SCOPELY PUBLICATION AGREEMENT
This Scopely Publication Agreement (this “Agreement”) is dated as of [________] [__], 2014 (the
“Effective Date”) by and between Sony Pictures Television Networks Games Inc., a Delaware
corporation (“Licensor”) and Scopely, Inc., a Delaware corporation (“Publisher”) (Licensor and Publisher
each, a “Party” and collectively, the “Parties”).
RECITALS
WHEREAS, Licensor owns or administers licensing, development, publication and distribution rights to
interactive mobile games based on the television series titled “Wheel of Fortune” (the “Property”); and
WHEREAS, Publisher provides interactive mobile game development, publishing, marketing and
monetization services; and
WHEREAS, the Publisher desires to license certain elements of the Property, and Licensor desires to
license such elements to Publisher, in order for Publisher to develop, publish, promote and distribute an
interactive mobile game based on the Property in accordance with the terms and conditions of this
Agreement.
NOW, THEREFORE, for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:
AGREEMENT
1.
DEFINITIONS
(a) “Agreement” means this Agreement, the exhibits attached hereto, and any other
documents incorporated herein by reference, each as may be amended from time to time by
the Parties in writing.
(b)
“Advertising Revenue” means gross advertising revenue generated by the Game.
(c) “Authorized Platform” means [the “Wheel of Fortune” website located at
www.wheeloffortune.com], Apple iOS, Google Android, Amazon App Store, and any other
third-party mobile application distribution platforms, application stores or marketplace
providers approved by Licensor in its sole discretion.
(d) “Claims” means any and all third party claims, liabilities, demands, losses, damages,
injuries losses, causes of action, judgments, settlements or expenses, including reasonable
attorneys’ fees.
(e) “Confidential Information” means all information disclosed, directly or indirectly, through
any means of communication or observation, by or on behalf of one Party (the “Disclosing
Party”) to or for the benefit of the other Party (the “Receiving Party”) relating to or derived
from the Disclosing Party’s technical, business, strategic, marketing or creative affairs, or any
other matter, that the Receiving Party is advised or has reason to know is the confidential or
proprietary information of the Disclosing Party. Additionally, any material provided by one
Party to the other Party which is clearly labeled “Confidential” (or other similar designation)
will be presumed to be Confidential Information; provided, however, that the absence of such
designation will not preclude any material from being deemed Confidential Information.
1
(f)
“Deliverables” has the meaning set forth in Section 3(b) below.
(g) “End User” means any user who downloads and/or installs the Game free-of-charge via
an Authorized Platform.
(h) “Game” means the “free-to-play” mobile software application created by Publisher and
approved by Licensor, based upon the Property’s TV show format, utilizing the Licensed
Materials and distributed free-of-charge to End Users via Authorized Platforms. The Game
shall in no event include Gambling (defined below).
(i) "Gambling” means games that are played with the expectation or purpose of winning
money, regardless of whether the outcome of the game is predominantly based on chance
and/or whether the outcome of the game involves an element of skill, and as may be further
defined and/or limited during the Term by applicable laws.
(j) “IAP Revenue” means gross revenue from in-application purchase (“IAP”) transactions
completed by End Users within the Game environment.
(k) “Intellectual Property Rights” means know-how, inventions, patents, patent rights, and
registrations and applications, renewals, continuations and extensions thereof, works of
authorship and art, copyrightable materials and copyrights (including, without limitation, titles,
computer code, designs, themes, objects, buildings and architecture, automobiles, characters,
character names, stories, dialog, catch phrases, locations, game play, rules, concepts, artwork,
animation, sounds, musical compositions, graphics and visual elements, audio-visual effects
and methods of operation, and any related documentation), copyright registrations and
applications, renewals and extensions thereof, mask works, industrial rights, trademarks,
service marks, trade names, logos, trademark registrations and applications, renewals and
extensions thereof, trade secrets, rights in trade dress and packaging, publicity, personality and
privacy rights, rights of attribution, paternity, integrity and other similarly afforded moral
rights, and all other forms of intellectual property and proprietary rights recognized by
applicable laws, treaties and conventions.
(l) “Launch Date” means the date the Game is launched throughout the Territory on all
Authorized Platforms, as confirmed in writing by Publisher to Licensor, such date not to be later
than six (6) months from the Submission Date to the Authorized Platforms.
(m) “Launch Period” means the period of time commencing on the Launch Date and
continuing for ninety (90) days thereafter.
(n)
“Launch Period Marketing Campaign” has the meaning set forth in Section 3(f)(ii) below.
(o)
“Licensor Ad Revenue” has the meaning set forth in Section 4(d) below.
(p) “Licensor Marketing Materials” means elements of the Licensed Materials and any other
artwork, images, animation, sounds, graphics, video, audio, Marks and other materials based
on or derived from the Property which are provided by Licensor hereunder for use by Publisher
to advertise, promote and market the Game (and/or to produce Publisher Marketing Materials
for the same purposes).
(q) “Marks” means trade names, trademarks, service marks, logos, marks or other business
identifiers of any entity of either Party.
2
(r)
“Minimum Guarantee” has the meaning set forth in 5(a) below.
(s) “Net Revenue” means all Advertising Revenue and IAP Revenue generated by the Game,
less (i) all taxes, duties and other governmental assessments deducted therefrom (excluding
any taxes on either Party’s direct income), (ii) all verifiable payments to, or amounts withheld
by, the Authorized Platforms (e.g., without limitation, Apple, Google, Amazon), (iii) all verifiable
fees, costs and expenses paid to Publisher’s technical operators and service providers (e.g.,
without limitation, hosting operators, analytics providers and installation tracking services); (iv)
all verifiable commissions, fees, costs and expenses paid to third-party advertising networks or
otherwise incurred by Publisher in connection with serving advertising in the Game; (v) all
verifiable refunds, chargebacks and promotional amounts (i.e., credits or discounts to End
Users), (vi) all verifiable currency exchange fees and conversion fees (if any) incurred by
Publisher with respect to receipts not in United States Dollars, (vii) all Permitted User
Acquisition Costs, including all amounts expended in connection with the Launch Period
Marketing Campaign,; and (viii) any other identified third-party fees, costs or expenses agreed
upon by the Parties in writing.
(t) “Permitted User Acquisition Costs” means any and all sums expended by Publisher to
advertise market and promote the Game in connection with the Launch Period Marketing
Campaign, up to a maximum of Seven Hundred Fifty Thousand Dollars ($750,000).
(u) “Post Launch Period” means the period of time commencing on the ninety-first (91st) day
after the Launch Date and continuing through the expiration or termination of the Term.
(v) “Licensed Materials” means the title, Marks, logos, , storylines, plots, themes, game play
functionality, designs, artwork, graphics, images, and any other creative or technical elements
contained in, based on, derived from or related to the Property that is provided by Licensor to
Publisher for purposes of performing Publisher’s obligations under this Agreement. The
Licensed Materials will include Licensor provided “puzzle” content from the Property (and any
updates thereto during the Term) for purposes of enriching content and gameplay within the
Game. The Licensed Materials will not include any characters, names, likeness, avatars,
including without limitation “Pat Sajak” or “Vanna White,” nor any music, including without
limitation, the “Wheel of Fortune” theme song.
(w) “Property” has the meaning set forth in the Recitals.
(x) “Publisher IP” means, without limitation, (i) any and all Publisher software, source code,
executable code, data files, underlying technology and/or related technical documentation
incorporated into the Game, and (ii) any other Intellectual Property Rights belonging to
Publisher prior to the Effective Date, or developed, created or acquired by Publisher on or after
the Effective Date (excluding any Licensed Materials incorporated therein). For avoidance of
doubt, all Publisher IP will be deemed Publisher’s Confidential Information hereunder.
(y) “Publisher Marketing Materials” means any advertising, marketing and promotional
materials relating to the Game which Publisher may produce in accordance with Section 3(f)(i)
below.
(z) “Submission Date” means the date the final Game is submitted to the Authorized
Platforms, such date specified in the table in Section 3(b) below.
(aa) “Royalties” has the meaning set forth in Section 5(b) below.
3
(bb) “Term” has the meaning set forth in Section 7(a) below.
(cc) “Territory” means worldwide without restriction.
2.
LICENSE GRANT
(a) Licensed Materials. Subject to the terms and conditions of this Agreement (including,
without limitation, Licensor’s approval rights as set forth hereunder), Licensor hereby grants to
Publisher, during the Term, throughout the Territory, a limited, non-transferable, nonsublicensable, exclusive right and license to use, reproduce, publish, create, develop, adapt,
perform, display, edit, compress, translate, bundle, combine, encode, distribute, transmit,
market, promote, advertise and otherwise exploit the Licensed Materials solely as necessary
for Publisher to develop, publish, and market the Game in accordance with the terms and
conditions of this Agreement. For the avoidance of doubt, the aforementioned exclusivity shall
only apply to the Game as defined in this Agreement for the Authorized Platforms and in the
“free-to-play” mobile distribution model, and shall not apply to (i) Licensor’s pre-existing games
in the market based on the Property, and (ii) free-to-play games based on the Property in the
casino style or that include Gambling (e.g., slot based game, casino style game, bingo type
game), and shall further not apply to non-free distribution models in the casual games market
and in software applications, including without limitation, transactional fee based distribution,
and subscription fee based distribution.
(b) Licensor Marketing Materials. Subject to the terms and conditions of this Agreement
(including, without limitation, Licensor’s approval rights as set forth hereunder), Licensor
hereby grants to Publisher, during the Term, throughout the Territory, a limited, non-exclusive,
non-transferable, non-sublicensable, right and license to use, reproduce, publish, create,
develop, adapt, perform, display, edit, compress, translate, bundle, combine, encode,
distribute, and transmit, the Licensor Marketing Materials (including any Publisher Marketing
Materials based thereon or derived therefrom), solely in connection with the advertising,
marketing and promotion of the Game.
(c) Reserved Rights. Except as expressly set forth in Sections 2(a) and 2(b) above, all
Intellectual Property Rights in and to the Property, Licensed Materials and Licensor Marketing
Materials will remain solely and exclusively with Licensor.
(d) Publisher’s Proprietary Rights. For avoidance of doubt, all Intellectual Property Rights in
and to the Publisher IP, the Game (excluding any Licensed Materials incorporated therein), and
the Publisher Marketing Materials (excluding any Licensed Materials incorporated therein) are
and will remain the sole and exclusive property of Publisher.
3.
PUBLISHER SERVICES
(a) Development. Subject to Licensor’s approval rights as described in Section 3(b) below,
Publisher will plan, develop, test, launch and live operate the Game at Publisher’s sole expense.
(i)
Licenses; Clearances; Approvals. Except for the Licensed Materials and Licensor
Marketing Materials, Publisher will obtain any and all licenses, clearances and approvals
necessary for Publisher to use and exploit the Game and Publisher Marketing Materials as
contemplated hereunder. Publisher will be solely responsible for and will timely and
directly pay any and all participation fees, residuals, royalties, fees, guild-related
payments and similar obligations arising from the Game and Publisher’s development,
4
publication distribution, and marketing thereof. Without limiting the foregoing, Publisher
will ensure that any music in the Game or Publisher Marketing Materials is fully cleared
for use by Publisher in connection with the Game, and Publisher will be solely responsible
for clearing and/or paying for any and all third-party obligations that may arise out of
Publisher’s use of any music in connection with the Game including, without limitation,
any royalties, mechanical fees, residuals publishing fees, license fees, reuse fees, guildrelated payments, and any compulsory licensing fees due to mechanical and performing
rights societies.
(b)
Delivery; Approvals; Launch.
Publisher will deliver those certain milestone deliverables set forth in the table below and
the final Game to Licensor for review and approval before the Launch Date (the
“Deliverables”.) The Deliverables submitted will include all necessary executable files to
permit Licensor to reasonably evaluate such Deliverable. Publisher will submit each
Deliverable to Licensor on the dates set forth in the milestone table below for written
approval. Any such approval request neither approved nor disapproved by Licensor
within ten (10) days of submission by Publisher will be deemed disapproved. Subject to
Licensor’s approval of each Deliverable and the final Game, , Publisher will launch the
Game on the Launch Date throughout the Territory on the Authorized Platform; provided,
however, that Licensor acknowledges and agrees that the actual Launch Date will depend
on the Authorized Platforms’ applicable approval and launch queues (which may vary
across the Territory) and confirmation in writing by Publisher to Licensor. During the
Post-Launch Period, Publisher shall seek Licensor’s review and approval to any
subsequent product feature update.
(c)
Publication; Monetization; Advertising; Marketing.
(i)
Publication. Publisher will publish the Game throughout the Territory under
Publisher’s accounts across all Authorized Platforms in accordance with Section 3(b)
above.
(ii)
Monetization.
Publisher will enable IAP transactions within the Game
environment utilizing Publisher’s Authorized Platform accounts and monetization
credentials. All revenue generated by IAP transactions within the Game will be
considered IAP Revenue. For avoidance of doubt, all payments to, or amounts withheld
by, the Authorized Platforms in connection with such IAP transactions will be permitted
deductions in the calculation of Net Revenue.
(iii)
Advertising. Publisher, with cooperation from Licensor, will broker, mediate,
manage and optimize sales of display advertising within the Game. All revenue generated
by advertising displayed within the Game will be considered Advertising Revenue. For
avoidance of doubt, all commissions, fees, costs and expenses paid to third-party
advertising networks or otherwise incurred by Publisher in connection with serving
advertising in the Game will be permitted deductions in the calculation of Net Revenue.
(A)
[Direct Sales. The Parties will coordinate sales of advertising for display in
the Game between their respective direct sales teams, and work together in
good faith to design and approve sponsorship packages (and any rate cards
associated therewith) to sell to brands and agencies (e.g., without limitation,
video units, engagement units, survey units, sponsorships and native
5
placements). Publisher’s development team will use commercially reasonable
efforts to build all such packages into the Game, subject to reasonable timelines
and deduction of any direct costs related thereto from Net Revenue.][TO BE
DISCUSSED]
(B)
[By Licensor. Licensor will sell advertising inventory into the Game in
accordance with Section 4(d) below. The Parties will cooperate to establish a list
of acceptable advertising formats and rates at which Licensor may sell such
advertising inventory.][TO BE DISCUSSED]
(C)
Cross Promotion. Each Party will be entitled to up to fifteen percent (15%)
of all available advertisement inventory in the Game for promotion of their own
products and services.
(D)
Advertising Standards & Restrictions. All advertising displayed within the
Game shall be in conformance with the Internet Advertising Bureau (“IAB”)
standards, or such other formats and standards as mutually agreed upon between
the parties. Publisher will sell advertising within the Game in compliance with the
obligations and restrictions set forth in Exhibit B.
(d) Hosting. Publisher will manage third-party hosting of the Game within a cloud-based
server environment (e.g., Amazon AWS or similar service) allowing the Game to operate in
accordance with industry standards of operation and security, with acceptable uptime
requirements, and free from unreasonable levels of lag and related errors or anomalies.
(e) Analytics. Publisher will provide Licensor with access to Game analytics data as
reasonably requested by Licensor, but at least on a weekly basis. Such data will include, at a
minimum, broken out by Authorized Platform, daily active users (“DAU”), monthly active users
(“MAU”), daily ARPDAU, daily sessions and session length, engagement, demographic, daily
app-downloads and retention rates, daily In-App Purchases and IAP Revenue, daily Advertising
Revenue and fill rates.
(f) Marketing; Promotion. Subject to Licensor’s approval rights as described 3(f)(i) below,
Publisher will market and promote the Game throughout the Term including, without
limitation, via mobile advertisements, social media marketing campaigns, promotion across
Publisher’s network, and other methods as determined by Publisher’s marketing and useracquisition teams.
(i)
Approvals. In connection with its marketing and promotion obligations, Publisher
may produce and distribute Publisher Marketing Materials throughout the Territory (or
portions thereof) during the Term. Prior to Publisher's distribution of any Publisher
Marketing Materials (or any Licensor Marketing Materials), Publisher will submit a
summary of such proposed materials and uses to Licensor for written approval. Any such
approval request neither approved nor disapproved by Licensor within ten (10) days of
submission by Publisher will be deemed disapproved. Approved materials and/or uses
need not be re-submitted during the Term unless otherwise specified in writing by
Licensor.
(ii)
Campaign Commitment. During the Launch Period, Publisher will spend up to a
maximum of Seven Hundred Fifty Thousand Dollars ($750,000) on a targeted marketing
campaign aimed at maximizing distribution of, and End User acquisition for, the Game
6
(the “Launch Period Marketing Campaign”). For avoidance of doubt, all marketing efforts
by Publisher in connection with the Launch Period Marketing Campaign will be considered
Permitted User Acquisition Costs and will be permitted deductions in the calculation of
Net Revenue.
(g) Collections; Payment. As between the Parties, Publisher will be responsible for invoicing
and collecting all IAP Revenue and all portions of Advertising Revenue attributable to Publisher’s
sales efforts pursuant to Section 3(c)(iii) above. Publisher will remit to Licensor all shares of
Net Revenue derived from IAP Revenue and Publisher-originated Advertising Revenue due to
Licensor in accordance with the provisions of Section 5 below.
(h) Privacy. Publisher shall develop the Game in compliance with all applicable privacy laws,
regulations and industry best practices regarding privacy, data collection and retention,
including without limitation (i) conspicuously posting a privacy policy within the Game, (ii)
collecting and sharing data in accordance with such privacy policy, (iii) the Children's Online
Privacy Protection Act of 1998, 5 U.S.C. 6501–6505, as amended, (iv) honor End-User opt-out
requests, (v) the Self-Regulatory Principles for Online Behavioral Advertising, and (vi) the
California Attorney General’s Privacy on the Go: Recommendations for the Mobile EcoSystem.
4.
LICENSOR OBLIGATIONS.
(a) [Content Updates; Refreshment. During the Term, as part of the Licensed Materials
package provided to Publisher, Licensor will provide “puzzle” content from the Property (and
any updates thereto during the Term) so as to enable Publisher to regularly refresh content
and enrich play within the Game. Licensor will cooperate with Publisher in good faith to
create new content to meet the ongoing demands of the Game. Additionally, the Parties may
agree to hire freelance writers or to establish a curated, user-generated content system to
address the Game’s ongoing content needs.][TO BE DISCUSSED].
(b) Marketing; Promotion. Subject to Licensor’s approval as set forth in Section 3 above,
Licensor will work with Publisher in good faith to develop Publisher Marketing Materials
including, without limitation, graphical display banners, viral videos, assets for inclusion in
press kits and other marketing collateral necessary for Publisher to perform its obligations
hereunder. Licensor will provide timely approvals of (i) Deliverables pursuant to Section 3(b)
above, and (ii) proposed uses of Publisher Marketing Materials and Licensor Marketing
Materials pursuant to Section 3(f)(i) above. Licensor will use commercially reasonable efforts
to secure promotional opportunities for the Game across Licensor’s diverse network (including,
without limitation, Licensor’s television series, “Wheel of Fortune” and digital networks).
(c) [Advertisement. Licensor will dutifully perform its obligations with respect to Gamerelated advertising sales as required in Section 3(c)(iii)(B) above. Licensor will be responsible
for invoicing and collecting all portions of Advertising Revenue attributable to Licensor’s sales
hereunder (“Licensor Ad Revenue”). Licensor will remit to Publisher a percentage share of all
Licensor Ad Revenue in accordance with the provisions of Section 5(d) below.] [TO BE
DISCUSSED]
5.
COMPENSATION; PAYMENT; RECORDS
(a) Minimum Guarantee. As consideration for the rights and licenses granted hereunder,
Publisher will pay to Licensor an advance Royalties sum of up to One Million Five Hundred
Thousand Dollars ($1,500,000), which sum will be fully recoupable by Publisher against any and
7
all Royalties (and Kickers) earned by Licensor during the Term pursuant to Sections 5(b) and
5(c) below, except for the first Installment Amount set forth in the table below, which shall not
be recoupable by Publisher (the “Minimum Guarantee”). The Minimum Guarantee will be paid
within 30 days of the Payment Date as follows:
Payment Date
Mutual execution of this Agreement
Installment Amount
$250,000
Launch Date
$250,000
First anniversary of Launch Date
$500,000
Expiration of Initial Term
$500,000
For the avoidance of doubt, to the extent Net Revenue generated by the Game and paid to
Licensor is insufficient to cover the Minimum Guarantee, Publisher shall not have any right to
“claw back” such advances.
(b) Royalties. As further consideration for the rights and licenses granted hereunder,
Publisher will pay to Licensor a share of Net Revenue generated by the Game (“Royalties”), as
follows:
Launch Period
% Share of Net Revenue
due to Licensor
30%
Post Launch Period
20%
Term Period
For avoidance of doubt, the Minimum Guarantee is an advance of future Royalties payments
and is fully recoupable against (i.e., not payable in addition to) any Royalties actually earned by
Licensor hereunder, except for the first Installment Amount set forth in the table above .
(c) Marketing Services; Revenue Share Bonus. In addition to any Royalties earned pursuant
to Section 5(b) above, Licensor will have the opportunity to earn bonus percentage shares of
Net Revenue (“Kickers”) in exchange for securing (at Licensor’s sole cost and expense)
advertisement slots against television broadcasts of the Property (at air times and in markets
within the Territory as selected by Licensor in its sole discretion) in order to promote and
market the Game. Licensor may earn Kickers during the first fourteen (14) days after the
Launch Date, and thereafter, on a quarterly basis during the Term. The percentage bonus
share of Net Revenue awarded (if any) for the first fourteen (14) days after the Launch Date, or
for any calendar quarter (as applicable) will correspond to the number of Licensor-selected
broadcast television advertisement slots actually secured by Licensor for promotion and
marketing of the Game during the applicable Term period, as follows:
First Fourteen (14) Days After Launch Date
Number Advertisement Slots Secured by Licensor
Kicker
More than ten (10) advertisement slots against
+2% of Net Revenue earned during
television broadcasts of the Property within the first
first calendar quarter of the Term.
fourteen (14) days after Launch Date.
Quarterly Thereafter During the Term
Number Advertisement Slots Secured by Licensor
Kicker
Between seven (7) and ten (10) advertisement slots +1% of Net Revenue earned during
8
against television broadcasts of the Property during any applicable calendar quarter.
calendar quarter.
More than ten (10) advertisement slots against
+2% of Net Revenue earned during
television broadcasts of the Property during any
applicable calendar quarter.
calendar quarter.
(d) [Licensor Ad Revenue; Publisher’s Share. During the Term, Licensor will pay to Publisher
a percentage share of all Licensor Ad Revenue as follows:
Launch Period
% Share of Licensor Ad
Revenue
due
to
Publisher
70%
Post Launch Period
80%]
Term Period
[TO BE DISCUSSED]
(e) Payment and Reporting. Within thirty (30) days after the end of each calendar month
during the Term, each Party will provide to the other Party a report detailing (as applicable) any
Royalties, Kickers or percentage share of Licensor Ad Revenue due to the other Party for the
applicable month. Within (30) days from the end of the month of the date of collection of any
Royalties, Kickers or Licensor Ad Revenue, each party will remit any payment due therewith.
All payments hereunder will be made in United States Dollars by check or wire transfer to a
bank account to be designated by the applicable payee.
(f) Withholding Taxes. If a Party is required, under applicable law, to deduct or withhold for
or on account of taxes from any payment due to the other Party hereunder, such Party will (i)
withhold the legally required amount from payment, (ii) remit the amount of tax withheld to
the applicable taxing authority, and (iii) deliver to the other Party documentation evidencing
such remittance of tax withheld (“Withholding Tax Receipt”). In the event a Party does not
provide a Withholding Tax Receipt in accordance with the preceding sentence, such Party shall
be liable to and shall reimburse the other Party on demand for the withholding taxes deducted
from payments.
(g) Books and Records. Each Party will keep accurate and complete books and records as
they relate hereto for two (2) years after the termination or expiration of the Term. On
reasonable notice (not fewer than thirty (30) business days), either Party will have the right to
appoint an independent auditor to examine the other Party’s books and records relating to this
Agreement during normal business hours. Such audits may not occur more than once during a
twelve (12) month period. If any audit discloses a Party owes payments to the other Party in
excess of ten percent (10%) of payments paid during any accounting period, the owing Party
will pay all reasonable, out-of-pocket audit costs together with the all shortfall amounts.
6.
CONFIDENTIALITY
(a) Confidentiality. Receiving Party will not use Disclosing Party’s Confidential Information
for any purpose other than to exercise or perform its rights or obligations under this
Agreement. Receiving Party will not, without the prior written consent of Disclosing Party,
copy or otherwise reproduce Disclosing Party’s Confidential Information, or disclose,
disseminate or otherwise communicate, in whole or in part, Disclosing Party’s Confidential
Information to any third party except to the Receiving Party’s officers, directors, employees
9
and agents who need to know the Confidential Information and who will have agreed to treat
the Confidential Information in accordance with the provisions of this Section 6. Receiving
Party further agrees that it will safeguard Disclosing Party’s Confidential Information from
disclosure and, at a minimum, use efforts commensurate with those Receiving Party employs
for protecting the confidentiality of its own Confidential Information which it does not desire to
disclose or disseminate, but in no event less than reasonable care. In the event that Receiving
Party becomes compelled by law or order of court or administrative body to disclose any
Disclosing Party’s Confidential Information Receiving Party will be entitled to disclose such
Confidential Information provided that (i) where practicable, Receiving Party provides
Disclosing Party with prompt prior written notice of such requirements to allow Disclosing
Party to take any necessary action to safeguard the Confidential Information; and (ii) if required
to do so, Receiving Party will furnish only that portion of Disclosing Party’s Confidential
Information which is legally required to be disclosed and will exercise its commercially
reasonable efforts to obtain assurances that Confidential Information will be treated in
confidence.
(b) Exceptions. Notwithstanding anything to the contrary herein, the following will not
constitute “Confidential Information” for the purposes of this Agreement: (i) information that
Receiving Party can show was known by it prior to the disclosure thereof to it, or independently
developed by it, in both cases, without using the Confidential Information; (ii) information that
is or becomes generally available to the public other than as a result of an unlawful disclosure
directly or indirectly by Receiving Party in breach of this Agreement; (iii) information that is or
becomes available to Receiving Party on a non-confidential basis from a source other than
Disclosing Party, provided that such source is not known by Receiving Party to be subject to any
prohibition against transmitting the information to Receiving Party; or (iv) information for
which Disclosing Party has authorized the relevant disclosure or other use.
(c) Publicity. Neither Party will make any news release, public announcement, reference to
this Agreement, its value, or its terms and conditions, or in any manner advertise or publish the
fact of this Agreement without the other Party’s prior written consent. The content and timing
of any news releases or public announcements concerning the Game will be negotiated by the
Parties acting in good faith.
7.
TERM; TERMINATION
(a) Term. The initial term of this Agreement (the “Initial Term”) will commence on the
Effective Date and continue through the two (2) year anniversary of the Launch Date. The
Initial Term will automatically extend for an additional two (2) years (the “Renewal Term”) if
gross revenue generated from the Game during the Initial Term meets or exceeds Twelve
Million Dollars ($12,000,000). The Initial Term and (if applicable) the Renewal Term are
together referred to as the “Term” hereunder.
(b) Termination for Cause. Either Party may terminate this Agreement upon written notice
to the other Party for any material breach of this Agreement by such other Party which
remains uncured for thirty (30) days following written notice of such breach. Upon Publisher’s
material breach of this Agreement, Licensor shall have the right to immediately suspend
Publisher’s right and license to exploit the Licensed Materials and the Game. In the event that
Licensor terminates the Agreement pursuant to this Section7(b), Licensor may, in addition to
any and all other rights which it may have against Publisher, (i) accelerate the payment of all
monies payable under this Agreement, including the Minimum Guarantee, such that they are
payable immediately and to retain such monies, (ii) shall be entitled to recover from Publisher
10
all payments past due hereunder, together with interest, compounded monthly, at the lesser of
(x) 110% of the Prime Rate and (y) the maximum rate permitted by law, plus reasonable
attorneys fees, and all costs and expenses, including collection agency fees, incurred by
Licensor to enforce the provisions thereof.
(c) Bankruptcy. Either Party may immediately terminate this Agreement upon written notice
to the other Party in the event either Party becomes insolvent, or a petition under any
bankruptcy act shall be filed by or against a Party (which petition, if filed against a Party, shall
not have been dismissed within thirty (30) days thereafter), or a Party executes an assignment
for the benefit of creditors, or a receiver is appointed for the assets of a Party, or a Party takes
advantage of any applicable insolvency or reorganization or any other like statute.
(d) Effect of Termination/Expiration. Upon termination or expiration of this Agreement
Publisher will cease any development or distribution of the Game, and the Parties will cease
any sales of advertising inventory in the Game. Additionally, upon termination or expiration of
this Agreement, at the request of a Disclosing Party, and at the Receiving Party’s option, the
Receiving Party shall return to the Disclosing Party or destroy copies of the Disclosing Party’s
Confidential Information.
8.
REPRESENTATIONS AND WARRANTIES
(a) By Publisher. Publisher represents and warrants to Licensor that: (i) Publisher is duly
organized, validly existing and in good standing under the laws of the jurisdiction in which it
was organized, (ii) Publisher has the full power and authority to enter into this Agreement and
perform its obligations thereunder, (iii) Publisher’s execution, delivery and performance of this
Agreement will not violate the provisions of any other agreement to which it is a party, or any
applicable laws, (v) all of Publisher’s services hereunder will be performed in a diligent and
workmanlike manner consistent with industry standards, and (iv) the Publisher IP, Publisher
Marketing Materials, and the Game will not infringe upon the Intellectual Property Rights of
any third party.
(b) By Licensor. Licensor represents and warrants to Publisher that: (i) Licensor is duly
organized, validly existing and in good standing under the laws of the jurisdiction in which it
was organized, (ii) Licensor has the full power and authority to enter into this Agreement and
perform its obligations thereunder, (iii) Licensor’s execution, delivery and performance of this
Agreement will not violate the provisions of any other agreement to which it is a party, or any
applicable laws, and (v) all of Licensor’s services hereunder will be performed in a diligent and
workmanlike manner consistent with industry standards,.
(c) Disclaimer. EXCEPT AS EXPRESSLY STATED IN THIS SECTION 8, THE PARTIES PROVIDE NO
OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. WITHOUT LIMITING THE FOREGOING, PUBLISHER MAKES NO
REPRESENTATIONS OR WARRANTIES WHATSOEVER REGARDING THE AMOUNT OF REVENUE, IF
ANY, THAT MAY BE GENERATED BY THE GAME.
9.
INDEMNIFICATION AND LIMITATION OF LIABILITY
(a) Indemnification. Each Party agrees to indemnify, defend and hold harmless the other
Party and its directors, officers, employees, and agents harmless from and against any and all
Claims arising from any breach of any representations, warranties or covenants made by the
11
indemnifying Party, or incurred in the settlement of any such Claim, and in the case of Licensor,
Licensor agrees to additionally indemnify, defend and hold harmless Publisher and its directors,
officers, employees, and agents harmless from and against any and all Claims that (i) the
Licensed Materials and the Licensor Marketing Materials, and their use by Publisher as
contemplated hereunder, infringe upon the Intellectual Property Rights of any third party, and
(ii) the Game violates such third party’s privacy rights; provided that the Party seeking
indemnity gives the indemnifying Party prompt written notice of the assertion of any such
Claim, reasonable assistance and the opportunity to assume sole control over the defense and
all negotiations for a settlement or compromise. Each Party will have the right to participate at
its own expense and by its own counsel in the defense of any such Claim, and the Parties will
cooperate with each other in the defense of any Claim. The indemnified Party will not
compromise or settle any Claim without the prior written consent of the indemnifying Party,
such consent not to be unreasonably withheld.
(b) LIMITATION OF LIABILITY.
EXCEPT FOR BREACHES OF SECTION 6 ABOVE
(CONFIDENTIALITY), NEITHER PARTY WILL BE RESPONSIBLE OR LIABLE TO THE OTHER PARTY
WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT,
NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY FOR ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES.EACH PARTY ACKNOWLEDGES AND AGREES THAT COMPENSATION AMOUNTS
PAYABLE HEREUNDER PROPERLY REFLECT THE ALLOCATION OF RISK SET FORTH IN THIS
AGREEMENT, AND THAT NEITHER PARTY WOULD ENTER INTO THIS AGREEMENT WITHOUT
THESE LIMITATIONS ON LIABILITY.
10.
MISCELLANEOUS
(a) Notices. All notices will be given in writing by mail (postage prepaid), overnight courier,
messenger or facsimile (and if sent by facsimile such notice will be concurrently sent by mail)
addressed as indicated below. The earlier of (i) actual receipt; (ii) three (3) business days after
the date of mailing; and (iii) the date of messengering or faxing, will be deemed to be the date
of service.
To Licensor:
Sony Pictures Television Networks Games, Inc.
10202 W. Washington Blvd.
Culver City, CA 90232
Attention: EVP, Digital Networks
With a Copy to:
Sony Pictures Entertainment Inc.
10202 W. Washington Blvd.
Culver City, CA 90232
Attention: General Counsel
To Publisher:
Scopely, Inc.
9950 Jefferson Blvd., Bldg. #2
Culver City, CA 90232
Attention: Eric Futoran, SVP
12
(b) Waiver, Modification. The terms of this Agreement may not be waived or modified
except by an agreement in writing executed by both Parties. The waiver by either Party of any
breach of this Agreement by the other Party must be in writing and will not be deemed to be a
waiver of any prior or succeeding breach.
(c) Relationship of the Parties. Nothing herein contained will be construed to place the
Parties in the relationship of principal and agent, partners or joint venturers and neither Party
will have the power to obligate or bind the other Party in any manner whatsoever.
(d) Assignment. Neither Party will assign or transfer this Agreement or its rights or
obligations hereunder without the prior written consent of the other Party, and any purported
assignment without such consent will be void ab initio and of no force and effect This
Agreement will be binding upon and will inure to the benefit of the Parties and their permitted
assigns.
(e) Governing Law; Arbitration. This Agreement will be construed in accordance with the
laws of the State of California applicable to agreements executed and to be wholly performed
therein. All actions or proceedings arising in connection with, touching upon or relating to this
Agreement, the breach thereof and/or the scope of the provisions of this Section (a
“Proceeding”) shall be submitted to JAMS (“JAMS”) for binding arbitration under its
Comprehensive Arbitration Rules and Procedures if the matter in dispute is over $250,000 or
under its Streamlined Arbitration Rules and Procedures if the matter in dispute is $250,000 or
less (as applicable, the “Rules”) to be held solely in Los Angeles, California, U.S.A., in the English
language in accordance with the provisions below.
(i)
Each arbitration shall be conducted by an arbitral tribunal (the “Arbitral
Board”) consisting of three (3) arbitrators who shall be retired judges knowledgeable in
commercial matters, one chosen by each of the parties within thirty (30) days of notice of
arbitration and one chosen by the two (2) arbitrators selected by the parties. If the
parties fail to mutually agree upon the third arbitrator within thirty (30) days of the
selection of both such arbitrators, then the third arbitrator shall be selected in accordance
with the Rules. The third arbitrator shall be a retired judge with at least ten (10) years
experience in commercial matters. The Arbitral Board shall assess the cost, fees and
expenses of the arbitration against the losing party, and the prevailing party in any
arbitration or legal proceeding relating to this Agreement shall be entitled to all
reasonable expenses (including, without limitation, reasonable attorney’s fees).
Notwithstanding the foregoing, the Arbitral Board may require that such fees be borne in
such other manner as the Arbitral Board determines is required in order for this
arbitration clause to be enforceable under applicable law. The parties shall be entitled to
conduct discovery in accordance with Section 1283.05 of the California Code of Civil
Procedure, provided that (a) the Arbitral Board must authorize all such discovery in
advance based on findings that the material sought is relevant to the issues in dispute and
that the nature and scope of such discovery is reasonable under the circumstances, and
(b) discovery shall be limited to depositions and production of documents unless the
Arbitral Board finds that another method of discovery (e.g., interrogatories) is the most
reasonable and cost efficient method of obtaining the information sought.
(ii)
There shall be a record of the proceedings at the arbitration hearing and the
Arbitral Board shall issue a Statement of Decision setting forth the factual and legal basis
for the Arbitral Board's decision. If neither party gives written notice requesting an
appeal within ten (10) business days after the issuance of the Statement of Decision, the
13
Arbitral Board's decision shall be final and binding as to all matters of substance and
procedure, and may be enforced by a petition to the Los Angeles County Superior Court
or, in the case of Publisher, such other court having jurisdiction over Publisher, which may
be made ex parte, for confirmation and enforcement of the award. If either party gives
written notice requesting an appeal within ten (10) business days after the issuance of the
Statement of Decision, the award of the Arbitral Board shall be appealed to three (3)
neutral arbitrators (the "Appellate Arbitrators"), each of whom shall have the same
qualifications and be selected through the same procedure as the Arbitral Board. The
appealing party shall file its appellate brief within thirty (30) days after its written notice
requesting the appeal and the other party shall file its brief within thirty (30) days
thereafter. The Appellate Arbitrators shall thereupon review the decision of the Arbitral
Board applying the same standards of review (and all of the same presumptions) as if the
Appellate Arbitrators were a California Court of Appeal reviewing a judgment of the Los
Angeles County Superior Court, except that the Appellate Arbitrators shall in all cases
issue a final award and shall not remand the matter to the Arbitral Board. The decision of
the Appellate Arbitrators shall be final and binding as to all matters of substance and
procedure, and may be enforced by a petition to the Los Angeles County Superior Court
or, in the case of Publisher, such other court having jurisdiction over Publisher, which may
be made ex parte, for confirmation and enforcement of the award. The party appealing
the decision of the Arbitral Board shall pay all costs and expenses of the appeal, including
the fees of the Appellate Arbitrators and including the reasonable outside attorneys' fees
of the opposing party, unless the decision of the Arbitral Board is reversed, in which event
the costs, fees and expenses of the appeal shall be borne as determined by the Appellate
Arbitrators.
(iii)
Subject to a party's right to appeal pursuant to the above, neither party shall
challenge or resist any enforcement action taken by the party in whose favor the Arbitral
Board, or if appealed, the Appellate Arbitrators, decided. Each party acknowledges that it
is giving up the right to a trial by jury or court. The Arbitral Board shall have the power to
enter temporary restraining orders and preliminary and permanent injunctions. Neither
party shall be entitled or permitted to commence or maintain any action in a court of law
with respect to any matter in dispute until such matter shall have been submitted to
arbitration as herein provided and then only for the enforcement of the Arbitral Board’s
award; provided, however, that prior to the appointment of the Arbitral Board or for
remedies beyond the jurisdiction of an arbitrator, at any time, either party may seek
pendente lite relief in a court of competent jurisdiction in Los Angeles County, California
or, if sought by Licensor, such other court that may have jurisdiction over Publisher,
without thereby waiving its right to arbitration of the dispute or controversy under this
section. All arbitration proceedings (including proceedings before the Appellate
Arbitrators) shall be closed to the public and confidential and all records relating thereto
shall be permanently sealed, except as necessary to obtain court confirmation of the
arbitration award. Notwithstanding anything to the contrary herein, Publisher hereby
irrevocably waives any right or remedy to seek and/or obtain injunctive or other equitable
relief or any order with respect to, and/or to enjoin or restrain or otherwise impair in any
manner, the production, distribution, exhibition or other exploitation of any motion
picture, production or project related to Licensor, its parents, subsidiaries and affiliates,
or the use, publication or dissemination of any advertising in connection with such motion
picture, production or project. The provisions of this Section shall supersede any
inconsistent provisions of any prior agreement between the parties.
14
(f) Binding Agreement. Neither Party will have any rights hereunder nor be bound unless
and until this Agreement has been accepted in writing by both Parties. If either Party does not
accept this Agreement, the Parties will be released from all liability hereunder and this
document will be of no force and effect.
(g) Severability. Should any paragraph, clause or provision of this Agreement be found
invalid or unenforceable by any court having jurisdiction over this Agreement, the subject
matter hereof, or the either Party, such decision will affect only the paragraph, clause or
provision so construed or interpreted and all remaining paragraphs, clauses or provisions will
remain valid and enforceable.
(h) Entire Agreement. There are no representations, warranties or covenants other than
those set forth in this Agreement, which sets forth the entire understanding between the
Parties with respect to the subject matter hereof.
(i) Headings. The headings of the Sections of this Agreement are for convenience only and
will not be of any effect in construing the meanings of the paragraphs.
(j) Survival. All of the Parties’ respective obligations hereunder which by their nature would
continue beyond the termination, cancellation, or expiration of this Agreement will survive.
(k) Drafting. Because the Parties have participated in drafting and negotiating this
Agreement, there will be no presumption against either Party on the ground that such Party
was responsible for preparing this Agreement or any portion thereof.
(l) Force Majeure. Neither party will be liable for any delay or failure in performing any of its
obligations hereunder, except for payment obligations, when any such delay or failure is
occasioned by causes or contingencies beyond its control, including without limitation force
majeure, fires, floods, war, strikes, governmental regulation and failures of Authorized
Platforms and other networks, provided that the Party delaying or failing to perform will
promptly after its inception give written notice of such cause or contingency to the other Party,
and provided further that the Party giving such notice will make commercially reasonable
efforts to remove such disability as soon as possible. Notwithstanding the foregoing, in the
event the events constituting force majeure cause a delay in performance of sixty (60)
consecutive days or more, either Party may terminate this Agreement immediately upon
written notice to the other Party.
(m) Counterparts. This Agreement may be executed in identical counterparts, all of which
taken together will constitute one single agreement between the Parties. A facsimile or PDF
transmission of the executed signature page of this Agreement will constitute due and proper
execution of this Agreement by the Party whose signature appears on such facsimile or PDF
page.
[Signature page follows.]
15
IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their duly authorized
officers as of the Effective Date:
SONY PICTURES TELEVISION NETWORKS GAMES SCOPELY, INC.
INC.
By: ________________________
By: ________________________
Its: ________________________
Its: ________________________
16
EXHIBIT A
RESTRICTED AD CATEGORIES AND GUIDELINES
1.
Restricted Ad Categories and Guidelines.
A.
Alcoholic Beverages: Licensor will accept advertising for alcoholic beverages as long as it
meets country-specific guidelines.
B.
Gambling: Any advertisement promoting any form of gambling or casino play (a) may not
depict actual money; and (b) may promote a Web site only if and to the extent such Web site does not
permit actual gambling and/or link to a site at which actual gambling may be conducted.
C.
Contests or Sweepstakes: Any advertisement promoting any contest or sweepstakes
must be submitted to Licensor together with all applicable contest and/or sweepstakes rules.
D.
Motion Pictures: Any advertisement promoting a motion picture must adhere to local
rules – for example, US advertising must include a visual graphic indicating the MPAA rating for the film.
Advertisements promoting motion pictures rated something equivalent to the MPAA NC-17 rating will
be considered on a case-by-case basis, and, if accepted, will likely be subject to scheduling restrictions at
Licensor’s discretion. Motion pictures rated something equivalent to R and those Not Yet Rated will be
restricted to content where we reasonably believe the majority of viewers are expected to be at least 17
years old or older.
E.
Video Games: Any advertisement promoting a video game must adhere to local rules –
for example, US advertising must include a visual graphic of and audio reference to the ESRB rating for
the game. Advertisements promoting video games rated AO and/or Not Yet Rated are subject to review
prior to air, and if accepted, will likely be subject to scheduling restrictions at Licensor’s discretion.
F.
Competitive Advertising: Licensor will accept competitive advertising on a case-by-case
basis; provided that Publisher shall at all times have the right to include advertisements for any product
or service of Licensor, without exception.
G.
Strictly Prohibited Categories: Licensor will not accept any advertisements promoting
pornography, tobacco products, illegal drugs, premium rate phone numbers and/or firearms.
H.
Additional Policies: Without limitation of any of the foregoing, Publisher will not sell
advertisments in violation of any of Licensor's additional advertising standards and policies as
communicated in writing thirty (30) days in advance to Publisher from time to time, provided that such
standards and policies are generally applicable to all advertisers and sales representatives.
17