Confidential License Agreement for Game Boy Advance - Nintendo of America Inc. and Acclaim Entertainment Inc.
CONFIDENTIAL LICENSE AGREEMENT
FOR GAME BOY ADVANCE
(Western Hemisphere)
THIS LICENSE AGREEMENT ("Agreement") is entered into between NINTENDO OF
AMERICA INC. ("NOA"), at 4820 150th Avenue N.E., Redmond, WA 98052 Attn: General
Counsel (Fax: 425-882-3585) and Acclaim Entertainment, Inc., ("LICENSEE") at One
Acclaim Plaza, Glen Cove, NY 11542-2708 Attn: Johnny Ma (Fax: (516) 656-2040).
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(R)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.
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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(R)", "GAME BOY(R) ADVANCE," "AGB" and the "Official Nintendo Seal of
Quality(R)", (b) select trade dress associated with the 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. 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.
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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 mark, 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.
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:
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(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.
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
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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 ten (10) 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
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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.
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 two (2) 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.
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Confidential information omitted where indicated by "[*]" and filed separately
with the Commission pursuant to a request for confidential treatment under Rule
24b-2 of the Securities Exchange Act of 1934.
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 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.
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.
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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 ten
(10) 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 ninety (90) day limited warranty on all Licensed Products. LICENSEE
shall also provide reasonable product service, including out-of-warranty
service, for all Licensed Products.
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
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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.
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 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 if such disclosure is required by an authorized
governmental or judicial entity, provided that NOA is given Notice thereof at
least thirty (30) days 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
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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 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,
(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
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(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 NOR NINTENDO CO., LTD. (OR THEIR RESPECTIVE AFFILIATES, LICENSORS OR
SUPPLIERS) SHALL BE LIABLE FOR LOSS OF PROFITS, OR FOR ANY SPECIAL, PUNITIVE,
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF LICENSEE OR ITS CUSTOMERS ARISING OUT OF
OR RELATED TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE BREACH OF THIS
AGREEMENT BY NOA, 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.
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Confidential information omitted where indicated by "[*]" and filed separately
with the Commission pursuant to a request for confidential treatment under Rule
24b-2 of the Securities Exchange Act of 1934.
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:
(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 thirty (30) 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 two (2) 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
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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 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 thirty (30) 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
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Confidential information omitted where indicated by "[*]" and filed separately
with the Commission pursuant to a request for confidential treatment under Rule
24b-2 of the Securities Exchange Act of 1934.
period of ninety (90) 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 thirty (30) 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 ten (10) 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 ten (10) 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 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 thirty (30) 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
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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 Records and Audit. During the Term and for a period of two (2) years
thereafter, LICENSEE agrees to keep accurate, complete and detailed records
related to the development and sale of the Licensed Products and the Marketing
Materials. Upon reasonable Notice to LICENSEE, NOA may, at its expense, audit
LICENSEE's records, reports and other information related to LICENSEE's
compliance with this Agreement.
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.
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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.
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. ACCLAIM ENTERTAINMENT, INC.
By: /s/ John Bauer By: /s/ Gregory Fischbach
---------------------------------- --------------------------------
Title: Executive VP, Administration Title: Chief Executive Officer
-----------------------------
Date: July 11, 2001 Date: June 19, 2001
-------------------------------- ------------------------------
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