\n[*] [*] [*] [*]<\/p>\n[*] [*] [*] [*]<\/p>\n
[*] [*] [*] [*]<\/p>\n
[*] [*] [*] [*]<\/p>\n
[*] [*] [*] [*]<\/p>\n
[*] [*] [*] [*]<\/p>\n
3MM+ 20% 20% 20%
\n——————————————————————————-
\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
8.4.1 STANDARD REBATE PROGRAM. All Publishers qualify for the Standard
\nRebate program. Rebates will be offered on an individual title basis. Rebates
\nwill be given to any individual Licensed Product that exceeds the above numbers
\nof Units during the first year after first commercial shipment of such Licensed
\nProduct. The rebate in effect at the end of such year for the Licensed Product
\nwill remain in effect for as long as Publisher continues to sell such Licensed
\nProduct, but Publisher will not receive further rebates if sales of such
\nLicensed Product hit additional thresholds as specified above after such year.
\nThe Standard Rebate may not be used in conjunction with a Third Party Demo Disc
\nprogram or any promotional program of SCEA, with Licensed Products that qualify
\nfor any “Greatest Hits” program of SCEA or with Licensed Products that qualify
\nfor the [*] .<\/p>\n
8.4.2 LEVEL 1 REBATE PROGRAM: To be eligible for the Level 1 Rebate
\nprogram, Publisher must ship over [*] Units of certain
\nLicensed Products in a single Fiscal Year. Level 1 Rebates shall be credited to
\nPublisher on an individual title basis. Other terms of the Level 1 Rebate are
\nas follows:<\/p>\n
(i) Only Publisher’s titles (as determined below) that meet the following
\nconditions shall count toward the [*] Unit threshold:
\nPublisher must order at least [*] Units of the<\/p>\n
13<\/p>\n
* Confidential portion omitted and filed separately with the Commission.<\/p>\n
16
\nLicensed Product both within the first year of commercial release of such
\nLicensed Product and during the qualifying Fiscal Year.<\/p>\n
(ii) Any Licensed Products, including “Greatest Hits” titles and products
\nfor the original PlayStation game console, but excluding all demo discs, shall
\ncount toward the [*] Unit threshold (provided they meet the conditions set forth
\nin Section 8.4.2(i) above). For purposes of determining Level 1 Rebate
\nthresholds and the conditions set forth in Section 8.4.2(i), full priced
\nLicensed Products and “Greatest Hits” Licensed Products shall be considered
\nseparate Licensed Products, with separate Unit minimums and release dates.<\/p>\n
(iii) Level 1 Rebates shall apply only to Licensed Products (not including
\n“Greatest Hits” titles, Licensed Products qualifying for the [*] and products
\nfor the original PlayStation game console) ordered in the Fiscal Year following
\nthe Fiscal Year in which the [*] Unit threshold is met. Units of Licensed
\nProducts that qualified Publisher for inclusion in the Level 1 Rebate program in
\nthe previous Fiscal Year shall not be entitled to receive the Level 1 Rebate.<\/p>\n
(iv) Publisher must re-qualify for the Level 1 Rebate Program each Fiscal
\nYear. If a Publisher fails to requalify for any Fiscal Year, then the Standard
\nRebate shall apply in such Fiscal Year. The first Fiscal Year for which a
\nPublisher may qualify for the Level 1 Rebate shall be the Fiscal Year ending
\nMarch 31, 2000, and if the Publisher qualifies for the Level 1 Rebate, it will
\napply to Licensed Products ordered in the Fiscal Year commencing April 1, 2000.<\/p>\n
(v) Licensed Products eligible for the Level 1 Rebate program shall not be
\neligible for Standard Rebates, and Level 1 Rebates shall supersede Standard
\nRebates with respect to any individual Licensed Product. If a Licensed Product
\nqualifies for the Standard Rebate in one Fiscal Year, and Publisher qualifies
\nfor the Level 1 Rebate in the next Fiscal Year; Units of such Licensed Product
\nordered in the next Fiscal Year will receive the Level 1 Rebate commencing on
\nApril 1 of the next Fiscal Year going forward, but such Level 1 Rebate will not
\nbe credited retroactively to Units of the Licensed Product ordered in the
\nprevious Fiscal Year. For example, Publisher orders [*] Units of Product X in
\nFiscal Year 2001, receiving a Standard Rebate of [*]. Publisher qualifies for
\nthe Level 1 Rebate in Fiscal Year 2002. Publisher will receive the Level 1
\nRebate of [*] commencing with Units ordered on April 1, 2001, but will not
\nreceive a retroactive credit for Units ordered prior to April 1, 2001. When
\nPublisher reaches the [*] Unit threshold, it will receive a retroactive credit
\nof [*] on all Level 1 Rebate Units ordered, as well as a retroactive credit of
\n[*] on Standard Rebate Units ordered in the previous Fiscal Year, and Publisher
\nwill receive the Level 1 Rebate of [*] going forward.<\/p>\n
8.4.3 LEVEL 2 REBATE PROGRAM: To be eligible for the Level 2 Rebate
\nprogram, Publisher must ship over [*] Units of certain Licensed Products in any
\nFiscal Year. Level 2 Rebates shall be credited to Publisher on an individual
\ntitle basis. Other terms of the Level 2 Rebate are as follows:<\/p>\n
(i) Only Publisher’s titles (as determined below) that meet the following
\nconditions shall count toward the [*] Unit threshold: Publisher must order at
\nleast [*] Units of the Licensed Product both within the first year of commercial
\nrelease of such Licensed Product and during the qualifying Fiscal Year.<\/p>\n
(ii) Any Licensed Products, including “Greatest Hits” titles and products
\nfor the original PlayStation game console, but excluding all demo discs, shall
\ncount toward the [*] Unit threshold (provided they meet the conditions set forth
\nin Section 8.4.3(i) above). For purposes of determining Level 2 Rebate
\nthresholds and the conditions set forth in Section 8.4.2(i), full priced
\nLicensed Products and “Greatest Hits” Licensed Products shall be considered
\nseparate Licensed Products, with separate Unit minimums and release dates.<\/p>\n
(iii) Level 2 Rebates shall apply only to Licensed Products (not including
\n“Greatest Hits” titles, Licensed Products qualifying for the [*] and products
\nfor the original PlayStation game console) ordered in the Fiscal Year following
\nthe Fiscal Year in which the [*] Unit threshold is met. Units of Licensed
\nProducts that qualified Publisher for inclusion in the Level 2 Rebate program in
\nthe previous. Fiscal Year shall not be entitled to receive the Level 2 Rebate.<\/p>\n
(iv) Publisher must re-qualify for the Level 2 Rebate Program each Fiscal
\nYear. If Publisher fails to requalify for any Fiscal Year then the Standard
\nRebate or Level 1 Rebate, as the case may be, shall apply in such Fiscal Year.
\nThe first Fiscal Year for which a Publisher may qualify for the Level 2 Rebate
\nshall be the Fiscal Year ending March 31, 2000, and if the Publisher qualifies
\nfor the Level 2 Rebate, it will apply to Licensed Products ordered in the Fiscal
\nYear commencing April 1, 2000.<\/p>\n
(v) Licensed Products eligible for the Level 2 Rebate program shall not be
\neligible for Standard Rebates or Level 1 Rebates, and Level 2 Rebates shall
\nsupersede Standard Rebates and Level 1 Rebates with respect to any individual
\nLicensed Product. If a Licensed Product qualifies for the Standard Rebate or
\nLevel 1 Rebate in one Fiscal Year, and Publisher qualifies for the Level 2
\nRebate in the next Fiscal Year, Units of such Licensed Product ordered in the
\nnext Fiscal Year will receive the Level 2 Rebate going forward, but such Level 2
\nRebate will not be credited retroactively to Units of the Licensed Product
\nordered in the previous Fiscal Year. See Section 8.4.2(v) for an example.<\/p>\n
* Confidential portions omitted and filed separately with the Commission.<\/p>\n
14
\n 17
\n 8.5 CALCULATION AND USE OF REBATES. Rebate percentages for all rebate
\nprograms shall be credited against royalties owed SCEA and shall have no other
\nmonetary value. All rebates, whether under the Standard Rebate, Level 1 Rebate
\nor Level 2 Rebate Programs shall be issued by SCEA as a credit to Publisher for
\nuse against future royalty payments. It is Publisher’s responsibility to inform
\nSCEA when it reaches any rebate threshold. In no event shall Publisher take a
\ndeduction off royalties owed SCEA or deduction off an invoice payable to SCEA
\non current production unless and until SCEA issues a credit to Publisher in
\nwriting or unless otherwise agreed in writing. From time to time SCEA may allow
\nPublisher to use credits in other manners on terms and conditions to be
\ndetermined by SCEA. Publisher may use rebate credits to procure Development
\nTools. Units of Licensed Products shall be considered “ordered” when Units
\nfirst begin to ship from a Designated Manufacturing Facility.<\/p>\n
8.6 REBATE CREDITS. Subject to Sections 8.4.2(v) and 8.4.3(v), all rebate
\nprograms are [*], such that Publisher receives a credit for each rebate
\npercentage against [*] Units when it reaches the Unit threshold for the next
\nrebate percentage. SCEA shall credit Publisher’s account with respect to [*]
\nrebates as follows: (A) if Publisher’s initial order for a Licensed Product is
\nless than any rebate threshold provided above, then SCEA shall [*] credit
\nPublisher’s account sixty (60) days following the date that Publisher notifies
\nSCEA that orders of a Licensed Product exceed any rebate threshold, subject to
\nSCEA’s right to confirm such information; and (B) if Publisher’s initial order
\nfor a Licensed Product reaches or exceeds any rebate threshold provided above,
\nthen Publisher may credit the rebate amount set forth above as a separate line
\nitem on the Purchase Order with respect to such Licensed Product, subject to
\nSCEA’s confirmation right.<\/p>\n
9. REPRESENTATIONS AND WARRANTIES.<\/p>\n
9.1 REPRESENTATIONS AND WARRANTIES OF SCEA. SCEA represents and warrants
\nsolely for the benefit of Publisher that SCEA has the right, power and
\nauthority to enter into this Agreement and to fully perform its obligations
\nhereunder.<\/p>\n
9.2 REPRESENTATIONS AND WARRANTIES OF PUBLISHER. Publisher represents and
\nwarrants that:<\/p>\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 Product Software,
\nProduct 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 Rights 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 Product Software,
\nProduct 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;<\/p>\n
(ii) The Product Software, Product Proposals, Product Information, Printed
\nMaterials and Advertising Materials and their contemplated use under this
\nAgreement do not and shall not infringe any person’s or entity’s rights
\nincluding without limitation, patents, copyrights (including rights in a joint
\nwork), trademarks, trade dress, trade secret, rights of publicity, privacy,
\nperformance, moral rights, literary rights and any other third party right;<\/p>\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;<\/p>\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;<\/p>\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 except as expressly permitted hereunder or as
\nconsented to by SCEA in writing;<\/p>\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 when
\nprovided to SCEA in accordance with the terms of this Agreement may be
\npublished, marketed, distributed and sold by SCEA in accordance with the terms
\nand conditions of this Agreement and without SCEA incurring any royalty,
\nresidual, union, guild or other fees;<\/p>\n
(vii) Publisher shall not make any representation or give any warranty to
\nany person or entity expressly or implicitly on SCEA’s behalf, or to the effect
\nthat the Licensed Products are connected in any way with SCEA (other than that
\nthe Executable Software and\/or Licensed Products have been developed, marketed,
\nsold and\/or distributed under license from SCEA);<\/p>\n
(viii) In the event that Executable Software is delivered to other
\nLicensed Publishers or Licensed Developers by Publisher in source code form,
\nPublisher will take all precautions consistent with the protection of<\/p>\n
* Confidential portion omitted and filed separately with the Commission.<\/p>\n
15
\n 18
\nvaluable trade secrets by companies in high technology industries to ensure the
\nconfidentiality of such source code;<\/p>\n
(ix) The Executable Software and any Product Information delivered to SCEA
\nshall be in a commercially acceptable form, free of significant bugs, defects,
\ntime bombs or viruses which could disrupt, delay, destroy the Executable
\nSoftware or System or render either of them less than fully useful, and shall
\nbe fully compatible with the System and any peripherals listed on the Printed
\nMaterials as compatible with the Licensed Product;<\/p>\n
(x) Each of the Licensed Products, Executable Software, Printed Materials
\nand Advertising Materials shall be developed, marketed, sold and distributed by
\nor at the direction of Publisher in an ethical manner and in full compliance
\nwith all applicable federal, state, provincial, local and foreign laws and any
\nregulations and standards promulgated thereunder (including but not limited to
\nfederal and state lottery laws as currently interpreted and enforced) and will
\nnot contain any obscene or defamatory matter;<\/p>\n
(xi) Publisher’s policies and practices with respect to the development,
\nmarketing, sale, and\/or distribution of the Licensed Products shall in no
\nmanner reflect adversely upon the name, reputation or goodwill of SCEA;<\/p>\n
(xii) Publisher has, or will contract with a Licensed Developer for, the
\ntechnical expertise and resources necessary to fulfill its obligations under
\nthis Agreement; and<\/p>\n
(xiii) Publisher shall make no false, misleading or inconsistent
\nrepresentations or claims with respect to any Licensed Products, the System or
\nSCEA.<\/p>\n
10. INDEMNITIES; LIMITED LIABILITY.<\/p>\n
10.1 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
\nsettlement thereof. SCEA shall have the exclusive right, at its discretion, to
\ncommence and prosecute at its own expense any lawsuit or to take such other
\naction with respect to such matters as shall be deemed appropriate by SCEA.
\nPublisher shall provide SCEA, at no expense to Publisher, reasonable assistance
\nand cooperation concerning any such matter; and Publisher shall not agree to
\nthe settlement of any such claim, action or proceeding without SCEA’s prior
\nwritten consent.<\/p>\n
10.2 INDEMNIFICATION BY PUBLISHER. Publisher shall indemnify and hold SCEA
\nharmless from and against any and all claims, losses, liabilities, damages,
\nexpenses 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 (i) a breach of any of the provisions of this Agreement; or
\n(ii) infringement of a third party’s intellectual property rights by Publisher;
\nor (iii) any claims of or in connection with any personal or bodily injury
\n(including death) or property damage, by whomever such claim is made, arising
\nout of, in whole or in part, the development, marketing, sale, distribution
\nand\/or use of any of the Licensed Products (or portions thereof) 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
\ndevelopment, marketing, sale and\/or distribution of Licensed Products. SCEA
\nshall give prompt written notice to Publisher of the assertion of any such
\nindemnified claim, and, with respect to third party claims, actions or
\nproceedings against SCEA, SCEA shall have the right to select counsel for SCEA
\nand reasonably control the defense and\/or settlement thereof. Subject to the
\nabove, Publisher shall have the right, at its discretion, to select its own
\ncounsel, to commence and prosecute at its own expense any lawsuit, to
\nreasonably control the defense and\/or settlement thereof or to take such other
\naction with respect to claims, actions or proceedings by or against Publisher.
\nSCEA shall retain the right to approve any settlement. SCEA shall provide
\nPublisher, at no expense to SCEA, reasonable assistance and cooperation
\nconcerning any such matter; and SCEA shall not agree to the settlement of any
\nsuch claim, action or proceeding (other than third party claims, actions or
\nproceedings against SCEA) without Publisher’s prior written consent.<\/p>\n
10.3 LIMITATION OF LIABILITY.<\/p>\n
10.3.1 LIMITATION OF SCEA’S LIABILITY. IN NO EVENT SHALL SCEA OR
\nOTHER SONY AFFILIATES AND THEIR SUPPLIERS, OFFICERS, DIRECTORS, EMPLOYEES OR
\nAGENTS BE LIABLE FOR LOSS OF PROFITS, OR ANY SPECIAL, PUNITIVE, INCIDENTAL,
\nINDIRECT OR CONSEQUENTIAL DAMAGES ARISING OUT OF, RELATING TO OR IN CONNECTION
\nWITH THIS AGREEMENT, INCLUDING WITHOUT LIMITATION THE BREACH OF THIS AGREEMENT
\nBY SCEA, THE MANUFACTURE OF THE LICENSED PRODUCTS AND THE USE OF THE LICENSED
\nPRODUCTS, EXECUTABLE SOFTWARE AND\/OR THE SYSTEM BY PUBLISHER OR ANY END-USER,
\nWHETHER UNDER THEORY OF CONTRACT, TORT<\/p>\n
16
\n 19
\n(INCLUDING NEGLIGENCE), INDEMNITY, PRODUCT LIABILITY OR OTHERWISE. IN NO EVENT
\nSHALL SCEA’S LIABILITY ARISING UNDER, RELATING TO OR IN CONNECTION WITH THIS
\nAGREEMENT, INCLUDING WITHOUT LIMITATION ANY LIABILITY FOR DIRECT OR INDIRECT
\nDAMAGES, AND INCLUDING WITHOUT LIMITATION ANY LIABILITY UNDER SECTION 10.1
\nHERETO, EXCEED THE TOTAL AMOUNT PAID BY PUBLISHER TO SCEA UNDER THIS AGREEMENT.
\nEXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER SCEA NOR ANY SONY AFFILIATE, NOR
\nANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, SHALL BEAR
\nANY RISK, OR HAVE ANY RESPONSIBILITY OR LIABILITY, OF ANY KIND TO PUBLISHER OR
\nTO ANY THIRD PARTIES WITH RESPECT TO THE QUALITY, OPERATION AND\/OR PERFORMANCE
\nOF ANY PORTION OF THE SONY MATERIALS, THE SYSTEM OR ANY LICENSED PRODUCT.<\/p>\n
10.3.2 LIMITATION OF PUBLISHER’S LIABILITY. IN NO EVENT SHALL
\nPUBLISHER OR ITS AFFILIATED COMPANIES AND THEIR SUPPLIERS, OFFICERS, DIRECTORS,
\nEMPLOYEES OR AGENTS BE LIABLE TO SCEA FOR ANY LOSS OF PROFITS, OR ANY SPECIAL,
\nPUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING OUT OF, RELATED
\nTO OR IN CONNECTION WITH (i) THIS AGREEMENT OR (ii) THE USE OR DISTRIBUTION IN
\nACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT OF ANY CODE PROVIDED
\nBY SCEA, IN WHOLE OR IN PART, WHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING
\nNEGLIGENCE), INDEMNITY, PRODUCT LIABILITY OR OTHERWISE, PROVIDED THAT SUCH
\nLIMITATIONS SHALL NOT APPLY TO DAMAGES RESULTING FROM PUBLISHER’S BREACH OF
\nSECTIONS 4, 10.2, 11 OR 13 OF THIS AGREEMENT, AND PROVIDED FURTHER THAT SUCH
\nLIMITATIONS SHALL NOT APPLY TO AMOUNTS WHICH PUBLISHER MAY BE REQUIRED TO PAY
\nTO THIRD PARTIES UNDER SECTIONS 10.2 OR 16.10.<\/p>\n
10.4 DISCLAIMER OF WARRANTY. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
\nHEREIN, NEITHER SCEA NOR ITS AFFILIATES AND SUPPLIERS MAKE, NOR DOES PUBLISHER
\nRECEIVE, ANY REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
\nREGARDING THE SONY MATERIALS, SCEA’S CONFIDENTIAL INFORMATION THE SYSTEM, THE
\nUNITS OF THE LICENSED PRODUCTS MANUFACTURED HEREUNDER AND\/OR PUBLISHER’S
\nPRODUCT INFORMATION INCLUDED ON SCEA DEMO DISCS. SCEA SHALL NOT BE LIABLE FOR
\nANY INJURY, LOSS OR DAMAGE, DIRECT, INDIRECT OR CONSEQUENTIAL, ARISING OUT OF
\nTHE USE OR INABILITY TO USE ANY UNITS AND\/OR ANY SOFTWARE ERRORS AND\/OR “BUGS”
\nIN PUBLISHER’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, SCEA’S CONFIDENTIAL INFORMATION,
\nLICENSED PRODUCTS, SCEA DEMO DISCS AND THE SYSTEM. ANY WARRANTY AGAINST
\nINFRINGEMENT THAT MAY BE PROVIDED IN SECTION 2-312(3) OF THE UNIFORM COMMERCIAL
\nCODE AND\/OR IN ANY OTHER COMPARABLE STATUTE IS EXPRESSLY DISCLAIMED.<\/p>\n
11. SCEA INTELLECTUAL PROPERTY RIGHTS.<\/p>\n
11.1 LICENSED TRADEMARKS. The Licensed Trademarks and the goodwill
\nassociated therewith are and shall be the exclusive property of SCEA or
\nAffiliates of SCEA. Nothing herein shall give Publisher any right, title or
\ninterest in or to any of the Licensed Trademarks or any other trademarks of
\nSCEA, other than the non-exclusive license provided herein. Publisher shall not
\ndo or cause to be done any act or thing in any way impairing or tending to
\nimpair or dilute any of SCEA’s rights, title or interests in or to any of the
\nLicensed Trademarks or any other trademarks of SCEA, nor shall Publisher
\nregister any trademark in its own name or in the name of any other person or
\nentity, or obtain rights to employ Internet domain names or addresses, which
\nare similar to or are likely to be confused with any of the Licensed Trademarks
\nor any other trademarks of SCEA.<\/p>\n
11.2 LICENSE OF SONY MATERIALS AND SYSTEM. All rights with respect to the
\nSony Materials and System, including, without limitation, all of SCEA
\nIntellectual Property Rights therein, are and shall be the exclusive property of
\nSCEA or Affiliates of SCEA. Nothing herein shall give Publisher any right, title
\nor interest in or to the Sony Materials or the System (or any portion thereof),
\nother than the non-exclusive license provided herein. Publisher shall not do or
\ncause to be done any act or thing in any way impairing or tending to impair any
\nof SCEA’s rights, title or interests in or to the Sony Materials or the System
\n(or any portion thereof).<\/p>\n
17
\n 20
\n12. INFRINGEMENT OF SCEA INTELLECTUAL PROPERTY RIGHTS BY THIRD PARTIES.<\/p>\n
In the event that Publisher discovers or otherwise becomes aware that any of the
\nSCEA Intellectual Property Rights have been or are being infringed upon by any
\nthird party, then Publisher shall promptly notify SCEA. SCEA shall have the sole
\nright, in its discretion, to institute and prosecute lawsuits against third
\nparties for such infringement of SCEA Intellectual Property Rights. Any lawsuit
\nshall be prosecuted solely at the cost and expense of SCEA and all sums
\nrecovered in any such lawsuits, whether by judgment, settlement or otherwise
\nshall belong solely to SCEA. Upon request of SCEA, Publisher shall execute all
\npapers, testify on all matters and otherwise cooperate in every way necessary
\nand desirable for the prosecution of any such lawsuit. SCEA shall reimburse
\nPublisher for the reasonable expenses incurred as a result of such cooperation,
\nbut unless authorized by other provisions of this Agreement, not costs and
\nexpenses attributable to the conduct of a cross-claim or third party action.<\/p>\n
13. CONFIDENTIALITY.<\/p>\n
13.1 SCEA’S CONFIDENTIAL INFORMATION.<\/p>\n
13.1.1 DEFINITION OF SCEA’s CONFIDENTIAL INFORMATION. “SCEA’s
\nConfidential Information” shall mean:<\/p>\n
(i) the System, Sony Materials and Development Tools;<\/p>\n
(ii) other documents and materials developed, owned, licensed or under the
\ncontrol of Sony, including all processes, data, hardware, software, inventions,
\ntrade secrets, ideas, creations, improvements, designs, discoveries,
\ndevelopments, research and know-how, including without limitation the SourceBook
\n2 and SCEA Intellectual Property Rights relating to the System, Sony Materials
\nor Development Tools; and<\/p>\n
(iii) information and documents regarding SCEA’s finances, business,
\nmarketing and technical plans, business methods and production plans.<\/p>\n
SCEA’s Confidential Information may consist of information in any medium,
\nwhether oral, printed, in machine-readable form or otherwise, including
\ninformation apprised to Publisher and reduced to tangible or written form at any
\ntime during the term of this Agreement. In addition, the existence of a
\nrelationship between Publisher and SCEA for the purposes set forth herein shall
\nbe deemed to be SCEA’s Confidential Information unless otherwise agreed to in
\nwriting by the parties or until publicly announced by SCEA.<\/p>\n
13.1.2 TERM OF PROTECTION OF SCEA’s CONFIDENTIAL INFORMATION. The term
\nfor the protection of SCEA’s Confidential Information shall commence on the
\nEffective Date first above written and shall continue in full force and effect
\nas long as any of SCEA’s Confidential Information continues to be maintained as
\nconfidential and proprietary by SCEA and\/or Sony. During such term, Publisher
\nshall, pursuant to Section 13.1.3 below, safeguard and hold in trust and
\nconfidence and not disclose or use (except for the purposes herein specified)
\nany and all of SCEA’s Confidential Information.<\/p>\n
13.1.3 PRESERVATION OF SCEA’s CONFIDENTIAL INFORMATION. Publisher
\nshall, with respect to SCEA’s Confidential Information:<\/p>\n
(i) not disclose SCEA’s Confidential Information to any person or entity,
\nother than those employees or directors of the Publisher whose duties justify a
\n“need-to-know” and who have executed a confidentiality agreement in which such
\nemployees or directors have agreed not to disclose and to hold confidential all
\nconfidential information and materials (inclusive of those of third parties)
\nwhich may be disclosed to them or to which they may have access during the
\ncourse of their duties. At SCEA’s request, Publisher shall provide SCEA with a
\ncopy of such confidentiality agreement between Publisher and its employees or
\ndirectors, and shall also provided SCEA with a list of employee and director
\nsignatories. Publisher shall not disclose any of SCEA’s Confidential Information
\nto third parties, including without limitation to consultants or agents. Any
\nemployees or directors who obtain access to SCEA’s Confidential Information
\nshall be advised by Publisher of the confidential nature of SCEA’s Confidential
\nInformation, and Publisher shall be responsible for any breach of this Agreement
\nby its employees or directors.<\/p>\n
(ii) take all measures necessary to safeguard SCEA’s Confidential
\nInformation in order to avoid disclosure, publication, or dissemination, using
\nas high a degree of care and scrutiny, but at least reasonable care, as is
\nconsistent with the protection of valuable trade secrets by companies in high
\ntechnology industries.<\/p>\n
(iii) ensure that all written materials relating to or containing SCEA’s
\nConfidential Information be maintained in a restricted access area and plainly
\nmarked to indicate the secret and confidential nature thereof.<\/p>\n
(iv) at SCEA’s request, return promptly to SCEA any and all portions of
\nSCEA’s Confidential Information, together with all copies thereof.<\/p>\n
(v) not use, modify, reproduce, sublicense, copy, distribute, create
\nderivative works from, or otherwise provide to third parties, SCEA’s
\nConfidential Information, or any portion thereof, except as provided herein, nor
\nshall Publisher remove any proprietary legend set forth on or contained within
\nany of SCEA’s Confidential Information.<\/p>\n
18<\/p>\n
21<\/p>\n
13.1.4 EXCEPTIONS. The foregoing restrictions shall not apply to
\nany portion of SCEA’s Confidential Information which:<\/p>\n
(i) was previously known to Publisher without restriction on disclosure
\nor use, as proven by written documentation of Publisher; or<\/p>\n
(ii) is or legitimately becomes part of the public domain through no fault
\nof Publisher or its employees; or<\/p>\n
(iii) is independently developed by Publisher’s employees who have not had
\naccess to SCEA’s Confidential Information, as proven by written documentation
\nof Publisher; or<\/p>\n
(iv) is required to be disclosed by administrative or judicial action;
\nprovided that Publisher must attempt to maintain the confidentiality of SCEA’s
\nConfidential Information by asserting in such action the restrictions set forth
\nin this Agreement, and, immediately after receiving notice of such action or
\nany notice of any threatened action, Publisher must notify SCEA to give SCEA
\nthe maximum opportunity to seek any other legal remedies to maintain such
\nSCEA’s Confidential Information in confidence as herein provided; or<\/p>\n
(v) is approved for release by written authorization of SCEA.<\/p>\n
13.1.5 NO OBLIGATION TO LICENSE. Disclosure of SCEA’s Confidential
\nInformation to Publisher shall not constitute any option, grant or license from
\nSCEA to Publisher under any patent or other SCEA Intellectual Property Rights
\nnow or hereinafter held by SCEA. The disclosure by SCEA to Publisher of SCEA’s
\nConfidential Information hereunder shall not result in any obligation on the
\npart of SCEA to approve any materials of Publisher hereunder or otherwise, nor
\nshall such disclosure by SCEA give Publisher any right to, directly or
\nindirectly, develop, manufacture or sell any product derived from or which uses
\nany of SCEA’s Confidential Information, other than as expressly set forth in
\nthis Agreement.<\/p>\n
13.1.6 PUBLISHER’S OBLIGATIONS UPON UNAUTHORIZED DISCLOSURE. If at
\nany time Publisher becomes aware of any unauthorized duplication, access, use,
\npossession or knowledge of any SCEA’s Confidential Information, it shall notify
\nSCEA as soon as reasonably practicable, and shall promptly act to recover any
\nsuch information and prevent further breach of the confidentiality obligations
\nherein. Publisher shall provide any and all reasonable assistance to SCEA to
\nprotect SCEA’s proprietary rights in any of SCEA’s Confidential Information that
\nit or its employees or permitted subcontractors may have directly or indirectly
\ndisclosed or made available, and that may be duplicated, accessed, used,
\npossessed or known in a manner or for a purpose not expressly authorized by this
\nAgreement, including but not limited to enforcement of confidentiality
\nagreements, commencement and prosecution in good faith (alone or with the
\ndisclosing party) of legal action, and reimbursement for all reasonable
\nattorneys’ fees, costs and expenses incurred by SCEA to protect its proprietary
\nrights in SCEA’s Confidential Information. Publisher shall take all steps
\nrequested by SCEA to prevent the recurrence of any unauthorized duplication,
\naccess, use, possession or knowledge of SCEA’s Confidential Information. In
\naddition, SCEA shall have the right to pursue any actions at law or in equity,
\nincluding without limitation the remedies set forth in Section 16.10 hereto.<\/p>\n
13.2 PUBLISHER’S CONFIDENTIAL INFORMATION.<\/p>\n
13.2.1 DEFINITION OF PUBLISHER’S CONFIDENTIAL INFORMATION.
\n“Publisher’s Confidential Information” shall mean:<\/p>\n
(i) any Product Software as provided to SCEA pursuant to this Agreement
\nand all documentation and information relating thereto, including Product
\nProposals, Printed Materials and Advertising Materials (other than
\ndocumentation and information intended for use by and release to end users, the
\ngeneral public or the trade);<\/p>\n
(ii) other documents and materials developed, owned, licensed or under the
\ncontrol of Publisher, including all processes, data, hardware, software,
\ninventions, trade secrets, ideas, creations, improvements, designs,
\ndiscoveries, developments, research and know-how; and<\/p>\n
(iii) information and documents regarding Publisher’s finances, business,
\nmarketing and technical plans, business methods and production plans.<\/p>\n
Publisher’s Confidential Information may consist of information in any medium,
\nwhether oral, printed, in machine-readable form or otherwise, including
\ninformation apprised to SCEA and reduced to tangible or written form at any
\ntime during the term of this Agreement.<\/p>\n
13.2.2 TERM OF PROTECTION OF PUBLISHER’S CONFIDENTIAL INFORMATION.
\nThe term for the protection of Publisher’s Confidential Information shall
\ncommence on the Effective Date first above written and shall continue in full
\nforce and effect as long as any of Publisher’s Confidential Information
\ncontinues to be maintained as confidential and proprietary by Publisher.<\/p>\n
13.2.3 PRESERVATION OF CONFIDENTIAL INFORMATION OF PUBLISHER. SCEA
\nshall, with respect to Publisher’s Confidential Information:<\/p>\n
(i) hold all Publisher’s Confidential Information in confidence, and shall
\ntake all reasonable steps to preserve the confidentiality of Publisher’s
\nConfidential Information, and to prevent it from falling into the public domain
\nor into <\/p>\n
19
\n 22
\nthe possession of persons other than those persons to whom disclosure is
\nauthorized hereunder.<\/p>\n
(ii) not disclose Publisher’s Confidential Information to any person
\nother than an SCEA employee or subcontractor who needs to know or have access
\nto such Confidential Information for the purposes of this Agreement, and only
\nto the extent necessary for such purposes.<\/p>\n
(iii) ensure that all written materials relating to or containing
\nPublisher’s Confidential Information be maintained in a secure area and plainly
\nmarked to indicate the secret and confidential nature thereof.<\/p>\n
(iv) at Publisher’s request, return promptly to Publisher any and all
\nportions of Publisher’s Confidential Information, together with all copies
\nthereof.<\/p>\n
(v) not use Publisher’s Confidential Information, or any portion
\nthereof, except as provided herein, nor shall SCEA remove any proprietary
\nlegend set forth on or contained within any of Publisher’s Confidential
\nInformation.<\/p>\n
13.2.4 EXCEPTIONS. The foregoing restrictions will not apply to any
\nportion of Publisher’s Confidential Information which:<\/p>\n
(i) was previously known to SCEA without restriction on disclosure or
\nuse, as proven by written documentation of SCEA; or<\/p>\n
(ii) is or legitimately becomes part of information in the public domain
\nthrough no fault of SCEA, its employees or its subcontractors; or<\/p>\n
(iii) is independently developed by SCEA’s employees or affiliates who
\nhave not had access to Publisher’s Confidential Information, as proven by
\nwritten documentation of SCEA; or<\/p>\n
(iv) is required to be disclosed by administrative or judicial action;
\nprovided that SCEA attempted to maintain the confidentiality of Publisher’s
\nConfidential Information by asserting in such action the restrictions set forth
\nin this Agreement, and immediately after receiving notice of such action,
\nnotified Publisher of such action to give Publisher the opportunity to seek any
\nother legal remedies to maintain such Publisher’s Confidential Information in
\nconfidence as herein provided; or<\/p>\n
(vi) is approved for release by written authorization of Publisher.<\/p>\n
13.2.5 SCEA’S OBLIGATIONS UPON UNAUTHORIZED DISCLOSURE. If at any
\ntime SCEA becomes aware of any unauthorized duplication, access, use,
\npossession or knowledge of any of Publisher’s Confidential Information, it
\nshall notify Publisher as soon as is reasonably practicable. SCEA shall provide
\nany and all reasonable assistance to Publisher to protect Publisher’s
\nproprietary rights in any of Publisher’s Confidential Information that it or
\nits employees or permitted subcontractors may have directly or indirectly
\ndisclosed or made available and that may be duplicated, accessed, used,
\npossessed or known in a manner or for a purpose not expressly authorized by
\nthis Agreement including but not limited to enforcement of confidentiality
\nagreements, commencement and prosecution in good faith (alone or with the
\ndisclosing party) of legal action, and reimbursement for all reasonable
\nattorneys’ fees, costs and expenses incurred by Publisher to protect its
\nproprietary rights in Publisher’s Confidential Information. SCEA shall take all
\nreasonable steps requested by Publisher to prevent the recurrence of any
\nunauthorized duplication, access, use, possession or knowledge of Publisher’s
\nConfidential Information.<\/p>\n
13.3 CONFIDENTIALITY OF AGREEMENT. The terms and conditions of this
\nAgreement shall be treated as SCEA’s Confidential Information and Publisher’s
\nConfidential Information; provided that each party may disclose the terms and
\nconditions of this Agreement:<\/p>\n
(i) to legal counsel;<\/p>\n
(ii) in confidence, to accountants, banks and financing sources and
\ntheir advisors;<\/p>\n
(iii) in confidence, in connection with the enforcement of this Agreement
\nor rights arising under or relating to this Agreement; and<\/p>\n
(iv) if required, in the opinion of counsel, to file publicly or
\notherwise disclose the terms of this Agreement under applicable federal and\/or
\nstate securities or other laws, the disclosing party shall be required to
\npromptly notify the other party such that the other party has a reasonable
\nopportunity to contest or limit the scope of such required disclosure, and the
\ndisclosing party shall request, and shall use its best efforts to obtain,
\nconfidential treatment for such sections of this Agreement as the other party
\nmay designate.<\/p>\n
14. TERM AND TERMINATION.<\/p>\n
14.1 EFFECTIVE DATE; TERM. This Agreement shall not be binding on the
\nparties until it has been signed by each party, in which event it shall be
\neffective from the Effective Date until March 31, 2003, unless earlier
\nterminated pursuant to Section 14.2. The term shall be automatically extended
\nfor additional one-year terms thereafter, unless either party provides the other
\nwith written notice of its election not to so extend on or before January 31 of
\nthe applicable year. Notwithstanding the foregoing the term for the protection
\nof SCEA’s Confidential Information and Publisher’s Confidential<\/p>\n
20
\n 23<\/p>\n
Information shall be as set forth in Sections 13.2.3 and 13.2.2 respectively.<\/p>\n
14.2 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:<\/p>\n
(i) If Publisher breaches (A) any of its obligations hereunder; or (B)
\nany other agreement entered into between SCEA or Affiliates of SCEA and
\nPublisher.<\/p>\n
(ii) The liquidation or dissolution of Publisher or a statement of
\nintent by Publisher to no longer exercise any of the rights granted by SCEA to
\nPublisher hereunder.<\/p>\n
(iii) If during the term of this Agreement, a controlling interest in
\nPublisher or in an entity which directly or indirectly has a controlling
\ninterest in Publisher is transferred to a party that (A) is in breach of any
\nagreement with SCEA or an Affiliate of SCEA; (B) directly or indirectly holds
\nor acquires a controlling interest in a third party which develops any
\ninteractive device or product which is directly or indirectly competitive with
\nthe System; or (C) is in litigation with SCEA or Affiliates of SCEA concerning
\nany proprietary technology, trade secrets or other SCEA Intellectual Property
\nRights or SCEA’s Confidential Information. As used in this Section 14.2,
\n“controlling interest” means, with respect to any form of entity, sufficient
\npower to control the decisions of such entity.<\/p>\n
(iv) If during the term of this Agreement, Publisher or an entity that
\ndirectly or indirectly has a controlling interest in Publisher enters into
\na business relationship with a third party with whom Publisher materially
\ncontributes to develop core components to an interactive device or product
\nwhich is directly or indirectly competitive with the System.<\/p>\n
Publisher shall immediately notify SCEA in writing in the event that any of the
\ncircumstances specified in this Section occur.<\/p>\n
14.3 PRODUCT-BY-PRODUCT TERMINATION BY SCEA. In addition to the events
\nof termination described in Section 14.2, 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 6.1 hereto,
\nand such breach is not corrected or cured within thirty (30) days after
\nreceipt of written notice of such breach; (b) Publisher uses a third party that
\nfails to comply with the requirements of Section 3 in connection with the
\ndevelopment of any Licensed Product; (c) 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 Licensed Product; or (d) Publisher cancels a Licensed
\nProduct or fails to provide SCEA in accordance with the provisions of Section 5
\nabove, with the final version of the Executable Software for any Licensed
\nProduct within three (3) months of the scheduled release date according to the
\nProduct Proposal (unless a modified final delivery date has been agreed to by
\nthe parties), or fails to provide work in progress to SCEA in strict accordance
\nwith the Review Process in Section 5.3.<\/p>\n
14.4 OPTIONS OF SCEA IN LIEU OF TERMINATION. As alternatives to terminating
\nthis Agreement or a particular Licensed Product as set forth in Sections 14.2
\nand 14.3 above, SCEA may, at its option and upon written notice to Publisher,
\ntake the following actions in lieu of terminating this Agreement. In the event
\nthat SCEA elects either of these options, Publisher may terminate this Agreement
\nupon written notice to SCEA rather than allowing SCEA to exercise these options.
\nElection of these options by SCEA shall not constitute a waiver of or compromise
\nwith respect to any of SCEA’s rights under this Agreement and SCEA may elect to
\nterminate this Agreement with respect to any breach.<\/p>\n
14.4.1 SUSPENSION OF AGREEMENT. SCEA may suspend this Agreement,
\nentirely or with respect to a particular Licensed Product or program, for a set
\nperiod of time which shall be specified in writing to Publisher upon the
\noccurrence of any breach of this Agreement.<\/p>\n
14.4.2 LIQUIDATED DAMAGES. Whereas a minor breach of any of the
\nevents set out below may not warrant termination of this Agreement, but will
\ncause SCEA damages in amounts difficult to quantify, SCEA may require Publisher
\nto pay liquidated damages of [*] per event as follows:<\/p>\n
(i) Failure to submit Advertising Materials to SCEA for approval
\n(including any required resubmissions);<\/p>\n
(ii) Broadcasting or publishing Advertising Materials without
\nreceiving the final approval or consent of SCEA;<\/p>\n
(iii) Failure to make SCEA’s requested revisions to Advertising
\nMaterials; or <\/p>\n
(iv) Failure to comply with the SourceBook 2, Manufacturing
\nSpecifications or Guidelines which relates in any way to use of Licensed
\nTrademarks.<\/p>\n
Liquidated damages shall be invoiced separately or on Publisher’s next invoice
\nfor Licensed Products. SCEA reserves the right to terminate this Agreement for
\nbreach in lieu of seeking liquidated damages or in the event that liquidated
\ndamages are unpaid.<\/p>\n
* Confidential portion omitted and filed separately with the Commission.<\/p>\n
21
\n 24
\n 14.5 NO REFUNDS. In the event of the termination of this Agreement in
\naccordance with any of the provisions of Sections 14.2 through 14.4 above, no
\nportion of any payments of any kind whatsoever previously provided to SCEA
\nhereunder shall be owed or be repayable to Publisher.<\/p>\n
15. EFFECT OF EXPIRATION OR TERMINATION.<\/p>\n
15.1 INVENTORY STATEMENT. Within thirty (30) days of the date of
\nexpiration or the effective date of termination with respect to any or all
\nLicensed Products or this Agreement, Publisher shall provide SCEA with an
\nitemized statement, certified to be accurate by an officer of Publisher,
\nspecifying the number of unsold Units of the Licensed Products as to which such
\ntermination applies, on a title-by-title basis, which remain in its inventory
\nand\/or under its control at the time of expiration or the effective date of
\ntermination. SCEA shall be entitled to conduct at its expense a physical
\ninspection of Publisher’s inventory and work in process upon reasonable written
\nnotice during normal business hours in order to ascertain or verify such
\ninventory and inventory statement.<\/p>\n
15.2 REVERSION OF RIGHTS. Upon expiration or termination and subject to
\nSection 15.3 below, the licenses and related rights herein granted to Publisher
\nshall immediately revert to SCEA, and Publisher shall cease from any further
\nuse of SCEA’s Confidential Information, Licensed Trademarks and Sony Materials
\nand any SCEA Intellectual Property Rights therein, and, subject to the
\nprovisions of Section 15.3 below, Publisher shall have no further right to
\ncontinue the development, publication, manufacture, marketing, sale or
\ndistribution of any Units of the Licensed Products, or to continue to use any
\nLicensed Trademarks; provided, however, that for a period of one year after
\ntermination, and subject to all the terms of Section 13, and provided this
\nAgreement is not terminated due to a breach or default of Publisher, Publisher
\nmay retain such portions of Sony Materials and SCEA’s Confidential Information
\nas SCEA in its sole discretion agrees are required to support end users of
\nLicensed Products but must return these materials at the end of such one year
\nperiod. Upon expiration or termination, the licenses and related rights herein
\ngranted to SCEA by Publisher shall immediately revert to Publisher, and SCEA
\nshall cease from any further use of Product Information and any Publisher
\nIntellectual Property Rights therein; provided that SCEA may continue the
\nmanufacture, marketing, sale or distribution of any SCEA Demo Discs containing
\nPublisher’s Product Information which Publisher had approved prior to
\ntermination.<\/p>\n
15.3 DISPOSAL OF UNSOLD UNITS. Provided that this Agreement is not
\nterminated due to a breach or default of Publisher, Publisher may, upon
\nexpiration or termination of this Agreement, sell off existing inventories of
\nLicensed Products, on a non-exclusive basis, for a period of ninety (90) days
\nfrom the date 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 destruction,
\nPublisher shall provide SCEA with an itemized statement, certified to be
\naccurate by an officer of Publisher, indicating the number of Units of the
\nLicensed Products which have been destroyed (on a title-by-title basis), the
\nlocation and date of such destruction and the disposition of the remains of such
\ndestroyed materials.<\/p>\n
15.4 RETURN OF SONY MATERIALS AND CONFIDENTIAL INFORMATION. Upon the
\nexpiration or earlier termination of this Agreement, Publisher shall immediately
\ndeliver to SCEA, or if and to the extent requested by SCEA destroy, all Sony
\nMaterials and any and all copies thereof, and Publisher and SCEA shall, upon the
\nrequest of the other party, immediately deliver to the other party, or if and to
\nthe extent requested by such party destroy, all Confidential Information of the
\nother party, including any and all copies thereof, which the other party
\npreviously furnished to it in furtherance of this Agreement. Within five (5)
\nworking days after any such destruction, Publisher and\/or SCEA, as appropriate,
\nshall provide the other party with an affidavit of destruction and an itemized
\nstatement, each certified to be accurate by an officer of Publisher, indicating
\nthe numbers of copies and\/or units of the Sony Materials and\/or Confidential
\nInformation which have been destroyed, the location and date of such destruction
\nand the disposition of the remains of such destroyed materials. In the event
\nthat Publisher fails to return the Sony Materials or Confidential Information
\nand SCEA must resort to legal means (including without limitation any use of
\nattorneys) to recover the Sony Materials or Confidential Information or the
\nvalue thereof, all costs, including SCEA’s reasonable attorney’s fees, shall be
\nborne by Publisher, and SCEA may, in addition to SCEA’s other remedies, withhold
\nsuch amounts from any payment otherwise due from SCEA to Publisher under any
\nagreement between SCEA and Publisher.<\/p>\n
15.5 EXTENSION OF THIS AGREEMENT; TERMINATION WITHOUT PREJUDICE. SCEA
\nshall be under no obligation to extend this Agreement notwithstanding any
\nactions taken by either of the parties prior to the expiration of this
\nAgreement. Upon the expiration of this Agreement, neither party shall be liable
\nto the other for any damages (whether direct, indirect, consequential or
\nincidental, and including, without limitation, any expenditures, loss of
\nprofits or prospective profits) sustained or arising out of or alleged to have
\nbeen sustained or to have arisen out of such expiration. The expiration or
\ntermination of this Agreement shall be without prejudice to any rights or
\nremedies which one party may otherwise have against the<\/p>\n
22
\n 25
\nother party, and shall not excuse either party from any such expiration or
\ntermination.<\/p>\n
16. MISCELLANEOUS PROVISIONS.<\/p>\n
16.1 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, or sent by recognized
\ninternational courier service, telegram or facsimile, with charges prepaid. The
\naddress for all notices or other communications required to be sent to SCEA or
\nPublisher, respectively, shall be the mailing address stated in the preamble
\nhereof, or such other address as may be provided by written notice from one
\nparty to the other on at least ten (10) days’ prior written notice. Any such
\nnotice shall be effective upon the date of actual or tendered delivery, as
\nconfirmed by the sending party.<\/p>\n
16.2 AUDIT PROVISIONS. Publisher shall keep full, complete, and accurate
\nbooks of account and records covering all transactions relating to this
\nAgreement. Publisher shall preserve such books of account, records, documents,
\nand material for a period of twenty-four (24) months after the expiration or
\nearlier termination of this Agreement. Acceptance by SCEA of an accounting
\nstatement, purchase order, or payment hereunder will not preclude SCEA from
\nchallenging or questioning the accuracy thereof at a later time. In the event
\nthat SCEA reasonably believes that the Wholesale Price provided by Publisher
\nwith respect to any Licensed Product is not accurate, SCEA shall be entitled to
\nrequest additional documentation from Publisher to support the listed Wholesale
\nPrice for such Licensed Product. In addition, during the Term and for a period
\nof two (2) years thereafter and upon the giving of reasonable written notice to
\nPublisher, representatives of SCEA shall have access to, and the right to make
\ncopies and summaries of, such portions of all of Publisher’s books and records
\nas pertain to the Licensed Products and any payments due or credits received
\nhereunder. In the event that such inspection reveals an under-reporting of any
\npayment due to SCEA, Publisher shall immediately pay SCEA such amount. In the
\nevent that any audit conducted by SCEA reveals that Publisher has under-reported
\nany payment due to SCEA hereunder by [*] or more for that audit period, then in
\naddition to the payment of the appropriate amount due to SCEA, Publisher shall
\nreimburse SCEA for all reasonable audit costs for that audit and any and all
\ncollection costs to recover the unpaid amount.<\/p>\n
16.3 FORM 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; provided, however, that the party
\ninterfered with gives the other party written notice thereof promptly, and, in
\nany event, within fifteen (15) business days of discovery of any such Force
\nMajeure condition. If notice of the existence of any Force Majeure condition is
\nprovided within such period, the time for performance or cure shall be extended
\nfor a period equal to the duration of the Force Majeure event or circumstance
\ndescribed in such notice, except that any such cause shall not excuse the
\npayment of any sums owed to SCEA prior to, during or after any such Force
\nMajeure condition. In the event that the Force Majeure condition continues for
\nmore than sixty (60) days, SCEA may terminate this Agreement for cause by
\nproviding written notice to Publisher to such effect.<\/p>\n
16.4 NO AGENCY, PARTNERSHIP OR JOINT VENTURE. The relationship between
\nSCEA and Publisher, respectively, is that of licensor and licensee. Both
\nparties are independent contractors and are not the legal representative,
\nagent, joint venturer, partner or employee of the other party for any purpose
\nwhatsoever. Neither party has any right or authority to assume or create any
\nobligations of any kind or to make any representation or warranty on behalf of
\nthe other party, whether express or implied, or to bind the other party in any
\nrespect whatsoever.<\/p>\n
16.5 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
\nany of its obligations hereunder, to any third party unless the prior written
\nconsent of SCEA shall first be obtained. This Agreement shall not be assigned
\nin contravention of Section 14.2(iii). Any attempted or purported assignment,
\ndelegation or other such transfer, directly or indirectly, without the required
\nconsent of SCEA shall be void. Subject to the foregoing, this Agreement shall
\ninure to the benefit of the parties and their respective successors and
\npermitted assigns (other than under the conditions set forth in Section
\n14.2(iii). SCEA shall have the right to assign any and all of its rights and
\nobligations hereunder to any Sony affiliate(s).<\/p>\n
16.6 SUBCONTRACTORS. Publisher shall not sell, assign, delegate,
\nsubcontract, sublicense or otherwise transfer or encumber all or any portion of
\nthe licenses herein granted without the prior written approval of SCEA,
\nprovided, however, that Publisher may retain those subcontractors who provide
\nservices which do not require access to Sony Materials or SCEA’s Confidential
\nInformation without such prior approval. Publisher may retain those
\nsubcontractor(s) to assist with the development, publication and marketing of
\nLicensed<\/p>\n
* Confidential portion omitted and filed separately with the Commission.<\/p>\n
23
\n 26
\nProducts (or portions thereof) which have signed (i) an LPA or LDA with SCEA
\n(the “PlayStation 2 Agreement”) in full force and effect throughout the term of
\nsuch development and marketing; or (ii) an SCEA-approved subcontractor
\nagreement (“Subcontractor Agreement”); and SCEA has approved such subcontractor
\nin writing, which approval shall be in SCEA’s sole discretion. Such
\nSubcontractor Agreement shall provide that SCEA is a third-party beneficiary of
\nsuch Subcontractor Agreement and has the full right to bring any actions
\nagainst such subcontractors to comply in all respects with the terms and
\nconditions of this Agreement. Publisher shall provide a copy of any such
\nSubcontractor Agreement to SCEA prior to and following execution thereof.
\nPublisher shall not disclose to any subcontractor any of SCEA’s Confidential
\nInformation, including, without limitation, any Sony Materials, unless and
\nuntil either a PlayStation 2 Agreement or a Subcontractor Agreement has been
\nexecuted and approved by SCEA. Notwithstanding any consent which may be granted
\nby SCEA for Publisher to employ any such permitted subcontractor(s), or any
\nsuch separate agreement(s) that may be entered into by Publisher with any such
\npermitted subcontractor, Publisher shall remain fully liable for its compliance
\nwith all of the provisions of this Agreement and for the compliance of any and
\nall permitted subcontractors with the provisions of any agreements entered
\ninto by such subcontractors in accordance with this Section. Publisher shall
\nuse its best efforts to cause its subcontractors retained in furtherance of
\nthis Agreement to comply in all respects with the terms and conditions of this
\nAgreement, and hereby unconditionally guarantees all obligations of its
\nsubcontractors. SCEA may subcontract any of its rights or obligations hereunder.<\/p>\n
16.7 COMPLIANCE WITH APPLICABLE LAWS. The parties shall at all times
\ncomply with all applicable regulations and orders of their respective countries
\nand other controlling jurisdictions and all conventions and treaties to which
\ntheir countries are a party or relating to or in any way affecting this
\nAgreement and the performance by the parties of this Agreement. Each party, at
\nits own expense, shall negotiate and obtain any approval, license or permit
\nrequired in the performance of its obligations, and shall declare, record or
\ntake such steps to render this Agreement binding, including, without
\nlimitation, the recording of this Agreement with any appropriate governmental
\nauthorities (if required).<\/p>\n
16.8 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be
\ngoverned by and interpreted 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 Superior Court of the County of San Mateo, State of California or
\nthe United States District Court for the Northern District of California. Each
\nof the parties hereby submits itself to the exclusive jurisdiction and venue of
\nsuch courts for purposes of any such action and agrees that any service of
\nprocess may be effected by delivery of the summons in the manner provided in the
\ndelivery of notices set forth in Section 16.1 above. In addition, each party
\nhereby waives the right to a jury trial in any action or proceeding related to
\nthis Agreement.<\/p>\n
16.9 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
\nof this Agreement or to file or defend any action arising out of this
\nAgreement, then the prevailing party in any such action shall be entitled, in
\naddition to any other rights and remedies available to it at law or in equity
\nto recover from the other party its reasonable fees for attorneys and expert
\nwitnesses, plus such court costs and expenses as may be fixed by any court of
\ncompetent jurisdiction. The term “prevailing party” for the purposes of this
\nSection shall include a defendant who has by motion, judgment, verdict or
\ndismissal by the court, successfully defended against any claim that has been
\nasserted against it.<\/p>\n
16.10 REMEDIES. Unless expressly set forth to the contrary, either party’s
\nelection of any remedies provided for in this Agreement shall not be exclusive
\nof any other remedies, and all such remedies shall be deemed to be cumulative.
\nAny breach of Sections 3, 4, 5, 6.1, 11 and 13 of this Agreement would cause
\nsignificant and irreparable harm to SCEA, the extent of which would be
\ndifficult to ascertain. Accordingly, in addition to any other remedies
\nincluding without limitation equitable relief to which SCEA may be entitled, in
\nthe event of a breach by Publisher or any of its employees or permitted
\nsubcontractors of any such Sections of this Agreement, SCEA shall be entitled
\nto the immediate issuance without bond of ex parte injunctive relief or, if a
\nbond is required under applicable law, on the posting of a bond in an amount
\nnot to exceed [*], enjoining any breach or threatened breach of any or all
\nof such provisions. In addition, if Publisher fails to comply with any of its
\nobligations as set forth herein, SCEA shall be entitled to an accounting and
\nrepayment of all forms of compensation, commissions, remuneration or benefits
\nwhich Publisher directly or indirectly realizes as a result of or arising in
\nconnection with any such failure to comply. Such remedy shall be in addition to
\nand not in limitation of any injunctive relief or other remedies to which SCEA
\nmay be entitled under this Agreement or otherwise at law or in equity. In
\naddition, Publisher shall indemnify SCEA for all losses, damages, liabilities,
\ncosts and expenses (including reasonable attorneys’ fees and all reasonable
\nrelated costs) which SCEA may sustain or incur as a result of any breach under
\nthis Agreement.<\/p>\n
16.11 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 portion thereof) shall be
\nenforced to the extent possible<\/p>\n
* Confidential portion omitted and filed separately with the Commission.<\/p>\n
24<\/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-42670","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\/42670","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=42670"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42670"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42670"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42670"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}