Document:

Unassociated Document

     

    SONY
      COMPUTER ENTERTAINMENT AMERICA INC.

     

     

    AND

     

     

    DESTINATION
      SOFTWARE INC.

     

    

     

    PLAYSTATION®
      PORTABLE ("PSP")

    PSP
      LICENSED PUBLISHER AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    TABLE
      OF CONTENTS

     

    
      	
              SECTION:

            	
              PAGE:

            
	 	 
	
              1.

            	
              DEFINITION
                OF TERMS

            	
              1

            
	 	 	 
	
              2.

            	
              LICENSE
                GRANT

            	
              3

            
	 	 	 
	
              3.

            	
              DEVELOPMENT
                OF LICENSED PSP PRODUCTS

            	
              3

            
	 	 	 
	
              4.

            	
              LIMITATIONS
                ON LICENSES; RESERVATION OF RIGHTS

            	
              4

            
	 	 	 
	
              5.

            	
              QUALITY
                STANDARDS FOR THE LICENSED PSP PRODUCTS

            	
              5

            
	 	 	 
	
              6.

            	
              MANUFACTURE
                OF THE LICENSED PSP PRODUCTS

            	
              8

            
	 	 	 
	
              7.

            	
              MARKETING
                AND DISTRIBUTION

            	
              10

            
	 	 	 
	
              8.

            	
              ROYALTIES

            	
              12

            
	 	 	 
	
              9.

            	
              REPRESENTATIONS
                AND WARRANTIES

            	
              13

            
	 	 	 
	
              10.

            	
              INDEMNITIES;
                LIMITED LIABILITY

            	
              14

            
	 	 	 
	
              11.

            	
              SCEA
                INTELLECTUAL PROPERTY RIGHTS

            	
              16

            
	 	 	 
	
              12.

            	
              INFRINGEMENT
                OF SCEA INTELLECTUAL PROPERTY RIGHTS BY THIRD PARTIES
                

            	
              16

            
	 	 
	
              13.

            	
              CONFIDENTIALITY

            	
              16

            
	 	 	 
	
              14.

            	
              TERM
                AND TERMINATION

            	
              19

            
	 	 	 
	
              15.

            	
              EFFECT
                OF EXPIRATION OR TERMINATION

            	
              20

            
	 	 	
               

            
	
              16.

            	
              MISCELLANEOUS
                PROVISIONS

            	
              21

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    PLAYSTATION®
      PORTABLE ("PSP")

     

    LICENSED
      PSP PUBLISHER AGREEMENT

     

    This
      LICENSED PSP PUBLISHER AGREEMENT for the PlayStation Portable,
(the
      "Agreement" or " PSP LPA"), entered into as of the 20th day of January, 2006
      (the "Effective Date"), by and between SONY COMPUTER ENTERTAINMENT AMERICA
      INC.,
      with offices at 919 E. Hillsdale Boulevard, Foster City, CA 94404 (hereinafter
      "SCEA"), and Destination Software, Inc., with offices at 137 Hurffville- Cross
      Keys Road, Suite C, Sewell, NJ 08080 (hereinafter Publisher").

     

    WHEREAS,
      SCEA,
      its
      parent company, Sony Computer Entertainment Inc., and certain of their
      affiliates and companies within the group of companies of which any of them
      form
      a part (collectively referred to herein as "SCE" or alternatively "Sony") are
      designing and developing, and licensing core components of, a portable, handheld
      computer entertainment system known as the PlayStation®
      Portable
      or the "PSP" computer entertainment system (hereinafter referred to as the
      " PSP
      Player").

     

    WHEREAS,
      SCEA
      has
      the right to grant licenses to certain SCEA Intellectual Property Rights within
      its licensed territory (as defined below) in connection with the PSP
      Player.

     

    WHEREAS,
      Publisher
      desires to be granted a non-exclusive license to publish, develop, have
      manufactured, market, distribute and sell Licensed PSP Products (as defined
      below) pursuant to the terms and conditions set forth in this Agreement; and
      SCEA is willing, on the terms and subject to the conditions of this Agreement,
      to grant Publisher such a license.

     

    NOW,
      THEREFORE,
      in
      consideration of the representations, warranties and covenants contained herein,
      and other good and valuable consideration, the receipt and sufficiency of which
      is hereby acknowledged, Publisher and SCEA hereby agree as follows:

    

    
      1.Definition
        of Terms.

    

     

    1.1
      "Advertising Materials" means any advertising, marketing, merchandising,
      promotional, public relations (including press releases) and display materials
      relating to or concerning Licensed PSP Products or proposed Licensed PSP
      Products, or any other advertising, merchandising, promotional, public relations
      (including press releases) and display materials depicting any of the Licensed
      Trademarks. For purposes of this Agreement, Advertising Materials include any
      advertisements in which the PSP Player is referred to or used in any way,
      including but not limited to giving the PSP Player away as prizes in contests
      or
      sweepstakes and the public display of the PSP Player in product placement
      opportunities.

     

    1.2
      "Affiliate of SCEA" means, as applicable, other regional SCE companies,
      including but not limited to, Sony Computer Entertainment Inc. in Japan, Sony
      Computer Entertainment Europe Ltd. in the United Kingdom, Sony Computer
      Entertainment Korea, Sony Computer Entertainment Hong Kong, Sony Computer
      Entertainment China, or such other Sony Computer Entertainment entity as may
      be
      established from time to time.

     

    1.3
      "Designated Manufacturing Facility" means a manufacturing facility or facilities
      which is designated by SCEA in its sole discretion to manufacture Licensed
      PSP
      Products or their component parts, which may include manufacturing facilities
      owned and operated by affiliated companies of SCEA.

     

    1.4
      "Executable Software" means software which includes Product Software and any
      software provided directly or indirectly by SCEA or an Affiliate of SCEA
      designed for execution exclusively on the PSP Player and which has the ability
      to communicate with the software resident in the PSP Player.

     

    1.5
      "Fiscal
      Year" means a year measured from April 1 to March 31.

     

    1.6
      "Guidelines" shall mean any guidelines of SCEA or an Affiliate of SCEA with
      respect to SCEA Intellectual Property Rights, which may be set forth in the
      PSP
      SourceBook or in other documentation provided by SCEA or an Affiliate of SCEA
      to
      Publisher.

     

    1.7
      "Legal
      Attribution Line" means the legal attribution line used on SCEA marketing or
      other materials, which shall be substantially similar to the following: "Product
      copyright and trademarks are the property of the respective publisher or their
      licensors".

     

    1.8
      "Legal
      Copy" means any legal or contractual information required to be used in
      connection with a Licensed PSP Product or Product Information, including but
      not
      limited to copyright and trademark attributions, contractual credits and
      developer or distribution credits.

     

    1.9
      "Licensed
      PSP Developer Agreement" or "PSP LDA" means a valid and current license
      agreement for the development of Licensed PSP Products for the PSP Player,
      fully
      executed between a Licensed PSP Developer and SCEA or an Affiliate of
      SCEA.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    1.10
      "Licensed PSP Products" means the Executable Software (which may be combined
      with Executable Software of other Licensed PSP Publishers or Licensed
PSP
      Developers), which shall consist of one interactive entertainment game product
      developed for the PSP Player per Unit, in final form developed exclusively
      for
      the PSP Player. Publisher shall have no right to package or bundle more than
      one
      product developed for the PSP Player in a single Unit unless separately agreed
      with SCEA. The term "Licensed PSP Products" expressly excludes traditional
      non-interactive entertainment products such as movies or music or other
      interactive entertainment products that are not complete games.

     

    1.11
      "Licensed PSP Publisher" means any publisher that has signed a valid and then
      current Licensed PSP Publisher Agreement

     

    1.12
      "Licensed PSP Publisher Agreement" or "PSP LPA" means a valid and current
      license agreement for the publication, development, manufacture, marketing,
      distribution and sale of Licensed PSP Products for the PSP Player, fully
      executed between a Licensed PSP Publisher and SCEA or an Affiliate of
      SCEA.

     

    1.13
      "Licensed Territory" means the United States (including its possessions and
      territories) and Canada. The Licensed Territory may be modified or supplemented
      by SCEA from time to time pursuant to Section 4.4 below.

     

    1.14
      "Licensed Trademarks" means the trademarks, service marks, trade dress, logos
      and other icons or indicia designated by SCEA in the PSP SourceBook or other
      Guidelines for use on or in connection with Licensed PSP Products. Nothing
      contained in this Agreement shall in any way grant Publisher the right to use
      the trademark "Sony" in any manner. SCEA may amend such Licensed Trademarks
      from
      time to time in the PSP SourceBook or other Guidelines or upon written notice
      to
      Publisher.

     

    1.15
      "Manufacturing Specifications" means specifications setting forth terms relating
      to the manufacture and assembly of PSP Format Discs, Packaging, Printed
      Materials and each of their component parts, which shall be set forth in the
      PSP
      SourceBook or other documentation provided by SCEA or a Designated Manufacturing
      Facility to Publisher and which may be amended from time to time upon reasonable
      notice to Publisher.

     

    1.16
      "Master
      Disc" means a recordable disc in the form requested by SCEA containing final
      pre-production Executable Software for a Licensed PSP Product

     

    1.17
      "Packaging" means, with respect to each Licensed PSP Product, the carton,
      containers, packaging, edge labels and other proprietary labels, trade dress
      and
      wrapping materials, including any jewel case (or other package or container)
      or
      parts thereof, but excluding Printed Materials and PSP Format
      Discs.

     

    1.18
      "PSP
      Format Discs" means the discs formatted for use with the PSP Player which,
      for
      purposes of this Agreement,
      are manufactured on behalf of Publisher and contain Licensed PSP Products or
      SCEA Demo Discs.

     

    1.19
      "Printed
      Materials" means all artwork and mechanicals set forth on the disc label of
      the
      PSP Format Disc relating to any of the Licensed PSP Products and on or inside
      any Packaging for the Licensed PSP Product, and all instructional manuals,
      liners, inserts, trade dress and other user information to be inserted into
      the
      Packaging.

     

    1.20
      "Product
      Information" means any information owned or licensed by Publisher relating
      in
      any way to Licensed PSP Products, including but not limited to demos, videos,
      hints and tips, artwork, depictions of Licensed PSP Product cover art and
      videotaped interviews.

     

    1.21
      "Product
      Proposal" shall have the meaning set forth in Section 5.2.1 hereto.

     

    1.22
      "Product
      Software" means any software including audio and video material developed by
      a
      Licensed PSP Publisher or Licensed PSP Developer, which, either by itself or
      combined with Product Software of other licensees, when integrated with software
      provided by SCEA or an Affiliate of SCEA, creates Executable Software. It is
      understood that Product Software contains no proprietary information of Sony
      or
      any other rights of SCEA.

     

    1.23
      "PSP
      Development System Agreement" means an agreement entered into between SCEA
      and a
      Licensed PSP Publisher, Licensed PSP Developer or other licensee for the sale
      or
      license of Development Tools.

     

    1.25
      "PSP
      Development Tools" means the PSP development tools sold or licensed by SCEA
      to a
      Licensed PSP Publisher or Licensed PSP Developer for use in the development
      of
      Executable Software for the PSP Player.

     

    1.26
      "Publisher
      Intellectual Property Rights" means those intellectual property rights,
      including but not limited to patents and other patent rights, copyrights,
      trademarks, service marks, trade names, trade dress, mask work rights, utility
      model rights, trade secret rights, technical information, know-how, and the
      equivalents of the foregoing under the laws of any jurisdiction, and all other
      proprietary or intellectual property rights throughout the universe, which
      pertain to Product Software, Product Information, Printed Materials, Advertising
      Materials or other rights of Publisher required or necessary under this
      Agreement.

     

    1.27
      "Purchase Order" means a written purchase order processed in accordance with
      the
      terms of Section 6.2.2 hereto, the Manufacturing Specifications or other terms
      provided separately by SCEA or a Designated Manufacturing Facility to
      Publisher.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    1.28
      "SCEA
      Demo Disc" means any demonstration disc developed and distributed by
      SCEA.

     

    1.29
      "SCEA
      Established Third Party Demo Disc Programs" means (i) any consumer or trade
      demonstration disc program specified in the PSP SourceBook, and (ii) any other
      third party demo disc program established by SCEA for Licensed PSP
      Publishers.

     

    1.30
      "SCEA
      Intellectual Property Rights" means those intellectual property rights,
      including but not limited to patents and other patent rights, copyrights,
      trademarks, service marks, trade names, trade dress, mask work rights, utility
      model rights, trade secret rights, technical information, know-how, and the
      equivalents of the foregoing under the laws of any jurisdiction, and all other
      proprietary or intellectual property rights throughout the universe, which
      are
      required to ensure compatibility with the PSP Player or which pertain to the
      Licensed Trademarks.

     

    1.31
      "SCEA
      Product Code" means the product identification number assigned to each Licensed
      PSP Product, which shall consist of separate product identification numbers
      for
      multiple disc sets (i.e., SLUS-xxxxx). This SCEA Product Code is used on the
      Packaging and PSP Format Disc relating to each Licensed PSP Product, as well
      as
      on most communications between SCEA and Publisher as a mode of identifying
      the
      Licensed PSP Product other than by title.

     

    1.32
      "SCE
      Materials" means any data, object code, source code, firmware, documentation
      (or
      any part(s) of any of the foregoing), related to the PSP Player, selected in
      the
      sole judgment of SCEA, which are provided or supplied by SCEA or an Affiliate
      of
      SCEA to Publisher or any Licensed PSP Developer and/or other Licensed PSP
      Publisher. For purposes of this Agreement, SCE Materials shall not include
      any
      hardware portions of the Development Tools, but shall include firmware in such
      hardware.

     

    1.33
      "PSP
      SourceBook" means the PSP SourceBook (or any other reference guide containing
      information similar to the PSP SourceBook but designated with a different name)
      prepared by SCEA, which is provided separately to Publisher. The PSP SourceBook
      is designed to serve as the first point of reference by Publisher in every
      phase
      of the development, approval, manufacture and marketing of Licensed PSP
      Products.

     

    1.34
      "Standard
      Rebate" shall mean the rebate offered by SCEA on titles of Licensed PSP Products
      that achieve specified sales volumes as set forth in Section 8.4 of this
      Agreement.

     

    1.35
      "Third
      Party Demo Disc" means any demo disc developed and marketed by a Licensed PSP
      Publisher, which complies with the terms of an SCEA Established Third Party
      Demo
      Disc Program.

     

    1.36
      "Unit"
      means an individual copy of a Licensed PSP Product title regardless of the
      number of PSP Format Discs constituting such Licensed PSP Product
      title.

     

    1.37
      "Wholesale Price" or "WSP" shall mean the greater of (i) the published price
      of
      the Licensed PSP Product offered to retailers by Publisher as evidenced by
      a
      sell sheet or price list issued by Publisher no later than thirty (30) days
      before first commercial shipment of the Licensed PSP Product, or (ii) the actual
      price paid by retailers upon the first commercial shipment of a Licensed PSP
      Product without offsets, rebates or deductions from invoices of any
      kind.

     

    
      2.License.

    

     

    2.1
      License
      Grant. SCEA
      grants to Publisher, and Publisher hereby accepts, for the term of this
      Agreement, within the Licensed Territory, under SCEA Intellectual Property
      Rights owned, controlled or licensed by SCEA, a non-exclusive, non-transferable
      license, without the right to sublicense (except as specifically provided
      herein), to publish Licensed PSP Products using SCE Materials, which right
      shall
      be limited to the following rights and other rights set forth in, and in
      accordance with the terms of, this PSP LPA: (i) to produce or develop Licensed
      PSP Products and to enter into agreements with Licensed PSP Developers and
      other
      third parties to develop Licensed PSP Products; (ii) to have such Licensed
      PSP
      Products manufactured; (iii) to market, distribute and sell such Licensed PSP
      Products and to authorize others to do so within the licensed territory; (iv)
      to
      use the Licensed Trademarks strictly and only in connection with the
      development, manufacturing, marketing, packaging, advertising and promotion
      of
      the Licensed PSP Products, and subject to SCEA's right of approval as provided
      herein; and (v) to sublicense to end users the right to use the Licensed PSP
      Products for noncommercial purposes in conjunction with the PSP Player only,
      and
      not with other devices or for public performance.

     

    2.2
      Separate
      PlayStation Agreements.
      Unless specifically
      set forth in this Agreement, all terms used herein are specific to the PSP
      Player and the third party licensing program related thereto and not to the
      original PlayStation, PlayStation 2 entertainment systems. or third party
      licensing program related thereto. Licenses relating to the original PlayStation
      or PlayStation 2 entertainment systems are subject to separate agreements with
      SCEA, and any license of rights to Publisher under such separate agreements
      shall not confer on Publisher any rights under the PSP Player and vice
      versa.

    

    
      3.Development
        of Licensed PSP Products.

    

     

    3.1
      Right
      to Develop. This
      PSP
      LPA grants Publisher the right to develop Licensed PSP Products and the right
      to
      purchase or license Development Tools, as is appropriate, from SCEA or its
      designated agent, pursuant to a separate Development System Agreement with
      SCEA.
In
      developing Executable Software (or portions thereof), Publisher and its agents
      shall fully comply in all respects with any and all technical specifications
      which may from time to time be issued by SCEA. In the event that Publisher
      uses
      third party tools to develop Executable Software, Publisher shall be responsible
      for ensuring that it has obtained appropriate licenses for such
      use.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    3.2
      Development
      by Third Parties. Except
      as
      otherwise set forth herein, Publisher shall not provide SCE Materials or SCEA's
      Confidential Information to any third party. Publisher shall be responsible
      for
      determining that third parties meet the criteria set forth herein. Publisher
      may
      contract with a third party for development of Licensed PSP Products, provided
      that such third party is: (i) a Licensed PSP Publisher, (ii) a Licensed PSP
      Developer, or (iii) an SCEA-authorized subcontractor in compliance with the
      provisions of Section 16.6. Publisher shall notify SCEA in writing of the
      identity of any such third party within thirty (30) days of entering into an
      agreement or other arrangement with the third party.

    

    
      4.Limitations
        on Licenses; Reservation of Rights.

    

     

    4.1
      Reverse
      Engineering Prohibited. Other
      than as expressly permitted by SCEA in writing, Publisher shall not directly
      or
      indirectly disassemble, decrypt, electronically scan, peel semiconductor
      components, decompile, or otherwise reverse engineer in any manner or attempt
      to
      reverse engineer or derive source code from, all or any portion of the SCE
      Materials, or permit, assist or encourage any third party to do so. Other than
      as expressly permitted by SCEA in writing, Publisher shall not use, modify,
      reproduce, sublicense, distribute, create derivative works from, or otherwise
      provide to third parties, the SCE Materials, in whole or in part, other than
      as
      expressly permitted by SCEA. SCEA shall permit Publisher to study the
      performance, design and operation of the Development Tools solely for the
      limited purposes of developing and testing Publisher's software applications,
      or
      to build tools to assist Publisher with the development and testing of software
      applications for Licensed PSP Products. Any tools developed or derived by
      Publisher resulting from the study of the performance, design or operation
      of
      the Development Tools shall be considered as derivative products of the SCE
      Materials for copyright purposes, but may be treated as trade secrets of
      Publisher. 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 express written permission of SCEA.
      Use of such tools shall be strictly limited to the creation or testing of
      Licensed PSP Products and any other use, direct or indirect of such tools is
      strictly prohibited. Publisher shall be required in all cases to pay royalties
      in accordance with Section 8 to SCEA on any of Publisher's products utilizing
      any SCE Materials or derivative works made therefrom. Moreover, Publisher shall
      bear all risks arising from incompatibility of its Licensed PSP Product and
      the
      PSP Player resulting from use of Publisher-created tools.
      The burden of proof under this Section shall be on Publisher to show by clear
      and convincing evidence if a dispute arises, and SCEA reserves the right to
      require Publisher to furnish evidence satisfactory to SCEA that Publisher has
      complied with this Section.

    

    4.2
      Reservation
      of SCEA's Rights.

     

    4.2.1
      Limitation of
      Rights to Licenses Granted. The
      licenses granted in this Agreement extend only to the publication, development,
      manufacture, marketing, distribution and sale of Licensed PSP Products for
      use
      on the PSP Player, in such formats as may be designated by SCEA within the
      Licensed Territory and does not permit transshipment of the Licensed PSP
      Products to unlicensed territories unless expressly approved in writing by
      SCEA
      or the Affiliate of SCEA with responsibility for licensing publishing rights
      in
      the region. Without limiting the generality of the foregoing and except as
      otherwise provided herein, Publisher shall not distribute or transmit the
      Executable Software or the Licensed PSP Products via electronic means or any
      other means now known or hereafter devised, including without limitation, via
      wireless, cable, fiber optic means, telephone lines, microwave and/or radio
      waves, or over a network of computers or other devices. Notwithstanding this
      limitation, Publisher may electronically transmit Executable Software from
      site
      to site, or from machine to machine over a computer network, for the sole
      purpose of facilitating development; provided that no right of retransmission
      shall attach to any such transmission, and provided further that Publisher
      shall
      use reasonable security measures customary within the high technology industry
      to reduce the risk of unauthorized interception or retransmission of such
      transmissions. This Agreement does not grant any right or license under any
      SCEA
      Intellectual Property Rights or otherwise, except as expressly provided herein,
      and no other right or license is to be implied by or inferred from any provision
      of this Agreement or the conduct of the parties hereunder.

     

    4.2.2
      Other
      Use of SCE Materials and SCEA Intellectual
      Property Rights. Publisher
      shall not make use of any SCE Materials or any SCEA Intellectual Property Rights
      (or any portion thereof) except as authorized by and in compliance with the
      provisions of this Agreement. Publisher shall not use the Executable Software,
      SCE Materials or SCEA's Confidential Information in connection with the
      development of any software for any emulator or other computer hardware or
      software system. No right, license or privilege has been granted to Publisher
      hereunder concerning the development of any collateral product or other use
      or
      purpose of any kind whatsoever which displays or depicts any of the Licensed
      Trademarks. The rights set forth in Section 2.1(v) hereto are limited to the
      right to sublicense such rights to end users for non-commercial use; any public
      performance relating to the Licensed PSP Product or the PSP Player is prohibited
      unless expressly authorized in writing by SCEA.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    4.3
      Reservation
      of Publisher's Rights. Separate
      and apart from SCE Materials and other rights licensed to Publisher by SCEA
      hereunder, as between Publisher and SCEA, Publisher retains all rights, title
      and interest in and to the Product Software, and the Product Proposals and
      Product Information related thereto, including without limitation Publisher
      Intellectual Property Rights therein, as well as Publisher's rights in any
      source code and other underlying material such as artwork and music related
      thereto and any names used as titles for Licensed PSP Products and other
      trademarks used by Publisher. Nothing in this Agreement shall be construed
      to
      restrict the right of Publisher to develop, distribute or transmit products
      incorporating the Product Software and such underlying material (separate and
      apart from the SCE Materials) for any hardware platform or service other than
      the PSP Player, or to use Printed Materials or Advertising Materials approved
      by
      SCEA as provided herein (provided that such Printed Materials and/or Advertising
      Materials do not contain any Licensed Trademarks) as Publisher determines for
      such other platforms. SCEA shall not do or cause to be done any act or thing
      in
      any way impairing or tending to impair or dilute any of Publisher's rights,
      title or interests hereunder. Notwithstanding the foregoing, Publisher shall
      not
      distribute or transmit Product Software which is intended to be used with the
      PSP Player via electronic means or any other means now known or hereafter
      devised, including without limitation, via wireless, cable, fiber optic means,
      telephone lines, microwave or radio waves, or a network of computers or other
      devices, except as otherwise permitted in Section 4.2.1 hereto.

     

    4.4
      Additions
      to and Deletions from Licensed Territory. SCEA
      may,
      from time to time, add one or more countries to the Licensed Territory by
      providing written notice of such addition to Publisher. SCEA shall also have
      the
      right to delete, and intends to delete any countries from the Licensed Territory
      if, in SCEA's reasonable judgment, the laws or enforcement of such laws in
      such
      countries do not protect SCEA Intellectual Property Rights. In the event a
      country is deleted from the Licensed Territory, SCEA shall deliver to Publisher
      a notice stating the number of days within which Publisher shall cease
      distributing Licensed PSP Products and shall retrieve any Development Tools
      located in any such deleted country. Publisher shall cease distributing Licensed
      PSP Products, and retrieve any Development Tools, directly or through
      subcontractors, by the end of the period stated in such notice.

     

    4.5
      PSP
      SourceBook Requirement. Publisher
      shall be required to comply with all the provisions of the PSP SourceBook,
      including without limitation the Technical Requirements Checklist therein,
      when
      published, or within a commercially reasonable time following its publication
      to
      incorporate such provisions, as if such provisions were set forth in this
      Agreement.

     

    4.6
      Covenant
      Not to Sue. Publisher,
      on behalf of itself and its representatives, affiliates, and any other person
      or
      entity acting on its behalf, hereby agrees not to file
      any
      action against and covenants not to sue SCEA, its parent, affiliates,
      subsidiaries or related companies on any and all claims, rights, charges,
      damages or causes of action arising from the infringement or alleged
      infringement of any U.S. or international patent owned by, assigned or
      exclusively licensed to Publisher. This Section shall survive any termination
      or
      expiration of this Agreement.

    

    5.
      Quality Standards for the Licensed PSP Products.

     

    5.1
      Quality
      Assurance Generally. The
      Licensed PSP Products (and all portions thereof) and Publisher's use of any
      Licensed Trademarks shall be subject to SCEA's prior written approval, which
      shall not be unreasonably withheld or delayed and which shall be within SCEA's
      sole discretion as to acceptable standards of quality. SCEA shall have the
      right
      at any stage of the development of a Licensed PSP Product to review such
      Licensed PSP Product to ensure that it meets SCEA's quality assurance standards.
      All Licensed PSP Products will be developed to utilize substantially the
      particular capabilities of the PSP Player's proprietary hardware, software
      and
      graphics. No approval by SCEA of any element or stage of development of any
      Licensed PSP Product shall be deemed an approval of any other element or stage
      of such Licensed PSP Product, nor shall any such approval be deemed to
      constitute a waiver of any of SCEA's rights under this Agreement. In addition,
      SCEA's approval of any element or any stage of development of any Licensed
      PSP
      Product shall not release Publisher from any of its representations and
      warranties in Section 9.2 hereunder.

    

    5.2
      Product
      Proposals.

     

    5.2.1
      Submission
      of Product Proposal. All
      Product Proposal submissions shall be in conformance with the submissions
      provisions as published in the PSP SourceBook as published or amended. Publisher
      shall submit to SCEA for SCEA's written approval or disapproval, which shall
      not
      be unreasonably withheld or delayed, a written concept document (the "Product
      Proposal") prior to beginning development of a Licensed PSP Product. Such
      Product Proposal must contain all information specified in the PSP SourceBook,
      as well as any additional information that SCEA may deem to be useful in
      evaluating the proposed Licensed PSP Product.

     

    5.2.2
      Approval
      of Product Proposal.
      After SCEA's
      review of Publisher's Product Proposal, Publisher will receive written notice
      from SCEA of the status of the Product Proposal, which may range from "Pass"
      to
      "Review" to "Fail." Such conditions shall have the meanings ascribed to them
      in
      the PSP SourceBook, and may be changed from time to time by SCEA. If a Product
      Proposal receives a "Fail", then neither Publisher nor any other Licensed PSP
      Developer or Licensed PSP Publisher may re-submit such Product Proposal without
      significant, substantive revisions. SCEA shall have no obligation to approve
      any
      Product Proposal submitted by Publisher. Any development
      conducted by or at the direction of Publisher and any legal commitment relating
      to development work shall be at Publisher's own financial and commercial risk.
      Publisher shall not construe approval of a Product Proposal as a commitment
      by
      SCEA to grant final approval to such Licensed PSP Product. Nothing herein shall
      restrict SCEA from commercially exploiting any coincidentally similar concept(s)
      and/or product(s), which have been independently developed by SCEA, an Affiliate
      of SCEA or any third party.

    

    5.2.3
      Chances
      to Product ProposaL Publisher
      shall notify SCEA promptly in writing in the event of any material proposed
      change in any portion of the Product Proposal. SCEA's approval of a Product
      Proposal shall not obligate Publisher to continue with development or production
      of the proposed Licensed PSP Product, provided that Publisher must immediately
      notify SCEA in writing if it discontinues, cancels or otherwise delays past
      the
      original scheduled delivery date the development of any proposed Licensed PSP
      Product. In the event that Publisher licenses a proposed Licensed PSP Product
      from another Licensed PSP Publisher or a Licensed PSP Developer, it shall
      immediately notify SCEA of such change and must re-submit such Licensed PSP
      Product to SCEA for approval in accordance with the provisions of Section 5.2.1
      above.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    5.3
      Work-in-Progress.

     

    5.3.1
      Submission
      and Review of Work-in-Progress. SCEA
      shall require Publisher to submit to SCEA work-in-progress on Licensed PSP
      Products at intervals to be defined in the PSP SourceBook, throughout the
      development of the Licensed PSP Product, or if requested by SCEA on written
      notice to Publisher, at any time during the development process. Publisher
      shall
      be responsible for submitting work-in-progress to SCEA in accordance with the
      product Review Process as determined by SCEA or otherwise set out in the PSP
      SourceBook. Failure to submit work-in-progress in accordance with any stage
      of
      the Review Process may, at SCEA's discretion, result in revocation of approval
      of such Product Proposal.

     

    5.3.2
      Approval
      of Work in Progress.
      SCEA shall
      have the right to approve, reject or require additional information with respect
      to each stage of the Review Process. Publisher shall make submission of the
      Licensed Product at first playable, pre-alpha, alpha, beta and final, or at
      such
      development stages to be more fully defined in the PSP SourceBook. SCEA shall
      approve each development stage of the Licensed Product or otherwise specify
      in
      writing the reasons for any rejection or request for additional information
      and
      shall state what corrections or improvements are necessary to obtain approval.
      If any stage of the Review Process is not provided to SCEA or is not
      successfully met after a reasonable cure period agreed to between SCEA and
      Publisher, SCEA shall have the right to revoke the approval of Publisher's
      Product Proposal.

     

    5.3.3
      Cancellation
      or Delay; Conditions of ApprovaL Licensed
      PSP Products which are canceled by Publisher or are late in meeting the final
      Executable Software delivery date by more than three (3) months (without
      expressly agreeing in writing with SCEA on a modified final delivery date)
      shall
      be subject to the termination provisions set forth in Section 14.3 hereto.
      In
      addition, failure to make changes required by SCEA to the Licensed PSP Product
      at any stage of the Review Process, or making material changes to the Licensed
      PSP Product without SCEA's approval, may subject Publisher to the termination
      provisions set forth in Section 14.3 hereto.

     

    5.4
      Approval
      of Executable Software. On
      or
      before the date specified in the Product Proposal or as determined by SCEA
      pursuant to the Review Process, Publisher shall deliver to SCEA for its
      inspection and evaluation, a final version of the Executable Software for the
      proposed Licensed PSP Product. SCEA will evaluate such Executable Software
      and
      notify Publisher in writing of its approval or disapproval, which shall not
      be
      unreasonably withheld or delayed. If such Executable Software is disapproved,
      SCEA shall specify in writing the reasons for such disapproval and state what
      corrections and improvements are necessary. After making the necessary
      corrections and improvements, Publisher shall submit a new version of such
      Executable Software for SCEA's approval. SCEA shall have the right to disapprove
      Executable Software if it fails to comply with SCEA's corrections or
      improvements or one or more conditions as set forth in the PSP SourceBook with
      no obligation to review all elements of any version of Executable Software.
      All
      final versions of Executable Software shall be submitted in the format
      prescribed by SCEA and shall include such number of Master Discs as SCEA may
      require from time to time. Publisher hereby (i) warrants that all final versions
      of Executable Software are fully tested; (ii) shall use its best efforts to
      ensure such Executable Software is fully debugged prior to submission to SCEA;
      and (iii) warrants that all versions of Executable Software comply or will
      comply with standards set forth in the PSP SourceBook or other documentation
      provided by SCEA to Publisher. In addition, prior to manufacture of Executable
      Software, Publisher must sign an accountability form stating that (x) Publisher
      approves the release of such Executable Software for manufacture in its current
      form and (y) Publisher shall be fully responsible for any problems related
      to
      such Executable Software.

    

    5.5
      Printed
      Materials.

     

    5.5.1
      Compliance
      with Guidelines. For
      each
      proposed Licensed PSP Product, Publisher shall be responsible, at Publisher's
      expense, for creating and developing Printed Materials. All Printed Materials
      shall comply with the Guidelines, which may be amended from time to time,
      provided that Publisher shall, except as otherwise provided herein, only be
      required to implement amended Guidelines in subsequent orders of Printed
      Materials and shall not be required to recall or destroy previously
      manufactured Printed Materials, unless such Printed Materials do not comply
      with
      the original requirements in the Guidelines or unless explicitly required to
      do
      so in writing by SCEA.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    5.5.2
      Submission
      and Approval of Printed Materials. No
      later
      than submission of final Executable Software for a proposed Licensed PSP
      Product, Publisher shall also deliver to SCEA, for review and evaluation, the
      proposed final Printed Materials and a form of limited warranty for the proposed
      Licensed PSP Product. Failure to meet any scheduled release dates for a Licensed
      PSP Product is solely the risk and responsibility of Publisher, and SCEA assumes
      no responsibility for Publisher failing to meet such scheduled release dates
      due
      to this submission process. The quality of such Printed Materials shall be
      of
      the same quality as that associated with other commercially available high
      quality software products. If any of the Printed Materials are disapproved,
      SCEA
      shall specify the reasons for such disapproval and state what corrections are
      necessary. SCEA shall have no liability to Publisher for costs incurred or
      irrevocably committed to by Publisher for production of Printed Materials that
      are disapproved by SCEA. After making the necessary corrections to any
      disapproved Printed Materials, Publisher must submit new Printed Materials
      for
      approval by SCEA. SCEA shall not unreasonably withhold or delay its review
      of
      Printed Materials.

    

    5.6
      Advertising
      Materials.

     

    5.6.1
      Submission and Approval of Advertising
      Materials. Pre-production
      samples of all Advertising Materials shall be submitted by Publisher to SCEA,
      at
      Publisher's expense, prior to any actual production, use or distribution of
      any
      such items by Publisher or on its behalf. SCEA shall evaluate and approve such
      Advertising Materials, which approval shall not be unreasonably withheld or
      delayed, as to the following standards: (i) the content, quality, and style
      of
      the overall advertisement; (ii) the quality, style, appearance and usage of
      any
      of the Licensed Trademarks; (iii) appropriate references of any required
      notices; and (iv) compliance with the Guidelines. If any of the Advertising
      Materials are disapproved, SCEA shall specify the reasons for such disapproval
      and state what corrections are necessary. SCEA may require Publisher to
      immediately withdraw and reprint any Advertising Materials that have been
      published but have not received the written approval of SCEA. SCEA shall have
      no
      liability to Publisher for costs incurred or irrevocably committed to by
      Publisher for production of Advertising Materials that are disapproved by SCEA.
      For each Licensed PSP Product, Publisher shall be required to deliver to SCEA
      an
      accountability form stating that all Advertising Materials for such Licensed
      PSP
      Product comply or will comply with the Guidelines for use of the Licensed
      Trademarks. After making the necessary corrections to any disapproved
      Advertising Materials, Publisher must submit new proposed Advertising Materials
      for approval by SCEA.

     

    5.6.2
      Failure
      to Comply; Three Strikes Program.
      Publishers who fail to obtain SCEA's approval of Advertising Materials prior
      to
      broadcast or publication shall be subject to the provisions of the "Three
      Strikes" program outlined in the PSP SourceBook. Failure to obtain SCEA's
      approval of Advertising Materials could result in termination of this PSP LPA
      or
      termination of approval of the Licensed PSP Product, or could subject Publisher
      to the provisions of Section 14.4 hereto. Failure
      to meet any scheduled release dates for Advertising Materials is solely the
      risk
      and responsibility of Publisher, and SCEA assumes no responsibility for
      Publisher failing to meet such scheduled release dates due to approval
      requirements as set forth in this Section.

     

    5.6.3
      SCEA
      Materials. Subject
      in each instance to the prior written approval of SCEA, Publisher may use
      advertising materials owned by SCEA pertaining to the PSP Player or to the
      Licensed Trademarks on such Advertising Materials as may, in Publisher's
      judgment, promote the sale of Licensed PSP Products.

     

    5.7
      Rating
      Requirements. If
      required by SCEA or any governmental entity, Publisher shall submit each
      Licensed PSP Product to a consumer advisory ratings system designated by SCEA
      or
      such governmental entity for the purpose of obtaining rating code(s) for each
      Licensed PSP Product. Any and all costs and expenses incurred in connection
      with
      obtaining such rating code(s) shall be borne solely by Publisher. Any required
      consumer advisory rating code(s) shall be displayed on the Licensed PSP Product
      and in the associated Printed Materials and Advertising Materials, at
      Publisher's cost and expense, in accordance with the PSP SourceBook or other
      documentation provided by SCEA to Publisher.

     

    5.8
      Publisher's
      Additional Quality Assurance Obligations. If
      at any
      time or times subsequent to the approval of Executable Software and Printed
      Materials, SCEA identifies any material defects (such materiality to be
      determined by SCEA in its sole discretion) with respect to the Licensed PSP
      Product, or in the event that SCEA identifies any improper use of its Licensed
      Trademarks or SCE Materials with respect to the Licensed PSP Product, or any
      such material defects or improper use are brought to the attention of SCEA,
      Publisher shall, at no cost to SCEA, promptly correct any such material defects,
      or improper use of Licensed Trademarks or SCE Materials, to SCEA's commercially
      reasonable satisfaction, which may include, if necessary in SCEA's judgment,
      the
      recall and re-release of such Licensed PSP Product. In the event any Units
      of
      Licensed PSP Products create any risk of loss or damage to any property or
      injury to any person, Publisher shall immediately take effective steps, at
      Publisher's sole liability and expense, to recall or to remove such defective
      Units from any affected channels of distribution, provided, however, that if
      Publisher is not acting as the distributor and/or seller for the Licensed PSP
      Products, its obligation hereunder shall be to use its best efforts to arrange
      removal of
      such
      Licensed PSP Product from channels of distribution. Publisher shall provide
      all
      end-user support for the Licensed PSP Products and SCEA expressly disclaims
      any
      obligation to provide end-user support on Publisher's Licensed PSP
      Products.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    6.
      Manufacture of the Licensed PSP Products.

     

    6.1
      Manufacture
      of Units. Upon
      approval of Executable Software and associated Printed Materials pursuant to
      Section 5, and subject to Sections 6.1.2, 6.1.3 and 6.1.4 below, the Designated
      Manufacturing Facility will, in accordance with the terms and conditions set
      forth in this Section 6, and at Publisher's expense (a) manufacture PSP Format
      Discs for Publisher; (b) manufacture Publisher's Packaging and/or Printed
      Materials; and/or (c) assemble the PSP Format Discs with the Printed Materials
      and the Packaging. Publisher shall comply with all Manufacturing Specifications
      related to the particular terms set forth herein. SCEA reserves the right to
      insert or require the Publisher to insert certain Printed Materials relating
      to
      the PSP Player or Licensed Trademarks into each Unit.

    

    6.1.1
      Manufacture
      of PSP Format Discs.

     

    6.1.1.1
      Designated
      Manufacturing
      Facilities.
      To
      insure
      compatibility of the PSP Format Discs with the PSP Player, consistent quality
      of
      the Licensed PSP Product and incorporation of anti-piracy security systems,
      SCEA
      shall designate and license a Designated Manufacturing Facility to reproduce
      PSP
      Format Discs. Publisher shall purchase *** of its requirements for PSP Format
      Discs from such Designated Manufacturing Facility during the term of the
      Agreement. Any Designated Manufacturing Facility shall be a third party
      beneficiary of this Agreement.

     

    6.1.1.2
      Creation
      of Master Licensed PSP Product. Pursuant
      to Section 5.4 in connection with final testing of Executable Software,
      Publisher shall provide SCEA with the number of Master Discs specified in the
      PSP SourceBook. A Designated Manufacturing Facility shall create from one of
      the
      fully approved Master Discs provided by Publisher the original master of the
      Licensed PSP Product from which all other copies of the Licensed PSP Product
      are
      to be replicated. Publisher shall be responsible for the costs, as determined
      by
      the Designated Manufacturing Facility, of producing such original master. In
      order to insure against loss or damage to the copies of the Executable Software
      furnished to SCEA, Publisher will retain duplicates of all Master Discs, and
      neither SCEA nor any Designated Manufacturing Facility shall be liable for
      loss
      of or damage to any Master Discs or Executable Software.

    

    6.1.2
      Manufacture
      of Printed Materials.

     

    6.1.2.1Manufacture
      by
      Designated
      Manufacturing
      Facility. If
      Publisher elects to obtain Printed
      Materials from a Designated Manufacturing Facility, Publisher shall deliver
      all
      SCEA-approved Printed Materials to that Designated Manufacturing Facility,
      at
      Publisher's sole risk and expense, and the Designated Manufacturing Facility
      will manufacture such Printed Materials in accordance with this Section 6.
      In
      order to insure against loss or damage to the copies of the Printed Materials
      furnished to SCEA, Publisher will retain duplicates of all Printed Materials,
      and neither SCEA nor any Designated Manufacturing Facility shall be liable
      for
      loss of or damage to any such Printed Materials.

     

    
      6.1.2.2 Manufacture by
        Alternate
        Source. Subject
        to SCEA's approval as provided in Section 5.5.2 hereto and in this Section,
        Publisher may elect to be responsible for manufacturing its own Printed
        Materials (other than any Artwork which may be placed directly upon the
        PlayStation Disc, which Publisher will supply to the Designated Manufacturing
        Facility for placement), at Publisher's sole risk and expense. Prior to
        production of each order, Publisher shall be required to supply SCEA with
        samples of any Printed Materials not produced or supplied by a Designated
        Manufacturing Facility, at no charge to SCEA or Designated Manufacturing
        Facility, for SCEA's approval with respect to the quality thereof. SCEA shall
        have the right to disapprove any Printed Materials that do not comply with
        the
        Manufacturing Specifications. Manufacturing Specifications for Printed Materials
        shall be comparable to manufacturing specifications applied by SCEA to its
        own
        software products for the PSP Player. If Publisher elects to supply its own
        Printed Materials, neither SCEA nor any Designated Manufacturing Facility
        shall
        be responsible for any delays arising from use of Publisher's own Printed
        Materials.

    

    

    6.1.3
      Manufacture
      of Packaging.

     

    6.1.3.1
      Manufacture
      by Designated Manufacturing
      Facility. To
      ensure
      consistent quality of the Licensed PSP Products, SCEA may designate and license
      a Designated Manufacturing Facility to reproduce proprietary Packaging for
      the
      PSP Player. If SCEA creates proprietary Packaging for the PSP Player, then
      Publisher shall purchase *** of its requirements for such proprietary Packaging
      from a Designated Manufacturing Facility during the term of the Agreement,
      and
      the Designated Manufacturing Facility will manufacture such Packaging in
      accordance with this Section 6.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    6.1.3.2
      Manufacture
      by Alternate Source. If
      SCEA
      elects to use standard, non-proprietary Packaging for the PSP Player, then
      Publisher may elect to be responsible for manufacturing its own Packaging (other
      than any proprietary labels and any portion of a container containing Licensed
      Trademarks, which Publisher must purchase from a Designated Manufacturing
      Facility). Publisher shall assume all responsibility for the creation of such
      Packaging at Publisher's sole risk and expense. Publisher shall be responsible
      for encoding and printing proprietary edge labels provided by a
      Designated Manufacturing Facility with information reasonably specified by
      SCEA
      from time to time and will apply such labels to each Unit of the Licensed PSP
      Product as reasonably specified by SCEA. Prior to production of each order,
      Publisher shall be required to supply SCEA with samples of any Packaging not
      produced or supplied by a Designated Manufacturing Facility, at no charge to
      SCEA or Designated Manufacturing Facility, for SCEA's approval with respect
      to
      the quality. SCEA shall have the right to disapprove any Packaging that does
      not
      comply with the Manufacturing Specifications. Manufacturing Specifications
      for
      Packaging shall be comparable to manufacturing specifications applied by SCEA
      to
      its own software products for the PSP Player. If Publisher procures Packaging
      from an alternate source, then it must also procure assembly services from
      an
      alternate source. If Publisher elects to supply its own Packaging, neither
      SCEA
      nor any Designated Manufacturing Facility shall be responsible for any delays
      arising from use of Publisher's own Packaging.

     

    6.1.4
      Assembly
      Services. Publisher
      may either procure assembly services from a Designated Manufacturing Facility
      or
      from an alternate source. If Publisher elects to be responsible for assembling
      the Licensed PSP Products, then the Designated Manufacturing Facility shall
      ship
      the component parts of the Licensed PSP Product to a destination provided by
      Publisher, at Publisher's sole risk and expense. SCEA shall have the right
      to
      inspect any assembly facilities utilized by Publisher in order to determine
      if
      the component parts of the Licensed PSP Products are being assembled in
      accordance with SCEA's quality standards. SCEA may require that Publisher recall
      any Licensed PSP Products that do not contain proprietary labels or other
      material component parts or that otherwise fail to comply with the Manufacturing
      Specifications. If Publisher elects to use alternate assembly facilities,
      neither SCEA nor any Designated Manufacturing Facility shall be responsible
      for
      any delays or missing component parts arising from use of alternate assembly
      facilities.

    

    6.2
      Price,
      Payment and Terms.

     

    6.2.1
      Price. The
      applicable price for manufacture of any Units of Licensed PSP Products ordered
      hereunder shall be provided to Publisher by the Designated Manufacturing
      Facility. Purchase shall be subject to the terms and conditions set out in
      any
      purchase order form supplied to Publisher by the Designated Manufacturing
      Facility.

     

    6.2.2
      Orders. Publisher
      shall issue to a Designated Manufacturing Facility a written Purchase Order(s)
      in a form designated by SCEA and containing the information required in the
      Manufacturing Specifications, with a copy to SCEA. All orders shall be subject
      to approval by SCEA, which shall not be unreasonably withheld or delayed.
      Purchase Orders issued by Publisher to
      a
      Designated Manufacturing Facility for each Licensed PSP Product approved by
      SCEA
      shall be non-cancelable and be subject to the order requirements of the
      Designated Manufacturing Facility.

     

    6.2.3
      Payment
      Terms. Purchase
      Orders will be invoiced as soon as reasonably practical after receipt, and
      such
      invoice will include both manufacturing price and royalties payable pursuant
      to
      Section 8.1 or 8.2 below for each Unit of Licensed PSP Products ordered. Each
      invoice will be payable either on a cash-in-advance basis or pursuant to a
      letter of credit, or at SCEA's sole discretion, on credit terms. Terms for
      cash-in-advance and letter of credit payments shall be as set forth in the
      PSP
      SourceBook. All amounts hereunder shall be payable in United States dollars.
      All
      associated banking charges with respect to payments of manufacturing costs
      and
      royalties shall be borne solely by Publisher.

     

    6.2.3.1
      Credit
      Terms. SCEA
      may
      at its sole discretion extend credit terms and limits to Publisher. SCEA may
      also revoke such credit terms and limits at its sole discretion. If Publisher
      qualifies for credit terms, then orders will be invoiced upon shipment of
      Licensed PSP Products and each invoice will be payable within thirty (30) days
      of the date of the invoice. Any overdue sums shall bear interest at the rate
      of
      one and one-half (1 - 1/2%) percent per month, or such lower rate as may be
      the
      maximum rate permitted under applicable law, from the date when payment first
      became due to and including the date of payment thereof. Publisher shall be
      additionally liable for all costs and expenses of collection, including without
      limitation, reasonable fees for attorneys and court costs.

     

    6.2.3.2
      General
      Terms. No
      deduction may be made from remittances unless an approved credit memo has been
      issued by a Designated Manufacturing Facility. Neither SCEA nor a Designated
      Manufacturing Facility shall be responsible for shortage or breakage with
      respect to any order if component parts or assembly services are obtained from
      alternate sources. Each shipment to Publisher shall constitute a separate sale,
      whether whole or partial fulfillment of any order. Nothing in this Agreement
      shall excuse or be construed as a waiver of Publisher's obligation to timely
      provide any and all payments owed to SCEA and Designated Manufacturing
      Facility.

     

    6.3
      Delivery
      of Licensed PSP Products. Neither
      SCEA nor any Designated Manufacturing Facility shall have an obligation to
      store
      completed Units of Licensed PSP Products. Publisher may either specify a mode
      of
      delivery or allow the Designated Manufacturing Facility to select a mode of
      delivery.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    6.4
      Ownership
      of Master Discs. Due
      to
      the proprietary nature of the mastering process, neither SCEA nor a Designated
      Manufacturing Facility shall under any circumstances release any original
      master, Master Discs or other
      in-process materials to Publisher. All such materials shall be and remain the
      sole property of SCEA or Designated Manufacturing Facility. Notwithstanding
      the
      foregoing, Publisher Intellectual Property Rights contained in Product Software
      that is contained in such in-process materials is, as between SCEA and
      Publisher, the sole and exclusive property of Publisher or its licensors (other
      than SCEA or its affiliates).

    

    7.
      Marketing
      and Distribution.

     

    7.1
      Marketing
      Generally. In
      accordance with the provisions of this Agreement and at no expense to SCEA,
      Publisher shall, and shall direct its distributors to, diligently market, sell
      and distribute the Licensed PSP Products, and shall use commercially reasonable
      efforts to stimulate demand for such Licensed PSP Products in the Licensed
      Territory and to supply any resulting demand. Publisher shall use its reasonable
      best efforts to protect the Licensed PSP Products from and against illegal
      reproduction or copying by end users or by any other persons or
      entities.

     

    7.2
      Samples. Publisher
      shall provide to SCEA, at no additional cost, for SCEA's internal use, ***
      sample copies of each Licensed PSP Product. Publisher shall pay any
      manufacturing costs to the Designated Manufacturing Facility in accordance
      with
      Section 6.2, but shall not be obligated to pay royalties, in connection with
      such sample Units. In the event that Publisher assembles any Licensed PSP
      Product using an alternate source, Publisher shall be responsible for shipping
      such sample Units to SCEA at Publisher's cost and expense. SCEA shall not
      directly or indirectly resell any such sample copies of the Licensed PSP
      Products without Publisher's prior written consent. SCEA may give sample copies
      to its employees, provided that it uses its reasonable efforts to ensure that
      such copies are not sold into the retail market. In addition, subject to
      availability, Publisher shall sell to SCEA additional quantities of Licensed
      PSP
      Products at the Wholesale Price for such Licensed PSP Product. Any changes
      to
      SCEA's policy regarding sample Units shall be set forth in the PSP
      SourceBook.

     

    7.3
      Marketing
      Programs of SCEA. From
      time
      to time, SCEA may invite Publisher to participate in promotional or advertising
      opportunities that may feature one or more Licensed PSP Products from one or
      more Licensed PSP 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 SCEA shall be
      submitted subject to Section 10.2 below and delivery of such materials to SCEA
      shall constitute acceptance by Publisher of the terms of the offer. Moreover,
      SCEA may use the Legal Attribution Line on all multi-product marketing
      materials, unless otherwise agreed in writing.

     

    7.4
      Demonstration
      Disc Programs. SCEA
      may,
      from time to time, provide opportunities for Publisher to participate in SCEA
      Demo Disc programs. In addition, SCEA
      may,
      from time to time, grant to Publisher the right to create Third Party Demo
      Discs
      pursuant to SCEA Established Third Party Demo Disc Programs. 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 PSP SourceBook
      or
      in other documentation to be provided by SCEA to Publisher. Except as otherwise
      specifically set forth herein, in the PSP SourceBook or in other documentation,
      Third Party Demo Discs shall be considered "Licensed PSP Products" and shall
      be
      subject in all respects to the terms and conditions of this Agreement pertaining
      to Licensed PSP Products. In addition, the following procedures shall also
      apply
      to SCEA Demo Discs and Third Party Demo Discs:

    

    7.4.1
      SCEA
      Demo Discs.

     

    7.4.1.1
      License. SCEA
      may,
      but shall not be obligated to, invite Licensed PSP Publishers to participate
      in
      any SCEA Demo Disc program. Participation by Publisher in an SCEA Demo Disc
      program shall be optional. If Publisher elects to participate in an SCEA Demo
      Disc program and provides Product Information to SCEA in connection thereto,
      Publisher shall thereby grant to SCEA a royalty-free license during the term
      of
      this Agreement in the Licensed Territory to manufacture, use, sell, distribute,
      market, advertise and otherwise promote Publisher's Product Information as
      part
      of such SCEA Demo Disc program. In addition, Publisher shall grant SCEA the
      right to feature Publisher and Licensed PSP Product names in SCEA Demo Disc
      Advertising Materials and to use copies of screen displays generated by the
      code, representative video samples or other Product Information in such SCEA
      Demo Disc

    Advertising
      Materials. All decisions relating to the selection of first and third party
      Product Information and all other aspects of SCEA Demo Discs shall be in the
      sole discretion of SCEA.

     

    7.4.1.2
      Submission
      and
      Approval of Product
      Information. Upon
      receipt of written notice that SCEA has tentatively chosen Publisher's Product
      Information for inclusion in an SCEA Demo Disc, Publisher shall deliver to
      SCEA
      such requested Product Information by no later than the deadline set forth
      in
      such notice. Separate notice will be sent for each SCEA Demo Disc, and Publisher
      must sign each notice prior to inclusion in such SCEA Demo Disc. Publisher
      shall
      include its own Legal Copy on the title screen or elsewhere in the Product
      Information submitted to SCEA. SCEA shall only provide the Legal Attribution
      Line on the SCEA Demo Disc title screen and packaging. Publisher's Product
      Information shall comply with SCEA's technical specifications provided to
      Publisher. SCEA reserves the right to review and test the Product Information
      provided and request revisions prior to inclusion on the SCEA Demo Disc. If
      SCEA
      requests changes to the Product Information and Publisher elects to continue
      to
      participate in such Demo Disc, Publisher shall make such changes as soon
      possible after receipt of written notice of such requested changes from SCEA,
      but not later than the deadline for receipt of Product Information. Failure
      to
      make such changes and provide the modified Product Information to SCEA by the
      deadline shall result in the Product Information being removed from the SCEA
      Demo Disc. Costs associated with preparation of Product Information supplied
      to
      SCEA shall be borne solely by Publisher. Except as otherwise provided in this
      Section, SCEA shall not edit or modify Product Information provided to SCEA
      by
      Publisher without Publisher's consent, not to be unreasonably withheld. SCEA
      shall have the right to use subcontractors to assist in the development of
      any
      SCEA Demo Disc. With respect to Product Information provided by Publisher in
      demo form, the demo delivered to SCEA shall not constitute the complete Licensed
      PSP Product and shall be, at a minimum, an amount sufficient to demonstrate
      the
      Licensed PSP Product's core features and value, without providing so much
      information as to give consumers a disincentive to purchase the complete
      Licensed PSP Product.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    7.4.1.3
      No Obligation to Publish. Acceptance
      of Product Information for test and review shall not be deemed confirmation
      that
      SCEA shall include the Product Information on an SCEA Demo Disc, nor shall
      it
      constitute approval of any other element of the Licensed PSP Product. SCEA
      reserves the right to choose from products submitted from other Licensed PSP
      Publishers and first party products to determine the products to be included
      in
      SCEA Demo Discs, and Publisher's Licensed PSP Products will not be guaranteed
      prominence or preferential treatment on any SCEA Demo Disc. Nothing herein
      shall
      be construed as creating an obligation of SCEA to publish Product Information
      submitted by Publisher in any SCEA Demo Disc, nor shall SCEA be obligated to
      publish, advertise or promote any SCEA Demo Disc.

     

    7.4.1.4
      SCEA
      Demo Discs Sold at Retail. Publisher
      is aware and acknowledges that certain SCEA Demo Discs may be distributed and
      sold by SCEA in the retail market. If Publisher elects to participate in any
      SCEA Demo Disc program which is sold in the retail market, as notified by SCEA
      to Publisher, Publisher acknowledges prior to participation in any such SCEA
      Demo Disc that it is aware of no limitations regarding Product Information
      provided to SCEA pursuant to the terms of this Agreement which would in any
      way
      restrict SCEA's ability to distribute or sell such SCEA Demo Disc at retail,
      nor
      does Publisher or its licensors (other than SCEA and/or its affiliates) have
      any
      anticipation of receiving any compensation from such retail sales. In the event
      that SCEA institutes a SCEA Demo Disc in which a fee or royalty is charged
      to
      Publisher, SCEA and Publisher will enter into a separate agreement regarding
      such SCEA Demo Disc.

     

    7.4.2
      Third
      Party Demo Discs.

     

    7.4.2.1
      License.
      Publisher may participate in any SCEA Established Third Party Demo Disc Program.
      Publisher shall notify SCEA of its intention to participate in any such program,
      and upon receipt of such notice, SCEA shall grant to Publisher the right and
      license to use Licensed PSP Products in Third Party Demo Discs and to use,
      distribute, market, advertise and otherwise promote (and, if permitted in
      accordance with the terms of any SCEA Established Third Party Program or
      otherwise permitted by SCEA, to sell) such Third Party Demo Discs in accordance
      with the PSP SourceBook, which may be modified from time to time at the sole
      discretion of SCEA. Unless separately agreed in writing with SCEA, Third Party
      Demo Discs shall not be used, distributed, promoted, bundled or sold in
      conjunction with other products. In addition, SCEA hereby consents to the use
      of
      the Licensed Trademarks in connection with Third Party Demo Discs, subject
      to
      the approval procedures set forth in this Agreement. If any SCEA Established
      Third Party Demo Disc Program is specified by SCEA to be for promotional use
      only and not for resale, and such Third Party Demo Disc is subsequently
      discovered to be for sale, Publisher's right to produce Third Party Demo Discs
      shall thereupon be automatically revoked, and SCEA shall have the right to
      terminate any related Third Party Demo Discs in accordance with the terms of
      Section 14.3 or 14.4 hereto.

     

    7.4.2.2
      Submission and
      Approval of Third
      Party Demo Discs. Publisher
      shall deliver to SCEA, for SCEA's prior approval, a final version of each Third
      Party Demo Disc in a format prescribed by SCEA. Such Third Party Demo Disc
      shall
      comply with all requirements provided to Publisher by SCEA in the PSP SourceBook
      or otherwise. In addition, SCEA shall evaluate the Third Party Demo Disc in
      accordance with the approval provisions for Executable Software and Printed
      Materials set forth in Sections 5.4 and 5.5, respectively. Furthermore,
      Publisher shall obtain the approval of SCEA in connection with any Advertising
      Materials relating to the Third Party Demo Discs in accordance with the approval
      provisions set forth in Section 5.6. Costs associated with Third Party Demo
      Discs shall be borne solely by Publisher. No approval by SCEA of any element
      of
      any Third Party Demo Disc shall be deemed an approval of any other element
      thereto, nor does any such approval constitute final approval for the related
      Licensed PSP Product. Unless otherwise permitted by SCEA, Publisher shall
      clearly and conspicuously state on all Third Party Demo Disc Packaging and
      Printed Materials that the Third Party Demo Disc is for promotional purposes
      only and not for resale.

     

    7.4.2.3
      Manufacture
      and Royalty of Third
      Party Demo Discs. Publisher
      shall comply with all Manufacturing Specifications with respect to the
      manufacture and payment for manufacturing costs of Third Party Demo Discs,
      and
      Publisher shall also comply with all terms and conditions of Section 6 hereto.
      No costs incurred in the development, manufacture, licensing, production,
      marketing and/or distribution (and if permitted by SCEA, sale) of the Third
      Party Demo Disc shall be deducted
      from any amounts payable to SCEA hereunder. Royalties on Third Party Demo Discs
      shall be as provided in Section 8.2.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    7.5
      Contests
      and Sweepstakes of Publisher. SCEA
      acknowledges that, from time to time, Publisher may conduct contests and
      sweepstakes to promote Licensed PSP Products. SCEA shall permit Publisher to
      include contest or sweepstakes materials in Printed Materials and Advertising
      Materials, subject to compliance with the approval provisions of Section 5.5
      and
      5.6 hereunder, compliance with the provisions of Section 9.2 and 10.2 hereunder,
      and subject to the following additional terms and conditions:

     

    (i) Publisher
      represents that it has retained the services of a fulfillment house to
      administer the contest or sweepstakes and if it has not retained the services
      of
      a fulfillment house, Publisher represents and warrants that it has the expertise
      to conduct such contests or sweepstakes, and in any event, Publisher shall
      assume full responsibility for all aspects of such contest or
      sweepstakes;

     

    (ii) Publisher
      warrants that each contest, sweepstakes, and promotion, comply with local,
      state
      and federal laws or regulations;

     

    (iii) Publisher
      represents and warrants that it has obtained the consent of all holders of
      intellectual property rights required to be obtained in connection with each
      contest or sweepstakes including, but not limited to, the consent of any holder
      of copyrights or trademarks relating to any Advertising Materials publicizing
      the contest or sweepstakes, or the prizes being awarded to winners of the
      contest or sweepstakes; and

     

    (iv) Publisher
      shall make available to SCEA all contest and sweepstakes material prior to
      publication in accordance with the approval process set forth in Section 5.5
      or
      5.6.

     

    Approval
      by SCEA of contest or sweepstakes materials for use in the Printed Materials
      or
      Advertising Materials (or any use of the PSP Player or Licensed PSP Products
      as
      prizes in such contest or sweepstakes) shall not constitute an endorsement
      by
      SCEA of such contest or sweepstakes, nor shall such acceptance be construed
      as
      SCEA having reviewed and approved such materials for compliance with any federal
      or state law, statute, regulations, order or the like, which shall be
      Publisher's sole responsibility.

     

    7.6
      PlayStation
      Website. All
      Licensed PSP Publishers shall be required to provide Product Information for
      a
      web page for each of its Licensed PSP Products for display on the PlayStation
      promotional website, or other website or websites as may be operated by SCEA
      from time to time in connection with the promotion of the PlayStation,
      PlayStation Portable, or PSP brands. Specifications for Product Information
      for
      such web pages shall be as provided in the PSP SourceBook. Publisher shall
      provide SCEA with such Product Information for each Licensed PSP Product upon
      submission of Printed Materials to SCEA for approval in accordance with Section
      5.5.2 hereto. Publisher shall also provide updates to such web page in a timely
      manner as required by SCEA in updates to the PSP SourceBook.

     

    7.7 Distribution.

     

    7.7.1
      Distribution
      Channels. Publisher
      may use such distribution channels as Publisher deems appropriate, including
      the
      use of third party distributors, resellers, dealers and sales representatives.
      In the event that Publisher elects to have one of its Licensed PSP Products
      distributed and sold by another Licensed PSP Publisher, Publisher must provide
      SCEA with advance written notice of such election, the name of the Licensed
      PSP
      Publisher and any additional information requested by SCEA regarding the nature
      of the distribution services provided by such Licensed PSP Publisher prior
      to
      manufacture of such Licensed PSP Product.

     

    7.7.2 Limitations on
      Distribution.Notwithstanding
      any other provisions in this Agreement, Publisher shall not, directly or
      indirectly, solicit orders from or sell any Units of the Licensed PSP Products
      to any person or entity outside of the Licensed Territory nor transship Licensed
      PSP Products between regional SCE territories. In addition, Publisher shall
      not
      directly or indirectly solicit orders for or sell any Units of the Licensed
      PSP
      Products in any situation where Publisher knows or reasonably should know that
      such Licensed PSP Products may be exported or resold outside of the Licensed
      Territory.

    

    8. Royalties.

     

    8.1
      Applicable
      Royalties on
      Licensed
      PSP Products.

     

    8.1.1
      Initial
      Orders. Publisher
      shall pay SCEA, either directly or through its designee, a per title royalty
      in
      United States dollars for each Unit of the Licensed PSP Products manufactured
      based on the initial Wholesale Price of the Licensed PSP Product, as
      follows:

     

    
      	 	
              Wholesale
                Price

            	
              Per
                Title Royalty

            
	
              Level
                1

              Level
                2

              Level
                3

            	
              ***

              ***

              ***

            	
              ***

              ***

              ***

            

    

     

    In
      the
      absence of satisfactory evidence to support the WSP, the royalty rate that
      shall
      apply will be the greater of *** per Unit *** applied
      to the highest known WSP. Royalties may be subject to change in SCEA's
      discretion upon
      sixty (60) days notice to Publisher. Upon receipt of such notice, Publisher
      shall have the option to terminate this Agreement upon written notice to SCEA
      rather than having such revised royalty structure go into effect.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    8.1.2
      Reorders and Other
      Programs.

     

    Royalties
      on additional orders to manufacture a specific Licensed PSP Product, regardless
      of which Publisher submits the order, shall be the royalty determined by the
      initial Wholesale Price as reported by initial Publisher for that Licensed
      PSP
      Product regardless of the wholesale price of the Licensed PSP Product at the
      time of reorder, except in the event that the Wholesale Price increases for
      such
      Licensed PSP Product, in which case the royalty shall be adjusted upwards to
      reflect the higher Wholesale Price. Licensed PSP Products qualifying for SCEA's
      "Greatest Hits" programs or other programs offered by SCEA shall be subject
      to
      the royalties applicable for such programs. Publisher acknowledges that as
      of
      the date of execution of this Agreement no "Greatest Hits" program exists for
      the PSP Third Party licensing program.

     

    8.2
      Third
      Party Demo Disc Program Royalties: Publisher
      shall pay SCEA a per Unit royalty in United States dollars of *** for each
      Third Party Demo Disc Unit manufactured. The quantity of Units ordered shall
      comply with the terms of such SCEA Established Third Party Demo Disc
      Program.

     

    8.3
      Payment
      For Licensed PSP Product. Payment
      of royalties under Sections 8.1 and 8.2 shall be made to SCEA through its
      Designated Manufacturing Facility concurrent with the placement of an order
      to
      manufacture Licensed PSP Product and payment of manufacturing costs in
      accordance with the terms and conditions set forth in Sections 6.2.3, unless
      otherwise agreed in writing with SCEA. At the time of placing an order to
      manufacture a Licensed PSP Product, Publisher shall submit to SCEA an accurate
      accounting statement setting out the number of units of Licensed PSP Product
      to
      be manufactured, projected initial wholesale price, applicable royalty, and
      total amount due SCEA. In addition, Publisher shall submit to SCEA prior to
      placing the initial order for each Licensed PSP Product a separate
      certification, in the form provided by SCEA in the PSP SourceBook, signed by
      officers of Publisher that certifies that the Wholesale Price provided to SCEA
      is accurate and attaching such documentation supporting the WSP as requested
      by
      SCEA. Payment shall be made prior to manufacture unless SCEA has agreed to
      extend credit terms to Publisher in writing pursuant to Section 6.2.3.1. Nothing
      herein shall be construed as requiring SCEA to extend credit terms to Publisher.
      The accounting statement due hereunder shall be subject to the audit and
      accounting provisions set forth in paragraph 16.2 below. No costs incurred
      in
      the development, manufacture, marketing, sale and/or distribution of the
      Licensed PSP Products shall be deducted from any royalties payable to SCEA
      hereunder. Similarly, there shall be no deduction from the royalties otherwise
      owed to SCEA 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
      Units
      of the Licensed PSP 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 Units of the Licensed PSP Products or arising with respect
      to the payment of royalties. In addition to the royalty payments provided to
      SCEA, Publisher shall be solely responsible for and bear any cost relating
      to
      any withholding taxes or other such assessments which may be imposed by any
      governmental authority with respect to the royalties paid to SCEA hereunder;
      provided, however, that SCEA shall not manufacture Licensed PSP Products outside
      of the United States without the prior consent of Publisher. Publisher shall
      provide SCEA 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 paid.

     

    8.4
      Rebates,
      Promotions or Discounts.
      From time
      to
      time SCEA may, at its sole option, offer to Publisher programs which result
      in
      rebates or other reduced royalties to Publisher. Eligibility to participate
      in a
      program offered by SCEA shall be determined by the terms and conditions set
      forth for participation at the time the program is offered. SCEA reserves the
      right to alter, extend, or terminate program offerings upon notice to
      Publishers. Nothing contained herein shall require SCEA to offer any rebate,
      promotion, or discount program to Publisher during the term of this
      Agreement.

    

    9.
      Representations and Warranties.

     

    9.1
      Representations
      and Warranties of SCEA. SCEA
      represents and warrants solely for the benefit of Publisher that SCEA has the
      right, power and authority to enter into this Agreement and to fully perform
      its
      obligations hereunder.

     

    9.2
      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 by Publisher of all or any part of the Product Software, Product
      Proposals, Product Information, Printed Materials, Advertising Materials or
      any
      underlying work or content embodied therein, or any name, designation or
      trademark used in conjunction with the Licensed PSP Products infringes or
      otherwise violates any Intellectual Property Right or other right or interest
      of
      any kind whatsoever of any third party, or otherwise contesting any right,
      title
      or interest of Publisher in or to the Product Software, Product Proposals,
      Product Information, Printed Materials, Advertising Materials or any underlying
      work or content embodied therein, or any name, designation or trademark used
      in
      conjunction with the Licensed PSP Products;

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (ii)
      The
      Product Software, Product Proposals, Product Information, Printed Materials
      and
      Advertising Materials and their contemplated use under this Agreement do not
      and
      shall not infringe any person's or entity's rights including without limitation,
      patents, copyrights (including rights in a joint work), trademarks, trade dress,
      trade secret, rights of publicity, privacy, performance, moral rights, literary
      rights and any other third party right;

     

    (iii) Publisher
      has the right, power and authority to enter into this Agreement, to grant SCEA
      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 or entity,
      and, throughout the term of this Agreement, Publisher shall not make any
      separate agreement with any person or entity that is inconsistent with any
      of
      the provisions of this Agreement;

     

    (v) Publisher
      has not sold, assigned, leased, licensed or in any other way disposed of or
      encumbered the rights granted to Publisher hereunder, and Publisher will not
      sell, assign, lease, license or in any other way dispose of or encumber any
      of
      such rights except as expressly permitted hereunder or as consented to by SCEA
      in writing;

     

    (vi) Publisher
      has obtained the consent of all holders of intellectual property rights required
      to be obtained in connection with use of any Product Information by SCEA as
      licensed hereunder, and Product Information when provided to SCEA in accordance
      with the terms of this Agreement may be published, marketed, distributed and
      sold by SCEA in accordance with the terms and conditions of this Agreement
      and
      without SCEA incurring any royalty, residual, union, guild or other
      fees;

     

    (vii) Publisher
      shall not make any representation or give any warranty to any person or entity
      expressly or implicitly on SCEA's behalf, or to the effect that the Licensed
      PSP
      Products are connected in any way with SCEA (other than that the Executable
      Software and/or Licensed PSP Products have been developed, marketed, sold and/or
      distributed under license from SCEA);

     

    (viii) In
      the
      event that Executable Software is delivered to other Licensed PSP Publishers
      or
      Licensed PSP Developers by Publisher 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 the confidentiality of such
      source code;

     

    (ix) The
      Executable Software and any Product Information delivered to SCEA shall be
      in a
      commercially acceptable form, free of significant bugs, defects, time bombs
      or
      viruses which could disrupt, delay, destroy the Executable Software or PSP
      Player or render either of them

    less
      than
      fully useful, and shall be fully compatible with the PSP Player and any
      peripherals listed on the Printed Materials as compatible with the Licensed
      PSP
      Product;

     

    (x) Each
      of
      the Licensed PSP Products, Executable Software, Printed Materials and
      Advertising Materials shall be developed, marketed, sold and distributed by
      or
      at the direction of Publisher in an ethical manner and in full compliance with
      all applicable federal, state, provincial, local and foreign laws and any
      regulations and standards promulgated thereunder (including but not limited
      to
      federal and state lottery laws as currently interpreted and enforced) and will
      not contain any obscene or defamatory matter;

     

    (xi) Publisher's
      policies and practices with respect to the development, marketing, sale, and/or
      distribution of the Licensed PSP Products shall in no manner reflect adversely
      upon the name, reputation or goodwill of SCEA;

     

    (xiii)
      Publisher has, or will contract with a Licensed PSP 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 any Licensed PSP Products, the PSP Player or
      SCEA.

    

    10.
      Indemnities; Limited Liability.

     

    10.1
      Indemnification
      by SCEA. SCEA
      shall indemnify and hold Publisher harmless from and against any and all third
      party claims, losses, liabilities, damages, expenses and costs, including,
      without limitation, reasonable fees for attorneys, expert witnesses and
      litigation costs, and including costs incurred in the settlement or avoidance
      of
      any such claim which result from or are in connection with a breach of any
      of
      the representations or warranties provided by SCEA herein; provided, however,
      that Publisher shall give prompt written notice to SCEA of the assertion of
      any
      such claim, and provided, further, that SCEA shall have the right to select
      counsel and control the defense and settlement thereof. SCEA shall have the
      exclusive right, at its discretion, to commence and prosecute at its own expense
      any lawsuit or to take such other action with respect to such matters as shall
      be deemed appropriate by SCEA. Publisher shall provide SCEA, at no expense
      to
      Publisher, reasonable assistance and cooperation concerning any such matter;
      and
      Publisher shall not agree to the settlement of any such claim, action or
      proceeding without SCEA's prior written consent.

     

    10.2
      Indemnification
      By Publisher.
      Publisher shall
      indemnify and hold SCEA harmless from and against any and all claims, losses,
      liabilities, damages, expenses and costs, including, without limitation,
      reasonable fees for attorneys, expert witnesses and litigation costs, and
      including costs incurred in the settlement or avoidance of any
      such
      claim, which result from or are in connection with

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (i) a
      breach
      of any of the provisions of this Agreement; or (ii)infringement
      of a third party's intellectual property rights by Publisher; or (iii) any
      claims of or in connection with any personal or bodily injury (including death)
      or property damage, by whomever such claim is made, arising out of, in whole
      or
      in part, the development, marketing, sale, distribution or use of any of the
      Licensed PSP Products (or portions thereof) unless due directly to the breach
      of
      SCEA in performing any of the specific duties or providing any of the specific
      services required; or (iv) any federal, state or foreign civil or criminal
      actions relating to the development, marketing, sale or distribution of Licensed
      PSP Products. SCEA shall give prompt written notice to Publisher of the
      assertion of any such indemnified claim, and, with respect to third party
      claims, actions or proceedings against SCEA, SCEA shall have the right to select
      counsel for SCEA and reasonably control the defense and settlement thereof.
      Subject to the above, Publisher shall have the right, at its discretion, to
      select its own counsel, to commence and prosecute at its own expense any
      lawsuit, to reasonably control the defense and settlement thereof or to take
      such other action with respect to claims, actions or proceedings by or against
      Publisher. SCEA shall retain the right to approve any settlement. SCEA shall
      provide Publisher, at no expense to SCEA, reasonable assistance and cooperation
      concerning any such matter; and SCEA shall not agree to the settlement of any
      such claim, action or proceeding (other than third party claims, actions or
      proceedings against SCEA) without Publisher's prior written
      consent.

    

    10.3
      LIMITATION
      OF LIABILITY.

     

    10.3.1 LIMITATION OF SCEA'S LIABILITY.
      IN NO EVENT SHALL SCEA OR OTHER SONY AFFILIATES AND THEIR SUPPLIERS,
      OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS BE LIABLE FOR LOSS OF PROFITS, OR
      ANY
      SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING OUT
      OF,
      RELATING TO OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING WITHOUT LIMITATION
      THE BREACH OF THIS AGREEMENT BY SCEA, THE MANUFACTURE OF THE LICENSED PSP
      PRODUCTS AND THE USE OF THE LICENSED PSP PRODUCTS, EXECUTABLE SOFTWARE OR THE
      PSP PLAYER BY PUBLISHER OR ANY END-USER, WHETHER UNDER THEORY OF CONTRACT,
      TORT
      (INCLUDING NEGLIGENCE), INDEMNITY, PRODUCT LIABILITY OR OTHERWISE. IN NO EVENT
      SHALL SCEA'S LIABILITY ARISING UNDER, RELATING TO OR IN CONNECTION WITH THIS
      AGREEMENT, INCLUDING WITHOUT LIMITATION ANY LIABILITY FOR DIRECT OR INDIRECT
      DAMAGES, AND INCLUDING WITHOUT LIMITATION ANY LIABILITY UNDER SECTION 10.1,
      EXCEED THE TOTAL AMOUNT PAID BY PUBLISHER TO SCEA UNDER THIS AGREEMENT. EXCEPT
      AS EXPRESSLY SET FORTH
      HEREIN, NEITHER SCEA NOR ANY SONY AFFILIATE, NOR ANY OF THEIR RESPECTIVE
      DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, SHALL BEAR ANY RISK, OR HAVE ANY
      RESPONSIBILITY OR LIABILITY, OF ANY KIND TO PUBLISHER OR TO ANY THIRD PARTIES
      WITH RESPECT TO THE QUALITY, OPERATION OR PERFORMANCE OF ANY PORTION OF THE
      SCE
      MATERIALS, THE PSP PLAYER OR ANY LICENSED PSP PRODUCT.

     

    10.3.2
      LIMITATION
      OF PUBLISHER'S LIABILITY.
      IN NO EVENT SHALL PUBLISHER OR ITS AFFILIATED COMPANIES AND THEIR SUPPLIERS,
      OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS BE LIABLE TO SCEA FOR ANY LOSS OF
      PROFITS, OR ANY SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES
      ARISING OUT OF, RELATED TO OR IN CONNECTION WITH (i) THIS AGREEMENT OR (ii)
      THE
      USE OR DISTRIBUTION IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS
      AGREEMENT OF ANY CODE PROVIDED BY SCEA, IN WHOLE OR IN PART, WHETHER UNDER
      THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), INDEMNITY, PRODUCT LIABILITY
      OR
      OTHERWISE, PROVIDED THAT SUCH LIMITATIONS SHALL NOT APPLY TO DAMAGES RESULTING
      FROM PUBLISHER'S BREACH OF SECTIONS 4, 10.2, 11 OR 13 OF THIS AGREEMENT, AND
      PROVIDED FURTHER THAT SUCH LIMITATIONS SHALL NOT APPLY TO AMOUNTS WHICH
      PUBLISHER MAY BE REQUIRED TO PAY TO THIRD PARTIES UNDER SECTIONS 10.2 OR
      16.10.

     

    10.4
      DISCLAIMER
      OF WARRANTY.
      EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, NEITHER SCEA NOR ITS AFFILIATES
      AND SUPPLIERS MAKE, NOR DOES PUBLISHER RECEIVE, ANY REPRESENTATIONS OR
      WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, REGARDING THE SCE MATERIALS, SCEA'S
      CONFIDENTIAL INFORMATION THE PSP PLAYER, THE UNITS OF THE
      LICENSED PSP PRODUCTS MANUFACTURED HEREUNDER OR PUBLISHER'S PRODUCT INFORMATION
      INCLUDED ON SCEA DEMO DISCS. SCEA SHALL NOT BE LIABLE FOR ANY INJURY, LOSS
      OR
      DAMAGE, DIRECT, INDIRECT OR CONSEQUENTIAL, ARISING OUT OF THE USE OR INABILITY
      TO USE ANY UNITS OR ANY SOFTWARE ERRORS OR "BUGS" IN PUBLISHER'S PRODUCT
      INFORMATION WHICH MAY BE REPRODUCED ON SCEA DEMO DISCS. WITHOUT LIMITING THE
      GENERALITY OF THE FOREGOING, SCEA AND ITS AFFILIATES AND SUPPLIERS
      EXPRESSLY DISCLAIM THE IMPLIED
      WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND
THEIR
      EQUIVALENTS UNDER THE LAWS OF ANY JURISDICTION, REGARDING THE SCE MATERIALS,
      SCEA'S CONFIDENTIAL INFORMATION, LICENSED PSP PRODUCTS, SCEA DEMO DISCS AND
      THE
      PSP PLAYER. ANY WARRANTY AGAINST INFRINGEMENT THAT MAY BE PROVIDED IN SECTION
      2-312(3) OF THE UNIFORM COMMERCIAL CODE OR IN ANY OTHER COMPARABLE STATUTE
      IS
      EXPRESSLY DISCLAIMED.

     

    
      
        
        

      

      
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    11. SCEA
      Intellectual Property Rights.

     

    11.1
      Licensed Trademarks.The
      Licensed Trademarks
      and the goodwill associated therewith are and shall be the exclusive property
      of
      SCEA or Affiliates of SCEA. Nothing herein shall give Publisher any right,
      title
      or interest in or to any of the Licensed Trademarks or any other trademarks
      of
      SCEA, other than the non-exclusive license provided herein. Publisher shall
      not
      do or cause to be done any act or thing in any way impairing or tending to
      impair or dilute any of SCEA's rights, title or interests in or to any of the
      Licensed Trademarks or any other trademarks of SCEA, nor shall Publisher
      register any trademark in its own name or in the name of any other person or
      entity, or obtain rights to employ Internet domain names or addresses, which
      are
      similar to or are likely to be confused with any of the Licensed Trademarks
      or
      any other trademarks of SCEA.

     

    11.2
      License
      of SCE Materials and PSP Player. All
      rights with respect to the SCE Materials and PSP Player, including, without
      limitation, all SCEA Intellectual Property Rights therein, are and shall be
      the
      exclusive property of SCEA or Affiliates of SCEA. Nothing herein shall give
      Publisher any right, title or interest in or to the SCE Materials or the PSP
      Player or any portion thereof, other than the non-exclusive license provided
      herein. Publisher shall not do or cause to be done any act or thing in any
      way
      impairing or tending to impair any of SCEA's rights, title or interests in
      or to
      the SCE Materials or the PSP Player or any portion thereof.

     

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

     

    In
      the
      event that Publisher discovers or otherwise becomes aware that any SCEA
      Intellectual Property Rights have been or are being infringed upon by any third
      party, Publisher shall promptly notify SCEA. SCEA shall have the sole right,
      in
      its discretion, to institute and prosecute lawsuits against third parties for
      such infringement of SCEA Intellectual Property Rights. Any lawsuit shall be
      prosecuted solely at the cost and expense of SCEA and all sums recovered in
      any
      such lawsuits, whether by judgment, settlement or otherwise shall belong solely
      to SCEA. Upon request of SCEA, Publisher shall execute all papers, testify
      on
      all matters and otherwise cooperate in every way necessary and desirable for
      the
      prosecution of any such lawsuit.SCEA
      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
      the
      conduct of a cross-claim or third party action.

     

    13.  Confidentiality.
      

     

    13.1 SCEA's
      Confidential Information.

    

    13.1.1
      Definition
      of
      SCEA's
      Confidential
      Information. "SCEA's
      Confidential Information"
      shall mean:

    

    (i) the
      PSP
      Player, SCE Materials and Development Tools and this Agreement;

    

    (ii) other
      documents and materials developed, owned, licensed or under the control of
      SCEA,
      including all processes, data, hardware, software, inventions, trade secrets,
      ideas, creations, improvements, designs, discoveries, developments, research
      and
      know-how, including without limitation the PSP SourceBook and SCEA Intellectual
      Property Rights relating to the PSP Player, SCE Materials or Development Tools;
      and

    

    (iii) information
      and documents regarding SCEA's finances, business, marketing and technical
      plans, business methods and production plans.

    

    SCEA's
      Confidential Information may consist of information in any medium, whether
      oral,
      printed, in machine-readable form or otherwise, including information apprised
      to Publisher and reduced to tangible or written form at any time during the
      term
      of this Agreement. In addition, the existence of a relationship between
      Publisher and SCEA for the purposes set forth herein shall be deemed to be
      SCEA's Confidential Information unless otherwise agreed to in writing by the
      parties or until publicly announced by SCEA.

    

    13.1.2
      Term
      of Protection of SCEA's Confidential
      Information. The
      term
      for the protection of SCEA's Confidential Information shall commence on the
      Effective Date first above written and shall continue in full force and effect
      as long as any of SCEA's Confidential Information continues to be maintained
      as
      confidential and proprietary by SCEA or SCE. During such term, Publisher shall,
      pursuant to Section 13.1.3 below, safeguard and hold in trust and confidence
      and
      not disclose or use any and all of SCEA's Confidential Information except for
      the purposes specified.

     

    
      
        
        

      

      
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    13.1.3
      Preservation
      of
      SCEA's
      Confidential
      Information. Publisher
      shall, with respect to SCEA's Confidential Information:

    

    (i)
      not
      disclose SCEA's Confidential Information to any person or entity, other than
      those employees or directors of the Publisher whose duties justify a
      "need-to-know" and who have executed a confidentiality agreement in which such
      employees or directors have agreed not to disclose,
      and to hold confidential, 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 SCEA's request, Publisher
      shall provide SCEA with a copy of such confidentiality agreement between
      Publisher and its employees or directors, and shall also provide SCEA with
      a
      list of employee and director signatories. Publisher shall not disclose any
      of
      SCEA's Confidential Information to third parties, including without limitation
      to consultants or agents. Any employees or directors who obtain access to SCEA's
      Confidential Information shall be advised by Publisher of the confidential
      nature of SCEA's Confidential Information, and Publisher shall be responsible
      for any breach of this Agreement by its employees or directors.

    

    (ii) take
      all
      measures necessary to safeguard SCEA's 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 SCEA's Confidential
      Information be maintained in a restricted access area and plainly marked to
      indicate the secret and confidential nature thereof.

    

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

    

    (v) not
      use,
      modify, reproduce, sublicense, copy, distribute, create derivative works from,
      or otherwise provide to third parties, SCEA's Confidential Information, or
      any
      portion thereof, except as provided herein, nor shall Publisher remove any
      proprietary legend set forth on or contained within any of SCEA's Confidential
      Information.

    

    13.1.4
      Exceptions. The
      foregoing restrictions shall not apply to any portion of SCEA's Confidential
      Information which:

    

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

    

    (ii) is
      or
      legitimately becomes part of the public domain through no fault of Publisher
      or
      its employees; or

    

    (iii) is
      independently developed by Publisher's employees who have not had access to
      SCEA's Confidential Information, as proven by written documentation of
      Publisher; or

    

    (iv) is
      required to be disclosed by administrative or judicial action; provided that
      Publisher must attempt to maintain the confidentiality of SCEA's Confidential
      Information by asserting in such action the restrictions set forth in this
      Agreement, and, immediately after receiving

    notice
      of
      such action or any notice of any threatened action, Publisher must notify SCEA
      to give SCEA the maximum opportunity to seek any other legal remedies to
      maintain such SCEA's Confidential Information in confidence as herein provided;
      or

    

    (v) is
      approved for release by written authorization of SCEA.

    

    13.1.5 No
      Obligation to
      License. Disclosure
      of SCEA's Confidential Information to Publisher shall not constitute any option,
      grant or license from SCEA to Publisher under any patent or other SCEA
      Intellectual Property Rights now or hereinafter held by SCEA. The disclosure
      by
      SCEA to Publisher of SCEA's Confidential Information shall not result in any
      obligation on the part of SCEA to approve any materials of Publisher, nor shall
      such disclosure by SCEA give Publisher any right to develop, directly or
      indirectly, manufacture or sell any product derived from or which uses any
      of
      SCEA's Confidential Information, 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 SCEA Confidential Information, it shall notify
      SCEA 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 SCEA to
      protect SCEA's proprietary rights in any SCEA 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 but not limited to enforcement of confidentiality
      agreements, commencement and prosecution in good faith (alone or with the
      disclosing party) of legal action, and reimbursement for all reasonable
      attorneys' fees, costs and expenses incurred by SCEA to protect its proprietary
      rights in SCEA's Confidential Information. Publisher shall take all steps
      requested by SCEA to prevent the recurrence of any unauthorized duplication,
      access, use, possession or knowledge of SCEA's Confidential Information. In
      addition, SCEA shall have the right to pursue any actions at law or in equity,
      including without limitation the remedies set forth in Section 16.10
      hereto.

    

    13.2
      Publisher's Confidential Information.

    

    13.2.1 Definition
      of Publisher's
      Confidential
      Information. "Publisher's
      Confidential Information" shall mean:

    

    (i)
      any
      Product Software as provided to SCEA 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 use by and release to end users, the general public
      or the trade);

     

    
      
        
        

      

      
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    (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, including information apprised
      to SCEA and reduced to tangible or written form at any time during the term
      of
      this Agreement.

    

     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 first above written and shall continue in full force and effect
      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. SCEA
      shall, with respect to Publisher's Confidential Information:

    

    (i)
      hold
      all Publisher's Confidential Information in confidence, and shall 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 an SCEA
      employee or subcontractor who needs to know or have access to such 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 secret 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 SCEA remove any proprietary legend set forth on
      or
      contained within any of Publisher's Confidential Information.

     

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

    

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

    

    (ii) is
      or
      legitimately becomes part of information in the public domain through no fault
      of SCEA, its employees or its subcontractors; or

    

    (iii) is
      independently developed by SCEA's employees or affiliates who have not had
      access to Publisher's Confidential Information, as proven by written
      documentation of SCEA; or

    

    (iv) is
      required to be disclosed by administrative or judicial action; provided that
      SCEA attempted to maintain the confidentiality of Publisher's Confidential
      Information by asserting in such action the restrictions set forth in this
      Agreement, and immediately after receiving notice of such action, notified
      Publisher of such action to give Publisher the opportunity to seek any other
      legal remedies to maintain such Publisher's Confidential Information in
      confidence as herein provided; or

    

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

    

    13.2.5 SCEA's Obligations
      Upon
      Unauthorized
      Disclosure. If
      at any
      time SCEA becomes aware of any unauthorized duplication, access, use, possession
      or knowledge of any of Publisher's Confidential Information, it shall notify
      Publisher as soon as is reasonably practicable. SCEA shall provide any and
      all
      reasonable assistance to Publisher to protect Publisher's proprietary rights
      in
      any of Publisher's Confidential Information that may have directly or indirectly
      disclosed by an SCEA employee and that may be duplicated, accessed, used,
      possessed or known in a manner or for a purpose not expressly authorized by
      this
      Agreement. SCEA 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. The
      terms
      and conditions of this Agreement shall be treated as SCEA's Confidential
      Information and Publisher's Confidential Information; provided that each party
      may disclose the terms and conditions of this Agreement:

    

    (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

     

    
      
        
        

      

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

    

    14.
      Term and Termination.

     

    14.1
      Effective
      Date; Term. This
      Agreement shall not be binding on the parties until it has been signed by each
      party, in which event it shall be effective from the Effective Date until March
      31, 2007, unless earlier terminated pursuant to Section 14.2. The term shall
      be
      automatically extended for additional one-year terms thereafter, unless either
      party provides the other with written notice of its election not to so extend
      on
      or before January 31 of the applicable year. Notwithstanding the foregoing
      the
      term for the protection of SCEA's 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 SCEA. SCEA
      shall have the right to terminate this Agreement immediately, by providing
      written notice of such election to Publisher, upon the occurrence of any of
      the
      following:

     

    (i) If
      Publisher breaches (A) any of its obligations; or (B) any other agreement
      entered into between SCEA or Affiliates of SCEA and Publisher.

     

    (ii) The
      liquidation or dissolution of Publisher or a statement of intent by Publisher
      to
      no longer exercise any of the rights granted by SCEA to Publisher.

     

    (iii) If
      during
      the term of this Agreement, Publisher or in an entity which directly or
      indirectly has a controlling interest in Publisher (A) is transferred to a
      party
      that is in breach of any agreement with SCEA or an Affiliate of SCEA; (B)
      directly or indirectly holds or acquires a controlling interest in a third
      party
      which develops any interactive device or product which is directly or indirectly
      competitive with the PSP Player; or (C) is in litigation with SCEA or Affiliates
      of SCEA. As used in this Section 14.2, "controlling interest" means, with
      respect to any form of entity, sufficient power to control the decisions of
      such
      entity.

     

    (iv) If
      during
      the term of this Agreement, Publisher or an entity that directly or indirectly
      has a controlling interest in Publisher enters into a business relationship
      with
      a third party with whom Publisher materially contributes to develop core
      components to an interactive device or product
      which is directly or indirectly competitive with the PSP Player.

     

    (v) Publisher
      files or causes to file litigation against SCEA or any SCE
      Affiliate.

     

    Publisher
      shall immediately notify SCEA in writing in the event that any of the events
      or
      circumstances specified in this Section occur.

     

    14.3
      Product-by-Product
      Termination by SCEA. In
      addition to the events of termination described in Section 14.2, above, SCEA,
      at
      its option, shall be entitled to terminate, on a product-by-product basis,
      the
      licenses and related rights herein granted to Publisher in the event that (a)
      Publisher fails to notify SCEA promptly in writing of any material change to
      any
      materials previously approved by SCEA in accordance with Section 5 or Section
      6.1 hereto, and such breach is not corrected or cured within thirty (30) days
      after receipt of written notice of such breach; (b) Publisher uses a third
      party
      that fails to comply with the requirements of Section 3 in connection with
      the
      development of any Licensed PSP Product; (c) any third party with whom Publisher
      has contracted for the development of Executable Software breaches any of its
      material obligations to SCEA pursuant to such third party's agreement with
      SCEA
      with respect to such Licensed PSP Product; or (d) Publisher cancels a Licensed
      PSP Product or fails to provide SCEA in accordance with the provisions of
      Section 5 above, with the final version of the Executable Software for any
      Licensed PSP Product within three (3) months of the scheduled release date
      according to the Product Proposal (unless a modified final delivery date has
      been agreed to by the parties), or fails to provide work in progress to SCEA
      in
      strict accordance with the Review Process in Section 5.3.

     

    14.4
      Options
      of SCEA in Lieu of Termination. As
      alternatives to terminating this Agreement or a particular Licensed PSP Product
      as set forth in Sections 14.2 and 14.3 above, SCEA may, at its option and upon
      written notice to Publisher, take the following actions. In the event that
      SCEA
      elects either of these options, Publisher may terminate this Agreement upon
      written notice to SCEA rather than allowing SCEA to exercise these options.
      Election of these options by SCEA shall not constitute a waiver of or compromise
      with respect to any of SCEA's rights under this Agreement and SCEA may elect
      to
      terminate this Agreement with respect to any breach.

     

    14.4.1
      Suspension
      of Agreement. SCEA
      may
      suspend this Agreement, entirely or with respect to a particular Licensed PSP
      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.

     

    
      
        
        

      

      
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    14.4.2
      Liquidated
      Damages. Whereas
      a
      minor breach of any of the events set out below may not warrant termination
      of
      this Agreement, but will cause SCEA damages
      in amounts difficult to quantify, SCEA may require Publisher to pay liquidated
      damages of *** per event as follows:

     

    (i) Failure
      to submit Advertising Materials to SCEA for approval (including any required
      resubmissions);

     

    (ii) Broadcasting
      or publishing Advertising Materials without receiving the final approval or
      consent of SCEA;

     

    (iii) Failure
      to make SCEA's requested revisions to Advertising Materials; or

     

    (iv) Failure
      to comply with the PSP SourceBook, Manufacturing Specifications or Guidelines
      which relates in any way to use of Licensed Trademarks.

    

    (v) any
      transshipment or attempted transshipment of Licensed Products into unlicensed
      territories, whether willfully or negligently, without the expressed written
      permission of the regional SCE Affiliate, in an amount that SCEA deems in sole
      discretion not to be a material breach of this Agreement.

     

    Liquidated
      damages shall be invoiced separately or on Publisher's next invoice for Licensed
      PSP Products. SCEA reserves the right to terminate this Agreement for breach
      in
      lieu of seeking liquidated damages or in the event that liquidated damages
      are
      unpaid.

     

    14.5
      No
      Refunds. In
      the
      event of the termination of this Agreement in accordance with any of the
      provisions of Sections 14.2 through 14.4 above, no portion of any payments
      of
      any kind whatsoever previously provided to SCEA hereunder shall be owed or
      be
      repayable to Publisher.

     

    15.
      Effect of Expiration or Termination.

     

    15.1
      Inventory
      Statement. Within
      thirty (30) days of the date of expiration or the effective date of termination
      with respect to any or all Licensed PSP Products or this Agreement, Publisher
      shall provide SCEA with an itemized statement, certified to be accurate by
      an
      officer of Publisher, specifying the number of unsold Units of the Licensed
      PSP
      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. SCEA 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 below, the licenses and
      related rights herein granted to Publisher shall immediately revert to SCEA,
      and
      Publisher shall cease from any further use of SCEA's Confidential Information,
      Licensed Trademarks and SCE Materials and any SCEA Intellectual Property Rights
      therein, and, subject to the provisions of Section 15.3 below, Publisher shall
      have no further right to continue the development, publication, manufacture,
      marketing, sale or distribution of any Units of the Licensed PSP Products,
      or to
      continue to use any Licensed Trademarks; provided, however, that for a period
      of
      one year after termination, and subject to all the terms of Section 13, and
      provided this Agreement is not terminated due to a breach or default of
      Publisher, Publisher may retain such portions of SCE Materials and SCEA's
      Confidential Information as SCEA in its sole discretion agrees are required
      to
      support end users of Licensed PSP Products but must return these materials
      at
      the end of such one year period. Upon expiration or termination, the licenses
      and related rights herein granted to SCEA by Publisher shall immediately revert
      to Publisher, and SCEA shall cease from any further use of Product Information
      and any Publisher Intellectual Property Rights therein; provided that SCEA
      may
      continue the manufacture, marketing, sale or distribution of any SCEA Demo
      Discs
      containing Publisher's Product Information which Publisher had approved prior
      to
      termination.

     

    15.3
      Disposal
      of Unsold Units. Provided
      that this Agreement is not terminated due to a breach or default of Publisher,
      Publisher may, upon expiration or termination of this Agreement, sell off
      existing inventories of Licensed PSP Products, on a non-exclusive basis, for
      a
      period of ninety (90) days from the date of expiration or 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
      ninety (90) day period, or in the event this Agreement is terminated as a result
      of any breach or default of Publisher, any and all Units of the Licensed PSP
      Products remaining in Publisher's inventory shall be destroyed by Publisher
      within five (5) business days of such expiration or termination. Within five
      (5)
      business days after such destruction, Publisher shall provide SCEA with an
      itemized statement, certified to be accurate by an officer of Publisher,
      indicating the number of Units of the Licensed PSP 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.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    15.4
      Return
      of SCE Materials and Confidential Information. Upon
      the
      expiration or earlier termination of this Agreement, Publisher shall immediately
      deliver to SCEA, or if and to the extent requested by SCEA destroy, all SCE
      Materials and any and all copies thereof, and Publisher and SCEA shall, upon
      the
      request of the other party, immediately deliver to the other party, or if and
      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 SCEA, as appropriate,
      shall provide the other party with an affidavit of destruction and an itemized
      statement, each certified to be accurate by an officer of Publisher, indicating
      the number
      of
      copies and units of the SCE Materials and 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 the SCE Materials or Confidential Information and SCEA must resort to
      legal means including without limitation any use of attorneys to recover the
      SCE
      Materials or Confidential Information or the value thereof, all costs, including
      SCEA's reasonable attorney's fees, shall be borne by Publisher, and SCEA may,
      in
      addition to SCEA's other remedies, withhold such amounts from any payment
      otherwise due from SCEA to Publisher under any agreement between SCEA and
      Publisher.

     

    15.5
      Extension
      of this Agreement; Termination Without Prejudice. SCEA
      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, without limitation, any expenditures, loss of profits
      or prospective profits) sustained or arising out of or alleged to have been
      sustained or to have arisen out of such expiration. 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 any such expiration or 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, telegram
      or facsimile, with charges prepaid. The address for all notices or other
      communications required to be sent to SCEA 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 or tendered delivery, as confirmed by the sending party.

     

    16.2
      Audit
      Provisions. Publisher
      shall keep full, complete, and accurate books of account and records covering
      all transactions relating to this Agreement. Publisher shall preserve such
      books
      of account, records, documents and material for a period of twenty-four (24)
      months after the expiration or earlier termination of this Agreement. Acceptance
      by SCEA of an accounting statement, purchase order, or payment hereunder will
      not preclude SCEA from challenging or questioning the accuracy thereof at a
      later time. In the event that SCEA reasonably believes that the Wholesale Price
      provided by Publisher with respect to any Licensed PSP Product is not accurate,
      SCEA shall be entitled to request additional documentation from Publisher to
      support the listed

    Wholesale
      Price for such Licensed PSP Product. In addition, during the Term and for a
      period of two (2) years thereafter and upon the giving of reasonable written
      notice to Publisher, representatives of SCEA shall have access to, and the
      right
      to make copies and summaries of, such portions of all of Publisher's books
      and
      records as pertain to the Licensed PSP Products and any payments due or credits
      received hereunder. In the event that such inspection reveals an under-reporting
      of any payment due to SCEA, Publisher shall immediately pay SCEA such amount.
      In
      the event that any audit conducted by SCEA reveals that Publisher has
      under-reported any payment due to SCEA hereunder by *** or more for that audit
      period, then in addition to the payment of the appropriate amount due to SCEA,
      Publisher shall reimburse SCEA for all reasonable audit costs for that audit
      and
      any and all collection costs to recover the unpaid amount.

     

    16.3
      Force
      Majeure. Neither
      SCEA 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, without limitation, 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 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 SCEA prior to, during
      or
      after any such Force Majeure condition. In the event that the Force Majeure
      condition continues for more than sixty (60) days, SCEA 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 SCEA and Publisher, respectively, is that of licensor
      and
      licensee. Both parties are independent contractors and are not 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.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    16.5
Assignment. SCEA
      has
      entered into this Agreement based upon the particular reputation, capabilities
      and experience of Publisher and its officers, directors and employees.
      Accordingly, Publisher may not assign 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 SCEA shall first be
      obtained. This Agreement shall not be assigned in contravention of Section
      14.2
      (iii). Any attempted or purported assignment, delegation or other such transfer,
      directly or indirectly, without the required consent of SCEA shall be void.
      Subject to the foregoing, this Agreement shall inure to the benefit of the
      parties and their respective successors and permitted assigns (other than under
      the conditions set forth in Section 14.2 (iii). SCEA shall have the right to
      assign any and all of its rights and obligations hereunder to any Sony
      affiliate(s).

     

    16.6
      Subcontractors. Publisher
      shall not sell, assign, delegate, subcontract, sublicense or otherwise transfer
      or encumber all or any portion of the licenses herein granted without the prior
      written approval of SCEA, provided, however, that Publisher may retain those
      subcontractors who provide services which do not require access to SCE Materials
      or SCEA's Confidential Information without such prior approval. Publisher may
      retain those subcontractor(s) to assist with the development, publication and
      marketing of Licensed PSP Products (or portions thereof) which have signed
      (i)
      an PSP LPA or PSP LDA with SCEA (the "PSP Agreement") in full force and effect
      throughout the term of such development and marketing; or (ii) an SCEA-approved
      subcontractor agreement ("Subcontractor Agreement"); and SCEA has approved
      such
      subcontractor in writing, which approval shall be in SCEA's sole discretion.
      Such Subcontractor Agreement shall provide that SCEA is a third-party
      beneficiary of such Subcontractor Agreement and has the full right to bring
      any
      actions against such subcontractors to comply in all respects with the terms
      and
      conditions of this Agreement. Publisher shall provide a copy of any such
      Subcontractor Agreement to SCEA prior to and following execution thereof.
      Publisher shall not disclose to any subcontractor any of SCEA's Confidential
      Information, including, without limitation, any SCE Materials, unless and until
      either a PSP Agreement or a Subcontractor Agreement has been executed and
      approved by SCEA. Notwithstanding any consent which may be granted by SCEA
      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 its
      best efforts to cause its subcontractors retained 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. SCEA may subcontract any of its rights or obligations
      hereunder.

     

    16.7
      Compliance
      with Applicable Laws.
      The parties
      shall at all times comply with all applicable regulations
      and orders of their respective countries and other controlling jurisdictions
      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. 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, without limitation, the recording of this Agreement with any
      appropriate governmental authorities (if required).

     

    16.8
      Governing
      Law; Consent to Jurisdiction. This
      Agreement 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 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 16.1 above. In addition, each
      party
      hereby waives the right to a jury trial in any action or proceeding related
      to
      this Agreement.

     

    16.9
      Legal
      Costs and Expenses. In
      the
      event it is necessary for either party to retain the services of an attorney
      or
      attorneys to enforce the terms of this Agreement or to file or defend any action
      arising out of this Agreement, then the prevailing party in any such action
      shall be entitled, in addition to any other rights and remedies available to
      it
      at law or in equity to recover from the other party its reasonable fees for
      attorneys 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.

     

    16.10
      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,
      and
      all such remedies shall be deemed to be cumulative. Any breach of Sections
      3, 4,
      5, 6.1, 11 and 13 of this Agreement would cause significant and irreparable
      harm
      to SCEA, the extent of which would be difficult to ascertain. Accordingly,
      in
      addition to any other remedies including without limitation equitable relief
      to
      which SCEA may be entitled, in the event of a breach by Publisher or any of
      its
      employees or permitted subcontractors of any such Sections of this Agreement,
      SCEA shall be entitled to the immediate issuance without bond of ex parte
      injunctive relief or, if a bond is required under applicable law, on the posting
      of a bond in an amount
      not to exceed ***,
      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,
      SCEA 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 SCEA may be entitled under
      this
      Agreement or otherwise at law or in equity. In addition, Publisher shall
      indemnify SCEA for all losses, damages, liabilities, costs and expenses
      (including reasonable attorneys' fees and all reasonable related costs) which
      SCEA may sustain or incur as a result of any breach under this
      Agreement.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    16.11
      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 thereof) shall be enforced to the extent possible
      consistent with the stated intention of the parties, or, if incapable of such
      enforcement, shall be deemed to be deleted from this Agreement, while the
      remainder of this Agreement shall continue in full force and remain in effect
      according to its stated terms and conditions.

     

    16.12
      Sections Surviving Expiration
      or
      Termination. The
      following sections shall survive the expiration or earlier termination of this
      Agreement for any reason: 4, 5.8, 6.2, 6.4, 8, 9, 10, 11, 13, 14.5, 15, and
      16.

     

    16.13
      Waiver. No
      failure or delay by either party in exercising any right, power or remedy under
      this Agreement shall operate as a waiver of any such right, power or remedy.
      No
      waiver of any provision of this Agreement shall be effective unless in writing
      and signed by the party against whom such waiver is sought to be enforced.
      Any
      waiver by either party of any provision of this Agreement shall not be construed
      as a waiver of any other provision of this Agreement, nor shall such waiver
      operate or be construed as a waiver of such provision respecting any future
      event or circumstance.

     

    16.14
      Modification and Amendment. No
      modification or amendment of any provision of this Agreement shall be effective
      unless in writing and signed by both of the parties. Notwithstanding the
      foregoing, SCEA reserves the right to modify the PSP SourceBook from time to
      time upon reasonable notice to Publisher.

     

    16.15
      Headings. 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.

     

    16.16
      Integration. This
      Agreement, together with the PSP SourceBook, constitutes the entire agreement
      between SCEA and Publisher and supersedes all prior or contemporaneous
      agreements, proposals, understandings and communications between SCEA and
      Publisher, whether oral or written, with respect to the subject matter hereof
      including any PSP Confidentiality and Nondisclosure Agreement and Materials
      Loan
      Agreement between SCEA and Publisher.

     

    16.17
      Counterparts. This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, and together shall constitute one and the same
      instrument.

     

    16.18
      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.

     

    IN
      WITNESS
      WHEREOF, the
      parties have caused this Agreement to be duly executed as of the day and year
      first written above.

     

    
      	 SONY COMPUTER
              ENTERTAINMENT AMERICA INC.	 	 DESTINATION SOFTWARE,
              INC.
	 	 	 	 	 

    

    
      	 By:
              	 	 	 By:
              	 
	 	 	 	 	 

    

    
      	 Print
              Name: 	 	 	 Print
              Name: 	 

    

    
      	 	 	 	 	 
	 Title:	 	 	 Title:	 

    

    
      	 	 	 	 	 
	 Date:
              	 	 	 Date:
              	 

    

     

    NOT
      AN AGREEMENT UNTIL EXECUTED BY BOTH PARTIES

     

    
      
        
        

      

      
        23Unassociated Document

    
       

      SONY
        COMPUTER ENTERTAINMENT AMERICA INC.

       

       

      AND

       

      DESTINATION
        SOFTWARE INC.

       

      

       

      PLAYSTATION®2

       

      CD-ROM/DVD-ROM

       

      LICENSED
        PUBLISHER AGREEMENT

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
        OF CONTENTS

       

       

      

        
          	
                  SECTION:

                	
                  PAGE:

                
	
                   

                	
                   

                
	
                  1.

                	
                  DEFINITION
                    OF TERMS

                	
                  1

                
	
                   

                	
                   

                	
                   

                
	
                  2.

                	
                  LICENSE
                    GRANT

                	
                  3

                
	
                   

                	
                   

                	
                   

                
	
                  3.

                	
                  DEVELOPMENT
                    OF LICENSED PRODUCTS

                	
                  3

                
	
                   

                	
                   

                	
                   

                
	
                  4.

                	
                  LIMITATIONS
                    ON LICENSES; RESERVATION OF RIGHTS

                	
                  4

                
	
                   

                	
                   

                	
                   

                
	
                  5.

                	
                  QUALITY
                    STANDARDS FOR THE LICENSED PRODUCTS

                	
                  5

                
	
                   

                	
                   

                	
                   

                
	
                  6.

                	
                  MANUFACTURE
                    OF THE LICENSED PSP PRODUCTS

                	
                  7

                
	
                   

                	
                   

                	
                   

                
	
                  7.

                	
                  MARKETING
                    AND DISTRIBUTION

                	
                  10

                
	
                   

                	
                   

                	
                   

                
	
                  8.

                	
                  ROYALTIES

                	
                  12

                
	
                   

                	
                   

                	
                   

                
	
                  9.

                	
                  REPRESENTATIONS
                    AND WARRANTIES

                	
                  15

                
	
                   

                	
                   

                	
                   

                
	
                  10.

                	
                  INDEMNITIES;
                    LIMITED LIABILITY

                	
                  16

                
	
                   

                	
                   

                	
                   

                
	
                  11.

                	
                  SCEA
                    INTELLECTUAL PROPERTY RIGHTS

                	
                  17

                
	
                   

                	
                   

                	
                   

                
	
                  12.

                	
                  INFRINGEMENT
                    OF SCEA INTELLECTUAL PROPERTY RIGHTS BY THIRD PARTIES
                    

                	
                  18

                
	
                   

                	
                   

                
	
                  13.

                	
                  CONFIDENTIALITY

                	
                  18

                
	
                   

                	
                   

                	
                   

                
	
                  14.

                	
                  TERM
                    AND TERMINATION

                	
                  20

                
	
                   

                	
                   

                	
                   

                
	
                  15.

                	
                  EFFECT
                    OF EXPIRATION OR TERMINATION

                	
                  22

                
	
                   

                	
                   

                	
                   

                
	
                  16.

                	
                  MISCELLANEOUS
                    PROVISIONS

                	
                  23

                

        

         

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      PLAYSTATION(®2

      CD-ROM/DVD-ROM

      LICENSED
        PUBLISHER AGREEMENT

       

      This
        LICENSED
        PUBLISHER AGREEMENT (the
        “Agreement” or “LPA”), entered into as of the 20th day of November, 2002 (the
“Effective Date”), by and between SONY
        COMPUTER ENTERTAINMENT AMERICA INC.,
        with offices at 919 E. Hillsdale Boulevard, Foster City,
        CA
        94404 (hereinafter “SCEA”), and Destination Software
        Inc., with offices at 400 North Church Street, #260,
        Moorsetown, NJ, 08057 (hereinafter Publisher”).

       

      WHEREAS,
        SCEA,
        its
        parent company, Sony Computer Entertainment Inc., and/or certain of their
        affiliates and companies within the group of companies of which any of them
        form
        a part (collectively referred to herein as “Sony”) are
        designing and developing, and licensing core components
        of, a computer entertainment system known as the
        PlayStation(R)2
        computer entertainment system (hereinafter
        referred to as the “System”).

       

      WHEREAS,
        SCEA
        has
        the right to grant licenses to certain
        SCEA Intellectual Property Rights (as defined below)
        in
        connection with the System.

       

      WHEREAS,
        Publisher
        desires to be granted a non-exclusive
        license to publish, develop, have manufactured, market, distribute and sell
        Licensed Products (as defined below) pursuant to the terms and conditions
        set
        forth in this Agreement; and SCEA is willing, on the terms and subject to
        the
        conditions of this Agreement, to grant Publisher such a license.

       

      NOW,
        THEREFORE, in
        consideration of the representations,
        warranties and covenants contained herein, and other good and valuable
        consideration, the receipt and sufficiency
        of which is hereby acknowledged, Publisher and
        SCEA
        hereby agree as follows:

       

      1. Definition
        of Terms.

       

      1.1
        “Advertising
        Materials” means any advertising, marketing, merchandising, promotional, public
        relations (including press releases) and display materials relating to or
        concerning Licensed Products or proposed Licensed Products,
        or any other advertising, merchandising, promotional,
        public relations (including press releases) and display
        materials depicting any of the Licensed Trademarks.
        For purposes of this Agreement, Advertising Materials
        include any advertisements in which the System is
        referred to or used in any way, including but not limited to
        giving
        the System away as prizes in contests or sweepstakes
        and the public display of the System in product
        placement opportunities.

       

      1.2
        “Affiliate
        of SCEA” means, as applicable, either
        Sony Computer Entertainment Inc. in Japan, Sony Computer
        Entertainment Europe Ltd. in the United Kingdom
        or such other Sony Computer Entertainment entity
        as
        may be established from time to time.

       

      1.3
        “Designated
        Manufacturing Facility” means a manufacturing facility or facilities which is
        designated by SCEA
        in
        its sole discretion to manufacture Licensed Products
        and/or their component parts, which may include manufacturing facilities
        owned
        and operated by affiliated companies of SCEA.

       

      1.4
        “Development
        System Agreement” means an agreement entered into between SCEA and a Licensed
        Publisher, Licensed Developer or other licensee for the sale or license of
        Development Tools.

       

      1.5
        “Development
        Tools” means the PlayStation 2 development tools sold or licensed by SCEA to a
        Licensed Publisher
        or Licensed Developer for use in the development
        of Executable Software for the System.

       

      1.6
        “Executable
        Software” means software which includes
        Product Software and any software provided directly
        or indirectly by SCEA or an Affiliate of SCEA designed
        for execution exclusively on the System and which
        has
        the ability to communicate with the software resident in the
        System.

       

      1.7
        “Fiscal
        Year” means a year measured from April 1
        to
        March 31.

       

      1.8
        “Generic
        Line” means the generic legal attribution
        line used on SCEA marketing or other materials, which
        shall be or be substantially similar to the following: “Product copyright and
        trademarks are the property of the respective publisher or their
        licensors”.

       

      1.9
        “Guidelines”
        shall mean any guidelines of SCEA
        or
        an Affiliate of SCEA with respect to SCEA Intellectual Property Rights, which
        may be set forth in the SourceBook
        2 or in other documentation provided by SCEA
        or
        an Affiliate of SCEA to Publisher.

       

      1.10
        “Legal
        Copy” means any legal or contractual information
        required to be used in connection with a Licensed
        Product or Product Information, including but not limited to copyright and
        trademark attributions, contractual credits and developer or distribution
        credits.

       

      1.11
        “Level
        1
        Rebate” shall have the meaning set forth
        in
        Section 8.4 hereto.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      1.12
        “Level
        2
        Rebate” shall have the meaning set forth
        in
        Section 8.4 hereto.

       

      1.13
        “Licensed
        Developer” means any developer that
        has
        signed a valid and then current Licensed Developer Agreement.

       

      1.14
        “Licensed
        Developer Agreement” or “LDA” means a valid and current license agreement for
        the development of Licensed Products for the System, fully executed between
        a
        Licensed Developer and SCEA or an Affiliate of SCEA.

       

      1.15
        “Licensed
        Products” means the Executable Software
        (which may be combined with Executable Software
        of other Licensed Publishers or Licensed Developers),
        which shall consist of one product developed for the System or for the original
        PlayStation game console per
        Unit,
        in final form developed exclusively for the System.
        Publisher shall have no right to package or bundle more than one product
        developed for the System or for the original PlayStation game console in
        a
        single Unit unless separately agreed with SCEA.

       

      1.16
        “Licensed
        Publisher” means any publisher that has signed a valid and then current Licensed
        Publisher Agreement.

       

      1.17
        “Licensed
        Publisher Agreement” or “LPA” means
        a
        valid and current license agreement for the publication,
        development, manufacture, marketing, distribution
        and sale of Licensed Products for the System, fully executed between a Licensed
        Publisher and SCEA or an Affiliate of SCEA.

       

      1.18
        “Licensed
        Territory” means the United States (including its possessions and territories)
        and Canada. The Licensed
        Territory may be modified and/or supplemented by
        SCEA
        from time to time pursuant to Section 4.4 below.

       

      1.19
        “Licensed
        Trademarks” means the trademarks, service marks, trade dress, logos and other
        icons or indicia designated
        by SCEA in the SourceBook 2 or other Guidelines
        for use on or in connection with Licensed Products.
        Nothing contained in this Agreement shall in any way
        grant
        Publisher the right to use the trademark “Sony” in
        any
        manner. SCEA may amend such Licensed Trademarks
        from time to time in the SourceBook 2 or other Guidelines or upon written
        notice
        to Publisher.

       

      1.20
        “Manufacturing
        Specifications” means specifications
        setting forth terms relating to the manufacture
        and assembly of PlayStation 2 Format Discs, Packaging, Printed Materials
        and
        each of their component parts, which shall be set forth in the SourceBook
        2 or
        other documentation provided by SCEA or a Designated Manufacturing Facility
        to
        Publisher and which may be amended from time to time upon reasonable notice
        to
        Publisher.

       

      1.21
        “Master
        Disc” means a recordable CD-ROM or DVD-ROM
        disc in the form requested by SCEA containing
        final pre-production Executable Software for a Licensed Product.

       

      1.22
        “Packaging”
        means, with respect to each Licensed
        Product, the carton, containers, packaging, edge labels
        and other proprietary labels, trade dress and wrapping
        materials, including any jewel case (or other CD-ROM
        or
        DVD-ROM container) or parts thereof, but excluding
        Printed Materials and PlayStation 2 Format Discs.

       

      1.23
        “PlayStation
        2 Format Discs” means the uniquely
        marked or colored CD-ROM or DVD-ROM discs formatted
        for use with the System which, for purposes of this Agreement, are manufactured
        on behalf of Publisher and
        contain Licensed Products or SCEA Demo Discs.

       

      1.24
        “Printed
        Materials” means all artwork and mechanicals
        set forth on the disc label of the PlayStation Disc
        relating to any of the Licensed Products and on or inside
        any Packaging for the Licensed Product, and all instructional manuals, liners,
        inserts, trade dress and other user information to be inserted into the
        Packaging.

       

      1.25
        “Product
        Information” means any information owned
        or
        licensed by Publisher relating in any way to Licensed
        Products, including but not limited to demos, videos,
        hints and tips, artwork, depictions of Licensed Product
        cover art and videotaped interviews.

       

      1.26
        “Product
        Proposal” shall have the meaning set forth in Section 5.2.1 hereto.

       

      1.27
        “Product
        Software” means any software including
        audio and video material developed by a Licensed
        Publisher or Licensed Developer, which, either by
        itself
        or combined with Product Software of other licensees, when integrated with
        software provided by SCEA
        or
        an Affiliate of SCEA, creates Executable Software.
        It is understood that Product Software contains no
        proprietary information of Sony or any other rights of SCEA.

       

      1.28
        “Publisher
        Intellectual Property Rights” means those
        intellectual property rights, including but not limited to
        patents and other patent rights, copyrights, trademarks, service marks, trade
        names, trade dress, mask work rights, utility
        model rights, trade secret rights, technical information,
        know-how, and the equivalents of the foregoing
        under the laws of any jurisdiction, and all other proprietary or intellectual
        property rights throughout the universe, which pertain to Product Software,
        Product Information,
        Printed Materials, Advertising Materials or other
        rights of Publisher required or necessary under this Agreement.

       

      1.29
        “Purchase
        Order” means a written purchase order
        processed in accordance with the terms of Section 6.2.2
        hereto, the Manufacturing Specifications or other terms
        provided separately by SCEA or a Designated Manufacturing Facility to
        Publisher.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      1.30
        “SCEA
        Demo Disc” means any demonstration disc developed and distributed by
        SCEA.

       

      1.31
        “SCEA
        Established Third Party Demo Disc Programs” means (i) any consumer or trade
        demonstration disc program specified in the SourceBook 2, and (ii) any other
        third party demo disc program established by SCEA for Licensed
        Publishers.

       

      1.32
        “SCEA
        Intellectual Property Rights” means those
        intellectual property rights, including but not limited to patents and other
        patent rights, copyrights, trademarks, service marks, trade names, trade
        dress,
        mask work rights, utility
        model rights, trade secret rights, technical information,
        know-how, and the equivalents of the foregoing
        under the laws of any jurisdiction, and all other proprietary or intellectual
        property rights throughout the universe,
        which are required to ensure compatibility with the
        System or which pertain to the Licensed Trademarks.

       

      1.33
        “SCEA
        Product Code” means the product identification number assigned to each Licensed
        Product, which
        shall consist of separate product identification numbers
        for multiple disc sets (i.e., SLUS-xxxxx). This SCEA
        Product Code is used on the Packaging and PlayStation
        Disc relating to each Licensed Product, as well as
        on
        most communications between SCEA and Publisher as
        a mode
        of identifying the Licensed Product other than by
        title.

       

      1.34
        “Sony
        Materials” means any data, object code, source
        code, firmware, documentation (or any part(s) of any
        of
        the foregoing), related to the System, selected in the sole judgment of SCEA,
        which are provided or supplied by SCEA
        or
        an Affiliate of SCEA to Publisher or any Licensed
        Developer and/or other Licensed Publisher. For purposes
        of this Agreement, Sony Materials shall not include
        any hardware portions of the Development Tools, but shall include firmware
        in
        such hardware.

       

      1.35
        “SourceBook
        2” means the PlayStation 2 SourceBook (or any other reference guide containing
        information
        similar to the SourceBook 2 but designated with
        a
        different name) prepared by SCEA, which is provided
        separately to Publisher. The SourceBook 2 is designed
        to serve as the first point of reference by Publisher
        in every phase of the development, approval, manufacture and marketing of
        Licensed Products.

       

      1.36
        “Standard
        Rebate” shall mean the rebate offered
        by SCEA on titles of Licensed Products that achieve
        specified sales volumes as set forth in Section 8.4 of
        this
        Agreement.

       

      1.37
        “Third
        Party Demo Disc” means any demo disc developed and marketed by a Licensed
        Publisher, which complies
        with the terms of an SCEA Established Third Party
        Demo Disc Program.

       

      1.38
        “Unit”
        means an individual copy of a Licensed Product
        title regardless of the number of PlayStation 2 Format
        Discs constituting such Licensed Product title.

       

      1.39
        “Wholesale
        Price” or “WSP” shall mean the greater of (i) the published price of the
        Licensed Product offered
        to retailers by Publisher as evidenced by a sell sheet
        or
        price list issued by Publisher no later than thirty (30)
        days
        before first commercial shipment of the Licensed Product,
        or (ii) the actual price paid by retailers upon the first
        commercial shipment of a Licensed Product without offsets, rebates or deductions
        from invoices of any kind.

       

      2. License.

       

      2.1
        License
        Grant. SCEA
        grants to Publisher, and Publisher hereby accepts, for the term of this
        Agreement, within the Licensed Territory, under SCEA Intellectual Property
        Rights owned, controlled or licensed by SCEA, a non-exclusive,
        non-transferable license, without the right to sublicense
        (except as specifically provided herein), to publish
        Licensed Products using Sony Materials, which right
        shall be limited to the following rights and other rights
        set forth in, and in accordance with the terms of, this LPA: (i) to produce
        or
        develop Licensed Products and to enter into agreements with Licensed Developers
        and other third parties to develop Licensed Products; (ii) to have such Licensed
        Products manufactured; (iii) to market, distribute and sell such Licensed
        Products and to authorize others to do so; (iv) to use the Licensed Trademarks
        strictly and only in
        connection with the development, manufacturing, marketing,
        packaging, advertising and promotion of the Licensed
        Products, and subject to SCEA’s right of approval as
        provided herein; and (v) to sublicense to end users the right
        to
        use the Licensed Products for 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 third party licensing
        program related thereto and not to the original PlayStation game console
        or
        third party licensing program related
        thereto. Licenses relating to the original PlayStation
        game console are subject to separate agreements
        with SCEA, and any license of rights to Publisher
        under such separate agreements shall not confer on
        Publisher any rights under the System and vice versa.

       

      3. Development
        of Licensed Products.

       

      3.1
        Right
        to Develop. This
        LPA
        grants Publisher the
        right
        to develop Licensed Products. It also gives Publisher
        the right to purchase and/or license Development Tools,
        as
        is appropriate, from SCEA or its designated agent,
        pursuant to a separate Development System Agreement
        with SCEA, to assist in such development. In developing
        Executable Software (or portions thereof), Publisher and its agents shall
        fully
        comply in all respects with any and all technical specifications which may
        from
        time to time be issued by SCEA. In the event that Publisher uses third party
        tools to develop Executable Software, Publisher
        shall be responsible for ensuring that it has obtained
        appropriate licenses for such use.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      3.2
        Development
        by Third Parties. Except
        as
otherwise
        set forth herein, Publisher shall not provide Sony Materials or SCEA’s
        Confidential Information to any third party. Publisher shall be responsible
        for
        determining that third
        parties meet the criteria set forth herein. Publisher may
        contract with a third party for development of Licensed
        Products, provided that such third party is: (i) a Licensed Publisher, (ii)
        a
        Licensed Developer, or (iii) an SCEA-authorized subcontractor in compliance
        with
        the provisions of Section 16.6. Publisher shall notify SCEA in writing of
        the
        identity of any such third party within thirty (30)
        days
        of entering into an agreement or other arrangement
        with the third party.

       

      4. Limitations
        on Licenses; Reservation of Rights.

       

      4.1
        Reverse
        Engineering Prohibited. Other
        than as
        expressly permitted by SCEA in writing, Publisher shall not
        directly or indirectly disassemble, decrypt, electronically
        scan, peel semiconductor components, decompile, or otherwise reverse engineer
        in
        any manner or attempt to reverse engineer or derive source code from, all
        or any
        portion of the Sony Materials, or permit, assist or encourage any third party
        to
        do so. Other than as expressly permitted by SCEA in writing, Publisher shall
        not
        use, modify, reproduce, sublicense, distribute, create derivative works from,
        or
        otherwise provide to third parties, the Sony Materials, in whole or in part,
        other than as expressly permitted by SCEA. SCEA shall permit Publisher to
        study
        the performance, design and operation of the Development Tools solely for
        the
        limited purposes of developing and testing
        Publisher’s software applications, or to build tools to
        assist
        Publisher with the development and testing of software applications for Licensed
        Products. Any tools developed or derived by Publisher resulting from the
        study
of
        the
        performance, design or operation of the Development
        Tools shall be considered as derivative products
        of the Sony Materials for copyright purposes, but may
        be
        treated as trade secrets of Publisher. In no event shall
        Publisher patent any tools created, developed or derived
        from Sony Materials. Publisher shall not make available to any third party
        any
        tools developed or derived from
        the
        study of the Development Tools without the express
        written permission of SCEA. Use of such tools shall
        be
        strictly limited to the creation or testing of Licensed
        Products and any other use, direct or indirect of such tools is strictly
        prohibited. Publisher shall be required in all cases to pay royalties in
        accordance with Section 8 hereto
        to
        SCEA on any of Publisher’s products utilizing any
        Sony
        Materials or derivative works made therefrom. 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 SCEA
        reserves the right to require Publisher to furnish evidence satisfactory
        to SCEA
        that Publisher has complied with this Section.

       

      4.2 Reservation
        of SCEA’s Rights.

       

      4.2.1
        Limitation
        of Rights to Licenses Granted.
        The
        licenses granted in this Agreement extend only
        to
        the publication, development, manufacture, marketing,
        distribution and sale of Licensed Products for use
        on
        the System, in such formats as may be designated by
        SCEA.
        Without limiting the generality of the foregoing and
        except as otherwise provided herein, Publisher shall not
        distribute or transmit the Executable Software or the Licensed Products via
        electronic means or any other means now
        known
        or hereafter devised, including without limitation,
        via wireless, cable, fiber optic means, telephone lines, microwave and/or
        radio
        waves, or over a network of computers
        or other devices. Notwithstanding this limitation,
        Publisher may electronically transmit Executable
        Software from site to site, or from machine to machine over a computer network,
        for the sole purpose of facilitating
        development; provided that no right of retransmission
        shall attach to any such transmission, and provided
        further that Publisher shall use reasonable security
        measures customary within the high technology industry to reduce the risk
        of
        unauthorized interception or retransmission of such transmissions. This
        Agreement does not grant any right or license, under any SCEA Intellectual
        Property Rights or otherwise, except as expressly provided herein, and no
        other
        right or license is to be implied by or inferred
        from any provision of this Agreement or the conduct
        of the parties hereunder.

       

      4.2.2
        Other
        Use of Sony Materials and SCEA
        Intellectual Property Rights. Publisher
        shall not make use of any Sony Materials or any SCEA Intellectual Property
        Rights (or any portion thereof) except as authorized
        by and in compliance with the provisions of this Agreement.
        Publisher shall not use the Executable Software,
        Sony Materials or SCEA’s Confidential Information
        in connection with the development of any software for any emulator or other
        computer hardware or software system. No right, license or privilege has
        been
        granted to Publisher hereunder concerning the development of
        any
        collateral product or other use or purpose of any kind
        whatsoever which displays or depicts any of the Licensed
        Trademarks. The rights set forth in Section 2.1(v) hereto
        are limited to the right to sublicense such rights to end
        users
        for non-commercial use; any public performance relating to the Licensed Product
        or the System is prohibited unless expressly authorized in writing by
        SCEA.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      4.3 Reservation
        of Publisher’s Rights. Separate
        and
        apart
        from Sony Materials and other rights licensed to Publisher by SCEA hereunder,
        as
        between Publisher and SCEA,
        Publisher retains all rights, title and interest in and to
        the
        Product Software, and the Product Proposals and Product Information related
        thereto, including without limitation
        Publisher Intellectual Property Rights therein, as well as Publisher’s rights in
        any source code and other underlying
        material such as artwork and music related thereto
        and any names used as titles for Licensed Products and other trademarks used
        by
        Publisher. Nothing in this Agreement
        shall be construed to restrict the right of Publisher
        to develop, distribute or transmit products incorporating the Product Software
        and such underlying material
        (separate and apart from the Sony Materials) for any
        hardware platform or service other than the System, or to use Printed Materials
        or Advertising Materials approved by SCEA as provided herein (provided that
        such
        Printed Materials and/or Advertising Materials do not contain any Licensed
        Trademarks) as Publisher determines for such other
        platforms. SCEA shall not do or cause to be done any
        act
        or thing in any way impairing or tending to impair or
        dilute
        any of Publisher’s rights, title or interests hereunder.
        Notwithstanding the foregoing, Publisher shall not
        distribute or transmit Product Software which is intended
        to be used with the System via electronic means or
        any
        other means now known or hereafter devised, including
        without limitation, via wireless, cable, fiber optic means, telephone lines,
        microwave and/or radio waves, or other a network of computers or other devices,
        except as otherwise permitted in Section 4.2.1 hereto.

       

      4.4
        Additions
        to and Deletions from Licensed Territory. SCEA
        may,
        from time to time, add one or more countries to the Licensed Territory by
        providing written notice of such addition to Publisher. SCEA shall also have
        the
        right to delete, and intends to delete any countries from the Licensed Territory
        if, in SCEA’s reasonable judgment, the laws or enforcement of such laws in such
        countries do not protect SCEA Intellectual Property Rights. In the event
        a
        country
        is deleted from the Licensed Territory, SCEA shall
        deliver to Publisher a notice stating the number of days
        within which Publisher shall cease distributing Licensed
        Products, and retrieve any Development Tools located, in any such deleted
        country. Publisher shall cease distributing
        Licensed Products, and retrieve any Development
        Tools, directly or through subcontractors, by the end of the period stated
        in
        such notice.

       

      4.5
        SourceBook
        2 Requirement. Publisher
        shall be
        required to comply with all the provisions of the SourceBook
        2, including without limitation the Technical Requirements
        Checklist therein, when published, or within a
        commercially reasonable time following its publication to incorporate
        such provisions, as if such provisions were set forth in this
        Agreement.

       

      5.
        Quality Standards for the Licensed Products.

       

      5.1
        Quality
        Assurance Generally. The
        Licensed
        Products (and all portions thereof) and Publisher’s
        use of any Licensed Trademarks shall be subject
        to SCEA’s prior written approval, which shall not be
        unreasonably withheld or delayed and which shall be within SCEA’s sole
        discretion as to acceptable standards of quality. SCEA shall have the right
        at
        any stage of the development
        of a Licensed Product to review such Licensed
        Product to ensure that it meets SCEA’s quality assurance
        standards. All Licensed Products will be developed
        to substantially utilize the particular capabilities of
        the
        System’s proprietary hardware, software and graphics.
        No approval by SCEA of any element or stage of development of any Licensed
        Product shall be deemed an approval of any other element or stage of such
        Licensed Product,
        nor shall any such approval be deemed to constitute
        a waiver of any of SCEA’s rights under this Agreement.
        In addition, SCEA’s approval of any element or
        any
        stage of development of any Licensed Product shall not release Publisher
        from
        any of its representations and warranties in Section 9.2 hereunder.

       

      5.2
        Product
        Proposals.

       

      5.2.1
        Submission
        of Product Proposal. Publisher
        shall submit to SCEA for SCEA’s written approval
        or disapproval, which shall not be unreasonably withheld or delayed, a written
        proposal (the “Product Proposal”).
        Such Product Proposal must contain all information
        specified in the SourceBook 2, as well as any additional information that
        SCEA
        may deem to be useful in evaluating the proposed Licensed Product.

       

       5.2.2
        Approval
        of Product Proposal. After
        SCEA’s
        review of Publisher’s Product Proposal, Publisher will receive written notice
        from SCEA of the status of the Product Proposal, which may range from “Approved”
to “Not Approved.” Such conditions shall have the meanings ascribed to them in
        the SourceBook 2, and may be changed from time to time by SCEA. If a Product
        Proposal is “Not Approved”, then neither Publisher nor any other Licensed
Developer
        or Licensed Publisher may re-submit such Product
        Proposal without significant, substantive revisions. SCEA shall have no
        obligation to approve any Product Proposal
        submitted by Publisher. Any development conducted
        by or at the direction of Publisher and any legal commitment relating to
        development work shall be at Publisher’s own financial and commercial risk.
        Publisher shall not construe approval of a Product Proposal as a commitment
        by SCEA to grant final approval to such Licensed
        Product. Nothing herein shall restrict SCEA from commercially
        exploiting any coincidentally similar concept(s)
        and/or product(s), which have been independently
        developed by SCEA, an Affiliate of SCEA or
        any
        third party.

       

       5.2.3
        Changes
        to Product Proposal. Publisher
        shall
        notify SCEA promptly in writing in the event of any material proposed change
        in
        any portion of the Product Proposal. SCEA’s approval of a Product Proposal shall
        not obligate
        Publisher to continue with development or production
        of the proposed Licensed Product, provided that Publisher must immediately
        notify SCEA in writing if it discontinues, cancels or otherwise delays past
        the
        original scheduled delivery date the development of any proposed Licensed
        Product. In the event that Publisher licenses a proposed Licensed Product
        from
        another Licensed Publisher
        or a Licensed Developer, it shall immediately notify
        SCEA of such change and must re-submit such Licensed
        Product to SCEA for approval in accordance with the provisions of Section
        5.2.1
        above.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      5.3
        Work-in-Progress.

       

      5.3.1
        Submission
        and Review of Work-in-Progress. SCEA
        shall require Publisher to submit to SCEA work-in-progress on Licensed Products
        at certain intervals throughout their development and, upon written notice
        to
Publisher,
        at any time during the development process. Upon
        approval of the Product Proposal, Publisher must, within the time frame
        indicated in the approval letter, communicate
        with SCEA and mutually agree on a framework
        for the review of such Licensed Product throughout
        the development process (“Review Process”). Once the Review Process has begun,
        Publisher shall be responsible for submitting work-in-progress to SCEA in
        accordance with such Review Process. Failure
        to submit work-in-progress in accordance with any stage of the Review Process
        may, at SCEA’s discretion, result in revocation of approval of such Product
        Proposal.

       

      5.3.2
        Approval
        of Work in Progress. SCEA
        shall
        have the right to approve, reject or require additional information
        with respect to each stage of the Review Process.
        SCEA shall specify in writing the reasons for any such
        rejection or request for additional information and shall
        state what corrections and/or improvements are necessary.
        If any stage of the Review Process is not provided to SCEA or is not
        successfully met after a reasonable
        cure period agreed to between SCEA and Publisher,
        SCEA shall have the right to revoke the approval
        of Publisher’s Product Proposal.

       

      5.3.3
        Cancellation
        or Delay; Conditions of Approval.
        Licensed
        Products which are canceled by Publisher or are late in meeting the final
        Executable Software
        delivery date by more than three (3) months (without
        agreeing with SCEA on a modified final delivery date) shall be subject to
        the
        termination provisions set forth in Section 14.3 hereto. In addition, failure
        to
        make changes required by SCEA to the Licensed Product at any stage of the
        Review
        Process, or making material changes to the Licensed Product without SCEA’s
        approval, may subject Publisher to the termination provisions set forth in
        Section 14.3 hereto.

       

      5.4
        Approval
        of Executable Software. On
        or
before
        the date specified in the Product Proposal or as determined by SCEA pursuant
        to
        the Review Process, Publisher shall deliver to SCEA for its inspection and
        evaluation,
        a final version of the Executable Software for the
        proposed Licensed Product. SCEA will evaluate such Executable Software and
        notify Publisher in writing of its approval or disapproval, which shall not
        be
        unreasonably withheld or delayed. If such Executable Software is disapproved,
        SCEA shall specify in writing the reasons for such disapproval and state
        what
        corrections and improvements are necessary. After making the necessary
corrections
        and improvements, Publisher shall submit a new
        version of such Executable Software for SCEA’s approval.
        SCEA shall have the right to disapprove Executable
        Software if it fails to comply with SCEA’s corrections or improvements or one or
        more conditions as set forth in the SourceBook 2 with no obligation to review
        all elements of any version of Executable Software. All final versions of
        Executable Software shall be submitted in the
        format prescribed by SCEA and shall include such number
        of
        Master Discs as SCEA may require from time to time. Publisher hereby (i)
        warrants that all final versions of Executable Software are fully tested;
        (ii)
        shall use its best efforts
        to ensure such Executable Software is fully debugged
        prior to submission to SCEA; and (iii) warrants that all versions of Executable
        Software comply or will comply
        with standards set forth in the SourceBook 2 or other
        documentation provided by SCEA to Publisher. In addition, prior to manufacture
        of Executable Software, Publisher must sign an accountability form stating
        that
        (x) Publisher approves the release of such Executable Software for manufacture
        in its current form and (y) Publisher shall be fully responsible for any
        problems related to such Executable Software.

       

      5.5
        Printed
        Materials.

       

      5.5.1
        Compliance
        with Guidelines. For
        each
        proposed Licensed Product, Publisher shall be responsible, at Publisher’s
        expense, for creating and developing Printed Materials. All Printed Materials
        shall comply with the Guidelines, which may be amended from time to time,
        provided that Publisher shall, except as otherwise provided herein, only
        be
        required to implement amended Guidelines in subsequent orders of Printed
        Materials and shall not be required
        to recall or destroy previously manufactured Printed
        Materials, unless such Printed Materials do not comply with the original
        requirements in the Guidelines or unless explicitly required to do so in
        writing
        by SCEA.

       

      5.5.2
        Submission
        and Approval of Printed Materials. No
        later
        than submission of final Executable Software for a proposed Licensed Product,
        Publisher shall also
        deliver to SCEA, for review and evaluation, the proposed
        final Printed Materials and a form of limited warranty
        for the proposed Licensed Product. Failure to meet
        any
        scheduled release dates for a Licensed Product is solely the risk and
        responsibility of Publisher, and SCEA assumes
        no responsibility for Publisher failing to meet such scheduled
        release dates due to this submission process. The quality
        of such Printed Materials shall be of the same quality
        as that associated with other commercially available
        high quality software products. If any of the Printed
        Materials are disapproved, SCEA shall specify the reasons for such disapproval
        and state what corrections are necessary.
        SCEA shall have no liability to Publisher for costs
        incurred or irrevocably committed to by Publisher for production of Printed
        Materials that are disapproved by SCEA. After making the necessary corrections
        to any disapproved Printed Materials, Publisher must submit new Printed
        Materials for approval by SCEA. SCEA shall not unreasonably
        withhold or delay its review of Printed Materials.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      5.6
        Advertising
        Materials.

       

      5.6.1
        Submission
        and Approval of Advertising
        Materials. Pre-production
        samples of all Advertising Materials shall be submitted by Publisher to
SCEA,
        at
        Publisher’s expense, prior to any actual production,
        use or distribution of any such items by Publisher or on its behalf. SCEA
        shall
        evaluate and approve
        such Advertising Materials, which approval shall not
        be
        unreasonably withheld or delayed, as to the following
        standards: (i) the content, quality, and style of the
        overall advertisement; (ii) the quality, style, appearance and
        usage
        of any of the Licensed Trademarks; (iii) appropriate
        references of any required notices; and (iv) compliance with the Guidelines.
        If
        any of the Advertising Materials are disapproved, SCEA shall specify the
        reasons
for
        such
        disapproval and state what corrections are necessary.
        SCEA may require Publisher to immediately withdraw and reprint any Advertising
        Materials that have been
        published but have not received the written approval of
        SCEA.
        SCEA shall have no liability to Publisher for costs
        incurred or irrevocably committed to by Publisher for production
        of Advertising Materials that are disapproved by
        SCEA.
        For each Licensed Product, Publisher shall be required to deliver to SCEA
        an
        accountability form stating that all Advertising Materials for such Licensed
        Product comply or will comply with the Guidelines for use of the Licensed
        Trademarks. After making the necessary corrections
        to any disapproved Advertising Materials, Publisher must submit new proposed
        Advertising Materials for approval by SCEA.

       

      5.6.2
        Failure
        to Comply; Three Strikes Program.
        Publishers
        who fail to obtain SCEA’s approval
        of Advertising Materials prior to broadcast or publication
        shall be subject to the provisions of the “Three
        Strikes” program outlined in the SourceBook 2. Failure to obtain SCEA’s approval
        of Advertising Materials could result in termination of this LPA or
termination
        of approval of the Licensed Product, or could
        subject Publisher to the provisions of Section 14.4 hereto.
Failure
        to meet any scheduled release dates for Advertising
        Materials is solely the risk and responsibility of
        Publisher, and SCEA assumes no responsibility for Publisher
        failing to meet such scheduled release dates due to
        approval requirements as set forth in this Section.

       

      5.6.3
        SCEA
        Materials. Subject
        in each instance
        to the prior written approval of SCEA, Publisher may
        use
        advertising materials owned by SCEA pertaining to
        the
        System or to the Licensed Trademarks on such Advertising Materials as may,
        in
        Publisher’s judgment, promote the sale of Licensed Products.

       

      5.7
        Rating
        Requirements. If
        required by SCEA or
        any
        governmental entity, Publisher shall submit each Licensed
        Product to a consumer advisory ratings system designated
        by SCEA and/or such governmental entity for the
        purpose of obtaining rating code(s) for each Licensed Product.
        Any and all costs and expenses incurred in connection
        with obtaining such rating code(s) shall be borne
        solely by Publisher. Any required consumer advisory rating code(s) procured
        hereby shall be displayed on the Licensed
        Product and in the associated Printed Materials and
        Advertising Materials, at Publisher’s cost and expense, in
        accordance with the SourceBook 2 or other documentation
        provided by SCEA to Publisher.

       

      5.8
        Publisher’s
        Additional Quality Assurance Obligations. If
        at any
        time or times subsequent to the approval of Executable Software and Printed
        Materials, SCEA
        identifies any material defects (such materiality to be
        determined by SCEA in its sole discretion) with respect to
        the
        Licensed Product, or in the event that SCEA identifies
        any improper use of its Licensed Trademarks or Sony
        Materials with respect to the Licensed Product, or any
        such
        material defects or improper use are brought to the
        attention of SCEA, Publisher shall, at no cost to SCEA, promptly correct
        any
        such material defects, or improper use of Licensed Trademarks or Sony Materials,
        to SCEA’s commercially
        reasonable satisfaction, which may include, if
        necessary in SCEA’s judgment, the recall and re-release of
        such
        Licensed Product. In the event any Units of 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/or to remove such defective
        Units from any affected channels of distribution, provided, however, that
        if
        Publisher is not acting as the distributor and/or seller for the Licensed
        Products, its obligation
        hereunder shall be to use its best efforts to arrange
        removal of such Licensed Product from channels of distribution.
        Publisher shall provide all end-user support for
        the
        Licensed Products and SCEA expressly disclaims any obligation to provide
        end-user support on Publisher’s Licensed Products.

       

      6.
        Manufacture of the Licensed Products.

       

      6.1
        Manufacture
        of Units. Upon
        approval of Executable
        Software and associated Printed Materials pursuant
        to Section 5, and subject to Sections 6.1.2, 6.1.3 and
        6.1.4
        below, the Designated Manufacturing Facility will,
        in
        accordance with the terms and conditions set forth in
        this
        Section 6, and at Publisher’s expense (a) manufacture
        PlayStation 2 Format Discs for Publisher; (b) manufacture
        Publisher’s Packaging and/or Printed Materials;
        and/or (c) assemble the PlayStation 2 Format Discs
        with the Printed Materials and the Packaging. Publisher
        shall comply with all Manufacturing Specifications
        related to the particular terms set forth herein.
        SCEA reserves the right to insert or require the Publisher to insert certain
        Printed Materials relating to the System or Licensed Trademarks into each
        Unit.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

       6.1.1
        Manufacture
        of PlayStation 2 Format Discs.

      

       6.1.1.1
        Designated
        Manufacturing Facilities.
        To
        insure
        compatibility of the PlayStation 2 Format
        Discs with the System, consistent quality of the Licensed Product and
        incorporation of anti-piracy security systems, SCEA shall designate and license
        a Designated Manufacturing Facility to reproduce PlayStation 2 Format
Discs.
        Publisher shall purchase *** of its requirements
        for PlayStation 2 Format Discs from such Designated Manufacturing Facility
        during the term of the Agreement.
        Any Designated Manufacturing Facility shall be
        a
        third party beneficiary of this Agreement.

       

       6.1.1.2
        Creation
        of Master CD-ROM or DVD-ROM. Pursuant
        to Section 5.4 in connection with final
        testing of Executable Software, Publisher shall provide
        SCEA with the number of Master Discs specified in
        the
        SourceBook 2. A Designated Manufacturing Facility shall create from one of
        the
        fully approved Master Discs provided by Publisher the original master CD-ROM
        or
        DVD-ROM, from which all other copies of the Licensed Product are to be
        replicated. Publisher shall be responsible for
        the
        costs, as determined by the Designated Manufacturing
        Facility, of producing such original master. In
        order
        to insure against loss or damage to the copies of the
        Executable Software furnished to SCEA, Publisher will retain duplicates of
        all
        Master Discs, and neither SCEA nor any
        Designated Manufacturing Facility shall be liable for loss
        of
        or damage to any Master Discs or Executable Software.

       

      6.1.2
        Manufacture
        of Printed Materials.

       

      6.1.2.1
        Manufacture
        by Designated Manufacturing
        Facility. If
        Publisher elects to obtain Printed
        Materials from a Designated Manufacturing Facility,
        Publisher shall deliver all SCEA-approved Printed Materials to that Designated
        Manufacturing Facility, at Publisher’s sole risk and expense, and the Designated
        Manufacturing Facility will manufacture such Printed Materials
        in accordance with this Section 6. In order to insure
        against loss or damage to the copies of the Printed Materials
        furnished to SCEA, Publisher will retain duplicates
        of all Printed Materials, and neither SCEA nor any
        Designated Manufacturing Facility shall be liable for loss
        of
        or damage to any such Printed Materials.

       

      6.1.2.2
        Manufacture
        by Alternate Source. Subject
        to
        SCEA’s approval as provided in Section 5.5.2 hereto
        and in this Section, Publisher may elect to be responsible
        for manufacturing its own Printed Materials (other
        than any Artwork which may be placed directly upon
        the
        PlayStation Disc, which Publisher will supply to the Designated Manufacturing
        Facility for placement), at Publisher’s
        sole risk and expense. Prior to production of each
        order, Publisher shall be required to supply SCEA with
        samples of any Printed Materials not produced or supplied by a Designated
        Manufacturing Facility, at no charge to SCEA or Designated Manufacturing
        Facility, for SCEA’s approval with respect to the quality thereof. SCEA
shall
        have the right to disapprove any Printed Materials that
        do
        not comply with the Manufacturing Specifications. Manufacturing Specifications
        for Printed Materials shall be comparable
        to manufacturing specifications applied by SCEA
        to
        its own software products for the System. If Publisher
        elects to supply its own Printed Materials, neither SCEA nor any Designated
        Manufacturing Facility shall be responsible for any delays arising from use
        of
        Publisher’s own Printed Materials.

       

      6.1.3
        Manufacture
        of Packaging.

       

      6.1.3.1
        Manufacture
        by Designated Manufacturing
        Facility. To
        ensure
        consistent quality of the
        Licensed Products, SCEA may designate and license a Designated
        Manufacturing Facility to reproduce proprietary
        Packaging for the System. If SCEA creates proprietary Packaging for the System,
        then Publisher shall purchase
        *** of its requirements for such proprietary
        Packaging from a Designated Manufacturing Facility
        during the term of the Agreement, and the Designated
        Manufacturing Facility will manufacture such Packaging in accordance with
        this
        Section 6.

       

      6.1.3.2
        Manufacture
        by Alternate Source. If
        SCEA
        elects to use standard, non-proprietary Packaging for the System, then Publisher
        may elect to be responsible for manufacturing its own Packaging (other than
        any
        proprietary labels and any portion of a container containing Licensed
        Trademarks, which Publisher must purchase from a
        Designated Manufacturing Facility). Publisher shall assume
        all responsibility for the creation of such Packaging at Publisher’s sole risk
        and expense. Publisher shall be responsible
        for encoding and printing proprietary edge labels
        provided by a Designated Manufacturing Facility with
        information reasonably specified by SCEA from time to
        time
        and will apply such labels to each Unit of the Licensed
        Product as reasonably specified by SCEA. Prior to
        production of each order, Publisher shall be required to supply SCEA with
        samples of any Packaging not produced or supplied by a Designated Manufacturing
        Facility, at no charge to SCEA or Designated Manufacturing Facility, for
        SCEA’s
        approval with respect to the quality thereof. SCEA shall have the right to
        disapprove any Packaging that does not comply with the Manufacturing
        Specifications. Manufacturing Specifications for Packaging shall be comparable
        to manufacturing specifications applied by SCEA
        to
        its own software products for the System. If Publisher
        procures Packaging from an alternate source, then
        it
        must also procure assembly services from an alternate
        source. If Publisher elects to supply its own Packaging,
        neither SCEA nor any Designated Manufacturing
        Facility shall be responsible for any delays arising from use of Publisher’s own
        Packaging.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      6.1.4
        Assembly
        Services. Publisher
        may either
        procure assembly services from a Designated Manufacturing Facility or from
        an
        alternate source. If Publisher
        elects to be responsible for assembling the Licensed
        Products, then the Designated Manufacturing Facility shall ship the component
        parts of the Licensed Product
        to a destination provided by Publisher, at Publisher’s
        sole risk and expense. SCEA shall have the right
        to
        inspect any assembly facilities utilized by Publisher in
        order
        to determine if the component parts of the Licensed
        Products are being assembled in accordance with SCEA’s
        quality standards. SCEA may require that Publisher
        recall any Licensed Products that do not contain proprietary labels or other
        material component parts or that otherwise
        fail to comply with the Manufacturing Specifications.
        If Publisher elects to use alternate assembly facilities, neither SCEA nor
        any
        Designated Manufacturing Facility shall be responsible for any delays or
        missing
        component parts arising from use of alternate assembly facilities.

       

      6.2 Price,
        Payment and Terms.

       

      6.2.1
        Price. The
        applicable price for manufacture
        of any Units of Licensed Products ordered hereunder shall be provided to
        Publisher by the Designated Manufacturing
        Facility. Purchase shall be subject to the terms
        and
        conditions set out in any purchase order form supplied to Publisher by the
        Designated Manufacturing Facility.

       

      6.2.2
        Orders. Publisher
        shall issue to a Designated
        Manufacturing Facility a written Purchase Order(s)
        in the form set forth and containing the information
        required in the Manufacturing Specifications, with
        a
        copy to SCEA. All orders shall be subject to approval
        by SCEA, which shall not be unreasonably withheld
        or delayed. Purchase Orders issued by Publisher to
        a
        Designated Manufacturing Facility for each Licensed Product approved by SCEA
        shall be non-cancelable and be subject to the order requirements of the
        Designated Manufacturing Facility.

       

      6.2.3
        Payment
        Terms. Purchase
        Orders will be
        invoiced as soon as reasonably practical after receipt, and
        such
        invoice will include both manufacturing price and royalties payable pursuant
        to
        Section 8.1 or 8.2 hereto for each Unit of Licensed Products ordered. Each
        invoice will be payable either on a cash-in-advance basis or pursuant to
        a
        letter of credit, or, at SCEA’s sole discretion, on credit terms.
        Terms for cash-in-advance and letter of credit payments
        shall be as set forth in the SourceBook 2. All amounts
        hereunder shall be payable in United States dollars.
        All associated banking charges with respect to payments
        of manufacturing costs and royalties shall be borne
        solely by Publisher.

       

      6.2.3.1
        Credit
        Terms. SCEA
        may
        at its sole
        discretion extend credit terms and limits to Publisher. SCEA may also revoke
        such credit terms and limits at its sole discretion. If Publisher qualifies
        for
        credit terms, then orders
        will be invoiced upon shipment of Licensed Products
        and each invoice will be payable within thirty(30)
        days
        of the date of the invoice. Any overdue sums shall
        bear interest at the rate of one and one-half (1- 1⁄2%) percent
        per month, or such lower rate as may be the maximum
        rate permitted under applicable law, from the date
        when
        payment first became due to and including the date
        of
        payment thereof. Publisher shall be additionally liable
        for all costs and expenses of collection, including without limitation,
        reasonable fees for attorneys and court costs.

       

      6.2.3.2
        General
        Terms. No
        deduction may
        be
        made from remittances unless an approved credit memo has been issued by a
        Designated Manufacturing Facility. Neither SCEA nor a Designated Manufacturing
        Facility shall be responsible for shortage or breakage with respect to any
        order
        if component parts and/or assembly services
        are obtained from alternate sources. Each shipment
        to Publisher shall constitute a separate sale, whether
        said shipment be whole or partial fulfillment of any
        order. 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 SCEA and Designated
        Manufacturing Facility.

       

       

      6.3 Delivery
        of Licensed Products. Neither
        SCEA
        nor
        any Designated Manufacturing Facility shall have
        an
        obligation to store completed Units of Licensed Products.
        Publisher may either specify a mode of delivery or
        allow
        Designated Manufacturing Facility to select a mode
        of
        delivery.

       

      6.4 Ownership
        of Master Discs. Due
        to
        the proprietary
        nature of the mastering process, neither SCEA nor a Designated Manufacturing
        Facility shall under any circumstances
        release any original master CD-ROM, Master
        Discs or other in-process materials to Publisher. All
        such
        materials shall be and remain the sole property of SCEA
        or
        Designated Manufacturing Facility. Notwithstanding
        the foregoing, Publisher Intellectual Property
        Rights contained in Product Software that is contained
        in such in-process materials is, as between SCEA and
        Publisher, the sole and exclusive property of Publisher or its licensors
        (other
        than SCEA and/or its affiliates).

       

      7.
         Marketing
        and Distribution.

       

      7.1
        Marketing
        Generally. In
        accordance with the provisions of this Agreement and at no expense to SCEA,
        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 in the Licensed Territory and to supply
        any resulting demand. Publisher shall use its reasonable
        best efforts to protect the Licensed Products from and against illegal
        reproduction and/or copying by end
        users
        or by any other persons or entities.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      7.2
        Samples.
        Publisher
        shall provide to SCEA, at no
        additional cost, for SCEA’s internal use, *** sample
        copies of each Licensed Product. Publisher shall pay
        any
        manufacturing costs to the Designated Manufacturing
        Facility in accordance with Section 6.2, but shall not be obligated to pay
        royalties, in connection with such
        sample Units. In the event that Publisher assembles any
        Licensed Product using an alternate source, Publisher shall
        be
        responsible for shipping such sample Units to SCEA
        at
        Publisher’s cost and expense. SCEA shall not directly or indirectly resell any
        such sample copies of the Licensed
        Products without Publisher’s prior written consent.
        SCEA may give sample copies to its employees, provided
        that it uses its reasonable efforts to ensure that such
        copies are not sold into the retail market. In addition, subject
        to availability, Publisher shall sell to SCEA additional
        quantities of Licensed Products at the Wholesale Price for such Licensed
        Product. Any changes to SCEA’s policy regarding sample Units shall be set forth
        in the SourceBook 2.

       

      7.3
        Marketing
        Programs of SCEA. From
        time
        to time,
        SCEA 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 SCEA shall be submitted subject to Section 10.2 hereunder
        and
        delivery of such materials to SCEA shall constitute acceptance by Publisher
        of
        the terms of
        the
        offer. Moreover, SCEA may use the Generic Line on
        all
        multi-product marketing materials, unless otherwise agreed in
        writing.

       

      7.4
        Demonstration
        Disc Programs. SCEA
        may,
from
        time
        to time, provide opportunities for Publisher to participate
        in SCEA Demo Disc programs. In addition, SCEA
        may,
        from time to time, grant to Publisher the right to
        create
        Third Party Demo Discs pursuant to SCEA Established Third Party Demo Disc
        Programs. 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 SourceBook 2 or in other documentation to be provided
        by SCEA to Publisher. Except as otherwise specifically set forth herein,
        in
        the
        SourceBook 2 or in other documentation, Third Party Demo
        Discs shall be considered “Licensed Products” and shall
        be
        subject in all respects to the terms and conditions of
        this
        Agreement pertaining to Licensed Products. In addition, the following procedures
        shall also apply to SCEA
        Demo
        Discs and Third Party Demo Discs:

       

      7.4.1
        SCEA
        Demo Discs.

       

      7.4.1.1
        License.
        SCEA
        may,
        but shall not be
        obligated to, invite Licensed Publishers to participate in any SCEA Demo
        Disc
        program. Participation by Publisher in
        an
        SCEA Demo Disc program shall be optional. If Publisher
        elects to participate in an SCEA Demo Disc program and provides Product
        Information to SCEA in connection
        thereto, Publisher shall thereby grant to SCEA a royalty-free
        license during the term of this Agreement in the Licensed Territory to
        manufacture, use, sell, distribute, market,
        advertise and otherwise promote Publisher’s Product
        Information as part of such SCEA Demo Disc program.
        In addition, Publisher shall grant SCEA the right to
        feature Publisher and Licensed Product names in SCEA Demo
        Disc
        Advertising Materials and to use copies of screen
        displays generated by the code, representative video samples or other Product
        Information in such SCEA Demo Disc Advertising Materials. All decisions relating
        to the selection
        of first and third party Product Information and all
        other
        aspects of SCEA Demo Discs shall be in the sole discretion of SCEA.

       

      7.4.1.2
        Submission
        and Approval of Product
        Information. Upon
        receipt of written notice that SCEA
        has
        tentatively chosen Publisher’s Product Information
        for inclusion in an SCEA Demo Disc, Publisher
        shall deliver to SCEA such requested Product Information by no later than
        the
        deadline set forth in such notice. Separate notice will be sent for each
        SCEA
        Demo Disc, and Publisher must sign each notice prior to inclusion in such
        SCEA
        Demo Disc. Publisher shall include its own Legal Copy on the title screen
        or
        elsewhere in the Product Information submitted to SCEA. SCEA shall only provide
        the Generic Line on the SCEA Demo Disc title screen and packaging. Publisher’s
        Product Information shall comply with
        SCEA’s technical specifications provided to Publisher.
        SCEA reserves the right to review and test the Product Information provided
        and
        request revisions prior to inclusion
        on the SCEA Demo Disc. If SCEA requests changes
        to the Product Information and Publisher elects to continue to participate
        in
        such Demo Disc, Publisher shall make
        such
        changes as soon as possible after receipt of written
        notice of such requested changes from SCEA, but not
        later
        than the deadline for receipt of Product Information.
        Failure to make such changes and provide the modified
        Product Information to SCEA by the deadline shall
        result in the Product Information being removed from the
        SCEA
        Demo Disc. Costs associated with preparation of
        Product Information supplied to SCEA shall be borne solely by Publisher.
        Except
        as otherwise provided in this Section,
        SCEA shall not edit or modify Product Information
        provided to SCEA by Publisher without Publisher’s
        consent, not to be unreasonably withheld. SCEA
        shall have the right to use subcontractors to assist in the development of
        any
        SCEA Demo Disc. With respect to Product Information provided by Publisher
        in
        demo form, the
        demo
        delivered to SCEA shall not constitute the complete
        Licensed Product and shall be, at a minimum, an amount
        sufficient to demonstrate the Licensed Product’s core
        features and value, without providing too much information
        so as to give consumers a disincentive to purchase
        the complete Licensed Product.

       

      7.4.1.3
        No
        Obligation to Publish. Acceptance
        of Product Information for test and review shall
        not
        be deemed confirmation that SCEA shall include the Product Information on
        an
        SCEA Demo Disc, nor shall it constitute approval of any other element of
        the
        Licensed Product. SCEA reserves the right to choose from products submitted
        from
        other Licensed Publishers and first party products
        to determine the products to be included in SCEA Demo Discs, and Publisher’s
        Licensed Products will not be guaranteed prominence or preferential treatment
        on
        any SCEA Demo Disc. Nothing herein shall be construed as creating
        an obligation of SCEA to publish Product Information
        submitted by Publisher in any SCEA Demo Disc,
        nor
        shall SCEA be obligated to publish, advertise or promote any SCEA Demo
        Disc.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      7.4.1.4
        SCEA
        Demo Discs Sold at Retail. Publisher
        is aware and acknowledges that certain SCEA Demo Discs may be distributed
        and
        sold by SCEA in the retail market. If Publisher elects to participate in
        any
        SCEA Demo Disc program which is sold in the retail market, as notified
        by SCEA to Publisher, Publisher acknowledges prior
        to
        participation in any such SCEA Demo Disc that it is
        aware
        of no limitations regarding Product Information provided to SCEA pursuant
        to the
        terms of this Agreement which
        would in any way restrict SCEA’s ability to distribute
        or sell such SCEA Demo Disc at retail, nor does Publisher or its licensors
        (other than SCEA and/or its affiliates)
        have any anticipation of receiving any compensation
        from such retail sales. In the event that SCEA
        institutes a SCEA Demo Disc in which a fee and/or royalty is charged to
        Publisher, SCEA and Publisher will enter
        into a separate agreement regarding such SCEA Demo
        Disc.

       

      7.4.2
        Third
        Party Demo Discs.

       

      7.4.2.1
        License. Publisher
        may participate in
        any
        SCEA Established Third Party Demo Disc Program. Publisher
        shall notify SCEA of its intention to participate in
        any
        such program, and upon receipt of such notice, SCEA
        shall grant to Publisher the right and license to use Licensed Products in
        Third
        Party Demo Discs and to use, distribute, market, advertise and otherwise
        promote
        (and, if permitted in accordance with the terms of any SCEA Established Third
        Party Program or otherwise permitted by SCEA, to sell) such Third Party Demo
        Discs in accordance with the SourceBook 2, which may be modified from time
        to
        time at the sole discretion of SCEA. Unless separately agreed
        in
        writing with SCEA, Third Party Demo Discs shall
        not
        be used, distributed, promoted, bundled or sold in conjunction with other
        products. In addition, SCEA hereby consents
        to the use of the Licensed Trademarks in connection
        with Third Party Demo Discs, subject to the approval
        procedures set forth in this Agreement. If any SCEA
        Established Third Party Demo Disc Program is specified by SCEA to be for
        promotional use only and not for resale, and such Third Party Demo Disc is
        subsequently discovered
        to be for sale, Publisher’s right to produce Third Party
        Demo Discs shall thereupon be automatically revoked,
        and SCEA shall have the right to terminate any related
        Third Party Demo Discs in accordance with the terms
        of
        Section 14.3 or 14.4 hereto.

       

      7.4.2.2
        Submission
        and Approval of Third
        Party Demo Discs. Publisher
        shall deliver to SCEA, for
        SCEA’s prior approval, a final version of each Third Party
        Demo Disc in a format prescribed by SCEA. Such Third Party Demo Disc shall
        comply with all requirements provided to Publisher by SCEA in the SourceBook
        2
        or otherwise. In addition, SCEA shall evaluate the Third Party Demo Disc
        in
        accordance with the approval provisions for Executable
        Software and Printed Materials set forth in Sections
        5.4 and 5.5, respectively. Furthermore, Publisher shall obtain the approval
        of
        SCEA in connection with any Advertising
        Materials relating to the Third Party Demo Discs
        in
        accordance with the approval provisions set forth in
        Section 5.6. Costs associated with Third Party Demo Discs
        shall be borne solely by Publisher. No approval by SCEA of any element of
        any
        Third Party Demo Disc shall be
        deemed
        an approval of any other element thereto, nor does
        any
        such approval constitute final approval for the related Licensed Product.
        Unless
        otherwise permitted by SCEA,
        Publisher shall clearly and conspicuously state on all
        Third
        Party Demo Disc Packaging and Printed Materials that
        the
        Third Party Demo Disc is for promotional purposes only and not for
        resale.

       

      7.4.2.3
        Manufacture
        and Royalty of Third
        Party Demo Discs. Publisher
        shall comply with all Manufacturing
        Specifications with respect to the manufacture
        and payment for manufacturing costs of Third Party Demo Discs, and Publisher
        shall also comply with all terms and conditions of Section 6 hereto. No costs
        incurred in the development, manufacture, licensing, production, marketing
        and/or distribution (and if permitted by SCEA, sale) of the Third Party Demo
        Disc shall be deducted from any
        amounts payable to SCEA hereunder. Royalties on Third
        Party Demo Discs shall be as provided in Section 8.2.

       

      7.5
        Contests
        and Sweepstakes of Publisher. SCEA
        acknowledges that, from time to time, Publisher may
        conduct contests and sweepstakes to promote Licensed
        Products. SCEA shall permit Publisher to include contest or sweepstakes
        materials in Printed Materials and Advertising
        Materials, subject to compliance with the approval
        provisions of Section 5.5 and 5.6 hereunder, compliance with the provisions
        of
        Section 9.2 and 10.2 hereunder,
        and subject to the following additional terms and
        conditions:

       

      (i) Publisher
        represents that it has retained the services of
        a
        fulfillment house to administer the contest or sweepstakes
        and if it has not retained the services of a fulfillment house, Publisher
        represents and warrants that it has the expertise to conduct such contests
        or
        sweepstakes, and in any event, Publisher shall assume full responsibility
        for
        all aspects of such contest or sweepstakes;

       

      (ii) Publisher
        warrants that each contest, sweepstakes, and promotion, comply with local,
        state
        and federal laws or regulations;

       

      (iii) Publisher
        represents and warrants that it has obtained the consent of all holders of
        intellectual property rights required to be obtained in connection with each
        contest
        or sweepstakes including, but not limited to, the consent
        of any holder of copyrights or trademarks relating to
        any
        Advertising Materials publicizing the contest or sweepstakes, or the prizes
        being awarded to winners of the contest or sweepstakes; and

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (iv)
        Publisher shall make available to SCEA all contest
        and sweepstakes material prior to publication in accordance
        with the approval process set forth in Section 5.5
        or
        5.6.

       

      Approval
        by SCEA of contest or sweepstakes materials for use
        in
        the Printed Materials or Advertising Materials (or any
        use
        of the System or Licensed Products as prizes in such
        contest or sweepstakes) shall not constitute an endorsement by SCEA of such
        contest or sweepstakes, nor shall
        such acceptance be construed as SCEA having reviewed
        and approved such materials for compliance with any
        federal or state law, statute, regulations, order or the like,
        which shall be Publisher’s sole responsibility.

       

      7.6
        PlayStation
        Website. All
        Licensed Publishers shall
        be
        required to provide Product Information for a web page for each of its Licensed
        Products for display on the PlayStation
        promotional website, or other website or websites
        as may be operated by SCEA 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 SourceBook 2. Publisher shall provide SCEA with
        such
        Product Information for each Licensed Product upon submission of Printed
        Materials to SCEA
        for
        approval in accordance with Section 5.5.2 hereto.
        Publisher shall also provide updates to such web page
        in a
        timely manner as required by SCEA in updates to the SourceBook 2.

       

      7.7 Distribution.

       

      7.7.1
        Distribution
        Channels. Publisher
        may use
        such
        distribution channels as Publisher deems appropriate,
        including the use of third party distributors, resellers, dealers and sales
        representatives. In the event that Publisher
        elects to have one of its Licensed Products distributed
        and sold by another Licensed Publisher, Publisher
        must provide SCEA with advance written notice of
        such
        election, the name of the Licensed Publisher and any
        additional information requested by SCEA regarding the
        nature of the distribution services provided by such Licensed Publisher prior
        to
        manufacture of such Licensed Product.

       

      7.7.2
        Limitations
        on Distribution. Notwithstanding
        any other provisions in this Agreement, Publisher
        shall not, directly or indirectly, solicit orders from
        or
        sell any Units of the Licensed Products to any person
        or
        entity outside of the Licensed Territory. In addition,
        Publisher shall not directly or indirectly solicit orders for or sell any
        Units
        of the Licensed Products in any situation where Publisher knows or reasonably
        should know
        that
        such Licensed Products may be exported or resold
        outside of the Licensed Territory.

       

      8. Royalties.

       

      8.1
        Applicable
        Royalties on Licensed Products. 

       

      8.1.1
        Initial
        Orders. Publisher
        shall pay SCEA,
        either directly or through its designee, a per title royalty
        in United States dollars for each Unit of the Licensed
        Products manufactured based on the initial Wholesale
        Price of the Licensed Product, as follows:

       

      
        	 	
                Wholesale
                  Price

              	
                Per
                  Title Royalty

              
	
                Band
                  1

              	
                ***

              	 	 	 	
                ***

              
	
                Band
                  2

              	
                ***

              	 	 	 	
                ***

              
	
                Band
                  3

              	
                ***

              	 	 	 	
                ***

              
	
                Band
                  4

              	
                ***

              	 	 	 	
                ***

              
	
                Band
                  5

              	
                ***

              	 	 	 	
                ***

              

      

       

      In
        the
        absence of satisfactory evidence to support the WSP, the
        royalty rate that shall apply will be *** per Unit. Royalties
        may be subject to change in SCEA’s discretion upon
        sixty (60) days notice to Publisher. Upon receipt of such notice, Publisher
        shall have the option to terminate this
        Agreement upon written notice to SCEA rather than having such revised royalty
        structure go into effect.

       

      8.1.2
        Reorders
        and Other Programs. Royalties
        on additional orders to manufacture a specific Licensed
        Product shall be the royalty determined by the initial
        Wholesale Price as reported by Publisher for that Licensed Product regardless
        of
        the wholesale price of the Licensed Product at the time of reorder, except
        in
        the event that
        the
        Wholesale Price increases for such Licensed Product,
        in which case the royalty shall be adjusted upwards
        to reflect the higher Wholesale Price. Licensed Products
        qualifying for SCEA’s “Greatest Hits” programs or
        other
        programs offered by SCEA shall be subject to the royalties
        applicable for such programs. Publisher acknowledges
        that as of the date of execution of this Agreement no “Greatest Hits” program
        exists for the PlayStation 2 Third Party licensing program.

       

      8.2
        Third
        Party Demo Disc Program Royalties: Publisher
        shall pay SCEA a per Unit royalty in United States
        dollars of *** for each Third Party Demo Disc Unit
        manufactured. The quantity of Units ordered shall comply
        with the terms of such SCEA Established Third Party
        Demo Disc Program.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      8.3
        Payment.
        Payment
        of royalties under Sections 8.1
        and
        8.2 shall be made to SCEA through its Designated Manufacturing
        Facility concurrent with the placement of an order
        to
        manufacture Licensed Product and payment of manufacturing
        costs in accordance with the terms and conditions
        set forth in Sections 6.2.3, unless otherwise agreed
        in
        writing with SCEA. At the time of placing an order
        to
        manufacture a Licensed Product, Publisher shall submit to SCEA an accurate
        accounting statement setting out
        the
        number of units of Licensed Product to be manufactured,
        projected initial wholesale price, applicable royalty,
        and total amount due SCEA. In addition, Publisher
        shall submit to SCEA prior to placing the initial order for each Licensed
        Product a separate certification, in the
        form
        provided by SCEA in the SourceBook 2, signed by
        officers of Publisher that certifies that the Wholesale Price
        provided to SCEA is accurate and attaching such documentation supporting
        the WSP
        as requested by SCEA. Payment shall be made prior to manufacture unless SCEA
        has
        agreed to extend credit terms to Publisher in writing pursuant
        to Section 6.2.3.3. Nothing herein shall be construed
        as requiring SCEA to extend credit terms to Publisher.
        The accounting statement due hereunder shall be
        subject to the audit and accounting provisions set forth in
        paragraph 16.2 below. No costs incurred in the development, manufacture,
        marketing, sale and/or distribution
        of the Licensed Products shall be deducted from
        any
        royalties payable to SCEA hereunder. Similarly, there
        shall be no deduction from the royalties otherwise owed
        to
        SCEA 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 Units of the
        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 Units
        of
        the Licensed Products or arising with respect to the
        payment of royalties hereunder. In addition to the royalty
        payments provided to SCEA hereunder, Publisher shall be solely responsible
        for
        and bear any cost relating to any
        withholding taxes or other such assessments which may
        be
        imposed by any governmental authority with respect
        to the royalties paid to SCEA hereunder; provided, however,
        that SCEA shall not manufacture Licensed Products
        outside of the United States without the prior consent
        of Publisher. Publisher shall provide SCEA 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 paid.

       

      8.4
        Rebate
        Programs. Publisher
        shall be eligible to
        participate in one of three rebate programs offered by SCEA: the Standard
        Rebate
        program, the Level 1 Rebate program,
        or the Level 2 Rebate program. If Publisher qualifies
        for such rebates as set forth herein, rebates shall be
        credited to Publisher’s account as provided below:

      
        	 	 	 	 	 	 
	
                Units
                  Ordered 

              	 	
                Standard 

              	 	
                Level
                  1 

              	
                Level
                  2 

              
	
                
                  ***

                

              	 	
                
                  ***

                

              	 	
                
                  ***

                

              	 	
                
                  ***

                

              	
                
                  ***

                

              
	 	 	
                ***

              	 	
                ***

              	 	
                ***

              	
                ***

              
	 	 	
                ***

              	
                 

              	
                ***

              	
                 

              	
                ***

              	
                ***

              
	 	 	
                ***

              	
                 

              	
                ***

              	 	
                ***

              	
                ***

              
	 	 	
                ***

              	 	
                ***

              	 	
                ***

              	
                ***

              
	 	 	
                ***

              	 	
                ***

              	 	
                ***

              	
                ***

              

      

       

      8.4.1
        Standard
        Rebate Program. All
        Publishers
        qualify for the Standard Rebate program. Rebates
        will be offered on an individual title basis. Rebates
        will be given to any individual Licensed Product that
        exceeds the above numbers of Units during the first year
        after first commercial shipment of such Licensed Product.
        The rebate in effect at the end of such year for the Licensed
        Product will remain in effect for as long as Publisher
        continues to sell such Licensed Product, but Publisher will not receive further
        rebates if sales of such Licensed
        Product hit additional thresholds as specified above after such year. The
        Standard Rebate may not be used
        in
        conjunction with a Third Party Demo Disc program or
        any
        promotional program of SCEA, with Licensed Products
        that qualify for any “Greatest Hits” program of SCEA or with Licensed Products
        that qualify for the ***].

       

      8.4.2
        Level
        1 Rebate Program: To
        be
        eligible for
        the
        Level 1 Rebate program, Publisher must ship over ***
        Units of
        certain Licensed Products in a single Fiscal Year. Level
        1
        Rebates shall be credited to Publisher on an individual
        title basis. Other terms of the Level 1 Rebate are
        as
        follows:

       

      (i) Only
        Publisher’s titles (as determined below) that meet
        the
        following conditions shall count toward the ***
        Unit
        threshold: Publisher must order at *** Units of the
        Licensed Product both within the first year of commercial
        release of such Licensed Product and during the
        qualifying Fiscal Year.

       

      (ii) Any
        Licensed Products, including “Greatest Hits” titles
        and products for the original PlayStation game console,
        but excluding all demo discs, shall count toward the***
        Unit threshold (provided they meet the conditions
        set forth in Section 8.4.2(i) above). For purposes
        of determining Level 1 Rebate thresholds and the conditions set forth in
        Section
        8.4.2(i), full priced Licensed Products and “Greatest Hits” Licensed Products
        shall be considered separate Licensed Products, with separate Unit minimums
        and
        release dates.

       

      (iii) Level
        1
        Rebates shall apply only to Licensed Products (not including “Greatest Hits”
titles, Licensed Products qualifying for the Band 1 royalty and products
        for
the
        original PlayStation game console) ordered in the Fiscal Year following the
        Fiscal Year in which the *** Unit
        threshold is met. Units of Licensed Products that qualified
        Publisher for inclusion in the Level 1 Rebate program in the previous Fiscal
        Year shall not be entitled to receive the Level 1 Rebate.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      (iv) Publisher
        must re-qualify for the Level 1 Rebate Program each Fiscal Year. If a Publisher
        fails to requalify for
        any
        Fiscal Year, then the Standard Rebate shall apply in such
        Fiscal Year. The first Fiscal Year for which a Publisher
        may qualify for the Level 1 Rebate shall be the Fiscal Year ending March
        31,
        2000, and if the Publisher qualifies for the Level 1 Rebate, it will apply
        to
        Licensed Products ordered in the Fiscal Year commencing April 1,
        2000.

       

      (v) Licensed
        Products eligible for the Level 1 Rebate program
        shall not be eligible for Standard Rebates, and Level
        1
        Rebates shall supersede Standard Rebates with respect to any individual Licensed
        Product. If a Licensed Product
        qualifies for the Standard Rebate in one Fiscal Year,
        and
        Publisher qualifies for the Level 1 Rebate in the next
        Fiscal Year, Units of such Licensed Product ordered in
        the
        next Fiscal Year will receive the Level 1 Rebate commencing
        on April 1 of the next Fiscal Year going forward,
        but such Level 1 Rebate will not be credited retroactively
        to Units of the Licensed Product ordered in the
        previous Fiscal Year. For example, Publisher orders *** Units
        of
        Product X in Fiscal Year 2001, receiving a Standard
        Rebate of ***%. Publisher qualifies for the Level
        1
        Rebate in Fiscal Year 2002. Publisher will receive the
        Level
        1 Rebate of ***% commencing with Units ordered
        on April 1, 2001, but will not receive a retroactive credit
        for Units ordered prior to April 1, 2001. When Publisher
        reaches the *** Unit threshold, it will receive a
        retroactive credit of ***% on all Level 1 Rebate Units ordered, as well as
        a
        retroactive credit of ***% on Standard Rebate Units ordered in the previous
        Fiscal Year, and Publisher will receive the Level 1 Rebate of ***% going
        forward.

       

      8.4.3
        Level
        2 Rebate Program: To
        be
        eligible for
        the
        Level 2 Rebate program, Publisher must ship over ***
        Units of
        certain Licensed Products in any Fiscal Year. Level
        2
        Rebates shall be credited to Publisher on an individual
        title basis. Other terms of the Level 2 Rebate are
        as
        follows:

       

      (i) Only
        Publisher’s titles (as determined below) that meet
        the
        following conditions shall count toward the *** Unit threshold: Publisher
        must
        order at least *** Units of the
        Licensed Product both within the first year of commercial
        release of such Licensed Product and during the
        qualifying Fiscal Year.

       

      (ii) Any
        Licensed Products, including “Greatest Hits” titles
        and products for the original PlayStation game console,
        but excluding all demo discs, shall count toward the***Unit
        threshold (provided they meet the conditions set
        forth
        in Section 8.4.3(i) above). For purposes of determining
        Level 2 Rebate thresholds and the conditions set
        forth
        in Section 8.4.2(i), full priced Licensed Products and
        “Greatest Hits” Licensed Products shall be considered separate Licensed
        Products, with separate Unit minimums and release dates.

       

      (iii) Level
        2
        Rebates shall apply only to Licensed Products (not including “Greatest Hits”
titles, Licensed Products qualifying for the Band 1 royalty and products
        for
the
        original PlayStation game console) ordered in the Fiscal Year following the
        Fiscal Year in which the *** Unit
        threshold is met. Units of Licensed Products that qualified Publisher for
        inclusion in the Level 2 Rebate program in the previous Fiscal Year shall
        not be
        entitled to receive the Level 2 Rebate.

       

      (iv) Publisher
        must re-qualify for the Level 2 Rebate Program
        each Fiscal Year. If Publisher fails to requalify for
        any
        Fiscal Year then the Standard Rebate or Level 1 Rebate, as the case may be,
        shall apply in such Fiscal Year. The first Fiscal Year for which a Publisher
        may
        qualify for the
        Level
        2 Rebate shall be the Fiscal Year ending March 31,
        2000,
        and if the Publisher qualifies for the Level 2 Rebate,
        it will apply to Licensed Products ordered in the Fiscal Year commencing
        April
        1, 2000.

       

      (v) Licensed
        Products eligible for the Level 2 Rebate program shall not be eligible for
        Standard Rebates or Level 1 Rebates, and Level 2 Rebates shall supersede
        Standard Rebates and Level 1 Rebates with respect to any individual Licensed
        Product. If a Licensed Product qualifies for the Standard Rebate or Level
        1
        Rebate in one Fiscal Year, and Publisher qualifies for the Level 2 Rebate
        in the
        next Fiscal Year, Units of such Licensed Product ordered in the next Fiscal
        Year
        will receive the Level 2 Rebate going forward, but
        such
        Level 2 Rebate will not be credited retroactively to
        Units
        of the Licensed Product ordered in the previous Fiscal Year. See Section
        8.4.2(v) for an example.

       

      8.5
        Calculation
        and Use of Rebates. Rebate
        percentages
        for all rebate programs shall be credited against
        royalties owed SCEA and shall have no other monetary
        value. All rebates, whether under the Standard Rebate,
        Level 1 Rebate or Level 2 Rebate Programs shall be
        issued
        by SCEA as a credit to Publisher for use against future royalty payments.
        It is
        Publisher’s responsibility to inform SCEA when it reaches any rebate threshold.
        In no event shall Publisher take a deduction off royalties owed SCEA or
        deduction off an invoice payable to SCEA on current production unless and
        until
        SCEA issues a credit to Publisher in writing or unless otherwise agreed in
        writing. From
        time
        to time SCEA may allow Publisher to use credits
        in other manners on terms and conditions to be determined by SCEA. Publisher
        may
        use rebate credits to procure
        Development Tools. Units of Licensed Products shall
        be
        considered “ordered” when Units first begin to ship
        from
        a Designated Manufacturing Facility.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      8.6
        Rebate
        Credits. Subject
        to Sections 8.4.2(v) and
        8.4.3(v), all rebate programs are ***, such that Publisher
        receives a credit for each rebate percentage Against
        *** Units
        when it reaches the Unit threshold for the
        next
        rebate percentage. SCEA shall credit Publisher’s account
        with respect to***rebates as follows: (A) if Publisher’s
        initial order for a Licensed Product is less than any
        rebate threshold provided above, then SCEA shall ***
        credit
        Publisher’s account sixty (60) days following the date that Publisher notifies
        SCEA that orders of a Licensed Product
        exceed any rebate threshold, subject to SCEA’s right
        to
        confirm such information; and (B) if Publisher’s initial order for a Licensed
        Product reaches or exceeds any rebate threshold provided above, then Publisher
        may credit the rebate amount set forth above as a separate line item on the
        Purchase Order with respect to such Licensed Product, subject to SCEA’s
        confirmation right.

       

      9. Representations
        and Warranties.

       

      9.1
        Representations
        and Warranties of SCEA. SCEA
        represents and warrants solely for the benefit of Publisher that SCEA has
        the
        right, power and authority to enter
        into this Agreement and to fully perform its obligations
        hereunder.

       

      9.2
        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 by Publisher of all or
        any
        part of the Product Software, Product Proposals, Product
        Information, Printed Materials, Advertising Materials
        or any underlying work or content embodied therein, or any name, designation
        or
        trademark used in conjunction
        with the Licensed Products infringes or otherwise
        violates any Intellectual Property Right or other right or interest of any
        kind
        whatsoever of any third party, or
        otherwise contesting any right, title or interest of Publisher
        in or to the Product Software, Product Proposals, Product
        Information, Printed Materials, Advertising Materials
        or any underlying work or content embodied therein, or any name, designation
        or
        trademark used in conjunction with the Licensed Products;

       

      (ii) The
        Product Software, Product Proposals, Product Information, Printed Materials
        and
        Advertising Materials and their contemplated use under this Agreement do
        not and
        shall not infringe any person’s or entity’s rights including without limitation,
        patents, copyrights (including rights in a joint work), trademarks, trade
        dress,
        trade secret, rights
        of
        publicity, privacy, performance, moral rights, literary
        rights and any other third party right;

       

      (iii) Publisher
        has the right, power and authority to enter into this Agreement, to grant
        SCEA
        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
        or
        entity, and, throughout the term of this Agreement,
        Publisher shall not make any separate agreement
        with any person or entity that is inconsistent with
        any
        of the provisions of this Agreement;

       

      (v) Publisher
        has not sold, assigned, leased, licensed
        or in any other way disposed of or encumbered the rights
        granted to Publisher hereunder, and Publisher will not
        sell,
        assign, lease, license or in any other way dispose of
        or
        encumber any of such rights except as expressly permitted
        hereunder or as consented to by SCEA in writing;

       

      (vi) Publisher
        has obtained the consent of all holders of intellectual property rights required
        to be obtained
        in connection with use of any Product Information by
        SCEA
        as licensed hereunder, and Product Information when
        provided to SCEA in accordance with the terms of this
        Agreement may be published, marketed, distributed and
        sold
        by SCEA in accordance with the terms and conditions
        of this Agreement and without SCEA incurring any royalty, residual, union,
        guild
        or other fees;

       

      (vii) Publisher
        shall not make any representation or give any warranty to any person or entity
        expressly or implicitly
        on SCEA’s behalf, or to the effect that the Licensed
        Products are connected in any way with SCEA (other than that the Executable
        Software and/or Licensed Products have been developed, marketed, sold and/or
        distributed under license from SCEA);

       

      (viii) In
        the
        event that Executable Software is delivered to other Licensed Publishers
        or
        Licensed Developers
        by Publisher 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 the confidentiality of
        such
        source code;

       

      (ix) The
        Executable Software and any Product Information delivered to SCEA shall be
        in a
        commercially acceptable
        form, free of significant bugs, defects, time bombs
        or
        viruses which could disrupt, delay, destroy the Executable
        Software or System or render either of them less
        than
        fully useful, and shall be fully compatible with the
        System and any peripherals listed on the Printed Materials
        as compatible with the Licensed Product;

       

      (x) Each
        of
        the Licensed Products, Executable Software,
        Printed Materials and Advertising Materials shall be
        developed, marketed, sold and distributed by or at the direction of Publisher
        in
        an ethical manner and in full compliance
        with all applicable federal, state, provincial, local
        and
        foreign laws and any regulations and standards promulgated
        thereunder (including but not limited to federal
        and state lottery laws as currently interpreted and enforced) and will not
        contain any obscene or defamatory matter;

       

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

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (xii) Publisher
        has, 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 any Licensed Products, the System or SCEA.

       

      10. Indemnities;
        Limited Liability.

       

      10.1
        Indemnification
        by SCEA. SCEA
        shall indemnify
        and hold Publisher harmless from and against any
        and
        all third party claims, losses, liabilities, damages, expenses
        and costs, including, without limitation, reasonable
        fees for attorneys, expert witnesses and litigation costs, and including
        costs
        incurred in the settlement
        or avoidance of any such claim which result from
        or
        are in connection with a breach of any of the representations or warranties
        provided by SCEA herein; provided, however, that Publisher shall give prompt
        written notice to SCEA of the assertion of any such claim, and provided,
        further, that SCEA shall have the right to select counsel
        and control the defense and settlement thereof. SCEA
        shall have the exclusive right, at its discretion, to commence and prosecute
        at
        its own expense any lawsuit or to
        take
        such other action with respect to such matters as shall
        be
        deemed appropriate by SCEA. Publisher shall provide
        SCEA, at no expense to Publisher, reasonable assistance
        and cooperation concerning any such matter; and Publisher
        shall not agree to the settlement of any such claim,
        action or proceeding without SCEA’s prior written consent.

       

      10.2
        Indemnification
        By Publisher. Publisher
        shall
        indemnify and hold SCEA harmless from and against any
        and
        all claims, losses, liabilities, damages, expenses and
        costs, including, without limitation, reasonable fees for attorneys,
        expert witnesses and litigation costs, and including
        costs incurred in the settlement or avoidance of any such claim, which result
        from or are in connection with

      (i) a
        breach
        of any of the provisions of this Agreement; or

       

      (ii) infringement
        of a third party’s intellectual property rights
        by
        Publisher; or (iii) any claims of or in connection with any personal or bodily
        injury (including death) or property damage, by whomever such claim is made,
        arising out
        of,
        in whole or in part, the development, marketing, sale,
        distribution and/or use of any of the Licensed Products
        (or portions thereof) unless due directly to the breach of SCEA in performing
        any of the specific duties and/or providing any of the specific services
        required of it hereunder;
        or (iv) any federal, state or foreign civil or criminal
        actions relating to the development, marketing, sale
        and/or distribution of Licensed Products. SCEA shall give prompt written
        notice
        to Publisher of the assertion of any such indemnified claim, and, with respect
        to third party claims, actions or proceedings against SCEA, SCEA shall have
        the
        right to select counsel for SCEA and reasonably control the defense and/or
        settlement thereof. Subject to the above, Publisher shall have the right,
        at its
        discretion, to select
        its own counsel, to commence and prosecute at its own
        expense any lawsuit, to reasonably control the defense and/or settlement
        thereof
        or to take such other action with respect to claims, actions or proceedings
        by
        or against Publisher. SCEA shall retain the right to approve any settlement.
        SCEA shall provide Publisher, at no expense to SCEA, reasonable assistance
        and
        cooperation concerning any
        such
        matter; and SCEA shall not agree to the settlement
        of any such claim, action or proceeding (other than
        third party claims, actions or proceedings against SCEA)
        without Publisher’s prior written consent.

       

      10.3 LIMITATION
        OF LIABILITY.

       

      10.3.1
        LIMITATION
        OF SCEA’S LIABILITY.
        IN
        NO EVENT SHALL SCEA OR OTHER
        SONY AFFILIATES AND THEIR SUPPLIERS,
        OFFICERS, DIRECTORS, EMPLOYEES
        OR AGENTS BE LIABLE FOR LOSS OF PROFITS, OR ANY SPECIAL, PUNITIVE, INCIDENTAL,
        INDIRECT OR CONSEQUENTIAL DAMAGES
        ARISING OUT OF, RELATING TO OR IN
        CONNECTION WITH THIS AGREEMENT, INCLUDING
        WITHOUT LIMITATION THE BREACH
        OF THIS AGREEMENT BY SCEA, THE MANUFACTURE OF THE LICENSED PRODUCTS AND THE
        USE
        OF THE LICENSED PRODUCTS, EXECUTABLE SOFTWARE AND/OR THE SYSTEM BY PUBLISHER
        OR
        ANY END-USER, WHETHER UNDER
        THEORY OF CONTRACT, TORT (INCLUDING
        NEGLIGENCE), INDEMNITY, PRODUCT
        LIABILITY OR OTHERWISE. IN NO EVENT
        SHALL SCEA’S LIABILITY ARISING UNDER,
        RELATING TO OR IN CONNECTION WITH
        THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY LIABILITY FOR DIRECT OR
        INDIRECT
        DAMAGES, AND INCLUDING WITHOUT
        LIMITATION ANY LIABILITY UNDER SECTION 10.1 HERETO, EXCEED THE TOTAL AMOUNT
        PAID
        BY PUBLISHER TO SCEA UNDER THIS AGREEMENT. EXCEPT AS EXPRESSLY SET FORTH
        HEREIN,
        NEITHER SCEA NOR ANY SONY AFFILIATE, NOR ANY OF THEIR RESPECTIVE
DIRECTORS,
        OFFICERS, EMPLOYEES OR AGENTS,
        SHALL BEAR ANY RISK, OR HAVE ANY RESPONSIBILITY OR LIABILITY, OF ANY KIND
        TO
        PUBLISHER OR TO ANY THIRD PARTIES WITH
        RESPECT TO THE QUALITY, OPERATION AND/OR PERFORMANCE OF ANY PORTION OF THE
        SONY
        MATERIALS, THE SYSTEM OR ANY LICENSED PRODUCT.

       

      
        
          
          

        

        
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      10.3.2
        LIMITATION
        OF PUBLISHER’S LIABILITY. IN
        NO EVENT SHALL PUBLISHER OR ITS AFFILIATED COMPANIES AND THEIR
SUPPLIERS,
        OFFICERS, DIRECTORS, EMPLOYEES
        OR AGENTS BE LIABLE TO SCEA FOR ANY LOSS OF PROFITS, OR ANY SPECIAL, PUNITIVE,
        INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING OUT OF,
RELATED
        TO OR IN CONNECTION WITH (i) THIS AGREEMENT OR (ii) THE USE OR DISTRIBUTION
        IN
        ACCORDANCE WITH THE TERMS AND CONDITIONS
        OF THIS AGREEMENT OF ANY CODE
        PROVIDED BY SCEA, IN WHOLE OR IN PART,
        WHETHER UNDER THEORY OF CONTRACT,
        TORT (INCLUDING NEGLIGENCE), INDEMNITY,
        PRODUCT LIABILITY OR OTHERWISE,
        PROVIDED THAT SUCH LIMITATIONS
        SHALL NOT APPLY TO DAMAGES RESULTING FROM PUBLISHER’S BREACH OF SECTIONS 4,
        10.2, 11 OR 13 OF THIS AGREEMENT, AND
        PROVIDED FURTHER THAT SUCH LIMITATIONS
        SHALL NOT APPLY TO AMOUNTS WHICH PUBLISHER MAY BE REQUIRED TO PAY
TO
        THIRD PARTIES UNDER SECTIONS 10.2 OR 16.10.

       

      10.4
        DISCLAIMER
        OF WARRANTY. EXCEPT
        AS
        OTHERWISE EXPRESSLY SET FORTH HEREIN,
        NEITHER SCEA NOR ITS AFFILIATES AND SUPPLIERS MAKE, NOR DOES PUBLISHER
RECEIVE,
        ANY REPRESENTATIONS OR WARRANTIES,
        EXPRESS, IMPLIED OR STATUTORY,
        REGARDING THE SONY MATERIALS, SCEA’S CONFIDENTIAL INFORMATION
        THE SYSTEM, THE UNITS OF THE
        LICENSED PRODUCTS MANUFACTURED HEREUNDER AND/OR PUBLISHER’S PRODUCT
INFORMATION
        INCLUDED ON SCEA DEMO DISCS.
        SCEA SHALL NOT BE LIABLE FOR ANY INJURY, LOSS OR DAMAGE, DIRECT, INDIRECT
        OR
        CONSEQUENTIAL, ARISING OUT OF THE USE OR INABILITY TO USE ANY UNITS AND/OR
        ANY
SOFTWARE
        ERRORS AND/OR “BUGS” IN PUBLISHER’S
        PRODUCT INFORMATION WHICH MAY BE REPRODUCED ON SCEA DEMO DISCS. WITHOUT LIMITING
        THE GENERALITY OF THE FOREGOING, SCEA AND ITS AFFILIATES AND
SUPPLIERS
        EXPRESSLY DISCLAIM THE IMPLIED WARRANTIES
        OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND
THEIR
        EQUIVALENTS UNDER THE LAWS OF ANY
        JURISDICTION, REGARDING THE SONY MATERIALS,
        SCEA’S CONFIDENTIAL INFORMATION,
        LICENSED PRODUCTS, SCEA DEMO
        DISCS AND THE SYSTEM. ANY WARRANTY
        AGAINST INFRINGEMENT THAT MAY
        BE PROVIDED IN SECTION 2-312(3) OF THE UNIFORM COMMERCIAL CODE AND/OR IN
        ANY
        OTHER COMPARABLE STATUTE IS EXPRESSLY DISCLAIMED.

       

      11.
        SCEA Intellectual Property Rights.

       

      11.1
        Licensed
        Trademarks. The
        Licensed Trademarks
        and the goodwill associated therewith are and shall be the exclusive property
        of
        SCEA or Affiliates of SCEA.
        Nothing herein shall give Publisher any right, title or
        interest in or to any of the Licensed Trademarks or any other
        trademarks of SCEA, other than the non-exclusive license
        provided herein. Publisher shall not do or cause to be
        done
        any act or thing in any way impairing or tending to impair or dilute any
        of
        SCEA’s rights, title or interests in or to any of the Licensed Trademarks or any
        other trademarks of SCEA, nor shall Publisher register any trademark in its
        own
        name or in the name of any other person or entity, or obtain
        rights to employ Internet domain names or addresses,
        which are similar to or are likely to be confused with
        any
        of the Licensed Trademarks or any other trademarks
        of SCEA.

       

      11.2
        License
        of Sony Materials and System. All
        rights
        with respect to the Sony Materials and System, including,
        without limitation, all of SCEA Intellectual Property Rights therein, are
        and
        shall be the exclusive property
        of SCEA or Affiliates of SCEA. Nothing herein shall give Publisher any right,
        title or interest in or to the Sony
        Materials or the System (or any portion thereof), other
        than the non-exclusive license provided herein. Publisher
        shall not do or cause to be done any act or thing in
        any
        way impairing or tending to impair any of SCEA’s rights, title or interests in
        or to the Sony Materials or the System (or any portion thereof).

       

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

       

      In
        the
        event that Publisher discovers or otherwise becomes aware
        that any of the SCEA Intellectual Property Rights have
        been
        or are being infringed upon by any third party, then
        Publisher shall promptly notify SCEA. SCEA shall have
        the
        sole right, in its discretion, to institute and prosecute
        lawsuits against third parties for such infringement
        of SCEA Intellectual Property Rights. Any lawsuit
        shall be prosecuted solely at the cost and expense of
        SCEA
        and all sums recovered in any such lawsuits, whether
        by judgment, settlement or otherwise shall belong solely to SCEA. Upon request
        of SCEA, Publisher shall execute all papers, testify on all matters and
        otherwise cooperate in every way necessary and desirable for the prosecution
        of
        any such lawsuit. SCEA 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 the conduct of
        a
        cross-claim or third party action.

      

      13. Confidentiality.

      

      13.1 SCEA’s
        Confidential Information.

       

      13.1.1
        Definition
        of SCEA’s Confidential
        Information. “SCEA’s
        Confidential Information”
        shall mean:

       

      (i)
        the
        System, Sony Materials and Development Tools;

       

      
        
          
          

        

        
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      (ii) other
        documents and materials developed, owned, licensed
        or under the control of Sony, including all processes,
        data, hardware, software, inventions, trade secrets,
        ideas, creations, improvements, designs, discoveries,
        developments, research and know-how, including
        without limitation the SourceBook 2 and SCEA Intellectual Property Rights
        relating to the System, Sony Materials or Development Tools; and

       

      (iii) information
        and documents regarding SCEA’s finances, business, marketing and technical
        plans, business methods and production plans.

       

      SCEA’s
        Confidential Information may consist of information
        in any medium, whether oral, printed, in machine-readable form or otherwise,
        including information apprised
        to Publisher and reduced to tangible or written form
        at
        any time during the term of this Agreement. In addition, the existence of
        a
        relationship between Publisher and
        SCEA
        for the purposes set forth herein shall be deemed to
        be
        SCEA’s Confidential Information unless otherwise agreed
        to
        in writing by the parties or until publicly announced
        by SCEA.

       

       13.1.2
        Term
        of Protection of SCEA’s Confidential Information. The
        term
        for the protection of SCEA’s Confidential Information shall commence on the
        Effective Date first above written and shall continue in full force and effect
        as long as any of SCEA’s Confidential Information continues to be maintained as
        confidential and proprietary
        by SCEA and/or Sony. During such term, Publisher
        shall, pursuant to Section 13.1.3 below, safeguard
        and hold in trust and confidence and not disclose or
        use
        (except for the purposes herein specified) any and all of
        SCEA’s
        Confidential Information.

       

       13.1.3
        Preservation
        of SCEA’s Confidential
        Information. Publisher
        shall, with respect to SCEA’s Confidential Information:

       

      (i)
        not
        disclose SCEA’s Confidential Information to
        any
        person or entity, other than those employees or directors
        of the Publisher whose duties justify a “need-to-know” and who have executed a
        confidentiality agreement in which such employees or directors have agreed
        not
        to disclose
        and to hold confidential 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 SCEA’s
        request, Publisher shall provide SCEA with a copy of such confidentiality
        agreement between Publisher and its employees
        or directors, and shall also provide SCEA with a list
        of
        employee and director signatories. Publisher shall not
        disclose any of SCEA’s Confidential Information to third
        parties, including without limitation to consultants or agents. Any employees
        or
        directors who obtain access to SCEA’s Confidential Information shall be advised
        by Publisher
        of the confidential nature of SCEA’s Confidential
        Information, and Publisher shall be responsible
        for any breach of this Agreement by its employees
        or directors.

       

      (ii) take
        all
        measures necessary to safeguard SCEA’s
        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
        SCEA’s Confidential Information be maintained in
        a
        restricted access area and plainly marked to indicate the
        secret and confidential nature thereof.

       

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

       

      (v) not
        use,
        modify, reproduce, sublicense, copy, distribute,
        create derivative works from, or otherwise provide
        to third parties, SCEA’s Confidential Information, or any portion thereof,
        except as provided herein, nor shall Publisher remove any proprietary legend
        set
        forth on or contained within any of SCEA’s Confidential
        Information.

       

       13.1.4
        Exceptions.
        The
        foregoing restrictions
        shall not apply to any portion of SCEA’s Confidential Information
        which:

       

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

       

      (ii) is
        or
        legitimately becomes part of the public domain through no fault of Publisher
        or
        its employees; or

       

      (iii) is
        independently developed by Publisher’s employees
        who have not had access to SCEA’s Confidential
        Information, as proven by written documentation
        of Publisher; or

       

      (iv) is
        required to be disclosed by administrative or judicial
        action; provided that Publisher must attempt to maintain the confidentiality
        of
        SCEA’s Confidential Information by asserting in such action the restrictions set
        forth in this Agreement, and, immediately after receiving notice
        of
        such action or any notice of any threatened action,
        Publisher must notify SCEA to give SCEA the maximum opportunity to seek any
        other legal remedies to maintain
        such SCEA’s Confidential Information in confidence
        as herein provided; or

       

      (v) is
        approved for release by written authorization of
        SCEA.

       

       13.1.5
        No
        Obligation to License. Disclosure
        of SCEA’s Confidential Information to Publisher
        shall not constitute any option, grant or license from SCEA to Publisher
        under
        any patent or other SCEA Intellectual Property Rights now or hereinafter
        held by
SCEA.
        The
        disclosure by SCEA to Publisher of SCEA’s Confidential Information hereunder
        shall not result in any obligation on the part of SCEA to approve any materials
        of Publisher hereunder or otherwise, nor shall such disclosure by SCEA give
        Publisher any right to, directly or indirectly, develop, manufacture or sell
        any
        product derived from or which uses any of SCEA’s Confidential Information, other
        than as expressly set forth in this Agreement.

       

      
        
          
          

        

        
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      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 SCEA’s Confidential Information, it shall notify
        SCEA 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 SCEA to protect SCEA’s
        proprietary rights in any of SCEA’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 but not limited to enforcement of
        confidentiality agreements, commencement
        and prosecution in good faith (alone or with
        the
        disclosing party) of legal action, and reimbursement
        for all reasonable attorneys’ fees, costs and expenses incurred by SCEA to
        protect its proprietary rights in
        SCEA’s
        Confidential Information. Publisher shall take all
        steps
        requested by SCEA to prevent the recurrence of any
        unauthorized duplication, access, use, possession or knowledge
        of SCEA’s Confidential Information. In addition,
        SCEA shall have the right to pursue any actions at
        law or
        in equity, including without limitation the remedies
        set forth in Section 16.10 hereto.

       

      13.2
        Publisher’s
        Confidential Information.

       

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

       

      (i) any
        Product Software as provided to SCEA 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 use by and release to end users, the general public
        or
        the trade);

       

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

       

      (iii) information
        and documents regarding Publisher’s
        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, including information
apprised
        to SCEA and reduced to tangible or written form at
        any
        time during the term of this Agreement.

       

       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 first above written and shall continue in full
        force and effect 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. SCEA
        shall, with respect to Publisher’s Confidential Information:

       

      (i) hold
        all
        Publisher’s Confidential Information in confidence, and shall 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 an SCEA employee or subcontractor who needs to know
        or
        have access to such 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 secret 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 SCEA
        remove any proprietary legend set forth on or contained
        within any of Publisher’s Confidential Information.

       

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

       

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

       

      (ii) is
        or
        legitimately becomes part of information in
        the
        public domain through no fault of SCEA, its employees
        or its subcontractors; or

       

      (iii) is
        independently developed by SCEA’s employees
        or affiliates who have not had access to Publisher’s
        Confidential Information, as proven by written documentation of SCEA;
        or

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      (iv)
        is
        required to be disclosed by administrative or judicial action; provided that
        SCEA attempted to maintain the confidentiality of Publisher’s Confidential
        Information by asserting in such action the restrictions set forth in this
        Agreement, and immediately after receiving notice of such action,
        notified Publisher of such action to give Publisher the
        opportunity to seek any other legal remedies to maintain
        such Publisher’s Confidential Information in confidence as herein provided;
        or

       

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

       

      13.2.5
        SCEA’s
        Obligations Upon Unauthorized
        Disclosure. If
        at any
        time SCEA becomes aware
        of
        any unauthorized duplication, access, use, possession
        or knowledge of any of Publisher’s Confidential Information,
        it shall notify Publisher as soon as is reasonably
        practicable. SCEA 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 but not limited to enforcement of
        confidentiality agreements, commencement
        and prosecution in good faith (alone or with
        the
        disclosing party) of legal action, and reimbursement
        for all reasonable attorneys’ fees, costs and expenses incurred by Publisher to
        protect its proprietary rights in Publisher’s Confidential Information. SCEA
        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. The
        terms
        and conditions of this Agreement shall be treated as SCEA’s Confidential
        Information and Publisher’s Confidential Information;
        provided that each party may disclose the terms
        and
        conditions of this Agreement:

       

      (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 counsel, to file
        publicly or otherwise disclose the terms of this Agreement
        under applicable federal and/or state securities or
        other
        laws, the disclosing party shall be required to promptly
        notify the other party such that the other party has
        a
        reasonable opportunity to contest or limit the scope of such
        required disclosure, and the disclosing party shall request, and shall use
        its
        best efforts to obtain, confidential treatment for such sections of this
        Agreement as the other party may designate.

       

      14.
        Term and Termination.

       

      14.1
        Effective
        Date; Term. This
        Agreement shall not be binding on the parties until it has been signed by
        each
        party, in which event it shall be effective from the Effective
        Date until March 31, 2003, unless earlier terminated
        pursuant to Section 14.2. The term shall be automatically extended for
        additional one-year terms thereafter,
        unless either party provides the other with written
        notice of its election not to so extend on or before January 31 of the
        applicable year. Notwithstanding the foregoing
        the term for the protection of SCEA’s 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 SCEA. SCEA
        shall have the right
        to
        terminate this Agreement immediately, by providing
        written notice of such election to Publisher, upon the occurrence of any
        of the
        following:

       

      (i) If
        Publisher breaches (A) any of its obligations hereunder;
        or (B) any other agreement entered into between
        SCEA or Affiliates of SCEA and Publisher.

       

      (ii) The
        liquidation or dissolution of Publisher or a statement
        of intent by Publisher to no longer exercise any of
        the
        rights granted by SCEA to Publisher hereunder.

       

      (iii) If
        during
        the term of this Agreement, 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 SCEA or
        an
        Affiliate of SCEA; (B) directly
        or indirectly holds or acquires a controlling interest in a third party which
        develops any interactive device or product which is directly or indirectly
        competitive with the System; or (C) is in litigation with SCEA or Affiliates
        of
SCEA
        concerning any proprietary technology, trade secrets or
        other
        SCEA Intellectual Property Rights or SCEA’s Confidential Information. As used in
        this Section 14.2, “controlling interest” means, with respect to any form of
entity,
        sufficient power to control the decisions of such entity.

       

      (iv) If
        during
        the term of this Agreement, Publisher or
        an
        entity that directly or indirectly has a controlling interest
        in Publisher enters into a business relationship with a third party with
        whom
        Publisher materially contributes to develop
        core components to an interactive device or product
        which is directly or indirectly competitive with the System. 

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      Publisher
        shall immediately notify SCEA in writing in
        the event
        that any of the events or circumstances specified in this
        Section occur.

       

      14.3
        Product-by-Product
        Termination by SCEA. In
        addition to the events of termination described in Section
        14.2, above, SCEA, at its option, shall be entitled to
        terminate, on a product-by-product basis, the licenses and
        related rights herein granted to Publisher in the event that (a) Publisher
        fails
        to notify SCEA promptly in writing of
        any
        material change to any materials previously approved
        by SCEA in accordance with Section 5 or Section 6.1
        hereto, and such breach is not corrected or cured within thirty
        (30) days after receipt of written notice of such breach;
        (b) Publisher uses a third party that fails to comply with the requirements
        of
        Section 3 in connection with the development of any Licensed Product; (c)
        any
        third party with whom Publisher has contracted for the development of
Executable
        Software breaches any of its material obligations
        to SCEA pursuant to such third party’s agreement
        with SCEA with respect to such Licensed Product;
        or (d) Publisher cancels a Licensed Product or fails
        to
        provide SCEA in accordance with the provisions of Section 5 above, with the
        final version of the Executable Software for any Licensed Product within
        three
        (3) months of
        the
        scheduled release date according to the Product Proposal
        (unless a modified final delivery date has been agreed
        to
        by the parties), or fails to provide work in progress
        to SCEA in strict accordance with the Review Process in Section
        5.3.

       

      14.4
        Options
        of SCEA in Lieu of Termination. As
        alternatives to terminating this Agreement or a particular
        Licensed Product as set forth in Sections 14.2 and
        14.3
        above, SCEA may, at its option and upon written notice to Publisher, take
        the
        following actions in lieu of terminating this Agreement. In the event that
        SCEA
        elects either
        of
        these options, Publisher may terminate this Agreement
        upon written notice to SCEA rather than allowing
        SCEA to exercise these options. Election of these options
        by SCEA shall not constitute a waiver of or compromise
        with respect to any of SCEA’s rights under this
        Agreement and SCEA may elect to terminate this Agreement with respect to
        any
        breach.

       

      14.4.1
        Suspension
        of Agreement. SCEA
        may
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.

       

      14.4.2
        Liquidated
        Damages. Whereas
        a
        minor breach of any of the events set out below may not warrant termination
        of this Agreement, but will cause SCEA damages
        in amounts difficult to quantify, SCEA may require
        Publisher to pay liquidated damages of *** per
        event
        as follows:

       

      (i)
        Failure to submit Advertising Materials to SCEA
        for
        approval (including any required resubmissions); Broadcasting
        or publishing Advertising Materials without receiving the final approval
        or
        consent of SCEA;

       

      (ii) Failure
        to make SCEA’s requested revisions to
        Advertising Materials; or

       

      (iii) Failure
        to comply with the SourceBook 2, Manufacturing
        Specifications or Guidelines which relates in
        any
        way to use of Licensed Trademarks.

       

      Liquidated
        damages shall be invoiced separately or on Publisher’s
        next invoice for Licensed Products. SCEA reserves
        the right to terminate this Agreement for breach in lieu of seeking liquidated
        damages or in the event that liquidated damages are unpaid.

       

      14.5
        No
        Refunds. In
        the
        event of the termination of this Agreement in accordance with any of the
        provisions of Sections
        14.2 through 14.4 above, no portion of any payments
        of any kind whatsoever previously provided to SCEA
        hereunder shall be owed or be repayable to Publisher.

       

      15.
        Effect of Expiration or Termination.

       

      15.1
        Inventory
        Statement. Within
        thirty (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 SCEA 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
        and/or under
        its
        control at the time of expiration or the effective date
        of
        termination. SCEA 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 below, the licenses
        and
        related rights herein granted to Publisher shall immediately
        revert to SCEA, and Publisher shall cease from
        any
        further use of SCEA’s Confidential Information, Licensed Trademarks and Sony
        Materials and any SCEA Intellectual Property Rights therein, and, subject
        to the
        provisions of Section 15.3 below, Publisher shall have no further right to
        continue the development, publication, manufacture, marketing, sale or
        distribution of any Units of the Licensed Products, or to continue to use
        any
        Licensed Trademarks;
        provided, however, that for a period of one year
        after termination, and subject to all the terms of Section
        13, and provided this Agreement is not terminated due
        to a
        breach or default of Publisher, Publisher may retain
        such portions of Sony Materials and SCEA’s Confidential
        Information as SCEA in its sole discretion agrees
        are required to support end users of Licensed Products
        but must return these materials at the end of such one
        year
        period. Upon expiration or termination, the licenses
        and related rights herein granted to SCEA by Publisher shall immediately
        revert
        to Publisher, and SCEA shall
        cease from any further use of Product Information and any Publisher Intellectual
        Property Rights therein; provided that
        SCEA
        may continue the manufacture, marketing, sale or
        distribution of any SCEA Demo Discs containing Publisher’s
        Product Information which Publisher had approved
        prior to termination.

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      15.3
        Disposal
        of Unsold Units. Provided
        that this Agreement is not terminated due to a breach or default of Publisher,
        Publisher may, upon expiration or termination of this Agreement, sell off
        existing inventories of Licensed Products,
        on a non-exclusive basis, for a period of ninety (90)
        days
        from the date of expiration or 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 ninety (90) day
        period, or in the event this Agreement is terminated as a
        result
        of any breach or default of Publisher, any and all Units of the Licensed
        Products remaining in Publisher’s inventory shall be destroyed by Publisher
        within five (5) business
        days of such expiration or termination. Within five
        (5)
        business days after such destruction, Publisher shall
        provide SCEA 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
        Return
        of Sony Materials and Confidential Information. Upon
        the
        expiration or earlier termination of this
        Agreement, Publisher shall immediately deliver to SCEA,
        or
        if and to the extent requested by SCEA destroy, all Sony Materials and any
        and
        all copies thereof, and Publisher and SCEA shall, upon the request of the
        other
party,
        immediately deliver to the other party, or if and 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 and/or SCEA, as appropriate,
        shall provide the other party with an affidavit of destruction and an itemized
        statement, each certified to be
        accurate by an officer of Publisher, indicating the number
        of
        copies and/or units of the Sony Materials and/or 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 the Sony Materials or Confidential Information
        and SCEA must resort to legal means (including
        without limitation any use of attorneys) to recover
        the Sony Materials or Confidential Information or the value thereof, all
        costs,
        including SCEA’s reasonable attorney’s
        fees, shall be borne by Publisher, and SCEA may,
        in
        addition to SCEA’s other remedies, withhold such amounts from any payment
        otherwise due from SCEA to Publisher
        under any agreement between SCEA and Publisher.

       

      15.5
        Extension
        of this Agreement; Termination Without Prejudice. SCEA
        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, without limitation, any expenditures, loss of profits or
        prospective profits) sustained or arising out of or alleged to have
        been
        sustained or to have arisen out of such expiration.
        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 any such expiration or 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, telegram or facsimile, with charges prepaid.
        The address for all notices or other communications
        required to be sent to SCEA 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
        or
        tendered delivery, as confirmed by the sending party.

       

      16.2
        Audit
        Provisions. Publisher
        shall keep full, complete,
        and accurate books of account and records covering
        all transactions relating to this Agreement. Publisher
        shall preserve such books of account, records, documents, and material for
        a
        period of twenty-four (24) months after the expiration or earlier termination
        of
        this Agreement.
        Acceptance by SCEA of an accounting statement,
        purchase order, or payment hereunder will not preclude
        SCEA from challenging or questioning the accuracy
        thereof at a later time. In the event that SCEA reasonably believes that
        the
        Wholesale Price provided by Publisher
        with respect to any Licensed Product is not accurate,
        SCEA shall be entitled to request additional documentation
        from Publisher to support the listed Wholesale
        Price for such Licensed Product. In addition, during the Term and for a period
        of two (2) years thereafter and
        upon
        the giving of reasonable written notice to Publisher,
        representatives of SCEA shall have access to, and
        the
        right to make copies and summaries of, such portions
        of all of Publisher's books and records as pertain to
        the
        Licensed Products and any payments due or credits received
        hereunder. In the event that such inspection reveals
        an under-reporting of any payment due to SCEA, Publisher
        shall immediately pay SCEA such amount. In the
        event
        that any audit conducted by SCEA reveals that Publisher has under-reported
        any
        payment due to SCEA hereunder
        by *** or more for that audit period, then in addition
        to the payment of the appropriate amount due to SCEA,
        Publisher shall reimburse SCEA for all reasonable audit costs for that audit
        and
        any and all collection costs to recover the unpaid amount.

       

      
        
          
          

        

        
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      16.3
        Force
        Majeure. Neither
        SCEA 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, without limitation, 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 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 SCEA prior to, during or after
        any
        such Force Majeure condition. In the event that the
        Force
        Majeure condition continues for more than sixty (60) days, SCEA 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 SCEA and Publisher, respectively,
        is that of licensor and licensee. Both parties are
        independent contractors and are not 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.
        SCEA
        has
        entered into this Agreement
        based upon the particular reputation, capabilities
        and experience of Publisher and its officers, directors and employees.
        Accordingly, Publisher may not assign 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 SCEA shall first be obtained. This Agreement shall not be assigned in
        contravention of Section 14.2 (iii). Any
        attempted or purported assignment, delegation or other
        such transfer, directly or indirectly, without the required
        consent of SCEA shall be void. Subject to the foregoing, this Agreement shall
        inure to the benefit of the parties
        and their respective successors and permitted assigns
        (other than under the conditions set forth in Section 14.2
        (iii). SCEA shall have the right to assign any and all of
        its
        rights and obligations hereunder to any Sony affiliate(s).

       

      16.6
        Subcontractors.
        Publisher
        shall not sell, assign,
        delegate, subcontract, sublicense or otherwise transfer or encumber all or
        any
        portion of the licenses herein
        granted without the prior written approval of SCEA, provided, however, that
        Publisher may retain those subcontractors who provide services which do not
        require access
        to
        Sony Materials or SCEA’s Confidential Information
        without such prior approval. Publisher may retain
        those 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 SCEA (the “PlayStation 2 Agreement”) in
        full
        force and effect throughout the term of such development
        and marketing; or (ii) an SCEA-approved subcontractor
        agreement (“Subcontractor Agreement”); and SCEA
        has
        approved such subcontractor in writing, which approval
        shall be in SCEA’s sole discretion. Such Subcontractor
        Agreement shall provide that SCEA is a third-party
        beneficiary of such Subcontractor Agreement and
        has
        the full right to bring any actions against such subcontractors to comply
        in all
        respects with the terms and conditions
        of this Agreement. Publisher shall provide a copy
        of
        any such Subcontractor Agreement to SCEA prior to
        and
        following execution thereof. Publisher shall not disclose
        to any subcontractor any of SCEA’s Confidential Information,
        including, without limitation, any Sony Materials,
        unless and until either a PlayStation 2 Agreement
        or a Subcontractor Agreement has been executed
        and approved by SCEA. Notwithstanding any consent which may be granted by
        SCEA
        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 its best efforts to cause its
        subcontractors retained 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. SCEA may
        subcontract any of its rights or obligations hereunder.

       

      16.7
        Compliance
        with Applicable Laws. The
        parties
        shall at all times comply with all applicable regulations
        and orders of their respective countries and other
        controlling jurisdictions 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. 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, without limitation, the recording
        of this Agreement with any appropriate governmental
        authorities (if required).

       

      
        
          
          

        

        
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      16.8
        Governing
        Law; Consent to Jurisdiction. This
        Agreement 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 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 16.1 above. In addition, each party hereby
        waives the right to a jury trial in any action or proceeding related to this
        Agreement.

       

      16.9
        Legal
        Costs and Expenses. In
        the
        event it is necessary
        for either party to retain the services of an attorney
        or attorneys to enforce the terms of this Agreement
        or to file or defend any action arising out of this Agreement,
        then the prevailing party in any such action shall
        be
        entitled, in addition to any other rights and remedies
        available to it at law or in equity to recover from the other party its
        reasonable fees for attorneys 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.

       

      16.10
        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,
        and
        all such remedies shall be deemed to be cumulative. Any breach of Sections
        3, 4,
        5, 6. 1, 11 and 13 of this Agreement would cause significant and irreparable
        harm to SCEA, the extent of which would be difficult to ascertain. Accordingly,
        in addition to any other remedies including
        without limitation equitable relief to which SCEA
        may
        be entitled, in the event of a breach by Publisher
        or any of its employees or permitted subcontractors
        of any such Sections of this Agreement, SCEA
        shall be entitled to the immediate issuance without bond of ex parte injunctive
        relief or, if a bond is required under
        applicable law, on the posting of a bond in an amount
        not to exceed ***, 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, SCEA 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 SCEA may be entitled
        under this Agreement or otherwise at law or in equity.
        In addition, Publisher shall indemnify SCEA for all losses, damages,
        liabilities, costs and expenses (including reasonable attorneys’ fees and all
        reasonable related costs) which SCEA may sustain or incur as a result of
        any
        breach under this Agreement.

       

      16.11
        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
        thereof) shall be enforced to the extent possible consistent with the stated
        intention of the parties, or, if incapable
        of such enforcement, shall be deemed to be deleted
        from this Agreement, while the remainder of this Agreement shall continue
        in
        full force and remain in effect according to its stated terms and
        conditions.

       

      16.12
        Sections
        Surviving Expiration or Termination.
        The
        following sections shall survive the expiration or earlier termination of
        this
        Agreement for any reason: 4, 5.8, 6.2, 6.4, 8, 9, 10, 11, 13, 14.5, 15, and
        16.

       

      16.13
        Waiver.
        No
        failure or delay by either party in exercising
        any right, power or remedy under this Agreement
        shall operate as a waiver of any such right, power
        or
        remedy. No waiver of any provision of this Agreement
        shall be effective unless in writing and signed by
        the
        party against whom such waiver is sought to be enforced.
        Any waiver by either party of any provision of this
        Agreement shall not be construed as a waiver of any other provision of this
        Agreement, nor shall such waiver operate or be construed as a waiver of such
        provision respecting any future event or circumstance.

       

      16.14
        Modification
        and Amendment. No
        modification
        or amendment of any provision of this Agreement
        shall be effective unless in writing and signed by
        both
        of the parties. Notwithstanding the foregoing, SCEA
        reserves the right to modify the SourceBook 2 from time to time upon reasonable
        notice to Publisher.

       

      16.15
        Headings.
        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.

       

      16.16
        Integration.
        This
        Agreement, together with the
        SourceBook 2, constitutes the entire agreement between
        SCEA and Publisher and supersedes all prior or contemporaneous
        agreements, proposals, understandings and
        communications between SCEA and Publisher, whether
        oral or written, with respect to the subject matter hereof including any
        PlayStation 2 Confidentiality and Nondisclosure Agreement and Materials Loan
        Agreement between SCEA and Publisher.

       

      16.17
        Counterparts.
        This
        Agreement may be executed
        in counterparts, each of which shall be deemed an original, and together
        shall
        constitute one and the same instrument.

       

      16.18
        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.

       

      
        
          
          

        

        
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      IN
        WITNESS WHEREOF, the
        parties have caused this Agreement to be duly executed as of the day and
        year
        first written above.

       

      
        
          	 SONY COMPUTER
                  ENTERTAINMENT AMERICA INC.	 	 DESTINATION
                  SOFTWARE,
                  INC.
	 	 	 	 	 

        

        
          	 By:
                  	 	 	 By:
                  	 
	 	 	 	 	 

        

        
          	 Print
                  Name: 	 	 	 Print
                  Name: 	 

        

        
          	 	 	 	 	 
	 Title:	 	 	 Title:	 

        

        
          	 	 	 	 	 
	 Date:
                  	 	 	 Date:
                  	 

        

      

      NOT
        AN AGREEMENT UNTIL

      EXECUTED
        BY BOTH PARTIES

       

      
        
          
          

        

        
          25

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