KONAMI CORPORATION
SOFTWARE DISTRIBUTION AGREEMENT
This SOFTWARE DISTRIBUTION AGREEMENT (the "Agreement") is made and
entered into by and between KONAMI OF AMERICA, INC., a company
organized under
the laws of Illinois ("Konami"), and MAJESCO SALES, INC., a company
organized
under the laws of New Jersey ("Distributor"), as of April 8, 2002
(The
"Effective Date"), and consists of this signature page and the
Exhibits hereto,
which are incorporated in full by this reference. Capitalized terms
used in this
Agreement shall be as defined on this signature page and in Exhibit
B ("General
Terms").
EXHIBITS
Exhibit A:
Special Terms
Exhibit B:
General Terms
Exhibit C:
Certificate to Nintendo
RECITALS
Konami develops, markets and licenses general commercial computer
game
software far use on, among others, the Nintendo Advanced Game Boy
("AGS")
operating systems.
Distributor wants to distribute through customary retail channels
certain of Konami's software in object code form to consumers
located within the
Territory.
Konami is willing to grant Distributor the limited and exclusive
right
to distribute through customary retail channels the object code
form of certain
of Konami's software products, subject to the terms and conditions
of this
Agreement.
IN WITNESS WHEREOF, the parties hereto, by their duly authorized
representatives, have executed and delivered this Agreement.
KONAMI OF AMERICA, INC.
MAJESCO SALES, INC.
By:
By:
--------------------------
--------------------------
Print Name:
Print Name:
Print Title:
Print Title:
Address:
Address:
Telephone:
Telephone:
Fax:
Fax:
EXHIBIT A
SPECIAL TERMS
1.
TERRITORY.
(A) DESCRIPTION OF TERRITORY: CANADA, MEXICO AND THE UNITED STATES.
(B)
RESTRICTIONS.
(1)
Distributor shall have the right to market and
distribute the Konami Products only to End Users
located in the Territory by means of Customary Retail
Channels.
(2)
Konami shall have the right to prevent Distributor,
immediately upon written notice to Distributor, from
distributing the Konami Products in any country in
the Territory if Konami reasonably concludes, or is
informed by one of Konami's suppliers that such
supplier has determined, that the country (a) does
not provide adequate protection for Konami's or the
supplier's proprietary rights in the Konami Products
or (b) has laws, or the government has committed
acts, which Konami or the supplier deems injurious to
its business interests.
(C)
SALES OUTSIDE TERRITORY.
Without the prior written consent of Konami, Distributor shall
not, with respect to the Konami Products, (i) establish or
maintain outside of the Territory any branch, warehouse or
distribution depot and (ii) actively license, market or
otherwise promote the use or distribution of the Konami
Products outside of the Territory.
2. KONAMI SOFTWARE (Title, Operating System(s)).
ESPN Golf (AGB)*
ESPN Fishing (AGB)*
ESPN Skateboarding (AGB)*
Jurassic Park-Park Builder (AGB)*
Jurassic Park-island Attack (AGB)*
Jurassic Park-DNA (AGB)*
Castlevania-Circle of the Moon (AGB)
--------
*
Expressly provided, however, that (i) the software marked with a
"*" above
includes animated characters, music, trademarks and other
intellectual
property not owned by Konam4 (ii) Distributor acknowledges the
ownership of
such third-party intellectual property by third parties and that
Distributor
must receive from such third parties the right to distribute such
intellectual property in conjunction with the distribution of the
Konami
Software, (iii) Konami has no rights to, and accordingly excludes
from the
definition of Konami Software and grants no rights to, such
Intellectual
property, but (iv) Konami will make reasonable efforts to assist
Distributor
in securing the rights necessarily for it to distribute the Konami
Software
with third-party intellectual property, though Konami does not
guarantee that
its assistance will result In Distributor receiving the rights so
distribute
the Konami Software with the third-party intellectual property.
A-1
Frogger Great Adventure; Temple of the Frog (AGB)
Gradius (AGB)
Konami Crazy Racers (AGB)
3.
KONAMI TRADEMARKS.
Konami (logo arid name mark)
Castlevania-Circle of the Moon
Frogger's Great Adventure: Temple of the Frog
Gradius
Konami Krazy Racers
4.
MINIMUM ROYALTIES, ADDITIONAL ROYALTIES AND PAYMENT TERMS.
(A)
MINIMUM ROYALTIES.
AMOUNT:
1. Distributor shall pay to Konami non-refundable
royalties of (****) (calculated as based on the
distribution by Distributor of (****) copies of the
Konami Software known as Gradius and Konami Krazy
Racers (combined distribution) at a royalty rate of
(****) per copy, and (****) copies of the Konami
Software known as Frogger and Castlevania (combined
distribution) at a royalty rate of (****) per copy,
but in no way or manner actually dependent on the
number of copies actually distributed by Distributor).
2. Distributor shall pay to Konami non-refundable
royalties of (****) (calculated as based on the
distribution by Distributor of (****) copies of the
Konami Software known as ESPN Skateboarding. Jurassic
Park-Park Builder, Jurassic Park-Island Attack,
Jurassic Park-DNA, that includes third party
intellectual property, combined distribution with the
Konami Software in Section 4(a) 1) at a royalty rate
of (****) per copy, but in no way or manner actually
dependent on the number of copies actually
distributed by Distributor).
TERMS:
The minimum payment set forth this Section 4(a) shall
be due and payable in accordance with the following
schedu1e:
DATE DUE AND PAYABLE
AMOUNT
--------------------
------
Effective Date
(****) for Konami Software with
Konami exclusive intellectual
property.
60 days after first shipment
(****) for Konami Software with
Konami exclusive intellectual
property.
-------------
(*)
Confidential portion omitted and filed separately with the
Securities
Exchange Commission.
A-2
(****) for Konami Software with
third party intellectual property.
(B)
ADDITIONAL ROYALTIES/PURCHASE OF GOODS.
AMOUNT:
1. Distributor shall pay Konami a
non-refundable royalty of (****) for each copy
of the Konami Software which it distributes in
excess of (****) copies (combined distribution)
of Konami Software titles with Konami exclusive
intellectual property (Ciradius and Konami
K.razy Racers) and shall accrue solely based on
copies of the Konami Software distributed by
Distributor. Distributor shall pay Konami a
non-refundable royalty of (****) for each copy
of the Konami Software it distributes in excess
of (****) (combined distribution) for the
Konami Software titles with Konami exclusive
intellectual property (Frogger or Castlevania)
and shall accrue solely based on copies of the
Konami Software distributed by Distributor.
Royalties shall not be reduced due to the
return (for any reason) of any copies of the
Konami Software to Distributor or by any bad
debt.
2. Distributor shall pay Konami a
non-refundable royalty of (****) for each copy
of the Konami Software which it distributes in
excess of (****) copies (combined distribution)
of Konami Software with third party
intellectual property (ESPN Skateboarding,
Jurassic Park-Park Builder, Jurassic Park-bland
Attack, and Jurassic Park-DNA) and shall accrue
solely based on copies of the Konami Software
distributed by Distributor, and shall not be
reduced due to the return (for any reason) of
any copies of the Konami Software to
Distributor or by any bad debt.
3. If Distributor distributes the Konami
Software titles ESPN Golf or ESFN Fishing it
shall pay a non-refundable royalty of per unit
to Konami and shall accrue solely based on
copies of the Konami Software distributed by
Distributor, and shall not be reduced due to
the return (for any reason) of any copies of
the Konami software to Distributor or by any
bad debt.
4. If Distributor purchases enough of an
individual Konami Software title for Konami to
qualify for a volume discount on that title
from Nintendo then said discount can only be
used by Distributor as a credit against future
purchases of Konami Software pursuant to this
Agreement.
--------------------------------------------------------------------------------
(*) Confidential portion omitted and filed separately with the
Securities
Exchange Commission.
A-3
5. Distributor will not have any responsibility
or liability to third parties for royalties
associated with Konami Software containing
third party intellectual property.
TERMS:
The royalties set forth in this Section 4(b)
shall accrue upon the shipment of each such
copy by Distributor to its customer.
Distributor shall pay such accrued royalties
within (****) after the end of each calendar
quarter in which such royalties accrue.
PURCHASE OF GOODS: Distributor shall submit an order for
Konami Software to Konami along with payment
for the cost of goods from Nintendo for the
Konami Software. Konami shall purchase the
Konami Software from Nintendo of America and
immediately transfer title to the Konami
Software to Distributor. Distributor shall
arrange for shipping of the Konami Software
from the Nintendo of America replication
facility. Konami shall issue an invoice to
Distributor for the Konami showing payment for
the Konami Software.
----------------
(*) Confidential portion omitted and filed separately with the
Securities
Exchange Commission.
A-4
EXHIBIT B
GENERAL TERMS
1.
DEFINITIONS.
1.1. CONFIDENTIAL INFORMATION means any and all information related
to
a party that such party treats as confidential and any information
relating to
third parties that such. party has an obligation to treat as
confidential, which
is disclosed by such party to the other party in the course of
performing the
duties and obligations of this Agreement, whether such information
is in oral,
written, graphic or electronic form; provided that (a) if such
information is in
writing or other tangible forms it is clearly marked as
"proprietary or
"confidential" when disclosed to the receiving party; or (b) if
such information
is not in tangible form, it (i) is identified as "proprietary" or
"confidential"
when disclosed and (ii) is summarized in a writing which is marked
"proprietary"
or "confidential" and is delivered to the receiving party within
thirty (30)
days after the date of disclosure. Confidential Information shall
not include
any information, data or material which: (a) the disclosing party
expressly
agrees in writing is free of any non-disclosure obligations; (b) at
the time of
disclosure to the receiving party ~vas known to the receiving party
(as
evidenced by documentation in the receiving party's possession)
free of any
nondisclosure obligations; (c) is independently developed by the
receiving party
(as evidenced by documentation in the receiving party's
possession); (d) is
lawfully received by the receiving party, free of any
non-disclosure
obligations, from a third party having the right to so furnish such
Confidential
Information or (e) is or becomes generally available to the public
without any
breach of this Agreement or unauthorized disclosure of such
Confidential
Information by the receiving party.
1.2. CUSTOMER RETAIL CHANNELS means those methods by which products
are
supplied to mass retail marketers for sale solely to consumers at
the retail
level.
1.3. END USER means any person or organization licensed to use, but
not
to further distribute, any Konami Software.
1.4. F.C.A. means Free Carrier as defined in INCOTERMS 1990.
1.5. LICENSE FEES means the minimum royalties and additional
royalties
for Konami Software distributed by Distributor pursuant to this
Agreement as set
forth in Section 4 of Exhibit A ("Special Terms").
1.6. KONAMI COLLATERAL MATERIAL means documentation and related
materials as are reasonably necessary, in Konami's discretion, for
Distributor's
distribution of copies of the Konami Products and as delivered by
Konami to
Distributor under this Agreement.
1.7. KONAMI PRODUCTS means singly or collectively the Konami
Software
and Konami Collateral Material.
1.8. KONAMI SOFTWARE means the object code version of the software
specified as "Konami Software" on Exhibit A ("Special Terms").
B-1
1.9. KONAMI TRADEMARKS means the Konami trademarks, service marks
and
logos described in Exhibit A ("Special Terms").
1.10. Territory means the geographical area set forth in Exhibit A
("Special Terms").
2. OWNERSHIP. The Confidential Information of Konami, the Konami
Products and the Konami Trademarks, and all intellectual property
rights therein
shall remain the exclusive property of Konami and its suppliers.
Distributor
expressly acknowledges that Konami has no rights to, and
accordingly is not
licensing to Distributor hereunder any rights to distribute, the
animated
characters depicted in those items of the Konami Software marked in
Section 2 of
Exhibit A ("Special Terms") hereto with an asterisk ("*"),
Distributor shall use
reasonable efforts to preserve such Konami and suppliers' rights
and shall not
do anything to contest or impair the intellectual property rights
of Konami or
its suppliers. Distributor acknowledges that all uses of the Konami
Trademarks
by Distributor shall inure to the benefit of and be on behalf of
Konami.
Distributor further acknowledges that the Konami Trademarks are
valid under
applicable law and that Distributor's utilization of the Konami
Trademarks will
not create any right, tide or interest in or to such trademarks.
3.
DELIVERY AND LICENSES.
3.1. DELIVERY. To the extent reasonably available to Konami as of
the
Effective Date, Konami shall deliver to Distributor copies of the
Konami
Software and copies of the Konami Collateral Material. Unless
otherwise agreed
by the parties, the shipping terms of such delivery shall be F.C.A.
Konami's or
Nintendo's shipping faculty.
3.2. DISTRIBUTION OF KONAMI PRODUCTS. Subject to the terms and
conditions of this Agreement and payment of the applicable License
Fees, Konami
hereby grants to Distributor an exclusive, non-transferable license
to
distribute via Customary Retail Channels copies of the Konami
Software to End
Users in the Territory; provided, Distributor shall distribute
copies of the
Konami Software (1) packaged with an End User License Agreement and
(2) on
tangible media appropriate for the operating system for which the
Konami
Software is designed (as of the Effective Date, video game player
cartridges
containing embodiments of the Konami Software in hardware) and not
electronically. Distributor agrees not to distribute the Konami
Products, or (i)
with knowledge or reason to know that the Konami Products will be
transported
outside of the Territory.
3.3. License to Use and Distribute Konami Collateral Material.
Subject
to the terms and conditions of this Agreement, Konami hereby grants
to
Distributor a non-exclusive, non-transferable license in the
Territory to
reproduce, have reproduced and distribute (as appropriate and
necessary for the
promotion, distribution and use of the Konami Software) the Konami
Collateral
Material to End Users in connection with the distribution of the
Konami Software
pursuant to Section 3.2.
4.
RESTRICTIONS AND LIMITATIONS.
4.1. USE OF KONAMI TRADEMARKS. Subject to the terms and conditions
of
this Agreement, Konami hereby grants to Distributor a
non-exclusive, limited
license to use the Konami Trademarks on Distributor's advertising
and printed
materials only for the Konami
B-2
Products- Distributor shall display notices of trademark status
(i.e., (R) or
(TM) as prescribed by Konami from time to time) adjacent to each
use of the
Konami Trademarks on each piece of advertising or printed materials
in which
such Konami Trademark appears. Distributor shall also include as a
footnote to
the Konami Trademarks along with the first or most prominent use of
each Konami
Trademark in each piece of advertising or printed materials in
which such Konami
Trademark appear: "[Mark] is a trademark of Konami Corporation,
which may be
registered in certain jurisdictions," and such other symbols and
notices as may
be prescribed by Konami from time to time. Distributor will include
the Konami
Trademarks m all advertisements, brochures, manuals or other
appropriate
materials used in the promotion, distribution or use of the Konami
Products.
4.2. CONVEYANCE OF LICENSE ONLY. This Agreement grants Distributor
a
license only. and only such license rights as are specifically
enumerated in
this Agreement. No other right, title or interest in the Konami
Products, Konami
Trademarks or Confidential Information of Konami is hereby conveyed
to
Distributor. Konami or its suppliers may from time to time choose
to register
its copyright interests in the Konami Products, but such acts shall
not cause or
be construed as causing any part thereof to become part of the
public domain.
4.3. GENERAL LIMITATIONS AND RESTRICTIONS. Except as expressly
authorized in this Agreement, Distributor shall not use or
reproduce any of the
Konami Products, or any portion thereof, without the express prior
written
consent of Konami. Distributor shall not (i) adapt, alter, modify,
translate or
create derivative works of the Konami Products, (ii) reverse
compile,
disassemble or otherwise attempt to reconstruct the source code for
the Konami
Software, (iii) electronically transfer the Konami Products from
one computer to
another over a network or enable any timesharing of the Konami
Products, (iv)
assign, plec1~e, rent, lease or loan the Konami Products, (v)
obfuscate, remove
or alter any of the trademarks, trade names, logos, patent or
copyright notices,
confidential or proprietary legends or other notices or markings on
or in the
Konami Products, and all such markings shall be included in all
copies thereof
made by Distributor (to the extent any copies arc authorized), (vi)
add, or
permit any third party to add, any markings, notices or legends to
the Konami
Products without Konami's express written consent, (vii) use the
Konami Software
for any purpose not authorized in the documentation provided by
Konami for such
Konami Software, including, without limitation, the Konami
Collateral Material,
or in any manner designed to access the functionality of any
portion of Konami
Software other than as permitted in the form delivered to
Distributor by Konami,
or (viii) permit any third party to perform any of the foregoing
prohibited
activities.
4.4. TRADEMARK RESTRICTIONS. Distributor shall not use the
trademark
"Konami" or any other mark likely to cause confusion with the
Konami Trademarks
as any portion of Distributor's corporate or trade name, or any
trademark or
service mark for any products or services of Distributor.
Distributor shall use
the Konami Trademarks solely to refer to the Konami Products.
Distributor shall
not use any other trademark or service mark in close proximity to
any of the
Konami Trademarks or combine the marks so as to effectively create
a unitary
composite mark without the prior written approval of Konami.
4.5. RESERVATION OF RIGHTS. Konami reserves the right to license,
support, install and service its products, including, without
limitation, the
Konami Products, outside of the Territory, either directly to end
users or
indirectly through other sales representatives, systems
integrators,
B-3
resellers, distributors and other third parties or distribution
channels, and
the right to support and service its products, including, without
limitation,
the Konami Products, in the Territory, either directly to end users
or
indirectly through third parties.
5.
OTHER DISTRIBUTOR OBLIGATIONS.
5.1. PROCUREMENT. Unless otherwise agreed in writing by the
parties,
Distributor shall be solely responsible for obtaining all hardware,
operating
software and equipment necessary for the reproduction and
distribution of the
Konami Collateral Materials and the distribution of the Konami
Products as
contemplated by this Agreement. In no event shall Konami have any
responsibility, liability or obligation with respect to any such
hardware,
software or equipment, or any problems experienced by Distributor
relating to
the use of such hard
