Document:

Exhibit 10.38

 

AMENDMENT TO THE

XBOX 360 PUBLISHER
LICENSE AGREEMENT

(Russian
Incentive Program; Hits Program Revisions)

 

This Amendment to the Xbox 360 Publisher License
Agreement (this “Amendment”) is entered into and effective as of the later of
the signature dates below (the “Amendment Effective Date”) by and between
Microsoft Licensing, GP,  a Nevada
general partnership (“Microsoft”), and THQ INC. (“Publisher”),
and supplements that certain Xbox 360 Publisher License Agreement  between the
parties dated as of October 31, 2005, as amended (the “Xbox 360 PLA”).  Microsoft Corporation, a Washington
corporation, is a party to this Amendment only with respect to its
acknowledgement of Section 6.2 and Exhibit 1, Section 6 of the Xbox 360
PLA.

 

RECITALS

 

A.                                   Microsoft
and Publisher entered into the Xbox 360 PLA to establish the terms under which
Publisher may publish video games for Microsoft’s Xbox 360 video game system.

 

B.                                     The
parties now wish to amend certain terms of the Xbox 360 PLA as set forth below.

 

Accordingly, for and in consideration of the mutual
covenants and conditions contained herein, and for other good and valuable
consideration, receipt of which each party hereby acknowledges, Microsoft and
Publisher agree as follows:

 

1.                                      Definitions.

 

Except as expressly provided otherwise in
this Amendment, capitalized terms shall have the same meanings as those
ascribed to them in the Xbox 360 PLA.

 

2.                                      Exhibits.

 

Exhibits
1, 6 and 8 of the Xbox 360 PLA are hereby amended and restated in their
entirety as attached hereto.

 

3.                                      Loaned Equipment.

 

Microsoft may from time-to-time agree to loan Publisher certain
Microsoft assets in connection with Publisher’s marketing and promotional
activities for the Software Titles. Such loaned assets may include without
limitation Xbox 360 kiosks, Xbox 360 consoles and accessories (the “Loaned
Equipment”). With respect to all Loaned Equipment provided to Publisher
hereunder, Publisher agrees that: (i) Publisher shall not provide the
Loaned Equipment to any third party unless such third party is approved by
Microsoft in advance (“Approved Third Party”) and, if so approved, Publisher
shall be responsible for ensuring that the Approved Third Party complies with
the terms of this Section 3; (ii) Publisher shall assume all
responsibility for theft, damage, loss or injuries to people or property that
occur while such Loaned Equipment is in Publisher’s and/or an Approved Third
Party’s possession, control or use; (iii) Publisher’s insurance policy set
forth in Section 16.4 of the Xbox 360 PLA shall cover all  theft,
damage, loss or injuries to people or property in connection with Publisher’s
or an Approved Third Party’s use or possession of the Loaned Equipment; (iv) Publisher
(and any Approved Third Party) shall only use power supplies, power cords,
cables, and other parts and accessories provided by Microsoft in connection
with the Loaned Equipment; and (v) Publisher shall, at its expense,
return the Loaned Equipment to Microsoft by the date requested by Microsoft and
in accordance with any shipping instructions provided by Microsoft.

 

4.                                      Content Rating.  Section 4.4 of the Xbox 360 PLA is hereby amended and
restated in its entirety:

 

“For those Sales Territories that utilize a
content rating system, Microsoft will not accept submission of a Software Title
(including any Online Content) for Certification approval unless and until
Publisher has obtained, at Publisher’s sole cost, a rating not higher than “Mature
(17+)” or its equivalent from the appropriate rating bodies and/or any and all
other independent content rating authority/authorities for the applicable Sales
Territory(ies) reasonably designated by Microsoft (such as ESRB, ELSPA, CERO,
etc.).  Publisher shall include the
applicable rating(s) prominently on FPUs and Marketing Materials, in
accordance with the applicable rating body guidelines, and shall include the
applicable rating in a header file of the Software Title and in Online Content,
as described in the Xbox 360 Publisher Guide. 
For those Sales Territories that do not utilize a content rating system,
Microsoft will not approve any Software Title or Online Content that, in its
opinion, contains excessive sexual content or violence, inappropriate language
or other elements deemed unsuitable for the Xbox 360 platform.  Microsoft will provide THQ advanced notice
via the Xbox 360 Publisher Guide whenever any new countries that do not have a
content rating system are added to Sales Territories and what, if any, content
guidelines it proposes for such

 

1

 

country. 
If, after Commercial Release, a Software Title is determined as suitable
for adults only or otherwise as indecent, obscene or otherwise prohibited by
law, the Publisher shall at its own costs recall all FPUs.  Unless Publisher has obtained a separate
rating for Online Content and communicated such separate rating to Microsoft in
the header file of the Online Content and/or as otherwise described in the Xbox
360 Publisher Guide, Publisher warrants and represents that all Online Content
not included in the initial Software Title FPU will not be inconsistent with
the content rating (or, in those countries that do not utilize a content rating
system, with the overall nature of the content) of the underlying Software
Title.  Content rating information and
requirements may be further described in the Xbox 360 Publisher Guide.”

 

5.                                      Publisher Bankruptcy.

 

5.1   
Microsoft and Publisher agree that the rights conferred by Publisher upon
Microsoft under the Xbox 360 PLA, including, without limitation, those
described in Paragraph 6.2 of the Xbox 360 PLA, constitute a
license running from Publisher to Microsoft of a right to
intellectual property for purposes of Section 365(n) of the United
States Bankruptcy Code (11 U.S.C. 101, et seq.), and that Microsoft shall have,
in a bankruptcy proceeding in which the Publisher is a debtor, the rights of a “licensee”
as set forth in that provision.

 

5.2   
Microsoft and Publisher acknowledge and agree that, in a bankruptcy proceeding
of Publisher, and notwithstanding any other provision contained in the Xbox 360
PLA or in this Amendment, Publisher shall not have the power, absent Microsoft’s
consent, to assume or assign to a third-party any license running from
Microsoft to Publisher of any property, interest or right created in the Xbox
360 PLA or in this Amendment.  Microsoft and Publisher hereby express
their mutual intention that all such rights be purely personal
to Publisher, such that governing non-bankruptcy law shall
preclude Publisher’s assignment (and, if applicable, assumption) of those
rights without Microsoft’s consent.

 

6.                                      Sub-Publishing.  Section 10.8.1 of the Xbox 360 PLA is hereby amended
and restated in its entirety:

 

“Publisher completes and provides Microsoft
with the Sub-Publishing Notification Form (located in the Publisher Guide)
at least **** prior to authorizing a Sub-Publisher to manufacture any Software
Title(s), of the Sub-Publishing relationship, along with (i) a summary of
the scope and nature of the Sub-Publishing relationship including, without
limitation, as between Publisher and Sub-Publisher, (ii) which party will
be responsible for Certification of the Software Title(s) and/or any
Online Content, (iii) a list of the Software Title(s) for which
Sub-Publisher has acquired publishing rights, (iv) the geographic
territory(ies) for which such rights were granted, and (v) the term of
Publisher’s agreement with Sub-Publisher;, and”

 

7.                                      Except and to the extent
expressly modified by this Amendment, the Xbox 360 PLA shall remain in full
force and effect and is hereby ratified and confirmed.   In the event of any conflict between this
Amendment and the Xbox 360 PLA the terms of this Amendment shall control.

 

IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be executed as of the Amendment Effective Date.

 

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

 

 

	
  MICROSOFT LICENSING, GP

  	
   

  	
  THQ Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Astrid B.Ford

  	
   

  	
  /s/ Brian J. Farrell

  
	
  By (sign)

  	
   

  	
  By (sign)

  
	
  Astrid B.Ford

  	
   

  	
  Brian J. Farrell

  
	
  Name (Print)

  	
   

  	
  Name (Print)

  
	
  Sr. Xbox Program
  Manager

  	
   

  	
  President and CEO

  
	
  Title

  	
   

  	
  Title

  
	
  Feb 26 2010

  	
   

  	
  02-24-10

  
	
  Date (Print mm/dd/yy)

  	
   

  	
  Date (Print mm/dd/yy)

  

 

 

	
  MICROSOFT CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Astrid B. Ford

  	
   

  	
   

  
	
  By (sign)

  	
   

  	
   

  
	
  Astrid B. Ford

  	
   

  	
   

  
	
  Name (Print)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Sr. Xbox Program
  Manager

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  
	
  Feb 26 2010

  	
   

  	
   

  
	
  Date (Print mm/dd/yy)

  	
   

  	
   

  

 

 

EXHIBIT 1

 

PAYMENTS

 

1.                                      Platform Royalty

 

a.                                       For each FPU manufactured during the term of
this Agreement, Publisher shall pay Microsoft nonrefundable royalties in
accordance with the royalty tables set forth below (Tables 1 and 2) and the “Unit
Discount” table set forth in Section 1.d of this Exhibit 1
(Table 3).

 

b.                                      To determine the applicable royalty rate for
a particular Software Title that will be sold in a particular Sales Territory,
the applicable Threshold Price from Table 1 below for the category of Software
Title (Standard Software Title, Hits Software Title and Expansion Pack) will
determine the correct royalty “Tier” (except with respect to the first
Commercial Release of Hits Software Titles as described further in (ii) below).  The royalty rate is then as set forth in
Table 2 based on such Tier and the Sales Territory in which the FPUs will be
sold.  For example, assume the Wholesale
Price of a Standard Software Title to be sold in the European Sales Territory
is ****.  According to Table 1, ****
royalty rates will apply to that Software Title and the royalty rate for each
FPU as set forth in Table 2 is ****.

 

Table 1: Tier

 

	
   

  	
   

  	
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****

 

Table 2: Royalty Rate

 

	
   

  	
   

  	
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c.                                       Setting the Royalty.

 

(i)                                     Standard Software Titles and Expansion Packs. Publisher shall submit to Microsoft, at
least **** before placing the first manufacturing order
for a Standard Software Title or an Expansion Pack, a completed and signed
“Xbox 360 Royalty Tier Selection Form” in the form attached to this Agreement
as Exhibit 2 for each Sales

 

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

 

 

Territory.  The selection indicated in the Xbox 360
Royalty Tier Selection Form will only be effective once it has been
approved by Microsoft.  If a Standard
Software Title or Expansion Pack does not have an approved Xbox 360 Royalty
Tier Selection Form as required hereunder (e.g. as a result of the
Publisher not providing a Xbox 360 Royalty Tier Selection Form or because
Microsoft has not approved the Xbox 360 Royalty Tier Selection Form), the
royalty rate for such Standard Software Title will default to **** or for such
Expansion Pack will default to ****, regardless of the actual Threshold Price
(i.e., if Microsoft does not approve an Xbox 360 Royalty Tier Selection Form because
it is filled out incorrectly, the royalty rate will default to ****).  Except as set forth in Section 2 (Hits
Programs), the selection of a royalty tier for a Standard Software Title or
Expansion Pack in a Sales Territory is binding for the life of that Software
Title or Expansion Pack even if the Threshold Price is reduced following the
Software Title’s Commercial Release.

 

(ii)                                  Hits Software Title. 
Publisher shall submit to Microsoft, at least **** prior to the targeted
Commercial Release of the Hits Software Title a completed and signed Hits
Programs Election Form in the form attached hereto as Exhibit 6
for each Sales Territory.  The Hits
Programs Election Form will only be effective once it has been approved by
Microsoft.  If a Hits Software Title does
not have an approved Hits Programs Election Form as required hereunder
(e.g. as a result of the Publisher not providing a Hits Programs Election Form or
because Microsoft has not approved the Hits Programs Election Form), the
royalty rate for such Hits Software Title will default to **** (i.e., if
Microsoft does not approve a Hits Programs Election Form because it is
filled out incorrectly, the royalty rate will default to ****).  Unless the Software Title is a Family Hits
Title, the first time a Software Title is Commercially Released as a Hits
Software Title, the **** royalty rate will apply.  However, if the Software Title is a Family
Hits Title and meets the WSP requirements set forth in Table 1 above, Publisher
may select the **** royalty rate.

 

Beginning ****
after the Commercial Release of a Hits Software Title at the **** royalty rate,
Publisher may elect to change the previously elected royalty rate for such Hits
Software Title to **** in a specific Sales Territory provided that the Hits
Software Title has a WSP or SRP that meets the requirements for **** royalty
rate in Table 1 above. Publisher must submit to Microsoft, at least **** before
placing the first manufacturing order for the applicable Hits Software Title, a
completed Xbox 360 Royalty Tier Migration Form  (a “Tier Migration Form”)
set forth in Exhibit 8 for each Sales Territory. The change in
royalty rate will only apply to manufacturing orders for such Hits Software
Title placed after the relevant Tier Migration Form has been approved by
Microsoft.

 

(iii)                             Cross Territory Sales. 
Except for FPUs manufactured pursuant to Section 5 below (Asia
Simship Program), Publisher may not sell FPUs in a certain Sales Territory that
were manufactured for a different Sales Territory.  For example, if Publisher were to manufacture
and pay royalties on FPUs designated for sale in the Asian Sales Territory,
Publisher could not sell those FPUs in the European Sales Territory.

 

d.                                      Russian Manufacturing Incentive Program. 
From January 1, 2010 through December 31, 2011, for Software
Titles releasing in Russia, these Software Titles may qualify for ****, even if
the Software Title qualifies for a different Tier in the rest of the European
Sales Territory, if the following requirements are met:

 

(i)                                     The **** Royalty Rate applies only to
FPUs that are sold in Russia, Poland, Hungary, and Czech Republic.

 

(ii)                                   The Xbox360 version of the Software
Title must commercially release no later than all other platform versions
including PC.

 

(iii)                             To qualify, the Software Title must be
fully localized, including voice, text, and packaging; and must not contain any
other language except Russian, Polish, Hungarian, and Czech.  The Xbox 360 version of the Software Title
must have at least localization parity with other platform versions.

 

e.                                       Unit Discounts.   Publisher is eligible for a
discount to FPUs manufactured for a particular Sales Territory (a “Unit
Discount”) based on the number of FPUs that have been manufactured for sale in
that Sales Territory as described in Table 3 below.   Except as provided in Section 5 below,
units manufactured for sale in a Sales Territory are aggregated only towards a
discount on FPUs manufactured for that Sales Territory; there is no worldwide
or cross-territorial aggregation of units for a particular Software
Title.  The discount will be rounded up to the nearest Cent, Yen or
hundredth of a Euro.

 

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

 

 

Table
3: Unit Discounts

 

	
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  ****

  

 

*
The revised Unit Discounts for the Japan Sales Territory will only be effective
for Software Titles that are initially manufactured for the Japan Sales
Territory after the Amendment Effective Date of the Amendment to the Xbox 360
Publisher License Agreement (2008 Renewal; Tier C; Hits Program Revisions; Expansion Packs; New
Xbox 360 Live and PDLC Incentive Program; XLSP; Japan Volume Rebate Revision;
Token Promotions; Joint Promotions) dated October 21, 2008 (“PLA Amendment No. 2”).  All Software Titles initially
manufactured prior to the PLA Amendment No. 2 Effective Date are subject
to the Unit Discounts set forth in the Xbox 360 PLA prior to the PLA Amendment No. 2.

 

2.                                      Hits Programs

 

a.                                       If a Software Title meets the criteria set
forth below and the applicable participation criteria in a particular Sales
Territory at the time of the targeted Commercial Release date of the Hits FPU
and Microsoft receives the Hits Programs Election Form within the time
period set forth in Section 2.a.iv below, Publisher is authorized to
manufacture and distribute Hits FPUs in such Sales Territory and at the royalty
rate in Table 2 of Section 1 above applicable to Hits FPUs.  In order for a Software Title to qualify as a
Hits FPU in a Sales Territory, the following conditions, as applicable per Hits
Program, must be satisfied:

 

i.                                          the
Software Title must have been commercially available as a Standard FPU in the
applicable Sales Territory for at least **** but not more than **** at the time of Commercial Release of
the Hits FPU.   For the European Sales
Territory, a Software Title releasing as a Family Hit between **** and ****
may be available as a Standard FPU in the European Sales Territory
for longer than **** at the time
of Commercial Release of the Hits FPU.

 

ii.                                       The
Threshold Price for the Hits FPU must not exceed a maximum Threshold Price for
the relevant Sales Territory (****for
the North American Sales Territory, ****in the European Sales Territory, **** in the Japan Sales Territory, or the equivalent of **** for the Asian Sales Territory).

 

iii.                                  Publisher
must provide notice to Microsoft, at least ****
prior to the targeted Commercial Release, of its intent to have a
certain Software Title participate in the Hits Program by providing Microsoft
with a completed Hits Program Election Form.

 

b.                                      As
of the date Publisher wishes to Commercially Release the Software Title as a
Hits FPU, Publisher must have manufactured the following minimum FPUs of the
Software Title as a Standard Software Title for the applicable time period,
Sales Territory and Hits Program.

 

Table 1:
Hits Program Manufacturing Requirements

Effective ****

 

	
   

  	
   

  	
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  Platinum or Classic Hits

  	
   

  	
  ****

  	
   

  	
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  ****

  	
   

  	
  ****

  
	
  Family Hits

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  

 

c.                                       All Marketing Materials for a Hits Software
Title must comply with all Microsoft branding requirements as may be required
in each Sales Territory, and Publisher shall submit all such Marketing
Materials to Microsoft for its approval in accordance with the Xbox 360
PLA.  Notwithstanding the foregoing, all
Hit FPUs must comply with the basic branding and other requirements for
Marketing Materials set forth in the Xbox 360 Publisher Guide.

 

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

 

 

d.                                      The Hit FPU version must be the same or
substantially equivalent to the Standard FPU version of the Software
Title.  Publisher may modify or add
additional content or features to the Hit FPU version of the Software Title
(e.g., demos or game play changes) subject to Microsoft’s review and approval,
and Publisher acknowledges that any such modifications or additions may require
the Software Title to be re-Certified at Publisher’s expense.

 

e.                                       Publisher acknowledges that Microsoft may
change any of the qualifications for participation in a Hit Program upon ****
advanced written notice to Publisher.

 

3.                                      Payment Process

 

Publisher will pre-pay all royalties owed to
Microsoft for all FPUs manufactured by its Authorized Replicator, in United
States dollars for all FPUs manufactured for sale in the North American Sales
Territory, in Euros for all FPUs manufactured for sale in the European Sales
Territory and in Yen for all FPUs manufactured for sale in the Japan and Asian
Sales Territories.  Publisher shall not
authorize its Authorized Replicators to begin production until such time as
Microsoft has verified that the funds were received in its bank account.  Depending upon Publisher’s credit worthiness,
Microsoft may, but is not obligated to, offer Publisher credit terms for the
payment of royalties due under this Agreement within **** from invoice
creation.   All
payments will be made by wire transfer only, in accordance with the payment
instructions set forth in the Xbox 360 Publisher Guide.

 

4.                                      Billing Address

 

a.                                       Publisher may have only two “bill to”
addresses for the payment of royalties under this Agreement, one for FPUs
manufactured by Authorized Replicators located in the North American Sales
Territory and one for FPUs manufactured by Authorized Replicators located in
the Japan Sales Territory and Asian Sales Territory.  If Publisher desires to have a “bill-to”
address in a European country, Publisher (or a Publisher Affiliate) must
execute an Xbox 360 Publisher Enrollment Form with MIOL within **** prior
to establishing a billing address in a European country in the form attached to
this Agreement as Exhibit 3.

 

Publisher’s
billing address(es) is as follows:

 

	
  North American Sales
  Territory:

  	
  Japan and Asian Sales
  Territory (if different than the North American billing address):

  
	
  Name:

  	
  THQ Inc.

  	
   

  	
   

  
	
  Address:

  	
  29003 Agoura Rd.

  	
  Name:

  	
   

  
	
   

  	
  Agoura Hills, CA 91301

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  	
   

  
	
  Email address:

  	
   

  	
  Attention:

  	
   

  
	
  Fax:

  	
  818-871-7400

  	
  Email address:

  	
   

  
	
  Phone:

  	
  818-871-5000

  	
  Fax:

  	
   

  
	
   

  	
   

  	
  Phone:

  	
   

  

 

5.                                      Asia Simship Program

 

The
purpose of this program is to encourage Publisher to release Japanese, North
American or European FPUs, that have been multi-region signed to run on NTSC-J
boxes (hereinafter collectively referred to as “Simship Titles”), in Hong Kong,
Singapore, Korea and Taiwan (referred to as “Simship Territory”) at the same
time as Publisher releases the Software Title in the Japan, European and/or
North American Sales Territories.  In
order for a Software Title to qualify as a Simship Title, Publisher must
Commercially Release the Software Title in the Simship Territory on the same
date as the Commercial Release date of such Software Title in the Japan,
European and/or North American Sales Territories, wherever the Software Title
was first Commercially Released (referred to as “Original Territory”).  To the extent that a Software Title qualifies
as a Simship Title, the applicable royalty tier (under Section 1.b of this
Exhibit 1 above) and Unit Discount (under Section 1.d of this Exhibit 1
above) is determined as if all FPUs of such Software Title manufactured for
distribution in both the Original Territory and the Simship Territory were
manufactured for distribution in the Original Territory.  For example, if a Publisher initially
manufactures **** FPUs of a Software Title for the Japan Sales Territory and
simships **** of those units to the

 

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

 

 

Simship
Territory, the royalty rate for all of the FPUs is determined by ****.  In this example, Publisher would also receive
a ****  Unit Discount on **** units for
having exceeded the Unit Discount level specified in Section 1.d. of this Exhibit 1
above applicable to the Japan Sales Territory. 
Publisher must provide Microsoft with written notice of its intention to
participate in the Asian Simship Program with respect to a particular Software
Title at least **** prior to manufacturing any FPUs it intends to qualify for
the program.  In its notice, Publisher
shall provide all relevant information, including total number of FPUs to be manufactured,
number of FPUs to be simshipped into the Simship Territory, date of simship,
etc.  Publisher remains responsible for
complying with all relevant import, distribution and packaging requirements as
well as any other applicable requirements set forth in the Xbox 360 Publisher
Guide.

 

6.                                      Online Content.  This section applies to Microsoft Corporation
and Publisher.

 

a.                                       For
the purpose of this Section 6, the following capitalized terms have the
following meanings:

 

“MS Point” means a proprietary
form of trading value that Microsoft makes available to consumers to redeem for
goods or services from Microsoft or its partners that are distributed
online.  Microsoft reserves all rights to
determine rates, value and policies applicable to the use of MS Points.

 

“MS Points Remittance Rate”
means a rate based on which Microsoft will calculate the Royalty Fee (defined
in Section 6.b below) due Publisher for Premium Online Content  redeemed for MS Points via Xbox Live.  Each year, effective ****, Microsoft will publish
the MS Points Remittance Rate in the Xbox 360 Publisher Guide.  Notwithstanding the foregoing, from the
Amendment Effective Date, the MS Points Remittance Rate will equal ****.  Microsoft will publish an updated MS Points
Remittance Rate that will apply prospectively for each sale of Premium Online
Content during the subsequent twelve (12) months (until **** of the following
year).

 

b.                                      Publisher may, from time to time, submit
Online Content to Microsoft for Microsoft to distribute via Xbox Live.  ****. 
For each Premium Online Content item, Microsoft will pay Publisher a
royalty calculated as follows (the “Royalty Fee”).

 

c.                                       For
Premium Online Content made available for redemption with MS Points, the
Royalty Fee will equal ****.

 

d.                                      For
all other Premium Online Content, the Royalty Fee will equal ****.

 

e.                                       The
Royalty Percentage for Premium Online Content is **** percent.  Microsoft may assign a Royalty Percentage for
other categories of Premium Online Content, from time to time, as set forth in
the Xbox 360 Publisher Guide.

 

f.                                         Notwithstanding
subsections c. — e. above, ****.

 

g.                                    Within
**** after the end of **** with respect to which Microsoft owes Publisher any
Royalty Fees, Microsoft shall furnish Publisher with a statement, together with
payment for any amount shown thereby to be due to Publisher.  The statement will contain information
sufficient to discern how the Royalty Fees were computed.

 

7.                                      Xbox Live Billing and Collection

 

Microsoft
is responsible for billing and collecting all fees associated with Xbox Live,
including fees for subscriptions and/or any Online Content for which an Xbox
Live User may be charged.  ****.

 

8.                                      Third Party Royalties and Other Payments

 

Publisher acknowledges and understands that under Section 15 of
the Xbox 360 PLA, Publisher warrants and represents that Publisher has obtained
and will maintain all third-party rights, consents and licenses necessary for
the permitted exploitation of Software Title Content and Online Content under
this Agreement, including without limitation payment of: (i) all so-called
“record” royalties payable to artists, producers, engineers, mixers, A&R
executives and other royalty participants arising from or related to the sales
of Software Titles; (ii) all mechanical royalties payable to publishers of
copyrighted musical compositions embodied in Software Title Content and Online
Content;  (iii) all synchronization royalties
payable to publishers of copyrighted musical compositions embodied in Software
Title Content and Online Content; (iv) all payments that may be required
under collective bargaining agreements applicable to Publisher or its
affiliates; and  (v) any and all
other royalties, fees or other amounts required to be paid.

 

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

 

 

9.                                      Taxes

 

a.                                       The amounts to be paid by either party to the
other do not include any foreign, U.S. federal, state, local, municipal or
other governmental taxes, duties, levies, fees, excises or tariffs, arising as
a result of or in connection with the transactions contemplated under this
Agreement including, without limitation, (i) any state or local sales or
use taxes or any value added tax or business transfer tax now or hereafter
imposed on the provision of any services to the other  party under this Agreement, (ii) taxes
imposed or based on or with respect to or measured by any net or gross income
or receipts of either party, (iii) any franchise taxes, taxes on doing
business, gross receipts taxes or capital stock taxes (including any minimum
taxes and taxes measured by any item of tax preference), (iv) any taxes
imposed or assessed after the date upon which this Agreement is terminated, (v) taxes
based upon or imposed with reference to either parties’ real and/or personal
property ownership and (vi) any taxes similar to or in the nature of those
taxes described in (i), (ii), (iii), (iv) or (v) above, now or
hereafter imposed on either party (or any third parties with which either party
is permitted to enter into agreements relating to its undertakings hereunder)
(all such amounts, together with any penalties, interest or any additions
thereto, collectively “Taxes”).   Neither
party is liable for any of the other party’s Taxes incurred in connection with
or related to the sale of goods and services under this Agreement, and all such
Taxes are the financial responsibility of the party obligated to pay such taxes
as determined by the applicable law, provided that both parties shall pay to
the other the appropriate Collected Taxes in accordance with subsection b
below. Each party agrees to indemnify, defend and hold the other party harmless
from any Taxes (other than Collected Taxes, defined below) or claims, causes of
action, costs (including, without limitation, reasonable attorneys’ fees) and
any other liabilities of any nature whatsoever related to such Taxes to the
extent such Taxes relate to amounts paid under this Amendment.

 

b.                                      Any sales or use  taxes described in a. above that (i) are
owed by either party solely as a result of entering into this Agreement and the
payment of the fees hereunder, (ii) are required to be collected from that
party under applicable law, and (iii) are based solely upon the amounts
payable under this Agreement (such taxes the “Collected Taxes”), will be stated
separately as applicable on payee’s invoices and will be remitted by the other
party to the payee, upon request payee shall remit to the other party official
tax receipts indicating that such Collected Taxes have been collected and paid
by the payee.  Either party may provide
the other party an exemption certificate acceptable to the relevant taxing
authority (including without limitation a resale certificate) in which case
payee shall not collect the taxes covered by such certificate.  Each party agrees to take such commercially
reasonable steps as are requested by the other party to minimize such Collected
Taxes in accordance with all relevant laws and to cooperate with and assist the
other party, in challenging the validity of any Collected Taxes or taxes
otherwise paid by the payor party.  Each
party shall indemnify and hold the other party harmless from any Collected
Taxes, penalties, interest, or additions to tax arising from amounts paid by one
party to the other under this Agreement, that are asserted or assessed against
one party to the extent such amounts relate to amounts that are paid to or
collected by one party from the other under this section. If any taxing
authority refunds any tax to a party that the other party originally paid, or a
party otherwise becomes aware that any tax was incorrectly and/or erroneously
collected from the other party, then that party shall promptly remit to the
other party an amount equal to such refund, or incorrect collection as the case
may be plus any interest thereon.

 

c.                                       If taxes are required to be withheld on any
amounts otherwise to be paid by one party to the other, the paying party shall
deduct such taxes from the amount otherwise owed and pay them to the
appropriate taxing authority.  At a party’s
written request and expense, the parties shall use reasonable efforts to
cooperate with and assist each other in obtaining tax certificates or other
appropriate documentation evidencing such payment, provided, however, that the
responsibility for such documentation shall remain with the payee party.  If Publisher is required by any non-U.S.A.
government to withhold income taxes on payments to Microsoft, then Publisher
may deduct such taxes from the amount owed Microsoft and shall pay them to the
appropriate tax authority, provided that within **** of such payment, Publisher delivers to
Microsoft an official receipt for any such taxes withheld or other documents
necessary to enable Microsoft to claim a U.S.A. foreign tax credit.

 

b.                                      This Section 7 shall govern the
treatment of all taxes arising as a result of or in connection with this
Agreement notwithstanding any other section of this Agreement.

 

10.                               Audit

 

During
the term of this Agreement and for **** thereafter each party shall keep all
usual and proper records related to its performance under this Agreement,
including but not limited to audited financial statements and support for all
transactions related to the ordering, production, inventory, distribution and
billing/invoicing information.  Such
records, books of account, and entries will be kept in accordance with
generally accepted accounting principles. 
Either party (the “Auditing Party”) may

 

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

 

 

audit
and/or inspect the other party’s (the “Audited Party”) records no more than
**** in any **** period in order to verify compliance with the terms of this
Agreement.  The Auditing Party may, upon
reasonable advance notice, audit the Audited Party’s records and consult with
the Audited Party’s accountants for the purpose of verifying the Audited Party’s
compliance with the terms of this Agreement and for a period of ****
thereafter.  Any such audit will be
conducted during regular business hours at the Audited Party’s offices.  Any such audit will be paid for by Auditing
Party unless Material discrepancies are disclosed.  As used in this section, “Material” means
****.  If Material discrepancies are
disclosed, the Audited Party agrees to pay the Auditing Party for ****.

 

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

 

 

EXHIBIT 2

 

XBOX 360
ROYALTY TIER SELECTION FORM

 

PLEASE COMPLETE THE BELOW
INFORMATION, SIGN THE FORM, AND FAX IT TO MICROSOFT AT

+1 (425) 708-2300 TO THE
ATTENTION OF MICROSOFT LICENSING, GP (MSLI) AND YOUR ACCOUNT MANAGER.

 

NOTES:

1.         THIS FORM MUST BE SUBMITTED
AT LEAST **** PRIOR TO THE FIRST MANUFACTURING ORDER BEING PLACED FOR THE SOFTWARE
TITLE FOR EACH RESPECTIVE SALES TERRITORY. 
IF THIS FORM IS NOT SUBMITTED ON TIME OR IS REJECTED BY MICROSOFT,
THE ROYALTY RATE WILL DEFAULT TO **** FOR THE
APPLICABLE SALES TERRITORY.

 

2.         A SEPARATE FORM MUST
BE SUBMITTED FOR EACH SALES TERRITORY.

 

1.               Publisher Name:

 

2.               Xbox 360
Software Title Name:

 

3.     XeMID Number:

 

4.     Sales
Territory (check one):

 

o            North American Sales Territory

o            Japan Sales Territory

o            European Sales Territory

o            Russian Incentive Manufacturing
Program (See Exhibit 1 of the PLA for qualification criteria)

o            Asian Sales Territory

 

5.     Final Certification Date:

 

6.     Select Royalty Tier: (check one): ****

 

The undersigned
represents that he/she has authority to submit this form on behalf of the above
Publisher, and that the information contained herein is true and accurate.

 

	
   

  	
   

  
	
   

  	
  By (sign)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name, Title (Print)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  E-Mail Address (for
  confirmation of receipt)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date (Print mm/dd/yy)

  

 

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

 

 

EXHIBIT 6

 

XBOX 360
HITS PROGRAMS ELECTION FORM

 

PLEASE COMPLETE THE BELOW
INFORMATION, SIGN THE FORM, AND FAX IT TO MICROSOFT AT +1 (425) 708-2300 TO
THE ATTENTION OF MICROSOFT LICENSING, GP (MSLI) AND YOUR ACCOUNT MANAGER.

 

NOTES:

·                  THIS FORM MUST BE SUBMITTED
BY A PUBLISHER AT LEAST **** PRIOR TO THE TARGET COMMERCIAL RELEASE DATE
FOR A SOFTWARE TITLE IN A HITS PROGRAM IN ANY SALES TERRITORY.

·                  A SEPARATE FORM MUST
BE SUBMITTED FOR EACH SALES TERRITORY IN WHICH THE PUBLISHER WISHES TO PUBLISH
A SOFTWARE TITLE AS PART OF A HITS PROGRAM AND FOR EACH HITS PROGRAM.

 

1)            Publisher Name:

 

2)              Xbox 360
Software Title Name:

 

3)              XMID Number:

 

4)              Hits Program
(circle one)

 

	
    Platinum Hits

  	
  Platinum Family Hits

  
	
    Classic Hits

  	
  Classic Family Hits

  

 

5)              Royalty Tier if
Family Hits (select one):  ****

 

6)              Sales Territory
for which Publisher wants to publish the Software Title as a Hit FPU (check
one):

 

	
  o            North American Sales Territory

  	
  o            Japan Sales Territory

  
	
  o            European Sales Territory

  	
  o            Asian Sales Territory

  

 

7)              Date of
Commercial Release of Software Title in applicable Sales Territory:

 

8)              Number of
Standard FPUs manufactured to date for the Software Title in the applicable
Sales Territory:

 

9)              Projected
Commercial Release date of Software Title in the applicable Sales Territory as
part of Hits Program:

 

The undersigned
represents that he/she has authority to submit this form on behalf of the above
publisher, and that the information contained herein is true and accurate.

 

	
   

  	
   

  
	
   

  	
  By (sign)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name, Title (Print)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  E-Mail Address (for
  confirmation of receipt)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date (Print mm/dd/yy)

  

 

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

 

 

EXHIBIT 8

 

XBOX 360
HITS ROYALTY TIER MIGRATION FORM

 

PLEASE COMPLETE THE BELOW
INFORMATION, SIGN THE FORM, AND FAX IT TO MICROSOFT AT

+1 (425) 708-2300 TO THE
ATTENTION OF MICROSOFT LICENSING, GP (MSLI) AND YOUR ACCOUNT MANAGER.

 

NOTES:

·             THIS FORM MUST BE SUBMITTED
AT LEAST **** PRIOR TO THE FIRST MANUFACTURING ORDER TO WHICH PUBLISHER DESIRES
THE NEW BASE ROYALTY TO APPLY FOR EACH RESPECTIVE SALES TERRITORY.

·             A HITS SOFTWARE TITLE MAY NOT
CHANGE ROYALTIES TIERS UNTIL AFTER IT HAS BEEN IN THE HITS PROGRAM FOR AT LEAST
****.

·             A SEPARATE FORM MUST
BE SUBMITTED FOR EACH SALES TERRITORY IN WHICH PUBLISHER DESIRES TO CHANGE THE
APPLICABLE BASE ROYALTY.

 

1.  Publisher Name:

 

2.  Xbox 360 Software Title Name:

 

3.  XMID Number:

 

4.
 Sales Territory (check one):

 

o            North American Sales Territory

o            European Sales Territory

o            Japan Sales Territory

o            Asian Sales Territory

 

5.  Date of First Commercial Release:

 

7.  Current royalty tier:  ****

 

8.  Select New Royalty Tier:  ****

 

The undersigned
represents that he/she has authority to submit this form on behalf of the above
publisher, and that the information contained herein is true and accurate.

 

	
   

  	
   

  
	
   

  	
  By (sign)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name, Title (Print)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  E-Mail Address (for
  confirmation of receipt)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date (Print mm/dd/yy)

  

 

* Confidential portion
omitted and filed separately with the Securities and Exchange Commission.Exhibit 10.47

 

CONFIDENTIAL
FIRST RENEWAL LICENSE AGREEMENT

FOR THE
WiiTM CONSOLE

(EEA, AUSTRALIA, AND NEW ZEALAND)

 

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

 

1.                                      RECITALS

 

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

 

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

 

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

 

1.4                                 By a prior agreement between the parties
effective October 30, 2006 (hereinafter the “Initial Agreement”), NINTENDO
granted to LICENSEE the right to develop video games compatible with the WiiTM
Console, embodying and using the Licensed Intellectual Properties.  The Initial Agreement is due to expire on October 30,
2009.  The parties desire to enter into a
renewal agreement (hereinafter the “Agreement”) effective as of the expiration
date of the Initial Agreement, to continue the relationship between the parties
without interruption, with the Agreement consisting of the terms and conditions
set forth herein.

 

2.                                      DEFINITIONS

 

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

 

2.2                                 “Bulk Goods” means Game Discs printed
with the Game Disc label portion of the 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.

 

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 the expiration date of the Initial Agreement.

 

2.7                                 “Finished
Product(s) means the fully assembled Game Disc with a Game Disc label,
Printed Materials, and packed in a plastic storage case.

 

2.8                                 “Game
Disc(s)” means custom optical discs for play on WiiTM on which a Game has been
stored.

 

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

 

2.10                           “Guidelines”
means the then-current version of “WiiTM Programming Guidelines;” “Licensee
Packaging Guidelines” pertaining to the layout, trademark usage and
requirements of the Game Disc label, instruction manual and Game Disc
packaging; “Marketing Materials”; “Nintendo Trademark Guidelines;” “Guidelines
on Ethical Content”; and  “Nintendo WiiTM
Software Submission Requirements,” together with other guidelines provided by
NINTENDO to LICENSEE from time to time. 
The Guidelines on Ethical Content are attached as Annex A, and the
remainder of the Guidelines have been provided to LICENSEE independent of this
Agreement.  The Guidelines may be changed
or updated from time to time without notice (provided such changes or updates
shall be delivered to LICENSEE as soon as possible thereafter), and the
versions current from time to time will be available on request from NINTENDO.

 

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

 

2.12                           “Intellectual
Property Rights” means individually, collectively or in any combination,
Proprietary Rights owned, licensed or otherwise held by NINTENDO that are
associated with the development, manufacturing, advertising, marketing or sale
of the Licensed Products, including, without limitation, (a) registered
and unregistered trademarks and trademark applications used in connection with
WiiTM including NintendoTM,
WiiTM,
Official Nintendo Seal of QualityTM,
and MiiTM,
(b) select trade dress associated with WiiTM 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 and for
which no additional licenses or consents are required, (e) patents, patent
applications, design registrations, utility models or copyrights which may be
associated with the Game Discs or Printed Materials, (f) copyrights in the
Guidelines, and (g) other Proprietary Rights of Nintendo in the
Confidential Information.

 

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

 

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

 

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

 

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

 

2

 

2.17                           “Notice” means any notice permitted or
required under this Agreement.  All
Notices shall be sufficiently given when (a) personally served or delivered,
or (b) transmitted by facsimile, with an original sent concurrently by
mail, or (c) deposited, carriage 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, or (d) transmitted
by e-mail with an express written acknowledgement of receipt sent personally by
or on behalf of the recipient (which shall include any automated reply).  Notice shall be deemed effective upon the
earlier of actual receipt or two (2) business days after transmittal,
provided, however, any Notice received after the recipient’s normal business
hours will be deemed received on the next business day.

 

2.18                           “Price Schedule” means the then-current
version of NINTENDO’s schedule of purchase prices and minimum order quantities
for the Finished Products and the Bulk Goods. 
The Price Schedule has been provided to LICENSEE independent of this
Agreement and may be changed or updated from time to time without notice (provided
such changes or updates shall be delivered to LICENSEE as soon as possible
thereafter), and the version current from time to time will be available on
request from NINTENDO.

 

2.19                           “Printed Materials” means title page,
instruction booklet, precaution booklet, and optional printed materials.

 

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

 

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

 

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

 

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

 

2.24                           “Security Technology” means the highly
proprietary security features of the WiiTM and 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, software, accessories or peripherals, or with respect to a video game
system other than the WiiTM, or limits distribution outside of the Territory.

 

2.25                           “Sole License” means a license under
which only the licensor and a single licensee can utilize the subject matter of
the license.

 

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

 

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

 

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

 

3

 

Finland, France, Germany,
Greece, Herzegovina, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein,
Lithuania, Luxembourg, Macedonia, Malta, Montenegro, the Netherlands, Norway,
Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, and the
United Kingdom.  The Territory shall also
include Australia, New Zealand, Russia, South Africa, Switzerland and Turkey.  NINTENDO may add additional countries to the
Territory upon written notice to LICENSEE. 
NINTENDO makes no representations or warranties that the WiiTM is being
or will continue to be distributed in all of the foregoing countries.

 

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

 

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

 

3.                                      GRANT OF LICENSE; LICENSEE
RESTRICTIONS

 

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

 

3.2                                 LICENSEE Acknowledgement. 
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 WiiTM and only in accordance with this Agreement.  In the event that LICENSEE challenges
NINTENDO’s ownership or the validity of the Intellectual Property Rights,
NINTENDO may terminate this Agreement without any notice or procedure.  Nothing contained herein shall be deemed to
grant NINTENDO any right, title, or interest in and to those portions of the
Licensed Products that do not consist of NINTENDO’s Intellectual Property
Rights, Proprietary Rights, or Confidential Information associated with the
WiiTM system.

 

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

 

(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 WiiTM systems, or between
WiiTM 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;

 

(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 in writing;

 

(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 WiiTM, the Nintendo DS system, the

 

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

 

4

 

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

 

(e)                                  embed, incorporate, or store a Game in
any media or format except the optical disc format utilized by WiiTM, 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 WiiTM, including the hardware, software (embedded
or not) or the Security Technology, except as specifically permitted under the
laws and regulations applicable in the Territory.

 

Nothing contained in this
Section 3.3 shall be deemed to prevent LICENSEE from developing a game or
games for other video game platforms, where such game or games have a similar
audiovisual display, look, feel, or game elements as found in the Game(s) developed
by LICENSEE under this Agreement; provided, however, that LICENSEE hereby
acknowledges that any use of NINTENDO’s Intellectual Property Rights,
Proprietary Rights, and/or Confidential Information in such other game or games
without the prior written consent of NINTENDO would be deemed to be a breach of
this Agreement and an infringement of NINTENDO’s Intellectual Property Rights.

 

3.4                                 Development Tools. 
NINTENDO and NOA may lease, loan or sell Development Tools, including
any improvements made by NINTENDO or NOA from time to time, to LICENSEE to
assist in the development of Games under this Agreement on such terms as may be
agreed between the parties.  Ownership
and use of any Development Tools, whether provided by NINTENDO or NOA, prior to
or during the Term hereof, shall be subject to the terms of this Agreement and
any separate license or purchase agreement required by NINTENDO or any third
party licensing the Development Tools. 
LICENSEE acknowledges the respective interests of NINTENDO, and in the
case of third-party Development Tools, such third parties, 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. 
Any license to LICENSEE to use the Development Tools does not extend
to:  (a) use of the Development
Tools for any purpose except the design and development of Games under this
Agreement, (b) reproduction or creation of derivatives of the Development
Tools, except in association with the development of Games under this
Agreement, (c) Reverse Engineering of the Development Tools (except as
specifically permitted under the laws and/or regulations applicable in the
Territory), or (d) without NINTENDO’s prior written approval, selling,
leasing, assigning, lending, licensing, encumbering or otherwise transferring
the Development Tools.  Anything
developed or derived by LICENSEE as a result of a study of the performance,
design or operation of any Nintendo Development Tools shall be considered a
derivative work of the Intellectual Property Rights, but may be retained and
utilized by LICENSEE in connection with this Agreement.  Unless LICENSEE can demonstrate that such
derivative work Development Tools have one or more applications that are
independent of and separate from the Intellectual Property Rights (“Independent
Applications”), it shall be deemed to have granted NINTENDO and NOA an
indefinite, worldwide, royalty-free, transferable and Sole License (including
the right to sub-license) to such derivative work Development Tools.  To the extent that LICENSEE can demonstrate
one or more Independent Applications of such derivative work Development Tools,
LICENSEE shall be deemed to have granted to NINTENDO and NOA a royalty-free and
transferable non-exclusive License (including the right to sub-license) in relation
to such Independent Applications for the Term. 
Anything developed or derived by LICENSEE as a result of a study of the
performance, design or operation of any third-party Development Tools shall be
governed by the terms of the license agreement applicable to such 

 

5

 

Development Tools.  Notwithstanding
any referral or information provided or posted regarding third-party
Development Tools, NINTENDO and NOA make no representations or warranties with
regard to any such third-party Development Tools.  LICENSEE acquires and utilizes third-party Development Tools at its own risk.

 

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

 

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

 

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

 

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

 

3.9                              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
NINTENDO.  Upon completion of a Game, LICENSEE shall
deliver a prototype of the Game to NINTENDO in a format specified in the
Guidelines.  Delivery shall be made in
accordance with the methods set forth in the Guidelines.  Each Submission shall include such other
information or documentation deemed necessary by NINTENDO, including, without
limitation, a complete set of written user instructions, a complete description
of any security holes, backdoors, time bombs, cheats, “Easter eggs” or other
hidden features or characters in the Game (of which LICENSEE is aware) and a complete
screen text script.  LICENSEE must
establish that the Game and any other content included on the Game Disc
complies with the guidelines of the Pan
European Game Information System (PEGI), the Unterhaltungssoftware
Selbstkontrolle (USK), the Office of Film and Literature Classification (OFLC),
or any other national or regional game rating system that NINTENDO may accept,
as applicable.  LICENSEE shall be
responsible for the submission of the Game to the appropriate national or
regional game rating organization and shall provide NINTENDO with a statement
or certificate in writing from the relevant organization, confirming the rating
for the Game.  Where any such game has
been rated as being suitable only for players aged 18 and over (or an
equivalent rating), LICENSEE must submit a certificate in writing that confirms
the game is rated as no higher than “M” (Mature) by the Entertainment Software
Rating Board (ESRB) of the U.S.  In
addition, NINTENDO reserves the right to require LICENSEE to provide NINTENDO
with such additional written indemnification for damages, claims, loss,
liability, fine or penalty resulting from the marketing, distribution or sale
of a Game with such an age rating, as NINTENDO, in its sole discretion, may
request.  If any such age rating is
subsequently changed by the relevant organization, LICENSEE shall inform
NINTENDO forthwith in writing of that fact and LICENSEE shall then comply with
the above provisions in relation to such new age rating.

 

4.2                                 Testing of a Completed Game. 
Upon submission of a completed Game, NINTENDO shall promptly test the
Game with regard to its technical compatibility with, and error-free operation
on, WiiTM utilizing the lot check process. 
Within a reasonable period of time after receipt, NINTENDO shall approve
or disapprove such Game in writing, which may include by e-mail.  If a Game is disapproved, NINTENDO shall
specify in writing the reasons for such disapproval and state what 

 

6

 

corrections are necessary.  After making the necessary corrections,
LICENSEE shall submit a revised Game to NINTENDO for testing.  NINTENDO shall not unreasonably withhold or
delay its approval of any Game.  Neither
the testing nor approval of a Game by NINTENDO shall relieve LICENSEE of its
sole responsibility for the development, quality and operation of the Game or
in any way create any warranty by NINTENDO relating to any Licensed Product.

 

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

 

4.4                                 Approval or Disapproval of Check Discs by
LICENSEE.  If, after review and testing, LICENSEE
approves the Check Discs, it shall promptly transmit to NINTENDO a signed
authorization for production in the form specified in the Guidelines.  If LICENSEE does not approve the sample Check
Discs for any reason, LICENSEE shall advise NINTENDO in writing and may, after
undertaking any necessary changes or corrections, resubmit the Game to NINTENDO
for approval in accordance with the procedures set forth in this Section 4.  The absence of a signed authorization form
from LICENSEE within five (5) business days after delivery of the
Check Discs to LICENSEE shall be deemed disapproval of such Check Discs.  Production of any order for Finished Goods or
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 (except if the disapproval is due to defects in
or failure of the Check Discs due to NINTENDO’s act, error or omission); (b) fails
to order the minimum order quantity of any Game approved by NINTENDO within six
(6) months after the date the Game was first approved by NINTENDO; or (c) submits
a revised version of the Game to NINTENDO after production of such Game has commenced,
LICENSEE shall reimburse NINTENDO (or its designee) for the reasonable
estimated cost of the production of the Check Discs, including the cost of the
disc stamper.  The payment will be due (i) thirty
(30) days after NINTENDO’s written notification to LICENSEE of the Check
Disc fee due NINTENDO because of LICENSEE’s failure to approve such Check Disc;
(ii) six (6) months after the date the Game was first approved by
NINTENDO; or (iii) upon the subsequent submission by LICENSEE of a revised
version of the Game to NINTENDO, as the case may be.

 

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

 

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

 

4.8                                 Promotional Discs. 
In the event NINTENDO 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 

 

7

 

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 NINTENDO’s approval for a Game and Artwork, LICENSEE
may at any time submit a written purchase order to NINTENDO for any approved Licensed
Product title.  The purchase order shall
specify whether it is for Finished Products or Bulk Goods.  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
NINTENDO or its designee.

 

5.2                                 Purchase Price and Minimum Order
Quantities.  The purchase price and minimum order
quantities for Finished Products and Bulk Goods shall be set forth in NINTENDO’s
then-current Price Schedule.  Unless
otherwise specifically provided for, the purchase price includes the cost of
manufacturing a single Game Disc.  No
taxes, duties, import fees or other tariffs related to the development, manufacture,
import, marketing or sale of the Licensed Products (except for taxes imposed on
NINTENDO’s income) are included in the purchase price and all such taxes are
the responsibility of LICENSEE.  The
Price Schedule is subject to change by NINTENDO at any time without Notice,
provided however, that any price increase shall be applicable only to purchase
orders submitted, paid for, and accepted by NINTENDO after the date of the
price increase.  Such changes shall be delivered
to LICENSEE as soon as possible thereafter.

 

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

 

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

 

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

 

6.                                      MANUFACTURE OF THE
LICENSED PRODUCT

 

6.1                                 Manufacturing. 
Given NINTENDO’s ownership of valuable Intellectual Property Rights,
NINTENDO 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
NINTENDO of a purchase order from LICENSEE and receipt of payment as provided
for at Section 5.3 herein, NINTENDO shall (through its suppliers and
subcontractors) arrange for manufacturing.

 

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

 

8

 

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 WiiTM.

 

6.3                                 Printed Materials for Bulk Goods. Upon delivery to LICENSEE of Bulk
Goods, LICENSEE shall assemble the Printed Materials and Bulk Goods 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 NINTENDO’s
prior written consent.  Bulk Goods may be
sold or distributed by LICENSEE only when fully assembled in accordance with
the Guidelines.

 

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

 

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

 

7.                                      MARKETING AND ADVERTISING

 

7.1                                 Approval of Marketing Materials. 
LICENSEE represents and warrants that the Printed Materials and the
Marketing Materials shall be of high quality and comply with (a) the
Guidelines, (b) the guidelines of the PEGI, and (c) to the best of
LICENSEE’s knowledge, all applicable laws and regulations and official codes of
practice in those jurisdictions in the Territory where they will be used or
distributed, including without limitation all applicable privacy laws.  To protect NINTENDO’s valuable Intellectual
Property Rights, to prevent the dilution of NINTENDO’s trademarks, and to avoid
use of the licensed Intellectual Property Rights giving rise to any implication
of NINTENDO’s sponsorship, association, approval or endorsement where this is
not the case, prior to actual use or distribution, LICENSEE shall submit to
NINTENDO for review samples of all proposed Marketing Materials.  NINTENDO shall, within ten (10) business
days of receipt, approve or disapprove of the quality of such samples.  If any of the samples are disapproved,
NINTENDO shall specify the reasons for such disapproval in writing, which may
include by e-mail, and state what corrections and/or improvements are
necessary.  After making the necessary
corrections and/or improvements, LICENSEE shall submit revised samples for
approval by NINTENDO.  NINTENDO shall not
unreasonably withhold or delay its approval of any proposed Marketing
Materials.  No Marketing Materials shall
be used or distributed by LICENSEE without NINTENDO’s prior written approval.

 

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

 

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

 

9

 

7.3                                 Warranty and Repair. 
LICENSEE shall provide the original consumer with a minimum ninety (90)
day (or such longer minimum period as may be required by applicable law)
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 law, provided that
the exact nature of such warranties and services shall be determined by
LICENSEE in its discretion, and further provided that such warranties and
services comply with the requirements of the laws and regulations applicable in
the Territory.

 

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

 

7.5                                 No Sales Outside the Territory. 
LICENSEE covenants that it shall not knowingly 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 NINTENDO’s reasonable judgment, significantly impair the ability of a
consumer to play the Game, NINTENDO may, after consultation with LICENSEE,
require the LICENSEE to recall the Licensed Product and undertake suitable
repairs or replacements.

 

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

 

7.8                                 Nintendo Gateway System. 
To promote and increase demand for games on Nintendo video game systems,
NINTENDO 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 NINTENDO 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 WiiTM or
the Development Tools, including, but not limited to, (a) all current or
future information, know-how, techniques, methods, tools, emulator hardware or
software, software development specifications, proprietary manufacturing
processes and/or trade secrets, (b) any information on inventions,
patents, or patent applications, (c) any business, legal, marketing,
pricing 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

 

10

 

directly or indirectly
from NINTENDO or NOA 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 or NOA and to whom LICENSEE has no obligation of confidentiality.

 

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

 

8.3                                 Disclosure and Use. 
NINTENDO may provide LICENSEE with highly confidential development
information, Guidelines, Development Tools, systems, specifications and related
resources and information constituting and incorporating the Confidential
Information to assist LICENSEE in the development of Games.  LICENSEE agrees to maintain all Confidential
Information as strictly confidential and to use such Confidential Information
only in accordance with this Agreement. 
LICENSEE shall limit access to the Confidential Information to
LICENSEE’s employees having a strict need to know, and shall advise such
individuals of their obligation of confidentiality as provided herein.  LICENSEE shall require each such individual to
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 have access to Confidential
Information shall not disclose or make any unauthorized use of the Confidential
Information.

 

8.4                                 No Disclosure to Independent Contractors. 
LICENSEE shall not disclose the Confidential Information, including
without limitation the Guidelines and Intellectual Property Rights, to any
Independent Contractor, nor permit any Independent Contractor to perform or
assist in development work for a Game that requires use of the Confidential
Information, without the prior written consent of NINTENDO.  Any Independent Contractor seeking access to
Confidential Information shall be required to enter into a written
non-disclosure agreement with NINTENDO or NOA that is no less restrictive than
the terms of this Section 8, and that expressly includes the following
language, prior to receiving any access to or disclosure of the Confidential
Information from either LICENSEE or NINTENDO:

 

“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’s use of such materials shall not create any
right, title or interest of Independent Contractor therein.  In the event that Independent Contractor
challenges Nintendo’s ownership or the validity of such materials, Nintendo may
terminate the agreement without any notice or procedure.  Nintendo Co., Ltd. and Nintendo of America
Inc. are intended third-party beneficiaries of this agreement.”

 

At LICENSEE’s option, the
written non-disclosure agreement may be with LICENSEE rather than NINTENDO or
NOA, in which case the form and substance of the non-disclosure agreement must
be acceptable to NINTENDO.  Upon NINTENDO
or NOA’s reasonable written request, LICENSEE shall provide to NINTENDO a
listing of all Independent Contractors who have received or been granted access
to Confidential Information along with copies of the applicable written non-

 

11

 

disclosure
agreements.  In addition, LICENSEE shall
take all reasonable measures to ensure that its Independent Contractors fulfill
the requirements of the applicable written non-disclosure agreements.

 

LICENSEE shall use its
best commercial efforts to ensure that its employees working with or otherwise
having access to Confidential Information shall not disclose or make
unauthorized use of the Confidential Information. ****

 

8.5                                 Agreement Confidentiality. 
LICENSEE agrees that the terms, conditions and contents of this
Agreement shall be treated as Confidential Information.  Any public announcement or press release
regarding this Agreement or the release dates for Games developed by LICENSEE
under this Agreement shall be subject to NINTENDO’s prior written approval,
such approval not to be unreasonably delayed or withheld.  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 government agencies
in the Territory and the United States that regulate publicly-traded
securities, provided that all Confidential Information shall be edited from
such disclosures to the maximum extent allowed by such government agencies, (d) in
response to lawful process, subject to court order limiting the persons to whom
Confidential Information may be disclosed and the extent of disclosure of such
Confidential Information, approved in advance by NINTENDO, and (e) to a
third party proposing to enter into a business transaction with LICENSEE or
with NINTENDO, but only to the extent reasonably necessary for carrying out the
proposed transaction and only under terms of mutual confidentiality.

 

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

 

8.7                                 Continuing Effect of the NDA. 
The terms of this Section 8 supplement the terms of the NDA, which
shall remain in effect.  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 or an agent or licensee of a third
party, such as a collecting society, by LICENSEE, as are necessary for
incorporation into the Game or the Artwork or as are used in the development,
advertising, marketing and sale of the Licensed Products or the Marketing
Materials under this Agreement.

 

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

 

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

 

12

 

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

 

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

 

9.3                                 INTELLECTUAL PROPERTY RIGHTS DISCLAIMER. 
NINTENDO (ON ITS OWN BEHALF AND ON BEHALF OF ITS AFFILIATES,
SUBSIDIARIES, LICENSORS, SUPPLIERS AND SUBCONTRACTORS) EXPRESSLY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES CONCERNING THE SCOPE OR VALIDITY OF THE
INTELLECTUAL PROPERTY RIGHTS.  NINTENDO
(ON ITS OWN BEHALF AND ON BEHALF OF ITS AFFILIATES, SUBSIDIARIES, 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 TO
THE MAXIMUM EXTENT LEGALLY PERMISSIBLE. 
ANY WARRANTY, CONDITION OR TERM THAT MAY BE PROVIDED IN ANY
APPLICABLE PROVISION OF ANY LAW OR REGULATION IN THE TERRITORY GOVERNING
COMMERCIAL ACTIVITY, OR ANY OTHER COMPARABLE LAW OR REGULATION, IS EXPRESSLY
DISCLAIMED.  LICENSEE HEREBY ASSUMES THE
RISK OF INFRINGEMENT.

 

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

 

9.5                                 LIMITATION OF LIABILITY. 
TO THE MAXIMUM EXTENT PERMITTED BY LAW, NEITHER NINTENDO NOR ITS
AFFILIATES, SUBSIDIARIES, LICENSORS, SUPPLIERS, OR SUBCONTRACTORS SHALL BE
LIABLE FOR LOSS OF PROFITS, OR FOR ANY SPECIAL, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL
DAMAGES OF LICENSEE OR ITS CUSTOMERS ARISING OUT OF OR RELATED TO THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE BREACH OF THIS AGREEMENT BY
NINTENDO, THE MANUFACTURE OF THE LICENSED PRODUCTS OR THE USE OF THE LICENSED
PRODUCTS ON ANY NINTENDO VIDEO GAME SYSTEM BY LICENSEE OR BY ANY END USER.

 

10.                               INDEMNIFICATION

 

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

 

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

 

(a)                                  a material 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 or the

 

13

 

Marketing Materials by
LICENSEE or on behalf of LICENSEE, excluding claims based solely upon the
Intellectual Property Rights,

 

(c)                                  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)                                 the design,
development, advertising, marketing, sale or use of any aspect of the Licensed
Products, the Marketing Materials, or any other promotional materials.

 

NINTENDO and LICENSEE
shall give prompt Notice to the other of any Claim which is or which may be
subject to indemnification under this Section 10.  With respect to any such Claim, LICENSEE, as
indemnitor, shall have the right to select counsel and to control the defense
and/or settlement thereof.  NINTENDO may,
at its own expense, participate in such action or proceeding with counsel of
its own choice.  LICENSEE shall not enter
into any settlement of any Claim in which (a) NINTENDO has been named as a
party, or (b) Intellectual Property Rights have been asserted, without
NINTENDO’s prior written consent, which shall not be unreasonably
withheld.  NINTENDO shall provide
reasonable assistance to LICENSEE in its defense of any Claim.

 

10.3                           LICENSEE’s Insurance. 
LICENSEE shall, at its own expense, obtain a comprehensive policy of
general liability insurance (including coverage for advertising injury and
product liability Claims) from an insurance company rated at least B+ by A.M.
Best or a comparable rating by another recognized insurance rating
organization.  Such policy of insurance
shall be in an amount of not less than the equivalent of **** on a
per-occurrence basis and shall provide for adequate protection against any
Claims.  Such policy shall name NINTENDO
as an additional insured and shall specify it may not be canceled without
thirty (30) days’ prior written Notice to NINTENDO.  A Certificate of Insurance shall be provided
to NINTENDO not later than the date of the initial order of Licensed Products
under this Agreement or within thirty (30) days of the Effective Date of
this Agreement, whatever date occurs later. 
If LICENSEE fails to provide NINTENDO with such Certificate of Insurance
or fails to maintain such insurance at any time during the Term and for a
period of two (2) years thereafter and fails to cure within thirty
(30) days of written notice, NINTENDO, in its sole discretion may (a) terminate
this Agreement in accordance with Section 13.2 herein; and/or (b) secure
comparable insurance, at LICENSEE’s expense, for the sole benefit and
protection of NINTENDO.

 

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

 

11.                               PROTECTION OF PROPRIETARY
RIGHTS

 

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

 

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

 

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

 

14

 

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

 

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 NINTENDO’s prior
written consent, which consent may be withheld by NINTENDO for any reason
whatsoever in its sole discretion.  In
the event of an attempted Assignment in violation of this provision, NINTENDO
shall have the right at any time, at its sole option, to immediately terminate
this Agreement.  Upon such termination,
NINTENDO 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
NINTENDO 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 proposed Assignment and the nature and extent of the
rights and obligations that LICENSEE proposes to assign.  NINTENDO may, in its sole discretion, approve
or disapprove such proposed Assignment. 
Unless written consent is given by NINTENDO to a proposed Assignment,
any attempted or purported Assignment shall be deemed disapproved and NINTENDO
shall have the unqualified right, in its sole discretion, to terminate this
Agreement at any time.  Upon termination,
NINTENDO shall have no further obligation under this Agreement to LICENSEE or
to LICENSEE’s intended or purported assignee.

 

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

 

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

 

15

 

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

 

12.5                           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 NINTENDO 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 material
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 NINTENDO’s
option, this Agreement may be terminated immediately and without Notice in the
event that LICENSEE (a) makes an assignment for the benefit of creditors, (b) becomes
insolvent, (c) files a voluntary petition for bankruptcy, (d) acquiesces
to any involuntary bankruptcy petition, (e) is adjudicated as a bankrupt,
or (f) ceases to do business.

 

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

 

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

 

13.6                           Breach of NDA or other NINTENDO License
Agreements.  At NINTENDO’s option, any material breach by
LICENSEE of (a) the NDA, or (b) any other license agreement between
NINTENDO and LICENSEE relating to the development of games for any Nintendo
video game system, which breach is not cured within the time period for cure
allowed under the applicable agreement (and which shall give NINTENDO
reasonable cause to believe that it needs to terminate this Agreement so as to
protect its legitimate business interests), shall be considered a material
breach of this Agreement entitling NINTENDO to terminate this Agreement in
accordance with Section 13.5 herein.

 

13.7                           No Further Use of the Intellectual
Property Rights.  Upon expiration 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
of expiration or termination, (a) return to NINTENDO all Development Tools
provided to LICENSEE by NINTENDO, and (b) return to NINTENDO or destroy
any and all copies of materials constituting, relating to, or disclosing any

 

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

 

16

 

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

 

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

 

14.                               GENERAL PROVISIONS

 

14.1                           Compliance with Applicable Laws and
Regulations.  LICENSEE shall at all times comply with
applicable laws, regulations and orders in the countries of the Territory
relating to or in any way affecting this Agreement and LICENSEE’s performance
under this Agreement, including, without limitation, the export laws and
regulations of any country with jurisdiction over the Intellectual Property
Rights, Licensed Products, Development Tools and/or either party.  LICENSEE shall not market, distribute, or
sell the Game and/or Game Discs in any country in the Territory in which such
marketing, distribution or sale would violate any applicable laws, regulations
or orders of such country.

 

14.2                           Force Majeure. 
Neither party shall be liable for any breach of this Agreement
occasioned by any cause beyond the reasonable control of such party, including
governmental action, war, riot or civil commotion, fire, natural disaster,
labor disputes, restraints affecting shipping or credit, delay of carriers,
inadequate supply of suitable materials, or any other cause which could not
with reasonable diligence be controlled or prevented by the parties.  In the event of material shortages, including
shortages of materials or production facilities necessary for production of the
Licensed Products, NINTENDO reserves the right to allocate such resources among
itself and its licensees, including LICENSEE hereunder.

 

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 Information, the Development Tools and the Intellectual
Property Rights.  Upon at least fifteen
(15) days prior written Notice to LICENSEE, NINTENDO may, at its expense
and subject to a confidentiality agreement, arrange for a third-party audit of
LICENSEE’s records, reports and other information solely related to LICENSEE’s
compliance with this Agreement; provided, however, that NINTENDO shall not,
during the course of the audit, access LICENSEE’s source code, development
plans, marketing plans, internal business plans or other items deemed
confidential by LICENSEE, except to the extent such materials incorporate, disclose
or reference NINTENDO’s Confidential Information or Intellectual Property
Rights.

 

14.4                           Waiver, Severability, Integration, and
Amendment.  The failure of a party to enforce any
provision of this Agreement shall not be construed to be a waiver of such
provision or of the right of such party to thereafter enforce such
provision.  In the event that any term,
clause or provision of this Agreement shall be construed to be or adjudged
invalid, void or unenforceable, such term, clause or provision shall be
construed as severed from this Agreement, and the remaining terms, clauses and
provisions shall remain in effect. 
Together with the NDA, this Agreement constitutes the entire agreement
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, 13.4, 13.7, 13.8
and 14 shall survive any expiration or termination of this Agreement to
the degree necessary to permit their complete fulfillment or discharge.

 

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

 

17

 

proceedings) with respect
to any matter arising under or growing out of this Agreement, shall be brought
in the Kyoto District Court.  Each party
hereby consents to the jurisdiction and venue of such court for such purposes.

 

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

 

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

 

14.10                     Delegation of Duties. 
NINTENDO, at its option, may delegate its duties under the present
Agreement to a wholly owned subsidiary. 
To the extent necessary for the parties to carry out their duties under
this Agreement, NINTENDO shall provide notice to LICENSEE of any such
delegation, including to whom at NINTENDO’s wholly owned subsidiary
communications from LICENSEE under this Agreement may be directed.  Also in the event of a delegation by
NINTENDO, the provisions of this Agreement shall continue to govern the
relationship between NINTENDO and LICENSEE and shall govern the relationship
between NINTENDO’s subsidiary and LICENSEE, subject to any amendments or
modifications to this Agreement which such subsidiary and LICENSEE may agree to
in their relationship.  NINTENDO shall
remain obligated under the present Agreement for the performance of NINTENDO’s
duties by NINTENDO’s subsidiary.

 

14.11                     Counterparts and Signature by Facsimile. 
This Agreement may be signed in counterparts, which shall together
constitute a complete Agreement.  A
signature transmitted by facsimile or electronically via computer network 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.

 

 

	
  NINTENDO:

  	
   

  	
  LICENSEE:

  
	
   

  	
   

  	
   

  
	
  NINTENDO CO., LTD.

  	
   

  	
  THQ INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Satoru Iwata

  	
   

  	
  By:

  	
  /s/ Brian J. Farrell

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Satoru Iwata

  	
   

  	
  Name:

  	
  Brian J. Farrell

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  Mar. 10,
  2010

  	
   

  	
  Date:

  	
  Dec. 7, 2009

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THQ (UK) LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ian Curran

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed:

  	
  Ian Curran

  
						

 

18

 

	
   

  	
   

  	
  Title:

  	
  EVP Global Publishing

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  Dec. 4, 2009

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THQ ENTERTAINMENT GmbH

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ian Curran

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed:

  	
  Ian Curran

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  EVP Global Publishing

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  Dec. 4, 2009

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THQ
  FRANCE SARL

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ian Curran

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed:

  	
  Ian Curran

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  EVP Global Publishing

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  Dec. 4, 2009

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THQ ASIA PACIFIC PTY (LTD)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Martin Good

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed:

  	
  Martin Good

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  SVP – Asia Pacific

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  4 December 2009

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THQ INTERACTIVE ENTERTAINMENT
  ESPAÑA, SL

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ian Curran

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed:

  	
  Ian Curran

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  EVP Global Publishing

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  Dec. 4, 2009

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THQ
  ITALY SRL

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ian Curran

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Ian Curran

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  EVP Global Publishing

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  Dec. 4, 2009

  

 

Attachment:

 

Annex A:  Guidelines on
Ethical Content

 

19

 

Annex A

 

Guidelines on Ethical Content

 

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

 

(a)                      contain sexually explicit content including but not
limited to nudity, rape, sexual intercourse and sexual touching; for instance,
NINTENDO does not allow bare-breasted women in Games, however, mild displays of
affection such as kissing or hugging are acceptable;

 

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

 

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

 

(d)                     depict verbal or physical spousal or child abuse;

 

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

 

(f)                        use profanity, obscenity or incorporate language or
gestures that are offensive by prevailing public standards and tastes; and

 

(g)                     promote the use of illegal drugs, smoking materials,
tobacco and/or alcohol; for example NINTENDO does not allow gratuitous beer or
cigarette advertisement anywhere in a Game; however, Sherlock Holmes smoking a
pipe would be acceptable as it fits the theme of the Game.

 

JEN:hjd

 

20

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