EXHIBIT 10.8.1
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JOINT DEVELOPMENT AND LICENSE AGREEMENT
This JOINT DEVELOPMENT AND LICENSE AGREEMENT is made the 20th day of
August, 1993, among Nintendo Co., Ltd., a Japan corporation having a place of
business at 00 Xxxxxxx Xxxxxxxxxxxxx-xxx, Xxxxxxxxxxx-xx, Xxxxx 000, Xxxxx
("NCL"), Nintendo of America Inc., a Washington corporation, having a place of
business at 0000 000xx Xxxxxx XX, Xxxxxxx, XX 00000 ("NOA") (NCL and NOA are
collectively referred to as "COMPANY"), Silicon Graphics, Inc., a Delaware
corporation and MIPS Technologies, Inc., a Delaware corporation, both of which
have a place of business at 0000 Xxxxx Xxxxxxxxx Xxxx., Xxxxxxxx Xxxx, XX
00000-0000 (collectively, "SGI").
WHEREAS, SGI (i) is in the business of designing, manufacturing and
marketing computer graphics workstation, server, subsystem, board level, and
microprocessor products, including accessories, options and software therefor,
and (ii) possesses expertise and owns proprietary rights relating to its
products, including, but not limited to, copyrights, know-how, inventions, trade
secrets, patents, patent applications and the like;
WHEREAS, Company (i) is in the business of: developing,
manufacturing and distributing high quality entertainment systems, including
the Nintendo Entertainment System-Registered Trademark-, the Super Nintendo
Entertainment System-Registered Trademark-, the Famicom-TM-, the Super
Famicom-TM-, and the Game Boy-Registered Trademark- compact video game
system, and (ii) possesses expertise and owns proprietary rights relating to
its products, including, but not limited to, copyrights, know-how,
inventions, trade secrets, patents, patent applications and the like; and
WHEREAS, the parties desire to conduct joint development of products
which will incorporate certain existing technology of SGI, and new technology to
be jointly developed by the parties;
NOW, THEREFORE, in furtherance of the foregoing, and in consideration
of the mutual covenants set forth below, Company and SGI hereby agree as
follows:
1. DEFINITIONS
1.1 "ACCESSORY" means a peripheral device which mechanically or
electrically connects to the Consumer Hardware to enhance the application
software. Examples of an Accessory include, but are not limited to: a
specialized joystick, head-mounted display or a CD ROM player.
1.2 "AFFILIATE" means any Person that directly or indirectly
controls, is controlled by, or is under common control with another Person.
1.3 "AGREEMENT" means this Joint Development and License Agreement.
1.4 "BACKGROUND TECHNOLOGY" means all Technology which (i) is under
the Control of SGI, (ii) was developed by SGI prior to the Effective Date
or is under development by SGI as of the Effective Date, and (iii) is
implemented into the design of one or more Company Products, including but
not limited to, the Technology specified in Attachment A to this Agreement.
1.5 "COIN OPERATED HARDWARE" means a dedicated screen and speaker
which are fully integrated so as to compromise a single physical unit or
multiple physical units, when such hardware (i) remains free-standing and
stationary during play, (ii) requires the player to insert coins, paper
currency, credit cards or tokens in a metering device to initiate Video Game
play or non-Video Game applications, (iii) is otherwise designed for
installation at arcades or other retail or commercial establishments, and (iv)
has a wholesale price of less than U.S. $30,000.00.
1.6 "COIN OPERATED SOFTWARE" means Video Game and Non-Video Game
software applications for use with the Coin-Operated Hardware.
1.7 "COMPANY" means NOA and NCL.
1.8 "COMPANY PRODUCTS" means the following products manufactured by
or on behalf of Company and/or the Licensees and sold by Company and/or the
Licensees, to the extent that they incorporate or are based upon some or all of
the Background Technology and/or the Developed Technology: (i) the Consumer
Hardware, (ii) the Packaged Software (and the application software stored
therein), (iii) Accessories, (iv) Coin Operated Hardware and (v) Coin Operated
Software.
1.9 "COMPANY TECHNOLOGY" means technology which (i) was developed by
Company prior to the Effective Date or is under development by Company as of the
Effective Date, or (ii) is otherwise independently developed or owned by
Company. In this Section 1.9, "technology" means technical information, data and
processes, whether tangible or intangible, including, without limitation, any
and all techniques, discoveries, inventions, copyrights, mask works, net lists,
know-how, patents (including any extension, reissue, continuation or renewal
patents), patent applications, mask work or copyright applications, inventor
certificates, trade secrets, designs, drawings, specifications, software
programs (including source code and object code), microcode, operating and
instruction manuals, magnetic tapes, methods of production, and other
proprietary information.
1.10 "CONSUMER HARDWARE" means stand-alone electronic hardware for
consumer use consisting of a microprocessor and other components which are
collectively designed, manufactured, distributed, sold, and marketed, at the
time of market introduction, primarily for the playing of Video Games in
conjunction with player input transmitted by "control pads" consisting of
directional buttons or switches, and/or joysticks, optical light guns,
accelerator sensors, or other peripheral devices, which may be manipulated by
the thumbs and/or one or two fingers of each hand of the player, or by
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the foot, hand, head, or body of the player. Consumer Hardware generates the
visual and aural output of Video Games, or other software applications, by means
of a hard-wire interface or connection with a television set or other output
display. Based on market information currently available, examples of Consumer
Hardware currently include, but are not limited to, the following: the Nintendo
Entertainment System; the Sega Game Gear, the Nintendo Game Boy System, the
Super Nintendo Entertainment System; the Sega Genesis; Atari Jaguar; and the
Interactive Multiplayer sold under license from 3DO Company. The Consumer
Hardware may be used for software applications other than playing Video Games.
1.11 " CONTROL" means, in the case of Background Technology, the
possession by either party of the right to grant licenses or sublicenses to, or
otherwise distribute, Background Technology without (i) violating the terms of
any agreement or other arrangement with, or the rights of, any third party, or
any binding laws or regulations, and (ii) such grant or the exercise of rights
thereunder giving rise to the payment of royalties, fees or other consideration
to a third party (except for payments between a party and its Affiliates).
"Control" means, in the case of a corporation or other legal entity, the
ownership or the right to vote in the corporation sufficient to elect a majority
of the corporation's board of directors.
1.12 "COORDINATOR" means a qualified representative of a party
designated by such party as project coordinator, to be responsible for
supervising and coordinating the implementation of the Development Plan
hereunder.
1.13 "DEVELOPED TECHNOLOGY" means the Technology developed
specifically for purposes of this Agreement and delivered by SGI to Company in
the course of the Development Plan, whether or not patentable or registrable,
which is conceived or first actually reduced to practice solely by a party, or
jointly by the parties, under the Development Plan, as listed in Attachment B
(Developed Technology). Developed Technology shall not include any of the
Background Technology, regardless of whether such Background Technology is
implemented or incorporated into Developed Technology. Developed Technology
shall not include Company Technology.
1.14 "DEVELOPMENT PLAN" means the plan for the research and
development of the Developed Technology conducted under the terms and conditions
of this Agreement, as mutually agreed in writing by SGI and Company.
1.15 "EFFECTIVE PLAN" means the date first set forth above, on which
date the term of this Agreement shall commence.
1.16 "FILING" means the submission of any documentation, application,
filing, registration or the like required to perfect or, with respect to
copyright registrations, to enforce, the parties' interest in the Developed
Technology under statutory intellectual property rights protection mechanisms,
including, without limitation, any correspondence or other communication with
any patent or copyright office or other governmental entities with respect
thereto.
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1.17 "LICENSED BACKGROUND TECHNOLOGY" means Background Technology
implemented in the Developed Technology, but only to the extent that such
Background Technology is not Purchasable Background Technology.
1.18 "LICENSEE" means a third party licensed by Company to use,
design, manufacture, market, distribute and/or sell Packaged Software,
Accessories, Coin Operated Hardware, and/or Coin Operated Software.
1.19 "PACKAGED SOFTWARE" means the form by which the application
software (Video Game and non-Video Game software) used in connection with the
Consumer Hardware is distributed to consumers, including but without limitation,
by semi- conductor, magnetic, optical media and/or similar method of
distribution. Packaged Software shall exclude: (i) application software
transmitted electronically and (ii) upgrades to system software that is embedded
in the Consumer Hardware.
1.20 "PERSON" means a corporation, partnership, trust, association,
government authority, educational institution, individual or other legal entity.
1.21 "PURCHASABLE BACKGROUND TECHNOLOGY" means equipment, software
and components that SGI and/or SGI licensees make generally available to
third parties and for which separate price quotes are included in price
lists, including INDY computer systems, MIPS-Registered Trademark-
microprocessors and MIPS-Registered Trademark- compilers.
1.22 "SGI" means Silicon Graphics, Inc., and MIPS Technologies, Inc.
1.23 "TECHNOLOGY" means technical information, data and processes,
whether tangible or intangible, including, without limitation, any and all
techniques, discoveries, inventions, copyrights, mask works, net lists,
know-how, patents (including any extension, reissue, continuation or renewal
patents), patent applications, mask work or copyright applications, inventor
certificates, trade secrets, designs, drawings, specifications, schematics,
software programs (including source and object codes), microcode, operating and
instructional manuals, magnetic tapes, methods of production and any other
proprietary information. Technology is either Background Technology or
Developed Technology.
1.24 "THEME PARK APPLICATION SYSTEM" means an entertainment device or
system that has audio and/or visual stimulation capability and (i) which has a
cost to an operator of more than U.S. $30,000.00, and (ii) is located at a theme
park, amusement park, carnival entertainment center, retail or commercial
establishment.
1.25 "VIDEO GAME" means any aurally and visually-oriented interactive
application game software, consisting of an independently marketed and packaged
unit of Packaged Software (or such unit of the Packaged Software when packaged
and sold together with a unit of the Consumer Hardware). "Video Games" may be
played by one or more players at a time; may coordinate graphics with fanciful
tunes or thematically significant music, along with incidental sound effects;
may feature
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special effects; may be designated to keep score, record milestones, or
otherwise track the progress or achievement of the players in terms of numbers
or with respect to the fictional narrative of the game environment; and are
intended to amuse and entertain. Examples of Video Games include: Tetris and
Super Mario Bros. 3, both of which are distributed for play on the Nintendo
Entertainment System; Sonic the Hedgehog II, distributed for play on the Sega
Genesis Video Game System; Street Fighter II and NCAA Basketball, both of which
are distributed for play on the Super Nintendo Entertainment System.
2. ATTACHMENTS.
2.1 This Agreement includes the following attachments:
a. Attachment A (Background Technology), which sets forth and
describes the Background Technology provided hereunder;
b. Attachment B (Developed Technology), which sets forth and
describes the Technology to be developed hereunder;
c. Attachment C (Development Funding and royalties), which sets
forth the development funding and royalties payable by Company to
SGI pursuant to this Agreement;
d. Attachment D (Competitive Companies), which sets forth the
companies referred to in Section 6.4
e. Attachment E (Minimums for Exclusivity), which sets forth the
royalties payable by Company as a condition to continued
exclusivity under Section 6.4.
All attachments listed in this Section 2 are incorporated into
and form a part of this Agreement.
3. SCOPE OF AGREEMENT
3.1 SCOPE. This Agreement sets forth the terms and conditions under
which (i) the parties shall conduct joint research and development of the
Developed Technology, (ii) Company will obtain a license to use the Licensed
Background Technology and the Developed Technology and (iii) SGI will arrange to
fulfill Company's requirements for Purchasable Background Technology.
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3.2 LIMITED RIGHTS. Each party hereby acknowledges and agrees that
the scope of the relationship between the parties shall be limited to the
purposes and activities set forth herein, and that the rights and obligations of
the parties with respect to each other shall be limited to those provided in
this Agreement. Neither party has the authority to assume or create any
obligation or responsibility in the name of the other party except as
specifically authorized herein, or as authorized after the Effective Date hereof
by the mutual written agreement of the parties.
4. DEVELOPMENT ACTIVITIES.
4.1 NAMING A COORDINATOR. SGI shall designate a Coordinator to
Company in writing within fifteen (15) days after the Effective Date. Company
hereby designates Xxxxx Xxxxxx as its Coordinator.
4.2 TECHNICAL AND FEASIBILITY REVIEW. Beginning on the Effective
Date and thereafter through January 31, 1994, (i) Company shall have the right
to evaluate the Background Technology and evaluate its suitability for the
development of and use in Consumer Hardware and Coin Operated Hardware, (ii)
Company and SGI will agree on a Development Plan, including the schedule for the
development of Company's Consumer Hardware and Coin Operated Hardware
incorporating the Developed Technology, the allocation of responsibility between
the parties, and the deliverables to be provided by each party to the other, and
(iii) Company and SGI will agree on the budget for the Development Plan. SGI
shall deliver a budget to Company for SGI's completion of its work under the
Development Plan that: (a) is stated as a flat fee (or fixed fee) for completion
of SGI's work under the Development Plan and represents SGI's good faith
calculation of its actual costs to complete its work under the Development Plan,
and (b) provides reasonable detail regarding such anticipated actual costs.
Provided SGI meets the foregoing conditions, and provided the budget is for
U.S. XXXXXXXX or less, Company shall accept the budget. This Agreement shall
terminate automatically if: (a) Company, in its sole discretion, desires to
terminate this Agreement and gives notice of its desire to terminate to SGI on
or before January 31, 1994, or (b) if Company and SGI do not agree in writing on
the Development Plan and the budget therefor on or before January 31, 1994;
provided, however, both parties are obligated to negotiate in good faith the
details of the Development Plan and budget. If this Agreement terminates on or
before January 31, 1994, then neither party shall have any further obligations
to the other under this Agreement, including the provisions of Section 7.0. From
the Effective Date through January 31, 0000, XXX shall facilitate Company's
evaluation of the Background Technology by (i) providing Company with a list of
patents pending and issued relating to the Background Technology, (ii) if
Company so requests, providing Company with copies of patent applications
pending and issued relating to the Background Technology; (iii) if Company so
requests, meeting and conferring with Company's patent counsel regarding such
patent information; and (iv) providing Company with such other information
reasonably requested by Company regarding the intellectual property rights of
SGI relating to the Background Technology.
4.3 DEVELOPMENT PLAN REVISIONS. At any time following the agreement
of SGI
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and Company on the Development Plan pursuant to Section 4.2, upon the mutual
written agreement of the parties, deliverable items and tasks may be modified
in, added to, or deleted from, the Development Plan, and equitable adjustments
made to the fees payable by Company to SGI under this Agreement and the schedule
for completion of the development of the Developed Technology. SGI shall have no
obligation to implement any changes to the Development Plan, and Company shall
have no obligation to pay any additional fees to SGI on account of any such
changes, unless SGI and Company have agreed in writing on any such changes to
the Development Plan, the associated fees and/or development schedule.
4.4 DESIGN AND DEVELOPMENT ACTIVITIES. The parties shall use
reasonable efforts to conduct the research, experimentation, development and
implementation work necessary to complete the design and development of the
Developed Technology, substantially in accordance with the Development Plan
Except as otherwise provided in the Development Plan, neither party shall
subcontract or otherwise delegate the performance of the design and development
services required hereunder to any third party in amounts which, in the
aggregate, exceed Two Hundred Fifty Thousand Dollars ($250,000.00) without the
prior written approval of the other party, which approval shall not be
unreasonably withheld or delayed. To the extent that any planned procedures or
development milestones are not completed on schedule, the Coordinators shall
determine whether a rescheduling of such procedures or milestones is reasonably
possible, or whether alternative procedures or milestones should be implemented.
4.5 MEETINGS BETWEEN COORDINATORS. After the Effective Date and
through January 31, 0000, XXX shall make its Coordinator and other
representatives available from time to time for meetings (including meetings in
Japan, subject to availability) and/or telephone conferences with Company's
Coordinator and other Company representatives to assist Company with the
technical and feasibility review described in Section 4.2. Beginning on the
first Monday after the first full week following February 1, 1994, and monthly
thereafter or at such other intervals as SGI and Company may agree upon in
writing during the implementation of the Development Plan, the Coordinators
shall meet at mutually acceptable times and locations, or make contact via
telephone, to discuss the results of the Development Plan and activities which
have transpired since the previous meeting.
4.6 DEVELOPMENT TOOLS FOR LICENSEES. In connection with the Company
Products, Company shall endorse SGI computer systems and development tools as
the systems and development tools of choice to be used by Licensees. At a later
time, SGI and Company will meet and confer and agree in writing on whether SGI
will distribute such computer system and development tools directly to Licensees
or whether Company will acquire such systems and tools and distribute them to
Licensees. SGI and Company will mutually agree on how and when development
specifications are provided to the Licensees.
4.7 COMPANY PRODUCT INTRODUCTIONS. Company shall have the sole
discretion to decide whether, when and how to sell Company Products. If Company
does not make first commercial sales of Consumer Hardware incorporating
Developed Technology before XXXXXX
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The preceding date presumes SGI's timely performance of each and every aspect of
the Development Plan. If SGI is untimely in performance under the Development
Plan, such date shall be considered to be extended for a period equivalent to
the period of SGI's delay in its performance under the Development Plan. Company
presently contemplates that the Consumer Hardware should have a suggested retail
price of less than U.S. $250 to be successful, but that such suggested retail
price may change.
5. BACKGROUND TECHNOLOGY
5.1 DEVELOPMENT AND EMBEDDED BACKGROUND TECHNOLOGY LICENSES. SGI
hereby grants to Company, and Company hereby accepts, (i) a nontransferable,
royalty- free temporary license to use the Licensed Background Technology only
to the extent necessary to permit Company to participate in the Development Plan
and only for so long as the parties are developing the Developed Technology
pursuant to the Development Plan, and (ii) a worldwide, royalty-bearing license
to use the Licensed Background Technology only to the extent specifically
implemented in the Developed Technology for purposes of the design, manufacture,
use, sale and distribution of Company Products. Except as specifically provided
in this Agreement, nothing in this Agreement shall authorize or entitle Company
to manufacture any products using the Background Technology, and no implied
licenses to use or to sublicense the Background Technology are granted under
this Agreement by implication, estoppel or otherwise. Subject to the written
agreement of Company and SGI on the compensation payable by Company to SGI,
Company shall also have the right to acquire from SGI a nonexclusive license to
use the Licensed Background Technology in connection with the design,
manufacture, use and sale of Theme Park Application Systems.
5.2 COMPANY SUBLICENSES. Company shall have the right to grant
nonexclusive sublicenses to Licensees to XXXXXX in connection with the design,
manufacture use, sale and/or distribution of Packaged Software, Accessories,
Coin Operated Software and/or Coin Operated Hardware, provided that all such
sublicenses shall be in writing and shall be pursuant to a form of agreement
incorporating license grant and proprietary rights provisions approved in
writing by SGI, whose approval shall not be unreasonably withheld.
5.3 SUPPLY OF PRODUCTS INCORPORATING PURCHASABLE BACKGROUND TECHNOLOGY.
To the extent that Company and/or Licensees require equipment, software and/or
components (including standard and/or customized MIPS microprocessors)
incorporating the Purchasable Background Technology for purposes of the design,
manufacture, use, sale or distribution of Company Products, SGI shall arrange
for the supply by SGI and/or its licensees of the requirements of Company and
such Licensees for such SGI equipment and/or components on SGI's or SGI's
licensees' standard commercial terms and conditions, as modified and agreed to
by the Company and SGI or the applicable SGI licensee.
5.4 MANUFACTURE OF COMPANY PRODUCTS. Company is free to choose,
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negotiate the price with, and direct the work of manufacturers of any
Application Specific Integrated Circuits ("ASICS") incorporated in the Company
Products, subject to the manufacturer's ability to use necessary design rules
and process technology, and to the manufacturer(s) agreement to protect SGI's
intellectual property, XXXXXX Company is free to choose, negotiate the price
with, and direct the work of, all of the manufacturers of all other components
of Company Products.
6. RIGHTS IN DEVELOPED TECHNOLOGY
6.1 XXXXXX
6.2 COOPERATION OF THE PARTIES IN FILINGS. The parties shall
cooperate in Filings, and Company shall bear all out-of-pocket expenses with
respect thereto. All Filings will be made at a time when appropriate during the
development or after the completion of an item of Developed Technology XXXXXX
Company shall have the primary administrative responsibility for Filings, and
Company shall bear all filing and attorneys' fees incurred in connection
therewith. As used herein, "administrative responsibility" means the physical
preparation of any documents required for a Filing, and the submission thereof
to the appropriate governmental entity. If SGI has not yet received a proposed
Filing from Company on an item of Developed Technology, and SGI believes that a
Filing should be made with respect thereto, SGI may submit a written request to
Company that Company proceed with the preparation of such Filing, provided,
however, that Company may, at its sole discretion, proceed or decline to proceed
with the preparation of such Filing. If Company declines to prepare and submit a
Filing, SGI may proceed with the preparation and submission of such Filing at
SGI's expense. In either case, a party preparing a Filing shall submit such
Filing to the other party for its review and approval prior to any submission to
any governmental entity. A Filing shall be deemed accepted by the receiving
party if the receiving party does not provided a written notice of rejection to
the submitting party within thirty (30) days after the submitting party's notice
thereof. If a party rejects a Filing, it shall include with its rejection notice
a detailed description of its reason(s) for rejection, and shall make specific
suggestions as to any modifications which it believes should be made to the form
or content of such Filing prior to submission. If the submitting party believes
that the modifications suggested by the receiving party are inappropriate, the
submitting party's Coordinator shall contact the receiving party's Coordinator,
and the Coordinators shall arrange and hold a meeting or discussion between
appropriate representatives of the parties, at a mutually agreeable time and
place, in order to determine a mutually acceptable form, content and time for
the proposed Filing. Each party shall provide the other with copies of any
correspondence, materials or other communications submitted to or received from
a governmental entity or a third party relating to any Filing.
6.3 FURTHER COOPERATION. Each party will take all steps necessary to
XXXXXX and to establish, evidence, maintain, defend and enforce the intellectual
property rights therein. Without charge to the other party, each party shall
give the other party all reasonable assistance in obtaining such proprietary
rights protection and in preparing and prosecuting any patent, copyright, mask
work or other filing or application made by the other party, provided that such
assistance does
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not require any out-of-pocket expenditure by the party providing such
assistance. Each party shall cause to be executed assignments and all other
instruments and documents as the other party may consider necessary or
appropriate to carry out the intent of this Section 6.3.
6.4 EXCLUSIVITY. The licenses hereby granted by SGI to Company shall
be non-exclusive, except as provided in this Section 6.4, which is subject to
Sections 4.7 and 7.6:
a. Competitive Companies. XXXXXX The "COMPETITIVE COMPANIES" are the
companies listed in Attachment D and any Affiliate of any of such companies, or
any successor of such companies (e.g. by way of merger, consolidation,
reorganization, transfer of assets or otherwise). Nothing in the preceding
sentence shall restrict SGI's direct or indirect sale of the Purchasable
Background Technology to the Competitive Companies.
b. Developed Technology. XXXXXX
c. Substantially Similar Developed Technology. XXXXXX
d. For purposes of Sections 6.4 and 6.5, XXXXXX
6.5 EXCEPTIONS TO COMPANY EXCLUSIVITY Notwithstanding the provisions
of Section 6.4(b), SGI shall itself be permitted to sell equipment or hardware
that incorporates the Developed Technology if: XXXXXX Except as explicitly
provided to the contrary in this Agreement, SGI shall have no obligation to
restrict, or to attempt to restrict the use or disposition by SGI customers or
equipment, software or components sold or licensed directly or indirectly from
SGI.
6.6 THIRD PARTY SOFTWARE. The parties acknowledge that (a) they do
not currently contemplate that the Developed Technology will incorporate any
third party software, and (b) neither SGI nor Company shall incorporate any
third party software into the Developed Technology unless the parties have
previously agreed in writing on the incorporation of such software into the
Developed Technology and the allocation of responsibility for any associated
royalties or license fees.
7. PAYMENTS
7.1 DEVELOPMENT FUNDING. Provided that this Agreement does not
terminate on or before January 31, 1994, as provided in Section 4.2, during the
twenty- four (24) month period after the Effective Date, NCL shall pay (or at
NCL's election, it shall direct NOA to pay) to SGI the development funding
agreed upon pursuant to Section 4.2, which shall consist of development fees and
prepaid royalties, in the proportions provided in Attachment C. Company shall
make the initial payment specified in Attachment C within five (5) days of the
Effective Date as the initial nonrefundable installment of such development
fees. The balance shall be paid in six (6) equal, non-refundable quarterly
installments beginning on February 1, 1994, and every three (3) months
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thereafter.
7.2 ROYALTIES. NCL shall pay (or at NCL's election, it shall direct
NOA to pay) to SGI royalties on net sales (gross shipments less returns) of
Company Products as provided in Attachment C. If Company plans to distribute
application software for Consumer Hardware incorporating Developed Technology
XXXXXX, Company and SGI shall agree in writing on royalties payable by Company
for such software as a condition to the XXXXXX distribution of such software by
Company or any Licensee.
7.3 ACCRUALS. All royalties payable by Company under Section 7.2 shall
accrue as follows: (i) for Consumer Hardware, Packaged Software, and Coin
Operated Hardware sold by NCL or any of its Affiliates, the sale shall occur
when NCL or such Affiliate sells the Consumer Hardware, Packaged Software, or
Coin Operated Hardware to its distributor or retailer, (ii) for Packaged
Software manufactured by NCL and sold by Licensees, the sale occurs when the
Packaged Software is sold by NCL to such Licensees, (iii) for Packaged Software
manufactured by Licensees and sold by the Licensees, the sale occurs when the
Packaged Software is sold by the Licensees to their distributors or retailers,
(iv) for Coin Operated Hardware sold by Licensees, the sale shall occur when the
Coin Operated Hardware is sold by the Licensees to its distributors or
retailers. For purposes of this Section 7.3, a product shall be considered
"sold" upon the earlier of the seller's shipment of or invoice for that product.
7.4 QUARTERLY PAYMENTS AND STATEMENTS. Within thirty (30) days
after the end of each calendar quarter during the term of this Agreement, NCL
shall pay (or at NCL's election it shall direct NOA to pay) to SGI all royalties
that have accrued during that quarter pursuant to Section 7.3. Each such payment
shall be accompanied by a written statement, certified to be accurate by an
officer of Company, showing the total net sales for Coin Operated Hardware,
Consumer Hardware and Packaged Software, broken down by Company Product
categories, the royalties payable by Company, and such additional information as
SGI may reasonably request regarding the sale of Company Products.
7.5 RECORDS AND AUDITS. During the term of this Agreement and for a
period of two (2) years following any expiration or termination of this
Agreement, Company shall maintain full and complete records in sufficient detail
to permit SGI to verify the accuracy of payment and statements submitted by
Company pursuant to Section 7.4. Upon reasonable notice, and no more frequently
than once in any calendar year, SGI or its certified public accountants shall
have the right to audit Company's records for the purpose of verifying the
accuracy of payments made by Company under Section 7.4. All such audits shall be
at SGI's expense, unless the audit reveals an underpayment by Company of five
percent (5%) or more in any royalty period, in which case Company shall
reimburse SGI the reasonable and documented costs of the audit. Company shall
promptly pay to SGI all underpayments disclosed by the audit, together with
interest on all overdue amounts equal to one percent (1%) per month.
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ORDER GRANTING CONFIDENTIAL TREATMENT ISSUED BY THE SECURITIES AND EXCHANGE
COMMISSION.
7.6 MINIMUMS FOR EXCLUSIVITY. As a condition to the continuation of
Company's rights under Section 6.4, Company shall have had royalties accrued as
provided for in Section 7.3 in an amount equal to the minimum royalties set
forth in Attachment E (provided Company thereafter makes payment of such
royalties to SGI in accordance with Section 7.4). XXXXXX
7.7 TAXES AND THE LIKE. Any payments made hereunder are net and
exclusive of all taxes, insurance, shipping and other charges. Company agrees to
pay or reimburse SGI for all sales, use, value added, or other taxes, duties,
importation fees or assessments with respect to this Agreement (excluding only
taxes based on the payee's net income), or shall supply appropriate tax
exemption certificates in form satisfactory to the taxing authority. The
development fees and advance royalties payable under Section 7.1 shall be
exclusive of all withholding taxes imposed by the laws of Japan. NCL shall be
entitled to withhold and deduct from royalties payable under Section 7.2
withholding taxes imposed by the laws of Japan on the remission of royalties to
the United States, provided that Company shall claim the benefits of the Treaty
on the Avoidance of Double Taxation between Japan and the United States, and
shall provide SGI with certificates of such withholding.
8. PROPRIETARY AND CONFIDENTIAL INFORMATION
8.1 CONFIDENTIALITY OF BACKGROUND TECHNOLOGY. Company acknowledges
SGI's representation that the Background Technology constitutes the valuable
proprietary and confidentiality information of SGI, and agrees to (i) retain in
confidence the Background Technology, (ii) restrict the use of and access to the
Background Technology to its employees to whom disclosure is necessary in
connection with the license granted in this Agreement and to authorized
sublicensees and subcontractors, (iii) appropriately bind each employee to whom
any such disclosure is made to hold the Background Technology in confidence, and
(iv) not sell, lease transfer or otherwise disclose the Background Technology to
any third party except in accordance with Section 5.0, provided, however, that
Company may disclose the Background Technology to its agents or consultants
under the terms and conditions of a signed, written confidential disclosure
agreement with terms and conditions which prohibit disclosure to other parties,
and which are otherwise at least as restrictive as the terms of subsections (i)-
(iii) of this Section 8.1. Without limiting the foregoing, Company agrees that
it will treat the Background Technology with at least the same degree of care as
it would its own highly proprietary information.
8.2 NO TRANSFER OF INTELLECTUAL PROPERTY. No right, title or
interest in or to the intellectual property in any Background Technology or any
copies, derivations or any portion of the Background Technology is transferred
to Company under this Agreement and/or as a result of Company's use of SGI's
Background Technology under any circumstances whatsoever. SGI is and shall
remain the sole and exclusive owner of the Background Technology. Company shall
remain the exclusive owner of all rights in the Company Technology.
8.3 NO TRANSFER OF RIGHTS IN TRADEMARKS. Nothing herein shall grant
either
12
party any right, title or interest in the trade names, trademarks, service
marks, words, symbols, or other marks used, adopted or owned by the other party
(or of any third party from whom such party has acquired license rights) from
time to time, either alone or in association with other words or names. Each
party shall be free to unilaterally adopt and use trademarks for use in
conjunction with its marketing, distribution, licensing and sale of products,
provided that such trademarks do not infringe trademarks owned by the other
party.
8.4 PROPRIETARY RIGHTS NOTICES. Company shall not remove from, cover
over or prevent from being displayed the notices of SGI's copyright, trade
secrets and proprietary rights notices printed on the Background Technology,
affixed to the media or containers of the Background Technology or the Developed
Technology, embedded in the Background Technology, displayed by the Background
Technology during use, or printed on materials comprising the Background
Technology. Company acknowledges that the existence of such notice(s) does not
mean that the Background Technology or the trade secrets and proprietary
information therein have been published or otherwise made public.
8.5 NO DISCLOSURE OF AGREEMENT. Neither party shall disclose the
terms and conditions or existence of this Agreement without the prior written
approval of the other party, except as may be required by law or regulation.
8.6 EXCLUSIONS. Neither party shall have any obligation as to
information of the other party or technology, which may include Background
Technology, that (i) is known to the receiving party at the time of disclosure;
or (ii) is independently developed by the receiving party; or (iii) becomes
known to the receiving party from another source without confidentiality
restriction on subsequent disclosure or use; or (iv) is or becomes part of the
public domain through no wrongful act of the receiving party; or (v) is
disclosed pursuant to any judicial or governmental request, requirement or
order; provided that the receiving party takes reasonable steps to give the
disclosing party sufficient prior notice in order to contest such request,
requirement or order; or (vi) is furnished to a third party by the disclosing
party without a similar confidentiality restriction on such third party.
8.7 INJUNCTIVE RELIEF. Each party acknowledges and agrees that in
the event of an unauthorized use, reproduction, distribution or disclosure of
any confidential information or data contained in the technology of the other
party, an adequate remedy at law may not be available, and therefore, injunctive
or other equitable relief would be appropriate to restrain such use,
reproduction, distribution or disclosure, threatened or actual
8.8 RESIDUALS. Notwithstanding any provision of this Section 8.0 or
any other provision of this Agreement to the contrary, neither party shall be
prohibited from, or be subject to liability for, using for any purpose the
"residuals" from the activities conducted in furtherance of the Development Plan
and from the use of or access to information or materials developed or received
hereunder, including, without limitation, any Technology. For purposes of this
Section 8.8, "residuals" means the know-how, techniques, ideas and other
intangible information that remain
13
within the general knowledge and experience of personnel who have participated
in such activities and used or had access to such information or materials.
9. WARRANTIES AND EXCLUSIONS
9.1 "AS IS." SGI PROVIDES THE BACKGROUND TECHNOLOGY TO COMPANY ON
AN "AS- IS" BASIS ONLY, AND DOES NOT WARRANT OR REPRESENT THAT THE OPERATION OF
THE BACKGROUND TECHNOLOGY WILL BE UNINTERRUPTED OR ERROR FREE, THAT ANY DEFECTS
IN THE BACKGROUND TECHNOLOGY ARE CORRECTABLE OR WILL BE CORRECTED, OR THAT THE
USE THEREOF WILL BE FREE FROM CLAIMS OF INFRINGEMENT.
9.2 WARRANTY EXCLUSION. NEITHER PARTY PROVIDES ANY WARRANTY
WHATSOEVER TO THE OTHER PARTY WITH RESPECT TO THE DEVELOPED TECHNOLOGY. Nothing
contained in this Agreement shall be construed as a warranty or representation
by either party that any manufacture, use, sale, lease or other disposition of
the Developed Technology will be free from infringement of any patent or other
proprietary right of any third party.
9.3 REPRESENTATIONS AND WARRANTIES.
a. By Company. Company represents and warrants to SGI as follows:
(i) This Agreement has been duly executed and delivered by
Company and is the valid and binding obligation of Company
enforceable in accordance with its terms. No approval or consent
of any foreign, federal, state, county, local, or other
governmental or regulatory body, and no approval or consent of
any other Person is required in connection with the execution and
delivery by Company of this Agreement and the consummation and
performance by Company of the transactions contemplated hereby;
and
(ii) The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated hereby will
not result in a material breach or violation of or constitute (or
with notice or lapse of time or both would constitute) a default
under: [1] the Articles of Incorporation, any amendments to it,
or the bylaws of Company; [2] any instrument, contract, or other
agreement to which Company is a party or by or to which Company
or any of its assets or properties is bound or subject; or [3]
any order, judgment, injunction, award, or decree of any court,
arbitrator or governmental or regulatory body against or binding
upon or applicable to Company or upon the securities, properties,
and businesses of Company.
14
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ORDER GRANTING CONFIDENTIAL TREATMENT ISSUED BY THE SECURITIES AND EXCHANGE
COMMISSION.
b. By SGI. SGI represents and warrants to Company as follows:
(i) This Agreement has been duly executed and delivered by SGI
and is the valid and binding obligation of SGI enforceable in
accordance with its terms. No approval or consent of any foreign,
federal, state, county, local, or other governmental or
regulatory body, and no approval or consent of any other Person
is required in connection with the execution and delivery by SGI
of this Agreement and the consummation and performance by SGI of
the transactions contemplated hereby; and
(ii) The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated hereby will
not result in a material breach or violation of or constitute (or
with notice or lapse of time or both would constitute) a default
under: [1] the Articles of Incorporation, any amendments to it,
or the bylaws of SGI; [2] any instrument, contract, or other
agreement to which SGI is a party or by or to which SGI or any of
its assets or properties is bound or subject; or [3] any order,
judgment, injunction, award, or decree of any court, arbitrator
or governmental or regulatory body against or binding upon or
applicable to SGI or upon the securities, properties, and
businesses of SGI.
(iii) As of the Effective Date, no action, suit, or proceeding is
currently pending before any court or governmental or regulatory
body claiming that the Background Technology infringes or
misappropriates the intellectual property rights of any third
party.
9.4 DISCLAIMER. THE FOREGOING WARRANTIES ARE IN LIEU OF, AND EACH
PARTY DISCLAIMS, ANY OTHER WARRANTIES, EXPRESS, IMPLIED OR OTHERWISE, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NONINFRINGEMENT.
9.5 SGI INTELLECTUAL PROPERTY INDEMNIFICATION. SGI will defend,
indemnify, and hold harmless Company and its Affiliates, directors, officers,
employees and agents against any claim, suit or proceeding alleging that the
XXXXXX infringes or misappropriates any U.S. XXXXXX copyright, mask work, trade
secret, patent or other intellectual property, proprietary or contract rights of
any third party and against any damages or liability resulting from such claim,
suite or proceeding, including, without limitation, reasonable attorneys' fees
and other costs and expenses, provided that (i) Company gives SGI notice of the
claim, suit or proceeding promptly after commencement thereof (or, if later,
promptly after Company learns that such claim, suit or proceeding relates to
XXXXXX), (ii) SGI may not settle any claim, suit or proceeding without the
prior, written consent of Company which consent shall not be unreasonably
withheld, provided that if Company refuses to consent to settlement acceptable
to the plaintiff(s) and proposed by SGI to Company, SGI's total liability under
this Section 9.5 shall be limited to the amount of the proposed
15
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ORDER GRANTING CONFIDENTIAL TREATMENT ISSUED BY THE SECURITIES AND EXCHANGE
COMMISSION.
settlement and attorney's fees incurred as of the date of SGI's request for
Company's consent, and (iii) Company provides SGI with all reasonable assistance
requested by SGI in connection with the defense and/or resolution of any such
claim, suit or proceeding, at SGI's expense. Notwithstanding the defense
obligation of SGI under this Section 9.5, Company shall have the right, at its
own expense, to appoint its own counsel to participate in any claim, suit or
proceeding, and SGI shall cooperate with Company and such counsel. If there is a
final determination of infringement or misappropriation, SGI shall, at its
option, use reasonable efforts to, (i) replace or modify any component of XXXXXX
with a functionally equivalent noninfringing component that conforms to the
requirements of this Agreement, or (ii) obtain a license for Company to use such
XXXXXX. Notwithstanding the foregoing, SGI shall have no liability for a claim,
suit or proceeding to the extent based on (a) modification of XXXXXX by or for
Company (other than by SGI), or (b) Company's use of the XXXXXX with Accessories
not supplied by SGI, or (c) Company's use of a version of the XXXXXX that was
not at the time of use the most recent version provided by SGI to Company. For
purposes of this Section 9.5, XXXXXX SGI'S LIABILITY UNDER THIS SECTION 9.5
SHALL IN NO EVENT EXCEED XXXXXX.
9.6 COMPANY INTELLECTUAL PROPERTY INDEMNIFICATION. Company will
defend, indemnify, and hold harmless SGI and its Affiliates, directors,
officers, employees and agents against any claim, suit or proceeding alleging
that the XXXXXX infringes or misappropriates any U.S. XXXXXX copyright, mask
work, trade secret, patent or other intellectual property, proprietary or
contract rights of any third party and against any damages or liability
resulting from such claim, suite or proceeding, including, without limitation,
reasonable attorneys' fees and other costs and expenses, provided that (i) SGI
gives Company notice of the claim, suit or proceeding promptly after
commencement thereof (or, if later, promptly after SGI learns that such claim,
suit or proceeding relates to XXXXXX), (ii) SGI gives Company sole authority to
defend and/or resolve any such claim, suit or proceeding or the portion thereof
relating to the XXXXXX and (iii) SGI provides Company with all reasonable
assistance requested by Company in connection with the defense and/or resolution
of any such claim, suit or proceeding, at Company's expense. Notwithstanding the
defense obligation of Company under this Xxxxxxx 0.0, XXX shall have the right,
at its own expense, to appoint its own counsel to participate in any claim, suit
or proceeding, and Company shall cooperate with SGI and such counsel.
Notwithstanding the foregoing, Company shall have no liability for a claim, suit
or proceeding to the extent based on (a) modification of the XXXXXX or (b) SGI's
use of the XXXXXX with equipment or components not supplied by Company. For
purposes of this Section 9.6, XXXXXX COMPANY'S LIABILITY UNDER THIS SECTION 9.6
SHALL IN NO EVENT EXCEED XXXXXX.
10.0 LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES OF
ANY KIND, (INCLUDING WITHOUT LIMITATION LOSS OF PROFIT OR DATA) WHETHER OR NOT
ADVISED OF THE POSSIBILITY OF SUCH LOSS, HOWEVER CAUSED, WHETHER FOR BREACH OR
REPUDIATION OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, INABILITY
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ORDER GRANTING CONFIDENTIAL TREATMENT ISSUED BY THE SECURITIES AND EXCHANGE
COMMISSION.
TO USE THE BACKGROUND OR DEVELOPED TECHNOLOGY, OR OTHERWISE. IN NO EVENT SHALL
THE AGGREGATE LIABILITY OF EITHER PARTY TO THE OTHER EXCEED XXXXXX. THE
ESSENTIAL PURPOSE OF THIS PROVISION IS TO LIMIT THE POTENTIAL LIABILITY OF THE
PARTIES ARISING OUT OF THIS AGREEMENT AND/OR LICENSE.
11. TERM; TERMINATION.
11.1 TERM. This Agreement shall commence on the Effective Date, and
shall expire ten (10) years from the date of Company's first commercial shipment
of a Coin Operated Hardware or Consumer Hardware incorporating Developed
Technology, whichever is first, provided, however, that (i) the development
stage of this Agreement shall expire in accordance with the Development Plan,
(ii) this Agreement may be terminated earlier in accordance with Section 4.2,
and (iii) this Agreement may be terminated earlier in accordance with Section
11.2. Company shall have the right to renew this Agreement for an additional
five-year period; provided (i) that, during the initial term of this Agreement,
Company has paid royalties to SGI in the amount set forth on Attachment E; and
(ii) that Company and SGI agree on royalty rates applicable to such five
(5)-year term (Company and SGI agree to negotiate such royalties in good faith).
11.2 TERMINATION FOR BREACH. If either party materially breaches any
of its obligations under this Agreement, upon sixty (60) days written notice
specifying such breach in detail, the notifying party may terminate this
Agreement, and all rights or licenses granted by the notifying party to the
breaching party hereunder, unless the breach specified in such notice has been
cured during the sixty (60) day period, or unless the breaching party is making
diligent efforts to cure a breach that is not reasonably susceptible of cure
within sixty (60) days. Notwithstanding the foregoing, Company shall be
obligated to cure any breach of any monetary obligations to SGI within thirty
(30) days of its receipt of notice of the breach. In the event of a termination
for breach, all licenses in Background Technology granted to the notifying party
hereunder prior to the effective date of such termination shall continue in full
force and effect.
11.3 EFFECT OF TERMINATION. In any event of termination under Section
11.2, the nonbreaching party shall be entitled to retain any Developed
Technology which it has received or developed to the date of such termination,
and all sublicenses granted by either party prior to the date of such
termination shall remain in effect.
11.4 SURVIVAL. The rights and obligations of the parties under
Sections 6.1 XXXXXX, 8.0 (PROPRIETARY AND CONFIDENTIAL INFORMATION), 9.0
(WARRANTIES AND EXCLUSIONS), 10.0 (LIMITATION OF LIABILITY), 11.2, 11.3, 11.4,
12.0, and 13.1 shall survive and continue after any termination or expiration of
this Agreement or termination of any license or rights under this Agreement, for
any reason whatsoever.
12. EXPORT. Notwithstanding any rights, license or privileges specified in
this Agreement, each
17
party agrees that it will not export any technology provided by the other party
hereunder or jointly developed hereunder, or any part thereof, either directly
or indirectly, without first obtaining any required licenses to so export from
the United States Government, and further agrees that it will comply with all
laws, rules and regulations applicable to the export or reexport of such
technology.
13. GENERAL.
13.1 GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of California, excluding
its choice of law rules. Company hereby consents to the jurisdiction of the
federal courts located in the Northern District of California over any dispute
between SGI and Company arising out of or in connection with this Agreement, and
waives any other venue to which it may be entitled by virtue of domicile or
otherwise.
13.2 SEVERABILITY. In the event that any one or more of the
provisions of this Agreement shall for any reason be held to be unenforceable in
any respect under any federal or state law, such unenforceability shall not
affect any other provision, but this Agreement shall then be construed as if
such unenforceable provision or provisions had never been contained herein,
provided that in such event the parties agree to negotiate in good faith
substitute enforceable provisions which most nearly effect the parties original
intent in entering into this Agreement.
13.3 ASSIGNMENT. Except as specifically provided to the contrary in
this Agreement, this Agreement and the licenses granted hereunder are to a
specific entity or legal person, and all rights hereunder are not assignable nor
are the obligations imposed delegable by either party without the prior written
consent of the other party which shall not be unreasonably withheld.
13.4 MODIFICATION. This Agreement may be modified only by a writing
signed by each party.
13.5 NONWAIVER. The failure of either party to enforce at any time
any of the provisions hereof shall not be construed to be a waiver of the right
of such party thereafter to enforce any such provisions.
13.6 NO AGENCY. This is a development and license agreement; no
agency, partnership, joint venture or other relationship is created hereby, and
neither party has any authority of any kind to bind the other party in any
respect whatsoever.
13.7 FORCE MAJEURE. Except for Company's obligations under Section 7
above, notwithstanding anything else in this Agreement, no default, delay or
failure to perform on the part of either party shall be considered a breach of
this Agreement, if such default, delay, or failure to perform is shown to be due
entirely to causes beyond the reasonable control of the party charged with a
default, including, but not limited to, causes such as strikes, lockouts or
other labor disputes, riots, civil disturbances, actions or inactions of
governmental authorities or suppliers, epidemics, war,
18
embargoes, severe weather, fire, earthquakes, acts of God or the public enemy,
nuclear disasters, or default of a common carrier.
13.8 NOTICES. All notices, reports, statements and approvals
("Notices") which either party is required or permitted to give under this
Agreement shall be sufficiently given when the same shall be: (a) personally
served or delivered to the party entitled to such Notice; or (b) deposited,
postage prepaid, with a guaranteed international or domestic air courier
service, addressed to the person and address stated herein, or to such other
person or address as may be provided in a written notice by either party to the
other; or (c) when transmitted by facsimile with an original sent concurrently
by first class mail (or guaranteed international or domestic air courier
service), addressed to the person, facsimile number, and address stated above,
or to such other person, address or facsimile number as may be provided in a
written notice by either party to the other. Notice shall be deemed effective
upon the earlier of actual receipt or three (3) business days after mailing or
transmittal.
THIS SPACE INTENTIONALLY LEFT BLANK; AGREEMENT CONTINUES ON NEXT PAGE.
19
13.9 SECTION HEADINGS AND CAPTIONS. The parties agree that the Section
or paragraph headings and captions used in this Agreement are for reference
purposes only and shall not be used in the interpretation of this Agreement.
13.10 EXECUTION IN COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be an original instrument, but all of
which shall constitute one and the same agreement. A facsimile signature shall
have the same force and effect as an original signature.
13.11 ENTIRE AGREEMENT. This Agreement supersedes all proposals oral
or written, all negotiations, conversations or discussions between the parties
relating to this Agreement and all past course of dealing or industry custom,
including the Nondisclosure Agreement between Company and SGI. It is expressly
understood and agreed that, because the parties hereto, no usage of trade or
other regular practice or method of dealing, either within the computer
industry, the software industry or between the parties hereto shall be used to
modify, interpret, supplement or alter in any manner the express terms of this
Agreement or any part hereof.
SGI: COMPANY:
SILICON GRAPHICS, INC. NINTENDO CO., LTD.
By: /s/ Xxx Xxx By: /s/ Mr. Xxxxxxx Xxxxxxxx
Name: Xxx Xxx ----------------------------
Title: Senior Vice President Mr. Xxxxxxx Xxxxxxxx, President
-------------------------------
MIPS TECHNOLOGIES, INC. NINTENDO OF AMERICA INC.
By: /s/ Xxx Xxx By: /s/ Xx. Xxxxxx Xxxxxxx
Name: Xxx Xxx --------------------------
Title: President Xx. Xxxxxx Xxxxxxx, President
-----------------------------
20
ATTACHMENT A
BACKGROUND TECHNOLOGY
"Background Technology" means the MIPS Multimedia Engine, including the MIPS
microprocessor architecture and instruction set, graphics library, video library
and audio library, and SGI and MIPS API and ABI and any other Technology (a)
developed prior to the Effective Date of (b) under development at SGI as of the
Effective Date and supplied by SGI to Company in connection with the development
of the Company Products.
Attachment A-1
[XXXXXX]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED PURSUANT TO AN
ORDER GRANTING CONFIDENTIAL TREATMENT ISSUED BY THE SECURITIES AND EXCHANGE
COMMISSION.
ATTACHMENT B
DEVELOPED TECHNOLOGY
"Developed Technology" means XXXXXX
Attachment B-1
[XXXXXX]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED PURSUANT TO AN
ORDER GRANTING CONFIDENTIAL TREATMENT ISSUED BY THE SECURITIES AND EXCHANGE
COMMISSION.
ATTACHMENT C
DEVELOPMENT FUNDING AND ROYALTIES
DEVELOPMENT FUNDING: To be agreed pursuant to Section 4.2
ADVANCE AGAINST ROYALTIES:
XXXXXX of the development funding paid to SGI, up to US$XXXXXXXX
pursuant to Sections 4.2 and 7.1, shall be deemed an advance against
royalties. All development funding in excess of US$XXXXXXXX paid to
SGI pursuant to Sections 4.2 and 7.1 shall be deemed an advance
against royalties.
INITIAL PAYMENT: $XXXXXXXX (such initial payment shall be considered all
development fees, and not an advance against royalties).
ROYALTIES:
a) XXXXXXXX for each Coin Operated Hardware incorporating Developed Technology
sold by Company or Licensee;
b) XXXXXXXX for each of the first XXXXXXXX units of Consumer
Hardware incorporating Developed Technology sold by Company; and
c) XXXXXXXX for each Packaged Software sold by Company or a Licensee
for use on a Consumer Hardware incorporating Developed Technology.
XXXXXX
Attachment C-1
[XXXXXX]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED PURSUANT TO AN
ORDER GRANTING CONFIDENTIAL TREATMENT ISSUED BY THE SECURITIES AND EXCHANGE
COMMISSION.
ATTACHMENT D
COMPETITIVE COMPANIES
1. XXXXXX 2. XXXXXX 3. XXXXXX 4. XXXXXX
Attachment D-1
[XXXXXX]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED PURSUANT TO AN
ORDER GRANTING CONFIDENTIAL TREATMENT ISSUED BY THE SECURITIES AND EXCHANGE
COMMISSION.
ATTACHMENT E
MINIMUMS FOR EXCLUSIVITY
MINIMUM ROYALTIES PER YEAR
YEAR (IN MILLIONS)
-------------
2* XXXXXXXX
3 XXXXXXXX
4 XXXXXXXX
5 XXXXXXXX
6 XXXXXXXX
7 XXXXXXXX
8 XXXXXXXX
9 XXXXXXXX
10 XXXXXXXX
. Ends 24 months after the date of first sale of the Consumer Hardware
incorporating Developed Technology.
Attachment E-1
