EXHIBIT 10.2
Confidential information omitted where indicated by "[*]" and filed separately
with the Commission pursuant to a request for confidential treatment under Rule
24b-2 of the Securities Exchange Act of 1934.
PLAYSTATION 2(R) LICENSED PUBLISHER AGREEMENT
THIS AGREEMENT RELATES TO THE PUBLISHING OF APPLICATION SOFTWARE FOR THE
PLAYSTATION (R)2 COMPUTER ENTERTAINMENT SYSTEM. ALL TERMS USED HEREIN ARE
SPECIFIC TO THE PLAYSTATION (R)2 SYSTEM AND NOT TO SONY'S PREDECESSOR
"PLAYSTATION" VIDEO ENTERTAINMENT SYSTEM. PUBLISHING RIGHTS FOR SUCH
PREDECESSOR SYSTEM ARE SUBJECT TO SEPARATE AGREEMENTS WITH SCEE, AND ANY
LICENCE OF RIGHTS TO PUBLISHER UNDER SUCH SEPARATE AGREEMENTS SHALL NOT CONFER
ON PUBLISHER ANY RIGHTS IN RELATION TO THE PLAYSTATION (R)2 SYSTEM, OR VICE
VERSA.
THIS AGREEMENT is entered into the 14th day of November, 2001 by and between
SONY COMPUTER ENTERTAINMENT EUROPE LIMITED
of 30 Golden Square, London W1F 9LD
(hereinafter referred to as "SCEE")
- and -
ACCLAIM ENTERTAINMENT (EUROPE) LIMITED of
Morcau House, 112-120 Brompton Road, Knightsbridge,
London, SW3 1JJ
(hereinafter referred to as "Publisher")
PUBLISHER AUTHORIZATION #: 175
WHEREAS
(A) SCEE, its parent company Sony Computer Entertainment Inc., and/or certain
of their affiliates and companies within the group of companies of which
any of them form part (hereinafter jointly and severally referred to as
"Sony") have developed, and are licensing core components of, a computer
entertainment system known and hereinafter referred to as "PLAYSTATION 2",
and are the owners of, or have the right to grant licences of, certain
proprietary information and intellectual property rights pertaining to
PlayStation 2.
(B) Publisher desires to be granted a non-exclusive licence to market,
distribute and sell Licensed Products (as defined below), and for such
Licensed Products and associated materials to be manufactured by an
authorised manufacturing facility licensed by SCEE, on the terms and
subject to the conditions set forth in this Agreement.
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(C) SCEE is willing, on the terms and subject to the conditions of this
Agreement, to grant Publisher the desired non-exclusive licence.
NOW THEREFORE, in consideration of the undertakings, representations and
warranties given herein, and of other good and valuable consideration the
receipt and sufficiency of which is acknowledged, PUBLISHER AND SCEE HEREBY
AGREE AS FOLLOWS:
1. DEFINITIONS
1.1 "Licensed Products" means PlayStation 2 format Software product(s) in
uniquely marked or coloured CD-ROM or DVD-ROM format software discs
(hereinafter referred to as "PlayStation 2 Discs").
1.2 "Licensed Territory" means the countries specified in Schedule 1.
1.3 "Sony Intellectual Property Rights" means all current and future patents
worldwide, pending patent applications and other patent rights (under
licence or otherwise), copyrights, trademarks, service marks, trade names,
semi-conductor topography rights, trade secret rights, technical
information and know-how (and the equivalents of each of the foregoing
under the laws of any jurisdiction) of Sony pertaining to Sony Materials
and/or PlayStation 2, and all other proprietary or intellectual property
rights worldwide (including, without limitation, all applications and
registrations with respect thereto) of Sony pertaining to Sony Materials
and/or PlayStation 2, and all renewals and extensions thereof.
1.4 "PlayStation 2 format Software" means Publisher's object code software,
which includes Licensed Developer Software and any software (whether in
object code or source code form) which is provided by SCEE and intended to
be combined with Licensed Developer Software for execution on PlayStation
2 and has the ability to communicate with the software resident in
PlayStation 2.
1.5 "Term" means the period from the date hereof until 31 March 2003 and
continuing thereafter unless and until terminated by not less than 1 (one)
month's notice on either side given to expire on such date or any
subsequent 31 March.
1.6 "Affiliate of SCEE" means, as applicable, either Sony Computer
Entertainment Inc. in Japan, Sony Computer Entertainment America Inc. in
the USA or such other Sony Computer Entertainment entity as may be
established by Sony from time to time.
1.7 "LDA 2" means the PlayStation 2 Licensed Developer Agreement between
Licensed Developer of the applicable PlayStation 2 format Software and
SCEE (or an equivalent such agreement between Licensed Developer and
Affiliate of SCEE).
1.8 "Licensed Trademarks" means the "PS" family logo and PlayStation 2 logotype
and such other trademarks, service marks, trade dress, logos and other
icons or indicia as shall be specified in the Specifications or otherwise
designated by SCEE from time to time. SCEE may amend such Licensed
Trademarks upon reasonable notice to Publisher.
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Publisher is not authorised to use the PlayStation, PSone or
PlayStation.com logos and/or logotypes, or the "PS2" or PlayStation Shapes
devices, other than as expressly permitted by separate agreement. Nothing
contained in this Agreement shall in any way grant Publisher the right to
use the trademark "Sony" in any manner as (or as part of) a trademark,
trade name, service mark or logo or otherwise howsoever.
1.9 "Licensed Developer" means Publisher or such other third party as shall
have developed Licensed Developer Software and PlayStation 2 format
Software pursuant to a then current LDA2.
1.10 "Sony Materials" means any hardware, data, object code, source code,
documentation (or any part(s) of any of the foregoing) and related
peripheral items provided to the Licensed Developer of any PlayStation 2
format Software pursuant to the LDA 2 applicable for such PlayStation 2
format Software.
1.11 "Licensed Developer Software" means Licensed Developer's application source
code and data (including audio and visual material) developed by Licensed
Developer in accordance with its LDA 2 which, when integrated with any
software (whether in object code or source code form) provided by SCEE,
creates PlayStation 2 format Software.
1.12 "Printed Materials" means all artwork and mechanicals to be set forth on
the Licensed Product itself, and on the PlayStation 2 box (or other
container) and, if applicable, the box (or other) packaging for the
Licensed Product and all instruction manuals, inlays, inserts, stickers
and other user information and/or materials to be inserted in or affixed
to such PlayStation 2 box and/or packaging.
1.13 "Advertising Materials" means all advertising, merchandising, promotional
and display materials of or concerning the Licensed Products.
1.14 "Manufactured Materials" means all units of the Licensed Products, of the
Printed Materials to be set forth on the Licensed Products themselves and
of the PlayStation 2 boxes for such Licensed Products (which expression
shall include any alternative form of container for Licensed Products
subsequently introduced by SCEE).
1.15 "Specifications" means such specifications relating to the content and/or
manufacture of Licensed Products, Printed Materials, Advertising Materials
and/or related matters or materials as may be issued by Sony, which
specifications (and/or procedures relating to the testing or verification
of all such materials for conformity to the Specifications and/or relating
to the ordering and manufacture of Licensed Products and associated
materia1s) may be amended from time to time upon reasonable notice to
Publisher.
1.16 "CNDA" means the Confidentiality & Non-Disclosure (or similar) Agreement
between Publisher and SCEE or an Affiliate of SCEE relating to PlayStation
2 and to Confidential Information of Sony and/or of Publisher thereunder.
1.17 "Confidential Information of Sony" means the content of this Agreement
(including the Schedules hereto and the Specifications) and all
confidential and/or proprietary information, documents and related
materials of whatever nature (including, without
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limitation all processes, hardware, software, inventions, trade secrets,
ideas, designs, research, know-how, business methods, production plans and
marketing plans) concerning PlayStation 2 developed or owned by, licensed
to or under the control of Sony and, without limitation, information
otherwise related to Sony's technology, know-how, products, potential
products, research projects, promotional advertising and marketing plans,
schedules and budgets, licensing terms and pricing, customer lists and
details, commercial relationships or negotiations, services, financial
models and other business information, whether relating to PlayStation 2
or otherwise including, unless covered by a separate Non-Disclosure
Agreement between Publisher and SCEE, relating to Sony's "PlayStation"
predecessor video entertainment system disclosed by whatever means,
whether directly or indirectly, by or on behalf of Sony to Publisher at
any time, whether disclosed orally, in writing or in machine-readable or
other form, or otherwise discovered by Publisher as a result of any
information or materials provided (whether directly or indirectly) by or
on behalf of Sony to Publisher.
1.18 "Confidential Information of Publisher" means any and all confidential
and/or proprietary information, documents and related materials of
whatever nature (including, without limitation all processes, hardware,
software, inventions, trade secrets, ideas, designs, research, know-how,
business methods, production plans and marketing plans) concerning
PlayStation 2 format Software developed or owned by, licensed to or under
the control of Publisher and, without limitation, information otherwise
related to Publisher's technology, know-how, products, potential products,
research projects, promotional advertising and marketing plans, schedules
and budgets, licensing terms and pricing, customer lists and details,
commercial relationships or negotiations, services, financial models and
other business information, whether relating to PlayStation 2 or otherwise
disclosed by whatever means, whether directly or indirectly, by or on
behalf of Publisher to SCEE at any time, whether disclosed orally, in
writing or in machine-readable or other form, or otherwise discovered by
SCEE as a result of any information or materials provided (whether
directly or indirectly) by or on behalf of Publisher to SCEE, which
information is designated by Publisher as, or becomes known to SCEE under
circumstances indicating that such information is, confidential or
proprietary.
1.19 "Third Party Intellectual Property Rights" means all current and future
patents worldwide, pending patent applications and other patent rights
(under licence or otherwise), copyrights, trademarks, service marks, trade
names, semi-conductor topography rights, trade secret rights, technical
information and know-how (and the equivalents of each of the foregoing
under the laws of any jurisdiction) of any third party other than
Publisher or Sony and all other proprietary or intellectual property
rights worldwide (including, without limitation, all applications and
registrations with respect thereto), and all renewals and extensions
thereof.
1.20 "Article 6" means Article 6 of Council Directive 91/250/EEC of 14 May 1991
on the legal protection of computer programmes.
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2. GRANT OF LICENCE
SCEE hereby, grants to Publisher, and Publisher hereby accepts, within the
Licensed Territory only and under the Sony Intellectual Property Rights, a
non-exclusive non-transferable licence, without the right to sub-license
(except as specifically provided herein), to publish PlayStation 2 format
Software in such genres or categories as SCEE shall from time to time designate
in the Specifications, and the right and obligation to use the Licensed
Trademarks, in the form and manner prescribed in the Specifications, strictly,
only and directly in connection with such publication. For these purposes, to
"publish" shall mean any or all of the following: (i) produce Advertising
Materials and Printed Materials; (ii) to issue to SCEE purchase orders for
Manufactured Materials as prescribed in Clause 6; (iii) to market, distribute
and sell Licensed Products (and to authorise others to do so); and (iv) to
sub-license to end users the right to use Licensed Products for non-commercial
purposes only and not for public performance.
3. LIMITATIONS
3.1 Subject always to Article 6, Publisher shall publish PlayStation 2 format
Software only if developed by a Licensed Developer strictly in accordance
with all the terms and conditions of such Licensed Developer's LDA 2 and
shall not publish or attempt to publish any other software whatsoever
intended for or capable of execution on PlayStation 2. The onus of
evidencing that PlayStation 2 format Software satisfies the foregoing
criteria shall rest on Publisher and SCEE reserves the right to require
Publisher to furnish evidence satisfactory to SCEE that the foregoing
criteria are satisfied.
3.2 Publisher shall not publish outside the Licensed Territory PlayStation 2
format Software unless and until Publisher shall be authorised and
licensed so to do pursuant to a current license agreement with the
applicable Affiliate of SCEE. Further, Publisher shall not sub-publish
such PlayStation 2 format Software through a third party either within or
outside the Licensed Territory unless and until such sub-publisher shall
be authorised and licensed so to do either pursuant to a current
PlayStation 2 Licensed Publisher Agreement with SCEE or a current
PlayStation 2 licence agreement with the applicable Affiliate of SCEE.
3.3 The licence granted in this Agreement extends only to the publication,
marketing, distribution and sale of Licensed Products in such formats as
may be designated by SCEE. Without limiting the generality of the
foregoing and except as otherwise provided herein, Publisher and, if
applicable, its sub-publishers shall at all times and in all territories
be strictly prohibited from undertaking or authorising the distribution or
transmission of PlayStation 2 format Software or Licensed Products through
electronic means or any other means now known or hereafter devised,
including without limitation, via wireless, cable, fiber optic means,
telephone lines, microwave and/or radio waves, or over a network of
interconnected computers or other devices. Notwithstanding this
limitation, Publisher may electronically transmit PlayStation 2 format
Software from site to site, or from machine to machine over a computer
network, for the sole purpose of facilitating development; provided that
no right of retransmission shall attach to any such transmission, and
provided further that Publisher shall use reasonable security measures
5
customary within the high technology industry to reduce the risk of
unauthorised interception or retransmission of such transmissions.
For the avoidance of doubt, the foregoing shall apply only to PlayStation
2 format Software and to Licensed Products and shall not apply to Licensed
Developer Software which does not utilise Sony Materials and/or Sony
Intellectual Property Rights and/or, subject to Council Directive
91/250/EEC, Confidential Information of Sony.
3.4 Subject only to Article 6, Publisher and, if applicable, its
sub-publishers shall at all times be strictly prohibited from
disassembling or decompiling software, peeling semiconductor components or
otherwise reverse engineering or attempting to reverse engineer or derive
source code or create derivative works from PlayStation 2 format Software,
from permitting or encouraging any third party so to do, and from
acquiring or using any materials from any third party who does so.
Publisher shall in all cases be primarily liable for the payment of
Platform Charge to SCEE in accordance with Clause 7 hereof in respect of
any product published by Publisher, or, if applicable, any of its
sub-publishers, which utilizes Sony Materials and/or Sony Intellectual
Property Rights and/or, subject to Council Directive 91/250/EEC,
Confidential Information of Sony. The onus of evidencing that any such
product is not so published shall rest on Publisher and SCEE reserves the
right to require Publisher to furnish evidence satisfactory to SCEE that
the applicable of the foregoing criteria are satisfied.
3.5 Publisher shall inform all such sub-publishers of the obligations imposed
by this Agreement and shall obtain their commitment to abide by the same.
3.6 Any breach of the provisions of this Clause 3 shall be a material breach
of this Agreement not capable of remedy.
4. RESERVATIONS
4.1 This Agreement does not grant any right or license, under any Sony
Intellectual Property Rights or otherwise, except as expressly provided
herein, and no other right or license is to be implied by or inferred from
any provision of this Agreement or the conduct of the parties hereunder.
Subject only to the rights of Publisher under this Agreement, all right,
title and interest in and to the Sony Materials and the Sony Intellectual
Property Rights are and shall be the exclusive property of Sony, and
Publisher shall not make use of, or do or cause to be done any act or
thing contesting or in any way impairing or tending to impair any of
Sony's right, title or interest in or to, any of the Sony Materials, Sony
Intellectual Property Rights, PlayStation 2 and/or Sony's "PlayStation"
predecessor video entertainment system except as authorised by and in
compliance with the provisions of this Agreement or as may otherwise
expressly be authorised in writing by Sony; provided however that the
foregoing shall not be taken to preclude Publisher from challenging the
validity of any Sony Intellectual Property Rights. No right, license or
privilege has been granted to Publisher hereunder concerning the
development of any collateral product or other use or purpose of any kind
whatsoever which displays or depicts any of the Licensed Trademarks. No
promotional or novelty items or premium products (including, by way of
illustration but without limitation, T-shirts, posters, stickers, etc)
displaying or
6
depicting any of the Licensed Trademarks shall be developed, manufactured,
marketed, sold and/or distributed by, with the authority of or on behalf
of, Publisher without the prior written consent and authorisation of SCEE
in each case.
4.2 The Licensed Trademarks and the goodwill associated therewith are and
shall be the exclusive property of Sony. Nothing herein shall give
Publisher any right, title or interest in or to any of the Licensed
Trademarks, other than the non-exclusive license and privilege to display
and use the Licensed Trademarks solely in accordance with the provisions
of this Agreement. Publisher shall not do or cause to be done any act or
thing contesting or in any way impairing or tending to impair any of
Sony's right, title or interest in or to any of the Licensed Trademarks,
nor shall Publisher register or apply to register any trademark in its own
name or in the name of any other person or entity, or obtain or seek to
obtain rights to employ Internet domain name(s) or address(es), which is
or are similar to or is or are likely to be confused with any of the
Licensed Trademarks; provided however that the foregoing shall not be
taken to preclude Publisher from challenging the validity of any Licensed
Trademarks.
4.3 Publisher or Licensed Developer (as applicable) retains all right, title
and interest in and to Licensed Developer Software, including Licensed
Developer's intellectual property rights therein and any names or other
designations used as titles therefore, and nothing in this Agreement shall
be construed to restrict the right of Licensed Developer to develop and/or
the right of Publisher to publish products incorporating Licensed
Developer Software (separate and apart from Sony Materials), and/or under
such names or other designations, for any hardware platform or service
other than PlayStation 2.
4.4 Subject to the proviso to Clauses 4.1 and 4.2 above, Publisher shall, at
the expense of SCEE, take all such steps as SCEE may reasonably require,
including the execution of Licenses and registrations, to assist SCEE in
maintaining the validity and enforceability of Sony Intellectual Property
Rights.
4.5 Without prejudice to Clause 11, Publisher or SCEE (as applicable) shall
promptly and fully notify the other in writing in the event that it
discovers or otherwise becomes aware of any actual, threatened or
suspected infringement of any of the intellectual property or trademark
rights of the other embodied in any of the Licensed Products, and of any
claim of infringement or alleged infringement by the other of any Third
Party Intellectual Property Rights, and shall at the request and expense
of the other do all such things as may reasonably be required to assist
the other in taking or resisting any proceedings in relation to any such
infringement or claim.
5. QUALITY STANDARDS
5.1 Publishers shall provide SCEE with a Product Planning Notification for
each Licensed Product in accordance with the Specifications.
Each Licensed Product, including without limitation the title and content
thereof, and/or Publisher's use of any of the Licensed Trademarks, shall
be required to conform to the
7
Specifications and shall not, except as specifically authorised in writing
by SCEE in each case, incorporate (in whole or in part) more than 1 (one)
game product.
Testing or verification for conformity to the specifications shall be
conducted by SECC or, at publisher's election, by an independent external
testing service (if and when such service becomes available).
5.2 Publisher shall submit for testing for conformity to the Specifications
such information and materials relating to the PlayStation 2 format
Software for each Licensed Product as shall be specified in the
Specifications. Such Specifications shall be comparable with the
specifications applied by Sony with respect to its own PlayStation 2
format Software products. SCEE acknowledges and agrees that such
Specifications shall be of prospective application only and shall not be
applied to any inventory units of the Licensed Products manufactured prior
to, or in the active process of manufacture at the date of, the
promulgation thereof by SCEE.
5.3 For each Licensed Product, Publisher shall be responsible, at Publisher's
expense, for the origination of all Printed Materials, and for the
manufacture and delivery to the manufacturer of such Licensed Product of
all Printed Materials other than those to be set forth on the Licensed
Product itself, all of which Printed Materials shall: (i) conform in all
material respect to the Specifications; and (ii) include such other
materials (including by way of illustration but not limitation, consumer
health warnings in relation to epilepsy) and such consumer advisory rating
code(s) as may from time to time be required by any governmental entity or
in compliance with any voluntary code of practice operated by members of
the interactive software development and publishing community. The
Specifications referred to in (i) above shall be comparable with the
specifications applied by Sony with respect to its own PlayStation 2
format Software products. SCEE acknowledges and agrees that such
Specifications shall be of prospective application only and shall not be
applied to any inventory units of the Licensed Products manufactured prior
to, or in the active process of manufacture at the date of, the
promulgation thereof. All materials to be submitted pursuant to this
Clause 5.3 shall be delivered by such means and in such form as shall be
prescribed in the Specifications and at Publisher's sole risk and expense.
Publisher undertakes that the quality of such Printed Materials shall be
of the same quality as that associated with high quality consumer
products.
5.4 When applicable, SCEE (or, where applicable, an independent external
testing service as aforesaid) will test or verify for conformity to the
Specifications (as the case may be) all materials submitted by Publisher
pursuant to Clause 5.2 and Clause 5.3. Where such testing or verification
is conducted by SCEE, SCEE shall advise Publisher of the results of such
testing or verification within the applicable of the timeframes specified
in the Specifications. Where such testing or verification is conducted by
such independent external testing service, such service shall advise
Publisher of the results of such testing or verification within timeframes
agreed between such service and Publisher (and SCEE shall have no
responsibility or liability whatsoever arising from a failure by such
service to meet such timeframes). If any of such materials (or any
element(s) thereof) fail to conform to the Specifications, SCEE (or, where
applicable, such independent external testing service) shall specify the
reasons for such failure and state what revisions are required. After
making the required revisions, Publisher may resubmit such materials in
8
such revised form for re-testing or re-verification by SCEE (or, where
applicable, such independent external testing service). The procedures
described in this Clause 5.4 shall if necessary be repeated until all such
materials for each Licensed Product shall expressly have been certified as
conforming to the Specifications, such certification to be validly given
only if in writing and signed by the duly authorised representative(s) of
SCEE as specified in the Specifications (or, where applicable, by the duly
authorised representative(s) of such independent external testing
service). SCEE shall have no liability to Publisher for the accuracy or
content (including translations and localisations) of Printed Materials
(except only items required to be included in accordance with the
Specifications) or in respect of costs incurred or irrevocably committed
by Publisher as a result of any failure to conform to Specifications (even
where certified for conformity) or in relation to, or to the use of,
Printed Materials which shall not have been given a certificate of
conformity by SCEE (or, where applicable, by such independent external
testing service). No production units of any Licensed Product shall be
manufactured, marketed, distributed or sold by, with the authority of or
on behalf of, Publisher unless and until such a certificate of conformity
of such Licensed Product shall first have been given by SCEE (or, where
applicable, by such independent external testing service). No certificate
of conformity from SCEE (or, where applicable, from such independent
external testing service) of any element of the materials so submitted or
resubmitted shall be deemed a certificate of conformity of any other
element of such materials, nor shall any such certificate of conformity be
deemed to constitute a waiver of any of SCEE's rights under this
Agreement.
The generality of the foregoing notwithstanding, in the event that
Publisher wishes to contest a finding by SCEE of non-conformity to the
Specifications, and as an alternate to making required revisions and
resubmissions as above, Publisher may have recourse to the appeals process
specified in the Specifications.
5.5 Publisher shall not change in any materials respect any of the materials
for which a certificate of conformity shall have been given by SCEE (or,
where applicable, by an independent external testing service) pursuant to
Clause 5.4 (or, if applicable, pursuant to Clause 5.6) (or, alternately,
which shall have been held to conform to the Specifications following
recourse by Publisher to the appeals process specified in the
Specifications). If any of the Licensed Products and/or related materials
published by, with the authority of or on behalf of Publisher fail to
conform to the Specifications and the materials for which SCEE (or, where
applicable, such independent external testing service) shall from time to
time have given a certificate of conformity, then the provisions of Clause
13.2 shall apply.
5.6 SCEE reserve the right to require that pre-production samples of all
Advertising Materials shall be submitted by Publisher to SCEE or at
Publisher's election, to an independent external testing service (if and
when such service becomes available), free of charge and in accordance
with the procedure specified in the Specifications, for verification for
conformity to the Specifications (including specifically, but without
limitation, in relation to the usage of any of the Licensed Trademarks),
prior to any actual production, use or distribution of any such items by,
with the authority or on behalf of, Publisher. No such proposed
Advertising Materials shall be produced, used or distributed
9
directly or indirectly by Publisher without first obtaining a certificate
of conformity to the Specifications. Where such verification is conducted
by SCEG, SCEE shall advise Publisher of the results of such verification
within the applicable of the time frame specified in the Specifications.
Where such verification is conducted by such independent external testing
service, such service shall advise Publisher of the results of such
verification within timeframes agreed between such service and Publisher
(and SCEE shall have no responsibility or liability whatsoever arising
from a failure by such service to meet such timeframes). If any such
Advertising Materials (or any element(s) thereof) fail to conform to the
Specifications, SCEE (or, where applicable, such independent external
testing service) shall specify the reasons for such failure and state what
revisions are required. After making the required revisions, Publisher may
resubmit such materials in such revised form for re-verification by SCEE
(or, where applicable, by such independent external testing service). The
procedures described in this Clause 5.6 shall if necessary be repeated
until all such Advertising Materials for each Licensed Product shall
expressly have been certified as conforming to the Specification, such
certification to be validly given only if in writing and signed by the
duly authorized representative(s) of SCEE as specified in the
Specifications (or, where applicable, by the duly authorised
representative(s) of such independent external testing service). SCEE
shall have no liability to Publisher in respect of costs incurred or
irrevocably committed by Publisher in relation to, or to the use of,
Advertising Materials which shall not have been given a certificate of
conformity by SCEE (or, where applicable, by such independent external
testing service). No certificate of conformity from SCEE (or, where
applicable, from such independent external testing service) of any element
of Advertising Materials so submitted or resubmitted shall be deemed a
certificate of conformity of any other element of such Advertising
Materials, nor shall any such certificate of conformity be deemed to
constitute a waiver of any of SCEE's rights under this Agreement.
The generality of the foregoing notwithstanding, in the event that
Publisher wishes to contest a finding of non-conformity to the
Specifications by SCEE, and as an alternate to making required revisions
and resubmissions as above, Publisher may have recourse to the appeals
process specified in the Specifications.
Subject in each instance to the prior written consent of SCEE, Publisher
may use such textual and/or pictorial advertising matter (if any) as may
be created by, with the authority or on behalf of, Sony pertaining to the
Sony Materials and/or to the Licensed Trademarks on such Advertising
Materials as may, in Publisher's judgment, promote the sale of Licensed
Products within the Licensed Territory. Sony shall have the right to use
Licensed Products and/or other materials relating to Publisher's
PlayStation 2 format Software titles in any advertising or promotion for
PlayStation 2 at Sony's expense, subject to giving Publisher reasonable
prior notice of such advertisement or promotion. Sony shall confer with
Publisher regarding the text of any such advertisement. If required by
Sony and/or any governmental entity or in compliance with any voluntary
code of practice operated by members of the interactive software
development and publishing community, Publisher shall, at Publisher's cost
and expense, also include consumer advisory rating code(s) and, if
required, other materials (including by way of illustration but not
limitation, consumer health warnings in relation to epilepsy) on any
10
and all Advertising Materials used in connection with Licensed Products.
Such consumer advisory rating code(s) shall be procured in accordance with
the provisions of Clause 5.7
5.7 Publisher agrees that, if required by SCEE or any governmental entity, it
shall submit each Licensed Product to a consumer advisory ratings system
designated by SCEE and/or such governmental entity for the purpose of
obtaining rating code(s) for each Licensed Product. Any and all costs and
expenses incurred in connection with obtaining such rating code(s) shall
be borne solely by Publisher. Any required consumer advisory rating
code(s) thereby procured shall be displayed on Licensed Products and
associated Printed Materials in accordance with the Specifications, at
Publisher's cost and expense.
5.8 In the event Publisher fails to comply with its obligations in relation
thereto as specified in Clause 5.7, SCEE reserves the right in its sole
discretion, at Publisher's sole cost and expense: (i) to display, or to
require the display on Licensed Products and/or associated Printed
Materials and/or associated Advertising Materials (as may be required)
materials (including by way of illustration but not limitation, consumer
health warnings in relation to epilepsy) and/or to procure and to display,
or to require the display of, consumer advisory rating code(s); or (ii) to
require non-complying Licensed Products and/or associated Printed
Materials and/or associated Advertising Materials forthwith to be
withdrawn from the market.
6. MANUFACTURE OF LICENSED PRODUCTS & ASSOCIATED MATERIALS
6.1 Subject only to Article 6, Publisher acknowledges and agrees that it shall
purchase Manufactured Materials only from an authorised manufacturing
facility licensed by SCEE. SCEE shall have the right, but no obligation,
to subcontract the whole or any part or phase of the production of any or
all of the Manufactured Materials or any part(s) thereof.
6.2 Subject always to Article 6, promptly following the giving by SCEE (or,
where applicable, by an independent external testing service as aforesaid)
of a certificate of conformity to the Specifications (or, alternatively, a
holding of conformity to the Specifications following recourse by
Publisher to the appeals process specified in the Specifications) for each
Licensed Product pursuant to Clause 5.2, SCEE shall create (from one of
the CD copies of the finally approved version of the PlayStation 2 format
Software as submitted by Publisher pursuant to Clause 5.2) the original
master PlayStation 2 Disc ("Master PlayStation 2 Disc") from which all
other copies of the Licensed Product are to be replicated in compliance
with the Specifications effective at the time of replication. Where such
certificate of conformity shall have been given by such as independent
external testing service, then the CD copy of the finally approved version
of the PlayStation 2 format Software as submitted by Publisher pursuant to
Clause 5.2 from which the Master PlayStation 2 Disc is to be created shall
be furnished SCEE by such service. Publisher shall be responsible for the
costs, as set forth in Schedule 2, of creating such Master PlayStation 2
Disc. Publisher will retain duplicates of all such PlayStation 2 format
Software. SCEE shall not be liable for loss of or damage to any copies of
the PlayStation 2 format Software furnished SCEE hereunder. There will be
no Technology Exchange between Sony and Publisher under this Agreement.
11
The mastering process being of a proprietary and commercially confidential
nature, neither SCEE nor any manufacturing subcontractor of SCEE will
under any circumstances release any Master PlayStation 2 Disc or other
in-process materials to Publisher. All such physical materials shall be
and remain the sole property of Sonly.
6.3 Subject always to Article 6, Publisher shall be solely responsible for the
delivery, direct to an authorised manufacturing facility licensed by SCEE
and in accordance with Clause 6.4, 110% (one hundred and ten percent) of
the number of sets of the Printed Materials (other than those set forth on
the applicable Licensed Product itself) required to fulfill Publisher's
purchase order for Manufactured Materials of each PlayStation 2 format
Software title, which Printed Materials shall be in strict compliance with
the Specifications. SCEE shall, at Publisher's request, gave Publisher all
reasonable assistance in arranging the manufacture of Printed Materials to
be used in conjunction with Licensed Products not manufactured in reliance
on Article 6 through SCEE's authorised manufacturing facility (if a Sony
company), but SCEE shall have no responsibility with respect to pricing,
delivery or any other related matter whatsoever in connection with such
manufacture.
6.4 Subject to the giving by SCEE of a certificate of conformity to the
Specifications (or, alternatively, a holding of conformity following
recourse by Publisher to the appeals process specified in the
Specifications) for the applicable PlayStation 2 format Software and
Printed Materials pursuant to Clause 5, and to the delivery to an
authorised manufacturing facility licensed by SCEE of the materials to be
delivered under Clause 6.3, SCEE will, at Publisher's expense and as
applicable, manufacture, assemble, package and deliver the Manufactured
Materials and the Printed Materials in accordance with the terms and
conditions set forth in this Clause 6. The delivery of the materials
specified in Clause 6.3 shall be made in accordance with the timetable for
such delivery specified in the Specifications.
6.5 Subject always to Article 6, Publisher shall issue to SCEE purchase
order(s) via SCEE's Electronic Order System (or otherwise as specified by
SCEE from time to time) in accordance with, and in compliance with the
timetable specified in, the Specifications. No such order shall be issued
unless and until all necessary certificates of conformity shall have been
given (or, alternatively, there shall have been a holding of conformity
following recourse by Publisher to the appeals process specified in the
Specifications) pursuant to Clause 5. Each such order shall reference
Publisher authorisation number and purchase order reference number,
specify quantities of PlayStation 2 format Software by title by pack sku
(in multiples of the minimum box shipment detailed in the Specifications),
state requested ex-factory delivery date and all packaging information
together with such other information as SCEE shall reasonably require and
shall be for not less than the applicable minimum order quantity as
specified in Schedule 2 hereto. All such purchase orders shall be subject
to acceptance by SCEE, which acceptance will be advised to Publisher not
more than 3 (three) working days following delivery in accordance with
Clause 6.4 of the materials required to be delivered under Clause 6.2 and
6.3. SCEE shall use all reasonable endeavours, subject to available
manufacturing capacity, to fulfil Publisher's purchase orders by
Publisher's requested ex-factory delivery date but does not in any event
guarantee so to do. Publisher shall have no right
12
to cancel or reschedule any purchase order or reorder (or any portion
thereof) for any Licensed Product unless the parties shall first have
reached mutual agreement as to Publisher's financial liability with
respect to any desired cancellation or rescheduling of any such purchase
order or reorder (or any portion thereof).
6.6 Subject only to the provisions of Clause 6.5 in relation to Printed
Materials, neither SCEE nor any manufacturing subcontractor of SCEE shall
be under any obligation to store finished units of Manufactured Materials
or of associated Printed Materials beyond the actual ex-factory delivery
date thereof. Delivery of Manufactured Materials shall be made ex-factory
the applicable authorised manufacturing facility licensed by SCEE in the
Licensed Territory. All risk of loss or damage in transit to any and all
Manufactured Materials manufactured by SCEE pursuant to Publisher's orders
shall pass to Publisher forthwith upon first handling by Publisher's
carrier.
6.7 Publisher may inspect and test any units of Manufactured Materials not
manufactured in reliance on Article 6 at Publisher's receiving
destination. Any finished units of such Manufactured Materials which fail
to conform to the Specifications and/or any description(s) contained in
this Agreement may be rejected by Publisher by providing written notice of
rejection to SCEE within 30 (thirty) days of receipt of such units of such
Manufactured Materials at Publisher's receiving destination. In such event,
the provisions of Clause 10.2 shall apply with respect to any such rejected
units of Manufactured Materials. Notwithstanding the provisions of Clause
10.2, if Publisher fails to reject any units of such Manufactured Materials
in the manner and within the 30 (thirty) day period prescribed above, such
units of Manufactured Materials shall irrevocably be deemed accepted by
Publisher and shall not subsequently be rejected.
6.8 In no circumstances shall SCEE or its authorised manufacturing facility
treat any of Publisher's Licensed Products in any way more or less
favourably, in terms or production turnaround times or otherwise, than the
Licensed Products of any other Licensed Publisher or SCEE or than
PlayStation 2 format Software products published by SCEE itself.
7. PLATFORM CHARGE
7.1 The all-in Platform Charge for finished units of Manufactured Materials in
respect of which SCEE accepts Publisher's purchase order in accordance
with Clause 6.5 shall be as specified in Schedule 2 (but subject to
adjustment as therein provided). Such Platform Charge shall be subject to
change by SCEE at any time upon reasonable notice to Publisher, provided,
however, that such Platform Charge shall not be changed with respect to
any units of Manufactured Materials which are the subject of an effective
purchase order or reorder but which have not yet been delivered by SCEE.
Such Platform Charge for finished units of Manufactured Materials is
exclusive of any value-added or similar sales tax, customs and excise
duties and other similar taxes or duties, which SCEE may be required to
collect or pay as a consequence of the sale or delivery of finished unites
of Manufactured Materials. Publisher shall be solely responsible for the
payment or reimbursement of any such taxes or duties, and other such
charges or
13
assessments applicable to the sale and/or purchase of finished units of
Manufactured Materials.
The Platform Charge for products developed utilising Sony Materials and/or
Sony Intellectual Property Rights and/or, subject to Council Directive
91/250/EEC, Confidential Information of Sony, but manufactured in reliance
on Article 6, shall be the otherwise applicable Platform Charge less only
such sum as represents from time to time the costs of raw materials and
for production services (including for utilisation if Sony's proprietary
Disc Mastering technology) for the products concerned which SCEE would
otherwise have been invoiced for by SCEE's authorised manufacturing
facility ("the Article 6 Platform Charge"). If Publisher has products so
manufactured in reliance on Article 6, then Publisher shall furnish SCEE,
within 28 (twenty eight) days following the close of each calendar month:
(i) a written reporting of the number or inventory units (by product title)
of products so manufactured during such calendar month: (ii) an external
auditor's certificate (or similar independent certificate reasonably
acceptable to SCEE) confirming the completeness and accuracy of such
reporting; (iii) Publisher's remittance for the Article 6 Platform Charge
multiplied by the number of inventory units reflected in such reporting.
Any failure fully and promptly to comply with the foregoing reporting and
payment obligation shall constitute a breach of this Agreement not capable
of remedy, entitling SCEE forthwith to terminate the Term pursuant to
Clause 13.1(i); and upon termination by SCEE for such cause, the provisions
of Clause 14.2 shall come into effect.
SCEE shall upon reasonable written request provide Publisher details of
the aforementioned costs of raw materials and production services if
Publisher has legitimately exercised its rights under Article 6 or
genuinely intends to exercise and rely upon such rights. However, SCEE
reserves the right to require Publisher to execute a separate
Non-Disclosure Agreement before making such information available.
7.2 No costs incurred in the development, manufacture, marketing, sale and/or
distribution of Licensed Products and/or associated materials shall be
deducted from any Platform Charge payable to SCEE hereunder. Similarly,
there shall be no deduction from the Platform Charge otherwise payable to
SCEE hereunder as a result of any uncollectable accounts owed to
Publisher, or for any credits, discounts, allowances or returns which
Publisher may credit or otherwise grant to any third party customer in
respect of any units of Licensed Products and/or associated materials, or
for any taxes, fees, assessments, or expenses of any kind which may be
incurred by Publisher in connection with its sale and/or distribution of
any units of Licensed Products associated materials, and/or arising with
respect to the payment of Platform Charge hereunder. Publisher shall
furnish SCEE official tax receipts or other such documentary evidence
issued by the applicable tax authorities sufficient to substantiate the
fact of the deduction of any withholding taxes and/or other such
assessments which may be imposed by any governmental authority with
respect to such payments of Platform Charge hereunder and the amount of
each such deduction.
7.3 Publisher shall effect payment for the Platform Charge specified in Clause
7.1 for the finished units of Manufactured Materials the subject matter of
each purchase order issued
14
Confidential information omitted where indicated by "[*]" and filed separately
with the Commission pursuant to a request for confidential treatment under Rule
24b-2 of the Securities Exchange Act of 1934.
pursuant to Clause 6.5 in accordance with the Specifications. Each delivery
of Manufactured Materials to Publisher shall constitute a separate sale
obligating Publisher to pay therefor, whether said delivery be whole or
partial fulfilment of any order. No claim for credit due to shortage of
Manufactured Materials as delivered to carrier will be allowed unless it is
made within 5 (five) working days from the date of receipt at Publisher's
receiving destination. Title to Manufactured Materials the subject of each
such purchase order shall pass to Publisher only upon payment in full of
the Platform Charge due in respect thereof. The receipt and deposit by SCEE
of any payment of Platform Charge tendered by or on behalf of Publisher as
aforesaid shall be without prejudice to any rights or remedies of SCEE and
shall not restrict or prevent SCEE from thereafter successfully challenging
the basis for calculation and/or the accuracy of such payments. SCEE
reserves the right, upon reasonable notice to Publisher, to require that
such payments of Platform Charge be made to such other Sony entity as SCEE
may designate from time to time.
8. MARKETING & DISTRIBUTION
Publisher shall, at no expense to SCEE, diligently market, distribute and
sell Licensed Products throughout (but only in) the Licensed Territory,
and shall use all reasonable efforts consistent with its best business
judgment to stimulate demand therefor in the Licensed Territory and to
supply any resulting demand. Publisher shall not market, distribute or
sell Licensed Products outside the Licensed Products or to any person,
firm, corporation or entity having its place of business, or to any
purchasing agency located, outside the Licensed Territory. Publisher shall
use all reasonable efforts consistent with its best business judgement to
protect Licensed Products from and against illegal reproduction and/or
copying by end users or by any other persons or entities. Such methods of
protection may include, without limitation, markings or insignia providing
identification of authenticity and packaging seals as may be specified in
the Specifications. SCEE shall be entitled, at SCEE's sole cost and
expense, to manufacture up to 200 (two hundred) additional units of
Manufactured Materials (or such greater number of additional units as
shall be agreed by Publisher, such agreement not unreasonably to be
withheld or delayed) for each PlayStation 2 format Software title (and to
purchase from Publisher, at a price equal to the actual cost thereof to
Publisher, a corresponding number of units of Printed Materials for each
such PlayStation 2 format Software title), for the purposes of or in
connection with the marketing and promotion of PlayStation 2; provided
however that SCEE shall not directly or indirectly resell any such units
of Manufactured Materials (and, if applicable, of Printed Materials)
within the Licensed Territory without Publisher's prior written consent.
Further, SCEE shall be entitled to utilise Publisher's name and/or logo
and the audio-visual content of, and/or the Printed Materials for,
PlayStation 2 format Software titles (not to exclude the likenesses of any
recognisable talent) for the purposes of or in connection with such
marketing and promotion.
9. CONFIDENTIALITY
9.1 [*]
15
Confidential information omitted where indicated by "[*]" and filed separately
with the Commission pursuant to a request for confidential treatment under Rule
24b-2 of the Securities Exchange Act of 1934.
9.2 [*]
9.3 [*]
9.4 [*]
9.5 [*]
9.6 [*]
10. WARRANTIES
10.1 SCEE represents and warrants solely for the benefit of Publisher that SCEE
has the right, power and authority to enter into, and fully to perform its
obligations under, this Agreement.
16
10.2 SCEE warrants that units of PlayStation 2 Discs comprising Licensed
Products manufactured by SCEE for Publisher pursuant to Clause 6 hereof
shall be free from defects in materials and workmanship under normal use
and service at time of delivery in accordance with Clause 6.6. The sole
obligation of SCEE under this warranty shall be, for a period of 90
(ninety) days from the date of delivery of such discs in accordance with
Clause 6.6, at SCEE's election, either (i) to replace such defective discs
or (ii) to issue credit for, or to refund to Publisher the Platform Charge
of such defective discs (excluding PlayStation 2 Disc mastering charge)
and to reimburse Publisher its reasonable return shipping costs. Such
warranty is the only warranty applicable to Licensed Products manufactured
by SCEE for Publisher pursuant to Clause 6. This warranty shall not apply
to damage resulting from accident, fair wear and tear, willful damage,
alteration, negligence, abnormal conditions of use, failure to follow
directions for use (whether given in instruction manuals or otherwise
howsoever) or misuse of Licensed Products, or to discs comprising less
than 1% (one percent) or, if greater, 100 (one hundred) units in the
aggregate of the total number of Licensed Products manufactured by SCEE
for Publisher per purchase order of any PlayStation 2 format Software
title. If, during such 90 (ninety) day period, defects appear as
aforesaid, Publisher shall notify SCEE and, upon request by SCEE (but not
otherwise), return such defective discs, with a written description of the
defect claimed, to such location as SCEE shall designate. SCEE shall not
accept for replacement, credit or refund as aforesaid any Licensed
Products except factory defective discs (i.e., discs that are not free
from defects in materials and workmanship under normal use and service).
All returns of defective discs shall be subject to prior written
authorisation by SCEE, not unreasonably to be withheld. If no defect
exists or the defect is not such as to be covered under the above
warranty, Publisher shall reimburse SCEE for expenses incurred in
processing and analysing the discs.
10.3 Publisher represents, warrants, covenants and agrees that: (i) Publisher
has the right, power and authority to enter into, and fully to perform its
obligation under, this Agreement; (ii) the making of this Agreement by
Publisher does not violate any separate agreement, rights or obligations
existing between Publisher and any other person, firm, corporation or
entity, and, throughout the Term, Publisher shall not make any separate
agreement with any person or entity which is inconsistent with any of the
provisions hereof; (iii) both Licensed Developer Software and PlayStation
2 format Software, and any name, designation or title used in conjunction
therewith, shall be free from any valid third party claim of infringement
of any Third Party Intellectual Property Rights; (iv) there is no
litigation, proceeding or claim pending or threatened against Publisher or
any subsidiary or affiliate of Publisher which may materially affect
Publisher's rights in and to Licensed Developer Software, the names,
designations or titles used in conjunction therewith, the works and
performances embodied therein and/or the copyrights pertaining thereto;
(v) Publisher shall have made or shall make any and all payments required
to be made to any person, firm, corporation or other entity, or to any
body or group representing authors or participants in the production of
the works or performances embodied in Licensed Developer Software and
PlayStation 2 format Software, or to publishers or other persons having
legal or contractual rights of any kind to participate in any income
arising in respect of the exploitation of such works or performances; (vi)
neither Publisher nor any subsidiary or affiliate of Publisher shall make
any
17
Confidential information omitted where indicated by "[*]" and filed separately
with the Commission pursuant to a request for confidential treatment under Rule
24b-2 of the Securities Exchange Act of 1934.
representation or give any warranty to any person or entity expressly or
impliedly on Sony's behalf, or to the effect that Licensed Products are
connected in any way with Sony (other than that Licensed Products have
been developed, marketed, manufactured, sold and/or distributed under
license from Sony); (vii) PlayStation 2 format Software shall be
distributed by Publisher solely in the form of Licensed Product; (viii)
each Licensed Product shall be marketed, sold and distributed in an
ethical manner and in accordance with all applicable laws and regulations;
and (ix) Publisher's policies and practices with respect to the marketing,
sale and/or distribution of Licensed Products shall in no manner reflect
adversely upon the name, reputation or goodwill of Sony.
10.4 [*]
11. INDEMNITIES
11.1 SCEE shall indemnify and hold Publisher harmless from and against any and
all claims, losses, liabilities, damages, expenses and costs, including
without limitation reasonable fees for lawyers, expert witnesses and
litigation costs, and including costs incurred in the settlement or
avoidance of any such claim, which result from or are in connection with a
breach of any of the warranties provided by SCEE herein; provided however
that Publisher shall give prompt written notice to SCEE of the assertion
of any such claim, and provided further that SCEE shall have the right to
select counsel and control the defence and/or settlement thereof, subject
to the right of Publisher to participate in any such action or proceeding
at its own expense with counsel of its own choosing. SCEE shall have the
exclusive right, at its discretion, to commence and prosecute at its own
expense any lawsuit or to take such other action with respect to such
matters as shall be deemed appropriate by SCEE. Publisher shall provide
SCEE, at no expense to Publisher, reasonable assistance and cooperation
concerning any such matter. Publisher shall not agree to the compromise,
settlement or abandonment of any such claim, action or proceeding without
SCEE's prior written consent. [*]
11.2 Publisher shall indemnify and hold SCEE harmless from and against any and
all claims, losses, liabilities, damages, expenses and costs, including
without limitation reasonable fees for lawyers, expert witnesses and
litigation costs, and including costs incurred in the settlement or
avoidance of any such claim, which result from or are in connection with
(i) a breach of any of the warranties provided by Publisher herein or any
breach of Publisher's confidentiality obligations as referred to in Clause
9.1 hereof, or (ii) any claim of infringement or alleged infringement of
any Third Party Intellectual Property Rights with respect to Licensed
Developer Software, or (iii) any claim of or in connection with any injury
(including death) or property damage, by whomsoever such claim is made
arising (in whole or in part) out of the manufacture, sale and/or use of
any of the Manufactured Materials unless resulting from the proven
negligence of Sony; provided however that SCEE shall give prompt written
notice to Publisher of the assertion of any such claim, and provide
further that Publisher shall have the right o select counsel and
18
control the defence and/or settlement thereof, subject to the right of
SCEE to participate in any such action or proceeding at its own expense
with counsel of its own choosing. Publisher shall have the exclusive
right, at its discretion, to commence and/or prosecute at its own expense
any lawsuit or to take such other action with respect to such matter as
shall be deemed appropriate by Publisher. SCEE shall provide Publisher, at
no expense to SCEE, reasonable assistance and cooperation concerning any
such matter, SCEE shall not agree to the compromise, settlement or
abandonment of any such claim, action or proceeding without Publisher's
prior written consent.
12. LIMITATIONS OF LIABILITY
12.1 IN NO EVENT SHALL SONY OR ITS SUPPLIERS BE LIABLE FOR PROSPECTIVE PROFITS,
OR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT (INCLUDING WITHOUT LIMITATION THE BREACH OF
THIS AGREEMENT BY SCEE), WHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING
NEGLIGENCE), INDEMNITY, PRODUCT LIABILITY OR OTHERWISE. IN NO EVENT SHALL
SONY'S LIABILITY ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION ANY LIABILITY FOR DIRECT DAMAGES, AND
INCLUDING WITHOUT LIMITATION ANY LIABILITY UNDER CLAUSE 11.1, EXCEED THE
PLATFORM CHARGE PAID BY PUBLISHER TO SCEE UNDER CLAUSE 7 WITHIN THE 2
(TWO) YEARS PRIOR TO THE DATE OF THE FIRST OCCURRENCE OF THE EVENT OR
CIRCUMSTANCES GIVING RISE TO SUCH LIABILITY. EXCEPT AS EXPRESSLY SET FORTH
HEREIN, NO SONY ENTITY, NOR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES OR AGENTS, SHALL BEAR ANY RISK, OR HAVE ANY RESPONSIBILITY OR
LIABILITY, OF ANY KIND TO PUBLISHER OR TO ANY THIRD PARTIES WITH RESPECT
TO THE FUNCTIONALITY AND/OR PERFORMANCE OF LICENSED PRODUCTS.
12.2 IN NO EVENT SHALL PUBLISHER BE LIABLE TO SCEE FOR PROSPECTIVE PROFITS, OR
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT (INCLUDING WITHOUT LIMITATION THE BREACH OF
THIS AGREEMENT BY PUBLISHER), WHETHER UNDER THEORY OF CONTRACT, TORT
(INCLUDING NEGLIGENCE), INDEMNITY, PRODUCT LIABILITY OR OTHERWISE,
PROVIDED THAT PUBLISHER EXPRESSLY AGREES THAT SUCH LIMITATIONS SHALL NOT
APPLY TO DAMAGES RESULTING FROM PUBLISHER'S BREACH OF CLAUSES 2, 3, 4, 9
OR 11.2 OF THIS AGREEMENT.
12.3 SUBJECT AS EXPRESSLY PROVIDED IN CLAUSES 10.1 AND 10.2, NO SONY ENTITY NOR
ITS SUPPLIERS MAKE, NOR DOES PUBLISHER RECEIVE, ANY WARRANTIES (EXPRESS,
IMPLIED OR STATUTORY) REGARDING THE SONY MATERIALS AND/OR UNITS OF
MANUFACTURED MATERIALS MANUFACTURED HEREUNDER. SONY SHALL NOT BE LIABLE
FOR ANY INJURY, LOSS OR DAMAGE, DIRECT OR CONSEQUENTIAL, ARISING OUT OF
THE USE OF, OR INABILITY TO USE, SUCH UNITS OF MANUFACTURED
19
MATERIALS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ANY
WARRANTIES, CONDITIONS OR OTHER TERMS IMPLIED BY STATUTE OR COMMON LAW
(INCLUDING AS TO MERCHANTABILITY, SATISFACTORY QUALITY AND/OR FITNESS FOR
A PARTICULAR PURPOSE AND THE EQUIVALENTS THEREOF UNDER THE LAWS OF ANY
JURISDICTION) ARE EXCLUDED TO THE FULLEST EXTENT PERMITTED BY LAW.
HOWEVER, NOTHING IN THIS AGREEMENT SHALL LIMIT SONY'S LIABILITY IN
RELATION TO CLAIMS ARISING FROM THE INJURY OR DEATH OF ANY PERSON
RESULTING FROM THE PROVEN NEGLIGENCE OF SONY.
13. TERMINATION BY SCEE
13.1 SCEE shall have the right forthwith to terminate this Agreement by written
notice to Publisher at any time after the occurrence of any of the
following events or circumstances: (i) any material breach of Publisher's
obligations under this Agreement (or, if Publisher shall also have
executed a PlayStation Non-Disclosure Agreement and/or PlayStation 2
Confidentiality & Non-Disclosure Agreement which shall have been breached
by Publisher, or a PlayStation Licensed Developer Agreement, PlayStation
Licensed Publisher Agreement, PlayStation 2 Tools & Materials Loan
Agreement and/or a PlayStation 2 Licensed Developer Agreement, or a
PlayStation or a PlayStation 2 licensed developer, development system or
licensed publisher agreement (or equivalent) with an Affiliate of SCEE,
which shall have been terminated for breach by SCEE or by such party)
which breach, if capable of remedy, shall not have been corrected or cured
in full within 30 (thirty) days following notice from SCEE (or the
applicable Affiliate of SCEE as the case may be) specifying and requiring
the correction or cure of such breach, or any repetition of a prior
material breach of any such obligation, whether or not capable of remedy;
(ii) any refusal or failure by Publisher to effect payment of Platform
Charge, promptly in accordance with Clauses 7.1 or 7.3 or at all, or a
statement that Publisher is or will be unable to pay, any sum(s) due
hereunder, or Publisher being unable to pay its debts generally as the
same fall due; (iii) Publisher's filing of an application for, or
consenting to or directing the appointment of, or the taking of possession
by, a receiver, custodian, trustee or liquidator (or the equivalent of any
of the foregoing under the laws of any jurisdiction) of any of Publisher's
property (whether tangible or intangible and wherever located), assets
and/or undertaking; (iv) the making by Publisher of a general assignment
for the benefit of creditors; (v) an adjudication in any jurisdiction that
Publisher is a bankrupt or insolvent; (vi) the commencing by Publisher of,
or Publisher's intention to commence, a voluntary case under applicable
bankruptcy laws of any jurisdiction; (vii) the filing by Publisher of, or
Publisher's intention to file, a petition seeking to take advantage of any
other law(s) of any jurisdiction providing for the relief of debtors;
(viii) Publisher's acquiescence in, intention to acquiesce in, or failure
to have dismissed within 90 (ninety) days, any petition filed against it
in any involuntary case brought pursuant to the bankruptcy or other law(s)
of any jurisdiction referred to in (vi) and (vii) above; (ix) a
controlling partnership or equity interest or any such interest (other
than an acquisition of less than an aggregate of 5% (five percent) of the
issued share capital of Publisher, as quoted on a recognised investments
exchange), in the case of a transfer to any party which (a) shall
previously have executed a PlayStation Non-Disclosure Agreement and/or
PlayStation 2 Confidentiality & Non-Disclosure Agreement
20
which shall have been breached by such party, or a PlayStation Licensed
Developer Agreement, PlayStation Licensed Publisher Agreement, PlayStation
2 Tools & Materials Loan Agreement, PlayStation 2 Licensed Developer
Agreement and/or a PlayStation 2 Licensed Publisher Agreement which shall
have been terminated for breach by SCEE, or a PlayStation or PlayStation 2
licensed developer, development system or licensed publisher agreement (or
equivalent) with an Affiliate of SCEE, which shall have been terminated
for breach by such party, or (b) is, or which directly or indirectly holds
or acquires a partnership or equity interest in, the developer of (or
other owner of intellectual property rights in) any interactive hardware
device or product which is or will be directly or indirectly competitive
with PlayStation 2, or (c) is in litigation with Sony concerning any
proprietary technology, trade secrets and/or intellectual property
matter(s) and/or has challenged the validity of any Sony Intellectual
Property Rights in Publisher or in all or substantially all of Publisher's
property (whether tangible or intangible), assets and/or undertaking, being
acquired, directly or indirectly, by any person, firm, corporation or other
entity; (x) Publisher enters into any third party business relationship
pursuant to which Publisher makes a material contribution to the
development of the core components of any interactive hardware device or
product which is or will be directly or indirectly competitive with
PlayStation 2, or if Publisher directly or indirectly holds or acquires a
partnership or equity interest (other than a holding or acquisition of less
than an aggregate of 5% (five percent) of the issued share capital, as
quoted on a recognized investments exchange) in, or otherwise forms a
strategic commercial relationship with, any third party firm, corporation
or other entity which has developed or during the Term develops (or which
owns or during the Term acquires ownership of intellectual property rights
in) any such device or product; (xi) Publisher failing to submit materials
relating to any new PlayStation 2 format Software in accordance with Clause
5.2, and/or failing to issue any purchase orders for Manufactured Materials
in accordance with Clause 6.5, during any period of 12 (twelve) consecutive
calendar months; or (xii) Publisher (or any parent company, subsidiary or
affiliate of Publisher) being in litigation with Sony concerning any
proprietary technology, trade secrets and/or intellectual property
matter(s) an/or challenging the validity of any Sony Intellectual Property
Rights. As used in this Clause 13.1. "controlling interest" means (i) in
relation to a body corporate, the power of the holder of such interest to
secure - (a) by means of the holding of shares or the possession of voting
power in, or in relation to, that or any other body corporate or (b) by
virtue of any powers conferred by the Articles of Association or other
document regulating that or any other body corporate - that the affairs of
such body corporate be conducted in accordance with the wishes of the
holder of such interest, and (ii) in relation to a partnership, the right
to a share of more than 50% (fifty percent) of the assets or of the income
of the partnership. Forthwith upon such occurrence, Publisher shall notify
SCEE of the occurrence of any of the events or circumstances specified in
(ii) to (x) above; and Publisher's failure to so do shall be a material
breach of this Agreement not capable of remedy.
13.2 Further, SCEE shall have the right by written notice to Publisher
forthwith to terminate the licenses and related rights herein granted to
Publisher in relation to any PlayStation 2 format Software at any time
after the occurrence of any of the following events: (i) any failure by
Publisher to submit to SCEE the materials required to be submitted under
Clauses 5.2 and 5.3 (or, if applicable, under Clause 5.6) in the form and
manner and in
21
Confidential information omitted where indicated by "[*]" and filed separately
with the Commission pursuant to a request for confidential treatment under Rule
24b-2 of the Securities Exchange Act of 1934.
conformity with the standards and specifications therein prescribed; and
(ii) any failure by Publisher promptly to notify SCEE in writing of any
material change to any of the materials approved by SCEE pursuant to
Clause 5.4 (or, if applicable, pursuant to Clause 5.6); provided however
that SCEE shall not be entitled to exercise such right of termination if
Publisher's failure under (i) above is directly caused by SCEE's failure
to comply with any of its material obligations expressly set forth herein.
14. EFFECT OF EXPIRATION OR TERMINATION
14.1 Notwithstanding the expiration of the Term, Publisher shall be entitled to
continue to publish PlayStation2 format Software the development of which
shall have been approved prior to or during the Term hereof by SCEE (or by
an Affiliate of SCEE) pursuant to the applicable LDA2, and to use the
Licensed Trademarks strictly, only and directly in connection with such
publication, until the expiration of the Term, or if later, until the
second anniversary of the 31 March next following such approval. Upon
expiration of the Term or, if applicable, such extended period for
publishing PlayStation 2 format Software, Publisher may sell off existing
inventories of the applicable PlayStation 2 format Software titles, on a
non-exclusive basis, for a period of 180 (one hundred and eighty) days
from the applicable expiration date; provided always that such inventory
thereof shall not have been manufactured solely or principally for sale
within such sell-off period.
14.2 However, upon the exercising by SCEE of its right of termination, either
of this Agreement pursuant to Clause 13.1(i) to (viii) or Clause 13.1(xii)
or in relation to any PlayStation 2 format Software pursuant to Clause
13.2, all rights, licences and privileges licensed or otherwise granted to
Publisher hereunder, either generally or in relation to such PlayStation 2
format Software (as applicable), shall forthwith and without further
formality revert absolutely to SCEE and Publisher shall forthwith cease
and desist from any further use of the Sony Materials, any Sony
Intellectual Property Rights related thereto and the Licensed Trademarks,
and, subject to Clause 14.3, shall have no further right to continue the
marketing, sale and/or distribution of any units of Licensed Product or of
any units of Licensed Product derived from such PlayStation 2 format
Software (as applicable).
14.3 In the event of termination by SCEE pursuant to Clause 13.1(ix), (x) or
(xi) or by Publisher pursuant to Clause 25, Publisher may sell-off then
unsold units of Licensed Product(s), for a period of 90 (ninety) days from
the effective date of termination; provided always that such inventory
thereof shall not have been manufactured solely or principally for sale
within such sell-off period. Subsequent to the expiry of 180 (one hundred
and eighty) day or 90 (ninety) day sell-off period, or in the event of
termination by SCEE pursuant to Clause 13.1(i) to (viii), Clause 13.1(xii)
or Clause 13.2, any and all units of Licensed Products or the applicable
Licensed Products (as the case may be) remaining in Publisher's inventory
and/or under its control shall be destroyed by Publisher within 5 (five)
working days following such expiry or effective date of termination. Within
5 (five) working days following such destruction, Publisher shall furnish
SCEE an itemized statement, certified accurate by a duly authorized
officer, partner or other representative (as applicable) of Publisher,
specifying the number of then unsold units of Licensed Product(s) to which
such termination applies, on a PlayStation 2 format Software title-by-
22
title basis, which remain in its inventory and/or under its control at
such date, confirming the number of units of Licensed Products destroyed,
on a PlayStation 2 format Software title-by-title basis, and indicating
the location and date of such destruction and the disposition of the
remains of such destroyed materials. SCEE shall be entitled to conduct a
physical inspection of Publisher's inventory during normal business hours
in order to ascertain or verify such inventory and/or statement.
14.4 Upon termination of the Term by SCEE pursuant to Clause 13.1, Publisher
shall forthwith deliver up to SCEE (or, if so requested by SCEE in
writing, destroy and promptly furnish SCEE a certificate of such
destruction signed by a duly authorized officer, partner or other
representative (as applicable) of Publisher) all Sony Materials, and any
Confidential Information of Sony of which Publisher shall have become
apprized and which has been reduced to tangible or written form, and any
and all copies thereof then in the possession, custody or control of
Publisher.
14.5 SCEE shall be under no obligation to renew or extend this Agreement
notwithstanding any actions taken by either of the parties prior to its
expiration or earlier termination. In the event of termination pursuant to
Clauses 13.1 or 13.2, no part of any payment(s) whatsoever theretofore
made to SCEE hereunder (or, if Publisher shall also have executed a LDA2,
thereunder) shall be owed or repayable to Publisher, and nor shall either
party be liable to the other for any damages (whether direct,
consequential or incidental, and including without limitation any
expenditures, loss of profits or prospective profits) sustained or arising
out of, or alleged to have been sustained or to have arisen out of, such
expiration or earlier termination. However, the expiration or earlier
termination of this Agreement shall not excuse either party from any prior
breach of any of the terms and provisions of this Agreement or from any
obligations surviving such expiration or earlier termination, and full
legal and equitable remedies shall remain available for any breach or
threatened breach of this Agreement or of any obligations arising
therefrom.
14.6 The expiration or earlier termination of this Agreement (whether by SCEE
pursuant to Clause 13 or otherwise howsoever) shall be without prejudice
to any and all rights and remedies which either party may then or
subsequently have against the other party.
15. NOTICES
15.1 All notices under this Agreement shall be in writing and shall be given by
courier or other personal delivery, by registered or certified mail, by
recognized international courier service or by facsimile transmission
(with an immediate confirmation copy by regular mail or any of the methods
specified above) at the appropriate address hereinbefore specified or at a
substitute address designated by notice by the party concerned (and in the
case of notices to SCEE shall be directed to its Vice President, Business
Affairs or such other Sony representative as shall from time to time be
designated by notice by SCEE). Notices given other than by facsimile
transmission shall be deemed given and effective when delivered. Notices
given by facsimile transmission shall be deemed given only upon receipt of
confirmation copy as aforesaid but, upon such receipt, shall be deemed
effective as of the date of transmission.
23
15.2 Whenever Publisher is required to obtain the authorization, consent or
approval of SCEE, Publisher shall request the same by notice to SCEE as
aforesaid, and with a copy under separate cover to its Director of Third
Party Relations or such other Sony representative as shall from time to
time be designated by notice to Publisher. Such authorization, consent or
approval shall not be deemed to be granted unless and until SCEE shall
have given a written affirmative response to each request therefor and
shall in no event be implied or inferred from any delay or failure of SCEE
to give such or any response.
16. FORCE MAJEURE
Neither SCEE nor Publisher shall be liable for any loss or damage or be deemed
to be in breach of this Agreement if its failure to perform, or failure to cure
any breach of, its obligations under this Agreement results from any events or
4 circumstances beyond its reasonable control, including without limitation any
natural disaster, fire, flood, earthquake or other act of God, inevitable
accidents, lockout, strike or other labour dispute, riot or civil commotion,
act of public enemy, enactment, rule, order or act of any government or
governmental authority, failure of technical facilities, or failure or delay of
transportation facilities.
17. RELATIONSHIP OF THE PARTIES
The relationship hereunder between SCEE and Publisher respectively is that of
licensor and licensee. Publisher is an independent contractor and shall not in
any respect act as or be deemed to be the legal representative, agent, joint
venturer, partner or employee of SCEE for any purpose whatsoever. Neither party
shall have any right or authority to assume or create any obligations of any
kind or make any representation or warranty (express or implied) on behalf of
the other party or to bind the other party in any respect whatsoever.
18. ASSIGNABILITY
SCEE has entered into this Agreement based on the particular reputation,
capabilities and experience of Publisher and of its officers, directors and
employees. Accordingly, Publisher may not assign, pledge or otherwise dispose
of this Agreement or of any of its rights hereunder, nor delegate or otherwise
transfer any of its obligations hereunder, to any third party unless the prior
written consent of SCEE shall first have been obtained in each case. Any
attempted or purported assignment, pledge, delegation or other disposition in
contravention of this Clause 18 shall be null and void and a material breach of
this Agreement not capable of remedy. SCEE shall be entitled, without the
consent of Publisher, to assign its rights and obligations hereunder to any
corporation or other entity in which Sony Corporation (or any successor in
interest thereto) holds a controlling interest, whether directly or indirectly.
Subject to the foregoing, this Agreement shall enure to the benefit of the
parties and their respective successors and permitted assigns.
A person who is not party to this Agreement shall have no right under the
Contracts (Rights of Third Parties) Act of 1999 to enforce any term of this
Agreement. This provision does not affect any right or remedy of any person
which exists or is available otherwise than pursuant to such Act.
24
19. COMPLIANCE WITH APPLICABLE LAWS
The parties shall at all times comply with all applicable regulations and
orders of their respective countries and all conventions and treaties to which
their countries are party or relating to or in any way affecting this Agreement
and the performance by the parties of this Agreement. Each party, at its own
expense, shall negotiate and obtain any approval, licence or permit required
for the performance of its obligations hereunder, and shall declare, record or
take such steps as may be necessary to render this Agreement binding, including
without limitation any required filing of this Agreement with any appropriate
governmental authorities.
20. GOVERNING LAW.
This agreement shall be governed by, construed and interpreted in accordance
with English Law, without giving effect to the conflict of laws principles
thereof. The parties irrevocably agree for the exclusive benefit of SCEE that
the English Courts shall have jurisdiction to adjudicate any proceeding, suit
or action arising out of or in connection with this Agreement. However, nothing
contained in this Clause 20 shall limit the right of SCEE to take any such
proceeding, suit or action against Publisher in any other court of competent
jurisdiction, nor shall the taking of any such proceeding, suit or action in
one or more jurisdictions preclude the taking of any other such proceeding,
suit or action in any other jurisdiction, whether concurrently or not, to the
extent permitted by the law of such other jurisdiction. Publisher shall have
the right to take any such proceeding, suit or action against SCEE only in the
English Courts.
21. REMEDIES
Publisher acknowledges and agrees that any breach by Publisher of this
Agreement may cause Sony irreparable harm and damage which may not be capable
of remedy by damages alone and therefore that in the event of any such breach
SCEE may seek equitable (including injunctive) relief against Publisher in
addition to damages and/or other remedy available to SCEE at law or in equity.
Either party's election to avail itself of any of the remedies provided for in
this Agreement shall not be exclusive of any other remedies available hereunder
or otherwise at law or in equity, and all such remedies shall be cumulative.
Publisher shall indemnify SCEE for all losses, liabilities, damages, expenses
and costs, including without limitation reasonable fees for lawyers, expert
witnesses and litigation costs, which SCEE may sustain or incur as a result of
any breach or threatened breach by Publisher of this Agreement.
22. SEVERABILITY
In the event that any provision of this Agreement (or any part(s) thereof),
other than a provision in respect of which SCEE gives a notice of amendment
pursuant to Clause 25, is determined by a court of competent jurisdiction to be
invalid or otherwise unenforceable, such provision (or part(s) thereof) shall
be enforced to the extent possible consistent with the stated intention of the
parties or, if incapable of such enforcement, shall be deemed to be deleted
from this Agreement, but not in any way so as to affect the validity or
enforceability of any other provisions of this Agreement which shall continue
in full force and effect.
25
23. PROVISIONS SURVIVING EXPIRATION OR TERMINATION
The following provisions of this Agreement shall survive and continue in full
force and effect notwithstanding its expiration or earlier termination (whether
by SCEE pursuant to Clause 13 hereof or otherwise howsoever):
Clause 3 Sub-Publishers
Clause 4 Reservations
Clause 5.7 + 5.8 Notices & Consumer Advisory Ratings
Clause 6 Manufacture of Licensed Products
Clause 7 Platform Charge
Clause 9 Confidentiality
Clause 10.2 to 10.4 Warranties
Clause 11 Indemnities
Clause 12 Limitations of Liability
Clause 14 Effect of Expiration or Termination
Clause 18 Assignability
Clause 20 Governing Law
Clause 21 Remedies
Clause 22 Severability
24. WAIVER
No failure or delay by either party in exercising any right, power or remedy
under this Agreement shall operate as a waiver of any such right, power or
remedy. No waiver of any provision of this Agreement shall be effective unless
in writing and signed by a party against whom it is sought to enforce such
waiver. Any waiver by either party of any provision of this Agreement shall not
be construed as a waiver of any other provision of this Agreement, nor shall
such waiver operate or be construed as a waiver of such provision in relation
to any future event or circumstance.
25. AMENDMENTS
NOTHING IN THIS AGREEMENT SHALL BE READ OR APPLIED IN SUCH A WAY AS
TO FRUSTRATE ARTICLE 6 AND, IF AND TO THE EXTENT ANY PROVISION OF
THIS AGREEMEENT (OR ANY PART THEREOF) HAS (OR IS CAPABLE OF HAVING)
SUCH EFFECT, IT SHALL BE DEEMED MODIFIED ACCORDINGLY.
SCEE RESERVES THE RIGHT, AT ANY TIME UPON REASONABLE NOTICE TO
PUBLISHER, TO AMEND THE RELEVANT PROVISIONS OF THIS AGREEMENT, THE
SCHEDULES HERETO AND/OR THE SPECIFICATIONS HEREIN REFERRED TO, TO
TAKE ACCOUNT OF OR IN RESPONSE TO ANY DECISION OR ORDER OF, OR
OBJECTION RAISED BY, ANY COURT OR GOVERNMENTAL OR OTHER COMPETITION
AUTHORITY OF COMPETENT JURISDICTION AND/OR ANY STATUTORY OR SIMILAR
MEASURES WHICH MIGHT BE IMPLEMENTED TO GIVE EFFECT TO ANY SUCH
DECISION, WHICH APPLY TO THIS AGREEMENT, THE SCHEDULES HERETO AND/OR
THE SPECIFICATIONS HEREIN REFERRED TO (AND FROM WHICH THIS AGREEMENT,
THE SCHEDULES HERETO AND/OR THE SPECIFICATIONS
26
HEREIN REFERRED TO ARE NOT EXEMPT) OR TO REFLECT ANY UNDERTAKING
GIVEN BY SONY TO ANY SUCH AUTHORITY IN RELATION TO ANY AND ALL SUCH
MATTERS AFORESAID. ANY SUCH AMENDMENT SHALL BE OF PROSPECTIVE
APPLICATION ONLY AND SHALL NOT BE APPLIED TO ANY LICENSED PRODUCT
MATERIALS RELATING TO WHICH SHALL HAVE BEEN SUBMITTED TO SCEE BY
PUBLISHER PURSUANT TO CLAUSE 5.2 AND/OR 5.3 PRIOR TO THE DATE OF
SCEE'S NOTICE OF AMENDMENT. IN THE EVENT THAT PUBLISHER IS UNWILLING
TO ACCEPT ANY SUCH AMENDMENT, THEN PUBLISHER SHALL HAVE THE RIGHT
FORTHWITH TO TERMINATE THIS AGREEMENT BY WRITTEN NOTICE TO SCEE GIVEN
NOT MORE THAN 90 (NINETY) DAYS FOLLOWING THE DATE OF SCEE'S NOTICE OF
AMENDMENT. THE PROVISIONS OF CLAUSE 14.3 SHALL COME INTO EFFECT UPON
ANY SUCH TERMINATION BY PUBLISHER.
Subject to the foregoing and except as otherwise provided herein,
this Agreement shall not be subject to amendment, change or
modification other than by another written instrument duly executed
by both of the parties hereto.
26. HEADINGS
The clause and other headings contained in this Agreement are intended
primarily for reference purposes only and shall not alone determine the
construction or interpretation of this Agreement or any provisions(s) hereof.
27. INTEGRATION
This document (including the Schedules hereto) constitutes the entire agreement
between the parties with respect to the subject matter contained herein, and
supersedes all prior or contemporaneous agreements, proposals, understandings
and communications between Sony and Publisher, whether oral or written, with
respect to the subject matter hereof. However, the generality of the foregoing
notwithstanding the CNDA and, if applicable, the LDA 2 executed by Publisher
shall continue in full force and effect.
28. COUNTERPARTS
This Agreement may be executed in 2 (two) counterparts, each of which shall be
deemed an original, and both of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
as of the date first above written.
27
SONY COMPUTER ENTERTAINMENT ACCLAIM ENTERTAINMENT (EUROPE)
EUROPE LIMITED LIMITED
/S/ CHRISTOPHER DEERING /S/ RODNEY COUSENS
- -------------------------------- ----------------------------------------
SIGNATURE SIGNATURE
CHRISTOPHER DEERING RODNEY COUSENS
- -------------------------------- ----------------------------------------
NAME NAME
PRESIDENT PRESIDENT AND CHIEF OPERATING OFFICER
- -------------------------------- ----------------------------------------
TITLE TITLE
28
SCHEDULE 1
to the PlayStation 2 Licensed Publisher Agreement dated the 14th day of
November 2000 between Sony Computer Entertainment Europe Limited and
Acclaim Entertainment (Europe) Limited
- -------------------------------------------------------------------------------
LICENSED TERRITORY (CLAUSE 1.2)
(1)
Andorra Ireland Qatar
Armenia Israel Romania
Australia Italy Russian Federation
Austria Jordan San Marino
Azerbaijan Kazakhstan Saudi Arabia
Bahrain Kenya Serbia
Belarus Kuwait Slovakia
Belgium Latvia Slovenia
Bosnia Herzegovina Lebanon Somalia
Botswana Liechtenstein South Africa & Namibia
Bulgaria Lithuania Spain
Croatia Luxembourg Sweden
Cyprus Macedonia Swaziland
Czech Republic Madagascar Switzerland
Denmark Malta Syria
Djibouti Mauritius Tanzania
Egypt Moldova Tunisia
Estonia Monaco Turkey
Ethiopia Morocco Turkmenistan
Finland Mozambique Ukraine
France Netherlands United Arab Emirates
Georgia New Zealand United Kingdom
Germany Nigeria Uzbekistan
Gibraltar Norway Vatican
Greece Oman Yemen
Hungary Poland Zambia
Iceland Portugal Zimbabwe
and all other countries which from time to time are members of the European
Union or have otherwise implemented the Treaty on a European Economic Area or
where Articles 85 & 86 of the Treaty of Rome (or provisions similar thereto)
have been implemented or are otherwise directly effective.
29
(2) Such countries in addition to those specified in (1) above in which the
PAL television standard obtains and which SCEE, in its sole discretion as
representative of Sony Computer Entertainment worldwide, determines from
time to time to include within the Licensed Territory by notice to
Publisher. Without limiting the generality of the foregoing, SCEE shall
have the right not to include within the Licensed Territory or, having
included, subsequently to exclude from the Licensed Territory by
reasonable notice to the Publisher (and intends so to exclude) any such
country or countries in which, in SCEE's best business judgment, the laws
or enforcement of such laws do not protect Sony Intellectual Property
Rights. By not later than the expiry of any such notice of exclusion,
Publisher shall cease and desist, in the country or countries concerned,
from any further use of the Sony Materials, any Sony Intellectual Property
Rights related thereto and the Licensed Trademarks and shall have no
further right to continue or authorize the marketing, sale and/or
distribution of any units of PlayStation 2 format Software.
30
Confidential information omitted where indicated by "[*]" and filed separately
with the Commission pursuant to a request for confidential treatment under Rule
24b-2 of the Securities Exchange Act of 1934.
SCHEDULE 2
to the PlayStation 2 Licensed Publisher Agreement dated the 14th day of
November 2000 between Sony Computer Entertainment Europe Limited and
Acclaim Entertainment (Europe) Limited
- -------------------------------------------------------------------------------
PLATFORM CHARGE (CLAUSE 7.1)
BAND PUBLISHER'S MAXIMUM PLATFORM CHARGE
PRICE TO TRADE PER UNIT
#1 (EURO)[*] (EURO)[*]
#2 (EURO)[*] (EURO)[*]
#3 (EURO)[*] (EURO)[*]
#4 (EURO)[*] (EURO)[*]
#5 (EURO)[*]+ (EURO)[*]
For these purposes, "maximum price to trade" shall mean:
Publisher's (or, where applicable, Publisher's distributor's) highest price
net of trade margin to any trade customer in the European Economic Area and
Australia for Publisher's (or, where applicable, Publisher's distributor's)
minimum order quantity of the relevant inventory, net of year end (or similar)
volume rebates (if any) properly attributable to sales of PlayStation software,
but prior to any credit, deduction or rebate for co-op advertising or other
marketing support, returns or otherwise howsoever.
Where Publisher's business (with the trade or through distributors) is conducted
in local currencies other the, the local currency/ exchange rates to be applied
for purposes of conforming to maximum price to trade for any given Band will be
the closing mid-point spot rate as quoted in the London "Financial Times" on the
first business day of each 6 month period, commencing 1 April 2000. Such
exchange rate will then reset for each successive 6 month period thereafter.
The local currency maximum price to trade for any given title will then be
that derived by applying the exchange rate obtaining for the 6 month period (as
above) in which Publisher places its first Purchase Order ("PO") for the title
concerned and will continue to apply for that title
31
Confidential information omitted where indicated by "[*]" and filed separately
with the Commission pursuant to a request for confidential treatment under Rule
24b-2 of the Securities Exchange Act of 1934.
unless and until, on migration (see below). Publisher places its first PO in a
different Band in a subsequent 6 month period.
SCEE reserves the right the review local currency maximum prices to trade per
Bank applicable for any given 6 month period (as above) in the event of a
material exchange rate fluctuation, deemed for these purposes to be +/-5%.
The foregoing assumes a standard 1-Disc PlayStation 2 CE-ROM product and covers
mastering, Disc, standard 2-colour Disc Label, PlayStation 2 box (or other
packaging) and automated assembly of all components, but excludes the cost of
Printed Materials other than Disc Label.
For multi-disk PlayStation 2 CD-ROM products and PlayStation 2 products in DVD5
format, the applicable Platform Charge specified above shall be [*].
For the following optional non-standard Manufactured Materials, the following
incremental charges (in addition to the otherwise applicable Platform Charge
specified above) will apply.
o Multi-Colour Disc Label
-----------------------
3-colour (EURO)[*] per Disc
4-colour (EURO)[*] per Disc
5-colour (EURO)[*] per Disc
6-colour (EURO)[*] per Disc
o White Basic Underlay (EURO)[*] per Disc
---------------------
o Picture Disc (EURO)[*] per Disc
------------
if the Disc Label is more than 2-colour,
for each additional colour
(maximum 2 additional colours/(EURO)[*] per Disc)
o Picture Disc -- High Definition (EURO)[*] per Disc
-------------------------------
o Shrink Wrap
-----------
1/2 Disc CD-ROM products (EURO)[*] per Disc
(in standard PlayStation 2 box)
(greater than) 2-Disc
CD-ROM products as individually quoted in each case
The Platform Charge and minimum order and reorder quantities for other
"non-standard" Manufactured Materials and/or production processes shall be so
detailed in the Specifications or, where not so detailed, and subject to
availability, as individually quoted in each case.
* * * * *
[*]
32
Confidential information omitted where indicated by "[*]" and filed separately
with the Commission pursuant to a request for confidential treatment under Rule
24b-2 of the Securities Exchange Act of 1934.
* * * * *
[*]
* * * * *
[*]
* * * * *
[*]
* * * * *
33
Confidential information omitted where indicated by "[*]" and filed separately
with the Commission pursuant to a request for confidential treatment under Rule
24b-2 of the Securities Exchange Act of 1934.
PLAYSTATION2 HIT TITLE REBATE PROGRAM.
Publisher's software orders in each qualifying financial year (April - March)
will determine the level of Hit Title Rebate ("HTR") in the following financial
year. The first qualifying year runs 1 April 1999-31 March 2000.
Titles with total bona fide orders below [*] units will not be taken into
account. Otherwise, all orders for software for Sony's "PlayStation"
predecessor video entertainment system (in one Band only per title) and all
orders for PlayStation format Software in each qualifying financial year will
be taken into account in calculating the Level of HTR for the following
financial year.
Once qualified for (as above), HTR for each financial year will be at one of
the following levels:
Level 1 (up to [*] units in qualifying financial year, i.e. immediately
preceding April - March),
Level 2 (over [*] units in qualifying financial year),
Level 3 (over [*]units in qualifying financial year).
HTR will be redeemable in the applicable financial year, against orders of
PlayStation 2 format Software only, as follows:
UNITS PER LEVEL 1 LEVEL 2 LEVEL 3
------- ------- -------
PLAYSTATION 2 TITLE*
Up to [*] [*]% [*]% [*]%
[*] - [*] [*]% [*]% [*]%
[*] - [*] [*]% [*]% [*]%
[*] - [*] [*]% [*]% [*]%
[*] - [*] [*]% [*]% [*]%
[*] - [*] [*]% [*]% [*]%
[*]+ [*]% 20% 20%
* NB: per title, not per SKU and cume across all PlayStation 2 titles.
-----
The HTR for each PlayStation 2 title shall continue to escalate (as above) for
orders in the same Band notwithstanding that such orders may be placed in a
following financial year. Subsequent orders for the same title but in a
different Band will be counted for these purposes as orders for a new "title".
* * * * *
In order to verify conformity with the Band structure for PlayStation 2 format
Software described above, SCEE will require from time to time at its own
expense to inspect and audit the relevant of Publisher's financial records
(and, where applicable, those of Publisher's associated companies, subsidiaries
and/or branch offices in the Licensed Territory). Any such inspection and audit
shall take place during normal business hours at Publisher's principal place of
business (or such other location as the relevant books and records are
maintained) upon reasonable prior
34
notice and shall, at SCEE's sole election, be
conducted either by an independent chartered or certified accountant or by an
appropriately professionally qualified member of SCEE's staff.
Initialed by Initialed by
[ ] [ ]
Sony Computer Entertainment Acclaim Entertainment (Europe)
Europe