Exhibit 10.54


[***] DENOTES CONFIDENTIAL
MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT


GLOBAL
PLAYSTATION®3 FORMAT



LICENSED PUBLISHER AGREEMENT




 





	
  Sony Computer Entertainment Europe

  	
   

  
	
  GLPA

  	
  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 Activision Inc., with offices at 3100 Ocean
Park Blvd., Santa Monica, CA 90405 (“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.


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


	
  Sony Computer Entertainment
  Europe

  	
   

  
	
  PLAYSTATION 3
  GLPA

  	
  CONFIDENTIAL

  



 



 2
 








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 with a related Disc



 3
 








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, the System, the design and development of Licensed
Products compatible with the System, and any SCE Confidential Information.



 4
 








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 be responsible at Publisher’s
sole risk and expense for ensuring that it has obtained all necessary licenses
for any such use.



 5
 








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 provided by such third-party Licensed
Publisher prior to manufacture of the Disc Product,



 6
 








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 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.



 7
 








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.



 8
 








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



 9
 








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


6.4          Publisher’s Additional Quality Assurance
Obligations. If at any time or times subsequent to the
approval of any part of a Licensed Product, the SEC 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 SEC Company’s
commercially reasonable satisfaction, which may include, in the SEC 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 [***] of its requirements for PlayStation 3 Format
Discs, including demonstration discs, from such Designated Manufacturing
Facility. Any Designated Manufacturing Facility shall be entitled to enforce
the terms of this Agreement.



 10
 








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 return 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 [***] of the proprietary Packaging for the
Disc Products. If so, then Publisher shall purchase [***] of its requirements
for such Packaging from a Designated Manufacturing Facility during the Term.


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


7.8          Orders and Delivery.


7.8.1       Orders. Publisher shall
issue Purchase Order(s) to a Designated Manufacturing Facility in the form set
forth and containing the information required in the Guidelines, with a copy to
the SCE Company.



 11
 








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 multi-product marketing materials,
unless otherwise agreed in writing.



 12
 








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 each invoice will be payable within 30 days of



 13
 








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 an 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 an 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     [***]


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 as are 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 crossclaim, 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



 18
 








(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, consultant 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) flies 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 (e) 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
or 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 [***] 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 [***], 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 [***] of such expiration or termination date.
Within [***] 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 [***] 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 [***] 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 [***]
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 [***] 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 



 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 he
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



 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      Counterpart. 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

  AMERICA INC.

  	
   

  	
  ACTIVISION INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Riley R.
  Russell

  	
   

  	
   

  	
  By:

  	
  /s/ Michael Griffith

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name:

  	
  Riley R. Russell

  	
   

  	
   

  	
  Print Name:

  	
  Michael Griffith

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  SVP - SCEA

  	
   

  	
   

  	
  Title:

  	
  Pres & CEO Activision Publishing

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  3/13/07

  	
   

  	
   

  	
  Date:

  	
  3/7/07

  	
   

  
	
   

  	
   

  	
   

  
	
  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; and


(2)            Canada.


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.



 A-1
 









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 25GB BD:            [***]


For product distributed on a 50GB BD:            [***]


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 25 disc and [***] for a BluRay 50 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:                        [***]


For sites that do
not use any PSN services:            [***]



 A-2
 









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.


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      [***]


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 6.8.2 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 [***] 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(ii) 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.



 A-3
 









7.                                      Notices.


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


For Publisher:       Michael
Griffith

Activision Inc.

3100 Ocean Park Blvd.

Santa Monica, CA 90405


For SCEA:             ATTN:
General Counsel

Sony Computer Entertainment America Inc.

919 East Hillsdale Boulevard

Foster City, CA 94404


8.                                      Governing
Law


This Agreement and
the Terms and Conditions 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.  Any action or proceeding brought to enforce
the terms of this Agreement or the Terms and Conditions or to adjudicate any
dispute arising hereunder shall be brought in the Superior Court of the County
of San Mateo, State of California or the United States District Court for the
Northern District of California.  Each of
the parties hereby submits itself to the exclusive jurisdiction and venue of
such courts for purposes of any such action and agrees that any service of
process may be effected by delivery of the summons in the manner provided in
the delivery of notices set forth in Section 15.1 of the Terms and Conditions.  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.


9.                                      Dispute
Resolution


The Parties shall
attempt in good faith to resolve through informal discussions or negotiations
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.



 A-4