SONY COMPUTER ENTERTAINMENT AMERICA INC. AND DESTINATION SOFTWARE INC. PLAYSTATION® PORTABLE ("PSP") PSP LICENSED PUBLISHER AGREEMENT
SONY
COMPUTER ENTERTAINMENT AMERICA INC.
AND
DESTINATION
SOFTWARE INC.
PLAYSTATION®
PORTABLE ("PSP")
TABLE
OF CONTENTS
|
SECTION:
|
PAGE:
|
|
|
1.
|
DEFINITION
OF TERMS
|
1
|
|
2.
|
LICENSE
GRANT
|
3
|
|
3.
|
DEVELOPMENT
OF LICENSED PSP PRODUCTS
|
3
|
|
4.
|
LIMITATIONS
ON LICENSES; RESERVATION OF RIGHTS
|
4
|
|
5.
|
QUALITY
STANDARDS FOR THE LICENSED PSP PRODUCTS
|
5
|
|
6.
|
MANUFACTURE
OF THE LICENSED PSP PRODUCTS
|
8
|
|
7.
|
MARKETING
AND DISTRIBUTION
|
10
|
|
8.
|
ROYALTIES
|
12
|
|
9.
|
REPRESENTATIONS
AND ▇▇▇▇▇▇▇▇▇▇
|
▇▇
|
|
▇▇.
|
INDEMNITIES;
LIMITED LIABILITY
|
14
|
|
11.
|
SCEA
INTELLECTUAL PROPERTY RIGHTS
|
16
|
|
12.
|
INFRINGEMENT
OF SCEA INTELLECTUAL PROPERTY RIGHTS BY THIRD PARTIES
|
16
|
|
13.
|
CONFIDENTIALITY
|
16
|
|
14.
|
TERM
AND ▇▇▇▇▇▇▇▇▇▇▇
|
▇▇
|
|
▇▇.
|
EFFECT
OF EXPIRATION OR TERMINATION
|
20
|
|
|
||
|
16.
|
MISCELLANEOUS
PROVISIONS
|
21
|
PLAYSTATION®
PORTABLE ("PSP")
LICENSED
PSP PUBLISHER AGREEMENT
This
LICENSED PSP PUBLISHER AGREEMENT for the PlayStation Portable,
(the
"Agreement" or " PSP LPA"), entered into as of the 20th day of January, 2006
(the "Effective Date"), by and between SONY COMPUTER ENTERTAINMENT AMERICA
INC.,
with offices at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter
"SCEA"), and Destination Software, Inc., with offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇- ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter Publisher").
WHEREAS,
SCEA,
its
parent company, Sony Computer Entertainment Inc., and certain of their
affiliates and companies within the group of companies of which any of them
form
a part (collectively referred to herein as "SCE" or alternatively "Sony") are
designing and developing, and licensing core components of, a portable, handheld
computer entertainment system known as the PlayStation®
Portable
or the "PSP" computer entertainment system (hereinafter referred to as the
" PSP
Player").
WHEREAS,
SCEA
has
the right to grant licenses to certain SCEA Intellectual Property Rights within
its licensed territory (as defined below) in connection with the PSP
Player.
WHEREAS,
Publisher
desires to be granted a non-exclusive license to publish, develop, have
manufactured, market, distribute and sell Licensed PSP Products (as defined
below) pursuant to the terms and conditions set forth in this Agreement; and
SCEA is willing, on the terms and subject to the conditions of this Agreement,
to grant Publisher such a license.
NOW,
THEREFORE,
in
consideration of the representations, warranties and covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Publisher and SCEA hereby agree as follows:
1.Definition
of Terms.
1.1
"Advertising Materials" means any advertising, marketing, merchandising,
promotional, public relations (including press releases) and display materials
relating to or concerning Licensed PSP Products or proposed Licensed PSP
Products, or any other advertising, merchandising, promotional, public relations
(including press releases) and display materials depicting any of the Licensed
Trademarks. For purposes of this Agreement, Advertising Materials include any
advertisements in which the PSP Player is referred to or used in any way,
including but not limited to giving the PSP Player away as prizes in contests
or
sweepstakes and the public display of the PSP Player in product placement
opportunities.
1.2
"Affiliate of SCEA" means, as applicable, other regional SCE companies,
including but not limited to, Sony Computer Entertainment Inc. in Japan, Sony
Computer Entertainment Europe Ltd. in the United Kingdom, Sony Computer
Entertainment Korea, Sony Computer Entertainment Hong Kong, Sony Computer
Entertainment China, or such other Sony Computer Entertainment entity as may
be
established from time to time.
1.3
"Designated Manufacturing Facility" means a manufacturing facility or facilities
which is designated by SCEA in its sole discretion to manufacture Licensed
PSP
Products or their component parts, which may include manufacturing facilities
owned and operated by affiliated companies of SCEA.
1.4
"Executable Software" means software which includes Product Software and any
software provided directly or indirectly by SCEA or an Affiliate of SCEA
designed for execution exclusively on the PSP Player and which has the ability
to communicate with the software resident in the PSP Player.
1.5
"Fiscal
Year" means a year measured from April 1 to March 31.
1.6
"Guidelines" shall mean any guidelines of SCEA or an Affiliate of SCEA with
respect to SCEA Intellectual Property Rights, which may be set forth in the
PSP
SourceBook or in other documentation provided by SCEA or an Affiliate of SCEA
to
Publisher.
1.7
"Legal
Attribution Line" means the legal attribution line used on SCEA marketing or
other materials, which shall be substantially similar to the following: "Product
copyright and trademarks are the property of the respective publisher or their
licensors".
1.8
"Legal
Copy" means any legal or contractual information required to be used in
connection with a Licensed PSP Product or Product Information, including but
not
limited to copyright and trademark attributions, contractual credits and
developer or distribution credits.
1.9
"Licensed
PSP Developer Agreement" or "PSP LDA" means a valid and current license
agreement for the development of Licensed PSP Products for the PSP Player,
fully
executed between a Licensed PSP Developer and SCEA or an Affiliate of
SCEA.
1
1.10
"Licensed PSP Products" means the Executable Software (which may be combined
with Executable Software of other Licensed PSP Publishers or Licensed
PSP
Developers), which shall consist of one interactive entertainment game product
developed for the PSP Player per Unit, in final form developed exclusively
for
the PSP Player. Publisher shall have no right to package or bundle more than
one
product developed for the PSP Player in a single Unit unless separately agreed
with SCEA. The term "Licensed PSP Products" expressly excludes traditional
non-interactive entertainment products such as movies or music or other
interactive entertainment products that are not complete games.
1.11
"Licensed PSP Publisher" means any publisher that has signed a valid and then
current Licensed PSP Publisher Agreement
1.12
"Licensed PSP Publisher Agreement" or "PSP LPA" means a valid and current
license agreement for the publication, development, manufacture, marketing,
distribution and sale of Licensed PSP Products for the PSP Player, fully
executed between a Licensed PSP Publisher and SCEA or an Affiliate of
SCEA.
1.13
"Licensed Territory" means the United States (including its possessions and
territories) and Canada. The Licensed Territory may be modified or supplemented
by SCEA from time to time pursuant to Section 4.4 below.
1.14
"Licensed Trademarks" means the trademarks, service marks, trade dress, logos
and other icons or indicia designated by SCEA in the PSP SourceBook or other
Guidelines for use on or in connection with Licensed PSP Products. Nothing
contained in this Agreement shall in any way grant Publisher the right to use
the trademark "Sony" in any manner. SCEA may amend such Licensed Trademarks
from
time to time in the PSP SourceBook or other Guidelines or upon written notice
to
Publisher.
1.15
"Manufacturing Specifications" means specifications setting forth terms relating
to the manufacture and assembly of PSP Format Discs, Packaging, Printed
Materials and each of their component parts, which shall be set forth in the
PSP
SourceBook or other documentation provided by SCEA or a Designated Manufacturing
Facility to Publisher and which may be amended from time to time upon reasonable
notice to Publisher.
1.16
"Master
Disc" means a recordable disc in the form requested by SCEA containing final
pre-production Executable Software for a Licensed PSP Product
1.17
"Packaging" means, with respect to each Licensed PSP Product, the carton,
containers, packaging, edge labels and other proprietary labels, trade dress
and
wrapping materials, including any jewel case (or other package or container)
or
parts thereof, but excluding Printed Materials and PSP Format
Discs.
1.18
"PSP
Format Discs" means the discs formatted for use with the PSP Player which,
for
purposes of this Agreement,
are manufactured on behalf of Publisher and contain Licensed PSP Products or
SCEA Demo Discs.
1.19
"Printed
Materials" means all artwork and mechanicals set forth on the disc label of
the
PSP Format Disc relating to any of the Licensed PSP Products and on or inside
any Packaging for the Licensed PSP Product, and all instructional manuals,
liners, inserts, trade dress and other user information to be inserted into
the
Packaging.
1.20
"Product
Information" means any information owned or licensed by Publisher relating
in
any way to Licensed PSP Products, including but not limited to demos, videos,
hints and tips, artwork, depictions of Licensed PSP Product cover art and
videotaped interviews.
1.21
"Product
Proposal" shall have the meaning set forth in Section 5.2.1 hereto.
1.22
"Product
Software" means any software including audio and video material developed by
a
Licensed PSP Publisher or Licensed PSP Developer, which, either by itself or
combined with Product Software of other licensees, when integrated with software
provided by SCEA or an Affiliate of SCEA, creates Executable Software. It is
understood that Product Software contains no proprietary information of Sony
or
any other rights of SCEA.
1.23
"PSP
Development System Agreement" means an agreement entered into between SCEA
and a
Licensed PSP Publisher, Licensed PSP Developer or other licensee for the sale
or
license of Development Tools.
1.25
"PSP
Development Tools" means the PSP development tools sold or licensed by SCEA
to a
Licensed PSP Publisher or Licensed PSP Developer for use in the development
of
Executable Software for the PSP Player.
1.26
"Publisher
Intellectual Property Rights" means those intellectual property rights,
including but not limited to patents and other patent rights, copyrights,
trademarks, service marks, trade names, trade dress, mask work rights, utility
model rights, trade secret rights, technical information, know-how, and the
equivalents of the foregoing under the laws of any jurisdiction, and all other
proprietary or intellectual property rights throughout the universe, which
pertain to Product Software, Product Information, Printed Materials, Advertising
Materials or other rights of Publisher required or necessary under this
Agreement.
1.27
"Purchase Order" means a written purchase order processed in accordance with
the
terms of Section 6.2.2 hereto, the Manufacturing Specifications or other terms
provided separately by SCEA or a Designated Manufacturing Facility to
Publisher.
2
1.28
"SCEA
Demo Disc" means any demonstration disc developed and distributed by
SCEA.
1.29
"SCEA
Established Third Party Demo Disc Programs" means (i) any consumer or trade
demonstration disc program specified in the PSP SourceBook, and (ii) any other
third party demo disc program established by SCEA for Licensed PSP
Publishers.
1.30
"SCEA
Intellectual Property Rights" means those intellectual property rights,
including but not limited to patents and other patent rights, copyrights,
trademarks, service marks, trade names, trade dress, mask work rights, utility
model rights, trade secret rights, technical information, know-how, and the
equivalents of the foregoing under the laws of any jurisdiction, and all other
proprietary or intellectual property rights throughout the universe, which
are
required to ensure compatibility with the PSP Player or which pertain to the
Licensed Trademarks.
1.31
"SCEA
Product Code" means the product identification number assigned to each Licensed
PSP Product, which shall consist of separate product identification numbers
for
multiple disc sets (i.e., SLUS-xxxxx). This SCEA Product Code is used on the
Packaging and PSP Format Disc relating to each Licensed PSP Product, as well
as
on most communications between SCEA and Publisher as a mode of identifying
the
Licensed PSP Product other than by title.
1.32
"SCE
Materials" means any data, object code, source code, firmware, documentation
(or
any part(s) of any of the foregoing), related to the PSP Player, selected in
the
sole judgment of SCEA, which are provided or supplied by SCEA or an Affiliate
of
SCEA to Publisher or any Licensed PSP Developer and/or other Licensed PSP
Publisher. For purposes of this Agreement, SCE Materials shall not include
any
hardware portions of the Development Tools, but shall include firmware in such
hardware.
1.33
"PSP
SourceBook" means the PSP SourceBook (or any other reference guide containing
information similar to the PSP SourceBook but designated with a different name)
prepared by SCEA, which is provided separately to Publisher. The PSP SourceBook
is designed to serve as the first point of reference by Publisher in every
phase
of the development, approval, manufacture and marketing of Licensed PSP
Products.
1.34
"Standard
Rebate" shall mean the rebate offered by SCEA on titles of Licensed PSP Products
that achieve specified sales volumes as set forth in Section 8.4 of this
Agreement.
1.35
"Third
Party Demo Disc" means any demo disc developed and marketed by a Licensed PSP
Publisher, which complies with the terms of an SCEA Established Third Party
Demo
Disc Program.
1.36
"Unit"
means an individual copy of a Licensed PSP Product title regardless of the
number of PSP Format Discs constituting such Licensed PSP Product
title.
1.37
"Wholesale Price" or "WSP" shall mean the greater of (i) the published price
of
the Licensed PSP Product offered to retailers by Publisher as evidenced by
a
sell sheet or price list issued by Publisher no later than thirty (30) days
before first commercial shipment of the Licensed PSP Product, or (ii) the actual
price paid by retailers upon the first commercial shipment of a Licensed PSP
Product without offsets, rebates or deductions from invoices of any
kind.
2.License.
2.1
License
Grant. SCEA
grants to Publisher, and Publisher hereby accepts, for the term of this
Agreement, within the Licensed Territory, under SCEA Intellectual Property
Rights owned, controlled or licensed by SCEA, a non-exclusive, non-transferable
license, without the right to sublicense (except as specifically provided
herein), to publish Licensed PSP Products using SCE Materials, which right
shall
be limited to the following rights and other rights set forth in, and in
accordance with the terms of, this PSP LPA: (i) to produce or develop Licensed
PSP Products and to enter into agreements with Licensed PSP Developers and
other
third parties to develop Licensed PSP Products; (ii) to have such Licensed
PSP
Products manufactured; (iii) to market, distribute and sell such Licensed PSP
Products and to authorize others to do so within the licensed territory; (iv)
to
use the Licensed Trademarks strictly and only in connection with the
development, manufacturing, marketing, packaging, advertising and promotion
of
the Licensed PSP Products, and subject to SCEA's right of approval as provided
herein; and (v) to sublicense to end users the right to use the Licensed PSP
Products for noncommercial purposes in conjunction with the PSP Player only,
and
not with other devices or for public performance.
2.2
Separate
PlayStation Agreements.
Unless specifically
set forth in this Agreement, all terms used herein are specific to the PSP
Player and the third party licensing program related thereto and not to the
original PlayStation, PlayStation 2 entertainment systems. or third party
licensing program related thereto. Licenses relating to the original PlayStation
or PlayStation 2 entertainment systems are subject to separate agreements with
SCEA, and any license of rights to Publisher under such separate agreements
shall not confer on Publisher any rights under the PSP Player and vice
versa.
3.Development
of Licensed PSP Products.
3.1
Right
to Develop. This
PSP
LPA grants Publisher the right to develop Licensed PSP Products and the right
to
purchase or license Development Tools, as is appropriate, from SCEA or its
designated agent, pursuant to a separate Development System Agreement with
SCEA.
In
developing Executable Software (or portions thereof), Publisher and its agents
shall fully comply in all respects with any and all technical specifications
which may from time to time be issued by SCEA. In the event that Publisher
uses
third party tools to develop Executable Software, Publisher shall be responsible
for ensuring that it has obtained appropriate licenses for such
use.
3
3.2
Development
by Third Parties. Except
as
otherwise set forth herein, Publisher shall not provide SCE Materials or SCEA's
Confidential Information to any third party. Publisher shall be responsible
for
determining that third parties meet the criteria set forth herein. Publisher
may
contract with a third party for development of Licensed PSP Products, provided
that such third party is: (i) a Licensed PSP Publisher, (ii) a Licensed PSP
Developer, or (iii) an SCEA-authorized subcontractor in compliance with the
provisions of Section 16.6. Publisher shall notify SCEA in writing of the
identity of any such third party within thirty (30) days of entering into an
agreement or other arrangement with the third party.
4.Limitations
on Licenses; Reservation of Rights.
4.1
Reverse
Engineering Prohibited. Other
than as expressly permitted by SCEA in writing, Publisher shall not directly
or
indirectly disassemble, decrypt, electronically scan, peel semiconductor
components, decompile, or otherwise reverse engineer in any manner or attempt
to
reverse engineer or derive source code from, all or any portion of the SCE
Materials, or permit, assist or encourage any third party to do so. Other than
as expressly permitted by SCEA in writing, Publisher shall not use, modify,
reproduce, sublicense, distribute, create derivative works from, or otherwise
provide to third parties, the SCE Materials, in whole or in part, other than
as
expressly permitted by SCEA. SCEA shall permit Publisher to study the
performance, design and operation of the Development Tools solely for the
limited purposes of developing and testing Publisher's software applications,
or
to build tools to assist Publisher with the development and testing of software
applications for Licensed PSP Products. Any tools developed or derived by
Publisher resulting from the study of the performance, design or operation
of
the Development Tools shall be considered as derivative products of the SCE
Materials for copyright purposes, but may be treated as trade secrets of
Publisher. In no event shall Publisher patent any tools, methods, or
applications, created, developed or derived from SCE Materials. Publisher shall
not make available to any third party any tools developed or derived from the
study of the Development Tools without the express written permission of SCEA.
Use of such tools shall be strictly limited to the creation or testing of
Licensed PSP Products and any other use, direct or indirect of such tools is
strictly prohibited. Publisher shall be required in all cases to pay royalties
in accordance with Section 8 to SCEA on any of Publisher's products utilizing
any SCE Materials or derivative works made therefrom. Moreover, Publisher shall
bear all risks arising from incompatibility of its Licensed PSP Product and
the
PSP Player resulting from use of Publisher-created tools.
The burden of proof under this Section shall be on Publisher to show by clear
and convincing evidence if a dispute arises, and SCEA reserves the right to
require Publisher to furnish evidence satisfactory to SCEA that Publisher has
complied with this Section.
4.2
Reservation
of SCEA's Rights.
4.2.1
Limitation of
Rights to Licenses Granted. The
licenses granted in this Agreement extend only to the publication, development,
manufacture, marketing, distribution and sale of Licensed PSP Products for
use
on the PSP Player, in such formats as may be designated by SCEA within the
Licensed Territory and does not permit transshipment of the Licensed PSP
Products to unlicensed territories unless expressly approved in writing by
SCEA
or the Affiliate of SCEA with responsibility for licensing publishing rights
in
the region. Without limiting the generality of the foregoing and except as
otherwise provided herein, Publisher shall not distribute or transmit the
Executable Software or the Licensed PSP Products via electronic means or any
other means now known or hereafter devised, including without limitation, via
wireless, cable, fiber optic means, telephone lines, microwave and/or radio
waves, or over a network of computers or other devices. Notwithstanding this
limitation, Publisher may electronically transmit Executable Software from
site
to site, or from machine to machine over a computer network, for the sole
purpose of facilitating development; provided that no right of retransmission
shall attach to any such transmission, and provided further that Publisher
shall
use reasonable security measures customary within the high technology industry
to reduce the risk of unauthorized interception or retransmission of such
transmissions. This Agreement does not grant any right or license under any
SCEA
Intellectual Property Rights or otherwise, except as expressly provided herein,
and no other right or license is to be implied by or inferred from any provision
of this Agreement or the conduct of the parties hereunder.
4.2.2
Other
Use of SCE Materials and SCEA Intellectual
Property Rights. Publisher
shall not make use of any SCE Materials or any SCEA Intellectual Property Rights
(or any portion thereof) except as authorized by and in compliance with the
provisions of this Agreement. Publisher shall not use the Executable Software,
SCE Materials or SCEA's Confidential Information in connection with the
development of any software for any emulator or other computer hardware or
software system. No right, license or privilege has been granted to Publisher
hereunder concerning the development of any collateral product or other use
or
purpose of any kind whatsoever which displays or depicts any of the Licensed
Trademarks. The rights set forth in Section 2.1(v) hereto are limited to the
right to sublicense such rights to end users for non-commercial use; any public
performance relating to the Licensed PSP Product or the PSP Player is prohibited
unless expressly authorized in writing by SCEA.
4
4.3
Reservation
of Publisher's Rights. Separate
and apart from SCE Materials and other rights licensed to Publisher by SCEA
hereunder, as between Publisher and SCEA, Publisher retains all rights, title
and interest in and to the Product Software, and the Product Proposals and
Product Information related thereto, including without limitation Publisher
Intellectual Property Rights therein, as well as Publisher's rights in any
source code and other underlying material such as artwork and music related
thereto and any names used as titles for Licensed PSP Products and other
trademarks used by Publisher. Nothing in this Agreement shall be construed
to
restrict the right of Publisher to develop, distribute or transmit products
incorporating the Product Software and such underlying material (separate and
apart from the SCE Materials) for any hardware platform or service other than
the PSP Player, or to use Printed Materials or Advertising Materials approved
by
SCEA as provided herein (provided that such Printed Materials and/or Advertising
Materials do not contain any Licensed Trademarks) as Publisher determines for
such other platforms. SCEA shall not do or cause to be done any act or thing
in
any way impairing or tending to impair or dilute any of Publisher's rights,
title or interests hereunder. Notwithstanding the foregoing, Publisher shall
not
distribute or transmit Product Software which is intended to be used with the
PSP Player via electronic means or any other means now known or hereafter
devised, including without limitation, via wireless, cable, fiber optic means,
telephone lines, microwave or radio waves, or a network of computers or other
devices, except as otherwise permitted in Section 4.2.1 hereto.
4.4
Additions
to and Deletions from Licensed Territory. SCEA
may,
from time to time, add one or more countries to the Licensed Territory by
providing written notice of such addition to Publisher. SCEA shall also have
the
right to delete, and intends to delete any countries from the Licensed Territory
if, in SCEA's reasonable judgment, the laws or enforcement of such laws in
such
countries do not protect SCEA Intellectual Property Rights. In the event a
country is deleted from the Licensed Territory, SCEA shall deliver to Publisher
a notice stating the number of days within which Publisher shall cease
distributing Licensed PSP Products and shall retrieve any Development Tools
located in any such deleted country. Publisher shall cease distributing Licensed
PSP Products, and retrieve any Development Tools, directly or through
subcontractors, by the end of the period stated in such notice.
4.5
PSP
SourceBook Requirement. Publisher
shall be required to comply with all the provisions of the PSP SourceBook,
including without limitation the Technical Requirements Checklist therein,
when
published, or within a commercially reasonable time following its publication
to
incorporate such provisions, as if such provisions were set forth in this
Agreement.
4.6
Covenant
Not to ▇▇▇. Publisher,
on behalf of itself and its representatives, affiliates, and any other person
or
entity acting on its behalf, hereby agrees not to file
any
action against and covenants not to ▇▇▇ SCEA, its parent, affiliates,
subsidiaries or related companies on any and all claims, rights, charges,
damages or causes of action arising from the infringement or alleged
infringement of any U.S. or international patent owned by, assigned or
exclusively licensed to Publisher. This Section shall survive any termination
or
expiration of this Agreement.
5.
Quality Standards for the Licensed PSP Products.
5.1
Quality
Assurance Generally. The
Licensed PSP Products (and all portions thereof) and Publisher's use of any
Licensed Trademarks shall be subject to SCEA's prior written approval, which
shall not be unreasonably withheld or delayed and which shall be within SCEA's
sole discretion as to acceptable standards of quality. SCEA shall have the
right
at any stage of the development of a Licensed PSP Product to review such
Licensed PSP Product to ensure that it meets SCEA's quality assurance standards.
All Licensed PSP Products will be developed to utilize substantially the
particular capabilities of the PSP Player's proprietary hardware, software
and
graphics. No approval by SCEA of any element or stage of development of any
Licensed PSP Product shall be deemed an approval of any other element or stage
of such Licensed PSP Product, nor shall any such approval be deemed to
constitute a waiver of any of SCEA's rights under this Agreement. In addition,
SCEA's approval of any element or any stage of development of any Licensed
PSP
Product shall not release Publisher from any of its representations and
warranties in Section 9.2 hereunder.
5.2
Product
Proposals.
5.2.1
Submission
of Product Proposal. All
Product Proposal submissions shall be in conformance with the submissions
provisions as published in the PSP SourceBook as published or amended. Publisher
shall submit to SCEA for SCEA's written approval or disapproval, which shall
not
be unreasonably withheld or delayed, a written concept document (the "Product
Proposal") prior to beginning development of a Licensed PSP Product. Such
Product Proposal must contain all information specified in the PSP SourceBook,
as well as any additional information that SCEA may deem to be useful in
evaluating the proposed Licensed PSP Product.
5.2.2
Approval
of Product Proposal.
After SCEA's
review of Publisher's Product Proposal, Publisher will receive written notice
from SCEA of the status of the Product Proposal, which may range from "Pass"
to
"Review" to "Fail." Such conditions shall have the meanings ascribed to them
in
the PSP SourceBook, and may be changed from time to time by SCEA. If a Product
Proposal receives a "Fail", then neither Publisher nor any other Licensed PSP
Developer or Licensed PSP Publisher may re-submit such Product Proposal without
significant, substantive revisions. SCEA shall have no obligation to approve
any
Product Proposal submitted by Publisher. Any development
conducted by or at the direction of Publisher and any legal commitment relating
to development work shall be at Publisher's own financial and commercial risk.
Publisher shall not construe approval of a Product Proposal as a commitment
by
SCEA to grant final approval to such Licensed PSP Product. Nothing herein shall
restrict SCEA from commercially exploiting any coincidentally similar concept(s)
and/or product(s), which have been independently developed by SCEA, an Affiliate
of SCEA or any third party.
5.2.3
Chances
to Product ProposaL Publisher
shall notify SCEA promptly in writing in the event of any material proposed
change in any portion of the Product Proposal. SCEA's approval of a Product
Proposal shall not obligate Publisher to continue with development or production
of the proposed Licensed PSP Product, provided that Publisher must immediately
notify SCEA in writing if it discontinues, cancels or otherwise delays past
the
original scheduled delivery date the development of any proposed Licensed PSP
Product. In the event that Publisher licenses a proposed Licensed PSP Product
from another Licensed PSP Publisher or a Licensed PSP Developer, it shall
immediately notify SCEA of such change and must re-submit such Licensed PSP
Product to SCEA for approval in accordance with the provisions of Section 5.2.1
above.
5
5.3
Work-in-Progress.
5.3.1
Submission
and Review of Work-in-Progress. SCEA
shall require Publisher to submit to SCEA work-in-progress on Licensed PSP
Products at intervals to be defined in the PSP SourceBook, throughout the
development of the Licensed PSP Product, or if requested by SCEA on written
notice to Publisher, at any time during the development process. Publisher
shall
be responsible for submitting work-in-progress to SCEA in accordance with the
product Review Process as determined by SCEA or otherwise set out in the PSP
SourceBook. Failure to submit work-in-progress in accordance with any stage
of
the Review Process may, at SCEA's discretion, result in revocation of approval
of such Product Proposal.
5.3.2
Approval
of Work in Progress.
SCEA shall
have the right to approve, reject or require additional information with respect
to each stage of the Review Process. Publisher shall make submission of the
Licensed Product at first playable, pre-alpha, alpha, beta and final, or at
such
development stages to be more fully defined in the PSP SourceBook. SCEA shall
approve each development stage of the Licensed Product or otherwise specify
in
writing the reasons for any rejection or request for additional information
and
shall state what corrections or improvements are necessary to obtain approval.
If any stage of the Review Process is not provided to SCEA or is not
successfully met after a reasonable cure period agreed to between SCEA and
Publisher, SCEA shall have the right to revoke the approval of Publisher's
Product Proposal.
5.3.3
Cancellation
or Delay; Conditions of ApprovaL Licensed
PSP Products which are canceled by Publisher or are late in meeting the final
Executable Software delivery date by more than three (3) months (without
expressly agreeing in writing with SCEA on a modified final delivery date)
shall
be subject to the termination provisions set forth in Section 14.3 hereto.
In
addition, failure to make changes required by SCEA to the Licensed PSP Product
at any stage of the Review Process, or making material changes to the Licensed
PSP Product without SCEA's approval, may subject Publisher to the termination
provisions set forth in Section 14.3 hereto.
5.4
Approval
of Executable Software. On
or
before the date specified in the Product Proposal or as determined by SCEA
pursuant to the Review Process, Publisher shall deliver to SCEA for its
inspection and evaluation, a final version of the Executable Software for the
proposed Licensed PSP Product. SCEA will evaluate such Executable Software
and
notify Publisher in writing of its approval or disapproval, which shall not
be
unreasonably withheld or delayed. If such Executable Software is disapproved,
SCEA shall specify in writing the reasons for such disapproval and state what
corrections and improvements are necessary. After making the necessary
corrections and improvements, Publisher shall submit a new version of such
Executable Software for SCEA's approval. SCEA shall have the right to disapprove
Executable Software if it fails to comply with SCEA's corrections or
improvements or one or more conditions as set forth in the PSP SourceBook with
no obligation to review all elements of any version of Executable Software.
All
final versions of Executable Software shall be submitted in the format
prescribed by SCEA and shall include such number of Master Discs as SCEA may
require from time to time. Publisher hereby (i) warrants that all final versions
of Executable Software are fully tested; (ii) shall use its best efforts to
ensure such Executable Software is fully debugged prior to submission to SCEA;
and (iii) warrants that all versions of Executable Software comply or will
comply with standards set forth in the PSP SourceBook or other documentation
provided by SCEA to Publisher. In addition, prior to manufacture of Executable
Software, Publisher must sign an accountability form stating that (x) Publisher
approves the release of such Executable Software for manufacture in its current
form and (y) Publisher shall be fully responsible for any problems related
to
such Executable Software.
5.5
Printed
Materials.
5.5.1
Compliance
with Guidelines. For
each
proposed Licensed PSP Product, Publisher shall be responsible, at Publisher's
expense, for creating and developing Printed Materials. All Printed Materials
shall comply with the Guidelines, which may be amended from time to time,
provided that Publisher shall, except as otherwise provided herein, only be
required to implement amended Guidelines in subsequent orders of Printed
Materials and shall not be required to recall or destroy previously
manufactured Printed Materials, unless such Printed Materials do not comply
with
the original requirements in the Guidelines or unless explicitly required to
do
so in writing by SCEA.
6
5.5.2
Submission
and Approval of Printed Materials. No
later
than submission of final Executable Software for a proposed Licensed PSP
Product, Publisher shall also deliver to SCEA, for review and evaluation, the
proposed final Printed Materials and a form of limited warranty for the proposed
Licensed PSP Product. Failure to meet any scheduled release dates for a Licensed
PSP Product is solely the risk and responsibility of Publisher, and SCEA assumes
no responsibility for Publisher failing to meet such scheduled release dates
due
to this submission process. The quality of such Printed Materials shall be
of
the same quality as that associated with other commercially available high
quality software products. If any of the Printed Materials are disapproved,
SCEA
shall specify the reasons for such disapproval and state what corrections are
necessary. SCEA shall have no liability to Publisher for costs incurred or
irrevocably committed to by Publisher for production of Printed Materials that
are disapproved by SCEA. After making the necessary corrections to any
disapproved Printed Materials, Publisher must submit new Printed Materials
for
approval by SCEA. SCEA shall not unreasonably withhold or delay its review
of
Printed Materials.
5.6
Advertising
Materials.
5.6.1
Submission and Approval of Advertising
Materials. Pre-production
samples of all Advertising Materials shall be submitted by Publisher to SCEA,
at
Publisher's expense, prior to any actual production, use or distribution of
any
such items by Publisher or on its behalf. SCEA shall evaluate and approve such
Advertising Materials, which approval shall not be unreasonably withheld or
delayed, as to the following standards: (i) the content, quality, and style
of
the overall advertisement; (ii) the quality, style, appearance and usage of
any
of the Licensed Trademarks; (iii) appropriate references of any required
notices; and (iv) compliance with the Guidelines. If any of the Advertising
Materials are disapproved, SCEA shall specify the reasons for such disapproval
and state what corrections are necessary. SCEA may require Publisher to
immediately withdraw and reprint any Advertising Materials that have been
published but have not received the written approval of SCEA. SCEA shall have
no
liability to Publisher for costs incurred or irrevocably committed to by
Publisher for production of Advertising Materials that are disapproved by SCEA.
For each Licensed PSP Product, Publisher shall be required to deliver to SCEA
an
accountability form stating that all Advertising Materials for such Licensed
PSP
Product comply or will comply with the Guidelines for use of the Licensed
Trademarks. After making the necessary corrections to any disapproved
Advertising Materials, Publisher must submit new proposed Advertising Materials
for approval by SCEA.
5.6.2
Failure
to Comply; Three Strikes Program.
Publishers who fail to obtain SCEA's approval of Advertising Materials prior
to
broadcast or publication shall be subject to the provisions of the "Three
Strikes" program outlined in the PSP SourceBook. Failure to obtain SCEA's
approval of Advertising Materials could result in termination of this PSP LPA
or
termination of approval of the Licensed PSP Product, or could subject Publisher
to the provisions of Section 14.4 hereto. Failure
to meet any scheduled release dates for Advertising Materials is solely the
risk
and responsibility of Publisher, and SCEA assumes no responsibility for
Publisher failing to meet such scheduled release dates due to approval
requirements as set forth in this Section.
5.6.3
SCEA
Materials. Subject
in each instance to the prior written approval of SCEA, Publisher may use
advertising materials owned by SCEA pertaining to the PSP Player or to the
Licensed Trademarks on such Advertising Materials as may, in Publisher's
judgment, promote the sale of Licensed PSP Products.
5.7
Rating
Requirements. If
required by SCEA or any governmental entity, Publisher shall submit each
Licensed PSP Product to a consumer advisory ratings system designated by SCEA
or
such governmental entity for the purpose of obtaining rating code(s) for each
Licensed PSP Product. Any and all costs and expenses incurred in connection
with
obtaining such rating code(s) shall be borne solely by Publisher. Any required
consumer advisory rating code(s) shall be displayed on the Licensed PSP Product
and in the associated Printed Materials and Advertising Materials, at
Publisher's cost and expense, in accordance with the PSP SourceBook or other
documentation provided by SCEA to Publisher.
5.8
Publisher's
Additional Quality Assurance Obligations. If
at any
time or times subsequent to the approval of Executable Software and Printed
Materials, SCEA identifies any material defects (such materiality to be
determined by SCEA in its sole discretion) with respect to the Licensed PSP
Product, or in the event that SCEA identifies any improper use of its Licensed
Trademarks or SCE Materials with respect to the Licensed PSP Product, or any
such material defects or improper use are brought to the attention of SCEA,
Publisher shall, at no cost to SCEA, promptly correct any such material defects,
or improper use of Licensed Trademarks or SCE Materials, to SCEA's commercially
reasonable satisfaction, which may include, if necessary in SCEA's judgment,
the
recall and re-release of such Licensed PSP Product. In the event any Units
of
Licensed PSP Products create any risk of loss or damage to any property or
injury to any person, Publisher shall immediately take effective steps, at
Publisher's sole liability and expense, to recall or to remove such defective
Units from any affected channels of distribution, provided, however, that if
Publisher is not acting as the distributor and/or seller for the Licensed PSP
Products, its obligation hereunder shall be to use its best efforts to arrange
removal of
such
Licensed PSP Product from channels of distribution. Publisher shall provide
all
end-user support for the Licensed PSP Products and SCEA expressly disclaims
any
obligation to provide end-user support on Publisher's Licensed PSP
Products.
7
6.
Manufacture of the Licensed PSP Products.
6.1
Manufacture
of Units. Upon
approval of Executable Software and associated Printed Materials pursuant to
Section 5, and subject to Sections 6.1.2, 6.1.3 and 6.1.4 below, the Designated
Manufacturing Facility will, in accordance with the terms and conditions set
forth in this Section 6, and at Publisher's expense (a) manufacture PSP Format
Discs for Publisher; (b) manufacture Publisher's Packaging and/or Printed
Materials; and/or (c) assemble the PSP Format Discs with the Printed Materials
and the Packaging. Publisher shall comply with all Manufacturing Specifications
related to the particular terms set forth herein. SCEA reserves the right to
insert or require the Publisher to insert certain Printed Materials relating
to
the PSP Player or Licensed Trademarks into each Unit.
6.1.1
Manufacture
of PSP Format Discs.
6.1.1.1
Designated
Manufacturing
Facilities.
To
insure
compatibility of the PSP Format Discs with the PSP Player, consistent quality
of
the Licensed PSP Product and incorporation of anti-piracy security systems,
SCEA
shall designate and license a Designated Manufacturing Facility to reproduce
PSP
Format Discs. Publisher shall purchase *** of its requirements for PSP Format
Discs from such Designated Manufacturing Facility during the term of the
Agreement. Any Designated Manufacturing Facility shall be a third party
beneficiary of this Agreement.
6.1.1.2
Creation
of Master Licensed PSP Product. Pursuant
to Section 5.4 in connection with final testing of Executable Software,
Publisher shall provide SCEA with the number of Master Discs specified in the
PSP SourceBook. A Designated Manufacturing Facility shall create from one of
the
fully approved Master Discs provided by Publisher the original master of the
Licensed PSP Product from which all other copies of the Licensed PSP Product
are
to be replicated. Publisher shall be responsible for the costs, as determined
by
the Designated Manufacturing Facility, of producing such original master. In
order to insure against loss or damage to the copies of the Executable Software
furnished to SCEA, Publisher will retain duplicates of all Master Discs, and
neither SCEA nor any Designated Manufacturing Facility shall be liable for
loss
of or damage to any Master Discs or Executable Software.
6.1.2
Manufacture
of Printed Materials.
6.1.2.1Manufacture
by
Designated
Manufacturing
Facility. If
Publisher elects to obtain Printed
Materials from a Designated Manufacturing Facility, Publisher shall deliver
all
SCEA-approved Printed Materials to that Designated Manufacturing Facility,
at
Publisher's sole risk and expense, and the Designated Manufacturing Facility
will manufacture such Printed Materials in accordance with this Section 6.
In
order to insure against loss or damage to the copies of the Printed Materials
furnished to SCEA, Publisher will retain duplicates of all Printed Materials,
and neither SCEA nor any Designated Manufacturing Facility shall be liable
for
loss of or damage to any such Printed Materials.
6.1.2.2 Manufacture by
Alternate
Source. Subject
to SCEA's approval as provided in Section 5.5.2 hereto and in this Section,
Publisher may elect to be responsible for manufacturing its own Printed
Materials (other than any Artwork which may be placed directly upon the
PlayStation Disc, which Publisher will supply to the Designated Manufacturing
Facility for placement), at Publisher's sole risk and expense. Prior to
production of each order, Publisher shall be required to supply SCEA with
samples of any Printed Materials not produced or supplied by a Designated
Manufacturing Facility, at no charge to SCEA or Designated Manufacturing
Facility, for SCEA's approval with respect to the quality thereof. SCEA shall
have the right to disapprove any Printed Materials that do not comply with
the
Manufacturing Specifications. Manufacturing Specifications for Printed Materials
shall be comparable to manufacturing specifications applied by SCEA to its
own
software products for the PSP Player. If Publisher elects to supply its own
Printed Materials, neither SCEA nor any Designated Manufacturing Facility
shall
be responsible for any delays arising from use of Publisher's own Printed
Materials.
6.1.3
Manufacture
of Packaging.
6.1.3.1
Manufacture
by Designated Manufacturing
Facility. To
ensure
consistent quality of the Licensed PSP Products, SCEA may designate and license
a Designated Manufacturing Facility to reproduce proprietary Packaging for
the
PSP Player. If SCEA creates proprietary Packaging for the PSP Player, then
Publisher shall purchase *** of its requirements for such proprietary Packaging
from a Designated Manufacturing Facility during the term of the Agreement,
and
the Designated Manufacturing Facility will manufacture such Packaging in
accordance with this Section 6.
8
6.1.3.2
Manufacture
by Alternate Source. If
SCEA
elects to use standard, non-proprietary Packaging for the PSP Player, then
Publisher may elect to be responsible for manufacturing its own Packaging (other
than any proprietary labels and any portion of a container containing Licensed
Trademarks, which Publisher must purchase from a Designated Manufacturing
Facility). Publisher shall assume all responsibility for the creation of such
Packaging at Publisher's sole risk and expense. Publisher shall be responsible
for encoding and printing proprietary edge labels provided by a
Designated Manufacturing Facility with information reasonably specified by
SCEA
from time to time and will apply such labels to each Unit of the Licensed PSP
Product as reasonably specified by SCEA. Prior to production of each order,
Publisher shall be required to supply SCEA with samples of any Packaging not
produced or supplied by a Designated Manufacturing Facility, at no charge to
SCEA or Designated Manufacturing Facility, for SCEA's approval with respect
to
the quality. SCEA shall have the right to disapprove any Packaging that does
not
comply with the Manufacturing Specifications. Manufacturing Specifications
for
Packaging shall be comparable to manufacturing specifications applied by SCEA
to
its own software products for the PSP Player. If Publisher procures Packaging
from an alternate source, then it must also procure assembly services from
an
alternate source. If Publisher elects to supply its own Packaging, neither
SCEA
nor any Designated Manufacturing Facility shall be responsible for any delays
arising from use of Publisher's own Packaging.
6.1.4
Assembly
Services. Publisher
may either procure assembly services from a Designated Manufacturing Facility
or
from an alternate source. If Publisher elects to be responsible for assembling
the Licensed PSP Products, then the Designated Manufacturing Facility shall
ship
the component parts of the Licensed PSP Product to a destination provided by
Publisher, at Publisher's sole risk and expense. SCEA shall have the right
to
inspect any assembly facilities utilized by Publisher in order to determine
if
the component parts of the Licensed PSP Products are being assembled in
accordance with SCEA's quality standards. SCEA may require that Publisher recall
any Licensed PSP Products that do not contain proprietary labels or other
material component parts or that otherwise fail to comply with the Manufacturing
Specifications. If Publisher elects to use alternate assembly facilities,
neither SCEA nor any Designated Manufacturing Facility shall be responsible
for
any delays or missing component parts arising from use of alternate assembly
facilities.
6.2
Price,
Payment and Terms.
6.2.1
Price. The
applicable price for manufacture of any Units of Licensed PSP Products ordered
hereunder shall be provided to Publisher by the Designated Manufacturing
Facility. Purchase shall be subject to the terms and conditions set out in
any
purchase order form supplied to Publisher by the Designated Manufacturing
Facility.
6.2.2
Orders. Publisher
shall issue to a Designated Manufacturing Facility a written Purchase Order(s)
in a form designated by SCEA and containing the information required in the
Manufacturing Specifications, with a copy to SCEA. All orders shall be subject
to approval by SCEA, which shall not be unreasonably withheld or delayed.
Purchase Orders issued by Publisher to
a
Designated Manufacturing Facility for each Licensed PSP Product approved by
SCEA
shall be non-cancelable and be subject to the order requirements of the
Designated Manufacturing Facility.
6.2.3
Payment
Terms. Purchase
Orders will be invoiced as soon as reasonably practical after receipt, and
such
invoice will include both manufacturing price and royalties payable pursuant
to
Section 8.1 or 8.2 below for each Unit of Licensed PSP Products ordered. Each
invoice will be payable either on a cash-in-advance basis or pursuant to a
letter of credit, or at SCEA's sole discretion, on credit terms. Terms for
cash-in-advance and letter of credit payments shall be as set forth in the
PSP
SourceBook. All amounts hereunder shall be payable in United States dollars.
All
associated banking charges with respect to payments of manufacturing costs
and
royalties shall be borne solely by Publisher.
6.2.3.1
Credit
Terms. SCEA
may
at its sole discretion extend credit terms and limits to Publisher. SCEA may
also revoke such credit terms and limits at its sole discretion. If Publisher
qualifies for credit terms, then orders will be invoiced upon shipment of
Licensed PSP Products and each invoice will be payable within thirty (30) days
of the date of the invoice. Any overdue sums shall bear interest at the rate
of
one and one-half (1 - 1/2%) percent per month, or such lower rate as may be
the
maximum rate permitted under applicable law, from the date when payment first
became due to and including the date of payment thereof. Publisher shall be
additionally liable for all costs and expenses of collection, including without
limitation, reasonable fees for attorneys and court costs.
6.2.3.2
General
Terms. No
deduction may be made from remittances unless an approved credit memo has been
issued by a Designated Manufacturing Facility. Neither SCEA nor a Designated
Manufacturing Facility shall be responsible for shortage or breakage with
respect to any order if component parts or assembly services are obtained from
alternate sources. Each shipment to Publisher shall constitute a separate sale,
whether whole or partial fulfillment of any order. Nothing in this Agreement
shall excuse or be construed as a waiver of Publisher's obligation to timely
provide any and all payments owed to SCEA and Designated Manufacturing
Facility.
6.3
Delivery
of Licensed PSP Products. Neither
SCEA nor any Designated Manufacturing Facility shall have an obligation to
store
completed Units of Licensed PSP Products. Publisher may either specify a mode
of
delivery or allow the Designated Manufacturing Facility to select a mode of
delivery.
9
6.4
Ownership
of Master Discs. Due
to
the proprietary nature of the mastering process, neither SCEA nor a Designated
Manufacturing Facility shall under any circumstances release any original
master, Master Discs or other
in-process materials to Publisher. All such materials shall be and remain the
sole property of SCEA or Designated Manufacturing Facility. Notwithstanding
the
foregoing, Publisher Intellectual Property Rights contained in Product Software
that is contained in such in-process materials is, as between SCEA and
Publisher, the sole and exclusive property of Publisher or its licensors (other
than SCEA or its affiliates).
7.
Marketing
and Distribution.
7.1
Marketing
Generally. In
accordance with the provisions of this Agreement and at no expense to SCEA,
Publisher shall, and shall direct its distributors to, diligently market, sell
and distribute the Licensed PSP Products, and shall use commercially reasonable
efforts to stimulate demand for such Licensed PSP Products in the Licensed
Territory and to supply any resulting demand. Publisher shall use its reasonable
best efforts to protect the Licensed PSP Products from and against illegal
reproduction or copying by end users or by any other persons or
entities.
7.2
Samples. Publisher
shall provide to SCEA, at no additional cost, for SCEA's internal use, ***
sample copies of each Licensed PSP Product. Publisher shall pay any
manufacturing costs to the Designated Manufacturing Facility in accordance
with
Section 6.2, but shall not be obligated to pay royalties, in connection with
such sample Units. In the event that Publisher assembles any Licensed PSP
Product using an alternate source, Publisher shall be responsible for shipping
such sample Units to SCEA at Publisher's cost and expense. SCEA shall not
directly or indirectly resell any such sample copies of the Licensed PSP
Products without Publisher's prior written consent. SCEA may give sample copies
to its employees, provided that it uses its reasonable efforts to ensure that
such copies are not sold into the retail market. In addition, subject to
availability, Publisher shall sell to SCEA additional quantities of Licensed
PSP
Products at the Wholesale Price for such Licensed PSP Product. Any changes
to
SCEA's policy regarding sample Units shall be set forth in the PSP
SourceBook.
7.3
Marketing
Programs of SCEA. From
time
to time, SCEA may invite Publisher to participate in promotional or advertising
opportunities that may feature one or more Licensed PSP Products from one or
more Licensed PSP Publishers. Participation shall be voluntary and subject
to
terms to be determined at the time of the opportunity. In the event Publisher
elects to participate, all materials submitted by Publisher to SCEA shall be
submitted subject to Section 10.2 below and delivery of such materials to SCEA
shall constitute acceptance by Publisher of the terms of the offer. Moreover,
SCEA may use the Legal Attribution Line on all multi-product marketing
materials, unless otherwise agreed in writing.
7.4
Demonstration
Disc Programs. SCEA
may,
from time to time, provide opportunities for Publisher to participate in SCEA
Demo Disc programs. In addition, SCEA
may,
from time to time, grant to Publisher the right to create Third Party Demo
Discs
pursuant to SCEA Established Third Party Demo Disc Programs. The specifications
with respect to the approval, creation, manufacture, marketing, distribution
and
sale of any such demo disc programs shall be set forth in the PSP SourceBook
or
in other documentation to be provided by SCEA to Publisher. Except as otherwise
specifically set forth herein, in the PSP SourceBook or in other documentation,
Third Party Demo Discs shall be considered "Licensed PSP Products" and shall
be
subject in all respects to the terms and conditions of this Agreement pertaining
to Licensed PSP Products. In addition, the following procedures shall also
apply
to SCEA Demo Discs and Third Party Demo Discs:
7.4.1
SCEA
Demo Discs.
7.4.1.1
License. SCEA
may,
but shall not be obligated to, invite Licensed PSP Publishers to participate
in
any SCEA Demo Disc program. Participation by Publisher in an SCEA Demo Disc
program shall be optional. If Publisher elects to participate in an SCEA Demo
Disc program and provides Product Information to SCEA in connection thereto,
Publisher shall thereby grant to SCEA a royalty-free license during the term
of
this Agreement in the Licensed Territory to manufacture, use, sell, distribute,
market, advertise and otherwise promote Publisher's Product Information as
part
of such SCEA Demo Disc program. In addition, Publisher shall grant SCEA the
right to feature Publisher and Licensed PSP Product names in SCEA Demo Disc
Advertising Materials and to use copies of screen displays generated by the
code, representative video samples or other Product Information in such SCEA
Demo Disc
Advertising
Materials. All decisions relating to the selection of first and third party
Product Information and all other aspects of SCEA Demo Discs shall be in the
sole discretion of SCEA.
7.4.1.2
Submission
and
Approval of Product
Information. Upon
receipt of written notice that SCEA has tentatively chosen Publisher's Product
Information for inclusion in an SCEA Demo Disc, Publisher shall deliver to
SCEA
such requested Product Information by no later than the deadline set forth
in
such notice. Separate notice will be sent for each SCEA Demo Disc, and Publisher
must sign each notice prior to inclusion in such SCEA Demo Disc. Publisher
shall
include its own Legal Copy on the title screen or elsewhere in the Product
Information submitted to SCEA. SCEA shall only provide the Legal Attribution
Line on the SCEA Demo Disc title screen and packaging. Publisher's Product
Information shall comply with SCEA's technical specifications provided to
Publisher. SCEA reserves the right to review and test the Product Information
provided and request revisions prior to inclusion on the SCEA Demo Disc. If
SCEA
requests changes to the Product Information and Publisher elects to continue
to
participate in such Demo Disc, Publisher shall make such changes as soon
possible after receipt of written notice of such requested changes from SCEA,
but not later than the deadline for receipt of Product Information. Failure
to
make such changes and provide the modified Product Information to SCEA by the
deadline shall result in the Product Information being removed from the SCEA
Demo Disc. Costs associated with preparation of Product Information supplied
to
SCEA shall be borne solely by Publisher. Except as otherwise provided in this
Section, SCEA shall not edit or modify Product Information provided to SCEA
by
Publisher without Publisher's consent, not to be unreasonably withheld. SCEA
shall have the right to use subcontractors to assist in the development of
any
SCEA Demo Disc. With respect to Product Information provided by Publisher in
demo form, the demo delivered to SCEA shall not constitute the complete Licensed
PSP Product and shall be, at a minimum, an amount sufficient to demonstrate
the
Licensed PSP Product's core features and value, without providing so much
information as to give consumers a disincentive to purchase the complete
Licensed PSP Product.
10
7.4.1.3
No Obligation to Publish. Acceptance
of Product Information for test and review shall not be deemed confirmation
that
SCEA shall include the Product Information on an SCEA Demo Disc, nor shall
it
constitute approval of any other element of the Licensed PSP Product. SCEA
reserves the right to choose from products submitted from other Licensed PSP
Publishers and first party products to determine the products to be included
in
SCEA Demo Discs, and Publisher's Licensed PSP Products will not be guaranteed
prominence or preferential treatment on any SCEA Demo Disc. Nothing herein
shall
be construed as creating an obligation of SCEA to publish Product Information
submitted by Publisher in any SCEA Demo Disc, nor shall SCEA be obligated to
publish, advertise or promote any SCEA Demo Disc.
7.4.1.4
SCEA
Demo Discs Sold at Retail. Publisher
is aware and acknowledges that certain SCEA Demo Discs may be distributed and
sold by SCEA in the retail market. If Publisher elects to participate in any
SCEA Demo Disc program which is sold in the retail market, as notified by SCEA
to Publisher, Publisher acknowledges prior to participation in any such SCEA
Demo Disc that it is aware of no limitations regarding Product Information
provided to SCEA pursuant to the terms of this Agreement which would in any
way
restrict SCEA's ability to distribute or sell such SCEA Demo Disc at retail,
nor
does Publisher or its licensors (other than SCEA and/or its affiliates) have
any
anticipation of receiving any compensation from such retail sales. In the event
that SCEA institutes a SCEA Demo Disc in which a fee or royalty is charged
to
Publisher, SCEA and Publisher will enter into a separate agreement regarding
such SCEA Demo Disc.
7.4.2
Third
Party Demo Discs.
7.4.2.1
License.
Publisher may participate in any SCEA Established Third Party Demo Disc Program.
Publisher shall notify SCEA of its intention to participate in any such program,
and upon receipt of such notice, SCEA shall grant to Publisher the right and
license to use Licensed PSP Products in Third Party Demo Discs and to use,
distribute, market, advertise and otherwise promote (and, if permitted in
accordance with the terms of any SCEA Established Third Party Program or
otherwise permitted by SCEA, to sell) such Third Party Demo Discs in accordance
with the PSP SourceBook, which may be modified from time to time at the sole
discretion of SCEA. Unless separately agreed in writing with SCEA, Third Party
Demo Discs shall not be used, distributed, promoted, bundled or sold in
conjunction with other products. In addition, SCEA hereby consents to the use
of
the Licensed Trademarks in connection with Third Party Demo Discs, subject
to
the approval procedures set forth in this Agreement. If any SCEA Established
Third Party Demo Disc Program is specified by SCEA to be for promotional use
only and not for resale, and such Third Party Demo Disc is subsequently
discovered to be for sale, Publisher's right to produce Third Party Demo Discs
shall thereupon be automatically revoked, and SCEA shall have the right to
terminate any related Third Party Demo Discs in accordance with the terms of
Section 14.3 or 14.4 hereto.
7.4.2.2
Submission and
Approval of Third
Party Demo Discs. Publisher
shall deliver to SCEA, for SCEA's prior approval, a final version of each Third
Party Demo Disc in a format prescribed by SCEA. Such Third Party Demo Disc
shall
comply with all requirements provided to Publisher by SCEA in the PSP SourceBook
or otherwise. In addition, SCEA shall evaluate the Third Party Demo Disc in
accordance with the approval provisions for Executable Software and Printed
Materials set forth in Sections 5.4 and 5.5, respectively. Furthermore,
Publisher shall obtain the approval of SCEA in connection with any Advertising
Materials relating to the Third Party Demo Discs in accordance with the approval
provisions set forth in Section 5.6. Costs associated with Third Party Demo
Discs shall be borne solely by Publisher. No approval by SCEA of any element
of
any Third Party Demo Disc shall be deemed an approval of any other element
thereto, nor does any such approval constitute final approval for the related
Licensed PSP Product. Unless otherwise permitted by SCEA, Publisher shall
clearly and conspicuously state on all Third Party Demo Disc Packaging and
Printed Materials that the Third Party Demo Disc is for promotional purposes
only and not for resale.
7.4.2.3
Manufacture
and Royalty of Third
Party Demo Discs. Publisher
shall comply with all Manufacturing Specifications with respect to the
manufacture and payment for manufacturing costs of Third Party Demo Discs,
and
Publisher shall also comply with all terms and conditions of Section 6 hereto.
No costs incurred in the development, manufacture, licensing, production,
marketing and/or distribution (and if permitted by SCEA, sale) of the Third
Party Demo Disc shall be deducted
from any amounts payable to SCEA hereunder. Royalties on Third Party Demo Discs
shall be as provided in Section 8.2.
11
7.5
Contests
and Sweepstakes of Publisher. SCEA
acknowledges that, from time to time, Publisher may conduct contests and
sweepstakes to promote Licensed PSP Products. SCEA shall permit Publisher to
include contest or sweepstakes materials in Printed Materials and Advertising
Materials, subject to compliance with the approval provisions of Section 5.5
and
5.6 hereunder, compliance with the provisions of Section 9.2 and 10.2 hereunder,
and subject to the following additional terms and conditions:
(i) Publisher
represents that it has retained the services of a fulfillment house to
administer the contest or sweepstakes and if it has not retained the services
of
a fulfillment house, Publisher represents and warrants that it has the expertise
to conduct such contests or sweepstakes, and in any event, Publisher shall
assume full responsibility for all aspects of such contest or
sweepstakes;
(ii) Publisher
warrants that each contest, sweepstakes, and promotion, comply with local,
state
and federal laws or regulations;
(iii) Publisher
represents and warrants that it has obtained the consent of all holders of
intellectual property rights required to be obtained in connection with each
contest or sweepstakes including, but not limited to, the consent of any holder
of copyrights or trademarks relating to any Advertising Materials publicizing
the contest or sweepstakes, or the prizes being awarded to winners of the
contest or sweepstakes; and
(iv) Publisher
shall make available to SCEA all contest and sweepstakes material prior to
publication in accordance with the approval process set forth in Section 5.5
or
5.6.
Approval
by SCEA of contest or sweepstakes materials for use in the Printed Materials
or
Advertising Materials (or any use of the PSP Player or Licensed PSP Products
as
prizes in such contest or sweepstakes) shall not constitute an endorsement
by
SCEA of such contest or sweepstakes, nor shall such acceptance be construed
as
SCEA having reviewed and approved such materials for compliance with any federal
or state law, statute, regulations, order or the like, which shall be
Publisher's sole responsibility.
7.6
PlayStation
Website. All
Licensed PSP Publishers shall be required to provide Product Information for
a
web page for each of its Licensed PSP Products for display on the PlayStation
promotional website, or other website or websites as may be operated by SCEA
from time to time in connection with the promotion of the PlayStation,
PlayStation Portable, or PSP brands. Specifications for Product Information
for
such web pages shall be as provided in the PSP SourceBook. Publisher shall
provide SCEA with such Product Information for each Licensed PSP Product upon
submission of Printed Materials to SCEA for approval in accordance with Section
5.5.2 hereto. Publisher shall also provide updates to such web page in a timely
manner as required by SCEA in updates to the PSP SourceBook.
7.7 Distribution.
7.7.1
Distribution
Channels. Publisher
may use such distribution channels as Publisher deems appropriate, including
the
use of third party distributors, resellers, dealers and sales representatives.
In the event that Publisher elects to have one of its Licensed PSP Products
distributed and sold by another Licensed PSP Publisher, Publisher must provide
SCEA with advance written notice of such election, the name of the Licensed
PSP
Publisher and any additional information requested by SCEA regarding the nature
of the distribution services provided by such Licensed PSP Publisher prior
to
manufacture of such Licensed PSP Product.
7.7.2 Limitations on
Distribution.Notwithstanding
any other provisions in this Agreement, Publisher shall not, directly or
indirectly, solicit orders from or sell any Units of the Licensed PSP Products
to any person or entity outside of the Licensed Territory nor transship Licensed
PSP Products between regional SCE territories. In addition, Publisher shall
not
directly or indirectly solicit orders for or sell any Units of the Licensed
PSP
Products in any situation where Publisher knows or reasonably should know that
such Licensed PSP Products may be exported or resold outside of the Licensed
Territory.
8. Royalties.
8.1
Applicable
Royalties on
Licensed
PSP Products.
8.1.1
Initial
Orders. Publisher
shall pay SCEA, either directly or through its designee, a per title royalty
in
United States dollars for each Unit of the Licensed PSP Products manufactured
based on the initial Wholesale Price of the Licensed PSP Product, as
follows:
|
Wholesale
Price
|
Per
Title Royalty
|
|
|
▇▇▇▇▇
▇
▇▇▇▇▇
▇
▇▇▇▇▇
▇
|
***
***
***
|
***
***
***
|
In
the
absence of satisfactory evidence to support the WSP, the royalty rate that
shall
apply will be the greater of *** per Unit *** applied
to the highest known WSP. Royalties may be subject to change in SCEA's
discretion upon
sixty (60) days notice to Publisher. Upon receipt of such notice, Publisher
shall have the option to terminate this Agreement upon written notice to SCEA
rather than having such revised royalty structure go into effect.
12
8.1.2
Reorders and Other
Programs.
Royalties
on additional orders to manufacture a specific Licensed PSP Product, regardless
of which Publisher submits the order, shall be the royalty determined by the
initial Wholesale Price as reported by initial Publisher for that Licensed
PSP
Product regardless of the wholesale price of the Licensed PSP Product at the
time of reorder, except in the event that the Wholesale Price increases for
such
Licensed PSP Product, in which case the royalty shall be adjusted upwards to
reflect the higher Wholesale Price. Licensed PSP Products qualifying for SCEA's
"Greatest Hits" programs or other programs offered by SCEA shall be subject
to
the royalties applicable for such programs. Publisher acknowledges that as
of
the date of execution of this Agreement no "Greatest Hits" program exists for
the PSP Third Party licensing program.
8.2
Third
Party Demo Disc Program Royalties: Publisher
shall pay SCEA a per Unit royalty in United States dollars of *** for each
Third Party Demo Disc Unit manufactured. The quantity of Units ordered shall
comply with the terms of such SCEA Established Third Party Demo Disc
Program.
8.3
Payment
For Licensed PSP Product. Payment
of royalties under Sections 8.1 and 8.2 shall be made to SCEA through its
Designated Manufacturing Facility concurrent with the placement of an order
to
manufacture Licensed PSP Product and payment of manufacturing costs in
accordance with the terms and conditions set forth in Sections 6.2.3, unless
otherwise agreed in writing with SCEA. At the time of placing an order to
manufacture a Licensed PSP Product, Publisher shall submit to SCEA an accurate
accounting statement setting out the number of units of Licensed PSP Product
to
be manufactured, projected initial wholesale price, applicable royalty, and
total amount due SCEA. In addition, Publisher shall submit to SCEA prior to
placing the initial order for each Licensed PSP Product a separate
certification, in the form provided by SCEA in the PSP SourceBook, signed by
officers of Publisher that certifies that the Wholesale Price provided to SCEA
is accurate and attaching such documentation supporting the WSP as requested
by
SCEA. Payment shall be made prior to manufacture unless SCEA has agreed to
extend credit terms to Publisher in writing pursuant to Section 6.2.3.1. Nothing
herein shall be construed as requiring SCEA to extend credit terms to Publisher.
The accounting statement due hereunder shall be subject to the audit and
accounting provisions set forth in paragraph 16.2 below. No costs incurred
in
the development, manufacture, marketing, sale and/or distribution of the
Licensed PSP Products shall be deducted from any royalties payable to SCEA
hereunder. Similarly, there shall be no deduction from the royalties otherwise
owed to SCEA as a result of any uncollectible accounts
owed to Publisher, or for any credits, discounts, allowances or returns which
Publisher may credit or otherwise grant to any third party customer of any
Units
of the Licensed PSP Products, or for any taxes, fees, assessments or expenses
of
any kind which may be incurred by Publisher in connection with its sale or
distribution of any Units of the Licensed PSP Products or arising with respect
to the payment of royalties. In addition to the royalty payments provided to
SCEA, Publisher shall be solely responsible for and bear any cost relating
to
any withholding taxes or other such assessments which may be imposed by any
governmental authority with respect to the royalties paid to SCEA hereunder;
provided, however, that SCEA shall not manufacture Licensed PSP Products outside
of the United States without the prior consent of Publisher. Publisher shall
provide SCEA with official tax receipts or other such documentary evidence
issued by the applicable tax authorities sufficient to substantiate that any
such taxes or assessments have in fact been paid.
8.4
Rebates,
Promotions or Discounts.
From time
to
time SCEA may, at its sole option, offer to Publisher programs which result
in
rebates or other reduced royalties to Publisher. Eligibility to participate
in a
program offered by SCEA shall be determined by the terms and conditions set
forth for participation at the time the program is offered. SCEA reserves the
right to alter, extend, or terminate program offerings upon notice to
Publishers. Nothing contained herein shall require SCEA to offer any rebate,
promotion, or discount program to Publisher during the term of this
Agreement.
9.
Representations and Warranties.
9.1
Representations
and Warranties of SCEA. SCEA
represents and warrants solely for the benefit of Publisher that SCEA has the
right, power and authority to enter into this Agreement and to fully perform
its
obligations hereunder.
9.2
Representations and Warranties of Publisher. Publisher
represents and warrants that:
(i)
There is no threatened or pending action, suit, claim or proceeding alleging
that the use by Publisher of all or any part of the Product Software, Product
Proposals, Product Information, Printed Materials, Advertising Materials or
any
underlying work or content embodied therein, or any name, designation or
trademark used in conjunction with the Licensed PSP Products infringes or
otherwise violates any Intellectual Property Right or other right or interest
of
any kind whatsoever of any third party, or otherwise contesting any right,
title
or interest of Publisher in or to the Product Software, Product Proposals,
Product Information, Printed Materials, Advertising Materials or any underlying
work or content embodied therein, or any name, designation or trademark used
in
conjunction with the Licensed PSP Products;
13
(ii)
The
Product Software, Product Proposals, Product Information, Printed Materials
and
Advertising Materials and their contemplated use under this Agreement do not
and
shall not infringe any person's or entity's rights including without limitation,
patents, copyrights (including rights in a joint work), trademarks, trade dress,
trade secret, rights of publicity, privacy, performance, moral rights, literary
rights and any other third party right;
(iii) Publisher
has the right, power and authority to enter into this Agreement, to grant SCEA
the rights granted hereunder and to fully perform its obligations
hereunder;
(iv) The
making of this Agreement by Publisher does not violate any separate agreement,
rights or obligations existing between Publisher and any other person or entity,
and, throughout the term of this Agreement, Publisher shall not make any
separate agreement with any person or entity that is inconsistent with any
of
the provisions of this Agreement;
(v) Publisher
has not sold, assigned, leased, licensed or in any other way disposed of or
encumbered the rights granted to Publisher hereunder, and Publisher will not
sell, assign, lease, license or in any other way dispose of or encumber any
of
such rights except as expressly permitted hereunder or as consented to by SCEA
in writing;
(vi) Publisher
has obtained the consent of all holders of intellectual property rights required
to be obtained in connection with use of any Product Information by SCEA as
licensed hereunder, and Product Information when provided to SCEA in accordance
with the terms of this Agreement may be published, marketed, distributed and
sold by SCEA in accordance with the terms and conditions of this Agreement
and
without SCEA incurring any royalty, residual, union, guild or other
fees;
(vii) Publisher
shall not make any representation or give any warranty to any person or entity
expressly or implicitly on SCEA's behalf, or to the effect that the Licensed
PSP
Products are connected in any way with SCEA (other than that the Executable
Software and/or Licensed PSP Products have been developed, marketed, sold and/or
distributed under license from SCEA);
(viii) In
the
event that Executable Software is delivered to other Licensed PSP Publishers
or
Licensed PSP Developers by Publisher in source code form, Publisher will take
all precautions consistent with the protection of valuable trade secrets by
companies in high technology industries to ensure the confidentiality of such
source code;
(ix) The
Executable Software and any Product Information delivered to SCEA shall be
in a
commercially acceptable form, free of significant bugs, defects, time bombs
or
viruses which could disrupt, delay, destroy the Executable Software or PSP
Player or render either of them
less
than
fully useful, and shall be fully compatible with the PSP Player and any
peripherals listed on the Printed Materials as compatible with the Licensed
PSP
Product;
(x) Each
of
the Licensed PSP Products, Executable Software, Printed Materials and
Advertising Materials shall be developed, marketed, sold and distributed by
or
at the direction of Publisher in an ethical manner and in full compliance with
all applicable federal, state, provincial, local and foreign laws and any
regulations and standards promulgated thereunder (including but not limited
to
federal and state lottery laws as currently interpreted and enforced) and will
not contain any obscene or defamatory matter;
(xi) Publisher's
policies and practices with respect to the development, marketing, sale, and/or
distribution of the Licensed PSP Products shall in no manner reflect adversely
upon the name, reputation or goodwill of SCEA;
(xiii)
Publisher has, or will contract with a Licensed PSP Developer for, the technical
expertise and resources necessary to fulfill its obligations under this
Agreement; and
(xiii)
Publisher shall make no false, misleading or inconsistent representations or
claims with respect to any Licensed PSP Products, the PSP Player or
SCEA.
10.
Indemnities; Limited Liability.
10.1
Indemnification
by SCEA. SCEA
shall indemnify and hold Publisher harmless from and against any and all third
party claims, losses, liabilities, damages, expenses and costs, including,
without limitation, reasonable fees for attorneys, expert witnesses and
litigation costs, and including costs incurred in the settlement or avoidance
of
any such claim which result from or are in connection with a breach of any
of
the representations or warranties provided by SCEA herein; provided, however,
that Publisher shall give prompt written notice to SCEA of the assertion of
any
such claim, and provided, further, that SCEA shall have the right to select
counsel and control the defense and settlement thereof. SCEA shall have the
exclusive right, at its discretion, to commence and prosecute at its own expense
any lawsuit or to take such other action with respect to such matters as shall
be deemed appropriate by SCEA. Publisher shall provide SCEA, at no expense
to
Publisher, reasonable assistance and cooperation concerning any such matter;
and
Publisher shall not agree to the settlement of any such claim, action or
proceeding without SCEA's prior written consent.
10.2
Indemnification
By Publisher.
Publisher shall
indemnify and hold SCEA harmless from and against any and all claims, losses,
liabilities, damages, expenses and costs, including, without limitation,
reasonable fees for attorneys, expert witnesses and litigation costs, and
including costs incurred in the settlement or avoidance of any
such
claim, which result from or are in connection with
14
(i) a
breach
of any of the provisions of this Agreement; or (ii)infringement
of a third party's intellectual property rights by Publisher; or (iii) any
claims of or in connection with any personal or bodily injury (including death)
or property damage, by whomever such claim is made, arising out of, in whole
or
in part, the development, marketing, sale, distribution or use of any of the
Licensed PSP Products (or portions thereof) unless due directly to the breach
of
SCEA in performing any of the specific duties or providing any of the specific
services required; or (iv) any federal, state or foreign civil or criminal
actions relating to the development, marketing, sale or distribution of Licensed
PSP Products. SCEA shall give prompt written notice to Publisher of the
assertion of any such indemnified claim, and, with respect to third party
claims, actions or proceedings against SCEA, SCEA shall have the right to select
counsel for SCEA and reasonably control the defense and settlement thereof.
Subject to the above, Publisher shall have the right, at its discretion, to
select its own counsel, to commence and prosecute at its own expense any
lawsuit, to reasonably control the defense and settlement thereof or to take
such other action with respect to claims, actions or proceedings by or against
Publisher. SCEA shall retain the right to approve any settlement. SCEA shall
provide Publisher, at no expense to SCEA, reasonable assistance and cooperation
concerning any such matter; and SCEA shall not agree to the settlement of any
such claim, action or proceeding (other than third party claims, actions or
proceedings against SCEA) without Publisher's prior written
consent.
10.3
LIMITATION
OF LIABILITY.
10.3.1 LIMITATION OF SCEA'S LIABILITY.
IN NO EVENT SHALL SCEA OR OTHER SONY AFFILIATES AND THEIR SUPPLIERS,
OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS BE LIABLE FOR LOSS OF PROFITS, OR
ANY
SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING OUT
OF,
RELATING TO OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING WITHOUT LIMITATION
THE BREACH OF THIS AGREEMENT BY SCEA, THE MANUFACTURE OF THE LICENSED PSP
PRODUCTS AND THE USE OF THE LICENSED PSP PRODUCTS, EXECUTABLE SOFTWARE OR THE
PSP PLAYER BY PUBLISHER OR ANY END-USER, WHETHER UNDER THEORY OF CONTRACT,
TORT
(INCLUDING NEGLIGENCE), INDEMNITY, PRODUCT LIABILITY OR OTHERWISE. IN NO EVENT
SHALL SCEA'S LIABILITY ARISING UNDER, RELATING TO OR IN CONNECTION WITH THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION ANY LIABILITY FOR DIRECT OR INDIRECT
DAMAGES, AND INCLUDING WITHOUT LIMITATION ANY LIABILITY UNDER SECTION 10.1,
EXCEED THE TOTAL AMOUNT PAID BY PUBLISHER TO SCEA UNDER THIS AGREEMENT. EXCEPT
AS EXPRESSLY SET FORTH
HEREIN, NEITHER SCEA NOR ANY SONY AFFILIATE, NOR ANY OF THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, SHALL BEAR ANY RISK, OR HAVE ANY
RESPONSIBILITY OR LIABILITY, OF ANY KIND TO PUBLISHER OR TO ANY THIRD PARTIES
WITH RESPECT TO THE QUALITY, OPERATION OR PERFORMANCE OF ANY PORTION OF THE
SCE
MATERIALS, THE PSP PLAYER OR ANY LICENSED PSP PRODUCT.
10.3.2
LIMITATION
OF PUBLISHER'S LIABILITY.
IN NO EVENT SHALL PUBLISHER OR ITS AFFILIATED COMPANIES AND THEIR SUPPLIERS,
OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS BE LIABLE TO SCEA FOR ANY LOSS OF
PROFITS, OR ANY SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES
ARISING OUT OF, RELATED TO OR IN CONNECTION WITH (i) THIS AGREEMENT OR (ii)
THE
USE OR DISTRIBUTION IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS
AGREEMENT OF ANY CODE PROVIDED BY SCEA, IN WHOLE OR IN PART, WHETHER UNDER
THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), INDEMNITY, PRODUCT LIABILITY
OR
OTHERWISE, PROVIDED THAT SUCH LIMITATIONS SHALL NOT APPLY TO DAMAGES RESULTING
FROM PUBLISHER'S BREACH OF SECTIONS 4, 10.2, 11 OR 13 OF THIS AGREEMENT, AND
PROVIDED FURTHER THAT SUCH LIMITATIONS SHALL NOT APPLY TO AMOUNTS WHICH
PUBLISHER MAY BE REQUIRED TO PAY TO THIRD PARTIES UNDER SECTIONS 10.2 OR
16.10.
10.4
DISCLAIMER
OF WARRANTY.
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, NEITHER SCEA NOR ITS AFFILIATES
AND SUPPLIERS MAKE, NOR DOES PUBLISHER RECEIVE, ANY REPRESENTATIONS OR
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, REGARDING THE SCE MATERIALS, SCEA'S
CONFIDENTIAL INFORMATION THE PSP PLAYER, THE UNITS OF THE
LICENSED PSP PRODUCTS MANUFACTURED HEREUNDER OR PUBLISHER'S PRODUCT INFORMATION
INCLUDED ON SCEA DEMO DISCS. SCEA SHALL NOT BE LIABLE FOR ANY INJURY, LOSS
OR
DAMAGE, DIRECT, INDIRECT OR CONSEQUENTIAL, ARISING OUT OF THE USE OR INABILITY
TO USE ANY UNITS OR ANY SOFTWARE ERRORS OR "BUGS" IN PUBLISHER'S PRODUCT
INFORMATION WHICH MAY BE REPRODUCED ON SCEA DEMO DISCS. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, SCEA AND ITS AFFILIATES AND SUPPLIERS
EXPRESSLY DISCLAIM THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND
THEIR
EQUIVALENTS UNDER THE LAWS OF ANY JURISDICTION, REGARDING THE SCE MATERIALS,
SCEA'S CONFIDENTIAL INFORMATION, LICENSED PSP PRODUCTS, SCEA DEMO DISCS AND
THE
PSP PLAYER. ANY WARRANTY AGAINST INFRINGEMENT THAT MAY BE PROVIDED IN SECTION
2-312(3) OF THE UNIFORM COMMERCIAL CODE OR IN ANY OTHER COMPARABLE STATUTE
IS
EXPRESSLY DISCLAIMED.
15
11. SCEA
Intellectual Property Rights.
11.1
Licensed Trademarks.The
Licensed Trademarks
and the goodwill associated therewith are and shall be the exclusive property
of
SCEA or Affiliates of SCEA. Nothing herein shall give Publisher any right,
title
or interest in or to any of the Licensed Trademarks or any other trademarks
of
SCEA, other than the non-exclusive license provided herein. Publisher shall
not
do or cause to be done any act or thing in any way impairing or tending to
impair or dilute any of SCEA's rights, title or interests in or to any of the
Licensed Trademarks or any other trademarks of SCEA, nor shall Publisher
register any trademark in its own name or in the name of any other person or
entity, or obtain rights to employ Internet domain names or addresses, which
are
similar to or are likely to be confused with any of the Licensed Trademarks
or
any other trademarks of SCEA.
11.2
License
of SCE Materials and PSP Player. All
rights with respect to the SCE Materials and PSP Player, including, without
limitation, all SCEA Intellectual Property Rights therein, are and shall be
the
exclusive property of SCEA or Affiliates of SCEA. Nothing herein shall give
Publisher any right, title or interest in or to the SCE Materials or the PSP
Player or any portion thereof, other than the non-exclusive license provided
herein. Publisher shall not do or cause to be done any act or thing in any
way
impairing or tending to impair any of SCEA's rights, title or interests in
or to
the SCE Materials or the PSP Player or any portion thereof.
12.
Infringement
of SCEA Intellectual Property Rights By Third Parties.
In
the
event that Publisher discovers or otherwise becomes aware that any SCEA
Intellectual Property Rights have been or are being infringed upon by any third
party, Publisher shall promptly notify SCEA. SCEA shall have the sole right,
in
its discretion, to institute and prosecute lawsuits against third parties for
such infringement of SCEA Intellectual Property Rights. Any lawsuit shall be
prosecuted solely at the cost and expense of SCEA and all sums recovered in
any
such lawsuits, whether by judgment, settlement or otherwise shall belong solely
to SCEA. Upon request of SCEA, Publisher shall execute all papers, testify
on
all matters and otherwise cooperate in every way necessary and desirable for
the
prosecution of any such lawsuit.SCEA
shall reimburse Publisher for the reasonable
expenses incurred as a result of such cooperation, but unless authorized by
other provisions of this Agreement, not costs and expenses attributable to
the
conduct of a cross-claim or third party action.
13. Confidentiality.
13.1 SCEA's
Confidential Information.
13.1.1
Definition
of
SCEA's
Confidential
Information. "SCEA's
Confidential Information"
shall mean:
(i) the
PSP
Player, SCE Materials and Development Tools and this Agreement;
(ii) other
documents and materials developed, owned, licensed or under the control of
SCEA,
including all processes, data, hardware, software, inventions, trade secrets,
ideas, creations, improvements, designs, discoveries, developments, research
and
know-how, including without limitation the PSP SourceBook and SCEA Intellectual
Property Rights relating to the PSP Player, SCE Materials or Development Tools;
and
(iii) information
and documents regarding SCEA's finances, business, marketing and technical
plans, business methods and production plans.
SCEA's
Confidential Information may consist of information in any medium, whether
oral,
printed, in machine-readable form or otherwise, including information apprised
to Publisher and reduced to tangible or written form at any time during the
term
of this Agreement. In addition, the existence of a relationship between
Publisher and SCEA for the purposes set forth herein shall be deemed to be
SCEA's Confidential Information unless otherwise agreed to in writing by the
parties or until publicly announced by SCEA.
13.1.2
Term
of Protection of SCEA's Confidential
Information. The
term
for the protection of SCEA's Confidential Information shall commence on the
Effective Date first above written and shall continue in full force and effect
as long as any of SCEA's Confidential Information continues to be maintained
as
confidential and proprietary by SCEA or SCE. During such term, Publisher shall,
pursuant to Section 13.1.3 below, safeguard and hold in trust and confidence
and
not disclose or use any and all of SCEA's Confidential Information except for
the purposes specified.
16
13.1.3
Preservation
of
SCEA's
Confidential
Information. Publisher
shall, with respect to SCEA's Confidential Information:
(i)
not
disclose SCEA's Confidential Information to any person or entity, other than
those employees or directors of the Publisher whose duties justify a
"need-to-know" and who have executed a confidentiality agreement in which such
employees or directors have agreed not to disclose,
and to hold confidential, all confidential information and materials inclusive
of those of third parties which may be disclosed to them or to which they may
have access during the course of their duties. At SCEA's request, Publisher
shall provide SCEA with a copy of such confidentiality agreement between
Publisher and its employees or directors, and shall also provide SCEA with
a
list of employee and director signatories. Publisher shall not disclose any
of
SCEA's Confidential Information to third parties, including without limitation
to consultants or agents. Any employees or directors who obtain access to SCEA's
Confidential Information shall be advised by Publisher of the confidential
nature of SCEA's Confidential Information, and Publisher shall be responsible
for any breach of this Agreement by its employees or directors.
(ii) take
all
measures necessary to safeguard SCEA's Confidential Information in order to
avoid disclosure, publication, or dissemination, using as high a degree of
care
and scrutiny, but at least reasonable care, as is consistent with the protection
of valuable trade secrets by companies in high technology
industries.
(iii) ensure
that all written materials relating to or containing SCEA's Confidential
Information be maintained in a restricted access area and plainly marked to
indicate the secret and confidential nature thereof.
(iv) at
SCEA's
request, return promptly to SCEA any and all portions of SCEA's Confidential
Information, together with all copies thereof.
(v) not
use,
modify, reproduce, sublicense, copy, distribute, create derivative works from,
or otherwise provide to third parties, SCEA's Confidential Information, or
any
portion thereof, except as provided herein, nor shall Publisher remove any
proprietary legend set forth on or contained within any of SCEA's Confidential
Information.
13.1.4
Exceptions. The
foregoing restrictions shall not apply to any portion of SCEA's Confidential
Information which:
(i) was
previously known to Publisher without restriction on disclosure or use, as
proven by written documentation of Publisher; or
(ii) is
or
legitimately becomes part of the public domain through no fault of Publisher
or
its employees; or
(iii) is
independently developed by Publisher's employees who have not had access to
SCEA's Confidential Information, as proven by written documentation of
Publisher; or
(iv) is
required to be disclosed by administrative or judicial action; provided that
Publisher must attempt to maintain the confidentiality of SCEA's Confidential
Information by asserting in such action the restrictions set forth in this
Agreement, and, immediately after receiving
notice
of
such action or any notice of any threatened action, Publisher must notify SCEA
to give SCEA the maximum opportunity to seek any other legal remedies to
maintain such SCEA's Confidential Information in confidence as herein provided;
or
(v) is
approved for release by written authorization of SCEA.
13.1.5 No
Obligation to
License. Disclosure
of SCEA's Confidential Information to Publisher shall not constitute any option,
grant or license from SCEA to Publisher under any patent or other SCEA
Intellectual Property Rights now or hereinafter held by SCEA. The disclosure
by
SCEA to Publisher of SCEA's Confidential Information shall not result in any
obligation on the part of SCEA to approve any materials of Publisher, nor shall
such disclosure by SCEA give Publisher any right to develop, directly or
indirectly, manufacture or sell any product derived from or which uses any
of
SCEA's Confidential Information, other than as expressly set forth in this
Agreement.
13.1.6 Publisher's
Obligations
Upon Unauthorized
Disclosure. If
at any
time Publisher becomes aware of any unauthorized duplication, access, use,
possession or knowledge of any SCEA Confidential Information, it shall notify
SCEA as soon as reasonably practicable, and shall promptly act to recover any
such information and prevent further breach of the confidentiality obligations
herein. Publisher shall provide any and all reasonable assistance to SCEA to
protect SCEA's proprietary rights in any SCEA Confidential Information that
it
or its employees or permitted subcontractors may have directly or indirectly
disclosed or made available, and that may be duplicated, accessed, used,
possessed or known in a manner or for a purpose not expressly authorized by
this
Agreement, including but not limited to enforcement of confidentiality
agreements, commencement and prosecution in good faith (alone or with the
disclosing party) of legal action, and reimbursement for all reasonable
attorneys' fees, costs and expenses incurred by SCEA to protect its proprietary
rights in SCEA's Confidential Information. Publisher shall take all steps
requested by SCEA to prevent the recurrence of any unauthorized duplication,
access, use, possession or knowledge of SCEA's Confidential Information. In
addition, SCEA shall have the right to pursue any actions at law or in equity,
including without limitation the remedies set forth in Section 16.10
hereto.
13.2
Publisher's Confidential Information.
13.2.1 Definition
of Publisher's
Confidential
Information. "Publisher's
Confidential Information" shall mean:
(i)
any
Product Software as provided to SCEA pursuant to this Agreement and all
documentation and information relating thereto, including Product Proposals,
Printed Materials and Advertising Materials (other than documentation
and information intended for use by and release to end users, the general public
or the trade);
17
(ii) other
documents and materials developed, owned, licensed or under the control of
Publisher, including all processes, data, hardware, software, inventions, trade
secrets, ideas, creations, improvements, designs, discoveries, developments,
research and know-how; and
(iii) information
and documents regarding Publisher's finances, business, marketing and technical
plans, business methods and production plans.
Publisher's
Confidential Information may consist of information in any medium, whether
oral,
printed, in machine-readable form or otherwise, including information apprised
to SCEA and reduced to tangible or written form at any time during the term
of
this Agreement.
13.2.2
Term
of Protection of Publisher's Confidential
Information. The
term
for the protection of Publisher's Confidential Information shall commence on
the
Effective Date first above written and shall continue in full force and effect
as long as any of Publisher's Confidential Information continues to be
maintained as confidential and proprietary by Publisher.
13.2.3
Preservation
of
Confidential
Information
of Publisher. SCEA
shall, with respect to Publisher's Confidential Information:
(i)
hold
all Publisher's Confidential Information in confidence, and shall take all
reasonable steps to preserve the confidentiality of Publisher's Confidential
Information, and to prevent it from falling into the public domain or into
the
possession of persons other than those persons to whom disclosure is authorized
hereunder.
(ii)
not
disclose Publisher's Confidential Information to any person other than an SCEA
employee or subcontractor who needs to know or have access to such Confidential
Information for the purposes of this Agreement, and only to the extent necessary
for such purposes.
(iii)
ensure that all written materials relating to or containing Publisher's
Confidential Information be maintained in a secure area and plainly marked
to
indicate the secret and confidential nature thereof.
(iv)
at
Publisher's request, return promptly to Publisher any and all portions of
Publisher's Confidential Information, together with all copies
thereof.
(v)
not
use Publisher's Confidential Information, or any portion thereof, except as
provided herein, nor shall SCEA remove any proprietary legend set forth on
or
contained within any of Publisher's Confidential Information.
13.2.4
Exceptions. The
foregoing restrictions will not apply to any portion of Publisher's Confidential
Information which:
(i) was
previously known to SCEA without restriction on disclosure or use, as proven
by
written documentation of SCEA; or
(ii) is
or
legitimately becomes part of information in the public domain through no fault
of SCEA, its employees or its subcontractors; or
(iii) is
independently developed by SCEA's employees or affiliates who have not had
access to Publisher's Confidential Information, as proven by written
documentation of SCEA; or
(iv) is
required to be disclosed by administrative or judicial action; provided that
SCEA attempted to maintain the confidentiality of Publisher's Confidential
Information by asserting in such action the restrictions set forth in this
Agreement, and immediately after receiving notice of such action, notified
Publisher of such action to give Publisher the opportunity to seek any other
legal remedies to maintain such Publisher's Confidential Information in
confidence as herein provided; or
(vi)
is
approved for release by written authorization of Publisher.
13.2.5 SCEA's Obligations
Upon
Unauthorized
Disclosure. If
at any
time SCEA becomes aware of any unauthorized duplication, access, use, possession
or knowledge of any of Publisher's Confidential Information, it shall notify
Publisher as soon as is reasonably practicable. SCEA shall provide any and
all
reasonable assistance to Publisher to protect Publisher's proprietary rights
in
any of Publisher's Confidential Information that may have directly or indirectly
disclosed by an SCEA employee and that may be duplicated, accessed, used,
possessed or known in a manner or for a purpose not expressly authorized by
this
Agreement. SCEA shall take all reasonable steps requested by Publisher to
prevent the recurrence of any unauthorized duplication, access, use, possession
or knowledge of Publisher's Confidential Information.
13.3
Confidentiality
of Agreement. The
terms
and conditions of this Agreement shall be treated as SCEA's Confidential
Information and Publisher's Confidential Information; provided that each party
may disclose the terms and conditions of this Agreement:
(i) to
legal
counsel;
(ii) in
confidence, to accountants, banks and financing sources and their
advisors;
(iii) in
confidence, in connection with the enforcement of this Agreement or rights
arising under or relating to this Agreement; and
18
(iv)
if
required, in the opinion of counsel, to file publicly or otherwise disclose
the
terms of this Agreement under applicable federal or state securities or other
laws, the disclosing party shall be required to promptly notify the other party
such that the other party has a reasonable opportunity to contest or limit
the
scope of such required disclosure, and the disclosing party shall request,
and
shall use its best efforts to obtain, confidential treatment for such sections
of this Agreement as the other party may designate.
14.
Term and Termination.
14.1
Effective
Date; Term. This
Agreement shall not be binding on the parties until it has been signed by each
party, in which event it shall be effective from the Effective Date until March
31, 2007, unless earlier terminated pursuant to Section 14.2. The term shall
be
automatically extended for additional one-year terms thereafter, unless either
party provides the other with written notice of its election not to so extend
on
or before January 31 of the applicable year. Notwithstanding the foregoing
the
term for the protection of SCEA's Confidential Information and Publisher's
Confidential Information shall be as set forth in Sections 13.1.2 and 13.2.2
respectively.
14.2
Termination
by SCEA. SCEA
shall have the right to terminate this Agreement immediately, by providing
written notice of such election to Publisher, upon the occurrence of any of
the
following:
(i) If
Publisher breaches (A) any of its obligations; or (B) any other agreement
entered into between SCEA or Affiliates of SCEA and Publisher.
(ii) The
liquidation or dissolution of Publisher or a statement of intent by Publisher
to
no longer exercise any of the rights granted by SCEA to Publisher.
(iii) If
during
the term of this Agreement, Publisher or in an entity which directly or
indirectly has a controlling interest in Publisher (A) is transferred to a
party
that is in breach of any agreement with SCEA or an Affiliate of SCEA; (B)
directly or indirectly holds or acquires a controlling interest in a third
party
which develops any interactive device or product which is directly or indirectly
competitive with the PSP Player; or (C) is in litigation with SCEA or Affiliates
of SCEA. As used in this Section 14.2, "controlling interest" means, with
respect to any form of entity, sufficient power to control the decisions of
such
entity.
(iv) If
during
the term of this Agreement, Publisher or an entity that directly or indirectly
has a controlling interest in Publisher enters into a business relationship
with
a third party with whom Publisher materially contributes to develop core
components to an interactive device or product
which is directly or indirectly competitive with the PSP Player.
(v) Publisher
files or causes to file litigation against SCEA or any SCE
Affiliate.
Publisher
shall immediately notify SCEA in writing in the event that any of the events
or
circumstances specified in this Section occur.
14.3
Product-by-Product
Termination by SCEA. In
addition to the events of termination described in Section 14.2, above, SCEA,
at
its option, shall be entitled to terminate, on a product-by-product basis,
the
licenses and related rights herein granted to Publisher in the event that (a)
Publisher fails to notify SCEA promptly in writing of any material change to
any
materials previously approved by SCEA in accordance with Section 5 or Section
6.1 hereto, and such breach is not corrected or cured within thirty (30) days
after receipt of written notice of such breach; (b) Publisher uses a third
party
that fails to comply with the requirements of Section 3 in connection with
the
development of any Licensed PSP Product; (c) any third party with whom Publisher
has contracted for the development of Executable Software breaches any of its
material obligations to SCEA pursuant to such third party's agreement with
SCEA
with respect to such Licensed PSP Product; or (d) Publisher cancels a Licensed
PSP Product or fails to provide SCEA in accordance with the provisions of
Section 5 above, with the final version of the Executable Software for any
Licensed PSP Product within three (3) months of the scheduled release date
according to the Product Proposal (unless a modified final delivery date has
been agreed to by the parties), or fails to provide work in progress to SCEA
in
strict accordance with the Review Process in Section 5.3.
14.4
Options
of SCEA in Lieu of Termination. As
alternatives to terminating this Agreement or a particular Licensed PSP Product
as set forth in Sections 14.2 and 14.3 above, SCEA may, at its option and upon
written notice to Publisher, take the following actions. In the event that
SCEA
elects either of these options, Publisher may terminate this Agreement upon
written notice to SCEA rather than allowing SCEA to exercise these options.
Election of these options by SCEA shall not constitute a waiver of or compromise
with respect to any of SCEA's rights under this Agreement and SCEA may elect
to
terminate this Agreement with respect to any breach.
14.4.1
Suspension
of Agreement. SCEA
may
suspend this Agreement, entirely or with respect to a particular Licensed PSP
Product or program, for a set period of time which shall be specified in writing
to Publisher upon the occurrence of any breach of this Agreement.
19
14.4.2
Liquidated
Damages. Whereas
a
minor breach of any of the events set out below may not warrant termination
of
this Agreement, but will cause SCEA damages
in amounts difficult to quantify, SCEA may require Publisher to pay liquidated
damages of *** per event as follows:
(i) Failure
to submit Advertising Materials to SCEA for approval (including any required
resubmissions);
(ii) Broadcasting
or publishing Advertising Materials without receiving the final approval or
consent of SCEA;
(iii) Failure
to make SCEA's requested revisions to Advertising Materials; or
(iv) Failure
to comply with the PSP SourceBook, Manufacturing Specifications or Guidelines
which relates in any way to use of Licensed Trademarks.
(v) any
transshipment or attempted transshipment of Licensed Products into unlicensed
territories, whether willfully or negligently, without the expressed written
permission of the regional SCE Affiliate, in an amount that SCEA deems in sole
discretion not to be a material breach of this Agreement.
Liquidated
damages shall be invoiced separately or on Publisher's next invoice for Licensed
PSP Products. SCEA reserves the right to terminate this Agreement for breach
in
lieu of seeking liquidated damages or in the event that liquidated damages
are
unpaid.
14.5
No
Refunds. In
the
event of the termination of this Agreement in accordance with any of the
provisions of Sections 14.2 through 14.4 above, no portion of any payments
of
any kind whatsoever previously provided to SCEA hereunder shall be owed or
be
repayable to Publisher.
15.
Effect of Expiration or Termination.
15.1
Inventory
Statement. Within
thirty (30) days of the date of expiration or the effective date of termination
with respect to any or all Licensed PSP Products or this Agreement, Publisher
shall provide SCEA with an itemized statement, certified to be accurate by
an
officer of Publisher, specifying the number of unsold Units of the Licensed
PSP
Products as to which such termination applies, on a title-by-title basis, which
remain in its inventory or under its control at the time of expiration or the
effective date of termination. SCEA shall be entitled to conduct at its expense
a physical inspection of Publisher's inventory and work in process upon
reasonable written notice during normal business hours in order to ascertain
or
verify such inventory and inventory statement.
15.2
Reversion
of Rights. Upon
expiration or termination and subject to Section 15.3 below, the licenses and
related rights herein granted to Publisher shall immediately revert to SCEA,
and
Publisher shall cease from any further use of SCEA's Confidential Information,
Licensed Trademarks and SCE Materials and any SCEA Intellectual Property Rights
therein, and, subject to the provisions of Section 15.3 below, Publisher shall
have no further right to continue the development, publication, manufacture,
marketing, sale or distribution of any Units of the Licensed PSP Products,
or to
continue to use any Licensed Trademarks; provided, however, that for a period
of
one year after termination, and subject to all the terms of Section 13, and
provided this Agreement is not terminated due to a breach or default of
Publisher, Publisher may retain such portions of SCE Materials and SCEA's
Confidential Information as SCEA in its sole discretion agrees are required
to
support end users of Licensed PSP Products but must return these materials
at
the end of such one year period. Upon expiration or termination, the licenses
and related rights herein granted to SCEA by Publisher shall immediately revert
to Publisher, and SCEA shall cease from any further use of Product Information
and any Publisher Intellectual Property Rights therein; provided that SCEA
may
continue the manufacture, marketing, sale or distribution of any SCEA Demo
Discs
containing Publisher's Product Information which Publisher had approved prior
to
termination.
15.3
Disposal
of Unsold Units. Provided
that this Agreement is not terminated due to a breach or default of Publisher,
Publisher may, upon expiration or termination of this Agreement, sell off
existing inventories of Licensed PSP Products, on a non-exclusive basis, for
a
period of ninety (90) days from the date of expiration or termination of this
Agreement, and provided such inventories have not been manufactured solely
or
principally for sale during such period. Subsequent to the expiration of such
ninety (90) day period, or in the event this Agreement is terminated as a result
of any breach or default of Publisher, any and all Units of the Licensed PSP
Products remaining in Publisher's inventory shall be destroyed by Publisher
within five (5) business days of such expiration or termination. Within five
(5)
business days after such destruction, Publisher shall provide SCEA with an
itemized statement, certified to be accurate by an officer of Publisher,
indicating the number of Units of the Licensed PSP Products which have been
destroyed (on a title-by-title basis), the location and date of such destruction
and the disposition of the remains of such destroyed materials.
20
15.4
Return
of SCE Materials and Confidential Information. Upon
the
expiration or earlier termination of this Agreement, Publisher shall immediately
deliver to SCEA, or if and to the extent requested by SCEA destroy, all SCE
Materials and any and all copies thereof, and Publisher and SCEA shall, upon
the
request of the other party, immediately deliver to the other party, or if and
to
the extent requested by such party destroy, all Confidential Information of
the
other party, including any and all copies thereof, which the other party
previously furnished to it in furtherance of this Agreement. Within five (5)
working days after any such destruction, Publisher or SCEA, as appropriate,
shall provide the other party with an affidavit of destruction and an itemized
statement, each certified to be accurate by an officer of Publisher, indicating
the number
of
copies and units of the SCE Materials and Confidential Information which have
been destroyed, the location and date of such destruction and the disposition
of
the remains of such destroyed materials. In the event that Publisher fails
to
return the SCE Materials or Confidential Information and SCEA must resort to
legal means including without limitation any use of attorneys to recover the
SCE
Materials or Confidential Information or the value thereof, all costs, including
SCEA's reasonable attorney's fees, shall be borne by Publisher, and SCEA may,
in
addition to SCEA's other remedies, withhold such amounts from any payment
otherwise due from SCEA to Publisher under any agreement between SCEA and
Publisher.
15.5
Extension
of this Agreement; Termination Without Prejudice. SCEA
shall be under no obligation to extend this Agreement notwithstanding any
actions taken by either of the parties prior to the expiration of this
Agreement. Upon the expiration of this Agreement, neither party shall be liable
to the other for any damages (whether direct, indirect, consequential or
incidental, and including, without limitation, any expenditures, loss of profits
or prospective profits) sustained or arising out of or alleged to have been
sustained or to have arisen out of such expiration. The expiration or
termination of this Agreement shall be without prejudice to any rights or
remedies which one party may otherwise have against the other party, and shall
not excuse either party from any such expiration or termination.
16.
Miscellaneous Provisions.
16.1
Notices. All
notices or other communications required or desired to be sent to either of
the
parties shall be in writing and shall be sent by registered or certified mail,
postage prepaid, or sent by recognized international courier service, telegram
or facsimile, with charges prepaid. The address for all notices or other
communications required to be sent to SCEA or Publisher, respectively, shall
be
the mailing address stated in the preamble hereof, or such other address as
may
be provided by written notice from one party to the other on at least ten (10)
days' prior written notice. Any such notice shall be effective upon the date
of
actual or tendered delivery, as confirmed by the sending party.
16.2
Audit
Provisions. Publisher
shall keep full, complete, and accurate books of account and records covering
all transactions relating to this Agreement. Publisher shall preserve such
books
of account, records, documents and material for a period of twenty-four (24)
months after the expiration or earlier termination of this Agreement. Acceptance
by SCEA of an accounting statement, purchase order, or payment hereunder will
not preclude SCEA from challenging or questioning the accuracy thereof at a
later time. In the event that SCEA reasonably believes that the Wholesale Price
provided by Publisher with respect to any Licensed PSP Product is not accurate,
SCEA shall be entitled to request additional documentation from Publisher to
support the listed
Wholesale
Price for such Licensed PSP Product. In addition, during the Term and for a
period of two (2) years thereafter and upon the giving of reasonable written
notice to Publisher, representatives of SCEA shall have access to, and the
right
to make copies and summaries of, such portions of all of Publisher's books
and
records as pertain to the Licensed PSP Products and any payments due or credits
received hereunder. In the event that such inspection reveals an under-reporting
of any payment due to SCEA, Publisher shall immediately pay SCEA such amount.
In
the event that any audit conducted by SCEA reveals that Publisher has
under-reported any payment due to SCEA hereunder by *** or more for that audit
period, then in addition to the payment of the appropriate amount due to SCEA,
Publisher shall reimburse SCEA for all reasonable audit costs for that audit
and
any and all collection costs to recover the unpaid amount.
16.3
Force
Majeure. Neither
SCEA nor Publisher shall be liable for any loss or damage or be deemed to be
in
breach of this Agreement if its failure to perform or failure to cure any of
its
obligations under this Agreement results from any event or circumstance beyond
its reasonable control, including, without limitation, any natural disaster,
fire, flood, earthquake or other act of God; shortage of equipment, materials,
supplies or transportation facilities; strike or other industrial dispute;
war
or rebellion; shutdown or delay in power, telephone or other essential service
due to the failure of computer or communications equipment or otherwise;
provided, however, that the party interfered with gives the other party written
notice thereof promptly, and, in any event, within fifteen (15) business days
of
discovery of any such Force Majeure condition. If notice of the existence of
any
Force Majeure condition is provided within such period, the time for performance
or cure shall be extended for a period equal to the duration of the Force
Majeure event or circumstance described in such notice, except that any such
cause shall not excuse the payment of any sums owed to SCEA prior to, during
or
after any such Force Majeure condition. In the event that the Force Majeure
condition continues for more than sixty (60) days, SCEA may terminate this
Agreement for cause by providing written notice to Publisher to such
effect.
16.4
No
Agency, Partnership or Joint Venture. The
relationship between SCEA and Publisher, respectively, is that of licensor
and
licensee. Both parties are independent contractors and are not the legal
representative, agent, joint venturer, partner or employee of the other party
for any purpose whatsoever. Neither party has any right or authority to assume
or create any obligations of any kind or to make any representation or warranty
on behalf of the other party, whether express or implied, or to bind the other
party in any respect whatsoever.
21
16.5
Assignment. SCEA
has
entered into this Agreement based upon the particular reputation, capabilities
and experience of Publisher and its officers, directors and employees.
Accordingly, Publisher may not assign this Agreement or any of its rights
hereunder, nor delegate or otherwise transfer any of its obligations hereunder,
to any third party unless the prior written consent of SCEA shall first be
obtained. This Agreement shall not be assigned in contravention of Section
14.2
(iii). Any attempted or purported assignment, delegation or other such transfer,
directly or indirectly, without the required consent of SCEA shall be void.
Subject to the foregoing, this Agreement shall inure to the benefit of the
parties and their respective successors and permitted assigns (other than under
the conditions set forth in Section 14.2 (iii). SCEA shall have the right to
assign any and all of its rights and obligations hereunder to any Sony
affiliate(s).
16.6
Subcontractors. Publisher
shall not sell, assign, delegate, subcontract, sublicense or otherwise transfer
or encumber all or any portion of the licenses herein granted without the prior
written approval of SCEA, provided, however, that Publisher may retain those
subcontractors who provide services which do not require access to SCE Materials
or SCEA's Confidential Information without such prior approval. Publisher may
retain those subcontractor(s) to assist with the development, publication and
marketing of Licensed PSP Products (or portions thereof) which have signed
(i)
an PSP LPA or PSP LDA with SCEA (the "PSP Agreement") in full force and effect
throughout the term of such development and marketing; or (ii) an SCEA-approved
subcontractor agreement ("Subcontractor Agreement"); and SCEA has approved
such
subcontractor in writing, which approval shall be in SCEA's sole discretion.
Such Subcontractor Agreement shall provide that SCEA is a third-party
beneficiary of such Subcontractor Agreement and has the full right to bring
any
actions against such subcontractors to comply in all respects with the terms
and
conditions of this Agreement. Publisher shall provide a copy of any such
Subcontractor Agreement to SCEA prior to and following execution thereof.
Publisher shall not disclose to any subcontractor any of SCEA's Confidential
Information, including, without limitation, any SCE Materials, unless and until
either a PSP Agreement or a Subcontractor Agreement has been executed and
approved by SCEA. Notwithstanding any consent which may be granted by SCEA
for
Publisher to employ any such permitted subcontractor(s), or any such separate
agreement(s) that may be entered into by Publisher with any such permitted
subcontractor, Publisher shall remain fully liable for its compliance with
all
of the provisions of this Agreement and for the compliance of any and all
permitted subcontractors with the provisions of any agreements entered into
by
such subcontractors in accordance with this Section. Publisher shall use its
best efforts to cause its subcontractors retained in furtherance of this
Agreement to comply in all respects with the terms and conditions of this
Agreement, and hereby unconditionally guarantees all obligations of its
subcontractors. SCEA may subcontract any of its rights or obligations
hereunder.
16.7
Compliance
with Applicable Laws.
The parties
shall at all times comply with all applicable regulations
and orders of their respective countries and other controlling jurisdictions
and
all conventions and treaties to which their countries are a party or relating
to
or in any way affecting this Agreement and the performance by the parties of
this Agreement. Each party, at its own expense, shall negotiate and obtain
any
approval, license or permit required in the performance of its obligations,
and
shall declare, record or take such steps to render this Agreement binding,
including, without limitation, the recording of this Agreement with any
appropriate governmental authorities (if required).
16.8
Governing
Law; Consent to Jurisdiction. This
Agreement shall be governed by and interpreted in accordance with the laws
of
the State of California, excluding that body of law related to choice of laws,
and of the United States of America. Any action or proceeding brought to enforce
the terms of this Agreement or to adjudicate any dispute arising hereunder
shall
be brought in the Superior Court of the County of San Mateo, State of California
or the United States District Court for the Northern District of California.
Each of the parties hereby submits itself to the exclusive jurisdiction and
venue of such courts for purposes of any such action and agrees that any service
of process may be effected by delivery of the summons in the manner provided
in
the delivery of notices set forth in Section 16.1 above. In addition, each
party
hereby waives the right to a jury trial in any action or proceeding related
to
this Agreement.
16.9
Legal
Costs and Expenses. In
the
event it is necessary for either party to retain the services of an attorney
or
attorneys to enforce the terms of this Agreement or to file or defend any action
arising out of this Agreement, then the prevailing party in any such action
shall be entitled, in addition to any other rights and remedies available to
it
at law or in equity to recover from the other party its reasonable fees for
attorneys and expert witnesses, plus such court costs and expenses as may be
fixed by any court of competent jurisdiction. The term "prevailing party" for
the purposes of this Section shall include a defendant who has by motion,
judgment, verdict or dismissal by the court, successfully defended against
any
claim that has been asserted against it.
16.10
Remedies. Unless
expressly set forth to the contrary, either party's election of any remedies
provided for in this Agreement shall not be exclusive of any other remedies,
and
all such remedies shall be deemed to be cumulative. Any breach of Sections
3, 4,
5, 6.1, 11 and 13 of this Agreement would cause significant and irreparable
harm
to SCEA, the extent of which would be difficult to ascertain. Accordingly,
in
addition to any other remedies including without limitation equitable relief
to
which SCEA may be entitled, in the event of a breach by Publisher or any of
its
employees or permitted subcontractors of any such Sections of this Agreement,
SCEA shall be entitled to the immediate issuance without bond of ex parte
injunctive relief or, if a bond is required under applicable law, on the posting
of a bond in an amount
not to exceed ***,
enjoining
any breach or threatened breach of any or all of such provisions. In addition,
if Publisher fails to comply with any of its obligations as set forth herein,
SCEA shall be entitled to an accounting and repayment of all forms of
compensation, commissions, remuneration or benefits which Publisher directly
or
indirectly realizes as a result of or arising in connection with any such
failure to comply. Such remedy shall be in addition to and not in limitation
of
any injunctive relief or other remedies to which SCEA may be entitled under
this
Agreement or otherwise at law or in equity. In addition, Publisher shall
indemnify SCEA for all losses, damages, liabilities, costs and expenses
(including reasonable attorneys' fees and all reasonable related costs) which
SCEA may sustain or incur as a result of any breach under this
Agreement.
22
16.11
Severability. In
the
event that any provision of this Agreement (or portion thereof) is determined
by
a court of competent jurisdiction to be invalid or otherwise unenforceable,
such
provision (or portion thereof) shall be enforced to the extent possible
consistent with the stated intention of the parties, or, if incapable of such
enforcement, shall be deemed to be deleted from this Agreement, while the
remainder of this Agreement shall continue in full force and remain in effect
according to its stated terms and conditions.
16.12
Sections Surviving Expiration
or
Termination. The
following sections shall survive the expiration or earlier termination of this
Agreement for any reason: 4, 5.8, 6.2, 6.4, 8, 9, 10, 11, 13, 14.5, 15, and
16.
16.13
Waiver. No
failure or delay by either party in exercising any right, power or remedy under
this Agreement shall operate as a waiver of any such right, power or remedy.
No
waiver of any provision of this Agreement shall be effective unless in writing
and signed by the party against whom such waiver is sought to be enforced.
Any
waiver by either party of any provision of this Agreement shall not be construed
as a waiver of any other provision of this Agreement, nor shall such waiver
operate or be construed as a waiver of such provision respecting any future
event or circumstance.
16.14
Modification and Amendment. No
modification or amendment of any provision of this Agreement shall be effective
unless in writing and signed by both of the parties. Notwithstanding the
foregoing, SCEA reserves the right to modify the PSP SourceBook from time to
time upon reasonable notice to Publisher.
16.15
Headings. The
section headings used in this Agreement are intended primarily for reference
and
shall not by themselves determine the construction or interpretation of this
Agreement or any portion hereof.
16.16
Integration. This
Agreement, together with the PSP SourceBook, constitutes the entire agreement
between SCEA and Publisher and supersedes all prior or contemporaneous
agreements, proposals, understandings and communications between SCEA and
Publisher, whether oral or written, with respect to the subject matter hereof
including any PSP Confidentiality and Nondisclosure Agreement and Materials
Loan
Agreement between SCEA and Publisher.
16.17
Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, and together shall constitute one and the same
instrument.
16.18
Construction. This
Agreement shall be fairly interpreted in accordance with its terms and without
any strict construction in favor of or against either of the
parties.
IN
WITNESS
WHEREOF, the
parties have caused this Agreement to be duly executed as of the day and year
first written above.
| SONY COMPUTER ENTERTAINMENT AMERICA INC. | DESTINATION SOFTWARE, INC. | |||
| By: | By: | |||
| Print Name: | Print Name: |
| Title: | Title: |
| Date: | Date: |
NOT
AN AGREEMENT UNTIL EXECUTED BY BOTH PARTIES
23