**Exhibit10.47**

 

**CONFIDENTIAL FIRST RENEWALLICENSE AGREEMENT**

**FOR THE WiiTM CONSOLE(EEA, AUSTRALIA, AND NEW ZEALAND)**

 

 

THISFIRST RENEWAL LICENSE AGREEMENT (“Agreement”) is entered into between **NINTENDO CO., LTD.** (“NINTENDO”) at 11-1 KamitobaHokotate-cho, Minami-ku, Kyoto, Japan 601-8501, Attn: General Manager, InternationalDivision, International Business Department (Fax: 81.75.662.9620); and,**THQ INC.**, whose address for contact is 29903 Agoura Road,Agoura Hills, California 91301 (Fax: 818.871.7400), Attn: VP of Business andLegal Affairs; and **THQ (UK) LIMITED**at Dukes Court, Duke Street, Woking, Surrey GU21 5BH, United Kingdom; and **THQ ENTERTAINMENT GmbH** at Kimplerstrabe 278, 47807 Krefeld, Germany; and **THQ FRANCE****SARL,** at 1 rue Saint Georges, 75009 Paris, France; and **THQ ASIA PACIFIC PTY LTD.,** at Level 8, 606 St. Kilda Road,Melbourne, VIC 3004, Australia; and **THQ INTERACTIVEENTERTAINMENT ESPAÑA, SL**, at Avda de Europa 19, Edificio 1, 1aplanta, Pozuela de Alarcón, 28224, Madrid, Spain; and **THQ ITALYSRL**, at Strada della Ronna 53, 21013 Gallarate (VA), Italy, and alegal address at Via Monte Rosa 91, 20149 Milan, Italy (together and severally:“LICENSEE”).  NINTENDO and LICENSEE agreeas follows:

 

**1.****            ****RECITALS**

 

1.1           NINTENDOdesigns, develops, manufactures, markets and sells advanced design,high-quality video game systems, including the WiiTM video game console (“WiiTM”).

 

1.2           LICENSEEdesires use of the highly proprietary programming specifications, unique andvaluable security technology, trademarks, copyrights and other valuableintellectual property rights of NINTENDO, which rights are only available foruse under the terms of a license agreement, to develop, have developed, havemanufactured, advertise, market and sell video game software for play on WiiTM.

 

1.3           NINTENDOis willing to grant a license to LICENSEE on the terms and conditions set forthin this Agreement.

 

1.4           By a prior agreement between the parties effective October 30,2006 (hereinafter the “Initial Agreement”), NINTENDO granted to LICENSEE theright to develop video games compatible with the WiiTM Console, embodying andusing the Licensed Intellectual Properties. The Initial Agreement is due to expire on October 30, 2009.  The parties desire to enter into a renewalagreement (hereinafter the “Agreement”) effective as of the expiration date ofthe Initial Agreement, to continue the relationship between the parties withoutinterruption, with the Agreement consisting of the terms and conditions setforth herein.

 

**2.****            ****DEFINITIONS**

 

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

 

2.2           “BulkGoods” means Game Discs printed with the Game Disc label portion of the Artworkfor delivery to LICENSEE without Printed Materials or other packaging.

 

2.3           “CheckDisc(s)” means the pre-production Game Discs to be produced by NINTENDO.

 

2.4           “ConfidentialInformation” means the information described in Section 8.1.

 

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2.5           “DevelopmentTools” means the development kits, programming tools, emulators and othermaterials of NINTENDO, or third parties authorized by NINTENDO, that may beused in the development of Games under this Agreement.

 

2.6           “EffectiveDate” means the expiration date of the Initial Agreement.

 

2.7           “FinishedProduct(s) means the fully assembled Game Disc with a Game Disc label, PrintedMaterials, and packed in a plastic storage case.

 

2.8           “GameDisc(s)” means custom optical discs for play on WiiTM on which a Game has beenstored.

 

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

 

2.10         “Guidelines”means the then-current version of “WiiTM Programming Guidelines;” “LicenseePackaging Guidelines” pertaining to the layout, trademark usage andrequirements of the Game Disc label, instruction manual and Game Discpackaging; “Marketing Materials”; “Nintendo Trademark Guidelines;” “Guidelineson Ethical Content”; and****“Nintendo WiiTMSoftware Submission Requirements,” together with other guidelines provided byNINTENDO to LICENSEE from time to time. The Guidelines on Ethical Content are attached as Annex A, and theremainder of the Guidelines have been provided to LICENSEE independent of thisAgreement.  The Guidelines may be changedor updated from time to time without notice (provided such changes or updatesshall be delivered to LICENSEE as soon as possible thereafter), and theversions current from time to time will be available on request from NINTENDO.

 

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

 

2.12         “IntellectualProperty Rights” means individually, collectively or in any combination,Proprietary Rights owned, licensed or otherwise held by NINTENDO that areassociated with the development, manufacturing, advertising, marketing or saleof the Licensed Products, including, without limitation, (a) registered andunregistered trademarks and trademark applications used in connection with WiiTM including NintendoTM, WiiTM, Official Nintendo Seal of QualityTM, and MiiTM, (b) select tradedress associated with WiiTM and licensed video games for play thereon, (c) ProprietaryRights in the Security Technology employed in the Games or Game Discs byNintendo, (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 Toolswhich belong to any third party and for which no additional licenses orconsents are required, (e) patents, patent applications, design registrations,utility models or copyrights which may be associated with the Game Discs orPrinted Materials, (f) copyrights in the Guidelines, and (g) other ProprietaryRights of Nintendo in the Confidential Information.

 

2.13         “LicensedProducts” means (a) Bulk Goods, and/or (b) Finished Products after beingassembled and packaged with the Printed Materials in accordance with theGuidelines.

 

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

 

2.15         “NDA”means the non-disclosure agreement related to WiiTM previously entered intobetween NINTENDO and/or NOA and LICENSEE.

 

2.16         “NOA”means NINTENDO’s subsidiary, Nintendo of America Inc. of Redmond, Washington,USA.

 

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2.17         “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 anoriginal sent concurrently by mail, or (c) deposited, carriage prepaid, with aguaranteed air courier service, in each case addressed as stated herein, oraddressed to such other person or address either party may designate in aNotice, or (d) transmitted by e-mail with an express written acknowledgement ofreceipt sent personally by or on behalf of the recipient (which shall includeany automated reply).  Notice shall be deemedeffective upon the earlier of actual receipt or two (2) business days aftertransmittal, provided, however, any Notice received after the recipient’snormal business hours will be deemed received on the next business day.

 

2.18         “PriceSchedule” means the then-current version of NINTENDO’s schedule of purchaseprices and minimum order quantities for the Finished Products and the BulkGoods.  The Price Schedule has beenprovided to LICENSEE independent of this Agreement and may be changed orupdated from time to time without notice (provided such changes or updatesshall be delivered to LICENSEE as soon as possible thereafter), and the versioncurrent from time to time will be available on request from NINTENDO.

 

2.19         “PrintedMaterials” means title page, instruction booklet, precaution booklet, andoptional printed materials.

 

2.20         “PromotionalDisc(s)” means custom optical discs compatible with WiiTM that incorporateselect game promotional or supplemental materials, as may be specified orpermitted in the Guidelines.

 

2.21         “ProprietaryRights” means any rights or applications for rights owned, licensed orotherwise held in patents, patent applications, utility models, registereddesign rights, unregistered design rights, trademarks, service marks, copyrights,and neighboring rights, semiconductor chip layouts or masks, database rights,trade secrets, trade dress, get up, moral rights and publicity rights, togetherwith all inventions, discoveries, ideas, know-how, data, information,processes, methods, procedures, formulas, drawings and designs, computerprograms, software source code and object code, and all amendments,modifications, and improvements thereto for which such patents, patentapplications, utility models, registered design rights, unregistered designrights, trademarks, service marks, copyrights, and neighboring rights,semiconductor chip layouts or masks, database rights, trade secrets, tradedress, get up, moral rights or publicity rights may exist or may be sought andobtained in the future.

 

2.22         “RebateProgram” means any then-current version of NINTENDO’s optional rebate program,establishing select terms for price rebates under this Agreement.

 

2.23         “ReverseEngineer(ing)” means, without limitation, ****.

 

2.24         “SecurityTechnology” means the highly proprietary security features of the WiiTM and theLicensed Products to minimize the risk of unlawful copying and otherunauthorized or unsafe usage, including, without limitation, any securitysignature, bios, data scrambling, password, hardware security apparatus,watermark, hologram, encryption, digital rights management system, copyrightmanagement information system, proprietary manufacturing process or any featurewhich obstructs piracy, limits unlawful, unsafe or unauthorized use, or facilitatesor limits compatibility with other hardware, software, accessories orperipherals, or with respect to a video game system other than the WiiTM, orlimits distribution outside of the Territory.

 

2.25         “SoleLicense” means a license under which only the licensor and a single licenseecan utilize the subject matter of the license.

 

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

 

2.27         “Territory”means any and all countries within the European Economic Area; namely Albania,Austria, Belgium, Bosnia, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark,Estonia,

 

* Confidential portionomitted and filed separately with the Securities and Exchange Commission.

 

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Finland, France,Germany, Greece, Herzegovina, Hungary, Iceland, Ireland, Italy, Latvia,Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta, Montenegro, theNetherlands, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia,Spain, Sweden, and the United Kingdom. The Territory shall also include Australia, New Zealand, Russia, SouthAfrica, Switzerland and Turkey.  NINTENDOmay add additional countries to the Territory upon written notice toLICENSEE.  NINTENDO makes norepresentations or warranties that the WiiTM is being or will continue to bedistributed in all of the foregoing countries.

 

2.28         “TM”means trademark of NINTENDO, whether registered or not.

 

2.29         “WiiNetwork Services” means and includes the Wii Shop Channel Services,WiiTMConnect24, and any related services and material delivered to a consumer’sWiiTM console over the Internet.

 

**3.****            ****GRANT OF LICENSE; LICENSEE RESTRICTIONS**

 

3.1           Limited License Grant.  For the Term and for the Territory, NINTENDOgrants to LICENSEE a nonexclusive, nontransferable, limited license to use theIntellectual Property Rights, for the purpose of and to the extent necessary,to develop (or have developed on LICENSEE’s behalf) Games for manufacture,advertising, marketing and sale by LICENSEE as Licensed Products, subject tothe terms and conditions of this Agreement. ****

 

3.2           LICENSEE Acknowledgement.  LICENSEE’s use of the Intellectual PropertyRights shall not create any right, title or interest of LICENSEE therein.  LICENSEE is authorized and permitted todevelop Games, and have manufactured, advertise, market, and sell LicensedProducts, only for play on WiiTM and only in accordance with this Agreement.  In the event that LICENSEE challengesNINTENDO’s ownership or the validity of the Intellectual Property Rights,NINTENDO may terminate this Agreement without any notice or procedure.  Nothing contained herein shall be deemed togrant NINTENDO any right, title, or interest in and to those portions of theLicensed Products that do not consist of NINTENDO’s Intellectual PropertyRights, Proprietary Rights, or Confidential Information associated with theWiiTM system.

 

3.3           Restrictions on License Grant.  NINTENDO does not guarantee that the hardwarefor the WiiTM system is distributed throughout the Territory.  Moreover, the present limited license toLICENSEE does not extend to the use of the Intellectual Property Rights for thefollowing purposes:

 

(a)           grantaccess to, distribute, transmit or broadcast a Game by electronic means or byany other means known or hereafter devised, including, without limitation, bywireless, cable, fiber optic, telephone lines, microwave, radiowave, computeror other device network, except (a) as a part of wireless Game play on andamong WiiTM systems, or between WiiTM and Nintendo DS systems, (b) for thepurpose of facilitating Game development under the terms of this Agreement, or(c) as otherwise approved in writing by NINTENDO. LICENSEE shall use reasonablesecurity measures, customary within the high technology industry, to reduce therisk of unauthorized interception or retransmission of any Gametransmission.  No right of retransmissionshall attach to any authorized transmission of a Game;

 

(b)           authorizeor permit any online activities involving a Game, including, withoutlimitation, multiplayer, peer-to-peer or online play, except as expresslypermitted by NINTENDO in writing;

 

(c)           modify,install or operate a Game on any server or computing device for the purpose ofor resulting in the rental, lease, loan or other grant of remote access to theGame;

 

(d)           emulate,interoperate, interface or link a Game for operation or use with any hardwareor software platform, accessory, computer language, computer environment, chipinstruction set, consumer electronics device or device other than WiiTM, theNintendo DS system, the

 

* Confidential portionomitted and filed separately with the Securities and Exchange Commission.

 

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Development Tools orsuch other Nintendo system as NINTENDO may authorize in the Guidelines;

 

(e)           embed,incorporate, or store a Game in any media or format except the optical discformat utilized by WiiTM, except as may be necessary as a part of the Gamedevelopment process under this Agreement;

 

(f)            design, implement or undertake any process, procedure, program or actdesigned to disable, obstruct, circumvent or otherwise diminish theeffectiveness or operation of the Security Technology;

 

(g)           utilizethe Intellectual Property Rights to design or develop any interactive videogame program, except as authorized under this Agreement;

 

(h)           manufactureor reproduce a Game developed under this Agreement, except through NINTENDO; or

 

(i)            Reverse Engineer or assist in Reverse Engineering all or any part of WiiTM,including the hardware, software (embedded or not) or the Security Technology,except as specifically permitted under the laws and regulations applicable inthe Territory.

 

Nothingcontained in this Section 3.3 shall be deemed to prevent LICENSEE fromdeveloping a game or games for other video game platforms, where such game orgames have a similar audiovisual display, look, feel, or game elements as foundin the Game(s) developed by LICENSEE under this Agreement; provided, however,that LICENSEE hereby acknowledges that any use of NINTENDO’s IntellectualProperty Rights, Proprietary Rights, and/or Confidential Information in suchother game or games without the prior written consent of NINTENDO would bedeemed to be a breach of this Agreement and an infringement of NINTENDO’sIntellectual Property Rights.

 

3.4           Development Tools.  NINTENDO and NOA may lease, loan or sellDevelopment Tools, including any improvements made by NINTENDO or NOA from timeto time, to LICENSEE to assist in the development of Games under this Agreementon such terms as may be agreed between the parties.  Ownership and use of any Development Tools,whether provided by NINTENDO or NOA, prior to or during the Term hereof, shallbe subject to the terms of this Agreement and any separate license or purchaseagreement required by NINTENDO or any third party licensing the DevelopmentTools.  LICENSEE acknowledges therespective interests of NINTENDO, and in the case of third-party DevelopmentTools, such third parties, in and to the Proprietary Rights associated with theDevelopment Tools.  LICENSEE’s use of theDevelopment Tools shall not create any right, title or interest of LICENSEEtherein.  Any license to LICENSEE to usethe Development Tools does not extend to: (a) use of the Development Tools for any purpose except the design anddevelopment of Games under this Agreement, (b) reproduction or creation ofderivatives of the Development Tools, except in association with thedevelopment of Games under this Agreement, (c) Reverse Engineering of theDevelopment Tools (except as specifically permitted under the laws and/orregulations applicable in the Territory), or (d) without NINTENDO’s priorwritten approval, selling, leasing, assigning, lending, licensing, encumberingor otherwise transferring the Development Tools.  Anything developed or derived by LICENSEE asa result of a study of the performance, design or operation of any NintendoDevelopment Tools shall be considered a derivative work of the IntellectualProperty Rights, but may be retained and utilized by LICENSEE in connectionwith this Agreement.  Unless LICENSEE candemonstrate that such derivative work Development Tools have one or moreapplications that are independent of and separate from the IntellectualProperty Rights (“Independent Applications”), it shall be deemed to havegranted NINTENDO and NOA an indefinite, worldwide, royalty-free, transferableand Sole License (including the right to sub-license) to such derivative workDevelopment Tools.  To the extent thatLICENSEE can demonstrate one or more Independent Applications of suchderivative work Development Tools, LICENSEE shall be deemed to have granted toNINTENDO and NOA a royalty-free and transferable non-exclusive License(including the right to sub-license) in relation to such IndependentApplications for the Term.  Anythingdeveloped or derived by LICENSEE as a result of a study of the performance,design or operation of any third-party Development Tools shall be governed bythe terms of the license agreement applicable to such Development Tools.  Notwithstandingany referral or information provided or posted regarding third-partyDevelopment Tools, NINTENDO and NOA make no representations or warranties withregard to 

 

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any such third-partyDevelopment Tools.  LICENSEEacquires and utilizes third-party Development Tools at its own risk.

 

3.5           Games Developed for Linked Play on Two Systems.  In the event the Guidelines permitLICENSEE to develop a Game for simultaneous or linked play on WiiTM and onanother Nintendo video game system, LICENSEE shall be required to acquire andmaintain with NINTENDO such additional licenses as are necessary for the use ofthe Proprietary Rights associated with such other Nintendo video game system.

 

3.6           In-Game Advertising.  LICENSEE shall not include advertising orproduct placements for products or services of LICENSEE or third parties,whether in the Game, as separate content on a Game Disc (e.g., a trailer), orin the Printed Materials, without NINTENDO’s prior written consent, which shallnot be unreasonably withheld or delayed.

 

3.7           Use of MiiTM Characters.  LICENSEE shall not develop any Game thatpermits NINTENDO’s MiiTM characters to appear in the Game without NINTENDO’sprior written consent.

 

3.8           Sending Data to Consumers.  LICENSEE shall not, without the prior writtenconsent of NINTENDO, send any data, content, messages, advertising, or othercommunications of any kind to any consumer’s WiiTM console through the WiiTMNetwork Services or otherwise.

 

3.9          Downloadable Content.  If LICENSEE desires to develop Games orupdates/additions of any kind for any Licensed Product, to be downloaded toconsumers through the Wii Network Services, the terms and conditions of suchdevelopment shall be separately agreed in writing between the parties.  LICENSEE acknowledges that the rights grantedherein do not include the right to use the Intellectual Property Rights todevelop downloadable content.

 

**4.****            ****SUBMISSION AND APPROVAL OF GAME AND ARTWORK**

 

4.1           Submission of a Completed Game to NINTENDO.  Upon completion of a Game, LICENSEE shalldeliver a prototype of the Game to NINTENDO in a format specified in theGuidelines.  Delivery shall be made inaccordance with the methods set forth in the Guidelines.  Each Submission shall include such otherinformation or documentation deemed necessary by NINTENDO, including, withoutlimitation, a complete set of written user instructions, a complete descriptionof any security holes, backdoors, time bombs, cheats, “Easter eggs” or otherhidden features or characters in the Game (of which LICENSEE is aware) and acomplete screen text script.  LICENSEEmust establish that the Game and any other content included on the Game Disccomplies with the guidelines of the PanEuropean Game Information System (PEGI), the UnterhaltungssoftwareSelbstkontrolle (USK), the Office of Film and Literature Classification (OFLC),or any other national or regional game rating system that NINTENDO may accept,as applicable.  LICENSEE shall beresponsible for the submission of the Game to the appropriate national orregional game rating organization and shall provide NINTENDO with a statementor certificate in writing from the relevant organization, confirming the ratingfor the Game.  Where any such game hasbeen rated as being suitable only for players aged 18 and over (or anequivalent rating), LICENSEE must submit a certificate in writing that confirmsthe game is rated as no higher than “M” (Mature) by the Entertainment SoftwareRating Board (ESRB) of the U.S.  Inaddition, NINTENDO reserves the right to require LICENSEE to provide NINTENDOwith such additional written indemnification for damages, claims, loss,liability, fine or penalty resulting from the marketing, distribution or saleof a Game with such an age rating, as NINTENDO, in its sole discretion, mayrequest.  If any such age rating is subsequentlychanged by the relevant organization, LICENSEE shall inform NINTENDO forthwithin writing of that fact and LICENSEE shall then comply with the aboveprovisions in relation to such new age rating.

 

4.2           Testing of a Completed Game.  Upon submission of a completed Game, NINTENDOshall promptly test the Game with regard to its technical compatibility with,and error-free operation on, WiiTM utilizing the lot check process.  Within a reasonable period of time afterreceipt, NINTENDO shall approve or disapprove such Game in writing, which mayinclude by e-mail.  If a Game isdisapproved, NINTENDO shall specify in writing the reasons for such disapprovaland state what corrections are necessary. After making the necessary corrections, LICENSEE shall submit a revisedGame to NINTENDO for testing.  NINTENDOshall not unreasonably withhold or delay its approval of 

 

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any Game.  Neither the testing nor approval of a Game byNINTENDO shall relieve LICENSEE of its sole responsibility for the development,quality and operation of the Game or in any way create any warranty by NINTENDOrelating to any Licensed Product.

 

4.3           Production of Check Discs.  By submission of a completed Game to NINTENDOin accordance with Section 4.1, LICENSEE authorizes NINTENDO to proceed withproduction of Check Discs for such Game. If NINTENDO approves a Game, it shall promptly, and without furthernotification to or instruction from LICENSEE, submit such Game for theproduction of Check Discs.  Unlessotherwise advised by LICENSEE, following production of the Check Discs,NINTENDO shall deliver to LICENSEE approximately ten (10) Check Discs forcontent 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 asigned authorization for production in the form specified in the Guidelines.  If LICENSEE does not approve the sample CheckDiscs for any reason, LICENSEE shall advise NINTENDO in writing and may, afterundertaking any necessary changes or corrections, resubmit the Game to NINTENDOfor approval in accordance with the procedures set forth in this Section 4.  The absence of a signed authorization formfrom LICENSEE within five (5) business days after delivery of the Check Discsto LICENSEE shall be deemed disapproval of such Check Discs.  Production of any order for Finished Goods orBulk 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 (except if thedisapproval is due to defects in or failure of the Check Discs due to NINTENDO’sact, error or omission); (b) fails to order the minimum order quantity of anyGame approved by NINTENDO within six (6) months after the date the Game wasfirst approved by NINTENDO; or (c) submits a revised version of the Game toNINTENDO after production of such Game has commenced, LICENSEE shall reimburseNINTENDO (or its designee) for the reasonable estimated cost of the productionof the Check Discs, including the cost of the disc stamper.  The payment will be due (i) thirty (30) daysafter NINTENDO’s written notification to LICENSEE of the Check Disc fee dueNINTENDO because of LICENSEE’s failure to approve such Check Disc; (ii) six (6)months after the date the Game was first approved by NINTENDO; or (iii) uponthe subsequent submission by LICENSEE of a revised version of the Game toNINTENDO, as the case may be.

 

4.6           Submission and Approval of Artwork.  Prior to submitting a completed Game toNINTENDO under Section 4.1, LICENSEE shall submit to NINTENDO all Artwork forthe proposed Licensed Product.  Withinten (10) business days of receipt, NINTENDO shall approve or disapprove theArtwork in writing, which may include by e-mail.  If any Artwork is disapproved, NINTENDO shallspecify in writing the reasons for such disapproval and state what correctionsor improvements are necessary.  Aftermaking the necessary corrections or improvements, LICENSEE shall submit revisedArtwork to NINTENDO for approval. NINTENDO shall not unreasonably withhold or delay its approval of anyArtwork.  The approval of the Artwork byNINTENDO shall not relieve LICENSEE of its sole responsibility for thedevelopment and quality of the Artwork or in any way create any warranty forthe Artwork or the Licensed Product by NINTENDO.  All Artwork must be approved prior tosubmitting an order for the Bulk Goods or Finished Products, and LICENSEE shallnot produce any Printed Materials for commercial distribution until suchArtwork or Finished Products has been approved by NINTENDO.

 

4.7           Artwork for Bulk Goods.  If LICENSEE intends to submit an order forBulk Goods, all Artwork and other materials to be included with the LicensedProduct shall be submitted to NINTENDO in accordance with Section 4.6herein.  No Printed Materials shall beproduced by LICENSEE until such Artwork has been approved by NINTENDO.

 

4.8           Promotional Discs.  In the event NINTENDO issues Guidelines inthe future that permit LICENSEE to develop and distribute Promotional Discs,either separately or as a part of the Licensed Product, the content andspecifications of such Promotional Disc shall be subject to all of the termsand conditions of this Agreement, including, without limitation, theGuidelines, the Price Schedule and the submission and approval proceduresprovided for in this Section 4.

 

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**5.****            ****ORDER PROCESS, PURCHASE PRICE, PAYMENT ANDDELIVERY**

 

5.1           Submission of Orders by LICENSEE.  After receipt of NINTENDO’s approval for aGame and Artwork, LICENSEE may at any time submit a written purchase order toNINTENDO for any approved Licensed Product title.  The purchase order shall specify whether itis for Finished Products or Bulk Goods. The terms and conditions of this Agreement shall control over anycontrary or additional terms of such purchase order or any other writtendocumentation or verbal instruction from LICENSEE.  All orders shall be subject to acceptance byNINTENDO or its designee.

 

5.2           Purchase Price and Minimum Order Quantities.  The purchase price and minimum orderquantities for Finished Products and Bulk Goods shall be set forth in NINTENDO’sthen-current Price Schedule.  Unlessotherwise specifically provided for, the purchase price includes the cost ofmanufacturing a single Game Disc.  Notaxes, duties, import fees or other tariffs related to the development,manufacture, import, marketing or sale of the Licensed Products (except fortaxes imposed on NINTENDO’s income) are included in the purchase price and allsuch taxes are the responsibility of LICENSEE. The Price Schedule is subject to change by NINTENDO at any time withoutNotice, provided however, that any price increase shall be applicable only topurchase orders submitted, paid for, and accepted by NINTENDO after the date ofthe price increase.  Such changes shallbe delivered to LICENSEE as soon as possible thereafter.

 

5.3           Payment.  Upon placement of an order with NINTENDO,LICENSEE shall pay the full purchase price either (a) by tender of anirrevocable letter of credit in favor of NINTENDO (or its designee) and payableat sight, issued by a bank acceptable to NINTENDO and confirmed, if requestedby NINTENDO, at LICENSEE’s expense, or (b) in cash, by wire transfer to anaccount designated by NINTENDO.  Allletters of credit shall comply with NINTENDO’s written instructions and allassociated banking charges shall be for LICENSEE’s account.

 

5.4           Delivery of Licensed Products.  NINTENDO shall deliver the Finished Productsand Bulk Goods ordered by LICENSEE to LICENSEE FOB Japan, CIP EuropeanDestination or ex-warehouse Grossostheim, per the terms in the Price Schedule.Also per the Price Schedule, ****. Upon mutual consent of NINTENDO andLICENSEE, orders may be delivered in partial shipments with a minimum shipmentquantity as specified in the Price Schedule. Such orders shall be delivered only to countries within theTerritory.  Title to the LicensedProducts shall vest in accordance with the terms of the applicable letter ofcredit or, in the absence thereof, per Incoterms 2000.

 

5.5           Rebate Program.  NINTENDO, at its sole option, may elect tooffer LICENSEE a Rebate Program.  Theterms and conditions of any Rebate Program shall be subject to NINTENDO’s solediscretion.  LICENSEE shall not beentitled to offset any claimed rebate amount against other amounts owingNINTENDO.  No interest shall be payableby NINTENDO to LICENSEE on any claimed rebate. The Rebate Program is subject to change or cancellation by NINTENDO atany time without Notice.

 

**6.****            ****MANUFACTURE OF THE LICENSED PRODUCT**

 

6.1           Manufacturing.  Given NINTENDO’s ownership of valuableIntellectual Property Rights, NINTENDO shall be the exclusive source for themanufacture of the Game Discs, Check Discs and Promotional Discs, withresponsibility for all aspects of the manufacturing process, including theselection of the locations and specifications for any manufacturing facilities,determination of materials and processes, appointment of suppliers andsubcontractors and management of all work-in-progress.  Upon acceptance by NINTENDO of a purchaseorder from LICENSEE and receipt of payment as provided for at Section 5.3herein, NINTENDO shall (through its suppliers and subcontractors) arrange formanufacturing.

 

 

 

* Confidential portionomitted and filed separately with the Securities and Exchange Commission.

 

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6.2           Security Features.  The final release version of the Game, theGame Disc and the Printed Materials shall include such Security Technology asNINTENDO, in its sole discretion, deems necessary or appropriate to (a) reducethe risk of unlawful copying or other unlawful, unsafe or unauthorized uses,(b) protect the Proprietary Rights of NINTENDO and of the LICENSEE, (c) promoteconsumer confidence, and (d) increase the quality, reliability or operation ofWiiTM.

 

6.3           Printed Materials for Bulk Goods.Upon delivery to LICENSEE of Bulk Goods, LICENSEE shall assemble the PrintedMaterials and Bulk Goods into the Licensed Products in accordance with theGuidelines.  No other materials, items,products or packaging may be included or assembled with the Bulk Goods withoutNINTENDO’s prior written consent.  BulkGoods may be sold or distributed by LICENSEE only when fully assembled inaccordance with the Guidelines.

 

6.4           Sample Printed Materials.  Within a reasonable period of time afterLICENSEE’s assembly of an initial order for Bulk Goods for a Game title,LICENSEE shall provide NINTENDO with (a) two (2) samples of the fully assembledLicensed Product, and (b) twenty (20) samples of the LICENSEE produced PrintedMaterials (excluding the plastic disc storage case, precaution booklet, andother optional printed materials) for such Game title.

 

6.5           Retention of Sample Licensed Products by NINTENDO.  NINTENDO may, at its own expense,manufacture reasonable quantities of the Game Discs or the Licensed Products,and make a reasonable number of copies of the Printed Materials, not to exceed**** copies, to be used for archival purposes, legal proceedings againstinfringers of the Intellectual Property Rights, and for other lawful purposes(but not for resale).

 

**7.****            ****MARKETING AND ADVERTISING**

 

7.1           Approval of Marketing Materials.  LICENSEE represents and warrants that thePrinted Materials and the Marketing Materials shall be of high quality andcomply with (a) the Guidelines, (b) the guidelines of the PEGI, and (c) to thebest of LICENSEE’s knowledge, all applicable laws and regulations and officialcodes of practice in those jurisdictions in the Territory where they will be usedor distributed, including without limitation all applicable privacy laws.  To protect NINTENDO’s valuable IntellectualProperty Rights, to prevent the dilution of NINTENDO’s trademarks, and to avoiduse of the licensed Intellectual Property Rights giving rise to any implicationof NINTENDO’s sponsorship, association, approval or endorsement where this isnot the case, prior to actual use or distribution, LICENSEE shall submit toNINTENDO for review samples of all proposed Marketing Materials.  NINTENDO shall, within ten (10) business daysof receipt, approve or disapprove of the quality of such samples.  If any of the samples are disapproved,NINTENDO shall specify the reasons for such disapproval in writing, which mayinclude by e-mail, and state what corrections and/or improvements arenecessary.  After making the necessarycorrections and/or improvements, LICENSEE shall submit revised samples forapproval by NINTENDO.  NINTENDO shall notunreasonably withhold or delay its approval of any proposed MarketingMaterials.  No Marketing Materials shallbe used or distributed by LICENSEE without NINTENDO’s prior written approval.

 

7.2           No Bundling.  To protect NINTENDO’s valuable IntellectualProperty Rights, to prevent the dilution of NINTENDO’s trademarks and to avoiduse of the licensed Intellectual Property Rights giving rise to any implicationof NINTENDO’s sponsorship, association, approval or endorsement where this isnot the case, LICENSEE shall not, without NINTENDO’s prior written approval,market or distribute any Games or Game Discs that have been bundled with (a) anyperipheral designed for use with WiiTM that has not been licensed or approved inwriting by NINTENDO, provided that LICENSEE is responsible for ensuring thatany such peripheral shall comply with all applicable laws and regulations inthe Territory, or (b) any other product or service where NINTENDO’sassociation, approval or endorsement might be suggested by bundling theproducts or services.

 

 

 

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

 

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7.3           Warranty and Repair.  LICENSEE shall provide the original consumerwith a minimum ninety (90) day (or such longer minimum period as may be requiredby applicable law) limited warranty on all Licensed Products.  LICENSEE shall also provide reasonableproduct service, including out-of-warranty service, for all LicensedProducts.  LICENSEE shall make suchwarranty and repair information available to consumers as required byapplicable law, provided that the exact nature of such warranties and servicesshall be determined by LICENSEE in its discretion, and further provided thatsuch warranties and services comply with the requirements of the laws and regulationsapplicable in the Territory.

 

7.4           Business Facilities.  LICENSEE agrees to develop and maintainsufficient customer service, either directly or through a third party, toadequately support the Licensed Products.

 

7.5           No Sales Outside the Territory.  LICENSEE covenants that it shall notknowingly market, sell, offer to sell, import or distribute the LicensedProducts outside the Territory, or within the Territory when LICENSEE hasactual or constructive knowledge that a subsequent destination of the LicensedProduct is outside the Territory.

 

7.6           Defects and Recall.  In the event of a material programming defectin 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 LicensedProduct and undertake suitable repairs or replacements.

 

7.7           NINTENDO Promotional Materials, Publications and Events.  With a view to improving thecompetitiveness of the video game products consisting of Nintendo video gamesystems and services and compatible software published by LICENSEE and others,at its option and expense, NINTENDO may (a) utilize screen shots, Artwork andinformation regarding the Licensed Products in all NINTENDO published orofficially licensed magazines, official NINTENDO sponsored web sites or otheradvertising, promotional or marketing media, which promote NINTENDO products,services or programs, and (b) exercise public performance rights in the Gamesand use related trademarks and Artwork in connection with NINTENDO sponsoredcontests, tours, conventions, trade shows, press briefings and similar eventswhich promote such video game products, subject to the prior written approvalof LICENSEE.

 

7.8           Nintendo Gateway System.  To promote and increase demand for games onNintendo video game systems, NINTENDO licenses select games in various non-coinactivated commercial settings such as commercial airlines, cruise ships, railsystems and hotels, where customers play games on specially adapted Nintendovideo game hardware referred to as the “Nintendo Gateway System”.  If NINTENDO identifies a Game for possiblelicense on the Nintendo Gateway System, the parties agree to conduct good faithnegotiations to determine commercially reasonable terms for such participation.

 

**8.****            ****CONFIDENTIAL INFORMATION**

 

8.1           Definition.  Confidential Information means informationprovided to LICENSEE by NINTENDO or any third party working with NINTENDOrelating to the hardware and software for WiiTM or the Development Tools,including, but not limited to, (a) all current or future information, know-how,techniques, methods, tools, emulator hardware or software, software developmentspecifications, proprietary manufacturing processes and/or trade secrets, (b) anyinformation on inventions, patents, or patent applications, (c) any business,legal, marketing, pricing or sales data or information, and (d) any otherinformation or data relating to development, design, operation, manufacturing,marketing or sales.  ConfidentialInformation shall include all confidential information disclosed, whether inwriting, orally, visually, or in the form of drawings, technicalspecifications, software, samples, pictures, models, recordings, or othertangible items which contain or manifest, in any form, the above listedinformation.  Confidential Informationshall not include (i) data and information which was in the public domain priorto LICENSEE’s receipt of the same hereunder, or which subsequently becomes partof the public domain by publication or otherwise, except by LICENSEE’s wrongfulact or omission, (ii) data and information which LICENSEE can demonstrate,through written records kept in the ordinary course of business, was in itspossession without restriction on use or disclosure, prior to its receipt ofthe same hereunder, and was not acquired

 

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directly orindirectly from NINTENDO or NOA under an obligation of confidentiality which isstill in force, and (iii) data and information which LICENSEE can show wasreceived by it from a third party who did not acquire the same directly orindirectly from NINTENDO or NOA and to whom LICENSEE has no obligation ofconfidentiality.

 

8.2           Disclosures Required by Law.  LICENSEE shall be permitted to discloseConfidential Information if such disclosure is required by an authorizedgovernmental or judicial entity, provided that LICENSEE shall notify NINTENDOat least ten (10) days prior to such disclosure, or such lesser period asmay be needed to comply with such requirement. LICENSEE shall use its best commercial efforts to limit the disclosureto the greatest extent possible consistent with LICENSEE’s legal obligations,and if required by NINTENDO, shall cooperate in the preparation and entry ofappropriate court orders limiting the persons to whom Confidential Informationmay be disclosed and the extent of disclosure of such Confidential Information.

 

8.3           Disclosure and Use.  NINTENDO may provide LICENSEE with highlyconfidential development information, Guidelines, Development Tools, systems,specifications and related resources and information constituting andincorporating the Confidential Information to assist LICENSEE in thedevelopment of Games.  LICENSEE agrees tomaintain all Confidential Information as strictly confidential and to use suchConfidential Information only in accordance with this Agreement.  LICENSEE shall limit access to theConfidential Information to LICENSEE’s employees having a strict need to know,and shall advise such individuals of their obligation of confidentiality asprovided herein.  LICENSEE shall requireeach such individual to retain in confidence the Confidential Informationpursuant to a written non-disclosure agreement with LICENSEE.  LICENSEE shall use its best efforts to ensurethat individuals who are permitted hereunder to work with or otherwise haveaccess to Confidential Information shall not disclose or make any unauthorizeduse of the Confidential Information.

 

8.4           No Disclosure to Independent Contractors.  LICENSEE shall not disclose the ConfidentialInformation, including without limitation the Guidelines and IntellectualProperty Rights, to any Independent Contractor, nor permit any IndependentContractor to perform or assist in development work for a Game that requiresuse of the Confidential Information, without the prior written consent ofNINTENDO.  Any Independent Contractorseeking access to Confidential Information shall be required to enter into awritten non-disclosure agreement with NINTENDO or NOA that is no lessrestrictive than the terms of this Section 8, and that expressly includesthe following language, prior to receiving any access to or disclosure of theConfidential Information from either LICENSEE or NINTENDO:

 

**“IndependentContractor may have access to highly-confidential and proprietary information,intellectual property, and trade secrets of Nintendo Co., Ltd. and/orNintendo 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 thisagreement and shall be treated by Independent Contractor as such.  Independent Contractor’s use of suchmaterials shall not create any right, title or interest of IndependentContractor therein.  In the event thatIndependent Contractor challenges Nintendo’s ownership or the validity of suchmaterials, Nintendo may terminate the agreement without any notice orprocedure.  Nintendo Co., Ltd. andNintendo of America Inc. are intended third-party beneficiaries of thisagreement.”**

 

AtLICENSEE’s option, the written non-disclosure agreement may be with LICENSEErather than NINTENDO or NOA, in which case the form and substance of thenon-disclosure agreement must be acceptable to NINTENDO.  Upon NINTENDO or NOA’s reasonable writtenrequest, LICENSEE shall provide to NINTENDO a listing of all IndependentContractors who have received or been granted access to ConfidentialInformation along with copies of the applicable written non-

 

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disclosureagreements.  In addition, LICENSEE shalltake all reasonable measures to ensure that its Independent Contractors fulfillthe requirements of the applicable written non-disclosure agreements.

 

LICENSEEshall use its best commercial efforts to ensure that its employees working withor otherwise having access to Confidential Information shall not disclose ormake unauthorized use of the Confidential Information.  LICENSEE agrees to indemnify NINTENDO againstall loss or damage, including consequential economic loss, for breach of theseobligations by the LICENSEE and its employees.

 

8.5           Agreement Confidentiality.  LICENSEE agrees that the terms, conditionsand contents of this Agreement shall be treated as Confidential Information.  Any public announcement or press releaseregarding this Agreement or the release dates for Games developed by LICENSEEunder this Agreement shall be subject to NINTENDO’s prior written approval,such approval not to be unreasonably delayed or withheld.  The parties may disclose this Agreement(a) to accountants, banks, financing sources, lawyers, parent companiesand related parties under substantially equivalent confidentiality obligations,(b) in connection with any formal legal proceeding for the enforcement ofthis Agreement, (c) as required by the regulations of the governmentagencies in the Territory and the United States that regulate publicly-tradedsecurities, provided that all Confidential Information shall be edited fromsuch disclosures to the maximum extent allowed by such government agencies,(d) in response to lawful process, subject to court order limiting thepersons to whom Confidential Information may be disclosed and the extent ofdisclosure of such Confidential Information, approved in advance by NINTENDO,and (e) to a third party proposing to enter into a business transactionwith LICENSEE or with NINTENDO, but only to the extent reasonably necessary forcarrying out the proposed transaction and only under terms of mutual confidentiality.

 

8.6           Notification Obligations.  LICENSEE shall promptly notify NINTENDO ofthe unauthorized use or disclosure of any Confidential Information of whichLICENSEE becomes aware and shall promptly act to recover any such informationand prevent further breach of the obligations herein.  The obligations of LICENSEE set forth hereinare in addition to and not in lieu of any other legal remedy that may beavailable to NINTENDO under this Agreement or applicable law.

 

8.7           Continuing Effect of the NDA.  The terms of this Section 8 supplementthe terms of the NDA, which shall remain in effect.  In the event of a conflict between the termsof 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)           itis a duly organized and validly existing corporation and has full authority toenter into this Agreement and to carry out the provisions hereof,

 

(b)           theexecution, delivery and performance of this Agreement by LICENSEE does notconflict with any agreement or understanding to which LICENSEE may be bound,and

 

(c)           excludingthe Intellectual Property Rights, LICENSEE is either (i) the sole owner ofall right, title and interest in and to the trademarks, copyrights and allother Proprietary Rights incorporated into the Game or the Artwork or used inthe development, advertising, marketing and sale of the Licensed Products orthe Marketing Materials, or (ii) the holder of such rights, includingtrademarks, copyrights and all other Proprietary Rights which belong to anythird party but have been licensed from such third party or an agent orlicensee of a third party, such as a collecting society, by LICENSEE, as arenecessary for incorporation into the Game or the Artwork or as are used in thedevelopment, advertising, marketing and sale of the Licensed Products or theMarketing Materials under this Agreement.

 

9.2           NINTENDO’s Representations and Warranties.  NINTENDO represents and warrants that:

 

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

 

(b)           theexecution, delivery and performance of this Agreement by NINTENDO do notconflict with any agreement or understanding to which NINTENDO may be bound.

 

9.3           INTELLECTUAL PROPERTY RIGHTS DISCLAIMER.  NINTENDO (ON ITS OWN BEHALF AND ON BEHALF OFITS AFFILIATES, SUBSIDIARIES, LICENSORS, SUPPLIERS AND SUBCONTRACTORS)EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES CONCERNING THE SCOPE ORVALIDITY OF THE INTELLECTUAL PROPERTY RIGHTS. NINTENDO (ON ITS OWN BEHALF AND ON BEHALF OF ITS AFFILIATES,SUBSIDIARIES, LICENSORS, SUPPLIERS AND SUBCONTRACTORS) EXPRESSLY DISCLAIMS ANYWARRANTY THAT THE DESIGN, DEVELOPMENT, ADVERTISING, MARKETING OR SALE OF THELICENSED PRODUCTS OR THE USE OF THE INTELLECTUAL PROPERTY RIGHTS BY LICENSEEWILL NOT INFRINGE UPON ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER PROPRIETARYRIGHTS OF A THIRD PARTY TO THE MAXIMUM EXTENT LEGALLY PERMISSIBLE.  ANY WARRANTY, CONDITION OR TERM THAT MAY BEPROVIDED IN ANY APPLICABLE PROVISION OF ANY LAW OR REGULATION IN THE TERRITORYGOVERNING COMMERCIAL ACTIVITY, OR ANY OTHER COMPARABLE LAW OR REGULATION, ISEXPRESSLY DISCLAIMED.  LICENSEE HEREBYASSUMES THE RISK OF INFRINGEMENT.

 

9.4           GENERAL DISCLAIMER.  NINTENDO (ON ITS OWN BEHALF AND ON BEHALF OFITS AFFILIATES, SUBSIDIARIES, LICENSORS, SUPPLIERS AND SUBCONTRACTORS)EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES WITH RESPECT TO THE LICENSEDPRODUCTS, INCLUDING, WITHOUT LIMITATION, THE SECURITY TECHNOLOGY.  LICENSEE PURCHASES AND ACCEPTS ALL LICENSEDPRODUCTS ON AN “AS IS” AND “WHERE IS” BASIS. NINTENDO (ON ITS OWN BEHALF AND ON BEHALF OF ITS AFFILIATES,SUBSIDIARIES, LICENSORS, SUPPLIERS AND SUBCONTRACTORS) EXPRESSLY DISCLAIMS ALLWARRANTIES, CONDITIONS OR OTHER TERMS OF ANY KIND UNDER THE APPLICABLE LAWS OFANY COUNTRY, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITYOR FITNESS FOR A GENERAL OR PARTICULAR PURPOSE.

 

9.5           LIMITATION OF LIABILITY.  TO THE MAXIMUM EXTENT PERMITTED BY LAW,NEITHER NINTENDO NOR ITS AFFILIATES, SUBSIDIARIES, LICENSORS, SUPPLIERS, ORSUBCONTRACTORS SHALL BE LIABLE FOR LOSS OF PROFITS, OR FOR ANY SPECIAL,PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF LICENSEE OR ITS CUSTOMERSARISING OUT OF OR RELATED TO THIS AGREEMENT, INCLUDING, WITHOUTLIMITATION, THE BREACH OF THIS AGREEMENT BY NINTENDO, THE MANUFACTURE OF THELICENSED PRODUCTS OR THE USE OF THE LICENSED PRODUCTS ON ANY NINTENDO VIDEOGAME SYSTEM BY LICENSEE OR BY ANY END USER.

 

**10.****         ****INDEMNIFICATION**

 

10.1         Claim.  “Claim” means any and all third-party claims,demands, actions, suits, proceedings, losses, liabilities, damages, expenses andcosts, including, without limitation, reasonable attorneys’ fees and actualcosts and any actual expenses incurred in the settlement or avoidance of anysuch claim.  “Claim” shall specificallyinclude civil, criminal, and regulatory matters, and those brought by anythird party (including governmental authorities or agencies) under anynational, subnational, or multinational law or regulation, or the rules ofany self-regulatory body (e.g., PEGI).

 

10.2         LICENSEE’s Indemnification.  LICENSEE shall indemnify and hold harmlessNINTENDO (and any of its affiliates, subsidiaries, licensors, suppliers,officers, directors, employees or agents) from any Claims which are alleged toresult from or be in connection with:

 

(a)           amaterial breach by LICENSEE of any of the provisions in this Agreement,

 

(b)           anyinfringement of a third party’s Proprietary Rights as a result of the design,development, advertising, marketing, sale or use of any aspect of the LicensedProducts or the

 

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Marketing Materialsby LICENSEE or on behalf of LICENSEE, excluding claims based solely upon theIntellectual Property Rights,

 

(c)           adefect, failure to warn, bodily injury (including death), or other personal orproperty 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)           the design, development,advertising, marketing, sale or use of any aspect of the Licensed Products, theMarketing Materials, or any other promotional materials.

 

NINTENDOand LICENSEE shall give prompt Notice to the other of any Claim which is orwhich may be subject to indemnification under this Section 10.  With respect to any such Claim, LICENSEE, asindemnitor, shall have the right to select counsel and to control the defenseand/or settlement thereof.  NINTENDO may,at its own expense, participate in such action or proceeding with counsel ofits own choice.  LICENSEE shall not enterinto any settlement of any Claim in which (a) NINTENDO has been named as aparty, or (b) Intellectual Property Rights have been asserted, withoutNINTENDO’s prior written consent, which shall not be unreasonablywithheld.  NINTENDO shall providereasonable assistance to LICENSEE in its defense of any Claim.

 

10.3         LICENSEE’s Insurance.  LICENSEE shall, at its own expense, obtain acomprehensive policy of general liability insurance (including coverage foradvertising injury and product liability Claims) from an insurance companyrated at least B+ by A.M. Best or a comparable rating by anotherrecognized insurance rating organization. Such policy of insurance shall be in an amount of not less than theequivalent of **** on a per-occurrence basis and shall provide for adequateprotection against any Claims. Such policy shall name NINTENDO as an additionalinsured and shall specify it may not be canceled without thirty (30) days’prior written Notice to NINTENDO.  ACertificate of Insurance shall be provided to NINTENDO not later than the dateof the initial order of Licensed Products under this Agreement or within thirty(30) days of the Effective Date of this Agreement, whatever date occurslater.  If LICENSEE fails to provideNINTENDO with such Certificate of Insurance or fails to maintain such insuranceat any time during the Term and for a period of two (2) years thereafterand fails to cure within thirty (30) days of written notice, NINTENDO, inits sole discretion may (a) terminate this Agreement in accordance withSection 13.2 herein; and/or (b) secure comparable insurance, atLICENSEE’s expense, for the sole benefit and protection of NINTENDO.

 

10.4         Suspension of Production.  In the event NINTENDO deems itself at riskwith respect to any Claim under this Section 10, NINTENDO may, at its soleoption, suspend production, delivery or order acceptance for any LicensedProducts, in whole or in part, pending resolution of such Claim.

 

**11.****         ****PROTECTION OF PROPRIETARY RIGHTS**

 

11.1         Joint Actions Against Infringers.  LICENSEE and NINTENDO may agree to jointlypursue cases of infringement involving the Licensed Products, as such LicensedProducts will contain Proprietary Rights owned by each of them.  Unless the parties otherwise agree, or unlessthe recovery is expressly allocated between them by the court, in the event ofsuch an action, any recovery shall be used first to reimburse LICENSEE andNINTENDO for their respective reasonable attorneys’ fees and costs, pro**rata, and any remaining recovery shall be distributed toLICENSEE and NINTENDO, pro rata, based upon the fees and costs incurred inbringing such action.

 

11.2         Actions by LICENSEE.  LICENSEE, without the consent of NINTENDO andto the extent permitted by law, may bring any action or proceeding relating toan infringement or potential infringement of LICENSEE’s Proprietary Rights inthe Licensed Products.  LICENSEE shallmake reasonable good faith efforts to inform NINTENDO of such actions in atimely manner.  LICENSEE will have the rightto retain all proceeds it may derive from any recovery in connection with suchactions.

 

 

* Confidential portionomitted and filed separately with the Securities and Exchange Commission.

 

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11.3         Actions by NINTENDO.  NINTENDO, without the consent of LICENSEE, maybring any action or proceeding relating to an infringement or potentialinfringement of NINTENDO’s Intellectual Property Rights in the LicensedProducts.  NINTENDO shall make, in atimely manner, reasonable, good faith efforts to inform LICENSEE of suchactions likely to affect LICENSEE’s rights. NINTENDO will have the right to retain all proceeds it may derive fromany recovery in connection with such actions.

 

**12.****         ****ASSIGNMENT**

 

12.1         Definition.  “Assignment” means every type and form ofassignment, transfer, sale, sublicense, delegation, encumbrance, pledge and/orhypothecation 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 ofall 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 obligationsunder this Agreement to or by LICENSEE’s trustee in bankruptcy, receiver, orother individual or entity appointed to control or direct the business andaffairs of LICENSEE, (c) an involuntary assignment, transfer, sale,sublicense, delegation, encumbrance, pledge or hypothecation of all or aportion of LICENSEE’s rights or obligations under this Agreement, including butnot 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 ofLICENSEE under this Agreement are sold, assigned or transferred to anotherindividual or entity for any reason. Assignment also includes the sale, assignment, transfer or other eventaffecting a change in the controlling interest of LICENSEE, whether by sale,transfer or assignment of shares in LICENSEE, or by sale, transfer orassignment of partnership interests in LICENSEE, or otherwise.

 

12.2         No Assignment by LICENSEE.  This Agreement and the subject matter hereofare  personal to LICENSEE.  No Assignment of LICENSEE’s rights orobligations hereunder shall be valid or effective without NINTENDO’s priorwritten consent, which consent may be withheld by NINTENDO for any reasonwhatsoever in its sole discretion.  Inthe event of an attempted Assignment in violation of this provision, NINTENDOshall have the right at any time, at its sole option, to immediately terminatethis Agreement.  Upon such termination,NINTENDO shall have no further obligation under this Agreement to LICENSEE orto LICENSEE’s intended or purported assignee.

 

12.3         Proposed Assignment.  Prior to any proposed Assignment of thisAgreement, LICENSEE shall give NINTENDO not less than thirty (30) daysprior written Notice thereof, which Notice shall disclose the name of theproposed assignee, the proposed effective date of the proposed Assignment andthe nature and extent of the rights and obligations that LICENSEE proposes toassign.  NINTENDO may, in its sole discretion,approve or disapprove such proposed Assignment. Unless written consent is given by NINTENDO to a proposed Assignment,any attempted or purported Assignment shall be deemed disapproved and NINTENDOshall have the unqualified right, in its sole discretion, to terminate thisAgreement at any time.  Upon termination,NINTENDO shall have no further obligation under this Agreement to LICENSEE orto LICENSEE’s intended or purported assignee.

 

12.4         Sale or Transfer of LICENSEE’s Business.  Notwithstanding the rights of NINTENDOspecified in Clauses 12.1-12.3, NINTENDO will not unreasonably withholdits consent of LICENSEE’s assignment of the present Agreement in conjunctionwith the sale or transfer of LICENSEE’s business related to this Agreement,provided that the purchaser/transferee does not manufacture, or havemanufactured for it, a Competitive Game System. Such Competitive Game Systems include, but without limitation,Apple/Bandai Pippin or Atmark, Atari Jaguar, Atari Lynx, 3D0 Real,Matsushita MZ, Microsoft® XBox®, MicrosoftXBOX 360, Phillips CD-I Interactive Player, Sega Master System, Sega Genesis,Sega CD, Sega Game Gear, Sega CD/X, Sega Katana, Sega Nomad,Sega 32x, Sega Saturn, Sega Pico, Sony PSK/PlayStation®, Sony PSX2,Sony PSP, Sony Personal Digital Assistant, and SNK Neo Geo.

 

Further,with respect to Related Parties, this Agreement may be sold, assigned,delegated, or sublicensed upon thirty (30) days’ prior notice to NINTENDO, providedthat any such sale, assignment, 

 

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delegation orsublicense will require that the Related Party purchaser, assignor, delegate,or sublicensee, affirmatively assume all of LICENSEE’s duties,responsibilities, and obligations under this Agreement.  The term “Related Party(ies)” shall mean anyperson or entity that directly or indirectly controls, is controlled by, or isunder common control with LICENSEE.  Forpurposes of this definition, “control” (or any variation thereof) meansbeneficial ownership of more than fifty percent (50%) of the equity or otherinterests entitled to vote for the election of directors or equivalentgoverning body of a person or entity. The term “Related Party(ies)” shall not include any person or entitythat directly or indirectly manufactures, or has manufactured for it, aCompetitive Game System.

 

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

 

**13.****         ****TERM AND TERMINATION**

 

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

 

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

 

13.3         Bankruptcy.  At NINTENDO’s option, this Agreement may beterminated immediately and without Notice in the event that LICENSEE(a) makes an assignment for the benefit of creditors, (b) becomesinsolvent, (c) files a voluntary petition for bankruptcy,(d) acquiesces to any involuntary bankruptcy petition, (e) isadjudicated as a bankrupt, or (f) ceases to do business.

 

13.4         Termination Other Than by Breach.  Upon the expiration of this Agreement or itstermination other than by LICENSEE’s breach, ****.  All Licensed Products in LICENSEE’s controlfollowing the expiration of such sell-off period shall be destroyed by LICENSEEwithin ten (10) days and Notice of such destruction (with proof certifiedby an officer of LICENSEE) shall be delivered to NINTENDO.

 

13.5         Termination by LICENSEE’s Breach.  If this Agreement is terminated by NINTENDOas a result of a breach of its terms and conditions by LICENSEE, LICENSEE shallimmediately cease all distribution, advertising, marketing or sale of anyLicensed Products.  All Licensed Productsin LICENSEE’s control as of the date of such termination shall be destroyed byLICENSEE within ten (10) days and Notice of such destruction (with proofcertified 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 materialbreach by LICENSEE of (a) the NDA, or (b) any other license agreementbetween NINTENDO and LICENSEE relating to the development of games for anyNintendo video game system, which breach is not cured within the time periodfor cure allowed under the applicable agreement (and which shall give NINTENDOreasonable cause to believe that it needs to terminate this Agreement so as toprotect its legitimate business interests), shall be considered a materialbreach of this Agreement entitling NINTENDO to terminate this Agreement inaccordance with Section 13.5 herein.

 

13.7         No Further Use of the Intellectual Property Rights.  Upon expiration or termination ofthis Agreement, LICENSEE shall cease all use of the Intellectual PropertyRights for any purpose, except as may be required in connection with the saleof the Licensed Products authorized under Section 13.4 herein.  LICENSEE shall, within thirty (30) daysof expiration or termination, (a) return to NINTENDO all Development Toolsprovided to LICENSEE by NINTENDO, and (b) return to NINTENDO or destroyany and all copies of materials constituting, relating to, or disclosing any

 

 

* Confidential portionomitted and filed separately with the Securities and Exchange Commission.

 

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ConfidentialInformation, including but not limited to Guidelines, writings, drawings,models, data, and tools, whether in LICENSEE’s possession or in the possessionof any past or present employee, agent or Independent Contractor who receivedthe information through LICENSEE.  Proofof such return or destruction shall be certified by an officer of LICENSEE andpromptly provided to NINTENDO.

 

13.8         Termination by NINTENDO’s Breach.  If this Agreement is terminated by LICENSEEas a result of a breach of its terms or conditions by NINTENDO, LICENSEE may,at its sole option, continue to sell the Licensed Products in the Territoryuntil the expiration of the Term, at which time the provisions ofSection 13.4 shall apply.

 

**14.****         ****GENERAL PROVISIONS**

 

14.1         Compliance with Applicable Laws and Regulations.  LICENSEE shall at all times complywith applicable laws, regulations and orders in the countries of the Territoryrelating to or in any way affecting this Agreement and LICENSEE’s performanceunder this Agreement, including, without limitation, the export laws andregulations of any country with jurisdiction over the Intellectual PropertyRights, Licensed Products, Development Tools and/or either party.  LICENSEE shall not market, distribute, orsell the Game and/or Game Discs in any country in the Territory in which suchmarketing, distribution or sale would violate any applicable laws, regulationsor orders of such country.

 

14.2         Force Majeure.  Neither party shall be liable for any breachof this Agreement occasioned by any cause beyond the reasonable control of suchparty, 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 causewhich could not with reasonable diligence be controlled or prevented by theparties.  In the event of materialshortages, including shortages of materials or production facilities necessaryfor production of the Licensed Products, NINTENDO reserves the right toallocate such resources among itself and its licensees, including LICENSEEhereunder.

 

14.3         Records and Audit.  During the Term and for a period of two(2) years thereafter, LICENSEE agrees to keep accurate, complete anddetailed records relating to the use of the Confidential Information, theDevelopment Tools and the Intellectual Property Rights.  Upon at least fifteen (15) days priorwritten Notice to LICENSEE, NINTENDO may, at its expense and subject to aconfidentiality agreement, arrange for a third-party audit of LICENSEE’srecords, reports and other information solely related to LICENSEE’s compliancewith this Agreement; provided, however, that NINTENDO shall not, during thecourse of the audit, access LICENSEE’s source code, development plans,marketing plans, internal business plans or other items deemed confidential byLICENSEE, except to the extent such materials incorporate, disclose orreference NINTENDO’s Confidential Information or Intellectual Property Rights.

 

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

 

14.5         Survival.  In addition to those rights specifiedelsewhere in this Agreement, the rights and obligations set forth inSections 3, 8, 9, 10, 11, 13.4, 13.7, 13.8 and 14 shall survive anyexpiration or termination of this Agreement to the degree necessary to permittheir complete fulfillment or discharge.

 

14.6         Governing Law and Venue.  This Agreement shall be governed by the lawsof Japan, without regard to its conflict of laws principles.  Any legal actions (including judicial andadministrative 

 

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proceedings) withrespect to any matter arising under or growing out of this Agreement, shall bebrought in the Kyoto District Court. Each party hereby consents to the jurisdiction and venue of such courtfor such purposes.

 

14.7         Injunctive Relief.  LICENSEE acknowledges that in the event ofits breach of this Agreement, no adequate remedy at law may be available toNINTENDO and that NINTENDO shall be entitled to seek injunctive or othersimilar available relief in addition to any additional relief available toNINTENDO.

 

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

 

14.9         Expansion of Rights.  NINTENDO may expand the rights granted toLICENSEE under this Agreement by providing written notice of such expansion ofrights to LICENSEE and without having to enter into a written addendum to thepresent Agreement with LICENSEE.

 

14.10       Delegationof Duties.  NINTENDO, at its option, may delegate itsduties under the present Agreement to a wholly owned subsidiary.  To the extent necessary for the parties tocarry out their duties under this Agreement, NINTENDO shall provide notice toLICENSEE of any such delegation, including to whom at NINTENDO’s wholly ownedsubsidiary communications from LICENSEE under this Agreement may bedirected.  Also in the event of adelegation by NINTENDO, the provisions of this Agreement shall continue togovern the relationship between NINTENDO and LICENSEE and shall govern therelationship between NINTENDO’s subsidiary and LICENSEE, subject to anyamendments or modifications to this Agreement which such subsidiary andLICENSEE may agree to in their relationship. NINTENDO shall remain obligated under the present Agreement for theperformance of NINTENDO’s duties by NINTENDO’s subsidiary.

 

14.11       Counterpartsand Signature by Facsimile.  This Agreement may be signed in counterparts,which shall together constitute a complete Agreement.  A signature transmitted by facsimile orelectronically via computer network shall be considered an original forpurposes of this Agreement.

 

INWITNESS WHEREOF, the parties have entered into this Agreement on the dates setforth below.

 

 
| **NINTENDO:**               | **LICENSEE:**                |
|-----------------------------|------------------------------|
| ** **                  | ** **                   |
| **NINTENDO CO., LTD.** | **THQ INC.**                 |
| ** **                  | ** **                   |
| ** **                  | ** **                   |
| By:                         |   /s/ Satoru Iwata |   | By: |  /s/ Brian J. Farrell |
|                        |                         |   |
| Name:                       | Satoru Iwata                 |   | Name: |  Brian J. Farrell |
|                        |                         |   |
| Title:                      | President                    |   | Title: |  President & CEO |
|                        |                         |   |
| Date:                       |  Mar. 10, 2010     |   | Date: |  Dec. 7, 2009 |
|                        |                         |   |   |   |
|                        |                         |   |   |   |
|                        |                         |   |   |   |
|                        |                         |   | **THQ (UK) LIMITED** |
|                        |                         |   |   |
|                        |                         |   | By: | /s/ Ian Curran |
|                        |                         |   |   |
|                        |                         |   | Printed: | Ian Curran |
|                             |                              |  |  |  |  |  |  |  |  |  |  |

 

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|                                              | Title:                         | EVP Global Publishing   |
|---------------------------------------------------|--------------------------------|-------------------------|
|                                              |                           |
|                                              | Date:                          | Dec. 4, 2009       |
|                                              |                           |
|                                              | ** **                     |
|                                              | **THQ ENTERTAINMENT GmbH**     |
|                                              |                           |
|                                              | By:                            | /s/ Ian Curran          |
|                                              |                           |
|                                              | Printed:                       | Ian Curran              |
|                                              |                           |                    |
|                                              | Title:                         | EVP Global Publishing   |
|                                              |                           |
|                                              | Date:                          | Dec. 4, 2009       |
|                                              |                           |
|                                              | ** **                     |
|                                              | **THQ FRANCE SARL**            |
|                                              |                           |
|                                              | By:                            | /s/ Ian Curran          |
|                                              |                           |
|                                              | Printed:                       | Ian Curran              |
|                                              |                           |
|                                              | Title:                         | EVP Global Publishing   |
|                                              |                           |
|                                              | Date:                          | Dec. 4, 2009       |
|                                              |                           |
|                                              | ** **                     |
|                                              | **THQ ASIA PACIFIC PTY (LTD)** |
|                                              |                           |
|                                              | By:                            | /s/ Martin Good         |
|                                              |                           |
|                                              | Printed:                       | Martin Good             |
|                                              |                           |
|                                              | Title:                         | SVP – Asia Pacific |
|                                              |                           |
|                                              | Date:                          | 4 December 2009    |
|                                              |                           |
|                                              | ** **                     |
| **THQ INTERACTIVE ENTERTAINMENT ESPAÑA, SL** |
|                                              |                           |
|                                              | By:                            | /s/ Ian Curran          |
|                                              |                           |
|                                              | Printed:                       | Ian Curran              |
|                                              |                           |
|                                              | Title:                         | EVP Global Publishing   |
|                                              |                           |
|                                              | Date:                          | Dec. 4, 2009       |
|                                              |                           |
|                                              | ** **                     |
| **THQ  ITALY SRL**                                |
|                                              |                           |
|                                              | By:                            | /s/ Ian Curran          |
|                                              |                           |
|                                              | Name:                          | Ian Curran              |
|                                              |                           |
|                                              | Title:                         | EVP Global Publishing   |
|                                              |                           |
|                                              | Date:                          | Dec. 4, 2009       |
| Attachment:                                       |                           |
| Annex A: Guidelines on  Ethical Content      |                           |
|                                                   |                                |                         |  |  |  |

 

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**Annex A**

 

**Guidelines on Ethical Content**

 

The following Guidelines on Ethical Content arepresented for assistance in the development of Games by defining the types ofthe theme inconsistent with NINTENDO’s corporate philosophy.  Exceptions may be made when necessary tomaintain the integrity of the Game or the Game’s theme.  Games shall not:

 

(a)       containsexually explicit content including but not limited to nudity, rape, sexualintercourse and sexual touching; for instance, NINTENDO does not allowbare-breasted women in Games, however, mild displays of affection such askissing or hugging are acceptable;

 

(b)       containlanguage or depictions which specifically denigrate members of any race,gender, ethnicity, religion or political group;

 

(c)       depictgratuitous or excessive blood or violence. NINTENDO does not permit depictions of animal cruelty or torture;

 

(d)       depictverbal or physical spousal or child abuse;

 

(e)       permitracial, gender, ethnic, religious or political stereotypes; for example,religious symbols such as crosses will be acceptable when fitting into thetheme of the Game and not promoting a specific religious denomination;

 

(f)        useprofanity, obscenity or incorporate language or gestures that are offensive byprevailing public standards and tastes; and

 

(g)       promotethe use of illegal drugs, smoking materials, tobacco and/or alcohol; forexample NINTENDO does not allow gratuitous beer or cigarette advertisementanywhere in a Game; however, Sherlock Holmes smoking a pipe would be acceptableas it fits the theme of the Game.

 

 

 

JEN:hjd

 

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