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 Apple iOS, Google Android, Amazon App Store, and,
subject to Licensor’s prior written approval, which shall be determined in good faith and not
unreasonably withheld, any other third-party mobile application distribution platforms,
application stores or marketplace providers.
(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
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presumed to be Confidential Information; provided, however, that the absence of such
designation will not preclude any material from being deemed Confidential Information.
(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 mobile software application created by Publisher hereunder utilizing
the Licensed Materials and distributed free-of-charge to End Users via Authorized Platforms. The
Game shall in no event include (i) Gambling, or (ii) virtual casino-style games whereby End Users
earn virtual currency.
(i)
“Gambling” means games that are played with the expectation or purpose of winning
money or prizes of monetary or cash equivalent value, 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, and as further set forth in
Section 3(b) below.
(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 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).
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(p)
“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.
(q)
“Marks” means trade names, trademarks, service marks, logos, marks or other business
identifiers of any entity of either Party.
(r)
“Minimum Guarantee” has the meaning set forth in 5(a) below.
(s)
“Net Revenue” means all Advertising Revenue and IAP Revenue received 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)
“Property” has the meaning set forth in the Recitals.
(w)
“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.
(x)
“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.
(y)
“Royalties” has the meaning set forth in Section 5(b) below.
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2.
(z)
“Term” has the meaning set forth in Section 7(a) below.
(aa)
“Territory” means worldwide without restriction.
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 (except by
permitted assignment under Section 10(d) below), non-sublicensable, 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 shall not apply to (i) Licensor’s pre-existing games in the
market based on the Property, (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 (iii) paybased distribution models in the casual games market, including without limitation, transactional
fee based distribution (e.g., pay-on-download), or subscription fee based distribution (e.g.,
recurring monthly fee). Notwithstanding the foregoing, during the Term of this Agreement,
Licensor shall not “clone” the Game and distribute it on the Authorized Platforms on a
transactional or subscription fee basis.
(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, nontransferable (except by permitted assignment under Section 10(d) below), 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
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(b)
directly pay any and all participation fees, residuals, royalties, fees, guild-related
payments and similar obligations arising from the Game and Publisher’s development,
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.
Delivery; Approvals; Launch & Post-Launch Period.
Subject to the remainder of this paragraph, the Launch Date shall be no later than May
10, 2015. Publisher will deliver, at a minimum, internal playable, MVP, alpha, geo-beta,
GM 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 for written approval, such approval not to be unreasonably
delayed. Licensor will have ten (10) days within any submission by Publisher to either
approve the applicable Deliverable(s), or to disapprove and provide a detailed written list
of the issues to be addressed and rectified by Publisher in order to obtain Licensor’s
approval (“Feedback”). If Licensor fails to respond to any Publisher approval request with
either approval or Feedback within ten (10) days, such request shall be deemed
disapproved. Subject to Licensor’s approval of 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 with the same approval process as outlined above.
(c)
Non-Material Updates.
Licensor acknowledges and agrees that Licensor’s approval will not be required for any
updates (or portions thereof) that are non-material or do not involve new uses of the
Licensed Material, such as bug fixes, crash fixes, and errors.
(d)
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.
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(iii)
Advertising. Publisher, with cooperation from Licensor, will broker, mediate,
manage and optimize sales of video and 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 thirdparty 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)
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.
(B)
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.
(e)
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.
(f)
Analytics. Publisher will provide Licensor with access to Game analytics data as
reasonably requested by Licensor, but at least on a bi-weekly basis. Such data will include, at a
minimum, broken out by Authorized Platform, daily active users (“DAU”), monthly active users
(“MAU”) daily ARPDAU, and daily sessions and session length, demographic, daily app-downloads
and retention rates, daily In-App Purchases and IAP Revenue, daily Advertising Revenue and fill
rates.
(g)
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 user-acquisition 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
(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.
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(h)
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.
(i)
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 SelfRegulatory 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 at Publisher’s sole cost. Additionally, the
Parties may agree to hire freelance writers at Publisher’s sole cost, or to establish a curated, usergenerated content system to address the Game’s ongoing content needs. Any new content will
be subject to the prior written approval of Licensor at all times during the Term, with such
approval to be given within ten (10) days and not to be unreasonably withheld
(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).
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
all Royalties (and Kickers) earned by Licensor during the Term pursuant to Sections 5(b) and 5(c)
below (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
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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.
(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
Between seven (7) and ten (10) advertisement slots
against television broadcasts of the Property during any
calendar quarter.
More than ten (10) advertisement slots against
television broadcasts of the Property during any
calendar quarter.
Kicker
+1% of Net Revenue earned during
applicable calendar quarter.
+2% of Net Revenue earned during
applicable calendar quarter.
(d)
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, or Kickers 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, or Kickers, each party will remit any
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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.
(e)
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.
(f)
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 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
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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 Section 7(b), Licensor may, in addition to any and all
other rights which it may have against Publisher, 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, plus reasonable attorneys fees, and reasonable 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 at the Receiving Party’s sole cost and expense.
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
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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 and Publisher
Marketing Materials 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
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 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; 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 indemnifying Party will
not compromise or settle any Claim without the prior written consent of the indemnified 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
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(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
(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; provided,
however, that no consent will be necessary in the event of any one or more assignments by a
Party of any and/or all rights or obligations hereunder to any successor entity(ies) resulting from
a merger, acquisition or consolidation, spin-off, divestiture or otherwise succeeding to all or a
substantial portion of such Party’s assets or business with thirty (30) days prior written notice to
the other Party and so long as any such assignee is not a competitor of the non-assigning Party.
Upon receipt of such aforementioned notice, the non-assigning Party may terminate this
Agreement upon thirty (30) days written notice to the assigning Party. 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
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“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
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
13
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.
(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.
14
(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.]
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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 INC.
SCOPELY, INC.
By: ________________________
By: ________________________
Its: ________________________
Its: ________________________
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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
advertisements 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