License Agreement for Nintendo 64 Video Game System - Nintendo of America Inc. and THQ INc.
CONFIDENTIAL LICENSE AGREEMENT
FOR NINTENDO 64 VIDEO GAME SYSTEM
(Western Hemisphere)
THIS AGREEMENT is entered into between NINTENDO OF AMERICA INC., a
Washington corporation with an address for notice purposes of 4820 150th Avenue
N.E., Redmond, WA 98052 (Fax: 206-882-3585) ("NINTENDO") and T.HQ, INC., a New
York/Delaware corporation with an address for notice purposes of 5016 N. Parkway
Calabasas, Suite 100, Calabasas, CA 91302 (Fax: (818) 591-1615), Attention:
President ("LICENSEE").
NINTENDO and LICENSEE acknowledge and agree as follows:
1. RECITALS
1.1 NINTENDO markets and sells a high-quality video game system,
including hardware, software and an input controller, marketed by NINTENDO under
its trademarks "Nintendo 64(copyright)" and "N64(trademark)", for playing video
games.
1.2 LICENSEE desires to gain access to and rights to utilize highly
proprietary programming specifications, development tools, trademarks and other
valuable intellectual property rights in order to develop video game software
and to purchase and sell such video game software from NINTENDO for play on the
Nintendo 64 system, which system was developed by NCL and Silicon Graphic, Inc.
1.3 NINTENDO is willing to grant a license to utilize such
proprietary information and intellectual property rights and to sell video game
software to LICENSEE upon the terms and conditions set forth in this Agreement.
2. DEFINITIONS
2.1 "Artwork" shall mean the final art and mechanical formats for
the Licensed Product including the Game Cartridge box, user instruction manual
with consumer precautions and warranty, Game Cartridge label and inserts.
2.2 "Competing Systems" shall mean hardware platforms, whether
marketed now or in the future, designed to play interactive video games,
including, but without limitation: Apple/Bandai Pippin or Atmark, Atari Jaguar,
Atari Lynx, 3DO Real, Matsushita M2, Phillips CD-1 Interactive Player, Sega
Master System, Sega Genesis, Sega CD, Sega Game Gear, Sega CD/X, Sega Nomad,
Sega Saturn, Sega Pico, Sony PSX/Playstation and SNK Neo Geo.
2.3 "Effective Date" shall mean the last date in which all parties
shall have signed this Agreement.
2.4 "Exclusive Licensed Product" shall mean the audiovisual work
tentatively entitled "WORLD CHAMPIONSHIP WRESTLING-TBD", in its current form and
as hereafter developed, including any adaptation, translation, derivative,
sequel or substantially similar game which is sold by LICENSEE as a Licensed
Product under this Agreement.
2.5 "Game Cartridge(s)" shall mean interchangeable plastic
cartridges adapted for use with the N64 System, housing the Game embodied in
electronic memory devices or comparable medium authorized by NINTENDO for
storing and playing Games on the N64 System.
2.6 "Game(s)" shall mean video game software compatible with the N64
System developed under this Agreement.
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2.7 "Guidelines" shall mean the "Nintendo 64 Packaging Guidelines"
and the "Nintendo 64 Development Manual" setting forth trademark, copyright and
related artwork standards, as published from time to time by NINTENDO.
2.8 "Independent Contractor" shall mean any third party agent,
consultant, contractor or independent programmer, other than LICENSEE.
2.9 "Licensed Copyright(s)" shall mean various copyrights in printed
materials, art or logo designs, trade dress, computer software, microcode,
electronic circuitry and rights in integrated circuit layout designs employed in
the N64 System.
2.10 "Licensed Intellectual Properties" shall mean individually,
collectively or in any combination, the Licensed Inventions, Licensed
Proprietary Information, Licensed Copyrights and Licensed Trademarks.
2.11 "Licensed Invention(s)" shall mean improvements and inventions
concerning the N64 System, including inventions which are or may become the
subject matter of various patents or patent applications.
2.12 "Licensed Product(s)" shall mean Game Cartridges (or comparable
medium authorized by Nintendo) for employing the Licensed Intellectual
Properties and having electronic memory devices storing the Games.
2.13 "Licensed Proprietary Information" shall mean any of the
following information relating to the N64 System: (a) all current or future
information, know-how, techniques, methods, information, tools, emulator
boards, software development specifications, and/or trade secrets, (b) any
patents or patent applications, (c) any business, marketing or sales data
information, and (d) any other information or data relating to development,
design, operation, manufacturing, marketing or sales. "Licensed Proprietary
Information" shall include information disclosed to LICENSEE by NINTENDO,
NINTENDO's affiliated companies, SGI, and/or other third parties working with
NINTENDO. Such Licensed Proprietary 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
Licensed Proprietary Information. Licensed Proprietary Information shall not
include: (a) 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, (b) 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, (c) 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, and (d) data and information
which is required to be disclosed by an authorized governmental or judicial
entity, provided that LICENSEE shall notify NINTENDO at least thirty (30) days
prior to such disclosure.
2.14 "Licensed Trademarks" shall mean registered and unregistered
trademarks and trademark applications used in connection with the N64 System,
including "Nintendo(R)", "Nintendo 64(R)", "N64(TM)", "Official Nintendo Seal
of Quality(R)" and trade dress in the N64 System.
2.15 "Marketing Materials" shall mean marketing, advertising or
promotional materials which incorporate the Licensed Intellectual Properties
which are developed by or for LICENSEE to promote the sale of the Licensed
Products.
2.16 "NCL" shall mean NINTENDO's parent company, Nintendo Co., Ltd.
of Kyoto, Japan.
2.17 "Nintendo 64 System" and "N64 System" shall mean the 64-bit
Nintendo 64 video game
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system, including the hardware, software and input controller marketed by
NINTENDO and Nintendo Co., Ltd.
2.18 "Other Agreements" shall mean that certain Product Developer
Non-Disclosure Agreement for Nintendo 64 entered into between NINTENDO and
LICENSEE with an effective date of 11/4/96.
2.19 "Product Proposal" shall mean a written proposal which provides a
detailed explanation of the Game.
2.20 "Schedule 1" shall mean the "Nintendo of America Inc. Price Sheet
N64 Licensed Game Paks" attached to this Agreement and incorporated by
reference into this Agreement.
2.21 "SGI" shall mean Silicon Graphics, Inc. and/or MIPS Technologies,
Inc.
2.22 "Term" shall mean three (3) years from the Effective Date.
2.23 "Territory" shall mean all countries within the Western Hemisphere,
including the United States, Canada, South America, Central America, Mexico and
all applicable territories and possessions.
3. GRANT OF LICENSE; RESERVATION OF RIGHTS BY NINTENDO
3.1 Grant. For the Term and in the Territory, NINTENDO hereby grants to
LICENSEE, and LICENSEE hereby accepts under the terms and conditions set forth
in this Agreement, a nonexclusive license to employ the Licensed Intellectual
Properties solely to develop and sell video games incorporated into Game
Cartridges for play on the N64 System. Except as may be permitted under a
separate written authorization from NINTENDO or NINTENDO Co., Ltd., LICENSEE
shall not use the Licensed Intellectual Properties for any other purpose.
3.2 Reservation of Rights in the Licensed Intellectual Properties.
LICENSEE acknowledges NINTENDO and Nintendo Co., Ltd.'s right, title, and
interest in and to the Licensed Intellectual Properties and the goodwill
associated with the Licensed Trademarks. LICENSEE will not at any time do or
cause to be done any act or thing which in any way impairs or is intended to
impair any part of such right, title, interest or goodwill. LICENSEE shall not
represent that it has any ownership in the Licensed Intellectual Properties.
Use of the Licensed Intellectual Properties shall not create any right, title
or interest therein in LICENSEE's favor.
3.3 Reservation of Rights of Distribution Outside the Territory.
LICENSEE shall market and sell the Licensed Products only in the Territory.
LICENSEE shall not directly or indirectly export any Licensed Products from the
Territory nor shall LICENSEE knowingly permit or assist any third party in
doing so.
3.4 Reservation of Rights to Reverse Engineer. LICENSEE may utilize and
study the design, performance and operation of the N64 System and the Licensed
Proprietary Information solely for the purpose of developing software which is
compatible with the N64 System for license under this Agreement. LICENSEE shall
not, directly or indirectly, reverse engineer or aid or assist in the reverse
engineering of all or any part of the N64 System, including the hardware,
software, input controller and/or tools. For purposes of this Agreement,
"reverse engineering" shall mean: (a) the x-ray electronic scanning and/or
physical or chemical stripping of semiconductor components; (b) the
disassembly, decompilation, decryption, simulation, debugging or code tracing
of microcode; and/or (c) the disassembly, decompilation, decryption, simulation,
debugging or code tracing of object code or executable code, specifically
including, but not limited to, any NINTENDO supplied or developed libraries or
microcode. The limitations set forth in this Section 3.4 shall not preclude
LICENSEE from engaging in reverse engineering of any Game code which was
developed solely by LICENSEE and related only to the Game and was not supplied
by nor derived from any code supplied by NINTENDO.
3.5 Reservation of Rights of Electronic Transmission. LICENSEE shall
not directly or indirectly
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duplicate, distribute or transmit Games via electronic means or any other means
now known or hereafter devised, including without limitation, wireless, cable,
fiber optic means, telephone lines, satellite transmission, microwave or radio
waves or over a network of interconnected computers or other devices.
Notwithstanding this limitation, LICENSEE shall not be prohibited from the
electronic transmission of Games during the development process for the sole
purpose of facilitating development; provided, however, that no right of
retransmission shall attach to any such transmission, and, provided further,
that LICENSEE shall use reasonable security measures, customary within the
industry, to reduce the risk of unauthorized interception or retransmission of
such transmissions.
3.6 Notification Obligations. LICENSEE shall promptly notify NINTENDO of
the loss or unauthorized use or disclosure of any Licensed Proprietary
Information and shall promptly act to recover any such information and/or
prevent further breach of confidentiality obligations herein.
4. CONFIDENTIALITY
4.1 Disclosure of Proprietary Information. NINTENDO has and shall during
the Term provide LICENSEE with highly proprietary development information,
development tools, emulation systems, programming specifications and related
resources and information constituting and incorporating the Licensed
Proprietary Information to enable LICENSEE to develop video games for use with
the N64 System.
4.2 Confidentiality of Licensed Proprietary Information. LICENSEE shall
maintain all Licensed Proprietary Information as strictly confidential and will
use such Licensed Proprietary Information only in accordance with this
Agreement. LICENSEE shall limit access to the Licensed Proprietary 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 Licensed
Proprietary Information pursuant to a written non-disclosure agreement between
LICENSEE and such employee. LICENSEE shall use its best efforts to ensure that
its employees working with or otherwise having access to Licensed Proprietary
Information shall not disclose or make unauthorized use of the Licensed
Proprietary Information.
4.3 Agent/Consultant Confidentiality. LICENSEE shall not disclose the
Licensed Proprietary Information to any Independent Contractor without
NINTENDO's prior written approval. Each approved Independent Contractor shall
be required to enter into a written non-disclosure agreement with NINTENDO
prior to receiving any access or disclosure of the Licensed Proprietary
Information.
4.4 SGI as a Third-Party Beneficiary. LICENSEE hereby acknowledges and
agrees that SGI shall be a third-party beneficiary of LICENSEE's
confidentiality obligations as set forth in this Section 4.
5. DEVELOPMENT; QUALITY STANDARDS; ARTWORK; MANUFACTURING
5.1 Development and Sale of the N64 System Programs. During the Term,
LICENSEE may develop Games and/or sell Licensed Products for the N64 System in
accordance with this Agreement.
5.2 Exclusivity; Exclusive Licensed Product. For the Exclusive Licensed
Product, LICENSEE agrees that, commencing on the Effective Date and continuing
for a period of one (1) year from NINTENDO's first shipment of such Exclusive
Licensed Product to LICENSEE, the Game incorporated into such Exclusive
Licensed Product shall not be sold anywhere in the Territory by LICENSEE or by
any third party for play on any Competing System. Except as provided herein
with regard to the Exclusive Licensed Product, or as may otherwise be limited by
the legitimate intellectual property rights of NINTENDO or any third party,
LICENSEE shall retain all rights with regard to the adaptation of Games for
development and sale in any other format, including on any Competing System.
5.3 Submission of Game Concept. Before commencing development of a Game,
LICENSEE
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shall submit to NINTENDO for approval, a Product Proposal. Such Product
Proposal must include a detailed explanation of the manner in which the Game
will utilize and exploit: (a) the unique 3-D capabilities and high quality
graphics display of the N64 System; (b) the complex, high-capacity processing
speed of the N64 System; and (c) the dynamic interfaces and touch control
features of the unique N64 System controller. For that purpose, the Product
Proposal shall include: (a) a description of the proposed Game; (b) the
development team profile, including information regarding any Independent
Contractor which LICENSEE proposes to retain to work on the Game; (c) a
description of any special hardware or software requirements; and (d) the
anticipated completion date of the proposed Licensed Product. Subsequent to
acceptance and approval of a Product Proposal, LICENSEE shall notify NINTENDO
in writing of any material proposed changes in the Product Proposal and/or the
proposed Licensed Product. From time to time, at approximately quarterly
intervals or such other reasonable times NINTENDO may establish for purposes of
ensuring utilization and exploitation of the N64 System in the manner set forth
above, LICENSEE shall submit work-in-progress on the Game to NINTENDO for
further review in accordance with the criteria set forth herein. NINTENDO shall
not unreasonably withhold or delay any approval provided for herein.
5.4 Delivery of Completed Game. Upon completion of a Game, LICENSEE shall
deliver to NINTENDO one (1) prototype of the Game in a format specified by
NINTENDO, together with written user instructions and a complete screen text
script. NINTENDO shall promptly evaluate the Game with regard to (a) its
technical compatibility with and error-free operation on the N64 System; (b)
the suitability of the Game content, taking into account reasonable standards
set forth in the Guidelines; and (c) whether the Game achieves the objectives
set forth in LICENSEE's approved Product Proposal. LICENSEE shall have
satisfied the Game content suitability criteria by providing NINTENDO with
proof that the Game has been provided with a certificate of a rating other than
ADULTS ONLY (or its equivalent) from the Entertainment Software Ratings Board
or comparable independent ratings body which reviews and certifies product for
violent or sexual content.
5.5 Approval of Completed Game. NINTENDO shall, within a reasonable
period of time after receipt, approve or disapprove such Game. If such Game is
disapproved, NINTENDO shall specify in writing the reasons for such disapproval
and state what corrections and/or improvements are necessary. After making the
necessary corrections and/or improvements, LICENSEE shall submit a revised Game
for approval by NINTENDO. The approval of any Game by NINTENDO 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 Licensed Product
by NINTENDO. NINTENDO shall not unreasonably withhold or delay any approval
provided for herein.
5.6 Development and Quality of Artwork. In connection with the submission
of a proposed Licensed Product to NINTENDO, LICENSEE shall submit all Artwork
to NINTENDO. All Artwork shall conform to the requirements set forth in the
Guidelines. Within fifteen (15) business days of receipt of the Artwork,
NINTENDO shall approve or disapprove the Artwork based upon the Guidelines. If
any of the Artwork is disapproved, NINTENDO shall specify in writing the
reasons for such disapproval and state what corrections and/or improvements are
necessary. After making the necessary corrections and/or improvements to the
disapproved Artwork, LICENSEE shall resubmit new Artwork for approval by
NINTENDO. NINTENDO shall not unreasonably withhold or delay its approval of any
Artwork.
5.7 Appointment of NCL as Manufacturer. LICENSEE hereby appoints NCL, and
NCL hereby accepts appointment, as manufacturer of the Licensed Products.
LICENSEE shall purchase from NCL through NINTENDO all of its requirements for
the Licensed Products. NCL shall have the sole responsibility for establishing
and fulfilling all aspects of the manufacturing process, including selecting
the location of and specifications for any manufacturing facilities, appointing
suppliers and subcontractors, and managing all work-in-progress and finished
goods inventory. NCL shall acquire and retain responsibility for all equipment,
tooling, molds or masks used in connection with the manufacture of the Licensed
Products.
5.8 Manufacture of Licensed Products. Upon approval of a Game and the
Artwork and upon
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receipt from LICENSEE of an order in accordance with Section 7 herein, NCL will
manufacture the Licensed Products for LICENSEE, including the Artwork.
5.9 Retention of Sample Licensed Products. NCL may, at its own expense,
manufacture samples of the Licensed Products, only to the extent necessary, to
be used by NINTENDO for archival purposes, legal proceedings against infringers
of the Licensed Intellectual Properties, and for other lawful purposes.
6. PURCHASE PRICE; PAYMENT; DELIVERY OF COMPLETED LICENSED PRODUCT
6.1 Minimum Initial Orders. Upon placement of an initial order,
LICENSEE shall order a minimum quantity of Ten Thousand (10,000) units of a
Licensed Product.
6.2 Subsequent Minimum Orders. LICENSEE may subsequently order
additional Licensed Product in a minimum quantity of Five Thousand (5,000)
units per title.
6.3 Purchase Price. The purchase price to be paid by LICENSEE to
NINTENDO for the Licensed Products shall be in accordance with NINTENDO's
pricing schedule currently set forth in the attached Schedule 1. The purchase
price includes the cost of manufacturing, printing and packaging the Licensed
Products and a royalty for the use of the Licensed Intellectual Properties.
Schedule 1 is subject to change by NINTENDO at any time without notice.
6.4 Payment. At the time an order is placed, LICENSEE shall provide to
NINTENDO an irrevocable letter of credit in favor of NINTENDO and payable at
sight, issued by a bank acceptable to NINTENDO and confirmed, at LICENSEE's
expense, if requested by NINTENDO. The letter of credit shall be in United
States dollars in an amount equal to the purchase price of the Licensed
Products ordered. All associated banking charges are for LICENSEE's account.
6.5 Shipment and Delivery. The Licensed Products shall be delivered
F.O.B. Japan, with shipment at LICENSEE's direction and expense. Orders may be
delivered by NINTENDO in partial shipments, each directed to no more than two
(2) destinations designated by LICENSEE in the Territory. Title to the Licensed
Products shall vest in accordance with the terms of the applicable letter of
credit.
7. MARKETING, SALE AND RENTAL OF THE LICENSED PRODUCTS
7.1 Marketing Materials. LICENSEE agrees that any Marketing Materials
shall all be of high quality and shall comply with the Guidelines.
7.2 Submission of Proposed Marketing Materials. Prior to actual use or
distribution, LICENSEE shall submit to NINTENDO for review and evaluation
initial samples of all Marketing Materials. NINTENDO shall, within fifteen (15)
business days of receipt of such samples, approve or disapprove of the quality
of such samples. If any of the samples are disapproved as to quality, NINTENDO
shall specify the reasons for such disapproval and state what corrections
and/or improvements are necessary. After making the necessary corrections
and/or improvements to the disapproved samples, LICENSEE may resubmit new
samples for approval by NINTENDO as to quality. No Marketing Materials shall
be distributed or utilized by LICENSEE without obtaining prior written approval
as to quality by NINTENDO. NINTENDO shall not unreasonably withhold or delay
its approval of the proposed Marketing Materials.
7.3 Warranty and Repair. With respect to the Licensed Product, LICENSEE
shall provide to the original consumer a minimum ninety (90) day limited
warranty, comparable to that offered by NINTENDO. LICENSEE shall also provide
to the original consumer, either directly or indirectly through authorized
service centers, reasonably accessible product service, including
out-of-warranty service for a period of three (3) years following sale of the
Licensed Product. In the event LICENSEE is unable to obtain sufficient
quantities of repair parts for service obligations from defective and/or
product returns, NINTENDO shall cooperate in
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providing reasonable quantities of repair parts to LICENSEE at its standard
cost.
7.4 Business Facilities; Sales of Game Cartridges. LICENSEE agrees
to develop, maintain and utilize during the Term: (a) suitable office
facilities within the Territory, 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 support, including telephone service, to adequately support the
Licensed Product.
7.5 Defects; Recall. In the event of a material programming defect
in the Licensed Product, which defect in the reasonable judgment of
NINTENDO would significantly impair the ability of a consumer to play the
Licensed Product, NINTENDO may require the LICENSEE to recall the Licensed
Product and undertake suitable repairs or replacements prior to sale.
7.6 Rental. In the event LICENSEE elects to engage in the
commercial rental of the Licensed Products within the Territory on such terms
and conditions as LICENSEE shall determine, LICENSEE shall secure appropriate
authorizations and/or assignments from the author(s) of the copyrightable
elements in the computer programs for the Licensed Product. LICENSEE shall
clearly provide notice on the Artwork for each Licensed Product of any rental
right or reservation thereof.
7.7 Nintendo Promotional Materials, Publications and Events. At its
option, NINTENDO may: (a) insert in the packaging for the Licensed Product
promotional materials concerning Nintendo Power(R) magazine; (b) utilize
screen shots, package art and related art and information regarding the Licensed
Product in Nintendo Power(R) or other media or marketing programs which promote
NINTENDO products; and (c) exercise public performance rights of the Licensed
Product, related trademarks and art in NINTENDO sponsored contests, tours and
events which generally promote NINTENDO products.
8. LICENSEE'S COPYRIGHTS AND TRADEMARKS
8.1 Copyright and Trademark Warranties: LICENSEE represents and
warrants that, throughout the Territory, LICENSEE is either: (a) the sole owner
of all right, title and interest in and to the trademarks, copyrights and
Artwork used on or in association with the Licensed Products; or (b) the
holder of sufficient right to the trademarks, copyrights and Artwork which have
been licensed from a third party for use in the Licensed Product.
8.2 Licensee's Indemnification. LICENSEE shall indemnify and hold
NINTENDO harmless from any claims, losses, liabilities, damages, expenses and
costs, including, without limitation, reasonable attorneys' fees and costs,
which result from: (a) a breach of any of the representations or warranties
provided by LICENSEE herein; (b) any claim of infringement of any third party's
intellectual property rights with respect to the Licensed Product, excluding
claims based solely upon NINTENDO's trademarks, copyrights and patents; or, (c)
any claim of bodily injury (including death) or property damage arising out of,
or in connection with, the development, sale and/or use of any of the Licensed
Products. NINTENDO shall give LICENSEE prompt written notice of the assertion of
any such claim and provided, further, that LICENSEE shall have the right to
select counsel and control the defense and/or settlement of any such claim,
subject to the right of NINTENDO to participate in any such action or proceeding
at its own expense with counsel of its own choice.
8.3 Insurance. LICENSEE shall, at its own expense, obtain a policy
of general liability insurance by a recognized insurance company. Such policy
of insurance shall be in an amount of not less than Five Million Dollars
($5,000,000 USD) and shall provide for adequate protection against any suits,
claims, loss or damage or any alleged intellectual property infringements by
the Licensed Products. Such policy shall name NINTENDO as an additional insured
and may not be canceled without thirty (30) days prior written notice to
NINTENDO. A Certificate of Insurance shall be provided to NINTENDO's Licensing
Department within thirty (30) days of the Effective Date. If LICENSEE fails to
maintain such insurance during the Term, NINTENDO
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may secure and maintain such insurance at LICENSEE'S expense.
9. LIMITATION OF LIABILITY
9.1 Disclaimer of Licensed Intellectual Properties. NINTENDO makes
no representations, guarantees or warranties concerning the scope or validity
of the Licensed Intellectual Properties, and does not warrant that the sale of
the Licensed Products by LICENSEE will not infringe upon the patent, trade
secret, copyright, mask work or trademark rights of another in the Territory.
THE RISK OF INFRINGEMENT IS HEREBY ASSUMED BY LICENSEE.
9.2 Warranty Disclaimer. NINTENDO DISCLAIMS ANY AND ALL WARRANTIES
OF THE LICENSED PRODUCTS AS BETWEEN NINTENDO AND LICENSEE AND AS BETWEEN
NINTENDO AND ANY THIRD PARTY PURCHASERS FROM LICENSEE. LICENSEE PURCHASES AND
ACCEPTS ALL LICENSED PRODUCTS FROM NINTENDO ON AN "AS IS" AND "WHERE IS" BASIS
AND WITHOUT ANY WARRANTIES, EXPRESS OR IMPLIED. WITH RESPECT TO THE LICENSED
PRODUCTS, NINTENDO DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A GENERAL OR PARTICULAR PURPOSE AND SHALL IN NO EVENT BE LIABLE FOR ANY
INCIDENTAL AND/OR CONSEQUENTIAL DAMAGES OF LICENSEE, ITS RETAILERS OR
CUSTOMERS. LICENSEE SHALL BE SOLELY RESPONSIBLE FOR PROVIDING WARRANTY AND
REPAIR/PLACEMENT SERVICES FOR ANY DEFECTIVE LICENSED PRODUCTS.
10 INFRINGEMENT OF LICENSED INTELLECTUAL PROPERTIES AND LICENSEE'S
TRADEMARKS AND COPYRIGHTS
10.1 Reporting. In the event: (a) any claim is asserted against
either party alleging that any of the Licensed Intellectual Properties or a
Licensed Product constitutes an infringement of another's rights; or, (b)
either party discovers that any of the Licensed Intellectual Properties or
LICENSEE's copyrights or trademarks used in connection with the Licensed
Products have been infringed by a third party, then the party with such
knowledge shall promptly notify the other party.
10.2 Licensed Intellectual Properties. NINTENDO shall have the sole
right, at its expense, to commence and/or defend a legal action or negotiate a
settlement relating to any alleged infringement by the Licensed Intellectual
Properties. LICENSEE agrees to give reasonable assistance in any such legal
action, but at no expense to it. NINTENDO shall be entitled to all of the
recovery or damages collected as a result of such legal action or negotiated
settlement. In the event of a legal action against LICENSEE alleging an
infringement by the Licensed Intellectual Properties as incorporated into
LICENSEE's Licensed Products which NINTENDO affirmatively elects in writing not
to defend, LICENSEE may defend or settle such legal action, at its option and
expense. NINTENDO agrees to provide reasonable assistance in defending any such
legal action. LICENSEE agrees to keep NINTENDO fully informed with respect to
developments in any such legal action and to provide NINTENDO reasonable notice
of the terms of any proposed settlement and to consider any comments by NINTENDO
before settlement is made.
10.3 Infringement of Licensed Products. LICENSEE shall take
reasonable steps to abate any infringement of LICENSEE's copyrights and
trademarks in the Licensed Products. LICENSEE shall also take all reasonable
and necessary steps, including legal action, to defend against any alleged
infringement caused by any of LICENSEE's software programs developed under this
Agreement or any Artwork, title or designation used in conjunction with any
of the Licensed Products. NINTENDO shall give to LICENSEE reasonable assistance
and cooperation in any such legal action, but at no expense to NINTENDO.
11. TERM AND TERMINATION
11.1 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 receipt of written notice thereof, then this Agreement
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shall automatically terminate on the date specified in such notice.
11.2 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 one hundred eighty (180) days to sell any unsold Licensed
Products. All Licensed Products in LICENSEE's control following expiration of
such sell-off period, shall be destroyed by LICENSEE within ten (10) days.
11.3 Termination by LICENSEE's Breach. If this Agreement is terminated by
NINTENDO as a result of a breach of its terms and conditions by LICENSEE,
LICENSEE shall immediately cease all distribution, promotion or sale of any
Licensed Products. All Licensed Products in LICENSEE's control as of such
termination shall be destroyed by LICENSEE within ten (10) days.
11.4 Licensed Intellectual Property Rights. Upon expiration and/or
termination of this Agreement, LICENSEE will cease all use of the Licensed
Intellectual Properties for any purpose, and will not disclose to third parties
any Licensed Proprietary Information. LICENSEE shall also return to NINTENDO
all writings, drawings, models, data 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 Licensed Proprietary Information
without making copies or otherwise retaining any such information.
11.5 Termination by Nintendo's Breach. If this agreement is terminated by
LICENSEE as a result of a breach of its terms or conditions by NINTENDO,
LICENSEE may continue to sell the Licensed Products in the Territory until the
expiration of the Term, at which time the provisions herein relating to
termination other than by default of LICENSEE shall apply to any unsold
Licensed Products.
12. GENERAL PROVISIONS
12.1 Nonassignability/Sublicensing. This Agreement is personal to LICENSEE
and may not be sold, assigned, delegated, sublicensed or otherwise transferred
or encumbered, including by operation of law or by the sale or transfer of more
than ten percent (10%) of the stock, assets or ownership interest or control of
LICENSEE, without the prior written consent of NINTENDO.
12.2 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 microcomputer chips
necessary for production of the Licensed Products, NINTENDO reserves the right
to allocate essential materials among itself and its licensees.
12.3 Waiver; Severability; Integration. The failure of any 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. This Agreement
constitutes the entire agreement between the parties relating to the subject
matter hereof, provided, however, that the Other Agreements shall remain in
effect, except as may be modified by specific reference herein. All prior
negotiations, representations, agreements and understandings are merged into,
extinguished by and completely expressed by this Agreement. Any amendment to
this Agreement shall be in writing, signed by both parties.
12.4 Governing Law: Venue. This Agreement shall be governed by, subject to
and construed under the laws of the State of Washington. Any legal actions
prosecuted or instituted by NINTENDO or by
NINTENDO 64 LICENSE AGREEMENT
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<PAGE> 10
LICENSEE under this Agreement, with respect to any matters arising under or
growing out of this Agreement, shall only be brought in a court of competent
jurisdiction in King County, Washington and each party hereby consents to the
jurisdiction and venue of such courts for such purposes.
12.5 Equitable Relief. LICENSEE acknowledges that in the event of its
breach of this Agreement, no adequate remedy at law may be available to
NINTENDO and that NINTENDO shall be entitled to seek injunctive or other
equitable relief in addition to any relief available at law.
12.6 Attorney's Fees. In the event it is necessary for either party of
this Agreement to undertake legal action to enforce any of the terms,
conditions or rights contained herein, or to defend any such action, then the
prevailing party in any such action shall be entitled to recover from the other
party all reasonable attorneys' fees, costs and expenses relating to such legal
action.
12.7 Notices. All notices required or permitted under this Agreement shall
be sufficiently given when: (a) personally served or delivered; (b) deposited,
postage prepaid, with a guaranteed air courier service, addressed as stated
herein, or to such other person or address either party may designate in a
notice; or, (c) by facsimile, with an original sent concurrently by first class
U.S. mail. Notice shall be deemed effective upon the earlier of actual receipt
or two (2) business days after transmittal.
12.8 Counterparts; 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, NINTENDO and LICENSEE have entered into this Agreement on
the dates set forth below.
NINTENDO: LICENSEE:
NINTENDO OF AMERICA INC. T.HQ, INC.
By: [ILLEGIBLE] By: /s/ BRIAN J. FARRELL
----------------------------------- -----------------------------------
Its: Executive Vice President, Its: President
Administration
Date: 4/28/97
Date: 5/9/97
NINTENDO 64 LICENSE AGREEMENT
PAGE 10
<PAGE> 11
SCHEDULE 1
NINTENDO OF AMERICA INC. PRICE SHEET
N64 LICENSE GAME PAKS
<TABLE>
<CAPTION>
MEMORY CAPACITY NOA PRICE
<S> <C>
32 Megabit $24.00
32 Megabit + E(2) ROM $26.00
64 Megabit $30.00
64 Megabit + E(2) ROM $32.00
96 Megabit $36.00
96 Megabit + E(2) ROM $38.00
</TABLE>
PRICE INCLUDES AN INSTRUCTION MANUAL UP TO 40 PAGES. THERE WILL BE AN EXTRA
CHARGE FOR MANUALS LARGER THAN 40 PAGES (INCLUDING THE FRONT AND BACK COVER).
EXTRA PACKAGING
(MUST BE ORDERED WITH PRODUCT ON SEPARATE PO)
<TABLE>
<CAPTION>
<S> <C>
Game Pak Box $.20
Instruction Manual
(under 40 pages) $.35
Instruction Manual
(over 40 pages) $.75
Game Pak Label $.10
Game Pak Poster $.15
Warranty Card $.07
</TABLE>
ALL PRICES SUBJECT TO CHANGE WITHOUT PRIOR NOTICE
1/30/97
NINTENDO 64 LICENSE AGREEMENT
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