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Exhibit: 10.16FD
AGREEMENT
AGREEMENT made this 21st day of May, 1993, by and between Random Games,
Inc., a Michigan corporation, doing business as Random Games & Toys, with its
principal place of business at 000 Xxxx Xxxxx Xxxxxx, Xxx Xxxxx, Xxxxxxxx 00000
acting as the agent of Xxxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxx, two individuals
(hereinafter collectively referred to as LICENSOR), and Third Quarter
Corporation (Fundex Games) an Indiana corporation with an office at 0000 X. 00xx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 (hereinafter "LICENSEE").
WITNESSETH:
WHEREAS, LICENSOR warrants and represents that it (or its principal) is
the copyright proprietor and/or patent rights owner or agent of the patent
rights owner and has the authority to sell, grant, convey, or Otherwise exchange
the manufacturing and/or marketing rights to an original product known as "Phase
10 Dice" (hereinafter "Product"), and described in Exhibit "A", attached,
samples of which have been supplied to LICENSEE, and
WHEREAS, LICENSOR desires to have this Product manufactured, promoted,
marketed, and merchandised by an experienced manufacturer, and
WHEREAS, LICENSEE is in the business of manufacturing and marketing and
desires to manufacture and market the Product,
NOW, THEREFORE, in consideration of the premises set forth above and
promises set forth below, LICENSEE and LICENSOR agree as follows:
1 . LICENSOR hereby grants to LICENSEE the exclusive right to manufacture
and/or market the Product and any accessories or other versions of the Product
throughout the World, and in addition, grants LICENSEE the exclusive right to
make, use and sell the subject matter of all patents and patent applications
whether pending or subsequently filed on the Product, and to sublicense such
rights. LICENSOR represents and warrants that it has not granted and shall not
grant the rights to the Product for these territories to any other party during
the term of this Agreement and that LICENSOR owns and controls all rights to the
Product throughout the territories covered by this Agreement. LICENSOR also
represents and warrants that the Product is its own original creative work and
that no adverse claim exists with respect to the Product. All rights not
specifically granted to LICENSEE remain with LICENSOR.
2. LICENSEE agrees to devote its best efforts to preparing the Product for
production, display, and offering for sale no later than the 1994 New York Toy
Fair and to use reasonable efforts to manufacture, promote, and sell the
Product. LICENSEE will provide two dozen production samples of each different
version of the Product to LICENSOR as soon as possible after the first
production run.
3. Any and all trademarks, whether registered or not, used by LICENSEE in
association with the manufacture, advertising, and distribution of the Product
shall remain the property of LICENSEE and their use and the goodwill founded
thereon shall inure to the benefit of LICENSEE and not LICENSOR.
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4. LICENSEE agrees to pay LICENSOR an advance royalty payment of Two
Thousand Five Hundred Dollars ($2,500.00), within ten (10) days of the execution
of this agreement. This advance royalty payment shall be non-refundable, and
shall be credited and set off against the royalties earned hereunder.
5. LICENSEE agrees to pay LICENSOR a royalty of five percent (5%) of the
net wholesale selling price of all units of any versions of the Product shipped
during each calendar quarter. LICENSEE shall make royalty payments on or before
the 25th day of the month following said quarter on all net shipments made
during the quarter. Such royalty payments shall be accompanied by a statement
setting forth the gross sales, returns, and credits (including cash and trade
discounts, trade allowances and customer allowances). Net wholesale selling
price is defined as LICENSEE's billed price, less cash and trade discounts and
trade allowances and bona fide returns and customer allowances, not to exceed,
in the aggregate, Eight Percent (8%). No cost incurred in the manufacture, sale,
distribution or exploitation of the Product, its improvements, or accessories,
shall be deducted from any royalties payable to LICENSOR.
6. In the case of sales by Letter of Credit (L.C.) LICENSOR shall receive
a royalty of six Percent (6%) of the L..C. selling price for sales of all items
Freight on Board (F.O.B.) from their country of origin. There shall be no
discounts from this price.
7. In the case of premium or advertising specialty sales of the Product,
LICENSEE agrees to pay LICENSOR a royalty of three percent (3%) of the net
wholesale selling price of all units of the Product shipped as a premium or
advertising specialty. The premium or advertising specialty markets are the
markets in which Products may be sold and used for the purpose of increasing the
sale of another item or promoting or publicizing any product or service.
8. As soon as possible LICENSEE shall apply to register claims to
copyright the various versions of the Product. All applications for registration
of claims to copyright shall identify LICENSOR or its designee as the copyright
claimant. At LICENSEE's request, LICENSOR shall execute assignments in favor of
LICENSEE of any and all copyrights relating to the Product without further
consideration. LICENSEE warrants that it will affix copyright notices on the
Product as will protect the Product and LICENSOR acknowledges and accepts that
said copyright notice may be in the name of LICENSEE, but only as LICENSOR's
licensee and not as a copyright owner.
9. Outside of North America, LICENSEE shall have the right to sublicense
the Product for production and sale upon any terms and conditions which it
wishes to grant and establish; provided, however that in the event that LICENSES
does so grant sublicenses on the Product, then and in the event, LICENSEE shall
pay to LICENSOR Fifty Percent (50%) of all monies received by it from such
sublicense or grant or Two and one half Percent (2.5%) of the sublicense's net
sales, whichever is greater. Such royalty shall be due to LICENSOR within
twenty-five (25) days after the close of the calendar quarter in which the
royalty payments are received by LICENSEE.
10. LICENSOR shall have the right to review any sublicensing agreement
with respect to the Product.
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11. If at the time of the termination of this Agreement there is
outstanding any unexpired sublicense granted hereunder by LICENSEE, LICENSOR
agrees upon request to continue such sublicense throughout the unexpired portion
of its term.
12. LICENSOR shall have the right through its representative, to examine
the books of accounts and sales of LICENSEE at reasonable times, during normal
business hours, to determine the correctness of royalty payments.
13. LICENSOR agrees to indemnify and hold harmless LICENSEE, its officers,
agents, and employees from and against any lawsuit, claim, or demand (and
reasonable attorney's fees related thereto) arising out of the authorized use of
the Product under this Agreement, provided that LICENSOR is given prompt notice
of such claim, and provided that such claims arise out of a breach of one or
more of the warranties made by LICENSOR in Paragraph 1 of this Agreement.
LICENSEE shall be entitled to place all royalties accrued into an escrow fund
from the date of such claim until such time that the claim is settled or
otherwise disposed of. If the judgement or settlement of such claim should be
against LICENSOR, LICENSOR will be liable for all amounts up to the amount of
royalties accrued in escrow. Any excess in such escrow account shall be paid to
LICENSOR. However, LICENSOR shall have no further liability under such claim. If
LICENSOR and LICENSEE are represented by separate counsel, then each shall bear
the cost of its own attorney's fees and costs. In the case of such a demand,
claim or lawsuit, LICENSEE shall have the final decision concerning disposal of
inventory and works in progress.
14. LICENSEE agrees to indemnify and hold harmless LICENSOR, its officers,
agents, and employees from and against any lawsuit, claim, or demand (and
reasonable attorney's fees related thereto) arising out of the breach of any
warranty of LICENSEE herein or the failure of LICENSEE fully to perform any of
its obligations herein set forth, or arising out of any defects or alleged
defects in the Product. This indemnity shall survive termination of this
agreement.
15. LICENSEE shall maintain at its own expense in full force and effect at
all times during which the Product is being sold by LICENSEE at least a One
Million Dollar products liability insurance policy with respect to the Product.
LICENSOR shall be named as an additional insured with LICENSEE on such
policy and such policy shall provide for at least ten days' prior written notice
to LICENSOR of the cancellation or any substantial modification of the policy.
This insurance may be obtained for LICENSOR by LICENSEE in conjunction with a
policy which covers products other than the Product. LICENSEE shall, from time
to time upon reasonable request by LICENSOR, promptly furnish or cause to be
furnished to LICENSOR evidence in form and substance satisfactory to LICENSOR of
the maintenance of the insurance required above, including, but not limited to,
copies of policies, certificates of insurance (with applicable riders and
endorsements) and proof of premium payments.
16. In the case of any infringement or unfair use of the Product by a
third party, the parties shall cooperate with each other in preventing or
stopping such infringement or unfair use.
17. If either party breaches any of its obligations under this Agreement,
the other party shall have the right, without prejudice to any other rights
which it may have, to terminate
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this Agreement by giving thirty (30) days' notice to the breaching party, and
this notice will automatically become effective unless the breaching party
completely remedies the breach within the thirty-day period.
18. This Agreement shall continue in effect until it is terminated
pursuant to paragraph 17, or the end of one (1) year beyond the date of the last
sale (as per Licensee's invoice date) made by LICENSEE of any one of the
versions of the Product under this contract.
19. This Agreement does not constitute and shall not be construed as
constituting a partnership or joint venture between the parties.
20. The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver or deprive or
limit that party of the right thereafter to insist upon strict adherence to that
term in the particular instance or that term or any other term of this Agreement
in any instance.
21. No change, modification, or waiver of any of the provisions hereof
shall be valid unless made in writing and signed by both parties.
22. It is understood and agreed that, in the event of an act of
government, war conditions, fire, flood, or other natural disaster, or labor or
manufacturing problems which prevent the performance by LICENSEE of the
provisions of this Agreement, such nonperformance by LICENSEE will not be
considered a breach of this Agreement, and such nonperformance will be excused
while, but no longer than, the conditions described herein prevail.
23. If any provision of this Agreement is for any reason declared to be
invalid, the validity of the remaining provisions shall not be affected thereby.
24. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns.
25. This Agreement shall be interpreted in accordance with and governed by
the laws of the State of Michigan.
26. All notices, consents and the like required to be given hereunder
shall be invalid unless in writing and sent by registered or certified mail to
the addresses of the parties set forth below, or the such changed addresses as
they shall in writing request:
Random Games & Toys
000 Xxxx Xxxxx
Xxx Xxxxx, XX 00000
Third Quarter Corporation (Fundex Games)
0000 X. 00xx Xxxxxx
Xxxxxxxxxxxx, XX 00000
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27. Any controversy or claim arising out of or relating to this Agreement
or the breach thereof, shall be settled by arbitration in accordance with the
Commercial Arbitration Rules, then obtaining, of the American Arbitration
Association before a single arbitrator and judgment upon the award rendered may
be entered in any court having jurisdiction thereof. Such arbitration shall be a
condition precedent to any suit or action on this contract. Arbitration under
this agreement shall he held in the state of Michigan.
IN WITNESS WHEREOF, the parties hereby have executed this Agreement.
LICENSEE: LICENSOR:
Third Quarter Corporation Random Games & Toys
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxx
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Title: President Title: Vice President
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Fed. ID # 00-0000000
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By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Soc. Sec. ###-##-####
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By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Soc. Sec. ###-##-####
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