CONFIDENTIAL FIRST RENEWAL LICENSE AGREEMENT FOR NINTENDO DS (EEA, AUSTRALIA, AND NEW ZEALAND)

 

CONFIDENTIAL

 

2.4           “Development Tools” means the development kits, programming tools, emulators and other materials of NINTENDO, or third parties authorized by NINTENDO, that may be used in the development of Games under this Agreement.

 

2.5           “Effective Date” means the expiration date of the Initial Agreement, or July 20, 2008.

 

2.6           “Finished Product(s)” means the fully assembled Game Card with a Game Card label, Printed Materials, and packed in a plastic storage case or other form of protective packaging.

 

2.7           “Game Card(s)” means custom card media specifically manufactured under the terms of this Agreement for play on the Nintendo DS system, incorporating semiconductor components in which a Game has been stored.

 

2.8           “Game(s)” means any interactive programs (including source and object/binary code) developed to be compatible with the Nintendo DS system.

 

2.9           “Guidelines” means the then-current version of the “Nintendo DS Guidelines”; “Licensee Packaging Guidelines”, pertaining to the layout, trademark usage and requirements of the Game Card label, instruction manual and Game Card packaging; “Marketing Materials”; “Nintendo DS Development Manual”; “Trademark Guidelines”; “Guidelines on Ethical Content”; “Nintendo DS Software Submission Requirements”, together with other guidelines that NINTENDO may provide to LICENSEE from time to time. The Guidelines on Ethical Content are attached as Annex A, and the remainder of the Guidelines have been provided to LICENSEE independent of this Agreement. The Guidelines may be changed or updated from time to time without notice (provided such changes or updates shall be delivered to LICENSEE as soon as possible thereafter), and the versions current from time to time will be available on request from NINTENDO.

 

2.10         “Independent Contractor” means any individual or entity that is not an employee of LICENSEE, including any independent programmer, consultant, contractor, board member or advisor.

 

2.11         “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 Games for the Nintendo DS system including “Nintendo TM ”, “Nintendo DS TM ”, and the “Official Nintendo Seal of Quality TM ”, (b) select trade dress associated with the Nintendo DS system and licensed Games for play thereon, (c) Proprietary Rights in the Security Technology incorporated into the Game Cards, (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 and for which no additional licenses or consents are required, (e) patents, patent applications, utility models, design registrations, or copyrights which may be associated with the Game Cards, (f) copyrights in the Guidelines, and (g) other Proprietary Rights of NINTENDO in the Confidential Information.

 

2.12         “Licensed Products” means (a) Bulk Goods, and/or (b) Finished Products after being assembled and packaged with the Printed Materials in accordance with the Guidelines.

 

2.13         “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 content other than the Game that is to be included on the Game Card.

 

2.14         “NDA” means the non-disclosure agreement providing for the protection of Confidential Information related to the Nintendo DS system previously entered into between NINTENDO and/or NOA and LICENSEE.

 

2.15 “NOA” means NINTENDO’s subsidiary, Nintendo of America Inc., of Redmond, Washington, USA.

 

PAGE 2 OF 20

 

 

CONFIDENTIAL

 

2.16         “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 mail, or (c) deposited, carriage 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, or (d) transmitted by e-mail with an express written acknowledgement of receipt sent personally by or on behalf of the recipient (which shall include any automated reply). Notice shall be deemed effective upon the earlier of actual receipt or two (2) business days after transmittal, provided, however, any Notice received after the recipient’s normal business hours will be deemed received on the next business day.

 

2.17         “Price Schedule” means the then-current version of NINTENDO’s schedule of purchase prices and minimum order quantities for the Finished Products and the Bulk Goods. The Price Schedule has been provided to LICENSEE independent of this Agreement and may be changed or updated from time to time without notice (provided such changes or updates shall be delivered to LICENSEE as soon as possible thereafter), and the version current from time to time will be available on request from NINTENDO.

 

2.18         “Printed Materials” means the Game Card label and title page, user instruction booklet, poster, warranty card and LICENSEE inserts incorporating the Artwork, together with a precautions booklet and optional printed materials.

 

2.19         “Proprietary Rights” means any rights or applications for rights to the extent recognized anywhere in the Territory relating to the Nintendo DS System, and owned, licensed or otherwise held in patents, patent applications, trademarks, service marks, copyrights and neighboring rights, semiconductor chip layouts or masks, trade secrets, utility models, registered design rights, unregistered design rights, database rights, get up, trade dress, moral rights and publicity rights, together with all inventions, discoveries, ideas, know-how, data, information, processes, methods, procedures, formulas, drawings and designs, computer programs, software source code and object code, and all amendments, modifications, and improvements thereto for which such patents, patent applications, trademarks, service marks, copyrights and neighboring rights, semiconductor chip layouts or masks, trade secrets, utility models, registered design rights, unregistered design rights, database rights, get up, trade dress, moral rights or publicity rights may exist or may be sought and obtained in the future.

 

2.20         “Reverse Engineer(ing)” means, without limitation, _ **** ____________________________________________

______________________________________________________________________________________________________

______________________________________________________________________________________________________

_______________________________________________________________.

 

2.21         “Security Technology” means the highly proprietary security features of the Nintendo DS system and the Licensed Products to minimize the risk of unlawful copying and other unauthorized or unsafe usage, including, without limitation, any security signature, bios, data scrambling, password, hardware security apparatus, watermark, hologram, encryption, digital rights management system, 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, software, accessories or peripherals with respect to a video game system other than the Nintendo DS system, or limits distribution outside of the Territory.

 

2.22         “Sole License” means a license under which only the licensor and a single licensee can utilize the subject matter of the license.

 

2.23         “Term” means three (3) years from the Effective Date.

 

2.24         “Territory” means any and all countries within the European Economic Area; namely Albania, Austria, Belgium, Bosnia, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Herzegovina, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta, Montenegro, the Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.

 

 

PAGE 3 OF 20

 

 

CONFIDENTIAL

 

The Territory also includes Australia, New Zealand, Russia, South Africa, Switzerland and Turkey. NINTENDO may add additional countries to the Territory upon written notice to LICENSEE.

 

2.25         “TM” means trade mark of NINTENDO, whether registered or not.

 

3.             GRANT OF LICENSE; LICENSEE RESTRICTIONS

 

3.1           Limited License Grant. For the Term and for the Territory, NINTENDO grants to LICENSEE a nonexclusive, nontransferable, limited license to use the Intellectual Property Rights for the purpose of and to the extent necessary, to develop (or have developed on LICENSEE’s behalf) Games for manufacture, advertising, marketing and sale by LICENSEE as Licensed Products, subject to the terms and conditions of this Agreement. _**** ______________

 

3.2           LICENSEE Acknowledgement . LICENSEE’s use of the Intellectual Property Rights shall not create any right, title or interest of LICENSEE therein. LICENSEE is authorized and permitted to develop Games, and have manufactured, advertise, market and sell Licensed Products, only for play on the Nintendo DS system and only in accordance with this Agreement. In the event that LICENSEE challenges NINTENDO’s ownership or the validity of the Intellectual Property Rights, NINTENDO may terminate this Agreement without any notice or procedure. Nothing contained herein shall be deemed to grant NINTENDO any right, title or interest in and to those portions of the Licensed Products that do not consist of NINTENDO’s Intellectual Property Rights, Proprietary Rights or Confidential Information associated with the Nintendo DS system.

 

3.3           Restrictions on License Grant . NINTENDO does not guarantee that the hardware for the Nintendo DS system is distributed throughout the Territory. Moreover, the present limited license to LICENSEE does not extend to the use of the Intellectual Property Rights for the following purposes:

 

(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, except (a) as a part of wireless Game play on and among Nintendo DS systems, (b) for the purpose of facilitating Game development under the terms of this Agreement, or (c) as otherwise approved in writing by NINTENDO. LICENSEE shall use reasonable security measures, customary within the high technology industry, to reduce the risk of unauthorized interception or retransmission of any Game transmission. No right of retransmission shall attach to any authorized transmission of a Game;

 

(b)           authorize or permit any online activities involving a Game, including, without limitation, multi-player, peer-to-peer or online play, except as expressly permitted by NINTENDO in writing;

 

(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, telephone, cellphone, PDA, or other device, including for purposes of data interchange, password usage or interactive video game play, other than a Nintendo DS system, an application approved by NINTENDO, or the Development Tools;

 

(e)           emulate any past, current or future NINTENDO brand video game system, or any portion thereof, in software or hardware or any combination thereof;

 

(f)            embed, incorporate, or store a Game in any media or format except the Game Card format utilized by the Nintendo DS system, except as may be necessary as a part of the Game development process under this Agreement;

 

(g)           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;

 

* Confidential portion omitted and filed separately with the Securities and Exchange Commission.

 

PAGE 4 OF 20

 

CONFIDENTIAL

 

(h)           utilize the Intellectual Property Rights to design or develop any interactive video game program, except as authorized under this Agreement;

 

(i)            manufacture or reproduce a Game developed under this Agreement, except through NINTENDO; or

 

(j)            Reverse Engineer or assist in Reverse Engineering all or any part of the Nintendo DS system, including the hardware, software (embedded or not), the Development Tools or the Security Technology, except as specifically permitted under the laws and regulations applicable in the Territory.

 

Nothing contained in this Section 3.3 shall be deemed to prevent LICENSEE from developing a game or games for other video game platforms, where such game or games have a similar audiovisual display, look, feel, or game elements as found in the Game(s) developed by LICENSEE under this Agreement; provided, however, that LICENSEE hereby acknowledges that any use of NINTENDO’s Intellectual Property Rights, Proprietary Rights, and/or Confidential Information in such other game or games without the prior written consent of NINTENDO would be deemed to be a breach of this Agreement and an infringement of Nintendo’s Intellectual Property Rights.

 

3.4           Development Tools . NINTENDO and NOA may lease, loan or sell Development Tools, including any improvements made by NINTENDO or NOA from time to time, to LICENSEE to assist in the development of Games under this Agreement on such terms as may be agreed between the parties. Ownership and use of any Development Tools, whether provided by NINTENDO or NOA, prior to or during the Term hereof, shall be subject to the terms of this Agreement and any separate license or purchase agreement required by NINTENDO or any third-party licensing the Development Tools. LICENSEE acknowledges the respective interests of NINTENDO, and in the case of third- party Development Tools, such third parties, 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. Any license to LICENSEE to use the Development Tools does not extend to: (a) use of the Development Tools for any purpose except the design and development of Games under this Agreement, (b) reproduction or creation of derivatives of the Development Tools, except in association with the development of Games under this Agreement, (c) Reverse Engineering of the Development Tools (except as specifically permitted under the laws and/or regulations applicable in the Territory), or (d) without NINTENDO’s prior written approval, selling, leasing, assigning, lending, licensing, encumbering or otherwise transferring the Development Tools. Any tools developed or derived by LICENSEE as a result of a study of the performance, design or operation of any NINTENDO 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. Unless LICENSEE can demonstrate that such derivative work has one or more applications that are independent of and separate from the Intellectual Property Rights (“Independent Applications”), it shall be deemed to have granted NOA and NINTENDO an indefinite, worldwide, royalty-free, transferable and Sole License (including the right to sub-license) to such derivative work. To the extent that LICENSEE can demonstrate one or more Independent Applications, LICENSEE shall be deemed to have granted to NOA and NINTENDO a royalty-free and transferable nonexclusive License (including the right to sub-license) in relation to such Independent Applications for the Term. Any tools developed or derived by LICENSEE as a result of a study of the performance, design or operation of any third-party Development Tools shall be governed by the terms of the license agreement applicable to such Development Tools. Notwithstanding any referral or information provided or posted regarding third-party Development Tools, NINTENDO and NOA make no representations or warranties with regard to any such third-party Development Tools. LICENSEE acquires and utilizes third-party Development Tools at its own risk.

 

3.5           In-Game Advertising. LICENSEE shall not include advertising or produce placements for products or services of LICENSEE or third parties, whether in the Game, as separate content (e.g., a trailer), or in the Printed Materials, without NINTENDO’s prior written consent, which consent shall not be unreasonably withheld or delayed.

 

PAGE 5 OF 20

 

CONFIDENTIAL

 

4.             SUBMISSION OF GAME AND ARTWORK FOR APPROVAL

 

4.1           Development and Sale of the Games . LICENSEE may develop or have developed Games and have manufactured, advertise, market and sell Licensed Products for play on the Nintendo DS system only in accordance with this Agreement.

 

4.2:          Third Party Developers . LICENSEE shall not disclose the Confidential Information (as defined in Section 8 below), 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 that requires use of the Confidential Information, unless and until such Independent Contractor has been approved by NINTENDO and has executed a written confidentiality agreement with NINTENDO (or with LICENSEE as provided in Section 8) relating to the Nintendo DS system. Upon request by LICENSEE, NINTENDO shall, within a reasonable period of time, inform LICENSEE whether any such third party is approved by NINTENDO.

 

4.3           Delivery of Completed Game . Upon completion of a Game, LICENSEE shall deliver a prototype of the Game to NINTENDO in a format specified in the Guidelines. Delivery shall be made in accordance with the methods set forth in the Guidelines. Each submission shall include such other information or documentation deemed necessary by NINTENDO, 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 (of which LICENSEE is aware) and a complete screen text script. NINTENDO shall promptly evaluate the Game with regard to its technical compatibility with and error-free operation on the Nintendo DS system. LICENSEE must establish that the Game and any other content included on the Game Card complies with the guidelines of the Pan European Game Information System (PEGI), the Unterhaltungssoftware Selbstkontrolle (USK), the Office of Film and Literature Classification (OFLC), or any other applicable national or regional game rating system that NINTENDO may accept, as applicable. LICENSEE shall be responsible for the submission of the Game to the appropriate national or regional game rating organization and shall provide NINTENDO with a statement or certificate in writing from the relevant organization, confirming the rating for the Game. Where any such game has been rated as being suitable only for players aged 18 and over (or an equivalent rating), LICENSEE must submit a certificate in writing that confirms the game is rated as no higher than “M” (Mature) by the Entertainment Software Rating Board (ESRB) of the U.S. In addition, NINTENDO reserves the right to require LICENSEE to provide NINTENDO with such additional written indemnification for damages, claims, loss, liability, fine or penalty resulting from the marketing, distribution or sale of a Game with such an age rating, as NINTENDO, in its sole discretion, may request. If any such age rating is subsequently changed by the relevant organization, LICENSEE shall inform NINTENDO forthwith in writing of that fact and LICENSEE shall then comply with the above provisions in relation to such new age rating.

 

4.4           Approval of Completed Game . NINTENDO shall, within a reasonable period of time after receipt, approve or disapprove each submitted Game in writing, which may include by e-mail. If a Game is disapproved, NINTENDO shall specify in writing the reasons for such disapproval and state what corrections or improvements are necessary to receive approval. After making the necessary corrections or improvements, LICENSEE shall submit a revised Game to NINTENDO for approval. NINTENDO shall not unreasonably withhold or delay its approval of any Game. The approval of a Game by NINTENDO shall not relieve LICENSEE of its sole responsibility for the development, quality and operation of the Game or in any way create any warranty for a Game or a Licensed Product by NINTENDO.

 

4.5           Submission and Approval of Artwork . Prior to submitting a completed Game to NINTENDO under Section 4.3, LICENSEE shall prepare and submit to NINTENDO all Artwork for the proposed Licensed Product. Within ten (10) business days of receipt, NINTENDO shall approve or disapprove the Artwork in writing, which may include e-mail. If any Artwork is disapproved, NINTENDO shall specify in writing the reasons for such disapproval and state what corrections or improvements are necessary to obtain approval from NINTENDO. After making the necessary corrections or improvements, LICENSEE shall submit revised Artwork to NINTENDO for approval. NINTENDO shall not unreasonably withhold or delay its approval of any Artwork. The approval of the Artwork by NINTENDO shall not relieve LICENSEE of its sole responsibility for the development and

 

PAGE 6 OF 20

 

CONFIDENTIAL

 

quality of the Artwork or in any way create any warranty for the Artwork or any Licensed Product by NINTENDO. All Artwork must be approved prior to submitting an order for the Bulk Goods or Finished Products, and LICENSEE shall not produce any Printed Materials for commercial distribution until such Artwork or Finished Products has been approved by NINTENDO.

 

4.6           Artwork for Bulk Goods . If LICENSEE intends to submit an order for Bulk Goods, all Artwork and other materials to be included with the Licensed Product shall be submitted to NINTENDO in accordance with Section 4.5 herein. No Printed Materials shall be produced by LICENSEE until such Artwork has been approved by NINTENDO under Section 4.5 herein.

 

5.             ORDER PROCESS, PURCHASE PRICE, PAYMENT AND DELIVERY

 

5.1           Submission of Orders by LICENSEE . After receipt of NINTENDO’s approval for a Game, LICENSEE may at any time submit written purchase orders to NINTENDO for any approved Licensed Product title. The purchase order shall specify whether it is for Finished Products or Bulk Goods. The terms and conditions of this Agreement shall take precedence over any contrary or additional terms of such purchase order or any other written documentation or verbal instructions from LICENSEE. All orders shall be subject to acceptance by NINTENDO or its designee.

 

5.2           Purchase Price and Minimum Order Quantities . The purchase price and minimum order quantities for Finished Products and Bulk Goods shall be set forth in NINTENDO’s then current Price Schedule. Unless otherwise specifically provided for, the purchase price includes the cost of manufacturing the Licensed Products. 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 NINTENDO’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 NINTENDO at any time without Notice, provided, however, that any price increase shall be applicable only to purchase orders submitted, paid for, and accepted by NINTENDO after the date of the price increase, and provided that such changes shall be delivered to LICENSEE as soon as possible thereafter.

 

5.3           Payment. Upon placement of an order with NINTENDO, LICENSEE shall pay the full purchase price to NINTENDO either (a) by tender of an irrevocable letter of credit in favor of NINTENDO (or its designee) and payable at sight, issued by a bank acceptable to NINTENDO and confirmed, if requested by NINTENDO, at LICENSEE’s expense, or (b) in cash, by wire transfer to an account designated by NINTENDO. All letters of credit shall comply with NINTENDO’s written instructions and all associated banking charges shall be for LICENSEE’s account.

 

5.4           Delivery of Licensed Products . NINTENDO shall deliver the Finished Products and Bulk Goods ordered by LICENSEE to LICENSEE FOB Japan, CIP European Destination or ex-warehouse Grossostheim, per the terms in the Price Schedule. Also per the Price Schedule, ______________________ ****______________________. Upon mutual consent of NINTENDO and LICENSEE, orders may be delivered in partial shipments with a minimum shipment quantity as specified in the Price Schedule. Such orders shall be delivered only to countries 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, per Incoterms 2000.

 

6.             MANUFACTURE OF THE LICENSED PRODUCT

 

6.1           Manufacturing . Given NINTENDO’s ownership of the valuable Intellectual Property Rights, NINTENDO shall be the exclusive source for the manufacture of the Game Cards, and shall control 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.

 

6.2           Manufacture of the Licensed Products . Upon acceptance by NINTENDO of a purchase order from LICENSEE for an approved Licensed Product title and receipt of payment as provided for under Section 5.3 herein, NINTENDO (through its suppliers and subcontractors) shall arrange for the manufacture of Finished Product or Bulk Goods, as specified in LICENSEE’s purchase order. In this regard, LICENSEE shall submit to NINTENDO certain technical information as set forth

 

 

PAGE 7 OF 20

 

CONFIDENTIAL

 

in a qu