Exhibit 10.42
CONFIDENTIAL LICENSE
AGREEMENT
FOR NINTENDO DS (Western Hemisphere)
THIS LICENSE AGREEMENT
(“Agreement”) is entered into between NINTENDO OF
AMERICA INC. (“NOA”), at 4820 150th Avenue N.E.,
Redmond, WA 98052 Attn: General Counsel (Fax: 425-882-3585) and
Activision Publishing, Inc., (“LICENSEE”) at 3100
Ocean Park Blvd, Santa Monica, CA 90405 Attn: General Counsel (Fax:
(310) 255-2152). NOA and LICENSEE agree as follows:
1.
RECITALS
1.1
NOA markets and
sells advanced design, high-quality video game systems, including
the Nintendo DS 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
manufactured, advertise, market and sell video game software for
play on the Nintendo DS 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 Card label and Printed
Materials in the format specified by NOA in the
Guidelines.
2.2
“Bulk
Goods” means the Game Cards with Game Card labels
affixed.
2.3
“Development
Tools” means the development kits, programming tools,
emulators and other materials that may be used in the development
of Games under this Agreement.
2.4
“Effective
Date” means October 11, 2004.
2.5
“Finished
Product(s)” means the fully assembled and shrink-wrapped
Licensed Products, each including a Game Card, Game Card label and
Printed Materials.
2.6
“Game
Card(s)” means custom card media specifically manufactured
under the terms of this Agreement for play on the Nintendo DS
system, incorporating semiconductor components in which a Game has
been stored.
2.7
“Game(s)” means
the Nintendo DS version of an interactive video game program, or
other applications approved by Nintendo (including source and
object/binary code) developed for the Nintendo DS
system.
[***] The portions of this document marked
with three asterisks represent confidential portions omitted and
filed separately with the Securities and Exchange
Commission.
2.8
“Guidelines”
means the current version or any future revision of the
“Nintendo DS Packaging Guidelines”, “Nintendo DS
Development Manual” and related guidelines provided by
NOA.
2.9
“Independent
Contractor” means any individual or entity that is not an
employee of LICENSEE, including any independent programmer,
consultant, contractor, board member or advisor.
2.10
“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 Games for the Nintendo DS system including
“Nintendo®”, “Nintendo DSTM”,
“DSTM and the “Official Nintendo Seal®”,
(b) select trade dress associated with the Nintendo DS system
and licensed Games for play thereon, (c) Proprietary Rights in
the Security Technology incorporated into the Game Cards,
(d) rights in the Development Tools for use in developing the
Games, (e) patents or design registrations
Nintendo in the Confidential
Information.
2.11
“Licensed
Products” means (a) Finished Products, or (b) Bulk
Goods when fully assembled and shrink-wrapped with the Printed
Materials.
2.12
“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.
2.13
“NDA”
means the non-disclosure agreement providing for the protection of
Confidential Information related to the Nintendo DS system
previously entered into between NOA and LICENSEE.
2.14
“Notice” means
any notice permitted or required under this Agreement. All notices
shall be sufficiently given when served or delivered,
(b) transmitted by faL,bimile, 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.
2.15
“Price
Schedule” means the current version or any future revision of
NOA’s schedule of purchase prices and minimum order
quantities for Finished Products and Bulk Goods.
2.16
“Printed
Materials” means the Game Card label and title sheet, user
instruction booklet, poster, warranty card and LICENSEE inserts
incorporating the Artwork, together with a precautions booklet as
specified by NOA.
[***] The portions of this document marked
with three asterisks represent confidential portions omitted and
filed separately with the Securities and Exchange
Commission.
2
2.17
“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 mark, copyright, mask work, trade secrets, trade
dress, moral rights or publicity rights may exist or may be sought
and obtained in the future.
2.18
“Reverse
Engineer(ing)” means, without limitation, (a) the x-ray,
electronic scanning or 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.
2.19
“Security
Technology” means, without limitation, any security
signature, bios, data scrambling, password, hardware security
apparatus, watermark, hologram, encryption, Digital Rights
management system, copyright management information system or any
feature that facilitates or limits compatibility with other
hardware, software, or accessories or other peripherals outside of
the Territory or on a different video game system.
2.20
“Term” mean three
(3) years from the Effective Date.
2.21
“Territory” means
all countries within the Western Hemisphere and their respective
territories and possessions.
3.
GRANT OF LICENSE; LICENSEE
RESTRICTIONS
3.1
Limited
License Grant . For the Term and for
the Territory, NOA grants to LICENSEE a nonexclusive,
nontransferable, limited license to use the intellectual Property
Rights to develop 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 valuable nature of the Intellectual Property Rights,
(b) the right, title, and interest of Nintendo in and to the
Intellectual Property Rights, and (c) the right, title and
interest of Nintendo in and to the Proprietary Rights associated
with all aspects of the Nintendo DS system. LICENSEE recognizes
that the Games, Game Cards and Licensed Products will embody
valuable rights of Nintendo and Nintendo’s licensors.
LICENSEE represents and warrants that it will not undertake any act
or thing that 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 is not
licensed to, and covenants that, without the express written
consent of Nintendo, it will not at any time, directly or
indirectly, do or cause to be done any of the
following:
[***] The portions of this document marked
with three asterisks represent confidential portions omitted and
filed separately with the Securities and Exchange
Commission.
3
(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, except
(a) as a part of wireless Game • lay on and among
Nintendo DS systems. (b) for the purpose of facilitating Game
development under the terms of this Agreement, or (c) as
otherwise approved in writing by Nintendo. LICENSEE shall use
reasonable security measures, customary within the high technology
industry, to reduce the risk of unauthorized interception or
retransmission of any Game transmission. No right of retransmission
shall attach to any authorized transmission of a Game,
(b)
modify, install
or operate a Game on any server or other device for the purpose of
or resulting in the rental, lease, loan or sale of rights of access
to the Game,
(c)
emulate,
interoperate, interface or link a Game for operation or use with
any hardware platform, software program, accessory, computer
language, computer environment, chip instruction set, consumer
electronics device, telephone, ceephone, RDA, or other device,
including for ‘purposes of data interchange, password usage
or interactive video game play, other than a Nintendo DS system, an
application approved by Nintendo, or the Development
Tools,
(d)
emulate any past,
current or future Nintendo brand video game system, or any portion
thereof, in software or hardware or any combination
thereof,
(e)
embed,
incorporate, or store a Game in any media or format except the Game
Card format utilized by the Nintendo DS 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
(i)
Reverse Engineer
or assist in the Reverse Engineering of all or any part of the
Development Tools or the Security Technology.
3.4
No Free-Riding
No Co-Publishing Arrangements . To protect
Nintendo’s valuable Intellectual Property Rights, to prevent
the dilution of Nintendo’s trademarks and to preclude
free-riding by third parties on the goodwill associated with
Nintendo’s trademarks, the license granted under this
Agreement is limited to LICENSEE and may not be delegated or
contracted out for the benefit of a third party, or to a division,
affiliate or subsidiary of LICENSEE. This Agreement, together with
all submissions, representations, undertakings and approvals
contemplated of LICENSEE by this Agreement, is and shall remain the
right and obligation only of LICENSEE. All Printed Materials and
Marketing Materials for a Game shall prominently and accurately
identify LICENSEE as NOA’s licensee. NOA does not permit the
designation or
[***] The portions of this document marked
with three asterisks represent confidential portions omitted and
filed separately with the Securities and Exchange
Commission.
4
identification of any third
party co-publisher for a Game on any Licensed Product Game Card
case or Game Card label, however, LICENSEE may identify a third
party as a co-publisher, licensor, developer or other partner of
LICENSEE in those Printed Materials (other than the Game Card
label), Marketing Materials or Game credits. as authorized under
the Guidelines. For purposes of clarification, LICENSEE’s
name, or logo, will appear on the Licensed Product Game Card case
and Game Card label as it appears in the preamble of this
Agreement.
3.5
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 and any separate license or purchase
agreement required by Nintendo. 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) 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 and shall belong to Nintendo, 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 Games and have
manufactured, advertise, market and sell Licensed Products for play
on the Nintendo DS system only in accordance with this
Agreement.
4.2
Third Party
Developers. LICENSEE shall not disclose the Confidential
Information, the Guidelines or the Intellectual Property Rights to
any independent Contractor, nor permit any Independent Contractor
to perform or assist in development work for a Game, unless and
until such Independent Contractor has been approved by NOA and has
executed a written confidentiality agreement with NOA relating to
the Nintendo DS system.
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 [***]. NOA shall promptly evaluate the Game with regard to
its technical compatibility with and error-free operation on the
Nintendo DS system. LICENSEE is responsible for ensuring that the
Game and any other content to be included on the Game Card complies
with the Advertising Code of Conduct of the Entertainment Software
Ratings Board (“ESRB”) and that the Game has
been
[***] The portions of this document marked
with three asterisks represent confidential portions omitted and
filed separately with the Securities and Exchange
Commission.
5
rated EC, E, M or T by the
ESRB. LICENSEE shall provide NOA with a related certificate of
rating for the Game from the ESRB.
4.4
Approval of
Completed Game . NOA shall, within a
reasonable period of time after receipt, approve or disapprove each
submitted Game. If a Game is disapproved, NOA shall specify in
writing the reasons for such disapproval and state what corrections
or improvements are necessary. After making the necessary
corrections or improvements, 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 seven
(7) business days of receipt, NOA shall approve or disapprove
the Artwork. If any Artwork is disapproved, NOA shall specify in
writing the reasons for such disapproval and state what corrections
or improvements are necessary. 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 development and quality of the Artwork or in any way create any
warranty for the Artwork or any Licensed Product by
NOA.
4.6
Artwork for
Bulk Goods . If LICENSEE submits an
order for Bulk Goods, 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 Products or Bulk Goods. 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 Finished Products and Bulk Goods shall
be set forth in NOA’s then current 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, provided, however, that any price increase shall be
applicable only to purchase orders submitted, paid for, and
accepted by NOA after the effective date of the price
increase.
[***] The portions of this document marked
with three asterisks represent confidential portions omitted and
filed separately with the Securities and Exchange
Commission.
6
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 are the
responsibility of the LICENSEE.
5.4
Shipment and
Delivery . All Licensed Products shall
be delivered to LICENSEE EXW Ex works Japan (as defined by
Incoterms 2000), 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
[***].
6.
MANUFACTURE OF THE LICENSED
PRODUCT
6.1
Manufacturing
. Nintendo
shall be the exclusive source for the manufacture of the Game
Cards, and shall control 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.
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 will arrange for
the manufacture of Finished Product or Bulk Goods, as specified in
LICENSEE’s purchase order.
6.3
Security
Features . The final release version
of the Game, Game Cards and Printed Materials shall include such
Security Technology as Nintendo, in its sole discretion and at its
sole expense, may deem necessary or appropriate.
6.4
Production of
Bulk Goods Printed Materials . For Bulk Goods, LICENSEE
shall arrange Goods, LICENSEE shall assemble the Game Cards and
Printed Materials into the Licensed Products. Games may be sold or
otherwise distributed by LICENSEE only in fully assembled and
shrink-wrapped Licensed Products.
6.5
Prior Approval
of LICENSEE’s Independent Contractor . Prior to the placement of
a purchase order for Bulk Goods, LICENSEE shall obtain NOA’s
approval of any Independent Contractors selected to perform
LICENSEE’s production and assembly operations. LICENSEE
shall provide NOA with the names, addresses and all business
documentation reasonably requested by NO
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