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COMMERCIAL EXPLOITATION LICENSE AGREEMENT FOR QUAKE
This Commercial Exploitation License Agreement for QUAKE
(the "Agreement") is between Id Software, Inc., a Texas
Corporation, (hereinafter "Id Software") and Licensee (as described
on the signature page hereof) and is made effective beginning on
the date of last signature hereto (the "Effective Date").
R E C I T A L S
WHEREAS, Id Software is the owner and developer of the
computer software game entitled QUAKE;
WHEREAS, Id Software desires to license certain
non-exclusive rights regarding QUAKE to Licensee; and
WHEREAS, Licensee desires to receive a license for such
rights.
T E R M S A N D C O N D I T I O N S
NOW, THEREFORE, for and in consideration of the mutual
premises contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the undersigned parties do hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the parties
hereto agree the words set forth below shall have the specified
meanings:
a. "Authorized Copy" shall mean one (1) copy of the
Subject Game actually purchased by Licensee from an
Id Software approved retailer; and
b. "Subject Game" shall mean the full registered
version of QUAKE on a CD-ROM and shall not mean the
shareware or any other version.
2. GRANT OF RIGHTS. Id Software hereby grants to
Licensee and Licensee hereby accepts, subject to the provisions and
conditions hereof, a world-wide (except as otherwise provided
herein), non-exclusive, non-transferable, and non-assignable
license to:
a. publicly display an Authorized Copy in exchange for
rental payment;
b. run the Authorized Copy so that it will accept
network/modem connections in exchange for payments
from end-users who also must have actually purchased
an Authorized Copy; and
c. otherwise commercially exploit an Authorized Copy,
except that Licensee shall not copy, reproduce,
manufacture or distribute the Authorized Copy.
3. RESERVATION OF RIGHTS AND PROHIBITIONS. Id Software
expressly reserves all rights not granted herein. Under no
circumstances shall Licensee copy, reproduce, manufacture or
distribute (free of charge or otherwise) the Authorized Copy or the
Subject Game. Licensee shall not reverse engineer, decompile,
disassemble, modify or alter the Authorized Copy. Licensee is not
receiving any rights hereunder regarding the Trademark or any
artwork, sound, music or other element of the Subject Game.
4. OWNERSHIP. Title to and all ownership rights in and
to the Subject Game, and the QUAKE Trademark (the "Trademark") and
the copyrights, trademarks, patents and other intellectual property
rights related thereto shall remain with Id Software which shall have
the exclusive right to protect the same by copyright or otherwise.
Licensee shall have no ownership rights in or to the Subject Game or
the Trademark and Licensee shall not own any intellectual property
rights regarding the Authorized Copy, including, without limitation,
the copyright regarding the Authorized Copy. Licensee acknowledges
that it only has a limited license to use the Authorized Copy, as
specified in that certain QUAKE Enduser License contained within the
Authorized Copy and as specified in this Agreement.
5. TERM AND TERMINATION.
a. The term of this Agreement and the license granted
herein begins on the Effective Date and shall expire on a date one
(1) calendar year from the Effective Date.
b. Either party may terminate this Agreement, for any
reason or no reason, on thirty (30) days written notice to the
other party. Termination will be effective on the thirtieth (30th)
day following delivery of the described notice. Notwithstanding
anything to the contrary herein, this Agreement shall immediately
terminate, without the requirement of any notice from Id Software
to Licensee, upon the occurrence of any of the following: (a) if
Licensee shall file a petition in bankruptcy or make an assignment
for the benefit of creditors, or if any bankruptcy proceeding or
assignment for benefit of creditors, shall be commenced against
Licensee and not be dismissed within sixty (60) days after the date
of its commencement; (b) the insolvency of Licensee; (c) the
cessation by Licensee of its business; or (d) the cessation by
Licensee, without the prior written consent of Id Software of the
distribution, manufacture, and sale responsibilities embodied
herein. Further, Id Software may elect to terminate this Agreement
upon the occurrence of any of the following: (1) if Licensee's
business operations are interrupted for forty (40) consecutive
calendar days; or (2) if each of two Id Software audit inspections
during any eighteen (18) month period demonstrates an
understatement by Licensee of Royalty payments due Id Software for
the six (6) month period immediately preceding each such inspection
of five percent (5%) or more. Upon the occurrence of such
terminating event, and the election of Id Software, if necessary,
to cause such termination, this Agreement and any and all rights
thereunder shall terminate without prejudice to any rights or
claims Id Software may have, and all rights hereunder shall
thereupon terminate, revert to and be vested in Id Software.
6. EFFECT OF TERMINATION OR EXPIRATION. Termination or
expiration of this Agreement, either by Id Software or
automatically, shall not create any liability against Id Software.
Upon expiration or earlier termination of this Agreement, Licensee
shall have no further right to exercise the rights licensed
hereunder or otherwise acquired in relation to this Agreement.
7. INDEMNIFICATION. Licensee hereby agrees to
indemnify, hold harmless and defend Id Software and Id Software's
predecessors, successors, assigns, officers, directors,
shareholders, employees, agents, representatives, licensees,
sublicensees, distributors, attorneys and accountants
(collectively, the "Id Related Parties") from and against any and
all damages, claims, losses, causes of action, liabilities,
lawsuits, judgments and expenses (including, without limitation,
reasonable attorneys' fees and expenses) arising from, relating to
or in connection with a breach of this Agreement by Licensee and
arising from, relating to or in connection with the Licensee's use
or non-use of the Authorized Copy (collectively, the "Claims"). Id
Software agrees to notify Licensee of any such Claims within a
reasonable time after Id Software learns of same. Licensee, at its
own expense, shall defend Id Software and the Id Related Parties
from any and all Claims. Id Software and the Id Related Parties
reserve the right to participate in any defense of the Claims with
counsel of their choice, and at their own expense. In the event
Licensee fails to provide a defense, then Licensee shall be
responsible for paying the attorneys' fees and expenses incurred by
Id Software and the Id Related Parties regarding the defense of the
Claims. Id Software and the Id Related Parties, as applicable,
agree to reasonably assist in the defense of the Claims. No
settlement by Licensee of any Claims shall be valid unless Licensee
receives the prior written consent of Id Software and the Id
Related Parties, as applicable, to any such settlement.
8. CONFIDENTIALITY. It is understood and agreed that
any proprietary information of Id Software that may from time to
time be made available or become known to Licensee is to be treated
as confidential, is to be used solely in connection with Licensee's
performance under this Agreement, and is to be disclosed only to
employees of Licensee who have a need for access. Such proprietary
information shall include, but not be limited to, trade secrets,
release information, financial information, personnel information,
and the like. Reasonable measures shall be taken by Licensee to
protect the confidentiality of Id Software's proprietary
information and any memoranda or papers containing proprietary
information of Id Software's that Licensee may receive are to be
returned to Id Software upon request. Licensee's obligations and
duties under this paragraph shall survive expiration or earlier
termination of this Agreement. Licensee shall obtain from its
employees an undertaking in a form which may be supplied by Id
Software, and which is subject to Id Software's prior written
approval, not to use or disclose to any third party any information
or knowledge concerning the business of Id Software which may be
communicated to such employees.
9. LIMITATION OF LIABILITY. ID SOFTWARE EXPRESSLY
DISCLAIMS ALL WARRANTIES NOT PROVIDED BY ID SOFTWARE HEREUNDER.
UNDER NO CIRCUMSTANCES SHALL ID SOFTWARE BE LIABLE TO LICENSEE FOR
ACTUAL, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR
ANY OTHER DAMAGES, WHETHER OR NOT ID SOFTWARE RECEIVES NOTICE OF
ANY SUCH DAMAGES.
10. COMPLIANCE WITH APPLICABLE LAWS. In performing
under this Agreement, Licensee agrees to comply with all applicable
laws, [including, without limitation, 22 U.S.C., 2778 and 22
U.S.C. C.F.R. Parts 120-130 (1995)] regulations, ordinances and
statutes, including, but not limited to, the import/export laws and
regulations of the United States and its governmental and
regulatory agencies (including, without limitation, the Bureau of
Export Administration and the U.S. Department of Commerce) and all
applicable international treaties and laws. Further, Licensee
shall defend, indemnify and hold harmless Id Software from any and
all sales tax, tariffs and/or duties in connection with Licensee's
performance hereunder.
11. SPECIFIC UNDERTAKINGS BY LICENSEE. In addition to
the obligations of Licensee otherwise set forth in this Agreement,
during the term of this Agreement, and thereafter where specified,
Licensee agrees that:
a. It will not attack the title of Id Software to the
Subject Game or the Trademark and any copyright, patent or
trademark or other intellectual property right related thereto and
it will not attack the validity of the license granted hereunder
during the term hereof or thereafter; and
b. It will promptly inform Id Software of any
unauthorized use of the Authorized Copy, the Subject Game and the
Trademark and any portions thereof and reasonably assist Id
Software in the enforcement of any rights Id Software may have
against such unauthorized users.
12. FINANCIAL OBLIGATIONS AND ACCOUNTING.
a. Payment of Royalties. Licensee agrees to pay Id
Software a royalty ("Royalty") at the rate of twelve and one-half
percent (12.5%) of Net Income. The term "Net Income" shall mean
all revenue received by Licensee from the commercial use of the
Authorized Copy, less only Licensee's actual, documented costs
relating directly to such use. A Royalty shall only be due for
those months in which Licensee's gross revenue from QUAKE
distribution exceeds U.S. Five Thousand Dollars ($5,000.00) and in
such months Licensee shall pay a full Royalty on all revenue
received.
b. Rendition of Statements. Licensee shall account to
Id Software with regard to transactions hereunder within forty-five
(45) days following the conclusion of each calendar quarter.
Licensee hereby represents and warrants that such statements of
account to be prepared shall be true and correct. The accounts
shall show in summary form the appropriate calculations relating to
the computation of Royalties, if any. The statements shall also
show the gross revenue received by Licensee per month. The
Royalties payable to Id Software hereunder shall be remitted with
the particular statement indicating such amount to be due. All
statements hereunder shall be deemed rendered when deposited,
postage prepaid, in the United States mail, addressed to Id
Software at Id Software's address set forth on the signature page
hereof.
c. Books of Account and Audits. Licensee shall keep
books of account relating to the commercial use of the Authorized
Copy on the basis of generally accepted accounting principles and
shall maintain such books of account for a period of at least two
(2) years after the expiration or earlier termination of this
Agreement; provided, however, that Licensee shall not be required
to keep such records longer than seven (7) years from their date of
origination. Id Software may, upon reasonable notice and at its
own expense, audit the applicable records at Licensee's office, in
order to verify statements rendered hereunder. Any such audit
shall take place during reasonable business hours and in such
manner so as not to interfere with Licensee's normal business
activities. Id Software agrees that such information inspected
and/or copied on behalf of Id Software hereunder shall be used only
for the purpose of determining the accuracy of the statements, and
shall be revealed only to such officers, directors, employees,
agents and/or representatives of Id Software as necessary to verify
the accuracy of the statements. If in an audit of Licensee's books
and records it is determined that there is a short fall of ten
percent (10%) or more in Royalties reported for any calendar
quarter, in addition to payment of such short fall and interest as
may be due, as provided herein, Licensee shall reimburse Id
Software for the full out-of-pocket costs of the audit including
reasonable travel costs and expenses; provided, however, that the
amount of reimbursement paid by Licensee shall not exceed U.S.
Fifteen Thousand Dollars ($15,000.00) for any audit.
d. Payment of the Royalty. Licensee assumes all risks
associated with fluctuations in foreign currency exchange rates.
Licensee shall pay and agrees to pay all sums due Id Software in
United States Dollars. With respect to Royalties due for
commercial use outside the United States, other currencies shall be
exchanged at the expense of Licensee into United States Dollars
using the bid price quoted at the Citibank, N.A. of New York, New
York, for the purchase of United States Dollars at the close of
business on the last day of the calendar quarter during which any
amounts accrue. Payment of the Royalties shall be made in Dallas
County, Texas.
e. Interest. If Id Software does not receive the
applicable Royalty payment on or before the due date of such
payment, Licensee agrees to pay and shall pay interest on Royalties
owed to Id Software from such date as specified in the following
sentence at a rate per annum equal to the Index Rate. For purposes
of clarification, the interest will begin to accrue on the first
(1st) day following the due date of the Royalty payment, unless the
Royalty payment is paid timely. The "Index Rate" shall be the
prime rate as published in The Wall Street Journal's "Money Rates"
table. If multiple prime rates are quoted in the table, then the
highest prime rate will be the Index Rate. In the event that the
prime rate is no longer published in the "Money Rates" table, then
Id Software will choose a substitute Index Rate which is based upon
comparable information. The applicable interest rate will be
determined and take effect on the first day of each month.
NOTHING HEREIN SHALL BE CONSTRUED AS A REQUEST OR DEMAND BY
ID SOFTWARE OF INTEREST AT A RATE HIGHER THAN ALLOWED BY APPLICABLE
LAW. IT IS THE INTENT OF THE PARTIES HERETO THAT NO INTEREST BE
CHARGED HEREUNDER WHICH EXCEEDS THE MAXIMUM RATE ALLOWED BY
APPLICABLE LAW. IF THE RATE REFERENCED ABOVE EXCEEDS THE MAXIMUM
RATE ALLOWED BY APPLICABLE LAW, THEN THE INTEREST RATE MADE
APPLICABLE HEREIN SHALL BE THE MAXIMUM RATE ALLOWED BY APPLICABLE
LAW.
13. SUBLICENSE. Licensee shall not be entitled to
sublicense any of its rights under this Agreement.
14. GOODWILL. Licensee recognizes the great value of
the goodwill associated with the Subject Game and the Trademark,
and acknowledges that such goodwill, now existing and hereafter
created, exclusively belongs to Id Software and that the Trademark
has acquired a secondary meaning in the mind of the public.
15. REMEDIES. In the event of a breach of this
Agreement by Id Software, Licensee's sole remedy shall be to
terminate this Agreement. In the event of a breach by Licensee of
this Agreement, Id Software may pursue the remedies to which it is
entitled under applicable law, including, but not limited to,
termination of this Agreement. Licensee agrees that its failure to
comply with the terms of this Agreement upon expiration or earlier
termination hereof or Licensee's unauthorized use of the Authorized
Copy may result in immediate and irreparable damage to Id Software
for which there is no adequate remedy at law, and in the event of
such failure by Licensee, Id Software shall be entitled to
injunctive relief. Pursuit of any remedy by Id Software shall not
constitute a waiver of any other right or remedy of Id Software
under this Agreement or under applicable law. Termination of this
Agreement shall not be a pre-condition to Id Software pursuing its
other remedies for breach.
16. LICENSEE'S WARRANTIES. Licensee warrants and
represents that it has full legal rights to enter into this
Agreement and to perform its obligations hereunder and that it will
comply, at all times during the terms of this Agreement, with all
applicable laws, as set forth hereinabove.
17. BANKRUPTCY. If Licensee's liabilities exceed its
assets, or if Licensee becomes unable to pay its debts as they
become due or if Licensee files for voluntary bankruptcy, or is
placed in bankruptcy which is not dissolved or dismissed after
thirty (30) days from the petition filing date, or if Licensee
becomes insolvent, or makes an assignment for the benefit of its
creditors or an arrangement pursuant to any bankruptcy laws or if
Licensee discontinues its business or if a receiver is appointed
for its business, this Agreement shall automatically terminate,
without notice, and become null and void; provided, however, all
duties of Licensee upon termination or expiration of this Agreement
shall continue in full force and effect.
18. ENTIRE AGREEMENT AND ASSIGNMENT. This Agreement
constitutes the entire understanding between Licensee and Id
Software regarding the Subject Game. Each and every clause of this
Agreement is severable from the whole and shall survive unless the
entire Agreement is declared unenforceable. No prior or present
agreements or representations shall be binding upon any of the
parties hereto unless incorporated in this Agreement. No
modification or change in this Agreement shall be valid or binding
upon the parties unless in writing, executed by the parties to be
bound thereby. This Agreement shall bind and inure to the benefit
of Id Software, its successors and assigns, and Id Software may
assign its rights hereunder, in Id Software's sole discretion.
This Agreement is personal to Licensee, and Licensee shall not
sublicense, assign, transfer, convey nor franchise its rights
granted hereunder.
19. CHOICE OF LAW, VENUE AND SERVICE OF PROCESS. This
Agreement shall be construed in accordance with the laws of the
State of Texas and applicable U.S. federal law and all claims
and/or lawsuits in connection with this Agreement must be brought
in Dallas County, Texas. Licensee hereby agrees that service of
process by certified mail to the address set forth below, with
return receipt requested, shall constitute valid service of process
upon Licensee. If for any reason Licensee has moved or cannot be
validly served, then Licensee appoints the Secretary of State of
the state of Texas to accept service of process on Licensee's
behalf.
20. EXCUSED PERFORMANCE. Neither party shall be deemed
to be in default of any provision of this Agreement nor be liable
for any delay, failure in performance or interruption of service,
resulting directly or indirectly from acts of God, civil or
military authority, civil disturbance, military action, war,
strikes, other catastrophes or any other similar cause beyond its
reasonable control. Written notice to the non-affected party of any
such condition shall be given by the affected party within ten (10)
days of the event.
21. DELIVERY OF NOTICES, AND DELIVERY OF PAYMENTS.
Unless otherwise directed in writing by the parties, all notices
given hereunder and all payments made hereunder shall be sent to
the addresses set forth on the signature page hereof. All
notices, requests, consents and other communications under this
Agreement shall be in writing and shall be deemed to have been
delivered on the date personally delivered or on the date deposited
in the United States Postal Service, postage prepaid, by certified
mail, return receipt requested, or telegraphed and confirmed, or
delivered by electronic facsimile and confirmed. Any notice to Id
Software shall also be sent to its counsel: D. Wade Cloud, Jr.,
Hiersche, Martens, Hayward, Drakeley & Urbach, P.C., 15303 Dallas
Parkway, Suite 700, LB 17, Dallas, Texas 75248.
22. NO PARTNERSHIP, ETC. This Agreement does not
constitute and shall not be construed as constituting a partnership
or joint venture between Id Software and Licensee. Neither party
shall have any right to obligate or bind the other party in any
manner whatsoever, and nothing herein contained shall give, or is
intended to give, any rights of any kind to any third persons.
23. COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which will be deemed to be an
original, and each of which alone and all of which together, shall
constitute one and the same instrument, but in making proof of this
Agreement it shall not be necessary to produce or account for each
copy of any counterpart other than the counterpart signed by the
party against whom this Agreement is to be enforced. This
Agreement may be transmitted by facsimile, and it is the intent of
the parties for the facsimile of any autograph printed by a
receiving facsimile machine to be an original signature and for the
facsimile and any complete photocopy of the Agreement to be deemed
an original counterpart.
24. MEDIATION. If a dispute arises out of or relates to
this Agreement, or a breach of this Agreement, and if the dispute
cannot be settled through direct discussion, then the parties agree
to endeavor to settle the dispute in an amicable manner by
mediation, under the applicable provisions of Section 154.00 et
seq., Texas Civil Practices and Remedies Code, as supplemented by
the rules of the Association of Attorney Mediators.
25. SURVIVAL. The following provisions shall survive
the expiration or earlier termination of this Agreement:
paragraphs 4., 7., 8., and the audit rights of Id Software in
paragraph 12.c.
26. MISCELLANEOUS.
a. All captions in this Agreement are intended solely
for the convenience of the parties, and none shall effect the
meaning or construction of any provision.
b. The terms and conditions of this Agreement have been
negotiated fully and freely among the parties. Accordingly, the
preparation of this Agreement by counsel for a given party will not
be material to the construction hereof, and the terms of this
Agreement shall not be strictly construed against such party.
By signing in the spaces provided below, the parties have
agreed to all of the terms and conditions set forth in this
Agreement.
AGREED:
LICENSEE:
Signed:_______________________________
Printed Name:_________________________
Title:________________________________
Address:______________________________
______________________________________
______________________________________
Telephone #: _________________________
Fax #:________________________________
E-Mail Address:_______________________
Date: ________________________________
AGREED:
ID SOFTWARE, INC.
Signed:_______________________________
Printed Name:_________________________
Title:________________________________
Address:______________________________
______________________________________
______________________________________
Telephone #: _________________________
Fax #:________________________________
E-Mail Address:_______________________
Date: ________________________________
June 10, 1996
COMMERCIAL EXPLOITATION LICENSE AGREEMENT FOR QUAKE
(DWC:dw:3406.0299:dwc\doc:5017)