EXHIBIT 10.54
PLAYSTATION(R)2
FORM OF LICENSED DEVELOPER AGREEMENT
This LICENSED DEVELOPER AGREEMENT (the "Agreement" or "LDA"), entered into
as of the 15th day of October, 2002 (the "Effective Date"), by and between SONY
COMPUTER ENTERTAINMENT AMERICA, INC. with offices at 000 X. Xxxxxxxxx Xxxxxxxxx,
Xxxxxx Xxxx, XX 00000 (hereinafter "SCEA"), and Ignition USA with offices
located at 0000 X. Xxxx Xxxxxx, #000, Xxxxxxxx, XX 00000 hereinafter
"Developer").
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 Intellectual
Property Rights (as defined below) in connection with the System.
WHEREAS, Developer desires to be granted a nonexclusive license to develop
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 Developer 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, Developer and SCEA
hereby agree as follows:
1. Definition of Terms.
1.1 "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.
1.2 "Developer 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 or other rights of
Developer required or necessary under this Agreement.
1.3 "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.
1.4 "Development Tools" means the PlayStation 2 development tools sold or
licensed by SCEA to a Licensed Developer or Licensed Publisher for use in the
development of Executable Software for the System.
1.5 "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.
1.6 "Licensed Developer" means any developer that has signed a valid and
then current Licensed Developer Agreement.
1.7 "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.
1.8 "Licensed Products" means the Executable Software (which may be
combined with Executable Software of other Licensed Developers or Licensed
Publishers), 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.
1.9 "Licensed Publisher" means any publisher that has signed a valid and
then current Licensed Publisher Agreement.
1.10 "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.
1.11 "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.
1.12 "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 Developer 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
Developer.
1.13 "Product Proposal" shall have the meaning set forth in Section 5.2.1
hereto.
1.14 "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.
1.15 "SCEA Intellectual Property Rights" means those intellectual properly
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 and or pertain to the Licensed Trademarks.
1.16 "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 Developer or any Licensed Publisher and/or other
Licensed Developer. For purposes of this Agreement, Sony Materials shall not
include any hardware portions of the Development Tools, but shall include
firmware in such hardware.
1.17 "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 Developer. The SourceBook 2 is designed to serve as the first point of
reference by Developer in every phase of the development and approval of
Licensed Products.
1.18 "Unit" means an individual copy of a Licensed Product title
regardless of the number of PlayStation 2 Format Discs constituting such
Licensed Product title.
2. License.
2.1 License Grant. SCEA grants to Developer, and Developer hereby accepts,
for the term of this Agreement, within the Licensed Territory, under SCEA
Intellectual Property Rights owned, controlled or licensed by SCEA, a
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non-exclusive, non-transferable license, without the right to sublicense (except
as specifically provided herein), to develop Licensed Products using Sony
Materials, which right shall be limited to the following rights and other rights
set forth ins and in accordance with the terms of, this LDA: (i) to produce or
develop Licensed Products or portions of Licensed Products (including but not
limited to audio and video components thereof); (ii) to sublicense or provide
Executable Software in accordance with the terms of this LDA to those Licensed
Publishers, Licensed Developers and/or subcontractors which comply with the
criteria set forth in Section 3.2; and (iii) to use the Development Tools and
other Sony Materials in accordance with the terms of this LDA to test Licensed
Products on behalf of Licensed Developers or Licensed Publishers.
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 Developer under such separate agreements
shall not confer on Developer any rights under the System and vice versa.
3. Development of Licensed Products.
3.1 Right to Develop. This LDA grants Developer the right to develop
Licensed Products. It also gives Developer 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), Developer
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
Developer uses third party tools to develop Executable Software, Developer shall
be responsible for ensuring that it has obtained appropriate licenses for such
use.
3.2 Development by Third Parties. Except as otherwise set forth herein,
Developer shall not provide Sony Materials or SCEA's Confidential Information to
any third party. Developer shall be responsible for determining that third
parties meet the criteria set forth herein. Developer may contract with a third
party for development of Licensed Products, provided that such third party is:
(i) a Licensed Developer, (ii) a Licensed Publisher, or (iii) an SCEA-authorized
subcontractor in compliance with the provisions of Section 13.6. Developer 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, Developer 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, alt 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, Developer 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 Developer to study the performance, design and operation
of the Development Tools solely for the limited purposes of developing and
testing Developer's software applications, or to build tools to assist Developer
with the development and testing of software applications for Licensed Products.
Any tools developed or derived by Developer 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 Developer. In no event shall Developer patent any
tools created, developed or dived from Sony Materials. Developer 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. Moreover, Developer shall bear all risks arising from
incompatibility of its Licensed Product and the System resulting from use of
Developer-created tools. The burden of proof under this Section shall be on
Developer, and SCEA reserves the right to require Developer to furnish evidence
satisfactory to SCEA that Developer 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 development 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, Developer
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, Developer 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 Developer shall use reasonable security measures customary
within the high technology industry to reduce the risk of unauthorized
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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.
Developer 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. Developer 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 Developer 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. Any public performance relating to the Licensed
Product or the System is prohibited unless expressly authorized in writing by
SCEA.
4.3 Reservation of Developer's Rights. Separate and apart from Sony
Materials and other rights licensed to Developer by SCEA hereunder, as between
Developer and SCEA, Developer (or a Licensed Publisher, as determined between
Developer and such Licensed Publisher) retains all rights, title and interest in
and to the Product Software, and the Product Proposals relating thereto,
including without limitation Developer Intellectual Property Rights (or
intellectual property rights of a Licensed Publisher as determined between
Developer and such Licensed Publisher) therein, as well as all of Developer's
(or Licensed 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 Developer. Nothing in this
Agreement shall be construed to restrict the right of Developer 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. 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 Developer's rights, title or interests hereunder. Notwithstanding the
foregoing, Developer 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 Developer. 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's Intellectual Property Rights. In the event a
country is deleted from the Licensed Territory, SCEA shall deliver to Developer
a notice stating the number of days within which Developer shall cease
exercising such licenses in the deleted country or countries, including but not
limited to retrieving any Development Tools located in any such country.
Developer shall cease exercising such licenses, and retrieve any Development
Tools, directly or through subcontractors, by the end of the period stated in
such notice.
4.5 SourceBook 2 Requirement. Developer 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 Developer'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 Developer from any of its representations and
warranties in Section 6.2 hereunder.
5.2 Product Proposals.
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5.2.1 Submission of Product Proposal. if Developer has not yet contracted
with a Licensed Publisher for the creation of Product Software, then Developer
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 Developer's
Product Proposal, Developer 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 Developer 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
Developer. Any development conducted by or at the direction of Developer and any
legal commitment relating to development work shall be at Developer's own
financial and commercial risk. Developer 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. Developer 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
Developer to continue with development or production of the proposed Licensed
Product, provided that Developer 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 addition, Developer
shall immediately notify SCEA if it has entered into an agreement with a
Licensed Publisher for the publication, marketing, distribution and sale of the
proposed Licensed Product, and such Licensed Publisher's LPA shall govern the
approval process of such Licensed Product after any such notification.
5.3 Work-in-Progress.
5.3.1 Submission and Review of Work-in-Progress. SCEA shall require
Developer to submit to SCEA work-in-progress on Licensed Products at certain
intervals throughout their development and, upon written notice to Developer, at
any time during the development process. Upon approval of the Product Proposal,
Developer 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, Developer 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 Developer, SCEA shall have the right to revoke the approval of
Developer's Product Proposal.
5.3.3 Cancellation or Delay; Conditions of Approval. Licensed Products
which are canceled by Developer 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 11.3 hereto. Furthermore, Developer must enter
into an agreement with a Licensed Publisher for the publication of any Licensed
Product or must itself enter into an LPA with SCEA prior to the final delivery
date; failure of Developer to do so within a grace period of three (3) months
after such date will result in revocation of approval for Developer's (or the
succeeding Licensed Publisher's) Product Proposal. 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 Developer to the termination provisions set forth in
Section 11.3 hereto.
5.4 Developer's Additional Quality Assurance Obligations. If at any time
or times subsequent to the approval of Executable Software as contemplated by an
LPA, SCEA identifies any material defects (such materiality to be determined by
SCEA in its sole discretion) with respect to the Licensed Product (or portions
thereof), 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, Developer shall immediately take effective steps or cooperate with
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the appropriate Licensed Publisher or Licensed Developer to take effective
steps, at Developer's and/or Licensed Publisher's or Licensed Developer's sole
liability and expense, to recall and/or to remove such defective Units from any
affected channels of distribution, provided, however, that if Developer 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.
6. Representations and Warranties.
6.1 Representations and Warranties of SCEA. SCEA represents and warrants
solely for the benefit of Developer that SCEA has the right, power and authority
to enter into this Agreement and to fully perform its obligations hereunder.
6.2 Representations and Warranties of Developer. Developer represents and
warrants that:
(i) There is no threatened or pending action, suit, claim or proceeding
alleging that the use by Developer of all or any part of the Product Software,
Product Proposals 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 Developer in or to the Product Software, Product
Proposals 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 and Product Proposals 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) Developer 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 Developer does not violate any
separate agreement, rights or obligations existing between Developer and any
other person or entity, and, throughout the term of this Agreement, Developer
shall not make any separate agreement with any person or entity that is
inconsistent with any of the provisions of this Agreement;
(v) Developer has not sold, assigned, leased, licensed or in any other
way disposed of or encumbered the rights granted to Developer hereunder, and
Developer 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) Developer 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 under
license from SCEA);
(vii) In the event that Executable Software is delivered to other
Licensed Developers or Licensed Publishers by Developer in source code form,
Developer 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;
(viii) The Executable Software 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 Licensed Product as compatible with the Licensed
Product;
(ix) Each of the Licensed Products and Executable Software incorporated
therein shall be developed by or at the direction of Developer 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
and will not contain any obscene or defamatory matter;
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(x) Developer's policies and practices with respect to the development
or testing of the Licensed Products (or portions thereof) and Executable
Software incorporated therein shall in no manner reflect adversely upon the
name, reputation or goodwill of SCEA;
(xi) Developer has the technical expertise and resources necessary to
fulfill its obligations under this Agreement; and
(xii) Developer shall make no false, misleading or inconsistent
representations or claims with respect to any Licensed Products, the System or
SCEA.
7. Indemnities; Limited Liability.
7.1 Indemnification by SCEA. SCEA shall indemnify and hold Developer
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 Developer 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. Developer shall
provide SCEA, at no expense to Developer, reasonable assistance and cooperation
concerning any such matter, and Developer shall not agree to the settlement of
any such claim, action or proceeding without SCEA's prior written consent.
7.2 Indemnification By Developer. Developer 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 Developer; 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, testing 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 and/or testing of
Licensed Products. SCEA shall give prompt written notice to Developer 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 tire defense and/or settlement thereof.
Subject to the above, Developer 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
Developer. SCEA shall retain the right to approve any settlement. SCEA shall
provide Developer, 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 Developer's prior written consent. If in the
reasonable judgment of SCEA, Developer is financially unable to conduct a
reasonable defense of any such action, then SCEA may undertake complete control
of such action upon notice to Developer, while reserving SCEA's right to obtain
full restitution of all of its fees and costs, including reasonable attorneys'
fees and experts' fees, under this Section from Developer.
7.3 LIMITATION OF LIABILITY.
7.3.1 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 USE OF THE LICENSED PRODUCTS, EXECUTABLE SOFTWARE AND/OR THE SYSTEM BY
DEVELOPER OR ANY END-USER, WHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING
NEGLIGENCE), INDEMNITY, PRODUCT LIABILITY OR OTHERWISE. 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 DEVELOPER 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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7.3.2 LIMITATION OF DEVELOPER'S LIABILITY. IN NO EVENT SHALL DEVELOPER 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 (d) 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 DEVELOPER'S BREACH OF SECTIONS 4, 7.2, 8 OR
10 OF THIS AGREEMENT, AND PROVIDED FURTHER THAT SUCH LIMITATIONS SHALL NOT APPLY
TO AMOUNTS WHICH DEVELOPER MAY BE REQUIRED TO PAY TO THIRD PARTIES UNDER
SECTIONS 7.2 OR 13.10.
7.4 DISCLAIMER OF WARRANTY. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
HEREIN, NEITHER SCEA NOR ITS AFFILIATES AND SUPPLIERS MAKE, NOR DOES DEVELOPER
RECEIVE, ANY REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
REGARDING THE SONY MATERIALS, SCEA'S CONFIDENTIAL INFORMATION AND/OR THE SYSTEM.
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 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.
8. SCEA's Intellectual Property Rights.
8.1 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 Developer 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. Developer 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 Developer
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.
8.2 License of Sony Materials and System. All rights with respect to the
Sony Materials and System, including, without limitation, all of the SCEA
Intellectual Property Rights therein, are and shall be the exclusive property of
SCEA or Affiliates of SCEA. Nothing herein shall give Developer 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. Developer 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).
9. Infringement of SCEA Intellectual Property Rights By Third Parties.
In the event that Developer 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 Developer 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, Developer shall execute ail
papers, testify on all matters and otherwise cooperate in every way necessary
and desirable for the prosecution of any such lawsuit. SCEA shall reimburse
Developer 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.
8
10. Confidentiality.
10.1 SCEA's Confidential Information.
10.1.1 Definition of SCEA's Confidential Information. "SCEA's Confidential
Information" shall mean:
(i) the System, Sony Materials and Development Tools;
(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 Sony's 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 Developer and reduced to tangible or written form at any
time during the term of this Agreement. In addition, the existence of a
relationship between Developer 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.
10.1.2 Term of Protection of SCEA's Confidential Information. The term for
the protection of SCEA's Confidential Information shaft 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, Developer
shall, pursuant to Section 10.1.3 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.
10.13 Preservation of SCEA's Confidential Information. Developer 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 Developer 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, Developer shall provide
SCEA with a copy of such confidentiality agreement between Developer and its
employees or directors, and shall also provide SCEA with a list of employee and
director signatories. Developer 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 Developer of the confidential nature of SCEA's
Confidential Information, and Developer 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 Developer remove any proprietary legend set forth on or contained within
any of SCEA's Confidential Information.
10.1.4 Exceptions. The foregoing restrictions shall not apply to any
portion of SCEA's Confidential Information which:
9
(i) was previously known to Developer without restriction on disclosure
or use, as proven by written documentation of Developer; or
(ii) is or legitimately becomes part of the public domain through no
fault of Developer or its employees; or
(iii) is independently developed by Developer's employees who have not had
access to SCEA's Confidential Information, as proven by written documentation of
Developer; or
(iv) is required to be disclosed by administrative or judicial action;
provided that Developer 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, Developer 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 of SCEA.
(v) is approved for release by Written authorization
10.1.5 No Obligation to License. Disclosure of SCEA's Confidential
Information to Developer shall not constitute any option, grant or license from
SCEA to Developer under any patent or other Intellectual Property Rights now or
hereinafter held by SCEA. The disclosure by SCEA to Developer of SCEA's
Confidential Information hereunder shall not result in any obligation on the
part of SCEA to approve any materials of Developer hereunder or otherwise, nor
shall such disclosure by SCEA give Developer 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.
10.1.6 Developer's Obligations Upon Unauthorized Disclosure. If at any
time Developer 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. Developer 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 mariner 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. Developer 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 13.10 hereto.
10.2 Developer's Confidential Information.
10.2.1 Definition of Developer's Confidential Information. "Developer'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 (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 Developer, 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 Developer's finances, business,
marketing and technical plans, business methods and production plans.
Developer'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.
10.2.2 Term of Protection of Developer's Confidential Information. The
term for the protection of Developer's Confidential Information shall commence
10
on the Effective Date first above written and shall continue in full force and
effect as long as any of Developer's Confidential Information continues to be
maintained as confidential and proprietary by Developer.
10.2.3 Preservation of Confidential Information of Developer. SCEA shall,
with respect to Developer's Confidential Information:
(i) hold all Developer's Confidential Information in confidence, and
shall take all reasonable steps to preserve the confidentiality of Developer'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 Developer'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
Developer's Confidential Information be maintained in a secure area and plainly
marked to indicate the secret and confidential nature thereof.
(iv) at Developer's request, return promptly to Developer any and all
portions of Developer's Confidential Information, together with all copies
thereof.
(v) not use Developer'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 Developer's Confidential Information.
10.2.4 Exceptions. The foregoing restrictions will not apply to any
portion of Developer'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 Developer'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 Developer's
Confidential Information by asserting in such action the restrictions set forth
in this Agreement, and immediately after receiving notice of such action,
notified Developer of such action to give Developer the opportunity to seek any
other legal remedies to maintain such Developer's Confidential Information in
confidence as herein provided;
(v) is approved for release by written authorization of Developer.
10.2.5 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 Developer's Confidential Information, it shall notify
Developer as soon as is reasonably practicable. SCEA shall provide any and all
reasonable assistance to Developer to protect Developer's proprietary rights in
any of Developer'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 ail reasonable attorneys' fees, costs and expenses
incurred by Developer to protect its proprietary rights in Developer's
Confidential Information. SCEA shall take all reasonable steps requested by
Developer to prevent the recurrence of any unauthorized duplication, access,
use, possession or knowledge of Developer's Confidential Information.
10.3 Confidentiality of Agreement. The terms and conditions of this
Agreement shall be treated as SCEA's Confidential Information and Developer's
Confidential Information; provided that each party may disclose the terms and
conditions of this Agreement:
11
(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.
11.Term and Termination.
11.1 Effective Date: Term. This Agreement shall not be binding on the
patties 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 11.2. 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 Developer's Confidential Information
shall be as set forth in Sections 10.1.2 and 10.2.2 respectively.
11.2 Termination by SCEA. SCEA shall have the right to terminate this
Agreement immediately, by providing written notice of such election to
Developer, upon the occurrence of any of the following:
(i) If Developer breaches (A) any of its obligations hereunder; or (B)
any other agreement entered into between SCEA or Affiliates of SCEA and
Developer.
(ii) The liquidation or dissolution of Developer or a statement of intent
by Developer to no longer exercise any of the rights granted by SCEA to
Developer hereunder.
(iii) If during the tern of this Agreement, a controlling interest in
Developer or in an entity which directly or indirectly has a controlling
interest in Developer 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 Intellectual Property Rights or
SCEA's Confidential Information. As used in this Section 11.2, "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, Developer or an entity that
directly or indirectly has a controlling interest in Developer enters into a
business relationship with a third party with whom Developer materially
contributes to develop core components to an interactive device or product which
is directly or indirectly competitive with the System.
Developer shall immediately notify SCEA in writing in the event that any
of the events or circumstances specified in this Section occur.
11.3 Product-by-Product Termination by SCEA. In addition to the events of
termination described in Section 11.2, above, SCEA, at its option, shall be
entitled to terminate, on a product-by-product basis, the licenses and related
rights herein granted to Developer in the event that (a) Developer fails to
notify SCEA promptly in writing of any material change to any materials
previously approved by SCEA in accordance with Section 5 hereto, and such breach
is not corrected or cured within thirty (30) days after receipt of written
notice of such breach; (b) Developer fails to comply with the requirements of
Section 3 in connection with the development of any Licensed Product; (c) any
third party with whom Developer has contracted for the development or
publication 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; (d) Developer or Developer's Licensed 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 Proms in Section 5.3; or (e) Developer fails to
select a Licensed Publisher for any Licensed Product and the final version of
12
Executable Software for such Licensed Product is not provided to SCEA within
three (3) months of the scheduled release date.
11.4 Options of SCEA in Lieu of Termination. As alternatives to
terminating this Agreement or a particular Licensed Product as set forth in
Sections 11.2 and 11.3 above, SCEA may, at its option and upon written notice to
Developer, take the following actions in lieu of terminating this Agreement. In
the event that SCEA elects either of these options, Developer 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.
11.4.1 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 Developer upon the occurrence of any
breach of this Agreement.
11.4.2 Liquidated Damages. Whereas a minor breach of the provisions
contained in 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 Developer to pay liquidated damages of Twenty Thousand Dollars
($20,000) per event for failure to comply with the SourceBook 2 which relates in
any way to use of Licensed Trademarks. Liquidated damages shall be invoiced
separately. 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.
11.5 No Refunds. In the event of the termination of this Agreement in
accordance with any of the provisions of Sections 11.2 through 11.4 above, no
portion of any payments of any kind whatsoever previously provided to SCEA
hereunder shall be owed or be repayable to Developer.
12. Effect of Expiration or Termination.
12.1 Reversion of Rights. Upon expiration or termination, the licenses and
related rights herein granted to Developer shall immediately revert to SCEA, and
Developer shall cease from any further use of SCEA's Confidential Information,
Licensed Trademarks and Sony Materials and any SCEA Intellectual Property Rights
therein. Developer shall have no further right to continue the development
and/or besting of any Executable Software, or to continue to use any Licensed
Trademarks.
12.3 Return of Sony Materials and Confidential Information. Upon the
expiration or earlier termination of this Agreement, Developer 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 Developer 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, ail 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, Developer 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 Developer, 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 Developer 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 Developer, and SCEA may, in addition to SCEA's other `remedies,
withhold such amounts from any payment otherwise due from SCEA to Developer
under any agreement between SCEA and Developer.
12.4 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.
13. Miscellaneous Provisions.
13.1 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
13
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
Developer, 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.
13.2 Force Majeure. Neither SCEA nor Developer 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 o#' 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 Developer to such effect.
13.3 No Agency, Partnership or Joint Venture. The relationship between
SCEA and Developer, 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.
13.4 Assignment. SCEA has entered into this Agreement based upon the
particular reputation, capabilities and experience of Developer and its
officers, directors and employees. Accordingly, Developer 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 11.2 (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 11.2
(iii). SCEA shall have the right to assign any and all of its rights and
obligations hereunder to any Sony affiliate(s).
13.5 Subcontractors. Developer 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 Developer may retain those subcontractors who provide
services which do not require access to Sony Materials or SCEA's Confidential
Information without such prior approval. Developer may retain those
subcontractors) to assist with the development 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; 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. Developer shall provide a copy of
any such Subcontractor Agreement to SCEA prior to and following execution
thereof. Developer 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 Developer to employ any such permitted subcontractor(s), or
any such separate agreements) that may be entered into by Developer with any
such permitted subcontractor, Developer 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. Developer
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.
13.6 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
14
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).
13.7 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 terns
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 13.1 above. In addition, each party
hereby waives the right to a jury trial in any action or proceeding related to
this Agreement.
13.8 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.
13.9 Remedies. Unless expressly set forth to the contrary, either party's
election of any remedies provided for in this Agreement shall not be exclusive
of any other remedies, and all such remedies shall be deemed to be cumulative.
Any breach of Sections 3, 4, 5, 8 and 10 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 Developer 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
$50,000, enjoining any breach or threatened breach of any or all of such
provisions. In addition, if Developer 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 Developer 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, Developer 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.
13.10 Severability. In the event that any provision of this Agreement (or
portion thereof) is determined by a court of competent jurisdiction to be
invalid or otherwise unenforceable, such provision (or portion 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 terns and conditions.
13.11 Sections Surviving Expiration or Termination. The following sections
shall survive the expiration or earlier termination of this Agreement for any
reason: 4, 5.4, 6, 7, 8, 10,11.5, 12, and 13.
13.12 Waiver. No failure or delay by either party in exercising any right,
power or remedy under this Agreement shall operate as a waiver of any such
right, power or remedy. No waiver of any provision of this Agreement shall be
effective unless in writing and signed by the party against whom such waiver is
sought to be enforced. Any waiver by either party of any provision of this
Agreement shall not be construed as a waiver of any other provision of this
Agreement, nor shall such waiver operate or be construed as a waiver of such
provision respecting any future event or circumstance.
13.13 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 Developer.
13.14 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.
13.15 Integration. This Agreement, together with the SourceBook 2,
constitutes the entire agreement between SCEA and Developer and supersedes all
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prior or contemporaneous agreements, proposals, understandings and
communications between SCEA and Developer, 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 Developer.
13.16 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, and together shall constitute one and the
same instrument.
13.17 Construction. This Agreement shall be fairly interpreted in
accordance with its terms and without any strict construction in favor of or
against either of the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first written above.
By: By:
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Print Name: Print Name:
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Title: Title:
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Date: Date:
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NOT AN AGREEMENT UNTIL EXECUTED BY BOTH
PARTIES
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