Exhibit 10.10
PLAYSTATION 2(R) LICENSED PUBLISHER AGREEMENT
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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 23 day of March 2001 by and between
SONY COMPUTER ENTERTAINMENT EUROPE LIMITED
of 30 Golden Square, London W1F 9LD
(hereinafter referred to as "SCEE")
- and -
ACTIVISION UK LIMITED
of Gemini House. 133 High Street, Yiewsley, West Drayton, Middlesex UB7 7QL
(hereinafter referred to as "Publisher")
PUBLISHER AUTHORISATION #: 56
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.
(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.
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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 PlayStation2, 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 PlayStation2, 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 an
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 othericons
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.
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 PlayStation2 format Software.
1.12 "Printed Materials" means all artwork and mechanicals to be set forth on
the Licensed Product itself, and on the PlayStation2 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 PlayStation2 box and/or packaging.
1.13 "Advertising Materials" means all advertising, merchandising, promotional
and display materials of or concerning the Licensed Products.
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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
materials) 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 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.
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1.20 "Article 6" means Article 6 of Council Directive 91/250/EEC of 14 May 1991
on the legal protection of computer programmes.
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 so to do); 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 licence 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 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
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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 utilises 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 licence, under any Sony
Intellectual Property Rights or otherwise, except as expressly provided
herein, and no other right or licence 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, licence 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 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 licence 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 therefor, 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 .
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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 licences 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 Publisher 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 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 SCEE 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 respects 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 Where 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
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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
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 material 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 reserves 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 directly or indirectly by
Publisher without first obtaining a certificate of conformity to the
Specifications. Where such verification is conducted by SCEE, SCEE shall
advise Publisher of the results of such verification within the applicable
of the timeframes 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
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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 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 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 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
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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, alternately, 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 an 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 PlayStation2 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. 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 Discs or other
in-process materials to Publisher. All such physical materials shall be and
remain the sole property of Sony.
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, *** 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, give 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, alternately, 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, alternately, there shall have been a holding of conformity
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
CONFIDENTIAL Page 9
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 Clauses 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 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 of production turnaround times or otherwise, than the
Licensed Products of any other Licensed Publisher of SCEE or than
PlayStation2 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 units of Manufactured
Materials. Publisher shall be solely responsible for the payment or
reimbursement of any such taxes or duties, and other such charges or
assessments applicable to the sale and/or purchase of finished units of
Manufactured Materials.
CONFIDENTIAL Page 10
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 of 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 of 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 obligations
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 and/or 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 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 payment. SCEE reserves the right, upon reasonable notice
to Publisher, to require that such payments of Platform Charge shall be
made to such other Sony entity as SCEE may designate from time to time.
CONFIDENTIAL Page 11
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 Territory 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 judgment 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 *** 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 All the terms and provisions of the CNDA shall apply to Confidential
Information of Sony and, if and to the extent applicable, Confidential
Information of Publisher.
9.2 Where Confidential Information of Publisher is not protected by the CNDA,
SCEE shall hold the same in confidence and shall take all reasonable steps
necessary to preserve such confidentiality. Except as may expressly be
authorised by Publisher, SCEE shall not at any time, directly or
indirectly: (i) disclose any Confidential Information of Publisher to any
person other than a Sony employee who needs to know or have access to such
information for the purposes of this Agreement, and only to the extent
necessary for such purposes; (ii) except for the purposes of this
Agreement, duplicate or use the Confidential Information of Publisher for
any other purpose whatsoever; or (iii) remove any copyright notice,
trademark notice and/or other proprietary legend set forth on or contained
within any of the Confidential Information of Publisher.
9.3 The provisions of Clause 9.2 hereof shall not apply to any Confidential
Information of Publisher which: (i) has become part of information in the
public domain through no fault of SCEE; (ii) was known to SCEE prior to the
disclosure thereof by Publisher; (iii) properly comes into the possession
of SCEE from a third party which is not under any obligation to maintain
the confidentiality of such information. SCEE may disclose Confidential
Information of Publisher pursuant to a judicial or governmental order
provided that SCEE promptly advises Publisher in writing prior to any such
disclosure so that Publisher may seek other legal remedies to maintain the
confidentiality of such Confidential Information of Publisher, and SCEE
shall comply with any applicable protective order or equivalent.
9.4 Unless and until a public announcement regarding this Agreement shall have
been made by Sony (or SCEE shall otherwise have agreed in writing), the
fact that the parties have entered into this Agreement shall be
Confidential Information of Sony and shall be treated in all respects
accordingly. The content of, and the timing and method of the making of,
any such public announcement shall be determined by SCEE in its best
business judgement. However, SCEE will give reasonable consideration to any
notice from Publisher requesting that no such public announcement be made,
at or prior to a particular time or at all.
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
CONFIDENTIAL Page 12
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.
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, wilful 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
obligations 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
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 licence
from Sony); (vii) PIayStation 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
CONFIDENTIAL Page 13
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 Further, Publisher represents, warrants, covenants and agrees that neither
Publisher nor any parent company, subsidiary or affiliate of Publisher
shall during the Term, whether for itself or for the benefit of any other
person, firm, corporation or entity, whether by itself or by its officers,
employees or agents, directly or indirectly, induce or seek to induce, on
an individually targeted basis, the employment of, or the engagement of the
services of, any Relevant Employee. For these purposes "Relevant Employee"
shall mean and include any employee of (i) SCEE, (ii) Psygnosis Limited or
(iii) PlayStation.com (Europe) Limited (or any of their subsidiaries or
branch offices outside the United Kingdom), the services of which employee
are (a) specifically engaged in product development (or directly related)
functions or (b) otherwise reasonably deemed by his/her employer to be of
material importance to the protection of its legitimate business interests,
and with which employee Publisher (or any parent company, subsidiary or
affiliate of Publisher) shall have had contact or dealings during the Term.
The foregoing provisions shall continue to apply for a period of 12
(twelve) months following expiry or earlier termination of the Term and are
hereby deemed substituted for any corresponding provisions in any
agreement(s) previously entered into between the parties hereto in relation
to PlayStation 2 and/or to Sony's "PlayStation" predecessor video
entertainment system.
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 provided
further that Publisher shall have the right to select counsel and control
the defence and/or settlement therof, 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.
CONFIDENTIAL Page 14
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 OCCURENCE 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 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 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 *** 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
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
CONFIDENTIAL Page 15
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 & NonDisclosure Agreement 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 recognised 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) and/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 occurence, Publisher shall notify SCEE of the occurence of any of the
events or circumstances specified in (ii) to (x) above; and Publisher's
failure so to 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 licences and related rights herein granted to Publisher in
relation to any PlayStation2 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
CONFIDENTIAL Page 16
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 PlayStation2 format Software titles, on a
non-exclusive basis, for a period of *** 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 PlayStation2
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 PlayStation2 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 *** 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 such *** day or *** 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 itemised statement, certified
accurate by a duly authorised 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 PlayStation2
format Software title-by-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 PlayStation2 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 authorised officer, partner or other representative (as
applicable) of Publisher) all Sony Materials, and any Confidential
Information of Sony of which Publisher shall have become apprised 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.
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
CONFIDENTIAL Page 17
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
recognised 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.
15.2 Whenever Publisher is required to obtain the authorisation, 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 authorisation, 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
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 to make any representation or warranty (express or implied) on behalf of
the other party or to bind the other party in any respect whatsoever.
CONFIDENTIAL Page 18
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 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.
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 any 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.
CONFIDENTIAL Page 19
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.
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 the 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 AGREEMENT (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 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
CONFIDENTIAL Page 20
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 provision(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.
SONY COMPUTER ENTERTAINMENT ACTIVISION UK LIMITED
EUROPE LIMITED
/s/ Christopher Deering /s/ George Rose
- ---------------------------------- ------------------------------------
Signature Signature
Christopher Deering George Rose
- ---------------------------------- ------------------------------------
Name Signatory's Name (please print)
President Director
- ---------------------------------- ------------------------------------
Title Title
CONFIDENTIAL Page 21
SCHEDULE I
to the PlayStation2 Licensed Publisher Agreement dated the 23 day of March, 2001
between Sony Computer Entertainment Europe Limited and Activision UK 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.
(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 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 authorise the marketing, sale and/or distribution of any
units of PlayStation 2 format Software.
CONFIDENTIAL Page 22
SCHEDULE 2
to the PlayStation2 Licensed Publisher Agreement dated the 23 day of March, 2001
between Sony Computer Entertainment Europe Limited and Activision UK Limited
Platform Charge (Clause 7.1)
Band Publisher's maximum Platform Charge
price to trade per unit
*** *** ***
*** *** ***
*** *** ***
*** *** ***
*** *** ***
For these purposes, "maximum price to trade" shall mean ~
Publishers (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 than EE, the local currency/EE 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 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 to review local currency maximum prices to trade per
Band applicable for any given *** period (as above) in the event of a material
exchange rate fluctuation, deemed for these purposes to be ***
The foregoing assumes a standard 1-Disc PlayStation 2 CD-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-disc PlayStation 2 CD-ROM products and PlayStation 2 products in DVD5
format, the applicable Platform Charge specified above shall be increased by ***
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
CONFIDENTIAL Page 23
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 ~
*** ***
*** ***
*** ***
*** ***
"o" White Base Underlay ***
"o" Picture Disc
*** ***
***
"o" Picture Disc - High Definition ***
"o" Shrink Wrap
*** ***
*** ***
The Platform Charge and minimum order and reorder quantities for other
"non-standard" Manufactured Materials and/or production processes shall be as
detailed in the Specifications or, where not so detailed, and subject to
availability, as individually quoted in each case.
PlayStation2 titles may "migrate" between Bands at any time from and after ***
(but not more than ***) following initial PO (or first PO upon prior migration,
as the case may be). Migration by more than one Band at a time, and repeat
migrations, are permitted.
For migrated PlayStation 2 re-issues (but not new PlayStation 2 titles), the
applicable Platform Charge specified above, will be increased by *** for orders
placed September - December below ***.
Minimum production order quantities (Clause 6.5) shall be *** units per pack sku
for initial orders, *** units for re-orders, in ***. Minimum production order
quantities shall be *** units per pack sku for all orders in ***.
SCEE offers free delivery to EEA countries (only) by regular road (and/or, where
applicable, sea) services, with air freight or other expedited delivery
available but the incremental costs thereof for Publisher's account. The minimum
quantity per title per drop is *** units for inventory in ***, *** for inventory
in ***.
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
CONFIDENTIAL Page 24
PIayStation2 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
PlayStation2 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 I (up to *** in qualifying financial year, ie immediately preceding April
~ March), Level 2 (over *** in qualifying financial year), Level 3 (over *** in
qualifying financial year).
HTR will be redeemable in the applicable financial year, against orders for
PlayStation2 format Software only, as follows ~
units per
PlayStation2 title * Level I Level 2 Level 3
*** *** *** ***
*** *** *** ***
*** *** *** ***
*** *** *** ***
*** *** *** ***
*** *** *** ***
*** *** *** ***
* NB: per title, not per SKU and not cume across all PlayStation2 titles
The HTR for each PlayStation2 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 PlayStation2 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 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.
Initialled by Initialed by
[ ] [ ]
Sony Computer Entertainment Europe Activision UK
[*] Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
CONFIDENTIAL Page 25