Exhibit 10.1

 

CONFIDENTIAL LICENSE AGREEMENT

FOR NINTENDO GAMECUBE
(Asia)

 

THIS LICENSE AGREEMENT (“Agreement”) is entered into between NINTENDO Co.,Ltd.
(“Nintendo”) at 11-1 KAMITOBA-HOKOTATE-CHO MINAMI-KU KYOTO, 601-8501 JAPAN Attn:
General Counsel (Fax: 81-75-662-9603) and THQ Asia Pacific Pty Ltd. (“LICENSEE”)
at Level 8, 606 St Kilda Road, Melbourne, Victoria 3004, Australia, Attn:
Managing Director (Fax: 61-3-9510-8548). Nintendo and LICENSEE agree as follows:

 

1.                                      RECITALS

 

1.1                                 Nintendo markets and sells advanced design,
high-quality video game systems, including the “NINTENDO GAMECUBE™” system.

 

1.2                                 LICENSEE desires use of the highly
proprietary programming specifications, unique and valuable security technology,
trademarks, copyrights and other valuable intellectual property rights of
Nintendo, which rights are only available for use under the terms of a license
agreement, to develop, have manufactured, advertise, market and sell video game
software for play on the NINTENDO GAMECUBE system.

 

1.3                                 Nintendo is willing to grant a license to
LICENSEE on the terms and conditions set forth in this Agreement.

 

2.                                      DEFINITIONS

 

2.1                                 “Artwork” means the text and design
specifications for the Game Disc label and the Printed Materials in the format
specified by Nintendo in the Guidelines.

 

2.2                                 “Bulk Goods” means Game Discs that have been
printed with the Game Disc label Artwork for delivery to LICENSEE without
Printed Materials or other packaging.

 

2.3                                 “Check Disc(s)” means the pre-production
Game Discs to be produced by Nintendo.

 

2.4                                 “Confidential Information” means the
information described in Section 8.1.

 

2.5                                 “Development Tools” means the development
kits, programming tools, emulators and other materials that may be used in the
development of Games under this Agreement.

 

2.6                                 “Effective Date” means the last date on
which all parties shall have signed this Agreement.

 

2.7                                 “Finished Goods” means Game Discs that have
been fully assembled with the Printed Materials, shrink-wrapped and boxed for
delivery to LICENSEE by Nintendo

 

2.8                                 “Game Discs(s)” means custom optical discs
for play on the NINTENDO GAMECUBE system on which a Game has been stored.

 

2.9                                 “Game(s)” means interactive video game
programs (including source and object/binary code) developed for play on the
NINTENDO GAMECUBE system.

 

2.10                           “Guidelines” means the then current version of
the “NINTENDO GAMECUBE Development Manual,” “NINTENDO GAMECUBE Packaging
Guidelines,” “Nintendo Trademark Guidelines”, together with related guidelines.

 

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2.11                           “Independent Contractor” means any individual or
entity that is not an employee of LICENSEE, including any independent
programmer, consultant, contractor, board member or advisor.

 

2.12                           “Intellectual Property Rights” means
individually, collectively or in any combination, Proprietary Rights owned,
licensed or otherwise held by Nintendo that are associated with the development,
manufacturing, advertising, marketing or sale of the Licensed Products,
including, without limitation, (a) registered and unregistered trademarks and
trademark applications used in connection with the NINTENDO GAMECUBE system
including “Nintendo®”, “NINTENDO GAMECUBE™,” “GCN” and “Original Nintendo Seal
of Quality®”, and (b) select trade dress associated with the NINTENDO GAMECUBE
system and licensed video games for play thereon, (c) Proprietary Rights in the
Security Technology employed in the Games or Game Discs by Nintendo, (d) rights
in the Development Tools for use in developing the Games, excluding, however,
rights to use, incorporate or duplicate select libraries, protocols and/or sound
or graphic files associated with the Development Tools which belong to any third
party, without obtaining any necessary licenses or consents, (e) patents, design
registrations or copyrights which may be associated with the Game Discs or
Printed Materials, (f) copyrights in the Guidelines, and (g) other Proprietary
Rights of Nintendo in the Confidential Information.

 

2.13                           “Licensed Products” means (a) Finished Goods, or
(b) Bulk Goods after being assembled with the Printed Materials in accordance
with the Guidelines by LICENSEE.

 

2.14                           “Marketing Materials” means marketing,
advertising or promotional materials developed by or for LICENSEE (or subject to
LICENSEE’s approval) that promote the sale of the Licensed Products, including
but not limited to, television, radio and on-line advertising, point-of-sale
materials (e.g., posters, counter-cards), package advertising, print media and
all audio or video media other than the Game that is to be included on the Game
Disc.

 

2.15                           “NDA” means the non-disclosure agreement related
to the NINTENDO GAMECUBE system previously entered into between Nintendo and/or
its subsidiary company, Nintendo of America Inc. (“NOA”) and LICENSEE.

 

2.16                           “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 registered 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.

 

2.17                           “Price Schedule” means the then current version
of Nintendo’s schedule of purchase prices and minimum order quantities for the
Licensed Products.

 

2.18                           “Printed Materials” means a plastic disc storage
case, title page, instruction booklet, incorporating the Artwork, together with
a precautions booklet in the form specified by Nintendo.

 

2.19                           “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.

 

2.20                           “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.

 

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2.21                           “Security Technology” means the highly
proprietary security features incorporated by Nintendo into the Licensed
Products to minimize the risk of unlawful copying and other unauthorized or
unsafe usage, including, without limitation, any security signature, bios, data
scrambling, password, hardware security apparatus, watermark, hologram,
copyright management information system, proprietary manufacturing process or
any feature which obstructs piracy, limits unlawful, unsafe or unauthorized use
or facilitates or limits compatibility with other hardware or software outside
of the Territory or on a different video game system.

 

2.22                           “Term” means three (3) years from the Effective
Date.

 

2.23                           “Territory” shall mean all countries within
Taiwan, Hong Kong, Singapore, Malaysia, Indonesia, Korea, Thailand and their
respective territories and possessions. Nintendo may add countries at its
option.

 

3.                                      GRANT OF LICENSE; LICENSEE RESTRICTIONS

 

3.1                                 Limited License Grant.  For the Term and for
the Territory, Nintendo grants to LICENSEE a nonexclusive, nontransferable,
limited license to use the Intellectual Property Rights to develop (or have
developed on their behalf) 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 NINTENDO GAMECUBE system.  LICENSEE
recognizes that the Games, Game Discs 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 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 NINTENDO GAMECUBE system or the
Development Tools,

 

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(e)                                  embed, incorporate, or store a Game in any
media or format except the optical disc format utilized by the NINTENDO GAMECUBE
system, except as may be necessary as a part of the Game development process
under this Agreement,

 

(f)                                    design, implement or undertake any
process, procedure, program or act designed to disable, obstruct, circumvent or
otherwise diminish the effectiveness or operation of the Security Technology,

 

(g)                                 utilize the Intellectual Property Rights to
design or develop any interactive video game program, except as authorized under
this Agreement,

 

(h)                                 manufacture or reproduce a Game developed
under this Agreement, except through Nintendo, or

 

(i)                                     Reverse Engineer or assist in Reverse
Engineering all or any part of the NINTENDO GAMECUBE system, including the
hardware, software (embedded or not) or the Security Technology.

 

****

 

3.4                                 Nintendo Development Tools.  Nintendo may
lease, loan or sell Development Tools to LICENSEE to assist in the development
of Games under 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) 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 a
derivative work 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.

 

3.5                                 Third Party Development Tools.  Nintendo may
authorize third parties to develop and market Development Tools to authorized
developers of Games.  Notwithstanding any referral or information provided or
posted regarding such Development Tools, Nintendo makes no representations or
warranties with regard to any such third party Development Tools.  Licensee
acquires and utilizes such Development Tools at its own risk.  LICENSEE shall
not, directly or indirectly, use such Development Tools for any purpose except
the design and development of Games under this Agreement.  All Nintendo
Proprietary Rights contained in or derived from such Development Tools shall
remain owned by Nintendo.

 

3.6                                 Games Developed for Linked Play on Two
Systems.  In the event the Guidelines permit LICENSEE to develop a Game for
simultaneous or linked play on the NINTENDO GAMECUBE system and on another
Nintendo video game system, LICENSEE shall be required to acquire and maintain
with Nintendo such additional licenses as are necessary for the use of the
Proprietary Rights associated with such other Nintendo video game system.

 

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* Confidential portion omitted and filed separately with the Securities and
Exchange Commission.

 

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4.                                      SUBMISSION AND APPROVAL OF GAME AND
ARTWORK

 

4.1                                 Submission of a Completed Game to Nintendo. 
Upon completion of a Game, LICENSEE shall deliver a prototype of the Game to
Nintendo in a format specified in the Guidelines.  Delivery shall be made in
accordance with the methods approved in the Guidelines.  Each Submission shall
include such other information or documentation deemed necessary by Nintendo,
including, without limitation, a complete set of written user instructions, a
complete description of any security holes, backdoors, time bombs, cheats,
“easter eggs” or other hidden features or characters in the Game **** and a
complete screen text script.  LICENSEE must establish that the Game and any
other content included on the Game Disc complies with the any applicable laws,
rules, ordinances and guidelines prescribed by any legislative or administrative
body or any association of video game industry.

 

4.2                                 Testing of a Completed Game.  Upon
submission of a completed Game, Nintendo shall promptly test the Game with
regard to its technical compatibility with and error-free operation on the
NINTENDO GAMECUBE system utilizing the lot check process.  Within a reasonable
period of time after receipt, Nintendo shall approve or disapprove such Game. 
If a Game is disapproved, Nintendo shall specify in writing the reasons for such
disapproval and state what corrections are necessary.  After making the
necessary corrections, LICENSEE shall submit a revised Game to Nintendo for
testing.  Nintendo shall not unreasonably withhold or delay its approval of any
Game.  Neither the testing nor approval of a Game by Nintendo shall relieve
LICENSEE of its sole responsibility for the development, quality and operation,
including but not limited to compatibility with the region code for the NINTENDO
GAMECUBE sold in the Territory, of the Game or in any way create any warranty
for Licensed Product by Nintendo.

 

4.3                                 Production of Check Discs.  By submission of
a completed Game to Nintendo in accordance with section 4.1, LICENSEE authorizes
Nintendo to proceed with production of Check Discs for such Game.  If Nintendo
approves a Game, it shall promptly, and without further notification to or
instruction from LICENSEE, submit such Game for the production of Check Discs. 
Unless otherwise advised by LICENSEE, following production of the Check Discs,
Nintendo shall deliver to LICENSEE approximately ten (10) Check Discs for
content verification, testing and final approval by LICENSEE.

 

4.4                                 Approval or Disapproval of Check Discs by
LICENSEE.  If, after review and testing, LICENSEE approves the Check Discs, it
shall promptly transmit to Nintendo a signed authorization for production in the
form specified in the Guidelines.  If LICENSEE does not approve the sample Check
Discs for any reason, LICENSEE shall advise Nintendo in writing and may, after
undertaking any necessary changes or corrections, resubmit the Game to Nintendo
for approval in accordance with the procedures set forth in this Section 4.  The
absence of a signed authorization form from LICENSEE within five (5) days after
delivery of the Check Discs to LICENSEE shall be deemed disapproval of such
Check Discs.  Production of any order for Licensed Product shall not proceed
without LICENSEE’s signed authorization.

 

4.5                                 Cost of Disc Stamper Production.  If
LICENSEE (a) disapproves the Check Discs for any reason, or (b) fails to order
the minimum order quantity of any Game approved by Nintendo, LICENSEE shall
reimburse Nintendo (or its designee) for the reasonable estimated cost of the
production of the Check Discs, including the cost of the disc stamper.  The
payment will be due upon the earlier of (a) the subsequent submission by
LICENSEE of a revised version of the Game to Nintendo, or (b) six (6) months
after the date the Game was first approved by Nintendo.

 

4.6                                 Submission and Approval of Artwork.  Prior
to submitting a completed Game to Nintendo under Section 4.1, LICENSEE shall
submit to Nintendo all Artwork for the proposed Licensed Product.  Within ten
(10) business days of receipt, Nintendo shall approve or disapprove the
Artwork.  If any Artwork is disapproved, Nintendo 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 Nintendo for approval.  Nintendo shall not
unreasonably withhold or delay its approval of any Artwork.  The approval of the
Artwork by Nintendo shall not relieve

 

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* Confidential portion omitted and filed separately with the Securities and
Exchange Commission.

 

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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 Nintendo.  All Artwork must be approved prior to submitting an order
for the Licensed Product.

 

4.7                                 Artwork for Bulk Goods.  If LICENSEE intends
to submit an order for Bulk Goods, all Artwork shall be submitted to Nintendo in
accordance with Section 4.6 herein.  No Printed Materials shall be produced by
LICENSEE until such Artwork has been approved by Nintendo.

 

5.                                      ORDER PROCESS, PURCHASE PRICE, PAYMENT
AND DELIVERY

 

5.1                                 Submission of Orders by LICENSEE.  After
receipt of Nintendo’s approval for a Game and Artwork, LICENSEE may at any time
submit a written purchase order to Nintendo for such Game.  The purchase order
shall specify whether the order is for Finished Goods or Bulk Goods.  The terms
and conditions of this Agreement shall control over any contrary terms of such
purchase order or any other written documentation or verbal instruction from
LICENSEE.  All orders shall be subject to acceptance by Nintendo.

 

5.2                                 Purchase Price and Minimum Order
Quantities.  The purchase price and minimum order quantities for the Licensed
Products (both Finished Goods and Bulk Goods) shall be set forth in Nintendo’s
then current Price Schedule.  Unless otherwise specifically provided for, the
purchase price includes the cost of manufacturing a single Game Disc, together
with a royalty for the use of the Intellectual Property Rights.  No taxes,
duties, import fees or other tariffs related to the development, manufacture,
import, marketing or sale of the Licensed Products (except for taxes imposed on
Nintendo’s income) are included in the Purchase Price and all such taxes are the
responsibility of LICENSEE.  The Price Schedule is subject to change by Nintendo
at any time without Notice. ****

 

5.3                                 Payment.  Upon placement of an order with
Nintendo, LICENSEE shall pay the full purchase price either (a) by tender of an
irrevocable letter of credit in favor of Nintendo (or its designee) and payable
at sight, issued by a bank acceptable to Nintendo and confirmed, if requested by
Nintendo, at LICENSEE’s expense, or (b) in cash, by wire transfer to an account
designated by Nintendo.  All letters of credit shall comply with Nintendo’s
written instructions and 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 Nintendo, with shipment
at LICENSEE’s direction and expense.  Orders may be delivered by Nintendo in
partial shipments, each directed to not more than one (1) 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 shall be the
exclusive source for the manufacture of the Game Discs and Check Discs, 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.  Upon acceptance by
Nintendo of a purchase order from LICENSEE and receipt of payment as provided
for at Section 5.3 herein, (through its suppliers and subcontractors) arrange
for the manufacture of the Licensed Product.

 

6.2                                 Security Features.  The final release
version of the Game, the Game Disc and the Printed Materials shall include such
Security Technology as Nintendo, in its sole discretion, deems necessary or

 

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* Confidential portion omitted and filed separately with the Securities and
Exchange Commission.

 

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appropriate to (a) reduce the risk of unlawful copying or other unlawful, unsafe
or unauthorized uses, (b) protect the Proprietary Rights of Nintendo and of the
LICENSEE, (c) promote consumer confidence, and (d) increase the quality,
reliability or operation of the NINTENDO GAMECUBE system.

 

6.3                                 Bulk Goods Orders.  LICENSEE may elect to
order Bulk Goods under the terms of this Agreement, in which event LICENSEE
shall arrange and pay for the production of the Printed Materials and the final
assembly of the Licensed Product in accordance with the Guidelines.

 

6.4                                 Printed Materials for Bulk Goods. Upon
delivery to LICENSEE of Bulk Goods, LICENSEE shall assemble the Printed
Materials and Game Discs into the Licensed Products in accordance with the
Guidelines.  No other materials, items, products or packaging may be included in
the assembled Bulk Goods without Nintendo’s prior written consent.  Bulk Goods
may be sold or distributed by LICENSEE only when fully assembled in accordance
with the Guidelines.

 

6.5                                 Prior Approval of LICENSEE’s Independent
Contractors.  Prior to the placement of a purchase order for Bulk Goods,
LICENSEE shall obtain Nintendo’s approval of any Independent Contractors
selected to perform the production and assembly operations.  LICENSEE shall
provide Nintendo with the names, addresses and all business documentation
reasonably requested by Nintendo for such Independent Contractors.  Nintendo
may, prior to approval and at reasonable intervals thereafter, (a) require
submission of additional business or financial information regarding the
Independent Contractors, (b) inspect applicable facilities of the Independent
Contractors, and (c) be present to supervise any work on the Licensed Products
to be done by the Independent Contractors.  If at any time Nintendo deems the
Independent Contractor to be unable to meet quality, security or performance
standards reasonably established by Nintendo, Nintendo 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 Nintendo’s concerns have been resolved to its satisfaction or
until LICENSEE has selected and received Nintendo’s approval of another
Independent Contractor.  Nintendo may establish preferred or required supply
sources for select components of the Printed Materials, which sources shall be
deemed preapproved in accordance with this Section 6.5.  LICENSEE shall comply
with all sourcing requirements established by Nintendo.

 

6.6                                 Sample Printed Materials for Bulk Goods. 
Within a reasonable period of time after LICENSEE’s assembly of an initial order
for a Bulk Goods title, LICENSEE shall provide Nintendo with (a)  **** samples
of the fully assembled Licensed Product, and (b) **** samples of the LICENSEE
produced Printed Materials (excluding the plastic disc storage case and
precautions booklet) for such Bulk Goods.

 

6.7                                 Retention of Sample Licensed Products by
Nintendo.  Nintendo may, at their own expense, manufacture reasonable quantities
of the Game Discs, the Printed Materials or the Licensed Products to be used for
archival purposes, legal proceedings against infringers of the Intellectual
Property Rights and for other lawful purposes, but not for resale.

 

6.8                                 ****

 

7.                                      MARKETING AND ADVERTISING

 

7.1                                 Approval of Marketing Materials.  LICENSEE
represents and warrants that the Printed Materials and the Marketing Materials
shall be of high quality and comply with (a) the Guidelines, (b) all voluntary
ESRB and/or ELSPA advertising, marketing or merchandising guidelines, and/or its
equivalent guidelines, and (c) ****, all applicable laws and regulations in
those jurisdictions in the Territory where they will be used or distributed. 
All LICENSEE controlled websites featuring the Games shall adopt a privacy
policy that has been, ****, observed by any law or regulation governing within
the Territory. Prior to actual use or distribution, LICENSEE shall submit to
Nintendo for review samples of all proposed Marketing Materials.  Nintendo
shall, within ten (10) business days of receipt, approve or disapprove of

 

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* Confidential portion omitted and filed separately with the Securities and
Exchange Commission.

 

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the quality of such samples.  If any of the samples are 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 revised samples for
approval by Nintendo.  No Marketing Materials shall be used or distributed by
LICENSEE without Nintendo’s prior written approval.  Nintendo 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 Goods or Bulk Goods that have been bundled with (a) any
peripheral designed for use with the NINTENDO GAMECUBE system that has not been
licensed or approved in writing by Nintendo, or (b) any other product or service
where Nintendo’s association or endorsement might be suggested by bundling 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 from the purchase date by the consumer and be responsible for
the cost in relation to such limited warranty.  LICENSEE shall also provide
reasonable product service, including out-of-warranty service, for all Licensed
Products.

 

7.4                                 No Sales Outside the Territory.  LICENSEE
represents and warrants that it shall not market, sell, offer to sell, export 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.

 

7.5                                 Defects and Recall.  In the event of a
material programming defect in a Licensed Product that would, in Nintendo’s
reasonable judgment, significantly impair the ability of a consumer to play the
Game, Nintendo may, after consultation with LICENSEE, require the LICENSEE to
recall the Licensed Product and undertake suitable repairs or replacements.

 

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 NINTENDO GAMECUBE 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 development specifications, proprietary
manufacturing processes and/or trade secrets, (b) any information on patents or
patent applications, (c) any business, legal, 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 LICENSEE shall
notify Nintendo at least **** business days prior to such disclosure.  LICENSEE
shall use its best commercial efforts to limit the disclosure to the greatest
extent possible consistent with

 

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* Confidential portion omitted and filed separately with the Securities and
Exchange Commission.

 

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LICENSEE’s legal obligations, and if required by Nintendo, shall cooperate in
the preparation and entry of appropriate protective orders.

 

8.3                                 Disclosure and Use.  Nintendo 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                                 Independent Contractor Use.  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, nor utilize any
Development Tools without Nintendo’s prior written consent. Each approved
Independent Contractor shall be required to enter into a written non-disclosure
agreement with Nintendo prior to receiving any access to or disclosure of such
materials from either LICENSEE or Nintendo.

 

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 Nintendo’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 Nintendo 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
Nintendo.

 

8.6                                 Notification Obligations.  LICENSEE shall
promptly notify Nintendo of the unauthorized use or disclosure of any
Confidential Information of which LICENSEE becomes aware, and shall promptly 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 Nintendo 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
after expiration or termination of this Agreement.  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

 

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* Confidential portion omitted and filed separately with the Securities and
Exchange Commission.

 

9

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(c)                                  excluding the Intellectual Property Rights,
LICENSEE is either (i) the sole owner of all right, title and interest in and to
the trademarks, copyrights and all other Proprietary Rights incorporated into
the Game or the Artwork or used in the development, advertising, marketing and
sale of the Licensed Products or the Marketing Materials, or (ii) the holder of
such rights, including  trademarks, copyrights and all other Proprietary Rights
which belong to any third party but have been licensed from such third party by
LICENSEE, as are necessary for incorporation into the Game or the Artwork or as
are used in the development, advertising, marketing and sale of the Licensed
Products or the Marketing Materials under this Agreement.

 

9.2                                 Nintendo’s Representations and Warranties. 
Nintendo 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 Nintendo does not conflict with any agreement or understanding
to which Nintendo may be bound.

 

9.3                                 INTELLECTUAL PROPERTY RIGHTS DISCLAIMER. 
NINTENDO (ON ITS OWN BEHALF. AND ITS AFFILIATES, LICENSORS, SUPPLIERS AND
SUBCONTRACTORS) EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES
CONCERNING THE SCOPE OR VALIDITY OF THE INTELLECTUAL PROPERTY RIGHTS.  NINTENDO
(ON ITS OWN BEHALF. AND ITS AFFILIATES, LICENSORS, SUPPLIERS AND SUBCONTRACTORS)
EXPRESSLY DISCLAIMS ANY WARRANTY THAT THE DESIGN, DEVELOPMENT, ADVERTISING,
MARKETING OR SALE OF THE LICENSED PRODUCTS OR THE USE OF THE INTELLECTUAL
PROPERTY RIGHTS BY LICENSEE WILL NOT INFRINGE UPON ANY PATENT, COPYRIGHT,
TRADEMARK OR OTHER PROPRIETARY RIGHTS OF A THIRD PARTY.  ANY WARRANTY THAT MAY
BE PROVIDED IN ANY APPLICABLE PROVISION OF ANY LAW OR REGULATION GOVERNING
COMMERCIAL ACTIVITY IS EXPRESSLY DISCLAIMED.  LICENSEE HEREBY ASSUMES THE RISK
OF INFRINGEMENT.

 

9.4                                 GENERAL DISCLAIMER.  NINTENDO (ON ITS OWN
BEHALF. AND ITS AFFILIATES, LICENSORS, SUPPLIERS AND SUBCONTRACTORS) EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTIES WITH RESPECT TO THE GAME DISCS AND THE LICENSED
PRODUCTS, INCLUDING, WITHOUT LIMITATION, THE SECURITY TECHNOLOGY.  LICENSEE
PURCHASES AND ACCEPTS ALL GAME DISCS AND LICENSED PRODUCTS ON AN “AS IS” AND
“WHERE IS” BASIS.  NINTENDO (ON ITS OWN BEHALF. AND ITS AFFILIATES, LICENSORS,
SUPPLIERS AND SUBCONTRACTOR) EXPRESSLY 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 NINTENDO NOR AFFILIATES, LICENSORS, SUPPLIERS
OR SUBCONTRACTORS SHALL BE LIABLE FOR LOSS OF PROFITS, OR FOR ANY SPECIAL,
PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF LICENSEE OR ITS CUSTOMERS
ARISING OUT OF OR RELATED TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE
BREACH OF THIS AGREEMENT BY NINTENDO, THE MANUFACTURE OF THE LICENSED PRODUCTS
OR THE USE OF THE LICENSED PRODUCTS ON ANY NINTENDO VIDEO GAME SYSTEM BY
LICENSEE OR BY ANY END USER.

 

10.                               INDEMNIFICATION

 

10.1                           LICENSEE’s Indemnification.  LICENSEE shall
indemnify and hold harmless Nintendo (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 actual costs and any actual
expenses incurred in the settlement or avoidance of any such claim, which result
from or are in connection with:

 

10

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(a)                                  a material breach of any of the provisions,
representations or warranties undertaken by LICENSEE in this Agreement,

 

(b)                                 any infringement of a third party’s
Proprietary Rights as a result of the design, development, advertising,
marketing, sale or use of any aspect of the Licensed Products, Promotional
Materials or the Marketing Materials, excluding claims based solely upon the
Intellectual Property Rights,

 

(c)                                  any claims alleging a defect, failure to
warn, bodily injury (including death) or other personal or property damage
arising out of, or in connection with, the design, development, compatibility
with the region code for the NINTENDO GAMECUBE sold in the Territory,
advertising, marketing, sale or use of any of any aspect of the Licensed
Products, and

 

(d)                                 any federal, state or foreign civil or
criminal actions relating to the design, development, advertising, marketing,
sale or use of any aspect of the Licensed Products, Promotional Materials or the
Marketing Materials.

 

Nintendo and LICENSEE shall give prompt Notice to the other of any claim which
is or which may be subject to indemnification under this Section 10.1.  With
respect to any such third party claim, LICENSEE, as indemnitor, shall have the
right to select counsel and to control the defense and/or settlement thereof. 
Nintendo 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
matter in which (i) Nintendo has been named as a party, or (ii) claims relating
to the Intellectual Property Rights have been asserted, without Nintendo’s prior
written consent.  Nintendo 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 satisfactory
to Nindendo and shall provide for adequate protection against any suits, claims,
loss or damage by the Licensed Products in the Territory.  Such policy shall
name Nintendo as additional insureds and shall specify it may not be canceled
without thirty (30) days’ prior written Notice to Nintendo.  If LICENSEE fails
to maintain such insurance at any time during the Term and for a period of two
(2) years thereafter and fails to cure within thirty (30) days of written notice
from Nintendo, Nintendo may secure such insurance at LICENSEE’s expense.

 

10.3                           Suspension of Production.  In the event Nintendo
deems itself at risk with respect to any claim, action or proceeding under this
Section 10, Nintendo 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

 

11.1                           Joint Actions against Infringers.  LICENSEE and
Nintendo 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 Nintendo
for their respective reasonable attorneys’ fees and costs, pro rata, and any
remaining recovery shall be distributed to LICENSEE and Nintendo, pro rata,
based upon the fees and costs incurred in bringing such action.

 

11.2                           Actions by LICENSEE.  LICENSEE, without the
consent of Nintendo, 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 good faith efforts to inform
Nintendo 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

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11.3                           Actions by Nintendo.  Nintendo, without the
consent of LICENSEE, may bring any action or proceeding relating to an
infringement or potential infringement of Nintendo’s Intellectual Property
Rights in the Licensed Products.  Nintendo shall make reasonable, good faith
efforts to inform LICENSEE of such actions likely to affect LICENSEE’s rights in
a timely manner.  Nintendo 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 Nintendo’s
prior written consent, of which  may be withheld by Nintendo at its sole
discretion. In the event of an assignment or other disposition in violation of
this Agreement, Nintendo 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 by operation of law which purports to affect this Agreement,
LICENSEE shall, not later than thirty (30) days thereafter, give Notice and seek
consent thereto from Nintendo.  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 or a merger of another business entity
into LICENSEE, (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 the 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) an assignment by operation of law, or (ii)
receipt of Notice of an assignment by operation of law, Nintendo 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 Nintendo’s Confidential Information prior
to or upon the occurrence of an assignment, whether by operation of law or
otherwise, unless and until Nintendo 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 LICENSEE is
in default or commits a breach of this Agreement, which is not cured within
thirty (30) days after Notice thereof, then Nintendo may terminate this
Agreement at its discretion.

 

13.3                           Bankruptcy.  At Nintendo’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, (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 one hundred eighty (180) days to sell any unsold
Licensed Products.  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 Notice of such destruction (with proof certified by an officer of
LICENSEE) shall be delivered to Nintendo.

 

13.5                           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,
advertising, marketing or sale of any Licensed Products.  All Licensed Products
in

 

12

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LICENSEE’s control as of the date of such termination shall be destroyed by
LICENSEE within ten (10) days and Notice of such destruction (with proof
certified by an officer of LICENSEE) shall be delivered to Nintendo.

 

13.6                           Breach of NDA or other Nintendo License
Agreements.  At Nintendo’s option, any breach by LICENSEE of (a) the NDA, or (b)
any other license agreement between Nintendo and LICENSEE relating to the
development of games for any Nintendo video game system, which breach is not
cured within the time period for cure allowed under the applicable agreement,
shall be considered a material breach of this Agreement entitling Nintendo 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 the Licensed Products authorized
under Section 13.4 herein.  LICENSEE shall, within thirty (30) days thereafter,
(a) return to Nintendo all Development Tools, and (b) return to Nintendo or
destroy all Guidelines, writings, drawings, models, data, tools and other
materials and things in relation to this Agreement and/or Nintendo 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 such return or destruction
shall be certified by an officer of LICENSEE and promptly provided to Nintendo.

 

13.8                           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, at its option, 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 Japan and any other country with jurisdiction
over the Licensed Products or the Development Tools.

 

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, Nintendo 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 two (2) years thereafter, LICENSEE agrees to keep reasonably accurate,
complete and detailed records relating to the use of the Confidential Materials,
the Development Tools and the Intellectual Property Rights.  Upon reasonable
Notice to LICENSEE, Nintendo may, at its expense, audit LICENSEE’s records,
reports and other information related to LICENSEE’s compliance with this
Agreement; provided, however, that Nintendo shall not, during the course of the
audit, access LICENSEE’s source code, development plans, marketing plans,
internal business plans or other items deemed confidential by LICENSEE, except
to the extent such materials incorporate, disclose or reference Nintendo’s
Confidential Information or Intellectual Property Rights.

 

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

 

13

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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, 11, 12 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 Japan, 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 to Kyoto District Court exclusively.  Each party
hereby consents to the jurisdiction and venue of such courts for such purposes.

 

14.7                           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.

 

14.8                           Counterparts and Signature.  This Agreement may
be signed in counterparts, which shall together constitute a complete Agreement.

 

IN WITNESS WHEREOF, the parties have entered into this Agreement on the dates
set forth below.

 

 

NINTENDO:

 

LICENSEE:

 

 

 

 

 

NINTENDO CO., LTD.

 

THQ ASIA PACIFIC PTY LTD.

 

 

 

 

 

 

 

 

 

By:

 

 

By:

 

 

Title:

 

 

Title:

 

 

Date:

 

 

Date:

 

 

 

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