Exhibit 10.2

 

XXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
WAS REQUESTED.  ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO THE RULES APPLICABLE TO SUCH
CONFIDENTIAL TREATMENT REQUEST.

 

 

[g259663ki01i001.jpg]

 

 

GLOBAL PLAYSTATION®3 FORMAT

 

LICENSED PUBLISHER AGREEMENT

 

 

TAKE TWO INTERNATIONAL S.A.

 

 

Sony Computer Entertainment Europe
GLPA

CONFIDENTIAL

 

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TABLE OF CONTENTS

 

SECTION:

 

 

PAGE:

 

 

 

 

1.

DEFINITION OF TERMS

 

2

 

 

 

 

2.

LICENSE

 

5

 

 

 

 

3.

DEVELOPMENT AND DISTRIBUTION OF LICENSED PRODUCTS

 

5

 

 

 

 

4.

ONLINE GAMEPLAY

 

7

 

 

 

 

5.

LIMITATIONS ON LICENSES; RESERVATION OF RIGHTS

 

7

 

 

 

 

6.

QUALITY STANDARDS FOR LICENSED PRODUCTS

 

9

 

 

 

 

7.

MANUFACTURE OF DISC PRODUCTS

 

11

 

 

 

 

8.

MARKETING OF LICENSED PRODUCTS

 

12

 

 

 

 

9.

PAYMENTS

 

14

 

 

 

 

10.

REPRESENTATIONS AND WARRANTIES

 

15

 

 

 

 

11.

INDEMNITIES; LIMITED LIABILITY

 

17

 

 

 

 

12.

INFRINGEMENT OF SCE INTELLECTUAL PROPERTY RIGHTS BY THIRD PARTIES

 

19

 

 

 

 

13.

CONFIDENTIALITY

 

19

 

 

 

 

14.

TERM RENEWAL AND TERMINATION

 

23

 

 

 

 

15.

EFFECT OF EXPIRATION OR TERMINATION

 

25

 

 

 

 

16.

MISCELLANEOUS PROVISIONS

 

27

 

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GLOBAL PLAYSTATION® 3 FORMAT
LICENSED PUBLISHER AGREEMENT

 

This Global PlayStation®3 Format Licensed Publisher Agreement (the “Agreement”)
is entered into on May 18, 2010 by and between SONY COMPUTER ENTERTAINMENT
EUROPE LIMITED, with offices at 10 Great Marlborough Street, London W1F 7LP
(“the SCE Company”) and TAKE TWO INTERNATIONAL S.A., with offices at 14, rue du
Rhône, CH-1204 Genève, Switzerland (“Publisher”).

 

The SCE Company’s parent company, Sony Computer Entertainment Inc. (“SCEI”), has
designed and developed certain core technology of or concerning the System.

 

The SCE Company has the right to grant non-exclusive licenses to qualified
entities regarding certain intellectual property rights with respect to the
System.

 

Publisher desires to be granted a non-exclusive license to publish, develop,
have manufactured, market, advertise, distribute and sell Licensed Products in
accordance with the provisions of this Agreement and the provisions of the
Regional Rider that is attached hereto and incorporated herein by reference, and
the SCE Company is willing, in accordance with the terms and subject to the
conditions of this Agreement and the Regional Rider, to grant Publisher such a
license.

 

In consideration of the representations, warranties and covenants contained
herein and in the Regional Rider, and other good and valuable consideration,
Publisher and the SCE Company hereby agree as follows:

 

1.              Definition of Terms.

 

1.1      “Advertising Materials” means any advertising, marketing,
merchandising, promotional, contest-related, public relations (including press
releases), display, point of sale or website materials regarding or relating to
the Licensed Products or depicting any of the Licensed Trademarks.  Advertising
Materials include any advertisements in which the System is displayed, referred
to, or used, including giving away any unit(s) of the System as prizes in
contests or sweepstakes and the public display of the System in product
placement opportunities.

 

1.2      “Affiliate” means, as applicable, either Sony Computer Entertainment
America Inc. (“SCEA”), Sony Computer Entertainment Inc. (“SCEI”) and Sony
Computer Entertainment Sony Computer Entertainment Europe GLPA Europe Ltd.
(“SCEE”), any subsidiary of the foregoing, or any other entity as may be
established from time to time and becomes a part of the Sony Computer
Entertainment Group.

 

1.3      “Attribution Line” means the legal attribution line used on Advertising
Materials, which shall be substantially similar to the following:  “Product
copyright and trademarks are the property of the respective publisher or its
licensors.”

 

1.4      “Designated Manufacturing Facility” means a manufacturing facility that
is designated by the SCE Company, in its sole discretion, to manufacture Disc
Products or any of their component parts.

 

1.5      “Development System Agreement” means an agreement entered into between
the SCE Company and a Licensed Publisher or other

 

2

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licensee regarding the sale, lease, loan or license of Development Tools.

 

1.6      “Development Tools” means the PlayStation 3 development tools sold,
leased, loaned or licensed solely for use in the development of Executable
Software.

 

1.7      “Disc Products” means the Executable Software on PS3 Format Discs,
Advertising Materials, Packaging, Printed Materials and Product Information
relating to any individual title which shall consist of one application software
product per Unit.  Disc Products may, but need not, be designed to allow Online
Gameplay.

 

1.8      “Effective Date” is the date specified in the preamble of this
Agreement.

 

1.9      “Executable Software” means software in final object code form that is
designed for use and operation exclusively on the System which consists of
Publisher Software and any SCE Materials and (except where agreed between
Publisher and any Affiliate) constitutes a complete, standalone videogame.

 

1.10    “Guidelines” means any guidelines or specifications of the SCE Company
with respect to the development, manufacture and publishing of Licensed
Products, including any requirements regarding the development of Executable
Software, the display of the Licensed Trademarks in any Licensed Products and
related Advertising Materials, or the protection of any of the SCE Intellectual
Property Rights, which may be set forth in the Technical Requirements Checklist,
Corporate Identity Guidelines or in any other documentation provided to
Publisher by the SCE Company.  Guidelines shall be comparable to the guidelines
and specifications applied by the SCE Company to its own software products for
the System.  All Guidelines may be modified, supplemented or amended by any
Affiliate from time to time upon reasonable notice to Publisher.  Guidelines are
incorporated into and form a part of this Agreement.

 

1.11    “Licensed Developer” means an entity that has signed a Licensed
Developer Agreement with any Affiliate.

 

1.12    “Licensed Developer Agreement” or “LDA” means a valid and current
license agreement authorizing the development of software for the System, fully
executed between a Licensed Developer and an Affiliate.

 

1.13    “Licensed Products” means Disc Products and Online Products, including
any Publisher demonstration discs.

 

1.14    “Licensed Publisher” means an entity that has signed a Licensed
Publisher Agreement with an Affiliate.

 

1.15    “Licensed Publisher Agreement” or “LPA” means a valid and current
license agreement for the publishing, development, manufacture, marketing,
advertising, distribution and sale of Licensed Products, fully executed between
a Licensed Publisher and an Affiliate.

 

1.16    “Licensed Trademarks” means the trademarks, service marks, trade dress,
logos, icons and other indicia designated in the Guidelines or otherwise for use
on, in or otherwise in connection with Licensed Products.  The Licensed
Trademarks (or any part thereof) are subject to change during the term of this
Agreement and may be modified, supplemented or amended by any Affiliate (as
applicable) from time to time upon reasonable notice to Publisher.

 

1.17    “Master Disc” means a recordable Blu-Ray disc in the form requested by
the SCE Company containing final pre-production Executable Software.

 

1.18    “Online Gameplay” means the capability to operate and interact with the
Executable Software associated with a Licensed Product used on a System that is
connected to the Internet or any other network and which may allow an end user
to participate in a game or gameplay with another end user (or other end users)
across the Internet or any other network.

 

3

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1.19    “Online Products” means (i) enhancements, improvements, additions,
patches, and updates, including characters, artifacts, scripts, levels,
modifications, player statistics and gameplay data, used in conjunction with a
related Disc Product or the Executable Software referred to in paragraph
(ii) below and distributed electronically to any end users after sale or
distribution of a Unit of such Disc Product, or such Executable Software; and
(ii) Executable Software distributed electronically to end-users.  Online
Products may, but need not, be designed to allow Online Gameplay.

 

1.20    “Packaging” means, with respect to each Disc Product, the carton,
containers, cases, edge labels, wrapping materials, security seals and other
proprietary labels and trade dress elements and wrapping materials of or
concerning the Disc Products (and all parts of any of the foregoing) but
specifically excluding Printed Materials and PlayStation 3 Format Discs.

 

1.21    “PlayStation 3 Format Disc” means the disc media formatted for use with
the System.

 

1.22    “Printed Materials” means all artwork and mechanicals for the disc label
for each PlayStation 3 Format Disc and for the Packaging relating to any of the
Disc Products, and all instructional manuals, liners, inserts, and any other
materials and user information within or attached to the Packaging and
distributed as part of the Disc Products.

 

1.23    “Product Information” means any information owned or licensed by
Publisher relating to any of the Licensed Products, including demos, videos,
hints and tips, artwork, depictions of Disc Product cover art and videotaped
interviews.

 

1.24    “Product Proposal” means a written proposal prepared by a Licensed
Publisher and submitted to the SCE Company under the Guidelines regarding the
concept and design for a Licensed Product.

 

“Publisher’s Group” means Take-Two Interactive Software, Inc and any subsidiary
thereof or any other entity as may be established from time to time and becomes
part of the Take-Two Interactive Software Group.

 

1.25    “Publisher Software” means any software including incorporated audio and
visual material developed by Publisher under this Agreement or an L DA, and does
not include any SCE Materials.

 

1.26    “Publisher Intellectual Property Rights” means those worldwide
intellectual property rights, current or future, that are owned and/or
controlled by Publisher or any member of Publisher’s Group, including rights in
or related to patents, inventions, designs, copyrights, databases, 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 any other intellectual property
rights recognized in the Territory (including all registrations, applications to
register and rights to apply for registration of same), that relate to the
Publisher Software, Packaging, Product Information, Printed Materials,
Advertising Materials or other materials.

 

1.27    “Purchase Order” means a written purchase order issued by Publisher
pursuant to Section 7.8.1, regarding the purchase of Disc Products that conform
to the Guidelines and other terms and conditions imposed by the SCE Company or
any Designated Manufacturing Facility.

 

1.28    “Regional Rider” means the additional set of binding terms and which are
appended to and form part of this Agreement, and which are applicable to the
Territory.

 

1.29    “SCE Confidential Information” means the term as defined in
Section 13.1.1.

 

1.30    “SCE Intellectual Property Rights” means those worldwide intellectual
property

 

4

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rights, current or future, including rights in or related to patents,
inventions, designs, copyrights, databases, trademarks (including the Licensed
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 any other
intellectual property rights recognized in the Territory (including all
registrations, applications to register and rights to apply for registration of
the same), for their full term including all renewals and extensions, that
relate to the SCE Materials, the System, the design and development of Licensed
Products compatible with the System, and any SCE Confidential Information.

 

1.31    “SCE Materials” means any data, object code, source code, firmware,
documentation (or any part(s) of any of the foregoing) or information relating
to the System or the development of interactive entertainment products
compatible with the System, selected in the sole judgment of the SCE Company,
which are directly or indirectly provided or supplied by any Affiliate to
Publisher.  SCE Materials shall not include any hardware portions of the
Development Tools, but shall include firmware in such hardware.

 

1.32    “System” means the PLAYSTATION®3 computer entertainment system.

 

1.33    “Term” means the period from the Effective Date until March 31, 2012.

 

1.34    “Territory” means the term as defined in the Regional Rider.

 

1.35    “Unit” means an individual copy of a specific Disc Product regardless of
the number of PlayStation 3 Format Discs that are contained within and are part
of such Disc Product.

 

2.              License.

 

2.1      License Grant.  The SCE Company grants to Publisher, for the Term and
throughout the Territory, and in accordance with the other terms, limitations
and conditions referenced herein, a non-exclusive, non-transferable license
under the SCE Intellectual Property Rights, without the right to sublicense
(except as specifically provided herein), to use SCE Materials as follows: 
(i) to develop and publish Licensed Products and to enter into agreements with
Licensed Developers and other approved third parties, where the SCE Company
requires such approval, subject to Section 3.2, to develop Licensed Products;
(ii) to have Disc Products manufactured by Designated Manufacturing Facilities;
(iii) to market, advertise, promote, sell and distribute Disc Products directly
to end users or to third parties for distribution to end users; (iv) to market,
advertise and promote, and, pursuant to a separate online distribution
agreement(s) with the SCE Company or any Affiliate, to distribute Online
Products to end users over the PlayStation®Network; (v) to use the Licensed
Trademarks only in connection with the manufacturing, marketing, packaging,
advertising, promotion, sale and distribution of the Licensed Products; and
(vi) to sublicense end-user customers the right to use the Licensed Products for
personal, noncommercial purposes in conjunction with the System 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 System and the attendant
SCE Company licensing program.  Licenses relating to the original PlayStation,
PS One, PlayStation 2 or PlayStation Portable game consoles are subject to
separate agreements with the SCE Company (or any Affiliate, as applicable), and
any license of rights to Publisher under such separate agreements shall not
confer on Publisher any rights with respect to the System and vice versa.

 

3.             Development and Distribution of Licensed Products.

 

3.1      Right to Develop.  The SCE Company grants Publisher the right to
purchase, lease or borrow, as applicable, certain hardware

 

5

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devices and license certain software tools and utilities that comprise the
Development Tools, as is appropriate, from the SCE Company or its designee,
pursuant to a separate Development System Agreement with the SCE Company or a
separate rider to this Agreement, which hardware and software components may be
used by Publisher only in connection with the development of Licensed Products
pursuant to Section 2.1.  In developing Executable Software (or portions
thereof), Publisher and any third-party Licensed Developers with whom Publisher
contracts shall fully comply in all respects with all Guidelines, including
technical specifications.  In the event that Publisher uses any third-party
tools to develop Executable Software or any portion thereof, Publisher shall be
responsible at Publisher’s sole risk and expense for ensuring that it has
obtained all necessary licenses for any such use.

 

3.2      Subcontractors.  Publisher may retain subcontractors who provide
services which do not require access to SCE Materials or SCE Confidential
Information without prior approval.  Otherwise, Publisher may retain
subcontractor(s) to assist with the development, publication and marketing of
Licensed Products (or portions thereof) which have signed (i) an LPA or LDA with
the SCE Company (the “PlayStation 3 Agreement”) in full force and effect
throughout the term of such development, publishing and marketing services or
(ii) if required by the SCE Company, an SCE Company-approved subcontractor
agreement (“Subcontractor Agreement”), and the SCE Company has approved such
subcontractor in writing (which approval shall be in the SCE Company’s sole
discretion).  Publisher shall not disclose to any subcontractor any of the SCE
Confidential Information, including any SCE Materials, unless and until either a
PlayStation 3 Agreement or any required Subcontractor Agreement has been
executed and approved by the SCE Company.  Publisher shall be solely responsible
for verifying that all third parties that contribute to the development of any
Licensed Product, or component thereof, satisfy the requirements of clause
(i) or (ii) of this Section 3.2.  Notwithstanding any consent which may be
granted by the SCE Company for Publisher to employ any such permitted
subcontractor(s), or any such separate agreement(s) that may be entered into by
Publisher with any such permitted subcontractor, Publisher shall remain fully
liable for its compliance with all of the provisions of this Agreement and for
the compliance of any and all permitted subcontractors with the provisions of
any agreements entered into by such subcontractors in accordance with this
Section.  Publisher shall use best efforts to cause all subcontractors that it
retains in furtherance of this Agreement to comply in all respects with the
terms and conditions of this Agreement, and hereby unconditionally guarantees
all obligations of its subcontractors.  The SCE Company may subcontract any of
its rights or obligations hereunder.

 

3.3      Form of Distribution.  Executable Software distributed physically to
end users and demonstration discs shall be in the form of PlayStation 3 Format
Discs only.  Publisher shall not, directly or indirectly, incorporate more than
one Disc Product in a single Unit, or package or bundle Units of any Disc
Product with any other goods or services, without the SCE Company’s prior
written consent.  Online Products, Online Gameplay and any services associated
with Online Gameplay, including subscriptions, shall be distributed or made
available electronically, including by wireless distribution, to end users over
the PlayStation®Network only, unless the SCE Company gives express written
consent to another manner of distribution on SCE Company standard terms or
otherwise as agreed.  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 purposes of facilitating
development and for testing to be carried out under Section 6; 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

 

6

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to reduce the risk of unauthorized interception or retransmission of such
transmissions.

 

3.4      Distribution Channels for Disc Products.  Publisher may use such
distribution channels to distribute Disc Products as Publisher deems
appropriate, including the use of third-party distributors, resellers, dealers
and sales representatives.  In the event that the SCE Company permits Publisher
to have any of its Disc Products published by another Licensed Publisher,
Publisher must, in addition to complying with Section 3.2, provide the SCE
Company with advance written notice of such arrangement, including the name of
the Licensed Publisher and any additional information requested by the SCE
Company regarding the nature of the distribution services that would be provided
by such third-party Licensed Publisher prior to manufacture of the Disc Product.

 

4.              Online Gameplay.

 

4.1      Access to and Maintenance of Online Gameplay.  Publisher shall (itself
or through a subcontractor approved pursuant to section 3.2) maintain servers
hosting Online Gameplay for the periods specified in the Guidelines.  Publisher,
or, at the SCE Company’s option, the SCE Company or its Affiliate, shall provide
notice to consumers in a clear and conspicuous manner via one of the methods
listed in Section 4.3 any permanent shutdown to a server hosting or supporting
Online Gameplay no later than three (3) months prior to any shutdown.

 

4.2      Publisher Online Designee.  Publisher shall appoint a dedicated contact
person for its Licensed Products designed to allow Online Gameplay, who shall
act as a liaison between the SCE Company and Publisher for all online matters
relating to Licensed Products designed to allow Online Gameplay.  Publisher’s
designee shall also be responsible for ensuring that all terms and conditions
relating to the online elements of the Licensed Products are complied with. 
Publisher shall give the SCE Company ten (10) days’ written notice prior to any
change in designee.

 

4.3      Online Legal Compliance.  Licensed Products designed for Online
Gameplay must include a legal disclosure enumerating end user, privacy and
moderation policies and age rating (collectively, “Online Terms”) prior to
allowing any end users to engage in Online Gameplay for the first time for a
particular user or as otherwise required by law.  The SCE Company reserves the
right to review Publisher’s Online Terms, but shall have no liability for
content of Publisher’s Online Terms.  Online Terms shall either be coded into
the applicable Licensed Product or available on the server hosting Online
Gameplay in such a way that an end user must agree to it prior to accessing and
engaging in Online Gameplay.  Online Terms must comply with the Guidelines. 
Publisher must inform all end users engaging in or accessing Online Gameplay if
any personally identifying information will be collected, how it will be
collected, and how it will be used.

 

4.4      Publisher Liability for Online Gameplay.  Publisher shall bear
exclusively all responsibility and liability for any features or capability of
Licensed Products related to Online Gameplay, including Online Gameplay between
territories using different television standards, whether PAL, NTSC or
otherwise.

 

5.              Limitations on Licenses; Reservation of Rights.

 

5.1      Application of Council Directive 91/250/EEC.  The limitations set forth
in Section 5 shall be subject to Council Directive 91/250/EEC in a Territory or
any part thereof in which that Directive has been implemented.

 

5.2      Reverse Engineering Prohibited.  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 otherwise derive any source code from, all or any portion of
the

 

7

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SCE Materials, or permit, assist or encourage any third party to do so.

 

5.3      Limitation on Creation of Derivative Works.  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 set forth herein without the SCE Company’s prior written
consent.

 

5.4      Limitation on Examination and Study of Tools.  Publisher may study the
performance, design and operation of the Development Tools solely for the
limited purposes of developing and testing Publisher Software, or to develop
tools to assist Publisher with the development and testing of Publisher
Software.  Any tools developed or derived by Publisher as a result of studying
the performance, design or operation of the Development Tools shall be
considered derivative works of the SCE Materials and shall be owned by the SCE
Company, but may be treated as trade secrets of Publisher.  This section shall
govern any conflict with a similar provision in any separate agreement.

 

5.5      Limitations Regarding Content of Licensed Products.  No rights are
granted under this Agreement with respect to non-game products or products which
contain significant elements of, or are a hybrid with, audio or video profile
products.  No rights are granted under this Agreement with respect to serving or
providing in-game dynamic advertisements.  Licensed Products may contain in-game
static advertisements, subject to the Guidelines.

 

5.6      Reservation of SCE Company’s Rights.

 

5.6.1  Limitations on Use of SCE Materials and SCE Intellectual Property
Rights.  This Agreement does not grant any right or license under, and Publisher
shall not use, any SCE Confidential Information, the SCE Materials, or any of
the SCE Intellectual Property Rights except as expressly authorized hereunder
and in strict compliance with the terms and conditions of this Agreement.  No
other right or license is to be implied by or inferred from any provision of
this Agreement or the conduct of the parties.  In particular, Publisher shall
not use the Executable Software, SCE Materials or SCE Confidential Information
(or any portion of any of the foregoing) in connection with the development of
any software for any emulator or other computer hardware or software system.  In
no event shall Publisher patent any tools, methods, or applications, 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 SCE Company’s express written permission.  Use of such tools
shall be strictly limited to the creation or testing of Licensed Products and
any other use, direct or indirect, of such tools is strictly prohibited. 
Moreover, Publisher shall bear all risks arising from incompatibility of its
Licensed Product and the System resulting from use of Publisher-created tools. 
The burden of proof under this Section shall be on Publisher, and the SCE
Company reserves the right to require Publisher to furnish evidence satisfactory
to the SCE Company that Publisher has complied with this Section.

 

5.6.2  Ownership and Protection of SCE Materials and SCE Intellectual Property
Rights.  All rights with respect to the SCE Materials and the System, including
all of the SCE Intellectual Property Rights, are the exclusive property of the
SCE Company or its Affiliates.  Publisher shall not do or cause to be done any
act or thing in any way impairing or tending to impair any of the SCE Company’s
rights, title or interests in or to the SCE Materials or the SCE Intellectual
Property Rights.  Publisher shall take all steps as the SCE Company may
reasonably require for the protection and maintenance of the SCE Intellectual
Property Rights, including executing licenses or obtaining registrations, and
all such steps shall be taken at SCEE’s cost provided

 

8

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Publisher has not done anything which has or which may impair the relevant SCE
Intellectual Property Rights.  Publisher shall not register any trademark in its
own name or in any other person’s name, or use, or obtain rights to use Internet
domain names or addresses, which are identical or similar to, or are likely to
be confused with any of the Licensed Trademarks or any other trademarks of the
SCE Company.  All goodwill associated with the Licensed Trademarks, including
any goodwill generated or arising by or through Publisher’s or its
sub-licensees’ activities under this Agreement, accrues to the benefit of and
belongs exclusively to the SCE Company.  Nothing contained in this Agreement
shall be deemed to grant Publisher the right to use the trademark “SONY” in any
manner or for any purpose.

 

5.6.3  Authentication.  The SCE Company reserves the right to require Publisher
to utilize an authentication or authorization system to be provided, licensed or
designated by the SCE Company to authenticate and verify all Licensed Products
and units of the System.  The SCE Company reserves the right to insert serial
numbers on all PlayStation 3 Format Discs for security or authentication
purposes.

 

5.7      Acknowledgment of Publisher’s Ownership Rights.  Separate and apart
from the SCE Materials and other rights licensed to Publisher by the SCE Company
hereunder, as between Publisher and the SCE Company, Publisher retains all
rights, title and interest in and to the Publisher Software, the Product
Proposals, Printed Materials and related Product Information, including
Publisher Intellectual Property Rights therein, as well as Publisher’s rights in
any source code and other underlying material such as artwork and music (but
specifically excluding the SCE Materials and any software provided directly or
indirectly by the SCE Company), any names used as titles for Licensed Products
and other trademarks used by Publisher and any other Publisher Intellectual
Property Rights and the SCE Company shall not have and shall not, pursuant to
this Agreement, acquire any rights to use any of the same other than as
expressly provided for under, and in accordance with the terms of, this
Agreement.  Nothing in this Agreement shall restrict the right of Publisher to
develop, distribute or transmit products incorporating the Publisher Software
and underlying material, which do not contain or were not developed through use
of the SCE Materials or the SCE Intellectual Property Rights, for any hardware
platform or service other than the System, or to use Printed Materials or
Advertising Materials approved by the SCE Company (excepting Printed Materials
or Advertising Materials that contain any Licensed Trademarks) as Publisher
determines for such other platforms.

 

5.8      Guidelines Requirement.  The licenses granted to Publisher are
expressly conditioned on Publisher’s compliance with all provisions of the SCE
Company’s Guidelines, as and when published or within a commercially reasonable
time following its receipt of a publication expressly referencing such
provisions, and any and all such provisions are incorporated herein by this
reference.  To the extent that the Guidelines change with respect to any
Licensed Product materials that Publisher submits to the SCE Company under
Section 6.1, Publisher shall only be required to implement any such revised
Guidelines in subsequent orders of corresponding Disc Product or subsequent
publications of corresponding Online Product.  Publisher shall not be required
to recall or destroy previously manufactured Disc Products, unless such Disc
Products do not comply with the original standards, requirements and conditions
set forth in the Guidelines or unless explicitly required to do so in writing by
the SCE Company.

 

6.              Quality Standards for Licensed Products.

 

6.1      Product Assessment, Format Quality Assurance and Printed and
Advertising Materials.  Publisher shall comply with the process and requirements
for assessment and format quality assurance of Licensed Products and Advertising
Materials, on a product-by-product basis as specified in the

 

9

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Guidelines.  The SCE Company will not approve Licensed Products that are outside
the PlayStation®3 format specifications in the Guidelines.

 

6.2      Rating Requirements.  No Licensed Product may be published, sold,
distributed, marketed, advertised or promoted unless each Licensed Product bears
a consumer advisory age rating, consisting of a rating code and product
descriptors, either as required by local law or as issued by, and following the
rating display requirements of, a consumer advisory ratings system designated by
the SCE Company.  Any and all costs and expenses incurred in connection with
obtaining such rating shall be borne solely by Publisher.  No Licensed Product,
Printed Materials or Advertising Materials may bear more than one consumer
advisory rating code.  Any Online Product that can be used with a Disc Product
must bear a rating that is the same as or lower than the rating issued to the
Disc Product, unless the SCE Company gives express written consent.

 

6.3      Compatibility of Licensed Products with Peripherals.  Publisher shall
be solely responsible for functionality and operational compatibility of its
Licensed Products with any third-party peripherals (e.g., controllers, memory
storage devices, etc.).  The SCE Company shall have no responsibility to test or
otherwise evaluate the compatibility of Publisher’s Licensed Products with any
third party peripherals.  The SCE Company shall not be held responsible for any
actual, incidental or consequential damages that may result from any use or
inability to use any third-party peripherals with any Licensed Products or the
System.  If the SCE Company elects, at its sole discretion, to test or otherwise
evaluate the compatibility of Publisher’s Licensed Products with any third party
peripheral device then, (i) any such testing or evaluation shall not obligate
the SCE Company to test or evaluate any other third-party peripherals; (ii) any
such testing or evaluation shall not shift to the SCE Company any responsibility
to ensure or assess the functionality or compatibility of any third-party
peripheral or require the SCE Company to report any third-party peripheral
incompatibilities; and (iii) Publisher shall provide the SCE Company, upon
request and at no additional cost or expense to the SCE Company, with a
reasonable number of samples of any such third-party peripheral products for
testing and review in a timely manner.  In the event that any Licensed Product
fails to perform to the SCE Company’s satisfaction with any third-party
peripheral that it is intended to support, the SCE Company shall have the right
to require that Publisher modify or remove such portions of the Executable
Software as are intended to support the affected third-party peripheral.

 

6.4      Publisher’s Additional Quality Assurance Obligations.  If at any time
or times subsequent to the approval of any part of a Licensed Product, the SCE
Company identifies any material defects (such materiality to be determined by
the SCE Company in its sole discretion) with respect to the Licensed Product, or
in the event that the SCE Company identifies any improper use of its Licensed
Trademarks or the SCE Materials, or any material defects or improper use are
brought to the attention of the SCE Company, Publisher shall, at no cost to the
SCE Company, promptly correct any such material defects, or improper use, to the
SCE Company’s commercially reasonable satisfaction, which may include, in the
SCE Company’s judgment, the recall and re-release of Units of the affected Disc
Product or publication of an update, upgrade or technical fix to an Online
Product.  In the event any Licensed 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 and remove
such Licensed Products from any affected channels of distribution; provided,
however, that if Publisher is not acting as the distributor or seller for the
Licensed Products, its obligation shall be to use its best efforts to arrange
removal of all affected Licensed Products from the relevant distribution
channels.  Publisher shall provide all end-user support for Licensed Products. 
Publisher and the SCE

 

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Group Company may enter into a separate agreement to have Publisher provide all
end-user support for Online Gameplay of Publisher’s Licensed Products that is
provided through the PlayStation®Network.  The SCE Company expressly disclaims
any obligations or liability to provide end-user support with respect to
Licensed Products. by the SCE Company or the Designated Manufacturing Facility,
of producing the reproducible masters of any and all Executable Software.

 

7.     Manufacture of Disc Products.

 

7.1      Manufacture of Units.  Upon approval of Executable Software and
associated Printed Materials pursuant to Section 6, and subject to Sections 7.4
— 7.7, the Designated Manufacturing Facility will, in accordance with the terms
and conditions set forth in this Section 7, and at Publisher’s request and sole
expense (a) manufacture PlayStation 3 Format Discs for Publisher; (b)
manufacture Publisher’s Packaging and Printed Materials; and (c) assemble the
PlayStation 3 Format Discs with the related Printed Materials and Packaging. 
Publisher shall comply with all Guidelines relating to the production of Units
of Disc Products.  The SCE Company reserves the right to insert or require
Publisher to make arrangements for the insertion of certain Printed Materials
relating to the System into each Unit.

 

7.2      Designated Manufacturing Facilities.  To insure compatibility of
PlayStation 3 Format Discs with the System, consistent quality of the Disc
Products and incorporation of anti-piracy security measures, the SCE Company
shall designate and license a Designated Manufacturing Facility or Facilities to
reproduce PlayStation 3 Format Discs.  Publisher shall purchase XXXX for
PlayStation 3 Format Discs, including demonstration discs, from such Designated
Manufacturing Facility.  Any Designated Manufacturing Facility shall be entitled
to enforce the terms of this Agreement.

 

7.3      Creation of Master PlayStation 3  Format Disc.  Using one of the fully
approved Master Discs provided by Publisher under the Guidelines, the SCE
Company or the Designated Manufacturing Facility shall create an encrypted,
reproducible master of the Executable Software (formatted as a PlayStation 3
Format Disc) from which all other copies of the Executable Software for the
corresponding Disc Product are to be replicated.  Publisher shall be responsible
for the costs, as determined.

 

7.4      Manufacture of Printed Materials by Designated Manufacturing Facility. 
If Publisher elects to order Printed Materials from a Designated Manufacturing
Facility, Publisher shall deliver all SCE Company-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 7.  In order to insure against loss or
damage to the copies of the Printed Materials furnished to the SCE Company,
Publisher shall retain duplicates of all Printed Materials, and neither the SCE
Company nor any Designated Manufacturing Facility shall be liable for any loss
of or damage to any Printed Materials.

 

7.5      Manufacture of Printed Materials by Alternate Source.  Subject to the
Guidelines, Publisher may elect to be responsible for manufacturing its own
Printed Materials (other than artwork which is to be reproduced or otherwise
displayed on any PlayStation 3 Format Discs, which Publisher will supply to the
Designated Manufacturing Facility for incorporation within the Disc Products),
at Publisher’s sole risk and expense.  The SCE Company shall have the right to
disapprove any Printed Materials that do not comply with the applicable
Guidelines.  If Publisher elects to supply its own Printed Materials, neither
the SCE Company nor any Designated Manufacturing Facility shall be responsible
for any delays arising from use of Publisher’s own Printed Materials.

 

7.6      Manufacture of Packaging by Designated Manufacturing Facility.  To

 

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ensure consistent quality of the Disc Products, the SCE Company may designate
and license a Designated Manufacturing Facility to reproduce all or part of the
proprietary Packaging for the Disc Products.  If so, then Publisher shall
purchase XXXX for such Packaging from a Designated Manufacturing Facility during
the Term.

 

7.7      Assembly Services.  Publisher may either procure assembly services from
a Designated Manufacturing Facility or, with the SCE Company’s prior written
consent, from an alternate source.  If Publisher elects to be responsible for
assembling the Disc Products, then the Designated Manufacturing Facility shall
ship the component parts of the Disc Product to a destination designated by
Publisher, at Publisher’s sole risk and expense.  The SCE Company shall have the
right to inspect any assembly facilities that Publisher proposes to use in order
to determine if the component parts of the Disc Products are being assembled in
accordance with the SCE Company’s quality standards.  The SCE Company may
require Publisher to recall any Units of any Disc Products that fail to comply
with the Guidelines.  If Publisher elects to use alternate assembly facilities,
neither the SCE Company nor any Designated Manufacturing Facility shall be
responsible for any delays or other production issues, including missing
component parts, arising from use of alternate assembly facilities.  Publisher
shall comply with all applicable labor laws and, in accordance with the
provisions of Section 16.8, shall not employ child labor, slave labor or forced
labor in connection with the assembly of the Licensed Products.

 

7.8      Orders and Delivery.

 

7.8.1  Orders.  Publisher shall issue Purchase Order(s) to a Designated
Manufacturing Facility in the form set forth and containing the information
required in the Guidelines, with a copy to the SCE Company.  No Purchase Orders
will be processed for any Disc Product unless that Disc Product is fully
compliant with the Guidelines.  All Purchase Orders shall be subject to approval
by the SCE Company not to be unreasonably withheld and to acceptance by the
Designated Manufacturing Facility pursuant to the Guidelines.  Purchase Orders
issued by Publisher to a Designated Manufacturing Facility for each Licensed
Product approved by the SCE Company shall be non-cancelable and are subject to
the order requirements of the Designated Manufacturing Facility.

 

7.8.2  General Terms.  Neither the SCE Company nor any 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.

 

7.9      Delivery of Disc Products.  The Designated Manufacturing Facility will
deliver Disc Products to Publisher at Publisher’s sole expense, except where
otherwise provided under this Agreement.  Publisher shall have no right to have
completed Units of Disc Products stored after manufacture.

 

7.10    Ownership of Original Master Discs.  Due to the proprietary and
confidential nature of the mastering and encryption process, neither the SCE
Company nor any Designated Manufacturing Facility shall under any circumstances
release any original Master Discs, reproducible masters created under section
7.3 or other in-process materials to Publisher.  All such materials shall be and
remain the sole property of the SCE Company or the Designated Manufacturing
Facility (as applicable).  Notwithstanding the foregoing, the Publisher
Intellectual Property Rights contained in the Publisher Software that is
contained in any such in-process materials is, as between the SCE Company and
Publisher, the sole and exclusive property of Publisher or its licensors.

 

8.     Marketing of Licensed Products.

 

8.1      Marketing Generally.  At no expense to the SCE Company, Publisher
shall, and shall direct its distributors to, diligently market, sell

 

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and distribute the Licensed Products, and shall use commercially reasonable
efforts to stimulate demand for such Licensed Products throughout the Territory
and to supply any resulting demand.  Publisher shall use reasonable efforts to
protect the Licensed Products from and against illegal reproduction or copying
by end users or by any other persons.

 

8.2      Samples.  Publisher shall provide sample Units of each Disc Product to
the SCE Company in the quantities and per the terms specified in the
Guidelines.  In the event that Publisher assembles any Disc Product using an
alternate source, Publisher shall be responsible for shipping such sample Units
to the SCE Company, at Publisher’s cost and expense, promptly following the
commercial release of such Disc Product.  Units shall not be shipped to the SCE
Company prior to the commercial release of such Disc Product.  The SCE Company
assumes no liability for release of samples prior to commercial release.  The
SCE Company shall not directly or indirectly resell any such sample Units of the
Disc Products without Publisher’s prior written consent.  The SCE Company may
distribute sample Units to its employees, provided that it uses its reasonable
efforts to ensure that such Units are not sold into the retail market.  In
addition, subject to availability, Publisher shall sell to the SCE Company
additional Units at cost.

 

8.3      Marketing Programs.  From time to time, the SCE Company may invite
Publisher to participate in promotional or advertising opportunities that may
feature one or more Licensed Products from one or more Licensed Publishers. 
Participation shall be voluntary and subject to terms to be determined at the
time of the opportunity.  In the event Publisher elects to participate, all
materials submitted by Publisher to the SCE Company shall be submitted subject
to the Guidelines and delivery of such materials to the SCE Company shall
constitute acceptance by Publisher of the terms of the offer.  Each Affiliate
shall display or otherwise use the Attribution Line on its multi-product
marketing materials (created pursuant to this section 8.3), unless otherwise
agreed in writing.

 

8.4      PlayStation Website.  Publisher shall provide the SCE Company with
Product Information for a web page for each of its Licensed Products for display
on the PlayStation promotional website, or other website(s) operated by the SCE
Company from time to time in connection with the promotion of the PlayStation
brand.  Specifications for Product Information for such web pages shall be as
provided in the Guidelines.  Publisher shall provide the SCE Company with such
Product Information for each Licensed Product upon submission of Printed
Materials to the SCE Company for approval pursuant to the Guidelines.  Publisher
shall also provide updates for any such web page in a timely manner as may be
required in the Guidelines.

 

8.5      Demonstration Disc Programs.  The SCE Company may, from time to time,
provide opportunities for Publisher to contribute Licensed Product content for
distribution as part of a demonstration disc published by any Affiliate, or
permit Publisher to publish its own demonstration disc pursuant to a third party
demonstration disc program.  The specifications with respect to the approval,
creation, manufacture, marketing, distribution and sale of any such demo disc
programs shall be set forth in the Guidelines.  The SCE Company reserves the
right to choose from products submitted from other Licensed Publishers and first
party products to determine the specific products that will be included in any
SCE Company demonstration discs, and Publisher’s Licensed Products will not be
guaranteed prominence or preferential treatment on any SCE demonstration disc. 
The SCE Company has no obligation to publish, advertise or promote any
demonstration disc.

 

8.6      Contests and Sweepstakes of Publisher.  Publisher may conduct contests,
sweepstakes, competitions and promotions, as permitted by law (collectively,
“Contest” or “Contests”), to promote Licensed Products.  The

 

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SCE Company shall permit Publisher to include Contest materials in Printed
Materials and Advertising Materials, subject to compliance with the provisions
of Sections 10.2 and 11.2, and subject to the Guidelines.

 

9.     Payments.

 

9.1      Payments for Licensed Products.  Publisher shall pay the SCE Company
either directly or through its designee, for Licensed Products, including
Licensed Products in any “Greatest Hits,” “Platinum” or any other program, and
demonstration discs, at the rates and in the manner specified in the Regional
Riders and the terms of this Section 9.  Publisher shall be required in all
cases to make payments to the SCE Company, in accordance with this Section 9 and
the Regional Rider, with respect to any and all of Publisher’s products that are
developed utilizing any SCE Materials or SCE Intellectual Property Rights or any
derivative works based on or otherwise derived from the same.  The burden of
proof under this Section shall be on Publisher.  The SCE Company reserves the
right to require Publisher to furnish evidence satisfactory to the SCE Company
that Publisher has complied with any or all of its obligations pursuant to this
Section.  Payment terms are subject to change in the SCE Company’s discretion
upon reasonable notice to Publisher.

 

9.2      Payment for Units of Disc Products.  Payments shall be made to the SCE
Company through its Designated Manufacturing Facility concurrent with the
placement of any Purchase Order for Units of any Disc Product in accordance with
the terms and conditions set forth in this Agreement unless otherwise agreed in
writing with the SCE Company.  Payment shall be made prior to manufacture unless
the SCE Company has agreed in writing to extend credit terms to Publisher under
Section 9.3.

 

9.3      Credit Terms.  The SCE Company is not required to extend any credit
terms to Publisher, but may do so in the SCE Company’s sole discretion.  Credit
terms and limits shall be subject to revocation or extension at the SCE
Company’s sole discretion.  If credit terms are extended to Publisher, Purchase
Orders will be invoiced upon shipment of Disc Products and each invoice will be
payable within 30 days of the date of the invoice.  Publisher shall be
additionally liable for all costs and expenses of collection, including without
limitation, reasonable fees for lawyers and court costs.

 

9.4      Charges and Deductions.  The amounts that Publisher must pay under this
Agreement are exclusive of all taxes, duties, charges or assessments which the
SCE Company or the Designated Manufacturing Facility may have to collect or pay
and for which Publisher is solely responsible.  No costs incurred in the
development, manufacture, marketing, sale or distribution of any Licensed
Products shall be deducted from any amounts payable under this Agreement. 
Similarly, there shall be no deduction from any amounts owed hereunder as a
result of any uncollectible accounts owed to Publisher, or for any credits,
discounts, allowances or returns which Publisher may credit or otherwise grant
to any third-party customer of any Licensed Products, or for any taxes, fees,
assessments or expenses of any kind which may be incurred by Publisher in
connection with its sale or distribution of any Licensed Products or arising
with respect to the payment of royalties.  Publisher may not assert any credit,
set-off or counterclaim to justify withholding payment under this Agreement. 
Publisher shall be solely responsible for and bear any costs relating to any
withholding taxes or other such assessments which may be imposed by any
governmental authority with respect to the payments to the SCE Company. 
Publisher shall provide the SCE Company with official tax receipts or other such
documentary evidence issued by the applicable tax authorities sufficient to
substantiate that any such taxes or assessments have in fact been timely paid. 
Deductions may only be made after issuance of an approved credit memo from the
SCE Company or a Designated Manufacturing Facility.

 

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9.5      General Terms.  Each shipment to Publisher shall constitute a separate
sale, whether said shipment constitutes the whole or partial fulfillment of any
Purchase Order.  Title to Units shall pass to Publisher only upon payment in
full of the amounts due under this Agreement for those Units.  The receipt and
deposit by the SCE Company of any moneys payable under this Agreement shall be
without prejudice to any rights or remedies the SCE Company has and shall not
restrict or prevent the SCE Company from challenging the basis for calculation
or payment accuracy.  Nothing in this Agreement shall excuse or be construed as
a waiver of Publisher’s obligation to timely provide any and all payments owed
to the SCE Company or any Designated Manufacturing Facility.

 

10.  Representations and Warranties.

 

10.1    Representations and Warranties of SCE Company.  The SCE Company
represents and warrants solely for the benefit of Publisher that (i) the SCE
Company has the right, power and authority to enter into this Agreement and to
fully perform its obligations hereunder; (ii) neither the SCE Company nor any
Affiliate shall make any representation or give any warranty to any person or
entity expressly or impliedly on Publisher’s behalf; and (iii) neither the SCE
Company’s policies and practices, nor those of any Designated Manufacturing
Facility, shall reflect adversely upon the name, reputation or goodwill of the
Publisher, where such policies or practices are directly relevant to the
performance by the SCE Company of this Agreement.

 

10.2    Representations and Warranties of Publisher.  Publisher represents and
warrants that:

 

(i)  There is no threatened or pending action, suit, claim or proceeding
alleging that the use or possession by Publisher or its affiliates of all or any
part of the Publisher Software, Product Proposals, Product Information, Printed
Materials, Advertising Materials, Packaging not provided by the Designated
Manufacturing Facility, or any underlying work or content embodied in any of the
foregoing, including any name, designation or trademark used in conjunction with
any of the Licensed Products, infringes or otherwise violates any intellectual
property right or other right or interest of any kind whatsoever anywhere in the
world of any third party, or otherwise contesting any right, title or interest
of Publisher in or to the Publisher Software, Product Proposals, Product
Information, Printed Materials, Advertising Materials, Packaging not provided by
the Designated Manufacturing Facility, or any underlying work or content
embodied in any of the foregoing, including any name, designation or trademark
used in conjunction with any of the Licensed Products;

 

(ii)  The Publisher Software, Product Proposals, Product Information, Printed
Materials, Advertising Materials, Packaging not provided by the Designated
Manufacturing Facility, and their contemplated disclosure or use under this
Agreement do not and shall not infringe any person’s rights including patents,
copyrights (including rights in a joint work), trademarks, trade dress, trade
secret, rights of publicity, privacy, performance, moral rights, literary rights
or any other right or interest anywhere in the world of any third party.
Publisher has obtained the consent of all holders of intellectual property
rights necessary for the SCE Company’s or its Affiliates’ use of any Publisher
Software, Product Proposals, Product Information, Printed Materials, Advertising
Materials and Packaging not provided by the Designated Manufacturing Facility
provided by Publisher, which may be reproduced, published, publicly displayed,
publicly performed, marketed, sold and otherwise distributed by the SCE Company
and any Affiliates in accordance with this Agreement.  Publisher has made all
payments required to any person having any legal rights arising from such
disclosure or use so that the SCE Company will not incur any obligation to pay
any royalty, residual, union, guild or other fees or expenses;

 

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(iii)  Publisher has the right, power and authority to enter into this
Agreement, to grant the SCE Company the rights granted hereunder and to fully
perform its obligations hereunder;

 

(iv)  The making of this Agreement by Publisher does not violate any separate
agreement, rights or obligations existing between Publisher and any other
person, and, throughout the Term, Publisher shall not make any separate
agreement with any third party that is inconsistent with any of the provisions
of this Agreement;

 

(v)  Publisher has not previously taken any action that could be interpreted as
having sold, assigned, leased, licensed or in any other way disposed of or
encumbered any of the rights granted to Publisher hereunder.  Publisher will not
sell, assign, lease, license or in any other way dispose of or encumber any of
such rights except as expressly consented to by the SCE Company in writing;

 

(vi)  Neither Publisher nor its affiliates shall make any representation or give
any warranty to any person or entity expressly or on the SCE Company’s behalf,
or to the effect that the Licensed Products are connected in any way with the
SCE Company other than that the Executable Software and Licensed Products have
been developed, marketed, sold and distributed under license from the SCE
Company;

 

(vii)  In the event that any Executable Software is delivered by Publisher to
any other Licensed Publishers or Licensed Developers in source code form,
Publisher will take all precautions consistent with the protection of valuable
trade secrets by companies in high technology industries to ensure that such
third parties protect and maintain the confidentiality of such source code;

 

(viii)  The Executable Software, excepting any SCE Materials, and any Product
Information shall be in a commercially acceptable form, free of significant
bugs, defects, time bombs or viruses or unauthorized content that is
inconsistent with the age rating applicable to the corresponding Licensed
Product, which could disrupt, delay, or destroy the Executable Software or
System, or render any of such items less than fully useful, and shall be fully
compatible with the System and all peripherals listed on the Printed Materials
as compatible with the Licensed Product, and Publisher shall notify the SCE
Company, within a reasonable period prior to publication, of any Licensed
Product content that could cause the SCE Company to suffer public disrepute,
contempt, scandal or ridicule, or which insults or offends the community or any
substantial organized group thereof or which could tend to adversely affect the
SCE Company’s name, reputation or goodwill associated with the System;

 

(ix)  Each of the Licensed Products shall be developed, marketed, sold and
distributed by or at the direction of Publisher in an ethical manner and in a
responsible manner with respect to the protection of children in the online
environment, and in full compliance with all applicable laws, including federal,
state, provincial, local and foreign laws, and any rules, regulations and
standards promulgated thereunder, including lottery laws and labor laws, and
will not contain content that violates applicable laws, including those relating
to privacy or any obscene or defamatory matter;

 

(x)  Publisher’s policies and practices with respect to the development,
marketing, sale, and distribution of the Licensed Products shall in no manner
reflect adversely upon the name, reputation or goodwill of the SCE Company or
any Affiliate;

 

(xi)  To the extent Publisher wishes to utilize a Licensed Developer to assist
in development of Licensed Products, Publisher has contracted, or will contract,
with a Licensed Developer for the technical expertise and resources necessary to
fulfill its obligations under this Agreement; and

 

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(xii)  Publisher shall make no false, misleading or inconsistent representations
or claims with respect to the System, any Licensed Products, or the SCE Company
or any Affiliate.

 

11.  Indemnities; Limited Liability.

 

11.1    Indemnification by SCE Company.  The SCE Company shall indemnify and
hold Publisher harmless from and against any and all third-party claims,
demands, losses, liabilities, damages, expenses and costs, including reasonable
fees for lawyers, expert witnesses and litigation costs, and costs incurred in
the settlement or avoidance of any such claim, in connection with or which
result from a breach of any of the SCE Company’s representations or warranties
set forth in Section 10.1 (collectively “SCE-Indemnified Claim(s)”); provided
that:  (i) Publisher shall give prompt written notice to the SCE Company of the
assertion of any SCE-Indemnified Claim; (ii) the SCE Company shall have the
right to select counsel and control the defense and settlement of any
SCE-Indemnified Claim and Publisher shall not agree to the settlement of any
SCE-Indemnified Claim without the SCE Company’s prior written consent; and (iii)
Publisher shall provide the SCE Company reasonable assistance and cooperation
concerning any SCE-Indemnified Claim, except that Publisher need not incur any
out-of-pocket costs in rendering such assistance and cooperation.  The SCE
Company 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 SCE-Indemnified Claims as shall be deemed appropriate by the SCE
Company.

 

11.2    Indemnification By Publisher.  Publisher shall indemnify and hold the
SCE Company harmless from and against any and all claims, demands, losses,
liabilities, damages, expenses and costs, including reasonable fees for lawyers,
expert witnesses and litigation costs, and costs incurred in the settlement or
avoidance of any such claim, in connection with or which result from (i) a
breach of any of the provisions of this Agreement; (ii) any claim of
infringement of a third party’s intellectual property rights or any consumer
claim, with respect to Publisher’s Licensed Products, including claims related
to Publisher’s support of unauthorized or unlicensed peripherals or software
that are not part of the PlayStation 3 format specifications as set forth in the
Guidelines; (iii) any claim related to any Licensed Product features or
capability related to cross-regional Online Gameplay; (iv) any claims of or in
connection with any personal or bodily injury (including death or disability) or
property damage arising out of, in whole or in part, the development, marketing,
advertising, sale, distribution or use of any of the Licensed Products (or
portions thereof) unless due directly and solely to the breach of the SCE
Company in performing any of the specific duties or providing any of the
specific services required of it hereunder; or (v) any federal, state or foreign
civil or criminal investigations or actions relating to the development,
marketing, advertising, sale or distribution of Licensed Products (all
subsections collectively, “Publisher-Indemnified Claim(s)”), provided that (a)
the SCE Company shall give prompt written notice to Publisher of the assertion
of any Publisher-Indemnified Claim; (b) Publisher shall have the right to select
counsel and control the defense and settlement of any Publisher-Indemnified
Claim, except that with respect to any Publisher-Indemnified Claims made by a
third party against the SCE Company, the SCE Company shall have the right to
select counsel for the SCE Company and reasonably control the defense and
settlement of the Publisher-Indemnified Claim against the SCE Company; and (c)
the SCE Company shall provide Publisher with reasonable assistance and
cooperation concerning any Publisher-Indemnified Claim, except that the SCE
Company need not incur any out-of-pocket costs in rendering such assistance and
cooperation.  Subject to the foregoing, Publisher 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 Publisher-Indemnified
Claims as shall be deemed appropriate by Publisher.

 

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11.3    LIMITATIONS OF LIABILITY.

 

11.3.1  SCE Limitation of Liability for Financial Losses.  In no event shall the
SCE Company or any Affiliates, or the officers, directors, employees, agents,
licensors or suppliers of any of such entities, be liable for loss of revenue,
loss of actual or prospective profits, loss of contracts, loss of anticipated
savings, loss of business opportunity, reputation or goodwill or loss of, damage
to or corruption of data (whether such loss or damages are direct, indirect,
special, incidental or consequential) arising out of, relating to, or in
connection with this Agreement or any collateral contract (including the breach
of this Agreement by the SCE Group Company), whether known, foreseen or
foreseeable and whether in contract, tort (including negligence), product
liability, under indemnity, or otherwise.

 

11.3.2  SCE Limitation of Liability for Other Consequential Losses.  In no event
shall the SCE Company, its Affiliates or the officers, directors, employees,
agents, licensors or suppliers of any of such entities, be liable for any
indirect, special, incidental or consequential loss or damage of any kind
arising out of or in connection with this Agreement or any collateral contract
(including the breach of this Agreement by the SCE Group Company), whether
known, foreseen or foreseeable and whether in contract, tort (including
negligence), product liability, under an indemnity or otherwise.

 

11.3.3  SCE Limitation of Liability for Representations.  Publisher shall have
no remedy with respect to any representation made to it upon which it relied in
entering into this Agreement and the SCE Company and its Affiliates and the
officers, directors, employees, agents, licensors or suppliers of any of such
entities shall have no liability to Publisher other than under the express terms
of this Agreement.  In this Section 11.3.3, “representation” means any
undertaking, promise, assurance, statement, representation, warranty or
understanding, whether in writing or otherwise, of any person (whether a party
to this Agreement or not), relating to the subject matter of this Agreement.

 

11.3.4  SCE Limitation of Liability for SCE Materials and Publisher’s
Materials.  Except as expressly set forth herein, neither the SCE Company, nor
its Affiliates, nor the officers, directors, employees, agents, licensors or
suppliers of any of such entities, shall bear any risk, or have any
responsibility or liability of any kind to Publisher or to any third parties
with respect to the quality, functionality, operation or performance of, or the
use or inability to use, all or any part of the SCE Materials, the System, the
Licensed Products or Units of Disc Products, or for any software errors or
“bugs” in Product Information included on SCE Company demonstration discs.

 

11.3.5  SCE Limitation of Financial Liability.  In no event shall the SCE
Company’s liability arising under, relating to, or in connection with this
Agreement, or any collateral contract, exceed the total amount paid by Publisher
under Section 9 within the 48 month period immediately prior to the date of the
first occurrence of the event or circumstances giving rise to the claimed
liability.

 

11.3.6  Publisher Limitation of Liability.  In no event shall Publisher, its
officers, directors, employees, agents, licensors or suppliers be liable to the
SCE Company for loss of revenue, loss of actual or prospective profits, loss of
contracts, loss of anticipated savings, loss of business opportunity, reputation
or goodwill or loss of, damage to or corruption of data (whether such loss or
damage is direct, indirect, special, incidental or consequential), arising out
of or in connection with this Agreement or any collateral contract (including
the breach of this Agreement by Publisher) provided that such limitations shall
not apply to damages resulting from Publisher’s breach of Sections 2, 3, 5,
11.2, or 13 of this Agreement, or to any amounts which Publisher may be required
to pay pursuant to Sections 11.2 or 16.10.

 

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11.3.7  Disclaimer of Warranty.  Except as expressly provided in Section 10.1,
neither the SCE Company, nor any of its officers, directors, employees, agents
or suppliers, make, nor does Publisher receive, any warranties (express, implied
or statutory) regarding all or part of the SCE Materials, the SCE Confidential
Information, the SCE Intellectual Property Rights, the System, Units
manufactured hereunder or Product Information included on demonstration discs. 
Without limiting the generality of the foregoing, the SCE Company disclaims any
warranties, conditions or other terms implied by any law (including as to
merchantability, satisfactory quality or fitness for a particular purpose and
warranties against infringement, and the equivalents thereof under the laws of
any jurisdiction) to the fullest extent permitted by applicable l aw.

 

11.3.8  Law Applicable to Liabilities.  Nothing in this Agreement shall exclude
or limit any liability of either party which may not be excluded or limited
under applicable l aw.

 

12.  Infringement of SCE Intellectual Property Rights By Third Parties.

 

In the event that Publisher discovers or otherwise becomes aware that any of the
SCE Intellectual Property Rights have been or are being infringed by any third
party, Publisher shall promptly notify the SCE Company.  The SCE Company shall
have the sole right, in its discretion, to institute and prosecute lawsuits
against third parties regarding infringement of SCE Intellectual Property
Rights.  Any lawsuit shall be prosecuted solely at the cost and expense of the
SCE Company and all sums recovered in any such lawsuits, whether by judgment,
settlement or otherwise, shall belong solely to the SCE Company.  Upon the SCE
Company’s request and cost, Publisher shall execute all papers, testify on all
matters and otherwise cooperate in every way necessary or desirable for the
prosecution of any such lawsuit.  The SCE Company shall reimburse Publisher for
the reasonable expenses incurred as a result of such cooperation, but unless
authorized by other provisions of this Agreement, not costs and expenses
attributable to any cross-claim, counterclaim or third party action.

 

13.  Confidentiality.

 

13.1    SCE Confidential Information.

 

13.1.1  Definition of SCE Confidential Information.  “SCE Confidential
Information” shall mean:

 

(i)  The SCE Materials, the Development Tools, the Guidelines, the Regional
Riders and this Agreement, including all exhibits and schedules attached to any
of the foregoing and all information related to these items;

 

(ii)  other information, documents and materials developed, owned, licensed or
under the control of the SCE Company or any Affiliate, including all processes,
data, hardware, software, inventions, trade secrets, ideas, creations,
improvements, designs, discoveries, developments, research and know-how,
including SCE Intellectual Property Rights relating to the SCE Materials and the
Development Tools; and

 

(iii)  information, documents and other materials regarding the SCE Company’s or
any Affiliate’s finances, business and business methods, marketing and technical
plans, and development and production plans; and

 

(iv)  third-party information and documents licensed to or under the control of
the SCE Company or any Affiliate.

 

The SCE Confidential Information consists of information in any medium, whether
oral, printed, in machine-readable form or otherwise, provided to Publisher
before or during the Term, including information subsequently reduced to
tangible or written form.  In addition, the existence of a relationship between
Publisher and the SCE Company shall be deemed to be the SCE Confidential
Information unless otherwise agreed to in writing by the parties or until

 

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publicly announced by the SCE Company or any Affiliate.

 

13.1.2  Term of Protection of the SCE Confidential Information.  The term for
the protection of the SCE Confidential Information shall commence on the
Effective Date and shall continue in full force and effect for as long as any of
the SCE Confidential Information continues to be maintained as confidential and
proprietary by the SCE Company or any Affiliate.

 

13.1.3  Preservation of SCE Confidential Information.  Publisher shall, with
respect to the SCE Confidential Information:

 

(i)  not disclose SCE Confidential Information to any person, other than those
employees, directors or officers of the Publisher or subcontractors expressly
approved under Section 3.2, whose duties justify a “need-to-know” and who have
executed a confidentiality agreement in which such employees, directors,
officers or subcontractors have agreed not to disclose and to protect and
maintain the confidentiality of all confidential information and materials
inclusive of those of third parties which may be disclosed to them or to which
they may have access during the course of their duties.  At the SCE Company’s
request, Publisher shall provide the SCE Company with a copy of such
confidentiality agreement between Publisher and its employees, directors,
officers, or subcontractors and shall also provide the SCE Company with a list
of employee, director, officer, and subcontractor signatories.  Publisher shall
not disclose any of the SCE Confidential Information to third parties, other
than expressly approved subcontractors under section 3.2, including to
consultants or agents without the SCE Company’s prior written consent.  Any
employees, directors, officers, subcontractors, authorized consultants and
agents who obtain access to or copies of the SCE Confidential Information shall
be advised by Publisher of the confidential or proprietary nature of the SCE
Confidential Information, and Publisher shall be responsible for any breach of
this Agreement by all such persons.

 

(ii)  hold all of the SCE Confidential Information in confidence and take all
measures necessary to preserve the confidentiality of the SCE Confidential
Information in order to avoid disclosure, publication, or dissemination, using
as high a degree of care and scrutiny, but at least reasonable care, as is
consistent with the protection of valuable trade secrets by companies in high
technology industries.

 

(iii)  ensure that all written materials relating to or containing the SCE
Confidential Information be maintained in a restricted access area and plainly
marked to indicate the proprietary and confidential nature thereof.

 

(iv)  at the SCE Company’s request, return promptly to the SCE Company any and
all portions of the SCE Confidential Information, together with all copies
thereof.

 

(v)  not use, copy, reproduce, modify, create derivative works from, sublicense,
distribute, or otherwise disseminate the SCE Confidential Information, or any
portion thereof, except as expressly authorized, nor shall Publisher remove any
proprietary legend set forth on or contained within any of the SCE Confidential
Information.

 

13.1.4  Exceptions.  The foregoing restrictions shall not apply to any portion
of the SCE Confidential Information which:

 

(i)  was previously known by Publisher without restriction on disclosure or use,
as proven by written documentation of Publisher;

 

(ii)  is or legitimately becomes part of the public domain through no fault of
Publisher or any of its employees, directors, officers, consultants or agents;

 

(iii)  is independently developed by Publisher’s employees or consultants who
have not had access to or otherwise used the SCE Confidential Information (or
any portion

 

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thereof), as proven by written documentation of Publisher;

 

(iv)  is required to be disclosed by court, administrative or governmental
order; provided that Publisher must use all reasonable efforts prior to issuance
of any such order to maintain the confidentiality of the SCE Confidential
Information, including asserting in any action or investigation the restrictions
set forth in this Agreement, and, immediately after receiving notice of any such
action, investigation, or threatened action or investigation, Publisher must
notify the SCE Company of such action,  investigation, or threatened action or
investigation, unless Publisher is ordered by a court not to so notify; or

 

(v)  is approved for release by written authorization of the SCE Company.

 

13.1.5  No Obligation to License.  Disclosure of the SCE Confidential
Information to Publisher shall not (i) constitute any option, grant or license
from the SCE Company to Publisher under any SCE Intellectual Property Rights now
or after owned or controlled by the SCE Company; (ii) result in any obligation
on the part of the SCE Company to approve any materials of Publisher; (iii) give
Publisher any right to, directly or indirectly, develop, manufacture, sell or
otherwise distribute any product derived from or which uses or was developed
with the use of the SCE Confidential Information (or any portion thereof), other
than as expressly set forth in this Agreement.

 

13.1.6  Publisher’s Obligations Upon Unauthorized Disclosure.  If at any time
Publisher becomes aware of any unauthorized duplication, access, use, possession
or knowledge of any of the SCE Confidential Information, it shall notify the SCE
Company as soon as reasonably practicable, and shall promptly act to recover any
such information and prevent further breach of the confidentiality obligations
herein.  Publisher shall provide any and all reasonable assistance to the SCE
Company to protect the SCE Company’s proprietary rights in any of the SCE
Confidential Information that Publisher or its employees, directors, officers,
or permitted subcontractors, consultants, or agents may have directly or
indirectly disclosed or made available, and that may be duplicated, accessed,
used, possessed or known in any manner or for any purpose not expressly
authorized by this Agreement, including enforcement of confidentiality
agreements, commencement and prosecution in good faith (alone or with the SCE
Company) of legal action, and reimbursement for all reasonable lawyers’ fees,
costs and expenses incurred by the SCE Company to protect the SCE Company’s
proprietary rights in the SCE Confidential Information.  Publisher shall take
all steps reasonably requested by the SCE Company to prevent the recurrence of
any unauthorized duplication, access, use, possession or knowledge of the SCE
Confidential Information.

 

13.2    Publisher’s Confidential Information.

 

13.2.1  Definition of Publisher’s Confidential Information.  “Publisher’s
Confidential Information” shall mean:

 

(i)  any Publisher Software provided to the SCE Company pursuant to this
Agreement and all documentation and information relating thereto, including
Product Proposals, Printed Materials and Advertising Materials (other than
documentation and information intended for release to and use by end users, the
general public or the trade);

 

(ii)  other documents and materials developed, owned, licensed or under the
control of Publisher, including all processes, data, hardware, software,
inventions, trade secrets, ideas, creations, improvements, designs, discoveries,
developments, research and know-how; and

 

(iii)  information and documents regarding Publisher’s or any member of
Publisher’s Group’s finances, business, marketing and

 

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technical plans, business methods and production plans.

 

Publisher’s Confidential Information may consist of information in any medium,
whether oral, printed, in machine-readable form or otherwise, provided to the
SCE Company before or during the Term, including information subsequently
reduced to tangible or written form.

 

13.2.2  Term of Protection of Publisher’s Confidential Information.  The term
for the protection of Publisher’s Confidential Information shall commence on the
Effective Date and shall continue in full force and effect for as long as any of
Publisher’s Confidential Information continues to be maintained as confidential
and proprietary by Publisher.

 

13.2.3  Preservation of Confidential Information of Publisher.  The SCE Company
shall, with respect to Publisher’s Confidential Information:

 

(i)  hold all Publisher’s Confidential Information in confidence and take all
reasonable steps to preserve the confidentiality of Publisher’s Confidential
Information, and to prevent it from falling into the public domain or into the
possession of persons other than those persons to whom disclosure is authorized
hereunder.

 

(ii)  not disclose Publisher’s Confidential Information to any person other than
the SCE Company’s or a Designated Manufacturing Facility’s employees, directors,
agents, consultants and subcontractors who need to know or have access to
Publisher’s Confidential Information for the purposes of this Agreement, and
only to the extent necessary for such purposes.

 

(iii)  ensure that all written materials relating to or containing Publisher’s
Confidential Information be maintained in a secure area and plainly marked to
indicate the proprietary and confidential nature thereof.

 

(iv)  at Publisher’s request, return promptly to Publisher any and all portions
of Publisher’s Confidential Information, together with all copies thereof.

 

(v)  not use Publisher’s Confidential Information, or any portion thereof,
except as provided herein, nor shall the SCE Company remove any proprietary
legend set forth on or contained within any of Publisher’s Confidential
Information.

 

13.2.4  Exceptions.  The foregoing restrictions shall not apply to any portion
of Publisher’s Confidential Information which:

 

(i)  was previously known by the SCE Company without restriction on disclosure
or use, as proven by written documentation of the SCE Company;

 

(ii)  comes into the possession of the SCE Company from a third party which is
not under any obligation to maintain the confidentiality of such information;

 

(iii)  is or legitimately becomes part of information in the public domain
through no fault of the SCE Company, or any of its employees, directors, agents,
consultants or subcontractors;

 

(iv)  is independently developed by the SCE Company’s employees, consultants or
subcontractors who have not had access to or otherwise used Publisher’s
Confidential Information (or any portion thereof), as proven by written
documentation of the SCE Company;

 

(v)  is required to be disclosed by court, administrative, or governmental
order; provided that the SCE Company attempts, prior to the issuance of any such
order, to maintain the confidentiality of Publisher’s Confidential Information,
including asserting in any action or investigation the restrictions set forth in
this Agreement, and immediately after receiving

 

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notice of any such action, investigation, or threatened action or investigation,
notifies Publisher of such action, investigation, or threatened action or
investigation, unless the SCE Company is ordered by a court not to so notify; or

 

(vi)  is approved for release by written authorization of Publisher.

 

13.2.5  SCE Company’s Obligations Upon Unauthorized Disclosure.  If at any time
the SCE Company becomes aware of any unauthorized duplication, access, use,
possession or knowledge of Publisher’s Confidential Information, it shall notify
Publisher as soon as is reasonably practicable.  The SCE Company shall provide
any and all reasonable assistance to Publisher to protect Publisher’s
proprietary rights in any of Publisher’s Confidential Information that it or its
employees or permitted subcontractors may have directly or indirectly disclosed
or made available and that may be duplicated, accessed, used, possessed or known
in a manner or for a purpose not expressly authorized by this Agreement,
including enforcement of confidentiality agreements, commencement and
prosecution in good faith (alone or with Publisher) of legal action, and
reimbursement for all reasonable lawyers’ fees, costs and expenses incurred by
Publisher to protect Publisher’s proprietary rights in Publisher’s Confidential
Information.  The SCE Company shall take all reasonable steps requested by
Publisher to prevent the recurrence of any unauthorized duplication, access,
use, possession or knowledge of Publisher’s Confidential Information.

 

13.3    Confidentiality of Agreement.  While the terms of this Agreement and the
Regional Rider shall be treated as SCE Confidential Information, Publisher may
disclose their terms and conditions:

 

(i)  to legal counsel;

 

(ii)  in confidence, to accountants, banks and financing sources and their
advisors;

 

(iii)  in confidence, in connection with the enforcement of this Agreement or
rights arising under or relating to this Agreement; and

 

(iv)  if required, in the opinion of its counsel, to file publicly or otherwise
disclose the terms of this Agreement under applicable securities or other laws,
Publisher shall promptly notify the SCE Company of such obligation so that the
SCE Company has a reasonable opportunity to contest or limit the scope of such
required disclosure, and Publisher shall request, and shall use best efforts to
obtain, confidential treatment for such sections of this Agreement as the SCE
Company may designate.

 

14.  Term Renewal and Termination.

 

14.1    Term Renewal.  The Term shall be automatically extended for additional
one-year terms, unless either party provides the other with written notice of
its election not to extend on or before January 31 of the year in which the Term
would renew.  Notwithstanding the foregoing, the term for the protection of SCE
Confidential Information and Publisher’s Confidential Information shall be as
set forth in Sections 13.1.2 and 13.2.2 respectively.

 

14.2    Termination by SCE Company.  The SCE Company shall have the right to
terminate the Agreement immediately, on written notice to Publisher, upon the
occurrence of any of the following:

 

(i)  If Publisher is in material breach of any of its obligations under the
Agreement or under any other agreement entered into between the SCE Company or
any Affiliate, on the one hand, and Publisher on the other hand;

 

(ii)  A statement of intent by Publisher to no longer exercise any of the rights
granted by the SCE Company to Publisher hereunder or Publisher failing to submit
materials under section 6.1 or failing to issue any Purchase Orders during any
period of twelve consecutive calendar months;

 

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(iii)  If Publisher (a) is unable to pay its debts when due; (b) makes an
assignment for the benefit of any of its creditors; (c) files or has filed
against it a petition, or an order of bankruptcy or insolvency is made, under
the bankruptcy or insolvency laws of any jurisdiction (and such petition is not
discharged within 60 days) or becomes or is adjudicated bankrupt or insolvent;
(d) is the subject of an order for, or applies for or notices its intent to
apply for, the appointment of an administrator, receiver, administrative
receiver, manager, liquidator, trustee or similar officer to be appointed over
any of its business or property; (e) ceases to do business or enters into
liquidation; or (f) takes or suffers any similar or analogous action in any
jurisdiction as a consequence of debt;

 

(iv)  If a controlling interest in Publisher or in an entity which directly or
indirectly has a controlling interest in Publisher is transferred to a party
that (a) is in breach of any agreement with the SCE Company or any Affiliate;
(b) directly or indirectly holds or acquires a controlling interest in a third
party which designs, develops or markets any of the core components for an
interactive device or product which is directly or indirectly competitive with
the System, or itself develops any product that is directly or indirectly
competitive with the System; or (c) is in litigation or in an adversarial
administrative proceeding with the SCE Company or any Affiliate concerning the
SCE Confidential Information or any SCE Intellectual Property Rights, including
challenging validity of any SCE Intellectual Property Rights;

 

(v)  If Publisher or any entity that directly or indirectly has a controlling
interest in Publisher (a) enters into a business relationship with a third party
related to the design or development of any core components for an interactive
device or product which is directly or indirectly competitive with the System;
or (b) acquires an interest in or otherwise forms a strategic business
relationship with any third party which has developed or owns or acquires
intellectual property rights in any such device or product;

 

(vi)  If Publisher or any of its affiliates initiates any legal or
administrative action against the SCE Company or any Affiliate or challenges the
validity of any SCE Intellectual Property Rights;

 

(vii)  If Publisher fails to pay any sums owed to the SCE Company on the date
due and such default is not fully corrected or cured within ten (10) business
days of the date on which such payment was originally due; or

 

(viii)  If Publisher or any of its officers or employees engage in “hacking” of
any software for any PlayStation format or in activities which facilitate the
same by any third party.

 

As used hereinabove, “controlling interest” means, with respect to any form of
entity, sufficient power to control the decisions of such entity.  Publisher
shall immediately notify the SCE Company in writing in the event that any of the
events or circumstances specified in this Section 14.2 occur.  In the event of
termination under 14.2(viii), the SCE Company shall have the right to terminate
any other agreements entered into between the SCE Company and Publisher.

 

14.3    Product-by-Product Termination.  In addition to the events of
termination described in Section 14.2, the SCE Company, at its option, shall be
entitled to terminate, with respect to a particular Licensed Product, the
licenses and related rights herein granted to Publisher immediately on written
notice to Publisher, in the event that (a) Publisher fails to notify the SCE
Company promptly in writing of any material change to any materials previously
approved by the SCE Company in accordance with Sections 6 and the relevant
Guidelines, and such breach is not corrected or cured within 30 days after
receipt of written notice of such breach; (b) Publisher uses a third party that
fails to comply with the requirements of Section 3.2 in connection with the
development of any Licensed Product; (c) any third party with whom Publisher has
contracted for the development of Licensed Products breaches any of its material

 

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obligations to the SCE Company pursuant to such third party’s agreement with the
SCE Company with respect to any such Licensed Product; (d) Publisher cancels a
Licensed Product or fails to provide the SCE Company, in accordance with the
provisions of Section 6 and the relevant Guidelines, with the final version of
the Executable Software for any Licensed Product within three months of the
scheduled release date (as referenced in the Product Proposal or as otherwise
mutually agreed by the parties in writing), fails to provide work in progress to
the SCE Company in strict compliance with the review process set forth in the
Guidelines, fails to provide fully tested final Executable Software in strict
conformance with the Guidelines; or (e) Publisher otherwise fails materially to
conform to the Guidelines with respect to any particular Licensed Product.

 

14.4    Options in Lieu of Termination.  As alternatives to terminating the
Agreement or all licensed rights with respect to a particular Licensed Product
as set forth in Sections 14.2 and 14.3, the SCE Company may, at its option and
upon written notice to Publisher, suspend this Agreement, entirely or with
respect to a particular Licensed Product or program, for a set period of time
which shall be specified in writing to Publisher upon the occurrence of any
breach of this Agreement.  Election of suspension shall not constitute a waiver
of or compromise with respect to any of the SCE Company’s rights under this
Agreement and the SCE Company may elect to terminate this Agreement with respect
to any breach.

 

14.5    No Refunds.  In the event that this Agreement expires or is terminated
under any of Sections 14.2 through 14.4, no portion of any payments of any kind
whatsoever previously provided hereunder shall be owed or be repayable or
refunded to Publisher.

 

15.  Effect of Expiration or Termination.

 

15.1    Inventory Statement.  Within 30 days of the date of expiration or the
effective date of termination with respect to any or all Licensed Products or
this Agreement, Publisher shall provide the SCE Company with an itemized
statement, certified to be accurate by an officer of Publisher, specifying the
number of unsold Units of the Licensed Products as to which such termination
applies, on a title-by-title basis, which remain in its inventory or under its
control at the time of expiration or the effective date of termination.  The SCE
Company shall be entitled to conduct at its expense a physical inspection of
Publisher’s inventory and work in process upon reasonable written notice during
normal business hours in order to ascertain or verify such inventory and
inventory statement.

 

15.2    Reversion of Rights.  Upon expiration or termination and subject to
Section 15.3, the licenses and related rights herein granted to Publisher shall
immediately revert to the SCE Company, and Publisher shall cease from any
further use of the SCE Confidential Information, Licensed Trademarks and the SCE
Materials and any SCE Intellectual Property Rights therein, and, subject to the
provisions of Section 15.3, Publisher shall have no further right to continue
the development, publication, manufacture, marketing, advertising, sale or other
distribution of any Licensed Products, or to continue to use any Licensed
Trademarks; provided, however, that for a period of one year after the effective
date of termination, and subject to all the terms of Section 13, and provided
this Agreement is not terminated due to any breach or default by Publisher,
Publisher may retain such portions of the SCE Materials and the SCE Confidential
Information as the SCE Company in its sole discretion agrees are required to
support end users who possess Licensed Products but must return all these
materials at the end of such one year period.  Upon expiration or termination,
the licenses and related rights herein granted to the SCE Company by Publisher
shall immediately revert to Publisher, and the SCE Company shall cease from any
further use of Product Information and any Publisher Intellectual Property
Rights therein; provided that the SCE Company may continue the manufacture,
marketing, advertising, sale and other such distribution of

 

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any SCE Company demonstration discs containing Publisher’s Product Information
which Publisher had previously approved.

 

15.3    Disposal of Unsold Units Upon Termination.  In the event of termination
of this Agreement under sections 14.2(ii), (iv), or (v), Publisher may sell off
existing inventories of Units of the Disc Products, on a non-exclusive basis,
and strictly in accordance with this Agreement, for a period of 90 days from the
date of expiration or effective date of termination of this Agreement, and
provided such inventories have not been manufactured solely or principally for
sale during such period.  Subsequent to the expiration of such 90 day period, or
in the event this Agreement is terminated under Sections 14.2(i), (iii), (vi),
(vii), or (viii), any and all Units of the Disc Products remaining in
Publisher’s inventory or otherwise under its control shall be destroyed by
Publisher within five (5) business days of such expiration or termination date. 
Within five (5) business days after such destruction, Publisher shall provide
the SCE Company with an itemized statement, certified to be accurate by an
officer of Publisher, indicating the number of Units of the Licensed Products
which have been destroyed (on a title-by-title basis), the location and date of
such destruction, and the disposition of the remains of such destroyed
materials.

 

15.4    Disposal of Unsold Units Upon Non-Renewal.  In the event that the Term
expires and this Agreement is not renewed, Publisher may continue to publish
those Licensed Products containing Executable Software whose development was
completed before or during the Term, and to use the Licensed Trademarks
strictly, only and directly in connection with such publication, until the Term
expires or, if later, until the second anniversary of the 31 January next
following such completion.  Upon expiration of the Term or, the extended period
for publishing Licensed Products, Publisher may sell off existing inventories of
such Licensed Products on a non-exclusive basis for a period of 180 days from
the applicable expiration date; provided that such inventory is not manufactured
solely or principally for sale within such sell-off period.

 

15.5    Return of the SCE Materials and the SCE Confidential Information.  Upon
the expiration or earlier termination of this Agreement or following either the
180 day period or the 90 day period referenced in Sections 15.4 and 15.3 and
subject to Section 15.2, Publisher shall immediately deliver to the SCE Company,
or if and to the extent requested by the SCE Company, destroy, all SCE Materials
and any and all copies thereof, and Publisher and the SCE Company shall, upon
the request of the other party, immediately deliver to the other party, or to
the extent requested by such party destroy, all Confidential Information of the
other party, including any and all copies thereof, which the other party
previously furnished to it in furtherance of this Agreement.  Within five (5)
working days after any such destruction, Publisher or the SCE Company, as
appropriate, shall provide the other party with a certificate of destruction and
an itemized statement, each certified to be accurate by an officer of Publisher,
indicating the number of copies or units of the SCE Materials or SCE
Confidential Information which have been destroyed, the location and date of
such destruction and the disposition of the remains of such destroyed
materials.  In the event that Publisher fails to return or certify the
destruction of the SCE Materials or SCE Confidential Information and the SCE
Company must resort to legal means (including any use of lawyers) to recover the
SCE Materials or SCE Confidential Information or the value thereof, all costs,
including the SCE Company’s reasonable lawyers’ fees, shall be borne by
Publisher, and the SCE Company may, in addition to the SCE Company’s other
remedies, withhold such amounts from any payment otherwise due from the SCE
Company to Publisher under any agreement between the SCE Company and Publisher.

 

15.6    Extension of this Agreement;  Termination Without Prejudice.  The SCE
Company shall be under no obligation to extend

 

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this Agreement notwithstanding any actions taken by either of the parties prior
to the expiration of this Agreement.  Upon the expiration of this Agreement,
neither party shall be liable to the other for any damages (whether direct,
indirect, consequential or incidental, and including 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.  The expiration or
termination of this Agreement shall be without prejudice to any rights or
remedies which one party may otherwise have against the other party, and shall
not excuse either party from liability with respect to any events occurring
prior to expiration or the effective date of termination.

 

16.  Miscellaneous Provisions.

 

16.1    Notices.  All notices or other communications required or desired to be
sent to either of the parties shall be in writing and shall be sent by
registered or certified mail, postage prepaid, or sent by recognized
international courier service, or facsimile, with charges prepaid.  The address
for all notices or other communications required to be sent to the SCE Company
or Publisher, respectively, shall be the mailing address stated in the preamble
hereof, or such other address as may be provided by written notice from one
party to the other on at least ten (10) days’ prior written notice.  Any such
notice shall be effective upon the date of actual receipt, as confirmed by the
receiving party.

 

16.2    Audit Provisions.  Publisher shall keep full, complete, and accurate
books of accounts and records covering all transactions relating to this
Agreement.  Publisher shall preserve such books of accounts, records, documents,
and materials for a period of 24 months after the expiration or earlier
termination of this Agreement.  Acceptance by the SCE Company of any accounting
statement, purchase order, or payment hereunder will not preclude the SCE
Company from challenging or questioning the accuracy thereof at a later time. 
In the event that the SCE Company reasonably believes that the pricing
information provided by Publisher with respect to any Licensed Product is not
accurate, the SCE Company shall be entitled to request additional documentation
from Publisher to support the pricing information provided for such Licensed
Product.  In addition, during the Term and for a period of two (2) years
thereafter and upon the giving of reasonable prior written notice to Publisher,
at the SCE Company’s expense, representatives of the SCE Company shall be given
access to, and the right to inspect, audit, and make copies and summaries of and
take extracts from, such portions of all books and records of Publisher, and
Publisher’s affiliates and branch offices, as pertain to the Licensed Products
and any payments due or credits received hereunder.  Any such audit shall take
place during normal business hours and shall, at the SCE Company’s sole
election, be conducted either by an independent certified accountant or by an
appropriately professionally qualified SCE Company employee.  In the event that
such inspection reveals any under-reporting of any payment due to the SCE
Company, Publisher shall immediately pay the SCE Company such amount.  In the
event that any audit conducted by the SCE Company reveals that Publisher has
under-reported any payment due to the SCE Company hereunder by XXXX or more for
the relevant audit period, then in addition to the payment of the appropriate
amount due to the SCE Company, Publisher shall reimburse the SCE Company for all
reasonable audit costs for that audit and any and all collection costs to
recover any unpaid amounts.

 

16.3    Force Majeure.  Neither the SCE Company 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 of its obligations under this
Agreement results from any event or circumstance beyond its reasonable control,
including any natural disaster, fire, flood, earthquake or other Act of God;
shortage of equipment, materials, supplies or transportation facilities; strike
or other industrial dispute; war

 

27

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or rebellion; shutdown or delay in power, telephone or other essential service
due to the failure of computer or communications equipment or otherwise;
provided, however, that the party interfered with gives the other party written
notice thereof promptly, and, in any event, within fifteen (15) business days of
discovery of any such Force Majeure condition.  If notice of the existence of
any Force Majeure condition is provided within such period, the time for
performance or cure shall be extended for a period equal to the duration of the
Force Majeure event or circumstance described in such notice, except that any
such cause shall not excuse the payment of any sums owed to the SCE Company
prior to, during or after the occurrence of any such Force Majeure condition. 
In the event that the Force Majeure condition continues for more than 60 days,
the SCE Company may terminate this Agreement for cause by providing written
notice to Publisher to such effect.

 

16.4    No Agency, Partnership or Joint Venture.  The relationship between the
SCE Company and Publisher, respectively, is that of licensor and licensee.  Both
parties are independent contractors and neither party is the legal
representative, agent, joint venturer, partner or employee of the other party
for any purpose whatsoever.  Neither party has any right or authority to assume
or create any obligations of any kind or to make any representation or warranty
on behalf of the other party, whether express or implied, or to bind the other
party in any respect whatsoever.

 

16.5    Assignment.  The SCE Company has entered into this Agreement based upon
the particular reputation, capabilities and experience of Publisher and its
officers, directors and employees.  Except as provided in this Agreement,
Publisher may not assign, sublicense, subcontract, encumber or otherwise
transfer this Agreement or 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 the SCE Company shall first be obtained.  Any
attempted or purported assignment, delegation or other such transfer, directly
or indirectly, without the required consent of the SCE Company shall be void and
a material breach of this Agreement.  Subject to the foregoing, this Agreement
shall inure to the benefit of the parties and their respective successors and
permitted assigns (other than in connection with any of the events referenced in
Section 14.2(iv).) The SCE Company shall have the right to assign any and all of
its rights and obligations hereunder to any Affiliate(s) or to any company in
the Sony family group of companies.

 

16.6    Non-solicitation.  Neither Publisher nor any of its affilates, by
itself, its officers, employees or agents, or indirectly, shall during the Term,
induce or seek to induce, on an individually targeted basis, the employment or
the engagement of the services of, any employee of the SCE Company or any of its
Affiliates, whose services are (a) specifically engaged in product development
or directly related functions or (b) otherwise reasonably deemed by his or her
employer to be of material importance to the protection of its legitimate
business interests, and (c) with whom Publisher or any of its affiliates shall
have had contact or dealings during the Term.  The foregoing provisions shall
continue to apply for a period of 12 months after this Agreement expires or is
terminated.

 

16.7    Compliance with Applicable Laws.  The parties shall at all times comply
with all applicable laws and regulations and all conventions and treaties to
which their countries are a party or relating to or in any way affecting this
Agreement and the performance by the parties of this Agreement, including the US
Children’s Online Privacy Protection Act and all other laws and regulations
relating to the gathering, handling and dissemination of all data from or
concerning end users of Online Products.  Each party, at its own expense, shall
negotiate and obtain any approval, license or permit required in the performance
of its obligations, and shall declare, record or take such steps to render this
Agreement binding, including the recording of this Agreement with

 

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any appropriate governmental authorities (if required).

 

16.8    Legal Costs and Expenses.  In the event it is necessary for either party
to retain the services of a lawyer to enforce the provisions of this Agreement
or to file or defend any action arising out of this Agreement, then the
prevailing party in any such action shall be entitled, in addition to any other
rights and remedies available to it at law or in equity, to recover from the
other party its reasonable fees for lawyers and expert witnesses, plus such
court costs and expenses as may be fixed by any court of competent
jurisdiction.  The term “prevailing party” for the purposes of this Section
shall include a defendant who has by motion, judgment, verdict or dismissal by
the court, successfully defended against any claim that has been asserted
against it.

 

16.9    Remedies.  Unless expressly set forth to the contrary, either party’s
election of any remedies provided for in this Agreement shall not be exclusive
of any other remedies at law or equity, and all such remedies shall be deemed to
be cumulative.  Any breach of Sections 2, 3, 5, 6, 7.1 — 7.7, 13 or 15 of this
Agreement would cause significant and irreparable harm to the SCE Company, the
extent of which would be difficult to ascertain and for which damages might not
be an adequate remedy.  Accordingly, in addition to any other remedies,
including damages to which the SCE Company may be entitled, in the event of a
breach or threatened breach by Publisher, or any of its directors, officers,
employees, agents or permitted consultants or subcontractors, of any such
Section or Sections of this Agreement, the SCE Company shall be entitled to the
immediate issuance without bond or other security, of ex parte equitable relief,
including injunctive relief, or, if a bond is required under applicable l aw, on
the posting of a bond in an amount not to exceed USD XXXX, enjoining any breach
or threatened breach of any or all of such provisions.  Such remedy shall be in
addition to and not in limitation of any injunctive relief or other remedies to
which the SCE Company may be entitled under this Agreement or otherwise at law
or in equity.

 

16.10  Severability.  In the event that any provision of this Agreement or
portion thereof is determined by a court of competent jurisdiction to be invalid
or otherwise unenforceable, such provision or portion 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, while the remainder of this Agreement shall continue in full force
and remain in effect according to its stated terms and conditions.

 

16.11  Sections Surviving Expiration or Termination.  The following Sections
shall survive the expiration or earlier termination of this Agreement for any
reason:  5, 6.2, 6.3, 6.4, 7.10, 9, 10, 11, 13, 14.5, 15 and 16 and any terms in
any Regional Rider that are expressly designated as surviving termination.

 

16.12  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 such waiver is
sought to be enforced.  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 respecting any future event or circumstance.

 

16.13  Modification and Amendment.  The SCE Company reserves the right, at any
time upon reasonable notice to Publisher, to amend the relevant provisions of
this Agreement or the Guidelines, to take account of or in response to any
decision, order, or objection of any court or governmental or other competition
authority of competent jurisdiction, or any statutory or similar measures that
give effect to any such decision (from which this Agreement and the Guidelines
are not exempt) or to reflect any

 

29

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undertaking by the SCE Company to any such authority.  Any such amendment shall
be of prospective application only and shall not be applied to any Licensed
Products submitted to the SCE Company pursuant to Section 6 prior to the date of
the SCE Company’s notice of amendment.  In the event that Publisher is unwilling
to accept any such amendment, then Publisher shall have the right to terminate
this Agreement by providing written notice to the SCE Company no more than 90
days following the date of the SCE Company’s notice of amendment.  The
provisions of Section 15.3 shall come into effect upon any such termination by
Publisher.  Subject to the remainder of this Section 16.13 and except as
otherwise provided in this Agreement, no modification or amendment of any
provision of this Agreement shall be effective unless in writing and signed by
both of the parties.

 

16.14  Interpretation.  The section headings used in this Agreement are intended
primarily for reference and shall not by themselves determine the construction
or interpretation of this Agreement or any portion hereof.  Any reference to
section numbers are to the sections of this Agreement.  Any reference to persons
includes natural persons as well as organizations, including firms,
partnerships, companies and corporations.  Any phrase introduced by the terms
“including,” “include,” “in particular,” or any similar expression shall be
construed as illustrative and shall not limit the category preceding those
terms.

 

16.15  Integration.  This Agreement, together with the Guidelines, constitutes
the entire agreement between the SCE Company and Publisher and supersedes all
prior or contemporaneous agreements, proposals, representations, understandings
and communications between the SCE Company and Publisher, whether oral or
written, with respect to the subject matter hereof, including any PlayStation 3
Confidentiality and Nondisclosure Agreement between the SCE Company and
Publisher.  Publisher is not relying upon any statement, representation,
warranty or understanding, whether negligently or innocently made, of any person
other than as expressly set out in this Agreement.

 

16.16  Counterparts.  This Agreement may be executed in counterparts, each of
which shall be deemed an original, and together shall constitute one and the
same instrument.

 

16.17  Construction.  This Agreement shall be fairly interpreted in accordance
with its terms and without any strict construction in favor of or against either
of the parties.

 

THIS AGREEMENT HAS BEEN ENTERED INTO ON THE DATE STATED AT THE BEGINNING OF IT.

 

SONY COMPUTER ENTERTAINMENT EUROPE LIMITED

 

TAKE TWO INTERNATIONAL S.A.

 

 

 

By:

/s/Jim Ryan

 

By:

/s/Sebastian Belcher

 

 

 

Print Name:

Jim Ryan

 

Print Name:

Sebastian Belcher

 

 

 

Title:

EVP & Co-COO

 

Title:

Director

 

 

 

 

 

Date:

May 18, 2010

 

Date:

May 13, 2010

 

NOT AN AGREEMENT UNTIL
EXECUTED BY BOTH PARTIES

 

30

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GLOBAL PLAYSTATION®3 FORMAT

 

LICENSED PUBLISHER AGREEMENT

 

Sony Computer Entertainment Europe Limited
Regional Rider

 

1.         Incorporation

 

This Rider’s terms and conditions are incorporated into and read in conjunction
with the terms and conditions of the Global PlayStation 3 Format Licensed
Publisher’s Agreement signed by Publisher (“Global Terms”).

 

2.         Definitions and Interpretation

 

All capitalized words and phrases referenced in this Rider that are not
expressly defined herein shall have the meanings set forth in the Definitions
section of the Global Terms.

 

3.         Territory

 

3.1       The Territory is expressly limited to the countries and territories
specified in the Schedule to this Rider.

 

3.2       SCEE shall be entitled to modify and amend the Territory from time to
time during the Term by providing written notice of any such changes to
Publisher.  In the event a country is excluded from the Territory, SCEE shall
deliver to Publisher a written notice stating the number of days within which
Publisher must cease the marketing, sale or distribution of Licensed Products
there (or authorizing others to do so) and any further use of the SCE Materials
or any SCE Intellectual Property Rights.

 

4.         License

 

4.1       The rights granted to Publisher under Section 2 of the Global Terms
shall not be exercised in respect of any Executable Software or Licensed
Products outside of the Territory unless and until Publisher shall be authorized
to do so pursuant to a current L PA with the applicable Affiliate.

 

4.2       All sums paid by Publisher after the Effective Date under any
Development System Agreement entered into by Publisher shall be treated as
license fees and SCEE shall have no obligation to refund all or any portion of
any such sums.

 

5.         SCEE Intellectual Property Rights

 

Nothing in Section 5 of the Global Terms shall be taken to prevent Publisher
from challenging the validity of the SCE Intellectual Property Rights.

 

6.        Quality Standards for Licensed Products

 

6.1       The testing and verification for conformity to the Guidelines under
Section 6.1 of the Global Terms may be conducted, at Publisher’s election, by an
independent external testing service (if and when such service becomes
available).  In those cases, the parties acknowledge and agree that Publisher

 

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will require each such independent external testing service to conduct such
testing and verification in place of SCEE and will assume all the obligations of
SCEE under Section 6.1 of the Global Terms, including responsibility for
advising Publisher of the results of such reviews, specifying the reasons for
any failure and stating what revisions are required, re-testing and for
providing written confirmation that any software or materials submitted conform
to the Guidelines.  The timeframes within which an independent external testing
service must carry out each stage of any testing or verification shall be 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.  Where Publisher elects to use an independent external testing
service to test Executable Software that service shall be responsible for
delivering Master Discs to SCEE or the Designated Manufacturing Facility.

 

6.2       Where any software or materials submitted under Section 6.1 of the
Global Terms are not approved, as an alternative to making required corrections
or improvements, or to providing any additional information requested by SCEE,
or in the event that Publisher wishes to contest the outcome of SCEE’s testing
or verification in relation to any specific product, Publisher may have recourse
to the appeals process specified in the Guidelines.

 

7.         Manufacture of Disc Products

 

7.1       In no circumstances shall SCEE or the Designated 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 Executable
Software games published by SCEE itself.

 

7.2       Publisher shall purchase all of its requirements for the following
items and services from the Designated Manufacturing Facility (and the terms of
Section 7 of the Global Terms shall be construed accordingly):

 

(i)            PlayStation 3 Format Discs (including demo discs);

(ii)           Artwork of mechanical s to be reproduced or otherwise displayed
on any PlayStation 3 Format Discs;

(iii)          Cases for all Disc Products; and

(iv)          Assembly of all components of Disc Products.

 

8.         Delivery of Disc Products

 

8.1       Delivery of Disc Products shall be made ex-factory the Designated
Manufacturing Facility and the Designated Manufacturing Facility shall use
reasonable endeavours, subject to available manufacturing capacity, to fulfil
Publisher’s Purchase Orders by the Publisher’s requested ex-factory delivery
date but does not, in any event, guarantee to do so.  All risk of loss or damage
in transit to any and all Disc Products manufactured pursuant to the Publisher’s
Purchase Orders shall pass to Publisher immediately upon first handling by
Publisher’s carrier.

 

8.2       SCEE offers free delivery to EEA countries (only) by regular road
(and/or, where applicable, sea) services, with airfreight or other expedited
delivery available but the incremental costs thereof for Publisher’s account. 
The minimum quantity per game per drop is 300 Units.

 

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9.         Charges Applicable to Licensed Products

 

9.1       In accordance with Section 9 of the Global Terms, Publisher shall pay
the Designated Manufacturing Facility the following charge for each finished
Unit (“Platform Charge”):

 

For Units distributed on Blu-ray Disc 25GB

 

XXXX% of Price to Trade plus €XXXX

For Units distributed on Blu-ray Disc 50GB

 

XXXX% of Price to Trade plus €XXXX

 

Where the Publisher has a direct distribution presence in any country, “Price to
Trade” means Publisher’s average net price to trade weighted by revenue across
those countries within the Territory where Publisher has a direct distribution
presence.  Price is defined as gross invoice value to retail net of on-invoice
trade margins and net of volume rebates properly attributable to sales of Units,
but prior to any credit, deduction, or rebate for co-op advertising or other
marketing or merchandising support.  Allowances, credits or discounts for
returns, price protection and prompt payment are specifically excluded.  Barter,
or other offsets, are not permissible as deductions.

 

A Publisher shall be deemed to have a direct distribution presence in any
country where XXXX% or more of Publisher’s Unit turnover is transacted direct by
either Publisher or Publisher’s wholly owned subsidiaries with retail customers,
and the trade price in each case is the price to retail.

 

Where the Publisher has an indirect distribution presence in any country, “Price
to Trade” means Publisher’s average net price to trade weighted by revenue
across those countries within the Territory where Publisher has an indirect
distribution presence, grossed up by XXXX%.  Price is defined as gross invoice
value to retail (where Publisher makes any sales direct to retail in a country
where it has an indirect distribution presence) and/or distributor (as
applicable) net of on-invoice trade margins and net of volume rebates properly
attributable to sales of Units, but prior to any credit, deduction, or rebate
for co-op advertising or other marketing or merchandising support, divided by
XXXX.  Where Publisher does not have responsibility for marketing costs, then an
agreed uplift to “Price to Trade” for the marketing cost is to be agreed with
SCEE and added.  Allowances, credits or discounts for returns, price protection
and prompt payment are specifically excluded.  Barter, or other offsets, are not
permissible as deductions.

 

A Publisher shall be deemed to have an indirect distribution presence in any
country where XXXX% or more of Publisher’s Unit turnover is transacted via
non-wholly owned or third party distributors, and the trade price in each case
is the Publisher’s price to its distributor.  Accordingly, for the purpose of
computing the Platform Charge, Publisher’s Price to Trade for indirect
distribution shall be grossed up by XXXX%.

 

The Platform Charge is calculated, for each Disc Product, in each year of the
Term (for the period 1 April to 31 March) by reference to Publisher’s average
net weighted Price to Trade as at day one launch of the relevant Disc Product. 
For the first year in which Units of a particular Disc Product are sold, the
Price to Trade calculation will be made by reference to the Publisher’s
projected day one prices to trade and annual sales to trade for the relevant
Disc Product For each subsequent year (for the period 1 April to 31 March),
Price to Trade will be calculated in accordance with Publisher’s actual day one
prices to trade and actual sales to trade in the prior annual period.

 

Where the SCE Company grants consent to bundling Units pursuant to Section 3.3
of the Global Terms, then any Units incorporated into any such bundle shall be
excluded from both the units and the Price to Trade calculations detailed above.

 

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The Price to Trade for each Disc Product shall be independently verified on
signature of this Agreement and thereafter on an annual basis (on, or as soon as
possible after, 1 April in each year in which Units of the Disc Product are
sold) for the purpose of calculating the correct Platform Charge.

 

The base currency for the Platform Charge is the Euro, based on revenue-weighted
averages of all relevant currencies in the Territory.  For non-Euro currencies,
the FT mid day spot-rate as of January 31 in each year of the Term will be
used.  In the event at the end of any calendar quarter any non-Euro currency has
moved against the Euro by more than 10% from the January 31 base rate, the base
rate will reset from the first of the following quarter.

 

The exercise of agreeing Publisher’s calculation for the Platform Charge will be
independently conducted.

 

There will be no retrospective adjustment of Platform Charges, notwithstanding
SCEE’s right to audit under the Global Terms.

 

9.2       The Platform Charge assumes a standard 1-disc product and covers
mastering, disc, 4-colour disc label, standard box and automated assembly of all
components, but excludes the cost of Printed Materials other than disc label. 
Platform Charge is €XXXX/unit for publisher promotional discs.  Publisher
promotional discs will have a standard 4-colour disc label and be supplied in a
jewel case (included in Platform Charge).  An inlay may be provided as Printed
Materials.  The charge for manual insertion of inlays for promotional discs
shall be as individually quoted in each case.  Shrink Wrap is available as an
option subject to incremental charges (i n addition to the otherwise applicable
Platform Charge specified above) of €XXXX/unit (or as individually quoted in
each case for products in non-standard packaging).  The Platform Charge and
minimum order and reorder quantities for other “non-standard” products and/or
production processes (subject to availability) shall be as individually quoted
in each case.  Further details relating to the Platform Charge, including
minimum order quantities, will be specified in Guidelines.

 

9.3       Migration.  Subject to all the terms and conditions of this paragraph
9.3, from 1 September 2008, Publisher may opt to migrate the Price to Trade of a
particular Disc Product to any nominated Price to Trade for the purposes of
calculating the Platform Charge for the relevant Units of such Disc Product
under this paragraph 9.  The option permits only a single new nominated Price to
Trade in respect of each Disc Product and may only take effect nine months after
submission of the first order for the relevant Units.  For the purposes of
calculating the Platform Charge only, the nominated new Price to Trade is deemed
to be no lower than €XXXX .  There is no requirement for Publisher to migrate
the Price to Trade in every country in which it sells Units for the relevant
Disc Product, or to do so at the same time, subject to SCEE’s prior approval in
each case and to any conditions imposed by SCEE from time to time in respect of
such arrangements.

 

9.4       Platinum.  From 1 August 2008, Units of a particular Disc Product may
carry Platinum branding (as specified in the Guidelines) provided that publisher
has ordered more than XXXX Units of the relevant Disc Product, the original
Price to Trade for the Disc Product was in excess of €XXXX, and that Publisher
has opted to migrate the Price to Trade for that Disc Product, in accordance
with paragraph 9.3 of this Rider, to a sum not exceeding €XXXX.  SCEE reserves
the right to change the qualifying criteria for Platinum branding from time to
time.

 

9.5       In addition to the Platform Charge, Publisher shall also pay to SCEE:

 

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9.5.1        Indirect Income.  XXXX% of all direct or indirect revenue, income
or other monetary value earned, recognized or otherwise derived from Licensed
Products, including in connection with the online distribution and Online
Gameplay of Licensed Products, and all websites or networks on which they are
published or may be played, including revenue sharing or advertising revenue;
and

 

9.5.2        Publishing off PLAYSTATION Network.  Where SCEE consents, pursuant
to Section 3.3 of the Global Terms, to Publisher distributing Online Products,
Online Gameplay or any services associated with Online Gameplay other than over
the PlayStation®Network, Publisher shall also pay to SCEE XXXX% of all direct or
indirect revenue, income or other monetary value earned, recognized or otherwise
derived from any such distribution of Online Products, Online Gameplay or
services associated with Online Gameplay, including one-off payments and
subscription income (comprising total value of receipts from subscriptions and
the total value of retail sales of vouchers for Online Gameplay).

 

Publisher shall provide SCEE with reports of the gross revenues actually
received by Publisher (or otherwise credited to its benefit), and shall make all
payments due to SCEE, pursuant to this paragraph 9.3, in accordance with the
Guidelines or as otherwise notified to Publisher.  SCEE shall have the right to
adopt and implement online revenue accounting verification mechanisms at its
sole discretion.

 

9.6       The Platform Charge for products developed utilising SCE Materials
and/or SCE Intellectual Property Rights and/or, subject to Council Directive
91/250/EEC (“the Directive”), SCE Confidential Information, but manufactured in
reliance on Article 6 of the Directive, 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 would
otherwise have been deducted from SCEE’s receipts from the Designated
Manufacturing Facility (“the Article 6 Platform Charge”).  If Publisher has
products so manufactured in reliance on Article 6 of the Directive, then
Publisher shall furnish SCEE, within 28 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 this Agreement, and upon termination by SCEE for such
cause, the provisions of Section 15.2 of the Global Terms shall come into
effect.  SCEE shall upon reasonable written request provide Publisher with
details of the aforementioned costs of raw materials and production services if
Publisher has legitimately exercised its rights under Article 6 of the Directive
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.

 

9.7       No claim for credit due to shortage of Disc Products as delivered to
carrier will be allowed unless it is made within four working days from the date
of receipt at Publisher’s receiving destination.

 

9.8       If Publisher fails to pay any amount payable by it under this
Agreement, SCEE may charge Publisher interest on the overdue amount.  Publisher
shall pay the interest immediately on demand,

 

35

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from the due date up to the date of actual payment, after as well as before
judgment, at the rate of 4% per annum above the base rate for the time being of
National Westminster Bank Plc.

 

10.      Representations and Warranties

 

SCEE warrants that all PlayStation 3 Format Discs manufactured by the Designated
Manufacturing Facility for Publisher pursuant to Section 7 of the Global Terms
shall be free from defects in materials and workmanship under normal use and
service at time of delivery in accordance with Section 7.9 of the Global Terms. 
The sole obligation of SCEE under this warranty shall be, for a period of 90
days from the date of delivery of such PlayStation 3 Format Discs in accordance
with Section 7.9 of the Global Terms, at SCEE’s election, either (i) to replace
such defective PlayStation 3 Format Discs or (ii) to issue credit for, or to
refund to Publisher the Platform Charge of such defective PlayStation 3 Format
Discs and to reimburse Publisher its reasonable return shipping costs.  Such
warranty is the only warranty applicable to Licensed Products manufactured by
the Designated Manufacturing Facility for Publisher pursuant to Section 7 of the
Global Terms.  This warranty shall not apply to damage resulting from accident,
fair wear and tear, wilful damage, alteration, negligence, abnormal conditions
of use, failure to follow directions for use (whether given in instruction
manuals or otherwise howsoever) or misuse of Licensed Products, or to
PlayStation 3 Format Discs comprising less than 1% (or, if greater, 100 units)
in the aggregate of the total number of Disc Products manufactured by the
Designated Manufacturing Facility for Publisher per Purchase Order of any
Executable Software game.  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 PlayStation 3 Format 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 PlayStation 3 Format Discs (i.e.
PlayStation 3 Format Discs that are not free from defects in materials and
workmanship under normal use and service).  All returns of defective PlayStation
3 Format Discs shall be subject to prior written authorisation by SCEE, not
unreasonably to be withheld.  If no defect exists or the defect is not such as
to be covered under the above warranty, Publisher shall reimburse SCEE for
expenses incurred in processing and analysing the PlayStation 3 Format Discs.

 

11.      Limitations of Liability

 

Nothing in this Agreement shall exclude or limit SCEE’s liability in relation to
claims arising from deceit, fraud, the injury or death of any person resulting
from the proven negligence of SCEE.

 

12.      Notices

 

All notices sent to SCEE under Section 16.1 of the Global Terms shall be
directed to its Senior Vice President, Third Party Relations & Business Affairs.

 

13.      Governing Law

 

This Agreement shall be governed by and interpreted in accordance with English
Law.  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 paragraph 13 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

 

36

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such other jurisdiction.  Publisher shall have the right to take any such
proceeding, suit or action against SCEE only in the English Courts.

 

37

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SCHEDULE

 

Territory

 

Albania

 

Algeria

 

Andorra

Angola

 

Armenia

 

Australia

Austria

 

Azerbaijan

 

Bahrain

Bangladesh

 

Belgium

 

Belorussia

Bosnia Herzegovina

 

Botswana

 

Bulgaria

Cameroon

 

Croatia

 

Cyprus

Czech Republic

 

Denmark

 

Djibouti

Egypt

 

Estonia

 

Ethiopia

Fiji

 

Finland

 

France

Georgia

 

Germany

 

Ghana

Gibraltar

 

Greece

 

Hungary

Iceland

 

India

 

Italy

Ireland

 

Israel

 

Kenya

Jordan

 

Kazakhstan

 

Kyrgyzstan

Kosovo

 

Kuwait

 

Liechtenstein

Latvia

 

Lebanon

 

Macedonia

Lithuania

 

Luxembourg

 

Malta & Gozo

Madagascar

 

Malawi

 

Monaco

Mauritius

 

Moldova

 

Mozambique

Montenegro

 

Morocco

 

New Zealand

Namibia

 

Netherlands

 

Oman

Nigeria

 

Norway

 

Poland

Pakistan

 

Papua New Guinea

 

Romania

Portugal

 

Qatar

 

Saudi Arabia

Russian Federation

 

San Marino

 

Slovenia

Senegal

 

Slovakia

 

Spain

Somalia

 

South Africa

 

Switzerland

Swaziland (South Africa)

 

Sweden

 

Tunisia

Tajikistan

 

Tanzania

 

Uganda

Turkey

 

Turkmenistan

 

United Kingdom

Ukraine

 

United Arab Emirates

 

Yemen

Uzbekistan

 

Vatican

 

Zimbabwe

Zaire

 

Zambia

 

 

 

Such countries in addition to those specified 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 Territory by notice to Publisher.

 

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