{"id":42495,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/licensed-publisher-agreement-sony-computer-entertainment.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"licensed-publisher-agreement-sony-computer-entertainment","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/licensed-publisher-agreement-sony-computer-entertainment.html","title":{"rendered":"Licensed Publisher Agreement – Sony Computer Entertainment America and BAM!"},"content":{"rendered":"\n (Confidential Portions Omitted)\n LICENSED PUBLISHER AGREEMENT\n\nLICENSED PUBLISHER AGREEMENT, entered into as of the 2nd day of February 2000 \n(the \"Agreement\" or \"LPA\"), by and between SONY COMPUTER ENTERTAINMENT AMERICA, \na division of Sony Computer Entertainment America Inc., with offices at 919 E. \nHillsdale Boulevard, Foster City, CA 94404 (hereinafter \"SCEA\"), and BAM!, with \noffices at 333 West Santa Clara Street, Suite 930 San Jose, CA 95113 \n(hereinafter \"Publisher\").\n\nWHEREAS, SCEA and\/or affiliated companies have developed a CD-based interactive \nconsole for playing video games and for other entertainment purposes known as \nthe PlayStation(R) game console (hereinafter referred to as the \"Player\") and \nalso own or have the right to grant licenses to certain intellectual property \nrights used in connection with the Player.\n\nWHEREAS, Publisher desires to be granted a non-exclusive license to publish, \nhave manufactured, market, distribute and sell Licensed Products (as defined \nbelow) pursuant to the terms and conditions set forth in this Agreement.\n\nWHEREAS, SCEA is willing, on the terms and subject to the conditions of this \nAgreement, to grant Publisher the desired non-exclusive license to publish, \nhave manufactured, market, distribute and sell Licensed Products in accordance \nwith the terms and conditions of this Agreement.\n\nNOW, THEREFORE, in consideration of the representations, warranties and \ncovenants contained herein, and other good and valuable consideration, the \nreceipt and sufficiency of which is hereby acknowledged, Publisher and SCEA \nhereby agree as follows:\n\n1. DEFINITION OF TERMS.\n\n 1.1 \"Advertising Materials\" means any advertising, marketing, \nmerchandising, promotional, public relations (including press releases) and \ndisplay materials relating to or concerning the Licensed Products, or any other \nadvertising, merchandising, promotional, public relations (including press \nreleases) and display materials depicting any of the Licensed Trademarks.\n\n 1.2 \"Affiliate of SCEA\" means, as applicable, either Sony Computer \nEntertainment Inc. in Japan, Sony Computer Entertainment Europe in the United \nKingdom or such other Sony Computer Entertainment entity as may be established \nby Sony Computer Entertainment Inc. from time to time.\n\n 1.3 \"CD Magazine\" means a magazine in PlayStation Disc format to be \nproduced by SCEA, which incorporates first and third party Product \nInformation, in addition to hints and tips, interviews and other SCEA and \nPlayer-related information, and which will be sold to subscribers and other \nconsumers or used for other promotional purposes of SCEA.\n\n 1.4 \"Consumer Promotional Disc Program\" shall have the meaning set forth \nin Section 1.36 hereto.\n\n 1.5 \"Designated Manufacturing Facility\" means a manufacturing facility \nwhich is designated by SCEA in its sole discretion to manufacture Licensed \nProducts and\/or component parts for the Player, which may include manufacturing \nfacilities owned and operated by affiliated companies of SCEA.\n\n 1.6 \"Development Tools\" means the development tools leased and licensed \nby SCEA to a Licensed Developer pursuant to a Licensed Developer Agreement for \nuse in the development of Executable Software.\n\n 1.7 \"Executable Software\" means Publisher's object code software which \ninclude Licensed Developer Software and any software (whether in object code or \nsource code form) provided directly or indirectly by SCEA or an Affiliate of \nSCEA which is intended to be combined with Licensed Developer Software for \nexecution on the Player and has the ability to communicate with the software \nresident in the Player.\n\n 1.8 \"Generic Line\" shall have the meaning set forth in Section 8.3 hereto.\n\n 1.9 \"Guidelines\" shall mean SCEA's Guidelines with respect to its \nIntellectual Property Rights, which may be set forth in the SourceBook or in \nother documentation provided by SCEA to Publisher.\n\n 1.10 \"Hit Title Rebate\" shall have the meaning set forth in Exhibit A, \nSection C hereto.\n\n 1.11 \"Intellectual Property Rights\" means, by way of example but not by \nway of limitation, all current and future worldwide patents and other patent \nrights, copyrights, trademarks, service marks, trade names, trade dress, mask \nwork rights, trade secret rights, technical information, know-how, and the \nequivalents of the foregoing under the laws of any jurisdiction, and all other \nproprietary or intellectual property rights throughout the universe, including \nwithout limitation all applications and registrations with respect thereto, and \nall renewals and extensions thereof.\n\n 1.12 \"Legal Copy\" means any legal or contractual information required to \nbe used in connection with a Licensed Product or Product Information, including \nbut not limited to copyright and trademark attributions, contractual credits \nand developer or distribution credits.\n\n\n -1-\n 2\n 1.13 \"Licensed Developer\" means any developer which is licensed by SCEA or\nan Affiliate of SCEA to develop Licensed Products pursuant to a valid and then\ncurrent Licensed Development Agreement.\n\n 1.14 \"Licensed Developer Agreement\" or \"LDA\" means a valid and current \nagreement or renewal thereof between a Licensed Developer and SCEA, or an \nequivalent such agreement between a Licensed Developer and an Affiliate of \nSCEA (e.g., the LDA with SCEE).\n\n 1.15 \"Licensed Developer Software\" means Licensed Developer's application \nsource code and data (including audio and video material) developed by a \nLicensed Developer in accordance with its LDA, which, either by itself or \ncombined with other Licensed Developer Software, when integrated with any \nsoftware (whether in object code or source code form) provided by SCEA or an \nAffiliate of SCEA, creates Executable Software.\n\n 1.16 \"Licensed Products\" means the Executable Software (which may be \ncombined with Executable Software of two or more Licensed Developers) which \nhas been approved by SCEA in accordance with the terms and conditions of this \nAgreement, and which is embodied on CD-ROM media in the form of PlayStation \nDiscs.\n\n 1.17 \"Licensed Publisher\" means any publisher which is licensed by SCEA \nto publish, have manufactured, market, distribute and sell Licensed Products \npursuant to a valid and then current Licensed Publisher Agreement.\n\n 1.18 \"Licensed Publisher Agreement\" or \"LPA\" means a valid and current \nagreement or renewal thereof between a Licensed Publisher and SCEA.\n\n 1.19 \"Licensed Territory\" means the United States (including its \npossessions and territories), Canada and Mexico, as may be modified and\/or \nsupplemented by SCEA from time to time pursuant to Section 4.4 below.\n\n 1.20 \"Licensed Trademarks\" means the trademarks, service marks, trade \ndress and logos designated by SCEA in the SourceBook or other documentation \nprovided by SCEA to Publisher as being licensed to Publisher. Nothing contained \nin this Agreement shall in any way grant Publisher the right to use the \ntrademark \"Sony\" in any manner as a trademark, trade name, service mark or \nlogo. SCEA may amend such Licensed Trademarks from time to time in the \nSourceBook or other documentation provided by SCEA to Publisher or upon written \nnotice to Publisher.\n\n 1.21 \"Manufacturing Specifications\" means specifications setting forth \nterms relating to the manufacturing and assembly of Licensed Products, \nPackaging, Printed Materials and their component parts, which shall be set \nforth in the SourceBook or other documentation provided by SCEA to Publisher.\n\n 1.22 \"Master Disc\" means a gold CD-ROM disc in the form requested by SCEA\ncontaining the final pre-production Executable Software for a Licensed Product,\nwhich has been approved by SCEA pursuant to Section 5.4 and meets the\nManufacturing Specifications.\n\n 1.23 \"Official Magazine Demo\" means a demo disc in PlayStation Disc \nformat, to be produced by SCEA, containing first and third party Product \nInformation, which will be \"packed-in\" to any official PlayStation magazine of \nSCEA or used for other promotional purposes of SCEA.\n\n 1.24 \"Packaging\" means, with respect to each Licensed Product, the \ncarton, containers, packaging, edge labels and other proprietary labels, trade \ndress and wrapping materials, including any jewel case (or other container) or \nparts thereof (including any portion of the jewel case containing Licensed \nTrademarks), but excluding Printed Materials and PlayStation Discs.\n\n 1.25 \"Pack-in Sampler Disc\" means a demo disc in PlayStation Disc format \nto be produced by SCEA, containing first and third party Product Information, \nwhich shall be \"packed-in\" to the Player hardware box or used for other \npromotional purposes of SCEA.\n\n 1.26 \"PlayStation Discs\" means the distinctive black PlayStation \ninteractive software CD-ROM discs compatible with the Player which are \nmanufactured on behalf of Publisher which contain the Licensed Product or SCEA \nDemo Discs.\n\n 1.27 \"Printed Materials\" means all artwork and mechanicals set forth on \nthe CD label of the PlayStation Disc relating to the Licensed Product and on or \ninside the jewel case (or other container) and\/or if applicable, on or inside \nthe box (or other) Packaging for the Licensed Product, and all instructional \nmanuals, liners, inserts, trade dress and other user information and\/or \nmaterials to be inserted into the jewel case and\/or other Packaging.\n\n 1.28 \"Product Information\" means either (i) object code of a Licensed \nProduct representing a playable portion of such Licensed Product (\"Demo\"); or \n(ii) a representative video sample of the Licensed Product; (iii) other \nLicensed Product related information, including but not limited to hints and \ntips, artwork, depictions of Licensed Product cover art, videotaped interviews, \netc. With respect to Product Information provided in Demo form, the Demo \ndelivered shall not consist of a complete game and shall be, at a minimum, an \namount sufficient to demonstrate the game's core features and value, without \nproviding too much game play so as to give the consumer a disincentive to \npurchase the complete Licensed Product, and such Demo shall also include any \nrequired Legal Copy on the title screen.\n\n 1.29 \"Purchase Order\" means a written purchase order processed in\naccordance with SCEA's instructions provided in this Agreement or provided\nseparately by SCEA to Publisher.\n\n\n - 2 -\n\n \n\n\n 3\n\n 1.30 \"Retail Sampler Disc\" means a demo disc in PlayStation Disc format to \nbe produced by SCEA, which contains first and third party Product Information, \nwhich will be sold at retail or used for other promotional purposes of SCEA.\n\n 1.31. \"SCEA Demo Disc\" means the SCEA developed and marketed demo discs, \nincluding the CD Magazine, Official Magazine Demo, Pack-in Sampler Disc, Retail \nSampler Disc, and any other first party demo disc created by SCEA subsequent to \nthe date of this Agreement in which SCEA invites Licensed Publishers to \nparticipate. Unless otherwise agreed in a separate agreement with Publisher, \nSCEA shall not charge any fees or royalties to Publisher for inclusion in SCEA \nDemo Discs.\n\n 1.32 \"SCEA Established Third Party Demo Disc Programs\" shall have the \nmeaning set forth in Section 1.36 hereto.\n\n 1.33 \"SCEA Product Code\" shall mean the product identification number \nassigned to each Licensed Product, which shall consist of separate product \nidentification numbers for multiple disc sets (i.e., SLUS-xxxxx). This SCEA \nProduct Code is used on the Packaging and PlayStation Disc relating to each \nLicensed Product, as well as on most communications between SCEA and Publisher \nas a mode of identifying the Licensed Product other than by title.\n\n 1.34 \"Sony Materials\" means any hardware, data, object code, source code, \ndocumentation (or any part(s) of any of the foregoing), including without \nlimitation any portion or portions of the Development Tools, which are provided \nor supplied by SCEA or an Affiliate of SCEA to Publisher or any Licensed \nDeveloper and\/or other Licensed Publisher.\n\n 1.35 \"SourceBook\" means the SourceBook (or any other reference guide \ncontaining information similar to the SourceBook but designated with a \ndifferent name) prepared by SCEA, which is provided separately to Publisher. \nThe SourceBook is designed to serve as the first point of reference by \nPublisher in every phase of the development, approval, manufacture and \nmarketing of Licensed Products.\n\n 1.36 \"Third Party Demo Disc\" means any demo disc in PlayStation Disc \nformat which contains Product Information and which SCEA has granted Publisher \npermission to produce or which complies with the terms of an SCEA Established \nThird Party Demo Disc Program. For purposes of this Agreement, \"SCEA \nEstablished Third Party Demo Disc Programs\" shall include (i) the Consumer \nPromotional Disc Program, whereby Publisher produces a sample disc, for \npromotional use only and not for resale, to promote Licensed Products to \nconsumers by creating a sampler containing Product Information from multiple \nLicensed Products or Product Information from a single Licensed Product; (ii) \nthe Trade Promotional Disc Program, whereby Publisher produces a sample disc \nincorporating a beta version of Publisher's Licensed Products which have been \nconcept approved by SCEA, for promotional use only and not for resale, to \npromote its Licensed Products to retailers, journalists and\/or trade partners \nprior to release of such Licensed Products and (iii) any other third party \ndemo disc program established by SCEA for Licensed Publishers in the future.\n\n 1.37 \"Trade Promotional Disc Program\" shall have the meaning set forth in \nSection 1.36 hereto.\n\n 1.38 \"Unit\" means a copy of each individual Licensed Product game title \nregardless of the number of PlayStation Discs constituting such Licensed \nProduct game title.\n\n2. LICENSE GRANT.\n\nSCEA hereby grants to Publisher, and Publisher hereby accepts, for the term of \nthis Agreement, within the Licensed Territory, under Intellectual Property \nRights owned or licensed by SCEA, a non-exclusive, non-transferable license, \nwithout the right to sublicense (except as specifically provided herein), to \npublish Licensed Products, which right to publish shall be limited to the \nfollowing rights and other rights set forth in this LPA: (i) to enter into \nagreements with Licensed Developers and other third parties pursuant to \nSections 3 and 17.5 hereto to develop Licensed Products which have been \napproved by SCEA in accordance with the terms of this LPA; (ii) to have such \nLicensed Products manufactured in accordance with the terms of this LPA; (iii) \nto market, distribute and sell such Licensed Products and to authorize others \nto do so in accordance with the terms of this LPA; (iv) to use the Licensed \nTrademarks strictly and only in connection with the marketing, packaging, \nadvertising and promotion of the Licensed Products, and subject to SCEA's right \nof approval as provided herein; (v) to sublicense to end users the right to use \nthe Licensed Products for noncommercial purposes only and not for public \nperformance; and (vi) from time to time to participate by invitation of SCEA in \nthe \"Third Party Greatest Hits\" program on terms and conditions to be \ndetermined and published by SCEA and separately agreed with Publisher.\n\n3. DEVELOPMENT OF LICENSED PRODUCTS.\n\nThis LPA grants Publisher the right to publish, have manufactured, market, \ndistribute and sell Licensed Products, and does not authorize Publisher to \ndevelop Licensed Products or to lease or license Development Tools from SCEA to \nassist in such development. In order for Publisher to have Licensed Products \ndeveloped for the Player or to lease or license Development Tools from SCEA to \nassist in such development, it must either (i) enter into a Licensed Developer \nAgreement directly with SCEA or with an Affiliate of SCEA; or (ii) enter into \nan agreement with a Licensed Developer for the development of Licensed \nProducts. Publisher may also publish, have manufactured, market, distribute \nand\/or sell Licensed Products for a Licensed Developer or another Licensed \nPublisher pursuant to the terms of this Agreement.\n\n\n\n -3-\n 4\nPublisher shall notify SCEA in writing of the identity of any third party or \nLicensed Developer with whom it has contracted to develop, publish, have \nmanufactured, market, distribute and\/or sell Licensed Products within thirty \n(30) days of entering into an agreement or other arrangement with the third \nparty. Publisher shall have the responsibility for determining that any \ndevelopers or other third parties meet the criteria set forth herein. It shall \nbe considered a material breach of this LPA for Publisher to provide \nDevelopment Tools or other Sony Materials to an unlicensed developer or other \nthird party.\n\n4. LIMITATIONS ON LICENSES; RESERVATION OF RIGHTS.\n\n 4.1 REVERSE ENGINEERING PROHIBITED. Publisher hereby agrees not to \ndirectly or indirectly disassemble, decrypt, electronically scan, peel \nsemiconductor components, decompile, or otherwise reverse engineer in any \nmanner or attempt to reverse engineer or derive source code from, all or any \nportion of the Sony Materials (whether or not all or any portion of the Sony \nMaterials are integrated with Licensed Developer Software), or permit or \nencourage any third party to do so. Publisher shall not use, modify, reproduce, \nsublicense, distribute, create derivative works from, or otherwise provide to \nthird parties, the Sony Materials, in whole or in part, other than as expressly \npermitted by this Agreement. Publisher shall be required in all cases to pay \nroyalties in accordance with Section 9 hereto to SCEA on any of Publisher's \nproducts utilizing Sony Materials. The burden of proof under this Section shall \nbe on Publisher, and SCEA reserves the right to require Publisher to furnish \nevidence satisfactory to SCEA that this Section has been complied with.\n\n 4.2 RESERVATION OF SCEA'S RIGHTS. The licenses granted in this Agreement \nfrom SCEA to Publisher extend only to publishing, manufacturing, marketing, \ndistribution and sale of Licensed Products for use on the Player, in such \nformat as may be designated by SCEA. Without limiting the generality of the \nforegoing and except as otherwise provided herein, Publisher shall not have the \nright to distribute or transmit the Executable Software or the Licensed \nProducts (to the extent each includes Sony Materials) via electronic means or \nany other means now known or hereafter devised, including without limitation, \nvia wireless, cable, fiber optic means, telephone lines, microwave and\/or \nradio waves, or over a network of interconnected computers or other devices. \nThis Agreement does not grant any right or license, under any Intellectual \nProperty Rights of SCEA or otherwise, except as expressly provided herein, and \nno other right or license is to be implied by or inferred from any provision of \nthis Agreement or the conduct of the parties hereunder. Publisher shall not \nmake use of any of the Sony Materials and\/or any Intellectual Property Rights \nor Licensed Trademarks related to the Sony Materials and\/or Player (or any \nportion thereof) except as authorized by and in compliance with the provisions \nof this Agreement or as may be otherwise expressly authorized in writing by \nSCEA. No right, license or privilege has been granted to Publisher hereunder \nconcerning the development of any collateral product or other use or purpose of \nany kind whatsoever which displays or depicts any of the Licensed Trademarks. \nThe rights set forth in Section 2(v) hereto are limited to the right to \nsublicense such rights to end users for non-commercial use; any public \nperformance relating to the Licensed Product or the Player is prohibited unless \nexpressly authorized in writing by SCEA.\n\n 4.3 RESERVATION OF PUBLISHER'S RIGHTS. Separate and apart from Sony \nMaterials licensed to Publisher hereunder, Publisher (or a Licensed Developer, \nas determined between Publisher and such Licensed Developer) retains all \nrights, title and interest in and to the Licensed Developer Software, including \nwithout limitation, Publisher's (or Licensed Developer's) Intellectual Property \nRights therein, as well as all of Publisher's (or Licensed Developer's) rights \nin any source code and other underlying material such as artwork and music \nrelated thereto, created by Publisher (or Licensed Developer) and contained \ntherein, and nothing in this Agreement shall be construed to restrict the right \nof Publisher to develop, distribute or transmit products incorporating the \nLicensed Developer Software and such underlying material (separate and apart \nfrom the Sony Materials) for any hardware platform or service other than the \nPlayer or from using the Printed Materials or any Advertising Materials \napproved by SCEA as provided herein (provided that such Printed Materials \nand\/or Advertising Materials do not contain any Licensed Trademarks) as \nPublisher determines for such other platforms.\n\n 4.4 ADDITIONS TO AND DELETIONS FROM LICENSED TERRITORY. SCEA may, from \ntime to time, add one or more countries to the Licensed Territory by providing \nwritten notice of such addition to Publisher. SCEA shall also have the right to \ndelete, and intends to delete any country or countries from the Licensed \nTerritory if, in SCEA's reasonable judgment, the laws or enforcement of such \nlaws in such country or countries do not protect SCEA's Intellectual Property \nRights. In the event a country is deleted from the Licensed Territory, \nSCEA shall deliver to Publisher a notice stating the number of days within \nwhich Publisher shall cease exercising such licenses in the deleted country or \ncountries. Publisher agrees to cease exercising such licenses, directly or \nthrough subcontractors, in such deleted country or countries, by the end of the \nperiod stated in such notice.\n\n5. QUALITY STANDARDS FOR THE LICENSED PRODUCTS.\n\n 5.1 QUALITY ASSURANCE GENERALLY. The Licensed Products, including, \nwithout limitation, the contents and title of each of the Licensed Products, \nand\/or Publisher's use of any of the Licensed Trademarks, shall be subject to \nSCEA's prior written approval, which shall not be unreasonably withheld or \ndelayed and which shall be within SCEA's sole discretion as to acceptable \nstandards of quality. SCEA shall have the right at any stage of the development \nof the Licensed Product to review such Licensed Product to ensure that it meets \nSCEA's quality assurance standards. Publisher agrees that all Licensed Products \nwill be designed (if an original title for the Player)\n\n -4-\n\n \n\n 5\nor modified (if a pre-existing title) to substantially utilize the particular \ncapabilities of the Sony Materials and the Player, including but not limited to \nutilizing the software libraries and graphics capabilities of the Player.\n\n 5.2 PRODUCT PROPOSALS.\n\n 5.2.1 SUBMISSION OF PRODUCT PROPOSAL. Before Publisher contracts with \na Licensed Developer for the creation of Licensed Developer Software (or, if \nPublisher is also a Licensed Developer, before Publisher commences programming \nof the Licensed Developer Software) for each of the Licensed Products, \nPublisher shall submit to SCEA, for SCEA's written approval or disapproval \n(which shall not be unreasonably withheld or delayed), a written proposal (the \n\"Product Proposal\") in accordance with the procedures specified in the \nSourceBook. Such Product Proposal must consist of a complete description of the \nproposed Licensed Product and such other information specified in the \nSourceBook, including but not limited to the scheduled and\/or anticipated \ndelivery date of final Executable Software, as well as any additional \ninformation that SCEA may deem to be useful in evaluating the proposed licensed \nProduct, which may include samples of past work.\n\n 5.2.2 APPROVAL OF PRODUCT PROPOSAL. After SCEA's review of \nPublisher's Product Proposal, Publisher will receive written notice of the \nfollowing possible statuses: (i) Approved; (ii) Conditional Approval; (iii) \nRe-submission Requested; or (iv) Not Approved. Such statuses shall have the \nmeaning ascribed to them in the SourceBook, and may be changed from time to \ntime by SCEA in subsequent versions of the SourceBook. Any requested \nre-submissions shall be made at Publisher's cost. If a Product Proposal is \"Not \nApproved\", then Publisher cannot re-submit such Product Proposal without \nsignificant, substantive revisions. In addition, if a Product Proposal as \nsubmitted by any Licensed Publisher or Licensed Developer is \"Not Approved\" by \nSCEA, it cannot be re-submitted by another Licensed Publisher or Licensed \nDeveloper without significant, substantive revisions. Publisher shall notify \nSCEA promptly in writing in the event of any material proposed change in any \nportion of the Product Proposal. SCEA's approval of a Product Proposal shall \nnot obligate Publisher to continue with development or production of the \nproposed Licensed Product, provided that Publisher must immediately notify SCEA \nin writing if it discontinues, cancels or otherwise delays past the original \nscheduled delivery date the development of any proposed Licensed Product. If \nPublisher licenses a Licensed Product from a Licensed Developer, it shall \nimmediately notify SCEA of such license, and SCEA will inform Publisher as to \nthe status of the Product Proposal and Review Process for such Licensed Product \nand this Agreement shall govern the approval process of such Licensed Product \nafter any such notification. SCEA shall have no obligation to approve any \nProduct Proposal submitted by Publisher, and any development conducted by or at \nthe direction of Publisher shall be at Publisher's own risk. Nothing herein \nshall restrict SCEA from commercially exploiting any coincidentally similar \nconcept(s) and\/or product(s) which have been independently developed by SCEA, \nan Affiliate of SCEA or any third party without reference to or reliance upon \nPublisher's work.\n\n 5.3 REVIEW OF WORK-IN-PROGRESS. SCEA has the right pursuant to this \nAgreement to require Publisher to submit to SCEA work-in-progress on the \nLicensed Product at certain intervals throughout the development of such \nLicensed Product and, upon written notice to Publisher, at any time during the \ndevelopment process. Upon receipt by Publisher of \"Approved\" or \"Conditional \nApproval\" status of the Licensed Product, Publisher must, within the time frame \nindicated in the approval letter, communicate with SCEA and mutually agree on a \nframework for the review of such Licensed Product throughout the development \nprocess (\"Review Process\"). Once the Review Process has begun, Publisher shall \nbe responsible for submitting work-in-progress to SCEA in accordance with such \nReview Process. FAILURE TO SUBMIT WORK-IN-PROGRESS IN ACCORDANCE WITH ANY STAGE \nOF THE REVIEW PROCESS MAY AT SCEA'S DISCRETION, RESULT IN REVOCATION OF \nAPPROVAL OF SUCH LICENSED PRODUCT. SCEA shall have the right to approve, reject \nor require additional information with respect to each stage of the Review \nProcess, which shall not be unreasonably withheld or delayed by SCEA. SCEA \nshall specify in writing the reasons for any such rejection or request for \nadditional information and shall state what corrections and\/or improvements are \nnecessary. If any stage of the Review Process is not provided to SCEA or, after \na reasonable cure period agreed to between SCEA and Publisher, is not \nsuccessfully met, SCEA shall have the right to revoke the approval of \nPublisher's Product Proposal. No approval by SCEA of any particular stage of \nthe Review Process shall be deemed an approval of any other stage, nor shall \nany such approval be deemed to constitute a waiver of any approval requirement \nwith respect to any other stage or any of SCEA's rights under this Agreement. \nLICENSED PRODUCTS WHICH ARE CANCELED BY PUBLISHER OR ARE LATE IN MEETING THE \nFINAL EXECUTABLE SOFTWARE STAGE OF THE REVIEW PROCESS BY MORE THAN THREE (3) \nMONTHS (WITHOUT AGREEING WITH SCEA ON A MODIFIED FINAL EXECUTABLE SOFTWARE \nDELIVERY DATE) ARE SUBJECT TO RE-SUBMISSION OF PRODUCT PROPOSAL, IN WHICH EVENT \nSCEA MAY RE-APPROVE OR DISAPPROVE SUCH PRODUCT PROPOSAL. The \"Approved\" or \n\"Conditional Approval\" status of the Product Proposal shall not be construed by \nPublisher as full approval of all elements of such Licensed Product, or as a \ncommitment by SCEA to grant final approval to the Licensed Product. Failure to \nmake changes required by SCEA to the Licensed Product at any stage of the \nReview Process, or making material changes to the Licensed Product without \nSCEA's approval may, in addition to the provisions set forth in this Section, \nsubject Publisher to the termination provisions set forth in Section 15.3 \nhereto.\n\n 5.4 APPROVAL OF EXECUTABLE SOFTWARE. Publisher shall, on or before the \ndate specified in the Product Proposal or as determined by SCEA pursuant to the \nReview Process, deliver to SCEA for its inspection and evaluation, a final \nversion of the Executable Software for the proposed Licensed Product. SCEA will \nevaluate such final version \n\n -5-\n 6\nof the Executable Software and notify Publisher in writing of its approval or \ndisapproval of such Executable Software, which shall not be unreasonably \nwithheld or delayed. If such Executable Software is disapproved, SCEA shall \nspecify in writing the reasons for such disapproval and state what corrections \nand\/or improvements are necessary. After making the necessary corrections \nand\/or improvements, Publisher may submit a new version of such Executable \nSoftware for approval or disapproval by SCEA. No approval by SCEA or any \nelement of the Executable Software shall be deemed an approval of any other \nelement of the Licensed Product, nor shall any such approval be deemed to \nconstitute a waiver of any of SCEA's rights under this Agreement. SCEA shall \nhave the right to disapprove Executable Software if it fails to comply with one \nor more conditions as set forth in the SourceBook with no obligation to review \nall elements of such version of Executable Software. All final versions of \nExecutable Software shall be submitted in the format prescribed by SCEA and \nshall include such number of gold master copies as SCEA may require from time \nto time. Publisher warrants that all final versions of Executable Software are \nfully tested and shall use its best efforts to ensure that final versions of \nExecutable Software are fully debugged prior to submission to SCEA. In \naddition, prior to manufacture of Executable Software, Publisher shall be \nrequired to sign an affidavit (in the form of attached Exhibit B) stating that \nthe Executable Software complies or will comply with standards set forth in the \nSourceBook or other documentation provided by SCEA to Publisher, Publisher \napproves the release of such Executable Software for manufacture in its current \nform and Publisher shall be fully responsible for any problems related to such \nExecutable Software.\n\n 5.5 PUBLISHER'S ADDITIONAL QUALITY ASSURANCE OBLIGATIONS. If at any \ntime or times subsequent to the approval of the Executable Software pursuant to \nSection 5.4, SCEA identifies any material bugs (such materiality to be \ndetermined by SCEA in its sole discretion) with respect to the Licensed Product \nor any material bugs are brought to the attention of SCEA or in the event that \nSCEA identifies any improper use its Licensed Trademarks or other Sony \nMaterials with respect to the Licensed Product or any such improper use is \nbrought to the attention of SCEA, Publisher shall, at no cost to SCEA, promptly \ncorrect any such material bugs, or improper Licensed Trademark or Sony Material \nuse, to SCEA's commercially reasonable satisfaction, which may include, if \nnecessary in SCEA's judgment, the recall and re-release of such Licensed \nProduct. In the event any Units of any of the Licensed Products create any \nreasonable risk of loss or damage to any property or injury to any person, \nPublisher shall immediately take effective steps, at Publisher's sole liability \nand expense, to recall and\/or to remove such defective Licensed Product from \nany affected channels of distribution, provided, however, that if Publisher is \nnot acting as the distributor and\/or seller for the Licensed Products, its \nobligation hereunder shall be to use its best efforts to arrange removal of \nsuch Licensed Product from channels of distribution. Publisher shall provide \nall end-user support for the Licensed Products and SCEA expressly disclaims any \nobligation to provide end-user support on Publisher's Licensed Products.\n\n 5.6 APPROVAL OF PRINTED MATERIALS. For each proposed Licensed Product,\nPublisher shall be responsible, at Publisher's expense, for creating and\ndeveloping all Printed Materials. All Printed Materials shall comply with the\nGuidelines, which may be amended from time to time, provided that Publisher\nshall, except as otherwise provided herein, only be required to implement any\nsuch amended Guidelines in subsequent orders of Printed Materials and shall not\nbe required to recall or destroy previously manufactured Printed Materials\nunless such Printed Materials do not comply with the original requirements in\nthe Guidelines or unless explicitly required in writing by SCEA pursuant to a\nlegal requirement involving SCEA's Intellectual Property Rights. Failure to\nfollow the Guidelines and\/or to submit or resubmit Printed Materials to SCEA as\nset forth herein, and in Section 7.1.3.1 hereto shall be a material breach of\nthis Agreement and the provisions of Section 15.3 shall apply. No later than the\ntime final Executable Software for a proposed Licensed Product is submitted to\nSCEA for inspection and evaluation, Publisher shall also deliver to SCEA, for\nreview and evaluation, the proposed final Printed Materials for such proposed\nLicensed Product and a form of limited warranty for the proposed Licensed\nProduct. Publisher acknowledges that failure to meet any scheduled release dates\nfor a Licensed Product are solely the risk and responsibility of Publisher, and\nSCEA assumes no responsibility for Publisher failing to meet such scheduled\nrelease dates due to disapproval of Printed Materials relating to such Licensed\nProduct. Publisher agrees that the quality of such Printed Materials shall be of\nthe same quality of that associated with other commercially available high\nquality consumer products. If any of the Printed Materials are disapproved, SCEA\nshall specify the reasons for such disapproval and state what corrections are\nnecessary. SCEA shall have no liability to Publisher for costs incurred or\nirrevocably committed to by Publisher for production of Packaging or Printed\nMaterials that is disapproved by SCEA. After making the necessary corrections to\nthe disapproved Printed Materials, Publisher must submit new proposed Printed\nMaterials for approval by SCEA. SCEA shall not unreasonably withhold or delay\nits review of the proposed Printed Materials. No approval by SCEA of any element\nof the Printed Materials shall be deemed an approval of any other element of the\nLicensed Product, nor shall any such approval by deemed to constitute a waiver\nof any of SCEA's rights under this Agreement. In addition, SCEA's approval of\nany element of Printed Materials shall not release Publisher from any of its\nrepresentations and warranties in Section 10.2 hereunder.\n\n 5.7 APPROVAL OF ADVERTISING MATERIALS. Pre-production samples of all \nAdvertising Materials relating to Licensed Products shall be submitted by \nPublisher to SCEA, free of cost, for SCEA's evaluation and approval, which \nshall not be unreasonably withheld or delayed, as to the quality, style, \nappearance and usage of any of the Licensed Trademarks, appropriate references \nof any\n\n\n -6-\n 7\nrequired notices and compliance with the Guidelines, prior to any actual \nproduction, use or distribution of any such items by Publisher or on its \nbehalf. No such proposed Advertising Materials shall be produced, used or \ndistributed directly or indirectly by Publisher without first obtaining the \nwritten approval of SCEA. If any of the Advertising Materials are disapproved, \nSCEA shall specify the reasons for such disapproval and state what corrections \nare necessary. SCEA may require Publisher to immediately withdraw and reprint \nany Advertising Materials which have been published but have not received the \nwritten approval of SCEA. SCEA shall have no liability to Publisher for costs \nincurred or irrevocably committed to by Publisher for production of Advertising \nMaterials that are disapproved by SCEA. For each Licensed Product, Publisher \nshall be required to deliver to SCEA an affidavit (in the form of attached \nExhibit C) stating that all advertising and promotional materials for the \nLicensed Product complies or will comply with the Guidelines for use of the \nLicensed Trademarks. After making the necessary corrections to the disapproved \nAdvertising Materials, Publisher must submit new proposed Advertising Materials \nfor approval by SCEA. SCEA shall not unreasonably withhold or delay its review \nof the proposed Advertising Materials. Failure to follow the Guidelines and\/or \nto submit or resubmit Advertising Materials to SCEA for review shall be a \nmaterial breach of this Agreement. PUBLISHERS WHO FAIL TO SUBMIT ADVERTISING \nMATERIALS TO SCEA FOR REVIEW OR OTHERWISE BROADCAST OR PUBLISH ADVERTISING \nMATERIALS WITHOUT THE APPROVAL OF SCEA SHALL BE SUBJECT TO THE PROVISIONS OF \nTHE \"THREE STRIKES\" PROGRAM AS OUTLINED IN THE SOURCEBOOK WHICH COULD RESULT IN \nTERMINATION OF THIS LPA; TERMINATION OF THE LICENSED PRODUCT; OR COULD SUBJECT \nPUBLISHER TO THE PROVISIONS OF SECTION 15.4 HERETO. Subject in each instance to \nthe prior written approval of SCEA (not to be unreasonably withheld), Publisher \nmay use such textual and\/or pictorial advertising matter (if any) as may be \ncreated by SCEA or in its behalf pertaining to the Sony Materials and\/or to the \nLicensed Trademarks on such promotional and advertising materials as may, in \nPublisher's judgment, promote the sale of the Licensed Products within the \nLicensed Territory. Publisher shall include, at Publisher's cost and expense, \nthe required consumer advisory rating code(s) on any and all Advertising \nMaterials used in connection with the Licensed Product, which shall be procured \nin accordance with the provisions of Section 6 below. Publisher acknowledges \nthat failure to meet any scheduled release dates for Advertising Materials is \nsolely the risk and responsibility of Publisher, and SCEA assumes no \nresponsibility for Publisher failing to meet such scheduled release dates due \nto approval requirements as set forth in this Section. No approval by SCEA of \nany element of the Advertising Materials shall be deemed an approval of any \nother element of the Licensed Product, nor shall any such approval be deemed to \nconstitute a waiver of any of SCEA's rights under this Agreement. In addition, \nSCEA's approval of any element of Advertising Materials shall not release \nPublisher from any of its representations and warranties in Section 10.2 \nhereunder.\n\n6. LABELING REQUIREMENTS.\n\nAll Printed Materials for each Unit of the Licensed Products shall have \nconspicuously, legibly and irremovably affixed thereto the notices specified in \na template provided in the SourceBook or other documentation provided by SCEA \nto Publisher, which template may be amended from time to time by SCEA during \nthe term of this Agreement, following which Publisher will incorporate such \namendment into its next print run for the Licensed Products. Publisher agrees \nthat, if required by SCEA or any governmental entity, it shall submit each \nLicensed Product to a consumer advisory ratings system designated by SCEA \nand\/or such governmental entity for the purpose of obtaining rating code(s) for \neach Licensed Product. Any and all costs and expenses incurred in connection \nwith obtaining such rating code(s) shall be borne solely by Publisher. Any \nrequired consumer advisory rating code(s) procured hereby shall be displayed on \nthe Licensed Product and in the associated Printed Materials and Advertising \nMaterials in accordance with the SourceBook or other documentation provided by \nSCEA to Publisher, at Publisher's cost and expense.\n\n7. MANUFACTURE OF THE LICENSED PRODUCTS.\n\n 7.1 MANUFACTURE BY SCEA.\n\n 7.1.1 APPOINTMENT OF SCEA AS MANUFACTURER. Publisher hereby appoints \nSCEA, and SCEA hereby accepts such appointment, as the manufacturer of \nPlayStation Discs and, subject to Section 7.1.3 below, the manufacturer and \nassembler of such PlayStation Discs with Printed Materials and Packaging. \nPublisher acknowledges and agrees that it shall purchase from SCEA or a \nDesignated Manufacturing Facility [*] of its requirements for PlayStation \nDiscs, during the term of the Agreement. SCEA shall provide to Publisher \nwritten Manufacturing Specifications, which may be amended from time to time \nupon reasonable notice to Publisher. SCEA shall have the right, but no \nobligation, to contract or subcontract any phase of production or manufacture \nof any or all of the Licensed Products, the Packaging, the Printed Materials or \nany part thereof, subject to Section 14 below. Any Designated Manufacturing \nFacility shall be a third party beneficiary of this Agreement.\n\n 7.1.2 CREATION OF MASTER CD-ROM. Following approval by SCEA of each \nLicensed Product pursuant to Section 5.4, Publisher shall provide SCEA with the \nnumber of Master Discs specified in the SourceBook or in any other \ndocumentation separately provided by SCEA to Publisher. SCEA or a Designated \nManufacturing Facility shall create from one of the Master Discs provided by \nPublisher the original master CD-ROM, from which all other copies of the \nLicensed Product are to be replicated. Publisher shall be responsible for the \ncosts, as set forth in the Manufacturing Specifications, of creating such \noriginal master CD-ROM. In order to insure against loss or damage to the copies \nof the Executable Software furnished to SCEA, Publisher will retain duplicates \nof all such Master\n\n\n -7-\n\n\n* Confidential portion omitted and filed separately with the Commission.\n 8\nDiscs. Neither SCEA nor a Designated Manufacturing Facility shall be liable for \nloss of or damage to any copies of the Master Discs or Executable Software.\n\n 7.1.3 PRINTED MATERIALS, PACKING AND ASSEMBLY SERVICES.\n\n 7.1.3.1 PRINTED MATERIALS. If Publisher elects to obtain Printed \nMaterials from SCEA, Publisher shall deliver the film for all SCEA approved \nPrinted Materials to SCEA or, if appropriate, at SCEA's option, to a Designated\nManufacturing Facility in accordance with the Manufacturing Specifications, at \nPublisher's sole risk and expense. Publisher may elect, subject to SCEA's \napproval as provided in Section 5.6 hereto and in this section, to be \nresponsible for manufacturing its own Printed Materials. In the event that \nPublisher elects to be responsible for manufacturing the Printed Materials \n(other than any Artwork which may be placed directly upon the PlayStation Disc, \nwhich will be supplied to SCEA for placement on the PlayStation Disc), \nPublisher shall deliver one hundred and ten percent (110%) of the number of \nUnits of such Printed Materials to SCEA or at SCEA's option to a Designated \nManufacturing Facility, within the time frame specified in the Manufacturing \nSpecifications, in the minimum order quantities set forth in Section 7.2.2 \nbelow, at Publisher's sole risk and expense. Publisher shall be required to \nsupply SCEA with twenty-four (24) samples of any Printed Materials not produced \nor supplied by SCEA or a Designated Manufacturing Facility prior to production, \nat no charge to SCEA or such Designated Manufacturing Facility, for SCEA's \napproval with respect to the quality thereof. Twelve (12) copies of such sample \nPrinted Materials shall be supplied to SCEA and twelve (12) copies shall be \nsupplied to a Designated Manufacturing Facility. In the event that such Printed \nMaterials for a Licensed Product are revised by Publisher prior to a reorder of \nUnits of Licensed Products, then Publisher must submit an additional \ntwenty-four (24) samples to SCEA and a Designated Manufacturing Facility for \napproval prior to production. Such Printed Materials shall be required to \ncomply with any Manufacturing Specifications established by SCEA for Printed \nMaterials for Licensed Products, and SCEA shall have the right to disapprove \nany Printed Materials that do not comply with such Manufacturing \nSpecifications. Such Manufacturing Specifications for Printed Materials shall \nbe comparable to the manufacturing specifications applied by SCEA to its own \nsoftware products for the Player. If Publisher elects to supply its own Printed \nMaterials, neither SCEA nor a Designated Manufacturing Facility shall bear any \nresponsibility for any delays.\n\n 7.1.3.2 PACKAGING. Publisher may either obtain Packaging from SCEA or\nfrom an alternate source. If Publisher elects to be responsible for\nmanufacturing its own Packaging (other than any edge labels or other proprietary\nlabels and any portion of the jewel case containing Licensed Trademarks, which\nPublisher will be required to purchase from SCEA or a Designated Manufacturing\nFacility), Publisher shall assume all responsibility for the creation of such\nPackaging, at Publisher's sole risk and expense. Publisher shall be responsible\nfor encoding and printing edge labels provided by SCEA or a Designated\nManufacturing Facility with information reasonably specified by SCEA from time\nto time and will apply such labels to each Unit of the Licensed Product as\nreasonable specified by SCEA. Publisher shall be required to supply SCEA with\ntwenty-four (24) samples of any Packaging not produced or supplied by SCEA or a\nDesignated Manufacturing Facility, at no charge to SCEA or Designated\nManufacturing Facility, prior to production for SCEA's approval with respect to\nthe quality thereof. Twelve (12) copies of such sample Packaging shall be\nsupplied to SCEA and twelve (12) copies shall be supplied to a Designated\nManufacturing Facility. In the event that Packaging for any Licensed Product is\nchanged in any way after SCEA and a Designated Manufacturing Facility have\nalready approved such Packaging, then Publisher must resubmit an additional\ntwenty-four (24) samples to SCEA and such Designated Manufacturing Facility for\napproval. Failure to submit or resubmit Packaging to SCEA and a Designated\nManufacturing Facility shall constitute a material breach of this Agreement, and\nthe provisions of Section 15.3 shall apply. Such Packaging shall be required to\ncomply with any Manufacturing Specifications established by SCEA for Packaging\nfor Licensed Products, and SCEA shall have the right to disapprove any Packaging\nthat does not comply with such Manufacturing Specifications. Such Manufacturing\nSpecifications for Packaging shall be comparable to the manufacturing\nspecifications applied by SCEA to its own software products for the Player. If\nPublisher procures Packaging from an alternate source, then it must also procure\nassembly services from an alternate source; neither SCEA nor a Designated\nManufacturing Facility shall be required to assemble such Licensed Product if\nPackaging is obtained from an alternate source. If Publisher elects to supply\nits own Packaging and assembly services, neither SCEA nor a Designated\nManufacturing Facility shall bear any responsibility for any delays.\n\n 7.1.3.3 ASSEMBLY SERVICES. Publisher may either procure assembly \nservices from SCEA or from an alternate source. If Publisher elects to be \nresponsible for assembling the Licensed Products, then SCEA shall ship the \ncomponent parts of the Licensed Product to a destination provided by Publisher, \nat Publisher's sole risk and expense. Assembly of Licensed Products shall be \nrequired to comply with any Manufacturing Specifications established by SCEA \nfor such assembly services, and SCEA shall have the right to inspect any \nassembly facilities utilized by Publisher in order to determine if the \ncomponent parts of the Licensed Products are being assembled in accordance with \nthe Manufacturing Specifications. SCEA shall have the right to require that \nPublisher recall any Licensed Products that do not contain proprietary labels \nor other material component parts or that otherwise fail to comply with the \nManufacturing Specifications. If Publisher elects to assemble its own Licensed \nProducts, neither SCEA nor a Designated Manufacturing Facility shall bear any \nresponsibility for any delays or missing component parts. Failure to comply \nwith Manufacturing Specifications regarding assembly services shall constitute \na material\n\n\n -8-\n\n 9\nbreach of this Agreement, and the provisions of Section 15.3 shall apply.\n\n 7.1.4 MANUFACTURE OF UNITS. Upon approval, pursuant to Section 5 and\nsubject to Section 7.1.3, of such pre-production samples of the Executable\nSoftware and the associated Printed Materials, Packaging and assembly services,\nSCEA or a Designated Manufacturing Facility will, in accordance with the terms\nand conditions set forth in this Section 7, and at Publisher's expense (a)\nmanufacture PlayStation Discs for Publisher; (b) manufacture Publisher's\nPackaging and\/or Printed Materials; and\/or (c) assemble the PlayStation Discs\nwith the Printed Materials and the Packaging.\n\n 7.2 PRICE, PAYMENT AND TERMS.\n\n 7.2.1 PRICE. The applicable price for manufacture of any Units of the\nLicensed Products ordered hereunder shall be provided to Publisher in the\nManufacturing Specifications prior to manufacture of the Licensed Products.\nPurchase price(s) shall be stated in United States dollars and are subject to\nchange by SCEA at any time upon reasonable notice to Publisher; provided,\nhowever, that the applicable price shall not be changed with respect to any\nUnits of Licensed Products which are the subject of an effective Purchase Order\nbut which have not yet been delivered by SCEA to Publisher at the designated\nF.O.B. point. Prices for finished Units of Licensed Products are exclusive of\nany foreign or U.S. federal, state, or local sales or value-added tax, use,\nexcise, customs duties or other similar taxes or duties, which SCEA may be\nrequired to collect or pay as a consequence of the sale or delivery of any Units\nof the Licensed Products to Publisher. Publisher shall be solely responsible for\nthe payment or reimbursement of any such taxes, fees and other such charges or\nassessments applicable to the sale and\/or purchase of any finished Units of any\nof the Licensed Products.\n\n 7.2.2 ORDERS. Publisher shall issue to SCEA written Purchase Order(s)\nin accordance with the Manufacturing Specifications. All Purchase Orders to SCEA\nshall reference this Agreement, give a Publisher authorization number, specify\nquantities by Licensed Products, state requested delivery date and all packaging\ninformation and be submitted on or with an order form to be provided in the\nManufacturing Specifications. All Purchase Orders to SCEA shall be subject to\nacceptance by SCEA which shall not be unreasonably withheld or delayed. Purchase\nOrders issued by Publisher to SCEA for each of the Licensed Products approved by\nSCEA shall be non-cancelable and be for at least [*] Units of such Licensed\nProduct. In the event that SCEA or a Designated Manufacturing Facility\nmanufactures the Printed Materials for the Publisher pursuant to Section 7.1.3\nabove, Publisher may, at Publisher's option, allow SCEA or such Designated\nManufacturing Facility to manufacture an additional 20% of such Printed\nMaterials at Publisher's expense on anticipation of reorders. Publisher agrees\nthat such Printed Materials will be stored by a Designated Manufacturing\nFacility for a period of no more than one hundred and eighty (180) days, after\nwhich time such Printed Materials will, at Publisher's option, either be\nreturned to Publisher at Publisher's cost and expense or be destroyed. Such\nDesignated Manufacturing Facility may also store a reasonably quantity of\nPrinted Materials procured from an alternate source for up to one hundred and\neighty (180) days, subject to a reasonable storage fee, after which time such\nPrinted Materials will, at Publisher's option, either be returned to Publisher\nat Publisher's cost and expense or be destroyed. Publisher shall have no right\nto cancel or reschedule any Purchase Order (or any portion thereof) for any of\nthe Licensed Products unless the parties shall first have determined the status\nof such Purchase Order in the manufacturing process and reached mutual agreement\nas to Publisher's financial liability with respect to any desired cancellation\nor rescheduling of any such Purchase Order (or any portion thereof).\n\n\n 7.2.3 PAYMENT TERMS. Purchase Orders will be invoiced on a pro forma\nbasis (a pro forma invoice is issued in advance of the official invoice) as soon\nas reasonably practical after receipt of Purchase Order and will include both\nmanufacturing price and royalties payable pursuant to Section 9 hereto for each\nUnit of Licensed Products ordered. Each invoice will be payable either on a\ncash-in-advance basis or pursuant to a letter of credit. If the cash in advance\noption is selected, then upon issuance of a pro forma invoice to Publisher by\nSCEA, Publisher shall immediately forward to a Designated Manufacturing Facility\nthe invoice amount. Such amount shall be payable in United States dollars and\nremitted by wire transfer to such bank account as shall be designated by SCEA or\na Designated Manufacturing Facility for such purpose. Upon receipt of such\namount by a Designated Manufacturing Facility, SCEA shall release the\nPublisher's Purchase Order to a Designated Manufacturing Facility for\nproduction. If the letter of credit option is selected, then at the time a\nPurchase Order is placed with SCEA, Publisher shall provide to SCEA an\nirrevocable letter of credit in favor of SCEA and payable at sight. The letter\nof credit must either be issued by a bank acceptable to SCEA or confirmed, at\nPublisher's expense, if so requested by SCEA. The letter of credit shall be in\nUnited States dollars in an amount equal to the manufacturing price determined\npursuant to Section 7.2.1 and the royalty determined pursuant to Section 9 for\neach Unit of the License Product ordered. All associated banking charges with\nrespect to payments of manufacturing costs and royalties (including but not\nlimited to the costs of obtaining a letter of credit) shall be borne solely by\nPublisher. If permitted by SCEA, SCEA may at its sole discretion extend credit\nterms and limits to Publisher. SCEA may also at any time revoke such credit\nterms and limits as extended. If Publisher qualifies for such credit terms, then\norders will be invoiced upon shipment and each invoice will be paid within\n[*] days of the date of the invoice. All overdue sums owed nor otherwise\npayable to SCEA under this Section 7 and under Section 9 hereto shall bear\ninterest at the rate of one and one-half (1-1\/2%) percent per month, or such\nlower rate as may be the maximum rate permitted under applicable law,\n\n\n* Confidential portion omitted and filed separately with the Commission.\n\n\n\n\n -9-\n\n\n\n\n\n\n 10\nfrom the date upon which payment of the same shall first become due up to and \nincluding the date of payment thereof whether before or after judgment. \nPublisher shall be additionally liable for all of SCEA's costs and expenses of \ncollection, including, without limitation, reasonable fees for attorneys and \ncourt costs. No deduction may be made from remittances unless an approved \ncredit memo has been issued by SCEA. No claim for credit due to shortage or \nbreakage will be allowed unless it is made within seven (7) days after \nPublisher receives the Licensed Product, and SCEA assumes no responsibility for \nshortage or breakage if Packaging and assembly services are obtained from \nalternate sources. Each shipment of Licensed Products to Publisher shall \nconstitute a separate sale to Publisher, whether said shipment be whole or \npartial fulfillment of any order. Notwithstanding the foregoing, nothing in \nthis Section shall excuse or be construed as a waiver of Publisher's obligation \nto timely provide any and all payments owed to SCEA hereunder.\n\n 7.3 DELIVERY OF LICENSED PRODUCTS. Neither SCEA nor any Designated \nManufacturing Facility shall have an obligation to store completed Units of \nLicensed Products. Delivery of Licensed Products shall be in accordance with \nthe Manufacturing Specifications, provided that Publisher may either specify \nthe carrier to be used or allow SCEA or a Designated Manufacturing Facility to \nuse the best way of getting the Licensed Products delivered. Title, risk of \nloss or damage in transit to any and all Licensed Products or component parts \nthereof manufactured by SCEA pursuant to Publisher's Purchase Orders shall vest \nin Publisher immediately upon delivery to the carrier.\n\n 7.4 TECHNOLOGY EXCHANGE AND QUALITY ASSURANCE. There will be no technology\nexchange between SCEA or any Designated Manufacturing Facility and Publisher\nunder this Agreement. Due to the proprietary nature of the mastering process,\nSCEA or a Designated Manufacturing Facility will not under any circumstances\nrelease any original master CD-ROM, Master Discs or other in-process materials\nto the Publisher. All such physical master discs, stampers, etc. shall be and\nremain the sole property of SCEA or a Designated Manufacturing Facility. SCEA\nrecognizes that the Intellectual Property Rights contained in Licensed Developer\nSoftware (separate and apart from any Sony Materials licensed to Publisher by\nSCEA hereunder) which is contained in physical master discs, stampers and other\nin-process materials is, as between SCEA and Publisher, the sole and exclusive\nproperty of Publisher or its licensors.\n\n8. MARKETING AND DISTRIBUTION.\n\n 8.1 MARKETING GENERALLY. In accordance with the provisions of this \nAgreement, at no expense to SCEA, Publisher shall, and shall direct its \ndistributors to, diligently market, sell and distribute the Licensed Products, \nand shall use its commercially reasonable best efforts to stimulate demand for \nsuch Licensed Products in the Licensed Territory and to supply any resulting \ndemand. Publisher shall use its reasonable best efforts to protect the Licensed \nProducts from and against illegal reproduction and\/or copying by end users or \nby any other persons or entities. Such methods of protection may include, \nwithout limitation, markings or insignia providing identification of \nauthenticity and packaging seals.\n\n 8.2 SAMPLES. Subject to availability, Publisher shall sell to SCEA\nquantities of the Licensed Products at as low a price and on terms as favorable\nas Publisher sells similar quantities of the Licensed Products to the general\ntrade. In addition, Publisher shall provide to SCEA at no additional cost, for\nSCEA's internal use and general marketing purposes, sample copies of each\nLicensed Product, which shall not exceed [*] Units of each Licensed Product.\nPublisher shall be obligated to pay the manufacturing costs to the Designated\nManufacturing Facility in accordance with Section 7.2.1, but not the royalty\ncharges in accordance with Section 9, in connection with such sample Units of\nLicensed Products. In the event that Publisher assembles any Licensed Product\nusing an alternate source, Publisher shall be responsible for shipping such\nsample Units to SCEA at Publisher's cost and expense. SCEA shall not directly or\nindirectly resell any such sample Units of the Licensed Products without\nPublisher's prior written consent.\n\n 8.3 MARKETING PROGRAMS OF SCEA. From time to time, SCEA may invite \nPublisher to participate in promotional or advertising opportunities which may \nfeature one or more Licensed Products from one or more Publishers. \nParticipation shall be voluntary and subject to terms to be determined at the \ntime of the opportunity. In the event Publisher elects to participate, all \nmaterials submitted by Publisher to SCEA shall be submitted subject to Section \n11.2 hereunder and delivery to SCEA shall constitute acceptance by Publisher of \nthe terms of the offer. Moreover, all materials, if featured with one or more \nsoftware products of SCEA or Licensed Products of other Publishers, may be used \nby SCEA, unless otherwise agreed in writing, with the following generic Legal \nCopy line: \"Game copyright and trademarks are the property of the respective \npublisher or their licensors\" (\"Generic Line\").\n\n 8.4 DEMONSTRATION DISC PROGRAMS. SCEA may, from time to time, provide \nopportunities for Publisher to participate in SCEA Demo Disc programs by \nproviding Product Information to SCEA. In addition, SCEA may, from time to \ntime, grant to Publisher the right to create Third Party Demo Discs pursuant to \nSCEA Established Third Party Demo Disc Programs. The specifications with \nrespect to the approval, creation, manufacture, marketing, distribution and \nsale of any such demo disc programs shall be set forth in the SourceBook or in \nother documentation to be provided by SCEA to Publisher when published. Except \nas otherwise specifically set forth herein, in the SourceBook or in other \ndocumentation provided by SCEA to Publisher, Third Party Demo Discs shall be \nconsidered \"Licensed Products\" and shall be subject in all respects to the \nterms and conditions of this Agreement. In addition, the following procedures \nshall also apply to SCEA Demo Discs and Third Party Demo Discs:\n\n* Confidential portion omitted and filed separately with the Commission.\n\n\n -10-\n 11\n 8.4.1 SCEA DEMO DISCS.\n\n 8.4.1.1 LICENSE. If Publisher wishes to participate in an SCEA \nDemo Disc program and provides Product Information to SCEA in connection \nthereto, Publisher shall thereby grant to SCEA a royalty-free license during \nthe term of this Agreement in the Licensed Territory to manufacture, use, sell, \ndistribute, market, advertise and otherwise promote Publisher's Product \nInformation as part of such SCEA Demo Disc program. In addition, Publisher \nshall grant SCEA the right to feature Publisher and Licensed Product names in \nadvertisements and promotional materials (including but not limited to in-store \ndisplays) and to make, copy, and distribute in packaging, advertising and \npromotional materials, copies of screen displays generated by the code, \nrepresentative video samples or other Product Information provided to SCEA for \nuse in such SCEA Demo Disc. Publisher agrees that all decisions relating to the \nselection of first and third party Product Information, marketing, \nadvertisement, promotion, distribution or sale of the SCEA Demo Discs as a \nwhole, including but not limited to SCEA Demo Discs title, trade name, logo \nand\/or other identification, sales presentation, or retail and wholesale \nprices, shall be in the sole discretion of SCEA.\n\n 8.4.1.2 SUBMISSION AND APPROVAL OF PRODUCT INFORMATION. Upon \nreceipt of a letter or other correspondence, the form of which is attached \nhereto as Exhibit D, notifying Publisher that SCEA has tentatively chosen \nPublisher's Product Information for inclusion in an SCEA Demo Disc, Publisher \nshall deliver to SCEA such requested Product Information no later than the \ndeadline set forth in such letter or other correspondence. A separate letter \nwill be sent for each SCEA Demo Disc, and Publisher must sign each letter prior \nto inclusion in such SCEA Demo Disc. Any Product Information provided by \nPublisher shall include Legal Copy on the title screen or elsewhere in the \nProduct Information submitted to SCEA. The only Legal Copy provided by SCEA \nshall be the Generic Line as provided in Section 8.3 above, which shall appear \non the SCEA Demo Disc title screen and packaging. Publisher acknowledges that \nSCEA shall have no responsibility to provide any Legal Copy beyond the Generic \nLine. Such Product Information shall comply with technical specifications \nprovided to Publisher by SCEA. SCEA reserves the right to review and test the \nProduct Information provided and request revisions prior to inclusion on the \nSCEA Demo Disc. In the event that SCEA requests changes to the Product \nInformation and Publisher elects to continue to participate in such Demo Disc, \nPublisher shall make such changes as soon as possible after receipt of written \nnotice of such requested changes from SCEA, but not later than the deadline for \nreceipt of Product Information. Failure to make such changes and provide the \nmodified Product Information to SCEA in accordance with such deadline shall \nresult in the Product Information being removed from consideration for the SCEA \nDemo Disc. Costs associated with preparation of Product Information for \ninclusion in the SCEA Demo Disc shall be borne by Publisher. Except as \notherwise provided in this Section, SCEA shall not edit or modify Product \nInformation provided to SCEA by Publisher without Publisher's consent, not to \nbe unreasonably withheld. SCEA shall have the right to use subcontractors to \nassist in the creation or development of any SCEA Demo Disc.\n\n 8.4.1.3 NO OBLIGATION TO PUBLISH. Acceptance of Product \nInformation for test and review shall not be deemed confirmation that SCEA \nshall include the Product Information on an SCEA Demo Disc. SCEA reserves the \nright to choose from products submitted from other Licensed Publishers and \nfirst party products to determine the products to be included in SCEA Demo \nDiscs, and will not guarantee to Publisher Licensed Product prominence with \nregards to screen shots or title treatment on the packaging or in SCEA Demo \nDiscs. Nothing herein shall be construed as creating an obligation of SCEA to \npublish Product Information submitted by Publisher in any SCEA Demo Disc, nor \nshall SCEA be obligated to publish, advertise or promote any SCEA Demo Disc.\n\n 8.4.1.4 RETAIL SAMPLER DISCS. Publisher is aware and \nacknowledges that the Retail Sampler Disc will be distributed and sold by SCEA \nin the retail market. If Publisher elects to participate in any Retail Sampler \nDisc program, Publisher acknowledges that it is aware of no limitations \nregarding any Licensed Product or any portion thereof provided to SCEA pursuant \nto the terms of this Agreement which would in any way restrict SCEA's ability \nto distribute or sell the Retail Sampler Disc at retail, nor does Publisher or \nits licensors have any anticipation of receiving any compensation from such \nretail sales. In the event that SCEA institutes a SCEA Demo Disc in which a fee \nand\/or royalty is charged to Publisher, SCEA and Publisher will enter into a \nseparate agreement for such SCEA Demo Disc.\n\n 8.4.2 THIRD PARTY DEMO DISCS.\n\n 8.4.2.1 LICENSE. If Publisher wishes to participate in a Third\nParty Demo Disc program by notifying SCEA of its intention thereto, SCEA shall\ngrant to Publisher the right and license to use Licensed Products in Third Party\nDemo Discs and to use, distribute, market, advertise and otherwise promote (and,\nif permitted in accordance with the terms of any SCEA Established Third Party\nProgram or otherwise permitted by SCEA, to sell) such Third Party Demo Discs in\naccordance with the specifications provided separately to Publisher by SCEA,\nwhich may be modified from time to time by SCEA. In addition, SCEA hereby\nconsents to the use of the Licensed Trademarks in connection with Third party\nDemo Discs, provided that SCEA's approval must be obtained prior to any use in\naccordance with the Terms of Section 8.4.2.2 hereto. If any SCEA Established\nThird Party Demo Disc Program is specified by SCEA to be for promotional use\nonly and not for resale, and such Third Party Demo Disc is subsequently\ndiscovered to be for sale, the right to produce Third Party Demo Discs under\nsuch SCEA Established Third Party Demo Disc Program shall thereupon be revoked,\nand SCEA shall have the right to terminate any\n\n\n -11-\n 12\nrelated Third Party Demo Discs in accordance with the terms of Section 15.3 \nhereto.\n\n 8.4.2.2 SUBMISSION AND APPROVAL OF THIRD PARTY DEMO DISCS. Publisher \nshall deliver to SCEA, for SCEA's prior approval, a final version of each Third\nParty Demo Disc in a format prescribed by SCEA. Such Third Party Demo Disc shall\ncomply with technical specifications and any other requirements provided to\nPublisher by SCEA in the SourceBook or otherwise. In addition, SCEA shall\nevaluate the Third Party Demo Disc in accordance with the approval provisions\nfor Executable Software and Printed Materials set forth in Sections 5.4 and 5.6,\nrespectively. Furthermore, Publisher shall obtain the approval of SCEA in\nconnection with any Advertising Materials relating to the Third Party Demo Discs\nin accordance with the approval provisions set forth in Section 5.7. Costs\nassociated with preparation of product code for inclusion on Third Party Demo\nDiscs shall be borne by Publisher. With respect to the Trade Promotional Disc\nProgram, Publisher acknowledges that Product Information provided in connection\nwith such program is in beta form and is not final approved code, nor should\nPublisher assume that final approval for mass production has been given at the\ntime of manufacture. Publisher agrees to use the generic packaging and printed\nmaterials pursuant to the Trade Promotional Disc Program and the Consumer\nPromotional Disc Program to clearly and conspicuously state that the Trade\nPromotional Disc Program and the Consumer Promotional Disc Program are for\npromotional purposes only and not for resale.\n\n 8.4.2.3 MANUFACTURE AND ROYALTY OF THIRD PARTY DEMO DISCS. Publisher \nshall comply with any Manufacturing Specifications provided separately by SCEA\nto Publisher with respect to the manufacture and payment for the costs of\nmanufacture of Third Party Demo Discs, and Publisher shall also comply with all\nterms and conditions of Section 7 hereto. No costs incurred in the development,\nmanufacture, licensing, production, marketing and\/or distribution (and if\npermitted by SCEA, sale) of the Third Party Demo Disc shall be deducted from any\namounts payable to SCEA hereunder. Royalties on Third Party Demo Discs shall be\nas provided in Exhibit A.\n\n 8.5 CONTESTS AND SWEEPSTAKES OF PUBLISHER. SCEA acknowledges that, from\ntime to time, Publisher may conduct contests and sweepstakes to promote Licensed\nProducts. SCEA agrees to permit Publisher to include contests and sweepstakes\nmaterials in Printed Materials and Advertising Materials, subject to compliance\nwith the approval provisions of Section 5.6 and 5.7 hereunder, compliance with\nthe provisions of Section 10.2 and 11.2 hereunder, and subject to the following\nadditional terms and conditions: (i) Publisher represents that it has retained\nthe services of a fulfillment house to administer the contest or sweepstakes and\nif it has not retained the services of a fulfillment house, Publisher represents\nand warrants that it has the expertise to conduct such contests or sweepstakes,\nand in any event, Publisher assumes full responsibility for such contest or\nsweepstakes; (ii) Publisher represents and warrants that it has obtained the\nconsent of all holders of intellectual property rights required to be obtained\nin connection with the contest or sweepstakes including, but not limited to, the\nconsent of any holder of copyrights or trademarks relating to any advertisement\nor any promotional materials publicizing the contest or sweepstakes, or the\nprizes being awarded to winners of the contest or sweepstakes; and (iii)\nPublisher shall make available to SCEA all contest and sweepstakes material\nprior to publication in accordance with the approval process set forth in\nSection 5.6 or 5.7. Approval by SCEA of contest or sweepstakes materials for use\nin the Printed Materials or Advertising Materials (or any use of the Player or\nLicensed Products as prizes in such contest or sweepstakes) shall not constitute\nan endorsement by SCEA of such contest or sweepstakes, nor shall such acceptance\nbe construed as SCEA having reviewed and approved such materials for compliance\nwith any federal or state law, statute, regulations, order or the like, which\nshall be Publisher's sole responsibility.\n\n 8.6 DISTRIBUTION CHANNELS. Publisher may use such distribution channels \nas Publisher deems appropriate, including the use of third party distributors, \nresellers, dealers and sales representatives. In the event that Publisher \nelects to have one of its Licensed Products distributed and sold by another \nLicensed Publisher, Publisher must provide SCEA with written notice of such \nelection, the name of the Licensed Publisher and any additional information \nrequested by SCEA regarding the nature of the distribution services provided by \nsuch Licensed Publisher prior to manufacture of any Units of such Licensed \nProduct.\n\n 8.7 LIMITATIONS ON DISTRIBUTION. Notwithstanding any other provisions in \nthis Agreement, Publisher shall not, directly or indirectly, solicit orders \nfrom and\/or sell any Units of the Licensed Products to any person or entity \noutside of the Licensed Territory, and Publisher further agrees that it shall \nnot directly or indirectly solicit orders for and\/or sell any Units of the \nLicensed Products in any situation where Publisher knows or reasonably should \nknow that such Licensed Products may be exported or resold outside of the \nLicensed Territory.\n\n9. ROYALTIES.\n\nPublisher shall pay SCEA a per Unit royalty in United States dollars, as set \nforth on Exhibit A hereto, for each Unit of the Licensed Products manufactured. \nPayment of such royalties shall be made to SCEA in conjunction with the payment \nto SCEA's Designated Manufacturing Facility of the manufacturing costs for each \nUnit and pursuant to the payment terms of Section 7.2.3 hereto. No costs \nincurred in the development, manufacture, marketing, sale and\/or distribution \nof the Licensed Products shall be deducted from any royalties payable to SCEA \nhereunder. Similarly, there shall be no deduction from the royalties otherwise \nowed to SCEA hereunder as a result of any uncollectible accounts owed to \nPublisher, or for any credits, discounts, allowances or returns which Publisher \nmay credit or otherwise grant to any third party customer of any \n\n\n -12-\n 13\n\nUnits of the Licensed Products, or for any taxes, fees, assessments or expenses\nof any kind which may be incurred by Publisher in connection with its sale\nand\/or distribution of any Units of the Licensed Products and\/or arising with\nrespect to the payment of royalties hereunder. In addition to the royalty\npayments provided to SCEA hereunder, Publisher shall be solely responsible for\nand bear any cost relating to any withholding taxes and\/or other such\nassessments which may be imposed by any governmental authority with respect to\nthe royalties paid to SCEA hereunder; provided, however, that SCEA shall not\nmanufacture Licensed Products outside of the United States without the prior\nconsent of Publisher. Publisher shall provide SCEA with official tax receipts or\nother such documentary evidence issued by the applicable tax authorities\nsufficient to substantiate that any such taxes and\/or assessments have in fact\nbeen paid.\n\n10. REPRESENTATIONS AND WARRANTIES.\n\n 10.1 REPRESENTATIONS AND WARRANTIES OF SCEA. SCEA represents and warrants\nsolely for the benefit of Publisher that SCEA has the right, power and authority\nto enter into this Agreement and to fully perform its obligations hereunder.\n\n 10.2 REPRESENTATIONS AND WARRANTIES OF PUBLISHER. Publisher represents \nand warrants that:\n\n (i) There is no threatened or pending action, suit, claim or proceeding\nalleging that the use by Publisher of all or any part of the Licensed Developer\nSoftware, Product Proposals, Product Information, Printed Materials, Advertising\nMaterials or any underlying work or content embodied therein, or any name,\ndesignation or trademark used in conjunction with the Licensed Products\ninfringes or otherwise violates any Intellectual Property Right or other right\nor interest of any kind whatsoever of any third party, or otherwise contesting\nany right, title or interest of Publisher in or to the Licensed Developer\nSoftware or any underlying work or content embodied therein, or any name,\ndesignation or trademark used in conjunction with the Licensed Products;\n\n (ii) The Licensed Developer Software, Product Proposals, Product \nInformation, Printed Materials and Advertising Materials and their contemplated\nuse under this Agreement does not and shall not infringe any person's or\nentity's rights including without limitation, patents, copyrights including\nrights in a joint work, trademarks, trade dress, trade secret, rights of\npublicity, privacy, performance, moral rights, literary rights and any other\nthird party right;\n\n (iii) Publisher has the right, power and authority to enter into this \nAgreement, to grant SCEA the rights granted hereunder and to fully perform its \nobligations hereunder;\n\n (iv) The making of this Agreement by Publisher does not violate any \nseparate agreement, rights or obligations existing between Publisher and any \nother person or entity, and, throughout the term of this Agreement, Publisher \nshall not make any separate agreement with any person or entity that is \ninconsistent with any of the provisions of this Agreement;\n\n (v) Publisher has not sold, assigned, leased, licensed or in any other \nway disposed of or encumbered the rights granted to Publisher hereunder, and \nPublisher will not sell, assign, lease, license or in any other way dispose of \nor encumber any of such rights;\n\n (vi) Publisher has obtained the consent of all holders of intellectual \nproperty rights required to be obtained in connection with use of any Product \nInformation by SCEA as licensed hereunder, and Product Information provided to \nSCEA may be published, marketed, distributed and sold by SCEA in accordance \nwith the terms and conditions of this Agreement and without SCEA incurring any \nroyalty, residual, union, guild or other fees;\n\n (vii) Publisher shall not make any representation or give any warranty \nto any person or entity expressly or implicitly on SCEA's behalf, or to the \neffect that the Licensed Products are connected in any way with SCEA (other \nthan that the Licensed Products have been developed, marketed, sold and\/or \ndistributed under license from SCEA);\n\n (viii) The Executable Software shall be distributed by Publisher solely \nin object code form;\n\n (ix) The Executable Software and any Product Information delivered to \nSCEA shall be in a commercially acceptable form, free of significant bugs, \ndefects, time bombs or viruses, such that use of the software or Player would \nbe disrupted, delayed, destroyed or rendered less than fully useful, and shall \nbe fully compatible with the Player and any peripherals listed on the Printed \nMaterials as compatible with the Licensed Product;\n\n (x) Each of the Licensed Products, Executable Software, Printed\nMaterials and Advertising Materials shall be developed, marketed, sold and\ndistributed by or at the direction of Publisher in an ethical manner and in full\ncompliance with all applicable federal, state, provincial, local and foreign\nlaws and any regulations and standards promulgated thereunder (including but\nnot limited to federal and state lottery laws as currently interpreted and\nenforced) and will not contain any obscene or defamatory matter;\n\n (xi) Publisher's policies and practices with respect to the marketing, \nsale, and\/or distribution of the Licensed Products shall in no manner reflect \nadversely upon the name, reputation or goodwill of SCEA; and\n\n (xii) Publisher shall make no false, misleading or inconsistent \nrepresentations or claims with respect to any Licensed Products, the Player or \nSCEA.\n\n11. INDEMNITIES; LIMITED LIABILITY.\n\n\n -13-\n 14\n 11.1 INDEMNIFICATION BY SCEA. SCEA shall indemnify and hold Publisher \nharmless from and against any and all third party claims, losses, liabilities, \ndamages, expenses and costs, including, without limitation, reasonable fees for \nattorneys, expert witnesses and litigation costs, and including costs incurred \nin the settlement or avoidance of any such claim which result from or are in \nconnection with a breach of any of the representations or warranties provided \nby SCEA herein; provided, however, that Publisher shall give prompt written \nnotice to SCEA of the assertion of any such claim, and provided, further, that \nSCEA shall have the right to select counsel and control the defense and\/or \nsettlement thereof, subject to the right of Publisher to participate in any \nsuch action or proceeding at its own expense with counsel of its own choosing. \nSCEA shall have the exclusive right, at its discretion, to commence and \nprosecute at its own expense any lawsuit or to take such other action with \nrespect to such matters as shall be deemed appropriate by SCEA. Publisher \nagrees to provide SCEA, at no expense to Publisher, reasonable assistance and \ncooperation concerning any such matter; and Publisher shall not agree to the \nsettlement of any such claim, action or proceeding without SCEA's prior written \nconsent.\n\n 11.2 INDEMNIFICATION BY PUBLISHER. Publisher shall indemnify and hold \nSCEA harmless from and against any and all third party claims, losses, \nliabilities, damages, expenses and costs, including, without limitation, \nreasonable fees for attorneys, expert witnesses and litigation costs, and \nincluding costs incurred in the settlement or avoidance of any such claim, \nwhich result from or are in connection with (i) a breach of any of the \nrepresentations or warranties provided by Publisher herein, including without \nlimitation claims resulting from Publisher's failure to timely pay any \nwithholding taxes or other assessments as set forth in Section 9 hereto, any \nbreach of Publisher's confidentiality obligations as set forth in Section 14 \nhereto or any breach of any representations, warranties or covenants relating \nto contests or sweepstakes as set forth in Sections 8.5 and 10.2 hereto; or \n(ii) any claim of infringement or alleged infringement of any third party's \nIntellectual Property Rights with respect to the Licensed Developer Software or \nany Product Information of Publisher; or (iii) any claims of or in connection \nwith any personal or bodily injury (including death) or property damage, by \nwhomsoever such claim is made, arising out of, in whole or in part, the \nmarketing, sale, distribution and\/or use of any of the Licensed Products \n(including but not limited to any damages or personal injury resulting from the \nawarding or failure to award contest or sweepstakes prizes), unless due \ndirectly to the breach of SCEA in performing any of the specific duties and\/or \nproviding any of the specific services required of it hereunder; or (iv) any \nfederal, state or foreign civil or criminal actions relating to the marketing, \nsale and\/or distribution of Licensed Products; provided, however, that SCEA \nshall give prompt written notice to Publisher of the assertion of any such \nclaim, and provided, further, that Publisher shall have the right to select \ncounsel and control the defense and\/or settlement thereof, subject to the right \nof SCEA to participate in any such action or proceeding at its own expense with \ncounsel of its own choosing. Publisher shall have the exclusive right, at its \ndiscretion, to commence and\/or prosecute at its own expense any lawsuit or to \ntake such other action with respect to such matter as shall be deemed \nappropriate by Publisher. SCEA shall retain the right to approve any \nsettlement. SCEA shall provide Publisher, at no expense to SCEA, reasonable \nassistance and cooperation concerning any such matter, and SCEA shall not agree \nto the settlement of any such claim, action or proceeding without Publisher's \nprior written consent.\n\n 11.3 LIMITATION OF LIABILITY.\n\n 11.3.1 LIMITATION OF SCEA'S LIABILITY. IN NO EVENT SHALL SCEA OR \nITS AFFILIATES OR OTHER COMPANIES AFFILIATED WITH SCEA AND ITS AFFILIATES, \nSUPPLIERS, OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS BE LIABLE FOR PROSPECTIVE \nPROFITS, OR ANY SPECIAL, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING \nOUT OF OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING WITHOUT LIMITATION THE \nBREACH OF THIS AGREEMENT BY SCEA, THE MANUFACTURE OF THE LICENSED PRODUCTS AND \nTHE USE OF THE LICENSED PRODUCTS, EXECUTABLE SOFTWARE AND\/OR THE PLAYER BY \nPUBLISHER OR ANY END-USER, WHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING \nNEGLIGENCE), INDEMNITY, PRODUCT LIABILITY OR OTHERWISE. IT IS THE \nRESPONSIBILITY OF PUBLISHER TO REVIEW THE ACCURACY OF THE DATA ON THE UNITS \nMANUFACTURED BY SCEA FOR PUBLISHER. IN NO EVENT SHALL SCEA'S LIABILITY ARISING \nUNDER OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY \nLIABILITY FOR DIRECT DAMAGES, AND INCLUDING WITHOUT LIMITATION ANY LIABILITY \nUNDER SECTION 11.1 AND ANY WARRANTY IN SECTION 11.4 HERETO, EXCEED THE TOTAL \nAMOUNT PAID BY PUBLISHER TO SCEA UNDER THIS AGREEMENT. EXCEPT AS EXPRESSLY SET \nFORTH HEREIN, NEITHER SCEA NOR ANY AFFILIATE, NOR ANY OF THEIR RESPECTIVE \nDIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, SHALL BEAR ANY RISK, OR HAVE ANY \nRESPONSIBILITY OR LIABILITY, OF ANY KIND TO PUBLISHER OR TO ANY THIRD PARTIES \nWITH RESPECT TO THE QUALITY, OPERATION AND\/OR PERFORMANCE OF ANY PORTION OF THE \nSONY MATERIALS, THE PLAYER OR ANY LICENSED PRODUCT.\n\n 11.3.2 LIMITATION OF PUBLISHER'S LIABILITY. IN NO EVENT SHALL \nPUBLISHER OR COMPANIES AFFILIATED WITH PUBLISHER, SUPPLIERS, OFFICERS, \nDIRECTORS, EMPLOYEES\n\n\n\n -14-\n 15\nOR AGENTS BE LIABLE to SCEA FOR ANY PROSPECTIVE PROFITS, OR SPECIAL, PUNITIVE, \nINCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH \n(i) THIS AGREEMENT OR (ii) THE USE OR DISTRIBUTION IN ACCORDANCE WITH THE TERMS \nAND CONDITIONS OF THIS AGREEMENT OR ANY CODE PROVIDED BY SCEA, IN WHOLE OR IN \nPART, OR ANY LICENSED DEVELOPER SOFTWARE BY PUBLISHER OR ANY THIRD PARTY, \nWHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), INDEMNITY,\nPRODUCT LIABILITY OR OTHERWISE, PROVIDED THAT PUBLISHER EXPRESSLY AGREES \nTHAT SUCH LIMITATIONS SHALL NOT APPLY TO DAMAGES RESULTING FROM PUBLISHER'S \nBREACH OF SECTIONS 2, 4, 11.2, 12.2 OR 14 OF THIS AGREEMENT, AND PROVIDED \nFURTHER THAT SUCH LIMITATIONS SHALL NOT APPLY TO AMOUNTS WHICH PUBLISHER MAY BE \nREQUIRED TO PAY TO THIRD PARTIES UNDER SECTIONS 11.2 OR 17.9.\n\n 11.4 WARRANTIES; DISCLAIMER OF WARRANTIES.\n\n 11.4.1 MANUFACTURING WARRANTY. SCEA warrants that the Units or any\ncomponent parts thereto that are manufactured by SCEA or a Designated\nManufacturing Facility for Publisher shall, at time of delivery to Publisher, be\n[*]. The sole obligation of SCEA and a Designated Manufacturing Facility under\nthis warranty shall be, for a period of [*] the date of shipment of Units of\nLicensed Products or component parts thereto to Publisher, at SCEA's election,\neither to replace the defective Units or component parts or to issue credit to\nPublisher for the purchase price and any royalties paid to SCEA and\/or a\nDesignated Manufacturing Facility for any such [*]. Such warranty is the only\nwarranty applicable to the Licensed Product manufactured by a Designated\nManufacturing Facility for Publisher pursuant to Section 7 of this Agreement.\nThis warranty shall not apply to damage resulting from accident, alteration,\nnegligence, normal wear and tear, willful damage, abnormal conditions of use,\nfailure to follow directions for use (whether given in instruction manuals or\notherwise) or misuse of the Licensed Products, or to damage to or defects in any\nmaterials provided by Publisher to SCEA or a Designated Manufacturing Facility.\nIf, during the aforesaid period, a [*] is received by Publisher, Publisher shall\nnotify SCEA within the warranty period set forth above and, upon request by\nSCEA, provide SCEA with the returned Unit(s) or component part(s) and a written\ndescription of the [*]. SCEA and any Designated Manufacturing Facility shall not\naccept the return of any Unit(s) or component part(s) except [*] (i.e., those\nUnits or component parts that are [*], and all such returns must be authorized\nby SCEA in writing and in advance. All Units or component parts which are\nreturned in accordance with this Section 11.4.1 will be sent to a place\ndesignated by SCEA at SCEA's expense. If the defect did not arise from causes\nplacing liability on SCEA or a Designated Manufacturing Facility under the above\nwarranty, Publisher shall reimburse SCEA and any Designated Manufacturing\nFacility for expenses incurred in shipping, processing and analyzing the Units\nor component parts. SCEA's and any Designated Manufacturing Facility's\nreasonable judgment as to the origin of the defect shall be final and binding.\nNotwithstanding the foregoing, nothing herein shall be construed by Publisher to\nextend or create any stated limited warranty to consumers beyond the terms of\nsuch warranty. NOTWITHSTANDING THE FOREGOING, ANY COMPONENT PARTS OF LICENSED\nPRODUCTS NOT MANUFACTURED BY SCEA OR A DESIGNATED MANUFACTURING FACILITY ARE NOT\nUNDER WARRANTY HEREUNDER.\n\n 11.4.2 DISCLAIMER OF WARRANTY. EXCEPT AS OTHERWISE EXPRESSLY SET\nFORTH ABOVE, NEITHER SCEA NOR ANY DESIGNATED MANUFACTURING FACILITY NOR ITS\nAFFILIATES AND SUPPLIERS MAKE, NOR DOES PUBLISHER RECEIVE, ANY WARRANTIES,\nEXPRESS, IMPLIED OR STATUTORY REGARDING THE SONY MATERIALS, THE PLAYER, THE\nUNITS OF THE LICENSED PRODUCTS MANUFACTURED HEREUNDER AND\/OR PUBLISHER'S PRODUCT\nINFORMATION INCLUDED ON SCEA DEMO DISCS. SCEA SHALL NOT BE LIABLE FOR ANY\nINJURY, LOSS OR DAMAGE, DIRECT OR CONSEQUENTIAL, ARISING OUT OF THE USE OR\nINABILITY TO USE THE UNITS AND\/OR ANY SOFTWARE ERRORS AND\/OR \"BUGS\" IN\nPUBLISHER'S PRODUCT INFORMATION WHICH MAY BE REPRODUCED ON SCEA DEMO DISCS.\nWITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SCEA AND ITS AFFILIATES AND\nSUPPLIERS EXPRESSLY DISCLAIM THE IMPLIED WARRANTIES OF MERCHANTABILITY AND\nFITNESS FOR A PARTICULAR PURPOSE AND THEIR EQUIVALENTS UNDER THE LAWS OF ANY\nJURISDICTION REGARDING THE SONY MATERIALS, LICENSED PRODUCTS, SCEA DEMO DISCS\nAND THE PLAYER. ANY WARRANTY AGAINST INFRINGEMENT THAT MAY BE PROVIDED IN\nSECTION 2-312(3) OF THE UNIFORM COMMERCIAL CODE AND\/OR IN ANY OTHER COMPARABLE\nSTATUTE IS EXPRESSLY DISCLAIMED.\n\n12. COPYRIGHT, TRADEMARK AND TRADE SECRET RIGHTS.\n\n 12.1 PUBLISHER RIGHTS. The Licensed Developer Software and all Product \nInformation, Product Proposals, Printed Materials and Advertising Materials \nrelated thereto (exclusive of the rights licensed from SCEA hereunder) and the \nIntellectual Property Rights therein and any names or other designations used \nas titles for the Licensed Products and any other trademarks used by Publisher \nand\/or its affiliates are and shall be exclusive property of Publisher or of \nany third party from which Publisher has\n\n* Confidential portions omitted and filed separately with the Commission.\n\n\n - 15 -\n 16\nbeen granted, or to whom Publisher has granted, the license and related rights \nto develop and otherwise exploit any such Licensed Developer Software and \nrelated materials or any such names or other designations. SCEA shall not do \nor cause to be done any act or thing in any way impairing or tending to impair \nor dilute any of Publisher's rights, title and\/or interests in or to \nPublisher's Intellectual Property Rights.\n\n 12.2 SCEA RIGHTS.\n\n 12.2.1 LICENSED TRADEMARKS. The Licensed Trademarks and the \ngoodwill associated therewith are and shall be the exclusive property of SCEA \nor Affiliates of SCEA. Nothing herein shall give Publisher any right, title or \ninterest in or to any of the Licensed Trademarks, other than the non-exclusive \nlicense and privilege during the term hereof to display and use the Licensed \nTrademarks solely in accordance with the provisions of this Agreement. \nPublisher shall not do or cause to be done any act or thing in any way \nimpairing or tending to impair or dilute any of SCEA's rights, title and\/or \ninterests in or to any of the Licensed Trademarks, nor shall Publisher register \nany trademark in its own name or in the name of any other person or entity, or \nobtain rights to employ Internet domain names or addresses, which are similar \nto or are likely to be confused with any of the Licensed Trademarks.\n\n 12.2.2 LICENSE OF SONY MATERIALS AND PLAYER. All rights with \nrespect to the Sony Materials and Player, including, without limitation, all of \nSCEA's Intellectual Property Rights therein, are and shall be the exclusive \nproperty of SCEA or Affiliates of SCEA. Nothing herein shall give Publisher any \nright, title or interest in or to the Sony Materials or the Player (or any \nportion thereof), other than the non-exclusive license during the term hereof \nto use the Sony Materials and Player for the manufacturing, marketing, \ndistribution and sale of the Licensed Products solely in accordance with the \nprovisions of this Agreement. Publisher shall not do or cause to be done any \nact or thing in any way impairing or tending to impair any of SCEA's rights, \ntitle and\/or interests in or to the Sony Materials or the Player (or any \nportion thereof).\n\n13. INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS BY THIRD PARTIES.\n\nIn the event that either Publisher or SCEA discovers or otherwise becomes aware \nthat any of the Intellectual Property Rights of the other have been or are \nbeing infringed upon by any third party, then the party with knowledge of such \ninfringement or apparent infringement shall promptly notify the other party. \nSCEA shall have the sole right, in its discretion, to institute and prosecute \nlawsuits against Third Parties for such infringement of SCEA's Intellectual \nProperty Rights. Publisher shall have the right, in its discretion, to \ninstitute and prosecute lawsuits against third persons for such infringement of \nPublisher's Intellectual Property Rights which are distinct from SCEA's \nIntellectual Property Rights. If Publisher does not institute an infringement \nsuit within thirty (30) days after SCEA's written request that it do so, SCEA \nmay institute and prosecute such lawsuit. Any lawsuit shall be prosecuted \nsolely at the cost and expense of the party bringing suit and all sums \nrecovered in any such lawsuits, whether by judgment, settlement or otherwise, \nin excess of the amount of reasonable attorneys' fees and other out of pocket \nexpenses of such suit, shall belong solely to the party bringing the suit. Upon \nrequest of the party bringing the lawsuit, the other party shall execute all \npapers, testify on all matters and otherwise cooperate in every way necessary \nand desirable for the prosecution of any such lawsuit. The party bringing suit \nshall reimburse the other party for the reasonable expenses incurred as a \nresult of such cooperation, but unless authorized by other provisions of this \nAgreement, not costs and expenses attributable to the conduct of a cross-claim \nor third party action.\n\n14. CONFIDENTIALITY.\n\n 14.1 PRIOR NONDISCLOSURE AGREEMENT. Publisher hereby reaffirms and \nratifies the Nondisclosure Agreement dated January 19, 2000 between SCEA and \nPublisher (\"Nondisclosure Agreement\") which, as amended by Section 14.2 below, \nwill remain in full force and effect with respect to the Confidential \nInformation of SCEA throughout the term of this Agreement.\n\n 14.2 ADDITIONAL REQUIREMENTS REGARDING CONFIDENTIAL INFORMATION OF SCEA.\n\n 14.2.1 CONFIDENTIAL INFORMATION OF SCEA. \"Confidential Information\"\nof SCEA (as defined in the Nondisclosure Agreement and amended hereby) shall\nalso include (i) the Sony Materials and information regarding SCEA's finances,\nbusiness, marketing and technical plans, (ii) all documentation and information\nrelating to the foregoing (other than documentation and information expressly\nintended for use by and released to end users or the general public), (iii) any\nand all other information, of whatever type and in whatever medium (including\nwithout limitation all data, ideas, discoveries, developments, know-how, trade\nsecrets, inventions, creations and improvements), that is disclosed in writing\nor in any other form by SCEA to Publisher, and (iv) this Agreement and the terms\nand conditions thereof. If at any time Publisher becomes aware of any\nunauthorized duplication, access, use, possession or knowledge of any\nConfidential Information of SCEA, it shall notify SCEA as soon as reasonably\npracticable, and shall promptly act to recover any such information and\/or\nprevent further breach of the confidentiality obligations herein. Publisher\nshall take all reasonable steps requested by SCEA to prevent the recurrence of\nany unauthorized duplication, access, use, possession or knowledge of the\nConfidential Information of SCEA.\n\n 14.2.2 CONFIDENTIALITY OF AGREEMENT. As provided above, the terms \nand conditions of this Agreement shall be treated as Confidential Information \nof SCEA;\n\n -16-\n 17\nprovided that each party may disclose the terms and conditions of this \nAgreement: (i) to legal counsel; (ii) in confidence, to accountants, banks and \nfinancing sources and their advisors; and (iii) in confidence, in connection \nwith the enforcement of this Agreement or rights under this Agreement; and (iv) \nif Publisher shall be required, in the opinion of counsel, to file publicly or \notherwise disclose the terms of this Agreement under applicable federal and\/or \nstate securities laws, Publisher shall be required to promptly notify SCEA such \nthat SCEA has a reasonable opportunity to contest or limit the scope of such \nrequired disclosure, and Publisher shall request, and shall use its best \nefforts to obtain, confidential treatment for such sections of this Agreement \nas SCEA may designate. Any failure to notify SCEA under clause (iv) of this \nSection 14.2.2 shall be deemed a material breach of this Agreement. Unless \notherwise permitted by SCEA, both parties shall treat the fact that they have \nentered into this Agreement as Confidential Information of the other party \nuntil a public announcement regarding the execution of this Agreement is \nreleased by SCEA, at its sole discretion, announcing that Publisher has become \na licensee of SCEA.\n\n 14.3 REQUIREMENTS REGARDING CONFIDENTIAL INFORMATION OF PUBLISHER.\n\n 14.3.1 CONFIDENTIAL INFORMATION OF PUBLISHER. \"Confidential \nInformation of Publisher\" shall mean (i) the Licensed Developer Software as \nprovided to SCEA pursuant to this Agreement and all documentation and \ninformation relating thereto, including Product Proposals, Printed Materials \nand Advertising Materials (other than documentation and information expressly \nintended for use by and release to end users, the general public or the trade), \nand (ii) information relating to Publishers' or its affiliates' or licensors' \nfinances, business, marketing and technical plans, that is disclosed in writing \nor in any other form by Publisher to SCEA.\n\n 14.3.2 PRESERVATION OF CONFIDENTIAL INFORMATION OF PUBLISHER. SCEA \nshall hold all Confidential Information of Publisher in confidence, and shall \ntake all reasonable steps necessary to preserve the confidentiality of the \nConfidential Information of Publisher, and to prevent it from falling into the \npublic domain or into the possession of persons other than those persons to \nwhom disclosure is authorized hereunder, including but not limited to those \nsteps that SCEA takes to protect the confidentiality of its own most highly \nconfidential information. Except as may be expressly authorized by Publisher in \nwriting, SCEA shall not at any time, either before or after any termination of \nthis Agreement, directly or indirectly: (i) disclose any Confidential \nInformation to any person other than an SCEA employee or subcontractor who \nneeds to know or have access to such Confidential Information for the purposes \nof this Agreement, and only to the extent necessary for such purposes; (ii) \nexcept as otherwise provided in this Agreement, duplicate the Confidential \nInformation of Publisher for any purpose whatsoever, (iii) use the Confidential \nInformation for any reason or purpose other than as expressly permitted in this \nAgreement; or (iv) except as otherwise provided in Section 8.3, remove any \ncopyright notice, trademark notice and\/or other proprietary legend set forth on \nor contained within any of the Confidential Information of Publisher.\n\n 14.3.3 OBLIGATIONS UPON UNAUTHORIZED DISCLOSURE. If at any time SCEA \nbecomes aware of any unauthorized duplication, access, use, possession or \nknowledge of any Confidential Information of Publisher, it shall notify the \nPublisher as soon as is reasonably practicable. SCEA shall provide any and all \nreasonable assistance to Publisher to protect Publisher's proprietary rights in \nany Confidential Information of Publisher that it or its employees or permitted \nsubcontractors may have directly or indirectly disclosed or made available and \nthat may be duplicated, accessed, used, possessed or known in a manner or for a \npurpose not expressly authorized by this Agreement including but not limited to \nenforcement of confidentiality agreements, commencement and prosecution in \ngood faith (alone or with the disclosing party) of legal action, and \nreimbursement for all reasonable attorneys' fees, costs and expenses incurred \nby Publisher to protect its proprietary rights in the Confidential Information \nof Publisher. SCEA shall take all reasonable steps requested by Publisher to \nprevent the recurrence of any unauthorized duplication, access, use, possession \nor knowledge of the Confidential Information of Publisher.\n\n 14.3.4 EXCEPTIONS. The foregoing restrictions will not apply to \ninformation that could be deemed to be Confidential Information of Publisher to \nthe extent that such information: (i) was known to SCEA at the time of \ndisclosure to it; (ii) becomes part of information in the public domain through \nno fault of SCEA; (iii) has been rightfully received from a third party \nauthorized by Publisher to make such disclosure without restriction; (iv) has \nbeen approved for release by prior written authorization of Publisher; or (v) \nhas been disclosed by court order or as otherwise required by law (including \nwithout limitation to the extent that disclosure may be required under Federal \nor state securities laws), provided that SCEA has notified the disclosing party \nimmediately upon learning of the possibility of any such court order or legal \nrequirement and has given Publisher a reasonable opportunity to contest or \nlimit the scope of such required disclosure.\n\n15. TERM AND TERMINATION.\n\n 15.1 EFFECTIVE DATE; TERM. This Agreement shall not be binding upon the \nparties until it has been signed by or on behalf of each party, in which event \nit shall be effective as of the date first written above (the \"Effective \nDate\"). Unless sooner terminated in accordance with the provisions hereof, the \nterm of this Agreement shall be for four (4) years from the Effective Date.\n\n 15.2 TERMINATION BY SCEA. SCEA shall have the right to terminate this \nAgreement immediately, by providing written notice of such election to \nPublisher, upon the occurrence of any of the following events or circumstances:\n\n\n -17-\n\n 18\n\n (i) If Publisher breaches (A) any of its material obligations provided for \nin this Agreement (including but not limited to Publisher's failure to pay any \namounts due hereunder), which materiality shall be determined by SCEA in its \nsole discretion; (B) some of its obligations provided for in this Agreement, \nthe combined effect of which has a material effect hereunder; or (C) any other \nagreement entered into between SCEA or Affiliates of SCEA and Publisher. In the \nevent of each such breach, Publisher shall have an opportunity to correct or \ncure such breach within thirty (30) days after receipt of written notice of \nsuch breach by SCEA, provided that, if after such thirty (30) day period, such \nbreach is not corrected or cured to SCEA's satisfaction, this Agreement shall \nbe terminated.\n\n (ii) Publisher's statement that it is unable to pay any amount due \nhereunder, or is unable to pay its debts generally as they shall become due.\n\n (iii) Publisher's filing of an application for, or consenting to, or \ndirecting the appointment of, or the taking of possession by, a receiver, \ncustodian, trustee or liquidator of all or substantially all of Publisher's \nproperty, whether tangible or intangible, wherever located.\n\n (iv) The making by Publisher of a general assignment for the benefit of \ncreditors.\n\n (v) The commencing by Publisher or Publisher's intention to commence a \nvoluntary case under any applicable bankruptcy laws (as now or hereafter may be \nin effect).\n\n (vi) Publisher is bankrupt or insolvent.\n\n (vii) The filing by Publisher or the intent to file by Publisher of a \npetition seeking to take advantage of any other law providing for the relief of \ndebtors.\n\n (viii) Publisher's acquiescence to, intention to acquiesce to, or failure \nto have dismissed within ninety (90) days, any petition filed against it in any \ninvoluntary case under any such bankruptcy law.\n\n (ix) The liquidation or dissolution of Publisher, or a statement of intent \nby Publisher to no longer exercise any of the rights granted by SCEA to \nPublisher hereunder.\n\n (x) If during the term of this Agreement a controlling interest in \nPublisher or a controlling interest in an entity which has, directly or \nindirectly, a controlling interest in Publisher is transferred to a party that \n(A) is in breach of any agreement with SCEA or an Affiliate of SCEA, and such \nagreement has been terminated as a result of such breach; (B) directly or \nindirectly holds or acquires an interest in a third party which develops any \ninteractive hardware device or product which is directly or indirectly \ncompetitive with the Player; (C) is in litigation with SCEA or Affiliates of \nSCEA concerning any proprietary technology, trade secrets or other Intellectual \nProperty Rights or Confidential Information of SCEA. As used in this Section \n15.2, \"controlling interest\" means, with respect to any form of entity, \nsufficient power, whether by holding shares of stock, management power, voting \npower or power conferred on such person by the Certificate of Incorporation, \nBylaws, Partnership Agreement or other documents regulating the form and powers \nof such entity, to control the decisions of such entity.\n\n (xi) If during the term of this Agreement Publisher, or an entity that \nhas, directly or indirectly, a controlling interest in Publisher, enters into a \nbusiness relationship with a third party with whom Publisher materially \ncontributes to develop core components to an interactive hardware device or \nproduct which is directly or indirectly competitive with the Player.\n\nPublisher shall be obligated to immediately notify SCEA in the event that any \nof the events of circumstances specified in subsections (ii) - (xi) occur, and \nany failure to so notify SCEA shall constitute a material breach with no \nopportunity to cure such breach.\n\n 15.3 PRODUCT-BY-PRODUCT TERMINATION BY SCEA. In addition to the events of \ntermination described in Section 15.2, above, SCEA, at its option, shall be \nentitled to terminate, on a product-by-product basis, the licenses and related \nrights herein granted to Publisher in the event that (a) Publisher fails to \nnotify SCEA promptly in writing of any material change to any materials \npreviously approved by SCEA in accordance with Section 5 or Section 7.1.3 \nhereto, and such breach is not corrected or cured prior to the earlier of (i) \nthirty (30) days after receipt of written notice of such breach or (ii) \ncommercial release of the product; or (b) any third party with whom Publisher \nhas contracted for the development of Executable Software breaches any of its \nmaterial obligations to SCEA pursuant to such third party's agreement with \nSCEA with respect to such Executable Software; or (c) Publisher cancels a \nLicensed Product or fails to provide SCEA in accordance with the provisions of \nSection 5.4 above, with the final version of the Executable Software for any \nLicensed Product within three (3) months of the scheduled release date \naccording to the Product Proposal, or fails to provide work in progress to SCEA \nin accordance with the Review Process in Section 5.3.\n\n 15.4 OPTION OF SCEA IN LIEU OF TERMINATION. As an alternative to\nterminating this Agreement or a particular Licensed Product as set forth in\nSections 15.2 and 15.3 above, SCEA may, at its option, require Publisher to pay\nliquidated damages of up to [*] per incident (as defined in the sole discretion\nof SCEA) for the following material breaches of Publisher; providing Sony\nMaterials or Confidential Information of SCEA to an unlicensed developer or\nother third party; failure to follow the Guidelines of SCEA with respect to any\nLicensed Trademarks; and failure to provide SCEA with Advertising Materials, or\nbroadcasting or publishing Advertising Materials without the approval of SCEA,\nas provided in Section 5.7. Such liquidated damages shall be required in SCEA's\nsole discretion depending on the \n\n[*] Confidential portion omitted and filed separately with the Commission.\n\n\n -18-\n 19\n\ncircumstances, including the extent and type of injury flowing from the breach, \nand SCEA's expectations for future performance of Publisher. In the event that \nSCEA selects this option, Publisher shall be entitled to terminate this \nAgreement upon notice to SCEA rather than paying the liquidated damages \nhereunder. Election of this option by SCEA shall not constitute a waiver of any \nof SCEA's rights under this Agreement with respect to any other incidents and \nSCEA shall have the right to terminate this Agreement with respect to any other \nmaterial breach.\n\n 15.5 NO REFUNDS. In the event of the termination of this Agreement in \naccordance with any of the provisions of Sections 15.2 through 15.4 above, no \nportion of any payments of any kind whatsoever previously provided to SCEA \nhereunder shall be owed or be repayable to Publisher.\n\n16. EFFECT OF EXPIRATION OR TERMINATION.\n\n 16.1 INVENTORY STATEMENT. Within thirty (30) days of the date of \nexpiration or the effective date of termination with respect to any and\/or all \nLicensed Products, Publisher shall provide SCEA with an itemized statement, \ncertified to be accurate by an officer of Publisher, specifying the number of \nunsold Units of the Licensed Products as to which such termination applies, on \na title-by-title basis, which remain in its inventory and\/or under its control \nat the time of expiration or the effective date of termination. SCEA shall be \nentitled to conduct at its expense a physical inspection of Publisher's \ninventory and work in process upon reasonable written notice during normal \nbusiness hours in order to ascertain or verify such inventory and\/or statement.\n\n 16.2 REVERSION OF RIGHTS. Upon expiration or termination and subject to \nSection 16.3 below, the licenses and related rights herein granted to Publisher \nshall immediately revert to SCEA, and Publisher shall cease and desist from any \nfurther use of Confidential Information of SCEA, the Licensed Trademarks and \nthe Sony Materials and any Intellectual Property Rights therein, and, subject \nto the provisions of Section 16.3 below, Publisher shall have no further right \nto continue the publication, manufacture, marketing, sale and\/or distribution \nof any Units of the Licensed Products, nor to continue to use the Licensed \nTrademarks; provided, however, that for a period of one year after termination, \nand subject to all the terms of Section 14, and provided this Agreement is not \nterminated due to a breach or default of Publisher, Publisher may retain such \nportions of Sony Materials as SCEA in its sole discretion agrees are required \nto support end users of Licensed Products but must return these materials at \nthe end of such one year period.\n\n16.3 DISPOSAL OF UNSOLD UNITS. Provided that this Agreement is not terminated \ndue to a breach or default of Publisher, Publisher may, upon expiration or \ntermination of this Agreement, sell off existing inventories of Licensed \nProducts, on a non-exclusive basis, for a period of ninety (90) days from the \ndate of expiration or termination of this Agreement, and provided such \ninventories have not been manufactured solely or principally for sale during \nsuch period. Subsequent to the expiration of such ninety (90) day period, or in \nthe event this Agreement is terminated as a result of any breach or default of \nPublisher, any and all Units of the Licensed Products remaining in Publisher's \ninventory shall be destroyed by Publisher within five (5) business days of such \nexpiration or termination. Within five (5) business days after such \ndestruction, Publisher shall provide SCEA with an itemized statement, certified \nto be accurate by an officer of Publisher, indicating the number of Units of \nthe Licensed Products which have been destroyed (on a title-by-title basis), \nthe location and date of such destruction and the disposition of the remains of \nsuch destroyed materials.\n\n 16.4 RETURN OF SONY MATERIALS AND CONFIDENTIAL INFORMATION. Upon the \nexpiration or earlier termination of this Agreement, Publisher shall \nimmediately deliver to SCEA, or if and to the extent requested by SCEA \ndestroy, all Sony Materials and any and all copies thereof, and Publisher and \nSCEA shall immediately deliver to the other party, or if and to the extent \nrequested by such party, destroy, all Confidential Information of the other \nparty, including any and all copies thereof, which the other party previously \nfurnished to it in furtherance of this Agreement, including, without \nlimitation, any such information, knowledge or know-how of which either party, \nas the receiving party, was apprised and which was reduced to tangible or \nwritten form by such party or in its behalf at any time during the term of this \nAgreement. Within five (5) working days after any such destruction, Publisher \nshall provide SCEA with an itemized statement certified to be accurate by an \nofficer of Publisher, indicating the number of copies and\/or units of the Sony \nMaterials and\/or units of the Sony Materials and\/or Confidential Information \nwhich have been destroyed, the location and date of such destruction and the \ndisposition of the remains of such destroyed materials.\n\n 16.5 RENEWAL OR EXTENSION OF THIS AGREEMENT; TERMINATION WITHOUT PREJUDICE.\nSCEA shall be under no obligation to renew or extend this Agreement \nnotwithstanding any actions taken by either of the parties prior to the \nexpiration of this Agreement. Upon the expiration of this Agreement, neither \nparty shall be liable to the other for any damages (whether direct, \nconsequential or incidental, and including, without limitation, any \nexpenditures, loss of profits or prospective profits) sustained or arising out \nof or alleged to have been sustained or to have arisen out of such expiration. \nHowever, the expiration of this Agreement shall not excuse either party from \nits previous breach of any of the provisions of this Agreement or from any \nobligations surviving the expiration of this Agreement, and full legal and \nequitable remedies shall remain available for any breach or threatened breach \nof this Agreement or any obligations arising therefrom. The expiration or \ntermination of this Agreement shall be without prejudice to any rights or \nremedies which one party may otherwise have against the other party.\n\n17. MISCELLANEOUS PROVISIONS.\n\n -19-\n 20\n 17.1 NOTICES. All notices or other communications required or desired to be\nsent to either of the parties shall be in writing and shall be sent by\nregistered or certified mail, postage prepaid, return receipt requested, or sent\nby recognized international courier service (e.g., Federal Express, DHL, etc.),\ntelex, telegram or facsimile, with charges prepaid. The address for all notices\nor other communications required to be sent to SCEA or Publisher, respectively,\nshall be the mailing address stated in the preamble hereof, or such other\naddress as may be provided by written notice from one party to the other on at\nleast ten (10) days' prior written notice. Any such notice shall be effective\nupon the date of receipt, as confirmed by the sending party.\n\n 17.2 FORCE MAJEURE. Neither SCEA nor Publisher shall be liable for any loss\nor damage or be deemed to be in breach of this Agreement if its failure to\nperform or failure to cure any of its obligations under this Agreement results\nfrom any event or circumstance beyond its reasonable control, including, without\nlimitation, any natural disaster, fire, flood, earthquake or other Act of God;\nshortage of equipment, materials, supplies or transportation facilities; strike\nor other industrial dispute; war or rebellion; shutdown or delay in power,\ntelephone or other essential service due to the failure of computer or\ncommunications equipment or otherwise; or compliance with any law, regulation or\norder (whether valid or invalid) of any governmental body, other than an order,\nrequirement or instruction arising out of Publisher's violation of any\napplicable law or regulation; provided, however, that the party interfered with\ngives the other party written notice thereof promptly, and, in any event, within\nfifteen (15) business days of discovery of any such Force Majeure condition. If\nnotice of the existence of any Force Majeure condition is provided within such\nperiod, the time for performance or cure shall be extended for a period equal to\nthe duration of the Force Majeure event or circumstance described in such\nnotice, except that any such cause shall not excuse the payment of any sums owed\nby SCEA prior to, during or after any such Force Majeure condition. In the event\nthat the Force Majeure condition continues for more than one hundred and twenty\n(120) days, SCEA may terminate this Agreement for cause by providing written\nnotice to Publisher to such effect.\n\n 17.3 NO PARTNERSHIP OR JOINT VENTURE. The relationship between SCEA and\nPublisher, respectively, is that of licensor and licensee. Both parties are\nindependent contractors and are not the legal representative, agent, joint\nventurer, partner or employee of the other party for any purpose whatsoever.\nNeither party has any right or authority to assume or create any obligations of\nany kind or to make any representation or warranty on behalf of the other party,\nwhether express or implied, or to bind the other party in any respect\nwhatsoever.\n\n 17.4 ASSIGNMENT. SCEA has entered into this Agreement based upon the\nparticular reputation, capabilities and experience of Publisher and its\nofficers, directors and employees. Accordingly, Publisher may not assign this\nAgreement or any of its rights hereunder, nor delegate or otherwise transfer any\nof its obligations hereunder, to any third party unless the prior written\nconsent of SCEA shall first be obtained. This Agreement shall not be assigned in\ncontravention of Section 15.2(x). Any attempted or purported assignment,\ndelegation or other such transfer, directly or indirectly, without the required\nconsent of SCEA shall be void and a material breach of this Agreement. Subject\nto the foregoing, this Agreement shall inure to the benefit of the parties and\ntheir respective successors (other than under the conditions set forth in\nSection 5.2(x)) and permitted assigns. SCEA shall have the right to assign any\nand all of its rights and obligations hereunder to any affiliate(s), including,\nwithout limitation, its obligations under Section 7 hereof.\n\n 17.5 SUBCONTRACTORS. Publisher shall not sell, assign, delegate,\nsubcontract, sublicense or otherwise transfer or encumber all or any portion of\nthe licenses herein granted; provided, however, that Publisher may retain those\nsubcontractor(s) to assist with the development of Licensed Products which: (i)\nhave signed a Nondisclosure Agreement and a Developer Agreement with SCEA (the\n\"PlayStation Agreements\") in full force and effect throughout the term of such\ndevelopment; or (ii) have signed an SCEA-approved subcontractor agreement\nbetween Publisher and subcontractor, which subcontractor agreement shall contain\nsubstantially identical terms to the Nondisclosure Agreement and the\nconfidentiality provisions of this Agreement (\"Subcontractor Agreement\"). If a\nsubcontractor will use Development Tools provided by Publisher, it must also\ncomply with the requirements set forth in Section 16.5 of an LDA with respect to\nusage of such Development Tools. Such Subcontractor Agreement shall provide that\nSCEA is a third party beneficiary of such Subcontractor Agreement, and has the\nfull right to bring any actions against such subcontractors to comply in all\nrespect with the terms and conditions of this Agreement. Publisher agrees to\nprovide a copy of any such Subcontractor Agreement to SCEA prior to and\nfollowing execution thereof. Publisher shall not disclose to any subcontractor\nany Confidential Information of SCEA (as defined herein and in the Nondisclosure\nAgreement), including, without limitation, any Sony Materials, unless and until\neither the PlayStation Agreements or a Subcontractor Agreement have been\nexecuted. Notwithstanding any consent which may be granted by SCEA for Publisher\nto employ any such permitted subcontractor(s), or any such separate agreement(s)\nthat may be entered into by Publisher with any such permitted subcontractor,\nPublisher shall remain fully liable for its compliance with all of the\nprovisions of this Agreement and for the compliance of any and all permitted\nsubcontractors with the provisions of any agreements entered into by such\nsubcontractors in accordance with this Section 17.5. Publisher shall use its\nbest efforts to cause its subcontractors employed hereby to comply in all\nrespects with the terms and conditions of this Agreement, and hereby\nunconditionally guarantees all obligations of its subcontractors.\n\n 17.6 COMPLIANCE WITH APPLICABLE LAWS. The parties shall at all times comply\nwith all applicable\n\n\n\n -20-\n\n 21\nregulations and orders of their respective countries and all conventions and \ntreaties to which their countries are a party or relating to or in any way \naffecting this Agreement and the performance by the parties of this Agreement. \nEach party, at its own expense, shall negotiate and obtain any approval, \nlicense or permit required in the performance of its obligations, and shall \ndeclare, record or take such steps to render this Agreement binding, including, \nwithout limitation, the recording of this Agreement with any appropriate \ngovernmental authorities (if required). \n\n 17.7 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be \ngoverned by and integrated in accordance with the laws of the State of \nCalifornia, excluding that body of law related to choice of laws, and of the \nUnited States of America. Any action or proceeding brought to enforce the terms \nof this Agreement or to adjudicate any dispute arising hereunder shall be \nbrought in the courts of the County of San Mateo, State of California (if under \nState law) or the Northern District of California (if under Federal law or \npursuant to diversity jurisdiction). Each of the parties hereby submits itself \nto the exclusive jurisdiction and venue of such courts for purposes of any such \naction and agrees that any service of process may be effected by delivery of \nthe summons in the manner provided in the delivery of notices set forth in \nSection 17.1 above. In addition, each party hereby waives the right to a jury \ntrial in any action or proceeding brought to enforce the terms of this \nAgreement or to adjudicate any dispute arising hereunder.\n\n 17.8 LEGAL COSTS AND EXPENSES. In the event it is necessary for either\nparty to retain the services of an attorney or attorneys to enforce the terms of\nthis Agreement or to file or defend any action arising out of this Agreement,\nthen the prevailing party in any such action shall be entitled, in addition to\nany other rights and remedies available to it at law or in equity to recover\nfrom the other party its reasonable fees for attorneys and expert witnesses,\nplus such court costs and expenses as may be fixed by any court of competent\njurisdiction. The term \"prevailing party\" for the purposes of this Section shall\ninclude a defendant who has by motion, judgment, verdict or dismissal by the\ncourt, successfully defended against any claim that has been asserted against\nit.\n\n 17.9 REMEDIES. Unless expressly set forth to the contrary, either \nparty's election of any remedies provided for in this Agreement shall not be \nexclusive of any other remedies available hereunder or otherwise at law or in \nequity, and all such remedies shall be deemed to be cumulative. Any breach of \nSections 2, 3, 4, 5, 6, 7.1, 12 and 14 of this Agreement would cause \nirreparable harm to SCEA, the extent of which would be difficult to ascertain. \nAccordingly, Publisher agrees that, in addition to any other remedies to which \nSCEA may be entitled, in the event of a breach by Publisher or any of its \nemployees or permitted subcontractors of any such Sections of this Agreement, \nSCEA shall be entitled to the immediate issuance without bond of ex parte \ninjunctive relief enjoining any breach or threatened breach of any or all of \nsuch provisions. In addition, Publisher shall indemnify SCEA for all losses, \ndamages, liabilities, costs and expenses (including reasonable attorneys' fees \nand all reasonable related costs) which SCEA may sustain or incur as a result \nof such breach.\n\n 17.10 SEVERABILITY. In the event that any provision of this Agreement (or \nportion thereof) is determined by a court of competent jurisdiction to be \ninvalid or otherwise unenforceable, such provision (or part thereof) shall be \nenforced to the extent possible consistent with the stated intention of the \nparties, or, if incapable of such enforcement, shall be deemed to be deleted \nfrom this Agreement, while the remainder of this Agreement shall continue in \nfull force and remain in effect according to its stated terms and conditions.\n\n 17.11 SECTIONS SURVIVING EXPIRATION OR TERMINATION. The following sections\nshall survive the expiration or earlier termination of this Agreement for any \nreason: 4, 5.5, 6, 7.2, 7.4, 9, 10, 11, 12, 14, 15.5, 16, 17.4, 17.5, 17.6, \n17.7, 17.8, 17.9 and 17.10.\n\n 17.12 WAIVER. No failure or delay by either party in exercising any \nright, power or remedy under this Agreement shall operate as a waiver of any \nsuch right, power or remedy. No waiver of any provision of this Agreement shall \nbe effective unless in writing and signed by the party against whom such waiver \nis sought to be enforced. Any waiver by either party of any provision of this \nAgreement shall not be construed as a waiver of any other provision of this \nAgreement, nor shall such waiver operate as or be construed as a waiver of such \nprovision respecting any future event or circumstance.\n\n 17.13 MODIFICATION. No modification of any provision of this Agreement \nshall be effective unless in writing and signed by both of the parties.\n\n 17.14 HEADINGS. The section headings used in this Agreement are intended \nprimarily for reference and shall not by themselves determine the construction\nor interpretation of this Agreement or any portion hereof.\n\n 17.15 INTEGRATION. This Agreement (together with the Exhibits attached \nhereto) constitutes the entire agreement between SCEA and Publisher and \nsupersedes all prior or contemporaneous agreements, proposals, understandings \nand communications between SCEA and Publisher, whether oral or written, with \nrespect to the subject matter hereof; provided, however, that notwithstanding \nanything to the contrary in the foregoing, the Nondisclosure Agreement referred \nto in Section 14 hereto shall remain in full force and effect.\n\n 17.16 COUNTERPARTS. This Agreement may be executed in counterparts, each \nof which shall be deemed an original, and together shall constitute one and the \nsame instrument.\n\n 17.17 CONSTRUCTION. This Agreement shall be fairly interpreted in \naccordance with its terms and without any\n\n\n - 21 -\n 22\nstrict construction in favor of or against either of the parties.\n\nIN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed \nas of the day and year first written above.\n\nSONY COMPUTER ENTERTAINMENT AMERICA BAM! [ILLEGIBLE]\n\nBy: \/s\/ PHIL HARRISON By: \/s\/ RAY MUSCI\n ----------------------------------- ----------------------------\nPrint Name: Phil Harrison Print Name: Ray Musci\n --------------------------- --------------------\nTitle: VP Third Party\/R&D Title: President\n -------------------------------- -------------------------\nDate: 2\/11\/00 Date: 2\/10\/00\n --------------------------------- --------------------------\n\nNOT AN AGREEMENT UNTIL\nEXECUTED BY BOTH PARTIES\n\n\n\n\n\n\n -22- CONFIDENTIAL\n 23\n\n EXHIBIT A\n\n\n ROYALTIES\n\n\nA. LICENSED PRODUCT PER UNIT ROYALTY. The per Unit royalty due under Section \n 9 of the Agreement with respect to each Licensed Product shall be [*], \n unless otherwise set forth below.\n\nB. SCEA ESTABLISHED THIRD PARTY DEMO DISC PROGRAM ROYALTIES. Publisher shall \n pay SCEA a per Unit royalty in United States dollars of [*] for each Unit\n of the Consumer Promotional Disc Program and the Trade Promotional Disc\n Program manufactured. The quantity of Units ordered shall comply with the\n terms of such SCEA Established Third Party Demo Disc Program. Payment of\n such royalties shall be made to SCEA in conjunction with the payments to\n SCEA of the manufacturing costs for each Unit and pursuant to the terms\n and conditions set forth in Sections 7.2.3 and 9 hereto and in such SCEA\n Established Third Party Demo Disc Program.\n\nC. ADJUSTMENTS TO LICENSED PRODUCT ROYALTY - HIT TITLE REBATE\n\n 1. In the event that the total purchases by Publisher from SCEA with \n respect to any Licensed Product exceed the following numbers of \n Units during the first three (3) years after first commercial \n shipment of such Licensed Product, Publisher shall be entitled to a \n rebate with respect to royalties paid by Publisher to SCEA pursuant \n to Section 9 of the Agreement (\"Hit Title Rebate\") which shall be \n credited to Publisher's account as provided below, as follows:\n\n<\/pre>\n
\n\n VOLUME ROYALTY REBATE
\n —— ————–
\n
\n a. Over [*] Units and up to [*] Units [*] of Royalty paid with
\n respect to such Units<\/p>\n b. Over [*] Units and up to [*] Units [*] of Royalty paid with
\n respect to such Units<\/p>\n
c. Over [*] Units and up to [*] Units [*] of Royalty paid with
\n respect to such Units<\/p>\n
d. Over [*] Units and up to [*] Units [*] of Royalty paid with
\n respect to such Units<\/p>\n
e. Over [*] Units [*] of Royalty paid with
\n respect to such Units.
\n<\/c><\/s><\/caption>\n<\/table>\n
2. SCEA shall credit Publisher’s account for the Hit Title Rebates as
\n follows: (i) if Publisher’s initial order for a Licensed Product is
\n less than the Hit Title Rebate threshold provided in C.1.a above,
\n then SCEA shall credit Publisher’s account sixty (60) days
\n following the date that Publisher notifies SCEA that sales of a
\n Licensed Product exceed the Hit Title Rebate threshold, subject to
\n SCEA’s right to confirm such information; (ii) if Publisher’s
\n initial order for a Licensed Product reaches or exceeds the Hit
\n Title Rebate threshold provided in C.1.a above, then Publisher may
\n credit the Hit Title Rebate amount set forth above as a separate
\n line item on the Purchase Order with respect to such Licensed
\n Product. It is Publisher’s responsibility to inform SCEA when it
\n reaches a Hit Title Rebate threshold, and Publisher shall not take
\n a Hit Title Rebate as a separate line item on a Purchase Order
\n without discussing first with SCEA.<\/p>\n
3. The Hit Title Rebate may not be used in conjunction with any
\n royalty reduction program of Sony in effect from time to time,
\n including but not limited to any “Greatest Hits” program, nor shall
\n a Hit Title Rebate be taken on a Third Party Demo Disc program or
\n any promotional program of SCEA.<\/p>\n
4. Each Licensed Product shall be considered independently for
\n purposes of calculating the Hit Title Rebate and the rebates shall
\n be [*]. By way of example:<\/p>\n
a. If Publisher’s aggregate shipments for a single Licensed
\n Product are less than [*] Units, [*].<\/p>\n
* Confidential portions omitted and filed separately with the Commission.<\/p>\n
– 23 – CONFIDENTIAL
\n 24
\n b. If Publisher’s aggregate shipments for a single Licensed Product
\n exceed [*] but are less than [*] Units, Publisher will be entitled
\n to receive [*] of the Royalty paid as a rebate with respect to the
\n first [*] Units, at the time Publisher is invoiced for such excess
\n order, and shall thereafter be charged a per Unit royalty of $[*]
\n less [*], until Units of the Licensed Product shipped exceed [*]
\n Units.<\/p>\n
c. If Publisher’s aggregate orders for a single Licensed Product
\n exceed [*] Units, but are less than [*] Units,
\n Publisher will receive [*] of the Royalty paid as a rebate with
\n respect to the first [*] Units, at the time Publisher is
\n invoiced for such excess order, and shall thereafter be charged a
\n per Unit royalty of $[*] less [*], until Units of the Licensed
\n Product shipped exceed [*] Units. Please note that in this
\n case Publisher will only receive a [*] additional rebate with
\n respect to the first [*] Units because it has already
\n received a [*] rebate on such Units.<\/p>\n
* Confidential portions omitted and filed separately with the Commission.<\/p>\n
– 24 –
\n 25
\n EXHIBIT B<\/p>\n
[PLAYSTATION LOGO]
\n SCEA THIRD PARTY ACCOUNTABILITY REPORT<\/p>\n
Product Codes SLUS-FAKE<\/p>\n
\n\nTitle: Super Fake Bug Date: 7\/8\/98 Rev. No. 1.0 First Rev Date: 7\/8\/98
\n
\nLead Analyst Genre Action\/Arcade No of Discs 1
\nAcct. Manager View 3\/4 Overhead ESRB T
\nPublisher F for Fake, L.T.D. Environment 3-D Total Revs 1
\nDeveloper Not Even Real Prod. No of Players Up to 2 Players
\nControllers Analog Pad
\nMisc Periph Memory Card
\n<\/c><\/c><\/s><\/caption>\n<\/table>\nSUPER FAKE BUG still contains problems.
\nSome of these problems may have been waived by the Account Manager, [*] <\/p>\n
Third Party Quality Assurance highly recommends correcting all Class
\n“A” bugs, and all “TRC” and “Guideline” issues. <\/p>\n
We also recommend that all remaining Class “B”, “C” and “D” bugs be corrected
\nwhere possible. <\/p>\n
The publisher, F FOR FAKE, L.T.D. assumes full responsibility for these
\nproblems.<\/p>\n
[1] A BUGS [1] B BUGS [1] C BUGS [1] D BUGS [1] GUIDELINE ISSUES [1] CONTENT
\nISSUES [1] TRC ISSUES<\/p>\n
Options used should be assumed to be default settings except where noted.<\/p>\n
Class= A<\/p>\n
BUG NO. [A1] DATE [7\/8\/98] CATEGORY [Crash] REV [1.0] REV FIXED [N\/A] FREQUENCY
\n[Always] STATUS [Open] EXPLANATION [Not Fixed] [100%]<\/p>\n
BUG DESCRIPTION<\/p>\n
In Fakeland, Act 2, if the user jumps onto the third lilypad from the left, the
\ngame freezes. At this point, the system had to be reset.<\/p>\n
Class= B<\/p>\n
BUG NO. [B1] DATE [7\/8\/98] CATEGORY [Collision] REV [1.0] REV FIXED [N\/A]
\nFREQUENCY [Always] STATUS [Open] EXPLANATION [Not Fixed] [100%]<\/p>\n
BUG DESCRIPTION<\/p>\n
In Space Odyssey, when Dr. Strangelove appears at the Overlook hotel and knocks
\non the door, if the user repeatedly pushes up on the D-Pad, Dr. Strangelove
\npasses through the door.<\/p>\n
* Confidential portion omitted and filed separately with the Commission.<\/p>\n
1<\/p>\n
26
\n SCEA THIRD PARTY ACCOUNTABILITY REPORT FOR:<\/p>\n
SUPER FAKE BUG<\/p>\n
\n\n————————————————————————————————
\nCLASS = C
\n————————————————————————————————
\n
\nBug No. C1 Date 7\/8\/98 Category Graphics Rev. 1.0 Rev. Fixed N\/A Frequency Always<\/p>\nStatus Open Explanation Not Fixed 100%<\/p>\n
<\/c><\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
BUG DESCRIPTION<\/p>\n
During any instant replay, if the camera is rotating while the ball is in
\nmotion from a kick, the entire screen jitters (shakes).<\/p>\n
EXPECTED: The screen should not jitter or shake when using normal functions
\nduring replay mode.<\/p>\n
\n\n————————————————————————————————
\nCLASS = D
\n————————————————————————————————
\n
\nBug No. D1 Date 7\/8\/98 Category Comment Rev. 1.0 Rev. Fixed N\/A Frequency Always<\/p>\nStatus Open Explanation Not Fixed 100%<\/p>\n
<\/c><\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
BUG DESCRIPTION<\/p>\n
The hedge maze outside the Overlook hotel does not contain snow. To enhance
\ngameplay appeal, snow and ice should be added to the hedge maze design.<\/p>\n
\n\n———————————————————————————————–
\nCLASS = TECHNICAL REQUIREMENT
\n———————————————————————————————–
\n
\nBug No. TRC 1 Date 7\/8\/98 Category TRC Rev. 1.0 Rev. Fixed N\/A Frequency Always<\/p>\nStatus Open Explanation Not Fixed 100%<\/p>\n
<\/c><\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
BUG DESCRIPTION<\/p>\n
No calibration mode is available for the Dual Analog controller. As outlined in
\nthe SONY Technical Requirements Checklist (Ver 1.2, Sec 11.2.1, Page 13) “There
\nis a calibration mode [for Analog Joystick].”<\/p>\n
\n\n———————————————————————————————————-
\nCLASS = GUIDELINE
\n———————————————————————————————————-
\n
\nBug No. Guideline 1 Date 7\/8\/98 Category Guideline Rev. 1.0 Rev. Fixed N\/A Frequency Always<\/p>\nStatus Open Explanation Not Fixed 100%<\/p>\n
<\/c><\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
BUG DESCRIPTION<\/p>\n
The triangle button does not take the user back to the previous menu. As
\noutlined in the SONY User Interface Guidelines (Ver 2.0, Sec 4.5, page A-3)
\n“The triangle button should be used to take the user to the previous menu.”<\/p>\n
2<\/p>\n
27
\n SCEA THIRD PARTY ACCOUNTABILITY REPORT FOR:<\/p>\n
SUPER FAKE BUG<\/p>\n
\n\n—————————————————————————————————–
\nCLASS = CONTENT
\n—————————————————————————————————–
\n
\nBug No. Content 1 Date 7\/8\/98 Category Content Rev. 1.0 Rev. Fixed N\/A Frequency Always<\/p>\nStatus Open Explanation Not Fixed 100%<\/p>\n
<\/c><\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
BUG DESCRIPTION<\/p>\n
In the Overlook hotel, the paintings on the wall contain images of naked women.<\/p>\n
\n—————————————————————————————————–
\n
\n1 A BUGS 1 B BUGS 1 C BUGS 1 D BUGS 1 GUIDELINE ISSUES 1 CONTENT ISSUES 1 TRC ISSUES
\n—————————————————————————————————–<\/p>\n<\/c><\/c><\/c><\/c><\/c><\/c><\/s><\/table>\n
——————————— ———————————-
\n -VP Third Party -Quality Assurance Director<\/p>\n
——————————— ———————————-
\n -Account Manager -Publisher Representative<\/p>\n
SUPER FAKE BUG<\/p>\n
3
\n 28<\/p>\n
EXHIBIT C<\/p>\n
[SONY LOGO] ADVERTISING\/PRINTED MATERIAL ACCOUNTABILITY FORM
\n PAGE 1 OF 1<\/p>\n
BASIC INFORMATION<\/p>\n
PRODUCT NUMBER DATE
\n——————————————————————————–<\/p>\n
TITLE VERSION
\n——————————————————————————–<\/p>\n
SCEA ACCOUNT MANAGER E-MAIL ADDRESS
\n——————————————————————————–<\/p>\n
PUBLISHER DEVELOPER
\n——————————————————————————–<\/p>\n
SUBMISSIONS CONTACT PHONE FAX
\n——————————————————————————–<\/p>\n
ADVERTISEMENT\/PRINTED MATERIAL CHECKLIST<\/p>\n
TYPE OF MEDIA BEING SUBMITTED:
\n——————————————————————————–<\/p>\n
INTENDED USE:
\n——————————————————————————–<\/p>\n
RELEASE DATE OF ADVERTISEMENT\/PRINTED MATERIAL:
\n——————————————————————————–<\/p>\n
[ ] Advertising material will not be created for this title.<\/p>\n
NOTES:
\n ———————————————————————-<\/p>\n
———————————————————————-<\/p>\n
ADVERTISING\/PRINTED MATERIAL: Pre-production samples of the advertising,
\nmerchandising, promotional, and display material of or concerning the Licensed
\nProducts (collectively referred to hereinafter as the “Advertising Materials”)
\nshall be submitted by Publisher to SCEA, free of cost, for SCEA’s evaluation
\nand approval as to quality, style, appearance, usage of any of the Licensed
\nTrademarks, and appropriate reference of any required legal notices, prior to
\nany actual production, use, or distribution of any such items by Publisher or
\nin its behalf. No such proposed Advertising Material shall be produced, used or
\ndistributed directly or indirectly by Publisher without first obtaining the
\nwritten approval of SCEA which approval will not be unreasonably withheld or
\ndelayed. SCEA may require Publisher to immediately withdraw and reprint any
\nAdvertising Materials for the Licensed Product which have been published but
\nthey have not received the written approval of SCEA. Failure to follow the SCEA
\nguidelines for use of Licensed Trademarks and Advertising Materials shall be
\nconsidered a material breach of Publisher’s License Agreement with SCEA.<\/p>\n
PRODUCT MANAGEMENT: By signing this form, the Publisher confirms that all
\nguidelines required by SCEA have been followed in the preparation of this
\nproduct advertising.<\/p>\n
SIGNATURE TITLE DATE
\n——————————————————————————–<\/p>\n
SUBMISSION INFORMATION<\/p>\n
SUBMISSION: After assembling the required materials, please forward them
\n with a copy of this completed form to:<\/p>\n
Packaging\/Advertising Coordinator
\n SCEA
\n 919 E. Hillsdale Blvd., Suite 200
\n Foster City, CA 94404
\n Phone: 650-655-5599 or 3549<\/p>\n
29
\n EXHIBIT D<\/p>\n
[FORM OF LETTER REGARDING SCEA DEMO DISCS]<\/p>\n
VIA FAX<\/p>\n
[Date]<\/p>\n
[Name]
\n[Third Party Name]
\n[Address]<\/p>\n
Re: [Specify SCEA Demo Disc Program]<\/p>\n
Dear ________________:<\/p>\n
This letter confirms that Sony Computer Entertainment America (“SCEA”) would
\nlike to include the Product Information (listed below) of your PlayStation game
\n(listed below) in the following Demo Disc:<\/p>\n
Game Title:
\n Type of Product Information Required:
\n Demo Disc program:
\n Deadline:
\n Date of Licensed Publisher Agreement:<\/p>\n
Please return a signed copy of this letter to ________ by fax at _________ and
\nsubmit the Product Information directly to SCEA’s consultant, ________________,
\nno later than the Deadline set forth above. Failure to provide this
\nacknowledged letter and the code, by this date, will result in removal of your
\nProduct Information from the Demo Disc.<\/p>\n
The inclusion of your Product Information is subject to the terms and
\nconditions of the Licensed Publisher Agreement between SCEA and you.<\/p>\n
Very truly yours, AGREED AND ACKNOWLEDGED BY:<\/p>\n
[PUBLISHER]<\/p>\n
By: _______________________________<\/p>\n
Title: ____________________________<\/p>\n
Date: _____________________________<\/p>\n
cc: Legal Department<\/p>\n
-27-<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6843,8866],"corporate_contracts_industries":[9394,9513],"corporate_contracts_types":[9613,9616],"class_list":["post-42495","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-bam-entertainment-inc","corporate_contracts_companies-sony-corp","corporate_contracts_industries-consumer__audio","corporate_contracts_industries-technology__software","corporate_contracts_types-operations","corporate_contracts_types-operations__ip"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42495","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42495"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42495"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42495"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42495"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}