Exhibit 10.71
THIS TRADEMARK LICENSE AGREEMENT (the "Agreement") is entered into on
September 4, 2003, between and among ATARI Interactive, Inc., a Delaware
corporation, having its principal place of business at 00 Xxxxxx Xxxx, Xxxxxxx,
XX 00000 ("ATARI Interactive"), Infogrames Entertainment S.A., a company
incorporated under the laws of France having its principal place of business at
1 Place Verrazzano, 69252 Xxxxx 00, Xxxxxx ("Parent"), and Atari, Inc., a
Delaware corporation, having its principal place of business at 000 0xx Xxxxxx,
Xxx Xxxx, X.X. 00000 ("Licensee").
WITNESSETH:
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WHEREAS, ATARI Interactive, which is a wholly-owned subsidiary of the
Parent, is the owner of the Trademarks listed or described on Schedule A hereto
(collectively the "Trademarks") used in connection with its business;
WHEREAS, ATARI Interactive has the power and authority to grant to
Licensee the right and license to use the Trademarks pursuant to this Agreement;
WHEREAS, pursuant to a Trademark License Agreement (the "Original
Trademark License"), effective as of May 1, 2003 between ATARI Interactive and
Licensee, Licensee obtained from ATARI Interactive a license to use the
Trademarks during the Term of the Original Trademark License for the business
of developing, producing, publishing and distributing entertainment and
edutainment software for p.c. and video game consoles and ancillary merchandise
related to video games exclusively.
WHEREAS, in consideration of the obligation of Licensee, as contained
in an Agreement Regarding Satisfaction of Debt and License Amendment (the
"Satisfaction Agreement") dated September __, 2003 between Licensee and Parent,
to issue 2,000,000 shares of common stock of Licensee to ATARI Interactive when
and as provided in the Satisfaction Agreement, Licensee and ATARI Interactive
are amending and restating the Original Trademark Agreement as set forth
herein;
NOW, THEREFORE, in consideration of the promises and mutual covenants,
agreements and obligations set forth herein and in the Satisfaction Agreement,
the sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Grant of License.
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1.1 (a) Subject to the terms and conditions herein, ATARI
Interactive hereby grants to Licensee, during the Term (as defined below) the
exclusive right and license to use the Trademarks in connection with the
Business in the Territory, including, without limitation, in Licensee's own
name, on all corporate materials and on all Product packaging, marketing,
advertising and promotional materials and for identification purposes for
individuals who are associated with the Products and/or the Business.
For the purposes of this Agreement, the term "Business" shall mean the
business of developing, producing, publishing and distributing entertainment
software and/or edutainment software including for and in connection with
online and multi-player applications, interactive television and mobile
telephony, and shall include ancillary merchandise and promotional goods
related to such software, to the Licensee's brand and to its corporate name
(together the "Product(s)") ; for the purposes of this Agreement, the term
"Product(s)" shall be construed limitatively and shall exclude the use of the
Trademarks for businesses in connection with interactive television, mobile
telephony, theme-parks, toys, etc...
(b) For the avoidance of doubt, the rights granted to
Licensee hereunder are exclusive, and neither Atari Interactive nor Parent
shall have the right, during the Term and with respect to in the Territory, to
grant any other license to any third party for the right to use the Trademarks
for the Products and/or Business.
1.2 The term "Territory" shall mean the United States of America,
Canada and Mexico and any other country which is encompassed by the definition
of "Territory" as set forth in the Distribution Agreement between Parent and
Licensee.
1.3 Licensee shall have the right to conduct its Business in the
Territory directly and/or through any sublicense (which sublicense shall
include the right to use the Trademarks in connection therewith, if applicable)
that it would ordinarily enter into during the Term in its usual course of
Business (e.g., OEM and distribution agreements, etc.), it being understood and
agreed that: (a) Licensee shall not grant to any third party any sublicense
that will endure for a period beyond December 31, 2013 and, more generally,
shall not grant any sublicense on terms and/or conditions that are inconsistent
with the terms and conditions of the present Agreement, in particular with
respect to the Products, the Business and the Territory; (b) this paragraph
shall not be deemed to permit Licensee from granting any trademark license with
respect to the Trademarks for use in connection with a third party's business,
nor shall Licensee have the right to grant a global trademark license to any
third party; and (c) during the Term, on a basis no less frequently than
quarterly, Licensee shall furnish ATARI Interactive and Parent with a written
summary of any and all such sublicenses it enters into.
1.4 In addition, it is expressly understood and agreed that the
rights of Licensee hereunder shall be deemed to include each of Licensee's
subsidiaries "controlled" by it, but only for so long as each remains a
subsidiary controlled by Licensee, as defined herein, it being understood and
agreed that Licensee shall remain liable for the obligations created hereunder
with respect to the rights exercised by any such subsidiaries. It is
understood and agreed that each of such subsidiaries shall not exercise any
right other than the rights contemplated by the present Agreement., in
particular with respect to the Products, the Business and the Territory.
"Control" shall mean the possession, whether direct or indirect, of the power
to direct or cause the direction of the management and policies of an entity,
whether through the ownership of voting securities, by contract, or otherwise.
1.5 For the avoidance of doubt, the parties agree that for the
purposes of this Agreement, Oddworld shall not be deemed a subsidiary of
Licensee.
1.6 Licensee agrees that notwithstanding the exclusivity in the
Territory, ATARI InteractiveLicensor shall have the right during the Term to
use the Trademarks in the Territory : (i) for purposes of its corporate
denomination and only to the extent that such denomination is sufficiently
distinctive from that of Licensee, and (ii) for the Business and the Products
but only to the extent it is published or distributed by Licensee in the
Territory, pursuant to the carried out through the distribution agreement
between Licensee and Parent as of the date hereof..
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2. Acknowledgment of Ownership.
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2.1 Subject to the limited representations in Section 8 below,
Licensee recognizes and acknowledges the validity of ATARI Interactive's rights
in the Trademarks and that ATARI Interactive is the owner thereof as so
represented by ATARI Interactive herein. Licensee agrees not to challenge the
validity of, or ATARI Interactive's title to, the Trademarks, and not to oppose
or petition to cancel any applications filed or registrations received in
respect of such rights. Licensee's use of the Trademarks shall inure to the
benefit of ATARI Interactive.
2.2 All rights and goodwill created by or arising from use of the
Trademarks by Licensee shall be and remain the sole and exclusive property of
ATARI Interactive, and Licensee does hereby waive and renounce any and all
claims to such Trademarks. Licensee further agrees not to perform any act or
omission materially adverse to the Trademarks.
2.3 Licensee shall not attempt to register or claim rights in the
Trademarks, alone or as part of its own trademark, in the Territory or in
jurisdictions foreign thereto, without the prior permission of ATARI
Interactive and of Parent. Licensee acknowledges that, notwithstanding the
provisions of Section 10.1 below, ATARI Interactive, as the owner of the
Trademarks, shall have the right to apply for, and to extend, registrations for
the Trademarks throughout the Territory. Licensee agrees to cooperate with
ATARI Interactive with respect to the preparation of any application for or
extensions of any such registrations, and shall execute any other documents
ATARI Interactive may reasonably require to maintain the registrations in
effect.
3. Term
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Subject to the terms of Sections 5 and 20 below, the term of
the license granted hereunder (the "Term") shall be deemed to commence on the
day on which the Original Trademark License became effective to and to continue
through and including December 31, 2013.
4. Upfront consideration and Royalties
4.1 The license granted by this Agreement will be royalty free
until, and including, December 31, 2008. However, as provided in the
Satisfaction Agreement, Licensee shall issue to ATARI Interactive two million
(2,000,000) shares of Licensee's common stock.
4.2 Licensee will pay ATARI Interactive a royalty equal to 1% of
Licensee's net revenues in each calendar quarter in each of the calendar years
ending December 31, 2009, 2010, 2011, 2012 and 2013. Notwithstanding the
foregoing, no royalties or other amounts shall be payable to ATARI Interactive
on amounts received by Licensee from ATARI Interactive or Parent or any
affiliates thereof in connection with sales of Licensee's Products or
otherwise.
4.3 For the purposes of this Agreement, Licensee's net revenues in
a quarter will be the net revenues shown on Licensee's consolidated statement
of income included in the Quarterly Report on Form 10-Q ("Form 10-Q") for that
quarter that Licensee files with the U.S. Securities and Exchange Commission
("SEC") or, if Licensee is not required to file reports with the SEC, the net
revenues shown on the consolidated statement of income for that quarter that
Licensee will be required to prepare for that purpose.
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4.4 Licensee will pay the royalty based upon net revenues in a
quarter to ATARI Interactive not later than 15 days after the day on which it
files its Form 10-Q for that quarter with the SEC, or if Licensee is not
required to file reports with the SEC, it will pay the royalty not later than
45 days after the close of each calendar quarter.
5. Termination of the Agreement.
5.1 If Licensee fails to make a royalty payment within 30 days
after it is due to be paid in accordance with Section 4.4, ATARI Interactive
will have the right to terminate this Agreement with thirty (30) days advance
written notice, except that such notice shall be of no force or effect and this
agreement shall not be terminated if the royalty is paid in full prior to the
end of the thirty-day period.
5.2 In the case of a breach of Section 7 below, ATARI Interactive
may terminate this agreement with thirty (30) days advance written notice. Such
notice shall be of no force or effect and the Agreement shall not thereby be
terminated if such breach shall have been cured prior to the expiration of such
30-day period.
5.3 If either party hereto shall file a voluntary petition under
any bankruptcy or insolvency law, or if any involuntary petition is filed
against either party hereto under any bankruptcy or insolvency law and such
petition is not dismissed within sixty (60) days of such filing, or if either
party hereto shall make any assignment for the benefit of its creditors or
shall make any arrangement pursuant to any bankruptcy or insolvency law, then
the other party hereto shall have the right to terminate the Term by the
delivery to such first party hereto of written notice of termination. This
notice shall state the basis for such claim of a right to terminate the Term
and shall be effective immediately upon its delivery.
5.4 In the case of a breach of Section 13.2 below, ATARI
Interactive shall have the right to terminate this Agreement immediately, upon
written notice to Licensee.
6. Effect of Termination or Expiration of this Agreement
6.1 Upon termination or expiration of this Agreement, Licensee
shall immediately cease use of the Trademarks provided, however, that Licensee
shall not be required to recall any Products in connection with the termination
of its or any of its affiliates rights to use the Trademarks hereunder.
6.2 Notwistanding anything to the contrary herein, non-exclusive
sub-license agreements granted by Licensee to third-parties in the Territory
with respect to the Trademarks will continue in full force and effect for
their terms following termination (but not natural expiration) of this
Agreement.
7. Quality Control
7.1 Licensee shall use the Trademarks in connection with the
Business, including but not limited to the Products and any marketing,
advertising, promotional and corporate materials, as may be set forth in
guidelines provided to Licensee by ATARI Interactive, as the same may be
modified or amended from time to time (the "Guidelines"), or as otherwise
specified in writing by ATARI Interactive, and in compliance with all
applicable laws, rules, regulations, policies, requirements and the like of
federal, state, local and other governmental, administrative or judicial
authorities. Licensee acknowledges that if the Products are of inferior
quality, the substantial goodwill which ATARI Interactive possesses in the
Trademarks may be impaired. Licensee must obtain ATARI Interactive and Parent's
prior written approval for any other use of the Trademarks.
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7.2 Licensee shall, at its sole cost and expense, upon reasonable
request by ATARI Interactive, supply to ATARI Interactive samples of the use of
the Trademarks, including samples of Products bearing the Trademarks and
promotional and written materials, for purposes of inspection to determine if
the Products and other materials meet the standards of quality acceptable to
ATARI Interactive. Such right of inspection to determine compliance with this
Agreement and the quality controls set forth herein shall only be undertaken
during business hours and without creating any unreasonable disturbance to
inspect the premises of Licensee.
7.3 Licensee shall not use the Trademarks in any advertising or
promotional material or in connection with the Products or conduct any
activities with respect to the Business in a manner which is reasonably likely
to adversely affect or detract from the Trademarks or ATARI Interactive or
Parent; provided, however, that Licensee shall not be in breach of this
Section 7.3 if ATARI Interactive and Parent have approved such use pursuant to
Section7.2.
7.4 Licensee understands that whenever it uses any of the
Trademarks which are registered, it may do so in connection with the
registration symbol R, provided that it shall not be requied to do so when, in
the reasonable opinion of Licensee's counsel, it is determined not to be
necessary.
8. Representations and Warranties.
8.1 Each party represents and warrants that, to the best of its
knowledge and belief, it is in possession of the full right, power and
authority to enter into this Agreement.
8.2 Notwithstanding section 8.1 above, Licensee acknowledges that
ATARI Interactive acquired the Trademarks from their prior owner with limited
warranties and acknowledges to be fully aware of the scope of rights granted
hereunder. ATARI Interactive makes no representations, implied or otherwise,
with regards to the sufficiency of the Trademarks for the Business by Licensee.
8.3 Licensee further acknowledges that it has acted as sole
attorney-in-fact for ATARI Interactive in the registration, renewal and general
surveillance of the Trademarks in the Terrory. Licensee represents and warrants
to ATARI Interactive that, except as disclosed in Schedule B hereto, to the
best of its knowledge and belief and after due inquiry, the Trademarks are not
subject to unauthorized uses or misuses by third parties and that it is not
aware of any infringement of the Trademarks. Licensee also acknowledges that
Licensor has granted a security interest in the Trademarks to General Electric
Capital Corporation as collateral for the repayment of a credit facility
granted by General Electric Capital Corporation to the Licensee in November
2002.
8.4 Licensee represents and warrants that, to the best of its
knowledge and belief, all activities conducted in connection with the Business
by Licensee and its employees, officers, directors, and sublicensees, if any,
shall be in material compliance with and shall not violate in any material
respect any laws, rules, regulations, policies, requirements and the like of
federal, state, local and other governmental, administrative or judicial
authorities.
9. Indemnification and Hold Harmless.
9.1 In consideration for the partially royalty-free grant of this
licence, ATARI Interactive shall have no obligation to indemnify or hold
Licensee harmless from and against, and shall not be responsible or liable for,
any claims, liabilities, damages, losses, costs, attorneys fees, etc., with
respect to any of the rights granted herein, action, inaction or activities by
Licensee, its sublicensees, and/or one or more third parties concerning, either
directly or indirectly, the subject matter of this Agreement.
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9.2 Licensee shall be solely responsible and liable for, with no
liability or responsibility on the part of ATARI Interactive or any third party
engaged by ATARI Interactive, and shall indemnify and hold ATARI Interactive
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, expenses, reasonable counsel fees and settlements, which ATARI
Interactive or its officers, directors, employees, agents, attorneys,
affiliates, etc. may sustain:
(a) Arising from any and all unauthorized action, inaction,
activities, products or services, including, but not limited
to, the Products provided by Licensee, its sublicensees or
third parties;
(b) Resulting from any breach or default in the performance
or observance of any of the covenants or obligations of
Licensee hereunder or of Licensee's sublicensees under the
applicable sublicense agreements;
(c) Arising from any of Licensee's or its sublicensees'
obligations or liabilities; or
(d) Arising from any product liabilities relating to the
Products.
9.3 The Parties further agree that, in the event Licensor is held
liable to Licensee for any reason whatsoever but has counter-claimed against
the prior owner or transferror of the Trademarks, Licensee will refrain from
seeking indemnification from Licensor until Licensor's counter-claimed is
definitely adjudicated or settled.
10. Enforcement and Protection.
10.1 Licensee shall endeavor, at ATARI Interactive's own
costs, to apply for, to register and to renew during the Term of this Agreement
the Trademarks (including the logo) in the Territory. In addition, Licensee
shall, at its own costs, investigate unauthorized uses or misuses by third
parties of the Trademarks, or variations thereof. ATARI Interactive shall not
be required to bring suit or take action with respect to such unauthorized use
or misuse by third parties. ATARI Interactive and Parent agree that, as
between Licecnsee, on the one hand, and ATARI Interactive and Parent, on the
other hand, Aany applications for registrations of, and extensions and renewals
of such registrations for, the Trademarks and any and all maintenance (and/or
attorneys') fees in connection with the formalization of the Trademarks outside
the Territory shall be at the expense of ATARI Interactive.. Notwithstanding
the generality of the foregoing, this paragraph is not intended to obligate
ATARI Interactive or Parent to register the Trademarks outside the Territory.
10.2 Licensee shall notify ATARI Interactive of any unauthorized use
or misuse of the Trademarks or variations thereof as comes to Licensee's
attention, with ATARI Interactive having the sole right and discretion to take
action in respect to the unauthorized use or misuse of the Trademarks;
provided, however, that to the extent ATARI Interactive declines to take action
with respect to any unauthorized use or misuse of the Trademarks and such
unauthorized use or misuse materially adversely affects Licensee's Business or
any Product published, developed or sold by, or under licence by, Licensee,
Licensee shall have the right to take action with respect to such unauthorized
use or misuse.
10.3 It is expressly understood that sublicensees of Licensee shall
have no right to take action in respect to the unauthorized use or misuse of
the Trademarks, but shall, however, notify Licensee of any such unauthorized
use or misuse of the Trademarks or variations thereof, as they come to their
attention.
11. Notices and Other Communications
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11.1 Any notice or other communication required, contemplated or
permitted by this Agreement by any party, shall be in writing and shall be
either personally delivered or sent by Federal Express or other reputable
overnight courier for next business day delivery with charges billed to or
prepaid by shipper, or sent by certified mail, return receipt requested,
postage prepaid, at the addresses set forth in the preamble of this Agreement,
to the attention of the General Counsel. A copy of all notices shall be sent
to Parent at 1 Place Verrazzano, 69252 Xxxx Xxxxx 00, Xxxxxx, Attn.: General
Counsel. The parties acknowledge and agree that any and all approvals required
or permitted to be given by ATARI Interative or Parent hereunder shall be given
only by Parent's Board of Directors.
11.2 Any notice personally served shall be deemed delivered on the
date of such service. Any notice sent by overnight courier as provided above
shall be deemed delivered on the first business day after the date such notice
was delivered to such overnight courier. Any notice sent by certified mail as
provided above shall be deemed delivered on the third business day next
following the postmark date the notice bears.
12. Injunctive Relief
Licensee acknowledges that ATARI Interactive may be irreparably harmed by any
breach of this Agreement and that any monetary relief may be inadequate to
compensate ATARI Interactive for any breach by Licensee. Therefore, in
addition to any monetary relief available to ATARI Interactive, ATARI
Interactive shall be entitled to seek injunctive relief against Licensee upon
making an adequate showing of a material breach of this Agreement by Licensee.
13. Assignment and Binding Effect
13.1 This Agreement shall be freely assignable by ATARI Interactive
without the prior written consent of Licensee, it being understood and agreed
that any assignment by ATARI Interactive shall be subject to the rights of
Licensee hereunder.
13.2 This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective assigns and successors in
interest, provided, however, that Licensee shall not assign or otherwise
transfer (except by permissible sublicense or other transfer expressly
permitted elsewhere herein) any of such rights, duties, obligations or
undertakings or any portion thereof, to any third party without the prior,
discretionary, written consent of ATARI Interactive and Parent which may be
denied without cause. Any attempted assignment or transfer in violation of
these provisions shall be invalid.
14. Severability
The invalidity, illegality or unenforceability of any provision hereof
shall not in any way affect, impair, invalidate or render unenforceable this
Agreement or any provision thereof.
15. Further Assurance
Licensee agrees that it will, after the date hereof, from time to time
and without further consideration thereof, execute and deliver such further
instruments and take such further actions as may be required to implement the
transactions contemplated hereby. ATARI Interactive agrees that it will, after
the date hereof, from time to time and without further consideration therefor,
execute and deliver such further instruments and take such further actions as
may be required to implement the transactions contemplated hereby.
16. Governing Law and Jurisdiction
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This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed wholly within such jurisdiction, without regard to the conflicts of
law principles thereof that would apply the laws of any other jurisdiction. All
disputes under this Agreement shall be resolved by the courts sitting in the
State of New York, including the state and federal courts, and the parties all
consent to the jurisdiction of such courts, agree to accept service of process
by mail, and hereby waive any jurisdictional or venue defenses otherwise
available to it.
17. Relationship of the Parties
Except for the surveillance and registration of the Trademarks,
this Agreement shall not create a relationship of agent, employee, or partner
of or joint venturer with the other party. The relationship between the
parties with respect to the subject matter covered hereby is one of licensor
and licensee.
18. Paragraph Headings
Paragraph and Section headings of this Agreement are for reference and
convenience only and shall have no bearing on the interpretation of this
Agreement.
19. Entire Agreement
This Agreement (including schedules attached hereto) constitutes the
entire agreement between the parties regarding the subject matter hereof. All
prior agreements or arrangements, written or oral, between the parties relating
to the subject matter hereof are hereby canceled and superseded.
20. Effectiveness
20.1 This Agreement will be effective only upon (i) satisfaction of
all conditions precedent to closing contained in the Underwriting Agreement
relating to the Public Offering described in the Satisfaction Agreement and
(ii) upon valid issuance and delivery to ATARI Interactive of 2,000,000 shares
as part of the Public Offering. If the conditions precedent are not satisfied,
or the shares are not delivered by 5:00 p.m. New York City time on December 31,
2003 (or such later date as is agreed to by Licensee and Parent), this
Agreement will be null and void.
20.2 When this Agreement becomes effective, it will supersede and
replace the Original Trademark Agreement, and Licensee's rights and obligations
with regard to the Trademarks will be as set forth in this Agreement.
20.3 Unless and until this Agreement becomes effective, the Original
Trademark Agreement will remain in effect and Licensee's rights and obligations
with regard to the Trademarks will be as set forth in the Original Trademark
Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed the day and year first written above.
ATARI INTERACTIVE, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: CEO
ATARI, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Sr. Executive V.P.
Acknowledged and Agreed to by:
Infogrames Entertainment, S.A.
/s/ Xxxxxxxx Xxxxxxxx
By:---------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Directeur General Delegue
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Schedule A
Trademarks
Atari
Fuji Logo
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Schedule B
Misuse or infringement of Trademarks
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