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.
EXHIBIT 10.6
CONFIDENTIAL LICENSE AGREEMENT
FOR GAME BOY ADVANCE
(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: (818)
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 GAME BOY(R) ADVANCE system.
1.2 LICENSEE desires a license to use highly proprietary programming
specifications, development tools, trademarks and other valuable intellectual
property rights of NOA and its parent company, Nintendo Co., Ltd. (collectively
"Nintendo"), to develop, have developed (subject to Section 4.2 below), have
manufactured, advertise, market and sell video game software for play on the
GAME BOY ADVANCE 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 design specifications for the Game Cartridge
label and Printed Materials in the format specified by NOA in the Guidelines.
2.2 "Development Tools" means the development kits, programming tools,
emulators, and other materials that may be used in the development of Games
under this Agreement.
2.3 "Effective Date" means the last date on which all parties shall
have signed this Agreement.
2.4 "Finished Product(s)" means the fully assembled and shrink-wrapped
Licensed Products, each including a Game Cartridge, Game Cartridge label and
Printed Materials.
2.5 "Game Cartridges(s)" means custom cartridges specifically
manufactured under the terms of this Agreement for play on the GAME BOY ADVANCE
system, incorporating semiconductor components in which a Game has been stored.
2.6 "Game(s)" means interactive video game programs (including source
and object/binary code) developed for play on the GAME BOY ADVANCE system.
2.7 "Guidelines" means the current version or any future revision of
the "Game Boy Packaging Guidelines", "Nintendo Trademark Guidelines", "Game Boy
Advance Development Manual" and related guidelines.
2.8 "Independent Contractor" means any individual or entity that is not
an employee of LICENSEE, including any independent programmer, consultant,
contractor, board member or advisor.
2.9 "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 video games for play on the GAME BOY ADVANCE system including
"Nintendo(R)", "GAME BOY(R)
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 1
ADVANCE," "AGB" and the "Official Nintendo Seal of Quality(R)", (b) select trade
dress associated with the GAME BOY ADVANCE system and licensed video games for
play thereon, (c) Proprietary Rights in the Security Technology incorporated
into the Game Cartridges, (d) rights in the Development Tools for use in
developing the Games, (e) patents or design registrations associated with the
Game Cartridges, (f) copyrights in the Guidelines, and (g) other Proprietary
Rights of Nintendo in Confidential Information.
2.10 "Licensed Products" means (a) Finished Products, or (b) Stripped
Products when fully assembled and shrink-wrapped with the Printed Materials.
2.11 "Marketing Materials" means marketing, advertising or promotional
materials developed by or for LICENSEE (or subject to LICENSEE's approval) to
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 and print media or materials.
2.12 "NDA" means the non-disclosure agreement providing for the
protection of Confidential Information related to the GAME BOY ADVANCE system
previously entered into between NOA and LICENSEE.
2.13 "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.
2.14 "Price Schedule" means the current version or any future revision
of NOA's schedule of purchase prices and minimum order quantities for the
Licensed Products.
2.15 "Printed Materials" means the box, user instruction booklet,
poster, warranty card and LICENSEE inserts incorporating the Artwork, together
with a precautions booklet as specified by NOA.
2.16 "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.
2.17 "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.
2.18 "Security Technology" means, without limitation, any security
signature, bios, data scrambling, password, hardware security apparatus,
watermark, hologram, copyright management information system or any feature
which facilitates or limits compatibility with other hardware or software
outside of the Territory or on a different video game system.
2.19 "Stripped Product(s)" means the Game Cartridges with Game
Cartridge labels affixed.
2.20 "Term" means three (3) years from the Effective Date.
2.21 "Territory" means all countries within the Western Hemisphere and
their respective territories and possessions.
PAGE 2
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, and have developed (subject to Section
4.2 below), 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 GAME BOY ADVANCE system. LICENSEE recognizes that the Games, Game
Cartridges and Licensed Products will embody valuable rights of Nintendo and
Nintendo's licensors. LICENSEE represents and warrants that it will not
knowingly 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,
(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 GAME BOY ADVANCE system or the Development
Tools,
(e) embed, incorporate, or store a Game in any media or format
except the cartridge format utilized by the GAME BOY ADVANCE 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 circumvent 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.
PAGE 3
(i) Reverse Engineer or assist in the Reverse Engineering of all
or any part of the GAME BOY ADVANCE system, including the hardware or software
(whether embedded or otherwise), or the Security Technology.
******
3.4 Development Tools. Nintendo may lease, loan or sell Development
Tools to LICENSEE to assist in the development of Games under this Agreement.
Ownership and use of any Development Tools provided to LICENSEE by Nintendo
shall be subject to the terms of 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 derivative works 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.
4. SUBMISSION OF GAME AND ARTWORK FOR APPROVAL
4.1 Development and Sale of the Games. LICENSEE may develop, or have
developed (subject to Section 4.2 below), Games and have manufactured,
advertise, market and sell Licensed Products for play on the GAME BOY ADVANCE
system only in accordance with this Agreement.
4.2 Third Party Developers. LICENSEE shall not disclose the
Confidential Information (as defined in Section 8 below), 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,
unless and until such Independent Contractor has been approved by NOA and has
executed a written confidentiality agreement with NOA relating to the GAME BOY
ADVANCE system. Upon request by LICENSEE, NOA shall, within a reasonable period
of time, inform LICENSEE whether any such third party is approved by NOA.
4.3 Delivery of Completed Game. Upon completion of a Game, LICENSEE
shall deliver a prototype of the Game to NOA in a format specified in the
Guidelines, together with 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 (of which LICENSEE is aware) and a complete
screen text script. NOA shall promptly evaluate the Game with regard to (a) its
technical compatibility with and error-free operation on the GAME BOY ADVANCE
system, and (b) its compliance with the game content guidelines of the
Entertainment Software Ratings Board ("ESRB"). LICENSEE shall provide NOA with a
certificate of a rating for the Game from the ESRB other than "AO" or "ADULTS
ONLY".
4.4 Approval of Completed Game. NOA shall, within a reasonable period
of time after receipt, approve or disapprove each submitted Game in writing. If
a Game 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,
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 4
LICENSEE shall submit a revised Game to NOA for approval. NOA shall not
unreasonably withhold or delay its approval of any Game. The approval of a Game
by NOA shall not relieve LICENSEE of its sole responsibility for the
development, quality and operation of the Game or in any way create any warranty
for a Game or a Licensed Product by NOA.
4.5 Submission of Artwork. Upon submission of a completed Game to NOA,
LICENSEE shall prepare and submit to NOA the 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.
4.6 Artwork for Stripped Product. If LICENSEE submits an order for
Stripped Product, all Artwork shall be submitted to NOA in advance of NOA's
acceptance of the order and no production of Printed Materials shall occur until
such Artwork has been approved by NOA under Section 4.5 herein.
5. ORDER PROCESS, PURCHASE PRICE, PAYMENT AND DELIVERY
5.1 Submission of Orders by LICENSEE. LICENSEE may at any time submit
written purchase orders to NOA for any approved Licensed Product title. The
purchase order shall specify whether it is for Finished Product or Stripped
Product. The terms and conditions of this Agreement shall control over any
contrary terms of such purchase order or any other written documents submitted
by LICENSEE. All orders are 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 shall be set forth in NOA's
then current written Price Schedule. The purchase price includes the cost of
manufacturing 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 are
included in the purchase price and all such taxes are the responsibility of
LICENSEE (except for taxes imposed on NOA's income). 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 to NOA either (a) by placement of an irrevocable letter
of credit in favor of NOA 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 NOA's designated account. All associated banking charges
shall be for LICENSEE's account.
5.4 Shipment and Delivery. The Licensed Products shall be delivered
F.O.B. Japan or such other delivery point specified by NOA, with shipment at
LICENSEE's direction and expense. Orders may be delivered by NOA in partial
shipments, each directed to not more than two (2) destinations designated by
LICENSEE within the Territory. Title to the Licensed Products shall vest in
accordance with the terms of the applicable letter of credit or, in the absence
thereof, at the point of delivery.
6. MANUFACTURE OF THE LICENSED PRODUCT
6.1 Manufacturing. Nintendo Co., Ltd. shall be the exclusive source for
the manufacture of the Game Cartridges, 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.
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 5
6.2 Manufacture of the Licensed Products. Upon acceptance by NOA of a
purchase order for an approved Licensed Product title and payment as provided
for under Section 5.3 herein, NOA (through Nintendo Co., Ltd., and/or its
subcontractors), will arrange for the manufacture of Finished Product or
Stripped Product, as specified in LICENSEE's purchase order.
6.3 Security Features. The final release version of the Game, Game
Cartridges and Printed Materials shall include such Security Technology as
Nintendo, in its sole discretion, may deem necessary or appropriate.
6.4 Production of Stripped Product Printed Materials. For Stripped
Product, LICENSEE shall arrange and pay for the production of the Printed
Materials using the Artwork. Upon receipt of an order of Stripped Product,
LICENSEE shall assemble the Game Cartridges and Printed Materials into the
Licensed Products. Licensed Products may be sold or otherwise distributed by
LICENSEE only in fully assembled and shrink-wrapped condition.
6.5 Prior Approval of LICENSEE's Independent Contractor. Prior to the
placement of a purchase order for Stripped Product, 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 the facilities of the Independent
Contractors upon prior written notice and provided LICENSEE may be present, at
its own expense, at any such inspection, and (c) be present to supervise any
work on the Licensed Products to be done by the Independent Contractors. If at
any time NOA reasonably deems an 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.
6.6 NOA Inserts for Stripped Product. NOA, at its option ******, may
provide LICENSEE with NOA produced promotional materials (as provided for at
Section 7.7(a) herein), which LICENSEE agrees to include in the assembly of the
Licensed Products.
6.7 Sample Printed Materials and Stripped Product. Within a reasonable
period of time after LICENSEE's assembly of the initial order for a Stripped
Product title, LICENSEE shall provide NOA with (a) one (1) sample of the fully
assembled, shrink-wrapped Licensed Product, and (b) *** samples of
LICENSEE produced Printed Materials for such Licensed Product.
6.8 Retention of Sample Licensed Products by Nintendo. Nintendo may, at
its own expense, manufacture reasonable quantities of the Game Cartridges or the
Licensed Products to be used for archival purposes, legal proceedings against
infringers of the Intellectual Property Rights or for other lawful purposes, but
not for resale.
7. MARKETING AND ADVERTISING
7.1 Approval of Marketing Materials. LICENSEE represents and warrants
that the Marketing Materials shall (a) be of high quality and comply with the
Guidelines, (b) comply with all voluntary ESRB advertising, marketing or
merchandising guidelines, and (c) ****** comply with all applicable laws and
regulations in those jurisdictions in the Territory where they will be used or
distributed. 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 the quality of such
samples. If any of the samples are disapproved, NOA shall specify the reasons
for such disapproval in writing 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
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 6
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
Product or Stripped Product that has been bundled with (a) any peripheral
designed for use with the GAME BOY ADVANCE system which has not been licensed or
approved in writing by NOA, or (b) any other product or service where NOA's
sponsorship, association, approval or endorsement might be suggested by the
bundling of 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 ******.
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)
reasonably necessary warehouse, distribution, marketing, sales, collection and
credit operations to facilitate proper handling of the Licensed Products, 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 knowingly 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.
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
Nintendo 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 GAME BOY ADVANCE system ******.
7.8 Nintendo Gateway System. To promote and increase demand for games
on Nintendo video game systems, NOA licenses a system (the "Nintendo Gateway
System") 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 systems. If NOA identifies a Game for
possible license on the Nintendo Gateway System, the parties agree to conduct
good faith negotiations toward including the Game in the Nintendo Gateway
System.
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 GAME BOY ADVANCE 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
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 7
development specifications, and/or trade secrets, (b) any patents or patent
applications, (c) any business, 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 NOA is given Notice
thereof 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 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 No Disclosure to Independent Contractors. LICENSEE shall not
disclose the Confidential Information to any Independent Contractor without the
prior written consent of NOA. Any Independent Contractor seeking access to
Confidential Information shall be required to enter into a written
non-disclosure agreement with NOA prior to receiving any access to or disclosure
of the Confidential Information 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
or the release dates for Games developed by LICENSEE under 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
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 8
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 terms 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 other intellectual property rights used on or in
association with the development, advertising, marketing and sale of the
Licensed Products and the Marketing Materials, or (ii) the holder of such rights
to the trademarks, copyrights and other intellectual property rights which have
been licensed from a third party as are necessary for the development,
advertising, marketing and sale of the Licensed Products and 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 ****
9.4 GENERAL DISCLAIMER BY NOA. NOA DISCLAIMS ANY AND ALL WARRANTIES
WITH RESPECT TO THE LICENSED PRODUCTS, INCLUDING, WITHOUT LIMITATION, THE
SECURITY TECHNOLOGY. LICENSEE PURCHASES AND ACCEPTS ALL LICENSED PRODUCTS ON AN
"AS IS" AND "WHERE IS" BASIS. NOA DISCLAIMS ALL WARRANTIES UNDER THE APPLICABLE
LAWS OF ANY COUNTRY, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A GENERAL OR PARTICULAR PURPOSE.
9.5 LIMITATION OF LIABILITY. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
NEITHER PARTY (OR THEIR RESPECTIVE AFFILIATES, LICENSORS OR SUPPLIERS) SHALL BE
LIABLE FOR LOSS OF PROFITS, OR FOR ANY SPECIAL, PUNITIVE, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OF THE OTHER PARTY OR ITS CUSTOMERS ARISING OUT OF OR
RELATED TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE BREACH OF THIS
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 9
AGREEMENT BY NOA, THE MANUFACTURE OF THE LICENSED PRODUCTS OR THE USE OF THE
LICENSED PRODUCTS ON ANY NINTENDO VIDEO GAME SYSTEM BY THE PARTIES OR ANY END
USER.
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 ****** design, development, advertising, marketing, sale or use of the
Licensed Products 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 ****** design, development, advertising, marketing, sale or use
of any of the Licensed Products, and
(d) any federal, state or foreign civil or criminal actions
relating to ****** design, development, advertising, marketing, sale or use of
the Licensed Products or the Marketing Materials.
NOA and LICENSEE shall give prompt Notice to the other of any indemnified claim
under this Section 10.1. With respect to any third party claim subject to this
indemnity clause, 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 such claim 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 that it may
not be canceled without thirty (30) days' prior written Notice to NOA. A
Certificate of Insurance shall be provided to NOA's Licensing Department not
later than the date of the initial order of Licensed Products under this
Agreement. 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
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 10
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 reimburse LICENSEE and NOA for their respective reasonable
attorneys' fees and costs incurred in bringing such action, 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 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 efforts to inform LICENSEE ****** of such actions 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******.
In 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 of
this Agreement by operation of law, 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
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) such an assignment by operation of law, or (ii) receipt of Notice
therefor, 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 NOA'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,
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 11
(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.
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
proof of such destruction (certified by an officer of LICENSEE) shall be
provided 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 proof
of such destruction (certified by an officer of LICENSEE) shall be provided to
NOA.
13.6 Breach of NDA or Other NOA License Agreements. At NOA's option,
any ****** breach by LICENSEE of (a) the NDA, or (b) any other license agreement
between NOA and LICENSEE relating to the development of games for any Nintendo
video game system which 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 Licensed Products authorized under Section 13.4
herein. LICENSEE shall, within thirty (30) days thereafter, return 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 any 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 and/or either party.
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
******.
14.3 Records and Audit. During the Term and for a period of ******,
LICENSEE agrees to keep accurate, complete and detailed records related to the
development and sale of the Licensed Products and the Marketing Materials. Upon
at least ****** prior written Notice to LICENSEE, NOA may, at its expense,
audit LICENSEE's records, reports and other information solely related to
LICENSEE's compliance with this Agreement.
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
PAGE 12
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 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 action (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/ XXXXX X. XXXXXXX
-------------------------------- ----------------------------
Title: Executive VP, Administration Title: President & Chief Executive Officer
Date: 7/18/01 Date: 7/16/01
PAGE 13
