Document:

Exhibit 10.8

 

EMPLOYMENT AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is entered into this 12th day of September,
2007, between Activision Publishing, Inc. (the “Employer”) and Ann Weiser (“you”).

 

RECITAL

 

The
Employer desires to employ you, and you desire to be so employed by the
Employer, on the terms and subject to the conditions set forth in this
Agreement.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the premises and the mutual promises set forth
in this Agreement, the Employer and you hereby agree as follows:

 

1.             Term of Employment

 

(a)           The term of your
employment under this Agreement (the “Term”) shall
commence on September 10, 2007 (the “Effective Date”)
and shall end on August 31, 2010 (the
“Expiration Date”) or such earlier date on which your
employment is terminated under Section 10. At least six (6) months prior to the
Expiration Date, you and the Employer each agree to provide the other party
notice of intent not to continue employment following the Expiration Date.

 

(b)           Except as set forth in
Section 12(t), upon the Expiration Date (or such earlier date on which your
employment is terminated pursuant to Section 10) all obligations and rights
under this Agreement shall immediately lapse. If your employment continues
beyond the Expiration Date, you shall be an at-will employee whose employment
may be terminated by either of the parties to this Agreement at any time for
any reason.

 

2.             Compensation

 

(a)           Subject to the
provisions of this Agreement, in full consideration for all rights and services
provided by you under this Agreement, during the Term you shall receive the
compensation set forth in this Section 2.

 

(b)           Commencing on the
Effective Date, you shall receive an annual base salary (“Base
Salary”) of $475,000.00 paid in accordance with the Employer’s
payroll policies in effect from time to time. On each anniversary of the Effective Date during the Term, your Base Salary
shall be reviewed and may be increased, but not decreased, by an amount
determined by the Board of Directors (the “Board”)
of Activision, Inc., the parent company of the Employer (“Activision”)
or the Compensation Committee of the Board (the “Compensation
Committee”), in its sole and absolute discretion.

 

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(c)           During the Term you will
be eligible to receive an annual discretionary bonus (the “Annual
Bonus”). Your target Annual Bonus during the Term will be seventy
five percent (75%) of your Base Salary in effect at the time bonus criteria for
the year are established; provided, however, that the actual
amount of the Annual Bonus, if any, shall be determined by the Compensation
Committee in its sole and absolute discretion based on the achievement of personal,
financial and business objectives and goals. The Annual Bonus will be paid at
the same time bonuses are paid to senior executives, but in no event later than
June 15th of the year following the fiscal year to which the Annual
Bonus relates. Except as otherwise set forth in this Agreement, you must remain
continuously employed by the Employer, Activision or their subsidiaries or
affiliates (collectively, the “Activision Group”)
through the date on which the Annual Bonus is paid to be eligible to receive
such Annual Bonus.

 

(d)           Subject to the approval
of the Compensation Committee, the Employer will grant to you a non-qualified
stock option to purchase 200,000
shares of Activision’s common stock (the “Options”)
and 15,000 restricted share units which represent the conditional right to
receive shares of Activision’s common stock (the “RSUs”,
and  collectively with the Options, the “Equity Awards”).

 

(i)            The Options will vest
ratably over three years, with one-third of the Option vesting on August 31st
of each of 2008, 2009 and 2010 subject
to your remaining employed by the Activision Group through each vesting date.

 

(ii)           The RSUs will vest in full on August 31, 2010
subject to your remaining employed by the Activision Group through such vesting date; provided, however,
that vesting of 25% of the RSUs will occur on August 31, 2008 if Activision
meets or exceeds the 2008 Annual Operating Plan operating income objectives established
 by the Compensation Committee and the
vesting of an additional 25% of the RSUs will occur on August 31, 2009 if
Activision meets or exceeds the 2009 Annual Operating Plan operating income
objectives established by the Compensation Committee.

 

You
acknowledge that the Equity Award grants made pursuant to this Section 2(e) are
expressly conditioned upon approval by the Compensation Committee, and that the
Compensation Committee has discretion to approve or disapprove the grants and/or
to determine and make modifications to the terms of the grants. The Equity
Awards shall be subject to all terms of the Activision 2003 Incentive Equity Plan
(the “Plan”) and Activision’s standard
forms of award agreements. In the event of a conflict between this Agreement
and the terms of the Plan or award agreements, the Plan or the award
agreements, as applicable, shall govern.

 

(e)           You shall receive a
sign-on bonus of $100,000 payable in a lump sum within thirty (30) days
following the Effective Date.

 

(f)            Within three (3)
months of the Effective Date, you shall relocate your principal residence to
within a 60-minute vehicle commute of Employer’s headquarters (Santa Monica,
California). Within thirty (30) days following the Effective Date the Employer
shall pay you a

 

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lump sum amount of $145,000
comprised of (i) $122,000 in relocation expenses and (ii) $23,000 of basic
moving expenses. In addition, at the same time, the Employer will pay you an
amount equal to the amount of incremental taxes it estimates you will pay by
reason of the inclusion in your income of the payments set forth in clause (i)
above. You acknowledge that this amount will be in lieu of any relocation
benefits you would have otherwise been entitled to under the Employer’s
policies.

 

(g)           During the Term the Employer shall pay you
an aggregate mortgage assistance payment equal to $72,000, payable in seventy-eight
(78) equal installments in accordance with the Employer’s payroll practices. In
addition, at the same time, the Employer will pay you an amount equal to the
amount of incremental taxes it estimates you will pay by reason of the
inclusion in your income of the payments set forth in the immediately preceding
sentence.

 

(h)           The Employer agrees
that it shall indemnify and hold you harmless to the fullest extent permitted
by Delaware law from and against any and all liabilities, costs and claims, and
all expenses actually and reasonably incurred in connection therewith,
including, without limitation, all costs and expenses actually and reasonably
incurred by you in defense of litigation arising out of your employment
hereunder.

 

3.             Title; Location

 

During the Term, you shall serve as the Chief Human
Resources Officer of the Employer. Your principal place of business shall be
the Employer’s headquarters in Santa Monica, California; provided, however,
that you acknowledge and agree that you may be required to travel from time to
time for business reasons.

 

4.             Duties

 

Upon commencement of the Term,
you shall report directly to the Chief Executive Officer and shall have such
duties commensurate with your position as may be assigned to you by the Chief
Executive Officer from time to time. You are also required to read, review and
observe all of the Employer’s existing policies, procedures, rules and
regulations in effect from time to time during the Term. You shall
devote your full-time working time to your duties hereunder, shall faithfully
serve the Activision Group, shall in all respects conform to and comply with
the lawful directions and instructions given to you in good faith by the Board and
shall use your best efforts to promote and serve the interests of the Activision
Group. Further, you shall not, directly or indirectly, render services to any
other person or organization without the consent of Chief Executive Officer or
otherwise engage in activities that would interfere significantly with your
faithful performance of your duties hereunder; provided, however,
that you may serve on civic or charitable boards or engage in charitable
activities without remuneration if doing so is not inconsistent with, or
adverse to, your employment hereunder.

 

5.             Expenses

 

To the extent you incur necessary and reasonable travel
or other business expenses in the course of your employment, you shall be
reimbursed for such expenses, upon presentation of written documentation in
accordance with the Employer’s policies in effect from time to time.

 

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6.             Other Benefits

 

(a)           During the Term you
shall be entitled to participate in all health, welfare, retirement, pension,
life insurance, disability and similar plans, programs and arrangements
generally available to senior executives of the Employer, as amended from time
to time.

 

(b)           During the Term, you
will be entitled to participate in all perquisite programs generally available
from time to time to senior executives of the Employer on the terms and
conditions then prevailing under such programs.

 

(c)           The Employer will
provide you during the Term, at the Employer’s expense, with a supplemental
term life insurance policy with a benefit amount of $2,000,000 through a
carrier of the Employer’s choice.

 

(d)           You expressly agree and
acknowledge that after the Expiration Date (or such earlier date on which your
employment is terminated pursuant to Section 10), you are entitled to no
additional benefits, except as specifically provided in this Agreement and the
benefit plans in which you participate during the Term, and subject in each
case to the terms and conditions of each such plan.

 

7.             Vacation and Paid
Holidays

 

(a)           You will be entitled to
paid vacation days in accordance with the normal vacation policies of the Employer
in effect from time to time; provided, however, that in no event
shall you be entitled to less than twenty (20) paid vacation days per year.

 

(b)           You shall be entitled
to all paid holidays allowed by the Employer to its full-time employees in the
United States.

 

8.             Protection of the Employer’s
Interests

 

(a)           Duty of
Loyalty. During the Term,
you will owe a “Duty of Loyalty” to the Employer,
which includes, but is not limited to, your not competing in any manner,
whether directly or indirectly, as a principal, employee, agent, owner, or
otherwise, with the Employer, or any affiliate of the Employer; provided,
however, that nothing in this Section 8(a) will limit your right to
own up to five percent (5%) of any of the debt or equity securities of
any business organization that is then required to file reports with the
Securities and Exchange Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended.

 

(b)           Policy
Compliance. You confirm that you have read, understand and will
comply with the Employer’s policies, procedures and rules in effect from time
to time, including without limitation, the Code of Business Conduct and Ethics
and the Code of Ethics for Senior Executive Officers, as amended from time to
time.

 

(c)           Property of the
Employer. All rights
worldwide with respect to any and all intellectual or other property of any
nature produced, created or suggested by you during the term of your employment
or resulting from your services which (i) relate in any manner at the time
of conception or reduction to practice to the actual or demonstrably
anticipated business of

 

4

 

the Employer, (ii) result
from or are suggested by any task assigned to you or any work performed by you
on behalf of the Employer, or (iii) are based on any property owned or
idea conceived by the Employer, shall be deemed to be a work made for hire and
shall be the sole and exclusive property of the Employer. You agree to execute,
acknowledge and deliver to the Employer, at the Employer’s request, such
further documents, including copyright and patent assignments, as the Employer
finds appropriate to evidence the Employer’s rights in such property. Your
agreement to assign to the Employer any of your rights as set forth in this Section
8(c) shall not apply to any invention that qualifies fully under the
provisions of California Labor Code Section 2870, where no equipment, supplies,
facility or trade secret information of the Employer were used and that was
developed entirely upon your own time, and that does not relate to the Employer’s
business, and that does not result from any work performed by you for the Employer.

 

(d)           Covenant Not
to Shop. During the Term,
you shall not seek or negotiate for employment with any entity or person
outside of the Activision Group. Notwithstanding the foregoing, during the final
six (6) months of the Term you may seek or negotiate employment outside of the
Activision Group upon written notice to the Employer. During the search process
you shall remain strictly subject to your continuing obligations under this
Agreement, including, without limitation, your duty of loyalty, compliance with
the Employer’s policies and your confidentiality obligations.

 

(e)           Confidentiality. No confidential or proprietary
information of the Activision Group shall be used by you or disclosed or made
available by you to any person except as required in the course of your
employment, and upon the termination of your employment (or at any time on the
Employer’s request), you shall return to the Employer all such information that
exists, whether in electronic, written, or other form (and all copies thereof)
under your control. Without limiting the generality of the foregoing, you
acknowledge signing and delivering to the Employer the Activision Employee
Proprietary Information Agreement attached as Exhibit A hereto (the “Proprietary Information Agreement”)
as of the Effective Date and you agree that all terms and conditions contained
in such agreement, and all of your obligations and commitments provided for in
such agreement, shall be deemed, and hereby are, incorporated into this
Agreement as if set forth in full herein. You also acknowledge that upon
termination of your employment for any reason whatsoever (or at any time on the
Employer’s request), you will promptly deliver to the Employer or surrender to
the Employer’s representative all property of the Activision Group, including
without limitation, all documents and other materials (and all copies thereof)
relating to the Activision Group’s business, all identification and access
cards, all contact lists and third party business cards however and wherever
preserved, and any equipment provided by the Activision Group, including
computers, telephones, personal digital assistants, memory cards and similar
devices which you possess or have in your custody or under your control. The
provisions of this Section 8(e) shall survive the expiration or earlier
termination of this Agreement.

 

(f)            Covenant Not
to Solicit.

 

(i)            During your
employment, you shall not, either alone or jointly, with or on behalf of
others, directly or indirectly, whether as principal, partner, agent,
shareholder, director, employee, consultant or otherwise: (a) offer

 

5

 

employment to, or
directly or indirectly solicit the employment or engagement of, or otherwise
entice away from the employment of the Activision Group, either for your own
account or for any other person, firm or company, any person employed by the
Activision Group, whether or not such person would commit any breach of a
contract by reason of his or her leaving the service of the Activision Group;
or (b) directly or indirectly solicit, induce or entice any client,
customer, contractor, licensor, agent, partner or other business relationship
of the Activision Group to terminate, discontinue, renegotiate or otherwise
cease or modify its relationship with the Employer or its affiliates.

 

(ii)           For a period of two (2)
years following the Expiration Date (or such earlier date on which your
employment is terminated pursuant to Section 10) for any reason whatsoever, you
shall not, either alone or jointly, with or on behalf of others, directly or
indirectly, whether as principal, partner, agent, shareholder, director,
employee, consultant or otherwise, solicit the employment or engagement of,
either for your own account or for any other person, firm or company, any
person employed by the Activision Group, whether or not such person would
commit any breach of a contract by reason of his or her leaving the service of
the Employer or its affiliates.

 

(iii)          At all times following
the Expiration Date (or such earlier date on which your employment is
terminated pursuant to Section 10) for any reason whatsoever, you shall not use
the confidential, trade secret information of the Activision Group or any other
unlawful means to directly or indirectly solicit, induce or entice any client,
customer, contractor, licensor, agent, partner or other business relationship
of the Activision Group to terminate, discontinue, renegotiate or otherwise
cease or modify its relationship with the Employer or its affiliates.

 

(iv)          You expressly
acknowledge and agree that the restrictions contained in this Section 8(f) are
reasonably tailored to protect the Activision Group’s confidential information
and trade secrets, and are reasonable in all circumstances in scope, duration
and all other respects. It is expressly agreed by the parties that if for any
reason whatsoever any one or more of such restrictions shall (either taken by
itself or themselves together) be adjudged to go beyond what is legally
permissible for the protection of the legitimate interests of the Activision
Group, that the prohibitions shall be in effect and upheld to the fullest
extent permissible under applicable laws.

 

9.             Disability

 

(a)           If, during the Term, you become “Disabled”, you
shall receive payment of an amount equal to three (3) times the Base Salary in
effect at the time of your Disability, determined in accordance with Section
2(b);  provided, however, that
this amount shall be reduced by any disability payments you receive under any
Employer-sponsored plan. The

 

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payment shall be made in
a lump sum thirty (30) days following the determination of your Disability.

 

(b)           For purposes of this
Agreement, “Disability” shall have the
meaning set forth under Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended
and the rules and regulations promulgated thereunder (the “Code”). The
existence of a Disability under Section
9(a) shall be determined by a physician mutually agreed upon by you and
the Employer. If you and the Employer are unable to agree on such a physician,
you and the Employer shall each appoint one physician and those two physicians
shall appoint a third physician who shall make the determination of whether you
have a Disability. You shall cooperate and make yourself available for any medical
examination requested by the Employer with respect to any determination of your
Disability within 10 days of such a request.

 

(c)           Nothing in this Section
9 shall reduce any right you
may otherwise have to receive any disability benefits under any Employer-sponsored
disability plan.

 

10.          Termination of
Employment

 

(a)           Resignation
by Employee. You promise not to resign your employment prior to the
Expiration Date unless you have Good Reason (as defined in Section 10(d)) to do so. If you do resign the
Employer may accept your resignation effective on the date set forth in your
notice or any earlier date. You acknowledge that your resignation without Good
Reason would damage the Employer in a variety of ways, such as by causing it to
incur the costs of replacing you (e.g.,
headhunter fees and training expenses) and by causing it to lose revenues or
profits (e.g., its resignation-related inability
to secure or retain customers, implement business strategies, or pursue
business opportunities); absent proof of greater damages, you agree that the
minimum damages the Employer would suffer from such a resignation shall be
presumed to equal 100% of the Base Salary you would have received during the
otherwise remaining period prior to the Expiration Date following your breach.

 

(b)           By the
Employer for Cause. At
any time during the Term, the  Employer may
terminate your employment for “Cause”,
which shall include, but not be limited to, a good-faith determination by the
Employer that you:

 

(i)            engaged in willful,
reckless or gross misconduct;

 

(ii)           materially breached
this Agreement or any other agreement between the Employer or the Activision
Group and you;

 

(iii)          committed, were
convicted of, or pled no contest to a felony or crime involving dishonesty or
moral turpitude;

 

(iv)          breached your Duty of Loyalty;

 

(v)           violated any material Activision
Group policy; or

 

(vi)          materially failed to
follow any lawful directive of the Employer.

 

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In the case of any termination for Cause pursuant to clauses (ii), (v),
or (vi) the Employer
shall give you at least thirty (30) days written notice of its intent to
terminate your employment. The notice shall specify (x) the effective date of
your termination and (y) the particular acts or circumstances that constitute
Cause for such termination. You shall be given the opportunity within fifteen
(15) days after receiving the notice to explain why Cause does not exist or to
cure any basis for Cause. Within fifteen (15) days after any such explanation
or cure, the Employer will make its final determination regarding whether Cause
exists and deliver such determination to you in writing. If the final decision
is that Cause exists and no cure has occurred, your employment with the Employer shall be terminated for Cause as of
the date of termination specified in the original notice. If the final decision
is that Cause does not exist or a cure has occurred, your employment with the
Employer shall not be terminated for
Cause at that time. If your employment terminates for any reason other than a
termination by the Employer for Cause, at a time when the Employer had Cause to
terminate you (or would have had Cause if it then knew all relevant facts),
your termination shall be treated as a termination by the Employer for Cause.

 

(c)           By the
Employer Without  Cause. The
Employer may terminate your employment without Cause at any time during the
Term and such termination shall not be deemed a breach by the Employer of any
term of this Agreement or any other duty or obligation, expressed or implied,
which the Employer may owe to you pursuant to any principle or provision of
law.

 

(d)           By You for
Good Reason. At any time during the Term, you may terminate your
employment for “Good Reason”, which, for the
purposes of this Agreement, shall mean that without your written agreement or
other voluntary action on your part, the Employer:

 

(i)            reassigns your primary
place of employment to a location that is  more than fifty
(50) miles from your primary place of employment as of the Effective Date and
that materially and adversely affects your commute; or

 

(ii)           materially reduces your
duties below those set forth in Section 4;

 

provided, however, that you must (x)
provide the Employer with written notice of your intent to terminate this
Agreement and your employment and a description of the event you believe
constitutes Good Reason within thirty (30) days after the initial existence of
the event and (y) the Employer shall have ninety (90) days after you
provide the notice described above to cure the default that constitutes Good
Reason (the “Cure Period”). You will have
five (5) days following the end of the Cure Period to terminate your
employment, after which Good Reason will no longer exist.

 

(e)           Death. In
the event of your death during the Term, your employment shall terminate
immediately as of the date of your death.

 

11.          Termination of
Obligations and Severance Payments

 

(a)           General. Upon
the termination of your employment pursuant to Section 10, your rights and the Employer’s obligations to you under this
Agreement shall immediately terminate

 

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except as provided in
this Section 11
and Section 12(t), and you (or your heirs or estate, as applicable) shall be
entitled to receive the amounts or benefits set forth below. The payments and
benefits provided pursuant to this Section 11 are (x) in lieu of any severance
or income continuation protection under any plan of the Activision Group that
may now or hereafter exist and (y) deemed to satisfy and be in full and final
settlement of all obligations of the Activision Group to you under this
Agreement. You shall have no further right to receive any other compensation
benefits following your termination of employment for any reason except as set
forth in this Section 11.

 

For the purposes of this Agreement, the following
terms shall have the following meanings:

 

“Basic Severance”
shall mean payment of (1) any earned but unpaid Base Salary through the
date of your termination; (2) any earned but unpaid Annual Bonus for any
fiscal year that ended prior to your termination; and (3) reimbursement of
approved expenses due to you pursuant to Section 5.

 

“Bonus Severance”
shall mean payment of a pro-rated annual bonus for the fiscal year in which
your termination of employment occurs, in an amount equal to the bonus you
would have received in accordance with Section 2(f) for such year if you had
remained employed through the date such bonus would have been paid, multiplied
by a fraction, the numerator of which is the number corresponding to the month
in which the Termination Date occurs and the denominator of which is 12. For
purposes of calculating the Bonus Severance, any personal, performance goals
will be deemed attained at the greater of (i) target performance and (ii)
actual performance.

 

“Termination Date”
shall mean the effective date of your termination of employment pursuant to
Sections 10(a)-(e).

 

(b)           Death. In
the event your employment is terminated under Section 10(e):

 

(i)            Your heirs or estate
shall receive payment of the Basic Severance in a lump sum within thirty (30)
days following the date of your death.

 

(ii)           Your heirs or estate
shall receive payment of the Bonus Severance in a lump sum on June 15th
of the year following the year in which your death occurs.

 

(iii)          Your heirs or estate
shall receive payment of an amount equal to three (3) times the Base Salary (at
the rate in effect at the time of your death) in a lump sum within
thirty (30) days following the date of your death.

 

(iv)          All Equity Awards that would have vested
during the twelve (12) months following your death shall immediately vest. All vested RSUs shall be paid in accordance with their terms and all vested
Options shall remain exercisable until the earlier of (i) one (1) year after
the date of your death or (ii) the original expiration date of the Options
(unless that date is within six (6) months of your death, in which case the
date that is six months

 

9

 

after your death). Any Equity Awards that do not
vest in accordance with this Section 11(b) will be
cancelled immediately.

 

(v)           Payments and benefits
under this Section 11(b) shall be in addition to any
payments your beneficiaries or estate may be entitled to receive pursuant to
any pension or employee benefit plan or life insurance policy maintained by the
Employer.

 

(c)           Termination
by the Employer Without Cause or by you for Good Reason. In the
event the Employer terminates your employment under Section 10(c) or you terminate your
employment under Section 10(d):

 

(i)            You shall receive
payment of the Basic Severance in a lump sum within thirty (30) days following
the Termination Date.

 

(ii)           During the period commencing on the
Termination Date and ending on the six (6) month anniversary of the Termination
Date (the “Initial Severance Period”), you shall receive payment of an amount
(the “Initial
Severance”) equal to the lesser of (x) the Base Salary (at the rate in effect on
the Termination Date) that you would have received had you remained employed
through the Expiration Date, (y) the Base Salary (at the rate in effect on the Termination Date) that you would have
received had you remained employed through the Initial Severance Period and (z)
the maximum amount payable pursuant to a “separation pay plan” as set forth in
Section 409A of the Code. Payment of the Initial Severance shall commence on
the date the Release (as defined in Section 11(c)(vi) below) becomes
effective and shall be paid in equal installments through the remainder of the Initial
Severance Period in accordance with the Employer’s payroll practices in effect
at the Termination Date. The Initial
Severance is intended to constitute a “separation payment plan” for purposes of Section
409A of the Code.

 

(iii)          During the period commencing on the first day
following the expiration of the Initial Severance Period and ending on
the Expiration Date (the “Additional Severance Period”) you shall receive payment of an amount (the
“Additional
Severance”) equal to the difference, if any between (x) the Base Salary (at the
rate in effect on the Termination Date) that you would have received had you
remained employed through the Expiration Date and (y) the Initial Severance. The
Additional Severance shall be paid in equal installments through the Additional
Severance Period in accordance with the Employer’s payroll practices in effect
at the time of Termination Date.

 

(iv)          You shall receive
payment of the Bonus Severance in a lump sum on the later of (x) June 15th
of the year following the year in which the Termination Date occurs and (y) the
first day following the end of the Initial Severance Period.

 

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(v)           All Equity Awards will continue to vest during
the twelve (12) months following the Termination Date. The vested RSUs shall be
paid in accordance with their terms and all vested Options shall remain
exercisable until the earlier of (x) thirty (30) days after the applicable
vesting date and (y) the original expiration date of the Options. Any
Equity Awards that do not vest in accordance with this Section 11(c) will be cancelled immediately.

 

(vi)          Payment of the Initial Severance, the Bonus
Severance, the Additional Severance and continued vesting of the Equity Awards pursuant
to this Section 11(c) are conditioned upon your execution of a waiver
and release agreement in a form prepared by the Employer (the “Release”) and the Release becoming
effective and irrevocable in its entirety. If the Release does not become effective and
irrevocable on or prior to the last date of the Initial Severance Period, you
shall not be entitled to any payments or benefits pursuant to this Section 11(b) other than the Basic Severance.

 

(vii)         If you are entitled to
receive payments as a result of a Disability pursuant to Section 9, then upon a
subsequent or concurrent termination of employment, you shall only be entitled
to the payments under Sections 11(c)(i), (iv) and (v).

 

(d)           Termination
For Cause or Termination In Breach of Section 10(a). In the event
your employment and this Agreement is terminated by the Employer under Section 10(b)
or you terminate your employment in breach of Section 10(a), then:

 

(i)            You shall receive
payment of the Basic Severance in a lump sum thirty (30) days following the
Termination Date; and

 

(ii)           All outstanding Equity
Awards shall cease to vest and, whether or not vested, shall no longer be
exercisable and shall be cancelled immediately.

 

(e)           Breach of
Post-termination Obligations. In the event that you breach any of
your obligations under Section 8, the Employer’s obligation, if any, to make
payments and provide benefits under Section 11 (other than payment of the Basic
Severance) shall immediately and permanently cease and you shall not be
entitled to any such payments or benefits. 

 

12.          General Provisions

 

(a)           Entire
Agreement. This Agreement and the Proprietary Information Agreement,
supersedes all prior or contemporaneous agreements and statements, whether
written or oral, concerning the terms of your employment with the Activision
Group, and no amendment or modification of these agreements shall be binding
unless it is set forth in a writing signed by both the Employer and you. To the
extent that this Agreement conflicts with any of the Employer’s policies,
procedures, rules or regulations, this Agreement shall supersede the other
policies, procedures, rules or regulations.

 

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(b)           Use of
Employee’s Name. Employer shall have the right, but not the
obligation, to use your name, voice or likeness for any publicity or
advertising purpose.

 

(c)           Assignment. The
Employer may assign this Agreement or all or any part of its rights and
obligations under this Agreement to any entity which succeeds to all or
substantially all of the Employer’s stock or assets (whether by merger,
acquisition, consolidation, reorganization or otherwise) and following such
assignment all references to the Employer shall be deemed to refer to such
assignee.

 

(d)           No Conflict
with Prior Agreements. You represent to the Employer that neither
your commencement of employment under this Agreement nor the performance of
your duties under this Agreement conflicts or will conflict with any
contractual or legal commitment on your part to any third party, nor does it or
will it violate or interfere with any rights of any third party.

 

(e)           Successors. This
Agreement shall be binding on and inure to the benefit of the Employer and its
successors and assigns. This Agreement shall also be binding on and inure to
the benefit of you and your heirs, executors, administrators and legal
representatives.

 

(f)            Waiver. No
waiver by you or the Employer at any time of any breach by the other party of,
or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
waiver of any provision of this Agreement shall be implied from any course of
dealing between or among the parties hereto or from any failure by any party
hereto to assert its rights hereunder on any occasion or series of occasions.

 

(g)           Prevailing
Law. Nothing contained in this Agreement shall be construed so as to
require the commission of any act contrary to law and wherever there is any
conflict between any provision of this Agreement and any present or future
statute, law, ordinance or regulation, the latter shall prevail, but in such
event the provision of this Agreement affected shall be curtailed and limited
only to the extent necessary to bring it within legal requirements.

 

(h)           Expiration. This
Agreement does not constitute a commitment of the Employer with regard to your
employment, express or implied, other than to the extent expressly provided for
herein. Upon the Expiration Date, or, if earlier, the termination of this
Agreement pursuant to Section 10, it is the contemplation of both parties that
your employment with the Activision Group shall cease, and that neither the Employer
nor you shall have any obligation to the other with respect to your continued
employment.

 

(i)            Taxation. The
Employer may withhold from any payments made under the Agreement all federal,
state, city or other applicable taxes as shall be required pursuant to any law,
governmental regulation or ruling.

 

(j)            Choice of
Law. Except to the extent governed by Federal law, this Agreement
shall be governed by and construed in accordance with the laws of the State of
California without regard to conflict of law principles.

 

12

 

(k)           Immigration.
In accordance with the Immigration Reform and Control Act of 1986,
employment under this agreement is conditioned upon satisfactory proof of your
identity and legal ability to work in the United States.

 

(l)            Arbitration.
All disputes relating to your employment (or its termination),
including disputes relating to your employment and this Agreement, shall be
resolved by final and binding arbitration in accordance with this Section. The
arbitration will be conducted by an impartial arbitrator experienced in
employment law selected from  the JAMS  panel of arbitrators in
accordance with JAMS then-current employment arbitration rules (except as
otherwise provided in this Section). You understand that the Employer and you are
waiving the right to institute a court action, except for requests for
injunctive relief pending arbitration, and understand that the Employer and you
are giving up any right to a jury trial. The Arbitrator’s award and opinion shall
be in writing and in the form typically rendered in labor and employment
arbitrations.

 

The Employer will pay any filing fee and the fees and
costs of the arbitrator, unless you initiate the claim, in which case you only
will be required to contribute an amount equal to the filing fee for a claim
initiated in a court of general jurisdiction in the State of California. The
arbitrator shall award attorneys’ fees and costs to the prevailing party,
unless prohibited by applicable law. This arbitration obligation shall not
prohibit the Employer or you from filing a claim with an administrative agency,
nor does it apply to claims for workers’ compensation or unemployment benefits,
or claims for benefits under an employee welfare or pension plan that specifies
a different dispute resolution procedure. The arbitration shall take place in
Santa Monica, California or the city in which you were last employed by the Employer,
unless the Employer and you agree otherwise.

 

(m)          Severability.
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under existing or future laws effective during the Term, such
provisions shall be fully severable, the Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
the illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal and enforceable.

 

(n)           Services
Unique. You recognize that the services being performed by you under
this Agreement are of a special, unique, unusual, extraordinary and
intellectual character giving them a peculiar value, the loss of which cannot
be reasonably or adequately compensated for in damages in the event of a breach
of this Agreement by you (particularly, but without limitation, with respect to
the provisions hereof relating to the exclusivity of your services and the
provisions of Sections 10 and 11 of this Agreement).

 

(o)           Injunctive
Relief. In the event of a breach of or threatened breach of the
provisions of this Agreement regarding the exclusivity of your services and the
provisions of Sections 8 and 10 of this Agreement, you agree that any remedy of
law would be inadequate.  Accordingly, you agree that the Employer is
entitled to obtain injunctive relief for

 

13

 

such breaches or
threatened breaches. The injunctive relief provided for in this Section 12(o)
is in addition to, and is not in limitation of, any and all other remedies at
law or in equity otherwise available to the applicable party. The parties agree
to waive the requirement of posting a bond in connection with a court or
arbitrator’s issuance of an injunction.

 

(p)           Subsequent
Employment. You shall receive the payments and benefits under
Section 11 (other than payment of the Basic Severance) only for the time period
that you do not obtain subsequent employment and/or provide services of any
kind for compensation, whether as principal, owner, partner, agent,
shareholder, director, employee, consultant, advisor or otherwise, to any
person, company, venture or other person or business entity. If, at any time,
you obtain subsequent employment or provide services as set forth in the prior
sentence, payments and benefits under Section 11 shall cease immediately.

 

(q)           Remedies
Cumulative. The remedies in this Agreement are not exclusive, and
the parties shall have the right to pursue any other legal or equitable
remedies to enforce the terms of this Agreement.

 

(r)            Headings. The
headings set forth herein are included solely for the purpose of identification
and shall not be used for the purpose of construing the meaning of the
provisions of this Agreement.

 

(s)           Section 409A.

 

(i)            If any amounts that
become due under this Agreement constitute “nonqualified deferred compensation”
within the meaning of Section 409A of the Code, payment of such amounts shall
not commence until you incur a “Separation from Service” (as defined
below).

 

(ii)           Notwithstanding anything herein to the contrary, if you are a “Specified Employee,” for purposes of Section 409A of the Code, on
the date on which you incur a Separation from Service, any payment hereunder
that provides for the “deferral
of compensation” within the
meaning of Section 409A of the Code shall not be paid or commence to be paid on
any date prior to the first business day after the date that is six months
following your “Separation from Service” (the “409A Suspension Period”); provided, however, that a
payment delayed pursuant to the preceding clause shall commence earlier in the
event of your death prior to the end of the six-month period. Within 14
calendar days after the end of the 409A Suspension Period, you shall be paid
a lump sum payment in cash equal to any payments delayed because of the
preceding sentence. Thereafter, you shall receive any remaining
benefits as if there had not been an earlier delay.

 

(iii)          For purposes of this
Agreement, “Separation from Service” shall
have the meaning set forth in Section 409A(a)(2)(i)(A) of the Code and
determined in accordance with the default rules under Section 409A of the Code.
“Specified Employee” shall have the
meaning set forth in

 

14

 

Section 409A(a)(2)(B)(1)
of the Code, as determined in accordance with the uniform methodology and
procedures adopted by the Employer and then in effect.

 

(iv)          Anything in this
Agreement to the contrary notwithstanding, no reimbursement payable to you
pursuant to any provisions of this Agreement or pursuant to any plan or
arrangement of the Activision Group covered by this Agreement shall be paid
later than the last day of the calendar year following the calendar year in
which the related expense was incurred, except to the extent that the right to
reimbursement does not provide for a “deferral of compensation” within the
meaning of Section 409A of the Code. No amount reimbursed during any calendar
year shall affect the amounts eligible for reimbursement in any other calendar
year.

 

(v)           The
provisions of this Agreement are intended to satisfy the applicable
requirements of Section 409A of the Code with respect to amounts subject
thereto and shall be performed, interpreted and construed consistent with such
intent. If any provision of this Agreement does not satisfy such requirements
or could otherwise cause you to recognize income under Section 409A of the Code,
you and the Employer agree to negotiate in good faith an appropriate
modification to maintain, to the maximum extent practicable, the original
intent of the applicable provision without violating the requirements of Section
409A of the Code or otherwise causing the recognition of income thereunder.

 

(t)            Section 280G. Notwithstanding anything
herein to the contrary, in the event that you receive any payments or
distributions, whether payable, distributed or distributable pursuant to the
terms of this Agreement or otherwise, that constitute “parachute payments”
within the meaning of Section 280G of the Code, and the net after-tax
amount of the parachute payment is less than the net after-tax amount if the
aggregate payment to be made to you were three times your “base amount” (as
defined in Section 280G(b)(3) of the Code), less $1.00, then the aggregate
of the amounts constituting the parachute payment shall be reduced to an amount
that will equal three times your base amount, less $1.00. The determinations to
be made with respect to this Section 12(s) shall be made by a certified
public accounting firm designated by the Employer.

 

(u)           Survivability.
The provisions of Sections 2(f), 8, 12(l), 12(m), 12(o), 12(p) and
12(r) shall survive the termination or expiration of this Agreement.

 

(v)           Counterparts.
This Agreement may be executed in counterparts, each of which shall
be deemed an original and all of which together shall constitute one and the
same instrument.

 

(w)          Legal
Counsel. You acknowledge that you have been given the opportunity to
consult with legal counsel or any other advisor of your own choosing regarding
this Agreement. You understand and agree that any attorney retained by the
Employer or any member of

 

15

 

management who has
discussed any term or condition of this Agreement with him or with you is only
acting on behalf of the Employer and not on your behalf.

 

(x)            Right to
Negotiate. You hereby acknowledge that you have been given the
opportunity to participate in the negotiation of the terms of this Agreement. You
acknowledge and confirm that you have read this Agreement and fully understand
its terms and contents.

 

13.          Notices

 

All notices which either party is required or may
desire to give the other shall be in writing and given either personally or by
depositing the same in the United States mail addressed to the party to be
given notice as follows:

 

 

	
  To the Employer:

  	
  Activision Publishing, Inc.

  3100 Ocean Park Boulevard

  Santa Monica, California 90405 

  Attention:  Chief Executive Officer

  
	
   

  	
   

  
	
  To You:

  	
  55 E. Erie Street, #4201

  Chicago, IL 60611

  
	
   

  	
   

  
	
  With a copy to:

  	
  Russell F. Conn, Esq.

  
	
   

  	
  Conn Kavanaugh Rosenthal 

  Peisch & Ford, LLP

  
	
   

  	
  Ten Post office Square

  
	
   

  	
  Boston, MA  02109

  

 

Either party may by written notice designate a
different address for giving of notices. The date of mailing of any such
notices shall be deemed to be the date on which such notice is given.

 

	
  ACCEPTED AND AGREED TO:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Employer

  	
   

  	
  Employee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ACTIVISION PUBLISHING, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael Griffith

  	
   

  	
  /s/ Ann Weiser

  
	
   

  	
  Michael Griffith

  	
  Ann Weiser

  	
   

  
	
   

  	
  Chief Executive Officer and President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  September 13, 2007

  	
   

  	
  Date:

  	
  September 17, 2007

  
							

 

16

 

Exhibit A

 

Proprietary Information Agreement

 

[TO COME]

 

17Exhibit 10.9

[***] DENOTES CONFIDENTIAL MATERIALS OMITTED AND
FILED

SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION

PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

 

CONFIDENTIAL
LICENSE AGREEMENT

FOR
THE Wii CONSOLE

(Western Hemisphere)

THIS LICENSE AGREEMENT (“Agreement”) is entered into
between NINTENDO OF AMERICA INC. (“NOA”) at 4820 150th Avenue N.E., Redmond, WA
 98052 Attn: General Counsel (Fax:
425-882-3585) and ACTIVISION PUBLISHING, INC. (“LICENSEE”) at 3100 Ocean Park
Blvd., Santa Monica, CA 90405 Attn:  Suzan Rude (Fax: 310-255-2100).  NOA and LICENSEE agree as follows:

1.                                      RECITALS

 

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

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

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

2.                                      DEFINITIONS

 

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

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

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

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

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

2.6           “Effective Date” means October 12,
2006.

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

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

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

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

 

2.11         “Intellectual Property Rights” means
individually, collectively or in any combination, Proprietary Rights owned,
licensed or otherwise held by Nintendo that are associated with the
development, manufacturing, advertising, marketing or sale of the Licensed
Products, including, without limitation, (a) registered and unregistered
trademarks and trademark applications used in connection with Wii including
Nintendo®, WiiTM, Official Nintendo Seal of Quality®, and MiiTM , (b) select
trade dress associated with Wii and licensed video games for play thereon, (c)
Proprietary Rights in the Security Technology employed in the Games or Game
Discs by Nintendo, (d) rights in the Development Tools for use in developing
the Games, excluding, however, rights to use, incorporate or duplicate select
libraries, protocols and/or sound or graphic files associated with the
Development Tools which belong to any third party and for which no additional
licenses or consents are required, (e) patents, design registrations or
copyrights which may be associated with the Game Discs or Printed Materials,
(f) copyrights in the Guidelines, and (g) other Proprietary Rights of Nintendo
in the Confidential Information.

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

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

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

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

2.16         “Notice” means any notice permitted or
required under this Agreement.  All
notices shall be sufficiently given when (a) personally served or delivered, or
(b) transmitted by facsimile, with an original sent concurrently by first class
U.S. mail, or (c) deposited, postage prepaid, with a guaranteed air courier
service, in each case addressed as stated herein, or addressed to such other
person or address either party may designate in a Notice.  Notice shall be deemed effective upon the
earlier of actual receipt or two (2) business days after transmittal, provided,
however, any Notice received after the recipient’s normal business hours will
be deemed received on the next business day.

2.17         “Price Schedule” means the then current
version of NOA’s schedule of purchase prices and minimum order quantities for
the Bulk Goods.

2.18         “Printed Materials” means a plastic
disc storage case, title page, instruction booklet, warranty card and poster
incorporating the Artwork.

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

2.20         “Proprietary Rights” means any rights
or applications for rights owned, licensed or otherwise held in patents,
trademarks, service marks, copyrights, mask works, trade secrets, trade dress,
moral rights and publicity rights, together with all inventions, discoveries,
ideas, technology, know-how, data, information, processes, formulas, drawings
and designs, licenses, computer programs, software source code and object code,
and all amendments, modifications, and improvements thereto for which such
patent, trademark, service mark, copyright mask work, trade secrets, trade
dress, moral rights or publicity rights may exist or may be sought and obtained
in the future.

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

 

2

 

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

2.23                           “Security Technology” means the highly
proprietary security features of the Wii 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 Wii, or limits distribution outside of the Territory.

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

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

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

3.                                      GRANT
OF LICENSE; LICENSEE RESTRICTIONS

 

3.1                                 Limited License Grant. 
For the Term and for the Territory, NOA grants to LICENSEE a
nonexclusive, nontransferable, limited license to use the Intellectual Property
Rights to develop (or have developed on LICENSEE’s behalf) Games for
manufacture, advertising, marketing and sale by LICENSEE as Licensed Products,
subject to the terms and conditions of this Agreement.  Except as permitted under a separate written
authorization from Nintendo, LICENSEE shall not use the Intellectual Property
Rights for any other purpose.

3.2                                 LICENSEE Acknowledgement. 
LICENSEE acknowledges (a) the valuable nature of the Intellectual
Property Rights, (b) the right, title and interest of Nintendo in and to the
Intellectual Property Rights, and (c) the right, title, and interest of
Nintendo in and to the Proprietary Rights associated with all aspects of
Wii.  LICENSEE recognizes that the
Development Tools, Games, Game Discs and Licensed Products will embody valuable
rights of Nintendo and Nintendo’s licensors. 
LICENSEE represents and warrants that it will not undertake any act or
thing which in any way impairs or is intended to impair any part of the right,
title, interest or goodwill of Nintendo in the Intellectual Property
Rights.  LICENSEE’s use of the
Intellectual Property Rights shall not create any right, title or interest of
LICENSEE therein.  Licensee is authorized
and permitted to develop Games, and have manufactured, advertise, market, and
sell Licensed Products, only for play on Wii and only in accordance with this
Agreement.

3.3                                 LICENSEE Restrictions and Prohibitions. 
LICENSEE is not licensed to and covenants that, without the express,
written consent of NOA, it will not at any time, directly or indirectly, do or
cause to be done any of the following:

(a)           grant access to, distribute, transmit
or broadcast a Game by electronic means or by any other means known or
hereafter devised, including, without limitation, by wireless, cable, fiber
optic, telephone lines, microwave, radiowave, computer or other device network,
except (a) as a part of wireless Game play on and among Wii systems, or between
Wii and Nintendo DS systems (b) for the purpose of facilitating Game
development under the terms of this Agreement, or (c) as otherwise approved in
writing by Nintendo.  LICENSEE shall use
reasonable security measures, customary within the high technology industry, to
reduce the risk of unauthorized interception or retransmission of any Game
transmission.  No right of retransmission
shall attach to any authorized transmission of a Game;

 

3

 

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

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

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

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

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

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

3.4                                 No Free-Riding; No Co-Publishing
Arrangements.  To protect Nintendo’s valuable Intellectual
Property Rights, to prevent the dilution of Nintendo’s trademarks and to
preclude free-riding by third parties on the goodwill associated with Nintendo’s
trademarks, the license granted under this Agreement is limited to LICENSEE and
may not be delegated or contracted out for the benefit of a third party, or to a
division, affiliate, or subsidiary of LICENSEE. 
This Agreement, together with all submissions, representations,
undertakings and approvals contemplated of LICENSEE by this Agreement, is and
shall remain the right and obligation only of LICENSEE.  All Printed Materials and Marketing Materials
for a Game shall prominently and accurately identify LICENSEE as NOA’s
licensee.  NOA does not permit the
designation or identification of any third party co-publisher for a Game on any
Game Disc or Game Disc label Artwork, however, LICENSEE may identify a third
party as a co-publisher, licensor, developer or other partner of LICENSEE in
those Printed Materials (other than the Game Disc label), Marketing Materials
or Game credits, as authorized under the Guidelines.  For purposes of clarification, LICENSEE’s
name, or logo, will appear on the Licensed Product Game Disc case and Game Disc
label as it appears in the preamble of this Agreement.

3.5                                 Development Tools. 
NOA and Nintendo Co., Ltd. may lease, loan or sell Development Tools to
LICENSEE to assist in the development of Games under this Agreement.  Ownership and use of any Development Tools
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 Toots, 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.  LICENSEE shall not, directly or indirectly,
(a) use the Development Tools for any purpose except the design and development
of Games under this Agreement, (b) reproduce or create derivatives of the
Development Tools, except in association with the development of Games under
this Agreement, (c) Reverse Engineer the Development Tools, or (d) sell, lease,
assign, lend, license, encumber or otherwise transfer the Development
Tools.  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

 

4

 

considered a derivative work of the Intellectual
Property Rights and shall belong to Nintendo, but may be retained and utilized
by LICENSEE in connection with this Agreement. 
In no event shall LICENSEE (i) seek, claim or file for any patent,
copyright or other Proprietary Right with regard to any such derivative work,
(ii) make available any such derivative work to any third party, or (iii) use
any such derivative work except in connection with the design and development
of Games under this Agreement.  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 Development Tools.  Notwithstanding any referral or information
provided or posted regarding third-party Development Tools, NOA and Nintendo
Co., Ltd. make no representations or warranties with regard to any such
third-party Development Tools.  LICENSEE
acquires and utilizes third-party Development Tools at its own risk.

3.6           Third Party Developers.  LICENSEE shall not disclose the Confidential
Information, the Guidelines or the Intellectual Property Rights to any
Independent Contractor, nor permit any Independent Contractor to perform or
assist in development work for a Game, unless and until such Independent
Contractor has signed a confidentiality agreement with LICENSEE that is no less
restrictive than the terms of Section 8 below, and that expressly includes the
following language [***]:

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

[***] DENOTES CONFIDENTIAL
MATERIALS OMITTED AND FILED  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION  PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

 

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

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

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

 

5

 

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

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

4.                                      SUBMISSION
AND APPROVAL OF GAME AND ARTWORK

 

4.1           Submission of a Completed Game to
NOA.  Upon completion of a Game,
LICENSEE shall deliver a prototype of the Game to NOA in a format specified in
the Guidelines.  Delivery shall be made
in accordance with the methods set forth in the Guidelines.  Each Submission shall include such other
information or documentation deemed necessary by NOA, including, without
limitation, a complete set of written user instructions, a complete description
of any security holes, backdoors, time bombs, cheats, “easter eggs” or other
hidden features or characters in the Game and a complete screen text
script.  LICENSEE must establish that the
Game and any other content included on the Game Disc complies with the
Advertising Code of Conduct of the Entertainment Software Ratings Board (“ESRB”)
and that the Game has been rated EC, E, El0+, T or M (or another non-Adult Only
category added by the ESRB) by the ESRB. 
LICENSEE shall provide NOA with a certificate of rating for the Game
issued by the ESRB.

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

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

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

4.5           Cost of Check Discs and Disc
Stamper.  If LICENSEE: (a)
disapproves the Check Discs for any reason; (b) fails to order the minimum
order quantity of any Game approved by NOA within six (6) months after the date
the Game was first approved by NOA; or (c) submits a revised version of the
Game to NOA after production of such Game has commenced, LICENSEE shall
reimburse NOA (or its designee) for the reasonable estimated cost of the
production of the Check Discs, including the cost of

 

6

 

the disc stamper. 
The payment will be due (i) thirty (30) days after NOA’s written
notification to LICENSEE of the Check Disc fee due NOA because of LICENSEE’s
failure to approve such Check Disc; (ii) six (6) months after the date the Game
was first approved by NOA; or (iii) upon the subsequent submission by LICENSEE
of a revised version of the Game to NOA, as the case may be.

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

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

5.                                      ORDER
PROCESS, PURCHASE PRICE, PAYMENT AND DELIVERY

 

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

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

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

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

5.5           Rebate Program.  NOA, at its sole option, may elect to offer
LICENSEE a Rebate Program.  The terms and
conditions of any Rebate Program shall be subject to NOA’s sole discretion.

 

7

 

LICENSEE shall not be entitled to offset any claimed
rebate amount against other amounts owing NOA. 
No interest shall be payable by NOA to LICENSEE on any claimed
rebate.  The Rebate Program is subject to
change or cancellation by NOA at any time without Notice.

6.                                      MANUFACTURE
OF THE LICENSED PRODUCT

 

6.1           Manufacturing.  Nintendo Co., Ltd. shall be the exclusive
source for the manufacture of the Game Discs, Check Discs and Promotional
Discs, with responsibility for all aspects of the manufacturing process,
including the selection of the locations and specifications for any
manufacturing facilities, determination of materials and processes, appointment
of suppliers and subcontractors and management of all work-in-progress.  Upon acceptance by NOA of a purchase order
from LICENSEE and receipt of payment as provided for at Section 5.3 herein, NOA
shall place the order with Nintendo Co., Ltd. who shall (through its suppliers
and subcontractors) arrange for manufacturing.

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

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

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

6.5           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 NOA with (a) six (6) samples of the fully assembled
Licensed Product, and (b) seventy-five (75) samples of the LICENSEE produced
Printed Materials (excluding the plastic disc storage case, warranty card, and
poster) for such Game title.

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

 

8

 

7.                                      MARKETING
AND ADVERTISING

 

7.1           Approval of Marketing Materials.  LICENSEE represents and warrants that the
Printed Materials and the Marketing Materials shall be of high quality and
comply with (a) the Guidelines, (b) the ESRB’s Advertising Code of Conduct and
Principles and Guidelines for Responsible Advertising, and (c) all applicable
laws and regulations in those jurisdictions in the Territory where they will be
used or distributed, including without limitation all applicable privacy laws such
as the Children’s Online Privacy Protection Act.  Prior to actual use or distribution, LICENSEE
shall submit to NOA for review samples of all proposed Marketing
Materials.  NOA shall, within ten (10)
business days of receipt, approve or disapprove of the quality of such
samples.  If any of the samples are
disapproved, NOA shall specify the reasons for such disapproval and state what
corrections and/or improvements are necessary. 
After making the necessary corrections and/or improvements, LICENSEE
shall submit revised samples for approval by NOA.  No Marketing Materials shall be used or
distributed by LICENSEE without NOA’s prior written approval.  NOA shall not unreasonably withhold or delay
its approval of any proposed Marketing Materials.

7.2           No Bundling.  To protect Nintendo’s valuable Intellectual
Property Rights, to prevent the dilution of Nintendo’s trademarks and to
preclude free-riding by non-licensed products on the goodwill associated with
Nintendo’s trademarks, LICENSEE shall not market or distribute any Games or
Game Discs that have been bundled with (a) any peripheral designed for use with
Wii that has not been licensed or approved in writing by NOA, or (b) any other
product or service where NOA’s association, approval or endorsement might be
suggested by bundling the products or services.

7.3           Warranty and Repair.  LICENSEE shall provide the original consumer
with a minimum ninety (90) day limited warranty on all Licensed Products.  LICENSEE shall also provide reasonable
product service, including out-of-warranty service, for all Licensed
Products.  LICENSEE shall make such
warranty and repair information available to consumers as required by
applicable federal and state law.

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

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

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

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

7.8           Nintendo Gateway System.  To promote and increase demand for games on
Nintendo video game systems, NOA licenses select games in various non-coin
activated commercial settings such as commercial airlines, cruise ships, rail
systems and hotels, where customers play games on specially adapted Nintendo
video game hardware referred to as the “Nintendo Gateway System”.  If NOA identifies

 

9

 

a Game for possible license on the Nintendo Gateway
System, the parties agree to conduct good faith negotiations to determine
commercially reasonable terms for such participation.

8.                                      CONFIDENTIAL
INFORMATION

 

8.1           Definition.  Confidential Information means information
provided to LICENSEE by Nintendo or any third party working with Nintendo
relating to the hardware and software for Wii or the Development Tools,
including, but not limited to, (a) all current or future information, know-how,
techniques, methods, information, tools, emulator hardware or software,
software development specifications, proprietary manufacturing processes and/or
trade secrets, (b) any information on patents or patent applications, (c) any
business, legal, marketing, 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 directly or indirectly from Nintendo
under an obligation of confidentiality which is still in force, and (iii) data
and information which LICENSEE can show was received by it from a third party
who did not acquire the same directly or indirectly from Nintendo and to whom
LICENSEE has no obligation of confidentiality.

8.2           Disclosures Required by Law.  LICENSEE shall be permitted to disclose
Confidential Information if such disclosure is required by an authorized
governmental or judicial entity, provided that LICENSEE shall notify NOA at
least thirty (30) days prior to such disclosure.  LICENSEE shall use its best efforts to limit
the disclosure to the greatest extent possible consistent with LICENSEE’s legal
obligations, and if required by NOA, shall cooperate in the preparation and
entry of appropriate protective orders.

8.3           Disclosure and Use.  NOA may provide LICENSEE with highly
confidential development information, Guidelines, Development Tools, systems,
specifications and related resources and information constituting and
incorporating the Confidential Information to assist LICENSEE in the
development of Games.  LICENSEE agrees to
maintain all Confidential Information as strictly confidential and to use such
Confidential Information only in accordance with this Agreement.  LICENSEE shall limit access to the
Confidential Information to LICENSEE’s employees, and Independent Contractors
that are in compliance with the requirements of Section 3.6 above, having a
strict need to know and shall advise such individuals of their obligation of
confidentiality as provided herein. 
LICENSEE shall require each such individual retain in confidence the
Confidential Information pursuant to a written non-disclosure agreement with
LICENSEE.  LICENSEE shall use its best
efforts to ensure that individuals who are permitted hereunder to work with or
otherwise having access to Confidential Information shall not disclose or make
any unauthorized use of the Confidential Information.

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

 

10

 

8.5           Notification Obligations.  LICENSEE shall promptly notify NOA of the
unauthorized use or disclosure of any Confidential Information by LICENSEE or
any of its employees, or any Independent Contractor or its employees, and shall
promptly act to recover any such information and prevent further breach of the obligations
herein.  The obligations of LICENSEE set
forth herein are in addition to and not in lieu of any other legal remedy that
may be available to NOA under this Agreement or applicable law.

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

9.                                      REPRESENTATIONS
AND WARRANTIES

 

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

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

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

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

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

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

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

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

9.4                                 GENERAL DISCLAIMER. 
NOA (ON ITS OWN BEHALF AND ON BEHALF OF NINTENDO CO., LTD. AND ITS
AFFILIATES, LICENSORS, SUPPLIERS AND SUBCONTRACTORS) EXPRESSLY DISCLAIMS ANY
AND ALL WARRANTIES WITH RESPECT TO THE BULK GOODS AND THE LICENSED PRODUCTS,
INCLUDING, WITHOUT LIMITATION, THE SECURITY TECHNOLOGY.  LICENSEE PURCHASES AND ACCEPTS ALL BULK GOODS
AND LICENSED PRODUCTS ON AN “AS IS” AND ‘WHERE IS” BASIS.  NOA (ON ITS OWN BEHALF AND ON BEHALF OF
NINTENDO CO., LTD.

 

11

 

AND ITS AFFILIATES, LICENSORS, SUPPLIERS AND
SUBCONTRACTOR) EXPRESSLY DISCLAIMS ALL WARRANTIES UNDER THE APPLICABLE LAWS OF
ANY COUNTRY, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A GENERAL OR PARTICULAR PURPOSE.

9.5                                 LIMITATION OF LIABILITY. 
TO THE MAXIMUM EXTENT PERMITTED BY LAW, NEITHER NOA NOR NINTENDO CO.,
LTD. (NOR THEIR AFFILIATES, LICENSORS, SUPPLIERS OR SUBCONTRACTORS) SHALL BE
LIABLE FOR LOSS OF PROFITS, OR FOR ANY SPECIAL, PUNITIVE, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OF LICENSEE OR ITS CUSTOMERS ARISING OUT OF OR RELATED TO
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE BREACH OF THIS AGREEMENT BY
NOA, THE MANUFACTURE OF THE BULK GOODS OR THE USE OF THE BULK GOODS ON ANY
NINTENDO VIDEO GAME SYSTEM BY LICENSEE OR 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 costs and any 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 federal, state, or foreign law or regulation, or the rules
of any self-regulatory body (e.g., ESRB).

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

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

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

(c)           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, Promotional
Materials or the Marketing Materials.

NOA
and LICENSEE shall give prompt Notice to the other of any Claim which is or
which may be
subject to indemnification under this Section 10.  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.  NOA may, at
its own expense, participate in such action or proceeding with counsel of its
own choice.  LICENSEE shall not enter
into any settlement of any Claim in which (i) NOA or Nintendo Co., Ltd. has
been named as a party, or (ii) Intellectual Property Rights have been asserted,
without NOA’s prior written consent.  NOA
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.  Such policy of insurance shall be
in an amount of not less than Five Million Dollars ($5,000,000 US) on a per
occurrence basis and shall provide for adequate protection against any
Claims.  Such policy shall name NOA and
Nintendo Co., Ltd. as additional insureds and shall specify it may not be
canceled without thirty (30) days’ prior written Notice to NOA.  A Certificate of Insurance shall be provided
to NOA’s Licensing Department not later than the date of the initial order of
Bulk Goods under this Agreement.  If
LICENSEE fails to provide NOA’s Licensing

 

12

 

Department 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, NOA, in its sole discretion may 1) terminate this
Agreement in accordance with Section 13.2 herein; and/or 2) secure comparable
insurance, at LICENSEE’s expense, for the sole benefit and protection of NOA
and Nintendo Co., Ltd. .

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

11.                               PROTECTION
OF PROPRIETARY RIGHTS

 

11.1                           Joint Actions against Infringers. 
LICENSEE and NOA may agree to jointly pursue cases of infringement
involving the Licensed Products, as such Licensed Products will contain
Proprietary Rights owned by each of them. 
Unless the parties otherwise agree, or unless the recovery is expressly
allocated between them by the court, in the event of such an action, any
recovery shall be used first to reimburse LICENSEE and NOA for their respective
reasonable attorneys’ fees and costs, pro rata, and any remaining recovery
shall be distributed to LICENSEE and NOA, pro rata, based upon the fees and
costs incurred in bringing such action.

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

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

12.                               ASSIGNMENT

 

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

12.2                           No Assignment by LICENSEE. 
This Agreement and the subject matter hereof are personal to
LICENSEE.  No Assignment of LICENSEE’s
rights or obligations hereunder shall be valid or effective without NOA’s prior
written consent, which consent may be withheld by NOA for any reason whatsoever
in its sole discretion.  In the event of
an attempted Assignment in violation of this provision, NOA shall have the
right at any time, at its sole option, to immediately terminate this
Agreement.  Upon

 

13

 

such termination, NOA shall have no further obligation
under this Agreement to LICENSEE or to LICENSEE’s intended or purported
assignee.

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

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

13.                               TERM
AND TERMINATION

 

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

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

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

13.4                           Termination Other Than by Breach. 
Upon the expiration of this Agreement or its termination other than by
LICENSEE’s breach, LICENSEE shall have a period of one hundred eighty (180)
days to sell any unsold Licensed Products. 
All Licensed Products in LICENSEE’s control following the expiration of
such sell-off period shall be destroyed by LICENSEE within ten (10) days and
Notice of such destruction (with proof certified by an officer of LICENSEE)
shall be delivered to NOA.

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

13.6                           Breach of NDA or other NOA License Agreements. 
At NOA’s option, any breach by LICENSEE of (a) the NDA, or (b) any other
license agreement between NOA and LICENSEE relating to the development of games
for any Nintendo video game system, which breach is not cured within the time
period for cure allowed under the applicable agreement, shall be considered a
material breach of this Agreement entitling NOA to terminate this Agreement in
accordance with Section 13.5 herein.

13.7                           No Further Use of the Intellectual
Property Rights.  Upon expiration 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 NOA all Development Tools provided to
LICENSEE by Nintendo, and (b) return to NOA or destroy any and all

 

14

 

copies of materials constituting, relating to, or
disclosing any 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 NOA.

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

14.                               GENERAL
PROVISIONS

 

14.1         Export Control.  LICENSEE agrees to comply with the export
laws and regulations of the United States and any other country with
jurisdiction over the Intellectual Property Rights, the Licensed Products or
the Development Tools.

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

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

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

14.5         Survival.  In addition to those rights specified
elsewhere in this Agreement, the rights and obligations set forth in Sections
3, 8, 9, 10, 11, 12.4, 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 the State of Washington, without regard to its conflict of laws
principles.  Any legal actions (including
judicial and administrative proceedings) with respect to any matter arising
under or growing out of this Agreement, shall be brought in a court of
competent jurisdiction in King County, Washington.  Each party hereby consents to the
jurisdiction and venue of such courts for such purposes.

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

 

15

 

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

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

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

 

	
  NOA:

  	
   

  	
  LICENSEE :

  
	
  NINTENDO OF AMERICA INC.

  	
   

  	
  ACTIVISION PUBLISHING, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ James R. Cannataro

  	
   

  	
  By:

  	
  /s/ Greg Deutsch

  
	
  Name:

  	
  James R. Cannataro

  	
   

  	
  Name:

  	
  Greg Deutsch

  
	
  Title:

  	
  Executive VP, Administration

  	
   

  	
  Title:

  	
  Vice President, Business and Legal Affairs

  
	
  Date:

  	
  Sept. 26, 2007

  	
   

  	
  Date:

  	
  Sept. 12, 2007

  

 

 

16

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