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EXHIBIT 10.31
(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 Bay Area Multimedia
Inc., a California corporation with an address for notice purposes of ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, (Fax: ▇▇▇-▇▇▇-▇▇▇▇),
Attention: President ("LICENSEE").
NINTENDO and LICENSEE acknowledge and agree as follows:
1. RECITALS
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" and "N64", 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
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,
Bandai WonderSwan, 3DO Real, Matsushita M2, Microsoft X-Box, ▇▇▇▇▇▇▇▇ ▇▇-1
Interactive Player, Sega Master System, Sega Genesis, Sega CD, Sega Game Gear,
Sega CD/X, Sega Nomad, Sega 32X, Sega Saturn, Sega Pico, Sega Dreamcast, Sony
PSX/Playstation, Sony PSX II/Playstation II, SNK Neo Geo/Neo Geo Pocket, VM Labs
Project X, and any successors or derivatives of any of the foregoing.
2.3 "Effective Date" shall mean the last date on which all parties shall
have signed this Agreement.
2.4 "Exclusive Licensed Product" shall mean the audiovisual work in its
current form and as hereafter developed, which is sold by LICENSEE as a Licensed
Product under this Agreement.
2.5 "Finished Goods" shall mean the Game Cartridge, fully assembled with
exterior labels, packaged in a plastic or polyethylene bag, placed in a high
quality, custom packaging box, including all
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required Artwork.
2.6 "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.
2.7 "Game(s)" shall mean video game software compatible with the N64
System developed under this Agreement.
2.8 "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.
2.9 "Independent Contractor" shall mean any third party agent,
consultant, contractor or independent programmer, other than LICENSEE.
2.10 "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.
2.11 "Licensed Intellectual Properties" shall mean individually,
collectively or in any combination, the Licensed Inventions, Licensed
Proprietary Information, Licensed Copyrights and Licensed Trademarks.
2.12 "Licensed Invention(s)" shall mean improvements and inventions
concerning the N64 System, including inventions that are or may become the
subject matter of various patents or patent applications.
2.13 "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.
2.14 "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
specification, 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.
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2.15 "Licensed Trademarks" shall mean registered and unregistered
trademarks and trademark applications used in connection with the N64 System,
including "▇▇▇▇▇▇▇▇", "▇▇▇▇▇▇▇▇ ▇▇", "▇▇▇", "Official Nintendo Seal of Quality"
and trade dress in the N64 System.
2.16 "Marketing Materials" shall mean marketing, advertising or promotional
materials that incorporate the Licensed Intellectual Properties that are
developed by or for LICENSEE to promote the sale of the Licensed Products.
2.17 "NCL" shall mean NINTENDO's parent company, Nintendo Co., Ltd. of
Kyoto, Japan.
2.18 "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 NCL.
2.19 "Product Proposal" shall mean a written proposal that 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 "Stripped Cartridge(s)" shall mean fully assembled Game Cartridges
with exterior labels shipped in a plastic or polyethylene bag, excluding the
required Artwork.
2.23 "Term" shall mean three (3) years from the Effective Date.
2.24 "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
3.1 Grant. For the Term and in the Territory, NINTENDO hereby grants to
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 NCL, LICENSEE shall not use the
Licensed Intellectual Properties for any other purpose.
3.2 Reservation of Rights in the Licensed Intellectual Properties.
LICENSEE acknowledges NINTENDO and NCL'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. 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.
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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 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
directly or indirectly duplicate, distribute or transmit Games via electronic
means or any other means now known or hereafter devised, including within
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
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
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
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.
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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
5.1 Development and Sale of the N64 System Programs. During the Term,
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
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 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,
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
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. 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
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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 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. NINTENDO shall not unreasonably withhold or delay its approval of any
Artwork.
5.7 Appointment of NCL as Manufacturer of Licensed Product. LICENSEE
hereby appoints NCL, and NINTENDO hereby confirms that NCL accepts such
appointment, as manufacturer of the Licensed Products in the form of Finished
Goods and/or Stripped Cartridges. NCL shall acquire and retain responsibility
for all equipment, tooling, molds or masks used in connection with the
manufacture of the Licensed Products. NCL shall have the sole responsibility for
establishing and fulfilling all aspects of the manufacturing process of the
Licensed Products, including selecting the location of the specifications of any
manufacturing facilities, appointing suppliers and subcontractors, and managing
all work-in progress.
5.8 Manufacture of Licensed Products. Upon approval of a Game and upon
receipt from LICENSEE of an order in accordance with Section 6 herein, NCL will
manufacture the Licensed Products for LICENSEE. LICENSEE may, at its option,
order Stripped Cartridges rather than Finished Goods and utilize an Independent
Contractor to manufacture the Artwork and/or complete the final pack-out only,
provided such Independent Contractor is approved in writing by NINTENDO.
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
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
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.
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* Confidential Portions Omitted and Filed Separately with the Commission.
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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
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
distribution, LICENSEE shall submit to NINTENDO for review and evaluation
initial samples of all Marketing Materials. NINTENDO 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. NINTENDO reserves the right to
disapprove Marketing Materials that include non-licensed accessories.
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
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
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
option, NINTENDO may: (a) insert in the packaging for the Licensed Product
promotional materials concerning Nintendo Power magazine; (b) utilize screen
shots, package art and related art and information regarding the Licensed
Product in Nintendo Power, Nintendo Power Source (NINTENDO's on-line version of
Nintendo Power) or other media
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or marketing programs which promote 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, provided that no other third party approvals are required.
7.8 NINTENDO Gateway System. LICENSEE acknowledges that NINTENDO operates
the Nintendo Gateway System in various non-coin activated commercial settings
including, but not limited to, commercial airlines, cruise ships and hotels,
whereby customers may be charged on a per use basis to play various Games on an
adapted Nintendo 64 and/or Super Nintendo Entertainment System. The purpose of
the Gateway System is to promote and increase demand for Nintendo 64 software
in general. LICENSEE acknowledges that NINTENDO selects high quality Nintendo
64 software for possible participation in the program and may indentify one or
more of LICENSEE's Games for possible adaptation and participation. Should
NINTENDO identify one of LICENSEE's Games for possible participation, LICENSEE
hereby agrees to conduct a good faith discussion with NINTENDO about the
inclusion and adaptation of such Game for the Nintendo 64 Gateway System.
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 and NCL harmless from any claims, losses, liabilities, damages,
expenses and costs, including, without limitation, reasonable 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
general liability insurance that includes product liability coverage by a
recognized insurance company. Such policy of insurance shall be in an amount of
not less than Three Million Dollars ($3,000,000 US) and shall provide for
adequate protection against any suits, claims, loss or damage or any alleged
intellectual property infringements by the Licensed Products. Such policy shall
name NINTENDO as an additional insured and may not be canceled without thirty
(30) days' prior written notice to NINTENDO. A Certificate of Insurance 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
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. LICENSEE
HEREBY ASSUMES THE
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RISK OF INFRINGEMENT.
9.2 Warranty Disclaimer. NINTENDO DISCLAIMS ANY AND ALL WARRANTIES OF THE
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.
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.
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11.2 Bankruptcy/Insolvency. At NINTENDO's option, this Agreement can 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.
11.3 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 sixty (160) days to sell any unsold Licensed
Products. LICENSEE shall destroy all Licensed Products in LICENSEE's control
following expiration of such sell-off period, within ten (10) days.
11.4 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. LICENSEE shall have a period of one hundred sixty (160) 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.
11.5 Licensed Intellectual Property Rights. Upon expiration and/or
termination of this Agreement, 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 or 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 information.
11.6 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, in whole or in part, including without limitation,
by operation of law, without the prior written consent of Nintendo, which
consent may be withheld by Nintendo in its sole discretion. For purposes of
determining whether an assignment of this agreement by Licensee (but not by
Licensor) has occurred under this Section 12.1, a merger of Licensee into
another business entity or a merger of another business entity into Licensee;
the sale or transfer of more than twenty percent (20%) of the stock of
Licensee, Licensee's assets, or ownership interest or control of Licensee; or,
the granting of any security interest or other encumbrance in this Agreement or
any rights arising under this Agreement, shall be deemed an assignment
requiring notice to, and the prior written consent of, Nintendo, which consent
may be withheld by Nintendo in its sole discretion. Upon any attempted sale,
assignment, delegation, sublicense or other transfer or encumbrance in
violation of the preceding sentences, this Agreement shall be deemed null and
void, and of no effect, and in such event, notwithstanding anything in this
Agreement to the contrary, Nintendo shall have the immediate, unqualified right
to terminate this Agreement in addition to all other rights and remedies it may
obtain due to Licensee's breach. This Agreement may be assigned by Licensor
upon written notice to Licensee but without any consent, provided, however,
that any such assignment shall not release the Licensor from its obligations to
the Licensee under this Agreement. Subject to such restriction and to the
restriction against assignment provided above, this Agreement shall be binding
upon and inure to the benefit of the parties, their successors and assigns.
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
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commotion, fire, natural disaster, labor disputes, restraints affecting
shipment 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; 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 purpose of this
Agreement.
12.9 Time is of the Essence. Time if of the essence with regard to this
Agreement and the performance of the parties' obligations hereunder.
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IN WITNESS WHEREOF, NINTENDO and LICENSEE have entered into this Agreement on
the dates set forth below.
NINTENDO: LICENSEE:
NINTENDO OF AMERICA INC. BAY AREA MULTIMEDIA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By:
------------------------------------------ ------------------------------
Its: Executive Vice President, Administration Its:
-----------------------------
Date: 2/18/00 Date:
---------------------------------------- ----------------------------
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IN WITNESS WHEREOF, NINTENDO and LICENSEE have entered into this Agreement on
the dates set forth below.
NINTENDO: LICENSEE:
NINTENDO OF AMERICA INC. BAY AREA MULTIMEDIA, INC.
By: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- -----------------------------
Its: Executive Vice President, Its: President
Administration ----------------------------
Date: Date: [Illegible]
-------------------------- ----------------------------
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SCHEDULE 1
NINTENDO OF AMERICA INC.
PRICE SHEET
N64 LICENSED GAME PAKS
Memory Capacity NOA Price
-----------------------------------------------------------
32 Megabit $ [*]
32 Megabit + 4K bit E. ROM $ [*]
32 Megabit + 16K bit E. ROM $ [*]
32 Megabit + 256K SRAM + Battery $ [*]
64 Megabit $ [*]
64 Megabit + 4K bit E. ROM $ [*]
64 Megabit + 16K bit E. ROM $ [*]
64 Megabit + 256K SRAM + Battery $ [*]
96 Megabit $ [*]
96 Megabit + 4K bit E. ROM $ [*]
96 Megabit + 16K bit E. ROM $ [*]
96 Megabit + 256K SRAM + Battery $ [*]
128 Megabit $ [*]
128 Megabit + 4K bit E. ROM $ [*]
128 Megabit + 16K bit E. ROM $ [*]
128 Megabit + 256K SRAM + Battery $ [*]
256 Megabit $ [*]
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* Confidential Portions Omitted and Filed Separately with the Commission.
15
256 Megabit + 4K bit E. ROM $[*]
256 Megabit + 16K bit E. ROM $[*]
256 Megabit + 256K SRAM + Battery $[*]
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 $[*]
Warranty Card $[*]
Inner Carton $[*]
Master Carton $[*]
ALL PRICES ARE SUBJECT TO CHANGE WITHOUT NOTICE
Revised 7/15/98
PAGE 14
* Confidential Portions Omitted and Filed Separately with the Commission.