exv10w42



 





Exhibit 10.42



“[ * ]” denotes confidential information omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment under Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.




CONFIDENTIAL LICENSE AGREEMENT

FOR THE Wii CONSOLE

(Western Hemisphere)




     THIS LICENSE AGREEMENT (“Agreement”) is entered into between NINTENDO OF AMERICA INC. (“NOA”)
and MIDWAY HOME ENTERTAINMENT INC. (“LICENSEE”). NOA and LICENSEE agree as follows:



1. RECITALS




     1.1 NOA markets and sells advanced design, high-quality video game systems, including the Wii
video game console (“Wii”).



     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 Wii.



     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 of Nintendo, or third parties authorized by Nintendo, that may be used in the development
of Games under this Agreement.



     2.6 “Effective Date” means the earlier of November 19, 2006, or the date that LICENSEE placed
its first order for Bulk Goods.



     2.7 “Game Discs(s)” means custom optical discs for play on Wii on 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 Wii.



     2.9 “Guidelines” means the then current version of “Wii Programming Guidelines,” “Licensee
Packaging Guidelines,” and “Nintendo Trademark Guidelines,” together with other guidelines provided
by NOA to LICENSEE from time to time.



     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 Wii including Nintendo®, WiiTM, Official Nintendo Seal of Quality®, and
MiiTM , (b) select trade dress associated with Wii 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 and for which no additional
licenses or consents are required, (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.



     2.12 “Licensed Products” means Bulk Goods after being assembled by or for LICENSEE 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 Disc.



     2.14 “NDA” means the non-disclosure agreement related to Wii previously entered into between
NOA and LICENSEE.



     2.15 “Nintendo” means NOA’s parent company, Nintendo Co., Ltd., of Kyoto, Japan, individually
or collectively with NOA.



     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 first class U.S. mail, or (c) deposited, postage prepaid,
with a guaranteed air courier service, in each case addressed as stated below, 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 [ * ] after transmittal, provided,
however, any Notice received after the recipient’s normal business hours will be deemed received on
the next business day.


If to NINTENDO:



Nintendo of America Inc.

4820 -150th Ave. NE

Redmond, WA 98052

Attn: General Counsel

Fax: 425-882-3585



If to LICENSEE



Senior Vice President & Chief Marketing Officer

Midway Home Entertainment Inc.

c/o Midway Amusement Games, LLC

2704 W. Roscoe Street

Chicago, IL 60618

Fax: 773-961-2299




 




*
  Information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.



CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)




PAGE 2 









 




With a copy to: SVP and General Counsel

Midway Games Inc.

2704 West Roscoe St.

Chicago, IL 60618




     2.17 “Price Schedule” means the then current version of NOA’s schedule of purchase prices and
minimum order quantities for the Bulk Goods.



     2.18 “Printed Materials” means a plastic disc storage case, title page, instruction booklet,
warranty card and poster incorporating the Artwork.



     2.19 “Promotional Disc(s)” means custom optical discs compatible with Wii that incorporate
select game promotional or supplemental materials, as may be specified or permitted in the
Guidelines.



     2.20 “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.



     2.21 “Rebate Program” means any then current version of NOA’s optional rebate program,
establishing select terms for price rebates under this Agreement.



     2.22 “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.



     2.23 “Security Technology” means the highly proprietary security features of the Wii 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, or with respect to a video game system other
than the Wii, or limits distribution outside of the Territory.



     2.24 “Term” means [ * ] from the Effective Date.



     2.25 “Territory” means all countries within the Western Hemisphere and their respective
territories and possessions.



     2.26 “Wii Network Services” means and includes the Wii Shop Channel Services, WiiConnect24,
and any related services and material delivered to a consumer’s Wii console over the Internet.



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 LICENSEE’s behalf) Games for manufacture, advertising, marketing and sale by
LICENSEE 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.




 




*
  Information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.



CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)





PAGE 3 









 








     3.2 LICENSEE Acknowledgement. LICENSEE acknowledges (a) the valuable nature 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 Wii. LICENSEE recognizes that the Development
Tools, 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. Licensee is
authorized and permitted to develop Games, and have manufactured, advertise, market, and sell
Licensed Products, only for play on Wii and only in accordance with this Agreement.



     3.3 LICENSEE Restrictions and Prohibitions. LICENSEE is not licensed to and covenants
that, without the express, written consent of NOA, 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, except (a) as a
part of wireless Game play on and among Wii systems, or between Wii and 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,
multiplayer, 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 or device other than Wii, the Nintendo DS system, the Development Tools
or such other Nintendo system as NOA may authorize in the Guidelines;




          (e) embed, incorporate, or store a Game in any media or format except the optical disc format
utilized by Wii, 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 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 Wii, including the
hardware, software (embedded or not) or the Security Technology.




     3.4 No Free-Riding; No Co-Publishing Arrangements. To protect Nintendo’s valuable
Intellectual Property Rights, to prevent the dilution of Nintendo’s trademarks and to preclude
free-riding by third parties on the goodwill associated with Nintendo’s trademarks, the license
granted under this Agreement is limited to LICENSEE and may not be delegated or contracted out for
the benefit of a third party, or to a division, affiliate, or subsidiary of LICENSEE. This
Agreement, together with all submissions, representations, undertakings and approvals contemplated
of LICENSEE by this Agreement, is and shall remain the right and obligation only of LICENSEE. All
Printed Materials and Marketing Materials for a



CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)




PAGE 4 









 







Game shall prominently and accurately identify LICENSEE as NOA’s licensee. Unless NOA agrees
otherwise, in advance, in writing. NOA does not permit the designation or identification of any
third party co-publisher for a Game on any Game Disc or Game Disc label Artwork, however, LICENSEE
may identify a third party as a co-publisher, licensor, developer or other partner of LICENSEE in
those Printed Materials (other than the Game Disc label), Marketing Materials or Game credits, as
authorized under the Guidelines. For purposes of clarification, LICENSEE’s name, or logo, will
appear on the Licensed Product Game Disc case and Game Disc label as it appears in the preamble of
this Agreement.




     3.5 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. Ownership and use of
any Development Tools 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. 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. Anything
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 and shall belong to Nintendo, 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. Anything 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, NOA and Nintendo Co., Ltd. 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.



     3.6 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 signed a confidentiality agreement with LICENSEE that is no less
restrictive than the terms of Section 8 below. LICENSEE shall, upon request by NOA, provide NOA
with copies of the confidentiality agreements required by this Section. Notwithstanding any such
confidentiality agreement, LICENSEE shall remain fully responsible for, and shall hold NOA and
Nintendo Co., Ltd. harmless against, any breach of the confidentiality agreement by any Independent
Contractor involving any Confidential Information, Guidelines, or Intellectual Property Rights.



     3.7 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 Wii 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.



     3.8 In Game Advertising. LICENSEE shall not include advertising or product placements
for products or services of third parties, whether in the Game, as separate content on a Game Disc
(e.g., a trailer), or in the Printed Materials without Nintendo’s prior written consent.



     3.9 Use of Mii Characters. LICENSEE shall not develop any Game that permits
Nintendo’s Mii characters to appear in the Game without NOA’s prior written consent.



     3.10 Sending Data to Consumers. LICENSEE shall not, without the prior, written
consent of NOA, send any data, content, messages, advertising, or other communications of any kind
to any consumer’s Wii console through the Wii Network Services or otherwise.



CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)




PAGE 5 









 








     3.11 Downloadable Content. If LICENSEE desires to develop Games, or updates/additions
of any kind for any Licensed Product, to be downloaded to consumers through the Wii Network
Services, the terms and conditions of such development shall be separately agreed in writing
between the parties. LICENSEE acknowledges that the rights granted herein do not include the right
to use the Intellectual Property Rights to develop downloadable content.



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 set forth 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 that the Game has been rated EC, E, E10+, T or M (or another non-Adult Only category
added by the ESRB) by the ESRB. LICENSEE shall provide NOA with a certificate of rating for the
Game issued by the ESRB.



     4.2 Testing of a Completed Game. Upon submission of a completed Game, NOA and
Nintendo Co., Ltd. shall promptly test the Game with regard to its technical compatibility with and
error-free operation on Wii, 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 by NOA or
Nintendo Co., Ltd. relating to any Licensed Product.



     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 [ * ] 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 [ * ]
after delivery of the Check Discs to LICENSEE shall be deemed disapproval of such Check Discs.
Production of any order for Bulk Goods shall not proceed without LICENSEE’s signed authorization.



     4.5 Cost of Check Discs and Disc Stamper. If LICENSEE: (a) disapproves the Check
Discs for any reason; (b) fails to order the minimum order quantity of any Game approved by NOA
within [ * ] after the date the Game was first approved by NOA; or (c) submits a revised
version of the Game to NOA after production of such Game has commenced, LICENSEE shall reimburse
NOA (or its designee) for the reasonable estimated cost of the production of the Check Discs,
including the cost of the disc stamper. The payment will be due (i) [ * ] after NOA’s written
notification to LICENSEE of the Check Disc fee due NOA because of LICENSEE’s failure to approve
such Check Disc; (ii) [ * ] after the date the Game was first approved by NOA; or (iii) upon
the subsequent submission by LICENSEE of a revised version of the Game to NOA, as the case may be.




 




*
  Information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.




CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)




PAGE 6 









 








     4.6 Submission and Approval of 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 [ * ] 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 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 Bulk Goods, and LICENSEE shall not produce any Printed Materials for
commercial distribution until such Artwork has been approved by NOA.



     4.7 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 Bulk Goods for such
Game. The terms and conditions of this Agreement shall control over any contrary or additional
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 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, provided however, that any price increase
shall be applicable only to purchase orders submitted, paid for, and accepted by NOA after the
effective date of the price increase.



     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. All
letters of credit shall comply with NOA’s written instructions and all associated banking charges
shall be for LICENSEE’s account.



     5.4 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 in accordance with the terms of the applicable letter of credit, or in
the absence thereof, upon delivery to LICENSEE and receipt by NOA of full payment for the shipment
at issue. The term “FCA” shall have the same meaning for purposes of this Section as given by
INCOTERMS 2000.



     5.5 Rebate Program. NOA, at its sole option, may elect to offer LICENSEE a Rebate
Program. The terms and conditions of any Rebate Program shall be subject to NOA’s sole discretion.
LICENSEE shall not be entitled to offset any claimed rebate amount against other amounts owing
NOA. No interest shall be payable by NOA to LICENSEE on any claimed rebate. The Rebate Program is
subject to change or cancellation by NOA at any time without Notice.



6. MANUFACTURE OF THE LICENSED PRODUCT




     6.1 Manufacturing. Nintendo Co., Ltd. shall be the exclusive source for the
manufacture of the Game Discs, Check Discs and Promotional Discs, with responsibility for all
aspects of the




 




*
  Information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.



CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)




PAGE 7 









 







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. Upon acceptance by NOA of a purchase order
from LICENSEE and receipt of payment as provided for at Section 5.3 herein, NOA shall place the
order with Nintendo Co., Ltd. who shall (through its suppliers and subcontractors) arrange for
manufacturing.




     6.2 Security Features. The final release version of the Game, the Game Disc and the
Printed Materials shall include such Security Technology as Nintendo, in its sole discretion, deems
necessary or appropriate to (a) reduce the risk of unlawful copying or other unlawful, unsafe or
unauthorized uses, (b) protect the Proprietary Rights of Nintendo and of the LICENSEE, (c) promote
consumer confidence, and (d) increase the quality, reliability or operation of Wii.



     6.3 Printed Materials for Bulk Goods. Upon delivery to LICENSEE of Bulk Goods,
LICENSEE shall assemble the Printed Materials and Bulk Goods into the Licensed Products in
accordance with the Guidelines. No other materials, items, products or packaging may be included
or assembled with the Bulk Goods without NOA’s prior written consent. Bulk Goods may be sold or
distributed by LICENSEE only when fully assembled in accordance with the Guidelines.



     6.4 Prior Approval of LICENSEE’s Independent Contractors. Prior to the placement of a
purchase order for Bulk Goods, 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 applicable 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 the 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 by such Independent Contractor until NOA’s concerns have been
resolved to its satisfaction or until LICENSEE has selected and received NOA’s approval of another
Independent Contractor. NOA may establish preferred or required supply sources for select
components of the Printed Materials, or for assembly of Printed Materials and Bulk Goods into
Licensed Products, which sources shall be deemed preapproved in accordance with this Section 6.4.
LICENSEE shall comply with all reasonable sourcing requirements established by NOA.



     6.5 Sample Printed Materials. Within a reasonable period of time after LICENSEE’s
assembly of an initial order for Bulk Goods for a Game title, LICENSEE shall provide NOA with (a) [
* ]of the fully assembled Licensed Product, and (b) [ * ]of the LICENSEE produced Printed
Materials (excluding the plastic disc storage case, warranty card, and poster) for such Game title.



     6.6 Retention of Sample Licensed Products by NOA. NOA or Nintendo may, at their own
expense, manufacture reasonable quantities of the Bulk Goods, and make a reasonable number of
copies of the Printed Materials to be used for archival purposes, legal proceedings against
infringers of the Intellectual Property Rights and for other lawful purposes.



7. MARKETING AND ADVERTISING




     7.1 Approval of Marketing Materials. LICENSEE represents and warrants that the
Printed Materials and the Marketing Materials shall be of high quality and comply with (a) the
Guidelines, (b) the ESRB’s Advertising Code of Conduct and Principles and Guidelines for
Responsible Advertising, and (c) all applicable laws and regulations in those jurisdictions in the
Territory where they will be used or distributed, including without limitation all applicable
privacy laws such as the Children’s Online Privacy Protection Act. Prior to actual use or
distribution, LICENSEE shall submit to NOA for review samples of all proposed Marketing Materials.
NOA shall, within [ * ] of receipt, approve or disapprove of 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




 




*
  Information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.




CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)




PAGE 8 









 







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. To protect Nintendo’s valuable Intellectual Property Rights, to
prevent the dilution of Nintendo’s trademarks and to preclude free-riding by non-licensed products
on the goodwill associated with Nintendo’s trademarks, LICENSEE shall not market or distribute any
Games or Game Discs that have been bundled with (a) any peripheral designed for use with Wii that
has not been licensed or approved in writing by NOA, or (b) any other product or service where
NOA’s association, approval or endorsement might be suggested by bundling the products or services.



     7.3 Warranty and Repair. LICENSEE shall provide the original consumer with a minimum
[ * ] day limited warranty on all Licensed Products. LICENSEE shall also provide
reasonable product service, including out-of-warranty service, for all Licensed Products. LICENSEE
shall make such warranty and repair information available to consumers as required by applicable
federal and state law.



     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 Product, and
(c) customer service and game counseling, including telephone service, to adequately support the
Licensed Products.



     7.5 No Sales Outside the Territory. LICENSEE covenants that it shall not market,
sell, offer to sell, import or distribute the Licensed Products outside the Territory, or within
the Territory when LICENSEE has 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 and expense,
NOA may (a) utilize screen shots, Artwork and information regarding the Licensed Products in
Nintendo Power, Nintendo Power Source, official Nintendo sponsored web sites or
other advertising, promotional or marketing media, which promote Nintendo products, services or
programs, and (b) 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 Wii.[ * ].



     7.8 Nintendo Gateway System. To promote and increase demand for games on Nintendo
video game systems, NOA licenses select games 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 hardware referred to as the “Nintendo Gateway System”. If
NOA identifies a Game for possible license on the Nintendo Gateway System, the parties agree to
conduct good faith negotiations to determine commercially reasonable terms for such participation.



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 Wii 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




 




*
  Information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.




CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)




PAGE 9 









 







specifications, proprietary manufacturing processes and/or trade secrets, (b) any information on
patents or patent applications, (c) any business, legal, marketing, pricing 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 LICENSEE shall notify NOA as soon as reasonably possible. 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 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, and
Independent Contractors that are in compliance with the requirements of Section 3.6 above, having a
strict need to know and shall advise such individuals of their obligation of confidentiality as
provided herein. LICENSEE shall require each such individual retain in confidence the Confidential
Information pursuant to a written non-disclosure agreement with LICENSEE. LICENSEE shall use its
best efforts to ensure that individuals who are permitted hereunder to work with or otherwise
having access to Confidential Information shall not disclose or make any unauthorized use of the
Confidential Information.



     8.4 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, affiliates
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 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.



     8.5 Notification Obligations. LICENSEE shall promptly notify NOA of the unauthorized
use or disclosure of any Confidential Information by LICENSEE or any of its employees, or any
Independent Contractor or its employees, 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.



     8.6 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 provisions of this Agreement shall control.



9. REPRESENTATIONS AND WARRANTIES




     9.1 LICENSEE’s Representations and Warranties. LICENSEE represents and warrants that:



CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)




PAGE 10 









 








          (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




          (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 all other Proprietary Rights
incorporated into the Game or the Artwork or used in the development, advertising, marketing and
sale of the Licensed Products or the Marketing Materials, or (ii) the holder of such rights,
including trademarks, copyrights and all other Proprietary Rights which belong to any third party
but have been licensed from such third party by LICENSEE, as are necessary for incorporation into
the Game or the Artwork or as are used in the development, advertising, marketing and sale of the
Licensed Products or 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. NOA (ON ITS OWN BEHALF AND ON BEHALF OF
NINTENDO CO., LTD. AND ITS AFFILIATES, LICENSORS, SUPPLIERS AND SUBCONTRACTORS) EXPRESSLY DISCLAIMS
ALL REPRESENTATIONS AND WARRANTIES CONCERNING THE SCOPE OR VALIDITY OF THE INTELLECTUAL PROPERTY
RIGHTS. NOA (ON ITS OWN BEHALF AND ON BEHALF OF NINTENDO CO., LTD. AND ITS AFFILIATES, LICENSORS,
SUPPLIERS AND SUBCONTRACTORS) EXPRESSLY DISCLAIMS ANY WARRANTY 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 ANY 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. NOA (ON ITS OWN BEHALF AND ON BEHALF OF NINTENDO CO., LTD.
AND ITS AFFILIATES, LICENSORS, SUPPLIERS AND SUBCONTRACTORS) EXPRESSLY DISCLAIMS ANY AND ALL
WARRANTIES WITH RESPECT TO THE BULK GOODS AND THE LICENSED PRODUCTS, INCLUDING, WITHOUT LIMITATION,
THE SECURITY TECHNOLOGY. LICENSEE PURCHASES AND ACCEPTS ALL BULK GOODS AND LICENSED PRODUCTS ON AN
“AS IS” AND “WHERE IS” BASIS. NOA (ON ITS OWN BEHALF AND ON BEHALF OF NINTENDO CO., LTD. AND ITS
AFFILIATES, LICENSORS, SUPPLIERS AND SUBCONTRACTOR) EXPRESSLY 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,
NINTENDO CO., LTD., [ * ] (NOR ANY OF THEIR AFFILIATES, LICENSORS, SUPPLIERS OR
SUBCONTRACTORS) SHALL BE LIABLE FOR LOSS OF PROFITS, OR FOR ANY SPECIAL, PUNITIVE, INCIDENTAL OR
CONSEQUENTIAL DAMAGES [ * ] ARISING OUT OF OR RELATED TO THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, ANY SUCH LOST PROFITS OR DAMAGES THAT RESULT FROM THE BREACH OF THIS
AGREEMENT [ * ]. NOA AND NINTENDO CO. LTD. (OR THEIR
RESPECTIVE AFFILIATES, LICENSORS OR SUPPLIERS) SHALL NOT BE LIABLE FOR LOSS OF PROFITS, OR FOR ANY
SPECIAL, PUNITIVE, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF LICENSEE OR ITS CUSTOMERS INCLUDING,
WITHOUT LIMITATION, ANY SUCH LOST PROFITS OR DAMAGES THAT RESULT FROM THE MANUFACTURE OF THE BULK
GOODS OR THE USE OF




 




*
  Information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.




CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)




PAGE 11 









 







THE BULK GOODS ON ANY NINTENDO VIDEO GAME SYSTEM BY LICENSEE OR BY ANY END USER.




10. INDEMNIFICATION




     10.1 Claim. “Claim” means any and all third party claims, demands, actions, suits,
proceedings, 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. “Claim” shall specifically include civil, criminal, and regulatory matters, and
those brought by any third party (including governmental authorities or agencies) under any
federal, state, or foreign law or regulation, or the rules of any self-regulatory body (e.g.,
ESRB).



     10.2 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 which are alleged to result from or be in
connection with:



          (a) a breach by LICENSEE of any of the provisions 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 any aspect of the Licensed Products,
Promotional Materials or the Marketing Materials,




          (c) 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 aspect of the Licensed Products, and




          (d) the design, development, advertising, marketing, sale or use of any aspect of the Licensed
Products, Promotional Materials or the Marketing Materials.



NOA and LICENSEE shall give prompt Notice to the other of any Claim which is or which may be
subject to indemnification under this Section 10. With respect to any such Claim, 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 Claim in which (i) NOA or Nintendo
Co., Ltd. has been named as a party, or (ii) Intellectual Property Rights have been asserted,
without NOA’s prior written consent. NOA shall provide reasonable assistance to LICENSEE in its
defense of any Claim.




     10.3 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 an insurance company rated at least B+ by A.M. Best. 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 Claims. Such policy shall
name NOA and Nintendo Co., Ltd. as additional insureds and shall specify it may not be canceled
without [ * ] prior written Notice to LICENSEE, who shall, in turn, promptly
provide Notice to NOA of any such cancellation. A Certificate of Insurance shall be provided to
NOA’s Licensing Department not later than the date of the initial order of Bulk Goods under this
Agreement. If LICENSEE fails to provide NOA’s Licensing Department with such Certificate of
Insurance or fails to maintain such insurance at any time during the Term and for a period of [
* ] thereafter, NOA, in its sole discretion may 1) terminate this Agreement in
accordance with Section 13.2 herein; and/or 2) secure comparable insurance, at LICENSEE’s expense,
for the sole benefit and protection of NOA and Nintendo Co., Ltd. .



     10.4 Suspension of Production. In the event NOA deems itself at risk with respect to
any Claim under this Section 10, NOA may, at its sole option, suspend production, delivery or order
acceptance for any Bulk Goods, in whole or in part, pending resolution of such Claim.



11. PROTECTION OF PROPRIETARY RIGHTS




     11.1 Joint Actions against Infringers. LICENSEE and NOA may agree to jointly pursue
cases of infringement involving the Licensed Products, as such Licensed Products will contain
Proprietary





 




*
  Information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.




CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)




PAGE 12 









 







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, 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 good faith 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, good faith efforts to inform LICENSEE
of such actions likely to affect LICENSEE’s rights 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 Definition. “Assignment” means every type and form of assignment, transfer,
sale, sublicense, and/or delegation, of LICENSEE’s rights or obligations under this Agreement,
including, but not limited to, (a) a voluntary assignment, transfer, sale, sublicense, or
delegation by LICENSEE of all or any portion of its rights or obligations under this Agreement,
(b) the assignment, transfer, sale, sublicense, or delegation of all or any portion of LICENSEE’s
rights or obligations under this Agreement to or by LICENSEE’s trustee in bankruptcy, receiver, or
other individual or entity appointed to control or direct the
business and affairs of LICENSEE, and (c) the merger or consolidation of LICENSEE if LICENSEE is a
corporation. Assignment also includes the sale, assignment, transfer or other event affecting a
change in the controlling interest of LICENSEE, whether by sale, transfer or assignment of shares
in LICENSEE, or by sale, transfer or assignment of partnership interests in LICENSEE, or otherwise.
[ * ].



     12.2 No Assignment by LICENSEE. This Agreement and the subject matter hereof are
personal to LICENSEE. No Assignment of LICENSEE’s rights or obligations hereunder shall be valid
or effective without NOA’s prior written consent, which consent may be withheld by NOA for any
reason whatsoever in its sole discretion. In the event of an attempted Assignment in violation of
this provision, NOA shall have the right at any time, at its sole option, to immediately terminate
this Agreement. Upon such termination, NOA shall have no further obligation under this Agreement
to LICENSEE or to LICENSEE’s intended or purported assignee.



     12.3 Proposed Assignment. Prior to any proposed Assignment of this Agreement,
LICENSEE shall give NOA not less than [ * ] prior written Notice thereof, which
Notice shall disclose the name of the proposed assignee, the proposed effective date of the
Assignment and the nature and extent of the rights and obligations that LICENSEE proposes to
assign. NOA may, in its sole discretion, approve or disapprove such proposed Assignment. Unless
written consent is given by NOA to a proposed Assignment, any attempted or purported Assignment
shall be deemed disapproved and NOA shall have the unqualified right, in its sole discretion, to
terminate this Agreement at any time. Upon termination, NOA shall have no further obligation under
this Agreement to LICENSEE or to LICENSEE’s intended or purported assignee.


12.4 LICENSEE’s Obligation of Non-Disclosure. LICENSEE shall not (a) disclose Nintendo’s
Confidential Information to any proposed assignee of LICENSEE, or (b) permit access to Nintendo’s




 




*
  Information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.




CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)




PAGE 13 









 







Confidential Information by any proposed assignee or other third party, without the prior written
consent of NOA 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 [ * ] 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 [ *
] 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 [ *
] and Notice of such destruction (with proof certified by an officer of LICENSEE) shall be
delivered 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 Bulk Goods and Licensed
Products in LICENSEE’s control as of the date of such termination shall be destroyed by LICENSEE
within [ * ] and Notice of such destruction (with proof certified by an officer of LICENSEE)
shall be delivered 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 breach 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 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 the Licensed Products
authorized under Section 13.4 herein. LICENSEE shall, within [ * ] of expiration or
termination, (a) return to NOA all Development Tools provided to LICENSEE by Nintendo, and (b)
return to NOA or destroy any and all copies of materials constituting, relating to, or disclosing
any Confidential Information, including but not limited to Guidelines, writings, drawings, models,
data, and tools, whether in LICENSEE’s possession or in the possession of any past or present
employee, agent or Independent Contractor who received the information through LICENSEE.. Proof of
such return or 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 Intellectual Property Rights,
the Licensed Products or the Development Tools.



     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



 




*
  Information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.




CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)




PAGE 14 









 







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 Bulk Goods, NOA reserves the right to allocate such resources among itself and its licensees.




     14.3 [Intentionally Omitted].



     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, 11, 12.4, 13.4, 13.7, 13.8 and 14 shall
survive any expiration or termination of this Agreement to the degree necessary to permit their
complete fulfilment or discharge.



     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 actions
(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.

	 	MIDWAY HOME ENTERTAINMENT INC
	 
	 	 
	By: /s/ James R. Cannataro                    

	 	By: /s/ Miguel Iribarren                    
	Name: James R. Cannataro                    

	 	Name: Miguel Iribarren                    
	Title: Executive VP, Administration

	 	Title: VP-Publishing                         






CONFIDENTIAL LICENSE AGREEMENT FOR THE Wii CONSOLE (WESTERN HEMISPHERE)





PAGE 15