CONFIDENTIAL LICENSE AGREEMENT FOR NINTENDO GAMECUBE

 

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                         CONFIDENTIAL LICENSE AGREEMENT

                              FOR NINTENDO GAMECUBE

                              (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 Majesco Sales, Inc. ("LICENSEE") at 160 Raritan

Center Parkway, Edison, NJ 08837 Attn: Joseph Sutton (Fax: (732)-225-8408). NOA

and LICENSEE agree as follows:

 

1.    RECITALS

 

     1.1 NOA markets and sells advanced design, high-quality video game systems,

including the "NINTENDO GAMECUBE(TM)K: system.

 

     1.2 LICENSEE desires use of the highly proprietary programming

specifications, unique and valuable security technology, trademarks, copyrights

and other valuable intellectual property rights of NOA and Its parent company,

Nintendo Co., Ltd., which rights are only available for use under the terms of a

license agreement, to develop, have manufactured, advertise, market and sell

video game software for play on the NINTENDO GAMECUBE 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 text and design specifications for the Game Disc

label and the Printed Materials In the format specified by NOA In the

Guidelines.

 

     2.2 "Bulk Goods" means Game Discs that have been printed with the Game Disc

label Artwork for delivery to LICENSEE without Printed Materials or other

packaging.

 

     2.3 "Check Disc(s)" means the pre-production Game Discs to be produced by

Nintendo.

 

     2.4 "Confidential Information" means the information described in Section

8.1.

 

     2.5 "Development Tools" means the development kits, programming tools,

emulators and other materials that may be used in the development of Games under

this Agreement.

 

     2.6 "Effective Date" means the last date on which all parties shall have

signed this Agreement.

 

     2.7 "Finished Goods" means Game Discs that have been fully assembled with

the Printed Materials, cellophane wrapped and boxed for delivery to LICENSEE by

NOA

 

 

 

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     2.8 "Game Discs(s)" means custom optical discs for play on the NINTENDO

GAMECUBE system on which a Game has been stored.

 

     2.9 "Game(s)" means interactive video game programs (including source and

object/binary code) developed for play on the NINTENDO GAMECUBE system.

 

     2.10 "Guidelines" means the then current version of the "NINTENDO GAMECUBE

Development Manual," "NINTENDO GAMECUBE Packaging Guidelines," "Nintendo

Trademark Guidelines" and the "Nintendo Game Content Guidelines", together with

related guidelines provided by NOA to LICENSEE from time to time.

 

     2.11 "Independent Contractor" means any Individual or entity that is not an

employee of LICENSEE, including any independent programmer, consultant,

contractor, board member or advisor.

 

     2.12 "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 the NINTENDO GAMECUBE system including "Nintendo(R)", "NINTENDO

GAMECUBE(TM)" "GCN" and "Official Nintendo Seal of Quality(R)", and (b) select

trade dress associated with the NINTENDO GAMECUBE system and licensed video

games for play thereon, (c) Proprietary Rights in the Security Technology

employed in the Games or Game Discs by Nintendo, (d) rights In the Development

Tools for use in developing the Games, excluding, however, rights to use,

incorporate or duplicate select libraries, protocols and/or sound or graphic

files associated with the Development Tools which belong to any third party,

without obtaining any necessary licenses or consents, (e) patents, design

registrations or copyrights which may be associated with the Game Discs or

Printed Materials, (f) copyrights in the Guidelines, and (g) other Proprietary

Rights of Nintendo in the Confidential Information.

 

     2.13 "Licensed Products" means (a) Finished Goods, or (b) Bulk Goods after

being assembled with the Printed Materials in accordance with the Guidelines by

LICENSEE.

 

     2.14 "Marketing Materials" means marketing, advertising or promotional

materials developed by or for LICENSEE (or subject to LICENSEE'S approval) that

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, print media and all audio or video

media other than the Game that is to be included on the Game Disc.

 

     2.15 "NDA" means the non-disclosure agreement related to the NINTENDO

GAMECUBE system previously entered into between NOA and LICENSEE.

 

     2.16 "Nintendo" means NOA's parent company, Nintendo Co., Ltd., of Kyoto,

Japan, individually or collectively with NOA.

 

     2.17 "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

 

 

 

 

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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.

 

     2.18 "Price Schedule" means the then current version of NOA's schedule of

purchase prices and minimum order quantities for the Licensed Products.

 

     2.19 "Printed Materials" means a plastic disc storage case, title page,

instruction booklet, warranty card and poster incorporating the Artwork,

together with a precautions booklet in the form specified by NOA.

 

     2.20 "Promotional Disc(s)" means custom optical discs compatible with the

NINTENDO GAMECUBE system that Incorporate select game promotional or

supplemental materials, as may be specified or permitted in the Guidelines.

 

     2.21 "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.

 

     2.22 "Rebate Program" means any then current version of NOA's optional

rebate program, establishing select terms for price rebates under this

Agreement.

 

     2.23 "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.

 

     2.24 "Security Technology" means the highly proprietary security features

incorporated by Nintendo into the Licensed Products to minimize the risk of

unlawful copying and other unauthorized or unsafe usage, including, without

limitation, any security signatures bios, data scrambling, password, hardware

security apparatus, watermark, hologram, copyright management Information

system, proprietary manufacturing process or any feature which obstructs piracy,

limits unlawful, unsafe or unauthorized use or facilitates or limits

compatibility with other hardware or software outside of the Territory or on a

different video game system.

 

     2.25 "Term" means three (3) years from the Effective Date.

 

     2.26 "Territory" shall mean all countries within the Western Hemisphere and

their respective territories and possessions.

 

 

 

 

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3.    GRANT OF LICENSE: LICENSEE RESTRICTIONS

 

     3.1 Limited License Grant. For the Term and for the Territory, NOA grants

to LICENSEE a nonexclusive, nontransferable, limited license to use the

Intellectual Property Rights to develop (or have developed on their behalf)

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

NINTENDO GAMECUBE system. LICENSEE recognizes that the Games, Game Discs and

Licensed Products will embody valuable rights of Nintendo and Nintendo's

licensors. LICENSEE represents and warrants that it will not undertake any act

or thing which in any way impairs or is intended to impair any part of the

right, title, interest or goodwill of Nintendo in the intellectual Property

Rights. LICENSEE's use of the Intellectual Property Rights shall not create any

right, title or interest of LICENSEE therein.

 

     3.3 LICENSEE Restrictions and Prohibitions. LICENSEE represents and

warrants that it will not at any time, directly or Indirectly, do or cause to be

done any of the following:

 

         (a) grant access to, distribute, transmit or broadcast a Game by

electronic means or by any other means known or hereafter devised, including,

without limitation, by wireless, cable, fiber optic, telephone lines, microwave,

radiowave, computer or other. device network; provided, however, that limited

transmissions may be made for the sole purpose of facilitating development under

the terms of this Agreement, but no right of retransmission shall attach to any

such authorized transmission and reasonable security measures, customary within

the high technology industry, shall be utilized to reduce the risk of

unauthorized Interception or retransmission of any such authorized transmission,

 

         (b) authorize or permit any online activities involving a Game,

including, without limitation, multiplayer, peer-to-peer or online play,

 

         (c) modify, install or operate a Game on any server or computing device

for the purpose of or resulting in the rental, lease, loan or other grant of

remote access to the Game,

 

         (d) emulate, interoperate, interface or link a Game for operation or

use with any hardware or software platform, accessory, computer language,

computer environment, chip instruction set, consumer electronics device or

device other than the NINTENDO GAMECUBE system or the Development Tools,

 

         (e) embed, incorporate, or store a Game In any media or format except

the optical disc format utilized by the NINTENDO GAMECUBE system, except as may

be necessary as a part of the Game development process under this Agreement,

 

 

 

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         (f) design, Implement or undertake any process, procedure, program or

act designed to disable, obstruct, circumvent or otherwise diminish the

effectiveness or operation of 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 Reverse Engineering all or any part

of the NINTENDO GAMECUBE system, Including the hardware, software (embedded or

not) or the Security Technology.

 

     3.4 Nintendo Development Tools. NOA and Nintendo Co., Ltd. may lease, loan

or sell Development Tools to LICENSEE to assist in the development of Games

under 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 to the

Development Tools, except in association with the development of Games under

this Agreement, (c) Reverse Engineer the Development Tools, or (d) sell, lease,

assign, lend, license, encumber or otherwise transfer the Development Tools. Any

tools developed or derived by LICENSEE as a result of a study of the

performance, design or operation of the Development Tools shall be considered a

derivative work 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 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.

 

     3.5 Third Party Development Tools. NOA and Nintendo Co., Ltd. may authorize

third parties to develop and market Development Tools to authorized developers

of Games. Notwithstanding any referral or information provided or posted

regarding such Development Tools, NOA and Nintendo Co., Ltd. make no

representations or warranties with regard to any such third party Development

Tools. Licensee acquires and utilizes such Development Tools at its own risk.

LICENSEE shall not, directly or indirectly, use such Development Tools for any

purpose except the design and development of Games under this Agreement. All

Nintendo Proprietary Rights contained In or derived from such Development Tools

shall remain owned by Nintendo.

 

     3.6 Games Developed for Linked Play on Two Systems. In the event the

Guidelines permit LICENSEE to develop a Game for simultaneous or linked play on

the NINTENDO GAMECUBE system and on another Nintendo video game system, LICENSEE

shall be required to acquire and maintain with NOA such additional licenses as

are necessary for the use of the Proprietary Rights associated with such other

Nintendo video game system.

 

 

 

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4.    SUBMISSION AND APPROVAL OF GAME AND ARTWORK

 

     4.1 Submission of a Completed Game to NOA. Upon completion of a Game,

LICENSEE shall deliver a prototype of the Game to NOA In a format specified in

the Guidelines. Delivery shall be made in accordance with the methods approved

in the Guidelines. Each Submission shall Include such other information or

documentation deemed necessary by NOA, including, without limitation, a complete

set of 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. LICENSEE must

establish that the Game and any other content included on the Game Disc complies

with the Advertising Code of Conduct of the Entertainment Software Ratings Board

("ESRB") and has been rated EC, E, M or T by the ESRB.

 

     4.2 Testing of a Completed Game. Upon submission of a completed Game, NOA

and Nintendo 00, Ltd. shall promptly test the Game with regard to its technical

compatibility with and error-free operation on the NINTENDO GAMECUBE system

utilizing the lot check process. Within a reasonable period of time after

receipt, NOA shall approve or disapprove such Game. If a Game is disapproved,

NOA shall specify In writing the reasons for such disapproval and state, what

corrections are necessary. After making the necessary corrections, LICENSEE

shall submit a revised Game to NOA for testing. NOA shall not unreasonably

withhold or delay Its approval of any Game. Neither the testing nor approval of

a Game by NOA or Nintendo Co., Ltd. shall relieve LICENSEE of Its sole

responsibility for the development, quality and operation of the Game or In any

way create any warranty for Licensed Product by NOA or Nintendo Co., Ltd.

 

     4.3 Production of Check Discs. By submission of a completed Game to NOA in

accordance with section 4.1, LICENSEE authorizes Nintendo to proceed with

production of Check Discs for such Game. If NOA approves a Game, it shall

promptly, and without further notification to or instruction from LICENSEE,

submit such Game for the production of Check Discs. Unless otherwise advised by

LICENSEE, following production of the Check Discs, NOA shall deliver to LICENSEE

approximately ten (10) Check Discs for content verification, testing and final

approval by LICENSEE.

 

     4.4 Approval or Disapproval of Check Discs by LICENSEE. If, after review

and testing, LICENSEE approves the Check Discs, it shall promptly transmit to

NOA a signed authorization for production in the form specified In the

Guidelines. If LICENSEE does not approve the sample Check Discs for any reason,

LICENSEE shall advise NOA in writing and may, after undertaking any necessary

changes or corrections, resubmit the Game to NOA for approval in accordance with

the procedures set forth In this Section 4. The absence of a signed

authorization form from LICENSEE within five (5) days after delivery of the

Check Discs to LICENSEE shall be deemed disapproval of such Check Discs.

Production of any order for Licensed Product shall not proceed without

LICENSEE's signed authorization.

 

     4.5 Cost of Disc Stamper Production. ****

 

     4.6 Submission and Approval and Artwork. Prior to submitting a completed

Game to NOA under Section 4.1, LICENSEE shall submit to NOA all Artwork for the

proposed Licensed Product. Within ten (10) business days of receipt, NOA shall

approve or disapprove the Artwork. If

 

 

[*] Confidential portion omitted and filed separately with the Securities and

Exchange Commission.

 

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any Artwork is disapproved, NOA shall specify in writing the reasons for such

disapproval and state what corrections or improvements are necessary. After

making the necessary corrections or Improvements, LICENSEE shall submit revised

Artwork to NOA for approval. NOA shall not unreasonably withhold or delay its

approval of any Artwork. The approval of the Artwork by NOA shall not relieve

LICENSEE of its sole responsibility for the development and quality of the

Artwork or in any way create any warranty for the Artwork or the Licensed

Product by NOA. All Artwork must be approved prior to submitting an order for

the Licensed Product.

 

     4.7 Artwork for Bulk Goods. If LICENSEE intends to submit an order for Bulk

Goods, all Artwork shall be submitted to NOA in accordance with Section 4.6

herein. No Printed Materials shall be produced by LICENSEE until such Artwork

has been approved by NOA.

 

     4.8 Promotional Discs. In the event NOA issues Guidelines in the future

that permit LICENSEE to develop and distribute Promotional Discs, either

separately or as a part of the Licensed Product, the content and specifications

of such Promotional Disc shall be subject to all of the terms and conditions of

this Agreement, including, without limitation, the Guidelines, the Price

Schedule and the submission and approval procedures provided for in this Section

4.

 

5.    ORDER PROCESS, PURCHASE PRICE, PAYMENT AND DELIVERY

 

     5.1 Submission of Orders by LICENSEE. After receipt of NOA's approval for a

Game and Artwork, LICENSEE may at any time submit a written purchase order to

NOA for such Game. The purchase order shall specify whether the order is for

Finished Goods or Bulk Goods. The terms and conditions of this Agreement shall

control over any contrary terms of such purchase order or any other written

documentation or verbal instruction from LICENSEE. All orders shall be 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 (both Finished Goods and Bulk

Goods) shall be set forth in NOA's then current Price Schedule. Unless otherwise

specifically provided for, the purchase price includes the cost of manufacturing

a single Game Disc, 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

(except for taxes Imposed on NOA's income) are Included In the Purchase Price

and all such taxes are the responsibility of LICENSEE. 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 either (a) by tender of an irrevocable letter of credit in

favor of NOA (or its designee) 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 an account designated by NOA. Alt letters of credit

shall comply with NOA's written instructions and all associated banking charges

shall be for LICENSEE's account.

 

 

 

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     5.4 Delivery of Finished Goods. Finished Goods shall be delivered to

LICENSEE FCA North Bend, Washington USA, or such other delivery point within the

continental United States as may be specified by NOA. Orders may be delivered In

partial shipments, at NOA's option. Title to Finished Goods shall vest In

LICENSEE ****.

 

     5.5 Delivery of Bulk Goods. Bulk Goods shall be delivered to LICENSEE FCA

Torrance, California USA, or such other delivery point within the continental

United States as may be specified by NOA. Orders may be delivered In partial

shipments, at NOA's option. Title to Bulk Goods shall vest in LICENSEE ****.

 

     5.6 Rebate Program. NOA, at Its sole option, may elect to offer LICENSEE a

Rebate Program. The terms and conditio