COMMERCIAL EXPLOITATION LICENSE AGREEMENT FOR QUAKE This Commercial Exploitation License Agreement for QUAKE (the "Agreement") is between Id Software, Inc., a Texas Corporation, (hereinafter "Id Software") and Licensee (as described on the signature page hereof) and is made effective beginning on the date of last signature hereto (the "Effective Date"). R E C I T A L S WHEREAS, Id Software is the owner and developer of the computer software game entitled QUAKE; WHEREAS, Id Software desires to license certain non-exclusive rights regarding QUAKE to Licensee; and WHEREAS, Licensee desires to receive a license for such rights. T E R M S A N D C O N D I T I O N S NOW, THEREFORE, for and in consideration of the mutual premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned parties do hereby agree as follows: 1. DEFINITIONS. As used in this Agreement, the parties hereto agree the words set forth below shall have the specified meanings: a. "Authorized Copy" shall mean one (1) copy of the Subject Game actually purchased by Licensee from an Id Software approved retailer; and b. "Subject Game" shall mean the full registered version of QUAKE on a CD-ROM and shall not mean the shareware or any other version. 2. GRANT OF RIGHTS. Id Software hereby grants to Licensee and Licensee hereby accepts, subject to the provisions and conditions hereof, a world-wide (except as otherwise provided herein), non-exclusive, non-transferable, and non-assignable license to: a. publicly display an Authorized Copy in exchange for rental payment; b. run the Authorized Copy so that it will accept network/modem connections in exchange for payments from end-users who also must have actually purchased an Authorized Copy; and c. otherwise commercially exploit an Authorized Copy, except that Licensee shall not copy, reproduce, manufacture or distribute the Authorized Copy. 3. RESERVATION OF RIGHTS AND PROHIBITIONS. Id Software expressly reserves all rights not granted herein. Under no circumstances shall Licensee copy, reproduce, manufacture or distribute (free of charge or otherwise) the Authorized Copy or the Subject Game. Licensee shall not reverse engineer, decompile, disassemble, modify or alter the Authorized Copy. Licensee is not receiving any rights hereunder regarding the Trademark or any artwork, sound, music or other element of the Subject Game. 4. OWNERSHIP. Title to and all ownership rights in and to the Subject Game, and the QUAKE Trademark (the "Trademark") and the copyrights, trademarks, patents and other intellectual property rights related thereto shall remain with Id Software which shall have the exclusive right to protect the same by copyright or otherwise. Licensee shall have no ownership rights in or to the Subject Game or the Trademark and Licensee shall not own any intellectual property rights regarding the Authorized Copy, including, without limitation, the copyright regarding the Authorized Copy. Licensee acknowledges that it only has a limited license to use the Authorized Copy, as specified in that certain QUAKE Enduser License contained within the Authorized Copy and as specified in this Agreement. 5. TERM AND TERMINATION. a. The term of this Agreement and the license granted herein begins on the Effective Date and shall expire on a date one (1) calendar year from the Effective Date. b. Either party may terminate this Agreement, for any reason or no reason, on thirty (30) days written notice to the other party. Termination will be effective on the thirtieth (30th) day following delivery of the described notice. Notwithstanding anything to the contrary herein, this Agreement shall immediately terminate, without the requirement of any notice from Id Software to Licensee, upon the occurrence of any of the following: (a) if Licensee shall file a petition in bankruptcy or make an assignment for the benefit of creditors, or if any bankruptcy proceeding or assignment for benefit of creditors, shall be commenced against Licensee and not be dismissed within sixty (60) days after the date of its commencement; (b) the insolvency of Licensee; (c) the cessation by Licensee of its business; or (d) the cessation by Licensee, without the prior written consent of Id Software of the distribution, manufacture, and sale responsibilities embodied herein. Further, Id Software may elect to terminate this Agreement upon the occurrence of any of the following: (1) if Licensee's business operations are interrupted for forty (40) consecutive calendar days; or (2) if each of two Id Software audit inspections during any eighteen (18) month period demonstrates an understatement by Licensee of Royalty payments due Id Software for the six (6) month period immediately preceding each such inspection of five percent (5%) or more. Upon the occurrence of such terminating event, and the election of Id Software, if necessary, to cause such termination, this Agreement and any and all rights thereunder shall terminate without prejudice to any rights or claims Id Software may have, and all rights hereunder shall thereupon terminate, revert to and be vested in Id Software. 6. EFFECT OF TERMINATION OR EXPIRATION. Termination or expiration of this Agreement, either by Id Software or automatically, shall not create any liability against Id Software. Upon expiration or earlier termination of this Agreement, Licensee shall have no further right to exercise the rights licensed hereunder or otherwise acquired in relation to this Agreement. 7. INDEMNIFICATION. Licensee hereby agrees to indemnify, hold harmless and defend Id Software and Id Software's predecessors, successors, assigns, officers, directors, shareholders, employees, agents, representatives, licensees, sublicensees, distributors, attorneys and accountants (collectively, the "Id Related Parties") from and against any and all damages, claims, losses, causes of action, liabilities, lawsuits, judgments and expenses (including, without limitation, reasonable attorneys' fees and expenses) arising from, relating to or in connection with a breach of this Agreement by Licensee and arising from, relating to or in connection with the Licensee's use or non-use of the Authorized Copy (collectively, the "Claims"). Id Software agrees to notify Licensee of any such Claims within a reasonable time after Id Software learns of same. Licensee, at its own expense, shall defend Id Software and the Id Related Parties from any and all Claims. Id Software and the Id Related Parties reserve the right to participate in any defense of the Claims with counsel of their choice, and at their own expense. In the event Licensee fails to provide a defense, then Licensee shall be responsible for paying the attorneys' fees and expenses incurred by Id Software and the Id Related Parties regarding the defense of the Claims. Id Software and the Id Related Parties, as applicable, agree to reasonably assist in the defense of the Claims. No settlement by Licensee of any Claims shall be valid unless Licensee receives the prior written consent of Id Software and the Id Related Parties, as applicable, to any such settlement. 8. CONFIDENTIALITY. It is understood and agreed that any proprietary information of Id Software that may from time to time be made available or become known to Licensee is to be treated as confidential, is to be used solely in connection with Licensee's performance under this Agreement, and is to be disclosed only to employees of Licensee who have a need for access. Such proprietary information shall include, but not be limited to, trade secrets, release information, financial information, personnel information, and the like. Reasonable measures shall be taken by Licensee to protect the confidentiality of Id Software's proprietary information and any memoranda or papers containing proprietary information of Id Software's that Licensee may receive are to be returned to Id Software upon request. Licensee's obligations and duties under this paragraph shall survive expiration or earlier termination of this Agreement. Licensee shall obtain from its employees an undertaking in a form which may be supplied by Id Software, and which is subject to Id Software's prior written approval, not to use or disclose to any third party any information or knowledge concerning the business of Id Software which may be communicated to such employees. 9. LIMITATION OF LIABILITY. ID SOFTWARE EXPRESSLY DISCLAIMS ALL WARRANTIES NOT PROVIDED BY ID SOFTWARE HEREUNDER. UNDER NO CIRCUMSTANCES SHALL ID SOFTWARE BE LIABLE TO LICENSEE FOR ACTUAL, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR ANY OTHER DAMAGES, WHETHER OR NOT ID SOFTWARE RECEIVES NOTICE OF ANY SUCH DAMAGES. 10. COMPLIANCE WITH APPLICABLE LAWS. In performing under this Agreement, Licensee agrees to comply with all applicable laws, [including, without limitation, 22 U.S.C., 2778 and 22 U.S.C. C.F.R. Parts 120-130 (1995)] regulations, ordinances and statutes, including, but not limited to, the import/export laws and regulations of the United States and its...
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