EXHIBIT 10.7
ALL SECTIONS MARKED WITH ASTERISKS REFLECT PORTIONS WHICH HAVE BEEN REDACTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION BY THQ INC. AS PART
OF A REQUEST FOR CONFIDENTIAL TREATMENT.
CONFIDENTIAL LICENSE AGREEMENT
FOR NINTENDO GAMECUBE
(Western Hemisphere)
THIS LICENSE AGREEMENT ("Agreement") is entered into between NINTENDO
OF AMERICA INC. ("NOA") at 0000 000xx Xxxxxx X.X., Xxxxxxx, XX 00000 Attn:
General Counsel (Fax: 000-000-0000) and THQ Inc. ("LICENSEE") at 00000 Xxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxx Xxxxx, XX 00000 Attn: Xxxxx X. Xxxxxxx (Fax:
(000)-000-0000). NOA and LICENSEE agree as follows:
1. RECITALS
1.1 NOA markets and sells advanced design, high-quality video game
systems, including the "NINTENDO GAMECUBE(TM)" system.
1.2 LICENSEE desires use of the highly proprietary programming
specifications, unique and valuable security technology, trademarks, copyrights
and other valuable intellectual property rights of NOA and its parent company,
Nintendo Co., Ltd., which rights are only available for use under the terms of a
license agreement, to develop, have developed, have manufactured, advertise,
market and sell video game software for play on the NINTENDO GAMECUBE system.
1.3 NOA is willing to grant a license to LICENSEE on the terms and
conditions set forth in this Agreement.
2. DEFINITIONS
2.1 "Artwork" means the text and design specifications for the Game
Disc label and the Printed Materials in the format specified by NOA in the
Guidelines.
2.2 "Bulk Goods" means Game Discs that have been printed with the Game
Disc label Artwork for delivery to LICENSEE without Printed Materials or other
packaging.
2.3 "Check Disc(s)" means the pre-production Game Discs to be
produced by Nintendo.
2.4 "Confidential Information" means the information described in
Section 8.1.
2.5 "Development Tools" means the development kits, programming tools,
emulators and other materials that may be used in the development of Games under
this Agreement.
2.6 "Effective Date" means the last date on which all parties shall
have signed this Agreement.
2.7 "Finished Goods" means Game Discs that have been fully assembled
with the Printed Materials, cellophane wrapped and boxed for delivery to
LICENSEE by NOA
2.8 "Game Discs(s)" means custom optical discs for play on the NINTENDO
GAMECUBE system on which a Game has been stored.
2.9 "Game(s)" means interactive video game programs (including source
and object/binary code) developed for play on the NINTENDO GAMECUBE system.
2.10 "Guidelines" means the then current version of the "NINTENDO
GAMECUBE Development Manual," "NINTENDO GAMECUBE Packaging Guidelines,"
"Nintendo Trademark Guidelines" and the "Nintendo Game Content Guidelines",
together with related guidelines provided by NOA to LICENSEE from time to time.
PAGE 1
2.11 "Independent Contractor" means any individual or entity that is
not an employee of LICENSEE, including any independent programmer, consultant,
contractor, board member or advisor.
2.12 "Intellectual Property Rights" means individually, collectively or
in any combination, Proprietary Rights owned, licensed or otherwise held by
Nintendo that are associated with the development, manufacturing, advertising,
marketing or sale of the Licensed Products, including, without limitation, (a)
registered and unregistered trademarks and trademark applications used in
connection with the NINTENDO GAMECUBE system including "Nintendo(R)", "NINTENDO
GAMECUBE(TM)," "GCN" and "Official Nintendo Seal of Quality(R)", and (b) select
trade dress associated with the NINTENDO GAMECUBE system and licensed video
games for play thereon, (c) Proprietary Rights in the Security Technology
employed in the Games or Game Discs by Nintendo, (d) rights in the Development
Tools for use in developing the Games, excluding, however, rights to use,
incorporate or duplicate select libraries, protocols and/or sound or graphic
files associated with the Development Tools which belong to any third party,
without obtaining any necessary licenses or consents, (e) patents, design
registrations or copyrights which may be associated with the Game Discs or
Printed Materials, (f) copyrights in the Guidelines, and (g) other Proprietary
Rights of Nintendo in the Confidential Information.
2.13 "Licensed Products" means (a) Finished Goods, or (b) Bulk Goods
after being assembled with the Printed Materials in accordance with the
Guidelines by LICENSEE.
2.14 "Marketing Materials" means marketing, advertising or promotional
materials developed by or for LICENSEE (or subject to LICENSEE's approval) that
promote the sale of the Licensed Products, including but not limited to,
television, radio and on-line advertising, point-of-sale materials (e.g.,
posters, counter-cards), package advertising, print media and all audio or video
media other than the Game that is to be included on the Game Disc.
2.15 "NDA" means the non-disclosure agreement related to the NINTENDO
GAMECUBE system previously entered into between NOA and LICENSEE.
2.16 "Nintendo" means NOA's parent company, Nintendo Co., Ltd., of
Kyoto, Japan, individually or collectively with NOA.
2.17 "Notice" means any notice permitted or required under this
Agreement. All notices shall be sufficiently given when (a) personally served or
delivered, or (b) transmitted by facsimile, with an original sent concurrently
by first class U.S. mail, or (c) deposited, postage prepaid, with a guaranteed
air courier service, in each case addressed as stated herein, or addressed to
such other person or address either party may designate in a Notice. Notice
shall be deemed effective upon the earlier of actual receipt or two (2) business
days after transmittal.
2.18 "Price Schedule" means the then current version of NOA's schedule
of purchase prices and minimum order quantities for the Licensed Products.
2.19 "Printed Materials" means a plastic disc storage case, title page,
instruction booklet, warranty card and poster incorporating the Artwork,
together with a precautions booklet in the form specified by NOA.
2.20 "Promotional Disc(s)" means custom optical discs compatible with
the NINTENDO GAMECUBE system that incorporate select game promotional or
supplemental materials, as may be specified or permitted in the Guidelines.
2.21 "Proprietary Rights" means any rights or applications for rights
owned, licensed or otherwise held in patents, trademarks, service marks,
copyrights, mask works, trade secrets, trade dress, moral rights and publicity
rights, together with all inventions, discoveries, ideas, technology, know-how,
data, information, processes, formulas, drawings and designs, licenses, computer
programs, software source code and object code, and all amendments,
modifications, and improvements thereto for which
PAGE 2
such patent, trademark, service xxxx, copyright mask work, trade secrets, trade
dress, moral rights or publicity rights may exist or may be sought and obtained
in the future.
2.22 "Rebate Program" means any then current version of NOA's optional
rebate program, establishing select terms for price rebates under this
Agreement.
2.23 "Reverse Engineer(ing)" means, without limitation, (a) the x-ray,
electronic scanning or physical or chemical stripping of semiconductor
components, (b) the disassembly, decompilation, decryption or simulation of
object code or executable code, or (c) any other technique designed to extract
source code or facilitate the duplication of a program or product.
2.24 "Security Technology" means the highly proprietary security
features incorporated by Nintendo into the Licensed Products to minimize the
risk of unlawful copying and other unauthorized or unsafe usage, including,
without limitation, any security signature, bios, data scrambling, password,
hardware security apparatus, watermark, hologram, copyright management
information system, proprietary manufacturing process or any feature which
obstructs piracy, limits unlawful, unsafe or unauthorized use or facilitates or
limits compatibility with other hardware or software outside of the Territory or
on a different video game system.
2.25 "Term" means three (3) years from the Effective Date.
2.26 "Territory" shall mean all countries within the Western Hemisphere
and their respective territories and possessions.
3. GRANT OF LICENSE; LICENSEE RESTRICTIONS
3.1 Limited License Grant. For the Term and for the Territory, NOA
grants to LICENSEE a nonexclusive, nontransferable, limited license to use the
Intellectual Property Rights to develop (or have developed on their behalf)
Games for manufacture, advertising, marketing and sale as Licensed Products,
subject to the terms and conditions of this Agreement. Except as permitted under
a separate written authorization from Nintendo, LICENSEE shall not use the
Intellectual Property Rights for any other purpose.
3.2 LICENSEE Acknowledgement. LICENSEE acknowledges (a) the value of
the Intellectual Property Rights, (b) the right, title and interest of Nintendo
in and to the Intellectual Property Rights, and (c) the right, title, and
interest of Nintendo in and to the Proprietary Rights associated with all
aspects of the NINTENDO GAMECUBE system. LICENSEE recognizes that the Games,
Game Discs and Licensed Products will embody valuable rights of Nintendo and
Nintendo's licensors. LICENSEE represents and warrants that it will not
undertake any act or thing which in any way impairs or is intended to impair any
part of the right, title, interest or goodwill of Nintendo in the Intellectual
Property Rights. LICENSEE's use of the Intellectual Property Rights shall not
create any right, title or interest of LICENSEE therein. ******
3.3 LICENSEE Restrictions and Prohibitions. LICENSEE represents and
warrants that it will not at any time, directly or indirectly, do or cause to be
done any of the following:
(a) grant access to, distribute, transmit or broadcast a Game by
electronic means or by any other means known or hereafter devised, including,
without limitation, by wireless, cable, fiber optic, telephone lines, microwave,
radiowave, computer or other device network; provided, however, that limited
transmissions may be made for the sole purpose of facilitating development under
the terms of this Agreement, but no right of retransmission shall attach to any
such authorized transmission and reasonable security measures, customary within
the high technology industry, shall be utilized to reduce the risk of
unauthorized interception or retransmission of any such authorized transmission,
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 3
(b) authorize or permit any online activities involving a Game,
including, without limitation, multiplayer, peer-to-peer or online play,
(c) modify, install or operate a Game on any server or computing
device for the purpose of or resulting in the rental, lease, loan or other grant
of remote access to the Game,
(d) emulate, interoperate, interface or link a Game for
operation or use with any hardware or software platform, accessory, computer
language, computer environment, chip instruction set, consumer electronics
device or device other than the NINTENDO GAMECUBE system or the Development
Tools,
(e) embed, incorporate, or store a Game in any media or format
except the optical disc format utilized by the NINTENDO GAMECUBE system, except
as may be necessary as a part of the Game development process under this
Agreement,
(f) design, implement or undertake any process, procedure,
program or act designed to disable, obstruct, circumvent or otherwise diminish
the effectiveness or operation of the Security Technology,
(g) utilize the Intellectual Property Rights to design or
develop any interactive video game program, except as authorized under this
Agreement,
(h) manufacture or reproduce a Game developed under this
Agreement, except through Nintendo, or
(i) Reverse Engineer or assist in Reverse Engineering all or any
part of the NINTENDO GAMECUBE system, including the hardware, software (embedded
or not) or the Security Technology.
******
3.4 Nintendo Development Tools. NOA and Nintendo Co., Ltd. may lease,
loan or sell Development Tools to LICENSEE to assist in the development of Games
under this Agreement. LICENSEE acknowledges the exclusive interest of Nintendo
in and to the Proprietary Rights associated with the Development Tools.
LICENSEE's use of the Development Tools shall not create any right, title or
interest of LICENSEE therein. LICENSEE shall not, directly or indirectly, (a)
use the Development Tools for any purpose except the design and development of
Games under this Agreement, (b) reproduce or create derivatives of the
Development Tools, except in association with the development of Games under
this Agreement, (c) Reverse Engineer the Development Tools, or (d) without NOA's
prior written approval, sell, lease, assign, lend, license, encumber or
otherwise transfer the Development Tools. Any tools developed or derived by
LICENSEE as a result of a study of the performance, design or operation of the
Development Tools shall be considered a derivative work of the Intellectual
Property Rights, but may be retained and utilized by LICENSEE in connection with
this Agreement. In no event shall LICENSEE (i) seek, claim or file for any
patent, copyright or other Proprietary Right with regard to any such derivative
work, (ii) make available any such derivative work to any third party, or (iii)
use any such derivative work except in connection with the design and
development of Games under this Agreement.
3.5 Third Party Development Tools. NOA and Nintendo Co., Ltd. may
authorize third parties to develop and market Development Tools to authorized
developers of Games. Notwithstanding any referral or information provided or
posted regarding such Development Tools, NOA and Nintendo Co.,
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 4
Ltd. make no representations or warranties with regard to any such third party
Development Tools. Licensee acquires and utilizes such Development Tools at its
own risk. LICENSEE shall not, directly or indirectly, use such Development Tools
for any purpose except the design and development of Games under this Agreement.
All Nintendo Proprietary Rights contained in or derived from such Development
Tools shall remain owned by Nintendo.
3.6 Games Developed for Linked Play on Two Systems. In the event the
Guidelines permit LICENSEE to develop a Game for simultaneous or linked play on
the NINTENDO GAMECUBE system and on another Nintendo video game system, LICENSEE
shall be required to acquire and maintain with NOA such additional licenses as
are necessary for the use of the Proprietary Rights associated with such other
Nintendo video game system.
4. SUBMISSION AND APPROVAL OF GAME AND ARTWORK
4.1 Submission of a Completed Game to NOA. Upon completion of a Game,
LICENSEE shall deliver a prototype of the Game to NOA in a format specified in
the Guidelines. Delivery shall be made in accordance with the methods approved
in the Guidelines. Each Submission shall include such other information or
documentation deemed necessary by NOA, including, without limitation, a complete
set of written user instructions, a complete description of any security holes,
backdoors, time bombs, cheats, "easter eggs" or other hidden features or
characters in the Game ****** and a complete screen text script. LICENSEE must
establish that the Game and any other content included on the Game Disc complies
with the Advertising Code of Conduct of the Entertainment Software Ratings Board
("ESRB") and has been rated EC, E, M or T by the ESRB.
4.2 Testing of a Completed Game. Upon submission of a completed Game,
NOA and Nintendo Co, Ltd. shall promptly test the Game with regard to its
technical compatibility with and error-free operation on the NINTENDO GAMECUBE
system utilizing the lot check process. Within a reasonable period of time after
receipt, NOA shall approve or disapprove such Game in writing. If a Game is
disapproved, NOA shall specify in writing the reasons for such disapproval and
state what corrections are necessary to receive approval from NOA. After making
the necessary corrections, LICENSEE shall submit a revised Game to NOA for
testing. NOA shall not unreasonably withhold or delay its approval of any Game.
Neither the testing nor approval of a Game by NOA or Nintendo Co., Ltd. shall
relieve LICENSEE of its sole responsibility for the development, quality and
operation of the Game or in any way create any warranty for Licensed Product by
NOA or Nintendo Co., Ltd.
4.3 Production of Check Discs. By submission of a completed Game to
NOA in accordance with section 4.1, LICENSEE authorizes Nintendo to proceed with
production of Check Discs for such Game. If NOA approves a Game, it shall
promptly, and without further notification to or instruction from LICENSEE,
submit such Game for the production of Check Discs. Unless otherwise advised by
LICENSEE, following production of the Check Discs, NOA shall deliver to LICENSEE
approximately ten (10) Check Discs for content verification, testing and final
approval by LICENSEE.
4.4 Approval or Disapproval of Check Discs by LICENSEE. If, after
review and testing, LICENSEE approves the Check Discs, it shall promptly
transmit to NOA a signed authorization for production in the form specified in
the Guidelines. If LICENSEE does not approve the sample Check Discs for any
reason, LICENSEE shall advise NOA in writing and may, after undertaking any
necessary changes or corrections, resubmit the Game to NOA for approval in
accordance with the procedures set forth in this Section 4. The absence of a
signed authorization form from LICENSEE within five (5) days after delivery of
the Check Discs to LICENSEE shall be deemed disapproval of such Check Discs.
Production of any order for Licensed Product shall not proceed without
LICENSEE's signed authorization.
4.5 Cost of Disc Xxxxxxx Production. ******
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 5
The payment will be due upon the earlier of (a) the subsequent submission by
LICENSEE of a revised version of the Game to NOA, or (b) six (6) months after
the date the Game was first approved by NOA.
4.6 Submission and Approval of Artwork. Prior to submitting a completed
Game to NOA under Section 4.1, LICENSEE shall submit to NOA all Artwork for the
proposed Licensed Product. Within ten (10) business days of receipt, NOA shall
approve or disapprove the Artwork in writing. If any Artwork is disapproved, NOA
shall specify in writing the reasons for such disapproval and state what
corrections or improvements are necessary to receive approval from NOA. After
making the necessary corrections or improvements, LICENSEE shall submit revised
Artwork to NOA for approval. NOA shall not unreasonably withhold or delay its
approval of any Artwork. The approval of the Artwork by NOA shall not relieve
LICENSEE of its sole responsibility for the development and quality of the
Artwork or in any way create any warranty for the Artwork or the Licensed
Product by NOA. All Artwork must be approved prior to submitting an order for
the Licensed Product.
4.7 Artwork for Bulk Goods. If LICENSEE intends to submit an order for
Bulk Goods, all Artwork shall be submitted to NOA in accordance with Section 4.6
herein. No Printed Materials shall be produced by LICENSEE until such Artwork
has been approved by NOA.
4.8 Promotional Discs. In the event NOA issues Guidelines in the future
that permit LICENSEE to develop and distribute Promotional Discs, either
separately or as a part of the Licensed Product, the content and specifications
of such Promotional Disc shall be subject to all of the terms and conditions of
this Agreement, including, without limitation, the Guidelines, the Price
Schedule and the submission and approval procedures provided for in this Section
4.
5. ORDER PROCESS, PURCHASE PRICE, PAYMENT AND DELIVERY
5.1 Submission of Orders by LICENSEE. After receipt of NOA's approval
for a Game and Artwork, LICENSEE may at any time submit a written purchase order
to NOA for such Game. The purchase order shall specify whether the order is for
Finished Goods or Bulk Goods. The terms and conditions of this Agreement shall
control over any contrary terms of such purchase order or any other written
documentation or verbal instruction from LICENSEE. All orders shall be subject
to acceptance by NOA in Redmond, WA.
5.2 Purchase Price and Minimum Order Quantities. The purchase price and
minimum order quantities for the Licensed Products (both Finished Goods and Bulk
Goods) shall be set forth in NOA's then current Price Schedule. Unless otherwise
specifically provided for, the purchase price includes the cost of manufacturing
a single Game Disc, together with a royalty for the use of the Intellectual
Property Rights. No taxes, duties, import fees or other tariffs related to the
development, manufacture, import, marketing or sale of the Licensed Products
(except for taxes imposed on NOA's income) are included in the Purchase Price
and all such taxes are the responsibility of LICENSEE. The Price Schedule is
subject to change by NOA at any time without Notice. ******
5.3 Payment. Upon placement of an order with NOA, LICENSEE shall pay
the full purchase price either (a) by tender of an irrevocable letter of credit
in favor of NOA (or its designee) and payable at sight, issued by a bank
acceptable to NOA and confirmed, if requested by NOA, at LICENSEE's expense, or
(b) in cash, by wire transfer to an account designated by NOA. All letters of
credit shall comply with NOA's written instructions and all associated banking
charges shall be for LICENSEE's account.
5.4 Delivery of Finished Goods. Finished Goods shall be delivered to
LICENSEE FCA North Bend, Washington USA, or such other delivery point within the
continental United States as may be specified by NOA. Orders may be delivered in
partial shipments, at NOA's option. Title to Finished Goods shall vest in
LICENSEE ****.
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 6
5.5 Delivery of Bulk Goods. Bulk Goods shall be delivered to LICENSEE
FCA Torrance, California USA, or such other delivery point within the
continental United States as may be specified by NOA. Orders may be delivered in
partial shipments, at NOA's option. Title to Bulk Goods shall vest in LICENSEE
******.
5.6 Rebate Program. NOA, at its sole option, may elect to offer
LICENSEE a Rebate Program. The terms and conditions of any rebate program shall
be subject to NOA's sole discretion. LICENSEE shall not be entitled to offset
any claimed rebate amount against other amounts owing NOA. No interest shall be
payable by NOA to LICENSEE on any claimed rebate. The Rebate Program is subject
to change or cancellation by NOA at any time without Notice.
6. MANUFACTURE OF THE LICENSED PRODUCT
6.1 Manufacturing. Nintendo Co. Ltd. shall be the exclusive source
for the manufacture of the Game Discs, Check Discs and Promotional Discs, with
responsibility for all aspects of the manufacturing process, including the
selection of the locations and specifications for any manufacturing facilities,
determination of materials and processes, appointment of suppliers and
subcontractors and management of all work-in-progress. Upon acceptance by NOA
of a purchase order from LICENSEE and receipt of payment as provided for at
Section 5.3 herein, NOA shall place the order with Nintendo Co., Ltd. who shall
(through its suppliers and subcontractors) arrange for the manufacture of the
Licensed Product.
6.2 Security Features. The final release version of the Game, the Game
Disc and the Printed Materials shall include such Security Technology as
Nintendo, in its sole discretion, deems necessary or appropriate to (a) reduce
the risk of unlawful copying or other unlawful, unsafe or unauthorized uses, (b)
protect the Proprietary Rights of Nintendo and of the LICENSEE, (c) promote
consumer confidence, and (d) increase the quality, reliability or operation of
the NINTENDO GAMECUBE system.
6.3 Bulk Goods Orders. LICENSEE may elect to order Bulk Goods under the
terms of this Agreement, in which event LICENSEE shall arrange and pay for the
production of the Printed Materials and the final assembly of the Licensed
Product in accordance with the Guidelines.
6.4 Printed Materials for Bulk Goods. Upon delivery to LICENSEE of Bulk
Goods, LICENSEE shall assemble the Printed Materials and Game Discs into the
Licensed Products in accordance with the Guidelines. No other materials, items,
products or packaging may be included in the assembled Bulk Goods without NOA's
prior written consent. ****** Bulk Goods may be sold or distributed by LICENSEE
only when fully assembled in accordance with the Guidelines.
6.5 Prior Approval of LICENSEE's Independent Contractors. Prior to the
placement of a purchase order for Bulk Goods, LICENSEE shall obtain NOA's
approval of any Independent Contractors selected to perform the production and
assembly operations. LICENSEE shall provide NOA with the names, addresses and
all business documentation reasonably requested by NOA for such Independent
Contractors. NOA may, prior to approval and at reasonable intervals thereafter,
(a) require submission of additional business or financial information regarding
the Independent Contractors, (b) inspect applicable facilities of the
Independent Contractors ****** and (c) be present to supervise any work on the
Licensed Products to be done by the Independent Contractors. If at any time NOA
deems the Independent Contractor to be unable to meet quality, security or
performance standards reasonably established by NOA, NOA may refuse to grant its
approval or withdraw its approval upon Notice to LICENSEE. LICENSEE may not
proceed with the production of the Printed Materials or assembly of the Licensed
Product until NOA's concerns have been resolved to its satisfaction or until
LICENSEE has selected and received NOA's approval of another Independent
Contractor. NOA may establish preferred or required supply sources for select
components of the Printed Materials, which sources shall be deemed preapproved
in accordance with this Section 6.5. LICENSEE shall comply with all sourcing
requirements established by NOA.
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 7
6.6 NOA Inserts for Bulk Goods. NOA, at its option, may provide
LICENSEE with NOA promotional materials (as provided for at Section 7.7(a)
herein) ****** which LICENSEE agrees to include in the assembly of the Bulk
Goods.
6.7 Sample Printed Materials for Bulk Goods. Within a reasonable period
of time after LICENSEE's assembly of an initial order for a Bulk Goods title,
LICENSEE shall provide NOA with (a) six (6) samples of the fully assembled
Licensed Product, and (b) seventy (70) samples of the LICENSEE produced Printed
Materials (excluding the plastic disc storage case, warranty card, poster and
precautions booklet) for such Bulk Goods.
6.8 Retention of Sample Licensed Products by NOA. NOA or Nintendo may,
at their own expense, manufacture reasonable quantities of the Game Discs, the
Printed Materials or the Licensed Products to be used for archival purposes,
legal proceedings against infringers of the Intellectual Property Rights and for
other lawful purposes. ******
7. MARKETING AND ADVERTISING
7.1 Approval of Marketing Materials. LICENSEE represents and warrants
that the Printed Materials and the Marketing Materials shall be of high quality
and comply with (a) the Guidelines, (b) the Advertising Code of Conduct and the
Principles and Guidelines for Responsible Advertising of the ESRB, and (c)
****** all applicable laws and regulations in those jurisdictions in the
Territory where they will be used or distributed. All LICENSEE controlled
websites featuring the Games shall adopt a privacy policy that ****** comply
with the Children's Online Privacy Protection Act. Prior to actual use or
distribution, LICENSEE shall submit to NOA for review samples of all proposed
Marketing Materials. NOA shall, within ten (10) business days of receipt,
approve or disapprove of the quality of such samples. If any of the samples are
disapproved, NOA shall specify in writing the reasons for such disapproval and
state what corrections and/or improvements are necessary to receive approval
from NOA. After making the necessary corrections and/or improvements, LICENSEE
shall submit revised samples for approval by NOA. No Marketing Materials shall
be used or distributed by LICENSEE without NOA's prior written approval. NOA
shall not unreasonably withhold or delay its approval of any proposed Marketing
Materials.
7.2 No Bundling. LICENSEE shall not market or distribute any Finished
Goods or Bulk Goods that have been bundled with (a) any peripheral designed for
use with the NINTENDO GAMECUBE system that has not been licensed or approved in
writing by NOA, or (b) any other product or service where NOA's association or
endorsement might be suggested by bundling the products or services ******.
7.3 Warranty and Repair. LICENSEE shall provide the original consumer
with a minimum ninety (90) day limited warranty on all Licensed Products.
LICENSEE shall also provide reasonable product service, including
out-of-warranty service, for all Licensed Products. LICENSEE shall make such
warranty and repair information available to consumers as required by applicable
federal and state law.******
7.4 Business Facilities. LICENSEE agrees to develop and maintain (a)
suitable office facilities within the United States, adequately staffed to
enable LICENSEE to fulfill all responsibilities under this Agreement, (b)
necessary warehouse, distribution, marketing, sales, collection and credit
operations to facilitate proper handling of the Licensed Product, and (c)
customer service and game counseling, including telephone service, to adequately
support the Licensed Products.
7.5 No Sales Outside the Territory. LICENSEE represents and warrants
that it shall not ****** market, sell, offer to sell, import or distribute the
Licensed Products outside the Territory, or within the Territory when with
actual or constructive knowledge that a subsequent destination of the Licensed
Product is outside the Territory.
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 8
7.6 Defects and Recall. In the event of a material programming defect
in a Licensed Product that would, in NOA's reasonable judgment, significantly
impair the ability of a consumer to play the Game, NOA may, after consultation
with LICENSEE, require the LICENSEE to recall the Licensed Product and undertake
suitable repairs or replacements.
7.7 NOA Promotional Materials, Publications and Events. At its option,
NOA may (a) insert in the Printed Materials for the Licensed Products
promotional materials concerning Nintendo Power magazine or other NOA products,
services or programs ****** (b) utilize screen shots, Artwork and information
regarding the Licensed Products in Nintendo Power, Nintendo Power Source or
other advertising, promotional or marketing media, which promotes NOA products,
services or programs, and (c) exercise public performance rights in the Games
and use related trademarks and Artwork in connection with NOA sponsored
contests, tours, conventions, trade shows, press briefings and similar events
which promote the NINTENDO GAMECUBE system.******
7.8 Nintendo Gateway System. To promote and increase demand for games
on Nintendo video game systems, NOA licenses select games in various non-coin
activated commercial settings such as commercial airlines, cruise ships, rail
systems and hotels, where customers play games on specially adapted Nintendo
video game hardware referred to as the "Nintendo Gateway System". If NOA
identifies a Game for possible license on the Nintendo Gateway System, the
parties agree to conduct good faith negotiations to determine commercially
reasonable terms for such participation.
8. CONFIDENTIAL INFORMATION
8.1 Definition. Confidential Information means information provided to
LICENSEE by Nintendo or any third party working with Nintendo relating to the
hardware and software for the NINTENDO GAMECUBE system or the Development Tools,
including, but not limited to, (a) all current or future information, know-how,
techniques, methods, information, tools, emulator hardware or software, software
development specifications, proprietary manufacturing processes and/or trade
secrets, (b) any information on patents or patent applications, (c) any
business, legal, marketing or sales data or information, and (d) any other
information or data relating to development, design, operation, manufacturing,
marketing or sales. Confidential Information shall include all confidential
information disclosed, whether in writing, orally, visually, or in the form of
drawings, technical specifications, software, samples, pictures, models,
recordings, or other tangible items which contain or manifest, in any form, the
above listed information. Confidential Information shall not include (i) data
and information which was in the public domain prior to LICENSEE's receipt of
the same hereunder, or which subsequently becomes part of the public domain by
publication or otherwise, except by LICENSEE's wrongful act or omission, (ii)
data and information which LICENSEE can demonstrate, through written records
kept in the ordinary course of business, was in its possession without
restriction on use or disclosure, prior to its receipt of the same hereunder and
was not acquired directly or indirectly from Nintendo under an obligation of
confidentiality which is still in force, and (iii) data and information which
LICENSEE can show was received by it from a third party who did not acquire the
same directly or indirectly from Nintendo and to whom LICENSEE has no obligation
of confidentiality.
8.2 Disclosures Required by Law. LICENSEE shall be permitted to
disclose Confidential Information if such disclosure is required by an
authorized governmental or judicial entity, provided that LICENSEE shall notify
NOA at least ten (10) business days prior to such disclosure. LICENSEE shall use
its best commercial efforts to limit the disclosure to the greatest extent
possible consistent with
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 9
LICENSEE's legal obligations, and if required by NOA, shall cooperate in the
preparation and entry of appropriate protective orders.
8.3 Disclosure and Use. NOA may provide LICENSEE with highly
confidential development information, Guidelines, Development Tools, systems,
specifications and related resources and information constituting and
incorporating the Confidential Information to assist LICENSEE in the development
of Games. LICENSEE agrees to maintain all Confidential Information as strictly
confidential and to use such Confidential Information only in accordance with
this Agreement. LICENSEE shall limit access to the Confidential Information to
LICENSEE's employees having a strict need to know and shall advise such
employees of their obligation of confidentiality as provided herein. LICENSEE
shall require each such employee to retain in confidence the Confidential
Information pursuant to a written non-disclosure agreement between LICENSEE and
such employee. LICENSEE shall use its best commercial efforts to ensure that its
employees working with or otherwise having access to Confidential Information
shall not disclose or make any unauthorized use of the Confidential Information.
8.4 Independent Contractor Use. LICENSEE shall not disclose the
Confidential Information, the Guidelines or the Intellectual Property Rights to
any Independent Contractor, nor permit any Independent Contractor to perform or
assist in development work for a Game, nor utilize any Development Tools without
NOA's prior written consent. Each approved Independent Contractor shall be
required to enter into a written non-disclosure agreement with NOA prior to
receiving any access to or disclosure of such materials from either LICENSEE or
NOA.
8.5 Agreement Confidentiality. LICENSEE agrees that the terms,
conditions and contents of this Agreement shall be treated as Confidential
Information. Any public announcement or press release regarding this Agreement
shall be subject to NOA's prior written approval.****** The parties may disclose
this Agreement (a) to accountants, banks, financing sources, lawyers, parent
companies and related parties under substantially equivalent confidentiality
obligations, (b) in connection with any formal legal proceeding for the
enforcement of this Agreement, (c) as required by the regulations of the
Securities and Exchange Commission ("SEC"), provided that all Confidential
Information regarding NOA shall be redacted from such disclosures to the maximum
extent allowed by the SEC, and (d) in response to lawful process, subject to a
written protective order approved in advance by NOA.
8.6 Notification Obligations. LICENSEE shall promptly notify NOA of the
unauthorized use or disclosure of any Confidential Information ****** and shall
promptly act to recover any such information and prevent further breach of the
obligations herein. The obligations of LICENSEE set forth herein are in addition
to and not in lieu of any other legal remedy that may be available to NOA under
this Agreement or applicable law.
8.7 Continuing Effect of the NDA. The terms of this Section 8
supplement the terms of the NDA, which shall remain in effect. In the event of a
conflict between the terms of the NDA and this Agreement, the provisions of this
Agreement shall control.
9. REPRESENTATIONS AND WARRANTIES
9.1 LICENSEE's Representations and Warranties. LICENSEE represents and
warrants that:
(a) it is a duly organized and validly existing corporation and
has full authority to enter into this Agreement and to carry out the provisions
hereof,
(b) the execution, delivery and performance of this Agreement by
LICENSEE does not conflict with any agreement or understanding to which LICENSEE
may be bound, and
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 10
(c) excluding the Intellectual Property Rights, LICENSEE is
either (i) the sole owner of all right, title and interest in and to the
trademarks, copyrights and all other Proprietary Rights incorporated into the
Game or the Artwork or used in the development, advertising, marketing and sale
of the Licensed Products or the Marketing Materials, or (ii) the holder of such
rights, including trademarks, copyrights and all other Proprietary Rights which
belong to any third party but have been licensed from such third party by
LICENSEE, as are necessary for incorporation into the Game or the Artwork or as
are used in the development, advertising, marketing and sale of the Licensed
Products or the Marketing Materials under this Agreement.
9.2 NOA's Representations and Warranties. NOA represents and warrants
that:
(a) it is a duly organized and validly existing corporation and
has full authority to enter into this Agreement and to carry out the provisions
hereof, and
(b) the execution, delivery and performance of this Agreement by
NOA does not conflict with any agreement or understanding to which NOA may be
bound.
9.3 INTELLECTUAL PROPERTY RIGHTS DISCLAIMER. NOA (ON ITS OWN BEHALF AND
ON BEHALF OF NINTENDO CO., LTD. AND ITS AFFILIATES, LICENSORS, SUPPLIERS AND
SUBCONTRACTORS) EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES
CONCERNING THE SCOPE OR VALIDITY OF THE INTELLECTUAL PROPERTY RIGHTS. NOA (ON
ITS OWN BEHALF AND ON BEHALF OF NINTENDO CO., LTD. AND ITS AFFILIATES,
LICENSORS, SUPPLIERS AND SUBCONTRACTORS) EXPRESSLY DISCLAIMS ANY WARRANTY THAT
THE DESIGN, DEVELOPMENT, ADVERTISING, MARKETING OR SALE OF THE LICENSED PRODUCTS
OR THE USE OF THE INTELLECTUAL PROPERTY RIGHTS BY LICENSEE WILL NOT INFRINGE
UPON ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER PROPRIETARY RIGHTS OF A THIRD
PARTY. ANY WARRANTY THAT MAY BE PROVIDED IN ANY APPLICABLE PROVISION OF THE
UNIFORM COMMERCIAL CODE OR ANY OTHER COMPARABLE LAW OR STATUTE IS EXPRESSLY
DISCLAIMED. LICENSEE HEREBY ASSUMES THE RISK OF INFRINGEMENT.
9.4 ******
9.5 LIMITATION OF LIABILITY. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
NEITHER NOA NOR NINTENDO CO., LTD. (NOR THEIR AFFILIATES, LICENSORS, SUPPLIERS
OR SUBCONTRACTORS) SHALL BE LIABLE FOR LOSS OF PROFITS, OR FOR ANY SPECIAL,
PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF LICENSEE OR ITS CUSTOMERS
ARISING OUT OF OR RELATED TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE
BREACH OF THIS AGREEMENT BY NOA, THE MANUFACTURE OF THE LICENSED PRODUCTS OR THE
USE OF THE LICENSED PRODUCTS ON ANY NINTENDO VIDEO GAME SYSTEM BY LICENSEE OR BY
ANY END USER.
******
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 11
10. INDEMNIFICATION
10.1 LICENSEE's Indemnification. LICENSEE shall indemnify and hold
harmless NOA and Nintendo Co., Ltd. (and any of their respective affiliates,
subsidiaries, licensors, suppliers, officers, directors, employees or agents)
from any claims, losses, liabilities, damages, expenses and costs, including,
without limitation, reasonable attorneys' fees and ****** costs and any ******
expenses incurred in the settlement or avoidance of any such claim, which result
from or are in connection with:
(a) a ****** breach of any of the provisions, representations or
warranties undertaken by LICENSEE in this Agreement,
(b) any infringement of a third party's Proprietary Rights as a
result of the design, development, advertising, marketing, sale or use of any
aspect of the Licensed Products, Promotional Materials or the Marketing
Materials, ******
(c) any claims alleging a defect, failure to warn, bodily injury
(including death) or other personal or property damage arising out of, or in
connection with, the design, development, advertising, marketing, sale or use of
any of any aspect of the Licensed Products, and
(d) any federal, state or foreign civil or criminal actions
relating to the design, development, advertising, marketing, sale or use of any
aspect of the Licensed Products, Promotional Materials or the Marketing
Materials.
NOA shall give prompt Notice to LICENSEE of any claim which is or which may be
subject to indemnification under this Section 10.1. With respect to any such
third party claim, LICENSEE, as indemnitor, shall have the right to select
counsel and to control the defense and/or settlement thereof. NOA may, at its
own expense, participate in such action or proceeding with counsel of its own
choice. LICENSEE shall not enter into any settlement of any matter in which (i)
NOA or Nintendo Co., Ltd. has been named as a party, or (ii) claims relating to
the Intellectual Property Rights have been asserted, without NOA's prior written
consent. NOA shall provide reasonable assistance to LICENSEE in its defense of
any such claim.
10.2 LICENSEE's Insurance. LICENSEE shall, at its own expense, obtain a
comprehensive policy of general liability insurance (including coverage for
advertising injury and product liability claims) from a recognized insurance
company. Such policy of insurance shall be in an amount of not less than *****
on a per occurrence basis and shall provide for adequate protection against any
suits, claims, loss or damage by the Licensed Products. Such policy shall name
NOA and Nintendo Co., Ltd. as additional insureds and shall specify it may not
be canceled without thirty (30) days' prior written Notice to NOA. If LICENSEE
fails to maintain such insurance at any time during the Term and for a period of
two (2) years thereafter ****** NOA may secure such insurance at LICENSEE's
expense.
10.3 Suspension of Production. In the event NOA ****** deems itself at
risk with respect to any claim, action or proceeding under this Section 10, NOA
may, at its sole option, suspend production, delivery or order acceptance for
any Licensed Products, in whole or in part, pending resolution of such claim,
action or proceeding.
11. PROTECTION OF PROPRIETARY RIGHTS
11.1 Joint Actions against Infringers. LICENSEE and NOA may agree to
jointly pursue cases of infringement involving of the Licensed Products, as such
Licensed Products will contain Proprietary Rights owned by each of them. Unless
the parties otherwise agree, or unless the recovery is expressly allocated
between them by the court, in the event of such an action, any recovery shall be
used first to
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 12
reimburse LICENSEE and NOA for their respective reasonable attorneys' fees and
costs, pro rata, and any remaining recovery shall be distributed to LICENSEE and
NOA, pro rata, based upon the fees and costs incurred in bringing such action.
11.2 Actions by LICENSEE. LICENSEE, without the consent of NOA, may
bring any action or proceeding relating to an infringement or potential
infringement of LICENSEE's Proprietary Rights in the Licensed Products. LICENSEE
shall make reasonable good faith efforts to inform NOA of such actions in a
timely manner. LICENSEE will have the right to retain all proceeds it may derive
from any recovery in connection with such actions.
11.3 Actions by NOA. NOA, without the consent of LICENSEE, may bring
any action or proceeding relating to an infringement or potential infringement
of NOA's Intellectual Property Rights in the Licensed Products. NOA shall make
reasonable, good faith efforts to inform LICENSEE in writing of such actions
likely to affect LICENSEE's rights in a timely manner. NOA will have the right
to retain all proceeds it may derive from any recovery in connection with such
actions.
12. ASSIGNMENT
12.1 No Assignment by LICENSEE. This Agreement is personal to LICENSEE
and may not be sold, assigned, delegated, sublicensed or otherwise transferred
or encumbered, in whole or in part, without NOA's prior written consent, which
consent may be withheld by NOA in its sole discretionIn the event of an
assignment or other transfer in violation of this Agreement, NOA shall have the
unqualified right to immediately terminate this Agreement without further
obligation to LICENSEE.
12.2 Assignment by Operation of Law. In the event of an assignment by
operation of law which purports to affect this Agreement, LICENSEE shall, not
later than thirty (30) days thereafter, give Notice and seek consent thereto
from NOA. Such Notice shall disclose the name of the assignee, the effective
date and the nature and extent of the assignment. An assignment by operation of
law includes, but is not limited to (a) a merger of LICENSEE into another
business entity, (b) the sale, assignment or transfer of all or substantially
all of the assets of LICENSEE to a third party, (c) the sale, assignment or
transfer to a third party of any of the LICENSEE's intellectual property rights
which are used in the development of or are otherwise incorporated into any
Licensed Products, or (d) the sale, assignment or transfer of any of LICENSEE's
stock resulting in the acquirer having management power over or voting control
of LICENSEE. Following the later of (i) an assignment by operation of law, or
(ii) receipt of Notice of an assignment by operation of law, NOA shall have the
unqualified right for a period of ninety (90) days to immediately terminate this
Agreement without further obligation to LICENSEE.
12.3 Non-Disclosure Obligation. In no event shall LICENSEE disclose or
allow access to Nintendo's Confidential Information prior to or upon the
occurrence of an assignment, whether by operation of law or otherwise, unless
and until NOA gives its written consent to such disclosure.
13. TERM AND TERMINATION
13.1 Term. This Agreement shall commence on the Effective Date and
continue for the Term, unless earlier terminated as provided for herein.
13.2 Default or Breach. In the event that either party is in default or
commits a breach of this Agreement, which is not cured within thirty (30) days
after Notice thereof, then this Agreement shall automatically terminate on the
date specified in such Notice.
13.3 Bankruptcy. At NOA's option, this Agreement may be terminated
immediately and without Notice in the event that LICENSEE (a) makes an
assignment for the benefit of creditors, (b) becomes insolvent, (c) files a
voluntary petition for bankruptcy, (d) acquiesces to any involuntary bankruptcy
petition, (e) is adjudicated as a bankrupt, or (f) ceases to do business.
PAGE 13
13.4 Termination Other Than by Breach. Upon the expiration of this
Agreement or its termination other than by LICENSEE's breach, LICENSEE shall
have a period of ****** to sell any unsold Licensed Products in inventory or in
process. All Licensed Products in LICENSEE's control following the expiration of
such sell-off period shall be destroyed by LICENSEE within ten (10) days and
Notice of such destruction (with proof certified by an officer of LICENSEE)
shall be delivered to NOA.
13.5 Termination by LICENSEE's Breach. If this Agreement is terminated
by NOA as a result of a breach of its terms and conditions by LICENSEE, LICENSEE
shall immediately cease all distribution, advertising, marketing or sale of any
Licensed Products. All Licensed Products in LICENSEE's control as of the date of
such termination shall be destroyed by LICENSEE within ten (10) days and Notice
of such destruction (with proof certified by an officer of LICENSEE) shall be
delivered to NOA.
13.6 Breach of NDA. At NOA's option, any breach by LICENSEE of the NDA,
which breach is not cured within the time period for cure allowed under the
applicable agreement, shall be considered a material breach of this Agreement
entitling NOA to terminate this Agreement in accordance with Section 13.5
herein.
13.7 No Further Use of the Intellectual Property Rights. Upon
expiration and/or termination of this Agreement, LICENSEE shall cease all use of
the Intellectual Property Rights for any purpose, except as may be required in
connection with the sale of the Licensed Products authorized under Section 13.4
herein. LICENSEE shall, within thirty (30) days thereafter, (a) return to NOA
all Development Tools, and (b) return to NOA or destroy all Guidelines,
writings, drawings, models, data, tools and other materials and things in
LICENSEE's possession or in the possession of any past or present employee,
agent or contractor receiving the information through LICENSEE, which constitute
or relate to or disclose any Confidential Information, without making copies or
otherwise retaining any such information. Proof of such return or destruction
shall be certified by an officer of LICENSEE and promptly provided to NOA.
13.8 Termination by NOA's Breach. If this Agreement is terminated by
LICENSEE as a result of a breach of its terms or conditions by NOA, LICENSEE
may, ****** continue to sell the Licensed Products in the Territory until the
expiration of the Term, at which time the provisions of Section 13.4 shall
apply.
14. GENERAL PROVISIONS
14.1 Export Control. LICENSEE agrees to comply with the export laws and
regulations of the United States and any other country with jurisdiction over
the Licensed Products or the Development Tools.
14.2 Force Majeure. Neither party shall be liable for any breach of
this Agreement occasioned by any cause beyond the reasonable control of such
party, including governmental action, war, riot or civil commotion, fire,
natural disaster, labor disputes, restraints affecting shipping or credit, delay
of carriers, inadequate supply of suitable materials, or any other cause which
could not with reasonable diligence be controlled or prevented by the parties.
In the event of material shortages, including shortages of materials or
production facilities necessary for production of the Licensed Products, NOA
reserves the right to allocate such resources among itself and its licensees,
including LICENSEE hereunder.
14.3 Records and Audit. During the Term and for a period of ******,
LICENSEE agrees to keep reasonably accurate, complete and detailed records in
accordance with LICENSEE's standard business practices, relating to the use of
the Confidential Materials, the Development Tools and the Intellectual Property
Rights. Upon at least ****** prior written Notice to LICENSEE, NOA may, at its
expense, audit LICENSEE's records, reports and other information related solely
to LICENSEE's compliance with this Agreement; provided, however, that NOA shall
not, during the course of the audit, access LICENSEE's source code, development
plans, marketing plans, internal business plans or other items deemed
confidential by LICENSEE, except to the extent such
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 14
materials incorporate, disclose or reference Nintendo's Confidential Information
or Intellectual Property Rights.
14.4 Waiver, Severability, Integration, and Amendment. The failure of a
party to enforce any provision of this Agreement shall not be construed to be a
waiver of such provision or of the right of such party to thereafter enforce
such provision. In the event that any term, clause or provision of this
Agreement shall be construed to be or adjudged invalid, void or unenforceable,
such term, clause or provision shall be construed as severed from this
Agreement, and the remaining terms, clauses and provisions shall remain in
effect. Together with the NDA, this Agreement constitutes the entire agreement
between the parties relating to the subject matter hereof. All prior
negotiations, representations, agreements and understandings are merged into,
extinguished by and completely expressed by this Agreement and the NDA. Any
amendment to this Agreement shall be in writing, signed by both parties.
14.5 Survival. In addition to those rights specified elsewhere in this
Agreement, the rights and obligations set forth in Sections 3, 8, 9, 10, 11, 12
and 13 shall survive any expiration or termination of this Agreement to the
degree necessary to permit their complete fulfilment or discharge.
14.6 Governing Law and Venue. This Agreement shall be governed by the
laws of the State of Washington, without regard to its conflict of laws
principles. Any legal actions (including judicial and administrative
proceedings) with respect to any matter arising under or growing out of this
Agreement, shall be brought in a court of competent jurisdiction in King County,
Washington. Each party hereby consents to the jurisdiction and venue of such
courts for such purposes.
14.7 Equitable Relief. LICENSEE acknowledges that in the event of its
breach of this Agreement, no adequate remedy at law may be available to NOA and
that NOA shall be entitled to seek injunctive or other equitable relief in
addition to any relief available at law.
14.8 Attorneys' Fees. In the event it is necessary for either party to
this Agreement to undertake legal action to enforce or defend any action arising
out of or relating to this Agreement, the prevailing party in such action shall
be entitled to recover from the other party all reasonable attorneys' fees,
costs and expenses relating to such legal action or any appeal therefrom.
14.9 Counterparts and Signature by Facsimile. This Agreement may be
signed in counterparts, which shall together constitute a complete Agreement. A
signature transmitted by facsimile shall be considered an original for purposes
of this Agreement.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the dates
set forth below.
NOA: LICENSEE:
NINTENDO OF AMERICA INC. THQ INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxx Xxxxx
Title: Executive VP, Administration Title: Vice President and Chief Legal Counsel
Date: April 5, 2002 Date: April 4, 2002
PAGE 15
