developed under this Agreement, except through Nintendo,
or
(i) Reverse Engineer or assist in
the Reverse Engineering of all or any part of the GAME BOY
ADVANCE system, including the hardware or software (whether embedded or otherwise), or the Security
Technology.
PAGE 3
3.4 Development Tools. Nintendo may lease, loan or sell Development Tools to LICENSEE
to assist in the development of Games under this Agreement. Ownership and use of any Development
Tools provided to LICENSEE by Nintendo shall be subject to the terms of this Agreement. LICENSEE
acknowledges the exclusive interest of Nintendo in and to the Proprietary Rights associated with
the Development Tools. LICENSEE’s use of the Development Tools shall not create any right, title or
interest of LICENSEE therein. LICENSEE shall not, directly or indirectly, (a) use the Development
Tools for any purpose except the design and development of Games under this Agreement. (b)
reproduce or create derivatives of the Development Tools, except in association with the
development of Games under this Agreement, (c) Reverse Engineer the Development Tools, or (d) sell,
lease, assign, lend, license, encumber or otherwise transfer the Development Tools. Any tools
developed or derived by LICENSEE as a result of a study of the performance, design or operation of
the Development Tools shall be considered derivative works of the Intellectual Property Rights, but
may be retained and utilized by LICENSEE in connection with this Agreement. In no event shall
LICENSEE (i) seek, claim or file for any patent, copyright or other Proprietary Right with regard
to any such derivative work, (ii) make available any such derivative work to any third party, or
(iii) use any such derivative work except in connection with the design and development of Games
under this Agreement.
4. SUBMISSION OF GAME AND ARTWORK FOR APPROVAL
4.1 Development and Sale of the Games. LICENSEE may develop Games and have
manufactured, advertise, market and sell Licensed Products for play on the GAME BOY ADVANCE system
only in accordance with this Agreement.
4.2 Third Party Developers. LICENSEE shall not disclose the Confidential Information,
the Guidelines or the Intellectual Property Rights to any Independent Contractor, nor permit any
Independent Contractor to perform or assist in development work for a Game, unless and until such
Independent Contractor has been approved by NOA and has executed a written confidentiality
agreement with NOA relating to the GAME BOY ADVANCE system.
4.3 Delivery of Completed Game. Upon completion of a Game, LICENSEE shall deliver a
prototype of the Game to NOA in a format specified in the Guidelines, together with written user
instructions, a complete description of any security holes, backdoors, time bombs, cheats, “easter
eggs” or other hidden features or characters in the Game and a complete screen text script. NOA
shall promptly evaluate the Game with regard to (a) its technical compatibility with and error-free
operation on the GAME BOY ADVANCE system, and (b) its compliance with the game content guidelines
of the Entertainment Software Ratings Board (“ESRB). LICENSEE shall provide NOA with a certificate
of a rating for the Game from the ESRB other than “AO” or “ADULTS ONLY”.
4.4 Approval of Completed Game. NOA shall, within a reasonable period of time after
receipt, approve or disapprove each submitted Game. If a Game is disapproved, NOA shall specify in
writing the reasons for such disapproval and state what corrections or improvements are necessary.
After making the necessary corrections or improvements, LICENSEE shall submit a revised Game to NOA
for approval. NOA shall not unreasonably withhold or delay its approval of any Game. The approval
of a Game by NOA shall not relieve LICENSEE of its sole responsibility for the development, quality
and operation of the Game or in any way create any warranty for a Game or a Licensed Product by
NOA.
4.5 Submission of Artwork. Upon submission of a completed Game to NOA, LICENSEE shall
prepare and submit to NOA the Artwork for the proposed Licensed Product. Within [* ]
business days of receipt, NOA shall approve or disapprove the Artwork. If any Artwork is
disapproved, NOA shall specify in writing the reasons for such disapproval and state what
corrections or improvements are necessary. After making the necessary corrections or improvements,
LICENSEE shall submit revised Artwork to NOA for approval, NOA shall not unreasonably withhold or
delay its approval of any Artwork. The approval of the Artwork by NOA shall not relieve LICENSEE of
its sole responsibility for the development and quality of the Artwork or in any way create any
warranty for the Artwork or the Licensed product by NOA.
*Information has been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
PAGE 4
4.6 Artwork for Stripped Product. If LICENSEE submits an order for Stripped
Product, all Artwork shall be submitted to NOA in advance of NOA’s acceptance of the order and no
production of Printed Materials shall occur until such Artwork has been approved by NOA under
Section 4.5 herein.
5. ORDER PROCESS, PURCHASE PRICE. PAYMENT AND DELIVERY
5.1 Submission of Orders by LICENSEE. LICENSEE may at any time submit written purchase
orders to NOA for any approved Licensed Product title. The purchase order shall specify whether it
is for Finished Product or Stripped Product. The terms and conditions of this Agreement shall
control over any contrary terms of such purchase order or any other written documents submitted by
LICENSEE. All orders are subject to acceptance by NOA in Redmond, WA.
5.2 Purchase Price and Minimum Order Quantities. The purchase price and minimum order
quantities for the Licensed Products shall be set forth in NOA’s then current Price Schedule. The
purchase price includes the cost of manufacturing together with a royalty for the use of the
Intellectual Property Rights. No taxes, duties, import fees or other tariffs related to the
development, manufacture, import, marketing or sale of the Licensed Products are included in the
purchase price and all such taxes are the responsibility of LICENSEE (except for taxes imposed on
NOA’s income). The Price Schedule is subject to change by NOA at any time without Notice.
5.3 Payment. Upon placement of an order with NOA. LICENSEE shall pay the full purchase
price to NOA either (a) by placement of an irrevocable letter of credit in favor of NOA and payable
at sight, issued by a bank acceptable to NOA and confirmed, if requested by NOA, at Licensee’s
expense, or (b) in cash, by wire transfer to NOA’s designated account. All associated banking
charges shall be for Licensee’s account.
5.4 Shipment and Delivery. The Licensed Products shall be delivered F.O.B. Japan or
such other delivery point specified by NOA, with shipment at
LICENSEE’S direction and
expense. Orders may be delivered by NOA in partial shipments, each directed to not more than [* ] destinations designated by LICENSEE within the Territory. Title to the Licensed Products
shall vest in accordance with the terms of the applicable letter of credit or, in the absence
thereof, at the point of delivery.
6. MANUFACTURE OF THE LICENSED PRODUCT
6.1 Manufacturing. Nintendo Co., Ltd. shall be the exclusive source for the
manufacture of the Game Cartridges, with responsibility for all aspects of the manufacturing
process, including the selection of the locations and specifications for any manufacturing
facilities, determination of materials and processes, appointment of suppliers and subcontractors
and management of all work-in-progress.
6.2 Manufacture of the Licensed Products. Upon acceptance by NOA of a purchase order
for an approved Licensed Product title and payment as provided for under Section 5.3 herein, NOA
(through Nintendo Co., Ltd., and/or its subcontractors), will arrange for the manufacture of
Finished Product or Stripped Product, as specified in LICENSEE’S purchase order.
6.3 Security Features. The final release version of the Game, Game Cartridges and
Printed Materials shall include such Security Technology as Nintendo, in its sole discretion, may
deem necessary or appropriate.
6.4 Production of Stripped Product Printed Materials. For Stripped Product, LICENSEE
shall arrange and pay for the production of the Printed Materials using the Artwork. Upon receipt
of an order of Stripped Product, LICENSEE shall assemble the Game Cartridges and Printed Materials
into the Licensed Products. Licensed Products may be sold or otherwise distributed by LICENSEE only
in fully assembled and shrink-wrapped condition.
6.5 Prior Approval of Licensee’s Independent Contractor. Prior to the placement of a
purchase order for Stripped Product, LICENSEE shall obtain NOA’s approval of any
Independent
*Information has been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
PAGE 5
Contractors selected to perform the production and assembly operations. LICENSEE shall provide
NOA with the names, addresses and all business documentation reasonably requested by NOA for such
Independent Contractors. NOA may, prior to approval and at reasonable intervals thereafter, (a)
require submission of additional business or financial information regarding the Independent
Contractors, (b) inspect the facilities of the Independent Contractors, and (c) be present to
supervise any work on the Licensed Products to be done by the Independent Contractors. If at any
time NOA deems an Independent Contractor to be unable to meet quality, security or performance
standards reasonably established by NOA, NOA may refuse to grant its approval or withdraw its
approval upon Notice to LICENSEE. LICENSEE may not proceed with the production of the Printed
Materials or assembly of the Licensed Product until NOA’s concerns have been resolved to its
satisfaction or until LICENSEE has selected and received NOA’s approval of another Independent
Contractor.
6.6 NOA Inserts for Stripped Product. NOA, at its option, may provide LICENSEE with
NOA produced promotional materials (as provided for at Section 7.7(a) herein), which LICENSEE
agrees to include in the assembly of the Licensed Products. NOA acknowledges that LICENSEE may be
subject to certain third party approval rights for the Licensed Products in order to comply with
this Section 6.6, and in the event it is required to do so, LICENSEE shall use its best efforts to
obtain such third party approval(s) within [* ] business days after NOA notifies LICENSEE
that it desires to insert such promotional materials. In the event that the insertion of any
promotional materials results in an incremental cost increase, NOA shall be responsible for any
cost increase provided LICENSEE delivers to NOA detailed documentation to support ail such costs.
6.7 Sample Printed Materials and Stripped Product. Within a reasonable period of time
after LICENSEE’S assembly of the initial order for a Stripped Product title, LICENSEE
shall provide NOA with (a) [* ] sample of the fully assembled, shrink-wrapped
Licensed Product, and (b) [* ] samples of LICENSEE produced Printed Materials for such
Licensed Product.
6.8 Retention of Sample Licensed Products by Nintendo. Nintendo may, at its own
expense, manufacture reasonable quantities of the Game Cartridges or the Licensed Products to be
used for archival purposes, legal proceedings against infringers of the Intellectual Property
Rights or for other lawful purposes.
7. MARKETING AND ADVERTISING
7.1 Approval of Marketing Materials. LICENSEE represents and warrants that the
Marketing Materials shall (a) be of high quality and comply with the Guidelines, (b) comply with
all voluntary ESRB advertising, marketing or merchandising guidelines, and (c) comply with all
applicable laws and regulations in those jurisdictions in the Territory where they will be used or
distributed. Prior to actual use or distribution, LICENSEE shall submit to NOA for review samples
of all proposed Marketing Materials. NOA shall, within [* ] business days of
receipt, approve or disapprove the quality of such samples. If any of the samples are disapproved,
NOA shall specify the reasons for such disapproval and state what corrections and/or improvements
are necessary. After making the necessary corrections and/or improvements. LICENSEE shall submit
revised samples for approval by NOA. No Marketing Materials shall be used or distributed by
LICENSEE without NOA’s prior written approval. NOA shall not unreasonably withhold or delay its
approval of any proposed Marketing Materials.
7.2 No Bundling. LICENSEE shall not market or distribute any Finished Product or
Stripped Product that has been bundled with (a) any peripheral designed for use with the GAME BOY
ADVANCE system which has not been licensed or approved in writing by NOA, or (b) any other product
or service where NOA’s sponsorship, association, approval or endorsement might be suggested by the
bundling of the products or services.
7.3 Warranty and Repair. LICENSEE shall provide the original consumer with a minimum
[* ] day limited warranty on all Licensed Products. LICENSEE shall also provide
reasonable product service, including out-of-warranty service, for all Licensed Products.
*Information has been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
PAGE 6
7.4 Business Facilities. LICENSEE agrees to develop and maintain (a) suitable
office facilities within the United States, adequately staffed to enable LICENSEE to fulfill all
responsibilities under this Agreement, (b) necessary warehouse, distribution, marketing, sales,
collection and credit operations to facilitate proper handling of the Licensed Products, and (c)
customer service and game counseling, including telephone service, to adequately support the
Licensed Products.
7.5 No Sales Outside the Territory. LICENSEE represents and warrants that it shall not
market, sell, offer to sell, import or distribute the Licensed Products outside the Territory, or
within the Territory when with actual or constructive knowledge that a subsequent destination of
the Licensed Product is outside the Territory.
7.6 Defects and Recall. In the event of a material programming defect in a Licensed
Product that would, in NOA’s reasonable judgment, significantly impair the ability of a consumer
to play the Game, NOA may, after consultation with LICENSEE, require the LICENSEE to recall the
Licensed Product and undertake suitable repairs or replacements.
7.7 NOA Promotional Materials, Publications and Events. At its option, NOA may (a)
insert in the Printed Materials for the Licensed Products promotional materials concerning
Nintendo Power magazine or other NOA products, services or programs, (b) utilize screen
shots, Artwork and information regarding the Licensed Products in Nintendo Power,
Nintendo Power Source or other advertising, promotional or marketing media which promotes
Nintendo products, services or programs, and (c) exercise public performance rights in the Games
and use related trademarks and Artwork in connection with NOA sponsored contests, tours,
conventions, trade shows, press briefings and similar events which promote the GAME BOY ADVANCE
system. NOA acknowledges that LICENSEE may be subject to certain third party approval rights for
the Licensed Products in order to comply with this Section 7.7, and in the event it is required to
do so, LICENSEE shall use its best efforts to obtain such third party approval(s) within [*
] business days after NOA notifies ‘LICENSEE that it desires to insert such promotional materials.
In the event that the insertion of any promotional materials results in an incremental cost
increase, NOA shall be responsible for any cost increase provided LICENSEE delivers to NOA detailed
documentation to support all such costs.
7.8 Nintendo Gateway System. To promote and increase demand for games on Nintendo
video game systems, NOA licenses a system (the “Nintendo Gateway System”) in various non-coin
activated commercial settings such as commercial airlines, cruise ships, rail systems and hotels,
where customers play games on specially adapted Nintendo video game systems. If NOA identifies a
Game for possible license on the Nintendo Gateway System, the parties agree to conduct good faith
negotiations toward including the Game in the Nintendo Gateway System.
8. CONFIDENTIAL INFORMATION
8.1 Definition. “Confidential Information” means information provided to LICENSEE
by
Nintendo or any third party working with Nintendo relating to the hardware and software for the
GAME BOY ADVANCE system or the Development Tools, including, but not limited to, (a) all current or
future information, know-how, techniques, methods, information, tools, emulator hardware or
software, software development specifications, and/or trade secrets, (b) any patents or patent
applications, (c) any business, marketing or sales data or information, and (d) any other
information or data relating to development, design, operation, manufacturing, marketing or sales.
Confidential Information shall include all confidential information disclosed, whether in writing,
orally, visually, or in the form of drawings, technical specifications, software, samples,
pictures, models, recordings, or other tangible items which contain or manifest, in any form, the
above listed information. Confidential Information shall not include (i) data and information which
was in the public domain prior to LICENSEE’S receipt of the same hereunder, or which
subsequently becomes part of the public domain by publication or otherwise, except by LICENSEE’S
wrongful act or omission, (ii) data and information which LICENSEE can demonstrate, through written
records kept in the ordinary course of business, was in its possession without restriction on use
or disclosure, prior to its receipt of the same hereunder and was not acquired directly or
indirectly from Nintendo under an obligation of confidentiality which is still in force, and (
iii) data and information which
*Information has been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
PAGE 7
LICENSEE can show was received by it from a third party who did not acquire the same directly
or indirectly from Nintendo and to whom LICENSEE has no obligation of confidentiality.
8.2 Disclosures Required by Law. LICENSEE shall be permitted to disclose
Confidential Information as such disclosure is required by an authorized governmental or judicial
entity, provided that NOA is given Notice as soon as reasonably possible prior to such disclosure.
LICENSEE shall use its best efforts to limit the disclosure to the greatest extent possible
consistent with LICENSEE’S legal obligations, and if required by NOA, shall cooperate in the
preparation and entry of appropriate protective orders.
8.3 Disclosure and Use. NOA may provide LICENSEE with highly confidential development
information, Guidelines, Development Tools, systems, specifications and related resources and
information constituting and incorporating the Confidential Information to assist LICENSEE in the
development of Games. LICENSEE agrees to maintain all Confidential Information as strictly
confidential and to use such Confidential Information only in accordance with this Agreement.
LICENSEE shall limit access to the Confidential Information to LICENSEE’S employees having a strict
need to know and shall advise such employees of their obligation of confidentiality as provided
herein. LICENSEE shall require each such employee to retain in confidence the Confidential
Information pursuant to a written non-disclosure agreement between LICENSEE and such employee.
LICENSEE shall use its best efforts to ensure that its employees working with or otherwise having
access to Confidential Information shall not disclose or make any unauthorized use of the
Confidential Information.
8.4 No Disclosure to Independent Contractors. LICENSEE shall not disclose the
Confidential Information to any Independent Contractor without the prior written consent of NOA.
Any Independent Contractor seeking access to Confidential Information shall be required to enter
into a written non-disclosure agreement with NOA prior to receiving any access to or disclosure of
the Confidential Information from either LICENSEE or NOA.
8.5 Agreement Confidentiality. LICENSEE agrees that the terms, conditions and contents
of this Agreement shall be treated as Confidential Information. Any public announcement or press
release regarding this Agreement or the release dates for Games developed by LICENSEE under this
Agreement shall be subject to NOA’s prior written approval. The parties may disclose this Agreement
(a) to accountants, banks, financing sources, lawyers, parent companies, affiliates and related
parties under substantially equivalent confidentiality obligations, (b) in connection with any
formal legal proceeding for the enforcement of this Agreement, (c) as required by the regulations
of the Securities and Exchange Commission (“SEC), provided that all Confidential Information
regarding NOA shall be redacted from such disclosures to the maximum extent allowed by the SEC, and
(d) in response to lawful process. subject to a written protective order approved in advance by
NOA.
8.6 Notification Obligations. LICENSEE shall promptly notify NOA of the unauthorized
use or disclosure of any Confidential Information and shall promptly act to recover any such
information and prevent further breach of the obligations herein. The obligations of LICENSEE set
forth herein are in addition to and not in lieu of any other legal remedy that may be available to
NOA under this Agreement or applicable law.
8.7 Continuing Effect of the NDA. The terms of this Section 8 supplement the terms of
the NDA, which shall remain in effect. In the event of a conflict between the terms of the NDA and
this Agreement, the terms of this Agreement shall control.
9. REPRESENTATIONS AND WARRANTIES
9.1 LICENSEE’S Representations and Warranties. LICENSEE represents and warrants that:
(a) it is a duly organized and validly existing corporation and
has full authority to enter
into this Agreement and to carry out the provisions hereof,
PAGE 8
(b) the execution, delivery and performance of this Agreement by LICENSEE does not conflict
with any agreement or understanding to which LICENSEE may be bound, and
(c) excluding the Intellectual Property Rights, LICENSEE is either (i) the sole owner of
all
right, title and interest in and to the trademarks, copyrights and other intellectual property
rights used on or in association with the development, advertising, marketing and sale of the
Licensed Products and the Marketing Materials, or (ii) the holder of such rights to the trademarks,
copyrights and other intellectual property rights which have been licensed from a third party as
are necessary for the development, advertising, marketing and sale of the Licensed Products and the
Marketing Materials under this Agreement.
9.2 NOA’s Representations and Warranties. NOA represents and warrants that:
(a) it is a duly organized and validly existing corporation and has full authority to enter
into this Agreement and to carry out the provisions hereof, and
(b) the execution, delivery and performance of this Agreement by NOA does not conflict with
any agreement or understanding to which NOA may be bound.
9.3 INTELLECTUAL PROPERTY RIGHTS DISCLAIMER BY NOA. NOA MAKES NO
REPRESENTATION OR WARRANTY CONCERNING THE SCOPE OR VALIDITY OF THE INTELLECTUAL PROPERTY RIGHTS.
NOA DOES NOT WARRANT THAT THE DESIGN, DEVELOPMENT. ADVERTISING, MARKETING OR SALE OF THE LICENSED
PRODUCTS OR THE USE OF THE INTELLECTUAL PROPERTY RIGHTS BY LICENSEE WILL NOT INFRINGE UPON PATENT,
COPYRIGHT, TRADEMARK OR OTHER PROPRIETARY RIGHTS OF A THIRD PARTY. ANY WARRANTY THAT MAY BE
PROVIDED IN ANY APPLICABLE PROVISION OF THE UNIFORM COMMERCIAL CODE OR ANY OTHER COMPARABLE LAW OR
STATUTE IS EXPRESSLY DISCLAIMED. LICENSEE HEREBY ASSUMES THE RISK OF INFRINGEMENT.
9.4 GENERAL DISCLAIMER BY NOA. NOA DISCLAIMS ANY AND ALL WARRANTIES WITH RESPECT TO
THE LICENSED PRODUCTS, INCLUDING, WITHOUT LIMITATION. THE SECURITY TECHNOLOGY. LICENSEE PURCHASES
AND ACCEPTS ALL LICENSED PRODUCTS ON AN “AS IS” AND “WHERE IS” BASIS. NOA DISCLAIMS ALL WARRANTIES
UNDER THE APPLICABLE LAWS OF ANY COUNTRY, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A GENERAL OR PARTICULAR PURPOSE.
9.5 LIMITATION OF LIABILITY. TO THE MAXIMUM EXTENT PERMITTED BY LAW, NEITHER NOA,
NINTENDO CO., LTD., OR LICENSEE (OR THEIR RESPECTIVE AFFILIATES. LICENSORS OR SUPPLIERS) SHALL BE
LIABLE FOR LOSS OF PROFITS, OR FOR ANY SPECIAL, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF
ANY OTHER PARTY OR ITS CUSTOMERS ARISING OUT OF OR RELATED TO THIS AGREEMENT, INCLUDING, WITHOUT
LIMITATION, THE BREACH OF THIS AGREEMENT BY THE OTHER PARTY. NOA AND NINTENDO CO. LTD. (OR THEIR
RESPECTIVE AFFILIATES. LICENSORS OR SUPPLIERS) SHALL NOT BE LIABLE FOR LOSS OF PROFITS, OR FOR ANY
SPECIAL, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF LICENSEE OR ITS CUSTOMERS INCLUDING.
WITHOUT LIMITATION, THE MANUFACTURE OF THE LICENSED PRODUCTS OR THE USE OF THE LICENSED PRODUCTS ON
ANY NINTENDO VIDEO GAME SYSTEM BY LICENSEE OR ANY END USER.
10. INDEMNIFICATION
10.1 LICENSEE’S Indemnification. LICENSEE shall indemnify and hold harmless NOA and
Nintendo Co., Ltd. (and any of their respective affiliates, subsidiaries, licensors, suppliers,
officers, directors, employees or agents) from any claims, losses, liabilities, damages, expenses
and costs, including, without limitation, reasonable attorneys’ fees and costs and any expenses
incurred in the settlement or avoidance of any such claim, which result from or are in connection
with:
PAGE 9
(a) a breach of any of the provisions, representations or
warranties undertaken by LICENSEE in
this Agreement,
(b) any infringement of a third party’s Proprietary Rights
as a result of the design,
development, advertising, marketing, sale or use of the Licensed Products or the Marketing
Materials,
(c) any claims alleging a defect, failure to warn, bodily injury
(including death) or other
personal or property damage arising out of, or in connection with, the design, development,
advertising, marketing, sale or use of any of the Licensed Products, and
(d) any federal, state or foreign civil or criminal actions
relating to the design,
development, advertising, marketing, sale or use of the Licensed Products or the Marketing
Materials.
NOA and LICENSEE shall give prompt Notice to the other of any indemnified claim under this Section
10.1. With respect to any third party claim subject to this indemnity clause, LICENSEE, as
indemnitor, shall have the right to select counsel and to control the defense and/or settlement
thereof. NOA may, at its own expense, participate in such action or proceeding with counsel of its
own choice. LICENSEE shall not enter into any settlement of any such claim in which (i) NOA or
Nintendo Co., Ltd. has been named as a party, or (ii) claims relating to the Intellectual Property
Rights have been asserted, without NOA’s prior written consent. NOA shall provide reasonable
assistance to LICENSEE in its defense of any such claim.
10.2 LICENSEE’S Insurance. LICENSEE shall, at its own expense, obtain a
comprehensive policy of general liability insurance (including coverage for advertising injury and
product liability claims) from a recognized insurance company. Such policy of insurance shall be in
an amount of not less than
[* ] on a per occurrence basis and shall provide for adequate protection
against any suits, claims, loss or damage by the Licensed Products. Such policy shall name NOA
and Nintendo Co., Ltd. as additional insureds and shall specify that it may not be canceled without
[* ] days’ prior written Notice to NOA. A Certificate of Insurance shall be provided to NOA’s Licensing
Department not later than the date of the initial order of Licensed Products under this Agreement.
If LICENSEE fails to maintain such insurance at any time during the Term and for a period of [* ] years thereafter, NOA may
secure such insurance at LICENSEE’S expense.
10.3 Suspension of Production. In the event NOA deems itself at risk with respect to
any claim, action or proceeding under this Section 10, NOA may, at its sole option, suspend
production, delivery or order acceptance for any Licensed Products, in whole or in part, pending
resolution of such claim, action or proceeding.
11.
PROTECTION OF PROPRIETARY
RIGHTS
11.1 Joint Actions Against Infringers. LICENSEE and NOA may agree to jointly pursue
cases of infringement involving of the Licensed Products, as such Licensed Products will contain
Proprietary Rights owned by each of them. Unless the parties otherwise agree, or unless the
recovery is expressly allocated between them by the court, in the event of such an action, any
recovery shall be used first to reimburse LICENSEE and NOA for their respective reasonable
attorneys’ fees and costs incurred in bringing such action, pro rata, and any remaining recovery
shall be distributed to LICENSEE and NOA, pro rata, based upon the fees and costs incurred in
bringing such action.
11.2 Actions by LICENSEE. LICENSEE, without the consent of NOA, may bring any action
or proceeding relating to an infringement or potential infringement of LICENSEE’S
Proprietary Rights in the Licensed Products. LICENSEE shall make reasonable efforts to inform
NOA of such actions in a timely manner. LICENSEE will have the right to retain all proceeds it may
derive from any recovery in connection with such actions.
11.3 Actions by NOA. NOA, without the consent of LICENSEE, may bring any action or
proceeding relating to an infringement or potential infringement of NOA’s Intellectual Property
Rights in the Licensed Products. NOA shall make reasonable efforts to inform LICENSEE of
such actions in a
*Information has been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
PAGE 10
timely manner. NOA will have the right to retain all proceeds it may derive from any recovery
in connection with such actions.
12. ASSIGNMENT
12.1 No Assignment by LICENSEE. This Agreement is personal to LICENSEE and may not be
sold, assigned, delegated, sublicensed or otherwise transferred or encumbered, in whole or in part,
without NOA’s prior written consent, which consent may be withheld by NOA in its sole discretion.
In the event of an assignment or other transfer in violation of this Agreement, NOA shall have the
unqualified right to immediately terminate this Agreement without further obligation to LICENSEE.
12.2 Assignment by Operation of Law. In the event of an assignment of this Agreement
by operation of law. LICENSEE shall, not later than [* ] days thereafter, give Notice
and seek consent thereto from NOA. Such Notice shall disclose the name of the assignee, the
effective date and the nature and extent of the assignment. An assignment by operation of law
includes, but is not limited to (a) a merger of LICENSEE into another business entity or a merger
of another business entity into LICENSEE, (b) the sale, assignment or transfer of all or
substantially all of the assets of LICENSEE to a third party, (c) the sale, assignment or transfer
to a third party of any of LICENSEE’s intellectual property rights which are used in the
development of or are otherwise incorporated into any Licensed Products, or (d) the sale,
assignment or transfer of any of Licensee’s stock resulting in the acquirer having management power
over or voting control of LICENSEE. Following the later of (i) such an assignment by operation of
law, or (ii) receipt of Notice therefor, NOA shall have the unqualified right for a period of [* ]
days to immediately terminate this Agreement without further obligation to LICENSEE.
12.3 Non-Disclosure Obligation. In no event shall LICENSEE disclose or allow access to
NOA’s Confidential Information prior to or upon the occurrence of an assignment, whether by
operation of law or otherwise, unless and until NOA gives its written consent to such disclosure.
13. TERM AND TERMINATION
13.1
Term This Agreement shall commence on the Effective Date and continue
for the Term, unless earlier terminated as provided for herein.
13.2 Default or Breach. In the event that either party is in default or commits a
breach of this Agreement, which is not cured within [* ] days after Notice thereof, then this
Agreement shall automatically terminate on the date specified in such Notice.
13.3 Bankruptcy. At NOA’s option, this Agreement may be terminated immediately and
without Notice in the event that LICENSEE (a) makes an assignment for the benefit of creditors, (b)
becomes insolvent, (c) files a voluntary petition for bankruptcy, (d) acquiesces to any involuntary
bankruptcy petition, (e) is adjudicated as a bankrupt, or (f) ceases to do business.
13.4 Termination Other Than by Breach. Upon the expiration of this Agreement or its
termination other than by LICENSEE’s breach, LICENSEE shall have a period of
[* ] days to sell any unsold Licensed Products. All
Licensed Products in LICENSEE’s control following the expiration of such sell-off period shall be
destroyed by LICENSEE within [* ] days and proof of such destruction (certified by an
officer of LICENSEE) shall be provided to NOA.
13.5 Termination by LICENSEE’s Breach. If this Agreement is terminated by NOA as a
result of a breach of its terms and conditions by LICENSEE, LICENSEE shall immediately cease all
distribution, advertising, marketing or sale of any Licensed Products. All Licensed Products in
LICENSEE’s control as of the date of such termination shall be destroyed by LICENSEE within [* ] days and proof of such destruction (certified by an officer of LICENSEE) shall
be provided
to NOA.
13.6 Breach of NDA or Other NOA License Agreements. At NOA’s option, any breach by
LICENSEE of (a) the NDA, or (b) any other license agreement between NOA and LICENSEE relating to
*Information has been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
PAGE 11
the development of games for any Nintendo video game system which is not cured within the time
period for cure allowed under the applicable agreement, shall be considered a material breach of
this Agreement entitling NOA to terminate this Agreement in accordance with Section 13.5 herein.
13.7 No Further Use of the Intellectual Property Rights. Upon expiration and/or
termination of this Agreement, LICENSEE shall cease all use of the Intellectual Property Rights for
any purpose, except as may be required in connection with the sale of Licensed Products authorized
under Section 13.4 herein. LICENSEE shall, within [* ] days thereafter, return or
destroy all Guidelines, writings, drawings, models, data, tools and other materials and things in
LICENSEE’S possession or in the possession of any past or present employee, agent or
contractor receiving the information through LICENSEE, which constitute or relate to or disclose
any Confidential Information, without making copies or otherwise retaining any such information.
Proof of any destruction shall be certified by an officer of LICENSEE and promptly provided to NOA.
13.8 Termination by NOA’s Breach. If this Agreement is terminated by LICENSEE as a
result of a breach of its terms or conditions by NOA, LICENSEE may continue to sell the Licensed
Products in the Territory until the expiration of the Term, at which time the provisions of Section
13.4 shall apply.
14. GENERAL
PROVISIONS
14.1 Export Control. LICENSEE agrees to comply with the export laws and regulations of
the United States and any other country with jurisdiction over the Licensed Products and/or either
party.
14.2 Force Majeure. Neither party shall be liable for any breach of this Agreement
occasioned by any cause beyond the reasonable control of such party, including governmental action,
war, riot or civil commotion, fire, natural disaster, labor disputes, restraints affecting shipping
or credit, delay of carriers, inadequate supply of suitable materials or any other cause which
could not with reasonable diligence be controlled or prevented by the parties. In the event of
material shortages, including shortages of materials or production facilities necessary for
production of the Licensed Products, NOA reserves the right to allocate such resources among itself
and its licensees.
14.3 [INTENTIONALLY OMITTED]
14.4 Waiver, Severability, Integration, and Amendment. The failure of a party to
enforce any provision of this Agreement shall not be construed to be a waiver of such provision or
of the right of such party to thereafter enforce such provision. In the event that any term, clause
or provision of this Agreement shall be construed to be or adjudged invalid, void or unenforceable,
such term, clause or provision shall be construed as severed from this Agreement, and the remaining
terms, clauses and provisions shall remain in effect. Together with the NDA, this Agreement
constitutes the entire agreement between the parties relating to the subject matter hereof. All
prior negotiations, representations, agreements and understandings are merged into, extinguished by
and completely expressed by this Agreement and the NDA. Any amendment to this Agreement shall be in
writing, signed by both parties.
14.5 Survival. In addition to those rights specified elsewhere in this Agreement, the
rights and obligations set forth in Sections 3, 8, 9, 10 and 13 shall survive any
expiration or termination of this Agreement to the degree necessary to permit their complete
fulfillment or discharge.
14.6 Governing Law and Venue. This Agreement shall be governed by the laws of the
State of Washington, without regard to its conflict of laws principles. Any legal action (including
judicial and administrative proceedings) with respect to any matter arising under or growing out of
this Agreement, shall be brought in a court of competent jurisdiction in King County, Washington.
Each party hereby consents to the jurisdiction and venue of such courts for such purposes.
14.7 Equitable Relief. LICENSEE acknowledges that in the event of its breach of this
Agreement, no adequate remedy at law may be available to NOA and that NOA shall be entitled to seek
injunctive or other equitable relief in addition to any relief available at law.
*Information has been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
PAGE 12
14.8 Attorneys’ Fees. In the event it is necessary for either party to this
Agreement to undertake legal action to enforce or defend any action arising out of or relating to
this Agreement, the prevailing party in such action shall be entitled to recover from the other
party all reasonable attorneys’ fees, costs and expenses relating to such legal action or any
appeal therefrom.
14.9 Counterparts and Signature by Facsimile. This Agreement may be signed in
counterparts, which shall together constitute a complete Agreement. A signature transmitted by
facsimile shall be considered an original for purposes of this Agreement.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the dates set forth below.
| NOA: | LICENSEE: | |||||||
| NINTENDO OF AMERICA INC. | MIDWAY HOME ENTERTAINMENT, INC. | |||||||
By:
|
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ | By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||||
Title:
|
Executive VP, Administration | Title: | EVP | |||||
Date:
|
8/6/01 | Date: | 7-30-01 | |||||
PAGE 13