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EXHIBIT 10.24
SONY PSX LICENSE AGREEMENT
THIS LICENSE AGREEMENT is entered into as of the 29th day of June, 1994, by and
between SONY COMPUTER ENTERTAINMENT OF AMERICA, a division of Sony Electronic
Publishing Company, with offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(hereinafter "Sony"), and THQ, Inc., with offices at 0000 Xxxxx xxxxxxx
Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000 (hereinafter "Licensee").
WHEREAS, Sony and/or its affiliates have developed a CD-based interactive
console for playing video games and for other entertainment purposes under the
development code name PS-X (hereinafter referred to as the 'Player') and also
own or have the right to grant licenses to certain intellectual property rights
used in connection with the Player.
WHEREAS, Licensee desires to be granted a non-exclusive license to develop and
distribute Licensed Products (as defined below) pursuant to the terms and
conditions set forth in this Agreement.
WHEREAS, Sony is willing, on the terms and subject to the conditions of this
Agreement, to grant Licensee the desired non-exclusive license to develop and
distribute Licensed Products, and desires to manufacture such Licensed Products
for Licensee.
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, Licensee and Sony
hereby agree as follows:
1. DEFINITION OF TERMS.
1.1 "Executable Software" means Licensee's object code software which
includes the Licensee Software and any software (whether in object code or
source code form) provided by Sony which is intended to be combined with
Licensee Software for execution on a Player and has the ability to communicate
with the software resident in the Player.
1.2 "Intellectual Property Rights" means, by way of example but
not by way of limitation, all current and future worldwide patents and other
patent rights, copyrights, trademarks, service marks, trade names, mask work
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, including
without limitation all applications and registrations with respect thereto, and
all renewals and extensions thereof.
1.3 "Licensed Territory" means the countries listed in Exhibit A,
as may be in effect from time to time.
1.4 "Licensed Products" shall mean the Executable Software
embodied on CD-ROM media.
1.5 "Licensed Trademarks" means the trademarks, service marks and
logos designated by Sony. Nothing contained in this Agreement shall in any way
grant Licensee the right to use the trademark "Sony" in any manner as a
trademark, trade name, service xxxx or logo other than as expressly permitted
by Sony. Sony may amend such Licensed Trademarks upon reasonable notice to
Licensee.
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1.6 "Licensee Software" means Licensee's application object code
and data (including audio and video material) developed by Licensee in
accordance with this Agreement, which, when linked to any software provided by
Sony, create Executable Software.
1.7 "Packaging" means, with respect to each Licensed Product, the
carton, containers, packaging and wrapping materials (but excluding
instructional manuals, liners or other user information for such Licensed
Product to be inserted in the jewel case).
1.8 "Sony Materials" means any data, object code, source code,
documentation, and hardware provided or supplied to Licensee by Sony,
including, without limitation, any portion or portions of the development
tools.
2. LICENSE GRANT.
Sony hereby grants to Licensee, and Licensee hereby accepts, for the
term of this Agreement, within the Licensed Territory, under Sony's
Intellectual Property Rights, including without limitation any relevant patents
Sony may own or have acquired by license, a non-exclusive, nontransferable
license, without the right to sublicense (except as specifically provided
herein): (i) to use the object code version of any software supplied by Sony
that is intended to be combined with Licensee Software and executed on a Player
internally as may reasonably be necessary to develop Licensed Products; (ii) to
reproduce and distribute executable files for execution on a Player
incorporating such software in accordance with the provisions of this License
Agreement, including without limitation, Section 7; (iii) to market, distribute
and sell such Licensed Products; (iv) to use the Licensed Trademarks in
connection with the packaging, advertising and promotion of the Licensed
Products; and (v) to sublicense to end users the right to use the Licensed
Products for non-commercial purposes only and not for public performance.
3. DEVELOPMENT TOOLS.
After execution of this Agreement, Sony will provide to Licensee the
hardware and software development tools which Sony deems to be necessary for
development of the Executable Software pursuant to an agreement to be entered
into separately between the parties hereto.
4. LIMITATIONS ON LICENSES; RESERVATION OF RIGHTS.
4.1 REVERSE ENGINEERING PROHIBITED. Licensee hereby agrees not to
disassemble, peel semiconductor components, decompile, or otherwise reverse
engineer or attempt to reverse engineer or derive source code from, all or any
portion of the Sony Materials (whether or not all or any portion of the Sony
Materials are integrated with the Licensee Software) or permit or encourage any
third party to do so. Licensee 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 this License Agreement.
4.2 RESERVATION OF SONY'S RIGHTS. The licenses granted in this
License Agreement extend only to development of Licensed Products for use on
the Player, in such format as may be designated by Sony. Without limiting the
generality of the foregoing, Licensee shall not have the right to 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
(to the extent such Executable Software or the Licensed Products include Sony
Materials), via wireless, cable, fiber optic means, telephone lines, microwave
and/or radio waves, or over a network of interconnected computers or other
devices This License Agreement does not grant any right or license, under any
Intellectual Property Rights of Sony or otherwise, except as expressly provided
herein, and no other right or license is to be implied
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by or inferred from any provision of this License Agreement or the conduct of
the parties hereunder. Licensee shall not make use of any of the Sony
Materials and Player or any Intellectual Property Rights related to the Sony
Materials and Player (or any portion thereof) except as authorized by and in
compliance with the provisions of this License Agreement or as may be otherwise
expressly authorized in writing by Sony. No right, license or privilege has
been granted to Licensee 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.
4.3 RESERVATION OF LICENSEE'S RIGHTS. Licensee retains all
rights, title and interest in and to the Licensee Software, including without
limitation, Licensee's Intellectual Property Rights therein, and nothing in
this Agreement shall be construed to restrict the right of Licensee to develop
products incorporating the Licensee Software (separate and apart from the Sony
Materials) for any hardware platform or service other than the Player.
5. QUALITY STANDARDS FOR THE LICENSED PRODUCTS.
5.1 QUALITY ASSURANCE OF PRODUCT PROPOSAL. The Licensed Products,
including, without limitation, the contents and title of each of the Licensed
Products, and/or Licensee's use of any of the Licensed Trademarks, shall be
subject to Sony's prior written approval, which shall be within Sony's sole
discretion as to acceptable standards of quality. Before Licensee commences
programming of the Licensee Software for each of the Licensed Products,
Licensee shall submit to Sony, for Sony's written approval or disapproval which
will not be unreasonably withheld or delayed, a written proposal (the "Product
Proposal") setting forth (i) the description of the proposed Licensed Product,
including the proposed title, story line, characters and game style, (ii) a
description of any licensed rights of third parties to be used by Licensee,
(iii) a description of the user interface characteristics, (iv) a description
of any multiple player options, (v) the development team profile, (vi) a
description of any special hardware/software requirements, (vii) the scheduled
and/or anticipated delivery dates with respect to any deliverable items and/or
release dates with respect to the proposed Licensed Product, and (viii) any
additional information that Sony may deem to be useful in evaluating the
proposed Licensed Product. In the event that Sony rejects such Product
Proposal, Sony shall have the right in its sole discretion to request Licensee
to make revisions or modifications to such proposal, and any such changes shall
be made at Licensee's cost. Licensee shall notify Sony promptly in writing in
the event of any material proposed change in any portion of the Product
Proposal and shall, from time to time at the request of Sony for quality
assurance purposes, submit work-in-progress on the Licensed Product during the
development process, in a medium designated by Sony, for Sony's approval. Sony
shall have the right, from time-to-time with appropriate notice to Licensee, to
limit the number of proposed Licensed Products that Licensee may submit to Sony
for review and approval or disapproval, during any twelve (1 2) month period
following the effective date of this Agreement.
5.2 APPROVAL OF EXECUTABLE SOFTWARE. Following Sony's written
approval of the Product Proposal, Licensee shall on or before the date
specified in the Product Proposal, deliver to Sony for As inspection and
evaluation, a prototype of the Executable Software for the proposed Licensed
Product. Such prototype shall be in the format prescribed by Sony. Sony will
evaluate such prototype Executable Software and notify Licensee in writing of
its approval or disapproval of such Executable Software which will not be
unreasonably withheld or delayed. If such Executable Software is disapproved,
Sony shall specify the reasons for such disapproval and state what corrections
and/or improvements are necessary. After making the necessary corrections
and/or improvements, Licensee may submit a new prototype for approval or
disapproval by Sony. No approval by Sony of any element of the Executable
Software shall be deemed an approval of any other element of the Licensed
Product, nor shall any such approval be deemed to constitute a waiver of any of
Sony's rights under this Agreement.
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5.3 APPROVAL OF PACKAGING AND ARTWORK. For each proposed Licensed
Product, Licensee shall be responsible, at Licensee's expense, for developing
all Packaging, all artwork and mechanicals ("Artwork"), and all instructional
manuals, liners and other user materials inserted into the jewel box
("inserts"). All Packaging, Artwork and Inserts shall comply with the
requirements of the Sony Guidelines (hereinafter "Guidelines") to be provided
to Licensee subsequent to the execution of this License Agreement, and as may
be amended from time to time by Sony. At the time prototype Executable
Software for a proposed Licensed Product is submitted to Sony for inspection
and evaluation, Licensee shall also deliver to Sony, for review and evaluation,
the proposed final Artwork for such proposed Licensed Product, and a form of
limited warranty for the proposed Licensed Product. Licensee agrees that the
quality of such Artwork shall be of the same quality as that associated with
high quality consumer products. If any of the Artwork is disapproved, Sony
shall specify the reasons for such disapproval and state what corrections are
necessary. After making the necessary corrections to the disapproved Artwork,
Licensee may submit new proposed Artwork for approval by Sony. Sony shall not
unreasonably withhold or delay its approval of the proposed Artwork submitted
for review by Licensee. No approval by Sony of any element of the Packaging or
Artwork shall be deemed an approval of any other element of the Licensed
Product, nor shall any such approval be deemed to constitute a waiver of any of
Sony's rights under this Agreement.
5.4 ADVERTISING MATERIALS. Pre-production samples of the
advertising, merchandising, promotional, and display materials of or concerning
the Licensed Products (collectively referred to hereinafter as the "Advertising
Materials') shall be submitted by Licensee to Sony, free of cost, for Sony's
evaluation and approval as to quality, style, appearance, usage of any of the
Licensed Trademarks, and appropriate reference of the notices, prior to any
actual production, use, or distribution of any such items by Licensee or in its
behalf. No such proposed Advertising Materials shall be produced, used, or
distributed directly or indirectly by Licensee without first obtaining the
written approval of Sony which approval will not be unreasonably withheld or
delayed. Subject in each instance to the prior written approval of Sony,
Licensee may use such textual and/or pictorial advertising matter (if any) as
may be created by Sony or in its behalf pertaining to the Sony Materials and/or
to the Licensed Trademarks on such promotional and advertising materials as
may, in Licensee's judgment, promote the sale of the Licensed Products within
the Licensed Territory. Sony shall have the right to use the Licensed Products
in any advertising or promotion for Player at Sony's expense, subject to giving
Licensee reasonable prior notice of such advertisement or promotion. Sony
shall confer with Licensee regarding the text of any such advertisement.
6. LABELING REQUIREMENTS.
All Packaging for each unit of the Licensed Products shall have
conspicuously, legibly and irremovably affixed thereto the notices specified in
a template to be provided to Licensee subsequent to the execution of this
License Agreement, which template may be amended from time to time by Sony
during the term of this License Agreement.
7. MANUFACTURE OF THE LICENSED PRODUCTS.
7.1 MANUFACTURE BY SONY.
7.1.1 APPOINTMENT OF SONY AS EXCLUSIVE MANUFACTURER.
Licensee hereby appoints Sony, and Sony hereby accepts such appointment, as the
exclusive manufacturer of all units of the Licensed Products. Licensee
acknowledges and agrees that it shall purchase from Sony one hundred (100%)
percent of its requirements for finished units of the Licensed Products and
Inserts for such Licensed Products, subject to Section 7.1.3 below, during the
term of the Agreement. Sony shall provide to Licensee written specifications
setting forth terms relating to the manufacturing of Licensed Products and
their component pans ("Specifications") subsequent to execution of this
Agreement,
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which may be amended from time to time upon reasonable notice to Licensee.
Sony shall have the right, but no obligation, to subcontract any phase of
production of any or all of the Licensed Products or any part thereof.
7.1.2 CREATION OF MASTER CD-ROM. Following approval by
Sony of each Licensed Product pursuant to Section 5.2, Licensee shall provide
Sony with two (2) copies (in the form of CD write-once discs or such other form
as may be requested by Sony in the Specifications) of the preproduction
Executable Software for the original master CD-ROM (the "Master CD-ROM") from
which all other copies of the Licensed Product are to be replicated. Promptly
following such receipt of such samples, Sony shall create the Master CD-ROM
from one (1) such sample of the pre-production Executable Software in
compliance with specifications effective at the time of replication. Licensee
shall be responsible for the costs, as set forth in the Specifications, of
creating such Master CD-ROM. In order to insure against loss or damage to the
copies of the Executable Software furnished to Sony, Licensee will retain
duplicates of all such Executable Software. Sony shall not be liable for loss
of or damage to any copies of the Executable Software.
7.1.3 DELIVERY OF PRINTED MATERIALS. Licensee shall
deliver the film for all Artwork and Inserts ("Printed Materials") to Sony or
at Sony's option to Sony's designated manufacturing facility in accordance with
the Specifications, at Licensee's sole risk and expense. In the event that
Licensee elects to be responsible for manufacturing the Printed Materials,
Licensee shall deliver such Printed Materials, in the minimum order quantities
set forth in Section 7.2.2 below.
7.1.4 MANUFACTURE OF UNITS. Upon approval, pursuant to
Section 5, of such preproduction samples of the Executable Software for the
Master CD-ROM and the associated Artwork, Sony will, in accordance with the
terms and conditions set forth in this Section 7, and at Licensee's expense (a)
manufacture units of the Licensed Product for Licensee; (b) manufacture
Licensee's Packaging and Inserts (subject to Licensee's right to manufacture
its own Printed Materials at Licensee's sole cost and expense); and (c) package
the CD-ROMs with the Printed Materials.
7.2 PRICE, PAYMENT AND TERMS.
7.2.1 PRICE. The applicable price for manufacture of any
units of the Licensed Products ordered hereunder shall be determined by Sony
and provided to Licensee in the Specifications prior to manufacture of the
Licensed Products. Such price shall be based on the market price for
manufacture of discs and Printed Materials (subject to Section 7.1.4 above),
packaging costs and costs for other related services provided by Sony.
Purchase price(s) shall be stated in United States dollars and are subject to
change by Sony at any time upon reasonable notice to Licensee; provided,
however, the applicable price shall not be changed with respect to any units of
the Licensed Products which are the subject of an effective purchase order but
which have not yet been delivered by Sony at the designated F.O.B. point.
Prices for the finished units of the Licensed Products are exclusive of any
other federal, state, or local sales, use, excise, or other similar taxes or
duties, which Sony may be required to collect or pay as a consequence of the
sale or delivery of any units of the Licensed Products to Licensee. Licensee
shall be solely responsible for the payment or reimbursement of any such taxes,
fees, and other such charges or assessments applicable to the sale and/or
purchase of any finished units of any of the Licensed Products.
7.2.2 ORDERS. Licensee shall issue to Sony written
purchase order(s) in accordance with the Specifications. Such orders shall
reference this Agreement, give Licensee authorization number, specify
quantities by Licensed Product, state requested delivery date and all packaging
information and be submitted on or with an order form to be provided in the
Specifications. All purchase orders shall be subject to acceptance by Sony.
Licensee shall issue to Sony, for each of the Licensed Products approved by
Sony pursuant to Section 5. 1, a non-cancelable Purchase Order for at
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least one thousand (1,000) units of such Licensed Product. In the event that
Sony manufactures the Printed Materials for the Licensee pursuant to Section
7.1.3 above, Licensee may, at Licensee's option, allow Sony to purchase an
additional 20% of such Printed Materials at Licensee's expense in anticipation
of reorders. Licensee agrees that such Printed Materials will be stored by
Sony for a period of no more than ninety (90) days. Licensee may order
additional units of any of such Licensed Products in the minimum reorder
quantity of one thousand (1,000) units per order, provided that reorder
quantities may be less than one thousand (1,000) units per order (but in no
event less than one hundred (100) units per order) in the event that either
(i) Sony has additional quantities of Printed Materials in stock, with respect
to any such Licensed Product, or (ii) Licensee agrees to provide its own
Printed Materials in accordance with Section 7.1.3 above. Licensee shall have
no right to cancel or reschedule any Purchase Order (or any portion thereof)
for any of the Licensed Products unless the parties shall first have reached
mutual agreement as to Licensee's financial liability with respect to any
desired cancellation or rescheduling of any such Purchase Order (or any portion
thereof).
7.2.3 PAYMENT TERMS. Orders will be invoiced upon
shipment, and will include royalties payable pursuant to Section 9 hereto.
Each invoice will be paid within thirty (30) days of the date of the invoice.
No other deduction may be made from remittances unless an approved credit memo
has been issued by Sony. No claim for credit due to shortage or breakage will
be allowed unless it is made within seven (7) days from the date of shipment.
Each shipment of Licensed Products to Licensee shall constitute a separate sale
obligating Licensee to pay therefore, whether said shipment be whole or partial
fulfillment of any order. All sums owed or otherwise payable to Sony under
this Section 7 and under Section 9 hereto 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 upon which payment
of the same shall first become due up to and including the date of payment
thereof whether before or after judgment. Licensee shall be additionally
liable for all of Sony's costs and expenses of collection, including, without
limitation, reasonable fees for attorneys and court costs. Notwithstanding the
foregoing, such specified rate of interest shall not excuse or be construed as
a waiver of Licensee's obligation to timely provide any and all payments owed
to Sony hereunder.
7.3 DELIVERY OF LICENSED PRODUCTS. Sony shall have no obligation
to store completed units of Licensed Products. Delivery of Licensed Products
shall be in accordance with the Specifications. Title, risk of loss, or damage
in transit to any and all Licensed Products manufactured by Sony pursuant to
Licensee's orders shall vest in Licensee immediately upon delivery to the
carrier.
7.4 TECHNOLOGY EXCHANGE AND QUALITY ASSURANCE. There will be no
technology exchange between Sony and Licensee under this Agreement. Due to the
proprietary nature of the mastering process, Sony will not under any
circumstances release any master discs or other in- process materials to the
Licensee. All such physical master discs, stampers, etc. shall be and remain
the sole property of Sony.
7.5 INSPECTION AND ACCEPTANCE. Licensee may inspect and test any
units of the Licensed Products at Licensee's receiving destination. Any
finished units of the Licensed Products which fail to conform to the
Specifications and/or any descriptions contained in this Agreement may be
rejected by Licensee by providing written notice thereof to Sony within thirty
(30) days of receipt of such units of the Licensed Products at Licensee's
receiving destination. In such event, the provisions of Section 11.4 regarding
Sony's warranty of the units shall apply with respect to any such rejected
units of the Licensed Products. Notwithstanding the provisions of Section
11.4.1 hereto, if Licensee fails to properly reject any units of the Licensed
Products within such thirty (30) day period, such Licensed Product units shall
be deemed accepted by Licensee and may not be subsequently rejected.
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8. MARKETING AND DISTRIBUTION.
In accordance with the provisions of this License Agreement, Licensee
shall, at no expense to Sony, diligently market, sell and distribute the
Licensed Products, and shall use its reasonable best efforts to stimulate
demand for such Licensed Products in the Licensed Territory and to supply any
resulting demand. Licensee 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. Such methods of protection may
include, without limitation, markings or insignia providing identification of
authenticity and packaging seals. Subject to availability, Licensee shall sell
to Sony quantities of the Licensed Products at as low a price and on terms as
favorable as Licensee sells similar quantities of the Licensed Products to the
general trade; provided, however, Sony shall not directly or indirectly resell
any such units of the Licensed Products within the Licensed Territory without
Licensee's prior written consent.
9. ROYALTIES.
Licensee shall pay Sony a per unit royalty in United States dollars,
as set forth on Exhibit B hereto, for each unit of the Licensed Products
manufactured. Payment of such royalties shall be made to Sony in conjunction
with the payment to Sony of the manufacturing costs for each unit and pursuant
to the payment terms of Section 7.2.3 hereto. No costs incurred in the
development, manufacture, marketing, sale, and/or distribution of the Licensed
Products shall be deducted from any royalties payable to Sony hereunder.
Similarly, there shall be no deduction from the royalties otherwise owed to
Sony hereunder as a result of any uncollectible accounts owed to Licensee, or
for any credits, discounts, allowances or returns which Licensee 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 Licensee in connection with its sale and/or distribution of
any units of the Licensed Products and/or arising with respect to the payment
of royalties hereunder. In addition to the royalty payments provided to Sony
hereunder, Licensee shall be solely responsible for any withholding taxes
and/or other such assessments which may be imposed by any governmental
authority with respect to the royalties paid to Sony hereunder. Licensee shall
provide Sony with official tax receipts or other such documentary evidence
issued by the applicable tax authorities sufficient to substantiate that any
such taxes and/or assessments have in fact been paid.
10. REPRESENTATIONS AND WARRANTIES.
10.1 REPRESENTATIONS AND WARRANTIES OF SONY. Sony represents and
warrants solely for the benefit of Licensee that Sony has the right, power and
authority to enter into this License Agreement and to fully perform its
obligations hereunder.
10.2 REPRESENTATIONS AND WARRANTIES OF LICENSEE. Licensee
represents and warrants that: (i) there is no threatened or pending action,
suit, claim or proceeding alleging that the use by Licensee of all or any part
of the Licensee Software 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 Licensee in or to the Licensee
Software or any underlying work or content embodied therein, or any name,
designation or trademark used in conjunction with the Licensed Products; (ii)
Licensee has the right, power and authority to enter into this License
Agreement and to fully perform its obligations hereunder; (iii) the making of
this License Agreement by Licensee does not violate any separate agreement,
rights or obligations existing between Licensee and any other person or entity,
and, throughout the term of this License Agreement, Licensee shall not make any
separate agreement with any person or entity that is inconsistent with any of
the provisions of this License Agreement; (iv) Licensee shall not make any
representation or give any
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warranty to any person or entity expressly or impliedly on Sony's behalf, or to
the effect that the Licensed Products are connected in any way with Sony (other
than that the Licensed Products have been developed, marketed, manufactured,
sold, and/or distributed under license from Sony), (v) the Executable Software
shall be distributed by Licensee solely in object code form; (vi) each of the
Licensed Products shall be marketed, sold, and distributed in an ethical manner
and in accordance with all applicable laws and regulations; and (vii)
Licensee's policies and practices with respect to the marketing, sale, and/or
distribution of the Licensed Products shall in no manner reflect adversely upon
the name, reputation or goodwill of Sony.
11. INDEMNITIES; LIMITED LIABILITY.
11.1 INDEMNIFICATION BY SONY. Sony shall indemnify and hold
Licensee 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 a breach of any of the warranties provided by Sony herein
provided, however, that Licensee shall give prompt written notice to Sony of
the assertion of any such claim, and provided, further, that Sony shall have
the right to select counsel and control the defense and/or settlement thereof,
subject to the right of Licensee to participate in any such action or
proceeding at its own expense with counsel of its own choosing. Sony 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 Sony. Licensee agrees to provide
Sony, at no expense to Licensee, reasonable assistance and cooperation
concerning any such matter; and Licensee shall not agree to the settlement of
any such claim, action or proceeding without Sony's prior written consent.
11.2 INDEMNIFICATION BY LICENSEE. Licensee shall indemnify and
hold Sony harmless from and against any and all claims, losses, liabilities,
damages, expenses and costs, including, without limitation, reasonable fees for
attorneys, expert witnesses and litigations 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 representations or warranties
provided by Licensee herein, including without limitation claims resulting from
Licensee's failure to timely pay, any withholding taxes or other assessments as
set forth in Section 9 hereto or any breach of Licensee's confidentiality
obligations as set forth in Section 14 hereto; or (ii) any claim of
infringement or alleged infringement of any third party's Intellectual Property
Rights with respect to the Licensee Software; or (iii) any claims of or in
connection with any bodily injury (including death) or property damage, by
whomsoever such claim is made, arising out of, in whole or in part, the sale
and/or use of any of the Licensed Products manufactured by Sony hereunder,
unless due to the negligence of Sony in performing any of the specific duties
and/or providing any of the specific manufacturing services required of it
hereunder; provided, however, that Sony shall give prompt written notice to
Licensee of the assertion of any such claim, and provided, further, that
Licensee shall have the right to select counsel and control the defense and/or
settlement thereof, subject to the right of Sony to participate in any such
action or proceeding at its own expense with counsel of its own choosing.
Licensee shall have the exclusive right, at its discretion, to commence and/or
prosecute at its own expense any lawsuit or to take such other action with
respect to such matter as shall be deemed appropriate by Licensee. Sony shall
provide Licensee, at no expense to Sony, reasonable assistance and cooperation
concerning any such matter. If Sony is joined as a party to any lawsuit
initiated by or against Licensee, Licensee shall indemnify and hold Sony
harmless from and against all claims, losses, liabilities, damages, expenses
and costs, including, without limitation, reasonable fees for attorneys and
court costs, incurred in connection with any such lawsuit. Sony shall not
agree to the settlement of any such claim, action or proceeding without
Licensee's prior written consent.
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11.3 LIMITATION OF LIABILITY; LICENSEE'S OBLIGATIONS.
11.3.1 LIMITATION OF SONY'S LIABILITY. IN NO EVENT SHALL SONY OR ITS
AFFILIATES OR SUPPLIERS BE LIABLE FOR PROSPECTIVE PROFITS, OR ANY SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION THE BREACH OF THIS AGREEMENT BY SONY,
THE MANUFACTURE OF THE LICENSED PRODUCTS AND THE USE OF THE LICENSED PRODUCTS
BY LICENSEE OR ANY END-USER, WHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING
NEGLIGENCE), INDEMNITY, PRODUCT LIABILITY OR OTHERWISE. IT IS THE
RESPONSIBILITY OF LICENSEE TO REVIEW THE ACCURACY OF THE DATA ON THE UNITS
MANUFACTURED BY SONY FOR LICENSEE. IN NO EVENT SHALL SONY'S LIABILITY ARISING
UNDER OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY
LIABILITY FOR DIRECT DAMAGES, AND INCLUDING WITHOUT LIMITATION ANY LIABILITY
UNDER SECTION 11.1 AND ANY WARRANTY IN SECTION 11.4 HERETO, EXCEED THE TOTAL
AMOUNT PAID BY LICENSEE TO SONY UNDER THIS AGREEMENT. EXCEPT AS EXPRESSLY SET
FORTH HEREIN, NEITHER SONY, NOR ANY 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 LICENSEE OR TO ANY THIRD PARTIES
WITH RESPECT TO THE QUALITY AND/OR PERFORMANCE OF ANY PORTION OF THE SONY
MATERIALS OR THE LICENSED PRODUCTS, INCLUDING, WITHOUT LIMITATION, THE
OPERATION OR PERFORMANCE OF ANY OF THE LICENSED PRODUCTS.
11.3.2 LIMITATION OF LICENSEE'S LIABILITY. IN NO EVENT SHALL
LICENSEE BE LIABLE TO SONY FOR ANY PROSPECTIVE PROFITS, OR SPECIAL, INCIDENTAL
OR CONSEQUENTIAL DAMAGES ARISING OUT OF 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 OBJECT CODE PROVIDED BY SONY, IN WHOLE OR
IN PART, OR ANY LICENSEE SOFTWARE BY LICENSEE OR ANY THIRD PARTY, WHETHER UNDER
THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE, INDEMNITY, PRODUCT LIABILITY OR
OTHERWISE, PROVIDED THAT LICENSEE EXPRESSLY AGREES THAT SUCH LIMITATIONS SHALL
NOT APPLY TO DAMAGES RESULTING FROM LICENSEE'S BREACH OF SECTIONS 2, 4, 11.2,
12.2 OR 14 OF THIS AGREEMENT, AND PROVIDED FURTHER THAT SUCH LIMITATIONS SHALL
NOT APPLY TO AMOUNTS WHICH LICENSEE MAY BE REQUIRED TO PAY TO THIRD PARTIES
UNDER SECTIONS 11.2 OR 17.9.
11.3.3 LICENSEE'S OBLIGATIONS. If at any time or times subsequent to
the approval of the Executable Software pursuant to Section 5.2, Sony
identifies any bugs with respect to the Licensed Product or any bugs are
brought to the attention of Sony, Licensee shall, at no cost to Sony, promptly
correct any such bugs, to Sony's reasonable satisfaction. In the event any
units of any of the Licensed Products create any risk of loss or damage to any
property or injury to any person, Licensee shall immediately take effective
steps, at Licensee's sole liability and expense, to recall and/or to remove
such defective product units from any affected channels of distribution.
Licensee shall provide all end-user support for the Licensed Products.
11.4 WARRANTIES; DISCLAIMER OF WARRANTIES.
11.4.1 MANUFACTURING WARRANTY. Sony warrants that the units that are
manufactured by Sony for Licensee pursuant to Section 7 of this Agreement
shall, at time of delivery to Licensee, be free from defects in material. The
sole obligation of Sony under this warranty shall be, for a period of one year
from the date of shipment of such discs by Sony to Licensee, at Sony's
election, either to replace, to issue credit, of to refund to Licensee the
purchase price paid to Sony for any such defective discs. Such warranty is the
only warranty applicable to the Licensed Product manufactured by Sony for
Licensee pursuant to Section 7 of this Agreement. This warranty shall not
apply to damage resulting from accident, alteration, negligence or misuse of the
Licensed Products. If, during
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the aforesaid period, a defective disc is received by Licensee, Licensee shall
notify Sony and, upon request by Sony, provide Sony with the returned disc(s)
and a written description of the defect claimed. Sony shall not accept the
return of any disc(s) except factory defective disc(s) (i.e., those discs that
are not free from defects in material), and all such returns must be authorized
by Sony in writing and in advance. All discs for which return is authorized
will be sent to a place designated by Sony at Sony's expense. If the defect
did not arise from causes placing liability on Sony under the above warranty,
Licensee shall reimburse Sony for expenses incurred in shipping, processing and
analyzing the discs. Sony's judgment as to the origin of the defect shall be
final and binding.
11.4.2 DISCLAIMER OF WARRANTY. EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH ABOVE, NEITHER SONY NOR ITS AFFILIATES AND SUPPLIERS MAKE, NOR DOES
LICENSEE RECEIVE, ANY WARRANTIES, EXPRESS, IMPLIED OR STATUTORY REGARDING THE
SONY MATERIALS AND THE PLAYER AND/OR THE UNITS OF THE LICENSED PRODUCTS
MANUFACTURED HEREUNDER. SONY SHALL NOT BE LIABLE FOR ANY INJURY, LOSS OR
DAMAGE, DIRECT OR CONSEQUENTIAL, ARISING OUT OF THE USE OR INABILITY TO USE THE
UNITS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SONY 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 AND THE PLAYER
AND/OR THE UNITS MANUFACTURED HEREUNDER. 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.
12. COPYRIGHT, TRADEMARK AND TRADE SECRET RIGHTS.
12.1 LICENSEE RIGHTS. The copyrights with respect to the Licensee
Software (exclusive of the rights licensed from Sony hereunder) and any names
or other designations used as titles for the Licensed Products are and shall be
the exclusive property of Licensee or of any third party from which Licensee
has been granted the license and related rights to develop and otherwise
exploit any such Licensee Software or any such names or other designations.
12.2 SONY RIGHTS.
12.2.1 LICENSED TRADEMARKS. The Licensed Trademarks and the goodwill
associated therewith are and shall be the exclusive property of Sony. Nothing
herein shall give Licensee any right, title or interest in or to any of the
Licensed Trademarks, other than the non-exclusive license and privilege during
the term hereof to display and use the Licensed Trademarks solely in accordance
with the provisions of this License Agreement. Licensee shall not do or cause
to be done any act or thing contesting or in any way impairing or tending to
impair any of Sony's rights, title, or interests in or to any of the Licensed
Trademarks, nor shall Licensee register any trademark in its own name or in the
name of any other person or entity which is similar to or is likely to be
confused with any of the Licensed Trademarks.
12.2.2 LICENSE OF SONY MATERIALS AND PLAYER. Subject to the rights
granted by Sony to Licensee hereunder, all rights with respect to the Sony
Materials and Player, including, without limitation, all of Sony's Intellectual
Property Rights therein, are and shall be the exclusive property of Sony.
Nothing herein shall give Licensee any right, title or interest in or to the
Sony Materials or the Player (or any portion thereof), other than the
non-exclusive license and privilege during the term hereof to use the Sony
Materials and Player for the development of the Executable Software solely in
accordance with the provisions of this License Agreement. Licensee shall not
do or cause to be done any act or thing contesting or in any way impairing or
tending to impair any of Sony's rights, title, and/or interests in or to the
Sony Materials or the Player (or any portion thereof).
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12.3 EFFECT OF TERMINATION. Upon the expiration or earlier
termination of this License Agreement for any reason, Licensee shall
immediately cease and desist from any further use of the Licensed Trademarks
and Sony Materials licensed hereunder, subject to the provisions of Section
16.3, below.
13. COPYRIGHT TRADEMARK AND TRADE SECRET PROTECTION.
In the event that either Licensee or Sony discovers or otherwise
becomes aware that any of the Intellectual Property Rights of the other
embodied in any of the Licensed Products have been or are being infringed upon
by any third party, then the party with knowledge of such infringement or
apparent infringement shall promptly notify the other party.
14. CONFIDENTIALITY.
14.1 NONDISCLOSURE AGREEMENT. Licensee hereby acknowledges that
the Nondisclosure Agreement dated November 30, 1993 between Sony and Licensee
("Nondisclosure Agreement") will remain in full force and effect with respect
to the Confidential Information of Sony throughout the term of this Agreement.
In the event of any conflict or inconsistency between the provisions of the
Nondisclosure Agreement and the provisions of this Section 14, the provisions
of the Nondisclosure Agreement shall control with respect to the Confidential
Information of Sony.
14.2 CONFIDENTIAL INFORMATION. For the purposes of this License
Agreement, "Confidential Information" of Sony means (i) the Sony Materials and
information regarding Sony's finances, business, marketing and technical plans,
(ii) all documentation and information relating to the foregoing (other than
documentation and information expressly intended for use by and released to end
users or the general public), and (iii) any and all other information, of
whatever type and in whatever medium (including without limitation all data,
ideas, discoveries, developments, know-how, trade secrets, inventions, creations
and improvements), that is disclosed in writing or in any other form by Sony to
Licensee. "Confidential Information" of Licensee shall mean the Licensee
Software as provided to Sony pursuant to this License Agreement and all
documentation and information relating thereto that is disclosed in writing or
in any other form by Licensee to Sony if the information is designated as (or is
provided under circumstances indicating the information is) confidential or
proprietary.
14.3 PRESERVATION OF CONFIDENTIALITY; NON-DISCLOSURE. Each party
("receiving party") shall hold all Confidential Information of the other party
("disclosing party") in trust and in strict confidence for the sole benefit of
the disclosing party and for the exercise of the limited rights expressly
granted to the receiving party under this License Agreement. The receiving
party shall take all steps necessary to preserve the confidentiality of the
Confidential Information of the disclosing party, 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, including but not
limited to those steps that the receiving party takes to protect the
confidentiality of its own most highly confidential information. Except as may
be expressly authorized by the disclosing party in writing, the receiving party
shall not at any time, either before or after any termination of this License
Agreement, directly or indirectly: (i) disclose any Confidential Information to
any person other than an employee or subcontractor of the receiving party who
needs to know or have access to such Confidential Information for the purposes
of this License Agreement, and only to the extent necessary for such purposes
(and with respect to any subcontractor, only in accordance with Section 17.5
below); (ii) except as otherwise provided in this License Agreement, duplicate
the Confidential Information for any purpose whatsoever; (iii) use the
Confidential Information for any reason or purpose other than as expressly
permitted in this License Agreement; or (iv) remove any copyright notice,
trademark notice and/or other proprietary legend set forth on or contained
within any of the Confidential Information.
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14.4 OBLIGATIONS UPON UNAUTHORIZED DISCLOSURE.
14.4.1 NOTICE TO DISCLOSING PARTY. If at any time the receiving
party becomes aware of any unauthorized duplication, access, use, possession or
knowledge of any Confidential Information, the receiving party shall
immediately notify the disclosing party. The receiving party shall provide any
and all reasonable assistance to the disclosing party to protect the disclosing
party's proprietary rights in any Confidential Information that the receiving
party 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 License 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 (and all related costs), costs and expenses incurred
by the disclosing party to protect its proprietary rights in the Confidential
Information. The receiving party shall take all reasonable steps requested by
the disclosing party to prevent the recurrence of any unauthorized duplication,
access, use, possession or knowledge of the Confidential Information.
14.4.2 ACCOUNTING, ETC. If Licensee violates or fails to comply with
any of the terms or conditions of this Section 14 or Section 4 hereto, Sony
shall be entitled to an accounting and repayment of all forms of compensation,
commissions, remuneration or benefits which Licensee directly or indirectly
realizes as a result of or in connection with any such violation or failure to
comply. Such remedy shall be in addition to and not in limitation of any
injunctive relief or other remedies to which Sony may be entitled under this
Agreement or otherwise, at law or in equity.
14.5 EXCEPTIONS. The foregoing restrictions will not apply to
information to the extent that the receiving party can demonstrate such
information: (i) was known to the receiving party at the time of disclosure to
the receiving party by the disclosing party as shown by the files of the
receiving party in existence at the time of disclosure; (ii) becomes part of
information in the public domain through no fault of the receiving party; (iii)
has been rightfully received from a third party authorized by the disclosing
party to make such disclosure without restriction; (iv) has been approved for
release by prior written authorization of the disclosing party; or (v) has been
disclosed by court order or as otherwise required by law (including without
limitation to the extent that disclosure may be required under Federal or state
securities laws), provided that the receiving party has notified the disclosing
party immediately upon learning of the possibility of any such court order or
legal requirement and has given the disclosing party a reasonable opportunity
(and cooperated with the disclosing party) to contest or limit the scope of
such required disclosure (including application for a protective order).
Information shall not be deemed known to the receiving party or publicly known
for purposes of the above exceptions (A) merely because it is embraced by more
general information in the prior possession of the receiving party or others,
or (B) merely because it is expressed in public material in general terms not
specifically the same as Confidential Information.
14.6 CONFIDENTIALITY OF AGREEMENT. The terms and conditions of
this License Agreement shall be treated as Confidential Information; provided
that each party may disclose the terms and conditions of this License
Agreement: (i) to legal counsel; (ii) in confidence, to accountants, banks and
financing sources and their advisors; and (iii) in confidence, in connection
with the enforcement of this License Agreement or rights under this License
Agreement. Licensee shall treat the fact that the parties have entered into
this License Agreement as Confidential Information until a public announcement
regarding this License Agreement is released.
15. TERM AND TERMINATION.
15.1 EFFECTIVE DATE; TERM. This License Agreement shall not be
binding upon the parties until it has been signed by or on behalf of each
party, in which event it shall be effective as of the date
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first written above (the "Effective Date"). Unless sooner terminated in
accordance with the provisions hereof, the initial term of this License
Agreement shall be for four (4) years from the Effective Date.
15.2 TERMINATION BY SONY. Sony shall have the right to terminate this
License Agreement immediately, by providing written notice of such election to
Licensee, upon the occurrence of any of the following events or circumstances:
(i) If Licensee breaches any of its material obligations provided for in this
License Agreement and such breach is not corrected or cured within thirty (30)
days after receipt of written notice of such breach; (ii) Licensee's failure to
pay, or a statement that it is unable to pay any amount due hereunder, or is
unable to pay its debts generally as they shall become due; or (iii) Licensee's
filing of an application for, or consenting to, or directing the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
all or substantially all of Licensee's property, whether tangible or intangible,
wherever located; or (iv) The making by Licensee of a general assignment for the
benefit of creditors; or (v) The commencing by Licensee or Licensee's intention
to commence a voluntary case under any applicable bankruptcy laws (as now or
hereafter may be in effect); or (vi) The adjudication that Licensee is a
bankrupt or insolvent; or (vii) The filing by Licensee or the intent to file by
Licensee of a petition seeking to take advantage of any other law providing for
the relief of debtors; or (viii) Licensee's acquiescence to, intention to
acquiesce to, or failure to have dismissed within ninety (90) days, any petition
filed against it in any involuntary case under any such bankruptcy law; or (ix)
If control of more than twenty-five percent (25%) of the ownership of Licensee
or substantially all of Licensee's assets are transferred to any person or
entity.
15.3 PRODUCT-BY-PRODUCT TERMINATION BY SONY. In addition to the
events of termination described in Section 15.2, above, Sony, at its option,
shall be entitled to terminate, on a product-by-product basis, the licenses and
related rights herein granted to Licensee (a) in the event that Licensee fails
to notify Sony promptly in writing of any material change to any of the elements
approved in Section 5.1, above; (b) if Licensee fails to provide Sony in
accordance with the provisions of Section 5.2, above, with the prototype
Executable Software for any Licensed Product, in the format required by Sony,
and which meets Sony's specifications; provided, however, Sony shall not be
entitled to exercise such right of termination if Licensee's failure to provide
such final Executable Software for any of the Licensed Products is directly
caused by Sony's failure to timely comply with any of its material obligations
expressly set forth herein.
15.4 ADVANCE PAYMENTS. In the event of the termination of this
License Agreement in accordance with any of the provisions of Sections 15.2 or
15.3, above, no portion of any payments of any kind whatsoever previously
provided to Sony hereunder shall be owed or be repayable to Licensee.
16. EFFECT OF EXPIRATION OR TERMINATION.
16.1 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, Licensee shall provide Sony with an itemized statement,
certified to be accurate by an officer of Licensee, 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. Sony shall be
entitled to conduct a physical inspection of Licensee's inventory and work in
process during normal business hours in order to ascertain or verify such
inventory and/or statement.
16.2 REVERSION OF RIGHTS. If this License Agreement is terminated
by Sony as a result of any breach or default by Licensee, the licenses and
related rights herein granted to Licensee shall immediately revert to Sony, and
Licensee shall cease and desist from any further use of the Sony Materials and
any Intellectual Property Rights related to the Sony Materials, and, subject to
the provisions of Section 16.3, below, Licensee shall have no further right to
continue the development,
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14
marketing, sale, and/or distribution of any units of the Licensed Products, nor
to continue to use the Licensed Trademarks.
16.3 DISPOSAL OF UNSOLD UNITS. In the event of the expiration of
this License Agreement or its termination other than as a result of any breach
or default by Licensee, Licensee shall have a period of up to 90 days within
which to sell off all or a portion of its remaining inventory of Licensed
Products. At the expiration of such sell-off period or in the event of
termination as a result of any breach or default of Licensee, any and all units
of the Licensed Products remaining in Licensee's inventory shall be destroyed
by Licensee within five (5) working days of such expiration or termination.
Within five (5) working days after such destruction, Licensee shall provide
Sony with an itemized statement, certified to be accurate by an officer of
Licensee, 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.
16.4 RETURN OF CONFIDENTIAL INFORMATION. Upon the expiration or
earlier termination of this License Agreement, Licensee and Sony shall
immediately deliver to the other party, as the disclosing party 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 License Agreement, including, without limitation, any such information,
knowledge, or know-how of which either party, as the receiving party, was
apprised and which was reduced to tangible or written form by such party or in
its behalf at any time during the term of this License Agreement.
16.5 RENEWAL OR EXTENSION OF LICENSE AGREEMENT. Sony shall be under
no obligation to renew or extend this License Agreement notwithstanding any
actions taken by either of the parties prior to the expiration of this License
Agreement. Upon the expiration of this License Agreement neither party shall be
liable to the other for any damages (whether direct, 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. However, the
expiration of this License Agreement shall not excuse either party from its
previous breach of any of the provisions of this License Agreement or from any
obligations surviving the expiration of this License Agreement, and full legal
and equitable remedies shall remain available for any breach or threatened
breach of this License Agreement or any obligations arising therefrom.
16.6 TERMINATION WITHOUT PREJUDICE. The expiration or termination
of this License Agreement in accordance with the provisions of Section 15,
above, shall be without prejudice to any rights or remedies which one party may
otherwise have against the other party.
17. MISCELLANEOUS PROVISIONS.
17.1 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, return receipt requested,
or sent by recognized international courier service (e.g., Federal Express, DHL,
etc.), telex, telegram or facsimile, with charges prepaid and subject to
confirmation by letter sent via registered or certified mail, postage prepaid,
return receipt requested. The address for all notices or other communications
required to be sent to Sony or Licensee, 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 receipt.
17.2 FORCE MAJEURE. Neither Sony nor Licensee shall be liable for
any loss or damage or be deemed to be in breach of this License Agreement if its
failure to perform or failure to cure any of its obligations under this License
Agreement results from any event or circumstance beyond its reasonable
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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;
or compliance with any law, regulation, or order (whether valid or invalid) of
any governmental body, other than an order, requirement, or instruction arising
out of Licensee's violation of any applicable law or regulation; provided,
however, that the party interfered with gives the other party written notice
thereof promptly, and, in any event, within fifteen (15) working 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 Sony prior to,
during, or after any such Force Majeure condition.
17.3 NO PARTNERSHIP OR JOINT VENTURE. The relationship between
Sony and Licensee, respectively, is that of licensor and licensee. Licensee is
an independent contractor and is not the legal representative, agent, joint
venturer, partner, or employee of Sony 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.
17.4 ASSIGNMENT. Sony has entered into this License Agreement based
upon the particular reputation, capabilities and experience of Licensee and its
officers, directors and employees. Accordingly, Licensee may not assign this
License 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 Sony shall first be obtained. Any attempted or purported
assignment, delegation or other such transfer without the required consent of
Sony shall be void and a material breach of this License Agreement. Subject to
the foregoing, this License Agreement shall inure to the benefit of the parties
and their respective successors and permitted assigns. Sony shall have the
right to assign any and all of its rights and obligations hereunder to any
affiliate(s), including, without limitation, its obligations under Section 7
hereof.
17.5 SUBCONTRACTORS. Licensee shall not sell, assign, delegate,
subcontract, sublicense or otherwise transfer or encumber all or any portion of
the licenses herein granted. Licensee shall have the right to employ suitable
subcontractors for the purposes of assisting Licensee with the development of
the Licensed Products, provided that Licensee must obtain the prior written
consent of Sony. Licensee shall not disclose to any subcontractor any
Confidential Information of Sony (as defined herein and in the Nondisclosure
Agreement), including, without limitation, any Sony Materials, unless and until
Licensee shall have such subcontractor sign a written agreement containing
substantially identical terms to the Nondisclosure Agreement and the
confidentiality provisions of this Agreement and shall submit a copy of such
agreement to Sony. Any and all agreements between Licensee and its permitted
subcontractors shall provide that Sony is a third party beneficiary of such
agreements 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. Notwithstanding any consent which may be granted by Sony for
Licensee to employ any such permitted subcontractor(s), or any such separate
agreement(s) that may be entered into by Licensee with any such permitted
subcontractor, Licensee shall remain fully liable for its compliance with all of
the provisions of this License 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 17.5. Licensee shall cause
its subcontractors to comply in all respects with the terms and conditions of
this License Agreement, and hereby unconditionally guarantees all obligations of
its subcontractors.
17.6 COMPLIANCE WITH APPLICABLE LAWS. The parties shall at all
times comply with all applicable regulations and orders of their respective
countries and all conventions and treaties to which
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their countries are a party or relating to or in any way affecting this License
Agreement and the performance by the parties of this License 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 License Agreement binding, including,
without limitation, the recording of this License Agreement with any
appropriate governmental authorities (if required).
17.7 GOVERNING LAW; CONSENT TO JURISDICTION. This License
Agreement shall be governed by and interpreted in accordance with the laws of
the State of New York, 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 License Agreement or to adjudicate any dispute
arising hereunder shall be brought in the courts of the County of New York,
State of New York (if under State law) or the Southern District of New York (if
under Federal law). 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 17.1,
above.
17.8 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 License 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.
17.9 REMEDIES. Unless expressly set forth to the contrary, either
party's election of any remedies provided for in this License Agreement shall
not be exclusive of any other remedies available hereunder or otherwise at law
or in equity, and all such remedies shall be deemed to be cumulative. Any
breach of Sections 2, 4, 5, 6, 7.1.1, 12 and 14 of this Agreement would cause
irreparable harm to Sony, the extent of which would be difficult to ascertain.
Accordingly, Licensee agrees that, in addition to any other remedies to which
Sony may be entitled, in the event of a breach by Licensee or any of its
employees or permitted subcontractors of any such sections of this Agreement,
Sony shall be entitled to the immediate issuance without bond of exparte
injunctive relief enjoining any breach or threatened breach of any or all of
such provisions. In addition, Licensee shall indemnify Sony for all losses,
damages, liabilities, costs and expenses (including actual attorneys' fees and
all related costs) which Sony may sustain or incur as a result of such breach.
17.10 SEVERABILITY. In the event that any provision of this License
Agreement (or portion thereof) is determined by a court of competent
jurisdiction to be invalid or otherwise unenforceable, such provision (or part
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 License Agreement, while the remainder of this License
Agreement shall continue in full force and remain in effect according to its
stated terms and conditions.
17.11 SECTIONS SURVIVING EXPIRATION OR TERMINATION. The following
sections shall survive the expiration or earlier termination of this License
Agreement for any reason: 4, 6, 7.2, 9, 10.2, 11, 12, 13, 14, 15.4, 16, 17.4,
17.5, 17.7, 17.8, 17.9, 17.10.
17.12 NONSOLICITATION OF PERSONNEL. Licensee agrees not to solicit
personnel of Sony or any of Sony's affiliates during the term of this
Agreement.
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17.13 WAIVER. No failure or delay by either party in exercising any
right, power, or remedy under this License Agreement shall operate as a waiver
of any such right, power, or remedy. No waiver of any provision of this License
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 License Agreement shall not be construed as a waiver of any
other provision of this License Agreement, nor shall such waiver operate as or
be construed as a waiver of such provision respecting any future event or
circumstance.
17.14 MODIFICATION. No modification of any provision of this
License Agreement shall be effective unless in writing and signed by both of
the parties.
17.15 HEADINGS. The section headings used in this License Agreement
are intended primarily for reference and shall not by themselves determine the
construction or interpretation of this License Agreement or any portion hereof.
17.16 INTEGRATION. This License Agreement (together with the
Exhibits attached hereto) constitutes the entire agreement between Sony and
Licensee and supersedes all prior or contemporaneous agreements, proposals,
understandings, and communications between Sony and Licensee, whether oral or
written, with respect to the subject matter hereof; provided, however, that
notwithstanding anything to the contrary in the foregoing, the Nondisclosure
Agreement referred to in Section 14 hereto shall remain in full force and
effect.
17.17 COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, and both of which
together shall constitute one and the same instrument.
17.18 CONSTRUCTION. This License 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 License Agreement to be duly
executed as of the day and year first written above.
SONY COMPUTER ENTERTAINMENT THQ, INC.
OF AMERICA
By [SIG] By [SIG]
----------------------------- ------------------------------
Title: Vice President Title: VP Software
----------------------------- ------------------------------
Date: July 12, 1994 Date: 6/30/94
----------------------------- ------------------------------
NOT AN AGREEMENT UNTIL
EXECUTED BY BOTH PARTIES
CONFIDENTIAL
17
18
EXHIBIT A
LICENSED TERRITORY
1. LICENSED TERRITORY: United States and Canada
2. ADDITIONAL PROVISIONS:
(a) DISTRIBUTION CHANNELS. Licensee may, pursuant to the licenses
granted in Section 2 above, distribute Licensee's Licensed Products
throughout the Licensed Territory and may use such distribution
channels as Licensee deems appropriate, including the use of third
party distributors, resellers, dealers and sales representatives
(collectively, "Distributors").
(b) LIMITATIONS ON DISTRIBUTION. Notwithstanding any other
provisions in this License Agreement, Licensee shall not, directly or
indirectly, solicit orders from and/or sell any units of the Licensed
Products to any person or entity outside of the Licensed Territory,
and Licensee further agrees that it shall not directly or indirectly
solicit orders for and/or sell any units of the Licensed Products in
any situation where Licensee reasonably should know that such Licensed
Products will be exported or resold outside of the Licensed Territory.
(c) CHANGES TO LICENSED TERRITORY. The licenses granted in
Section 2 of this License Agreement may only be exercised by Licensee
in the Licensed Territory. Sony shall have the right to delete, and
intends to delete any country or countries from the Licensed Territory
if, in Sony's reasonable judgment, the laws or enforcement of such
laws in such country or countries do not protect Sony's Intellectual
Property Rights. In the event a country is deleted from the Licensed
Territory, Sony shall deliver to Licensee a notice stating the number
of days within which Licensee shall cease exercising such licenses in
the deleted country or countries. Licensee agrees to cease exercising
such licenses, directly or through subcontractors, in such deleted
country or countries, by the and of the period stated in such notice.
X-0
00
XXXXXXX X
ROYALTIES
A. PER UNIT ROYALTY. The per unit royalty due under Section 9 of the
Agreement with respect to each Licensed Product shall be $7.00, unless
otherwise set forth below with respect to a Licensed Product:
B. ADJUSTMENTS TO ROYALTY - HIT TITLE REBATE
(1) In the event that the total purchases by Licensee from Sony
with respect to any Licensed Product exceed the following numbers of units
during the first three (3) years after first commercial shipment of the
Licensed Product, Licensee shall be entitled to a rebate with respect to
royalties paid by Licensee to Sony pursuant to Section 9 of the Agreement which
shall be credited to Licensee's account 60 days following the date that the
relevant royalties are paid, as follows:
Volume Royalty Rebate
------ --------------
a. Over 500,000 units and up to 1,000,000 units 3% of Royalty paid
with respect to such units
b. Over 1,000,000 units and up to 2,000,000 units 5% of Royalty paid
with respect to such units
C. Over 2,000,000 units 10% of Royalty paid
with respect to such units
(2) Each title shall be considered independently for purposes of
calculating and the rebates shall be cumulative. By way of example:
a. If Licensee's aggregate orders for a single Licensed Product are less
than 500,000, no rebate is available.
b. If Licensee's aggregate orders for a single Licensed Product exceed
500,000 but are less than 1,000,000, Licensee will receive 3% of the
Royalty paid as a rebate with respect to the first 500,000 units, at
the time Licensee places such excess order.
C. If Licensee's aggregate orders for a single Licensed Product exceed
1,000,000 but are less than 2,000,000, Licensee will receive 5% of the
Royalty paid as a rebate with respect to the first 1,000,000 units, at
the time Licensee places such excess order. (Please note that in this
case Licensee will only receive a 2% additional rebate with respect to
the first 500,000 units because they have already received a 3%
rebate.
E-2
