CONFIDENTIAL LICENSE AGREEMENT FOR NINTENDO GAMECUBE (Western Hemisphere)
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™” 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.
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®”, “NINTENDO GAMECUBE™,” “GCN” and “Official Nintendo Seal of Quality®”, 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
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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 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
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written authorization from Nintendo, LICENSEE shall not use the Intellectual Property Rights for any other purpose.
(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,
(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
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
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(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.
******
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.
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
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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.
4.5 Cost of Disc Xxxxxxx Production. ******
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.
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
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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.
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 ******.
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 ******.
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
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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
6.4 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
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
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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.
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.
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.
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
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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. ******. ******.
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
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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.
LICENSEE’s legal obligations, and if required by NOA, shall cooperate in the preparation and entry of appropriate protective orders.
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
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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
(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.
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THE UNIFORM COMMERCIAL CODE OR ANY OTHER COMPARABLE LAW OR STATUTE IS EXPRESSLY DISCLAIMED. LICENSEE HEREBY ASSUMES THE RISK OF INFRINGEMENT.
9.4 ******
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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.
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
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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.
11. PROTECTION OF PROPRIETARY RIGHTS
12. ASSIGNMENT
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
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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.
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
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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 materials incorporate, disclose or reference Nintendo’s Confidential Information or Intellectual Property Rights.
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
[*] Confidential portion omitted and filed separately with the Securities and Exchange Commission.
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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.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the dates set forth below.
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NOA: |
LICENSEE: |
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NINTENDO OF AMERICA INC. |
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By: |
/s/ Xxxx Xxxxx |
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By: |
/s/ Xxxxxx Xxxxx |
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Title: |
Executive VP, Administration |
Title: |
Vice President and Chief Legal Counsel |
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Date: |
April 5, 2002 |
Date: |
April 4, 2002 |
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