Document:

Exhibit 10.26

 

PURCHASE AGREEMENT

 

Dated As Of April 20,
2005

 

Among

 

JAMDAT Mobile (Hawaii) LLC,

 

JAMDAT Mobile Inc.,

 

Blue Lava Wireless, LLC,

 

Henk B. Rogers 2005
Dynasty Trust, Akemi M. Rogers 2005 Dynasty Trust,

 

Henk Rogers and Akemi
Rogers

 

 

PURCHASE
AGREEMENT

 

THIS PURCHASE AGREEMENT dated as of April 20, 2005 (this “Agreement”),
is by and among: JAMDAT Mobile (Hawaii) LLC, a Delaware limited liability
company (“Buyer”), JAMDAT Mobile Inc., a Delaware corporation (“JAMDAT”),
Blue Lava Wireless, LLC, a Hawaii limited liability company (the “Company”),
and Henk Rogers, an individual (“Henk Rogers”), and Akemi Rogers, an
individual (“Akemi Rogers,” and collectively with Henk Rogers and Akemi
Rogers, the “Individual Members”), and Henk B. Rogers 2005 Dynasty
Trust, a trust formed under the laws of Hawaii (“Family Trust I”), and Akemi
M. Rogers 2005 Dynasty Trust, a trust formed under the laws of Hawaii (“Family
Trust II,” and collectively with the Family Trust I, the “Trust Members”).  The Individual Members and the Trust Members
are the owners of 100% of the limited liability company membership interests of
the Company, and are collectively referred to herein as, the “Members”).

 

RECITALS

 

A.                                   The parties hereto
desire that on the Closing Date, the Members will sell and assign to Buyer, and
Buyer will purchase and accept, all of the Members’ Membership Interests in the
Company (the “Sale”), which Sale will result in Buyer acquiring 100% of
the membership interests of the Company in exchange for cash and shares of
JAMDAT Common Stock, $0.0001 par value per share (“JAMDAT Common Stock”).

 

B.                                     All of the Members of the Company have
approved the Sale pursuant to the terms of this Agreement and in accordance
with the applicable provisions of the Hawaii Uniform Limited Liability Company
Act and all other applicable Legal Requirements.

 

C.                                     The Boards of Directors of JAMDAT and the
Buyer, have approved the Sale pursuant to the terms of this Agreement and the
other transactions contemplated hereby in accordance with Delaware General
Corporation Law and all other applicable Legal Requirements.

 

D.                                    In connection with the Sale and the other
transactions contemplated hereby, the parties hereto desire to set forth
certain representations, warranties and covenants made by each to the other or
others as an inducement to the consummation of the Sale, upon the terms and
subject to the conditions contained herein.

 

E.                                      In connection with the Sale, the Members
on the one hand, and the Buyer on the other, are willing to indemnify the other
against certain losses and Liabilities that may occur as a result of the Sale
and the operations of the Company, in each case, upon the terms and subject to
the conditions contained herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual
covenants and promises contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:

 

1

 

ARTICLE 1

 

DEFINITIONS

 

1.1                                 Defined Terms. 
As used herein, the terms below shall have the following meanings.  Any of such terms, unless the context
otherwise requires, may be used in the singular or plural, depending upon the
reference.

 

“Accounts Receivable” is defined in
Section 5.8.

 

“Acquisition Proposal” means any proposal for a
sale, purchase, exchange, merger or other transaction involving the direct or
indirect acquisition of all, or a substantial portion of the equity interest in
or the assets of, the Company, other than the transactions contemplated by this
Agreement.

 

“Affiliate” shall have the meaning set forth in
the Exchange Act.  Without limiting the
foregoing, all directors and officers of a Person that is a corporation and all
managers and managing members of a Person that is a limited liability company,
shall be deemed Affiliates of such Person for all purposes hereunder.

 

“Affiliate Indebtedness” shall mean any and all
Liabilities of the Company to any of the Members or any of their respective
Affiliates other than the Company.

 

“Affiliated Tetris Companies” means the
Company, The Tetris Company, LLC, a Delaware limited liability company, Tetris
Holding, LLC, a Delaware limited liability company, Games International, LLC, a
Delaware limited liability company, Elorg Company, LLC, a Delaware limited
liability company, Blue Planet Software, Inc., a Hawaii corporation and each of
such Person’s successors.

 

“Agreement” is defined in the first paragraph
of this Agreement.

 

“Applicable Contract” shall mean any Contract
(a) under which the Company has or may acquire any rights, (b) under
which the Company has or may become subject to any Liability, or (c) by
which the Company or any of the assets owned or used by it is or may become
bound or to which the Company or any of the assets owned or used by it is or
may be subject.

 

“Benefit Plans” is defined in Section 5.11(a).

 

“Business” shall mean (i) the development
and distribution of downloadable wireless entertainment applications for mobile
telephone and other mobile devices and (ii) any business in which the
Company has been engaged as of the date of this Agreement.

 

“Business Day” means a day other than Saturday,
Sunday or any day on which banks located in the States of Hawaii and California
are authorized or obligated to close.

 

“Buyer” is defined in the first paragraph of
this Agreement.

 

2

 

“Buyer Advance” means the amount of $5,000,000.00
paid to the Company under that certain letter regarding exclusivity period from
JAMDAT to the Company dated March 23, 2005 that has not been repaid as of the
Closing.

 

“Buyer’s Disclosure Schedules” shall mean the
schedules and disclosures prepared and delivered by JAMDAT and the Buyer for
and to the Members and dated as of the date hereof which set forth any
exceptions to the representations and warranties of JAMDAT and Buyer contained
herein and certain other information called for by this Agreement.  Unless otherwise specified, each reference in
this Agreement to any numbered schedule is a reference to that numbered
schedule which is included in the Disclosure Schedules.

 

“Buyer Indemnified Parties” is defined in
Section 8.2(b).

 

“Buyer Tax Contest” is defined in
Section 8.5.

 

“Calendar Quarter” shall mean each
three (3) month quarter (or portion thereof) ending on March 31, June
30, September 30 or December 31.

 

“Capital Change” is defined in Section 2.2(b).

 

“Claim” is defined in Section 8.2(e).

 

“Claim Notice” is defined in Section 8.2(e).

 

“Closing” is defined in Section 4.1.

 

“Closing Cash” is defined in Section 2.2(a)(ii).

 

“Closing Consideration” is defined in Section
2.2(a)(iii).

 

“Closing Date” is defined in Section 4.1.

 

“Closing Net Cash or Net Debt Statement” is
defined in Section 2.5.

 

“Closing Shares” is defined in Section 2.2(a)(iii).

 

“Company Closing Payments” is defined in
Section 2.2(c).

 

“Company
Intellectual Property” shall
mean all material Intellectual Property (other than, to the extent not
reducible to schedule form, trade dress, trade secrets, know-how and goodwill
attendant to the Intellectual Property and other intellectual property rights)
used by Company to conduct the Business as presently conducted.

 

“Company-Owned
Intellectual Property” shall mean Company Intellectual Property
owned by or exclusively licensed to Company.

 

“Company
Registered Intellectual Property” shall mean any Intellectual Property that is the subject of an
application, certificate, filing, registration or other document issued, filed

 

3

 

with, or recorded by any governmental authority owned by, registered or
filed in the name of, the Company.

 

“Consent” shall mean any approval, consent,
ratification, waiver, or other authorization (including, but not limited to,
any Governmental Authorization).

 

“Consideration Shares” is defined in
Section 2.2(a)(v).

 

“Contract” shall mean any agreement, contract,
or legally enforceable promise or undertaking (whether written or oral and
whether express or implied) or similar obligation.

 

“Control Group Member” shall mean any person or
entity which, together with the Company, would be treated as a single employer
under Sections 414(b), (c), (m) or (o) of the IRC.

 

“Damages” is defined in Section 8.2(a).

 

“Employees” shall mean all employees who are
immediately prior to the Closing (i) in the active employment of the
Company and are presently on the employee payroll, whether full or part-time,
or (ii) on sick leave, short-term disability or other leave of absence
approved by the Company.

 

“Encumbrance” shall mean any charge, claim,
community property interest, condition, equitable interest, mortgage, deed of
trust, option, pledge, hypothecation, charge, security interest, right of first
refusal or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of ownership,
including but not limited to any covenant, condition, restriction, reservation,
rights of way, easement or other title encumbrance or title exception affecting
any property or asset.

 

“Environment” shall mean soil, land surface or
subsurface strata, surface waters (including navigable waters, ocean waters,
streams, ponds, drainage basins and wetlands), groundwater, drinking water
supply, stream sediments, ambient air (including indoor air), plant and animal
life and any other environmental medium or natural resource.

 

“Environmental Law” shall mean all federal,
state, district, local and foreign laws and Legal Requirements, all rules or
regulations promulgated thereunder and all orders, consent orders, judgments,
notices, notice requirements, agency guidelines, policies or restrictions and
licenses, permits or demand letters issued, promulgated or entered pursuant
thereto, relating to pollution or protection of the Environment.

 

“Environmental Permits” shall mean all
licenses, permits, approvals, authorizations, consents or orders of, or filings
with, any Governmental Body, whether federal, state, local or foreign, required
for the operation of the Company’s facilities under Environmental Laws.

 

“ERISA” shall mean the Employee Retirement
Income Security Act of 1974, as amended, or any successor law.

 

4

 

“Escrow Agent” means US Bank.

 

“Escrow Agreement” is defined in Section
4.2(i).

 

“Escrow Shares” is defined in Section 2.2(a)(iv).

 

“Estimated Net Cash” is defined in
Section 2.5.

 

“Estimated Net Debt” is defined in
Section 2.5.

 

“Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.

 

“Fenwick Opinion” is defined in Section 4.2(j).

 

“Financial Statements” is defined in
Section 5.4.

 

“GAAP” shall mean United States generally
accepted accounting principles and practices.

 

“Governmental Authorization” shall mean any approval,
Consent, license, permit, waiver or other authorization issued, granted, given
or otherwise made available by or under the authority of any Governmental Body
or pursuant to any Legal Requirement.

 

“Governmental Body” shall mean any.

 

(a)                                  nation, state, county, city, town,
village, district or other jurisdiction of any nature;

 

(b)                                 federal, state, county, local, municipal,
foreign or other government;

 

(c)                                  governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department,
official or entity and any court or other tribunal);

 

(d)                                 multi-national organization or body; or

 

(e)                                  body exercising, or entitled to exercise,
any administrative, executive, judicial, legislative, police, regulatory or
taxing authority or power of any nature.

 

“Hazardous Materials” shall mean any waste,
chemical, pollutant, material or other substance that is listed, defined,
designated or classified as, or otherwise determined to be, hazardous,
radioactive, infectious, reactive, corrosive, ignitable, flammable or toxic or
a pollutant or a contaminant subject to regulation, control or remediation
under any Environmental Law (whether solids, liquids or gases), including any
mixture or solution thereof, and specifically including petroleum and all
derivatives thereof or synthetic substitutes therefor, polychlorinated
biphenyls, radon gas, urea formaldehyde and asbestos or asbestos-containing
materials.

 

5

 

“HSR Act” means Section 7A of the Clayton Act
(Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended) and the rules and regulations promulgated thereunder.

 

“Income Taxes” shall mean net income Taxes
imposed under subtitle A of the IRC and any other Tax the predominant
character of which is that of an income tax in the U.S. sense within the
meaning of United States Treasury Department Regulations Section
1.901-1(a)(1)(ii) (disregarding for this purpose whether such other Tax is
imposed by a foreign or domestic governmental entity).

 

“Intellectual Property”
means: (a) inventions and discoveries (whether or not patentable and whether or
not reduced to practice), improvements thereto, and patents, patent
applications, invention disclosures, and other rights of invention, worldwide,
including without limitation any reissues, divisions, continuations and
continuations-in-part, provisionals, reexamined patents or other applications
or patents claiming the benefit of the filing date of any such application or
patent; (b) trademarks, service marks, trade names, trade dress, logos, domain
names, product names and slogans, including any common law rights,
registrations, and applications for registration for any of the foregoing, and
the goodwill associated with all of the foregoing, worldwide; (c) copyrightable
works, all rights in copyrights, including moral rights, copyrights, website
content, and other rights of authorship and exploitation, and any applications,
registrations and renewals in connection therewith, worldwide; (d) trade
secrets and confidential business and technical information, including, without
limitation, web site user information, customer and supplier lists and related
information, pricing and cost information, business and marketing plans,
advertising statistics, any other financial, marketing and business data,
technical data, specifications, schematics and know-how; (e) to the extent not
covered by subsections (a) through (d), above, Software and web sites
(including all related computer code and content); (f) rights to exclude others
from appropriating any of such Intellectual Property, including the rights to
sue for and remedies against past, present and future infringements of any or
all of the foregoing and rights of priority and protection of interests
therein; and (g) any other proprietary, intellectual property and other rights
relating to any or all of the foregoing anywhere in the world.

 

“IRC” shall mean the Internal Revenue Code of 1986, as amended,
or any successor law.

 

“IRS” shall mean the United States Internal
Revenue Service or any successor agency.

 

“Knowledge” shall mean and an individual will
be deemed to have “Knowledge” of a particular fact or other matter if such
individual is actually aware of such fact or other matter.  A Person (other than an individual) will be
deemed to have “Knowledge” of a particular fact or other matter if any
individual who is serving, or who has at any time served, as a director,
limited liability company manager, officer, partner, executor or trustee of
such Person (or in any similar capacity) has, or at any time had, Knowledge of
such fact or other matter.

 

“Knowledge of the Company” or other similar
phrases shall mean and include, the Knowledge of the Company and the Knowledge
of the Members.

 

6

 

“Legal Requirement” shall mean any federal,
state, county, local, municipal, foreign, international, multinational or other
administrative order, constitution, law, ordinance, common law, regulation,
statute or treaty.

 

“Liability” shall mean any direct or indirect
liability, indebtedness, obligation, commitment, expense, claim, deficiency,
deferred income, guaranty or endorsement of or by any Person of any kind or
type, whether known, unknown, accrued, absolute, contingent, matured or
unmatured.

 

“Licenses” is defined in Section 5.12(b).

 

“License Agreement” is defined in Section 4.2(p).

 

“Lock Up Agreement” is defined in Section 4.2(o).

 

“Material Adverse Effect” or “Material
Adverse Change” shall mean (i) any material adverse effect or change
in the condition (financial or other), business, results of operations,
Liabilities or operations of a specified Person, its business and/or assets,
excluding general economic, business and industry conditions affecting such Person
and other Persons in the first Person’s industry or engaged in businesses
similar to the business of the first Person and (ii) any material
limitation or restriction on the ability of a party to this Agreement to
consummate the Transactions.

 

“Member Indemnified Parties” is defined in
Section 8.2(a).

 

“Members” is defined in the first paragraph of
this Agreement.

 

“Members’ Disclosure Schedules” shall mean the
schedules and disclosures prepared and delivered by the Company and the Members
for and to Buyer and dated as of the date hereof which set forth any exceptions
to the representations and warranties of the Company and the Members contained
herein and certain other information called for by this Agreement.  Unless otherwise specified, each reference in
this Agreement to any numbered schedule is a reference to that numbered
schedule which is included in the Disclosure Schedules.

 

“Membership Interest(s)” shall mean the limited
liability company membership interest(s) of the Company.

 

“Monthly Net Revenues” is defined in Section
2.6(a).

 

“Morris Employment Agreement” is defined in
Section 4.2(k).

 

“Net Cash” means an amount determined as of
Closing equal to the excess, if any, of (i) the sum of all of the Company’s
cash, bank account balances, cash equivalents, certificates of deposit, U.S.
Treasury bills and other short term, marketable securities and accounts
receivable (as of March 31, 2005), over (ii) all Liabilities of the
Company that should be reflected on a balance sheet of the Company properly
prepared in accordance with GAAP (other than the Buyer Advance, and the Lease
and liabilities paid by the Company’s payment of the Company Closing Payments).

 

7

 

“Net Debt” means an amount determined as of
Closing equal to the excess, if any, of (i) all Liabilities of the Company
that should be reflected on a balance sheet of the Company properly prepared in
accordance with GAAP (other than the Buyer Advance and the Lease and
liabilities paid by the Company’s payment of the Company Closing Payments),
over (ii) the sum of all of the Company’s cash, bank account balances,
cash equivalents, certificates of deposit, U.S. Treasury bills and other short
term, marketable securities and accounts receivable (as of March 31, 2005).

 

“Non-Competition Agreement(s)” is defined in
Section 4.2(g).

 

“Order” shall mean, with respect to any Person
any award, decision, injunction, judgment, order, ruling, subpoena or verdict
entered, issued, made or rendered by any court, administrative agency or other
Governmental Body or by any arbitrator specifically directed at that Person.

 

“Ordinary Course of Business” shall describe
any action taken by a Person if such action is consistent with the past
practices of such Person and is taken in the ordinary course of the normal
operations of such Person.

 

“Organizational Documents” shall mean
(a) the articles or certificate of incorporation, all certificates of
determination and designation, and the bylaws of a corporation; (b) the
partnership agreement and any statement of partnership of a general
partnership; (c) the limited partnership agreement and the certificate or
articles of limited partnership of a limited partnership; (d) the
operating agreement, limited liability company agreement and the certificate or
articles of organization or formation of a limited liability company;
(e) any charter or similar document adopted or filed in connection with
the creation, formation or organization of a Person; and (f) any amendment
to any of the foregoing.

 

“Permitted Liens” is defined in Section 5.6.

 

“Person” shall mean any individual, corporation
(including any non-profit corporation), general or limited partnership, limited
liability company, joint venture, estate, trust, association, organization, labor
union or other legal entity or Governmental Body.

 

“Post Closing Consideration” shall mean the
Post Closing Cash Consideration and the Post Closing Shares.

 

“Post Closing Shares” is defined in Section
2.2(a)(v).

 

“Pre-Closing Period” is defined in Section
7.1(a).

 

“Proceeding” shall mean any action,
arbitration, audit, hearing, investigation (to the Knowledge of the Company and
the Members), litigation or suit (whether civil, criminal, administrative,
investigative or informal) commenced, brought, conducted or heard by or before,
or otherwise involving, any Governmental Body or arbitrator.

 

“Registration Rights Agreement” is defined in
Section 4.2(h).

 

8

 

“Representative” shall mean any officer,
director, principal, member, attorney, agent, Employee or other representative
of a Person.

 

“Rogers Employment Agreement” is defined in
Section 4.2(l).

 

“Sale Consideration” is defined in
Section 2.2(a).

 

“SEC Documents” means JAMDAT’s prospectus on Form S-1 filed July 2, 2004
and all amendments thereto, JAMDAT’s quarterly report on Form 10-Q filed
November 15, 2004, and all of JAMDAT’s other filings with the United States
Securities and Exchange Commission.

 

“Securities Act” shall mean the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Seller Closing Documents” is defined in
Section 5.2(a).

 

“Seller Tax Contest” is defined in
Section 8.7.

 

“SMRH Opinion” is defined in Section 4.3(g).

 

“Software” is defined in Section 5.19(g).

 

“Software Rights” is defined in Section
5.19(f).

 

“Straddle Period” is defined in
Section 3.4(c).

 

“Straddle Period Tax Contest” is defined in
Section 8.6.

 

“Subsidiary” shall mean, with respect to any
Person who is not an individual (for the purposes of this definition, the “Owner”),
any corporation or other Person of which securities or other interests having
the power to elect a majority of that corporation’s or other Person’s board of
directors or similar governing body, or otherwise having the power to direct
the business and policies of that corporation or other Person (other than
securities or other interests having such power only upon the happening of a
contingency that has not occurred) are held by the Owner or one or more of its
Subsidiaries.

 

“Tax Arbitration” is defined in
Section 3.8.

 

“Tax Arbitrator” is defined in
Section 3.8.

 

“Tax Claim” is defined in Section 8.5.

 

“Tax Contest” means a Buyer Tax Contest, Seller
Tax Contest or a Straddle Period Contest.

 

“Tax Damages” is defined in Section 8.2(c)(i).

 

“Tax Purchase Price” is defined in
Section 3.2(a).

 

9

 

“Taxes “ shall mean (whether or not disputed)
taxes of any kind, levies or other assessments, import duties, export duties,
imposts, charges, fees, including but not limited to (x) all federal,
state, local or foreign taxes, including all income, profits, capital gains,
receipts, corporate franchise, net worth, gross receipts, general excise,
sales, use, value added, property, ad valorem, value-added, intangible,
unitary, conveyance, transfer, stamp, documentation, documentary, license,
payroll, employment, estimated, excise, environmental, occupation, premium,
property, recording, registration, remittance, customs, duties, tariffs, severance,
windfall profits, franchise, license, withholding, social security,
unemployment, disability, alternative or add-on minimum, recapture or other
taxes, levies, fees or assessments together with any interest and any
penalties, fines, additions to tax, and additional amounts with respect
thereto, (y) any liability for payment of amounts described in clause
(x) as a result of transferee liability, or being a member of an
affiliated, combined, consolidated or other group for any period, or otherwise
through operation of law, and (z) any liability for payment of amounts
described in clauses (x) or (y) as a result of any tax sharing, tax
indemnity or tax allocation agreement or any other express or implied agreement
or any practice, policy or arrangement of indemnifying any other Person for
taxes or any other amount described above in this definition.

 

“Tax Return” means any return, declaration,
report, claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.

 

“Threatened” shall describe, with respect to
any Person, any claim, Proceeding, dispute, action or other matter if
(i) any demand or statement has been made (orally or in writing) to such
Person or its Affiliate with respect to such claim, Proceeding, dispute, action
or other matter or (ii) any notice has been given (orally or in writing)
to such Person or its Affiliate with respect thereto.

 

“Threshold” is defined in Section 8.2(c)(i).

 

“Transaction Documents” shall mean this
Agreement, the Non-Competition Agreements, the License Agreement, the
Registration Rights Agreement, the Escrow Agreement, the Lock Up Agreement and
all other agreements, instruments and documents executed and delivered by the
Members of the Company at the Closing pursuant to this Agreement.

 

“Transactions” shall mean the Sale and the
other transactions contemplated hereby and in the Transaction Documents.

 

“Unaudited Balance Sheet” is defined in Section
5.4(a)(ii).

 

ARTICLE 2

 

THE SALE

 

2.1                                 The Sale.  Subject to
the terms and conditions of this Agreement, each of the Members hereby agrees
to sell and assign to the Buyer, free and clear of all Encumbrances (other than
Encumbrances imposed by federal and state securities laws), and the Buyer hereby
agrees to purchase and accept, all of the Membership Interests of the Company
in exchange for the Sale Consideration, all effective as of the Closing
Date.  At the Closing, the Company and

 

10

 

the Members shall execute such assignments and other
documents and take such further actions as reasonably requested by the Buyer to
cause the Buyer to be vested with one hundred percent (100%) of the
Company’s outstanding Membership Interests and to be admitted as the sole
member of the Company.  From and after
the Closing Date, the Members shall not be entitled to any rights with respect
to the Membership Interests, including distributions from the Company or to
exercise any voting or other rights with respect to the Membership
Interests.  Without limiting the
obligations of the Members under this Agreement, from and after the Closing
Date, the Members shall not have any obligations under the Organizational
Documents of the Company.

 

2.2                                 Sale Consideration.

 

(a)                                  Sale Consideration. 
As the purchase price for their Membership Interests in the Company and
the covenants of the Members in the Non-Competition Agreements, the Members
shall be entitled to receive from JAMDAT and JAMDAT shall pay or cause to be
paid to the Members (or on behalf of the Members as directed by them in
accordance with Section 2.2(c) hereof) the following consideration
(collectively, the “Sale Consideration”) as directed in writing by the
Members not less than five (5) days prior to Closing as set forth on Schedule
2.2(a):

 

(i)                                     The Buyer Advance delivered to the
Members via wire transfer on March 24, 2005;

 

(ii)                                  Fifty Two Million Six Hundred Thousand Dollars
($52,600,000.00) less the Buyer Advance, payable in immediately available funds
at the Closing by wire transfer, (the “Closing Cash”);

 

(iii)                               3,050,000 shares of JAMDAT Common Stock,
as adjusted for any Capital Change at any time after the date of this Agreement
and prior to the Closing (the “Closing Shares,” and together with the
Closing Cash, the “Closing Consideration”);

 

(iv)                              1,000,000 shares of JAMDAT Common Stock,
as adjusted for any Capital Change at any time after the date of this Agreement
and prior to the Closing (the “Escrow Shares”), certificates for which
Escrow Shares shall be delivered by JAMDAT to the Escrow Agent at Closing to be
held in escrow pursuant and subject to the terms and conditions of the Escrow
Agreement as security for the obligations of JAMDAT to issue Escrow Shares to
the Members pursuant to Section 2.3 hereof; and

 

(v)                                 Thirteen Million Seven Hundred Thousand
Dollars ($13,700,000.00) (the “Post Closing Consideration”), payable on
the one year anniversary of the Closing. 
At the election of JAMDAT in its sole and absolute discretion, the Post
Closing Consideration shall be payable in any combination of immediately
available funds and/or JAMDAT Common Stock (the “Post Closing Shares,”
and together with the Closing Shares and Escrow Shares, the “Consideration
Shares”), with the value of any Post Closing Shares being

 

11

 

determined for this purpose as the number of such Post
Closing Shares multiplied by the average closing price of one share of JAMDAT
Common Stock for the fifteen (15) trading days immediately prior to the one
year anniversary of the Closing as reported by the NASDAQ National Market,
provided, that the aggregate Consideration Shares to be issued in connection
with the Transactions shall not exceed 19.9% of the issued and outstanding JAMDAT
Common Stock as of the date hereof.  In
order to elect to pay any or all of the Post Closing Consideration with shares
of JAMDAT Common Stock, the Post Closing Shares must be registered on or before
the one year anniversary of the Closing pursuant to an effective registration
statement filed under the Securities Act.

 

(b)                                 Notwithstanding the provisions of Section
2.2(a), if JAMDAT recapitalizes, either through a subdivision (or stock split)
of any of its outstanding shares of JAMDAT Common Stock into a greater number
of such shares, or a combination (or reverse stock split) of any of its
outstanding shares of JAMDAT Common Stock into a lesser number of such shares,
or reorganizes, reclassifies or otherwise changes its outstanding shares of
JAMDAT Common Stock into the same or a different number of shares of other
classes or series of JAMDAT stock (other than through a subdivision or
combination of shares provided for in the preceding clause), or declares a
dividend or other distribution on its outstanding shares payable in shares of
JAMDAT Common Stock or in shares or securities convertible into shares of
JAMDAT Common Stock (each, a “Capital Change”) at any time after the
date of this Agreement and prior to the Closing, then the number of Closing
Shares and Escrow Shares will each be proportionally and equitably adjusted.

 

(c)                                  Company Closing Payments. The Members hereby direct JAMDAT as
follows (the “Company Closing Payments”):

 

(i)                                     At the Closing, to pay a portion of the
Closing Cash in the amounts and to the parties set forth on Schedule
2.2(c)(i);

 

(ii)                                  At the Closing, to deliver a portion of
the Closing Shares in the amounts and to the parties set forth on Schedule
2.2(c)(ii); and

 

(iii)                               On the one-year anniversary of the
Closing, to pay a portion of the Post Closing Consideration in the amounts and
to the parties set forth on Schedule 2.2(c)(iii) (with the amounts
of cash and shares of JAMDAT Common Stock paid or delivered to each such
parties to be in the same proportions).

 

2.3                                 Escrow.

 

(a)                                  Escrow.  In order to
establish a source of recovery in connection with satisfaction of claims of the
Member Indemnified Parties for any post-closing indemnity claim pursuant to
Article VIII and as evidence of the obligation of JAMDAT through the Escrow
Agent as agent of JAMDAT for such purpose to deliver the Escrow Shares at the
time or times (if any) as the Members become entitled to receive the Escrow

 

12

 

Shares pursuant to the terms of the Escrow Agreement,
at Closing JAMDAT shall deliver to the Escrow Agent to hold in escrow pursuant
to the terms of the Escrow Agreement, a certificate or certificates for the
Escrow Shares.  As part of the Sale
Consideration, Escrow Agent, as agent for JAMDAT, shall deliver to the Members
the Escrow Shares at the time or times (if any) as the Members become entitled
to receive the Escrow Shares pursuant to the terms of the Escrow
Agreement.  Only such delivery by the
Escrow Agent, as agent for JAMDAT (and not delivery of the Escrow Shares to the
Escrow Agent), shall constitute payment of the portion of the Sale
Consideration (if any) consisting of the Escrow Shares.

 

(b)                                 Rights to Escrow Shares. 
During the period the Escrow Shares remain subject to the terms and
conditions of the Escrow Agreement, JAMDAT shall have all right, title and
interest in and to the Escrow Shares (subject only to such rights of the
Members to receive Escrow Shares pursuant to the terms of the Escrow Agreement
at such time or times as those rights arise), and JAMDAT shall be entitled to
any and all of the voting rights related to the Escrow Shares and any and all dividends
and other income payable by JAMDAT on the Escrow Shares during such period.  JAMDAT shall deliver any and all dividends
and other income payable by JAMDAT on the Escrow Shares to the Escrow Agent to
be held in escrow and considered and treated as Escrow Shares for disposition
pursuant to the terms and conditions of the Escrow Agreement.

 

(c)                                  Cooperation. 
At the Closing, JAMDAT shall deliver to the Escrow Agent certificates
evidencing the Escrow Shares, and the Members shall deliver to the Escrow Agent
assignments executed in blank with respect to the Escrow Shares.  In connection with any partial or complete
release of Escrow Shares, Buyer shall provide to the Members certificates
evidencing such released Escrow Shares and the parties shall execute such
documents and take such further actions as necessary or appropriate to
effectuate the provisions of this Section.

 

2.4                                 Intentionally Omitted.

 

2.5                                 Closing Adjustment for Net Cash or Net
Debt.

 

(a)                                  Estimated Net Cash and Estimated Net Debt. 
Not more than five (5) calendar days prior to the Closing and not later
than two (2) calendar days prior to the Closing, the Members shall deliver to
Buyer an estimate of the Net Cash or Net Debt (as the case may be) (the “Estimated
Net Cash” and the “Estimated Net Debt”, respectively).  Immediately prior to the Closing, either (i)
the Company shall distribute to the Members the amount of any Estimated Net
Cash, or (ii) the Members shall contribute to the capital of the Company cash
in the amount of any Estimated Net Debt. 
Within thirty (30) calendar days after the Closing Date, Buyer shall
prepare and deliver to the Members a statement setting forth the amount of Net
Cash or the amount of Net Debt, as the case may be, including the underlying
basis of such determination (the “Closing Net Cash or Net Debt Statement”).  Within fifteen (15) calendar days after the
Buyer shall have delivered the Closing Net Cash or Net Debt Statement (the “Member
Objection Period”), the Members may provide the Buyer with a certificate
(the “Member Certificate”) stating whether the Members believe that the
calculations set forth in the Closing Net Cash or

 

13

 

Net Debt Statement are correct and complete or not
correct or complete in the Members’ view. 
If either (i) the Member Certificate states that the Members believe
that the calculations set forth in the Closing Net Cash or Net Debt Statement
are correct or (ii) the Members fail to timely provide the Buyer with the
Member Certificate within the Member Objection Period, then the Members shall
be deemed to have conclusively agreed with and shall be bound by the
calculations set forth in the Closing Net Cash or Net Debt Statement for
purposes of this Section 2.5.  If the
Member Certificate is timely delivered to Buyer and objects to the Buyer’s
determination in the Closing Net Cash or Net Debt Statement, then the Members
and the Buyer shall confer in good faith in an effort to reach agreement or
compromise on the determinations in the Closing Net Cash or Net Debt Statement;
provided, that if after ten (10) calendar days of negotiation and discussion
the parties have not reached an agreement regarding the Closing Adjustment (as
defined below), the parties shall appoint a mutually and reasonably
satisfactory independent certified public accountant (the “Accountant”)
to review the calculations of both the Members and the Buyer of Estimated Net
Cash and/or the Estimated Net Debt, and to make a final written determination
of the Closing Adjustment, which determination shall be conclusive and binding
on the Members, Buyer, the Company and JAMDAT. 
The Accountant’s engagement pursuant to this Section 2.5(a) shall be
limited solely to determining the Net Cash or the Net Debt of the Company and
the Closing Adjustment.  The Members on
the one hand and JAMDAT and the Buyer on the other hand shall bear the fees and
expenses, in equal proportions, of the Accountant in connection with its
engagement hereunder.

 

(b)                                 Closing Adjustment. 
If it is finally determined in accordance with this Section 2.5 that
there is: (i) Net Cash, then within five (5) calendar days (A) Buyer shall pay
to the Members the excess, if any, of Net Cash over Estimated Net Cash or (B)
the Members shall pay to Buyer cash in an amount equal to the sum of (w) the
excess, if any, of Estimated Net Cash over Net Cash plus (x) the amount of Net
Debt, if any, and (ii) if there was Net Debt, then within five (5) calendar
days (C) Buyer shall pay to the Members the sum equal to (y) the excess, if
any, of Estimated Net Debt over Net Debt, if any, plus (z) the amount of any
Net Cash, or (D) the Members shall pay to Buyer cash in the amount equal to any
excess of Net Debt over Estimated Net Debt. 
Any payment pursuant to the immediately preceding sentence (the “Closing
Adjustment”) shall be treated as an adjustment to purchase price for Tax
purposes to the extent permitted by applicable Legal Requirements with respect
to Taxes.

 

2.6                                 Undistributed Pre-Closing Revenues.  Within
five (5) Business Days after the last day of each calendar month following the
Closing Date, until up to and including the last calendar month that is one
hundred twenty (120) days following the end of the calendar quarter in which
the Closing occurs (the “Closing Quarter”) (each such monthly period, a “Post-Closing
Monthly Period”), JAMDAT shall (A) deliver to the Members an estimated
statement of Monthly Net Revenues actually received by the Company during such
Post-Closing Monthly Period (the “Monthly Net Revenue Statement”), and
(B) promptly pay to the Members an amount of cash equal to such Monthly Net
Revenues (such amounts, the “Net Revenue Payments”).  “Monthly Net Revenues” means an amount
equal to the difference of (a) all cash received by the Company after the
Closing Date during the applicable Post-Closing Monthly Period that represents
the collection of Accounts Receivable earned by the Company on or

 

14

 

before March 31, 2005 (which Accounts Receivable are
not reflected on the Closing Net Cash Statement), less (b) any royalty or other
Liability of any kind payable in respect of such Accounts Receivable (which Liability
is not reflected on the Closing Net Debt Statement), which Liabilities shall be
the responsibility of the Company and paid in accordance with their terms.  Receipt of Monthly Net Revenues and Liabilities
payable in respect of such amounts shall be determined consistent with past practices
of the Company and in accordance with GAAP and the Accounting Rules set forth
on Schedule 2.6 (the “Accounting Rules”).

 

ARTICLE 3

 

CERTAIN TAX
MATTERS

 

3.1                                 Income Tax Treatment.  JAMDAT,
the Buyer and the Members acknowledge and agree the Sale shall be treated for
Income Tax purposes as a purchase by JAMDAT and the Buyer of the assets of the
Company that constitute a single trade or business for purposes of IRC
Section 1060 and applicable provisions of this Article III, and
(except as required by a final determination as defined in IRC
Section 1313(a) or as JAMDAT and Buyer and the Members may agree)
none of them shall take a contrary position for any Income Tax purpose; provided, however, JAMDAT and Buyer
acknowledge that the Members may, to the extent permitted by applicable Tax
Legal Requirements, treat the Sale as a sale of the Membership Interests for
Hawaii Income Tax and excise Tax purposes and for United States federal Income
Tax purposes in accordance with IRS Revenue Ruling 99-6.

 

3.2                                 Allocation of Tax Purchase Price.

 

(a)                                  The parties agree that the Sale
Consideration and all other amounts treated for federal Income Tax purposes as
purchase price paid by the Buyer for the assets of the Company (the “Tax
Purchase Price”) shall be allocated for such purposes as provided in
Treasury Regulations Sections 1.1060-1(c) and pursuant to the procedures
set forth in this Section 3.2; provided that the parties agree that
the covenants contained in the Non-Competition Agreement for Henk Rogers shall
be allocated not more than $500,000 of the Sale Consideration.  The parties shall file all Tax Returns
(including but not limited to Internal Revenue Service Form 8594) in all
respects and for all purposes consistent with any such allocation so agreed, if
any.  None of the parties shall take any
position (whether in audits, Tax Returns, or otherwise) that is inconsistent
with such allocation that is so agreed, if any, unless required to do so by a
final determination as defined in IRC Section 1313(a).  Nothing contained in this Agreement will
impose on either party the duty or obligation to contest any action that the
IRS, any Governmental Body or any other taxing authority may take or contest
any adjustment or change in such allocation that the IRS, any Governmental Body
or any other taxing authority may make or propose.

 

(b)                                 No later than 75 days after the Closing
Date, Buyer shall give written notice to the Members of Buyer’s proposed
allocation of the Tax Purchase Price in accordance with Section 3.2(a).  If the Members do not give written notice to
Buyer within 20 days after receipt of such notice from Buyer that the Members
disagree with any part or all of such proposal, then such allocation as so
proposed by Buyer shall be

 

15

 

deemed agreed by the parties for purposes of the
application of this Section 3.2, and the Tax Purchase Price shall be
allocated as provided in such notice so given by Buyer.  If the Members do so give notice of any such
objection, then from that time until the expiration of 120 days after the
Closing, the Buyer and Members shall negotiate in good faith to reach mutual
agreement regarding any matters subject to such objection and the allocation of
the Tax Purchase Price consistent with the requirements of Section 3.2(a),
and if the Buyer and Member do reach such agreement within such period, then
the matters and allocation so agreed upon shall be deemed agreed by the parties
for purposes of the application of this Section 3.2.  In the event that the Members do so give
notice of any such objection and the Buyer and Members are unable so to reach
agreement on all such matters, then the matters and allocation that have been
agreed shall be deemed agreed by the parties for purposes of the application of
this Section 3.2 and, to the extent not so agreed by Buyer and
Members, Buyer and each Member shall file its Tax Returns based on its own good
faith determinations.  Buyer and the
Members may enter into or refuse or fail to enter into any agreement pursuant
to this Section 3.2 in its or their good faith discretion.

 

(c)                                  Each of JAMDAT and Buyer shall have no
concern, responsibility or liability for allocation of Tax Purchase Price
between or among any one or more of the Members or their designees or assignees
and shall not be obligated by this Section 3.2 to make or agree to any
allocation of Tax Purchase Price between or among the Members, their designees
or assignees, and/or any other person.

 

3.3                                 Taxation of Escrow Shares. 
For Tax purposes, the Members intend to report the Escrow Shares and the
Post Closing Consideration on the installment method of taxation under IRC §453
as an installment obligation.  The
parties shall file all Income Tax Returns (including, but not limited to
Internal Revenue Service Form 8594) in all respects and for all purposes
consistently under the installment method and United States Treasury Department
Regulations Section 1.338-7 based upon the fair market value of the Escrow
Shares at the time or times of release thereof from escrow, unless such
inconsistency is mandated by applicable Legal Requirements.  Further, the parties shall report any income
from the Escrow Shares during the applicable escrow period in a manner
consistent with Proposed United States Treasury Department Regulation
Section 1.468B-8, which states that Buyer shall be treated for tax
purposes as owning the Escrow Shares for the period prior to the date on which
the last of the events subject to a bona fide contingency either has or has not
occurred.  The parties acknowledge and
agree that JAMDAT shall be considered the owner of the Escrow Shares for Income
Tax purposes until such time or times and to the extent the Members become
entitled to receive Escrow Shares pursuant to the Escrow Agreement (it being
further agreed that JAMDAT may treat the Escrow Shares as not outstanding for Income
Tax purposes until such time or times).

 

3.4                                 Taxes on Sale and Transactions; Tax
Returns.  The Members, jointly and severally, shall be
responsible for, and shall pay when due, any and all Taxes incurred by the
Company, the Members, Buyer and JAMDAT, or any of them, as a result of the Sale
and the Transactions (except as otherwise provided in the Escrow Agreement),
including without limitation any income, documentary, gross receipts, general
excise, sales, use, stamp, registration or other Taxes incurred in connection
with the exchange by the Members of Membership

 

16

 

Interests for the Sale Consideration as provided
hereunder, the transfer of any assets of the Company and the covenants of the
Members in the Non-Competition Agreements. 
Buyer, Company and the Members further agree, upon request and in
connection with Closing and the preparation and filing of Tax Returns therefor pursuant
to this Section 3.4, to use their commercially reasonable efforts to
obtain any certificate or other document from any Governmental Body or any
other Person as may be necessary to mitigate, reduce or eliminate any such
documentary, gross receipts, general excise, sales, use, stamp or registration
Tax.

 

(a)                                  The Members shall, at their expense,
timely file all Tax Returns required to be filed by the Members (and which are
not required to be executed or filed by the Company or Buyer) with respect to
all such Taxes and timely pay all Taxes reflected as due thereon.

 

(b)                                 The Members shall, at their own expense,
(i) no less than fifteen (15) calendar days before required to be filed,
prepare and submit to Buyer for review and approval by Buyer in its reasonable
discretion, (A) all Tax Returns (other than Income Tax Returns) required
to be filed by the Company with respect to such Taxes and (B) all Tax
Returns relating to the Company and the Business for a period ending on or
before the Closing Date including the final United States federal Income Tax
Return for the Company, the final State of Hawaii Income Tax Return for the
Company and all applicable Hawaii general excise and use Tax Returns and
(ii) timely file all such Tax Returns so approved by Buyer together with
payment in full of all Taxes shown as due thereon. If so approved by Buyer,
then the Buyer will (i) cause the Company to execute such Tax Returns and
deliver them to the Members for filing and (ii) if required by applicable
Legal Requirements, Buyer will join in the execution of any such Tax Returns
required.

 

(c)                                  No less than fifteen (15) calendar days
before required to be filed, Buyer shall prepare and submit to the Members for
their review and approval (which approval shall not be unreasonably withheld) any
Tax Returns for any period that includes and neither begins nor ends on the
Closing Date (a “Straddle Period”), together with a statement setting
forth the amount of any Taxes shown as due on such Tax Returns that are
allocated to the pre-Closing portion of such Straddle Period under this
Section 3.4(c).  No less than five
(5) calendar days before required to be filed, the Members shall pay to Buyer
cash in the amount of such Taxes so allocated to such pre-Closing portion of
such Straddle Period.  For purposes of
this Agreement, Taxes incurred during a Straddle Period shall be allocated to
the pre-Closing portion of such Straddle Period as follows:  (i) ad valorem
Taxes for such Straddle Period shall be equal to the amount of such ad valorem Taxes for the full Straddle
Period multiplied by a fraction, the numerator of which is the number of days
during the pre-Closing portion of such Straddle Period and the denominator of
which is the number of days during the full Straddle Period; and (ii) Taxes
(other than the Taxes referred to in clause (i)) for the pre-Closing
portion of such Straddle Period shall be computed as if such Straddle Period
ended on the Closing Date.

 

(d)                                 Any disagreement or dispute between
Buyer, on the one hand, and the Members, on the other hand, regarding the form
or content of any Tax Return to be 

 

17

 

filed pursuant to this Section 3.4 and that
requires the approval of Buyer or that will be filed by the Company and on which
the Members are entitled to approve pursuant to this Section 3.4
(i) shall be resolved in Buyer’s reasonable discretion solely for purposes
of facilitating the timely filing of such Tax Return, and (ii) shall
finally be resolved pursuant to a Tax Arbitration.

 

3.5                                 Tax-Related Books and Records. 
Buyer agrees to permit the Members and their Representatives access to
the Company’s books and records (other than any books and records created after
the Closing Date) to the extent reasonably required for purposes of
(i) preparing and filing Tax Returns required to be prepared and filed by
them pursuant to Section 3.4, (ii) enabling the Members to approve
Tax Returns which the Members are entitled to approve pursuant to
Section 3.4, (iii) any Tax Arbitration, and (iv) any Tax Contest
involving the Company in which the Members are permitted or required to
participate pursuant to this Agreement. 
The Members shall permit Buyer and its Representatives reasonable access
to the books and records of the Members and their Affiliates (other than any
books and records (A) created after the Closing Date, (B) that do not relate to
the Company or (C) that are subject to the attorney-client privilege),  to the extent reasonably required for
purposes of (i) preparing and filing Tax Returns required to be prepared
and filed by Buyer or the Company pursuant to Section 3.4,
(ii) enabling Buyer to review and exercise its right to approve Tax
Returns that Buyer is entitled to review and approve pursuant to
Section 3.4, (iii) any Tax Arbitration, and (iv) any Tax Contest
involving the Company.  In addition, if a
party to this Agreement shall desire to dispose of any of such books or records
prior to the expiration of seven (7) years after the Closing Date (or, to the
extent such books and records relate thereto, prior to a final determination of
any Tax Arbitration or Tax Contest), such party shall, prior to such
disposition, give each other party to this Agreement a reasonable opportunity,
at such party’s expense, to segregate and remove such books and records as such
other party may select.

 

3.6                                 Cooperation on Tax Matters.

 

(a)                                  Buyer, the Company, and the Members shall
cooperate to the extent reasonably required in connection with the filing of
Tax Returns pursuant to this Agreement and any Tax Contest.  Such cooperation shall include the retention
and (upon the other party’s request) the provision of books and records and
other information which are reasonably relevant to any such Tax Contest and
explanation of any such material to the extent reasonably required; provided, however, for avoidance of any doubt, neither this
sentence nor any other provision of this Agreement shall require JAMDAT or
Buyer to disclose to the Members or any arbitrator or subject to discovery any
Tax Return or tax accrual workpapers of a Member Indemnified Party.

 

(b)                                 The Members shall promptly notify Buyer,
in writing, upon receipt by any Member or any of Affiliate of a Member of
notice of any pending or Threatened federal, state, local or foreign Tax audits
or assessments relating to the income, properties or operations of the
Company.  The Buyer shall promptly notify
the Members, in writing, upon receipt by the Company after the Closing Date
(other than from the Members) of a notice of any pending or Threatened federal,
state, local or foreign Tax audits or assessments relating to the income,
properties or operations of the Company for any taxable period that ends on or
before the Closing Date.

 

18

 

3.7                                 Withholding. 
At or prior to the Closing, and at each subsequent time as Buyer
reasonably may require in connection with the payment or delivery of any Sale
Consideration or the release of any Escrow Shares, each of the Members shall
deliver to Buyer a properly completed IRS Form W-9 (or suitable substitute
form), indicating that such Member is a United States person and establishing
an exemption from backup withholding.  At
the time of any direction by a Member to Buyer, pursuant to Section 2.2 of
this Agreement or otherwise, to pay or deliver to a designee, assignee or other
person any Sale Consideration, Escrow Shares or other amount includible within
the Tax Purchase Price, such Member shall cause such designee, assignee or
other person to deliver to Buyer a duly completed and executed IRS Form W-8
or W-9 that relieves Buyer of any obligation under any Tax or other applicable
Legal Requirements to withhold and remit to any governmental authority any
amount that such Member shall so direct Buyer to pay or deliver to such
designee, assignee or other person.  In
all events, to the extent required by applicable Legal Requirements, Buyer
shall be entitled to withhold from any amount payable by Buyer to any Member or
any designee or assignee of any Member as directed pursuant to Section 2.2
of this Agreement or otherwise.

 

3.8                                 Tax Arbitration.  Any
disagreement or dispute after Closing between Buyer and/or the Company, on the
one hand, and the Members, on the other hand, regarding (i) any matter
governed by this Article III (other than a matter governed by Section 3.2)
or (ii) relating to the manner in which a Tax Contest is to be handled,
shall be submitted for final and binding resolution to resolve such
disagreement or dispute to (A) with respect to any matter described in
clause (i), a Tax partner at a nationally or regionally recognized
accounting firm or (B) with respect to any matter described in clause
(ii), a Tax partner at a nationally or regionally recognized law firm with
substantial experience over a period of not less than 10 years in the handling
of Tax audits, examinations, administrative appeals and related litigation
(such procedure for resolution, a “Tax Arbitration,” and such Tax
partner, the “Tax Arbitrator”). 
The Tax Arbitrator shall be selected by agreement of the Buyer, on the
one hand, and the Members, on the other hand (and, if they fail to agree within
a reasonable period, the Tax Arbitrator shall be selected by agreement of two
persons who are qualified to serve as Tax Arbitrator, one selected by Buyer and
the other selected by the Members).  Each
side shall instruct the Tax Arbitrator to choose either the position proposed
by it or the position proposed by the other side and to deliver to each side,
as promptly as practicable and in any event within ninety (90) calendar days
after his or her appointment, a written report setting forth the resolution of
any such disagreement or dispute determined in accordance with this
Section 3.8.  The determination of the
Tax Arbitrator shall be final and binding upon the parties to this Agreement
and their respective Affiliates.  The
fees, expenses and costs of the Tax Arbitrator shall be borne one hundred
percent (100%) by the side whose position is rejected by the Tax Arbitrator.  Other than such fees and expenses of the Tax
Arbitrator, each side shall be responsible for their own costs and expenses
incurred in connection with any Tax Arbitration.  Notwithstanding the foregoing, no arbitrator
shall have any power or authority to determine or issue any award or order
mandating or compelling the manner in which a party in fact treats any item on
any Tax Return of such party or compelling or prohibiting compliance by such
party with such Tax payment, withholding or reporting obligations that such
party determines it has (or that it is determined to have under any final
determination within the meaning of IRC Section 1313(a) or any similar
determination under other applicable tax law) or the manner in which it
conducts or resolves any Tax Contest to which it is a taxpayer party; provided, however, without any implication to be drawn from
this proviso that any such breach may or will give rise to liability for (or an
excuse

 

19

 

from liability for) any damages, this sentence shall
not be construed to excuse, reduce or otherwise limit a party’s liability to
another party for compensatory damages for breach of this Agreement.

 

ARTICLE 4

 

CLOSING

 

4.1                                 Closing  Upon the terms
and subject to the conditions set forth herein, the closing of the Transactions
(the “Closing”) shall be held at 10:00 a.m. local time at the
offices of Sheppard Mullin Richter & Hampton, LLP, 333 S. Hope Street,
Los Angeles, California 90071, on the first Business Day after all of the
conditions to Closing set forth in Sections 4.2 and 4.3 and the deliveries set
forth in Sections 4.5 and 4.6 have been satisfied or waived in accordance with
this Agreement or at such other time or on such other date at such other place
as the parties hereto may mutually agree. 
Notwithstanding the actual time of Closing, the Closing shall be deemed
to have occurred on 12:01 am on the day of the Closing (the “Closing
Date”).

 

4.2                                 Closing Conditions of JAMDAT and Buyer. 
The obligations of JAMDAT and Buyer hereunder to purchase the Membership
Interests are subject to the fulfillment, at or before the Closing, of each of
the following conditions (all or any of which may be waived in whole or in part
by Buyer in its sole discretion):

 

(a)                                  Representations and Warranties. 
Each of the representations and warranties made by the Company and the
Members in this Agreement (other than those made as of a specified date earlier
than the Closing Date) shall be true and correct in all material respects
(without regard to materiality exceptions or qualifiers in such representations
and warranties) on and as of the Closing Date as though such representation or
warranty was made on and as of the Closing Date, and any representation or
warranty made as of a specified date earlier than the Closing Date shall have
been true and correct in all material respects (without regard to materiality
exceptions or qualifiers in such representations and warranties) on and as of
such earlier date.

 

(b)                                 Performance. 
The Company and the Members shall have performed and complied with, in
all material respects, each agreement, covenant and obligation required by this
Agreement and the Transaction Documents to be so performed or complied with by
the Company and the Members at or before the Closing.

 

(c)                                  Orders.  There shall
not be in effect on the Closing Date any Order or Proceeding restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the Transactions contemplated by this Agreement and the Transaction Documents
or which could reasonably be expected to otherwise result in a material
diminution of the benefits of the Transactions contemplated by this Agreement
and the Transaction Documents to JAMDAT or Buyer.

 

(d)                                 Regulatory Consents and Approvals. 
All consents, approvals and actions of, filings with and notices to any
Governmental Body necessary to permit

 

20

 

JAMDAT, Buyer, Company and the Members to perform
their obligations under this Agreement and to consummate the transactions contemplated
hereby (a) shall have been duly obtained, made or given, (b) shall not be
subject to the satisfaction of any condition that has not been satisfied or
waived and (d) shall be in full force and effect, and all terminations or
expirations of waiting periods imposed by any Governmental Body necessary for
the consummation of the transactions contemplated by this Agreement shall have
occurred.  The Members and the Company
shall provide, in form and substance acceptable to Buyer in its sole
discretion, any notices required to be given under the Hawaii Dislocated
Workers Law, the federal WARN Act or any similar legal requirement related to
or as a result of the Transactions, and all applicable notice periods shall
have expired; provided, however, that in the event the parties decide to close
the Transactions on a date earlier than the expiration of 60 days after the
date the notice required to be given by the Company under the Hawaii Dislocated
Workers Law (in a form approved by Buyer) is received by each of the Company’s
employees, then the parties agree that, on the Closing Date, the Buyer will either
(i) provide “pay in lieu of full notice” to each employee of the Company in the
amount of such employee’s full wages and benefits per day for the number of
days that the notice given to such employee was less than 60 days or (ii) guarantee
continued employment and/or full wages and benefits for at least 60 days
following the Closing in a manner sufficient to satisfy the requirements of the
Hawaii Dislocated Workers Law (provided, if an employee’s employment is
terminated prior to the expiration of the 60 day period, the employee will
receive full wages and benefits for the balance of the 60 day period).

 

(e)                                  Proceedings. 
All proceedings to be taken on the part of the Company and the Members
in connection with the Transactions contemplated by this Agreement and the
Transaction Documents shall be reasonably satisfactory in form and substance to
Buyer, and Buyer shall have received copies of all such documents and other
evidences as Buyer may reasonably request in order to establish the
consummation of the Transactions and the taking of all proceedings in
connection therewith.

 

(f)                                    Third Party Consents. 
All consents (or in lieu thereof waivers) of third parties necessary for
the performance by any of JAMDAT, Buyer, the Company and the Members of their
obligations under this Agreement and the Transaction Documents and to the
consummation of the Transactions contemplated hereby as are required under any
Contract to which JAMDAT, Buyer, the Company or the Members, is a party or by
which any of their respective assets and properties are bound set forth on Schedule
4.2(f) shall have been obtained, (b) shall be in form and substance
reasonably satisfactory to JAMDAT and Buyer, (c) shall not be subject to the
satisfaction of any condition that has not been satisfied or waived and (d)
shall be in full force and effect, except where the failure to obtain any such
consent (or in lieu thereof waiver) could not reasonably be expected,
individually or in the aggregate with other such failures, to materially
adversely affect JAMDAT, Buyer, or the business or condition of the Company or
otherwise result in a material diminution of the benefits of the Transactions
contemplated by this Agreement and the Transaction Documents to Buyer.

 

21

 

(g)                                 Non-Competition Agreements. 
The Individual Members and John Morris shall have executed and delivered
non-competition agreements in the form of Exhibit A attached hereto
(the “Non-Competition Agreements”).

 

(h)                                 Registration Rights Agreement. 
The Members and the parties on Schedule 2.2(c)(ii) shall have executed
and delivered a registration rights agreement in the form of Exhibit B
attached hereto (the “Registration Rights Agreement”).

 

(i)                                     Escrow Agreement. 
The Members shall have executed and delivered an escrow agreement in the
form of Exhibit C attached hereto (the “Escrow Agreement”).

 

(j)                                     Opinion of Counsel. 
Buyer shall have received the opinion of Fenwick & West, LLP,
counsel to the Company, dated the Closing Date, in the form attached hereto as Exhibit
D (the “Fenwick Opinion”).

 

(k)                                  Employment of John Morris. 
John Morris shall have agreed to become employed by Buyer as of the
Closing on the terms and conditions set forth in the form offer letter attached
hereto as Schedule 4.2(k) (the “Morris Employment Agreement”).

 

(l)                                     Employment of Henk Rogers. 
Henk Rogers shall have agreed to become employed by Buyer as of the
Closing on the terms and conditions set forth in the form offer letter attached
hereto as Schedule 4.2(l) (the “Rogers Employment Agreement”).

 

(m)                               Board.  Henk Rogers
shall have agreed to serve for a three year term as a director of JAMDAT Mobile
Inc., effective as of the Closing.

 

(n)                                 No Material Adverse Change. 
There shall not have occurred any Material Adverse Change in the Company
or its condition, its assets and properties from the date of this Agreement to
the Closing, nor shall there have occurred from the date of this Agreement to
the Closing any material adverse change in the United States financial markets.

 

(o)                                 Lock Up Agreement. 
Each of the Members and the parties on Schedule 2.2(c)(ii) shall have
executed and delivered Lock Up Agreement in the form of Exhibit E
attached hereto (the “Lock Up Agreement”).

 

(p)                                 License Agreement. 
The Company shall have entered into the Tetris Wireless Copyright and
Trademark License and Distribution Agreement substantially in the form attached
hereto as Exhibit G (the “License Agreement”) and the License
Agreement shall be in full force and effect.

 

(q)                                 Good Standing Certificates. 
The Members shall deliver to Buyer a “long-form” or “short-form” certificate
of good standing from the Director of the Department of Commerce and Consumer
Affairs of the State of Hawaii dated not earlier than the day prior to the
Closing Date.

 

22

 

(r)                                    Bulk Sales Certificate. 
The Company and the Members shall deliver to Buyer at or prior to
Closing a bulk sales certificate (Form G-8A) from the State of Hawaii with
respect to the Transactions.

 

(s)                                  Tax Clearance Certificates. 
The Members shall deliver to Buyer at Closing an approved Tax Clearance
Certificate (Form A-6) for the Company dated not earlier than ten (10) Business
Days prior to the Closing Date.

 

(t)                                    Releases.  The Company
shall have obtained releases with respect to the obligations to be satisfied by
the making of the Company Closing Payments in form and substance reasonably
satisfactory to Buyer and JAMDAT.

 

(u)                                 Forms W-9, etc. 
JAMDAT and the Buyer shall have received from each Member and each
recipient of a Company Closing Payment a duly completed and executed
Form W-9 and any form required to relieve JAMDAT and Buyer of any
obligation to withhold any amount from payments to be made at Closing to such
Member or recipient.

 

4.3                                 Closing Conditions of the Company and the
Members.  The obligations of Members hereunder to sell
the Membership Interests to Buyer are subject to the fulfillment, at or before
the Closing, of each of the following conditions (all or any of which may be
waived in whole or in part by the Members in their sole discretion):

 

(a)                                  Representations and Warranties. 
Each of the representations and warranties made by JAMDAT and Buyer in
this Agreement (other than those made as of a specified date earlier than the
Closing Date) shall be true and correct in all material respects (without
regard to materiality exceptions or qualifiers in such representations and
warranties) on and as of the Closing Date as though such representation or
warranty was made on and as of the Closing Date, and any representation or
warranty made as of a specified date earlier than the Closing Date shall have
been true and correct in all material respects (without regard to materiality
exceptions or qualifiers in such representations and warranties) on and as of
such earlier date.

 

(b)                                 Performance. 
Each of JAMDAT and Buyer shall have performed and complied with, in all
material respects, each agreement, covenant and obligation required by this
Agreement and the Transaction Documents to be so performed or complied with by
JAMDAT and Buyer at or before the Closing.

 

(c)                                  Orders.  There shall
not be in effect on the Closing Date any Order or Proceeding restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the Transactions contemplated by this Agreement and the Transaction Documents,
and there shall not be pending on the Closing Date any Proceeding in, before or
by any Governmental Body which could reasonably be expected to result in the
issuance of any such Order which would have the probable effect of enjoining or
preventing the consummation of the transactions contemplated by this Agreement
and the Transaction Documents.

 

23

 

(d)                                 Regulatory Consents and Approvals. 
All consents, approvals and actions of, filings with and notices to any
Governmental Body necessary to permit Buyer, Company and the Members to
consummate the transactions contemplated by this Agreement (i) shall have been
duly obtained, made or given, (ii) shall not be subject to the satisfaction of
any condition that has not been satisfied or waived and (iii) shall be in full
force and effect, and all terminations or expirations of waiting periods
imposed by any Governmental Body necessary for the consummation of the
transactions contemplated by this Agreement shall have occurred.

 

(e)                                  Registration Rights Agreement. 
Buyer and JAMDAT shall have executed and delivered the Registration
Rights Agreement.

 

(f)                                    Escrow Agreement. 
Buyer shall have executed and delivered the Escrow Agreement.

 

(g)                                 Opinion of Counsel. 
The Members shall have received the opinion of Sheppard Mullin Richter
& Hampton, LLP, counsel to Buyer and JAMDAT, dated the Closing Date, in the
form attached hereto as Exhibit H (the “SMRH Opinion”).

 

(h)                                 Morris Employment Agreement. 
JAMDAT or Buyer shall have executed and delivered the Morris Employment
Agreement.

 

(i)                                     Rogers Employment Agreement. 
JAMDAT or Buyer shall have executed and delivered the Rogers Employment
Agreement.

 

(j)                                     No Material Adverse Change. 
There shall not have occurred any Material Adverse Change in the Buyer
or JAMDAT from the date of this Agreement to the Closing.

 

(k)                                  License Agreement. 
JAMDAT hall have entered into and delivered to TTC the License
Agreement.

 

(l)                                     NASDAQ Listing. 
The Closing Shares that are issuable upon the Closing shall be
authorized for listing on the NASDAQ National Stock Market (subject only to
official notice of issuance).

 

4.4                                 Deliveries at Closing by Buyer or JAMDAT
to the Members and Others.  At the Closing, Buyer or
JAMDAT, as applicable, shall deliver to the Members and other parties set forth
below the following:

 

(a)                                  Closing Consideration. The Closing Consideration (including
the stock certificates representing the Closing Shares duly registered in the
names of the Members), but with respect to the Closing Shares only subject to
delivery of an instruction letter to Buyer’s transfer agent directing issuance
of the Escrow Shares to the Members and the Escrow Agent’s retention of the
Escrow Shares pursuant to Section 2.3.

 

(b)                                 Company Closing Payments. 
The Company Closing Payments in the amounts and to the parties set forth
on Schedule 2.2(c)(i) and Schedule 2.2(c)(ii)

 

24

 

(including the stock certificates representing any
shares of JAMDAT Common Stock duly registered in the names of such parties).

 

(c)                                  Non-Competition Agreements. 
The executed Non-Competition Agreements.

 

(d)                                 Registration Rights Agreement. 
The executed Registration Rights Agreement.

 

(e)                                  Escrow Agreement. 
The executed Escrow Agreement.

 

(f)                                    Legal Opinion. 
The SMRH Opinion.

 

(g)                                 Buyer Certificates. 
The following certificates:

 

(i)                                     A certificate (i) evidencing the
accuracy of all representations and warranties of Buyer, (ii) evidencing
the performance by Buyer of, or the compliance by Buyer with, all covenants and
obligations required to be performed or complied with by Buyer as of the
Closing, and (iii) otherwise facilitating the consummation of any of the
Transactions;

 

(ii)                                  A certificate executed by the Secretary
of Buyer certifying as of the Closing Date (I) a true and complete copy of
the Organizational Documents of Buyer, (II) a true and complete copy of
the resolutions of the board of directors of Buyer authorizing the execution,
delivery and performance of this Agreement by Buyer and the consummation of the
Transactions and (III) incumbency matters; and

 

(iii)                               A certificate of the appropriate Secretary
of State certifying the good standing of Buyer in its state of incorporation.

 

(h)                                 JAMDAT Certificates. 
The following certificates:

 

(i)                                     A certificate (i) evidencing the accuracy
of all representations and warranties of JAMDAT, (ii) evidencing the performance
by JAMDAT of, or the compliance by JAMDAT with, all covenants and obligations
required to be performed or complied with by JAMDAT as of the Closing, and
(iii) otherwise facilitating the consummation of any of the Transactions;

 

(ii)                                  A certificate executed by the Secretary
of JAMDAT certifying as of the Closing Date (I) a true and complete copy of the
Organizational Documents of JAMDAT, (II) a true and complete copy of the
resolutions of the JAMDAT Board of Directors authorizing the execution, delivery
and performance of this Agreement by JAMDAT and the consummation of the
Transactions and (III) incumbency matters; and

 

(iii)                               A certificate of the appropriate
Secretary of State certifying the good standing of JAMDAT in its state of
incorporation.

 

25

 

(i)                                     License Agreement. 
The executed License Agreement.

 

(j)                                     Employment Agreements. 
The Rogers Employment Agreement and the Morris Employment Agreement.

 

4.5                                 Deliveries made by the Members to JAMDAT
and Buyer.  At the Closing, the Members shall deliver to
JAMDAT and Buyer the following:

 

(a)                                  Membership Interest Assignments. 
At the Closing, the Members shall deliver to Buyer assignment agreements
and other documents as necessary or appropriate to assign and transfer to Buyer
all of the issued and outstanding Membership Interests of the Company and to
admit Buyer as the sole member and manager of the Company.

 

(b)                                 Non-Competition Agreements. 
The executed Non-Competition Agreements.

 

(c)                                  Registration Rights Agreement. 
The executed Registration Rights Agreement.

 

(d)                                 Escrow Agreement. 
The executed Escrow Agreement.

 

(e)                                  Lock Up Agreements. 
The executed Lock Up Agreements.

 

(f)                                    Legal Opinion. 
The Fenwick Opinion.

 

(g)                                 Certificates of the Company, Affiliated
Tetris Companies and the Members.  The Company and the Members will furnish Buyer
with such certificates of the officers and others of the Company and such
Affiliated Tetris Companies as requested by Buyer to evidence compliance with
the conditions set forth in this Agreement as may be reasonably requested by
Buyer, which shall include, but not be limited to:

 

(i)                                     A certificate (I) evidencing the
accuracy of all representations and warranties of the Company and the Members,
(II) evidencing the performance of the Company and the Members, or the
compliance by the Company and the Members with, all covenants and obligations
required to be performed or complied with by the Company and the Members as of
the Closing, and (III) otherwise facilitating the consummation of any of the
Transactions;

 

(ii)                                  A certificate executed by the Members
certifying as of the Closing Date (I) a true and complete copy of the
Organizational Documents of the Company, (II) a true and complete copy of the
resolutions of the Company and the Members authorizing the execution, delivery
and performance of this Agreement by the Company and the consummation of the
Transactions and (III) incumbency matters;

 

26

 

(iii)                               A certificate of each appropriate Department
of Commerce & Consumer Affairs or Secretary of State certifying the good
standing of the Company in its state of formation and all states in which it is
qualified to do business; and

 

(iv)                              A certificate or certificates of such
Affiliated Tetris Companies as requested by Buyer certifying as of the Closing
Date (I) a true and complete copy of the Organizational Documents of such
Affiliated Tetris Companies as requested by Buyer, (II) a true and complete copy
of the resolutions of such Affiliated Tetris Companies as requested by Buyer
authorizing the execution, delivery and performance of the License Agreement by
such Affiliated Tetris Companies and (III) incumbency matters.

 

(h)                                 Consents.  Each of the Consents
identified in Schedule 5.2.

 

(i)                                     Other Agreements. Such employment, tax (e.g. IRS Form W-9), and other documents
and agreements related to Buyer’s employment of Henk Rogers as reasonably
requested by Buyer.

 

(j)                                     Resignations.  The
Persons holding the positions of a manager, a director or officer of the
Company, in office immediately prior to the Closing, shall have resigned from
such positions in writing effective as of the Closing.

 

(k)                                  Employment Agreements.  The
Rogers Employment Agreement and the Morris Employment Agreement.

 

ARTICLE
5

 

REPRESENTATIONS
AND WARRANTIES 

OF THE COMPANY AND THE MEMBERS

 

Each of the Company
and the Members hereby, jointly and severally, represent and warrant to Buyer
that the following representations and warranties are, as of the date hereof,
and will be, as of the Closing Date, true and correct, except as described in
the Members’ Disclosure Schedules.

 

5.1                                 Organization and Good Standing.  Each
of the Affiliated Tetris Companies is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of formation, with full power and
authority to own, operate or lease its assets and conduct its Business.  Each of the Affiliated Tetris Companies is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction where the character of its properties
owned, operated or leased, or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company.  Schedule 5.1
contains a complete and accurate list of jurisdictions in which the Company is
authorized to do business.  Blue Lava
Management, LLC and Blue Lava Holdings, LLC have been dissolved and no longer
exist.

 

27

 

5.2                                 Authority; No Conflict.

 

(a)                                  This Agreement and the other Transaction
Documents to which the Members or the Company are a party (the “Seller
Closing Documents”) have been duly executed and delivered by the Members
and the Company, to the extent that they are a party thereto, no other limited
liability company or other action on the part of the Company or the Members
being necessary, and constitute the legal, valid, and binding obligations of
the Members and the Company, as the case may be, enforceable against the
Members and the Company in accordance with their respective terms, in each case
except as such enforceability may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization and other similar laws affecting creditors’ rights generally and
(ii) general principles of equity, regardless of whether asserted in a
proceeding in equity or at law.  Each of
the Members and the Company have all requisite power, authority and capacity to
execute and deliver this Agreement and the Seller Closing Documents and to
perform their respective obligations under this Agreement and the Seller
Closing Documents.

 

(b)                                 Assuming all consents, approvals,
authorizations and other actions described in Schedule 5.2 have
been obtained or made, as applicable, the execution, delivery and performance
of this Agreement and the Seller Closing Documents by the Members and the
Company shall not, directly or indirectly (with or without notice or lapse of
time):

 

(i)                                     contravene, conflict with or result in a
violation of (A) any provision of the Organizational Documents of the
Company or (B) any resolution or other action adopted or taken by the
Company or the Members;

 

(ii)                                  contravene, conflict with or result in a
violation of any Legal Requirement or any Order to which the Company or the
Members or any of the assets owned or used by the Company, may be subject;

 

(iii)                               contravene, conflict with or result in a
violation of any of the terms or requirements of any Governmental Authorization
that is held by the Company or that otherwise relates to the business of, or
any of the assets owned or used by, the Company;

 

(iv)                              cause the Company to become subject to, or to
become liable for the payment of, any Tax;

 

(v)                                 cause any of the assets owned by the Company
to be reassessed or revalued by any taxing authority or other Governmental
Body;

 

(vi)                              contravene, conflict with or result in a
violation or breach of any provision of, or give any Person the right to
declare a default or exercise any remedy under, or to accelerate the maturity
or performance of, or to cancel, terminate or modify, any material Applicable
Contract;

 

(vii)                           result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets owned or used by the
Company; or

 

28

 

(viii)                        result in any breach of, or constitute a
default (or event which with the giving of notice or lapse of time, or both,
would become a default) under, or give to any Person any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of any
Encumbrance on any of the Membership Interests or any of the assets of the
Company pursuant to, any note, bond, mortgage, indenture, Contract, agreement,
lease, license, permit, franchise or other instrument to which the Members or
the Company are a party or by which any of the Membership Interests are bound
or affected.

 

(c)                                  Except as set forth in Schedule 5.2,
execution and delivery of this Agreement and the Seller Closing Documents by
the Members and the Company and the consummation of the Transactions does not
and shall not require any Consent of, or filing with or notification to, any
Governmental Body or any other Person.

 

5.3                                 Capitalization.

 

(a)                                  Ownership.  The authorized capital of the
Company immediately prior to the Closing consists solely of limited liability
company membership interests (the “Membership Interests”).  As of the date hereof, no Membership
Interests are reserved for issuance upon exercise of options granted to
Employees or any other Person.  The
Members are, and will be on the Closing Date, the record and beneficial owners
of all of the Membership Interests set forth in Schedule 5.3, free
and clear of all Encumbrances.  The
Membership Interests set forth in Schedule 5.3 represent 100% of the
limited liability company membership interests of the Company.  The Membership Interests are not represented
by certificates.  All of the outstanding
Membership Interests of the Company are and will be, as of the Closing Date,
duly authorized, validly issued, fully paid and not subject to additional
capital contribution requirements.  There
are no Contracts relating to the issuance, sale or transfer of any Membership Interests
or any other securities of the Company other than the Company’s Organizational
Documents.  Except as set forth in Schedule 5.3,
there are no outstanding subscriptions, calls, commitments, warrants or options
for the purchase of any Membership Interests or any other securities of the
Company or any securities convertible into or exchangeable for Membership
Interests or other securities issued by the Company, or any other commitments
of any kind for the issuance of additional Membership Interests or other
securities issued by the Company.  None
of the outstanding Membership Interests or any other securities of the Company
was issued in violation of the Securities Act or any other Legal Requirement.

 

(b)                                 Subsidiaries.  The
Company has no Subsidiaries and has no direct or indirect stock or other equity
or ownership interest (whether controlling or not), or any Contract to acquire
any such interest, in any Person or other entity.

 

5.4                                 Financial Statements.

 

(a)                                  Financial Statements. 
Prior to the execution of this Agreement, the Company and the Members
have delivered to Buyer true and complete copies of the following financial
statements (the “Financial Statements”):

 

29

 

(i)                                     the audited balance sheets of the Company as
of December 31, 2002, 2003 and 2004, and the related audited consolidated
statements of operations, Members’ equity and cash flows for each of the years
then ended, together with a true and correct copy of the report on such audited
information by PricewaterhouseCoopers, LLP, and all letters from such
accountants with respect to the results of such audits; and

 

(ii)                                  the unaudited balance sheet of the Company
and its consolidated subsidiaries as of March 31, 2005 (the “Unaudited
Balance Sheet”) and the related unaudited consolidated statements of
operations, stockholders’ equity and cash flows for the portion of the year
then ended.

 

(b)                                 Except as set forth in the notes thereto and
as disclosed in Schedule 5.4, all such Financial Statements (i) were
prepared in accordance with GAAP, (ii) fairly present the consolidated
financial condition and results of operations of the Company and its
consolidated subsidiaries as of the respective dates thereof and for the
respective periods covered thereby in all material respects, and (iii) were
compiled from the books of account and other records of the Company regularly
maintained by management and used to prepare the Financial Statements of the
Company in accordance with the principles stated therein.  The Company has maintained its books of
account and other records in a manner sufficient to permit the preparation of
Financial Statements in accordance with GAAP.

 

(c)                                  To the Company’s Knowledge, there is no
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company’s internal controls and procedures.

 

5.5                                 Books and Records                                        The books of account and other records of the
Company, all of which have been made available to Buyer, are complete and
correct and, in all material respects, have been maintained in accordance with
sound business practices and all applicable Legal Requirements and, with
respect to the books of account, fairly and accurately reflect the income,
expenses, assets and Liabilities of the Company.  At the Closing, all of those books and
records shall be in the possession of the Company.

 

5.6                                 Title to Properties; Encumbrances  The
Company owns and has good and marketable title to all of its tangible property
and assets free and clear of all Encumbrances other than Encumbrances set forth
on Schedule 5.6 (“Permitted Liens”).  The
Company does not own or lease any real property other than as set forth on Schedule
5.6.  The Company owns all tangible
properties and assets that it purports to own. 
The tangible assets of the Company set forth in the Unaudited
Balance Sheet and the properties owned or leased by the Company as of the date
hereof and disclosed to Buyer are in the possession of the Company at the
facilities set forth on Schedule 5.6 and constitute all the tangible
assets and properties required to conduct the Business of the Company, with the
exception of such other tangible assets and properties described on Schedule 5.6.  The Company has no physical inventory.

 

5.7                                 Condition and Sufficiency of Assets  The
equipment of the Company is in good operating condition and repair, reasonable
wear and tear excepted.  The equipment of
the

 

30

 

Company
is adequate for the uses to which it is being (or proposed to be) put, and the
equipment of the Company is not in need of maintenance or repairs except for
ordinary, routine maintenance and repairs that are not material in nature or
cost.  The equipment of the Company is
sufficient for the continued conduct of the business of the Company after the
Closing in substantially the same manner as conducted prior to the Closing.

 

5.8                                 Accounts Receivable  All
accounts receivable of the Company that are reflected on the Unaudited Balance
Sheet, the Closing Net Cash or Net Debt Statement or on the accounting records
of the Company as of the Closing (collectively, the “Accounts Receivable”)
arose or will have arisen from bona fide sales, sublicenses or licenses
actually made or services actually performed by the Company in the Ordinary
Course of Business.  As of the Closing
Date the Accounts Receivable will be collectible net of any respective reserves
shown on the Unaudited Balance Sheet as of the Closing. There is no contest,
claim or right of set-off, other than returns in the Ordinary Course of
Business, under any Contract with any obligor of any Accounts Receivable
relating to the amount or validity of such Accounts Receivable.

 

5.9                                 No Undisclosed Liabilities 
Except as set forth in the Unaudited Balance Sheet, or Schedule 5.9,
the Company has no Liabilities except for (i) current Liabilities incurred in
the Ordinary Course of Business since the date of the Unaudited Balance Sheet,
none of which, individually or in the aggregate, would have a Material Adverse
Effect on the Company, (ii) Liabilities reflected on the Closing Net Cash or
Net Debt Statement, (iii) the Company Closing Payments, or (iv) nonmonetary
obligations under contracts and agreements disclosed in the Members’ Disclosure
Schedules.

 

5.10                           Taxes.

 

(a)                                  Filing of Tax Returns.  The
Company has duly and timely filed (or caused to be filed) with the appropriate
taxing authorities all Tax Returns required to be filed.  All such Tax Returns filed are complete and
accurate in all material respects.  All
Taxes owed by the Company (whether or not shown on any Tax Return) have been
timely paid in full or an adequate reserve has been provided in the Financial
Statements.  The Company is not currently
the beneficiary of any extension of time within which to file any Tax
Return.  No claim has ever been made in
writing by an authority in a jurisdiction where the Company does not file Tax
Returns that the Company is (or that the Members by reason of owning Membership
Interests are) or may be subject to taxation by that jurisdiction.

 

(b)                                 Payment of Taxes. 
Except as set forth in Schedule 5.10, the unpaid Taxes of
the Company (i) did not, as of the date of the Unaudited Balance Sheet exceed
the reserve for Tax liability set forth on the face of the Unaudited Balance
Sheet (rather than in any notes thereto), and (ii) will not exceed that reserve
as adjusted for operations and transactions through the Closing Date in
accordance with the past custom and practice of the Company in filing its Tax
Returns.

 

(c)                                  Audits, Investigations, Disputes or Claims.         No deficiencies for Taxes have been claimed,
proposed or assessed in writing by any taxing or other governmental authority
against the Company.  There are no
pending or Threatened

 

31

 

audits, investigations, disputes or claims or other Proceedings for or
relating to any Liability for Taxes with respect to the Company, and there are
no matters under discussion with any Governmental Bodies, or known to the
Company or any Member, with respect to Taxes that are likely to result in an
additional Liability for Taxes with respect to the Company.  There have been no audits of federal, state
or local Tax Returns by the relevant taxing authorities, and, except as set
forth in Schedule 5.10, neither the Company, any predecessor or any
Member has been notified that any taxing authority intends to audit a Tax
Return.  The Company has made available
to Buyer complete and accurate copies of federal, state and local Tax Returns
of the Company for the years ended December 31, 2002, 2003 and 2004, and
complete and accurate copies of all examination reports and statements of
deficiencies assessed against or agreed to by the Company since the Company’s
inception.  The Company has not waived
any statute of limitations in respect of Taxes or agreed to any extension of
time with respect to a Tax assessment or deficiency.

 

(d)                                 Encumbrances. 
There are no Encumbrances for Taxes (other than for current Taxes not
yet due and payable) on any of the assets of the Company or any of the Membership Interests.

 

(e)                                  Tax Sharing Agreements. 
There are no Tax-sharing agreements or similar arrangements (including
indemnity arrangements) with respect to or involving the Company or any of its
assets or Business, and after the Closing Date, the Company, its assets, and
its Business shall not be bound by any such Tax-sharing agreements or similar
arrangements or have any Liability thereunder for amounts due in respect of
periods prior to the Closing Date.

 

(f)                                    Tax Status of the Company and Members.  At
all times during its existence the Company has been, and through and including
the Closing Date the Company will be, a partnership or a disregarded entity for
federal income Tax purposes and for purposes of any state or local income Tax
that the Company is (or that the Members by reason of owning Membership
Interests are) subject to as a result of the operations of the Company on or
prior to the Closing Date.  Each of the
Members is a United States person for federal income Tax purposes and a
resident of Hawaii for Hawaii income tax purposes.

 

(g)                                 Withholding.  The Company has duly and
timely withheld from employee salaries, wages and other compensation and amounts
payable to other persons, and has paid over to the appropriate taxing
authorities all amounts required to be so withheld and paid over for all
periods under all applicable Legal Requirements.

 

(h)                                 Sales and Use Taxes.   The
Company has reported, paid and/or collected all material general excise, gross
receipts, sales and use taxes required to be reported, paid and/or collected
and has remitted, or will remit on a timely basis, such amounts to the
appropriate taxing authority, or has been furnished properly completed
exemption certificates and has maintained all such records and supporting
documents in the manner required by all applicable general excise, gross
receipts, sales and use Tax Legal Requirements.

 

32

 

(i)                                     Certain Items.  The
Company will not be required to include any item of income in, or exclude any
item of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date as a result of any (A) change in method
of accounting for a taxable period ending on or prior to the Closing Date, (B) “closing
agreement” as described in Section 7121 of the IRC (or any corresponding or
similar provision of state or local income Tax law) executed on or prior to the
Closing Date, (C) installment sale or open transaction disposition made on or prior
to the Closing Date, (D) prepaid amount received on or prior to the Closing
Date or (E) tax recapture provisions under Chapter 235 of the Hawaii Revised
Statutes, as amended.  None of the assets
of the Company is (i) tax-exempt use property within the meaning of
Section 168(h) of the IRC, (ii) tax-exempt bond financed property within
the meaning of IRC Section 168(g), or (iii) subject to a lease under
IRC Section 7701(h) or any predecessor provision.  Except as set forth on Schedule 5.10,
the Company has never claimed a credit for research and experimentation
expenditures under IRC Section 41 or any predecessor provision or under Section
235-110.91 of the Hawaii Revised Statutes, as amended.

 

(j)                                     Certain Transactions.  The
Company has not engaged in any transaction that could give rise to (i) a
registration obligation with respect to any Person under Section 6111 of the
IRC or the regulations thereunder, (ii) a list maintenance obligation with
respect to any Person under Section 6112 of the IRC or the regulations
thereunder, or (iii) a disclosure obligation as a “reportable transaction”
under Section 6011 of the IRC and the regulations thereunder.

 

(k)                                  QHTB Status.  The Company has received a
comfort letter ruling from the Department of Taxation of the State of Hawaii
that it is a “qualified high technology business” within the meaning of Hawaii
Revised Statutes 235-§110.9 and §235-7.3.

 

5.11                           Employee Benefits.

 

(a)                                  Schedule 5.11(a) sets forth a complete list of all plans,
contracts, agreements, practices, policies or arrangements, oral or written,
providing for employment or for any bonuses, deferred compensation, excess
benefits, pensions, retirement benefits, profit sharing, stock bonuses, stock
options, stock purchases, stock appreciation, phantom stock, restricted stock,
incentive, foreign benefits, life, accident and health insurance,
hospitalization, savings, holiday, vacation, severance pay, change of control
payments or benefits, unemployment, sick pay, leave, disability, tuition
refund, service awards or any other employee or executive benefits, including,
without limitation, any such plan, contract, agreement, practice, policy or
arrangement which is an “employee benefit plan” as defined in Section 3(3) of
ERISA, including any “employee welfare benefit plan” as defined in Section 3(1)
of ERISA and any employee pension benefit plan as defined in Section 3(2) of
ERISA providing employee benefits or compensation to current or former
employees of the Company or any Control Group Member maintained or contributed
to by the Company or any Control Group Member or to which the Company or any
Control Group Member is a party (each of the preceding hereinafter is referred
to individually as a “ Benefit Plan” and collectively as the “Benefit

 

33

 

Plans”).  With respect to each Benefit Plan, the
Members have delivered to Buyer a current, accurate and complete copy (or, to
the extent no such copy exists, an accurate description) thereof and, to the
extent applicable: (i) any related trust agreement or other funding instrument;
(ii) the most recent IRS opinion letter, if applicable; and (iii) any summary
plan description and other written communications by the Company or any Control
Group Member to its employees concerning the extent of the benefits provided
under a Benefit Plan.

 

(b)                                 Except as otherwise provided on Schedule
5.11(a):

 

(i)                                     the Company is not contributing nor has it in
the past contributed to any multiemployer plan within the meaning of Section
4001(a)(3) of ERISA in which employees of the Company or any Control Group
Member participate and no withdrawal liability has been incurred by or asserted
against the Company or any Control Group Member with respect to a multiemployer
plan;

 

(ii)                                   (A) for each Benefit Plan that is intended
to satisfy the provisions of Section 401(a) of the IRC, the Company has
obtained a favorable opinion letter from the IRS; (B) the opinion letter has
not been revoked by the IRS and the IRS has not given any written notice to the
Company that it intends to revoke the opinion letter; (C) no reportable event
within the meaning of Section 4043 of ERISA or “prohibited transaction” within
the meaning of Section 406 of ERISA has occurred with respect to any Benefit
Plan which would result in any liability with respect to the Benefit Plan or
the Company, and no excise tax has been imposed pursuant to Section 4975 of the
IRC in respect thereof; and (D) all contributions required to be made to the
Benefit Plans prior to the Closing Date shall have been paid by the date due or
properly accrued;

 

(iii)                               each Benefit Plan has been maintained,
operated and administered in accordance with its terms, and is in compliance
with all applicable laws and regulations, including, but not limited to, ERISA,
the IRC and the Health Insurance Portability and Accountability Act of 1996 and
its promulgating regulations, as amended.

 

(iv)                              the Company is in compliance with Part 6 of
Subtitle B of Title I of ERISA and IRC Section 4980B, and all other applicable
laws that require the continuation of benefit coverage upon the happening of
certain events, and the Members have (or have caused the applicable Benefit
Plan(s) to provide) and will continue to provide (or cause the applicable
Benefit Plan(s) to provide) for “continuation coverage” to or for the benefit
of each “covered employee” and each “qualified beneficiary” entitled thereto
(as such terms are defined in IRC Section 4980B) and shall otherwise comply in
all respects with the requirements (including, but not limited to, notice
requirements) of IRC Section 4980B as to each such covered employee and each
such qualified beneficiary with respect to whom a “qualifying event” (as
defined in IRC Section 4980B) has occurred (or will occur) as a result of the
transactions contemplated by this Agreement;

 

34

 

(v)                                 the assets of the Benefit Plans maintained by
the Company and any Control Group Member for the benefit of the Company’s and
any Control Group Member’s employees do not include any stock or securities
issued by the Company or any Control Group Member;

 

(vi)                              all reports and documents with respect to
each Benefit Plan required by ERISA or other applicable laws to be filed or
distributed have been timely filed or distributed;

 

(vii)                           no Benefit Plan exists that could result in
the payment to any present or former employee of the Company or any Control
Group Member of any money or other property or accelerate or provide any other
rights or benefits to any present or former employee of the Company or any
Control Group Member as a result of the transactions contemplated by this
Agreement, whether or not such payments would constitute parachute payment
within the meaning of Section 280G of the IRC;

 

(viii)                        all contributions to each of the Benefit
Plans intended to be qualified under Section 401(a) of the IRC are, and have
been in the year to which they related, fully deductible;

 

(ix)                                other than qualified domestic relations
orders as defined in Section 414(p) of the IRC and qualified medical child
support orders as defined in Section 609(a)(2)(A) of ERISA, and except for
claims for benefits in the ordinary course, there are no actions, liens, suits,
arbitrations, disputes, legal, administrative or other proceedings or
governmental investigations pending against any of the Benefit Plans;

 

(x)                                   no Benefit Plan subject to Title IV of ERISA
has been maintained during the last three (3) years by the Company or any
Control Group Member;

 

(xi)                                none of the Benefit Plans is subject to
Section 302 of ERISA or Section 412 of the IRC;

 

(xii)                             no Benefit Plan provides medical benefits
beyond termination of service or retirement other than continuation of health
care coverage mandated by applicable Legal Requirements; and

 

(xiii)                          each Benefit Plan, either by its terms or by
applicable Legal Requirements, can be amended or terminated without limitation.

 

5.12                           Compliance with Legal Requirements;
Governmental Licenses and Permits.

 

(a)                                  Except as set forth in Schedule 5.12(a):  (i) The Company and each of the Members are
not, and have not been at any time since the inception of the Company, in
violation of any material Legal Requirement applicable to the Company or

 

35

 

the Members (in their capacity as a Member of the Company), the conduct
of their Business or the ownership of the Company’s assets or property, or by
which any of them are bound; and (ii) no event has occurred or circumstance
exists or has been alleged that (with or without notice or lapse of time) may
constitute or result in a violation by the Company or any Member of, or a
failure on the part of the Company or any Member to comply with, any such
material Legal Requirement or give rise to any obligation on the part of the
Company or any Member to undertake, or to bear all or any portion of the cost
of, any remedial action of any nature.

 

(b)                                 Except as set forth in Schedule 5.12(b),
the Company holds and is in compliance with, and Schedule 5.12(b) sets
forth, all material governmental qualifications, registrations, filings,
privileges, franchises, licenses, permits, approvals or authorizations
(collectively, the “Licenses”) necessary for the lawful conduct and
operation of the Business as currently conducted and operated.  The Licenses are valid and in full force and
effect and, other than as a result of facts or circumstances relating to Buyer,
shall remain so immediately following consummation of the Transactions.  To the Company’s and each of the Members’
Knowledge, no Person has alleged any violation or failure to comply by the
Company with any License listed or required to be listed on Schedule 5.12(b),
no suspension, cancellation or termination of any such License is Threatened,
and no event has occurred or circumstance exists that may (with or without
notice or lapse of time) constitute or result directly or indirectly in a
violation of or a failure to comply with any term or requirement of any such
License or result directly or indirectly in the revocation, withdrawal,
suspension, cancellation or termination of, or any modification to, any such
License.

 

5.13                           Absence of Proceeding; Orders.

 

(a)                                  Except as set forth in Schedule 5.13,
to the Knowledge of the Company and the Members, there is no pending
Proceeding:

 

(i)                                     that has been commenced by or against the
Company or any Member, that otherwise relates to or may affect the Business of,
or any of the assets or property owned or used by, the Company; or

 

(ii)                                  that challenges, or that may have the effect
of preventing, delaying, making illegal or otherwise interfering with, any of
the Transactions.

 

To the Knowledge of the Company and the Members, no
such Proceeding has been Threatened and, no event has occurred or circumstance
exists that (with or without notice or lapse of time) may reasonably be
expected to give rise to any such Proceeding. 
The Members have delivered to Buyer copies of all pleadings,
correspondence, and other documents relating to each Proceeding listed in Schedule 5.13.  The Proceedings listed in Schedule 5.13
are not expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company or on its ability to operate or conduct its business or
own or use its assets after the Closing.

 

(b)                                 Except as set forth in Schedule 5.13:

 

36

 

(i)                                     there is no Order to which the Company or any
of the assets owned or used by the Company, is subject;

 

(ii)                                  the Members are not subject to any Order that
relates to the Business of, or any of the assets owned or used by, the Company;
and

 

(iii)                               to the Knowledge of the Company and the
Members, no manager, agent or Employee of the Company is subject to any Order
that prohibits such manager, agent or Employee from engaging in or contributing
to any conduct, activity or practice relating to the Business of the Company.

 

5.14                           Absence of Certain Changes and Events. 
Except as set forth in Schedule 5.14, since the date of the
Unaudited Balance Sheet, the Company has conducted its business only in the
Ordinary Course of Business and there has not been any:

 

(a)                                  (i) change in authorized or issued
Membership Interests or equity of the Company; (ii) grant of any option or
right to purchase Membership Interests or equity of the Company;
(iii) issuance of any security convertible into such Membership Interests
or equity; (iv) grant of any registration rights; (v) purchase,
redemption, retirement or other acquisition by the Company of any such
Membership Interests or equity; or (vi) declaration or payment of any
dividend or other distribution or payment in respect of such Membership
Interests or equity;

 

(b)                                 amendment to the Organizational Documents of
the Company;

 

(c)                                  payment or increase by the Company of any
bonuses, salaries or other compensation (including management or other similar
fees) to any member, shareholder, manager, director, officer, Employee or entry
into any employment, severance or similar Contract with any Member, manager or
Employee (except in the Ordinary Course of Business);

 

(d)                                 adoption of, or increase in the payments to
or benefits under, any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, severance or other employee benefit plan for or
with any of the Employees of the Company or any increase in the payment to or
benefits under any Benefit Plan for or with any Employees of the Company;

 

(e)                                  damage to or destruction or loss of any
tangible asset or property of the Company, whether or not covered by insurance,
that would have a Material Adverse Effect on the Company;

 

(f)                                    entry into, termination or acceleration of,
or receipt of notice of termination of (i) any material license,
distributorship, dealer, sales representative, joint venture, credit or similar
agreement or (ii) any Contract or transaction involving a Liability by or
to the Company of at least $50,000;

 

37

 

(g)                                 sale or licenses (other than sales or
licenses of the Company’s products for consumer use in the Ordinary Course of
Business), or lease or other disposition of any asset or property of the
Company;

 

(h)                                 mortgage, pledge or imposition of any
Encumbrance on any asset or property of the Company, including the sale, lease
or other disposition of any of the Intellectual Property of the Company
(excluding sales or licenses of the Company’s products for consumer use in the
Ordinary Course of Business);

 

(i)                                     delay or failure to repay when due any
obligation, including without limitation, accounts payable and accrued expenses
(except in the Ordinary Course of Business);

 

(j)                                     accrual of any expenses except for such
accruals in the Ordinary Course of Business;

 

(k)                                  capital expenditures in excess of $50,000;

 

(l)                                     cancellation or known waivers of any claims
or rights with a value to the Company in excess of $25,000;

 

(m)                               incurrence of or increase in any Liability,
except in the Ordinary Course of Business, or any deferred payment of or
failure to pay when due any Liability which deferral or failure may have a
Material Adverse Effect on the Company;

 

(n)                                 loan to, or any agreement with, any Employee
other than an employment agreement;

 

(o)                                 failure to preserve intact the current
business organization of the Company, keep available the services of its
current officers, Employees and agents or, to the Knowledge of the Company,
failure to maintain the relations and good will with its suppliers, customers,
creditors, Employees, agents and others having business relationships with
them;

 

(p)                                 change in the accounting methods used by the
Company;

 

(q)                                 election made, extension granted or waiver of
a statute of limitations with respect to Taxes or settlement or compromise any
federal, state, local or foreign claim or Liability for Taxes; or

 

(r)                                    agreement, whether oral or written, by the
Company with respect to or to do any of the foregoing.

 

5.15                           Contracts; No Defaults.

 

(a)                                  Schedule 5.15 contains a complete and accurate list, and
the Company has made available to Buyer true and complete copies, of:

 

38

 

(i)                                     each Applicable Contract that involves
performance of services or delivery of goods by the Company of an amount or
value, individually or, for a series of related Applicable Contracts, in the
aggregate, in excess of $25,000 per year for 2004 or any year thereafter;

 

(ii)                                  each Applicable Contract that involves
performance of services or delivery of goods or materials to the Company during
any twelve (12) month period of an amount or value, individually or, for a
series of related Applicable Contracts, in the aggregate, in excess of $25,000;

 

(iii)                               each Applicable Contract that was not entered
into in the Ordinary Course of Business;

 

(iv)                              each lease, rental or occupancy agreement,
license, installment and conditional sale agreement of the Company and each
other Applicable Contract, in each case affecting the ownership, title to, use
of, occupancy, or any leasehold or other interest in, any real or tangible
personal property (except personal property leases and installment and
conditional sales agreements having a value per item or aggregate payments of
less than $10,000 and with terms of less than one year);

 

(v)                                 each Applicable Contract, in each case with
respect to Intellectual Property, including agreements with current or former
Employees, consultants or contractors regarding the appropriation or the
non-disclosure of any Intellectual Property;

 

(vi)                              each collective bargaining agreement of the
Company and each other Applicable Contract relating to employment, in each case
to or with any labor union or other Employee representative of a group of
Employees and each other written employment or consulting agreement with any
Employees or consultants;

 

(vii)                           each joint venture or partnership of the
Company (however named) and each other Applicable Contract, in each case
involving a sharing of profits, losses, costs or Liabilities by the Company
with any other Person;

 

(viii)                        each Applicable Contract containing covenants
that in any way purport to restrict the business activity of the Company or
Henk Rogers or limit the freedom of the Company or Henk Rogers to engage in any
line of business or to compete with any Person;

 

(ix)                                each Applicable Contract providing for
royalty payments to or by any Person based on sales or profits;

 

(x)                                   each power of attorney granted by or to the
Company that will be after the Closing, effective and outstanding;

 

39

 

(xi)                                each Applicable Contract entered into other
than in the Ordinary Course of Business that contains or provides for an
express undertaking by the Company to be responsible for consequential damages;

 

(xii)                             each Applicable Contract for capital
expenditures in excess of $50,000;

 

(xiii)                          each Applicable Contract in effect presently
or during the last twelve (12) months between the Company and its former or
current members, directors, officers or Employees;

 

(xiv)                         each written warranty extended by the Company
other than in the Ordinary Course of Business and each guaranty, and or other
similar undertaking with respect to contractual performance in excess of
$25,000 extended by the Company;

 

(xv)                            each severance agreement or similar
arrangement that provides any obligations (absolute or contingent) for the
Company or any other Person to make any payment to any officer, director, or
Employee or member of the Company or any Affiliate of the foregoing after
termination; and

 

(xvi)                         each amendment, supplement, and modification
(whether oral or written) in respect of any of the foregoing.

 

(b)                                 Except as set forth in Schedule 5.15,
no Member (or any Affiliated Tetris Company or any Affiliate thereof) has or
may acquire any rights under, and no Member has or may become subject to, any
obligation or liability under any Contract (except by virtue of such Member’s
ownership of Member Interests) that relates to the business of, or any of the
assets owned or used by, the Company;

 

(c)                                  Except as set forth in Schedule 5.15,
each Contract identified or required to be identified in Schedule 5.15
is in full force and effect and is legal, valid, binding and enforceable in
accordance with its terms against the Company and, to the Knowledge of the
Company, against all of the parties thereto, in each case except as such
enforceability may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization and other similar laws affecting creditors’ rights generally and
(ii) the general principles of equity, regardless of whether asserted in a
proceeding in equity or at law.

 

(d)                                 Except as set forth in Schedule 5.15:

 

(i)                                     the Company currently is, and at all times
since the date of each such Contract has been, in compliance with all material
terms and requirements of each Contract identified or required to be identified
on Schedule 5.15 or with respect to each incidence of
non-compliance, such non-compliance has been timely and fully cured;

 

(ii)                                  to the Knowledge of the Company, each other
Person that has or had any obligation or Liability under any Applicable
Contract identified or

 

40

 

required to be identified on Schedule 5.15 is, and at all
times since the Company’s inception has been, in compliance with all material
terms and requirements of such Applicable Contract;

 

(iii)                               to the Knowledge of the Company, no event has
occurred or circumstance exists that (with or without notice or lapse of time)
may in any material respect contravene, conflict with, or result in a material
violation or breach of, or give the Company or any other Person the right to
declare a default or exercise any remedy under, or to accelerate the maturity
or performance of, or to cancel, terminate or modify, any Contract identified
or required to be identified on Schedule 5.15; and

 

(iv)                              the Company has not given to or received from
any other Person, at any time since the Company’s inception, any written or, to
the Knowledge of the Company, other notice or communication regarding any
actual,  or alleged material violation or
breach of, or default under, any Contract identified or required to be
identified in Schedule 5.15.

 

(e)                                  There are no pending significant
renegotiations of, or attempts to renegotiate, and there are no outstanding
rights to renegotiate any material amounts paid or payable to the Company
under, any Contract identified or required to be identified in Schedule 5.15
with any Person and no Person has made written demand for such renegotiation.

 

(f)                                    The Contracts relating to the provision of
products or services by the Company have been entered into in the Ordinary
Course of Business and have been entered into without the commission of any act
by the Company or in concert with any other Person, or any consideration having
been paid or promised, that is or would be in violation by the Company of any
Legal Requirement.

 

5.16                           Insurance  Schedule 5.16
contains a true and complete list of all liability, property and other
insurance policies of the Company currently in effect that insure the Business,
the Employees, the Members or the Company. 
Each such insurance policy is valid and binding and in full force and
effect, no premiums due thereunder have not been paid and the Company has not received
any notice of cancellation or termination in respect of any such policy or is
in default thereunder.  Neither the
Company nor the Person to whom such policy has been issued has received notice
that any insurer under any policy referred to in this Section is denying
liability with respect to a claim thereunder or defending under a reservation
of rights clause.

 

5.17                           Environmental Matters. 
Except as set forth in Schedule 5.17, the Company does not
need any Environmental Permits or Licenses under Environmental Laws in
connection with the conduct of the Business. 
The Company has, at all times, conducted, held and used, and is
continuing to conduct, hold and use, its affairs, the Business and properties
in accordance with all applicable Environmental Laws.

 

5.18                           Labor and Employee Relations.  The
Company is not and has never been throughout the period of operation of the
Company (and no predecessor Person or other entity

 

41

 

has
been) a party to any collective bargaining or other labor Contract.  There has not been, and there is not
presently pending or existing, and, to the Knowledge of the Company, there is
not Threatened, (a) any strike, slowdown, picketing, work stoppage,
lock-out or Employee grievance process, (b) any Proceeding against or
affecting the Company relating to the alleged violation of any Legal
Requirement pertaining to labor relations or employment matters, or
(c) any application for certification of a collective bargaining agent.  No event has occurred or, to the Knowledge of
the Company, circumstance exists that could reasonably be expected to result in
any work stoppage or other labor dispute. 
There is no lockout of any Employees by the Company, and no such action
is contemplated by the Company.  The
Company has complied in all respects with all Legal Requirements relating to
employment, equal employment opportunity, nondiscrimination, immigration,
wages, hours, benefits, collective bargaining, the payment of social security
and similar Taxes, occupational safety and health, and plant closing
(including, but not limited to, the Hawaii Dislocated Workers law).  The Company is not liable for the payment of
any compensation, damages, Taxes, fines, penalties or other amounts, however
designated, for failure to comply with any of the foregoing Legal
Requirements.  Schedule 5.18
sets forth the names and current employment status of all Persons currently and
previously employed by the Company since the date of its inception. No
Employee, or manager of the Company is a party to, or is otherwise bound by,
any agreement or arrangement, including any confidentiality, noncompetition, or
proprietary rights agreement, between such Employee, manager and any other
Person that in any way adversely affects or will affect (i) the
performance of such Employee’s duties as an Employee or manager of the Company,
or (ii) the ability of the Company to conduct its Business, including any
such agreement or arrangement with the Members or the Company by any such
Employee or manager.  The Company has not
at any time in the twenty-four (24) month period prior to the Closing employed
more than 54 Persons, whether full-time or part-time.

 

5.19                           Intellectual Property.

 

(a)                                  Schedule 5.19(a) hereto sets forth a correct and complete
list of: (i) all Company Registered Intellectual Property; (ii) all
licenses and agreements pursuant to which Company licenses, on an exclusive
basis, any Intellectual Property to or from any third party; (iii) all licenses
and agreement pursuant to which Company licenses, on a non-exclusive basis, any
Intellectual Property, to or from any third party, excluding generally
available off-the-shelf microcomputer and work station software and any other
generally available software with an acquisition cost of less than $1,000 or
less; and (iv) all games commercially released or under development.

 

(b)                                 Except as set forth on Schedule 5.19(b),
the Company has not interfered with, infringed upon or misappropriated any
Intellectual Property rights of any third party, and the Company (and
management level Employees with direct responsibility for Intellectual Property
matters) has never received any written charge, complaint, claim, demand, or
notice alleging any such interference, infringement or misappropriation (including
any claim that the Company must license or refrain from using any Intellectual
Property rights of any third party).  To
the Knowledge of the Company, no third party has interfered with, infringed
upon or misappropriated any Company-Owned Intellectual Property.

 

42

 

(c)                                  Except as set forth on Schedule 5.19(c),
the Company (A) owns all right, title and interest in, or has a valid and
binding license to use, the Company Intellectual Property; (B) the rights of
the Company to Company-Owned Intellectual Property are free and clear of all
Encumbrances, except for Permitted Liens; (C) all registrations with and
applications to governmental or regulatory bodies in respect of the
Company-Owned Intellectual Property are valid and in full force and effect and
the Company has taken all action required to maintain their validity and
effectiveness; (D) there are no restrictions on the (i) direct or indirect
transfer of any license, or any interest therein, held by the Company in
respect of the Company-Owned Intellectual Property or (ii) direct or indirect
changes of control of the Company; (E) the Company has taken reasonable
measures to protect the secrecy and confidentiality of its trade secrets; and
(F) the Company is not, nor has it received any written notice that it is, in
default (or with the giving of notice or lapse of time or both, would be in
default) under any license with respect to any Company Intellectual Property.

 

(d)                                 Except as identified on Schedule 5.19(d),
no approval or consent of any Person is needed so that the interest of Buyer in
the Company Intellectual Property shall continue to be in full force and effect
following the Transactions contemplated by this Agreement and the Transaction
Documents, and the Company is not subject to any written restriction,
agreement, instrument, order, judgment or decree which would be violated or
breached by the consummation of the Transactions contemplated by this Agreement
and the Transaction Documents.

 

(e)                                  Except for the fees identified in Schedule
5.19(e) for the agreements identified therein, no licensing fees, royalties
or payments are due or payable by the Company or any other Person in connection
with the Company Intellectual Property, other than maintenance fees payable to
U.S. governmental agencies as set forth on Schedule 5.19(e).

 

(f)                                    Schedule 5.19(f) separately lists and identifies all
(A) computer programs, (B) computer databases (including, but not limited
to, databases used in conjunction with such computer programs) and (C)
documentation, specifications, manuals and materials associated therewith that
are included in the Company Intellectual Property, excluding generally
available off-the-shelf microcomputer and work station software and generally available
off-the-shelf microcomputer and work station software and any other generally
available software with an acquisition cost of less than $1000 or less
(collectively, the “Software Rights”). 
Except as set forth in Schedule 5.19(f) all right, title and
interest in and to the Software is owned by the Company free and clear of all
Encumbrances, except for Permitted Liens, are fully transferable to Buyer, and
no party other than Company has any interest in the Software.

 

(g)                                 The computer software included in the
Software Rights (the “Software”) that comprises or constitutes a product
that Company manufactures, sells, licenses or otherwise delivers to its
customers in connection with conducting the Business performs in accordance
with the software’s applicable contractual commitments.

 

43

 

(h)                                 The Company has kept secret and has not
disclosed the source code for the Software to any person or entity other than
certain Employees or independent contractors of the Company each of whom is
identified in Schedule 5.19(h) and is subject to the terms of a binding
confidentiality agreement with respect thereto. 
The Company has taken reasonable measures to protect the confidentiality
and proprietary nature of the Software, including without limitation, the use
of the confidentiality agreements with all of its Employees or independent
contractors having access to the Software source and object code.

 

(i)                                     No Employee of the Company is in default
under, and the consummation of the Transactions contemplated by this Agreement
and the Transaction Documents will not result in a default of, any term of any
Contract relating to the Software or, to Company’s knowledge, any
non-competition arrangement or any other written agreement or any restrictive
covenant relating to the Software or its development or exploitation.  The Company does not have any obligation to
compensate any Person for the development, use, sale or exploitation of the
Software nor has Company granted to any other Person or entity any license,
option or other rights to develop, use, sell or exploit in any manner the
Software whether requiring the payment of royalties or not.

 

(j)                                     All Company Intellectual Property for which
confidentiality is appropriate has been maintained in confidence by Company in
accordance with protection procedures believed by the Company to be adequate
for protection customarily used in the industry to protect rights of like
importance.  All former and current
managers, Employees, agents, consultants and independent contractors who have
authored, co-authored or otherwise contributed to or participated in any
material way in the conception and development of Company Intellectual Property
that is owned by Company and which is used in and is material to the Business (“IP
Participant”), have executed and delivered to the Company a proprietary
information agreement, pursuant to which, inter alia, such IP Participant has
assigned any and all of his rights in such Company Intellectual Property to the
Company and, to the extent appropriate, has agreed to keep such Company
Intellectual Property confidential and not to use such Company Intellectual
Property for any purpose unrelated to his work for the Company.  No former or current IP Participant has filed,
asserted in writing or, to the Knowledge of the Company (or management
Employees of the Company with direct responsibility for Intellectual Property
matters), threatened any claim against the Company in connection with his or
her involvement in any Company Intellectual Property which is used in and is
material to the Company’s business.  To
the Knowledge of the Company (or management Employees of the Company with
direct responsibility for Intellectual Property matters), no IP Participant has
any patents issued or applications pending for any device, process, design or
invention of any kind now used or needed by the Company which patents or
applications have not been assigned to the Company.

 

(k)                                  Except as set forth on Schedule 5.19,
no former or current Member, shareholder, director, officer, Employee or
independent contractor of the Company or any Affiliate of the Company or the
foregoing has any right to receive royalty payments or license fees from the
Company.

 

44

 

(l)                                     With respect to privacy and security
agreements and privacy and security contractual commitments (the “Commitments”),
(A) the Company is in full compliance with all applicable Commitments; (B) the
Transactions contemplated by this Agreement and the Transaction Documents will
not violate any Commitments; (C) the Company has not received inquiries from
the Federal Trade Commission or any other federal or state governmental
agencies regarding Commitments; (D) the Company has not received any written
(including email) complaints from any web site user regarding Commitments, or
compliance with Commitments; (E) the Commitments have not been rejected by any
applicable certification organization which has reviewed such Commitment or to
which any such Commitment has been submitted and (F), the Company has not
experienced the cancellation, termination or revocation of any privacy or
security certification issued by any Commitments.

 

(m)                               The Company has in its possession or control:
(A) correct and complete, fully-executed copies of all of the licenses and
agreements (as amended to date) that are required to be identified on Schedules
5.19; and (B) correct and complete copies of all documents (including
without limitation patents, registration certificates, renewal certificates,
applications, prosecution histories, and all documents submitted to or received
from the relevant patent, copyright, trademark, domain name or other
authorities in the United States and foreign jurisdictions, as the case may be)
relating to each item of Company Registered Intellectual Property that is
required to be identified on Schedule 5.19.  The Company has delivered to Buyer correct
and complete, fully-executed copies of all of the documents described in this
subsection.

 

5.20                           Certain Payments. 
Neither the Company, nor any of its Members, managers, agents or
Employees or any other Person affiliated with or acting for or on behalf of the
Company, has at any time on behalf of the Company (a) made any illegal
contribution, gift, bribe, rebate, payoff, influence payment, kickback or other
payment to any Person, private or public, regardless of form, whether in money,
property or services (i) to obtain favorable treatment in securing business,
(ii) to pay for favorable treatment for business secured, (iii) to obtain
special concessions or for special concessions already obtained, for or in
respect of the Company or any of its Affiliates or (iv) in violation of any
Legal Requirement, or (b) established or maintained any fund or asset of the
Company that has not been recorded in the books and records of the Company or
in violation of any Legal Requirement.

 

5.21                           No Other Agreements to Sell Assets or Equity
of the Company.  Neither the Company nor any of the Members,
managers or Affiliates has any commitment or legal obligation, absolute or
contingent, to any other Person or firm, other than as contemplated by this
Agreement and the Transactions, to sell, assign, transfer, license or effect a
sale of any of the assets of the Company (other than inventory and products and
licenses in the Ordinary Course of Business), to sell or effect a sale of the
Membership Interests of the Company, to effect any merger, acquisition,
consolidation, liquidation, dissolution or other reorganization of the Company
or to enter into any agreement or cause the entering into of an agreement with
respect to any of the foregoing.

 

5.22                           Relationships with Related Parties. 
Except as set forth in Schedule 5.22, neither the Company nor any
Person related to or affiliated with any Member owns or has owned

 

45

 

(of
record or as a beneficial owner) an equity interest or any other financial or
profit interest in, a Person that has (i) had business dealings or a material
financial interest in any transaction with the Company other than business
dealings or transactions conducted in the Ordinary Course of Business with the
Company at substantially prevailing market prices and on substantially
prevailing market terms or (ii) engaged in a business competing with the
Company with respect to any line of the products or services of the Company in
any market presently served by the Company except for less than one percent
(1%) of the outstanding capital stock of any such competing business that is
publicly traded on any recognized exchange or in the over-the-counter
market.  Except as set forth in Schedule
5.22, no Affiliate of any Member is a party to any Contract with, or has
any claim or right against, the Company.

 

5.23                           Bank Accounts, Powers of Attorney.  Schedule 5.23
sets forth an accurate and complete list showing the name and address of each
bank or other financial institution or securities broker in which the Company
has any account, safe deposit box, borrowing arrangement or certificate of
deposit, the number of any such account or any such box and the names of all
Persons authorized to draw thereon or to have access thereto.

 

5.24                           HSR Act.  Henk Rogers and Akemi Rogers
are the ultimate parent entity of the Company and Members within the meaning of
the HSR Act and the value of their total assets, including those related to all
Affiliated Tetris Companies and any Affiliates, are below $100 million and
their annual revenues, including those of all Affiliated Tetris Companies and
any Affiliates, are below $100 million within the meaning of the HSR Act and
regulations set forth in 16 CFR 801 et seq, including without limitation
Regulation No. 801.11.

 

5.25                           Brokers and Finders. 
Except as set forth on Schedule 5.25, the Company, the Members
and their respective agents have incurred no obligation or Liability for
brokerage or finders’ fees or agents’ commissions or other similar payment in
connection with this Agreement or the Transactions.  The Members agree to indemnify Buyer against
and to hold Buyer harmless from, any claims for brokerage or similar commission
or other compensation which may be made against Buyer by any third party in
connection with the Transactions, which claim is based upon such third party
having acted as broker, finder, investment banker, advisor, consultant or
appraiser or in any similar capacity on behalf of any of the Company, any of
the Members or any of their Affiliates.

 

5.26                           Disclosure.  No representation or warranty
of the Members or the Company in this Agreement and no statement by them in the
Members’ Disclosure Schedule is a misstatement of a material fact or omits
to state a material fact necessary to make the statements herein or therein, in
light of the circumstances in which they were made, not misleading.

 

5.27                           Acquisition of JAMDAT Mobile Inc. Stock.

 

(a)                                  Each of the Members understands that
(i) the Consideration Shares have not been registered under the Securities
Act, nor qualified under the securities laws of any other jurisdiction,
(ii) the Consideration Shares cannot be resold unless they subsequently
are registered under the Securities Act and qualified under applicable state
securities laws or foreign securities laws, unless exemptions from such
registration and qualification requirements are available.

 

46

 

(b)                                 The Consideration Shares to be received by
the Members pursuant to this Agreement will be acquired for the Member’s own
accounts and not with a view to, or intention of, distribution thereof in
violation of the Securities Act, any applicable state securities laws or
foreign securities laws, and the Consideration Shares will not be disposed of
in contravention of the Securities Act or any applicable state securities laws
or foreign securities laws.  Each of the
Members represents and warrants that he or she has no agreement, or other
arrangement, formal or informal, with any Person to sell, transfer or pledge
any part of the Consideration Shares or which would guarantee any profit, or
protect against any loss, with respect to this investment and each of the
Members has no plans to enter into any such agreement or arrangement.

 

(c)                                  Each of the Members is an accredited investor
as such term is defined in Section 501 of Regulation D of the Securities
Act, has substantial knowledge and experience in financial and business
matters, has specific experience making investment decisions of a similar
nature, and is capable, without the use of a financial advisor, of utilizing
and analyzing the information made available in connection with the acquisition
of the Consideration Shares under this Agreement and of evaluating the merits
and risks of an investment in the Consideration Shares.

 

(d)                                 Each of the Members has carefully reviewed
and understands the risks of, and other considerations relating to, an
investment in the Consideration Shares.

 

(e)                                  Each of the Members is able to bear the
economic risk of an investment in the Consideration Shares for an indefinite
period of time because (i) there is no assurance that the business of
Buyer will be economically successful and (ii) the Consideration Shares
have not been registered under the Securities Act and, therefore, cannot be
sold unless subsequently registered under the Securities Act or an exemption from
such registration is available, will bear legends to such effect, and are
subject to the Lock Up Agreement.

 

(f)                                    Each of the Members has had the opportunity
to review the SEC Documents and has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of the
Consideration Shares, has had full access to such other information concerning
Buyer as each of the Members has requested and has not received and is not
relying upon any written offering literature or prospectus except for Buyer’s
representations, warranties and covenants set forth in this Agreement.

 

(g)                                 Buyer is entering into this Agreement in
reliance upon the representations and warranties of the Members herein.

 

(h)                                 Each of the Members acknowledges and agrees
that neither Buyer nor any of its Representatives has made any representations,
warranties, or guaranties to any Member or to any Representatives concerning
the condition, operations, affairs or prospects of Buyer, except for the
express representations, warranties and covenants of Buyer set forth in this
Agreement.

 

47

 

(i)                                     Each of the Members and their Affiliates has
not, directly or indirectly, at any time prior to the Closing loaned or sold
short any Common Stock of JAMDAT or any derivative security related thereto to
any Person for the purpose of facilitating any short sale or similar
transaction involving the Common Stock of JAMDAT.

 

ARTICLE
6

 

REPRESENTATIONS
AND WARRANTIES OF JAMDAT AND BUYER

 

Each of JAMDAT and the Buyer hereby, jointly and
severally, represent and warrant to the Members that the following
representations and warranties are, as of the date hereof, and will be, as of
the Closing Date, true and correct, except as described in the Buyer’s Disclosure
Schedule:

 

6.1                                 Organization. 
JAMDAT is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the corporate power
and authority to own, operate and lease its properties and to carry on its
business as now conducted and as proposed to be conducted, and is qualified to
transact business, and is in good standing, in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of
its activities make such qualification necessary, except in any jurisdiction in
which the failure to so qualify or be in good standing would not be reasonably
expected to have a Material Adverse Effect on JAMDAT.  Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the limited liability company power and authority to own,
operate and lease its properties and to carry on its business.  Buyer was formed solely to consummate the
Transactions and has not carried on any business since the date of its
organization.  JAMDAT owns all of the
issued and outstanding membership interests of Buyer.

 

6.2                                 Power and Authority. 
JAMDAT has all requisite corporate power and authority to enter into, execute,
deliver and perform its obligations under, this Agreement and all of the
Transaction Documents to which it is a party. 
The execution, delivery and performance of this Agreement and all of the
Transaction Documents to which it is a party by JAMDAT have been duly and
validly approved and authorized by its Board of Directors in compliance with
applicable law (including the Delaware General Corporation Law) and JAMDAT’s
Certificate of Incorporation and Bylaws, each as amended.  The approval of JAMDAT’s stockholders is not
required for JAMDAT to enter into or perform its obligations under this
Agreement or any of the Transaction Documents to which it is a party.   Buyer has all requisite limited liability
company power and authority to enter into, execute, deliver and perform its
obligations under, this Agreement and all of the Transaction Documents to which
it is a party.  The execution, delivery
and performance of this Agreement and all of the Transaction Documents to which
it is a party by Buyer have been duly and validly approved and authorized by
its managers and its sole member in compliance with applicable law (including
the Delaware Limited Liability Company Act) and Buyer’s Organizational
Documents.

 

48

 

6.3                                 Authority; No Conflict.

 

(a)                                  This Agreement constitutes the legal, valid,
and binding obligation of JAMDAT, enforceable against JAMDAT, in accordance
with its terms.  Upon the execution and
delivery by JAMDAT of the Transaction Documents to which it is a party, such
Transaction Documents will constitute the legal, valid and binding obligations
of JAMDAT, enforceable against JAMDAT, in accordance with their respective
terms, except where such enforceability may be limited by (i) bankruptcy,
insolvency, moratorium, reorganization and other similar laws affecting
creditors’ rights generally and (ii) general principles of equity, regardless
of whether asserted in a proceeding in equity or at law.  This Agreement constitutes the legal, valid,
and binding obligation of Buyer, enforceable against Buyer, in accordance with
its terms.  Upon the execution and
delivery by Buyer of the Transaction Documents to which it is a party, such
Transaction Documents will constitute the legal, valid and binding obligations
of Buyer, enforceable against Buyer, in accordance with their respective terms,
except where such enforceability may be limited by (i) bankruptcy, insolvency,
moratorium, reorganization and other similar laws affecting creditors’ rights
generally and (ii) the general principles of equity, regardless of whether
asserted in a proceeding in equity or at law.

 

(b)                                 Except as set forth in Schedule 6.3(b),
neither the execution and delivery of this Agreement by JAMDAT or Buyer, nor
the consummation or performance of any of the Transactions by JAMDAT or Buyer,
will (1) give any Person the right to prevent, delay or otherwise interfere
with any of the Transactions pursuant to: 
(i) any provision of JAMDAT’s or Buyer’s Organizational Documents; (ii)
any resolution adopted by the board of directors of JAMDAT or Buyer; (iii) any
Legal Requirement or Order to which JAMDAT or Buyer may be subject; or (iv) any
Contract to which JAMDAT or Buyer is a party or by which JAMDAT or Buyer may be
bound, except in the case of each of clauses (iii) and (iv) above, for such
contraventions, conflicts, violations, Liabilities, reassessments,
revaluations, breaches or creations of Encumbrances which, individually and in
the aggregate, would not have a Material Adverse Effect with respect to JAMDAT
or Buyer, or (2) conflict with, or (with or without notice or lapse of time, or
both) result in a termination, breach, impairment or violation of, or
constitute a default under:  (i) any
provision of the Organizational Documents of JAMDAT or Buyer as currently in
effect; (ii) any Legal Requirement applicable to JAMDAT or Buyer or any of
their respective material assets or properties; or (iii) any Contract to which
JAMDAT or Buyer is a party or by which JAMDAT or Buyer or any of their
respective material assets or properties are bound.

 

(c)                                  Except as set forth in Schedule 6.3(c),
neither JAMDAT nor Buyer will be required to obtain any Consent from any Person
in connection with the execution and delivery of this Agreement or any
Transaction Document to which it is a party, or the consummation or performance
of any of the Transactions.

 

6.4                                 JAMDAT and Buyer Capital Structure.

 

(a)                                  The authorized capital stock of JAMDAT
consists of 60,000,000 shares of common stock, par value $0.0001 per share, of
which 50,000,000 shares have been designated common stock (or JAMDAT Common
Stock), 10,000,000 shares have been designated preferred stock, of which there
were 20,736,176 shares of JAMDAT

 

49

 

Common Stock and no shares of preferred stock issued and outstanding as
of April 5, 2005.  All outstanding shares
of JAMDAT capital stock are duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights and have been offered,
issued, sold and delivered by JAMDAT in compliance with (i) all registration or
qualification requirements (or applicable exemptions therefrom) of all
applicable securities laws and all other applicable Legal Requirements and (ii)
all requirements set forth in applicable agreements or instruments.  As of April 5, 2005: (i) there were options
outstanding to purchase an aggregate of 1,433,804 shares of JAMDAT Common Stock
pursuant to JAMDAT’s stock option plans; (ii) there were warrants outstanding
to purchase an aggregate of 337,333 shares of JAMDAT Common Stock; and (iii) 4,166,666
shares of JAMDAT Common Stock reserved for future issuance under JAMDAT’s 2004 Equity
Incentive Plan.  All shares of JAMDAT
Common Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights.

 

(b)                                 Buyer is a limited liability company, the
entire issued and outstanding membership interests and all other equity or debt
securities of which are held by JAMDAT. 
All of Buyer’s outstanding membership interests have been duly
authorized and validly issued, and are fully paid and nonassessable.  Buyer was formed for the purpose of
consummating the Transactions and has no material assets or liabilities except
as necessary for such purpose.

 

50

 

6.5                                 SEC Filings.

 

(a)                                  JAMDAT has filed all forms, statements,
schedules, reports and documents (including items incorporated by reference)
required to be filed by JAMDAT with the SEC since the effective date of the
registration statement for JAMDAT’s initial public offering and all such forms,
statements, schedules, reports and documents in the form filed with the SEC are
available on the SEC’s EDGAR website. 
All such required forms, statements, schedules, reports and documents
are referred to herein as the “JAMDAT SEC Reports.” As of their
respective dates, the JAMDAT SEC Reports (i) were prepared in accordance with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC thereunder applicable to such JAMDAT
SEC Reports and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except to
the extent corrected prior to the date of this Agreement by a subsequently
filed JAMDAT SEC Report.  JAMDAT has
filed with the SEC as exhibits to the JAMDAT SEC Reports all agreements,
documents and instruments required to be so filed, and such exhibits are true
and complete copies of such agreements, documents or instruments, as the case
may be (subject to redaction to preserve confidential treatment where
appropriate).  None of JAMDAT’s Subsidiaries
is required to file any reports with the SEC under the Exchange Act.  Except as set forth in the JAMDAT SEC
Reports, since December 31, 2004, there has not been any Material Adverse
Change in JAMDAT.

 

(b)                                 Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the JAMDAT
SEC Reports (the “JAMDAT Financials”), including each JAMDAT SEC Report
filed after the date of this Agreement until the Closing, (i) complied as to
form in all material respects with the published rules and regulations of the
SEC with respect thereto, (ii) was prepared in accordance with GAAP applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto or, in the case of unaudited interim financial statements,
as may be permitted by the SEC on Form 10-Q, Form 8-K or any successor form
under the Exchange Act), and (iii) fairly presented the consolidated financial
position of JAMDAT and its Subsidiaries as at the respective dates thereof and
the consolidated results of JAMDAT’s and its Subsidiaries’ operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements may not contain footnotes and were or are subject to normal and
recurring year-end adjustments in accordance with GAAP.  The audited balance sheet of JAMDAT as of
December 31, 2004 (the “JAMDAT Balance Sheet Date”) contained in the
JAMDAT SEC Reports is hereinafter referred to as the “JAMDAT Balance Sheet.”  Except as disclosed in the JAMDAT Financials,
since the JAMDAT Balance Sheet Date, neither JAMDAT nor any of its Subsidiaries
has any liabilities (absolute, accrued, contingent or otherwise) required under
GAAP to be set forth on a balance sheet that are, individually or in the
aggregate, material to the business, results of operations or financial
condition of JAMDAT and its Subsidiaries taken as a whole, except for:  (i) Liabilities incurred since the JAMDAT
Balance Sheet Date in the Ordinary Course of Business and, individually or in
the aggregate, do not result from any breach of contract, tort or violation of
any Law, (ii) those specifically set forth or

 

51

 

adequately provided for in the JAMDAT Balance Sheet, and (iii) the fees
and expenses of investment bankers, attorneys and accountants incurred in
connection with this Agreement.  JAMDAT
has not had any dispute with any of its auditors regarding accounting matters
or policies during any of its past three full fiscal years or during the
current fiscal year-to-date.  The books
and records of JAMDAT and each of its Subsidiaries have been maintained, and
are being maintained, in all material respects in accordance with applicable
legal and accounting requirements, and the JAMDAT Financials are consistent
with such books and records.

 

(c)                                  JAMDAT maintains a system of internal
controls over financial reporting sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

 

(d)                                 JAMDAT has established and maintains
disclosure controls and procedures (as such term is defined in Rule 13a-14 and
15d-14 under the 1934 Act), which (i) are designed to ensure that material
information relating to JAMDAT, including its consolidated subsidiaries, is
made known to JAMDAT’s principal executive officer and its principal financial
officer by others within those entities; and (ii) are effective in all material
respects to perform the functions for which they were established.  JAMDAT is not aware of any fraud, whether or
not material, that involves management or other employees who have a
significant role in JAMDAT’s internal controls. 
Since the date of the most recent evaluation of JAMDAT’s disclosure
controls and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.  Upon the Closing,
JAMDAT will be in compliance with all provisions of the Sarbanes-Oxley Act of
2002 that are effective and applicable to JAMDAT as an “issuer” as defined
under the Sarbanes-Oxley Act of 2002. 
Since the date of its initial public offering, neither JAMDAT nor any of
its Subsidiaries nor, to JAMDAT’s Knowledge, any director, officer, employee,
auditor, accountant or representative of JAMDAT or any of its Subsidiaries has
received or otherwise had or obtained Knowledge of any material complaint,
allegation, assertion or claim, whether written or oral, in each case,
regarding deficient accounting or auditing practices, procedures, methodologies
or methods or potentially fraudulent conduct of JAMDAT or any of its
subsidiaries or their respective internal controls or any material inaccuracy
in JAMDAT’s Financials.  No attorney
representing JAMDAT or any of its Subsidiaries, or any current or former employee
of JAMDAT or any of its Subsidiaries, whether or not employed by JAMDAT or any
of its Subsidiaries, has reported to the JAMDAT Board or any committee thereof
or to any director or officer of JAMDAT evidence of a material violation of
securities laws, breach of fiduciary duty, fraudulent conduct or similar
violation by JAMDAT or any of its officers, directors, employees or agents.

 

52

 

(e)                                  There are no material off-balance sheet
transactions, arrangements, obligations (including contingent obligations), or
any other relationships with unconsolidated entities or other persons, that may
have a Material Adverse Effect on JAMDAT’s financial condition, changes in
financial condition, results of operations, liquidity, capital expenditures,
capital resources, or significant components of revenues or expenses.

 

6.6                                 Compliance with Laws.   
Neither JAMDAT nor Buyer nor any of their Subsidiaries is in, and none
of them has received written notice of, a violation of or default with respect
to, any Legal Requirement, except for such violations or defaults that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on JAMDAT or Buyer. 
Each of JAMDAT and Buyer, and their subsidiaries hold all Governmental
Authorizations, other than those as to which the failure to hold, individually
or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on JAMDAT.

 

6.7                                 Proceedings.  There is no pending Proceeding
that has been commenced against JAMDAT or Buyer and that challenges, or may
have the effect of preventing, delaying, making illegal, or otherwise
interfering or restricts (or, if successful, would materially restrict or
prohibit), any of the Transactions, or if determined adversely to any of them,
would reasonably be expected to have a Material Adverse Effect on JAMDAT or
Buyer, and to JAMDAT’s and Buyer’s Knowledge, no such Proceeding has been
Threatened.

 

6.8                                 Investment.  Buyer is acquiring the
Membership Interests for its own account for investment, without a view to
their distribution within the meaning of § 2(11) of the Securities Act.

 

6.9                                 Brokers or Finders. 
Except for fees and expenses payable to Merrill Lynch in connection with
a valuation opinion related to the Transactions, neither JAMDAT nor Buyer has
incurred any obligation or Liability for brokerage or finders’ fees or agents’
commissions or other similar payments in connection with this Agreement and the
Transactions, and JAMDAT hereby indemnifies and holds the Members harmless from
any such fees, commissions or payments alleged to be due by or through JAMDAT
or Buyer as a result of the actions of JAMDAT or Buyer.

 

6.10                           Consideration Shares.  As
of the date of issuance thereof, the Closing Shares and, if issued, the
Post-Closing Shares shall be duly authorized, validly issued pursuant to
resolution of JAMDAT’s Board of Directors and outstanding, fully paid and
non-assessable, and the Members shall be the record and beneficial owners of
such Consideration Shares, free and clear of all Encumbrances, except for Buyer’s
rights under the Escrow Agreement with respect to the Escrow Shares,
restrictions imposed under the Securities Act and state securities laws, the
Registration Rights Agreement, JAMDAT’s charter documents and the Lock Up
Agreements.  Subject to the
representations of the Members set forth in Section 5.27 hereof, the Closing
Shares are being issued and, if issued, the Post-Closing Shares will be issued,
in compliance with all Legal Requirements including, without limitation, the
Securities Act and applicable state securities laws and NASDAQ listing and
other requirements.

 

53

 

6.11                           Disclosure.  Except with respect to the
Transactions, the Comerica financing and JAMDAT’s financial results for the
period from January 1, 2005 through the Closing, no representation or warranty
of JAMDAT or the Buyer in this Agreement or the JAMDAT SEC Reports and no
statement by them herein or in the JAMDAT SEC Reports is a misstatement of a
material fact or omits to state a material fact necessary to make the
statements herein or therein, in light of the circumstances in which they were
made, not misleading.

 

ARTICLE
7

 

COVENANTS

 

7.1                                 Covenants of the Company and the Members.

 

(a)                                  Performance.  Each of the Company and the
Members covenants and agrees with Buyer that, at all times from and after the
date hereof until the earlier of (i) the Closing or (ii) the termination of
this Agreement in accordance with its terms (the “Pre-Closing Period”)
and, with respect to any covenant or agreement by its terms to be performed in
whole or in part after the Closing, for the period specified therein, each of
the Company and the Members will comply with all covenants and provisions of
this Article VII, except to the extent Buyer may otherwise consent in writing
or as contemplated by this Agreement and the Transactions.  With respect to the Members’ dealings with
JAMDAT and the Buyer, no Member shall take any position which is inconsistent
with the position of any other Member.

 

(b)                                 Regulatory and Other Approvals. 
During the Pre-Closing Period, the Members will, and will cause the
Company to, as promptly as practicable (i) take all commercially reasonable
steps necessary or desirable to obtain all consents, approvals or actions of,
make all filings with and give all notices to Governmental Bodies or any other
Person required of the Members or the Company to consummate the Transactions
contemplated hereby and by the Transaction Documents, (ii) provide such other
information and communications to such Governmental Bodies or other Persons as
Buyer or such Governmental Bodies or other Persons may reasonably request in
connection therewith and (iii) cooperate with Buyer in connection with the
performance of its obligations under Section 7.2.  During the Pre-Closing Period, the Members
and the Company will provide prompt notification to Buyer when any such
consent, approval, action, filing or notice referred to in clause (i) above is
obtained, taken, made or given, as applicable, and will advise Buyer of any
communications (and, unless precluded by applicable Legal Requirements, provide
copies of any such communications that are in writing) with any Governmental
Body or other Person regarding any of the transactions contemplated by this
Agreement or any of the Transaction Documents.

 

(c)                                  HSR Filings.  In addition to and not in
limitation of the Company and the Members’ covenants contained in Section
7.1(a), during the Pre-Closing Period, the Company and the Members will (i)
take promptly all actions necessary to make the filings required of the Company
and the Members or their Affiliates under the HSR Act, (ii) comply at the
earliest practicable date with any request for additional information received
by the Company and the Members or their Affiliates from the Federal Trade

 

54

 

Commission
or the Antitrust Division of the Department of Justice pursuant to the HSR Act
and (iii) cooperate with Buyer in connection with Buyer’s filing under the HSR
Act and in connection with resolving any investigation or other inquiry
concerning the transactions contemplated by this Agreement commenced by the
Federal Trade Commission, the Antitrust Division of the Department of Justice
or any state attorney general.

 

(d)                                 Investigation by Buyer. 
During the Pre-Closing Period, the Members will, and will cause the
Company to, (i) provide Buyer with full access, upon reasonable prior notice
and during normal business hours, to all officers, employees, agents and
accountants of the Company and their assets and properties for the purpose of
conducting its due diligence investigation of the Company, and (ii) furnish
Buyer with all such information and data (including without limitation copies
of Contracts, Benefit Plans, employment policies, employment handbooks,
personnel records and other books and records) concerning the business and
operations of the Company as Buyer or reasonably may request in connection with
such investigation.  The foregoing shall
be subject to Section 10.9 regarding confidentiality

 

(e)                                  No Solicitations. 
During the Pre-Closing Period, the Members will not take, nor will they
permit the Company, or any Affiliate of the Members (or authorize or permit any
Representative or other Person retained by or acting for or on behalf of the
Members, the Company or any such Affiliate) to take, directly or indirectly,
any action to solicit, encourage, receive, negotiate, assist or otherwise
facilitate (including by furnishing confidential information with respect to
the Company or permitting access to the assets and properties and books and
records of the Company) any offer or inquiry from any Person concerning an
Acquisition Proposal.  If the Members,
the Company or any such Affiliate (or any such Person acting for or on their
behalf) receives from any Person any offer, inquiry or informational request
referred to above concerning an Acquisition Proposal, the Members will promptly
advise such Person, by written notice, of the terms of this Section 7.1(e) and
will promptly, orally and in writing, advise Buyer of such offer, inquiry or
request and deliver a copy of such notice to Buyer.

 

(f)                                    Conduct of Business. 
During the Pre-Closing Period, the Members will cause the Company to
conduct business only in the Ordinary Course of Business other than as
contemplated by this Agreement and the Transactions.  Without limiting the generality of the
foregoing, the Members will, unless otherwise approved in writing by Buyer or
JAMDAT or contemplated by this Agreement and the Transactions:

 

(i)                                     cause the Company to use its commercially
reasonable efforts to (I) preserve intact the present business organization and
reputation of the Company, (II) keep available (subject to dismissals and
retirements in the Ordinary Course of Business) the services of the present
officers, employees and consultants of the Company, (III) maintain the assets
and properties of the Company in good working order and condition, ordinary
wear and tear excepted, (IV) maintain the good will of customers, suppliers,
lenders and other Persons to whom the Company sells goods or provides services
or with whom the Company otherwise has significant business relationships and
(V) continue all current sales, 

 

55

 

marketing
and promotional activities relating to the business and operations of the Company;

 

(ii)                                  except to the extent required by
applicable Legal Requirements, (I) cause the books and records to be maintained
in the usual, regular and ordinary manner, (II) not permit any change in (A)
any pricing, investment, accounting, financial reporting, inventory, credit,
allowance or Tax practice or policy of the Company, or (B) any method of
calculating any bad debt, contingency or other reserve of the Company for
accounting, financial reporting or Tax purposes and (III) not permit any change
in the fiscal year of the Company;

 

(iii)                                (I) use, and will cause the Company to
use, commercially reasonable efforts to maintain in full force and effect until
the Closing substantially the same levels of coverage as the insurance afforded
under the Contracts listed in Schedule 5.16, (II) to the extent
requested by Buyer prior to the Closing Date, use all commercially reasonable
efforts to cause such insurance coverage held by any Person (other than the
Company) for the benefit of the Company to continue to be provided for at least
ninety (90) days after the Closing on substantially the same terms and
conditions as provided on the date of this Agreement and (III) cause any and
all benefits under such Contracts paid or payable (whether before or after the
date of this Agreement) with respect to the business, operations, employees or
assets and properties of the Company to be paid to the Company; and

 

(iv)                              cause the Company to comply, in all
material respects, with all Legal Requirements applicable to the business and
operations of the Company, and promptly following receipt thereof to give Buyer
copies of any notice received from any Governmental Body or other Person
alleging any violation of any such Legal Requirement or Order.

 

(g)                                 Financial Statements and Reports; Filings.

 

(i)                                     As promptly as practicable and in any
event no later than forty five (45) days after the end of each fiscal quarter
ending after the date hereof and before the Closing Date (other than the fourth
quarter) or ninety (90) days after the end of each fiscal year ending after the
date hereof and before the Closing Date, as the case may be, the Members will
deliver to Buyer true and complete copies of (in the case of any such fiscal
year) the audited and (in the case of any such fiscal quarter) the unaudited
consolidated balance sheet, and the related audited or unaudited consolidated
statements of operations, stockholders’ equity and cash flows, of the Company
and its consolidated subsidiaries, in each case as of and for the fiscal year
then ended or as of and for each such fiscal quarter and the portion of the
fiscal year then ended, as the case may be, together with the notes, if any,
relating thereto, which financial statements shall be prepared on a basis
consistent with the Financial Statements.

 

56

 

(ii)                                  As promptly as practicable, the Members
will deliver copies of all License applications and other filings made by the
Company after the date hereof and before the Closing Date with any Governmental
Body (other than routine, recurring filings made in the Ordinary Course of
Business or License applications which are not material to the Company).

 

(h)                                 Employee Matters. 
During the Pre-Closing Period, the Members will use their commercially
reasonable efforts to cause the Company’s Employees designated on Schedule 4.2(k)
to agree to be employed by Buyer or the Company following the Closing (provided
that commercially reasonable efforts shall not include the payment of any
consideration or enhanced compensation to such employees).  During the Pre-Closing Period, the Members
will cause the Company to administer each Benefit Plan, or cause the same to be
so administered, in all material respects in accordance with the applicable
provisions of all applicable Legal Requirements.  During the Pre-Closing Period, the Members
will promptly notify Buyer in writing of each receipt by the Members or the
Company (and furnish Buyer with copies) of any notice of investigation or
administrative proceeding by the IRS or other Governmental Body or Person
involving any Benefit Plan.  Except as
may be required by applicable Legal Requirements, during the Pre-Closing
Period, the Members will refrain, and will cause the Company to refrain, from
directly or indirectly (except as contemplated by this Agreement and the
Transaction):

 

(i)                                     making any representation or promise,
oral or written, to any officer, employee or consultant of the Company
concerning any Benefit Plan, except for statements as to the rights or accrued
benefits of any officer, employee or consultant under the terms of any Benefit
Plan;

 

(ii)                                  making any increase in the salary, wages
or other compensation of any officer, employee or consultant of the Company or
any Subsidiary whose annual salary is or, after giving effect to such change,
would be $50,000 or more;

 

(iii)                               adopting, entering into or becoming bound
by any Benefit Plan, employment-related Contract or collective bargaining
agreement, or amending, modifying or terminating (partially or completely) any
Benefit Plan, employment-related Contract or collective bargaining agreement,
except to the extent required by applicable Legal Requirements and, in the
event compliance with Legal Requirements presents options, only to the extent
that the option which the Company reasonably believes to be the least costly is
chosen or in the Ordinary Course of Business; or

 

(iv)                              establishing or modifying any (i)
targets, goals, pools or similar provisions in respect of any fiscal year under
any Benefit Plan, employment-related Contract or other employee compensation
arrangement or (ii) salary ranges, increase guidelines or similar provisions in
respect of any Benefit Plan, employment-related Contract or other employee
compensation arrangement.

 

57

 

(i)                                     Certain Restrictions. 
During the Pre-Closing Period, the Members will cause the Company to
refrain from (except as expressly contemplated by this Agreement and the
Transactions):

 

(i)                                     amending its articles of organization,
operating agreement and any other Organizational Documents or taking any action
with respect to any such amendment or any recapitalization, reorganization,
liquidation or dissolution of the Company

 

(ii)                                  authorizing, issuing, selling or
otherwise disposing of any Membership Interests of or any option or right of
any kind to acquire securities with respect to the Company, or modifying or
amending any right of any holder of outstanding shares of capital stock of or
right to acquire securities of any kind with respect to the Company;

 

(iii)                               declaring, setting aside or paying any
dividend or other distribution in respect of the Membership Interests of the
Company or any Subsidiary not wholly owned by the Company, or directly or
indirectly redeeming, purchasing or otherwise acquiring any Membership
Interests of or any right to acquire securities of any kind with respect to the
Company;

 

(iv)                              acquiring or disposing of, or incurring
any Encumbrance (other than a Permitted Lien) on, any Company assets and
properties, other than in the Ordinary Course of Business;

 

(v)                                  (i) entering into, amending, modifying,
terminating (partially or completely), granting any waiver under or giving any
consent with respect to (A) any Contract that would, if in existence on the
date of this Agreement, be required to be disclosed in the Schedule 5.15
or (B) any material License or (ii) granting any irrevocable powers of
attorney;

 

(vi)                              violating, breaching or defaulting under
in any material respect, or taking or failing to take any action that (with or
without notice or lapse of time or both) would constitute a material violation
or breach of, or default under, any term or provision of any License held or
used by the or any Contract to which the Company is a party or by which any of
its assets and properties is bound;

 

(vii)                           except for existing royalties obligations
of the Company to TTC (A) incurring indebtedness in an aggregate principal
amount exceeding $50,000 (net of any amounts of indebtedness discharged during
such period), or (B) voluntarily purchasing, canceling, prepaying or otherwise
providing for a complete or partial discharge in advance of a scheduled payment
date with respect to, or waiving any right of the Company under, any
indebtedness of or owing to the Company;

 

(viii)                        engaging with any Person in any merger or
other business combination;

 

58

 

(ix)                                making capital expenditures or
commitments for additions to property, plant or equipment constituting capital
assets in an aggregate amount exceeding $25,000;

 

(x)                                   making any change in the lines of
business in which it participates or is engaged;

 

(xi)                                writing off or writing down any of its
assets and properties outside the Ordinary Course of Business; or

 

(xii)                             entering into any Contract to do or
engage in any of the foregoing.

 

(j)                                     Affiliate Transactions. 
During the Pre-Closing Period, and except as expressly contemplated by
this Agreement and the Transactions, the Company will not enter into any
Contract or amend or modify any existing Contract, and will not engage in any
transaction outside the Ordinary Course of Business or on other then an arm’s-length
basis with the Members or any Affiliate.

 

(k)                                  Books and Records. 
On the Closing Date, the Members will deliver or make available to Buyer
at the offices of the Company all of the books and records of the Company, and
if at any time after the Closing the Members discover in their possession or
under their control any other books and records of the Company, they will
forthwith deliver such books and records to Buyer.

 

(l)                                     Notice and Cure. 
During the Pre-Closing Period, the Members will notify Buyer in writing
(where appropriate, through updates to the Members’ Disclosure Schedule) of,
and contemporaneously will provide Buyer with true and complete copies of any
and all information or documents relating to, and will use commercially
reasonable efforts to cure before the Closing, any event, transaction or
circumstance, as soon as practicable after it becomes known to a Member,
occurring after the date of this Agreement that causes or will cause any
covenant or agreement of the Company or any Member under this Agreement to be
breached in any material respect or that renders or will render untrue in any
material respect any representation or warranty of the Company or any Member
contained in this Agreement as if the same were made on or as of the date of
such event, transaction or circumstance. 
No notice given pursuant to this Section shall have any effect on the
representations, warranties, covenants or agreements contained in this
Agreement for purposes of determining satisfaction of any condition contained
herein or shall in any way limit Buyer’s right to seek indemnity under Article
VIII.

 

(m)                               Fulfillment of Conditions. 
Each of the Company and the Members will execute and deliver at the
Closing each Transaction Document that the Company and the Members are required
hereby to execute and deliver as a condition to the Closing, and will take all
commercially reasonable steps necessary or desirable and proceed diligently and
in good faith to satisfy each other condition to the obligations of JAMDAT and
Buyer contained in this Agreement.

 

59

 

(n)                                 Stock Matters. 
Each of the Members will not, and will use commercially reasonable
efforts to cause their Affiliates not to, directly or indirectly, at any time
loan or sell short any JAMDAT Common Stock or any derivative security related
thereto to any Person for the purpose of facilitating any short sale or similar
transaction involving the JAMDAT Common Stock. 
The Members shall immediately notify JAMDAT in writing at such time as
they obtain Knowledge with respect to any such activities by their Affiliates.

 

(o)                                 Bulk Sales Report. 
The Company and the Members shall file a timely Report of Bulk Sale or
Transfer (Form G-8A) with the Department of Taxation of the State of Hawaii in
compliance with Section 237-43 of the Hawaii Revised Statutes and obtain the
certificate from the Department of Taxation required to be delivered to Buyer
under Section 4.2 of this Agreement.  Any
estimate of an amount for purposes of completing and filing such certificate
shall not be binding for purposes of Section 3.2.

 

7.2                                 Covenants of JAMDAT and Buyer.

 

(a)                                  Performance. 
Each of JAMDAT and Buyer covenants and agrees with the Company and the
Members that, at all times during the Pre-Closing Period, JAMDAT and Buyer will
comply with all covenants and provisions of this Article VII applicable to it,
except to the extent the Members may otherwise consent in writing or as
contemplated by this Agreement and the Transactions.

 

(b)                                 Regulatory and Other Approvals. 
JAMDAT and Buyer will as promptly as practicable (i) take all
commercially reasonable steps necessary or desirable to obtain all consents,
approvals or actions of, make all filings with and give all notices to
Governmental Bodies or any other Person required of JAMDAT and Buyer to
consummate the Transactions contemplated hereby and by the Transaction
Documents, (ii) provide such other information and communications to such
Governmental Bodies or other Persons as the Members or such Governmental Bodies
or other Persons may reasonably request in connection therewith and (iii)
cooperate with the Company and the Members in connection with the performance
of their obligations under Section 7.1. 
JAMDAT and Buyer will provide prompt notification to the Members when
any such consent, approval, action, filing or notice referred to in clause (i)
above is obtained, taken, made or given, as applicable, and will advise the
Members of any communications (and, unless precluded by applicable Legal
Requirements, provide copies of any such communications that are in writing)
with any Governmental Body or other Person regarding any of the transactions
contemplated by this Agreement or any of the Transaction Documents.

 

(c)                                  HSR Filings. 
During the Pre-Closing Period, in addition to and without limiting
JAMDAT and Buyer’s covenants contained in Section 7.2(a), each of JAMDAT and
Buyer will (i) take promptly all actions necessary to make the filings required
of Buyer or its Affiliates under the HSR Act, (ii) comply at the earliest
practicable date with any request for additional information received by JAMDAT
and Buyer or its Affiliates from the Federal Trade Commission or the Antitrust
Division of the Department of Justice pursuant to the HSR Act and (iii)
cooperate with the Company 

 

60

 

and
the Members in connection with the Company’s and the Members’ filing under the
HSR Act and in connection with resolving any investigation or other regulatory
inquiry concerning the transactions contemplated by this Agreement commenced by
the Federal Trade Commission, the Antitrust Division of the Department of
Justice or any state attorney general.

 

(d)                                 Notice and Cure. 
During the Pre-Closing Period, each of JAMDAT and Buyer will notify the
Members in writing of, and contemporaneously will provide the Members with true
and complete copies of any and all information or documents relating to, and
will use all commercially reasonable efforts to cure before the Closing, any
event, transaction or circumstance, as soon as practicable after it becomes
known to JAMDAT or Buyer, occurring after the date of this Agreement that causes
or will cause any covenant or agreement of JAMDAT or Buyer under this Agreement
to be breached in any material respect or that renders or will render untrue in
any material respect any representation or warranty of JAMDAT or Buyer
contained in this Agreement as if the same were made on or as of the date of
such event, transaction or circumstance. 
No notice given pursuant to this Section shall have any effect on the
representations, warranties, covenants or agreements contained in this
Agreement for purposes of determining satisfaction of any condition contained
herein or shall in any way limit any Member’s right to seek indemnity under
Article VIII.

 

(e)                                  Fulfillment of Conditions. 
Each of JAMDAT and Buyer will execute and deliver at the Closing each Transaction
Document that JAMDAT and Buyer is hereby required to execute and deliver as a
condition to the Closing, will take all commercially reasonable steps necessary
or desirable and proceed diligently and in good faith to satisfy each other
condition to the obligations of the Members contained in this Agreement.

 

(f)                                    Proceedings. 
During the Pre-Closing Period, JAMDAT and Buyer shall notify Company and
the Members in writing promptly after learning of any Proceeding or
investigation by or before any Governmental Body, initiated by or against
JAMDAT or Buyer, or known by either of them to be threatened against JAMDAT or
Buyer or any of its officers, directors, employees or stockholders in their
capacity that would be reasonably expected to have a Material Adverse Effect on
JAMDAT or Buyer if determined adversely to JAMDAT or Buyer.

 

(g)                                 New Employee Options.  JAMDAT
shall (i) within ninety (90) days after the Closing, grant stock options to
purchase a minimum of 75,000 shares of JAMDAT Common Stock under JAMDAT’s 2004
Equity Incentive Plan to employees of the Company, and (ii) within twenty four
(24) months after the Closing grant stock options to purchase a minimum of
50,000 shares (not including the shares in subclause (i) above) of JAMDAT
Common Stock under JAMDAT’s 2004 Equity Incentive Plan to employees of the
Company; provided that, subject to the stated minimums above, the exact number
of such options issued shall be made in the sole and absolute discretion of
JAMDAT (all such options issued pursuant to this Section 7.2(g), collectively,
the “New Employee Options”).

 

61

 

(h)                                 Listing of Additional Shares. 
JAMDAT will cause the shares of (i) JAMDAT Common Stock to be issued in
the Transaction to the Members, and (ii) when issued, the shares of JAMDAT
capital stock issued upon to be issued upon exercise of the New Employee
Options, to be approved for listing on the NASDAQ National Stock Market,
subject only to official notice of issuance.

 

(i)                                     SEC Documents. 
During the Pre-Closing Period, JAMDAT will file, lodge or deliver to the
SEC all JAMDAT SEC Reports required under Legal Requirements to be filed,
lodged or delivered by JAMDAT with in the time required by such Legal
Requirements.  During the Pre-Closing
Period, promptly after filing any publicly available report, schedule, form,
statement or other document with the SEC, JAMDAT shall make available a copy
thereof to the Members.

 

ARTICLE 8

 

INDEMNIFICATION;
REMEDIES

 

8.1                                 Survival of Representations, Etc.   The
representations and warranties of the Company, the Members, Buyer and JAMDAT
contained herein shall survive until the three-year anniversary of the Closing
(the “Expiration Date”), provided, however, that
(i) the representations and warranties contained in Sections 5.2(a),
5.3, 6.2, 6.3(a) and 6.4 (the “Surviving Claims”)
shall continue to survive until the expiration of the applicable statute of
limitations (giving effect to any waiver or extension thereof) and
(ii) the representations and warranties contained in Section 5.10(g)
and Section 5.10(h) (“Surviving Tax Claims”) shall continue
to survive until the expiration of thirty (30) days after expiration of the
applicable statute of limitations (giving effect to any waiver or extension
thereof).  The right to indemnification,
payment of Damages or other remedy based on such representations and warranties
and any covenants and obligations in this Agreement relating to such
representations and warranties will not be affected by any investigation conducted
with respect to, or any Knowledge acquired at any time, whether before or after
the execution and delivery of this Agreement or the Closing Date, with respect
to the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant or obligation.   The
waiver of any condition based on the accuracy of any representation or
warranty, or on the performance of or compliance with any covenant or
obligation, will not affect the right to indemnification, payment of Damages,
or other remedies based on such representations, warranties, covenants and
obligations.

 

8.2                                 Indemnification.

 

(a)                                  By the Members.  The
Members shall jointly and severally indemnify, save and hold harmless JAMDAT,
Buyer and their Affiliates and Subsidiaries and each of their respective
Representatives (collectively, the “Member Indemnified Parties”), from
and against any and all costs, losses, Liabilities, obligations, damages,
lawsuits, deficiencies, claims, demands and expenses (whether or not arising
out of third-party claims), including without limitation interest, penalties,
costs of mitigation, reasonable attorneys’, accountants’ and expert witnesses’
fees and charges and all amounts paid in investigation, defense or settlement
of any of the foregoing  (herein, “Damages”),

 

62

 

incurred
in connection with, arising out of, resulting from: (i) any breach of any
representation or warranty made by the Members or the Company in this
Agreement, or any certificate, document or instrument delivered by such party
at or prior to the Closing, (ii) any breach of any covenant or agreement
required to be performed at or prior to the Closing made by the Members or the
Company in this Agreement, or any certificate, document or instrument delivered
by such party at or prior to the Closing, (iii) any breach of any
representation, warranty or covenant made by any party (other than Buyer or
JAMDAT) in any other Transaction Document, and (iv) any and all Taxes
(A) required to be paid by the Company and/or the Members under this
Agreement, (B) for which the Company has any Liability with respect to any
Tax period ending on or before the Closing Date (including the pre-Closing
portion of any Straddle Period), whether or not disclosed to JAMDAT or Buyer on
any Schedule to this Agreement or otherwise (but not including for purposes of
this subclause (B) any Taxes to the extent of the dollar amount thereof
included in Liabilities that were taken into account in the calculation of Net
Cash or Net Debt), (C) of any Person (other than the Member Indemnified
Party) for which the Company has liability under any provision of state, local
or foreign law, as a transferee or successor, by contract, or otherwise,
(D) that the Company was required to or did withhold on or before the
Closing Date with respect to any employee, Member or other person,
(E) relating to any Seller Tax Contest, or (F) relating to any Buyer
Tax Contest or Straddle Period Contest, to the extent relating to matters
described in or one or more of the preceding subclauses (A), (B), (C), (D), and
(E).  The term “Damages” as used
in this Section 8.2 is not limited to matters asserted by third parties
against any indemnified party, but includes Damages incurred or sustained by an
indemnified party in the absence of third party claims.

 

(b)                                 By JAMDAT and Buyer. 
JAMDAT and Buyer shall jointly and severally indemnify, save and hold
harmless the Members and their respective Affiliates and Representatives (the “Buyer
Indemnified Parties”) from and against any and all Damages incurred in
connection with, arising out of, resulting from:  (i) any breach of any representation or
warranty made by Buyer in this Agreement or any certificate, document or
instrument delivered by such party at or prior to the Closing; or (ii) any
breach of any covenant or agreement required to be performed at or prior to the
Closing made by Buyer in this Agreement, or any certificate, document or
instrument delivered by such party at or prior to the Closing.

 

(c)                                  Limitations on Indemnity.

 

(i)                                     Except as provided in this Article VIII,
the Members shall not be required to indemnify and hold harmless the Buyer with
respect to a Claim arising out of or resulting from this Agreement pursuant to
Section 8.2(a) unless and until the cumulative aggregate amount of all Damages
which are otherwise recoverable by the Buyer under Section 8.2(a) exceeds Two
Hundred Fifty Thousand Dollars ($250,000.00) (the “Threshold”); provided,
however, Damages relating to any Surviving Tax Claim or any matter
described in clause (iv) in the first sentence of Section 8.2(a) or
in any one or more of subclauses (A), (B), (C), (D), (E) and (F) thereof (“Tax
Damages”) shall not be subject to the Threshold as described in the first
independent clause of this sentence but nonetheless shall 

 

63

 

count
toward the Threshold for purposes of the next sentence.  If the Buyer brings an eligible Claim or
eligible Claims for an amount in excess of the Threshold, the Members shall be
obligated to indemnify the Buyer for the full amount of all Damages under
Section 8.2(a) including the amount of the Threshold.

 

(ii)                                  Subject to limitations set forth in this
Article VIII or elsewhere in this Agreement upon the obligations of the parties
with respect to Taxes, Tax Damages and Tax Contests, the indemnified party will
use commercially reasonable efforts to mitigate damages in respect of any Claim
for which it is seeking indemnification under this Article VIII.

 

(iii)                               With respect to the amount of any Damages
subject to indemnification under this Section 8.2 pursuant to any Claim therefor,
such Damages shall be calculated net of any insurance proceeds or recoveries
actually received as compensation or reimbursement for such Damages by the
Member Indemnified Party, on one hand, or Buyer Indemnified Party, on the other
hand,  that incurred such Damages, as
applicable, from any other third party; provided, however, that,
notwithstanding the foregoing, nothing herein shall be deemed to require any
indemnified party to use efforts to effect recovery of available insurance
claims or recoveries from any third party after denial by the insurer or third
party of a submitted claim in connection with any claim for any Damages (so
that, for example and not by way of limitation, an indemnified party shall not
be required to file or prosecute any claim in litigation or arbitration or
other proceeding to effect recovery), or to purchase insurance with respect to
matters subject to indemnification hereunder, and decisions regarding the
purchase of such insurance shall be at each party’s sole discretion.

 

(d)                                 Cooperation. 
The indemnified party shall cooperate in all reasonable respects with
the indemnifying party and its Representatives (including without limitation
its attorneys) in the investigation, trial and defense of such lawsuit or
action and any appeal arising therefrom; provided, however, that
the indemnified party may, at its own cost, participate in negotiations,
arbitrations and the investigation, trial and defense of such lawsuit or action
and any appeal arising therefrom.  The
parties shall cooperate with each other in any notifications to insurers.  This Section 8.2(d) shall not apply with
respect to any Buyer Tax Contest or Seller Tax Contest.

 

(e)                                  Defense of Claims.  If a claim for Damages (a “Claim”)
is to be made by a party entitled to indemnification hereunder against the
indemnifying party, the party claiming such indemnification shall, give written
notice (a “Claim Notice”) to the indemnifying party as soon as
practicable after the party entitled to indemnification becomes aware of any
fact, condition or event which may give rise to Damages for which
indemnification may be sought under this Section 8.2.  If any lawsuit or enforcement action is filed
against any party entitled to the benefit of indemnity hereunder, written
notice thereof shall be given to the indemnifying party as promptly as
practicable (and in any event within fifteen (15) calendar days after the
service of the citation or summons).  Any
Claim Notice given by the party entitled to indemnification to the indemnifying
party pursuant to this Agreement shall be made prior to the Expiration Date
(except with 

 

64

 

respect
to (i) Claims made in respect of Surviving Claims which must be made prior
to the expiration of the applicable statute of limitations for such claims
(giving effect to any waiver or extension thereof), and (ii) Surviving Tax
Claims, which must be made prior to the expiration of thirty (30) days after
expiration of the applicable statute of limitations (giving effect to any
waiver or extension thereof)), be in writing and shall (i) indicate that the
party entitled to indemnification has incurred, paid or accrued (in accordance
with GAAP) or, in good faith, believes it shall have to incur, pay or accrue
(in accordance with GAAP), Damages in an aggregate stated amount arising from
such Claim if it is reasonably possible to set forth an aggregate stated
amount, and (ii) a brief description, in reasonable detail (to the extent
reasonably available to the party entitled to indemnification), of the facts,
circumstances or events giving rise to the alleged Damages based on the
Indemnified Party’s good faith belief thereof, including the identity and
address of any third-party claimant and copies of any formal demand or
complaint, the amount of Damages if known, the date each such item was
incurred, paid or accrued (in accordance with GAAP) if known, or the basis for
such anticipated Damages, and the specific nature of the breach to which such
item is related and whether the party entitled to indemnification has notified
the insurance carrier if applicable.  The
failure of any indemnified party to give timely notice hereunder shall not
affect rights to indemnification hereunder, except to the extent that the
indemnifying party has been materially damaged or prejudiced by such
failure.  After such notice, the
indemnifying party may elect, by written notice to the indemnified party, at
the indemnifying party’s own expense, except in the case of a Tax Contest, (i)
to take control of the defense and investigation of such lawsuit or action,
(ii) to employ and engage attorneys of its own choice, but, in any event,
reasonably acceptable to the indemnified party, to handle and defend the same
unless the named parties to such action or proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and the
indemnified party has been advised in writing by counsel that there may be one
or more legal defenses available to such indemnified party that are different
from or additional to those available to the indemnifying party, in which event
the indemnified party shall be entitled, at the indemnifying party’s cost, risk
and expense, to separate counsel of its own choosing and (iii) to compromise or
settle such lawsuit or action, which compromise or settlement shall be made
only with the written consent of the indemnified party, such consent not to be unreasonably
withheld.

 

(f)                                    If the indemnifying party fails to assume
the defense of such lawsuit or action within fifteen (15) calendar days after
receipt of the Claim Notice if required to do so under Section 8.2(e), the
indemnified party against which such lawsuit or action has been asserted will
(upon delivering notice to such effect to the indemnifying party) have the
right to undertake, at the indemnifying party’s cost and expense, the defense,
compromise or settlement of such lawsuit or action on behalf of and for the
account and risk of the indemnifying party; provided, however, in which event
the indemnifying party shall be entitled, at the indemnifying party’s cost,
risk and expense, to participate in such defense, compromise or settlement with
separate counsel of its own choosing; provided, further, that such lawsuit or
action shall not be compromised or settled without the written consent of the
indemnifying party, which consent shall not be unreasonably withheld.  If the indemnified party settles or
compromises such lawsuit or action without the prior written consent of the
indemnifying party, the indemnifying party

 

65

 

will
bear no liability hereunder for or with respect to such lawsuit or action unless
such consent has been requested and unreasonably denied.  In the event the indemnified party assumes
the defense of the lawsuit or action, the indemnified party will keep the
indemnifying party reasonably informed of the progress of any such defense,
compromise or settlement.  The
indemnifying party shall be liable for any settlement of any action effected
pursuant to and in accordance with this Section 8.2 and for any final judgment
(subject to any right of appeal) and the indemnifying party agrees to indemnify
and hold harmless an indemnified party from and against any Damages by reason
of such settlement or judgment.   This
Section 8.2(f) shall not apply to any Tax Contest.

 

8.3                                 Limitation on Indemnity/Commitments.

 

(a)                                  The indemnification obligations of the
Members (on the one hand) and JAMDAT and Buyer (on the other hand) with respect
to any breach of any representation or warranty or covenant or agreement
pursuant to Sections 8.2(a) or (b), respectively, shall be limited to
Claims for Damages made prior to the Expiration Date (except with respect to
(i) Claims made in respect of Surviving Claims which must be made prior to
expiration of the applicable statute of limitations for such claims (giving
effect to any waiver or extension thereof) and (ii) Surviving Tax Claims,
which must be made prior to expiration of thirty (30) days after expiration of
the applicable statute of limitations (giving effect to any waiver or extension
thereof)).

 

(b)                                 Neither (i) the termination of the
representations or warranties contained herein, nor (ii) the expiration of the
indemnification obligations described in this Article VIII, will affect the
rights of a Person in respect of any Claim made by such Person received by the
indemnifying party prior to the Expiration Date (except with respect to (i) Claims
made in respect of Surviving Claims which must be made prior to the expiration
of the applicable statute of limitations for such claims (giving effect to any
waiver or extension thereof) and (ii) Surviving Tax Claims, which must be made
prior to expiration of thirty (30) days after expiration of the applicable
statute of limitations (giving effect to any waiver or extension thereof)).

 

8.4                                 Exclusive Remedies. 
From and after the Closing, except for fraud or intentional misrepresentation
of a party (“Fraud Claims”) the sole and exclusive remedy of the Buyer
Indemnified Parties against the Buyer or JAMDAT for any Damages directly or
indirectly incurred, paid or accrued in connection with or resulting from or
arising out of this Agreement (including any breach or alleged breach and of
the representations, warranties or covenants or agreements of the other party
under this Agreement) or any certificate, document or instrument delivered by
such party at or prior to the Closing, is set forth in this Article VIII.  From and after the Closing, except with
respect to (a) Fraud Claims of a party, and (b) as provided in the last
sentence of Section 8.4, the sole and exclusive remedy of JAMDAT, the
Buyer and other Member Indemnified Parties against the Members for any Damages
directly or indirectly incurred, paid or accrued in connection with or
resulting from or arising out of this Agreement (including any breach or
alleged breach and of the representations, warranties or covenants or
agreements of the other party under this Agreement) or any certificate,
document or instrument delivered by such party at or prior to the Closing, is
set forth in this Article VIII, and shall be limited to and may only be
satisfied by recourse to the Escrow Shares then held in escrow, 

 

66

 

provided that with respect to any Surviving Claims and
any Surviving Tax Claims JAMDAT and the Buyer may seek recourse directly
against the Members only (i) to the extent that any Damages incurred by JAMDAT
and the Buyer, in respect of such Surviving Claims and Surviving Tax Claims cannot
be satisfied by recourse to the Escrow Shares, and (ii) up to a maximum amount
equal to (x) the total value of the Sale Consideration, less (y) the
total amount of all previously satisfied Claims.  Buyer, JAMDAT and the Members agree and
acknowledge that the limitations set forth herein shall be of no force or
effect with respect to Damages of Buyer or JAMDAT related to the
Non-Competition Agreement, the Registration Rights Agreement, the Lock Up Agreement
or the License Agreement.

 

8.5                                 Buyer Tax Contest.  A
Member Indemnified Party designated by JAMDAT shall have sole control of any
audit or examination of any Tax Return filed by it or them (or any
administrative appeal or litigation relating thereto) at any time, including
any such Tax Return for any period beginning on or after the Closing Date (a “Buyer
Tax Contest”), including the right to pursue or forego any Buyer Tax
Contest or continuation thereof; provided, however, that (a) counsel for such
Member Indemnified Party in any Buyer Tax Contest involving a Claim for Tax
Damages (a “Tax Claim”)shall consult in good faith with a single counsel
appointed for Seller in connection with such Buyer Tax Contest and shall keep
such Seller counsel reasonably informed regarding such Buyer Tax Contest to the
extent it pertains to any Tax Claim, and (b) such Member Indemnified Party may
not resolve or settle such Buyer Tax Contest if any Member would be required to
indemnify any Member Indemnified Party, or otherwise be required to make a
payment, as a result of such resolution or settlement of the Buyer Tax Contest
unless either (i) such Member consents to that resolution or settlement (which
consent shall not be unreasonably withheld) or (ii) such Member Indemnified
Party foregoes the right to such indemnification by such Member and such
resolution or settlement does not impose upon a Member an obligation to make a
payment for indemnification or otherwise.

 

8.6                                 Straddle Period Returns.  A
Member Indemnified Party designated by JAMDAT shall control any audit or
examination of any Tax Return (or any administrative appeal or litigation
relating thereto) for any Straddle Period (“Straddle Period Tax Contest”),
including the right to pursue or forego any Straddle Period Tax Contest or
continuation thereof; provided, however,
that, to the extent such Straddle Period Tax Contest involves a Tax Claim, (i) the
counsel for such Member Indemnified Party shall consult in good faith with a
single counsel appointed for all Members in connection with such Straddle
Period Tax Contest and shall keep such counsel reasonably informed regarding
such Straddle Period Tax Contest, and (ii) such Member Indemnified Party
may not resolve or settle such Straddle Period Tax Contest if any Member would
be required to indemnify any Member Indemnified Party, or otherwise be required
to make a payment, as a result of such resolution or settlement of the Straddle
Period Tax Contest unless either (A) such Member consents to that resolution or
settlement (which consent shall not be unreasonably withheld) or (B) such
Member Indemnified Party foregoes the right to such indemnification by such
Member and such resolution or settlement does not impose upon a Member an obligation
to make a payment for indemnification or otherwise.

 

8.7                                 Seller Tax Contests. 
The Members shall have sole control of any audit or examination of any
Tax Return filed by the Company for a period ending on or before the Closing
Date and any related administrative appeal or any litigation if such audit or
examination and any related administrative appeal or litigation is not a Buyer
Tax Contest or a Straddle 

 

67

 

Period Tax Contest (a “Seller Tax Contest”), including the right to pursue or forego any
Seller Tax Contest or continuation thereof; provided, however,
that (i) counsel for the Members in any Seller Tax Contest shall consult
in good faith with a single counsel appointed for the Member Indemnified
Parties and the Company in connection with any Seller Tax Contest and shall
keep such counsel reasonably informed regarding such Seller Tax Contest,
(ii) the Members shall not resolve or settle any Seller Tax Contest
if such resolution or settlement would or could reasonably be anticipated to
result in an increase in liability for Tax of any Member Indemnified Party or
the Company for any taxable period (or portion thereof) beginning on or after
Closing unless JAMDAT consents to that resolution or settlement (which consent
shall not be unreasonably withheld), and (iii) the Members shall deliver to
JAMDAT copies of all written communications to and from any Governmental Body
in respect of any such Seller Tax Contest and will give JAMDAT the right to
attend all conferences (telephonic or otherwise), subject to JAMDAT’s execution
of a commercially reasonable confidentiality agreement.

 

ARTICLE 9

 

TERMINATION

 

9.1                                 Termination. 
This Agreement may be terminated, and the transactions contemplated
hereby may be abandoned:

 

(a)                                  at any time before the Closing, by mutual
written agreement of JAMDAT and Buyer (on the one hand), and the Company and
the Members (on the other hand);

 

(b)                                 at any time before the Closing, by Buyer
or JAMDAT upon a breach of any representation, warranty, covenant or agreement
on the part of Company or the Members set forth in this Agreement, or if any
representation or warranty of Company or the Members shall have become untrue,
in either case such that the conditions set forth in Section 4.2(a) or 4.2(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided that if such
inaccuracy in Company’s or the Members’ representations and warranties or
breach by Company or the Members is curable by such party through the exercise
of its commercially reasonable efforts, then JAMDAT or Buyer may not terminate
this Agreement under this Section 9.1(b) for ten (10) calendar days after
delivery of written notice from Buyer or JAMDAT to Company and the Members of
such breach (it being understood that Buyer or JAMDAT may not terminate this
Agreement pursuant to this Section 9.1(b) if such breach by Company or the
Members is cured during such ten day period or if Buyer or JAMDAT shall have
materially breached this Agreement);

 

(c)                                  at any time before the Closing, by the
Company or the Members upon a breach of any representation, warranty, covenant
or agreement on the part of Buyer or JAMDAT set forth in this Agreement, or if
any representation or warranty of Buyer or JAMDAT shall have become untrue, in
either case such that the conditions set forth in Section 4.3(a) or 4.3(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided that if such
inaccuracy in Buyer’s or JAMDAT’s representations and warranties or breach by
Buyer or JAMDAT is curable by such party through the exercise of its
commercially reasonable efforts, then the Company or Members may not terminate
this Agreement under this Section 9.1(c) for ten days after delivery of written
notice 

 

68

 

from the Company or the Members to Buyer or JAMDAT of
such breach (it being understood that the Company or the Members may not
terminate this Agreement pursuant to this Section 9.1(c) if such breach by
Buyer or JAMDAT is cured during such ten day period or if the Company or the
Members shall have materially breached this Agreement);

 

(d)                                 at any time after April 30, 2005 by
Buyer, the Company and the Members upon notification of the non-terminating
party by the terminating party if the Closing shall not have occurred on or
before such date and such failure to consummate is not caused by a breach of
this Agreement by the terminating party.

 

9.2                                 Effect of Termination.  If this Agreement is validly terminated
pursuant to Section 9.1, this Agreement will forthwith become null and
void, and there will be no liability or obligation on the part of JAMDAT,
Buyer, the Company and the Members (or any of their respective officers,
directors, employees, agents or other representatives or Affiliates), except as
provided in the next succeeding sentence and except that the provisions with
respect to expenses in Section 10.6 and confidentiality in
Section 10.9 will continue to apply following any such termination.  Notwithstanding any other provision in this
Agreement to the contrary, upon termination of this Agreement pursuant to
Section 9.1(b), (c) or (d), JAMDAT and Buyer will remain liable to
the Company and the Members for any willful breach of this Agreement by JAMDAT
or Buyer existing at the time of such termination, and the Company and the
Members will remain liable to JAMDAT and Buyer for any willful breach of this
Agreement by the Company or the Members existing at the time of such
termination, and JAMDAT and Buyer, the Company and the Members may seek such
remedies, including damages and fees of attorneys, against the other with
respect to any such breach as are provided in this Agreement or as are
otherwise available at Law or in equity.

 

ARTICLE 10

 

MISCELLANEOUS

 

10.1                           Assignment.  Neither this
Agreement nor any of the rights or obligations hereunder may be assigned by any
party without the prior written consent of the other party; except that, JAMDAT
or Buyer may, without consent of the Members, assign all such rights and
obligations to a wholly-owned Subsidiary (or a partnership controlled by JAMDAT
or Buyer) or Subsidiaries of JAMDAT or Buyer or to a successor in interest to
all of JAMDAT or Buyer’s business which shall assume all obligations and
Liabilities of Buyer under this Agreement, provided that Buyer and JAMDAT shall
also remain responsible for all of its obligations under this Agreement.  Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

 

10.2                           Notices.  All notices,
requests, demands and other communications which are required or may be given
under this Agreement shall be in writing and shall be deemed to have been duly
given when received if personally delivered; when transmitted if transmitted by
telecopy, electronic or digital transmission method; the day after it is sent,
if sent for next day delivery to a domestic address by recognized overnight
delivery service (e.g., Federal Express); and upon receipt, if sent by
certified or registered mail, return receipt requested.  In each case notice shall be sent to:

 

69

 

If to the Members,
Family Trust I or Family Trust II or,
prior to the Closing, the Company, addressed to:

 

Henk B. Rogers 2005 Dynasty
Trust

Akemi M. Rogers 2005 Dynasty Trust

Henk Rogers

Akemi Rogers

1050 Lunalilo St., PH5

Honolulu, Hawaii 96822

Telephone:  (808) 528-2463

Facsimile No.:  (808) 528-1634

 

with a copy to:

 

Hong & Kwock, a Law
Corporation

220 S. King St # 1220

Honolulu, HI 96813

Telephone: (808) 528-1400

Facsimile No.:  (808) 528-1404

Attn: David Kwock, Esq.

 

Prior to the Closing, if to the Company,

 

Blue Lava Wireless, LLC

2800 Woodlawn Drive, Suite
245

Honolulu, Hawaii 96822, USA

Attn.: Henk Rogers, Member

Attn: Akemi Rogers, Member

Telephone: (808) 539-3900

Facsimile No.: (808) 539-3831 

 

with a copy to:

 

Fenwick & West LLP

Embarcadero Center West

275 Battery Street

San Francisco, CA 94111

Telephone: (415) 875-2300 

Facsimile No.:  (415) 281-1350

Attn: Samuel B. Angus, Esq.

 

If to JAMDAT or Buyer, addressed to:

 

JAMDAT Mobile Inc.

3415 S. Sepulveda Blvd., Ste. 700

Los Angeles, CA 90034

Facsimile No.: (310) 397-0353

Attn: Craig S. Gatarz, Esq.

 

70

 

with a copy to:

 

Sheppard, Mullin, Richter & Hampton LLP

800 Anacapa Street

Santa Barbara, CA  93101-2212

Facsimile: (805) 568-1955

Attn: C. Thomas Hopkins, Esq.

 

or to such other place and with such other copies as
either party may designate as to itself by written notice to the others.

 

10.3                           Choice of Law. 
This Agreement shall be construed in accordance with and governed by the
laws of the State of California (without giving effect to its choice of law
principles), except with respect to matters of law concerning the internal
corporate or LLC affairs of any corporate entity which is a party to or the
subject of this Agreement, and as to those matters the law of the jurisdiction
under which the respective entity derives its powers shall govern.

 

10.4                           Entire Agreement; Amendments and Waivers. 
This Agreement and the Transaction Documents, together with all exhibits
and schedules hereto and thereto (including the Disclosure Schedule and
the other agreements referred to herein), constitutes the entire agreement
among the parties pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties, including but not limited to the Letter of Intent
regarding Proposed Acquisitions dated February 10, 2005 and the Letter
regarding Exclusive Dealing dated March 23, 2005.  This Agreement may not
be amended except in an instrument in writing signed on behalf of each of the
parties hereto.  No amendment,
supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby.  No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.

 

10.5                           Multiple Counterparts. 
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

10.6                           Expenses.  Each party to
this Agreement will bear its respective expenses incurred in connection with
the preparation, execution and performance of this Agreement and the
Transactions.  In the event of
termination of this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from a breach of
this Agreement by the other party. In the event the Transaction described
hereto is consummated, all expenses of the former Members related to the
Transaction described hereto shall be paid solely by those Members.

 

10.7                           Invalidity.  In the event
that any one or more of the provisions contained in this Agreement or in any
other instrument referred to herein, shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, then, to the maximum extent
permitted by 

 

71

 

law, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or any other such
instrument.

 

10.8                           Publicity.  Except as
required by applicable Legal Requirements, none of JAMDAT, Buyer, the Company
nor the Members shall issue any press release or make any public statement
regarding this Agreement and the Transactions contemplated hereby, without
prior written approval of the other parties; provided, however,
that in the case of announcements, statements, acknowledgments or revelations
which either party is required by applicable Legal Requirements to make, issue
or release, the making, issuing or releasing of any such announcement, statement,
acknowledgment or revelation by the party so required to do so by law shall not
constitute a breach of this Agreement if such party shall have given, to the
extent reasonably possible, not less than two (2) calendar days prior
notice to the other party, and shall have attempted, to the extent reasonably
possible, to clear such announcement, statement, acknowledgment or revelation
with the other party and limit such announcement, statement, acknowledgment or
revelation to extent commercially reasonable through confidential treatment or
protective order.  Each party hereto
agrees that it will not unreasonably withhold any such consent or
clearance.  JAMDAT and Buyer shall have
the right to issue or make an appropriate press release or public announcement
after the Closing.

 

10.9                           Confidential Information; No Disclosure.

 

(a)                                  Each party hereto will hold, and will use
its best efforts to cause its Affiliates, and their respective Representatives
to hold, in strict confidence from any Person (other than any such Affiliate or
Representative), unless (i) compelled to disclose by judicial or
administrative process (including without limitation in connection with
obtaining the necessary approvals of this Agreement and the Transactions of any
Governmental Body) or by other Legal Requirements or (ii) disclosed in a
Proceeding brought by a party hereto in pursuit of its rights or in the
exercise of its remedies hereunder, all documents, data and information
concerning the other party or any of its Affiliates furnished to it by the
other party or such other party’s Representatives in connection with this
Agreement or the Transactions, except to the extent that such documents or
information can be shown to have been (a) previously known by the party
receiving such documents or information, (b) in the public domain (either
prior to or after the furnishing of such documents or information hereunder)
through no fault of such receiving party or (c) later acquired by the
receiving party from another source if the receiving party is not aware that
such source is under an obligation to another party hereto to keep such
documents and information confidential; provided that following the Closing the
foregoing restrictions will not apply to Buyer’s use of documents and
information concerning the Business and the Company furnished by the Company
hereunder or when a party has to assert rights against another pursuant to this
Agreement.  In the event the Transactions
are not consummated, upon the request of the other party, each party hereto,
will, and will cause its Affiliates and their respective Representatives to,
promptly redeliver or cause to be redelivered all copies of documents and
information furnished by the other party in connection with this Agreement or
the Transactions and destroy or cause to be destroyed all notes, memoranda,
summaries, analyses, compilations and other writings related thereto or based
thereon prepared by the party furnished such documents and information or its
Representatives.  The obligations in this

 

72

 

Section
10.9 shall be in addition to the obligations of the parties to that certain
Non-Disclosure Agreement between the Company and JAMDAT dated as of
February 4, 2005, which remains in full force and effect.

 

(b)                                 The parties hereto recognize that the
laws and public policies of the various states of the United States may differ
as to the validity and enforceability of covenants similar to those set forth
in this Section.  It is the intention of
the parties that the provisions of this Section be enforced to the fullest
extent permissible under the laws and policies of each jurisdiction in which
enforcement may be sought and that the unenforceability (or the modification to
conform to such laws or policies) of any provisions of this Section shall
not render unenforceable, or impair, the remainder of the provisions of this
Section.  Accordingly, if any provision
of this Section shall be determined to be invalid or unenforceable, such
invalidity or unenforceability shall be deemed to apply only with respect to
the operation of such provision in the particular jurisdiction in which such
determination is made and not with respect to any other provision or
jurisdiction;

 

(c)                                  The parties hereto acknowledge and agree
that any remedy at law for any breach of the provisions of this
Section would be inadequate and the Company hereby consents to the
granting by any court of an injunction or other equitable relief, without the
necessity of actual monetary loss being proved, in order that the breach or
Threatened breach of such provisions may be effectively restrained.

 

10.10                     Burden and Benefit. 
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns.  There are no third party beneficiaries of
this Agreement; provided, however, that any Person that is not a
party to this Agreement but, by the terms of Section 8.2, is entitled to
indemnification, shall be considered a third party beneficiary of this
Agreement, with full rights of enforcement as though such Person was a
signatory to this Agreement.

 

10.11                     Service of Process; Consent to
Jurisdiction.

 

(a)                                  Service of Process. 
Each of the parties hereto irrevocably consents to the service of any
process, pleading, notices or other papers by the mailing of copies thereof by
registered, certified or first class mail, postage prepaid, to such party at
such party’s address set forth herein, or by any other method provided or
permitted under California law.

 

(b)                                 Consent and Exclusive Jurisdiction. 
Each party hereto irrevocably and unconditionally:  (i) agrees that any suit, action or
other legal proceeding arising out of this Agreement shall be brought only in
the United States District Court for the Central District of California or, if
such court does not have jurisdiction or will not accept jurisdiction, in any
court of general jurisdiction in the County of Los Angeles, California;
(ii) consents to the exclusive jurisdiction of any such court in any such
suit, action or proceeding; and (iii) waives any objection which such
party may have to the laying of venue of any such suit, action or proceeding in
any such court.

 

73

 

10.12                     Attorneys’ Fees. 
If any party to this Agreement brings an action to enforce its rights
under this Agreement, the prevailing party shall be entitled to recover its
costs and expenses, including without limitation reasonable attorneys’ fees and
legal costs and costs of accountants and investigations, incurred in connection
with such action, including any appeal of such action.

 

10.13                     Representation by Counsel. 
Each party hereto represents and agrees with each other that it has been
represented by or had the opportunity to be represented by, independent counsel
of its own choosing, and that it has had the full right and opportunity to
consult with its respective attorney(s), that to the extent, if any, that it
desired, it availed itself of this right and opportunity, that it or its authorized
officers (as the case may be) have carefully read and fully understand this
Agreement in its entirety and have had it fully explained to them by such party’s
respective counsel, that each is fully aware of the contents thereof and its
meaning, intent and legal effect, and that it or its authorized officer (as the
case may be) is competent to execute this Agreement and has executed this
Agreement free from coercion, duress or undue influence.

 

10.14                     Titles.  The titles,
captions or headings of the Articles and Sections herein are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.

 

10.15                     No Interpretation Against Drafter. 
This Agreement and the Transaction Documents are the product of
negotiations between the parties hereto represented by counsel and any rules of
construction relating to interpretation against the drafter of an agreement
shall not apply to this Agreement and are expressly waived.

 

10.16                     Additional Survival. 
In addition to the survival of representations and warranties and other
provisions referenced in Section 8.1 of this Agreement, which shall survive
pursuant to the terms of such Section, the obligations of the Members and Buyer
contained in Articles II, III, VIII and X of this Agreement shall survive
the Closing Date indefinitely.

 

10.17                     Further Assurances. 
The parties hereto agree (a) to furnish upon request to each other
such further information, (b) to execute and deliver to each other such
other documents, and (c) to do such other acts and things, all as may be
reasonably requested by another party hereto for the purpose of carrying out
the intent of this Agreement and the Transactions contemplated by this
Agreement.

 

10.18                     Interpretation. 
All references to currency herein are to United States dollars unless
otherwise specified herein.  The words “include”
or “including” shall be deemed to be followed by “without limitation” or “but
not limited to” whether or not they are followed by such phrases or words of
like import.  References to any statute
or statutory provision shall be construed as a reference to the same as it may
have been, or may be from time to time e, amended, modified or re-enacted.  References to this “Agreement” or any other
agreement or document shall be construed as a reference to such agreement or
document as amended, modified or supplemented and in effect from time to time
and shall include a reference to any document which amends, modifies or
supplements it, or is entered into, made or given pursuant to or in accordance
with its terms.

 

74

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

75

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed on their respective behalf, by their
respective representatives thereunto duly authorized, all as of the day and
year first above written.

 

 

JAMDAT:

 

JAMDAT Mobile, Inc.

 

	
  /s/ Mitch Lasky

  	
   

  
	
  By:

  	
  Mitch Lasky

  
	
  Its:

  	
  Chief Executive Officer

  
			

 

 

BUYER:

 

JAMDAT Mobile (Hawaii) LLC

 

 

	
  /s/ Mitch Lasky

  	
   

  
	
  By:

  	
  Mitch Lasky

  	
   

  
	
  Its:

  	
  Manager

  	
   

  

 

 

THE COMPANY:

 

Blue Lava Wireless, LLC

 

 

	
  /s/ Henk Rogers

  	
   

  
	
  By:

  	
  Henk Rogers

  
	
  Its:

  	
  Co-Manager

  
			

 

 

	
  /s/ Akemi Rogers

  	
   

  
	
  By:

  	
  Akemi Rogers

  
	
  Its:

  	
  Co-Manager

  
			

 

MEMBERS:

 

 

	
  /s/ Henk Rogers

  	
   

  
	
  Henk Rogers

  

 

S-1

 

	
  /s/ Akemi Rogers

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Akemi Rogers

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

FAMILY TRUST I

 

 

Henk B. Rogers 2005 Dynasty Trust

 

 

	
  By:

  	
  /s/ Akemi Rogers

  	
   

  
	
  Name:

  	
  Akemi Rogers

  
	
  Its:

  	
  Trustee

  
	
   

  
	
   

  	
  Agreed:

  	
  /s/ Henk Rogers

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: Henk Rogers, Settlor

  
						

 

 

FAMILY TRUST II

 

 

Akemi M. Rogers 2005 Dynasty Trust

 

	
  By:

  	
  /s/ Henk Rogers

  	
   

  
	
  Name:

  	
  Henk Rogers

  
	
  Its:

  	
  Trustee

  
	
   

  
	
   

  	
  Agreed:

  	
  /s/ Akemi Rogers

  	
   

  
	
   

  	
  Name: Akemi Rogers, Settlor

  
						

 

S-2Exhibit
10.27

 

TETRIS
LICENSE AND DISTRIBUTION AGREEMENT

 

This Tetris License and Distribution Agreement (this “Agreement”) is made
and entered into as of April 20, 2005 (the “Effective Date”), by and among The
Tetris Company, LLC, a Delaware limited liability company whose registered
address is 103 Foulk Road, Suite 202, Wilmington, Delaware 19803, USA (“Licensor”), Blue Lava
Wireless, LLC, a Hawaii limited
liability company with a business address at 2800 Woodlawn Drive, Suite 245,
Honolulu, Hawaii 96822, USA (“Licensee”), JAMDAT Mobile Inc., a Delaware corporation
with a business address at 3415 S. Sepulveda Blvd., Suite 700, Los Angeles, CA
90034 USA (“JAMDAT”), and JAMDAT Mobile
(Hawaii) LLC, a Delaware limited liability company (“JAMDAT
Hawaii”).  Attached as Schedule 1 to this
Agreement is an acknowledgement and agreement by the entity set forth therein
(the “Acknowledging Party”).  Attached as Schedule 2 to this
Agreement is an acknowledgement and agreement by the entity set forth therein.

 

RECITALS

 

A.            Licensor
and Licensee are parties to that certain Copyright and Trademark License and
Distribution Agreement dated May 18, 2002, as amended (the “Existing License Agreement”),
pursuant to which Licensor granted to Licensee a license to exploit Licensor’s
rights in the trademark “Tetris” and in the game known as “Tetris” in
connection with wireless mobile handset telephones.

 

B.            Licensor
is a publisher of games and other entertainment applications for wireless
devices.

 

C.            JAMDAT
is a publisher of games and other entertainment applications for wireless
devices.

 

D.            JAMDAT,
JAMDAT Hawaii, Licensee and the members of Licensee have entered into that
certain Purchase Agreement of even date herewith (“Purchase Agreement”)
pursuant to which JAMDAT Hawaii will acquire Licensee (the “Acquisition”).

 

E.             It
is a condition to the closing of the Acquisition under the Purchase Agreement
that Licensor and Licensee enter into this Agreement pursuant to which Licensor
and Licensee are terminating the Existing License Agreement and Licensor is
granting to Licensee an exclusive license (subject to certain existing
agreements) to exploit Licensor’s rights in the trademark “Tetris” and in the
game known as “Tetris” in connection with Mobile Telephony Devices (as defined
herein).

 

NOW, THEREFORE, in consideration of the
foregoing and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:

 

1

 

1.             DEFINITIONS

 

1.1                                 “Adapted Game” shall
mean any application or game that incorporates or that infringes any of the
intellectual property rights embodied in the Licensed Properties or that under
U.S. Copyright Law would be deemed to be a derivative work of the Licensed
Properties, and is designed for play on a Mobile Telephony Device, including
any new versions or new releases of such application or game that complies with
the provisions of Section 5.

 

1.2                                 “Collateral Product”
shall mean any product that incorporates or
that infringes any of the intellectual property rights embodied in the Licensed
Properties or that under U.S. Copyright Law would be deemed to be a derivative
work of the Licensed Properties, (e.g., T-shirts, hats, shoes, apparel,
clothing accessories, sports equipment, pens, and other promotional products),
and that is incidental to the Commercial Exploitation of Adapted Games.  Unless the context indicates otherwise, all
references to Adapted Games in this Agreement include Collateral Products.

 

1.3                                 “Commercially Exploit”
(and variants thereof such as “Commercially Exploiting” and “Commercial Exploitation”)
shall mean, as to Adapted Games that are resident on a Mobile Telephony Device
or remotely accessed through a Mobile Telephony Device, to make, import, use,
reproduce, market, advertise, promote, distribute, sell, exploit, publicly
display, publicly perform, prepare derivative works of, license, grant
subscriptions to, sublicense or otherwise exploit such games, whether directly
or indirectly through a third party acting on Licensee’s behalf, on a
revenue-generating basis.

 

1.4                                 “Distribution Channel”
shall mean any and all methods or channels, whether now known or hereafter
developed or devised, of distributing or selling products or other content to
be up-loaded, downloaded, remotely accessed and/or used on Mobile Telephony
Devices, including, without limitation, the following: (i) over the air
provisioning via wireless cellular networks or other satellite wireless
networks or systems (using existing or future transport, delivery,
transmission, or provisioning technologies of any kind); (ii) online or
wireless sites, shops, storefronts or portals; (iii) retailers, including,
without limitation, carrier retail locations and other retail locations where
Mobile Telephony Devices are generally sold; (iv) OEM methods of distribution,
including, without limitation, embedded or bundling transactions; and (v)
through the distribution, sale or use of physical media (or similar means) that
enable the delivery of such products or content to Mobile Telephony Devices,
including, without limitation, SD cards, MMC cards and similar such media.

 

1.5                                 “Existing Gaming Devices”
means the devices listed in Appendix B, attached hereto.

 

1.6                                 “Existing License Agreement”
is defined in Recital A., above.

 

1.7                                 “Game” shall mean the
game known as “TETRIS®”, in whatever form or format.

 

2

 

1.8                                 “Gaming Device” shall
mean:

 

(a)                                  desktop,
laptop and other personal computers and gaming consoles (e.g., PlayStation 2,
Xbox);

 

(b)                                 Existing
Gaming Devices;

 

(c)                                  any
Successor or Derivative Devices to the devices identified in subsection (a)
above and to Existing Gaming Devices; and

 

(d)                                 any
other device (other than a Mobile Telephony Device) that is conceived, designed
or developed after the Effective Date and that is capable of playing games or
similar applications (such as handheld gaming devices, iPods, MP3 players,
electronic organizers or personal digital assistants, in each case which are
not capable of voice telephone communication).

 

The parties acknowledge and agree that any and all
devices now existing or conceived, designed or developed after the Effective
Date by Nintendo Co. Ld., or any of its Subsidiaries (“Nintendo”), will be
deemed to be a Gaming Device, unless Nintendo enters into the business of
selling Mobile Telephony Devices and the sale of Mobile Telephony Devices
represents a material portion of Nintendo’s then-existing overall business or
Nintendo is acquired by a company for which the sale of Mobile Telephony
Devices represents a material portion of its business.  In each of the foregoing instances, “material”
means annual sales of at least one billion U.S. dollars.

 

1.9                                 “Licensed Properties”
shall mean: (i) the Game, and all games and elements embodying the essential
play pattern, the rules and/or the “look and feel” of the Game, including,
without limitation, any of Licensor’s patents, design scripts, screen displays,
audiovisual works, the source code and object code for any software included
therein, and Licensor’s copyrights and other rights related thereto; (ii) the
Tetris Marks; (iii) the Tetris Music; and (iv) any sequels, updates or
derivatives to any of items described in the foregoing clauses (i) to (iii)
developed by or on behalf of Licensor during the Term.  The Licensed Properties include, without
limitation, those items listed in Appendix A, attached hereto, and
shall also include any sequels, updates or derivatives thereof developed by or
on behalf of Licensor during the Term.

 

1.10                           “Mobile Telephony Device”
shall mean any mobile device (other than a Gaming Device) now existing or that
is conceived, designed or developed after the Effective Date that enables a
user to send and receive a telephone call (voice telephone communication).  Examples of devices that would be classified
as Mobile Telephony Devices in accordance with the foregoing include, without
limitation, mobile telephones, cellular telephones, satellite telephones, fixed
wireless telephones, wireless PDA/telephone devices (generally known as “smart
phones”) and convergence device handsets or combination or “convergence”
devices that combine the ability to send and receive a telephone call (voice
telephone communication) with other capabilities (such as RIM Blackberry, Nokia
N-Gage, 

 

3

 

handheld gaming devices, iPods, MP3 players or
electronic organizers, in each case which are capable of voice telephone
communication).  A Mobile Telephony
Device may operate on any platform, including, but not limited to Wireless
Platforms, and may be used to Commercially Exploit Adapted Games through any
Distribution Channel.

 

1.11                           “OEM” means a
manufacturer of a Mobile Telephony Device.

 

1.12                           “Purchase Agreement”
is defined in Recital D., above.

 

1.13                           “Sublicensee” shall
mean as to Licensee, any Subsidiary, and any unaffiliated third party
sublicensee, including, without limitation, an OEM sublicensee, local or
foreign distribution partner, third party publisher or a network carrier.

 

1.14                           “Subsidiary” shall
mean, with respect to any party, a corporation, company, partnership, limited
liability company or entity that is controlled by such party.  For purposes hereof, “control” shall mean:
(i) in the case of corporate entities, direct or indirect ownership of greater
than fifty percent (50%) of the stock or shares entitled to vote for the
election of the board of directors or other governing body of the entity; and
(ii) in the case of non-corporate entities, direct or indirect ownership of
greater than or equal to fifty percent (50%) of the equity interest with the
power to direct the management and policies of such non-corporate entities.

 

1.15                           “Successor or Derivative Devices”
shall mean any device that is conceived, designed or developed after the
Effective Date and that incorporates substantially the same or similar
functionality and features as an existing device, but also includes substantial
new functionality and/or features.

 

1.16                           “Term” is defined in
Section 10.1.

 

1.17                           “Tetris Design Guidelines”
shall mean Licensor’s guidelines for the design of games published under the
trademark “TETRIS®”, as set forth in Appendix C, attached hereto.  Licensor shall provide Licensee the right to
participate in updating and/or revising such guidelines, which revised
guidelines will apply only to devices designed after the date Licensor releases
a revised version of such guidelines to all its licensees of the Licensed
Properties.  In all events, such
revisions: (i) will be commercially reasonable with respect to changes required
from the existing guidelines and with respect to the time required to implement
the new guidelines; and (ii) will not have a material adverse impact on
Licensee’s ability to Commercially Exploit any Adapted Game.

 

1.18                           “Tetris Logo” shall
mean Licensor’s Tetris logo, as set forth in Appendix D, attached
hereto.

 

1.19                           “Tetris Marks” shall
mean the trademark “TETRIS®” and the Tetris Logo.

 

1.20                           “Tetris Music” shall
mean Licensor’s music associated with the play of the Game.

 

4

 

1.21                           “Wireless Platforms”
shall mean any and all computer systems or bases of technologies, now known or
hereafter developed or devised (whether hardware-based, software-based, a
combination thereof, or otherwise), underlying or embodied on a Mobile
Telephony Device, upon which an application program can operate, can be made to
operate or can be developed, including without limitation, all development
platforms, application environments, runtime environments and programming
languages, whether now known or hereafter developed or devised, and further
including, without limitation, short message service, BREW (Binary Runtime
Environment for Wireless), J2ME (Java 2 Platform, Micro Edition), WAP (Wireless
Application Protocol—WML and xHTML), MOPHUN, Smartphone, Symbian, ExEn, Palm
OS, Windows Mobile, I-mode (cHTML) and iAppli.

 

2.             GRANT OF RIGHTS

 

2.1                                 Exclusive
License Grant.  Licensor hereby
grants to Licensee, during the Term, an exclusive, non-transferable (except as
set forth in Section 12.3), worldwide, right and license, with the right to
sublicense (but only in accordance with Section 2.4) to the Licensed Properties
to:

 

(a)                                  create
and have created Adapted Games in conformance with the Tetris Design Guidelines
and the approval process set forth in Section 5;

 

(b)                                 Commercially
Exploit Adapted Games for play only on Mobile Telephony Devices;

 

(c)                                  Use,
reproduce and display the Tetris Marks, solely in connection with Licensee’s
exercise of the license rights granted under subsection (b) above and Section
2.2 below; and

 

(d)                                 Use,
reproduce, modify and perform the Tetris Music, solely in connection with
Licensee’s exercise of the license rights granted under subsection (b) above
and Section 2.2 below.

 

2.2                                 Non-exclusive Collateral Products License Grant.  Licensor
hereby grants to Licensee, during the Term, a non-exclusive, non-transferable
(except as set forth in Section 12.3), worldwide, royalty-free, right and
license, with the right to sublicense (but only in accordance with Section 2.4)
to the Licensed Properties to Commercially Exploit Collateral Products, solely
in connection with Licensee’s Commercial Exploitation of Adapted Games, as
permitted under Section 2.1 and provided that Licensee receives no monetary
compensation (or any equivalent benefit) directly from Licensee’s exercise of
the rights granted under this Section 2.2.

 

2.3                                 Exceptions
to License Rights.  Licensee
acknowledges and agrees that, prior to the Effective Date, Licensor, Licensee or
Blue Planet Software, Inc entered into the license agreements listed on Appendix E,
attached hereto (the “Existing
Tetris License Agreements”) pursuant to which Licensor, Licensee
or Blue Planet Software, Inc granted to certain licensees the right to
Commercially Exploit the Licensed Properties on or in connection with various
devices, including Mobile Telephony Devices. 
Licensee further acknowledges and

 

5

 

agrees that each Existing Tetris License Agreement
will remain in full force and effect until the expiration of the current term
or earlier termination of each such agreement in accordance with its terms, and
that the license rights granted to Licensee under Section 2.1 are subject
to the rights granted to Licensor’s, Licensee’s or Blue Planet Software, Inc.’s
licensees under the Existing Tetris License Agreements.  Licensor and Licensee each agrees that it
shall allow to lapse (and not renew) each of the Existing Tetris License
Agreements to which it is a party upon expiration of the current term of each
such agreement.

 

2.4                                 Sublicensing.

 

(a)                                  Licensee
has the right to sublicense any of the rights granted to Licensee under Section
2.1 to Sublicensees pursuant to a written agreement with each Sublicensee that
imposes obligations on such Sublicensees that are consistent in all material
respects with the obligations imposed on Licensee hereunder.

 

(b)                                 Without
limiting the provisions of subsection (a), in the event Licensee enters into a
written sublicense agreement with a Sublicensee that is not a carrier, OEM,
online or wireless portal (e.g., Yahoo) or a “brick and mortar,” online or
wireless retailer (e.g., Radio Shack, Amazon.com) and is a third party
publisher (each, a “Publisher
Sublicensee”), Licensee shall enter into a written sublicense
agreement with each such Publisher Sublicensee (a “Publisher  Sublicense Agreement”)
that: (i) requires the Publisher Sublicensee to acknowledge Licensor’s and its
licensor’s ownership rights in and to the Licensed Properties; and (ii) include
provisions that enable Licensee to comply with its obligations under Section
6.  By way of example, the following
publishers are Publisher Sublicensees for purposes of this Agreement: Com2uS and
G-Mode.  At Licensor’s request, Licensee
shall provide Licensor with an unredacted copy of each proposed Publisher
Sublicense Agreement to enable Licensor to confirm that such agreement complies
with the foregoing requirements.

 

2.5                                 Restrictions
and Exclusions.  Only Licensee and
its Sublicensees, if any, may Commercially Exploit the Adapted Games.  End user players of the Adapted Games are
granted a license to use the Adapted Games for their personal use only.

 

2.6                                 Reservation
of Rights.  Licensor reserves all
rights and licenses in and to the Licensed Properties not expressly granted to
Licensee in this Agreement.  No rights or
licenses are granted to Licensee or its Sublicensees by implication, estoppel
or otherwise.

 

2.7                                 Delivery
of Licensed Properties to Licensee. 
Licensor shall deliver all Licensed Properties listed in Appendix A
to Licensee on the Effective Date.  All
written materials shall be provided in hard copy and in a computer file (if
feasible, in a data file that may be accessed using an application that enables
text searching, e.g., in a Microsoft Word file).

 

6

 

3.             PROMOTION AND MARKETING

 

3.1                                 Obligation.  During the Term, Licensee shall use its
commercially reasonable efforts to Commercially Exploit the Adapted Games.

 

4.             PAYMENT

 

4.1                                 Initial
Payment.  In partial consideration of
the license rights granted by Licensee to Licensor hereunder, Licensee will pay
Licensor a non-refundable, non-recoupable license fee in the amount of seven
million four hundred thousand dollars ($7,400,000).  In no event will the license fee paid by
Licensee pursuant to this Section 4.1 be deemed an advance against any
royalties payable by Licensee pursuant to Section 4.3.

 

4.2                                 Certain
Definitions.  For purposes of
calculating the royalties payable by Licensee to Licensor under this Agreement,
the terms Net Revenue and Permitted Deductions are defined as follows:

 

(a)                                  “Net Revenues” shall
mean the amounts actually received by Licensee from the Commercial Exploitation
of the Adapted Games by Licensee and its Sublicensees, net of the Permitted
Deductions; provided, however, that: (i) Net Revenues shall be
calculated without regard for any taxes withheld from amounts paid to Licensee
or any Sublicensee, and (ii) as to Publisher Sublicensees only, the amounts
received by Licensee will be deemed to be no less than the amount actually
received by such Publisher Sublicensee in connection with the Commercial
Exploitation of the Adapted Games, without deduction of any kind other than
carrier or platform provider revenue shares. 
In addition, “Net Revenues” shall include any amounts not collected by
Licensee (or its Sublicensees) from any affiliated customers.

 

(b)                                 “Permitted Deductions”
shall mean any actual returns, chargebacks, refunds or credits that are supported
by written documentation, and any fees, charges, expenses or other amounts paid
by Licensee or Sublicensees to network carriers, Wireless Platform providers or
Distribution Channel owners for the Adapted Games.  “Permitted Deductions” shall not include any
fees, charges, expenses or other amounts paid by Licensee to third parties for
advertising, promotional, marketing and like services or for content included
within Adapted Games.

 

4.3                                 Royalties.  Licensee shall pay to Licensor royalties
based on Licensee’s Net Revenues from the Commercial Exploitation by Licensee
and its Sublicensees of the Adapted Games (“Payments”) calculated in accordance with
the applicable royalty rate set forth in Appendix F, attached hereto.

 

4.4                                 Payment
Terms.  Licensee shall make all
Payments due and payable under Section 4.3 on a quarterly basis within
forty-five (45) days after the last day of each calendar quarter.  All payments shall be made by wire transfer
in U.S. dollars into Licensor’s bank account at Key Bank, 201 S. Warrant St., Syracuse,
New York 13202, Account No. 326900004903, ABA No. 021300077.  All expenses

 

7

 

connected with transferring Payments shall be borne by
Licensee.  Licensee may not setoff
against any Payments due and payable under Section 4.3 amounts that Licensee or
any Sublicensee claims are due to it under this Agreement or otherwise.

 

4.5                                 Delay
of Royalty Payment.  In case a
Payment is not made within the forty-five (45) day period described in Section
4.4, such unpaid Payment will bear interest calculated at the rate of one
percent (1%) per month, compounded daily, for the number of actual days that
have elapsed between the date such Payment was due and the date it is paid or
the highest rate permitted by applicable law, whichever is lower.

 

4.6                                 Quarterly
Royalty Reports.  Within forty-five
(45) days after the end of each calendar quarter, Licensee shall furnish to
Licensor a written royalty report for the immediately preceding calendar
quarter in the format set forth in Appendix G, attached hereto (each
such report, a “Royalty
Report”).  However, the
first such Royalty Report shall cover the time period between the Effective
Date and the end of the then-current calendar quarter.

 

4.7                                 Taxes.  All foreign, federal, state, county or
municipal sales, use, excise or similar tax assessments, levies, fees or other
charges assessed or charged on the payments by Licensee to Licensor hereunder
shall be Licensor’s responsibility. 
Except as required by law, Licensee shall not withhold any taxes,
levies, fees or charges from any amounts payable to Licensor; provided,
however, if Licensee is required by applicable law to withhold any amount for
payment of taxes, levies, fees or charges, Licensee shall remit the amounts withheld
to the appropriate taxing authorities and provide Licensor with a written
receipt from the tax authority for all such taxes, levies, fees or charges so
withheld.  Licensee shall provide all
assistance, documentation and information reasonably required for Licensor to
obtain an exemption or reduced withholding tax rate.

 

4.8                                 Records.  During the Term and for a period of two (2)
years thereafter, Licensee shall keep and maintain complete and accurate books,
records and other customary documentation (and shall require its Sublicensees
to maintain such books, records and other customary documentation)
(collectively, “Royalty
Records”) regarding Licensee’s and its Sublicensees’ Commercial
Exploitation of the Adapted Games.  Such
Royalty Records shall be in sufficient detail and shall include, without
limitation, all data and information reasonably required to enable Licensor to
confirm the information set forth in the Royalty Reports delivered to Licensor
pursuant to Section 4.6 during the 2 year period prior to the audit.

 

4.9                                 Audit.  For the purpose of verifying the correctness
of the Payments paid or to be paid by Licensee, Licensor may retain, at its own
expense, not more than once during any calendar year, an independent nationally
recognized certified public accountant (who shall not be compensated on a
contingent fee basis) to audit the Royalty Records solely for the purpose of
verifying the accuracy of the Payments. Notwithstanding the foregoing, Licensor
will have the right to have an additional audit conducted within one (1) year
following any occurrence of a Material Shortfall (defined below).  Licensor’s accountant may only conduct such
an audit

 

8

 

upon a minimum of fifteen (15) days written notice
prior to any audit; provided, that all audits are conducted during
Licensee’s regular business hours and on Licensee’s premises.  Licensor’s accountant shall enter into an
appropriate confidentiality agreement with Licensee, and shall deliver a copy
of its audit report and related work papers simultaneously to Licensor and
Licensee.  If any audit uncovers a
shortfall in payments owed to Licensor hereunder, then Licensee shall
immediately pay such shortfall to Licensor plus interest pursuant to
Section 4.5 hereof on the amount past due. 
If such shortfall exceeds five percent (5%) of the Payments due and
payable to Licensor during the royalty period(s) in which the shortfall
occurred (a “Material
Shortfall”), Licensee shall, in addition, immediately reimburse
Licensor the reasonable out-of-pocket costs paid by Licensor to the accountant
in connection with conducting such an audit.

 

5.             QUALITY AND APPROVAL OF ADAPTED GAMES

 

5.1                                 Quality.  Licensee may itself create or have created
Adapted Games.  Licensee agrees that the
Adapted Games shall meet Licensor’s standards of quality, as reasonably
determined and applied by Licensor. 
Licensee shall not Commercially Exploit any new version of an Adapted
Game, unless and until the same has been submitted to Licensor.

 

5.2                                 Quality
Control Process.  At least ten (10)
days prior to the commercial release or distribution of any Adapted Game,
Licensee shall provide to Licensor: (A) the gold master of such Adapted Game,
and (B) sample text and sample screen shots for such Game.  Licensor will have the right to test the
Adapted Game on representative Mobile Telephony Devices on which such Adapted
Game is designed to operate, including applicable Mobile Telephony Devices with
the lowest functionality on which Licensee intends to distribute the Adapted
Game.  If Licensor disapproves of any
such Adapted Game, then (i) Licensor shall notify Licensee in writing within
five (5) business days of receipt of such Adapted Game, which written notice shall
specify in detail the basis for such disapproval; and (ii) Licensee shall
promptly modify the Adapted Game so as to overcome Licensor’s written
objections.  This procedure will be
repeated with each submission until Licensor fails to provide a written notice
of disapproval to Licensee within five (5) business days of receipt of a
revised version of the Adapted Game. 
Licensor may not disapprove any Adapted Game based on the failure of an
Adapted Game to conform with the Tetris Design Guidelines if and to the extent
it is impossible or commercially impracticable for Licensee to make such
Adapted Game conform with the Tetris Design Guidelines due to a conflict with a
Wireless Platform’s or Mobile Telephony Device’s technical requirements
applicable to such Adapted Game. 
Licensee shall not be required to submit to, or seek approval from,
Licensor any ported, localized, updated or derivative version of a previously
approved version of an Adapted Game.

 

5.3                                 Copies
of Adapted Games.  Upon commercial
release of any new version of an Adapted Game, Licensee shall provide to
Licensor two copies of the same in a format mutually agreed upon by the
parties.  Licensor shall have the
absolute and unqualified right, at any time, to request samples of and to
inspect each Adapted

 

9

 

Game (including any promotional materials) to ensure
they meet Licensor’s commercially reasonable standard of quality.

 

5.4                                 Promotional
Materials.  Licensor has the right to
review and disapprove each new marketing, advertising, or promotional material
(“Promotional Material”)
that incorporates a Tetris Mark. 
Licensee shall provide to Licensor a copy of such Promotional Material
at least ten (10) days prior to any commercial release or public distribution
of such Promotional Material.  If
Licensor reasonably disapproves of any Promotional Material, then (i) Licensor
shall notify Licensee in writing within five (5) business days of receipt of
such Promotional Material, which written notice shall specify in detail the
basis for such disapproval; and (ii) Licensee shall promptly modify such
Promotional Material so as to overcome Licensor’s reasonable written
objections.  This procedure will be
repeated with each submission until Licensor fails to provide a written notice
of disapproval to Licensee within five (5) business days of receipt of such
Promotional Material.

 

6.             PROPRIETARY RIGHTS

 

6.1                                 Licensor’s
Ownership Rights.  Licensor and its
licensors exclusively own all right, title and interest in and to the Licensed
Properties, including all worldwide copyright rights, trademark rights and all
other intellectual property or proprietary rights therein.  Without limiting the foregoing, Licensee
expressly acknowledges and agrees that it will not challenge the validity of
Licensor’s and its licensors’ ownership, proprietary or other rights or
interests in the Game and the Licensed Properties.

 

6.2                                 Licensee
Ownership Rights.  Subject to and
without limiting Licensor’s and its licensor’s rights and interests in and to
the Licensed Properties, as between Licensee and Licensor, Licensee will own
all right, title and interest in and to any code, modules, game elements,
functionality, features and other portions of the Adapted Games developed by or
on behalf of Licensee (or its Sublicensees) (collectively, “Licensee-Owned Developments”),
including all worldwide copyright rights, trademark rights and all other
intellectual property or proprietary rights therein.  Licensor acknowledges that it will have no
rights or interests in and to any such Licensee-Owned Developments, except as
set forth below in Section 6.3 or unless otherwise expressly agreed to in
writing by the parties.

 

6.3                                 Joint
Ownership Rights.  Notwithstanding
the provisions set forth in Section 6.2, subject to and without limiting
Licensor’s and its licensors’ rights and interests in and to the Licensed
Properties, Licensor and Licensee shall jointly own all copyright rights,
trademark rights and any other intellectual property or proprietary rights in
any portion of the Licensee-Owned Developments that relate either to the “look
and feel” of the Game or the play of the Game itself or become a new feature or
function of the Game (“Jointly-Owned
Developments”). 
Accordingly, Licensee hereby irrevocably transfers and assigns to
Licensor, and agrees to irrevocably transfer and assign to Licensor, an
undivided joint ownership interest in and to any Jointly-Owned Developments
including all worldwide copyright rights, trademark rights and all other
intellectual property or proprietary rights therein.  Licensee will

 

10

 

provide reasonable assistance and cooperation to
Licensor (and will cause its Sublicensees to provide reasonable assistance and
cooperation to Licensor) to enable Licensor to acquire and perfect Licensor’s
joint ownership interests in and to any Jointly-Owned Developments, including
but not limited to the execution of any documents as may reasonably be
requested by Licensor.  Neither party
will be entitled to any accounting of profits, royalties or other form of
compensation with respect to the sale, distribution, licensing or other form of
exploitation of any Jointly-Owned Developments; provided, however, that the
foregoing provision will not be deemed to waive, limit or affect in any way Licensee’s
obligation to make Payments to Licensor as required under Section 4.  In addition, subject to and without limiting
Licensor’s and its licensors’ rights and interests in and to the Licensed
Properties, neither party will require any form of consent, permission or other
form of approval from the other party with respect to the sale, distribution,
licensing or other form of exploitation of the Jointly-Owned Developments.

 

6.4                                 No
Impairment.  Neither party shall by
any act, or omission to act, impair or prejudice the intellectual property
rights of the other party or the license of the rights granted by this
Agreement; provided that the foregoing will not be deemed to limit either party’s
rights at law, under this Agreement or otherwise.

 

6.5                                 Trademarks.

 

(a)                                  Licensee
agrees to affix or apply to all Adapted Games that Licensee or its Sublicensees
Commercially Exploit pursuant to this Agreement, on all disks or other end user
storage media, appropriate screen
displays, packages, written advertisements, written promotional items
and other such materials, the trademark “TETRIS®” and a trademark notice in the
form set forth in Appendix H, attached hereto.  Licensee shall comply with all laws and government regulations pertaining to the
proper use and designation of trademarks and service marks in the United States
and worldwide.    Appendix H will provide that the
initial splash screen for Tetris game will feature only the JAMDAT logo and
trademark.

 

(b)                                 Licensee
agrees not to use the Tetris Marks, unless the Tetris Marks are used in
connection with the Adapted Games or in the promotion thereof.  Licensee may reference “TETRIS®” in
informational materials about Licensee or its business, provided that such
reference is in the same type-face as the surrounding text, and provided that “®”
follows each reference to “TETRIS,” unless Licensor gives its written consent
to any other use.

 

(c)                                  Nothing
contained in this Agreement shall in any way be deemed to apply to any
trademarks held by Licensor other than the Tetris Marks.  Licensor expressly retains the exclusive
right in and to all of its trademarks as against Licensee and any other
persons.

 

(d)                                 Licensee’s
rights in the Tetris Marks are limited to those expressly granted in this
Agreement, and Licensee agrees that it will acquire no additional rights in the
Tetris Marks by virtue of its performance under this

 

11

 

Agreement.  Nothing in this Agreement shall limit
Licensee’s rights in any names or trademarks created or used by Licensee in
connection with marketing the Adapted Game.

 

(e)                                  All
goodwill associated with Licensee’s use of the Tetris Marks shall inure solely
to the benefit of Licensor and its licensors. 
Licensee will at no time contest
or aid in contesting the validity, enforceability or ownership of the Tetris
Marks nor seek to register in any country the Tetris Marks or any
trademark, trade name or other designation that is confusingly similar to the
Tetris Marks.

 

(f)                                    Licensee
agrees that Licensee’s compliance with the quality standards set forth in
Section 5 above is a condition for its right to use the Tetris Marks pursuant
to this Agreement.

 

(g)                                 Licensor agrees that during the Term,
Licensor will use its commercially diligent efforts to maintain or have
maintained all registrations in the Licensed Properties, including the Tetris
Marks, in all jurisdictions in which any item of Licensed Property is
registered as of the Effective Date.  For
purposes of clarification, “maintain” or “have maintained” means payment of any
applicable maintenance, renewal or registration fees.

 

6.6                                 Copyright
Notice.  Licensee shall employ a
proper copyright notice on all written advertisements, promotional items and
graphics used in connection with the Adapted Games.  Such copyright notice shall also be displayed
on the discs or other end user storage media, appropriate screens of the
Adapted Games, user manuals and the box or container, if any, for each copy of
the Adapted Games.  A sample of such
copyright notice is set forth in Appendix H, attached hereto.

 

7.             CONFIDENTIAL INFORMATION

 

7.1                                 Confidential
Information.  Licensor and Licensee
acknowledge that all the following information that is provided in writing, or
in any other tangible form, by a party (the “Disclosing Party”) to the other party
(the “Receiving Party”)
is confidential information (the “Confidential Information”):

 

(a)                                  Any
non-public information disclosing any of the business practices of the
Disclosing Party, including, without limitation, customer lists, pricing and
marketing practices and plans and strategies, licensing revenue, Royalty
Reports, Payments, and relationships with customers;

 

(b)                                 The
design of the Game or the Adapted Games;

 

(c)                                  The
Tetris Design Guidelines;

 

(d)                                 Any
software code that is provided by the Disclosing Party in connection with this
Agreement; and

 

(e)                                  The
terms and conditions of this Agreement.

 

12

 

7.2                                 Confidentiality.

 

(a)                                  The
Receiving Party acknowledges that the Confidential Information has been and
will be delivered to it by the Disclosing Party only for the limited purposes
set forth hereunder.  Each party will
keep all Confidential Information confidential and will not disclose it or
permit its disclosure in any form to any person or entity other than as
permitted hereunder.  Each party shall
use every reasonable effort to ensure that its employees, contractors and other
third parties to whom access to the Confidential Information is given comply
with the obligations set forth in this Section 7.2.

 

(b)                                 The
provisions of this Section 7.2 do not apply to any information that:
(i) is or becomes generally known to the public through no fault or breach
of this Agreement by the Receiving Party; (ii) is rightfully known by the
Receiving Party prior to the time of disclosure without an obligation of
confidentiality; (iii) is independently developed by the Receiving Party
without use of or access to Confidential Information of the Disclosing Party;
or (iv) the Receiving Party rightfully obtains from a third party without
restriction on use or disclosure.

 

(c)                                  Either
party may disclose the terms and conditions of this Agreement to a third party
for a reasonable business purpose (such as in connection with an offer by a
third party to buy substantially all of the assets of such party), provided
that an appropriate non-disclosure agreement is in place.

 

(d)                                 Either
party may disclose the terms and conditions of this Agreement to comply with
any disclosure obligations under any applicable law or regulation, including,
but not limited to, any securities laws or regulations; provided, that the Disclosing Party agrees to seek confidential
treatment of the terms and conditions of this Agreement under any applicable
law or regulation or otherwise to have such terms and conditions be held in
confidence to the extent permitted under such law or regulation.

 

(e)                                  In
the event that a party hereto is required to disclose Confidential Information
pursuant to an order issued by a court of competent jurisdiction, such party
shall provide the Disclosing Party prompt written notice of the order in
advance of such disclosure so that the Disclosing Party may seek an appropriate
protective or confidential order or other relief.  In addition, the party required to make such
a disclosure will limit the disclosure to the information legally required to
be so disclosed.

 

7.3                                 Injunctive
Relief.  Each party acknowledges and
agrees that the unauthorized disclosure or unauthorized use of Confidential
Information by the Receiving Party, its employees, agents or contractors, may
cause the Disclosing Party irreparable harm for which its remedies at law will
be inadequate.  In such event, the
Disclosing Party will therefore have the right, in addition to any other
remedies

 

13

 

available to it, to obtain immediate injunctive relief
to enjoin any breach or threatened breach of the receiving party’s obligations
set forth in this Section 7.

 

8.             REPRESENTATIONS AND WARRANTIES

 

8.1                                 Authorization.  Each party hereby represents and warrants to
the other party that: (i) it is duly organized and validly existing under the
applicable law of its jurisdiction; (ii) it is duly authorized to execute,
deliver and perform this Agreement; (iii) it has taken all proper action
necessary to render this Agreement binding and enforceable; and (iv) it has the
necessary power and authority to enter into this Agreement and to perform its
obligations under this Agreement without approval from any governmental entity
or third party.

 

8.2                                 Enforceability.  Each party hereby represents and warrants to
the other party that this Agreement has been duly and validly executed and
delivered by such party, and (assuming due authorization, execution and
delivery by the other parties hereto) is a valid and binding obligation of such
party, enforceable against it in accordance with its terms.

 

8.3                                 Licensor’s
Representations and Warranties. 
Licensor represents and warrants to Licensee that: (i) it has the
right to grant licenses in and to
the Licensed Properties, except as set forth in Section 8.7; (ii) it has not
licensed any Licensed Property to any third party for use on Mobile Telephony
Devices anywhere in the world, except as set forth in Section 2.3; and
(iii) it has the sole and exclusive right to grant each and every right herein granted.

 

8.4                                 Licensor’s
Agreements with its licensors. 
Licensor represents and warrants to Licensee that: (i) Licensor, Blue
Planet Software, Inc., Tetris Holding, LLC, Elorg Company, LLC and Games
International, LLC collectively own all rights, title, and interest in and to
the Licensed Properties; and (ii) Licensor is not in breach of any agreement to
which it is a party that would adversely affect its ability to perform its
obligations hereunder.

 

8.5                                 Licensor’s
Intellectual Property Warranty. 
Licensor represents and warrants that the Licensed Properties do not and
will not misappropriate or infringe any third party’s intellectual property
rights, including, but not limited to patent, copyright, trademark, service
mark, trade secret, or other proprietary right. 
In the event that Licensor becomes aware (or Licensee provides Licensor
with written notice) that an item of the Licensed Properties is the object of
any misappropriation or infringement claim or suit, Licensor will use its
commercially reasonable efforts to procure, at Licensor’s reasonable expense,
the right to use such Licensed Property.

 

8.6                                 Licensee’s
Intellectual Property Warranty. 
Licensee and its Sublicensees represent and warrant to Licensor that all
portions of the Adapted Games (except for the Licensed Properties) shall not
misappropriate or infringe any third party’s intellectual property rights,
including, but not limited to patent, copyright, trademark, service mark, trade
secret, or other proprietary right.

 

14

 

8.7                                 Exceptions.  Licensor’s representations and warranties in
Section 8.3 shall not apply: (a) with respect to the Tetris Marks in
countries in which Licensor’s licensors do not possess a registration of the
Tetris Marks in the trademark class that includes Mobile Telephony Devices or
the Adapted Games; and (b) with respect to the copyrights in the Adapted Games
in countries that are not members of the Universal Copyright Convention.

 

8.8                                 No
Other Warranties.  EXCEPT AS
EXPRESSLY PROVIDED IN THIS SECTION 8, LICENSOR DISCLAIMS ANY AND ALL
REPRESENTATIONS AND WARRANTIES INCLUDING, BUT NOT LIMITED TO, ANY EXPRESS OR
IMPLIED WARRANTY OF TITLE, MERCHANTABILITY, FITNESS OF A PARTICULAR PURPOSE OR
NONINFRINGEMENT.

 

8.9                                 Mutual
Indemnification.  Each party (an “indemnifying party “)
hereby agrees to defend, indemnify and hold harmless the other party (the “indemnified party”)
against any and all losses, claims, damages, liabilities, costs and expenses,
including legal expenses and reasonable attorney’s fees, arising out of any
third-party claim based on the indemnifying party’s (which, as to Licensee will
include its Sublicensees): (a) failure to fulfill or breach of any
obligation under this Agreement; or (b) breach of any representation or
warranty it has made in this Agreement (or, as to Licensee’s Sublicensees, any
representation or warranty that a Sublicensee makes under the applicable
Sublicense Agreement).  In any instance
that Licensee is the indemnifying party, JAMDAT will be jointly and severally
liable with Licensee for Licensee’s indemnity obligations as set forth
herein.  In any instance that Licensor is
the indemnifying party, the Acknowledging Party will be jointly and severally
liable with Licensor for Licensor’s indemnity obligations as set forth
herein.  In the event of a claim for
which a party is entitled to indemnification hereunder, the indemnified party
shall: (i) give the indemnifying party prompt written notice of the relevant
claim; (ii) reasonably cooperate with the indemnifying party, at the
indemnifying party’s expense, in the defense of any such claim; and (iii) give
the indemnifying party the right to control the defense and settlement of any
such claim; provided, that, Licensee agrees that Licensor will have the
right to retain control of the defense and settlement of any claim that is
asserted against Licensee (or that is asserted against Licensor and Licensee,
either jointly or severally) to the extent such claim relates in all material
respects to the goodwill or reputation of Licensor, or Licensor’s or its
licensor’s rights in the Licensed Properties. 
In no event shall the indemnifying party enter into any settlement that
affects the indemnified party’s rights or interests without the indemnified
party’s prior written approval, which shall not be unreasonably withheld.  The indemnified party shall have the right to
retain counsel, at the indemnified party’s sole expense, to participate in the
defense of any claim tendered by the indemnified party hereunder.

 

9.             PROSECUTION OF INFRINGEMENT CLAIMS

 

9.1                                 Prosecution
of Infringement Claims.  Each party
shall notify the other party immediately of any infringement or counterfeit of
an Adapted Game that becomes known to such party (a “Prosecutable Infringement Clam”).  If
Licensee chooses

 

15

 

to prosecute any such Prosecutable Infringement Claim,
Licensee shall bear all costs and expenses incurred by Licensee (collectively, “Litigation Costs”), but Licensor
shall have the right to participate, at Licensor’s expense, in prosecuting any
such Prosecutable Infringement Claim.  If
Licensee recovers any damages, settlements or other as a result of prosecuting
such an action (collectively, “Damages”),
Licensee shall first be entitled to reimbursement from such Damages for any
Litigation Costs.  The remaining portion
of such Damages, if any, will be treated as Licensee’s Net Revenue pursuant to
Section 4.2 (except that Licensee will have no right to deduct any Permitted
Deductions or other amounts from such Damages), and Licensee will pay Licensor
the applicable royalty based on such Net Revenues in accordance with the
provisions of Section 4.2.  If Licensee
chooses not to prosecute a Prosecutable Infringement Claim, Licensor shall have
the right to prosecute such Prosecutable Infringement Claim.  Each party shall provide the other party with
such reasonable assistance and cooperation as is needed to prosecute any such
Prosecutable Infringement Claim and will supply the other party, at such other
party’s sole expense, with all documents and other information that are
reasonably necessary to prosecute any such Prosecutable Infringement Claim.

 

10.           TERM AND TERMINATION

 

10.1                           Term.
 This Agreement commences as of the
Effective Date and, unless terminated earlier in accordance with the terms of
this Agreement, shall remain in force and effect for an initial term of fifteen
(15) years (the “Initial
Term”).  At the end of the
Initial Term, Licensee shall have a one-time option to renew this Agreement
(the “Renewal Option”)
for an additional three (3) year renewal term (the “Renewal Term”) by
paying Licensor, no later than four (4) months prior to the expiration of the
Initial Term, Twenty Million Dollars ($20,000,000) in cash as a non-refundable,
fully recoupable advance against future royalties payable by Licensee during
the Renewal Term.  If Licensee elects not
to exercise the Renewal Option (a “License ROFN Condition”), Licensee shall have
a one-time right of first negotiation, as set forth in Section 10.2, to acquire
a new license to Commercially Exploit the Adapted Games.  The Initial Term and the Renewal Term, if
any, are referred to collectively as the “Term”.

 

10.2                           Right
of First Negotiation as to a New License.

 

(a)                                  In
the event of a License ROFN Condition (as defined in Section 10.1 above), prior
to commencing discussions with any third party regarding the negotiation of a
license to Commercially Exploit the Adapted Games (a “New License”),
Licensor will first notify Licensee thereof in writing (the “New License ROFN Notice”)
and offer Licensee the one-time opportunity to negotiate such New License.  Licensee will have ten (10) days following
the receipt of the New License ROFN Notice (the “New License ROFN Period”) to notify
Licensor that it is interested in commencing such negotiations.

 

16

 

(b)                                 If
Licensee notifies Licensor prior to the expiration of the New License ROFN
Period that it is interested in commencing such negotiations, then the parties
will, in good faith, attempt to negotiate the terms and conditions of such New
License; provided, however, that Licensor shall not, during any such
discussions with Licensee, inform, offer, negotiate or enter into a New License
with another party.  If Licensor and
Licensee fail to execute such New License within a reasonable time following
the commencement of negotiations, but in any event, within forty five (45)
days, then, unless the parties otherwise agree in writing, Licensor will have
the right to terminate discussions with Licensee regarding a New License and
shall be free to enter into negotiations with parties other than Licensee in
respect to such a New License; provided, that in no event shall the
material terms (i.e., consideration, royalties, term, exclusivity, scope of
license) of any agreement entered into with a party other than Licensee in
respect of such a New License be (in the aggregate) more favorable to such
party than the corresponding terms last offered to Licensee pursuant to the
provisions of this Section 10.2.

 

(c)                                  If
Licensee fails to respond to Licensor prior to the expiration of the New
License ROFN Period or if Licensee notifies Licensor prior to the expiration of
the New License ROFN Period that it is not interested in commencing such
negotiations, then Licensor will have no further obligation to Licensee under
this Section 10.2 or otherwise with respect to such New License and Licensee’s
right to negotiate a New License will automatically terminate.

 

(d)                                 Nothing
in this Section 10.2 or otherwise obligates Licensor to enter into a New
License with Licensee, provided that Licensor has complied with its obligations
as set forth in this Section 10.2.

 

10.3                           Termination
for Breach.  Each party will have the
right to terminate this Agreement if the other party materially breaches this
Agreement and fails to cure such material breach within thirty (30) days
following the non-breaching party’s written notice thereof.

 

10.4                           Termination
for Breach of Purchase Agreement. 
Licensor will have the right to terminate this Agreement if Licensee or
JAMDAT breaches Section 2.2(a) (Sales Consideration) of the Purchase
Agreement and fails to cure such breach within thirty (30) days after Licensor’s
written notice thereof.

 

10.5                           Termination
Upon Discontinuance of Commercial Exploitation.  This Agreement shall terminate automatically
twelve (12) months after Licensee and its Sublicensees have discontinued
Commercial Exploitation of all Adapted Games.

 

10.6                           Effect
of Termination.  Upon the expiration
or termination of this Agreement:

 

(a)                                  Subject
to the provisions of Section 10.7, all rights and licenses granted to Licensee
under this Agreement will immediately terminate and Licensee

 

17

 

will cease use and
Commercial Exploitation of (and will ensure that its Sublicensees cease use of)
all Licensed Properties;

 

(b)                                 Licensee
will pay to Licensor any and all accrued and unpaid amounts due to Licensor
under Section 4.3 in accordance with Section 4.4;

 

(c)                                  Licensee
will promptly return to Licensor (and will not retain any copies, electronic or
otherwise of), and will ensure that its Sublicensees promptly return to
Licensor (and not retain any copies, electronic or otherwise of) all Licensed
Properties in Licensee’s or in its Sublicensees’ possession or control, (except
that Licensee and each Sublicensee may retain one (1) archival copy of such
materials); and

 

(d)                                 each
party will promptly return to Disclosing Party all Confidential Information of
the Disclosing Party in such party’s possession or control.

 

10.7                           Post-Termination
“Sell-off” Rights.  Following the
expiration or termination of this Agreement (the “End Date”), Licensee shall have the
following rights with respect to the continued Commercial Exploitation of
Adapted Games hereunder:

 

(a)                                  for
a period of twelve (12) months following the End Date (the “Sell-Off Period”),
the right to:

 

(i)                                     have
manufactured pursuant to agreements entered into at least six (6) months prior
to the End Date, Mobile Telephony Devices containing embedded copies of the
Adapted Games; and

 

(ii)                                  sell
and distribute (x) Mobile Telephony Devices with embedded Adapted Games and (y)
physical media devices (including without limitation, SD, MMC and similar such
cards) containing Adapted Games; and

 

(b)                                 the
right to continue to make available to end users, pursuant to the terms of end
user license agreements covering the Mobile Telephony Devices entered into
during the Term (a “Qualified
End User”) the Adapted Games; and specifically and without
limitation, the right to allow:

 

(i)                                     Qualified
End Users who have licensed Adapted Games on a subscription basis (which
subscription is measured either by the number of minutes of game play, amount
of airtime, expiration date, number of downloads or similar measure) to use the
Adapted Games pursuant to the terms of their end user license agreements until
the expiration or earlier termination of such agreements; and

 

(ii)                                  Licensee
(and its Sublicensees) to distribute the Adapted Games to such Qualified End
Users until the expiration or earlier termination the applicable end user
license agreements.

 

18

 

Licensee shall continue to make Payments so long as it
is exercising its Sell-Off Rights in accordance with this Section 10.8.

 

10.8                           Survival
of Certain Provisions.  The rights
and obligations of the parties under Sections 4 (for the duration required to
comply with Section 10.8), 6, 7, 8, 9, 10.2, 10.6, 10.7, 10.8, 10.9, 11 and 12
shall in accordance with their terms, survive the termination or expiration of
this Agreement.

 

10.9                           Effectiveness.  Notwithstanding anything to the contrary
herein, the effectiveness of this Agreement is expressly conditioned upon the
closing of the Acquisition, and, in the event that the Purchase Agreement is
terminated in accordance with its terms, this Agreement shall be of no further
force or legal effect.  Further, upon the
Effective Date, the Existing License Agreement shall immediately terminate.

 

11.           DISPUTE RESOLUTION

 

11.1                           Informal
Dispute Resolution.  The parties will
attempt to resolve all disputes, claims, or controversies arising under or
related to this Agreement or its subject matter or any right or obligation
created by this Agreement (“Dispute”)
through good faith negotiations conducted by the representatives of the parties
designated below. The party asserting the Dispute will give prompt written
notice to the other party describing the Dispute in reasonable detail.  If the parties are unable to resolve the
Dispute within thirty (30) days after commencing such negotiations, then the
parties may resolve the Dispute through judicial action.

 

Licensor Representative: Henk Rogers

 

Licensee Representative: General Counsel

 

Each party may change the representative designated
above by providing the other party with thirty (30) days prior written notice.

 

11.2                           Governing
Law.  This Agreement shall be
governed by and construed under the laws of the state of California, without
regard to such state’s conflicts of laws rules and, if applicable, United
States federal laws.

 

11.3                           Exclusive
Venue.  The sole and exclusive venue
for resolution of all Disputes hereunder shall be in federal and state courts
located in Los Angeles County, California. 
The parties express consent to personal jurisdiction in California and
waive any challenges to exclusive venue in courts located in Los Angeles
County, California.

 

11.4                           Equitable
Relief.  Each party reserves the
right to seek injunctive or other equitable relief in a court of competent
jurisdiction with respect to any Dispute.

 

12.           GENERAL PROVISIONS

 

12.1                           Waiver.  No waiver of any right, obligation or default
shall be implied, but must be in writing, signed by the party against whom the
waiver is sought to be enforced.

 

19

 

One or more waivers of any right, obligation or
default shall not be construed as a waiver of any subsequent right, obligation
or default.

 

12.2                           Entire
Agreement.  This Agreement (together
with its Exhibits and Appendices) and the Purchase Agreement and the exhibits
and schedules hereto and thereto constitute the entire and exclusive agreement
between the parties relating to the subject matter thereof.  All prior negotiations, representations,
agreements and understandings relating to the subject matter hereof are
superseded by this Agreement.  Neither
party shall be bound by any definition, condition, warranty, representation,
modification, consent or waiver other than as expressly stated herein and the
Purchase Agreement.  The provisions of
the United Nations Convention on Contracts for the International Sales of
Goods, or any other similar international treaty, shall neither be applicable
nor relevant to this Agreement nor be used in any manner whatsoever to explain,
qualify, or supplement any of the terms of this Agreement.

 

12.3                           Assignment.  It is expressly understood that this
Agreement shall be freely assignable and transferable by Licensor subject to
written notification to Licensee of such assignment or transfer.  It is further understood that the license
granted herein is personal in nature and, without the written consent of
Licensor, shall not be assignable to a third party by any action of Licensee or
by operation of law, and any attempt by Licensee to so assign this Agreement
without such consent shall be null and void and shall terminate this
Agreement.  Notwithstanding the
foregoing, at any time after the closing of the Acquisition: (i) Licensee may
assign this Agreement, without Licensor’s consent, to JAMDAT, JAMDAT Hawaii or
to another wholly-owned Subsidiary of JAMDAT; or (ii) Licensee may assign
this Agreement to an acquirer or successor, as the case may be, in connection
with a Change of Control (defined herein) of Licensee.  For purposes hereof, a “Change of Control”
shall mean with respect to a party: (a) the direct or indirect acquisition by
another entity in a single transaction or a series of related transactions of
either: (i) the majority of voting power of such party or (ii) all or
substantially all of the assets or business of such party; or (b) the merger of
such party with or into another entity in which the shareholders or equity
holders immediately prior to such transaction cease to hold a majority of
voting power of such party immediately after such transaction.  Subject to the foregoing, the rights and
obligation of the parties under this Agreement will be binding upon and will
inure to the benefit of the parties’ respective successors and permitted
assigns.

 

12.4                           Force
Majeure.  The obligations of Licensee
and Licensor hereunder, except for the duty to make payments, are subject to
and contingent upon the absence of interferences or interruptions, such as
strikes, riots, war, invasion, fire, explosion, accident, earthquakes, delays
of carriers, acts of God and all other delays beyond the parties’ reasonable
control, and any such interference with an obligation of either of the parties
by any such reason shall not be deemed a breach thereof.

 

12.5                           Notices.  All notices required or permitted to be given
under this Agreement shall be in writing (unless otherwise stated) and shall be
deemed given upon receipt from express air courier services, or five (5) days
after being sent by certified mail,

 

20

 

return receipt requested, or upon personal delivery,
to the address set forth below, or to such other addresses as the parties shall
notify each other of from time to time:

 

	
  If to Licensor:

  	
  THE TETRIS COMPANY,
  L.L.C.

  
	
   

  	
  103 Foulk Road, Suite
  202

  
	
   

  	
  Wilmington, Delaware
  19803, USA

  
	
   

  	
  Attn.: Henk Rogers

  
	
   

  	
   

  	
   

  
	
  If to Licensee:

  	
  Blue Lava Wireless, LLC

  
	
   

  	
  c/o JAMDAT Mobile Inc.

  
	
   

  	
  3415
  S. Sepulveda Blvd., Suite 700

  
	
   

  	
  Los
  Angeles, CA 90034 USA

  
	
   

  	
  Attn.: General Counsel

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
  Sheppard Mullin

  
	
   

  	
  800
  Anacapa Street

  
	
   

  	
  Santa
  Barbara, CA 93101 USA

  
	
   

  	
  Attn.: C. Thomas
  Hopkins

  

 

12.6                           Relationship
of the Parties.  The parties, by this
Agreement, do not intend to create a partnership, principal/agent; master/servant
or joint venture relationship, and nothing in this Agreement shall be construed
as creating such a relationship between the parties.  No party nor its agents or employees are the
representatives of the other party for any purpose except as expressly set
forth in this Agreement, and neither party has the power or authority as agent,
employee or any other capacity to represent, act for, bind or otherwise create
or assume any obligation on behalf of the other party for any purpose
whatsoever.

 

12.7                           Severability.  Should any provision of this Agreement be
held unenforceable, invalid, or prohibited under law, then the remainder of
this Agreement shall be valid and enforceable to the fullest extent permitted
by law.

 

12.8                           Interpretation.  This Agreement shall be interpreted as though
the parties shared equally in its preparation. 
The parties assume joint responsibility for the form and composition of
each provision of this Agreement.  The
parties hereto agree that they have been represented by counsel during the
negotiation, preparation and execution of this Agreement and therefore waive
the application of any law, regulation, holding or rule of construction
providing that ambiguities in an agreement or other document will be construed
against the party drafting such agreement or document.  The headings of the Sections of this
Agreement are for convenience only and shall not be of any effect in construing
the meanings of the Sections.

 

12.9                           Amendment.  No amendment or modification of this
Agreement may be made except by an instrument in writing signed by all parties
hereto.

 

21

 

12.10                     Counterparts.  This Agreement may be executed in identical
counterparts, each of which shall be deemed to be an original and, which taken
together, shall be deemed to constitute one and the same Agreement when a duly
authorized representative of each party has signed a counterpart.  Each party agrees that the delivery of the
Agreement by facsimile shall have the same force and effect as delivery of
original signatures and that each party may use such facsimile signatures as
evidence of the execution and delivery of the Agreement by all parties to the
same extent that an original signature could be used.

 

IN WITNESS WHEREOF the parties have caused this Agreement to be
executed as of the Effective Date by their duly authorized representatives.

 

	
  BLUE
  LAVA WIRELESS, LLC (Licensee)

  	
  THE
  TETRIS COMPANY, L.L.C. (Licensor)

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Henk Rogers

  	
   

  	
  By:

  	
  /s/ Henk Rogers

  	
   

  
	
   

  	
  Henk Rogers, Co-Manager

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  Henk Rogers

  	
   

  
	
   

  	
   

  
	
  By:  

  	
  /s/ Akemi Rogers

  	
   

  	
  Its: 

  	
   

  	
   

  
	
   

  	
  Akemi Rogers, Co-Manager

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  JAMDAT
  MOBILE INC.

  	
  JAMDAT
  MOBILE (HAWAII) LLC

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Craig Gatarz

  	
   

  	
  By: 

  	
  /s/ Craig Gatarz

  	
   

  
	
   

  	
  Craig Gatarz

  	
   

  	
   

  	
  Craig Gatarz, Manager

  	
   

  
	
   

  	
  Chief Operating Officer

  	
   

  	
   

  
								

 

22

 

SCHEDULE
1

 

I
acknowledge and agree that:

 

(1)           I have reviewed the Agreement.

 

(2)           In the event Licensor breaches any
agreement to which I am a party, I shall not, directly or indirectly, under any
circumstances take any action to limit Licensee’s rights in the Licensed
Properties so long as Licensee is not in material breach of the Agreement.

 

(3)           I
acknowledge and agree to be bound by the indemnification obligation set forth
in the third sentence of Section 8.9 of the Agreement.

 

(4)           (i) 
Licensor has the right to grant licenses in and to the Licensed
Properties, except as set forth in Section 8.7 of the Agreement; (ii) neither I
nor Licensor has licensed any Licensed Property to any third party for use on
Mobile Telephony Devices anywhere in the world, except as set forth in Section
2.3 of the Agreement; and (iii) Licensor has the sole and exclusive right to
grant a license to any Licensed Property for use on Mobile Telephony Devices
anywhere in the world, except as set forth in Section 2.3 of the Agreement.

 

	
  TETRIS HOLDING, LLC.

  	
  ELORG COMPANY, LLC.

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Henk Rogers

  	
   

  	
  By: 

  	
  /s/ Henk Rogers

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: 

  	
  Henk Rogers

  	
   

  	
  Name: 

  	
  Henk Rogers

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title: 

  	
  Member of
  Manager

  	
   

  	
  Title: 

  	
  Member of Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date: 

  	
  April 20, 2005

  	
   

  	
  Date: 

  	
  April 20, 2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GAMES INTERNATIONAL, LLC.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Henk Rogers

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: 

  	
  Henk Rogers

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title: 

  	
  Domestic Manager

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date: 

  	
  April 20, 2005

  	
   

  	
   

  	
   

  
										

 

1

 

SCHEDULE
2

 

I acknowledge and agree
that:

 

(1)           I have reviewed the Agreement.

 

(2)           In the event Licensor breaches any
agreement to which I am a party, I shall not, directly or indirectly, under any
circumstances take any action to limit Licensee’s rights in the Licensed
Properties so long as Licensee is not in material breach of the Agreement.

 

(3)           I
have not granted and will not grant during the term of the Agreement any
license in the Licensed Properties to any third party for use on Mobile
Telephony Devices anywhere in the world, except as set forth in
Section 2.3 of the Agreement.

 

(4)           Licensor has the sole and exclusive
right to grant a license to any Licensed Property for use on Mobile Telephony
Devices anywhere in the world, except as set forth in Section 2.3 of the
Agreement.

 

(5)           I
will allow to lapse (and not renew) any of the Existing Tetris License
Agreements to which I am a party upon expiration of the current term of such
agreements.

 

	
  BLUE
  PLANET SOFTWARE, INC.

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Henk Rogers

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name: 

  	
  Henk Rogers

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date: 

  	
  April 20, 2005

  	
   

  	
   

  
						

 

1

 

APPENDIX
A

LICENSED
PROPERTIES

Appendix A to the Tetris License
and Distribution Agreement dated April 20, 2005, by and among The Tetris
Company, LLC, Blue Lava Wireless, LLC and JAMDAT Mobile Inc. lists those Tetris
copyright registrations and trademark registrations and applications that, as
of the Effective Date, are part of the “Licensed Properties” (Section 1.9).

 

Copyright Registrations

 

	
  Title

  	
   

  	
  Registration

  Number

  	
   

  	
  Effective
  Date

  of Registration

  	
   

  	
  Jurisdiction

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tetris

  	
   

  	
  TX 2,600,074

  	
   

  	
  May 15, 1989

  	
   

  	
  U.S.

  
	
  Tetris — Version 0

  	
   

  	
  PA 1,214,036

  	
   

  	
  May 22, 1989

  	
   

  	
  U.S.

  
	
  Tetris — Version 1

  	
   

  	
  PA 1,214,035

  	
   

  	
  May 22, 1989

  	
   

  	
  U.S.

  
	
  Tetris — Version 2

  	
   

  	
  PA 412,169

  	
   

  	
  May 22, 1989

  	
   

  	
  U.S.

  
	
  Tetris

  	
   

  	
  PA 412,170

  	
   

  	
  May 19, 1989

  	
   

  	
  U.S.

  
	
  Magical Tetris

  Challenge

  	
   

  	
  TX 5,071,676

  	
   

  	
  February 8, 2000

  	
   

  	
  U.S.

  

 

1

 

Trademark
Applications and Registrations

 

 

	
  Country

  	
   

  	
  Trademark

  	
   

  	
  Application

  Number

  	
   

  	
  Filing Date

  	
   

  	
  Registration

  Number

  	
   

  	
  Registration

  Date

  	
   

  	
  Class/s

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Argentina

  	
   

  	
  TETRIS

  	
   

  	
  1,687,292

  	
   

  	
  13-Apr-89

  	
   

  	
  1,445,582 (Renewed as
  1,956,270on 22-Oct-03)

  	
   

  	
  30-June-93

  	
   

  	
  9

  
	
  Argentina

  	
   

  	
  TETRIS

  	
   

  	
  1,687,293

  	
   

  	
  13-Apr-89

  	
   

  	
  1,352,238 (Renewed as
  1,752,817 on 21-Apr-04)

  	
   

  	
  13-Jul-89

  	
   

  	
  28

  
	
  Australia

  	
   

  	
  TETRIS

  	
   

  	
  508,699

  	
   

  	
  14-Apr-89

  	
   

  	
  A508699

  	
   

  	
  28-Mar-94

  	
   

  	
  28

  
	
  Australia

  	
   

  	
  TETRIS

  	
   

  	
  508,700

  	
   

  	
  14-Apr-89

  	
   

  	
  A508700

  	
   

  	
  28-Mar-94

  	
   

  	
  9

  
	
  Austria

  	
   

  	
  TETRIS

  	
   

  	
  AM1818/89

  	
   

  	
  20-Nov-89

  	
   

  	
  128 241

  	
   

  	
  15-Jan-90

  	
   

  	
  9, 28

  
	
  Bahamas

  	
   

  	
  TETRIS

  	
   

  	
  14,906

  	
   

  	
  20-Nov-91

  	
   

  	
  14,906

  	
   

  	
  20-Nov-91

  	
   

  	
  Brit. Cl. 8

  
	
  Bahamas

  	
   

  	
  TETRIS

  	
   

  	
  14,905

  	
   

  	
  20-Nov-91

  	
   

  	
  14,905

  	
   

  	
  20-Nov-91

  	
   

  	
  Brit. Class 49

  
	
  Barbados

  	
   

  	
  TETRIS

  	
   

  	
  81/6543

  	
   

  	
  28-Jan-92

  	
   

  	
  81/6543

  	
   

  	
  17-Apr-98

  	
   

  	
  9

  
	
  Benelux

  	
   

  	
  TETRIS

  	
   

  	
  0727672

  	
   

  	
  13-Apr-89

  	
   

  	
  461510

  	
   

  	
  13-Apr-89

  	
   

  	
  9, 28

  
	
  Bermuda

  	
   

  	
  TETRIS

  	
   

  	
  29290

  	
   

  	
  11-May-97

  	
   

  	
  29290

  	
   

  	
  05-Nov-97

  	
   

  	
  28

  
	
  Bermuda

  	
   

  	
  TETRIS

  	
   

  	
  21538

  	
   

  	
  19-Nov-91

  	
   

  	
  21538

  	
   

  	
  19-Nov-91

  	
   

  	
  9

  
	
  Bolivia

  	
   

  	
  TETRIS

  	
   

  	
  03819562

  	
   

  	
  18-Nov-91

  	
   

  	
  54999-C

  	
   

  	
  07-Jul-93

  	
   

  	
  9

  
	
  Brazil

  	
   

  	
  TETRIS

  	
   

  	
  815146167

  	
   

  	
  26-Sep-89

  	
   

  	
  815146167

  	
   

  	
  12-Jul-94

  	
   

  	
  28

  
	
  Brazil

  	
   

  	
  TETRIS

  	
   

  	
  815177682

  	
   

  	
  18-Oct-89

  	
   

  	
  815177682

  	
   

  	
  15-Oct-91

  	
   

  	
  9

  
	
  Canada

  	
   

  	
  TETRIS

  	
   

  	
  646473

  	
   

  	
  08-Dec-89

  	
   

  	
  TMA432118

  	
   

  	
  26-Aug-94

  	
   

  	
  16, 25, 28

  
	
  Canada

  	
   

  	
  TETRIS

  	
   

  	
  628867

  	
   

  	
  05-Apr-89

  	
   

  	
  TMA383791

  	
   

  	
  03-May-91

  	
   

  	
  9

  
	
  Chile

  	
   

  	
  TETRIS

  	
   

  	
  192.103

  	
   

  	
  08-Nov-91

  	
   

  	
  629.108

  	
   

  	
  19-Feb-92

  	
   

  	
  9, 28

  
	
  China

  	
   

  	
  RUSSIAN SQUARES

  (in Chinese

  Characters)

  	
   

  	
  3743422

  	
   

  	
  26-Sep-03

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  9

  
	
  China

  	
   

  	
  RUSSIAN SQUARES

  (in Chinese

  Characters)

  	
   

  	
  3743421

  	
   

  	
  26-Sep-03

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  28

  
	
  China

  	
   

  	
  SQUARES

  (in Chinese

  Characters)

  	
   

  	
  3743418

  	
   

  	
  26-Sep-03

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  41

  
	
  China

  	
   

  	
  SQUARES

  (in Chinese

  Characters)

  	
   

  	
  3743420

  	
   

  	
  26-Sep-03

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  9

  

 

2

 

	
  Country

  	
   

  	
  Trademark

  	
   

  	
  Application

  Number

  	
   

  	
  Filing Date

  	
   

  	
  Registration

  Number

  	
   

  	
  Registration

  Date

  	
   

  	
  Class/s

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  China

  	
   

  	
  SQUARES

  (in Chinese

  Characters)

  	
   

  	
  3743419

  	
   

  	
  26-Sep-03

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  28

  
	
  China

  	
   

  	
  TETRIS

  	
   

  	
  9105881

  	
   

  	
  02-Dec-91

  	
   

  	
  625218

  	
   

  	
  10-Jan-93

  	
   

  	
  9

  
	
  China

  	
   

  	
  TETRIS

  	
   

  	
  2001170222

  	
   

  	
  12-Sep-01

  	
   

  	
  1998609

  	
   

  	
  07-Feb-03

  	
   

  	
  28

  
	
  Colombia

  	
   

  	
  TETRIS

  	
   

  	
  351693

  	
   

  	
  03-Dec-91

  	
   

  	
  147786

  	
   

  	
  31-Jan-94

  	
   

  	
  28

  
	
  Colombia

  	
   

  	
  TETRIS

  	
   

  	
  351692

  	
   

  	
  03-Dec-91

  	
   

  	
  147785

  	
   

  	
  31-Jan-94

  	
   

  	
  9

  
	
  Costa Rica

  	
   

  	
  TETRIS

  	
   

  	
  77.557

  	
   

  	
  16-Jan-92

  	
   

  	
  79890

  	
   

  	
  03-Jun-92

  	
   

  	
  28

  
	
  Costa Rica

  	
   

  	
  TETRIS

  	
   

  	
  79.000

  	
   

  	
  16-Jan-92

  	
   

  	
  81580

  	
   

  	
  27-Nov-92

  	
   

  	
  9

  
	
  Denmark

  	
   

  	
  TETRIS

  	
   

  	
  VA 026731982

  	
   

  	
  13-Apr-89

  	
   

  	
  VR 1991 06549

  	
   

  	
  04-Oct-91

  	
   

  	
  9, 28

  
	
  Ecuador

  	
   

  	
  TETRIS

  	
   

  	
  33,365

  	
   

  	
  17-Jul-92

  	
   

  	
  2263

  	
   

  	
  09-Sep-93

  	
   

  	
  9

  
	
  Egypt

  	
   

  	
  TETRIS

  	
   

  	
  81464

  	
   

  	
  21-Nov-91

  	
   

  	
  81464

  	
   

  	
  19-Aug-96

  	
   

  	
  9

  
	
  Egypt

  	
   

  	
  TETRIS

  	
   

  	
  81463

  	
   

  	
  21-Nov-91

  	
   

  	
  81463

  	
   

  	
  19-Aug-96

  	
   

  	
  28

  
	
  European Community

  	
   

  	
  TETRIS

  	
   

  	
  002 283 109

  	
   

  	
  03-Jul-01

  	
   

  	
  002 283 109

  	
   

  	
  19-Dec-02

  	
   

  	
  9, 28

  
	
  European Community

  	
   

  	
  SOUND MARK

  	
   

  	
  002 289 049

  	
   

  	
  19-Jun-01

  	
   

  	
  002 289 049

  	
   

  	
  30-Aug-02

  	
   

  	
  9, 28

  
	
  Finland

  	
   

  	
  TETRIS

  	
   

  	
  892013

  	
   

  	
  20-Apr-89

  	
   

  	
  120269

  	
   

  	
  20-Jul-92

  	
   

  	
  9, 28

  
	
  France

  	
   

  	
  TETRIS

  	
   

  	
  128.020

  	
   

  	
  28-Apr-89

  	
   

  	
  1.545.110

  	
   

  	
  28-Apr-89

  	
   

  	
  9, 28

  
	
  Germany

  	
   

  	
  TETRIS

  	
   

  	
  V21367/9Wz

  	
   

  	
  19-Apr-89

  	
   

  	
  1.155.420

  	
   

  	
  19-Apr-89

  	
   

  	
  9, 28

  
	
  Greece

  	
   

  	
  TETRIS

  	
   

  	
  106694

  	
   

  	
  19-Nov-91

  	
   

  	
  106694

  	
   

  	
  19-Nov-91

  	
   

  	
  9

  
	
  Guatemala

  	
   

  	
  TETRIS

  	
   

  	
  001715

  	
   

  	
  13-Mar-92

  	
   

  	
  75189

  	
   

  	
  26-Mar-95

  	
   

  	
  9

  
	
  Honduras

  	
   

  	
  TETRIS

  	
   

  	
  9206/91

  	
   

  	
  28-Nov-91

  	
   

  	
  55.539

  	
   

  	
  15-Jun-92

  	
   

  	
  28

  
	
  Honduras

  	
   

  	
  TETRIS

  	
   

  	
  9454-91

  	
   

  	
  09-Dec-91

  	
   

  	
  55.540

  	
   

  	
  15-Jun-92

  	
   

  	
  9

  
	
  Hong Kong

  	
   

  	
  TETRIS

  	
   

  	
  3162/89

  	
   

  	
  18-Apr-89

  	
   

  	
  3206 of 1990

  	
   

  	
  18-Apr-89

  	
   

  	
  28

  
	
  Hong Kong

  	
   

  	
  TETRIS

  	
   

  	
  3163/89

  	
   

  	
  18-Apr-89

  	
   

  	
  1783 of 1991

  	
   

  	
  18-Apr-89

  	
   

  	
  9

  
	
  Hungary

  	
   

  	
  TETRIS

  	
   

  	
  4897/91

  	
   

  	
  13-Nov-91

  	
   

  	
  134 627

  	
   

  	
  13-Nov-91

  	
   

  	
  9

  
	
  Iceland

  	
   

  	
  TETRIS

  	
   

  	
  1075/1991

  	
   

  	
  04-Nov-91

  	
   

  	
  247/1992

  	
   

  	
  20-Feb-92

  	
   

  	
  9

  
	
  India

  	
   

  	
  TETRIS

  	
   

  	
  562047

  	
   

  	
  18-Nov-91

  	
   

  	
  562047

  	
   

  	
  14-Jan-00

  	
   

  	
  28

  
	
  India

  	
   

  	
  TETRIS

  	
   

  	
  562048

  	
   

  	
  18-Nov-91

  	
   

  	
  562048

  	
   

  	
  31-Dec-99

  	
   

  	
  9

  
	
  Indonesia

  	
   

  	
  TETRIS

  	
   

  	
  28-Nov-91

  	
   

  	
  327262

  	
   

  	
  30-Jan-95

  	
   

  	
  9

  	
   

  	
   

  
	
  Ireland

  	
   

  	
  TETRIS

  	
   

  	
  6218/91

  	
   

  	
  11-Dec-91

  	
   

  	
  151260

  	
   

  	
  11-Dec-91

  	
   

  	
  9

  
	
  Israel

  	
   

  	
  TETRIS

  	
   

  	
  156979

  	
   

  	
  08-May-02

  	
   

  	
  156979

  	
   

  	
  05-Aug-03

  	
   

  	
  9

  
	
  Israel

  	
   

  	
  TETRIS

  	
   

  	
  156980

  	
   

  	
  08-May-02

  	
   

  	
  156980

  	
   

  	
  05-Aug-03

  	
   

  	
  28

  
	
  Italy

  	
   

  	
  TETRIS

  	
   

  	
  39437C/89

  	
   

  	
  18-Apr-89

  	
   

  	
  569386

  	
   

  	
  08-May-92

  	
   

  	
  9, 28

  
	
  Jamaica

  	
   

  	
  TETRIS

  	
   

  	
  9/1359

  	
   

  	
  08-Jan-92

  	
   

  	
  26,459

  	
   

  	
  08-Jan-92

  	
   

  	
  9

  
	
  Japan

  	
   

  	
  TETRIS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2502393

  	
   

  	
  26-Feb-93

  	
   

  	
  16

  
	
  Japan

  	
   

  	
  TETRIS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2448218

  	
   

  	
  31-Aug-92

  	
   

  	
  25

  

 

3

 

	
  Country

  	
   

  	
  Trademark

  	
   

  	
  Application

  Number

  	
   

  	
  Filing Date

  	
   

  	
  Registration

  Number

  	
   

  	
  Registration

  Date

  	
   

  	
  Class/s

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Japan

  	
   

  	
  TETRIS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2618711

  	
   

  	
  31-Jan-94

  	
   

  	
  28

  
	
  Japan

  	
   

  	
  TETRIS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2578903

  	
   

  	
  30-Sep-93

  	
   

  	
  9

  
	
  Japan

  	
   

  	
  TETRIS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2437078

  	
   

  	
  31-Jul-92

  	
   

  	
  16

  
	
  Japan

  	
   

  	
  TETRIS FLASH with
  Katakana

  	
   

  	
  H05-089001

  	
   

  	
  30-Aug-93

  	
   

  	
  3201750

  	
   

  	
  30-Sep-96

  	
   

  	
  28

  
	
  Japan

  	
   

  	
  TETRIS FLASH with
  Katakana

  	
   

  	
  H05-089000

  	
   

  	
  30-Aug-93

  	
   

  	
  3221508

  	
   

  	
  29-Nov-96

  	
   

  	
  9

  
	
  Japan

  	
   

  	
  TETRY SPHERE

  	
   

  	
  H09-113097

  	
   

  	
  2-May-97

  	
   

  	
  4221203

  	
   

  	
  18-Dec-98

  	
   

  	
  9, 28

  
	
  Korea, Republic of

  	
   

  	
  TETRIS

  	
   

  	
  2002-0005439

  	
   

  	
  29-Apr-02

  	
   

  	
  237256

  	
   

  	
  07-May-92

  	
   

  	
  28

  
	
  Korea, Republic of

  	
   

  	
  TETRIS

  	
   

  	
  2001-24169

  	
   

  	
  04-Jun-01

  	
   

  	
  545663

  	
   

  	
  21-Apr-03

  	
   

  	
  9

  
	
  Malaysia

  	
   

  	
  TETRIS

  	
   

  	
  91/07269

  	
   

  	
  20-Nov-91

  	
   

  	
  91007269

  	
   

  	
  07-Aug-95

  	
   

  	
  9

  
	
  Mexico

  	
   

  	
  TETRIS

  	
   

  	
  627026

  	
   

  	
  29-Oct-03

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  28

  
	
  Mexico

  	
   

  	
  TETRIS

  	
   

  	
  632414

  	
   

  	
  3-Dec-03

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  9

  
	
  New Zealand

  	
   

  	
  TETRIS

  	
   

  	
  214451

  	
   

  	
  15-Nov-91

  	
   

  	
  214451

  	
   

  	
  12-Dec-95

  	
   

  	
  28

  
	
  New Zealand

  	
   

  	
  TETRIS

  	
   

  	
  214450

  	
   

  	
  15-Nov-91

  	
   

  	
  214450

  	
   

  	
  14-Aug-95

  	
   

  	
  9

  
	
  Norway

  	
   

  	
  TETRIS

  	
   

  	
  89.1962

  	
   

  	
  21-Apr-89

  	
   

  	
  145.744

  	
   

  	
  27-June-91

  	
   

  	
  9, 28

  
	
  Panama

  	
   

  	
  TETRIS

  	
   

  	
  059629

  	
   

  	
  07-Jan-92

  	
   

  	
  059629

  	
   

  	
  23-Jun-93

  	
   

  	
  28

  
	
  Panama

  	
   

  	
  TETRIS

  	
   

  	
  59628

  	
   

  	
  07-Jan-92

  	
   

  	
  59628

  	
   

  	
  23-Jun-93

  	
   

  	
  9

  
	
  Paraguay

  	
   

  	
  TETRIS

  	
   

  	
  15955

  	
   

  	
  11-Nov-91

  	
   

  	
  247979

  	
   

  	
  29-Apr-92

  	
   

  	
  9

  
	
  Paraguay

  	
   

  	
  TETRIS

  	
   

  	
  15954

  	
   

  	
  11-Nov-91

  	
   

  	
  247978

  	
   

  	
  29-Apr-92

  	
   

  	
  28

  
	
  Peru

  	
   

  	
  TETRIS

  	
   

  	
  193601

  	
   

  	
  19-Nov-91

  	
   

  	
  97244

  	
   

  	
  08-May-92

  	
   

  	
  9

  
	
  Peru

  	
   

  	
  TETRIS

  	
   

  	
  193602

  	
   

  	
  19-Nov-91

  	
   

  	
  98381

  	
   

  	
  31-Jul-92

  	
   

  	
  28

  
	
  Philippines

  	
   

  	
  TETRIS

  	
   

  	
  79262

  	
   

  	
  20-Jan-92

  	
   

  	
  56454

  	
   

  	
  03-Nov-93

  	
   

  	
  28

  
	
  Poland

  	
   

  	
  TETRIS

  	
   

  	
  Z-103439

  	
   

  	
  15-Nov-91

  	
   

  	
  76253

  	
   

  	
  31-Jan-94

  	
   

  	
  9

  
	
  Portugal

  	
   

  	
  TETRIS

  	
   

  	
  279.083

  	
   

  	
  16-Dec-91

  	
   

  	
  279.083

  	
   

  	
  30-Sep-93

  	
   

  	
  9

  
	
  Portugal

  	
   

  	
  TETRIS

  	
   

  	
  279.084

  	
   

  	
   

  	
   

  	
  279.084

  	
   

  	
  30-Sep-93

  	
   

  	
  28

  
	
  Russian Federation

  	
   

  	
  TETRIS

  	
   

  	
  2000709892

  	
   

  	
  26-May-00

  	
   

  	
  193228

  	
   

  	
  28-Aug-2000

  	
   

  	
  9

  
	
  Russian Federation

  	
   

  	
  TETP|/|C [This is
  “TETRIS” in Cyrillic letters]

  	
   

  	
  2000709893

  	
   

  	
  26-May-00

  	
   

  	
  193227

  	
   

  	
  28-Aug-2000

  	
   

  	
  9

  
	
  Russian Federation

  	
   

  	
  ELORG & Design

  	
   

  	
  92004865

  	
   

  	
  17-Nov-92

  	
   

  	
  110935

  	
   

  	
  26-Dec-2000

  	
   

  	
  9, 28

  

 

4

 

	
  Country

  	
   

  	
  Trademark

  	
   

  	
  Application

  Number

  	
   

  	
  Filing Date

  	
   

  	
  Registration

  Number

  	
   

  	
  Registration

  Date

  	
   

  	
  Class/s

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Saudi Arabia

  	
   

  	
  TETRIS

  	
   

  	
  15818

  	
   

  	
  08-Feb-92

  	
   

  	
  266/36

  	
   

  	
  19-Oct-92

  	
   

  	
  9

  
	
  Singapore

  	
   

  	
  TETRIS

  	
   

  	
  10253/91

  	
   

  	
  15-Nov-91

  	
   

  	
  T91/10253A

  	
   

  	
  15-Nov-91

  	
   

  	
  28

  
	
  Singapore

  	
   

  	
  TETRIS

  	
   

  	
  10252/91

  	
   

  	
  15-Nov-91

  	
   

  	
  T91/10252C

  	
   

  	
  15-Nov-91

  	
   

  	
  9

  
	
  South Africa

  	
   

  	
  TETRIS

  	
   

  	
  91/5694

  	
   

  	
  19-Jul-91

  	
   

  	
  91/5694

  	
   

  	
  19-Jul-91

  	
   

  	
  9

  
	
  South Africa

  	
   

  	
  TETRIS

  	
   

  	
  91/5695

  	
   

  	
  19-Jul-91

  	
   

  	
  91/5695

  	
   

  	
  19-Jul-91

  	
   

  	
  28

  
	
  Sweden

  	
   

  	
  TETRIS

  	
   

  	
  89-3580

  	
   

  	
  13-Apr-89

  	
   

  	
  245 760

  	
   

  	
  22-Jan-93

  	
   

  	
  9, 28

  
	
  Switzerland

  	
   

  	
  TETRIS

  	
   

  	
  3281

  	
   

  	
  26-Apr-89

  	
   

  	
  373.308

  	
   

  	
  16-Nov-89

  	
   

  	
  9, 28

  
	
  Taiwan

  	
   

  	
  TETRIS

  	
   

  	
  (78)018252

  	
   

  	
  25-Apr-89

  	
   

  	
  507644

  	
   

  	
  01-Dec-90

  	
   

  	
  Local Cl. 86

  
	
  Taiwan

  	
   

  	
  TETRIS

  	
   

  	
  (78)018250

  	
   

  	
  25-Apr-89

  	
   

  	
  498703

  	
   

  	
  16-Sep-90

  	
   

  	
  Local Cl. 72

  
	
  Taiwan

  	
   

  	
  TETRIS

  	
   

  	
  (78)018251

  	
   

  	
  25-Apr-89

  	
   

  	
  493634

  	
   

  	
  01-Aug-90

  	
   

  	
  Local Cl. 78

  
	
  Taiwan

  	
   

  	
  RUSSIAN SQUARES

  	
   

  	
  93023699

  	
   

  	
  24-5-2004

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  9

  
	
  Taiwan

  	
   

  	
  RUSSIAN SQUARES

  	
   

  	
  93023704

  	
   

  	
  24-5-2004

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  28

  
	
  Taiwan

  	
   

  	
  RUSSIAN SQUARES

  	
   

  	
  93023486

  	
   

  	
  24-5-2004

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  41

  
	
  Taiwan

  	
   

  	
  RUSSIAN SQUARES

  (in Chinese

  Characters)

  	
   

  	
  93023703

  	
   

  	
  24

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  9

  
	
  Taiwan

  	
   

  	
  RUSSIAN SQUARES

  (in Chinese

  Characters)

  	
   

  	
  93023701

  	
   

  	
  24

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  28

  
	
  Taiwan

  	
   

  	
  RUSSIAN SQUARES

  (in Chinese

  Characters)

  	
   

  	
  93023485

  	
   

  	
  24

  	
   

  	
  N.A.

  	
   

  	
  N.A.

  	
   

  	
  41

  
	
  Trinidad and Tobago

  	
   

  	
  TETRIS

  	
   

  	
  20200

  	
   

  	
  19-Nov-91

  	
   

  	
  20200

  	
   

  	
  31-Oct-94

  	
   

  	
  8 (Local Class)

  
	
  Trinidad and Tobago

  	
   

  	
  TETRIS

  	
   

  	
  20199

  	
   

  	
  20-Nov-91

  	
   

  	
  20199

  	
   

  	
  03-Oct-94

  	
   

  	
  49 (Local Class)

  
	
  Turkey

  	
   

  	
  TETRIS

  	
   

  	
  2002/012521

  	
   

  	
  22-May-02

  	
   

  	
  2002/012521

  	
   

  	
  22-May-02

  	
   

  	
  9, 28

  
	
  United Kingdom

  	
   

  	
  TETRIS

  	
   

  	
  1382544

  	
   

  	
  27-Apr-89

  	
   

  	
  1382544

  	
   

  	
  27-Apr-89

  	
   

  	
  28

  

 

5

 

	
  Country

  	
   

  	
  Trademark

  	
   

  	
  Application

  Number

  	
   

  	
  Filing Date

  	
   

  	
  Registration

  Number

  	
   

  	
  Registration

  Date

  	
   

  	
  Class/s

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  United Kingdom

  	
   

  	
  TETRIS

  	
   

  	
  1382543

  	
   

  	
  27-Apr-89

  	
   

  	
  1382543

  	
   

  	
  27-Apr-89

  	
   

  	
  9

  
	
  United States of
  America

  	
   

  	
  SOUND MARK

  	
   

  	
  75/389,198

  	
   

  	
  10-Nov-97

  	
   

  	
  2,288,504

  	
   

  	
  26-Oct-99

  	
   

  	
  9, 28

  
	
  United States of
  America

  	
   

  	
  TETRIS

  	
   

  	
  74/036,747

  	
   

  	
  08-Mar-90

  	
   

  	
  1,657,499

  	
   

  	
  17-Sep-91

  	
   

  	
  28

  
	
  United States of
  America

  	
   

  	
  TETRIS

  	
   

  	
  75/781,744

  	
   

  	
  20-Aug-99

  	
   

  	
  2,362,238

  	
   

  	
  27-Jun-00

  	
   

  	
  9, 16, 25

  
	
  United States of
  America

  	
   

  	
  TETRIS & Design

  	
   

  	
  75/782,993

  	
   

  	
  20-Aug-99

  	
   

  	
  2,362,250

  	
   

  	
  27-Jun-00

  	
   

  	
  9, 16, 25, 28

  
	
  Uruguay

  	
   

  	
  TETRIS

  	
   

  	
  249.409

  	
   

  	
  14-Nov-91

  	
   

  	
  345.488

  	
   

  	
  28-Jun-93

  	
   

  	
  9, 28

  
	
  Venezuela

  	
   

  	
  TETRIS

  	
   

  	
  14788/91

  	
   

  	
  30-Jul-91

  	
   

  	
  163,448-F

  	
   

  	
  19-Aug-94

  	
   

  	
  9

  
	
  Venezuela

  	
   

  	
  TETRIS

  	
   

  	
  14787/91

  	
   

  	
  30-Jul-91

  	
   

  	
  163,447-F

  	
   

  	
  19-Aug-94

  	
   

  	
  28

  
	
  Venezuela

  	
   

  	
  TETRIS

  	
   

  	
  14786/91

  	
   

  	
  30-Jul-91

  	
   

  	
  163,446-F

  	
   

  	
  19-Aug-94

  	
   

  	
  7

  
	
  Venezuela

  	
   

  	
  TETRIS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  P249874

  	
   

  	
   

  	
   

  	
  9

  
	
  Venezuela

  	
   

  	
  TETRIS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  P249875

  	
   

  	
   

  	
   

  	
  11

  
	
  Vietnam

  	
   

  	
  TETRIS

  	
   

  	
  12302

  	
   

  	
  20-Mar-93

  	
   

  	
  13,124

  	
   

  	
  27-Aug-94

  	
   

  	
  9, 28

  

 

6

 

APPENDIX B

 

EXISTING GAMING DEVICES

 

	
  Manufacturer

  	
   

  	
  Type

  	
   

  	
  Model

  	
   

  	
  Country

  
	
  Bandai

  	
   

  	
  hand-held
  gaming device

  	
   

  	
  Wonderswan

  	
   

  	
  Japan

  
	
  Bandai

  	
   

  	
  hand-held
  gaming device

  	
   

  	
  Wonderswan
  color

  	
   

  	
  Japan

  
	
  Gizmondo

  	
   

  	
  hand-held
  gaming device

  	
   

  	
  Gizmondo

  	
   

  	
  Worldwide

  
	
  Nintendo

  	
   

  	
  hand-held
  gaming device

  	
   

  	
  DS

  	
   

  	
  Worldwide

  
	
  Nintendo

  	
   

  	
  hand-held
  gaming device

  	
   

  	
  GameBoy

  	
   

  	
  Worldwide

  
	
  Nintendo

  	
   

  	
  hand-held
  gaming device

  	
   

  	
  GameBoy
  Color

  	
   

  	
  Worldwide

  
	
  Nintendo

  	
   

  	
  hand-held
  gaming device

  	
   

  	
  GameBoy
  SP

  	
   

  	
  Worldwide

  
	
  Nintendo

  	
   

  	
  hand-held
  gaming device

  	
   

  	
  GameBoy
  Advance

  	
   

  	
  Worldwide

  
	
  Sony

  	
   

  	
  hand-held
  gaming device

  	
   

  	
  PSP

  	
   

  	
  Worldwide

  
	
  Tapwave

  	
   

  	
  hand-held
  gaming device

  	
   

  	
  Zodiac
  2

  	
   

  	
  Japan

  
	
  Tapwave

  	
   

  	
  palm
  gaming device

  	
   

  	
  Zodiac
  Handheld

  	
   

  	
  US

  
	
  Unofficial
  Nintendo Product

  	
   

  	
  hand-held
  gaming device

  	
   

  	
  Pokefami
  Portable Gaming device

  	
   

  	
  Worldwide

  
	
  Via

  	
   

  	
  hand-held
  gaming device

  	
   

  	
  Moma
  Eve port. Gaming device

  	
   

  	
  US

  

 

1

 

APPENDIX F

 

ROYALTY
RATES

 

	
  Total Revenues*

  	
   

  	
  Royalty Rate

  
	
   

  	
   

  	
   

  
	
  $1 - $3,500,000

  	
   

  	
  No royalties payable

  
	
   

  	
   

  	
   

  
	
  $3,500,001 - $200,000,000

  	
   

  	
  20%

  
	
   

  	
   

  	
   

  
	
  > $200,000,000

  	
   

  	
  25%

  

*Total Revenues means
Licensee’s Net Revenues (as defined in the Agreement) from any and all
Commercial Exploitation of Adapted Games

 

1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]