“[*]” denotes confidential
information omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential
treatment under Rule 24b-2 under the Securities Exchange Act
of 1934, as amended.
PLAYSTATION PORTABLE
(“PSP”)
LICENSED PSP PUBLISHER
AGREEMENT
This
LICENSED PSP PUBLISHER AGREEMENT for the PlayStation
Portable , (the “Agreement” or “PSP
LPA”), entered into as of the 15th day of September, 2004
(the “Effective Date”), by and between SONY COMPUTER
ENTERTAINMENT AMERICA INC., with offices at 919 E. Hillsdale
Boulevard, Foster City, CA 94404 (hereinafter “SCEA”),
and Midway Home Entertainment, with offices at 10110 Mesa Rim Road,
San Diego, CA 92121 (hereinafter Publisher”).
WHEREAS , SCEA, its parent company, Sony Computer
Entertainment Inc., and certain of their affiliates and companies
within the group of companies of which any of them form a part
(collectively referred to herein as “SCE” or
alternatively “Sony”) are designing and developing, and
licensing core components of, a portable, handheld computer
entertainment system known as the PlayStation
® Portable or the “PSP” computer
entertainment system (hereinafter referred to as the “PSP
Player”).
WHEREAS , SCEA has the right to grant licenses to
certain SCEA Intellectual Property Rights within its licensed
territory (as defined below) in connection with the PSP
Player.
WHEREAS , Publisher desires to be granted a
non-exclusive license to publish, develop, have manufactured,
market, distribute and sell Licensed PSP Products (as defined below
) pursuant to the terms and conditions set forth in this Agreement;
and SCEA is willing, on the terms and subject to the conditions of
this Agreement, to grant Publisher such a license.
NOW,
THEREFORE , in
consideration of the representations, warranties and covenants
contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Publisher
and SCEA hereby agree as follows:
1.1
“Advertising Materials” means any advertising,
marketing, merchandising, promotional, public relations (including
press releases) and display materials relating to or concerning
Licensed PSP Products or proposed Licensed PSP Products, or any
other advertising, merchandising, promotional, public relations
(including press releases) and display materials depicting any of
the Licensed Trademarks. For purposes of this Agreement,
Advertising Materials include any advertisements in which the PSP
Player is referred to or used in any way, including but not limited
to giving the PSP Player away as prizes in contests or sweepstakes
and the public display of the PSP Player in product placement
opportunities.
1.2
“Affiliate of SCEA” means, as applicable, other
regional SCE companies, including but not limited to, Sony Computer
Entertainment Inc. in Japan, Sony Computer Entertainment Europe
Ltd, in the United Kingdom, Sony Computer Entertainment Korea, Sony
Computer Entertainment Hong Kong, Sony Computer Entertainment
China, or such other Sony Computer Entertainment entity as may be
established from time to time.
1.3
“Designated Manufacturing Facility” means a
manufacturing facility or facilities which is designated by SCEA in
its sole discretion to manufacture Licensed PSP Products or their
component parts, which may include manufacturing facilities owned
and operated by affiliated companies of SCEA.
1.4
“Executable Software” means software which includes
Product Software and any software provided directly or indirectly
by SCEA or an Affiliate of SCEA designed for execution exclusively
on the PSP Player and which has the ability to communicate with the
software resident in the PSP Player.
1.5
“Fiscal Year” means a year measured from April 1 to
March 31.
1.6
“Guidelines” shall mean any guidelines of SCEA or an
Affiliate of SCEA with respect to SCEA Intellectual Property
Rights, which may be set forth in the PSP Sourcebook or in other
documentation provided by SCEA or an Affiliate of SCEA to
Publisher.
1.7
“Legal Attribution Line” means the legal attribution
line used in SCEA marketing or other materials, which shall be
substantially similar to the following: “Product copyright
and trademarks are the property of the respective publisher or
their licensors”.
1.8
“Legal Copy” means any legal or contractual information
required to be used in connection with a Licensed PSP Product or
Product Information, including but not limited to copyright and
trademark attributions, contractual credits and developer or
distribution credits.
1.9
“Licensed PSP Developer Agreement” or “PSP
LDA” means a valid and current license agreement for the
development of Licensed PSP Products for the PSP Player, fully
executed between a Licensed PSP Developer and SCEA or an Affiliate
of SCEA.
1.10
“Licensed PSP Products” means the Executable Software
(which may be combined with Executable Software of other Licensed
PSP Publishers or Licensed
1
PSP
Developers), which shall consist of one interactive entertainment
game product developed for the PSP Player per Unit, in final form
developed exclusively for the PSP Player. Publisher shall have no
right to package or bundle more than one product developed for the
PSP Player in a single Unit unless separately agreed with SCEA. The
term “Licensed PSP Products” expressly excludes
traditional non-interactive entertainment products such as movies
or music or other interactive entertainment products that are not
complete games.
1.11
“Licensed PSP Publisher” means any publisher that has
signed a valid and then current Licensed PSP Publisher
Agreement.
1.12
“Licensed PSP Publisher Agreement” or “PSP
LPA” means a valid and current license agreement for the
publication, development, manufacture, marketing, distribution and
sale of Licensed PSP Products for the PSP Player, fully executed
between a Licensed PSP Publisher and SCEA or an Affiliate of
SCEA.
1.13
“Licensed Territory” means the United States (including
its possessions and territories) and Canada. The Licensed Territory
may be modified or supplemented by SCEA from time to time pursuant
to Section 4.4 below.
1.14
“Licensed Trademarks” means the trademarks, service
marks, trade dress, logos and other icons or indicia designated by
SCEA in the PSP Sourcebook or other Guidelines for use on or in
connection with Licensed PSP Products. Nothing contained in this
Agreement shall in any way grant Publisher the right to use the
trademark “Sony” in any manner. SCEA may amend such
Licensed Trademarks from time to time in the PSP Sourcebook or
other Guidelines or upon written notice to Publisher.
1.15
“Manufacturing Specifications” means specifications
setting forth terms relating to the manufacture and assembly of PSP
Format Discs, Packaging, Printed Materials and each of their
component parts, which shall be set forth in the PSP SourceBook or
other documentation provided by SCEA or a Designated Manufacturing
Facility to Publisher and which may be amended from time to time
upon reasonable notice to Publisher.
1.16
“Master Disc” means a recordable disc in the form
requested by SCEA containing final pre-production Executable
Software for a Licensed PSP Product.
1.17
“Packaging” means, with respect to each Licensed PSP
Product, the carton, containers, packaging, edge labels and other
proprietary labels, trade dress and wrapping materials, including
any jewel case (or other package or container) or parts thereof,
but excluding Printed Materials and PSP Format Discs.
1.18
“PSP Format Discs” means the discs formatted for use
with the PSP Player which, for purposes of this
Agreement, are
manufactured on behalf of Publisher and contain Licensed PSP
Products or SCEA Demo Discs
1.19
“Printed Materials” means all artwork and mechanicals
set forth on the disc label of the PSP Format Disc relating to any
of the Licensed PSP Products and on or inside any Packaging for the
Licensed PSP Product, and all instructional manuals, liners,
inserts, trade dress and other user information to be inserted into
the Packaging.
1.20
“Product Information” means any information owned or
licensed by Publisher relating in any way to Licensed PSP Products,
including but not limited to demos, videos, hints and tips,
artwork, depictions of Licensed PSP Product cover art and
videotaped interviews.
1.21
“Product Proposal’’ shall have the meaning set
forth in Section 5.2.1 hereto.
1.22
“Product Software” means any software Including audio
and video material developed by a Licensed PSP Publisher or
Licensed PSP Developer, which, either by itself or combined with
Product Software of other licensees, when integrated with software
provided by SCEA or an Affiliate of SCEA, creates Executable
Software. It is understood that Product Software contains no
proprietary information of Sony or any other rights of
SCEA.
1.23
“PSP Development System Agreement” means an agreement
entered Into between SCEA and a Licensed PSP Publisher, Licensed
PSP Developer or other licensee for the sale or license of
Development Tools.
1.25
“PSP Development Tools” means the PSP development tools
sold or licensed by SCEA to a Licensed PSP Publisher or Licensed
PSP Developer for use in the development of Executable Software for
the PSP Player.
1.26
“Publisher Intellectual Property Rights” means those
intellectual property rights, including but not limited to patents
and other patent rights, copyrights, trademarks, service marks,
trade names, trade dress, mask work rights, utility model rights,
trade secret rights, technical information, know-how, and the
equivalents of the foregoing under the laws of any jurisdiction,
and all other proprietary or intellectual property rights
throughout the universe, which pertain to Product Software, Product
Information, Printed Materials, Advertising Materials or other
rights of Publisher required or necessary under this
Agreement.
1.27
“Purchase Order” means a written purchase order
processed in accordance with the terms of Section 6.2.2
hereto, the Manufacturing Specifications or other terms provided
separately by SCEA or a Designated Manufacturing Facility to
Publisher.
2
1.28
“SCEA Demo Disc” means any demonstration disc developed
and distributed by SCEA.
1.29
“SCEA Established Third Party Demo Disc Programs” means
(i) any consumer or trade demonstration disc program specified
in the PSP SourceBook, and (ii) any other third party demo
disc program established by SCEA for Licensed PSP
Publishers.
1.30
“SCEA Intellectual Property Rights” means those
intellectual property rights, including but not Limited to patents
and other patent rights, copyrights, trademarks, service marks,
trade names, trade dress, mask work rights, utility model rights,
trade secret rights, technical information, know-how, and the
equivalents of the foregoing under the laws of any jurisdiction,
and all other proprietary or intellectual property rights
throughout the universe, which are required to ensure compatibility
with the PSP Player or which pertain to the Licensed
Trademarks.
1.31
“SCEA Product Code” means the product identification
number assigned to each Licensed PSP Product, which shall consist
of separate product identification numbers for multiple disc sets
(i.e., SLUS-xxxxx). This SCEA Product Code is used on the Packaging
and PSP Format Disc relating to each Licensed PSP Product, as well
as on most communications between SCEA and Publisher as a mode of
identifying the Licensed PSP Product other than by
title.
1.32
“SCE Materials” means any data, object code, source
code, firmware, documentation (or any part(s) of any of the
foregoing), related to the PSP Player, selected in the sole
judgment of SCEA, which are provided or supplied by SCEA or an
Affiliate of SCEA to Publisher or any Licensed PSP Developer and/or
other Licensed PSP Publisher. For purposes of this Agreement, SCE
Materials shall not include any hardware portions of the
Development Tools, but shall include firmware in such
hardware.
1.33
“PSP SourceBook” means the PSP SourceBook (or any other
reference guide containing information similar to the PSP
SourceBook but designated with a different name) prepared by SCEA,
which is provided separately to Publisher. The PSP SourceBook is
designed to serve as the first point of reference by Publisher in
every phase of the development, approval, manufacture and marketing
of Licensed PSP Products.
1.34
“Standard Rebate” shall mean the rebate offered by SCEA
on titles of Licensed PSP Products that achieve specified sales
volumes as set forth in Section 8.4 of this
Agreement.
1.35
“Third Party Demo Disc” means any demo disc developed
and marketed by a Licensed PS P Publisher, which complies with the
terms of an SCEA Established Third Party Demo Disc
Program.
1.36
“Unit” means an individual copy of a Licensed PSP
Product title regardless of the number of PSP Format Discs
constituting such Licensed PSP Product title.
1.37
“Wholesale Price” or “WSP” shall mean the
greater of (i) the published price of the Licensed PSP Product
offered to retailers by Publisher as evidenced by a sell sheet or
price list issued by Publisher no later than
[* ]
days before first commercial shipment of the Licensed PSP Product,
or (ii) the actual price paid by retailers upon the first
commercial shipment of a Licensed PSP Product without offsets,
rebates or deductions from invoices of any kind.
2.1 License
Grant. SCEA grants to Publisher, and Publisher hereby
accepts, for the term of this Agreement, within the Licensed
Territory, under SCEA Intellectual Property Rights owned,
controlled or licensed by SCEA, a non-exclusive, non-transferable
license, without the right to sublicense (except as specifically
provided herein), to publish Licensed PSP Products using SCE
Materials, which right shall be limited to the following rights and
other rights set forth in, and in accordance with the terms of,
this PSP LPA: (i) to produce or develop Licensed PSP Products
and to enter into agreements with Licensed PSP Developers and other
third parties to develop Licensed PSP Products; (ii) to have
such Licensed PSP Products manufactured; (iii) to market,
distribute and sell such Licensed PSP Products and to authorize
others to do so within the licensed territory; (iv) to use the
Licensed Trademarks strictly and only in connection with the
development, manufacturing, marketing, packaging, advertising and
promotion of the Licensed PSP Products, and subject to SCEA’s
right of approval as provided herein; and (v) to sublicense to
end users the right to use the Licensed PSP Products for
noncommercial purposes in conjunction with the PSP Player only, and
not with other devices or for public performance.
2.2
Separate PlayStation Agreements . Unless specifically
set forth in this Agreement, all terms used herein are specific to
the PSP Player and the third party licensing program related
thereto and not to the original PlayStation, PlayStation 2
entertainment systems. or third party licensing program related
thereto. Licenses relating to the original PlayStation or
PlayStation 2 entertainment systems arc subject to separate
agreements with SCEA, and any license of rights to Publisher under
such separate agreements shall not confer on Publisher any rights
under the PSP Player and vice versa.
3. Development of Licensed PSP
Products.
3.1 Right
to Develop. This PSP LPA grants Publisher the right to
develop Licensed PSP Products and the right to purchase or license
Development Tools, as is appropriate, from SCEA or its designated
agent, pursuant to a separate Development System Agreement with
SCEA.
*Information
has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934, as amended.
3
In developing
Executable Software (or portions thereof), Publisher and its agents
shall fully comply in all respects with any and all technical
specifications which may from time to time be issued by SCEA. In
the event that Publisher uses third party tools to develop
Executable Software, Publisher shall be responsible for ensuring
that it has obtained appropriate licenses for such use.
3.2
Development by Third Parties . Except as otherwise set
forth herein, Publisher shall not provide SCE Materials or
SCEA’s Confidential Information to any third party. Publisher
shall be responsible for determining that third parties meet the
criteria set forth herein. Publisher may contract with a third
party for development of Licensed PSP Products, provided that such
third party is: (i) a Licensed PSP Publisher, (ii) a
Licensed PSP Developer, or (iii) an SCEA-authorized
subcontractor in compliance with the provisions of
Section 16.6. Publisher shall notify SCEA in writing of the
identity of any such third party within
[* ]
days of entering into an agreement or other arrangement with the
third party.
4. Limitations on Licenses; Reservation
of Rights.
4.1 Reverse
Engineering Prohibited . Other than as expressly permitted
by SCEA in writing, Publisher shall not directly or indirectly
disassemble, decrypt, electronically scan, peel semiconductor
components, decompile, or otherwise reverse engineer in any manner
or attempt to reverse engineer or derive source code from, all or
any portion of the SCE Materials, or permit, assist or encourage
any third party to do so. Other than as expressly permitted by SCEA
in writing, Publisher shall not use, modify, reproduce, sublicense,
distribute, create derivative works from, or otherwise provide to
third parties, the SCE Materials, in whole or in part, other than
as expressly permitted by SCEA. SCEA shall permit Publisher to
study the performance, design and operation of the Development
Tools solely for the limited purposes of developing and testing
Publisher’s software applications, or to build tools to
assist Publisher with the development and testing of software
applications for Licensed PSP Products. Any tools developed or
derived by Publisher resulting from the study of the performance,
design or operation of the Development Tools shall be considered as
derivative products of the SCE Materials for copyright purposes,
but may be heated as trade secrets of Publisher. In no event shall
Publisher patent any tools created, developed or derived from SCE
Materials. Publisher shall not make available to any third party
any tools developed or derived from the study of the Development
Tools without the express written permission of SCEA. Use of such
tools shall he strictly limited to the creation or testing of
Licensed PSP Products and any other use, direct or indirect of such
tools is strictly prohibited. Publisher shall be required in all
cases to pay royalties in accordance with Section 8 to SCEA on
any of Publisher’s products utilizing any SCE Materials or
derivative works made therefrom. Moreover, Publisher shall bear all
risks arising from incompatibility of its Licensed PSP Product and
the PSP Player resulting from use of Publisher-created tools.
The
burden of proof
under this Section shall be on Publisher to show by clear and
convincing evidence if a dispute arises, and SCEA reserves the
right to require Publisher to furnish evidence satisfactory to SCEA
that Publisher has complied with this Section.
4.2
Reservation of SCEA’s Rights.
4.2.1 Limitation of Rights to Licenses Granted
. The licenses granted in this Agreement extend only
to the publication, development, manufacture, marketing,
distribution and sale of Licensed PSP Products for use on the PSP
Player, in such formats as may be designated by SCEA within the
Licensed Territory and does not permit transshipment of the
Licensed PSP Products to unlicensed territories unless expressly
approved in writing by SCEA or the Affiliate of SCEA with
responsibility for licensing publishing rights in the region.
Without limiting the generality of the foregoing and except as
otherwise provided herein, Publisher shall not distribute or
transmit the Executable Software or the Licensed PSP Products via
electronic means or any other means know 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 computers or other devices. Notwithstanding this
limitation, Publisher may electronically transmit Executable
Software from site to site, or from machine to machine over a
computer network, for the sole purpose of facilitating development;
provided that no right of retransmission shall attach to any such
transmission, and provided further that Publisher shall use
reasonable security measures customary within the high technology
industry to reduce the risk of unauthorized interception or
retransmission of such transmissions. This Agreement does not grant
any right or license under any SCEA Intellectual Property Rights or
otherwise, except as expressly provided herein, and no other right
or license is to be implied by or inferred from any provision of
this Agreement or the conduct of the parties hereunder.
4.2.2 Other Use of SCE Materials and SCEA Intellectual
Property Rights. Publisher shall not make use of any SCE
Materials or any SCEA Intellectual Property Rights (or any portion
thereof) except as authorized by and in compliance with the
provisions of this Agreement. Publisher shall not use the
Executable Software, SCE Materials or SCEA’s Confidential
information in connection with the development of any software for
any emulator or other computer hardware or software system. No
right, license or privilege has been granted to Publisher hereunder
concerning the development of any collateral product or other use
or purpose of any kind whatsoever which displays or depicts any of
the Licensed Trademarks. The rights set forth in
Section 2.1(v) hereto are limited to the right to sublicense
such rights to end users for non-commercial use; any public
performance relating to the Licensed PSP Product or the PSP Player
is prohibited unless expressly authorized in writing by
SCEA.
*Information
has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934, as amended.
4
4.3
Reservation of Publisher’s Rights. Separate and
apart from SCE Materials and other rights licensed to Publisher by
SCEA hereunder, as between Publisher and SCEA, Publisher retains
all rights, title and interest in and to the Product Software, and
the Product Proposals and Product Information related thereto,
including without limitation Publisher Intellectual Property Rights
therein, as well as Publisher’s rights in any source code and
other underlying material such as artwork and music related thereto
and any names used as titles for Licensed PSP Products and other
trademarks used by Publisher. Nothing in this Agreement shall be
construed to restrict the right of Publisher to develop, distribute
or transmit products incorporating the Product Software and such
underlying material (separate and apart from the SCE Materials) for
any hardware platform or service other than the PSP Player, or to
use Printed Materials or Advertising Materials approved by SCEA as
provided herein (provided that such Printed Materials and/or
Advertising Materials do not contain any Licensed
‘Trademarks) as Publisher determines for such other
platforms. SCEA shall not do or cause to be done any act or thing
in any way impairing or tending to impair or dilute any of
Publisher’s rights, title or interests hereunder.
Notwithstanding the foregoing, Publisher shall not distribute or
transmit Product Software which is intended to be used with the PSP
Player via electronic means or any other means now known or
hereafter devised, including without limitation, via wireless,
cable, fiber optic means, telephone lines, microwave or radio
waves, or a network of computers or other devices, except as
otherwise permitted in Section 4.2.1 hereto.
4.4
Additions to and Deletions from Licensed Territory. SCEA
may, from time to time, add one or more countries to the Licensed
Territory by providing written notice of such addition to
Publisher. SCEA shall also have the right to delete, and intends to
delete any countries from the Licensed Territory if in SCEA’s
reasonable judgment, the laws or enforcement of such laws in such
countries do not protect SCEA Intellectual Property Rights. In the
event a country is deleted from the Licensed Territory, SCEA shall
deliver to Publisher a notice stating the number of days within
which Publisher shall cease distributing Licensed PSP Products and
shall retrieve any Development Tools located in any such deleted
country. Publisher shall cease distributing Licensed PSP Products,
and retrieve any Development Tools, directly or through
subcontractors, by the end of the period stated in such
notice.
4.5 PSP
SourceBook Requirement. Publisher shall be required to
comply with all the provisions of the PSP SourceBook, including
without limitation the Technical Requirements Checklist therein,
when published, or within a commercially reasonable time following
its publication to incorporate such provisions, as if such
provisions were set forth in this Agreement.
4.6
Covenant Not to Sue. Publisher, on behalf of itself and
its representatives, affiliates, and any other person or entity
acting on its behalf, hereby agrees not to file any
action against
and covenants not to sue SCEA, any Affiliate of SCEA, or any of
SCEA’s or its Affiliates’ subsidiaries on any and all
claims, rights, charges, damages or causes of action arising from
the infringement or alleged infringement of any U.S. or
international patent owned by, assigned or exclusively licensed to
Publisher that is classified in a field which would cover products
sold by SCEA in the United States and that has an effective filing
date during the term of this Agreement and before the expiration or
termination of this Agreement plus
[* ].
This Section shall survive any termination or expiration of this
Agreement with respect to the patents specified herein.
5. Quality
Standards for the Licensed PSP Products.
5.1 Quality
Assurance Generally. The Licensed PSP Products (and all
portions thereof) and Publisher’s use of any Licensed
Trademarks shall be subject to SCEA’s prior written approval,
which shall not be unreasonably withheld or delayed and which shall
be within SCEA’s sole discretion as to acceptable standards
of quality. SCEA shall have the right at any stage of the
development of a Licensed PSP Product to review such Licensed PSP
Product to ensure that it meets SCEA’s quality assurance
standards. All Licensed PSP Products will be developed to utilize
substantially the particular capabilities of the PSP Player’s
proprietary hardware, software and graphics. Xo approval by SCEA of
any element or stage of development of any Licensed PSP Product
shall be deemed an approval of any other element or stage of such
Licensed PSP Product, nor shall any such approval be deemed to
constitute a waiver of any of SCEA’s rights under this
Agreement. In addition, SCEA’s approval of any element or any
stage of development of any Licensed PSP Product shall not release
Publisher from any of its representations and warranties in
Section 9.2 hereunder.
5.2.1 Submission of Product Proposal. All Product
Proposal submissions shall be in conformance with the submissions
provisions as published in the PSP SourceBook as published or
amended. Publisher shall submit to SCEA for SCEA’s written
approval or disapproval, which shall not be unreasonably withheld
or delayed, a written concept document (the “Product
Proposal”) prior to commencing development of a Licensed
Product. Such Product Proposal must contain all information
specified in the PSP SourceBook, as well as any additional
information that SCEA may deem to be useful in evaluating the
proposed Licensed PSP Product.
5.2.2 Approval of Product Proposal. After
SCEA’s review of Publisher’s Product Proposal,
Publisher will receive written notice from SCEA of the status of
the Product Proposal, which may range from “Pass”
to
*Information
has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934, as amended.
5
“Review” to “Fail.” Such
conditions shall have the meanings ascribed to them in the PSP
SourceBook, and may be changed from time to time by SCEA. If a
Product Proposal receives a “Fail”, then neither
Publisher nor any other Licensed PSP Developer or Licensed PSP
Publisher may re-submit such Product Proposal without significant,
substantive revisions. SCEA shall have no obligation to approve any
Product Proposal submitted by Publisher. Any development conducted
by or at the direction of Publisher and any legal commitment
relating to development work shall be at Publisher’s own
financial and commercial risk. Publisher shall not construe
approval of a Product Proposal as a commitment by SCEA to grant
final approval to such Licensed PSP Product. Nothing herein shall
restrict SCEA from commercially exploiting any coincidentally
similar concept(s) and/or product(s), which have been independently
developed by SCEA, an Affiliate of SCEA or any third
party.
5.2.3 Changes to Product Proposal. Publisher shall
notify SCEA promptly in writing in the event of any material
proposed change in any portion of the Product Proposal.
SCEA’s approval of a Product Proposal shall not obligate
Publisher to continue with development or production of the
proposed Licensed PSP Product, provided that Publisher must
immediately notify SCEA in writing if it discontinues, cancels or
otherwise delays past the original scheduled delivery date the
development of any proposed Licensed PSP Product. In the event that
Publisher licenses a proposed Licensed PSP Product from another
Licensed PSP Publisher or a Licensed PSP Developer, it shall
immediately notify SCEA of such change and must re-submit such
Licensed PSP Product to SCEA for approval in accordance with the
provisions of Section 5.2.1 above.
5.3.1 Submission and Review of Work-in-Progress. SCEA
shall require Publisher to submit to SCEA work-in-progress on
Licensed PSP Products at intervals to be defined in the PSP
SourceBook, throughout the development of the Licensed PSP Product,
or if requested by SCEA on written notice to Publisher, at any time
during the development process. Publisher shall be responsible for
submitting work-in-progress to SCEA in accordance with the product
Review Process as determined by SCEA or otherwise set out in the
PSP SourceBook. Failure to submit work-in-progress in accordance
with any stage of the Review Process may, at SCEA’s
discretion, result in revocation of approval of such Product
Proposal.
5.3.2 Approval of Work in Progress. SCEA shall have
the right to approve, reject or require additional information with
respect to each stage of the Review Process. Publisher shall make
submission of the Licensed Product at first playable, pre-alpha,
alpha, beta and final, or at such development stages to be more
fully defined in the PSP SourceBook. SCEA shall approve each
development stage of the Licensed Product or otherwise specify in
writing the reasons for any rejection or request for
additional
information and shall state what corrections or improvements are
necessary to obtain approval. If any stage of the Review Process is
not provided to SCEA or is not successfully met after a reasonable
cure period agreed to between SCEA and Publisher, SCEA shall have
the right to revoke the approval of Publisher’s Product
Proposal.
5.3.3
Cancellation or Delay: Conditions of Approval. Licensed
PSP Products which are canceled by Publisher or are late in meeting
the final Executable Software delivery date by more than [*
]
months (without agreeing with SCEA on a modified final delivery
date) shall be subject to the termination provisions set forth in
Section 14.3 hereto. In addition, failure to make changes
required by SCEA to the Licensed PSP Product at any stage of the
Review Process, or making material changes to the Licensed PSP
Product without SCEA’s approval, may subject Publisher to the
termination provisions set forth in Section 14.3
hereto.
5.4
Approval of Executable Software. On or before the date
specified in the Product Proposal or as determined by SCEA pursuant
to the Review Process, Publisher shall deliver to SCEA for its
inspection and evaluation, a final version of the Executable
Software for the proposed Licensed PSP Product. SCEA will evaluate
such Executable Software and notify Publisher in writing of its
approval or disapproval, which shall not be unreasonably withheld
or delayed. If such Executable Software is disapproved, SCEA shall
specify in writing the reasons for such disapproval and state what
corrections and improvements are necessary. After making the
necessary corrections and improvements, Publisher shall submit a
new version of such Executable Software for SCEA’s approval.
SCEA shall have the right to disapprove Executable Software if it
fails to comply with SCEA’s corrections or improvements or
one or more conditions as set forth in the PSP SourceBook with no
obligation to review all elements of any version of Executable
Software. All final versions of Executable Software shall be
submitted in the format prescribed by SCEA and shall include such
number of Master Discs as SCEA may require from time to time.
Publisher hereby (i) warrants that all final versions of Executable
Software are fully tested; (ii) shall use its best efforts to
ensure such Executable Software is fully debugged prior to
submission to SCEA; and (iii) warrants that all versions of
Executable Software comply or will comply with standards set forth
in the PSP SourceBook or other documentation provided by SCEA to
Publisher. In addition, prior to manufacture of Executable
Software, Publisher must sign an accountability form stating that
(x) Publisher approves the release of such Executable Software
for manufacture in its current form and (y) Publisher shall be
fully responsible for any problems related to such Executable
Software.
5.5.1 Compliance with Guidelines. For each proposed
Licensed PSP Product, Publisher shall be
*Information
has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934, as amended.
6
responsible, at
Publisher’s expense, for creating and developing Printed
Materials. All Printed Materials shall comply with the Guidelines,
which may be amended from time to time, provided that Publisher
shall, except as otherwise provided herein, only be required to
implement amended Guidelines in subsequent orders of Printed
Materials and shall not be required to recall or destroy previously
manufactured Printed Materials, unless such Printed Materials do
not comply with the original requirements in the Guidelines or
unless explicitly required to do so in writing by SCEA.
5.5.2 Submission and Approval of Printed Materials.
No later than submission of final Executable Software for a
proposed Licensed PSP Product, Publisher shall also deliver to
SCEA, for review and evaluation, the proposed final Printed
Materials and a form of limited warranty for the proposed Licensed
PSP Product. Failure to meet any scheduled release dates for a
Licensed PSP Product is solely the risk and responsibility of
Publisher, and SCEA assumes no responsibility for Publisher failing
to meet such scheduled release dates due to this submission
process. The quality of such Printed Materials shall be of the same
quality as that associated with other commercially available high
quality software products. If any of the Printed Materials are
disapproved, SCEA shall specify the reasons for such disapproval
and state what corrections are necessary. SCEA shall have no
liability to Publisher for costs incurred or irrevocably committed
to by Publisher for production of Printed Materials that are
disapproved by SCEA. After making the necessary corrections to any
disapproved Printed Materials, Publisher must submit new Printed
Materials for approval by SCEA. SCEA shall not unreasonably
withhold or delay its review of Printed Materials.
5.6
Advertising Materials .
5.6.1 Submission and Approval of Advertising
Materials. Pre-production samples of all Advertising
Materials shall be submitted by Publisher to SCEA, at
Publisher’s expense, prior to any actual production, use or
distribution of any such items by Publisher or on its behalf. SCEA
shall evaluate and approve such Advertising Materials, which
approval shall not be unreasonably withheld or delayed, as to the
following standards: (i) the content, quality, and style of
the overall advertisement; (ii) the quality, style, appearance
and usage of any of the Licensed Trademarks; (iii) appropriate
references of any required notices: and (iv) compliance with
the Guidelines. If any of the Advertising Materials are
disapproved, SCEA shall specify the reasons for such disapproval
and state what corrections are necessary. SCEA may require
Publisher to immediately withdraw and reprint any Advertising
Materials that have been published but have not received the
written approval of SCEA. SCEA shall have no liability to Publisher
for costs incurred or irrevocably committed to by Publisher for
production of Advertising Materials that are disapproved by SCEA.
For each Licensed PSP Product, Publisher shall
be required to
deliver to SCEA an accountability form stating that all Advertising
Materials for such Licensed PSP Product comply or will comply with
the Guidelines for use of the Licensed Trademarks. After making the
necessary corrections to any disapproved Advertising Materials,
Publisher must submit new proposed Advertising Materials for
approval by SCEA.
5.6.2 Failure to Comply; [*
] Strikes Program. Publishers who fail to obtain
SCEA’s approval of Advertising Materials prior to broadcast
or publication shall be subject to the provisions of the
“[*
]
Strikes” program outlined in the PSP SourceBook. Failure to
obtain SCEA’s approval of Advertising Materials could result
in termination of this PSP LPA or termination of approval of the
Licensed PSP Product, or could subject Publisher to the provisions
of Section 14.4 hereto. Failure to meet any scheduled
release dates for Advertising Materials is solely the risk and
responsibility of Publisher, and SCEA assumes no responsibility for
Publisher failing to meet such scheduled release dates due to
approval requirements as set forth in this Section.
5.6.3 SCEA Materials. Subject in each instance to the
prior written approval of SCEA, Publisher may use advertising
materials owned by SCEA pertaining to the PSP Player or to the
Licensed Trademarks on such Advertising Materials as may, in
Publisher’s judgment, promote the sale of Licensed PSP
Products.
5.7 Rating
Requirements. If required by SCEA or any governmental
entity, Publisher shall submit each Licensed PSP Product to a
consumer advisory ratings system designated by SCEA or such
governmental entity for the purpose of obtaining rating code(s) for
each Licensed PSP 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)
shall be displayed on the Licensed PSP Product and in the
associated Printed Materials and Advertising Materials, at
Publisher’s cost and expense, in accordance with the PSP
SourceBook or other documentation provided by SCEA to
Publisher.
5.8
Publisher’s Additional Quality Assurance
Obligations. If at any time or times subsequent to the
approval of Executable Software and Printed Materials, SCEA
identifies any material defects (such materiality to be determined
by SCEA in its sole discretion) with respect to the Licensed PSP
Product, or in the event that SCEA identifies any improper use of
its Licensed Trademarks or SCE Materials with respect to the
Licensed PSP Product, or any such material defects or improper use
are brought to the attention of SCEA, Publisher shall, at no cost
to SCEA, promptly correct any such material defects, or improper
use of Licensed Trademarks or SCE Materials, to SCEA’s
commercially reasonable satisfaction, which may include, if
necessary in SCEA’s judgment, the recall and re-release of
such Licensed PSP Product. In the event any Units of
*Information
has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934, as amended.
7
Licensed PSP
Products create any risk of loss or damage to any property or
injury to any person, Publisher shall immediately take effective
steps, at Publisher’s sole liability and expense, to recall
or to remove such defective Units from any affected channels of
distribution, provided, however, that if Publisher is not acting as
the distributor and/or seller for the Licensed PSP Products, its
obligation hereunder shall be to use its best efforts to arrange
removal of such Licensed PSP Product from channels of distribution.
Publisher shall provide all end-user support for the Licensed PSP
Products and SCEA expressly disclaims any obligation to provide
end-user support on Publisher’s Licensed PSP
Products.
6.
Manufacture of the Licensed PSP Products.
6.1
Manufacture of Units. Upon approval of Executable
Software and associated Printed Materials pursuant to
Section 5, and subject to Sections 6.1.2, 6.1.3 and 6.1.4
below, the Designated Manufacturing Facility will, in accordance
with the terms and conditions set forth in this Section 6, and
at Publisher’s expense (a) manufacture PSP Format Discs
for Publisher; (b) manufacture Publisher’s Packaging and/or
Printed Materials; and/or (c) assemble the PSP Format Discs
with the Printed Materials and the Packaging. Publisher shall
comply with all Manufacturing Specifications related to the
particular terms set forth herein. SCEA reserves the right to
insert or require the Publisher to insert certain Printed Materials
relating to the PSP Player or Licensed Trademarks into each
Unit.
6.1.1 Manufacture of PSP Format Discs.
6.1.1.1 Designated Manufacturing Facilities. To
insure compatibility of the PSP Format Discs with the PSP Player,
consistent quality of the Licensed PSP Product and incorporation of
anti-piracy security systems, SCEA shall designate and license a
Designated Manufacturing Facility to reproduce PSP Format Discs.
Publisher shall purchase
[* ] of
its requirements for PSP Format Discs from such Designated
Manufacturing Facility during the term of the Agreement. Any
Designated Manufacturing Facility shall be a third party
beneficiary of this Agreement.
6.1.1.2 Creation of Master Licensed PSP Product.
Pursuant to Section 5.4 in connection with final testing of
Executable Software, Publisher shall provide SCEA with the number
of Master Discs specified in the PSP SourceBook. A Designated
Manufacturing Facility shall create from one of the fully approved
Master Discs provided by Publisher the original master of the
Licensed PSP Product from which all other copies of the Licensed
PSP Product are to be replicated. Publisher shall be responsible
for the costs, as determined by the Designated Manufacturing
Facility, of producing such original master. In order to insure
against loss or damage to the copies of the Executable Software
furnished to SCEA, Publisher will retain duplicates of all Master
Discs, and neither SCEA nor
any Designated
Manufacturing Facility shall be liable for loss of or damage to any
Master Discs or Executable Software.
6.1.2 Manufacture of Printed Materials.
6.1.2.1 Manufacture by Designated Manufacturing
Facility . If Publisher elects to obtain Printed Materials
from a Designated Manufacturing Facility, Publisher shall deliver
all SCEA-approved printed Materials to that Designated
Manufacturing Facility, at Publisher’s sole risk and expense,
and the Designated Manufacturing Facility will manufacture such
Printed Materials in accordance with this Section 6. In order
to insure against loss or damage to the copies of the Printed
Materials furnished to SCEA, Publisher will retain duplicates of
all Printed Materials, and neither SCEA nor any Designated
Manufacturing Facility shall be liable for loss of or damage to any
such Printed Materials.
6.1.2.2 Manufacture by Alternate Source .
Subject to SCEA’s approval as provided in Section 5.5.2
hereto and in this Section, Publisher may elect to be responsible
for manufacturing its own Printed Materials (other than any Artwork
which may be placed directly upon the PlayStation Disc, which
Publisher will supply to the Designated Manufacturing Facility for
placement), at Publisher’s sole risk and expense. Prior to
production of each order, Publisher shall be required to supply
SCEA with samples of any Printed Materials not produced or supplied
by a Designated Manufacturing Facility, at no charge to SCEA or
Designated Manufacturing Facility, for SCEA’s approval with
respect to the quality thereof. SCEA shall have the right to
disapprove any Printed Materials that do not comply with the
Manufacturing Specifications. Manufacturing Specifications for
Printed Materials shall be comparable to manufacturing
specifications applied by SCEA to its own software products for the
PSP Player. If Publisher elects to supply its own Printed
Materials, neither SCEA nor any Designated Manufacturing Facility
shall be responsible for any delays arising from use of
Publisher’s own Printed Materials.
6.1.3 Manufacture of Packaging.
6.1.3.1 Manufacture by Designated Manufacturing
Facility. To ensure consistent quality of the Licensed PSP
Products, SCEA may designate and license a Designated Manufacturing
Facility to reproduce proprietary Packaging for the PSP Player. If
SCEA creates proprietary Packaging for the PSP Player, then
Publisher shall purchase
[* ] of
its requirements for such proprietary Packaging from a Designated
Manufacturing Facility during the term of the Agreement, and the
Designated Manufacturing Facility will manufacture such Packaging
in accordance with this Section 6.
6.1.3.2 Manufacture by Alternate Source. If SCEA
elects to use standard, non-proprietary Packaging
*Information
has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934, as amended.
8
for the PSP
Player, then Publisher may elect to be responsible for
manufacturing its own Packaging (other than any proprietary labels
and any portion of a container containing Licensed Trademarks,
which Publisher must purchase from a Designated Manufacturing
Facility). Publisher shall assume all responsibility for the
creation of such Packaging at Publisher’s sole risk and
expense. Publisher shall be responsible for encoding and printing
proprietary edge labels provided by a Designated Manufacturing
Facility with information reasonably specified by SCEA from time to
time and will apply such labels to each Unit of the Licensed PSP
Product as reasonably specified by SCEA. Prior to production of
each order, Publisher shall be required to supply SCEA with samples
of any Packaging not produced or supplied by a Designated
Manufacturing Facility, at no charge to SCEA or Designated
Manufacturing Facility, for SCEA’s approval with respect to
the quality. SCEA shall have the right to disapprove any Packaging
that docs not comply with the Manufacturing Specifications.
Manufacturing Specifications for Packaging shall be comparable to
manufacturing specifications applied by SCEA to its own software
products for the PSP Player. If Publisher procures Packaging from
an alternate source, then it must also procure assembly services
from an alternate source. If Publisher elects to supply its own
Packaging, neither SCEA nor any Designated Manufacturing Facility
shall be responsible for any delays arising from use of
Publisher’s own Packaging.
6.1.4 Assembly Services. Publisher may either procure
assembly services from a Designated Manufacturing Facility or from
an alternate source. If Publisher elects to be responsible for
assembling the Licensed PSP Products, then the Designated
Manufacturing Facility shall ship the component parts of the
Licensed PSP Product to a destination provided by Publisher, at
Publisher’s sole risk and expense. SCEA shall have the right
to inspect any assembly facilities utilized by Publisher in order
to determine if the component parts of the Licensed PSP Products
are being assembled in accordance with SCEA’s quality
standards. SCEA may require that Publisher recall any Licensed PSP
Products that do not contain proprietary labels or other material
component parts or that otherwise fail to comply with the
Manufacturing Specifications. If Publisher elects to use alternate
assembly facilities, neither SCEA nor any Designated Manufacturing
Facility shall be responsible for any delays or missing component
parts arising from use of alternate assembly facilities.
6.2 Price.
Payment and Terms.
6.2.1 Price. The applicable price for manufacture of
any Units of Licensed PSP Products ordered hereunder shall be
provided to Publisher by the Designated Manufacturing Facility.
Purchase shall be subject to the terms and conditions set out in
any purchase order form supplied to Publisher by the Designated
Manufacturing Facility.
6.2.2 Orders . Publisher shall issue to a Designated
Manufacturing Facility a written Purchase Order(s) in a form
designated by SCEA and containing the information required in the
Manufacturing Specifications, with a copy to SCEA. All orders shall
be subject to approval by SCEA, which shall not be unreasonably
withheld or delayed. Purchase Orders issued by Publisher to a
Designated Manufacturing Facility for each Licensed PSP Product
approved by SCEA shall be non-cancelable and be subject to the
order requirements of the Designated Manufacturing
Facility.
6.2.3 Payment Terms . Purchase Orders will be
invoiced as soon as reasonably practical after receipt, and such
invoice will include both manufacturing price and royalties payable
pursuant to Section 8.1 or 8.2 below for each Unit of Licensed
PSP Products ordered. Each invoice will be payable either on a
cash-in-advance basis or pursuant to a letter of credit, or at
SCEA’s sole discretion, on credit terms. Terms for
cash-in-advance and letter of credit payments shall be as set forth
in the PSP SourceBook. All amounts hereunder shall be payable in
United States dollars. All associated banking charges with respect
to payments of manufacturing costs and royalties shall be borne
solely by Publisher.
6.2.3.1 Credit Terms . SCEA may at its sole
discretion extend credit terms and limits to Publisher. SCEA may
also revoke such credit terms and limits at its sole discretion. If
Publisher qualifies for credit terms, then orders will be invoiced
upon shipment of Licensed PSP Products and each invoice will be
payable within [*
] days
of the date of the invoice. Any overdue sum shall bear interest at
the rate of [*
]
percent per month, or such lower rate as may be the maximum rate
permitted under applicable law, from the date when payment first
became due to and including the date of payment thereof. Publisher
shall be additionally liable for all costs and expenses of
collection, including without limitation, reasonable fees for
attorneys and court costs.
6.2.3.2 General Terms . No deduction may be made from
remittances unless an approved credit memo has been issued by a
Designated Manufacturing Facility. Neither SCEA nor a Designated
Manufacturing Facility shall be responsible for shortage or
breakage with respect to any order if component parts or assembly
services are obtained from alternate sources. Each shipment to
Publisher shall constitute a separate sale, whether whole or
partial fulfillment of any order. Nothing in this Agreement shall
excuse or be
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