Exhibit 10.22


 





 


GLOBAL PLAYSTATION®3 FORMAT


 


LICENSED PUBLISHER
AGREEMENT


 


	
  Sony
  Computer Entertainment America Inc.

  	
   

  	
   

  	
   

  
	
  GLPA

  	
  REDACTED

  	
   

  	
  CONFIDENTIAL

  



 

















 


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

  	
  10

  
	
   

  	
   

  	
   

  
	
  8.

  	
  MARKETING OF LICENSED
  PRODUCTS

  	
  12

  
	
   

  	
   

  	
   

  
	
  9.

  	
  PAYMENTS

  	
  13

  
	
   

  	
   

  	
   

  
	
  10.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
  14

  
	
   

  	
   

  	
   

  
	
  11.

  	
  INDEMNITIES; LIMITED
  LIABILITY

  	
  16

  
	
   

  	
   

  	
   

  
	
  12.

  	
  INFRINGEMENT OF SCE
  INTELLECTUAL PROPERTY RIGHTS BY THIRD PARTIES 

  	
  18

  
	
   

  	
   

  	
   

  
	
  13.

  	
  CONFIDENTIALITY

  	
  18

  
	
   

  	
   

  	
   

  
	
  14.

  	
  TERM RENEWAL AND
  TERMINATION

  	
  22

  
	
   

  	
   

  	
   

  
	
  15.

  	
  EFFECT OF EXPIRATION OR
  TERMINATION

  	
  24

  
	
   

  	
   

  	
   

  
	
  16.

  	
  MISCELLANEOUS PROVISIONS

  	
  26

  



 

















 


GLOBAL PLAYSTATION® 3 FORMAT

LICENSED PUBLISHER AGREEMENT


 


This
Global PlayStation®3 Format Licensed
Publisher Agreement (the “Agreement”) is entered into on March 5,
2007 by and between SONY COMPUTER ENTERTAINMENT AMERICA INC., with offices at
919 East Hillsdale Boulevard, Foster City, California (“the SCE Company”) and
THQ Inc., with offices at 29903 Agoura Road, Calabasas Hills, CA 91301 (“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”), Sony Computer Entertainment Europe Ltd. (“SCEE”), Sony Computer
Entertainment Korea (“SCEK”), 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 licensee regarding the sale, lease, loan or license of
Development Tools.


 


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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 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.


 


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


 


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with
a related Disc Product and distributed electronically to any end users after
sale or distribution of a Unit of the related Disc Product; 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.


 


1.25  “Publisher Software” means any
software including incorporated audio and visual material developed by
Publisher under this Agreement or an LDA, 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 controlled by Publisher, 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 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,


 


4

















 


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 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


 


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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 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


 


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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 maintain servers hosting
Online Gameplay for the periods specified in the Guidelines. Publisher, or, at
SCEE’s option, SCEE 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. If Publisher has executed the Regional Rider in a Territory governed
by Council Directive 91/250/EEC, the limitations set forth in Section 5
shall be subject to Council Directive 91/250/EEC.


 


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 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


 


7

















 


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. 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.


 


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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, 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)
and any names used as titles for Licensed Products and other trademarks used by
Publisher. 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 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


 


9

















 


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 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.


 


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[ * ] for
PlayStation 3 Format Discs, including demonstration discs, from such Designated
Manufacturing Facility. Any


 






*Confidential portion omitted
and filed separately with the Securities and Exchange Commission.


 


10

















 


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
by the SCE Company or the Designated Manufacturing Facility, of producing the
reproducible masters of any and all Executable Software.


 


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
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 [ * ] 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


 






*Confidential portion omitted
and filed separately with the Securities and Exchange Commission.


 


11

















 


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 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 be entitled to display and otherwise use the Attribution Line on its 


 


12

















 


multi-product marketing materials,
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 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


 


13

















 


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.


 


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 the SCE Company has the
right, power and authority to enter into this Agreement and to fully perform
its obligations hereunder.


 


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;


 


14














 


(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;


 


(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;


 


(vii)  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;


 


(viii)  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;


 


(ix)  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, or 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, and shall be fully compatible with the System and all peripherals
listed on the Printed Materials as compatible with the Licensed Product;


 


(x)  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,


 


15

















 


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;


 


(xi)  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;


 


(xii)  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


 


(xiii)  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 


 


16

















 


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.


 


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


 


17

















 


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.


 


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 law.


 


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 law.


 


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, 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


 


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(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
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:


 


19














 


(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 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 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);


 


20

















 


(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 finances, business, marketing and 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;


 


21

















 


(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 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


 


22

















 


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;


 


(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 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


 


23

















 


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 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


 


24

















 


therein;
provided that the SCE Company may continue the manufacture, marketing,
advertising, sale and other such distribution of 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.


 


25














 


15.6  Extension
of this Agreement; Termination Without Prejudice.  The
SCE Company shall be under no obligation to extend 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 [ * ] 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 or rebellion; shutdown or delay in power,
telephone or other essential service due to the


 






*Confidential portion omitted
and filed separately with the Securities and Exchange Commission.


 


26

















 


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 affiliates, 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 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


 


27

















 


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 law, on the
posting of a bond in an amount not to exceed USD [ * ], enjoining any breach or threatened breach of any or all
of such provisions. In addition, if Publisher fails to comply with any of its
obligations as set forth herein, the SCE Company shall be entitled to an
accounting and repayment of all forms of compensation, commissions,
remuneration or benefits which Publisher directly or indirectly realizes as a
result of or arising in connection with any such failure to comply. 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 undertaking by the SCE Company to any such
authority. Any such amendment shall be of


 






*Confidential portion omitted
and filed separately with the Securities and Exchange Commission.


 


28

















 


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 16.14 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

  	
   

  	
  THQ INC.

  
	
  AMERICA INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print
  Name:

  	
  Riley
  R. Russell

  	
   

  	
  Print
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  SVP-SCEA

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
  NOT AN AGREEMENT UNTIL

  EXECUTED BY BOTH PARTIES

  	
   

  	
   

  
											



 


29














 


SONY COMPUTER ENTERTAINMENT AMERICA INC.


 


NORTH AMERICAN TERRITORY RIDER TO THE

GLOBAL PLAYSTATION3 FORMAT LICENSED PUBLISHER AGREEMENT


 


This
North American Territory Rider to the Global
PlayStation®3 Format Licensed Publisher Agreement (the “Rider” or “North
American Rider”) is entered into and rendered effective as of this 5th day of March, 2007 (the “Effective Date”).


 


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 (“PS3 LPA”).


 


2.                                      Definitions


 


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 PS3 LPA.


 


2.1  “PSN Services” means any
function, feature, capability, utility or service provided by SCEA or its
Affiliates via the PlayStation Network, including, but not limited to, user
identification names, associated user lists and functions to maintain or
control such lists, communication utilities such as chat and messaging and
commerce-related services.


 


2.2  “Wholesale Price” or  “WSP” means
the initial wholesale price Publisher offers to retailers of Disc Products as
evidenced by sell sheets or other trade materials. No deduction for volume
discounts, cooperative marketing, merchandising incentives, or other sales or
marketing programs shall be taken to determine the initial wholesale price for
the purpose of calculating royalties.


 


3.                                      Territory


 


A.           The Territory pursuant to this Rider and the PS3 LPA is expressly
limited to the following countries and territories:


 


(1)                                      The United States of America and its
territories and possessions;


 


(2)                                      Canada; and


 


(3)                                      Mexico.


 


B.                                          SCEA 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 deleted from the
Territory, SCEA shall deliver to Publisher a written notice stating the number
of days within which Publisher must cease distributing Licensed Products and
must retrieve any Development Tools located, in any deleted country.


 


C.                                          Publisher shall not, directly or indirectly,
solicit orders for or sell any Units of Disc Products in any situation where
Publisher knows or reasonably should know that any of such Disc Products may be
exported to or resold outside of the Territory.


 


30

















 


4.                                      Royalties Applicable to
Licensed Products


 


A.                                   Disc Products.


 


(i)                 Initial Orders. In accordance with Section 9 of
the PS3 LPA, Publisher shall pay SCEA, either directly or through its designee,
a royalty in United States dollars for each Unit of the Disc Products
manufactured, as follows:


 


For product distributed on a [ * ]GB
BD: [ * ]% of WSP + $ [ * ]


 


For product distributed on a [ * ]GB
BD: [ * ]% of WSP + $ [ * ]


 


To insure quality, royalty payments include manufacturing of the BluRay
disc and Packaging, excluding Printed Materials and inserts. In the future and
at its sole discretion, SCEA may allow Publisher to use alternative packaging
facilities provided that Publisher can prove that it can meet all of SCEA’s
quality assurance criteria set forth in the Guidelines. At that time, SCEA may
restructure royalties to account for costs related to Packaging.


 


In the absence of satisfactory evidence to support the WSP, the royalty
rate that shall apply will be [ * ]
($ [ * ]) for a BluRay [ * ] disc and [ * ] ($ [ * ])
for a BluRay [ * ] disc, per Unit.
Upon receipt of any notice of change in royalties under Section 9.1 of the
PS3 LPA, Publisher shall have the option to terminate this Agreement upon
written notice to SCEA and discontinue all production, publishing, marketing,
advertising, sale, distribution and other exploitation of Licensed Products,
rather than having such revised royalty structure go into effect.


 


(ii)             Reorders and Other Programs. Royalties on additional orders for Disc
Products shall be the royalty determined by the initial Wholesale Price as
originally reported by Publisher for that Disc Product, regardless of the
wholesale price of the Disc Product at the time of reorder, except: (a) in
the event that the Wholesale Price increases for such Disc Product, in which
case the royalty shall be adjusted upwards to reflect the higher Wholesale
Price; or (b) the product qualifies for an alternative royalty program
offered by SCEA. Disc Products qualifying for SCEA’s “Greatest Hits” programs
or other SCEA alternative royalty programs shall be subject to the royalty
rates applicable for such programs. As of the Effective Date, SCEA has not
established a “Greatest Hits” or alternative royalty program for the
PlayStation 3 computer entertainment system.


 


(iii)         Third Party Publisher Demo
Disc Program Royalties. Publisher
shall be able to produce demonstration discs on such terms and conditions that
shall be established by SCEA and published in the PlayStation 3 Source Book.
The quantity of Units ordered shall comply with the terms of such SCEA Established
Third Party Demo Disc Program.


 


B.             Online Products.


 


On a site that allows end-users access to Online Gameplay, for revenue,
income, or other monetary value (“Consumer Value”) that is earned, recognized,
or otherwise derived by Publisher without cost to consumers, including revenue
recognized through distribution of Licensed Products or services provided free
of charge to end-users, the following fees apply:


 


For sites that use any PSN services: [
* ]% of Consumer Value


 


For
sites that do not use any PSN services: [ * ]%
of Consumer Value


 


Prior to distributing a Licensed Product to
consumers without cost or other consideration, Publisher shall confer with SCEA
to determine the deemed Consumer Value of a Licensed Product.


 






*Confidential portion omitted
and filed separately with the Securities and Exchange Commission.


 


31

















 


C.                                     Advertising. Content or services that are
supported by advertising shall be subject to a separate agreement and to SCEA’s
advertising policies and procedures. No advertisements shall be placed in
Online Products nor shall advertisements be placed or served dynamically in
Licensed Products without a separate express license from SCEA. SCEA
reserves the right to charge an additional or different royalty for
third-party advertising in-game, whether dynamic or static.


 


5.                                 Accounting.


 


Publisher
shall provide SCEA with monthly reports of the gross Consumer Value revenues
actually received by Publisher (or otherwise credited to its benefit). Such
monthly reports shall be delivered on a per title basis to SCEA no later than
thirty (30) days after the end of each month, beginning with the month in which
Publisher launches a title-specific site that allows end-users access to Online
Gameplay of that title. SCEA shall have the right to adopt and implement online
royalty accounting verification mechanisms at its sole discretion.


 


6.                                 Additional Regional Terms.


 


6.1 Payment Terms. In addition to the remedies and requirements
set forth in the PS3 LPA, any overdue sums shall bear interest at the rate of [ * ] percent ( [ * ] %) per month, or such lower rate as may be the maximum
rate permitted under applicable law, from the date when payment first became
due through and including the date of payment.


 


6.2 Subpublishing Prohibited. Publisher’s license to publish Licensed
Products in the Territory under the PS3 LPA does not extend to Licensed
Products previously published for the PlayStation 3 computer entertainment
system by another Licensed Publisher.


 


6.3 Liquidated Damages. As an additional option in lieu of
termination under Section 14.4 of the PS3 LPA, SCEA may require Publisher
to pay liquidated damages of [ * ]($[ * ]) for certain breaches of the
Agreement, including violations of SCEA’s trademark rights under Section 5.6.2
of the PS3 LPA. Liquidated damages may be invoiced separately or on Publisher’s
next invoice for Disc Products. Election of liquidated damages shall not
constitute a waiver of or compromise with respect to any of SCEA’s rights under
this Rider or the PS3 LPA and SCEA may elect to terminate the PS3 LPA with
respect to any breach.


 


6.4 Additional Ground for Termination. If Publisher fails to pay any sums owed to
SCEA (including liquidated damages pursuant to Section 6.3 of this Rider) 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, SCEA shall be
entitled to terminate under Section 14.2 of the PS3 LPA.


 


6.5 Subcontractors. SCEA requires that Publisher enter into a
Subcontractor Agreement for use of subcontractors under Sections 2.1(i), 3.2
and 16.7 of the PS3 LPA. Each Subcontractor Agreement shall provide that SCEA
has the full right to bring any actions against the signing subcontractor, to
require the subcontractor to comply with all the terms and conditions of the
PS3 LPA or the Subcontractor Agreement. Publisher shall provide a copy of any
proposed Subcontractor Agreement to SCEA prior to, and a fully-executed copy
promptly following, execution of the Subcontractor Agreement. Publisher shall
give SCEA written notice of the identity of any prospective subcontractor no
less than ten (10) business days prior to entering into an agreement or
other arrangement with the prospective subcontractor.


 


7.                                 Notices.


 


Any
notices required under this Rider or the PS3 LPA shall be delivered addressed
to the following persons:


 






*Confidential portion omitted
and filed separately with the Securities and Exchange Commission.


 


32

















 


	
   

  	
  For
  Publisher:

  	
  Business
  and Legal Affairs

  
	
   

  	
   

  	
  THQ, Inc.

  
	
   

  	
   

  	
  29903
  Agoura Road

  
	
   

  	
   

  	
  Calabasas,
  CA 90301

  
	
   

  	
   

  	
   

  
	
   

  	
  For
  SCEA:

  	
  ATTN:
  General Counsel

  
	
   

  	
   

  	
  Sony Computer Entertainment America Inc.

  
	
   

  	
   

  	
  919 East Hillsdale Boulevard

  
	
   

  	
   

  	
  Foster
  City, CA 94404

  



 


8.                                      Governing Law


 


The
Agreement and this Rider shall be governed by and interpreted in accordance
with the laws of the State of California, excluding that body of law related to
choice of laws, and of the United States of America.


 


9.                                      Dispute Resolution


 


The
Parties shall attempt in good faith to resolve through informal discussions or
negotations any dispute, controversy or claim of any kind or nature arising
under or in connection with this Agreement, including breach, termination or
validity thereof (a “Dispute”). Any Dispute that the Parties are unable to
resolve through informal discussions or negotiations after 30 days will be
submitted to binding arbitration conducted in accordance with and subject to
the Commercial Arbitration Rules of the American Arbitration Association (“AAA”)
except to the extent otherwise required under this dispute resolution clause.
One arbitrator will be selected by the Parties’ mutual agreement or, failing
that, by the AAA. The arbitrator must have substantial experience in disputes
involving technology licensing agreements. The arbitrator will allow such
discovery as is appropriate, and impose such restrictions as are appropriate,
consistent with the purposes of arbitration in accomplishing fair, speedy and
cost-effective resolution of disputes, except that (i) no requests for
admissions will be permitted; (ii) interrogatories will be limited to (a) identifying
persons with knowledge of relevant facts and b) identifying expert witnesses
and obtaining their opinions and the bases therefor; and (iii) each party
will be limited to five (5) depositions. Judgment upon the award rendered
in any such arbitration may be entered in any court having jurisdiction
thereof. Any arbitration conducted pursuant to this section will take place in
San Francisco, California. Each Party will bear its own costs. The Parties will
share equally in paying the expenses and fees of the arbitrator. The arbitrator
may not alter the foregoing allocation of the parties’ costs, nor of the
arbitrator’s fees and expenses. Other than those matters involving injunctive
relief or any action necessary to enforce the award of the arbitrator, the
Parties agree that the provisions of this section are a complete defense to any
suit, action or other proceeding instituted in any court or before any
administrative tribunal with respect to any Dispute. Notwithstanding the
foregoing, SCEA may apply to any court of competent jurisdiction within the
Licensed Territory seeking a temporary restraining order, preliminary injunction,
or other interim or conservatory relief, with respect to the protection of any
intellectual property rights or Confidential Information of or concerning the
SCE Group Companies or the System, including, without limitation, the SCE
Materials and Licensed Trademarks.


 


33