EXHIBIT 10.43
RETAIL LICENSE
WARNER BROS. CONSUMER PRODUCTS
#12420-MATR
LICENSE AGREEMENT made December 18, 2000, by and between Warner Bros.
Consumer Products, a division of Time Warner Entertainment Company, L.P., whose
address is 0000 Xxxxxx Xxxx., Xxxxxxx, XX 00000 (hereinafter referred to as
"LICENSOR") and Interplay Entertainment Corp., a Delaware corporation, whose
address is 00000 Xxx Xxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxx Xxxxx
(hereinafter referred to as "LICENSEE").
RECITALS
A. Licensor is in the business of licensing certain entertainment and
other properties. Licensee is in the business of developing, designing,
manufacturing and selling interactive game products. Licensee presently has a
written agreement (the "Shiny Agreement") with Shiny Entertainment ("Shiny")
for, among other things, the exclusive right to the game development and design
services of Xxxxx Xxxxx ("Xxxxx"). Licensor desires to use the services of
Shiny and Perry in the development of the prototypes for the Licensed Products
(defined below).
WITNESSETH:
The parties hereto hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement the following terms shall have the following
respective meanings:
(a) "Advertising and Promotion Commitment": Licensee shall spend
certain minimum amounts on advertising, marketing, promotion and brand building
of the Licensed Products (as defined below). Licensee shall submit to Licensor,
as part of Licensee's initial Business Plan (as defined below), a proposed
Advertising and Promotion Commitment on a country-by-country and year-by-year
basis. Such Advertising and Promotion Commitment shall include, without
limitation:
(i) advertising and promotional spending for the Licensed
Products for the Term of this Agreement, in an aggregate amount of not less than
[*] of gross sales of the Licensed Products, provided however, that such
advertising and promotional spend shall in no event be less than [*] and shall
not be required to exceed [*].
(ii) approximately [*] of the overall advertising and promotional
spend set forth in subparagraph (i) above shall be spent in connection with the
initial launch of the first Licensed Products (i.e., during the period
commencing nine (9) months before and ending nine (9) months after such launch);
provided, however, that the amount spent on such initial launch shall be not
less than [*] and shall not be required to be more than [*];
(iii) if Licensee conducts any online advertising or promotion, a
minimum of [*] of Licensee's online advertising and promotional spend shall be
used to purchase advertising with Warner Bros. Online in connection with
advertising on the xx.xxx/xxxxxx.xxx website.
For purposes of this paragraph, the Advertising and Promotion Commitment
shall include amounts spent on the following: television, radio, print, direct
mail and online media buys; in-store point of purchase materials; and such other
consumer oriented advertising and promotion for the Licensed Products as may be
approved by Licensor after review of Licensee's marketing plan. The Advertising
and Promotion Commitment specifically excludes commercial production and other
advertising production costs, agency fees or commissions, and, except as
otherwise specifically approved by Licensor in advance in writing, trade
oriented marketing costs.
Licensee shall, no later than [*] days following the end of each calendar
quarter during the Term, submit a statement evidencing fulfillment of the
Advertising and Promotion Commitment for the immediately preceding calendar
quarter.
(b) "Business Plan": Licensee shall, no later than [*], submit to
Licensor an outline of Licensee's business plan (the "Outline") for Licensee's
activities during the Term in connection with this Agreement. On or before
execution of this Agreement, Licensee shall submit to
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* Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Licensor a more detailed business plan based on the Outline (the "Business
Plan"). Both the Outline and the Business Plan are subject to the approval of
Licensor in its sole discretion. The Business Plan shall, without limitation,
address the following areas:
(i) The channels of distribution for each country within the
Territory (as defined below);
(ii) Projected sales of the Licensed Products (in units), by
Platform, categorized by Licensed Product, by Platform, by channel of
distribution, and by country within the Territory;
(iii) Projected sales price of each Licensed Product for each
country within the Territory (For countries outside of the United States, such
sales price shall be provided in both US Dollars and in local currency);
(iv) Projected revenue forecast in US Dollars of each Licensed
Product and each country within the Territory (For countries outside of the
United States, such forecast shall be provided in both US Dollars and in local
currency);
(v) Projected market share of the Licensed Products for each
country within the Territory;
(vi) Overall marketing strategy and specific marketing strategies
for each country within the Territory;
(vii) Overall promotional plans and specific promotional plans for
each country within the Territory;
(viii) Plans for participation in trade shows for each country
within the Territory;
(ix) Advertising and promotional budgets for each Licensed
Product for each country within the Territory;
(x) Planned product development schedule, ship dates and
Marketing Dates, by Platform, for each Licensed Product for each country within
the Territory;
(xi) Plans for modifying the Licensed Products for [*], as well
as Licensee's prospective partners with expertise in the [*] interactive game
industry and Licensee's distribution, marketing and sales plans for [*].
On or before [*] of each calendar year during the Term, Licensee shall
submit for Licensor's prior written approval, an updated version of the Business
Plan addressing the above items for the remainder of the Term. Any significant
deviation during the Term from the most recently approved Business Plan must be
submitted to Licensor for prior written approval.
(c) "Business Reviews": Licensee shall meet with Licensor on at least
a quarterly basis to discuss the implementation of the Business Plan and results
of the business relating to the Licensed Products. At such quarterly Business
Reviews (and at such other times during the Term as Licensor shall reasonably
request), Licensee shall provide to Licensor:
(i) copies of all market research results relating to the
Licensed Products or advertising therefor, including, without limitation,
viability tests, commercial tests and line tests. Licensee shall also provide to
Licensor access to Licensee's head of market research for purposes of
interpretation of such market research results; and
(ii) information, in such form as Licensor shall reasonably
request, regarding inventory movement, inventory on-hand, and sales results for
each Licensed Product on a country-by-country [*] basis [*]; and
(iii) market share data, in such form as Licensor shall reasonably
request, including, without limitation, applicable Nielsen data.
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* Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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(d) "Editorial and Executive Production Fees": Licensee shall pay to
Licensor the following Editorial and Executive Production Fees for each title
developed by Licensee: [*]. The Editorial and Executive Production Fees shall be
charged for each title for the Term of this Agreement. Licensee shall pay the
Editorial and Executive Production Fees within [*] from the date of this
Agreement. [*]. Payment shall be due [*] days from the date of the invoice.
Provided that Licensee is not otherwise in default hereunder, any unused balance
of fees after completion of a particular title will be refunded to Licensee
within thirty (30) days after Gold Master approval.
(e) "Licensed Property": The elements, including, but not limited to,
trademarks, copyrights, logos, character names, artwork, environmental settings,
costumes and plot elements (the "Movie Elements"), depicted, included in, or
associated with:
(i) the released version of the theatrical motion picture whose
working title is "THE MATRIX 2" ("Movie II"); and
(ii) the released version of the theatrical motion picture whose
working title is "THE MATRIX 3" ("Movie III").
but only to the extent merchandising rights have been granted to Licensor in and
to such Movie Elements. References herein to a "Motion Picture" or the "Motion
Pictures" shall mean either or both of Movie II and Movie III. Excluded
herefrom is the right to reproduce the names, likenesses, autographs,
signatures, visual representations, audio recordings or voices (the "Name and
Likeness") of the actors and actresses in the Motion Pictures (the
"Performer(s)") except to the extent specifically permitted otherwise in writing
by Licensor and then only to the extent the Performer(s) have granted
merchandising rights to Licensor. Notwithstanding the foregoing, all uses of
any of the Movie Elements and the Name and Likeness of the Performer(s) afforded
hereunder must be specifically approved in writing by Licensor, pursuant to
Paragraph 10 herein.
[*]
(f) "Licensed Product(s)" (each category below may be referred to from
time to time herein as a "Platform"):
(i) Sony Playstation II
(ii) Sega Dreamcast
(iii) Nintendo Color Gameboy
(iv) Nintendo Gameboy Advance
(v) Nintendo Gamecube
(vi) Microsoft's upcoming X-Box
(vii) CD-ROM and DVD-ROM specifically targeted and marketed solely
for use as video games (i.e. in no event shall such product
be targeted, marketed or sold as a "home entertainment"
product or otherwise in a manner that in Licensor's
reasonable judgment may be confused with product distributed
and sold by Warner Home Video).
The following products are specifically excluded from this Agreement:
(A) [*];
(B) [*];
(C) [*];
(D) [*];
(E) [*];
(F) [*];
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* Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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(G) [*];
(H) [*]; and
(I) [*].
(g) "Marketing Date":
(i) For the first title based on Movie II, for Licensed Product
(i)(Sony Playstation II), the Marketing Date shall be:
(A) For the United States, Puerto Rico, U.S. Virgin Islands
and Canada ("North America"), [*];
(B) For countries or territories other than North America,
[*].
(ii) For Platforms other than Sony Playstation II, the Marketing
Date for Licensed Products based on either Movie II or Movie III shall be no
later than the target release date for such Platform as set forth in Licensee's
initial Business Plan, as approved by Licensor. In the event that Licensee fails
to provide such dates, [*], then Licensor shall set the Marketing Dates by
written notice to Licensee.
(iii) The Licensed Products shall not be released prior to [*]
unless otherwise agreed by Licensor in writing.
(h) "Territory":
(i) Worldwide excluding [*].
(ii) Prior to the execution of this Agreement, Licensee has
submitted to Licensor a business plan for [*] which includes, in addition to the
information requested for the general Business Plan, the names of Licensee's
prospective partners with expertise in the [*] interactive game industry, who
will assist Licensee in modifying the Licensed Products for the [*] market and
in distributing the Licensed Products in [*]. Licensor will add [*] to the
Territory if, on or before [*], Licensee shall have engaged its partner for [*]
from the prospective partners identified in Licensee's business plan for [*]. If
Licensee does not timely satisfy the foregoing condition, Licensor shall be free
to solicit other licensees for the Licensed Property for [*].
(i) "WBSS Sales": Licensee shall sell the Licensed Products to Warner
Bros. Studio Stores ("WBSS") in accordance with the following terms:
(i) Licensee shall at all times give highest priority to WBSS in
the filling and shipment of orders for Licensed Products. In the event of a
shortage of inventory of Licensed Products, Licensee shall supply WBSS with all
quantities ordered by WBSS before filling orders for retailers in any other
Channel of Distribution.
(ii) Licensee shall offer the Licensed Products for sale to WBSS
at a price equal to [*] and subject to any applicable legal restrictions.
(iii) With respect to sales of Licensed Products made to WBSS
locations within the United States, Licensee shall [*]. With respect to sales of
Licensed Products made to WBSS locations within the United States, Licensee [*]
shall report such sales separately in the periodic statements required in
Paragraph 6 below. [*].
(iv) With respect to sales of Licensed Products made to WBSS
locations outside the United States, Licensee shall [*] report such sales
separately in the periodic statements required in Paragraph 6 below. Royalties
with respect to sales of Licensed Products made to WBSS locations outside the
United States [*].
(j) Product Design and Development; Conversions:
(i) Shiny and Perry shall be primarily responsible for the design
and development of the initial Platform for the Licensed Products so long as
their services are available to Licensee, and Licensee shall allow them to
devote the amount of time reasonably necessary to
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* Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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develop the Licensed Products in compliance with Licensee's obligations
hereunder. Licensee shall reasonably consult with Licensor if Licensee desires
to reassign Shiny and/or Perry prior to the completion of design and development
of the initial Platform for the Licensed Products; provided, however, that
Licensee shall have final approval over any such reassignment of Shiny and/or
Perry. In the event that Shiny or Perry are terminated by Licensee, or if there
exists an incurable material default by Licensee under its agreement with Perry
for his services, as determined by a court of competent jurisdiction, such that
Perry or Shiny will no longer provide services to or on behalf of Licensee
(through no fault of Licensor or its affiliates), Licensor shall be permitted to
take any action that it deems to be necessary or advisable in order to have
Shiny and/or Perry complete design and development of the Licensed Products,
including without limitation entering into separate agreements with Shiny and/or
Perry or any other entity that will provide the services of Perry, provided that
Licensee's costs in connection with the Licensed Products shall be reimbursed in
full and Licensor shall then pay to Licensee a developer's royalty upon all
sales of the Licensed Products which Shiny and/or Perry helped to design, such
royalty to be negotiated by the parties at such time, consistent with then
prevailing industry standards.
(ii) The conversion of a particular title from Platform to
Platform may be handled by Licensee or by a conversion house chosen by Licensee,
subject to the approval of Licensor. Shiny and Perry will be involved in such
conversions to the extent necessary to maintain the creative integrity of
subsequent Platforms in relation to the initial Platform (Sony Playstation II)
unless at least [*] of the assets from such initial Platform are used in the new
Platform, in which case Shiny and Perry need not be involved in the conversion.
(k) Milestones: Licensee shall deliver to Licensor the items set
forth on Exhibit 1, on or before the dates specified for such items.
(l) Related Agreements: On or before [*], Licensee shall deliver the
following related agreements executed by Licensee, in a form acceptable to
Licensor. [*]:
(i) [*];
(ii) [*];
(iii) [*]; and
(iv) [*].
A default under this Agreement shall constitute a default under each of the
above listed agreements, and a default under any of the above listed agreements
shall constitute a default under this Agreement.
2. GRANT OF LICENSE.
(a) Upon the terms and conditions hereinafter set forth, Licensor
hereby grants to Licensee and Licensee hereby accepts for the Term of this
Agreement, as hereinafter defined, a license to utilize the Licensed Property
[*] solely upon or in connection with the manufacture, distribution and sale of
the Licensed Products solely for retail sale throughout the Territory, subject
to the provisions of Paragraph 2(b), below.
(b) [*]:
(i) [*].
(ii) [*];
(iii) [*]; and
(iv) [*].
[*]
(c) No license is granted hereunder for the manufacture, distribution
or sale of the Licensed Product(s) for publicity purposes, for sale or gift in
combination with other products or services, as giveaways, as premiums used for
the purpose of publicizing, promoting or increasing
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* Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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sales of any other product(s) or service(s), or in connection with any similar
method of merchandising. Notwithstanding anything to the contrary contained
herein, Licensee may (i) distribute, for promotional purposes only, not more
than [*] units of each Licensed Product in the United States, and a total of not
more than [*] units of each Licensed Product in territories other than the
United States, as well as [*] "time limited" or reduced feature "demo" versions,
subject to Licensor's approval rights set forth in Paragraph 10; and (ii)
subject to the prior written approval of Licensor on a case-by-case basis, and
timely payment of all amounts that may then be due hereunder, allow the Licensed
Products to be bundled with other products in connection with Licensee's "OEM"
(Original Equipment Manufacturer) business where, by way of example only,
multiple software products may be included with the purchase of a game console
or pc hardware.
(d) Licensee specifically understands and agrees that no rights are
granted herein with respect to the Warner Bros. "shield" logo or trademark (the
"Warner Bros. Shield"), or any other trademark(s), logo(s) or copyrights owned
by Licensor other than those specifically set forth above in the Licensed
Property, it being understood that all rights in and to said properties are
reserved exclusively to Licensor for use and/or licensing as it deems
appropriate to third party(s) of its choice.
(e) Notwithstanding anything to the contrary contained herein,
including the general prohibition on use of the Warner Bros. Shield, the
Licensed Property shall also include the Warner Bros. Interactive Entertainment
Name/Logo (the "Name/Logo") as shall be provided by Licensor and as such may be
changed by Licensor from time to time. Licensee shall utilize the Name/Logo on
such Licensed Products and in such manner as Licensor shall designate. The
parties agree that, notwithstanding anything to the contrary contained elsewhere
in this Agreement, Licensee's use of the Name/Logo shall be on a non-exclusive
basis.
(f) Without limiting any other approval rights of Licensor as
contained herein, no television commercials may be utilized under this Agreement
without the specific prior written approval of Licensor.
(g) Subject to the terms and conditions hereof, Licensee may
advertise, promote and sell the Licensed Product(s) online over the Internet, in
compliance with Licensor's online policies and guidelines, and provided that
Licensee's online site contains a hyperlink to Licensor's website for the Motion
Picture.
3. TERM.
The term ("Term") of this Agreement shall commence on May 1, 2000 and shall
expire on [*]. Notwithstanding anything to the contrary set forth above, as to
any Licensed Products developed hereunder subsequent to, and other than, any
Platform for the first title (i.e. other than for any Platform of "Game 1"), the
Term shall be extended to the date which is three (3) years after the first to
occur of [*].
4. CONSIDERATION.
In full consideration for the rights, licenses and privileges herein
granted to Licensee, Licensee shall pay to Licensor the following:
(a) Guaranteed Consideration: For the rights herein granted the sum of
[*] payable as follows:
DATE AMOUNT
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Upon execution of this Agreement [*]
On or before [*] [*]
On or before [*] [*]
On or before [*] [*]
All Guaranteed Consideration paid by Licensee pursuant to this subparagraph
4(a) shall be applied against such royalties as are or have become due Licensor
under subparagraph 4(d). [*].
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*Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
6
(b) Additional Consideration:
(i) It is contemplated that a minimum of two Licensed Product
titles will be developed and sold pursuant to this Agreement, one title for
Movie II and one title for Movie III. It is critical to Licensor that the first
Platform (i.e., Licensed Product (i) (Sony Playstation II)) based on Movie II be
released for general distribution and sale to the public [*]. The development of
such Licensed Products, and the distribution and sale of such Licensed Products
[*], is integral to the development, filming, production, distribution and
marketing of Movie II. If the Sony Playstation II Platform based on Movie II is
not released for general distribution and sale to the public [*], then Licensee
shall pay to Licensor the additional consideration provided for below
(collectively, the "Additional Consideration"):
(A) [*], which shall be immediately due and payable by
Licensee to Licensor; or
(B) alternatively, in lieu of the payment provided for in
subparagraph (A) above, Licensee in its sole discretion, upon written notice to
Licensor delivered on or before the Marketing Date for such Sony Playstation II
Platform, may elect instead to increase the royalty rates payable under
Paragraph 4(d) of this Agreement by [*]. Such additional [*] royalty shall be
payable on all Net Sales of all Licensed Products (including OEM sales) until
the cumulative amount of such additional [*] royalty equals [*] or until the end
of the Term (including any extension thereof, if applicable), whichever is first
to occur.
(ii) Notwithstanding anything to the contrary set forth in this
Agreement, the Additional Consideration shall not be offset by, or applied
against, Royalties, Guaranteed Consideration or any other amounts that may
otherwise be due or payable hereunder.
(iii) Licensee shall be given a day for day extension for delays
that are caused by Licensor or others engaged by Licensor to perform services in
connection with the Licensed Products (a "Licensor's Delay"), provided that
Licensee gives Licensor written notice as soon as reasonably possible, and in
any event within seven (7) days after the occurrence of such alleged Licensor's
Delay, indicating that development of the Licensed Products is being delayed,
the party that Licensee believes is responsible for such delay, and the act or
omission that is causing such delay. The Additional Consideration shall become
due and payable only after Licensee has been credited for any such Licensor's
Delays with respect to the applicable title. Any such extension of the Marketing
Date as the result of such Licensor's Delay must be confirmed in writing by
Licensor to be effective.
(iv) In addition, Licensor and Licensee will implement the
following procedure in order to, if possible, ensure that the parties achieve
the goal of releasing the Sony Playstation II Platform [*]. Licensor and
Licensee understand that changes are difficult to incorporate and may
necessitate changes that can impact the Licensed Products on many levels.
Consequently, substantially all fundamental game play changes must be provided
to Licensee on or before [*] or the date which is [*], whichever is later.
Within forty-five (45) days after such date, Licensor and Licensee, including
the development teams working on the Licensed Products and Licensor's licensing
team, will meet to determine whether there are any fundamental game play changes
to be undertaken, which ones, and whether any or all of those fundamental game
play changes pose a threat to the goal of releasing the Sony Playstation II
Platform based on Movie II, [*]. Licensee's development team will advise
Licensor which changes cannot be made, or which features cannot be completed, in
time to release the Sony Playstation II Platform [*]. If Licensor nonetheless
wants such changes or features incorporated, then a new Marketing Date will be
established by mutual agreement of the parties at such meeting and the
Additional Consideration provided for hereunder shall not be due and payable
unless Licensee fails to meet such new Marketing Date requirement.
(v) If Licensee elects to make the lump sum payment of
Additional Consideration, and Licensor has timely received such payment but
subsequently decides to terminate this Agreement prior to the release of the
Sony Playstation II Platform based on Movie II due to the delay in releasing
such Licensed Products, then if such termination by Licensor is within six (6)
months after the Marketing Date, Licensor will refund the Additional
Consideration to Licensee within ten (10) business days after the date of
Licensor's notice of termination. Nothing contained in this Paragraph shall
limit or restrict any other rights or remedies of Licensor, including any other
termination rights, pursuant to this Agreement.
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*Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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(c) [*].
(d) Royalty Payments: Licensee shall pay to Licensor royalties on all
Net Sales (as such term "Net Sales" is defined herein) of the Licensed Products,
as follows:
(i) [*] of all Net Sales, from [*] units of each original
title, including all platforms and formats except for OEM sales of Licensed
Products; and thereafter,
(ii) [*] of all Net Sales, from [*] units of the same original
title, including all platforms and formats except for OEM sales of Licensed
Products; and thereafter,
(iii) [*] of all Net Sales, from [*], of the same original title,
including all platforms and formats except for OEM sales of Licensed Products.
(iv) Notwithstanding anything to the contrary set forth above,
royalties on OEM sales of Licensed Products shall be [*] of Net Sales of such
Licensed Products throughout the Term of this Agreement, without any escalation,
and quantities of OEM sales shall not be counted for purposes of determining
increases in the royalty rates, above.
The term "Net Sales" shall mean all monies billed or billable by Licensee,
from the exercise of its rights to distribute and sell Licensed Product(s) in
the Territory before any allowances or discounts have been deducted from the
normal selling price, inclusive of interest, monetary correction, and any other
payment charges whatsoever, less the following items only:
(A) any sales, excise or value added taxes, which are
separately stated, and which are required to be collected from customers as part
of Net Sales, and which are payable to taxing authorities;
(B) quantity discounts;
(C) actual returns (i.e., that are not resold) not
exceeding [*] of total units sold; and
(D) [*]
Except to the extent provided in the immediately preceding sentence, no
deduction shall be made for the cost of goods sold or for any bad debts, or any
reserves therefor, importing costs, selling costs, advertising costs, real
estate taxes, business license taxes, net income taxes, franchise taxes,
withholding taxes or any other taxes not billed to customers of Licensee as part
of Net Sales.
Net Sales shall not include any sales by Licensee or its affiliated
companies, to Licensee or its affiliated companies, the primary purpose of which
is the transfer of Licensed Product for eventual resale; provided, however, that
Royalties as a result of such sales shall be based upon and paid when the
Licensed Product is ultimately sold to the distributor (including any
distributor in which Licensee has less than a controlling interest so long as
the transaction is an arms-length transaction at prevailing market rates),
retailer, consumer or other unaffiliated third party.
Licensee will pay all taxes, customs duties, assessments, and excise
charges or fees, except as provided in subparagraph 4(d)(A), and other charges
levied upon the importation of or assessed against the Licensed Product under
this Agreement, as well as all Licensee's costs of doing business and Licensor
shall have no liability therefor.
Royalties shall be payable concurrently with the periodic statements
required in Paragraph 6 hereof except to the extent offset by Guaranteed
Consideration theretofore remitted. It is a material term and condition of this
Agreement that Licensee report Net Sales and report and pay royalties on a
country-by-country or region-by-region basis, as provided in Paragraph 6, below.
In the event Licensee fails to do so, Licensor shall have the right to terminate
this Agreement, in accordance with the provisions of Paragraph 15 herein.
[*]
(e) Separately from and in addition to the Guaranteed Consideration or
Royalties or any other amounts payable hereunder, Licensor shall pass through to
Licensee, and Licensee shall
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*Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
8
either reimburse Licensor for amounts paid by Licensor, or shall pay directly to
the actors and actresses, as directed by Licensor, all amounts payable to such
actors and actresses in connection with the Licensed Products, as royalties or
otherwise ("Talent Participation Fees"), not to exceed, in the aggregate, [*].
Licensee shall have the right to audit Licensor once in any twelve (12) month
period, during normal business hours, upon not less than thirty (30) days prior
written notice, for a period of two (2) years from the date of any invoice to
Licensee for such amounts. For purposes of clarification, separate from the
foregoing, Licensee shall be solely responsible for clearing all third party
rights in connection with the Licensed Products, and for any related fees and
costs, including any re-use fees or other payments to third parties that may be
required under applicable law or guild or collective bargaining agreements. Upon
written request by Licensee, Licensor will make reasonable efforts to assist
Licensee in Licensee's efforts to clear such third party rights.
5. RESERVATION OF RIGHTS; PREMIUMS.
(a) Licensor reserves all rights not expressly conveyed to Licensee
hereunder. [*].
(b) Notwithstanding anything to the contrary stated herein, Licensor,
for itself and its affiliates, specifically reserves the right, without
limitation throughout the world, to use, or license any third party(s) of its or
their choice to use the Licensed Property for the marketing, promotion,
manufacture, distribution and sale of products similar or identical to those
licensed herein in Paragraph 1(f) above for sale through any catalogue(s)
produced or distributed by or on behalf of Licensor or its affiliated companies,
or for sale or distribution in any theaters or arenas, or for sale or
distribution in connection with any home video product, including DVD or other
formats, or for sale or distribution in any retail stores operated by or on
behalf of Licensor, its affiliated companies, franchisees, or licensees, or for
sale or distribution in any theme/amusement parks operated by or on behalf of
Licensor or its licensees, Six Flags, Premier Parks, Movie World, or their
affiliated companies. In addition, Licensor reserves the right to allow Six
Flags and Movie World to manufacture (or have manufactured by a third party)
products similar or identical to those licensed herein for distribution or sale
in theme and/or amusement parks owned or operated by Six Flags and/or Movie
World. [*].
(c) Subject to Paragraph 2(c) hereof, Licensee agrees that it will not
use, or knowingly permit the use of, and will exercise due care that its
customers likewise will refrain from the use of, the Licensed Products as a
premium, except with the prior written consent of Licensor. Subject to
Licensor's prior written approval as aforesaid, Licensee shall pay to Licensor a
sum equal to [*] of all premium sales. For purposes of this paragraph, the term
"premium" shall be defined as including, but not necessarily limited to,
combination sales, free or self-liquidating items offered to the public in
conjunction with the sale or promotion of a product or service, including
traffic building or continuity visits by the consumer/customer, or any similar
scheme or device, the prime intent of which is to use the Licensed Products in
such a way as to promote, publicize and or sell the products, services or
business image of the user of such item. Notwithstanding anything to the
contrary set forth herein, this paragraph shall not apply to OEM sales of
Licensed Products, which are addressed separately elsewhere in this Agreement.
6. PERIODIC STATEMENTS.
(a) Within [*] days after the end of the first calendar quarter after
the date of execution of the License Agreement and promptly on the [*] day after
the end of each calendar quarter thereafter, Licensee shall furnish to Licensor
complete and accurate statements certified to be accurate by Licensee, or if a
corporation, by an officer of Licensee, showing with respect to all Licensed
Products distributed and sold by Licensee during the preceding calendar quarter,
on a Platform by Platform basis, with OEM sales and WBSS sales separately
reported, the (i) number of units; (ii) country or region (as specified below)
in which manufactured, sold and/or to which shipped; (iii) description (as such
term is defined below) of the Licensed Products; (iv) gross sales price; (v)
itemized deductions from gross sales price, and (vi) Net Sales price, together
with any returns made during the preceding calendar quarter. Such statements
shall be in such formats as Licensor shall require (which formats may be amended
by Licensor from time to time), and shall be furnished to Licensor whether or
not any of the Licensed Products have been sold during the calendar quarters to
which such statements refer. In the event Licensee has royalties earned in
currencies other than in U.S. Dollars, then Licensee shall convert said amounts
into U.S. Dollars based upon the exchange rate published by the Wall Street
Journal as of the fifteenth day of the applicable month or if such day shall
fall on a non-business day then as of the first business day following said
fifteenth
----------
*Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
9
day. Receipt or acceptance by Licensor of any of the statements furnished
pursuant to this Agreement or of any sums paid hereunder shall not preclude
Licensor from questioning the correctness thereof at any time, and in the event
that any inconsistencies or mistakes are discovered in such statements or
payments, they shall immediately be rectified and the appropriate payments made
by Licensee. Upon demand of Licensor, Licensee shall at its own expense, but not
more than once in any twelve (12) month period, furnish to Licensor a detailed
statement certified by an officer of Licensee showing, on a Platform by Platform
basis, with OEM sales and WBSS sales separately reported, the (i) number of
units; (ii) country or region (as specified below) in which manufactured, sold
and/or to which shipped; (iii) description of the Licensed Products; (iv) gross
sales price; (v) itemized deductions from gross sales price and (vi) Net Sales
price of the Licensed Products covered by this Agreement distributed and/or sold
by Licensee up to and including the date upon which Licensor has made such
demand. For purposes of this subparagraph, the term "Description" shall mean a
detailed description of the Licensed Products including the nature of each of
the Licensed Products, any and all names and likenesses, whether live actors or
animated characters, from the Licensed Property utilized on the Licensed
Products and/or any related packaging and/or wrapping material, and any other
components of the Licensed Property utilized on the Licensed Products and/or any
related packaging and/or wrapping material. In the event Licensor is responsible
for the payment of any additional third party participations based on Licensee
not reporting by character name and likeness as provided above, Licensee shall
reimburse Licensor for the full amount of all such third party claims, including
without limitation, the participation itself, interest, audit and attorneys'
fees. Licensee understands and agrees that it is a material term and condition
of this Agreement that Licensee include the Description on all statements. In
the event Licensee fails to do so, Licensor shall have the right to terminate
this Agreement, in accordance with the provisions of Paragraph 15 herein.
Notwithstanding anything to the contrary set forth above, Licensee shall report
and pay royalties on a country-by-country basis for the following countries:
[*]; and otherwise on a region-by-region basis as follows: [*].
(b) The statements and payments required hereunder shall each
reference the contract number(s) and shall be delivered as follows:
If by United States Postal Service, then to:
WARNER BROS. CONSUMER PRODUCTS
00000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
If by Federal Express or other overnight mail or courier service, then to:
BANK ONE
Attention WBCP lockbox #21477
525 West Monroe
0xx Xxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Telephone Number 000-000-0000
(c) Any payments which are made to Licensor hereunder after the due
date required therefor, shall bear interest at [*] (or the maximum rate
permissible by law, if less) from the date such payments are due to the date of
payment. Licensor's right hereunder to interest on late payments shall not
preclude Licensor from exercising any of its other rights or remedies pursuant
to this Agreement or otherwise with regard to Licensee's failure to make timely
remittances.
(d) [*]
7. BOOKS AND RECORDS.
(a) Licensee shall keep, maintain and preserve (in Licensee's
principal place of business, or for any records more than two years old, in a
reasonably secure location near such principal place of business, available on
not less than forty-eight (48) hours notice) for a period of at least two years
following the termination or expiration of the Term of this Agreement or any
renewals hereof (if applicable), complete and accurate records of accounts
including, without limitation, purchase orders, inventory records, invoices,
correspondence, banking and financial and other records pertaining to the
various items required to be submitted by Licensee as well as to ensure
Licensee's compliance with local laws as required pursuant to Paragraph 13(f)
hereof. Such
----------
*Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
10
records and accounts shall be available for inspection and audit at any time or
times during or for a period of up to [*] years after the Term of this Agreement
or any renewal(s) hereof (if applicable) during reasonable business hours and
upon reasonable notice by Licensor or its nominees. Licensee agrees not to cause
or permit any interference with Licensor or nominees of Licensor in the
performance of their duties. During such inspections and audits, Licensor shall
have the right to take extracts and/or make copies of Licensee's records as it
deems necessary.
(b) The exercise by Licensor in whole or in part, at any time of the
right to audit records and accounts or of any other right herein granted, or the
acceptance by Licensor of any statement or statements or the receipt and/or
deposit by Licensor, of any payment tendered by or on behalf of Licensee shall
be without prejudice to any rights or remedies of Licensor and such acceptance,
receipt and/or deposit shall not preclude or prevent Licensor from thereafter
disputing the accuracy of any such statement or payment.
(c) If pursuant to its right hereunder Licensor causes an audit and
inspection to be instituted which thereafter discloses a deficiency between the
amount found to be due to Licensor and the amount actually received or credited
to Licensor, then Licensee shall, upon Licensor's demand, promptly pay the
deficiency, together with interest thereon at the then current prime rate from
the date such amount became due until the date of payment, and, if the
deficiency is more than [*] of all royalties paid by Licensee during the period
covered by the audit, then Licensee shall pay the reasonable costs and expenses
of such audit and inspection.
8. INDEMNIFICATIONS.
(a) During the Term, and continuing after the expiration or
termination of this Agreement, Licensor shall indemnify Licensee and shall hold
it harmless from any loss, liability, damage, cost or expense, arising out of
any claims or suits which may be brought or made against Licensee by reason of
the breach by Licensor of the warranties or representations as set forth in
Paragraph 13 hereof, provided that Licensee shall give prompt written notice,
and full cooperation and assistance to Licensor relative to any such claim or
suit and provided, further, that Licensor shall have the option to undertake and
conduct the defense of any suit so brought. Licensee shall not, however, be
entitled to recover for lost profits. Licensee shall cooperate fully in all
respects with Licensor in the conduct and defense of said suit and/or
proceedings related thereto.
(b) During the Term, and continuing after the expiration or
termination of this Agreement, Licensee shall indemnify Licensor, Time Warner
Entertainment Company, L.P. ("TWE") and each of its affiliates and shall hold
them harmless from any loss, liability, damage, cost or expense arising out of
any claims or suits which may be brought or made against Licensor, TWE or any of
its affiliates, by reason of: (i) any breach of Licensee's covenants and
undertakings hereunder; (ii) any unauthorized use by Licensee of the Licensed
Property; (iii) any use of any trademark, or copyright (except trademarks or
copyrights in the Licensed Property used in accordance with the terms of this
Agreement), design, patent, process, method or device; (iv) Licensee's non-
compliance with any applicable federal, state or local laws or with any other
applicable regulations; [*].
(c) With regard to Paragraph 8(b) above, Licensee agrees to obtain, at
its own expense, Comprehensive Commercial General Liability Insurance, including
product liability and contractual liability coverage providing adequate
protection for Licensor and Licensee against any such claims or suits in amounts
no less than [*] per occurrence, combined single limits. Simultaneously with the
execution of this Agreement, Licensee undertakes to submit to Licensor a fully
paid policy or certificate of insurance naming Licensor, TWE and each of its
affiliates as additional insured parties and, requiring that the insurer shall
not terminate or materially modify such policy or certificate of insurance
without written notice to Licensor at least thirty (30) days in advance thereof.
Such insurance shall at all times be primary and not contributory with any
insurance carried by Licensor, TWE or any of their affiliates. Further the
delivery of the policy or certificate, as provided in this Paragraph 8(c) are
material obligations of Licensee.
9. ARTWORK; TRADEMARKS AND COPYRIGHTS.
Licensee shall, within thirty (30) days of receiving an invoice, pay
Licensor for artwork executed for Licensee by Licensor (or by third parties
under contract to Licensor) at Licensee's request for use in the development of
the Licensed Products and any related packaging, display and promotional
materials at Licensor's prevailing commercial art rates. The foregoing shall
include any
----------
*Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
11
artwork that, in Licensor's reasonable opinion, and subject to Licensee's
written approval, is necessary to modify artwork initially prepared by Licensee
and submitted for approval. Estimates of artwork charges are available upon
request.
(a) Trademarks:
(i) Licensee agrees that it will cause to appear indelibly and
legibly on each of the Licensed Product(s) and all advertising material, tags,
labels and devices bearing the Licensed Property, the following notice or such
other notice as may be approved or required by Licensor:
(TM) & (C) 200X Warner Bros. (in the US and Canada)
(TM) & (C) 200X Village Roadshow Films (BVI) Limited. (in all
other territories)
(The year date shall be as instructed by Licensor)
(ii) Licensee further agrees that it will not apply for or seek
to obtain trademark registration for the Licensed Property and that Licensor
may, at its option, apply for and obtain in its own name trademark registrations
for the Licensed Product(s), and that, upon request, Licensee will furnish
necessary specimens or facsimiles for such purpose free of cost, as well as
evidence of the date of first shipment or sale of each Licensed Product in
interstate or foreign or other federally regulable U.S. commerce and, if
earlier, also in intrastate commerce.
(iii) Licensee agrees that if Licensee receives knowledge of the
use of the Licensed Property by anyone other than Licensee on Licensed
Product(s) or products confusingly similar thereto, Licensee will call such fact
to the attention of Licensor. Licensor shall then have the option to institute
legal proceedings to prevent such use, and Licensee shall cooperate and assist
in the prosecution of any such action. If demanded by Licensor, Licensee shall
join in or cooperate in the prosecution of any such legal proceeding as may be
instituted by Licensor. Any such legal proceedings shall be solely at Licensor's
expense. If Licensee is joined in such proceeding, Licensor shall indemnify and
hold harmless Licensee from and against any claim, sanction, liability, damages,
attorney's fees, judgments or orders of any kind arising out of such proceeding.
(b) Copyrights:
(i) Game Program: The copyright in and to the computer program
(object and source code) incorporated into any Licensed Product (herein the
"Program") shall be owned as follows:
(A) If a Program is created solely by Licensee or an
approved sublicensee under license or authority of Licensee without any
contribution by Licensor to the creation of that Program in the form of
programming effort, then the copyright in and to such Program shall be owned
solely by Licensee;
----------
*Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
12
(B) If a Program is created jointly by Licensee and
Licensor, then the copyright in and to such Program shall be owned jointly by
Licensor and Licensee.
(ii) Audio-Visual Display: The copyright in and to the images
displayed on the screen, and the sounds produced during the course of the game
play, including all possible combinations and sequences thereof, in both the
"attract mode" and the "play mode," and the underlying script therefor (herein
the "Audio-Visual Display") shall be owned as follows:
(A) The copyright in and to all elements of the Audio-
Visual Display constituting pre-existing material of Licensor as set forth in
Paragraph 1(e) "Licensed Property" such as, without limitation, the characters
portrayed in the Motion Pictures or any reproductions thereof, or derived
therefrom and incorporating the Licensed Property, as well as any special
effects provided to Licensee by Licensor or its affiliates (hereinafter "Pre-
Existing Material"), are acknowledged to be the sole and exclusive property of
Licensor and shall remain the sole and exclusive property of Licensor;
(B) The copyright in and to all elements of the Audio-
Visual Display constituting original material created by Licensee, and which
does not incorporate any Licensed Property, shall be the sole and exclusive
property of Licensee. Licensee retains sole and exclusive ownership of all of
Licensee's inventions, whether patented or not, trade secrets and similar
information and processes of a confidential nature, and works of authorship,
whether copyrighted or not, whether manifested in the Audio-Visual Display or
not, and whether embodied in hardware or software used to create the Audio-
Visual Display. Licensee shall be free to use and license others to use elements
of the Audio-Visual Display owned by Licensee.
(iii) Packaging, Advertising and Promotional Materials: Except as
otherwise provided herein, the copyrights in and to any original material, other
than the Programs and the Audio-Visual Displays, which is created by or for
Licensee for the purpose of packaging, advertising or promoting the Licensed
Product(s), including but not limited to the enclosure for the Licensed
Product(s), all cartons, containers, packing and wrapping material, tags,
labels, imprints or other devices, and all advertising and promotional materials
(all such material hereinafter referred to as the "Other Materials"), shall be
owned solely and exclusively by Licensee; provided, however, that the copyright
in and to all elements of the Other Materials that constitute Licensor's Pre-
Existing Material, material furnished to Licensee by or on behalf of Licensor,
or any material that is derivative of the foregoing, is acknowledged to be owned
solely and exclusively by Licensor and shall remain the sole and exclusive
property of Licensor.
(iv) Limitations on Ownership Rights: The parties agree and
acknowledge that each shall have the same right as any person or party with
regard to any material incorporated in the Licensed Product(s), Other Materials,
Programs, or Audio-Visual Displays which is in the public domain (provided that
it has not entered into the public domain as the result of an act or omission in
breach of this Agreement or any other written agreement by or between the
parties hereto).
(v) Artwork: The Licensed Property shall be displayed or used
only in such form and in such manner as has been specifically approved in
writing by Licensor in advance and Licensee undertakes to assure usage of the
trademark(s) and character(s) solely as approved hereunder. Licensee further
agrees and acknowledges that any and all Artwork (defined below) created,
utilized, approved and/or authorized for use hereunder by Licensor in connection
with the Licensed Products or which otherwise features or includes the Licensed
Property shall be owned in its entirety exclusively by Licensor. "Artwork" as
used herein shall include, without limitation, all pictorial, graphic, visual,
audio, audio-visual, digital, literary, animated, artistic, dramatic,
sculptural, musical or any other type of creations and applications, whether
finished or not, including, but not limited to, animation, drawings, designs,
sketches, images, tooling and tooling aids, illustrations, film, video,
electronic, digitized or computerized information, software, object code, source
code, on-line elements, music, text, dialogue, stories, visuals, effects,
scripts, voiceovers, logos, one-sheets, promotional pieces, packaging, display
materials, printed materials, photographs, interstitials, notes, shot logs,
character profiles and translations, produced by Licensee or for Licensee,
pursuant to this Agreement, excluding any intellectual property rights in and to
any elements that are wholly owned by Licensee and that do not include the
Licensed Property and specifically excluding any rights of Licensee in and to
the Program, as provided in Paragraph 9(b)(i) above. Licensor reserves for
itself or its designees all rights to use any and all Artwork created, utilized
and/or approved hereunder without limitation. Licensee acknowledges that, as
between Licensor and Licensee, the Licensed Property and Artwork and all other
depictions expressions and derivations thereof, and all copyrights, trademarks
and other proprietary rights therein are owned exclusively by Licensor and
Licensee shall
13
have no interest in or claim thereto, except for the limited right to use the
same pursuant to this Agreement and subject to its terms and conditions.
Licensor's rights hereunder specifically exclude Licensee's ownership of any
artwork that utilizes intellectual property wholly owned by Licensee or third
parties and which does not incorporate the Licensed Property, whether such
artwork is used in Licensee's packaging, advertising or products.
(vi) Work-Made-for-Hire: Licensee agrees and acknowledges that
any Artwork incorporating the Licensed Property and created by Licensee or for
Licensee hereunder, including without limitation any special effects created by
Licensor or any of its affiliates, but specifically excluding copyrights,
trademarks or other intellectual property wholly owned by Licensee is a "work
made for hire" for Licensor under the U.S. Copyright Act, and any and all
similar provisions of law under other jurisdictions, and that Licensor is the
author of such works for all purposes, and that Licensor is the exclusive owner
of all the rights comprised in the undivided copyright and all renewals,
extensions and reversions therein, in and to such works in perpetuity and
throughout the universe. Licensee hereby waives and releases in favor of
Licensor all rights (if any) of "droit moral," rental rights and similar rights
in and to the Artwork (the "Intangible Rights") and agrees that Licensor shall
have the right to revise, condense, abridge, expand, adapt, change, modify, add
to, subtract from, re-title, re-draw, re-color, or otherwise modify the Artwork,
without the consent of Licensee. Licensee hereby irrevocably grants, transfers
and assigns to Licensor all right, title and interest, including copyrights,
trademark rights, patent rights and other proprietary rights, it may have in and
to the Artwork, in perpetuity and throughout the universe, and to all
proprietary depictions, expressions or derivations of the Licensed Property
created by or for Licensee. Licensee acknowledges that Licensor shall have the
right to terminate this Agreement in the event Licensee asserts any rights
(other than those specifically granted pursuant to this Agreement) in or to the
Licensed Property or Artwork.
Licensee hereby warrants that any and all work created by Licensee under
this Agreement apart from the materials provided to Licensee by Licensor is and
shall be wholly original with or fully cleared by Licensee and shall not copy or
otherwise infringe the rights of any third parties, and Licensee hereby
indemnifies Licensor and will hold Licensor harmless from any such claim of
infringement or otherwise involving Licensee's performance hereunder. At the
request of Licensor, Licensee shall execute such form(s) of assignment of
copyright or other papers as Licensor may reasonably request in order to confirm
and vest in Licensor the rights in the properties as provided for herein. In
addition, in the event that Licensee fails to comply with Licensor's request
within thirty (30) days after written request by Licensor, Licensee hereby
appoints Licensor as Licensee's Attorney-in-Fact to take such actions and to
make, sign, execute, acknowledge and deliver all such documents as may from time
to time be necessary to confirm in Licensor, its successors and assigns, all
rights granted herein. If any third party makes or has made any contribution to
the creation of Artwork authorized for use hereunder, Licensee agrees to obtain
from such party a full confirmation and assignment of rights so that the
foregoing rights shall vest fully in Licensor, in the form of the Contributor's
Agreement attached hereto as Exhibit 2 and by this reference made a part hereof,
prior to commencing work, and subject to the prior written approval of Licensor,
and subject to the prior written approval of Licensor ensuring that all rights
in the Artwork and Licensed Property arise in and are assigned to Licensor.
Promptly upon entering into each such Contributor's Agreement, Licensee shall
give Licensor a copy of such Contributor's Agreement. [*]
(vii) Use of Third Party Content: Licensee shall not use any
third party content or technology in the Licensed Product(s), including without
limitation any audio elements from the soundtracks of any motion picture or
television series based upon the Licensed Property without Licensor's prior
written approval, and unless: (i) Licensee is expressly permitted to use such
third party content or technology pursuant to written agreements with all third
party rights holders; and (ii) Licensee has acquired for Licensee and Licensor
all rights, permissions, clearances, releases or other authorizations necessary
to use such third party content or technology in conjunction with the
development and exploitation of the Licensed Products(s) anywhere in the
Territory by Licensee or Licensor or by either party's licensees, successors or
assigns in perpetuity. Licensee shall be responsible, in perpetuity, for all
payments in connection with the use of third party content or technology, except
as the parties mutually agree upon at such time as Licensor approves of the use
of such third party content or technology. Licensor shall have the right to
review all Licensee agreements with third parties to ensure their acceptability
and Licensee shall deliver such agreements to Licensor within fourteen (14)
business days of Licensor's request therefor.
---------
* Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
14
10. QUALITY OF LICENSED PRODUCT(S).
(a) Licensee agrees that the Licensed Product(s) shall be of high
standard and of such style, appearance and quality as shall be adequate and
suitable to their promotion, distribution and sale to the best advantage of
Licensee and Licensor. The quality and style of such product and its cartons and
containers shall be subject to Licensor's approval. To this end Licensee shall,
before selling or distributing any of the Licensed Product(s), furnish to
Licensor free of cost for its written approval as to quality and style, the
materials specified in the "Milestones" set forth on Exhibit 1 attached hereto.
In the event that any Milestone deliverable shall not have been approved,
disapproved, or otherwise commented upon within ten (10) business days after
receipt thereof by Licensor, then Licensee shall have the right to so notify
Licensor of such fact by facsimile or by overnight delivery service. In the
event that Licensor fails to then approve, disapprove or otherwise comment upon
the submitted items within seven (7) business days after receipt by it of such
communication, any items so submitted shall be deemed to have been approved
subject to the rights of any third parties (e.g., as to the use of the Name and
Likeness of a Performer). Licensee shall, in addition, thereafter furnish to
Licensor free of cost, for its written approval, forty-five (45) production
samples of each such Licensed Product(s) together with their cartons and
containers including packaging and wrapping material, to ensure quality control
simultaneously upon distribution to the public. In addition, Licensee shall
provide Licensor with six (6) catalogs which display all of Licensee's products,
not just the Licensed Products, if such catalogs exist. [*].
After samples of Licensed Product(s) have been approved pursuant to this
paragraph, Licensee shall not depart therefrom in any material respect without
Licensor's prior written consent or add any additional element(s) such as in-
pack flyers, business reply cards and so on without Licensor's approval in each
case.
Licensor shall have the right to withdraw its approval of samples if the
quality of any Licensed Product ceases to be acceptable.
(b) Any modification of a Licensed Product must be submitted in
advance for Licensor's written approval as if it were a new Licensed Product.
Approval of a Licensed Product which uses particular artwork does not imply
approval of such artwork for use with a different Licensed Product.
(c) Licensed Products must conform in all material respects to the
final production samples approved by Licensor. [*].
(d) If any changes or modifications are required to be made to any
material submitted to Licensor for its written approval in order to ensure
compliance with Licensor's specifications or standards of quality, Licensee
agrees promptly to make such changes or modifications.
(e) [*].
(f) Subject to the terms hereof, including without limitation the
approval process provided for in Paragraph 10(a) above, Licensee may utilize the
Licensed Property for such advertising, promotional and display materials for
the Licensed Product(s) as in its judgment will best promote the sale of said
Licensed Product(s). Licensee agrees that it will not use the Licensed Property
or any reproduction thereof in any advertising, promotional or display material
or in any other manner without Licensor's prior written approval not to be
unreasonably withheld. Without limiting the foregoing, no television commercials
may be utilized under this License without the specific prior approval of
Licensor. Notwithstanding the approval process for other materials, in the event
that any material submitted to Licensor for approval in connection with a
television commercial shall not have been approved, disapproved or otherwise
commented upon within thirty (30) days after receipt thereof by Licensor, then
Licensee shall have the right to so notify Licensor of such fact by facsimile or
by overnight delivery service. In the event that Licensor fails to then approve,
disapprove or otherwise comment upon the submitted items within ten (10)
business days after receipt by it of such facsimile or overnight delivery
service any items so submitted shall be deemed to have been approved subject to
the rights of third parties (e.g., as to the use of the Name and Likeness of a
Performer). A reasonable number of production copies of all such advertising,
promotional and display materials will be furnished to Licensor free of charge.
---------
* Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
15
(g) To avoid confusion of the public, Licensee agrees not to associate
other characters or properties with the Licensed Property on the Licensed
Products or in any packaging, promotional or display materials unless Licensee
receives Licensor's prior written approval. Furthermore, Licensee agrees not to
use the Licensed Property (or any component thereof) on any business sign,
business cards, stationery or forms, nor as part of the name of Licensee's
business or any division thereof.
(h) Licensee shall use reasonable commercial efforts to notify its
customers of the requirement that Licensor has the right to approve all
promotional, display and advertising material pursuant to this Agreement.
(i) Any animation used in electronic media, including but not limited
to animation for television commercials and character voices for radio
commercials, shall be produced by Warner Bros. Animation pursuant to a separate
agreement between Licensee and Warner Bros. Animation, subject to Warner Bros.
Animation's customary rates, except as may be otherwise specifically agreed in
writing by Licensor. Licensee shall be provided, free of charge, with special
effects and other elements of the Motion Pictures that may be developed in
connection with the Motion Pictures; provided, however, that Licensee shall be
required to pay for any services or materials, including without limitation any
special effects, that are commissioned or requested by Licensee specifically for
use in the Licensed Products, whether or not such materials are later used in
either Motion Picture, at the standard rates customarily charged by such entity
(even if an affiliate of Licensor), pursuant to a separate agreement with such
entity. [*]. If a party other than Warner Bros. provides such services or
creates or develops such materials, such other party shall be required to
execute a Contributor's Agreement in the form attached hereto, confirming that
Licensor is the owner of all rights in and to such materials or the results of
such services. [*].
(j) Licensor's approval of Licensed Product(s) (including without
limitation, the Licensed Product(s) themselves as well as promotional, display,
and advertising materials) shall in no way constitute or be construed as an
approval by Licensor of Licensee's use of any trademark, copyright and/or other
proprietary materials, not owned by Licensor.
(k) Notwithstanding the foregoing, if any of the Licensed Product(s)
have already received Licensor's written approval prior to the execution of this
Agreement, then Licensee shall not be required to resubmit such Licensed
Product(s) for approval after execution hereof, except with respect to any
modifications made to such Licensed Product(s), or to any packaging, hangtags,
promotional and/or advertising materials.
11. DISTRIBUTION; SUBLICENSE/MANUFACTURE.
(a) Licensee shall sell the Licensed Products either to jobbers,
wholesalers, distributors or retailers for sale or resale and distribution
directly to the public. [*]. If Licensee sells or distributes the Licensed
Products at a special price (i.e., a price that is less than prevailing market
rates in an arms-length transaction), directly or indirectly, to itself,
including without limitation, any subsidiary of Licensee (including any
affiliated distributors) or to any other person, firm, or corporation affiliated
with Licensee or its officers, directors or major stockholders, for ultimate
sale to unrelated third parties, Licensee shall pay royalties with respect to
such sales or distribution, based upon the price generally charged the trade by
Licensee.
(b) [*]. In the event Licensee is not the manufacturer of the
Licensed Products, Licensee shall, subject to the prior written approval of
Licensor, which approval shall not be unreasonably withheld, be entitled to
utilize a third party manufacturer in connection with the manufacture and
production of the Licensed Products, provided that such manufacturer shall
execute a letter in the form of Exhibit 3 attached hereto and by this reference
made a part hereof. In such event, Licensee shall remain primarily obligated
under all of the provisions of this Agreement and any default of this Agreement
by such manufacturer shall be deemed a default by Licensee hereunder. In no
event shall any such third party manufacturer agreement include the right to
grant any rights to subcontractors.
12. GOODWILL.
Licensee recognizes the great value of the publicity and goodwill
associated with the Licensed Property and acknowledges: (i) such goodwill is
exclusively that of Licensor; and (ii) that the Licensed Property has acquired a
secondary meaning as Licensor's trademarks and/or
---------
* Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
16
identifications in the mind of the purchasing public. Licensee further
recognizes and acknowledges that a breach by Licensee of any of its covenants,
agreements or undertakings hereunder will cause Licensor irreparable damage,
which cannot be readily remedied in damages in an action at law, and may, in
addition thereto, constitute an infringement of Licensor's copyrights,
trademarks and/other proprietary rights in, and to the Licensed Property,
thereby entitling Licensor to equitable remedies, and costs.
13. LICENSOR'S WARRANTIES AND REPRESENTATIONS.
Licensor represents and warrants to Licensee that:
(a) It has, and will have throughout the Term of this Agreement, the
right to license the Licensed Property to Licensee in accordance with the terms
and provisions of this Agreement; and
(b) The making of this Agreement by Licensor, and performance by
Licensor as contemplated hereunder, does not violate any agreements, rights or
obligations of any person, firm or corporation.
14. LICENSEE'S WARRANTIES AND REPRESENTATIONS. Licensee represents and
warrants to Licensor that, during the Term and thereafter, except to the extent
otherwise provided in subparagraphs (m), (n) and (o), below:
(a) It will not attack the title of Licensor (or third parties that
have granted rights to Licensor) in and to the Licensed Property or any
copyright or trademarks pertaining thereto, nor will it attack the validity of
the license granted hereunder;
(b) It will not harm, misuse or bring into disrepute the Licensed
Property, but on the contrary, will maintain the value and reputation thereof to
the best of its ability;
(c) It will manufacture, sell, promote and distribute the Licensed
Products in an ethical manner and in accordance with the terms and intent of
this Agreement, and in compliance with all applicable government regulations and
industry standards;
(d) It will not create any expenses chargeable to Licensor without the
prior written approval of Licensor in each and every instance. It will not cause
or allow any liens or encumbrances to be placed against, or grant any security
interest (except to Licensor as provided hereunder) in, the Licensed Property
without Licensor's prior written consent;
(e) It will use commercially reasonable efforts to protect its right
to manufacture, sell, promote, and distribute the Licensed Products hereunder;
(f) It will at all times comply with all government laws and
regulations, including but not limited to product safety, food, health, drug,
cosmetic, sanitary or other similar laws, relating or pertaining to the
manufacture, sale, advertising or use of the Licensed Products, and shall
maintain its appropriate customary high quality standards during the Term
hereof. It shall comply with any regulatory agencies which shall have
jurisdiction over the Licensed Products and shall procure and maintain in force
any and all permissions, certifications and /or other authorizations from
governmental and/or other official authorities that may be required in response
thereto. Each Licensed Product [*] distributed hereunder shall comply with all
applicable laws and regulations. [*];
(g) [*].
(h) It will provide Licensor with the date(s) of first use of the
Licensed Products in interstate and intrastate commerce, where appropriate;
(i) It will, pursuant to Licensor's instructions, duly take any and
all necessary steps to secure execution of all necessary documentation for the
recordation of itself as user of the Licensed Property in any jurisdiction where
this is required or where Licensor reasonably requests that such recordation
shall be effected. Licensee further agrees that it will at its own expense
cooperate with Licensor in cancellation of any such recordation at the
expiration of this Agreement or upon termination of Licensee's right to use the
Licensed Property. Licensee hereby appoints Licensor its Attorney-in-Fact for
such purpose;
---------
* Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
17
(j) It will use its best efforts to manufacture, distribute and sell
the Licensed Product(s) throughout the Territory; specifically, it shall:
(i) Manufacture, distribute and sell the Licensed Product(s) in
such price and quality brackets as are required to meet competition by reputable
manufacturers of similar articles;
(ii) Make and maintain adequate arrangements for the distribution
of the Licensed Product(s) throughout the Territory;
(iii) Supply said retail outlets with the necessary types of the
Licensed Product(s) during the first and final thirds of each calendar year; and
(iv) It will not deliver or sell Licensed Product(s) outside the
Territory or knowingly sell Licensed Product(s) to a third party for delivery
outside the Territory.
(k) [*];
(l) If requested by Licensor to do so, it will utilize specific design
elements of the Licensed Property provided to Licensee by Licensor on hangtags,
labels, and other materials;
(m) [*];
(n) [*].
(o) For so long as Perry's services are available to Licensee,
Licensee shall allow Perry and Shiny to devote the amount of time reasonably
necessary to develop the Licensed Products in compliance with Licensee's
obligations hereunder.
15. TERMINATION BY LICENSOR.
(a) Licensor shall have the right to terminate this Agreement without
prejudice to any rights that it may have, whether pursuant to the provisions of
this Agreement, at law, in equity, or otherwise, upon the occurrence of any one
or more of the following events (herein called "defaults"):
(i) Licensee materially defaults in the performance of any of
its obligations provided for in this Agreement; or
(ii) Licensee shall have failed to deliver to Licensor or to
maintain in full force and effect the insurance referred to in Paragraph 8(b)
hereof; or
(iii) Licensee shall fail to make any payment due hereunder [*];
or
(iv) Licensee shall fail to deliver any of the statements
hereinabove referred to or to give access to the [*] license records pursuant to
the provisions hereof to Licensor's authorized representatives for the purposes
permitted hereunder, and such failure shall continue for [*] days after written
notice thereof is sent by Licensor to the Licensee; or
(v) Licensee shall fail to comply with any laws or regulations
as provided in Paragraph 14(f) hereof or any governmental agency or other body,
office or official vested with appropriate authority finds that the Licensed
Products are harmful or defective in any way, manner or form, or are being
manufactured, sold or distributed in contravention of applicable laws or
regulations, or in a manner likely to cause harm to persons or property, [*]; or
(vi) Licensee shall [*] make any assignment for the benefit of
creditors, or shall file any petition under the bankruptcy or insolvency laws of
any nation, jurisdiction, county or place, or shall have or suffer a receiver or
trustee to be appointed for its business or property, or be adjudicated a
bankrupt or an insolvent; or
(vii) Licensee does not commence in good faith to manufacture,
distribute and sell each title on each Platform throughout the Territory on or
before its applicable Marketing Date, or thereafter fails to diligently and
continuously manufacture, distribute and sell each title on each Platform
throughout the Territory. Such default and Licensor's resultant right of
termination (or
---------------
* Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
18
recapture) shall only apply to the specific title and Platform that Licensee
fails to distribute in accordance with the foregoing; or
(viii) Licensee shall manufacture, sell or distribute, whichever
first occurs, any of the Licensed Product(s) without the prior written approval
of Licensor as provided in Paragraph 10 hereof; or
(ix) [*]; or
(x) Licensee uses Artwork which has not been approved by
Licensor in compliance with the provisions of Paragraph 10 hereof; or
(xi) [*]; or
(xii) Licensee delivers or sells Licensed Products outside the
Territory or knowingly sells Licensed Products(s) to a third party who Licensee
knows intends to, or who Licensee reasonably should suspect intends to, sell or
deliver such Licensed Products outside the Territory; or
(xiii) [*]; or
(xiv) [*]; or
(xv) [*].
(b) In the event any of these defaults occur, Licensor shall give
notice of termination in writing to Licensee by facsimile and certified mail.
Licensee shall have [*] days from the date of giving notice in which to correct
any of these defaults and [*] days for payment [*], and failing such, this
Agreement shall thereupon immediately terminate, and any and all payments then
or later due from Licensee hereunder (including Guaranteed Consideration) shall
then be promptly due and payable in full [*]. Notwithstanding anything to the
contrary set forth in this Agreement, Licensor shall refund to Licensee the
applicable Additional Consideration received by Licensor, as and to the extent
provided in Paragraph 4(b)(v), above.
(c) In the event of any default by Licensor hereunder, Licensor shall
have [*] days from the date of notice from Licensee in which to cure such
default. Licensee shall have the right to terminate this Agreement without
prejudice to any other rights which it may have, whether pursuant to the
provisions of this Agreement, or otherwise at law or in equity, if Licensor
defaults in the performance of any of its obligations provided for in this
Agreement or in the event of a material breach by Licensor of its warranties or
representations set forth in this Agreement. In the event any such default
occurs, Licensee shall give notice of termination in writing to Licensor by
certified mail. Licensor shall have [*] and failing such correction, this
Agreement shall thereupon immediately terminate, [*].
16. FINAL STATEMENT UPON TERMINATION OR EXPIRATION.
Licensee shall deliver, as soon as practicable, but not later than thirty
(30) days following expiration or termination of this Agreement, a statement
indicating the number and description of Licensed Products on hand together with
a description of all advertising and promotional materials relating thereto.
Following expiration or termination of this Agreement, Licensee shall
immediately cease any and all manufacturing of the Licensed Product. However,
if Licensee has complied with all the terms of this Agreement, including, but
not limited to, complete and timely payment of the Guaranteed Consideration and
Royalty Payments, then Licensee may continue to distribute and sell its
remaining inventory, on a non-exclusive basis only, for a period not to exceed
[*] following such termination or expiration (the "Sell-Off Period") of the Term
that is applicable to the particular Licensed Product, subject to payment of
applicable royalties thereon. [*]. If Licensee has any remaining inventory of
the Licensed Products following the Sell-Off Period, Licensee shall, at
Licensor's option, make available such inventory to Licensor for purchase at or
below cost, deliver up to Licensor for destruction said remaining inventory or
furnish to Licensor an affidavit attesting to the destruction of said remaining
inventory. Licensor shall have the right to conduct a physical inventory in
order to ascertain or verify such inventory and/or statement. In the event that
Licensee refuses to permit Licensor to conduct such physical inventory,
Licensee shall forfeit its right to the
---------------
* Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
19
Sell-Off Period hereunder or any other rights to dispose of such inventory. In
addition to the forfeiture, Licensor shall have recourse to all other legal
remedies available to it.
17. PAYMENTS AND NOTICES; RELATIONSHIP OF THE PARTIES.
Except as otherwise specifically provided herein, all notices which either
party hereto is required or may desire to give to the other shall be given by
addressing the same to the other at the address set forth above, or at such
other address as may be designated in writing by any such party in a notice to
the other given in the manner prescribed in this paragraph. All such notices
shall be sufficiently given when the same shall be deposited so addressed,
postage prepaid, in the United States mail and/or when the same shall have been
delivered, so addressed, by facsimile or by overnight delivery service and the
date of transmission by facsimile, receipt of overnight delivery service or two
business days after mailing shall for the purposes of this Agreement be deemed
the date of the giving of such notice.
This Agreement does not constitute and shall not be construed as
constitution of a partnership or joint venture between Licensor and Licensee.
Neither party shall have any right to obligate or bind the other party in any
manner whatsoever, and nothing herein contained shall give, or is intended to
give, any rights of any kind to any third persons.
18. [*].
[*].
19. BANKRUPTCY RELATED PROVISIONS.
(a) The parties hereby agree and intend that this Agreement is an
executory contract governed by Section 365 of the Bankruptcy Code.
(b) In the event of Licensee's bankruptcy, the parties intend that
any royalties payable under this Agreement during the bankruptcy period be
deemed administrative claims under the Bankruptcy Code because the parties
recognize and agree that the bankruptcy estate's enjoyment of this Agreement
will (i) provide a material benefit to the bankruptcy estate during its
reorganization and (ii) deny Licensor the benefit of the exploitation of the
rights through alternate means during the bankruptcy.
(c) The parties acknowledge and agree that any delay in the decision
of trustee of the bankruptcy estate to assume or reject the Agreement (the
"Decision Period") materially xxxxx Licensor by interfering with Licensor's
ability to alternatively exploit the rights granted under this Agreement during
a Decision Period of uncertain duration. The parties recognize that arranging
appropriate alternative exploitation would be a time consuming and expensive
process and that it is unreasonable for Licensor to endure a Decision Period of
extended uncertainty. Therefore, the parties agree that the Decision Period
shall not exceed [*] days. Notwithstanding the foregoing, nothing herein shall
prohibit Licensor from seeking relief from a bankruptcy court at any time,
including during such [*] day period.
(d) Licensor, in its interest to safeguard its valuable interests
(including, without limitation, its intellectual property rights in the Licensed
Property), has relied on the particular skill and knowledge base of Licensee,
for, among other reasons, those set forth in Paragraph 1(j) above. Therefore,
the parties acknowledge and agree that in a bankruptcy context this Agreement is
a license of the type described by Section 365(c)(1) of the Bankruptcy Code and
may not be assumed by a bankruptcy trustee or assigned without the prior written
consent of the Licensor.
20. CONSTRUCTION.
This Agreement shall be construed in accordance with the laws of the State
of California of the United States of America without regard to its conflicts of
laws provisions.
21. WAIVER, MODIFICATION, ETC.
No waiver, modification or cancellation of any term or condition of this
Agreement shall be effective unless executed in writing by the party charged
therewith. No written waiver shall excuse the performance of any acts other
than those specifically referred to therein. The fact that the
---------------
* Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
20
Licensor has not previously insisted upon Licensee expressly complying with any
provision of this Agreement shall not be deemed to be a waiver of Licensor's
future right to require compliance in respect thereof and Licensee specifically
acknowledges and agrees that the prior forbearance in respect of any act, term
or condition shall not prevent Licensor from subsequently requiring full and
complete compliance thereafter. If any term or provision of this Agreement is
held to be invalid or unenforceable by any court of competent jurisdiction or
any other authority vested with jurisdiction, such holding shall not affect the
validity or enforceability of any other term or provision hereto and this
Agreement shall be interpreted and construed as if such term or provision, to
the extent the same shall have been held to be invalid, illegal or
unenforceable, had never been contained herein. Headings of paragraphs herein
are for convenience only and are without substantive significance.
22. CONFIDENTIALITY.
The Artwork and the materials and information supplied to one party by the
other hereunder constitute, relate to, contain and form a part of confidential
and proprietary information of the disclosing party, including, but not limited
to, Style Guides, design elements, character profiles, unpublished copyrighted
material, release dates, marketing and promotional strategies, information about
new products, properties and characters, computer code (if any), the terms and
conditions of this Agreement, and other information which is proprietary in
nature or is a trade secret (collectively, the "Proprietary Information"). The
Proprietary Information is highly confidential and disclosure of the Proprietary
Information will result in serious harm to the owner thereof. Among other
damage, unauthorized disclosure of the Proprietary Information will (i) damage
carefully planned marketing strategies, (ii) reduce interest in the Licensed
Property, (iii) make unique or novel elements of the Licensed Property
susceptible to imitation or copying by competitors, infringers or third parties
prior to Licensor's release of the information or materials, (iv) damage
proprietary protection in undisclosed or unpublished information or materials,
and (v) provide unauthorized third parties with materials capable of being used
to create counterfeit and unauthorized merchandise, audio-visual products or
other products, all of which will seriously damage the parties' rights and
business. Except as expressly approved in writing by the owner of the
Proprietary Information, the other party shall not reproduce or use the
Proprietary Information of the other party and shall not discuss, distribute,
disseminate or otherwise disclose the Proprietary Information or the substance
or contents thereof, in whole or in part, in its original form or in any other
form, with or to any other person or entity other than employees of the parties
and, in the case of Licensee, third parties who have executed a Contributor's
Agreement (as provided in Paragraph 9(b)) or third party manufacturer's
agreement (as provided in Paragraph 11(b)) and been approved by Licensor as
provided hereunder, and such employees and third parties shall be given access
to the Proprietary Information only on a "need-to-know" basis. The foregoing
restrictions shall not apply to any information which, (i) at the time of
disclosure, is in the public domain or which, after disclosure, becomes part of
the public domain by publication or otherwise through no action or fault of the
receiving party; (ii) information which the receiving party can show was in its
possession at the time of disclosure and was not acquired, directly or
indirectly, from the other party; (iii) information which was received from a
third party having the legal right to transmit the same; (iv) information which
is independently developed, conceived, or created without use of or reference to
any Proprietary Information of the other party; (v) information which is
disclosed pursuant to valid court order or other legal process; or (vi)
information that must be disclosed by law or governmental regulation such as in
filings with the Securities and Exchange Commission.
23. ENTIRE AGREEMENT.
This Agreement constitutes the entire Agreement between the parties
concerning the subject matter hereof and cancels and supersedes any prior
understandings and agreements between the parties hereto with respect thereto.
There are no representations, warranties, terms, conditions, undertakings or
collateral agreements, expressed, implied or statutory, between the parties
other than as expressly set forth in this Agreement.
24. ACCEPTANCE BY LICENSOR.
This instrument, when signed by Licensee, shall be deemed an application
for license and not a binding agreement unless and until accepted by Warner
Bros. Consumer Products by signature of a duly authorized officer and the
delivery of such a signed copy to Licensee. The receipt and/or deposit by
Warner Bros. Consumer Products of any check or other consideration given by
Licensee and/or delivery of any material by Warner Bros. Consumer Products to
Licensee shall not be deemed an acceptance by Warner Bros. Consumer Products of
this application. The foregoing shall apply to any documents relating to
renewals or modifications hereof.
21
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above written.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
LICENSOR: LICENSEE:
WARNER BROS. CONSUMER PRODUCTS, INTERPLAY ENTERTAINMENT CORP., a
a division of Time Warner Delaware corporation
Entertainment Company, L.P.
By:____________________________ By:_______________________________
Xxxx X. Xxxxx Name:__________________________
Senior Vice President, Title:_________________________
Business and Legal Affairs
Date:__________________________ Date:_____________________________
22
EXHIBIT 1 #12420-MATR
Milestones 1 and 2 (due on or before [*]):
[*]
[*]
Milestone 3 (due on or before [*]):
[*]
Milestone 4 (due on or before [*]):
[*]
Milestone 5 (due on or before [*]):
[*]
Milestone 6 (due on or before [*]):
[*]
Milestone 7 (due on or before [*]):
[*]
---------------
* Portions omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
23
EXHIBIT 2 #12420-MATR
CONTRIBUTOR'S AGREEMENT
-----------------------
I, _______________________, the undersigned ("Contributor"), have been
engaged by INTERPLAY ENTERTAINMENT CORP. ("Licensee") to work on or contribute
to the creation of Licensed Products, described as ____________________________,
by Licensee under an agreement between Licensee and Warner Bros., a division of
Time Warner Entertainment Company, L.P., c/o Warner Bros. Consumer Products, a
division of Time Warner Entertainment Company, L.P. ("Warner") dated
___________________ (the "License Agreement").
I understand and agree that the Licensed Products, and all artwork or other
results of my services for Licensee in connection with such Licensed Products
("Work") is a "work made for hire" for Warner and that all right, title and
interest in and to the Work shall vest and remain with Warner or Licensee, as
specified in the License Agreement. I reserve no rights therein. Without
limiting the foregoing, I hereby assign and transfer to Warner all other rights
whatsoever, in perpetuity throughout the universe which I may have or which may
arise in me or in connection with the Work that is owned by Warner as provided
in the License Agreement. I hereby waive all moral rights in connection with
such Work together with any other rights which are not capable of assignment. I
further agree to execute any further documentation relating to such transfer or
waiver or relating to such Work at the request of Warner or Licensee, failing
which Warner is authorized to execute same as my Attorney-in-Fact. Nothing
contained herein shall be deemed to alter the rights of Warner or Licensee, as
specified in the License Agreement, with respect to ownership of the Work.
Contributor:
By:_______________________________
signature
_______________________________
print name
_______________________________
address
_______________________________
_______________________________
country
_______________________________
date
Warner Bros. Consumer Products:
By:______________________________
Date:____________________________
EXHIBIT 3 #12420-MATR
WARNER BROS. CONSUMER PRODUCTS
0000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxx 000 Xxxxx - 0xx Xxxxx
Xxxxxxx, XX 00000
Re: Approval of Third Party Manufacturer
Gentlemen:
This letter will serve as notice to you that pursuant to Paragraph 11(b) of
the License Agreement dated ________________, 2000 between you and INTERPLAY
ENTERTAINMENT CORP., we have been engaged as the manufacturer for Licensee in
connection with the manufacture of the Licensed Products as defined in the
aforesaid License Agreement. We hereby acknowledge that we may not manufacture
Licensed Products for, or sell or distribute Licensed Products to, anyone other
than Licensee. We are cognizant of the terms and conditions set forth in said
License Agreement and hereby agree to observe those provisions of said License
Agreement which are applicable to our function as manufacturer of the Licensed
Products. It is expressly understood that we are obligated to comply with all
local laws, including without limitation, labor laws, wage and hour laws and
anti-discrimination laws and that you or your representatives shall, at anytime,
have the right to inspect our facilities and review our records to ensure
compliance therewith. It is understood that this engagement is on a royalty
free basis and that we may not subcontract any of our work without your prior
written approval.
We understand that our engagement as the manufacturer for Licensee is
subject to your written approval. We request, therefore, that you sign in the
space below, thereby showing your acceptance of our engagement as aforesaid.
Very truly yours,
_______________________________
manufacturer/company name
By:_______________________________
signature
_______________________________
print name
_______________________________
address
_______________________________
_______________________________
country
_______________________________
date
_______________________________
product(s) manufacturing
AGREED TO AND ACCEPTED:
WARNER BROS. CONSUMER PRODUCTS,
a Division of Time Warner
Entertainment Company, L.P.
By:______________________________
Xxxx X. Xxxxx
Senior Vice President,
Business and Legal Affairs
Date:____________________________
