Playstation 2(R) Licensed Publisher Agreement - Sony Computer Entertainment Europe Ltd. and The 3DO Co.
CONFIDENTIAL
Confidential information omitted where indicated by "[*]" and filed separately
with the Securities Exchange Commission pursuant to a request for confidential
treatment under Rule 406 of the Securities Act of 1933.
PLAYSTATION 2(R) LICENSED PUBLISHER AGREEMENT
THIS AGREEMENT RELATES TO THE PUBLISHING OF APPLICATION SOFTWARE FOR THE
PLAYSTATION(R) 2 COMPUTER ENTERTAINMENT SYSTEM. ALL TERMS USED HEREIN ARE
SPECIFIC TO THE PLAYSTATION(R) 2 SYSTEM AND NOT TO SONY'S PREDECESSOR
"PLAYSTATION" VIDEO ENTERTAINMENT SYSTEM. PUBLISHING RIGHTS FOR SUCH PREDECESSOR
SYSTEM ARE SUBJECT TO SEPARATE AGREEMENTS WITH SCEE, AND ANY LICENCE OF RIGHTS
TO PUBLISHER UNDER SUCH SEPARATE AGREEMENTS SHALL NOT CONFER ON PUBLISHER ANY
RIGHTS IN RELATION TO THE PLAYSTATION(R) 2 SYSTEM, OR VICE VERSA.
This Agreement is entered into the 13th day of December 2000 by and between
SONY COMPUTER ENTERTAINMENT EUROPE LIMITED
of 30 Golden Square, London WlF 9LD
(hereinafter referred to as "SCEE")
- and -
3DO EUROPE LIMITED
of 21-23 Mossop Street, London SW3 2LY
(hereinafter referred to as "Publisher")
PUBLISHER AUTHORISATION #: 136
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 licenses of, certain proprietary information and
intellectual property rights pertaining to PlayStation 2.
(B) Publisher desires to be granted a non-exclusive license 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:
<PAGE>
CONFIDENTIAL
1. Definitions
1.1 "Licensed Products" means PlayStation 2 format Software
product(s) in uniquely marked or coloured CD-ROM or DVD-ROM format software
discs (hereinafter referred to as "PlayStation 2 Discs").
1.2 "Licensed Territory" means the countries specified in
Schedule 1.
1.3 "Sony Intellectual Property Rights" means all current and future
worldwide patents, pending patent applications and other patent rights (under
licence or otherwise), copyrights, trademarks, service marks, trade names,
semi-conductor topography rights, trade secret rights, technical information and
know-how (and the equivalents of each of the foregoing under the laws of any
jurisdiction) of Sony pertaining to Sony Materials and/or PlayStation 2, and all
other proprietary or intellectual property rights worldwide (including, without
limitation, all applications and registrations with respect thereto) of Sony
pertaining to Sony Materials and/or PlayStation 2, and all renewals and
extensions thereof.
1.4 "PlayStation 2 format Software" means Publisher's object code
software, which includes Licensed Developer Software and any software (whether
in object code or source code form) which is provided by SCEE and intended to be
combined with Licensed Developer Software for execution on PlayStation 2 and has
the ability to communicate with the software resident in PlayStation 2.
1.5 "Term" means the period from the date hereof until 31 March 2003
and continuing thereafter unless and until terminated by not less than 1 (one)
month's notice on either side given to expire on such date or any subsequent 31
March.
1.6 "Affiliate of SCEE" means, as applicable, either Sony Computer
Entertainment Inc. in Japan, Sony Computer Entertainment America Inc. in the USA
or such other Sony Computer Entertainment entity as may be established by Sony
from time to time.
1.7 "LDA 2" means the PlayStation 2 Licensed Developer Agreement
between Licensed Developer of the applicable PlayStation 2 format Software and
SCEE (or an equivalent such agreement between Licensed Developer and 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
other icons or indicia as shall be specified in the Specifications or otherwise
designated by SCEE from time to time. SCEE may amend such Licensed Trademarks
upon reasonable notice to Publisher.
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 LDA 2.
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
-2-
<PAGE>
CONFIDENTIAL
Developer of any PlayStation 2 format Software pursuant to the LDA 2 applicable
for such PlayStation 2 format Software.
1.11 "Licensed Developer Software" means Licensed Developer's
application source code and data (including audio and visual material) developed
by Licensed Developer in accordance with its LDA 2 which, when integrated with
any software (whether in object code or source code form) provided by SCEE,
creates PlayStation 2 format Software.
1.12 "Printed Materials" means all artwork and mechanicals to be set
forth on the Licensed Product itself, and on the PlayStation 2 box (or other
container) and, if applicable, the box (or other) packaging for the Licensed
Product and all instruction manuals, inlays, inserts, stickers and other user
information and/or materials to be inserted in or affixed to such PlayStation 2
box and/or packaging.
1.13 "Advertising Materials" means all advertising, merchandising,
promotional and display materials of or concerning the Licensed Products.
1.14 "Manufactured Materials" means all units of the Licensed
Products, of the Printed Materials to be set forth on the Licensed Products
themselves and of the PlayStation 2 boxes for such Licensed Products (which
expression shall include any alternative form of container for Licensed Products
subsequently introduced by SCEE).
1.15 "Specifications" means such specifications relating to the
content and/or manufacture of Licensed Products, Printed Materials, Advertising
Materials and/or related matters or materials as may be issued by Sony, which
specifications (and/or procedures relating to the testing or verification of all
such materials for conformity to the Specifications and/or relating to the
ordering and manufacture of Licensed Products and associated 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
-3-
<PAGE>
CONFIDENTIAL
processes, hardware, software, inventions, trade secrets, ideas, designs,
research, know-how, business methods, production plans and marketing plans)
concerning PlayStation 2 format Software developed or owned by, licensed to or
under the control of Publisher and, without limitation, information otherwise
related to Publisher's technology, know-how, products, potential products,
research projects, promotional advertising and marketing plans, schedules and
budgets, licensing terms and pricing, customer lists and details, commercial
relationships or negotiations, services, financial models and other business
information, whether relating to PlayStation 2 or otherwise disclosed by
whatever means, whether directly or indirectly, by or on behalf of Publisher to
SCEE at any time, whether disclosed orally, in writing or in machine-readable or
other form, or otherwise discovered by SCEE as a result of any information or
materials provided (whether directly or indirectly) by or on behalf of Publisher
to SCEE, which information is designated by Publisher as, or becomes known to
SCEE under circumstances indicating that such information is, confidential or
proprietary.
1.19 "Third Party Intellectual Property Rights" means all current
and future patents worldwide, pending patent applications and other patent
rights (under licence or otherwise), copyrights, trademarks, service marks,
trade names, semi-conductor topography rights, trade secret rights, technical
information and know-how (and the equivalents of each of the foregoing under the
laws of any jurisdiction) of any third party other than Publisher or Sony and
all other proprietary or intellectual property rights worldwide (including,
without limitation, all applications and registrations with respect thereto),
and all renewals and extensions thereof.
1.20 "Article 6" means Article 6 of Council Directive 91/250/EEC of
14 May 1991 on the legal protection of computer programmes.
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
-4-
<PAGE>
CONFIDENTIAL
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 or 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 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
-5-
<PAGE>
CONFIDENTIAL
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.
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.
-6-
<PAGE>
CONFIDENTIAL
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 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 to enable such materials (or element(s) thereof) to so conform. 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
-7-
<PAGE>
CONFIDENTIAL
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 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 to
enable such Advertising Materials (or element(s) thereof so to conform. 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
-8-
<PAGE>
CONFIDENTIAL
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 require non-complying Licensed
Products and/or associated Printed Materials and/or associated Advertising
Materials forthwith to be withdrawn from the market.
-9-
<PAGE>
CONFIDENTIAL
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 PlayStation 2
format Software. SCEE shall not be liable for loss of or damage to any copies of
the PlayStation 2 format Software furnished SCEE hereunder. There will be no
technology exchange between Sony and Publisher under this Agreement. 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, 110% (one hundred and ten
percent) of the number of sets of the Printed Materials (other than those set
forth on the applicable Licensed Product itself) required to fulfill Publisher's
purchase order for Manufactured Materials of each PlayStation 2 format Software
title, which Printed Materials shall be in strict compliance with the
Specifications. SCEE shall, at Publisher's request, 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,
-10-
<PAGE>
CONFIDENTIAL
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 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 fulfill 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 PlayStation 2
format Software products published by SCEE itself.
7. Platform Charge
7.1 The all-in Platform Charge for finished units of Manufactured
Materials in respect of which SCEE accepts Publisher's purchase order in
accordance with Clause 6.5 shall be as specified in Schedule 2. 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
-11-
<PAGE>
CONFIDENTIAL
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.
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 an
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 - and, in the event SCEE is able to obtain a corresponding credit
against its own tax liability, Publisher shall be entitled to a corresponding
credit against its subsequent purchases of Manufactured Materials hereunder.
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 fulfillment 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
-12-
<PAGE>
CONFIDENTIAL
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.
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 200 (two hundred) additional units of Manufactured
Materials (or such greater number of additional units as shall be agreed by
Publisher, such agreement not unreasonably to be withheld or delayed) for each
PlayStation 2 format Software title (and to purchase from Publisher, at a price
equal to the actual cost thereof to Publisher, a corresponding number of units
of Printed Materials for each such PlayStation 2 format Software title), for the
purposes of or in connection with the marketing and promotion of PlayStation 2;
provided however that SCEE shall not directly or indirectly resell any such
units of Manufactured Materials (and, if applicable, of Printed Materials)
within the Licensed Territory without Publisher's prior written consent.
Further, SCEE shall be entitled to utilise Publisher's name and/or logo and the
audio-visual content of and/or the Printed Materials for, PlayStation 2 format
Software titles (not to exclude the likenesses of any recognisable talent) for
the purposes of or in connection with such marketing and promotion.
9. Confidentiality
9.1 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;
-13-
<PAGE>
CONFIDENTIAL
(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.
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, to grant
the licensed rights herein granted to Publisher, 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), together with the actual costs
of associated Printed Materials, and to reimburse Publisher its reasonable
return shipping costs. Such warranty is the only warranty applicable to Licensed
Products manufactured by SCEE for Publisher pursuant to Clause 6. This warranty
shall not apply to damage resulting from accident, fair wear and tear, willful
damage, alteration, negligence, abnormal conditions of use, failure to follow
directions for use (whether given, in instruction manuals or otherwise
howsoever) or misuse of Licensed Products, or to discs comprising less than 1%
(one percent) [or, if greater, 100 (one hundred) units] in the aggregate of the
total number of Licensed Products manufactured by SCEE for Publisher per
purchase order of any PlayStation 2 format Software title. If, during such 90
(ninety) day period, defects appear as aforesaid, Publisher shall notify SCEE
and, upon request by SCEE (but not otherwise), return such defective discs, with
a written description of the defect claimed, to such location as SCEE shall
designate. SCEE shall not accept for replacement, credit or refund as aforesaid
any Licensed Products except factory defective discs (i.e. discs that are not
free from defects in materials and workmanship under normal use and service).
All returns of defective discs shall be subject to prior written authorisation
by SCEE, not unreasonably to be withheld. If no defect exists or the defect is
not such as to be covered under the above warranty, Publisher shall reimburse
SCEE for reasonable 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
-14-
<PAGE>
CONFIDENTIAL
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) PlayStation 2 format Software shall be distributed by Publisher
solely in the form of Licensed Product; (viii) each Licensed Product shall be
marketed, sold and distributed in an ethical manner and in accordance with all
applicable laws and regulations; and (ix) Publisher's policies and practices
with respect to the marketing, sale and/or distribution of Licensed Products
shall in no manner reflect adversely upon the name, reputation or goodwill of
Sony.
10.4 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 or any breach of SCEE's confidentiality
obligations as set forth in Clause 9.2 hereof; 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 defense 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
-15-
<PAGE>
CONFIDENTIAL
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 (excluding any claim
relating to Sony Intellectual Property Rights or the Licensed Trademarks or any
software, in object code or source code form, which has been provided by SCEE to
Publisher in furtherance of this Agreement), 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; its affiliates or designees; 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 thereof, subject to the right
of SCEE to participate in any such action or proceeding at its own expense with
counsel of its own choosing. Publisher shall have the exclusive right, at its
discretion, to commence and/or prosecute at its own expense any lawsuit or to
take such other action with respect to such matter as shall be deemed
appropriate by Publisher. SCEE shall provide Publisher, at no expense to SCEE,
reasonable assistance and cooperation concerning any such matter. SCEE shall not
agree to the compromise, settlement or abandonment of any such claim, action or
proceeding without Publisher's prior written consent.
12. Limitations of Liability
12.1 IN NO EVENT SHALL SONY OR ITS SUPPLIERS BE LIABLE FOR
PROSPECTIVE PROFITS, OR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT (INCLUDING WITHOUT LIMITATION THE BREACH
OF THIS AGREEMENT BY SCEE), WHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING
NEGLIGENCE), INDEMNITY, PRODUCT LIABILITY OR OTHERWISE. IN NO EVENT SHALL SONY'S
LIABILITY ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION ANY LIABILITY FOR DIRECT DAMAGES, AND INCLUDING WITHOUT LIMITATION
ANY LIABILITY UNDER CLAUSE 11.1, EXCEED THE PLATFORM CHARGE PAID BY PUBLISHER TO
SCEE UNDER CLAUSE 7 WITHIN THE 2 (TWO) YEARS PRIOR TO THE DATE OF THE FIRST
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
-16-
<PAGE>
CONFIDENTIAL
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 30 (thirty) days following notice from SCEE
(or the applicable Affiliate of SCEE as the case may be) specifying and
requiring the correction or cure of such breach, or any repetition of a prior
material breach of any such obligation, whether or not capable of remedy; (ii)
any refusal or failure by Publisher to effect payment of Platform Charge,
promptly in accordance with Clauses 7.1 or 7.3 or at all, or a statement that
Publisher is or will be unable to pay, any sum(s) due hereunder, or Publisher
being unable to pay its debts generally as the same fall due; (iii) Publisher's
filing of an application for, or consenting to or directing the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator (or
the equivalent of any of the foregoing under the laws of any jurisdiction) of
any of Publisher's property (whether tangible or intangible and wherever
located), assets and/or undertaking; (iv) the making by Publisher of a general
assignment for the benefit of creditors; (v) an adjudication in any jurisdiction
that Publisher is a bankrupt or insolvent; (vi) the commencing by Publisher of,
or Publisher's intention to commence, a voluntary case under applicable
bankruptcy laws of any jurisdiction; (vii) the filing by Publisher of, or
Publisher's intention to file, a petition seeking to take advantage of any other
law(s) of any jurisdiction providing for the relief of debtors; (viii)
Publisher's acquiescence in, intention to acquiesce in, or failure to have
dismissed within 90 (ninety) days, any petition filed against it in any
involuntary case brought pursuant to the bankruptcy or other law(s) of any
jurisdiction referred to in (vi) and (vii) above; (ix) a controlling partnership
or equity interest [or any such interest (other than an acquisition of less than
an aggregate of 5% (five percent) of the issued share capital of Publisher, as
quoted on a recognised investments exchange), in the case of a transfer to any
party which (a) shall previously have executed a PlayStation Non-Disclosure
Agreement and/or PlayStation 2
-17-
<PAGE>
CONFIDENTIAL
Confidentiality & Non-Disclosure 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 occurrence, Publisher shall notify SCEE of the
occurrence of any of the events or circumstances specified in (ii) to (x) above;
and Publisher's failure 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 PlayStation 2 format Software at any time after
the occurrence of any of the following events: (i) any failure by Publisher to
submit to SCEE the materials required to be submitted under Clauses 5.2 and 5.3
(or, if applicable, under Clause 5.6) in the form and manner and in conformity
with the standards and specifications therein prescribed which failure, if
capable of remedy, shall not have been corrected or cured in full within 30
(thirty) days following notice from SCEE specifying and requiring the correction
or cure of such breach; 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.
-18-
<PAGE>
CONFIDENTIAL
14. Effect of Expiration or Termination
14.1 Notwithstanding the expiration of the Term, Publisher shall be
entitled to continue to publish PlayStation 2 format Software the development of
which shall have been approved prior to or during the Term hereof by SCEE (or by
an Affiliate of SCEE) pursuant to the applicable LDA2, and to use the Licensed
Trademarks strictly, only and directly in connection with such publication,
until the expiration of the Term or, if later, until the second anniversary of
the 31 March next following such approval. Upon expiration of the Term or, if
applicable, such extended period for publishing PlayStation 2 format Software,
Publisher may sell off existing inventories of the applicable PlayStation 2
format Software titles, on a non-exclusive basis, for a period of 180 (one
hundred and eighty) days from the applicable expiration date; provided always
that such inventory thereof shall not have been manufactured solely or
principally for sale within such sell-off period.
14.2 However, upon the exercising by SCEE of its right of
termination, either of this Agreement pursuant to Clause 13.1(i) to (viii) or
Clause 13.1(xii) or in relation to any PlayStation 2 format Software pursuant to
Clause 13.2, all rights, licences and privileges licensed or otherwise granted
to Publisher hereunder, either generally or in relation to such PlayStation 2
format Software (as applicable), shall forthwith and without further formality
revert absolutely to SCEE and Publisher shall forthwith cease and desist from
any further use of the Sony Materials, any Sony Intellectual Property Rights
related thereto and the Licensed Trademarks, and, subject to Clause 14.3, shall
have no further right to continue the marketing, sale and/or distribution of any
units of Licenced Product or of any units of Licensed Product derived from such
PlayStation 2 format Software (as applicable).
14.3 In the event of termination by SCEE pursuant to Clause
13.1(ix), (x) or (xi) or by Publisher pursuant to Clause 25, Publisher may sell
off then unsold units of Licensed Product(s), for a period of 90 (ninety) days
from the effective date of termination; provided always that such inventory
thereof shall not have been manufactured solely or principally for sale within
such sell-off period. Subsequent to the expiry of such 180 (one hundred and
eighty) day or 90 (ninety) day sell-off period, or in the event of termination
by SCEE pursuant to Clause 13.1(i) to (viii), Clause 13.1(xii) or Clause 13.2,
any and all units of Licensed Products or the applicable Licensed Products (as
the case may be), remaining in Publisher's inventory and/or under its control
shall be destroyed by Publisher within 5 (five) working days following such
expiry or effective date of termination. Within 5 (five) working days following
such destruction, Publisher shall furnish SCEE an 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 PlayStation 2 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
PlayStation 2 format Software title-by-title basis, and indicating the location
and date of such destruction and the disposition of the remains of such
destroyed materials. SCEE shall be entitled to conduct a physical inspection of
Publisher's inventory during normal business hours in order to ascertain or
verify such inventory and/or statement.
14.4 Upon termination of the Term by SCEE pursuant to Clause 13.1,
Publisher shall forthwith deliver up to SCEE (or, if so requested by SCEE in
writing, destroy and promptly furnish SCEE a certificate of such destruction
signed by a duly 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.
-19-
<PAGE>
CONFIDENTIAL
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
-20-
<PAGE>
CONFIDENTIAL
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.
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 and 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
-21-
<PAGE>
CONFIDENTIAL
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.
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.
-22-
<PAGE>
CONFIDENTIAL
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 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. Headlines
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.
-23-
<PAGE>
CONFIDENTIAL
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
EUROPE LIMITED 3DO EUROPE LIMITED
/s/ Christopher Deering /s/ Stephen E. Fowler
----------------------------------- ------------------------------------
Signature Signature
Christopher Deering Stephen E. Fowler
----------------------------------- ------------------------------------
Name Signatory's Name (please print)
President President
----------------------------------- ------------------------------------
Title Title
-24-
<PAGE>
CONFIDENTIAL
SCHEDULE 1
to the PlayStation 2 Licensed Publisher Agreement dated the 13th day of
December 2000 between Sony Computer Entertainment Europe
Limited and 3DO Europe Limited
Licensed Territory (Clause 1.2)
(1)
Andorra Ireland Qatar
Armenia Israel Romania
Australia Italy Russian Federation
Austria Jordan San Marino
Azerbaijan Kazakhstan Saudi Arabia
Bahrain Kenya Serbia
Belarus Kuwait Slovakia
Belgium Latvia Slovenia
Bosnia Herzegovina Lebanon Somalia
Botswana Liechtenstein South Africa & Namibia
Bulgaria Lithuania Spain
Croatia Luxembourg Sweden
Cyprus Macedonia Swaziland
Czech Republic Madagascar Switzerland
Denmark Malta Syria
Djibouti Mauritius Tanzania
Egypt Moldova Tunisia
Estonia Monaco Turkey
Ethiopia Morocco Turkmenistan
Finland Mozambique Ukraine
France Netherlands United Arab Emirates
Georgia New Zealand United Kingdom
Germany Nigeria Uzbekistan
Gibraltar Norway Vatican
Greece Oman Yemen
Hungary Poland Zambia
Iceland Portugal Zimbabwe
and all other countries which from time to time are members of the European
Union or have otherwise implemented the Treaty on a European Economic Area or
where Articles 85 & 86 of the Treaty of Rome (or provisions similar thereto)
have been implemented or are otherwise directly effective.
(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
<PAGE>
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.
-2-
<PAGE>
CONFIDENTIAL
SCHEDULE 2
to the PlayStation 2 Licensed Publisher Agreement dated the 13th day
of December 2000 between Sony Computer Entertainment Europe Limited
and 3DO Europe Limited
Platform Charge (Clause 7.1)
Publisher's maximum price to
Band trade Platform Charge per unit
#1 [ * ] [ * ]
#2 [ * ] [ * ]
#3 [ * ] [ * ]
#4 [ * ] [ * ]
#5 [ * ] [ * ]
For these purposes, "maximum price to trade" shall mean--
--------------------------------------------------------------------------------
Publisher's (or, where applicable, Publisher's distributor's) highest
price net of trade margin to any trade customer in the European Economic Area
and Australia for Publisher's (or, where applicable, Publisher's distributor's)
minimum order quantity of the relevant inventory, net of year end (or similar)
volume rebates (if any) properly attributable to sales of PlayStation software,
but prior to any credit, deduction or rebate for co-op advertising or other
marketing support, returns or otherwise howsoever.
Where Publisher's business (with the trade or through distributors) is
conducted in local currencies other than ______, the local currency/__ exchange
rates to be applied for purposes of conforming to maximum price to trade for any
given Band will be the closing mid-point spot rate as quoted in the London
"Financial Times" on the first business day of each 6 month period, commencing 1
April 2000. Such exchange rate will then reset for each successive 6 month
period thereafter.
The local currency maximum price to trade for any given title will then
be that derived by applying the exchange rate obtaining for the 6 month period
(as above) in which Publisher places its first Purchase Order ("PO") for the
title concerned and will continue to apply for that title 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 6 month period (as above) in the event
of a material exchange rate fluctuation, deemed for these purposes to be +/- 5%.
The foregoing assumes a standard 1-Disc PlayStation 2 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 [ * ] unit.
--------------------------------------------------------------------------------
* Confidential portions omitted and filed separately with the commission.
<PAGE>
CONFIDENTIAL
For the following optional non-standard Manufactured Materials, the
following incremental charges (in addition to the otherwise applicable Platform
Charge specified above) will apply --
o Multi-Colour Disc Label
3-colour [ * ] per Disc
4-colour [ * ] per Disc
5-colour [ * ] per Disc
6-colour [ * ] per Disc
o White Base Underlay [ * ] per Disc
o Picture Disc [ * ] per Disc
if the Disc Label is more than 2-colour, for [ * ] per Disc
each additional colour (maximum 2 additional
colours / [ * ] per Disc)
o Picture Disc - High Definition
[ * ] per Disc
o Shrink Wrap
1/2-Disc CD-ROM products (in standard [ * ] per Disc
PlayStation 2 box)
>2-Disc CD-ROM products as individually
quoted in each case
The Platform Charge and minimum order and reorder quantities for other
"non-standard" Manufactured Materials and/or production processes shall be as
detailed in the Specifications or, where not so detailed, and subject to
availability, as individually quoted in each case.
----------------------------------
[ * ]
----------------------------------
[ * ]
------------------------------------
[ * ]
------------------------------------
PlayStation 2 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.
--------------------------------------------------------------------------------
* Confidential portions omitted and filed separately with the commission.
-2-
<PAGE>
CONFIDENTIAL
Titles with total bona fide orders below [ * ] units will not be taken
into account. Otherwise, all orders for software for Sony's "PlayStation"
predecessor video entertainment system (in one Band only per title) and all
orders for PlayStation 2 format Software in each qualifying financial year will
be taken into account in calculating the Level of HTR for the following
financial year.
Once qualified for (as above), HTR for each financial year will be at
one of the following levels--
Level 1 ([ * ] units in qualifying financial year, i.e. immediately
preceding April - March),
Level 2 ([ * ] units in qualifying financial year),
Level 3 ([ * ] units in qualifying financial year).
HTR will be redeemable in the applicable financial year, against orders
for PlayStation 2 format Software only as follows --
units per PlayStation 2
title * Level 1 Level 2 Level 3
----------------------- ------------------- --------------- --------------
[ * ]
* NB: per title, not per SKU and not cume across all PlayStation 2
titles
The HTR for each PlayStation 2 title shall continue to escalate (as
above) for orders in the same Band notwithstanding that such orders may be
placed in a following financial year. Subsequent orders for the same title but
in a different Band will be counted for these purposes as orders for a new
"title".
* * * * *
In order to verify conformity with the Band structure for PlayStation 2
format Software described above, SCEE will require from time to time at its own
expense to inspect and audit the relevant of Publisher's financial records (and,
where applicable, those of Publisher's associated companies, subsidiaries and/or
branch offices in the Licensed Territory). Any such inspection and audit shall
take place during normal business hours at Publisher's principal place of
business (or such other location as the relevant books and records are
maintained) upon reasonable prior 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 Initialled by
[ ] [ ]
Sony Computer Entertainment Europe 3DO Europe Limited
--------------------------------------------------------------------------------
* Confidential portions omitted and filed separately with the commission.
-3-