EXHIBIT 10.23
Confidential Portions Omitted
CONFIDENTIAL LICENSE AGREEMENT
FOR NINTENDO 64 VIDEO GAME SYSTEM
(Western Hemisphere)
THIS AGREEMENT is entered into between NINTENDO OF AMERICA INC., a
Washington corporation with an address for notice purposes of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇., ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇) ("NINTENDO") and INTERPLAY
PRODUCTIONS, a California corporation with an address for notice purposes of
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (Fax: (▇▇▇) ▇▇▇-▇▇▇▇), Attention:
President ("LICENSEE").
NINTENDO and LICENSEE acknowledge and agree as follows:
1. RECITALS
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1.1 NINTENDO markets and sells a high-quality video game system, including
hardware, software and an input controller, marketed by NINTENDO under its
trademarks "Nintendo 64(R)" and "N64(TM)", for playing video games.
1.2 LICENSEE desires to gain access to and rights to utilize highly
proprietary programming specifications, development tools, trademarks and other
valuable intellectual property rights in order to develop video game software
and to purchase and sell such video game software from NINTENDO for play on the
Nintendo 64 system, which system was developed by NCL and Silicon Graphics, Inc.
1.3 NINTENDO is willing to grant a license to utilize such proprietary
information and intellectual property rights and to sell video game software to
LICENSEE upon the terms and conditions set forth in this Agreement.
2. DEFINITIONS
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2.1 "Artwork" shall mean the final art and mechanical formats for the
Licensed Product including the Game Cartridge box, user instruction manual with
consumer precautions and warranty, Game Cartridge label and inserts.
2.2 "Competing Systems" shall mean hardware platforms, whether marketed
now or in the future, designed to play interactive video games, including, but
without limitation: Apple/Bandai ▇▇▇▇▇▇ or Atmark, Atari Jaguar, Atari Lynx, 3DO
Real, Matsushita M2, ▇▇▇▇▇▇▇▇ ▇▇-I Interactive Player, Sega Master System, Sega
Genesis, Sega CD, Sega Game Gear, Sega CD/X, Sega Nomad, Sega 32X, Sega Saturn,
Sega Pico, Sony PSX/Playstation and SNK Neo Geo. IBM-PC and Macintosh personal
computer systems are expressly omitted from the definition of "Competing
Systems".
2.3 "Effective Date" shall mean the last date in which all parties shall
have signed this Agreement.
2.4 "Exclusive Licensed Product" shall mean the audiovisual work to be
agreed upon by the parties during the Term, and shipped during the Term.
2.5 "Game Cartridge(s)" shall mean interchangeable plastic cartridges
adapted for use with the N64 System, housing the Game embodied in electronic
memory devices or comparable medium authorized by NINTENDO for storing and
playing Games on the N64 System.
2.6 "Game(s)" shall mean video game software compatible with the N64
System developed under
NINTENDO 64 LICENSE AGREEMENT
PAGE 1
this Agreement.
2.7 "Guidelines" shall mean the "Nintendo 64 Packaging Guidelines" and the
"Nintendo 64 Development Manual" setting forth trademark, copyright and related
artwork standards, as published from time to time by NINTENDO.
2.8 "Independent Contractor" shall mean any third party agent, consultant,
contractor or independent programmer, other than LICENSEE.
2.9 "Licensed Copyright(s)" shall mean various copyrights in printed
materials, art or logo designs, trade dress, computer software, microcode,
electronic circuitry and rights in integrated circuit layout designs employed in
the N64 System.
2.10 "Licensed Intellectual Properties" shall mean individually,
collectively or in any combination, the Licensed Inventions, Licensed
Proprietary Information, Licensed Copyrights and Licensed Trademarks.
2.11 "Licensed Invention(s)" shall mean improvements and inventions
concerning the N64 System, including inventions which are or may become the
subject matter of various patents or patent applications.
2.12 "Licensed Product(s)" shall mean Game Cartridges (or comparable medium
authorized by Nintendo) for employing the Licensed Intellectual Properties and
having electronic memory devices storing the Games.
2.13 "Licensed Proprietary Information" shall mean any of the following
information relating to the N64 System: (a) all current or future information,
know-how, techniques, methods, information, tools, emulator boards, software
development specifications, and/or trade secrets, (b) any patents or patent
applications, (c) any business, marketing or sales data information, and (d) any
other information or data relating to development, design, operation,
manufacturing, marketing or sales. "Licensed Proprietary Information" shall
include information disclosed to LICENSEE by NINTENDO, NINTENDO's affiliated
companies, SGI, and/or other third parties working with NINTENDO. Such Licensed
Proprietary 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 Licensed Proprietary
Information. Licensed Proprietary Information shall not include: (a) 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, (b)
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, (c) data and information which 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, and (d) data and information which is required to be disclosed
by an authorized governmental or judicial entity, provided that LICENSEE shall
notify NINTENDO at least thirty (30) days prior to such disclosure.
2.14 "Licensed Trademarks" shall mean registered and unregistered
trademarks and trademark applications used in connection with the N64 System,
including "Nintendo(R)", "Nintendo 64 (R)", "N64(TM)," "Official Nintendo Seal
of Quality(R)" and trade dress in the N64 System.
2.15 "Marketing Materials" shall mean marketing, advertising or promotional
materials which incorporate the Licensed Intellectual Properties which are
developed by or for LICENSEE to promote the sale of the Licensed Products.
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PAGE 2
2.16 "NCL" shall mean NINTENDO's parent company, Nintendo Co., Ltd. of
Kyoto, Japan.
2.17 "Nintendo 64 System" and "N64 System" shall mean the 64-bit Nintendo
64 video game system, including the hardware, software and input controller
marketed by NINTENDO and Nintendo Co., Ltd.
2.18 "Other Agreements" shall mean that certain Product Developer Non-
Disclosure Agreement for Nintendo 64 entered into between NINTENDO and LICENSEE
with an effective date of 4/23/96.
2.19 "Product Proposal" shall mean a written proposal which provides a
detailed explanation of the Game.
2.20 "Schedule 1" shall mean the "Nintendo of America Inc. Price Sheet N64
Licensed Game Paks" attached to this Agreement and incorporated by reference
into this Agreement.
2.21 "SGI" shall mean Silicon Graphics, Inc. and/or MIPS Technologies, Inc.
2.22 "Term" shall mean three (3) years from the Effective Date.
2.23 "Territory" shall mean all countries within the Western Hemisphere,
including the United States, Canada, South America, Central America, Mexico and
all applicable territories and possessions.
3. GRANT OF LICENSE; RESERVATION OF RIGHTS BY NINTENDO
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3.1 Grant. For the Term and in the Territory, NINTENDO hereby grants to
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LICENSEE, and LICENSEE hereby accepts under the terms and conditions set forth
in this Agreement, a nonexclusive license to employ the Licensed Intellectual
Properties solely to develop and sell video games incorporated into Game
Cartridges for play on the N64 System. Except as may be permitted under a
separate written authorization from NINTENDO or Nintendo Co., Ltd., LICENSEE
shall not use the Licensed Intellectual Properties for any other purpose.
3.2 Reservation of Rights in the Licensed Intellectual Properties.
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LICENSEE acknowledges NINTENDO and Nintendo Co., Ltd.'s right, title, and
interest in and to the Licensed Intellectual Properties and the goodwill
associated with the Licensed Trademarks. LICENSEE will not at any time do or
cause to be done any act or thing which in any way impairs or is intended to
impair any part of such right, title, interest or goodwill. LICENSEE shall not
represent that it has any ownership in the Licensed Intellectual Properties.
Use of the Licensed Intellectual Properties shall not create any right, title or
interest therein in LICENSEE's favor.
3.3 Reservation of Rights of Distribution Outside the Territory.
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LICENSEE shall market and sell the Licensed Products only in the Territory.
LICENSEE shall not directly or indirectly export any Licensed Products from the
Territory nor shall LICENSEE knowingly permit or assist any third party in doing
so.
3.4 Reservation of Rights to Reverse Engineer. LICENSEE may utilize and
-----------------------------------------
study the design, performance and operation of the N64 System and the Licensed
Proprietary Information solely for the purpose of developing software which is
compatible with the N64 System for license under this Agreement. LICENSEE shall
not, directly or indirectly, reverse engineer or aid or assist in the reverse
engineering of all or any part of the N64 System, including the hardware,
software, input controller and/or tools. For purposes of this Agreement,
"reverse engineering" shall mean: (a) the x-ray electronic scanning and/or
physical or chemical stripping of semiconductor components; (b) the disassembly,
decompilation, decryption, simulation, debugging or code tracing of microcode;
and/or (c) the disassembly, decompilation, decryption, simulation, debugging or
code tracing of object code or executable code, specifically including, but not
limited to, any NINTENDO supplied or developed libraries or microcode. The
limitations set forth in this Section 3.4 shall not preclude
NINTENDO 64 LICENSE AGREEMENT
PAGE 3
LICENSEE from engaging in reverse engineering of any Game code which was
developed solely by LICENSEE and related only to the Game and was not supplied
by nor derived from any code supplied by NINTENDO.
3.5 Reservation of Rights of Electronic Transmission. LICENSEE shall not
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directly or indirectly duplicate, distribute or transmit Games via electronic
means or any other means now known or hereafter devised, including without
limitation, wireless, cable, fiber optic means, telephone lines, satellite
transmission, microwave or radio waves or over a network of interconnected
computers or other devices. Notwithstanding this limitation, LICENSEE shall not
be prohibited from the electronic transmission of Games during the development
process for the sole purpose of facilitating development; provided, however,
that no right of retransmission shall attach to any such transmission, and,
provided further, that LICENSEE shall use reasonable security measures,
customary within the industry, to reduce the risk of unauthorized interception
or retransmission of such transmissions.
3.6 Notification Obligations. LICENSEE shall promptly notify NINTENDO of
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the loss or unauthorized use or disclosure of any Licensed Proprietary
Information and shall promptly act to recover any such information and/or
prevent further breach of the confidentiality obligations herein.
4. CONFIDENTIALITY
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4.1 Disclosure of Proprietary Information. NINTENDO has and shall during
-------------------------------------
the Term provide LICENSEE with highly proprietary development information,
development tools, emulation systems, programming specifications and related
resources and information constituting and incorporating the Licensed
Proprietary Information to enable LICENSEE to develop video games for use with
the N64 System.
4.2 Confidentiality of Licensed Proprietary Information. LICENSEE shall
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maintain all Licensed Proprietary Information as strictly confidential and will
use such Licensed Proprietary Information only in accordance with this
Agreement. LICENSEE shall limit access to the Licensed Proprietary 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 Licensed
Proprietary 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 Licensed Proprietary
Information shall not disclose or make unauthorized use of the Licensed
Proprietary Information.
4.3 Agent/Consultant Confidentiality. LICENSEE shall not disclose the
--------------------------------
Licensed Proprietary Information to any Independent Contractor without
NINTENDO's prior written approval. Each approved Independent Contractor shall be
required to enter into a written non-disclosure agreement with NINTENDO prior to
receiving any access to or disclosure of the Licensed Proprietary Information.
4.4 SGI as a Third-Party Beneficiary. LICENSEE hereby acknowledges and
---------------------------------
agrees that SGI shall be a third-party beneficiary of LICENSEE's confidentiality
obligations as set forth in this Section 4.
5. DEVELOPMENT; QUALITY STANDARDS; ARTWORK; MANUFACTURING
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5.1 Development and Sale of the N64 System Programs. During the Term,
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LICENSEE may develop Games and/or sell Licensed Products for the N64 System in
accordance with this Agreement.
5.2 Exclusivity; Exclusive Licensed Product. For the Exclusive Licensed
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Product, LICENSEE agrees that, commencing on the Effective Date and continuing
for a period of one (1) year from NINTENDO's first shipment of such Exclusive
Licensed Product to LICENSEE, neither the Game incorporated into such
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PAGE 4
Exclusive Licensed Product nor any adaptation, translation, derivative, sequel
or substantially similar game which is sold by LICENSEE as a Licensed Product
under this Agreement shall be sold anywhere in the Territory by LICENSEE or by
any third party for play on any Competing System. Except as provided herein with
regard to the Exclusive Licensed Product, or as may otherwise be limited by the
legitimate intellectual property rights of NINTENDO or any third party, LICENSEE
shall retain all rights with regard to the adaptation of Games for development
and sale in any other format, including on any Competing System.
5.3 Submission of Game Concept. Before commencing development of a Game,
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LICENSEE shall submit to NINTENDO for approval, a Product Proposal. Such
Product Proposal must include a detailed explanation of the manner in which the
Game will utilize and exploit: (a) the unique 3-D capabilities and high quality
graphics display of the N64 System; (b) the complex, high-capacity processing
speed of the N64 System; and, (c) the dynamic interfaces and touch control
features of the unique N64 System controller. For that purpose, the Product
Proposal shall include: (a) a description of the proposed Game; (b) the
development team profile, including information regarding any Independent
Contractor which LICENSEE proposes to retain to work on the Game; (c) a
description of any special hardware or software requirements; and, (d) the
anticipated completion date of the proposed Licensed Product. Subsequent to
acceptance and approval of a Product Proposal, LICENSEE shall notify NINTENDO
in writing of any material proposed changes in the Product Proposal and/or the
proposed Licensed Product. From time to time, at approximately quarterly
intervals or such other reasonable times NINTENDO may establish for purposes of
ensuring utilization and exploitation of the N64 System in the manner set forth
above, LICENSEE shall submit work-in-progress on the Game to NINTENDO for
further review in accordance with the criteria set forth herein. NINTENDO shall
not unreasonably withhold or delay any approval provided for herein.
5.4 Delivery of Completed Game. Upon completion of a Game, LICENSEE shall
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deliver to NINTENDO one (1) prototype of the Game in a format specified by
NINTENDO, together with written user instructions and a complete screen text
script. NINTENDO shall promptly evaluate the Game with regard to: (a) its
technical compatibility with and error-free operation on the N64 System; (b)
the suitability of the Game content, taking into account reasonable standards
set forth in the Guidelines; and, (c) whether the Game achieves the objectives
set forth in LICENSEE's approved Product Proposal. LICENSEE shall have
satisfied the Game content suitability criteria by providing NINTENDO with proof
that the Game has been provided with a certificate of a rating other than ADULTS
ONLY (or its equivalent) from the Entertainment Software Ratings Board or
comparable independent ratings body which reviews and certifies product for
violent or sexual content.
5.5 Approval of Completed Game. NINTENDO shall, within a reasonable period
--------------------------
of time after receipt, approve or disapprove such Game. If such Game is
disapproved, NINTENDO shall specify in writing 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 a revised Game
for approval by NINTENDO, provided, however, that LICENSEE shall not be
obligated to submit a revised Game for approval if LICENSEE decides not to sell
the Game. The approval of any Game by NINTENDO 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 Licensed Product by NINTENDO. NINTENDO
shall not unreasonably withhold or delay any approval provided for herein.
5.6 Development and Quality of Artwork. In connection with the submission
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of a proposed Licensed Product to NINTENDO, LICENSEE shall submit all Artwork to
NINTENDO. All Artwork shall conform to the requirements set forth in the
Guidelines. Within fifteen (15) business days of receipt of the Artwork,
NINTENDO shall approve or disapprove the Artwork based upon the Guidelines. If
any of the Artwork is disapproved, NINTENDO shall specify in writing the
reasons for such disapproval and state what corrections and/or improvements are
necessary. After making the necessary corrections and/or improvements to the
disapproved Artwork, LICENSEE shall resubmit new Artwork for approval by
NINTENDO, provided, however,
NINTENDO 64 LICENSE AGREEMENT
PAGE 5
that LICENSEE shall not be obligated to submit new Artwork for approval if
LICENSEE decides not to use the Artwork. NINTENDO shall not unreasonably
withhold or delay its approval of any Artwork.
5.7 Appointment of NCL as Manufacturer. LICENSEE hereby appoints NCL, and
----------------------------------
NCL hereby accepts appointment, as manufacturer of the Licensed Products.
LICENSEE shall purchase from NCL through NINTENDO all of its requirements for
the Licensed Products. NCL shall have the sole responsibility for establishing
and fulfilling all aspects of the manufacturing process, including selecting the
location of and specifications for any manufacturing facilities, appointing
suppliers and subcontractors, and managing all work-in-progress and finished
goods inventory. NCL shall acquire and retain responsibility for all equipment,
tooling, molds or masks used in connection with the manufacture of the Licensed
Products.
5.8 Manufacture of Licensed Products. Upon approval of a Game and the
--------------------------------
Artwork and upon receipt from LICENSEE of an order in accordance with Section 7
herein, NCL will manufacture the Licensed Products for LICENSEE, including the
Artwork.
5.9 Retention of Sample Licensed Products. NCL may, at its own expense,
-------------------------------------
manufacture samples of the Licensed Products, only to the extent necessary, to
be used by NINTENDO for archival purposes, legal proceedings against infringers
of the Licensed Intellectual Properties, and for other lawful purposes.
6. PURCHASE PRICE; PAYMENT; DELIVERY OF COMPLETED LICENSED PRODUCT
---------------------------------------------------------------
6.1 Minimum Initial Orders. Upon placement of an initial order, LICENSEE
----------------------
shall order a minimum quantity of [ * ] units of a Licensed Product.
6.2 Subsequent Minimum Orders. LICENSEE may subsequently order additional
-------------------------
Licensed Product in a minimum quantity of [ * ] units per title.
6.3 Purchase Price. The purchase price to be paid by LICENSEE to NINTENDO
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for the Licensed Products shall be in accordance with NINTENDO's pricing
schedule currently set forth in the attached Schedule 1. The purchase price
includes the cost of manufacturing, printing and packaging the Licensed Products
and a royalty for the use of the Licensed Intellectual Properties. Schedule 1
is subject to change by NINTENDO at any time without notice.
6.4 Payment. At the time an order is placed, LICENSEE shall provide to
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NINTENDO an irrevocable letter of credit in favor of NINTENDO and payable at
sight, issued by a bank acceptable to NINTENDO and confirmed, at LICENSEE's
expense, if requested by NINTENDO. The letter of credit shall be in United
States dollars in an amount equal to the purchase price of the Licensed Products
ordered. All associated banking charges are for LICENSEE's account.
6.5 Shipment and Delivery. The Licensed Products shall be delivered
---------------------
F.O.B. Japan, with shipment at LICENSEE's direction and expense. Orders may be
delivered by NINTENDO in partial shipments, each directed to no more than two
(2) destinations designated by LICENSEE in the Territory. Title to the Licensed
Products shall vest in accordance with the terms of the applicable letter of
credit.
7. MARKETING, SALE AND RENTAL OF THE LICENSED PRODUCTS
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7.1 Marketing Materials. LICENSEE agrees that any Marketing Materials
-------------------
shall all be of high quality and shall comply with the Guidelines.
7.2 Submission of Proposed Marketing Materials. Prior to actual use or
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distribution, LICENSEE shall submit to NINTENDO for review and evaluation
initial samples of all Marketing Materials. NINTENDO
NINTENDO 64 LICENSE AGREEMENT
PAGE 6
* Confidential Portions Omitted and Filed Separately with the Commission.
shall, within fifteen (15) business days of receipt of such samples, approve or
disapprove of the quality of such samples. If any of the samples are disapproved
as to quality, NINTENDO shall specify the reasons for such disapproval and state
what corrections and/or improvements are necessary. After making the necessary
corrections and/or improvements to the disapproved samples, LICENSEE may
resubmit new samples for approval by NINTENDO as to quality. No Marketing
Materials shall be distributed or utilized by LICENSEE without obtaining prior
written approval as to quality by NINTENDO. NINTENDO shall not unreasonably
withhold or delay its approval of the proposed Marketing Materials.
7.3 Warranty and Repair. With respect to the Licensed Product, LICENSEE
-------------------
shall provide to the original consumer a minimum ninety (90) day limited
warranty, comparable to that offered by NINTENDO. LICENSEE shall also provide
to the original consumer, either directly or indirectly through authorized
service centers, reasonably accessible product service, including out-of-
warranty service for a period of three (3) years following sale of the Licensed
Product. In the event LICENSEE is unable to obtain sufficient quantities of
repair parts for service obligations from defective and/or product returns,
NINTENDO shall cooperate in providing reasonable quantities of repair parts to
LICENSEE at its standard cost.
7.4 Business Facilities; Sales of Game Cartridges. LICENSEE agrees to
---------------------------------------------
develop, maintain and utilize during the Term: (a) suitable office facilities
within the Territory, 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 Product; and, (c) customer service and game counseling support,
including telephone service, to adequately support the Licensed Product.
7.5 Defects; Recall. In the event of a material programming defect in the
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Licensed Product, which defect in the reasonable judgment of NINTENDO would
significantly impair the ability of a consumer to play the Licensed Product,
NINTENDO may require the LICENSEE to recall the Licensed Product and undertake
suitable repairs or replacements prior to sale.
7.6 Rental. In the event LICENSEE elects to engage in the commercial
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rental of the Licensed Products within the Territory on such terms and
conditions as LICENSEE shall determine, LICENSEE shall secure appropriate
authorizations and/or assignments from the author(s) of the copyrightable
elements in the computer programs for the Licensed Product. LICENSEE shall
clearly provide notice on the Artwork for each Licensed Product of any rental
right or reservation thereof.
7.7 Nintendo Promotional Materials, Publications and Events. At its
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option, NINTENDO may: (a) insert in the packaging for the Licensed Product
promotional materials concerning Nintendo Power(R) magazine; (b) utilize screen
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shots, package art and related art and information regarding the Licensed
Product in Nintendo Power(R) or other media or marketing programs which promote
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NINTENDO products; and (c) exercise public performance rights of the Licensed
Product, related trademarks and art in NINTENDO sponsored contests, tours and
events which generally promote NINTENDO products.
8. LICENSEE'S COPYRIGHTS AND TRADEMARKS
------------------------------------
8.1 Copyright and Trademark Warranties. LICENSEE represents and warrants
----------------------------------
that, throughout the Territory, LICENSEE is either: (a) the sole owner of all
right, title and interest in and to the trademarks, copyrights and Artwork used
on or in association with the Licensed Products; or (b) the holder of sufficient
rights to the trademarks, copyrights and Artwork which have been licensed from a
third party for use in the Licensed Product.
8.2 Licensee's Indemnification. LICENSEE shall indemnify and hold
--------------------------
NINTENDO harmless from any claims, losses, liabilities, damages, expenses and
costs, including, without limitation, reasonable
NINTENDO 64 LICENSE AGREEMENT
PAGE 7
attorneys' fees and costs, which result from: (a) a breach of any of the
representations or warranties provided by LICENSEE herein; (b) any claim of
infringement of any third party's intellectual property rights with respect to
the Licensed Product, excluding claims based solely upon NINTENDO's trademarks,
copyrights and patents; or, (c) any claim of bodily injury (including death) or
property damage arising out of, or in connection with, the development, sale
and/or use of any of the Licensed Products. NINTENDO shall give LICENSEE prompt
written notice of the assertion of any such claim and provided, further, that
LICENSEE shall have the right to select counsel and control the defense and/or
settlement of any such claim, subject to the right of NINTENDO to participate in
any such action or proceeding at its own expense with counsel of its own choice.
8.3 Insurance. LICENSEE shall, at its own expense, obtain a policy of
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general liability insurance which includes product liability coverage by a
recognized insurance company. Such policy of insurance shall be in an amount of
not less than Two Million Dollars ($2,000,000 USD) and shall provide for
adequate protection against any suits, claims, loss or damage or any alleged
intellectual property infringements (excluding patent infringements) by the
Licensed Products. Protection against any alleged intellectual property
infringements (excluding patent infringements) by the Licensed Products may
instead, at LICENSEE's option, be obtained under a separate errors and omissions
policy by a recognized insurance company in an amount of not less than One
Million Dollars ($1,000,000 USD), in which case the policy of general liability
covering any suits, claims, loss or damage by the Licensed Products shall still
be in an amount not less than Two Million Dollars ($2,000,000 USD). The policy
of general liability shall name NINTENDO as an additional insured, and neither
policy may be canceled without thirty (30) days prior written notice to
NINTENDO. A Certificate of Insurance for each policy shall be provided to
NINTENDO's Licensing Department within thirty (30) days of the Effective Date.
If LICENSEE fails to maintain such insurance during the Term, NINTENDO may
secure and maintain such insurance at LICENSEE's expense.
9. LIMITATION OF LIABILITY
-----------------------
9.1 Disclaimer of Licensed Intellectual Properties. NINTENDO makes no
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representations, guarantees or warranties concerning the scope or validity of
the Licensed Intellectual Properties, and does not warrant that the sale of the
Licensed Products by LICENSEE will not infringe upon the patent, trade secret,
copyright, mask work or trademark rights of another in the Territory. THE RISK
OF INFRINGEMENT IS HEREBY ASSUMED BY LICENSEE.
9.2 Warranty Disclaimer. NINTENDO DISCLAIMS ANY AND ALL WARRANTIES OF THE
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LICENSED PRODUCTS AS BETWEEN NINTENDO AND LICENSEE AND AS BETWEEN NINTENDO AND
ANY THIRD PARTY PURCHASERS FROM LICENSEE. LICENSEE PURCHASES AND ACCEPTS ALL
LICENSED PRODUCTS FROM NINTENDO ON AN "AS IS" AND "WHERE IS" BASIS AND WITHOUT
ANY WARRANTIES, EXPRESS OR IMPLIED. WITH RESPECT TO THE LICENSED PRODUCTS,
NINTENDO DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A GENERAL
OR PARTICULAR PURPOSE AND SHALL IN NO EVENT BE LIABLE FOR ANY INCIDENTAL AND/OR
CONSEQUENTIAL DAMAGES OF LICENSEE, ITS RETAILERS OR CUSTOMERS. LICENSEE SHALL
BE SOLELY RESPONSIBLE FOR PROVIDING WARRANTY AND REPAIR/REPLACEMENT SERVICES FOR
ANY DEFECTIVE LICENSED PRODUCTS. NOTWITHSTANDING THE CONDITIONS SET FORTH IN
THIS PARAGRAPH, NINTENDO WILL USE ITS BEST EFFORTS TO RESOLVE ANY CATASTROPHIC
DEFECT IN THE LICENSED PRODUCTS PURCHASED BY LICENSEE FROM NINTENDO. A
"CATASTROPHIC DEFECT" IS DEFINED AS A MANUFACTURING DEFECT RATE OF FIVE PERCENT
(5%) OR GREATER IN ANY SHIPMENT OF LICENSED PRODUCTS TO LICENSEE.
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PAGE 8
10. INFRINGEMENT OF LICENSED INTELLECTUAL PROPERTIES AND
----------------------------------------------------
LICENSEE'S TRADEMARKS AND COPYRIGHTS
------------------------------------
10.1 Reporting. In the event: (a) any claim is asserted against either
---------
party alleging that any of the Licensed Intellectual Properties or a Licensed
Product constitutes an infringement of another's rights; or, (b) either party
discovers that any of the Licensed Intellectual Properties or LICENSEE's
copyrights or trademarks used in connection with the Licensed Products have been
infringed by a third party, then the party with such knowledge shall promptly
notify the other party.
10.2 Licensed Intellectual Properties. NINTENDO shall have the sole
--------------------------------
right, at its expense, to commence and/or defend a legal action or negotiate a
settlement relating to any alleged infringement by the Licensed Intellectual
Properties. LICENSEE agrees to give reasonable assistance in any such legal
action, but at no expense to it. NINTENDO shall be entitled to all of the
recovery or damages collected as a result of such legal action or negotiated
settlement. In the event of a legal action against LICENSEE alleging an
infringement by the Licensed Intellectual Properties as incorporated into
LICENSEE's Licensed Products which NINTENDO affirmatively elects in writing not
to defend, LICENSEE may defend or settle such legal action, at its option and
expense. NINTENDO agrees to provide reasonable assistance in defending any such
legal action. LICENSEE agrees to keep NINTENDO fully informed with respect to
developments in any such legal action and to provide NINTENDO reasonable notice
of the terms of any proposed settlement and to consider any comments by NINTENDO
before settlement is made.
10.3 Infringement of Licensed Products. LICENSEE shall take reasonable
---------------------------------
steps to ▇▇▇▇▇ any infringement of LICENSEE's copyrights and trademarks in the
Licensed Products. LICENSEE shall also take all reasonable and necessary steps,
including legal action, to defend against any alleged infringement caused by any
of LICENSEE's software programs developed under this Agreement or any Artwork,
title or designation used in conjunction with any of the Licensed Products.
NINTENDO shall give to LICENSEE reasonable assistance and cooperation in any
such legal action, but at no expense to NINTENDO.
11. TERM AND TERMINATION
--------------------
11.1 Default or Breach. In the event that either party is in default or
-----------------
commits a breach of this Agreement which is not cured within thirty (30) days
after written notice thereof, then this Agreement shall automatically terminate
on the date specified in such notice.
11.2 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 one hundred eighty (180) days to sell any unsold Licensed
Products. All Licensed Products in LICENSEE's control following expiration of
such sell-off period, shall be destroyed by LICENSEE within ten (10) days.
11.3 Termination by LICENSEE's Breach. If this Agreement is terminated by
--------------------------------
NINTENDO as a result of a breach of its terms and conditions by LICENSEE,
LICENSEE shall immediately cease all distribution, promotion or sale of any
Licensed Products. All Licensed Products in LICENSEE's control as of such
termination shall be destroyed by LICENSEE within ten (10) days.
11.4 Licensed Intellectual Property Rights. Except as provided in Section
-------------------------------------
11.5, upon expiration and/or termination of this Agreement (or expiration of any
sell-off period, as applicable), LICENSEE will cease all use of the Licensed
Intellectual Properties for any purpose, and will not disclose to third parties
any Licensed Proprietary Information. LICENSEE shall also return to NINTENDO
all writings, drawings, models, data 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 Licensed Proprietary Information without making
copies or otherwise retaining any such
NINTENDO 64 LICENSE AGREEMENT
PAGE 9
information.
11.5 Termination by Nintendo's Breach. If this Agreement is terminated by
--------------------------------
LICENSEE as a result of a breach of its terms or conditions by NINTENDO,
LICENSEE may continue to sell the Licensed Products in the Territory until the
expiration of the Term, at which time the provisions herein relating to
termination other than by default of LICENSEE shall apply to any unsold Licensed
Products.
12. GENERAL PROVISIONS
------------------
12.1 Nonassignability/Sublicensing. This Agreement is personal to
-----------------------------
LICENSEE and may not be sold, assigned, delegated, sublicensed or otherwise
transferred or encumbered, including by operation of law or by the sale or
transfer of more than fifty percent (50%) of the stock, assets or ownership
interest or control of LICENSEE, without the prior written consent of NINTENDO.
12.2 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 microcomputer chips
necessary for production of the Licensed Products, NINTENDO reserves the right
to allocate essential materials among itself and its licensees.
12.3 Waiver; Severability; Integration. The failure of any 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. This Agreement constitutes
the entire agreement between the parties relating to the subject matter hereof,
provided, however, that the Other Agreements shall remain in effect, except as
may be modified by specific reference herein. All prior negotiations,
representations, agreements and understandings are merged into, extinguished by
and completely expressed by this Agreement. Any amendment to this Agreement
shall be in writing, signed by both parties.
12.4 Governing Law: Venue. This Agreement shall be governed by, subject
--------------------
to and construed under the laws of the State of Washington. Any legal actions
prosecuted or instituted by NINTENDO or by LICENSEE under this Agreement, with
respect to any matters arising under or growing out of this Agreement, shall
only be brought in a court of competent jurisdiction in King County, Washington
and each party hereby consents to the jurisdiction and venue of such courts for
such purposes.
12.5 Equitable Relief. LICENSEE acknowledges that in the event of its
----------------
breach of this Agreement, no adequate remedy at law may be available to NINTENDO
and that NINTENDO shall be entitled to seek injunctive or other equitable relief
in addition to any relief available at law.
12.6 Attorneys' Fees. In the event it is necessary for either party of
---------------
this Agreement to undertake legal action to enforce any of the terms, conditions
or rights contained herein, or to defend any such action, then the prevailing
party in any such action shall be entitled to recover from the other party all
reasonable attorneys' fees, costs and expenses relating to such legal action.
12.7 Notices. All notices required or permitted under this Agreement
-------
shall be sufficiently given when: (a) personally served or delivered; (b)
deposited, postage prepaid, with a guaranteed air courier service, addressed as
stated herein, or to such other person or address either party may designate in
a notice;
NINTENDO 64 LICENSE AGREEMENT
PAGE 10
or, (c) by facsimile, with an original sent concurrently by first class U.S.
mail. Notice shall be deemed effective upon the earlier of actual receipt or two
(2) business days after transmittal.
12.8 Counterparts; 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, NINTENDO and LICENSEE have entered into this Agreement on
the dates set forth below.
NINTENDO: LICENSEE:
NINTENDO OF AMERICA INC. INTERPLAY PRODUCTIONS
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇
----------------------------------------- ---------------------------
Its: Executive Vice President, Administration Its: Exec. V.P.
--------------------------
Date: 10/7/97 Date: 27 Aug. 97
--------------------------------------- -------------------------
NINTENDO 64 LICENSE AGREEMENT
PAGE 11
SCHEDULE 1
----------
NINTENDO OF AMERICA INC.
PRICE SHEET
N64 LICENSED GAME PAKS
MEMORY CAPACITY NOA PRICE
32 Megabit $ [ * ]
32 Megabit + 4k bit E/2/ ROM $ [ * ]
32 Megabit + 16k bit E/2/ ROM $ [ * ]
64 Megabit $ [ * ]
64 Megabit + 4k bit E/2/ ROM $ [ * ]
64 Megabit + 16k bit E/2/ ROM $ [ * ]
96 Megabit $ [ * ]
96 Megabit + 4k bit E/2/ ROM $ [ * ]
96 Megabit + 16k bit E/2/ ROM $ [ * ]
128 Megabit $ [ * ]
128 Megabit + 4k bit E/2/ ROM $ [ * ]
128 Megabit + 16k bit E/2/ ROM $ [ * ]
Price includes an instruction manual up to 40 pages. There will be an extra
charge for manuals larger than 40 pages (including the front and back cover)
EXTRA PACKAGING (MUST BE ORDERED WITH PRODUCT ON A SEPARATE PO)
Game Pak Box $ [ * ]
Instruction Manual $ [ * ] (under 40 pages)
Instruction Manual $ [ * ] (over 40 pages)
Game Pak Label $ [ * ]
Game Pak Poster $ [ * ]
ALL PRICES ARE SUBJECT TO CHANGE WITHOUT NOTICE
Revised 7/9/97
NINTENDO 64 LICENSE AGREEMENT
PAGE 12
* Confidential Portions Omitted and Filed Separately with the Commission.
