Document:

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
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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

 

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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.

 

 

	
   

  	
   

  	
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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.

 

 

	
   

  	
   

  	
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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

 

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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.

 

 

	
   

  	
   

  	
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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
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Commission.

 

 

	
   

  	
   

  	
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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
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Commission.

 

 

	
   

  	
   

  	
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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 16Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”), dated
as of November 27, 2007 (the “Effective
Date”), is made
by and between ImmunoGen, Inc., a Massachusetts corporation (the “Company”), and John A. Tagliamonte (“Executive”).. This Agreement is intended to
confirm the understanding and set forth the agreement between the Company and
Executive with respect to Executive’s employment by the Company. In
consideration of the mutual promises and covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby mutually acknowledged, the Company and the Executive hereby
agree as follows:

 

1.                                     Employment.

 

(a)                                 Title and
Duties. Subject to the terms and conditions of this Agreement, the Company
will employ Executive, and Executive will be employed by the Company, as Vice
President, Business Development, reporting to the Chief Executive Officer.
Executive will have the responsibilities, duties and authority commensurate with
said position. Executive will also perform such other services of an executive
nature for the Company as may be reasonably assigned to Executive from time to
time by the Chief Executive Officer or the Board of Directors of the Company
(the “Board”).

 

(b)                                Devotion to
Duties. For so long as Executive is employed hereunder, Executive will devote
substantially all of Executive’s business time and energies to the business and
affairs of the Company; provided that nothing contained in this Section 1(b) will
be deemed to prevent or limit Executive’s right to manage Executive’s personal
investments on Executive’s own personal time, including, without limitation,
the right to make passive investments in the securities of (i) any entity
which Executive does not control, directly or indirectly, and which does not
compete with the Company, or (ii) any publicly held entity (other than the
Company or its related entities) so long as Executive’s aggregate direct and
indirect interest does not exceed three percent (3%) of the issued and
outstanding securities of any class of securities of such publicly held entity.
Except as set forth on Exhibit A hereto, Executive represents that
Executive is not currently a director (or similar position) of any other entity
and is not employed by or providing consulting services to any other person or
entity, and Executive agrees to refrain from undertaking any such position or
engagement without the prior approval of the Board. Executive may continue to
serve as a director and/or volunteer for the entities listed on Exhibit A
provided that such service does not create any conflicts, ethical or otherwise,
with Executive’s responsibilities to the Company and further provided that
Executive’s time commitments do not unreasonably interfere with her fulfillment
of her responsibilities hereunder, as determined by the Board or its designated
committee thereof.

 

 

2.                                      Term of Agreement:
Termination of Employment.

 

(a)                                  Term of Agreement. The term of
this Agreement shall commence on the Effective Date and shall continue in
effect for two (2) years; provided, however, that commencing on the second
anniversary of the Effective Date and continuing each anniversary thereafter,
the Term shall automatically be extended for one (1) additional year
unless, not later than nine (9) months before the conclusion of the Term,
the Company or the Executive shall have given notice not to extend the Term.
Such notice or such termination of this Agreement shall not on its own have the
effect of terminating Executive’s employment, nor shall it constitute Cause (as
defined below). The duration of this Agreement is hereafter referred to as the “Term.”

 

(b)                                 Termination of Employment. The Executive
is employed on an at-will basis and, subject to the provisions of Section 4,
either the Executive or the Company may terminate the employment relationship
at any time for any reason. Notwithstanding anything else contained in this
Agreement, Executive’s employment during the Term will terminate upon the
earliest to occur of the following:

 

(i)                                     Death. Immediately
upon Executive’s death;

 

(ii)                                  Termination by
the Company.

 

(A)                              If because of
Disability (as defined below), then upon written notice by the Company to
Executive that Executive’s employment is being terminated as a result of
Executive’s Disability, which termination shall be effective on the date of
such notice;

 

(B)                                If for Cause,
then upon written notice by the Company to Executive that states that Executive’s
employment is being terminated for Cause (as defined below) and sets forth the
specific alleged Cause for termination and the factual basis supporting the
alleged Cause, which termination shall be effective on the date of such notice
or such later date as specified in writing by the Company; or

 

(C)                                If without
Cause (i.e., for reasons other than Sections 2(b)(ii)(A) or (B)),
then upon written notice by the Company to Executive that Executive’s
employment is being terminated without Cause, which termination shall be
effective on the date of such notice or such later date as specified in writing
by the Company; or

 

(iii)                               Termination by
Executive. Upon written notice by Executive to the Company
that Executive is terminating Executive’s employment, which termination shall
be effective at Executive’s election, not less than thirty (30) days and not
more than sixty (60) days after the date of such notice; provided that
the Executive may request at such time to leave with a shorter notice period,
and the Company shall not unreasonably withhold its consent to such shorter
period; and further provided that the Company may choose to accept Executive’s
resignation effective as of an earlier date.

 

2

 

Notwithstanding anything in this Section 2(b),
the Company may at any point terminate Executive’s employment for Cause prior
to the effective date of any other termination contemplated hereunder if such
Cause exists.

 

(c)                                 Definition of “Disability”. For purposes
of this Agreement, “Disability”  shall mean that Executive (i) is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than
twelve (12) months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than twelve (12)
months, receiving income replacement benefits for a period of not less than
three (3) months under a Company-sponsored group disability plan.
Whether the Executive has a Disability will be determined by a majority of the
Board based on evidence provided by one or more physicians selected by the
Board and approved by Executive, which approval shall not be unreasonably
withheld.

 

(d)                                Definition of “Cause”. For purposes
of this Agreement, “Cause”  shall mean that Executive has (i) intentionally
committed an act or omission that materially harms the Company; (ii) been
grossly negligent in the performance of Executive’s duties to the Company; (iii) willfully
failed or refused to follow the lawful and proper directives of the CEO or the
Board; (iv) been convicted of, or pleaded guilty or nolo contendre, to a felony; (v) committed an act involving moral
turpitude; (vi) committed an act relating to the Company involving, in the
good faith judgment of the Board, material fraud or theft; (vii) breached
any material provision of this Agreement or any nondisclosure agreement
(including the Proprietary Information, Inventions and Competition Agreement
attached here (as) Exhibit B), between Executive and the Company,
as all of the foregoing may be amended prospectively from time to time; or (viii) breached
a material provision of any code of conduct or ethics policy in effect at the
Company, as all of the foregoing may be amended prospectively from time to
time.

 

3.                                       Compensation.

 

(a)                                  Base Salary. While
Executive is employed hereunder, the Company will pay Executive a base salary
at the gross annualized rate of $247,000.00 (the “Base Salary”), paid in accordance with the Company’s usual payroll
practices. The Base Salary will be subject to review annually or on such
periodic basis (not to exceed annually) as the Company reviews the compensation
of the Company’s other senior executives and may be adjusted upwards in the
sole discretion of the Board or its designee. The Company will deduct from each
such installment any amounts required to be deducted or withheld under
applicable law or under any employee benefit plan in which Executive
participates.

 

(b)                                 Annual Bonus. Executive may
be eligible to earn an Annual Bonus relating to each fiscal year, based on the
achievement of individual and Company written goals established on an annual
basis by the Board within thirty (30) days of the beginning of the fiscal year.
If the Executive meets the applicable goals, is employed by the Company at the

 

3

 

end
of the year to which the Annual Bonus relates, and is not terminated for Cause
prior to the payment of the Annual Bonus, then the Executive shall be entitled
to an Annual Bonus for that year equal to 30% of his then-current Base Salary
(the “Target Annual Bonus”). Any
awarded Annual Bonus shall be paid within 21/2 months of the year to which it
relates.

 

(c)                                 Fringe Benefits. In addition
to any benefits provided by this Agreement, Executive shall be entitled to
participate generally in all employee benefit, welfare and other plans,
practices, policies and programs and fringe benefits maintained by the Company
from time to time on a basis no less favorable than those provided to other
similarly-situated executives of the Company. Executive understands that,
except when prohibited by applicable law, the Company’s benefit plans and
fringe benefits may be amended, enlarged, diminished or terminated
prospectively by the Company from time to time, in its sole discretion, and
that such shall not be deemed to be a breach of this Agreement.

 

(d)                                Vacation. Executive
will be entitled to accrue up to twenty (20) vacation days per year that
Executive remains employed by the Company, administered in accordance with and
subject to the terms of the Company’s vacation policy, as it may be amended
prospectively from time to time.

 

(e)                                 Reimbursement of Expenses. The Company
will promptly reimburse Executive for all ordinary and reasonable out-of-pocket
business expenses that are incurred by Executive in furtherance of the Company’s
business in accordance with the Company’s policies with respect thereto as in
effect from time to time.

 

4.                                       Compensation Upon
Termination.

 

(a)                                 Definition of
Accrued Obligations. For purposes of this Agreement, “Accrued Obligations”  means (i) the portion of Executive’s
Base Salary that has accrued prior to any termination of Executive’s employment
with the Company and has not yet been paid; (ii) to the extent required by
law and the Company’s policy, an amount equal to the value of Executive’s
accrued but unused vacation days; (iii) the amount of any expenses
properly incurred by Executive on behalf of the Company prior to any such
termination and not yet reimbursed; and (iv) the Annual Bonus related to
the most recently completed fiscal year, if not already paid and if the
termination is not for Cause (the amount of which shall be determined in
accordance with Section 3(b) above). Executive’s entitlement to any
other compensation or benefit under any plan or policy of the Company,
including but not limited to applicable option plans, shall be governed by and
determined in accordance with the terms of such plans or policies, except as
otherwise specified in this Agreement.

 

(b)                                Termination for
Cause, By the Executive, or as a Result of Executive’s Disability or Death.

 

(i)                                    If Executive’s
employment is terminated during the Term either by the Company for Cause or by
Executive, or if Executive’s employment terminates as a result of the Executive’s
death, the Company will pay the Accrued Obligations to Executive promptly
following the effective date of such termination.

 

4

 

(ii)                                  In case of
termination during the Term by the Company as a result of the Executive’s
Disability, the Company will pay Executive the Accrued Obligations plus an
amount equal to four (4) months of Executive’s then-current Base Salary.

 

(c)                                 Termination by
the Company without Cause. If Executive’s employment hereunder is
terminated by the Company without Cause during the Term, then:

 

(i)                                     The Company
will pay the Accrued Obligations to Executive promptly following the effective
date of such termination;

 

(ii)                                  The Company
will pay Executive a total amount equal to twelve (12) months of Executive’s
then current Base Salary, less applicable taxes and deductions; to be made in
approximately equal biweekly installments in accordance with the Company’s
usual payroll practices over a period of twelve (12) months beginning after the
effective date of the separation agreement described in Section 4(d);

 

(iii)                               The Company
will continue to provide medical insurance coverage for Executive and Executive’s
family, subject to the requirements of COBRA and subject to Executive’s payment
of a premium co-pay related to the coverage that is no less favorable than the
premium co-pay charged to active employees of the Company electing the same
coverage for eighteen (18) months from the Separation Date; provided,
that the Company shall have no obligation to provide such coverage if Executive
fails to elect COBRA benefits in a timely fashion or if Executive becomes
eligible for medical coverage with another employer; and

 

(iv)                              That portion of
unvested options then held by Executive, if any, that would have vested during
the twelve (12) month period following the effective date of employment
termination but for such termination shall vest and be immediately exercisable
as of the date of the employment termination. That portion of the shares of
restricted stock then held by Executive, if any, that are subject to a lapsing
forfeiture right that would have terminated during the twelve (12) month period
following the effective date of employment termination but for such termination
will terminate as of the date of the employment termination. All options and
shares of restricted stock shall otherwise be subject to the terms and conditions
of their respective agreements and with the applicable plan.

 

(d)                                Release of
Claims. The Company shall not be obligated to pay Executive any of the
compensation or provide Executive any of the benefits set forth in Section 4(b) or
4(c) (other than the Accrued Obligations) unless and until Executive has
executed a timely separation agreement in a form acceptable to the Company,
which shall include a release of claims between the Company and the Executive,
and may include provisions regarding mutual non-disparagement and
confidentiality.

 

(e)                                 No Other
Payments or Benefits Owing. The payments and benefits
set forth in this Section 4 shall be the sole amounts owing to Executive
as separation pay upon termination of Executive’s employment. Executive shall
not be eligible for any other

 

5

 

payments, including but not
limited to additional Base Salary payments, bonuses, commissions, or other
forms of compensation or benefits, except as may otherwise be set forth in this
Agreement or other Company plan documents with respect to plans in which
Executive is a participant.

 

(f)                                    Notwithstanding
any other provision with respect to the timing of payments under Section 4,
if, at the time of Executive’s termination, Executive is deemed to be a “specified
employee” (within the meaning of Code Section 409A, and any successor
statute, regulation and guidance thereto) of the Company, then limited only to
the extent necessary to comply with the requirements of Code Section 409A,
any payments to which Executive may become entitled under Section 4 which
are subject to Code Section 409A (and not otherwise exempt from its
application) will be withheld until the first (1st) business day of
the seventh (7th) month following the termination of Executive’s
employment, at which time Executive shall be paid an aggregate amount equal to
the accumulated, but unpaid, payments otherwise due to Executive under the
terms of Section 4.

 

5.                                      Competition. Executive
agrees to sign and return to the Company the Proprietary Information,
Inventions, and Competition Agreement (the “Proprietary Information Agreement”)
attached hereto as Exhibit B concurrently with the execution of
this Agreement. The parties agree that the obligations set forth in the Proprietary
Information Agreement shall survive termination of this Agreement and
termination of the Executive’s employment, regardless of the reason for such
termination.

 

6.                                      Property and
Records. Upon termination of Executive’s employment hereunder for any reason
or for no reason, Executive will deliver to the Company any property of the
Company which may be in Executive’s possession, including blackberry-type
devices, laptops, cell phones, products, materials, memoranda, notes, records,
reports or other documents or photocopies of the same.

 

7.                                      General.

 

(a)                                  Notices. Except as
otherwise specifically provided herein, any notice required or permitted by
this Agreement shall be in writing and shall be delivered as follows with
notice deemed given as indicated: (i) by personal delivery when delivered
personally; (ii) by overnight courier upon written verification of
receipt; (iii) by telecopy or facsimile transmission upon acknowledgment
of receipt of electronic transmission; or (iv) by certified or registered
mail, return receipt requested, upon verification of receipt. Notices to
Executive shall be sent to the last known address in the Company’s records or
such other address as Executive may specify in writing. Notices to the Company
shall be sent to the Company’s CEO and Lead Director, or to such other Company
representative as the Company may specify in writing.

 

(b)                                 Entire Agreement/Modification. This
Agreement, together with the Proprietary Information Agreement attached hereto,
and the other agreements specifically referred to herein, embodies the entire
agreement and understanding between the parties hereto and supersedes all prior
oral or written agreements and understandings relating to the

 

6

 

subject matter hereof. No statement,
representation, warranty, covenant or agreement of any kind not expressly set
forth in this Agreement (or in a subsequent written modification or amendment
executed by the parties hereto) will affect, or be used to interpret, change or
restrict, the express terms and provisions of this Agreement.

 

(c)                                  Waivers and
Consents. The terms and provisions of this Agreement may be
waived, or consent for the departure therefrom granted, only by written
document executed by the party entitled to the benefits of such terms or
provisions. No such waiver or consent will be deemed to be or will constitute a
waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent will be effective
only in the specific instance and for the purpose for which it was given, and
will not constitute a continuing waiver or consent.

 

(d)                                 Assignment and
Binding Effect. The Company may assign its rights and obligations
hereunder to any person or entity that succeeds to all or substantially all of
the Company’s business or that aspect of the Company’s business in which
Executive is principally involved. Executive may not assign Executive’s rights
and obligations under this Agreement without the prior written consent of the
Company. This Agreement shall be binding upon Executive, Executive’s heirs,
executors and administrators and the Company, and its successors and assigns,
and shall inure to the benefit of Executive, Executive’s heirs, executors and
administrators and the Company, and its successors and assigns.

 

(e)                                  Insurance. Executive
shall be entitled to the same rights, if any, to indemnification and coverage
under the Company’s Directors and Officers Liability Insurance policies as they
may exist from time to time to the same extent as other similarly-situated
executive employees of the Company.

 

(f)                                    Governing Law. This
Agreement and the rights and obligations of the parties hereunder will be
construed in accordance with and governed by the law of the Commonwealth of
Massachusetts, without giving effect to conflict of law principles.

 

(g)                                 Severability. The parties
intend this Agreement to be enforced as written. However, should any provisions
of this Agreement be held by a court of law to be illegal, invalid or
unenforceable, the legality, validity and enforceability of the remaining
provisions of this Agreement shall not be affected or impaired thereby.

 

(h)                                 Headings and
Captions. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference only and will
in no way modify or affect the meaning or construction of any of the terms or
provisions hereof.

 

8.                                       Taxation.

 

(a)                                  The parties
intend this Agreement to be in compliance with Code Section 409A. The
Executive acknowledges and agrees that the Company does not guarantee the tax
treatment or tax consequences associated with any payment or benefit arising
under this Agreement, including but not limited to consequences related to Code
Section 409A. The Company and Executive agree that both will negotiate in
good faith and jointly execute an amendment to modify this Agreement to the
extent necessary to comply with the requirements of Code Section 409 A.

 

7

 

(b)     If any payment
or benefit Executive would receive under this Agreement, when combined with any
other payment or benefit Executive receives pursuant to a change in control (“Payment”)
would (i) constitute a “parachute payment” within the meaning of Code Section 280G,
and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999
of the Code (the “Excise Tax”), then such Payment shall be either (x) the
full amount of such Payment or (y) such less amount as would result in no
portion of the Payment being subject to the Excise Tax, whichever of the
foregoing amounts, taking into account the applicable federal, state, and local
employments taxes, income taxes, and the Excise Tax results in Executive’s
receipt, on an after-tax basis, of the greater amount of the Payment,
notwithstanding that all or some portion of the Payment may be subject to the
Excise Tax.  The Executive shall be
allowed to specify which payment(s) or benefit(s) shall be reduced if
necessary to implement this section and avoid the excise tax application.  The Company shall provide the Executive with
sufficient information to make such determination and to file and pay any
required taxes.

 

9. Counterparts.  This Agreement may be
executed in two or more counterparts, and by different parties hereto on
separate counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.  For all
purposes a signature by fax shall be treated as an original.

 

IN WITNESS WHEREOF, the
parties hereto have executed and delivered this Employment Agreement as of the
date first written above.

 

	
  EXECUTIVE

  	
  IMMUNOGEN,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  John A. Tagliamonte

  	
   

  	
  /s/
  Mitchel Sayare

  	
   

  
	
  (Signature)

  	
   

  	
  Mitchel
  Sayare

  
	
  Print
  Name: John A. Tagliamonte

  	
  Chairman
  and Chief Executive Officer

  
					

 

8

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