Exhibit 10.1

 

CONFIDENTIAL LICENSE AGREEMENT

FOR THE Wii CONSOLE
(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 THQ INC. (“LICENSEE”) at 29903 Agoura Road, Agoura
Hills, CA 91301, Attn: Business & Legal Affairs (Fax: 818-871-7400). NOA and
LICENSEE agree as follows:

 

1.                                      RECITALS

 

1.1                              NOA markets and sells advanced design,
high-quality video game systems, including the  Wii video game console (“Wii”).

 

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 NOA
and its parent company, Nintendo Co., Ltd., 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 Wii.

 

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 text and design
specifications for the Game Disc label and the Printed Materials in the format
specified by NOA 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 of Nintendo, or third
parties authorized by Nintendo, that may be used in the development of Games
under this Agreement.

 

2.6                                 “Effective Date” means October 13, 2006.

 

2.7                                 “Game Discs(s)” means custom optical discs
for play on Wii on which a Game has been stored.

 

2.8                              “Game(s)” means any interactive programs
(including source and object/binary code) developed to be compatible with Wii.

 

2.9                                 “Guidelines” means the then current version
of “Wii Programming Guidelines,” “Licensee Packaging Guidelines,” and “Nintendo
Trademark Guidelines,” together with other guidelines provided by NOA to
LICENSEE from time to time.

 

2.10                           “Independent Contractor” means any individual or
entity that is not an employee of

 

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

 

 

 

 

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LICENSEE, including any independent programmer, consultant, contractor, board
member or advisor.

 

2.11                           “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 Wii including “Nintendo®”,
“WiiTM,” “Official Nintendo Seal of Quality®”, and MiiTM , (b) select trade
dress associated with Wii 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.

 

2.12                           “Licensed Products” means Bulk Goods after being
assembled by or for LICENSEE with the Printed Materials in accordance with the
Guidelines.

 

2.13                           “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 content other than the Game that is to be included on the
Game Disc.

 

2.14                           “NDA” means the non-disclosure agreement related
to Wii previously entered into between NOA and LICENSEE.

 

2.15                           “Nintendo” means NOA’s parent company, Nintendo
Co., Ltd., of Kyoto, Japan, individually or collectively with NOA.

 

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 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.

 

2.17                           “Price Schedule” means the then current version
of NOA’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, warranty card and poster incorporating
the Artwork

 

2.19                           “Promotional Disc(s)” means custom optical discs
compatible with Wii that incorporate select game promotional or supplemental
materials, as may be specified or permitted in the Guidelines.

 

2.20                           “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.

 

2.21                           “Rebate Program” means any then current version
of NOA’s optional rebate program, establishing select terms for price rebates
under this Agreement.

 

 

 

 

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2.22                           “Reverse Engineer(ing)” means, without
limitation, (a) the x-ray, electronic scanning or physical or chemical stripping
of semiconductor components, (b) the disassembly, decompilation, decryption or
simulation of object code or executable code, or (c) any other technique
designed to extract source code or facilitate the duplication of a program or
product.

 

2.23                           “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,
encryption, digital rights management system,  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.

 

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

 

2.25                           “Territory” means all countries within the
Western Hemisphere and their respective territories and possessions.

 

2.26                           “Wii Network Services” means and includes the Wii
Shop Channel Services, WiiConnect24, and any related services and material
delivered to a consumer’s Wii console over the Internet.

 

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 (or have developed on
their behalf) Games for manufacture, advertising, marketing and sale by LICENSEE
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 Wii. 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. ****  Licensee is authorized and permitted to develop Games, and have
manufactured, advertise, market, and sell Licensed Products, only for play on
Wii and only in accordance with this Agreement. ****

 

3.3                                 LICENSEE Restrictions and Prohibitions.
LICENSEE is not licensed to and covenants that, without the express, written
consent of NOA, 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, except
(a) as a part of wireless Game play on and among Wii systems, or between Wii and
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;

 

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

 

 

 

 

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(b)                                 authorize or permit any online activities
involving a Game, including, without limitation, multiplayer, peer-to-peer or
online play, except as expressly permitted by Nintendo;

 

(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 Wii, the Nintendo DS system, the
Development Tools or such other Nintendo system as NOA may authorize in the
Guidelines;

 

(e)                                  embed, incorporate, or store a Game in any
media or format except the optical disc format utilized by Wii, 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 Wii, including the hardware, software (embedded
or not) 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 identification of any third party co-publisher for a Game on any
Licensed Product, Game Disc or Game Disc label Artwork, 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 Disc 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 Disc case and Game Disc label as it appears in the preamble of this
Agreement.

 

3.5                                 Nintendo Development Tools. NOA and Nintendo
Co., Ltd. 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

 

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

 

 

 

 

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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 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.

 

3.6                                 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 signed a confidentiality agreement with LICENSEE
that is no less restrictive than the terms of Section 8 below, and that
expressly includes the following language:

 

“Independent Contractor may have access to highly-confidential and proprietary
information, intellectual property, and trade secrets of Nintendo Co., Ltd.
and/or Nintendo of America Inc. (collectively, “Nintendo”). Independent
Contractor expressly acknowledges (i) the valuable nature of such materials; and
(ii) Nintendo’s right, title and interest in such materials. All such materials
constitute confidential information under this agreement and shall be treated by
Independent Contractor as such. Independent Contractor shall 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 such materials. Independent
Contractor’s use of such materials shall not create any right, title or interest
of Independent Contractor therein. Nintendo Co., Ltd. and Nintendo of America
Inc. are intended third-party beneficiaries of this agreement.”

 

LICENSEE shall, upon **** request by NOA, provide NOA with copies of the
confidentiality agreements required by this Section. Notwithstanding any such
confidentiality agreement, LICENSEE shall remain fully responsible for, and
shall hold NOA and Nintendo Co., Ltd. harmless against, any breach of the
confidentiality agreement by any Independent Contractor involving any
Confidential Information, Guidelines, or Intellectual Property Rights.

 

3.7                                 Third Party Development Tools. NOA and
Nintendo Co., Ltd. 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, NOA and
Nintendo Co., Ltd. make 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.

 

3.8                                 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 Wii and on another Nintendo video game system,
LICENSEE shall be required to acquire and maintain with NOA such additional
licenses as are necessary for the use of the Proprietary Rights associated with
such other Nintendo video game system.

 

3.9                                 In Game Advertising. LICENSEE shall not
include advertising or product placements for products or services of third
parties, whether in the Game, as separate content on a Game Disc (e.g., a

 

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

 

 

 

 

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trailer), or in the Printed Materials without Nintendo’s prior written consent
****.

 

3.10                           Use of Mii Characters. LICENSEE shall not develop
any Game that permits Nintendo’s Mii characters to appear in the Game without
NOA’s prior, written consent.

 

3.11                           Sending Data to Consumers. LICENSEE shall not,
without the prior, written consent of NOA, send any data, content, messages,
advertising, or other communications of any kind to any consumer’s Wii console
through the Wii Network Services or otherwise.

 

3.12                        Downloadable Content. If LICENSEE desires to develop
Games, or updates/additions of any kind for any Licensed Product, to be
downloaded to consumers through the Wii Network Services, the terms and
conditions of such development shall be separately agreed in writing between the
parties. LICENSEE acknowledges that the rights granted herein do not include the
right to use the Intellectual Property Rights to develop downloadable content.

 

4.                                      SUBMISSION AND APPROVAL OF GAME AND
ARTWORK

 

4.1                                 Submission of a Completed Game to NOA. Upon
completion of a Game, LICENSEE shall deliver a prototype of the Game to NOA 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 NOA, 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 Advertising Code of Conduct of the Entertainment
Software Ratings Board (“ESRB”) and that the Game has been rated EC, E, E10+, T
or M (or another non-Adult Only category added by the ESRB) by the ESRB.
LICENSEE shall provide NOA with a certificate of rating for the Game issued by
the ESRB.

 

4.2                                 Testing of a Completed Game. Upon submission
of a completed Game, NOA and Nintendo Co., Ltd. shall promptly test the Game
with regard to its technical compatibility with and error-free operation on Wii
utilizing the lot check process. Within a reasonable period of time after
receipt, NOA shall approve or disapprove such Game ****. If a Game is
disapproved, NOA 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 NOA for testing. NOA shall
not unreasonably withhold or delay its approval of any Game. Neither the testing
nor approval of a Game by NOA or Nintendo Co., Ltd. shall relieve LICENSEE of
its sole responsibility for the development, quality and operation of the Game
or in any way create any warranty by NOA or Nintendo Co., Ltd. relating to any
Licensed Product.

 

4.3                                 Production of Check Discs. By submission of
a completed Game to NOA in accordance with section 4.1, LICENSEE authorizes
Nintendo to proceed with production of Check Discs for such Game. If NOA
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,
NOA 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 NOA 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 NOA in writing and may, after
undertaking any necessary changes or corrections, resubmit the Game to NOA 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.

 

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

 

 

 

 

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Production of any order for Bulk Goods shall not proceed without LICENSEE’s
signed authorization.

 

4.5                                 Cost of Check Discs and Disc Stamper. If
LICENSEE: (a) disapproves the Check Discs for any reason; (b) fails to order the
minimum order quantity of any Game approved by NOA within six (6) months after
the date the Game was first approved by NOA; or (c) submits a revised version of
the Game to NOA after production of such Game has commenced, LICENSEE shall
reimburse NOA (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 (i) thirty (30) days after NOA’s written notification to
LICENSEE of the Check Disc fee due NOA because of LICENSEE’s failure to approve
such Check Disc; (ii) six (6) months after the date the Game was first approved
by NOA; or (iii) upon the subsequent submission by LICENSEE of a revised version
of the Game to NOA, as the case may be.

 

4.6                                 Submission and Approval of Artwork. Prior to
submitting a completed Game to NOA under Section 4.1, LICENSEE shall submit to
NOA all Artwork for the proposed Licensed Product. Within ten (10) 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 shall not relieve LICENSEE of
its sole responsibility for the development and quality of the Artwork or in any
way create any warranty for the Artwork or the Licensed Product by NOA. All
Artwork must be approved prior to submitting an order for the Bulk Goods, and
LICENSEE shall not produce any Printed Materials for commercial distribution
until such Artwork has been approved by NOA.

 

4.7                                 Promotional Discs. In the event NOA issues
Guidelines in the future that permit LICENSEE to develop and distribute
Promotional Discs, either separately or as a part of the Licensed Product, the
content and specifications of such Promotional Disc shall be subject to all of
the terms and conditions of this Agreement, including, without limitation, the
Guidelines, the Price Schedule and the submission and approval procedures
provided for in this Section 4.

 

5.                                      ORDER PROCESS, PURCHASE PRICE, PAYMENT
AND DELIVERY

 

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

 

5.2                                 Purchase Price and Minimum Order Quantities.
The purchase price and minimum order quantities for the Bulk Goods shall be set
forth in NOA’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 NOA’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 NOA at any time without Notice, ****.

 

5.3                                 Payment. Upon placement of an order with
NOA, LICENSEE shall pay the full purchase price either (a) by tender of an
irrevocable letter of credit in favor of NOA (or its designee) 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 an account designated
by NOA. All letters of credit shall comply with NOA’s written instructions and
all associated banking charges shall be for LICENSEE’s account.

 

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

 

 

 

 

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5.4                                 Delivery of Bulk Goods. Bulk Goods shall be
delivered to LICENSEE FCA Torrance, California, USA, or such other delivery
point within the continental United States as may be specified by NOA. Orders
may be delivered in partial shipments, at NOA’s option. Title to Bulk Goods
shall vest in LICENSEE in accordance with the terms of the applicable letter of
credit, or in the absence thereof, upon delivery to LICENSEE and receipt by NOA
of full payment for the shipment at issue. The term “FCA” shall have the same
meaning for purposes of this Section as given by INCOTERMS 2000.

 

5.5                                 Rebate Program. NOA, at its sole option,
may elect to offer LICENSEE a Rebate Program. The terms and conditions of any
rebate program shall be subject to NOA’s sole discretion. LICENSEE shall not be
entitled to offset any claimed rebate amount against other amounts owing NOA. No
interest shall be payable by NOA to LICENSEE on any claimed rebate. The Rebate
Program is subject to change or cancellation by NOA at any time without Notice.

 

6.                                      MANUFACTURE OF THE LICENSED PRODUCT

 

6.1                                 Manufacturing. Nintendo Co., Ltd. shall be
the exclusive source for the manufacture of the Game Discs, Check Discs and
Promotional 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 NOA of a purchase order from LICENSEE and receipt of payment as
provided for at Section 5.3 herein, NOA shall place the order with Nintendo Co.,
Ltd. who shall (through its suppliers and subcontractors) arrange for
manufacturing.

 

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 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 Wii.

 

6.3                                 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 or
assembled with the Bulk Goods without NOA’s prior written consent ****. Bulk
Goods may be sold or distributed by LICENSEE only when fully assembled in
accordance with the Guidelines.

 

6.4                                 Prior Approval of LICENSEE’s Independent
Contractors. Prior to the placement of a purchase order for Bulk Goods, LICENSEE
shall obtain NOA’s approval of any Independent Contractors selected to
perform the production and assembly operations. LICENSEE shall provide NOA with
the names, addresses and all business documentation reasonably requested by NOA
for such Independent Contractors. NOA may, prior to approval and at reasonable
intervals thereafter, (a) require submission of additional business or financial
information regarding the Independent Contractors, (b) inspect 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 NOA **** deems the Independent Contractor to be unable to meet
quality, security or performance standards reasonably established by NOA, NOA
may refuse to grant its approval or withdraw its approval upon Notice to
LICENSEE. LICENSEE may not proceed with the production of the Printed Materials
or assembly of the Licensed Product until NOA’s concerns have been resolved to
its satisfaction or until LICENSEE has selected and received NOA’s approval of
another Independent Contractor. NOA may establish preferred or required supply
sources for select components of the Printed Materials, or for assembly of
Printed Materials and Bulk Goods into Licensed Products, which sources shall be
deemed preapproved in accordance with this Section 6.4. LICENSEE shall comply
with all sourcing requirements established by NOA.

 

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

 

 

 

 

PAGE 8

 

 

 

 

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

 

6.6                                 Retention of Sample Licensed Products by
NOA. NOA or Nintendo may, at their own expense, manufacture reasonable
quantities of the Bulk Goods, and make a reasonable number of copies of the
Printed Materials to be used for archival purposes, legal proceedings against
infringers of the Intellectual Property Rights and for other lawful purposes.

 

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) the Advertising
Code of Conduct and the Principles and Guidelines for Responsible Advertising of
the ESRB, and (c) all applicable laws and regulations in those jurisdictions in
the Territory where they will be used or distributed, including without
limitation all applicable privacy laws such as the Children’s Online Privacy
Protection Act. Prior to actual use or distribution, LICENSEE shall submit to
NOA for review samples of all proposed Marketing Materials. NOA shall, within
ten (10) business days of receipt, approve or disapprove of the quality of such
samples. If any of the samples are disapproved, NOA shall specify 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 NOA. No Marketing
Materials shall be used or distributed by LICENSEE without NOA’s prior written
approval. NOA shall not unreasonably withhold or delay its approval of any
proposed Marketing Materials.

 

7.2                                 No Bundling. To protect Nintendo’s valuable
Intellectual Property Rights, to prevent the dilution of Nintendo’s trademarks
and to preclude free-riding by non-licensed products on the goodwill associated
with Nintendo’s trademarks, LICENSEE shall not market or distribute any Games or
Game Discs that have been bundled with (a) any peripheral designed for use with
Wii that has not been licensed or approved in writing by NOA, or (b) any other
product or service where NOA’s association, approval 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. LICENSEE shall also provide reasonable product service,
including out-of-warranty service, for all Licensed Products ****. LICENSEE
shall make such warranty and repair information available to consumers as
required by applicable federal and state law.

 

7.4                                 Business Facilities. LICENSEE agrees to
develop and maintain  (a) suitable office facilities within the United States,
adequately staffed to enable LICENSEE to fulfill all responsibilities under this
Agreement, (b) **** necessary warehouse, distribution, marketing, sales,
collection and credit operations to facilitate proper handling of the Licensed
Product, and (c) customer service and game counseling, including telephone
service, to adequately support the Licensed Products.

 

7.5                                 No Sales Outside the Territory. LICENSEE
covenants that it shall not **** market, sell, offer to sell, import or
distribute the Licensed Products outside the Territory, or within the Territory
when LICENSEE has actual or constructive knowledge that a subsequent destination
of the Licensed Product is outside the Territory.

 

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

 

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

 

 

 

 

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undertake suitable repairs or replacements.

 

7.7                                 NOA Promotional Materials, Publications and
Events. At its option and expense, NOA may (a) utilize screen shots, Artwork and
information regarding the Licensed Products in Nintendo Power, Nintendo Power
Source, official Nintendo sponsored web sites or other advertising, promotional
or marketing media, which promotes Nintendo products, services or programs, and
(b) exercise public performance rights in the Games and use related trademarks
and Artwork in connection with NOA sponsored contests, tours, conventions, trade
shows, press briefings and similar events which promote ****.

 

7.8                                 Nintendo Gateway System. To promote and
increase demand for games on Nintendo video game systems, NOA licenses select
games in various non-coin activated commercial settings such as commercial
airlines, cruise ships, rail systems and hotels, where customers play games on
specially adapted Nintendo video game hardware referred to as the “Nintendo
Gateway System”. If NOA identifies a Game for possible license on the Nintendo
Gateway System, the parties agree to conduct good faith negotiations to
determine commercially reasonable terms for such participation.

 

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 Wii 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 NOA at least ****  days prior to such disclosure. LICENSEE shall use
its best **** efforts to limit the disclosure to the greatest extent possible
consistent with LICENSEE’s legal obligations, and if required by NOA, shall
cooperate in the preparation and entry of appropriate protective orders.

 

8.3                                 Disclosure and Use. NOA may provide LICENSEE
with highly confidential development information, Guidelines, Development Tools,
systems, specifications and related resources and information constituting and
incorporating the Confidential Information to assist LICENSEE in the development
of Games. LICENSEE agrees to maintain all Confidential Information as strictly
confidential and to use such Confidential Information only in accordance with
this Agreement. LICENSEE shall limit access to the Confidential Information to
LICENSEE’s employees, and Independent Contractors that are in compliance with
the requirements of Section 3.6 above, having a strict need to know and shall
advise such individuals of their obligation of confidentiality as provided
herein. LICENSEE shall require each

 

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

 

 

 

 

PAGE 10

 

 

 

 

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such individual retain in confidence the Confidential Information pursuant to a
written non-disclosure agreement with LICENSEE. LICENSEE shall use its best ****
efforts to ensure that individuals who are permitted hereunder to work with or
otherwise having access to Confidential Information shall not disclose or make
any unauthorized use of the Confidential Information.

 

8.4                                 Agreement Confidentiality. LICENSEE agrees
that the terms, conditions and contents of this Agreement shall be treated as
Confidential Information. Any public announcement or press release regarding
this Agreement or the release dates for Games developed by LICENSEE under this
Agreement shall be subject to NOA’s prior written approval ****. The parties
may disclose this Agreement (a) to accountants, banks, financing sources,
lawyers, parent companies and related parties under substantially equivalent
confidentiality obligations, (b) in connection with any formal legal proceeding
for the enforcement of this Agreement, (c) as required by the regulations of the
Securities and Exchange Commission (“SEC”), provided that all Confidential
Information shall be redacted from such disclosures to the maximum extent
allowed by the SEC, and (d) in response to lawful process, subject to a written
protective order approved in advance by NOA.

 

8.5                                 Notification Obligations. LICENSEE shall
promptly notify NOA of the unauthorized use or disclosure of any Confidential
Information by LICENSEE or any of its employees, or any Independent Contractor
or its employees **** 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 NOA under this Agreement or applicable law.

 

8.6                                 Continuing Effect of the NDA. The terms of
this Section 8 supplement the terms of the NDA, which shall remain in effect. In
the event of a conflict between the terms of the NDA and this Agreement, the
provisions of this Agreement shall control.

 

9.                                      REPRESENTATIONS AND WARRANTIES

 

9.1                                 LICENSEE’s Representations and Warranties.
LICENSEE represents and warrants that:

 

(a)                                  it is a duly organized and validly existing
corporation and has full authority to enter into this Agreement and to carry out
the provisions hereof,

 

(b)                                 the execution, delivery and performance of
this Agreement by LICENSEE does not conflict with any agreement or understanding
to which LICENSEE may be bound, and

 

(c)                                  excluding the Intellectual Property Rights,
LICENSEE is either (i) the sole owner of all right, title and interest in and to
the trademarks, copyrights and 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                                 NOA’s Representations and Warranties. NOA
represents and warrants that:

 

(a)                                  it is a duly organized and validly existing
corporation and has full authority to enter into this Agreement and to carry out
the provisions hereof, and

 

(b)                                 the execution, delivery and performance of
this Agreement by NOA does not conflict with any agreement or understanding to
which NOA may be bound.

 

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

 

 

 

 

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9.3                                 INTELLECTUAL PROPERTY RIGHTS DISCLAIMER. NOA
(ON ITS OWN BEHALF AND ON BEHALF OF NINTENDO CO., LTD. AND ITS AFFILIATES,
LICENSORS, SUPPLIERS AND SUBCONTRACTORS) EXPRESSLY DISCLAIMS ALL REPRESENTATIONS
AND WARRANTIES CONCERNING THE SCOPE OR VALIDITY OF THE INTELLECTUAL PROPERTY
RIGHTS. NOA (ON ITS OWN BEHALF AND ON BEHALF OF NINTENDO CO., LTD. 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 THE UNIFORM COMMERCIAL CODE OR ANY OTHER COMPARABLE LAW OR STATUTE
IS EXPRESSLY DISCLAIMED. LICENSEE HEREBY ASSUMES THE RISK OF INFRINGEMENT.

 

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

 

10.                               INDEMNIFICATION

 

10.1                           LICENSEE’s Indemnification. LICENSEE shall
indemnify and hold harmless NOA and Nintendo Co., Ltd. (and any of their
respective affiliates, subsidiaries, licensors, suppliers, officers, directors,
employees or agents) from any claims, losses, liabilities, damages, expenses and
costs, including, without limitation, reasonable attorneys’ fees and **** costs
and any **** expenses incurred in the settlement or avoidance of any such claim,
which result from or are in connection with:

 

(a)                                  a **** breach by LICENSEE of any of the
provisions 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 ****,

 

(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, advertising,
marketing, sale or use of any aspect of the Licensed Products, and

 

(d)                                 any claim, demand, or action (whether civil,
criminal, regulatory, or otherwise) relating to the design, development,
advertising, marketing, sale or use of any aspect of the Licensed Products,
Promotional Materials or the Marketing Materials including, without limitation,
any claim, demand or action brought by any third party (including governmental
authorities or agencies) under any

 

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

 

 

 

 

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federal, state, or foreign law or regulation, or the rules of any
self-regulatory body (e.g., ESRB).

 

NOA 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. NOA may, at
its own expense, participate in such action or proceeding with counsel of its
own choice. LICENSEE shall not enter into any settlement of any matter in which
(i) NOA or Nintendo Co., Ltd. has been named as a party, or (ii) claims relating
to the Intellectual Property Rights have been asserted, without NOA’s prior
written consent ****. NOA shall provide reasonable assistance to LICENSEE in its
defense of any such claim.

 

10.2                           LICENSEE’s Insurance. LICENSEE shall, at its own
expense, obtain a **** general liability insurance **** (including coverage for
advertising injury and product liability claims) from an insurance company rated
at least B+ by A.M. Best. Such policy of insurance shall be in an amount of not
less than **** on a per occurrence basis **** and shall provide for adequate
protection against any suits, claims, loss or damage **** the Licensed Products.
Such policy shall name NOA and Nintendo Co., Ltd. as additional insureds and
shall specify **** it may not be canceled without thirty (30) days’ prior
written Notice to NOA. A Certificate of Insurance shall be provided to NOA’s
Licensing Department not later than the date of the initial order of Bulk Goods
under this Agreement. If LICENSEE fails to maintain such insurance at any time
during the Term and for a period of two (2) years thereafter ****, NOA, in its
sole discretion may 1) terminate this Agreement in accordance with Section 13.2
herein; or 2) secure comparable insurance for the benefit of NOA and Nintendo
Co., Ltd. ****.

 

10.3                           Suspension of Production. In the event NOA ****
deems itself at risk with respect to any claim, action or proceeding under this
Section 10, NOA may, at its sole option, suspend production, delivery or order
acceptance for any Bulk Goods, 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
NOA may agree to jointly pursue cases of infringement involving the Licensed
Products, as such Licensed Products will contain Proprietary Rights owned by
each of them. Unless the parties otherwise agree, or unless the recovery is
expressly allocated between them by the court, in the event of such an action,
any recovery shall be used first to reimburse LICENSEE and NOA for their
respective reasonable attorneys’ fees and costs, pro rata, and any remaining
recovery shall be distributed to LICENSEE and NOA, pro rata, based upon the fees
and costs incurred in bringing such action.

 

11.2                           Actions by LICENSEE. LICENSEE, without the
consent of NOA, may bring any action or proceeding relating to an infringement
or potential infringement of LICENSEE’s Proprietary Rights in the Licensed
Products. LICENSEE shall make reasonable good faith efforts to inform NOA of
such actions in a timely manner. LICENSEE will have the right to retain all
proceeds it may derive from any recovery in connection with such actions.

 

11.3                           Actions by NOA. NOA, without the consent of
LICENSEE, may bring any action or proceeding relating to an infringement or
potential infringement of NOA’s Intellectual Property Rights in the Licensed
Products. NOA shall make reasonable, good faith efforts to inform LICENSEE of
such actions likely to affect LICENSEE’s rights in a timely manner. NOA will
have the right to retain all proceeds it may derive from any recovery in
connection with such actions.

 

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

 

 

 

 

PAGE 13

 

 

 

 

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12.                               ASSIGNMENT

 

12.1                           Definition. “Assignment” means every type and
form of assignment, transfer, sale, sublicense, delegation, encumbrance, pledge
and/or hypothecation of LICENSEE’s rights or obligations under this Agreement,
including, but not limited to, (a) a voluntary assignment, transfer, sale,
sublicense, delegation, encumbrance, pledge and/or hypothecation by LICENSEE of
all or any portion of its rights or obligations under this Agreement, (b) the
assignment, transfer, sale, sublicense, delegation, encumbrance, pledge and/or
hypothecation of all or any portion of LICENSEE’s rights or obligations under
this Agreement to or by LICENSEE’s trustee in bankruptcy, receiver, or other
individual or entity appointed to control or direct the business and affairs of
LICENSEE, (c) an involuntary assignment, transfer, sale, sublicense, delegation,
encumbrance, pledge or hypothecation of all or a portion of LICENSEE’s rights or
obligations under this Agreement, including but not limited to a foreclosure by
a third party upon assets of LICENSEE, (d) the merger or consolidation of
LICENSEE if LICENSEE is a corporation, and (e) any other means or method whereby
rights or obligations of LICENSEE under this Agreement are sold, assigned or
transferred to another individual or entity for any reason. Assignment also
includes the sale, assignment, transfer or other event affecting a change in the
controlling interest of LICENSEE, whether by sale, transfer or assignment of
shares in LICENSEE, or by sale, transfer or assignment of partnership interests
in LICENSEE, or otherwise.

 

12.2                           No Assignment by LICENSEE. This Agreement and the
subject matter hereof are  personal to LICENSEE. No Assignment of LICENSEE’s
rights or obligations hereunder shall be valid or effective without NOA’s prior
written consent, not to be **** withheld by NOA. In the event of an attempted
Assignment in violation of this provision, NOA shall have the right at any time,
at its sole option, to immediately terminate this Agreement. Upon such
termination, NOA shall have no further obligation under this Agreement to
LICENSEE or to LICENSEE’s intended or purported assignee.

 

12.3                           Proposed Assignment. Prior to any proposed
Assignment of this Agreement, LICENSEE shall give NOA not less than thirty (30)
days prior written Notice thereof, which Notice shall disclose the name of the
proposed assignee, the proposed effective date of the Assignment and the nature
and extent of the rights and obligations that LICENSEE proposes to assign
(“Notice of Assignment”). ****  Unless written consent is given by NOA to a
proposed Assignment, any attempted or purported Assignment shall be deemed
disapproved and NOA shall have the unqualified right, in its sole discretion, to
terminate this Agreement at any time. Upon termination, NOA shall have no
further obligation under this Agreement to LICENSEE or to LICENSEE’s intended or
purported assignee.

 

12.4                           LICENSEE’s Obligation of Non-Disclosure. LICENSEE
shall not (a) disclose Nintendo’s Confidential Information to any proposed
assignee of LICENSEE, or (b) permit access to Nintendo’s Confidential
Information by any proposed assignee or other third party, without the prior
written consent of NOA to such disclosure.

 

13.                               TERM AND TERMINATION

 

13.1                           Term. This Agreement shall commence on the
Effective Date and continue for the Term, unless earlier terminated as provided
for herein.

 

13.2                           Default or Breach. In the event that either party
is in default or commits a breach of this Agreement, which is not cured within
thirty (30) days after Notice thereof, then this Agreement shall automatically
terminate on the date specified in such Notice.

 

13.3                           Bankruptcy. At NOA’s option, this Agreement
may be terminated immediately and without Notice in the event that LICENSEE
(a) makes an assignment for the benefit of creditors, (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.

 

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

 

 

 

 

PAGE 14

 

 

 

 

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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 NOA.

 

13.5                           Termination by LICENSEE’s Breach. If this
Agreement is terminated by NOA as a result of a breach of its terms and
conditions by LICENSEE, LICENSEE shall immediately cease all distribution,
advertising, marketing or sale of any Licensed Products. All Licensed Products
in LICENSEE’s control as of the date of such termination shall be destroyed by
LICENSEE within ten (10) days and Notice of such destruction (with proof
certified by an officer of LICENSEE) shall be delivered to NOA.

 

13.6                           Breach of NDA or other NOA License Agreements. At
NOA’s option, any breach by LICENSEE of (a) the NDA, or (b) any other license
agreement between NOA and LICENSEE relating to the development of games for any
Nintendo video game system, which 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 NOA to terminate this Agreement in accordance
with Section 13.5 herein.

 

13.7                           No Further Use of the Intellectual Property
Rights. Upon expiration and/or termination of this Agreement, LICENSEE shall
cease all use of the Intellectual Property Rights for any purpose, except as
may be required in connection with the sale of the Licensed Products authorized
under Section 13.4 herein. LICENSEE shall, within thirty (30) days thereafter,
(a) return to NOA all Development Tools, and (b) return to NOA or destroy all
Guidelines, writings, drawings, models, data, tools and other materials and
things in LICENSEE’s possession or in the possession of any past or present
employee, agent or contractor receiving the information through LICENSEE, which
constitute or relate to or disclose any Confidential Information, without making
copies or otherwise retaining any such information. Proof of such return or
destruction shall be certified by an officer of LICENSEE and promptly provided
to NOA.

 

13.8                           Termination by NOA’s Breach. If this Agreement is
terminated by LICENSEE as a result of a breach of its terms or conditions by
NOA, LICENSEE may **** continue to sell the Licensed Products in the Territory
until the expiration of the Term, at which time the provisions of Section 13.4
shall apply.

 

14.                               GENERAL PROVISIONS

 

14.1                           Export Control. LICENSEE agrees to comply with
the export laws and regulations of the United States and any other country with
jurisdiction over the Licensed Products 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, NOA reserves the right to allocate such resources among itself and its
licensees.

 

14.3                           Records and Audit. During the Term and for a
period of two (2) years thereafter, LICENSEE agrees to keep accurate, complete
and detailed records **** relating to the use of the Confidential Materials, the
Development Tools and the Intellectual Property Rights. Upon **** Notice to
LICENSEE, NOA may, at its expense, audit LICENSEE’s records, reports and other
information **** related to LICENSEE’s compliance with this Agreement; provided,
however, that NOA 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.

 

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

 

 

 

 

PAGE 15

 

 

 

 

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14.4                           Waiver, Severability, Integration, and Amendment.
The failure of a party to enforce any provision of this Agreement shall not be
construed to be a waiver of such provision or of the right of such party to
thereafter enforce such provision. In the event that any term, clause or
provision of this Agreement shall be construed to be or adjudged invalid, void
or unenforceable, such term, clause or provision shall be construed as severed
from this Agreement, and the remaining terms, clauses and provisions shall
remain in effect. Together with the NDA, this Agreement constitutes the entire
agreement between the parties relating to the subject matter hereof. All prior
negotiations, representations, agreements and understandings are merged into,
extinguished by and completely expressed by this Agreement and the NDA. Any
amendment to this Agreement shall be in writing, signed by both parties.

 

14.5                           Survival. In addition to those rights specified
elsewhere in this Agreement, the rights and obligations set forth in Sections 3,
8, 9, 10, 11, 12, 13 and 14 shall survive any expiration or termination of this
Agreement to the degree necessary to permit their complete fulfilment or
discharge.

 

14.6                           Governing Law and Venue. This Agreement shall be
governed by the laws of the State of Washington, without regard to its conflict
of laws principles. Any legal actions (including judicial and administrative
proceedings) with respect to any matter arising under or growing out of this
Agreement, shall be brought in a court of competent jurisdiction in King County,
Washington. Each party hereby consents to the jurisdiction and venue of such
courts for such purposes.

 

14.7                           Equitable Relief. LICENSEE acknowledges that in
the event of its breach of this Agreement, no adequate remedy at law may be
available to NOA and that NOA shall be entitled to seek injunctive or other
equitable relief in addition to any relief available at law.

 

14.8                           Attorneys’ Fees. In the event it is necessary for
either party to this Agreement to undertake legal action to enforce or defend
any action arising out of or relating to this Agreement, the prevailing party in
such action shall be entitled to recover from the other party all reasonable
attorneys’ fees, costs and expenses relating to such legal action or any appeal
therefrom.

 

14.9                           Counterparts and Signature by Facsimile. This
Agreement may be signed in counterparts, which shall together constitute a
complete Agreement. A signature transmitted by facsimile shall be considered an
original for purposes of this Agreement.

 

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

 

 

NOA:

 

LICENSEE:

 

 

 

NINTENDO OF AMERICA INC.

 

THQ INC.

 

 

 

 

 

 

By:

 

 

By:

 

Name: James R. Cannataro

 

Name: Brian J. Farrell

Title: Executive VP, Administration

 

Title: President and CEO

Date:

 

 

Date:

 

 

 

 

 

PAGE 16

 

 

 

 

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