Preview of our top selling Games Software License Agreement
Paramount Pictures / Interplay - Master Merchandising License Agreement
Confidential Portions Omitted
MASTER MERCHANDISING LICENSE AGREEMENT
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Dated as of June 16, 1992.
1. PARTIES: PARAMOUNT PICTURES CORPORATION ("Paramount")
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5555 Melrose Avenue
Hollywood, California 90038
INTERPLAY PRODUCTIONS, INC. ("Licensee")
17922 Fitch Avenue
Irvine, California 92714
Attention: Brian Fargo
2. PROPERTY:
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As used herein, the term "Property" shall mean the characters,
characterizations, designs and visual representations which appear, and
only as they appear, in the theatrical motion picture and/or television
series (for convenience, the "Picture") specified in the numbered Addendum
("Addendum") to this Agreement, set forth in the form as Exhibit A hereto,
which may be executed by the parties hereto from time to time, including
the names and likenesses of only those performers approved in writing by
Paramount, and only as they appear as characters in the Picture; but not
including, without the prior written consent of Paramount, any actual
material from the Picture, such as footage (film, tape, disc or other
medium), outtakes, music, effects track, voice track or sound track of the
3. LICENSED ARTICLES:
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The articles to be manufactured and distributed by Licensee hereunder
("Licensed Articles") shall be set forth in each Addendum.
4. TERRITORY: As set forth in each Addendum.
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5. TERM: As set forth in each Addendum.
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6. LICENSE:
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(a) Subject to the Terms of each Addendum and this Agreement, Paramount
hereby grants to Licensee and Licensee hereby accepts, the right,
license and privilege to manufacture or have manufactured the
designated Licensed Articles based upon the Property, and to
distribute, offer for sale, sell, advertise and promote them in the
Territory during the Term.
(b) The license granted herein includes the non-exclusive right to use,
subject to all the terms and conditions hereof, the title of the
Picture and the trade and service marks and names, and the logos and
art work, if any, embodying them (all of which are, except where dealt
with individually, referred to herein as the "Trademarks") as set
forth in each Addendum.
(c) Licensee shall not use the Property in any manner not specifically
authorized by this Agreement.
7. RESERVATION OF RIGHTS:
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(a) All rights in and to the Property and the Picture not expressly
granted herein to Licensee are hereby expressly reserved to Paramount
or its designees without restriction.
(b) Licensee acknowledges that the license granted herein does not include
any right, title or interest in or to the Property or the Picture, nor
to any copyrights, patents, and/or trademarks therein or associated
therewith. Furthermore, this Agreement relates solely to the Picture.
Licensee is not, by virtue of this Agreement, acquiring any right
whatsoever in any motion picture or television production or other
endeavor which is based upon, derivative of, inspired by or otherwise
related to the Picture, including without limitation, remakes,
sequels, sound recordings, publications, or other endeavors in which
the characters, characterizations, designs and/or visual
representations contained in the Picture may appear; as between
Paramount and Licensee, all right, title and interest in and to the
foregoing is retained by Paramount.
(c) With respect to the Property and the Picture, Paramount reserves unto
itself and/or its designees the right to manufacture, distribute,
offer for sale, sell, advertise, promote, display and otherwise
exploit articles similar and/or identical to the Licensed Articles,
for use in connection with premium sales or give-aways, promotional
give-aways, vending machine sales, home television sales (e.g. home
shopping club), and/or sales by or through fan clubs, and for sale,
advertising, promotion, display and other exploitation in or in
connection with any and all facilities owned, operated and/or
controlled by Paramount, its parent, affiliated and/or subsidiary
companies. Paramount agrees to purchase from Licensee, and Licensee
agrees to furnish to Paramount, at its most favorable wholesale
distributor price, any number of Licensed Articles required by
Paramount for use in connection with any of the foregoing reserved
8. MANUFACTURING AND DISTRIBUTION OBLIGATIONS/MARKETING DATE:
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(a) Licensee shall manufacture, distribute and commence the marketing of a
substantial number of items of the Licensed Articles not later than
the date set forth in each Addendum ("Marketing Date").
(b) In the event Licensee fails, or demonstrates an inability to meet the
Marketing Date for any Licensed Article, Paramount shall have the
right, upon thirty (30) days written notice, to terminate the rights
granted to Licensee with respect to such Licensed Article, without in
any way reducing, proportionally or otherwise, the Guarantee (as such
term is defined below) required to be paid to Paramount by Licensee
(c) If, subsequent to the commencement of marketing and distribution of
any Licensed Article, Licensee fails to actively continue marketing
and distributing any units of said Licensed Article in any country or
substantial portion of the Territory, Paramount, in addition to any
and all other remedies available to it hereunder, may, by giving
written notice thereof to Licensee, terminate the license granted
hereunder with respect to such Licensed Article within such country or
substantial portion of the Territory. This notice shall be effective
thirty (30) days after being given, unless Licensee shall,
within such period, have recommenced distribution or manufacture of
such Licensed Article within such country or substantial portion of
the Territory.
(d) Licensee acknowledges that Paramount is entering into this Agreement
not only in consideration of the payments to be made to it hereunder,
but also in consideration of the promotional value to it and to the
Picture of the widespread distribution, sale, advertising and
promotion of each of the Licensed Articles. Accordingly, Licensee
shall procure the greatest volume of sales of the Licensed Articles
consistent with high quality and shall make and maintain timely and
adequate arrangements for their manufacture, distribution, advertising
and promotion.
(e) Licensee shall distribute and sell the Licensed Articles outright at a
competitive price, and not on approval, consignment, sale-or-return
(except as may be permitted in each Addendum) or any similar basis,
and further, only to jobbers, wholesalers, and retailers for
distribution and sale to retail stores and merchants, and by or
through mail/telephone order sales, radio sales, and computer shopping
services; but not for any of the purposes or markets which are
reserved to Paramount under Paragraph 7 herein.
(f) Licensee may not enter into any agreement with any third party for the
manufacturing or distribution of any of the Licensed Articles without
Paramount's prior written consent. Licensee shall manufacture the
Licensed Articles in N. America, S. America, Europe, Japan, Taiwan,
Korea and Singapore.
9. PAYMENT:
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Licensee shall pay Paramount the following:
(a) A non-returnable advance ("Advance") of such sum as may be set forth
in each Addendum, to be applied against royalties payable pursuant to
Paragraph 9(b) below, and payable as may be set forth in each
(b) A royalty ("Royalty") of such amount as may be set forth in each
Addendum or such percent of the greater of Licensee's gross wholesale
price or such amount as Licensee may actually receive for each
Licensed Article manufactured and sold hereunder as may be set forth
in each Addendum.
Said Royalty shall be paid to Paramount on all Licensed Articles
distributed by Licensee hereunder whether for sale or for purposes of
promoting sales (such as free samples in excess of an allowance of [*]
units of each title and format) and shall be computed on the same
basis as if sold by Licensee at its customary price without discount.
[*]
- --------------- [*] Confidential Portions Omitted and Filed Separately With the Commission
(c) A Guarantee of such sum as may be set forth in each Addendum payable,
to the extent not then already paid to Paramount under subparagraphs
9(a) and 9(b), as may be set forth in each Addendum.
10. ACCOUNTING AND AUDIT:
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(a) Licensee shall render accounting statements (in the form of Exhibit
"B" attached hereto and made a part hereof) to Paramount on a
quarterly (calendar year) basis within thirty (30) days of the end of
each quarter, whether or not any payment is shown to be due to
Paramount thereunder, and remit payments due Paramount along with such
statements, addressed to: PARAMOUNT LICENSING, Department 4312, SCF
Pasadena, California 91050-4312, with a copy of each such statement to
the DIRECTOR, FINANCE - LICENSING, PARAMOUNT PICTURES CORPORATION,
5555 Melrose Avenue, Los Angeles, California 90038. If the Territory
of the Agreement covers more than one country, accounting statements
shall be separated on a country-by-country basis. All payments shall
be made without set-off of any amount or nature whatsoever, whether
based upon any claimed debt or liability of Paramount to Licensee. All
sums not paid when due shall bear interest at the rate of ten percent
(10%) per annum (or such higher percent, not to exceed twenty percent
(20%), as may be permitted under the laws of the State of California),
without prejudice to any other rights of Paramount in connection
therewith. The receipt and deposit of monies by Paramount shall not
prevent or limit Paramount's right to contest the accuracy and/or
correctness of any statement in respect of such monies.
(b) Licensee shall keep accurate books of account and records covering all
transactions relating to this Agreement and shall retain all other
documents and materials in its possession or under its control
relating to the subject matter hereof, at Licensee's principal place
of business for not less than two (2) years after the actual delivery
of each accounting statement hereunder and shall allow Paramount and
its representatives, upon prior written notice, to audit said books of
account and records and to make copies thereof at Paramount's expense.
If any such audit reveals Royalties due to Paramount in excess of [*]
of the Royalties paid to Paramount for the period covered by such
audit, all auditing fees, costs and expenses shall be borne by
Licensee, in addition to which interest shall be added to the amount
discovered to be due, to be computed from the first due date of the
applicable accounting period in which such payment was found to be
unpaid. If the services of attorneys are engaged by Paramount in
collection of monies due to it hereunder, their fees, expenses and
costs shall be borne by Licensee, or if paid by Paramount, promptly
reimbursed to it by Licensee. If any such audits reveals Royalty
payments due to Paramount in excess of [*] of the Royalties paid to
Paramount for the period covered by such audit, then, in addition to
any and all other rights, legal and/or equitable, of Paramount,
Paramount shall have the right, effective immediately upon giving
notice to such effect to Licensee, to terminate the Term of this
11. APPROVALS/ARTWORK:
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(a) The quality of the Licensed Articles as well as the quality of all
packaging, hang-tags, labels, press releases, advertising,
promotional, display and any other material prepared in connection
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with the Licensed Articles (collectively, "Packaging and Promotional
Material") which includes the Property and/or Trademarks shall be no
less than the best quality of similar articles, packaging,
advertising, promotional and display materials presently manufactured,
distributed, sold and/or used by Licensee in the Territory and shall
be in full conformity with all applicable laws and regulations.
(b) Paramount shall have absolute approval of the Licensed Articles and
all Packaging and Promotional Material at all stages of the
development and application thereof. Licensee may not manufacture,
use, offer for sale, sell, advertise, promote, ship or distribute any
Licensed Articles nor any Packaging and Promotional Material relating
to the Licensed Articles until and unless Licensee has received
Paramount's approval therefor in the manner prescribed hereinbelow.
Any acts by Licensee contrary to the terms of this Paragraph shall be
deemed a material breach of this Agreement, entitling Paramount, in
addition to any and all remedies it may have at law and in equity, to
terminate this Agreement.
(c) Licensee shall, in a timely manner and in sufficient time for review
and consideration, submit for Paramount's discretional approval all
materials relating to the Licensed Articles, including, without
limitation, drawings, plans, blueprints, models, computer graphics,
prototype samples and component parts of the Licensed Articles and all
Packaging and Promotional Material in connection therewith prior to
any use thereof by Licensee; the same shall be submitted to APPROVALS
COORDINATOR-LICENSING, at PARAMOUNT PICTURES CORPORATION, 5555 Melrose
Avenue, Los Angeles, California 90038. All submissions shall be made
prior to any use thereof, or public disclosure thereof, by or on
behalf of Licensee. Any submission not approved in writing by
Paramount within fourteen (14) days shall be deemed disapproved (see
Exhibit "C" (Approval Guidelines) which is attached hereto and made a
part hereof). All approvals requested of Paramount under this
Agreement may be granted or withheld by Paramount in its sole
discretion, subject to the terms of this paragraph.
(d) Paramount shall furnish to Licensee, at Licensee's cost, such artwork
as may be reasonably necessary for the manufacture, advertising and
promotion of the Licensed Articles, subject to availability and to
Paramount's absolute right of approval (the "Artwork"); all such
Artwork shall be and remain the property of Paramount, notwithstanding
its creation or modification (which is also subject to Paramount's
absolute approval) by Licensee, and shall be returned to Paramount
after its use by Licensee. Licensee shall not use the Artwork in any
other manner.
(e) In order that Paramount may be assured that the provisions of this
Agreement are being observed, Licensee shall allow Paramount or its
designee to enter upon Licensee's premises during regular business
hours, upon prior notice, for the purpose of inspecting the Licensed
Articles, Packaging and Promotional Material and the facilities in
which they are manufactured and packaged. In the event that the
quality standards hereinabove referred to are not met, or in the event
that said quality standards are not maintained throughout the period
of manufacture of any Licensed Articles hereunder, then, upon written
notice from Paramount, Licensee shall immediately discontinue the
manufacture and distribution of such Licensed
Articles that do not reasonable meet Paramount's quality standards,
and/or the advertising and promotional material related thereto,
unless Licensee shall have remedied such failure of quality to
Paramount's satisfaction within ten (10) days after Licensee's receipt
of notice thereof; failure to effect such remedial measures shall
entitle Paramount to terminate this Agreement upon notice to Licensee.
12. SAMPLES:
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Licensee shall furnish to Paramount [*] samples of each title of the
Licensed Articles in the floppy disc and CD formats, and [*] samples of
each title of the Licensed Articles in the cartridge format at the
commencement of distribution thereof, and additional samples, as and when
requested by Paramount, at cost, such samples not to be resold by
13. GOODWILL, PATENTS, TRADEMARKS AND COPYRIGHT:
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(a) Licensee recognizes and acknowledges that:
(i) the title of the Picture (and, if the Picture is a sequel to a
prior work, or if there are now or are later developed sequels
to the Picture, the titles of such prior work and of such
sequels) and the logos and/or artwork (including artwork
developed for advertising and promotional use) embodying such
title or titles are, as between Paramount and Licensee,
trademarks of Paramount, whether or not registered as such;
(ii) the good will associated with the Picture and the Trademarks
inures soley and exclusively to Paramount; and
(iii) that the Picture and the Trademarks have acquired, and will
continue indefinitely to have and to acquire, a secondary
meaning in the minds of the public.
(b) All rights in the Property and Trademarks other than those
specifically granted herein are reserved to Paramount for its own use
and benefit. Licensee acknowledges that it shall not acquire any
rights in the Property and/or Trademarks as a result of Licensee's use
thereof, and that all use of the Property and/or Trademarks by
Licensee shall inure to the benefit of Paramount. Licensee shall not,
directly or indirectly, during the term of this Agreement or
thereafter, attack the ownership by Paramount of the Property, the
Trademarks or the validity thereof or attack the validity of the
license herein granted to it. Licensee shall not at any time apply for
any registration of any copyright, patent or trademark or other
designation which would affect the ownership of the Property or
Trademarks nor file any document with any governmental authority or
take any action which would affect the ownership of the Property or
Trademarks or aid or abet anyone else in doing so. Licensee shall at
no time, whether during the Term or thereafter:
(i) use or authorize the use of any trademark, trade name or other
designation identical with or confusingly similar to the
Trademarks;
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(ii) manufacture, distribute, offer for sale, advertise or promote
any article, using in connection therewith any words and/or
symbols and/or combinations thereof which are identical with or
confusingly similar to any element of the Property or the
Picture, whether or not such element shall have been protected
by patent, copyright or trademark.
(c) Except as may be set forth in each Addendum, all copyright, patent and
trademark in the Licensed Articles and Packaging and Promotional
Material shall be in the name of Paramount. Licensee shall cause
copyright, patent and trademark notices to appear on or within each
unit of the Licensed Articles and/or each item of Packaging and
Promotional Material as may be designated and approved by Paramount.
For purposes of trademark registration, promptly after the first
public sale of each Licensed Article, Licensee shall deliver to
Paramount such samples, free of cost, of each Licensed Article and its
packaging, enclosures, promotional materials and advertising, along
with a copy of the invoice showing the first public shipment of the
Licensed Article from Licensee to any third party in interstate
commerce as may be reasonable requested by Paramount.
(d) Except as may be set forth in each Addendum, any and all additions to,
and new renderings, modifications or embellishments of, the artwork
shall, notwithstanding their invention, creation and use by Licensee,
be and remain the property of Paramount, and Paramount may use, and
license others to use, the same, subject only to the provisions of
this Agreement. If Licensee retains or engages any third parties who
are not employees of Licensee to make any contribution to the
invention or creation of any artwork or designs involving or related
to the Property or to the Picture, so that such third parties might be
deemed "authors" or "inventors" of such artwork or designs (as the
terms "authors" and "inventors" are used in present or future United
States copyright and patent statutes or judicial decisions), then
Licensee shall obtain from all such parties, and furnish to Paramount,
a full assignment of rights in and to such artwork and/or designs
(free and clear of any and all claims, encumbrances, interests or
rights of any nature of such third parties, of Licensee, or of any and
all other third parties), vesting same in Paramount. Licensee shall
not permit any of its employees to obtain or reserve, by written or
oral agreement or otherwise, any rights as "authors" or "inventors" of
any such artwork or designs. Licensee shall furnish to Paramount, at
Paramount's request, full information concerning the invention and
creation of such artwork and designs, together with the originals of
assignments of all rights therein obtained from all such third
(e) Licensee shall cooperate with Paramount in the prosecution and defense
of the Property and/or the Trademarks, the filing and prosecution of
any patent, trademark or copyright application or other applications,
the recording of this Agreement or any other agreements, and the
publication of any notices or the doing of any other act or acts with
respect to the Property and/or Trademarks, including the prevention of
the use thereof by any unauthorized person, firm or corporation, that
in Paramount's judgment may be necessary or desirable under any law,
regulation or decree of the Territory. In connection with any of the
foregoing, Licensee shall arrange for Paramount to be promptly
supplied with any such information or materials as Paramount may
reasonably require. In
the event that any matter arises with respect to the protection of the
Property and/or Trademarks in the Territory, Licensee shall promptly
advise Paramount in writing of the nature and extent of same.
Paramount may, in its sole discretion, take, or elect not to take,
such action as it deems advisable against any infringing party, in its
own name and/or Licensee's name, and may prosecute, settle or
otherwise dispose of such action without consultation with, or
responsibility to, Licensee. Paramount shall incur no liability to
Licensee by reason of Paramount's failure or refusal to prosecute, or
failure or refusal to permit Licensee to prosecute, any alleged
infringement or imitation by third parties, nor by reason of any
settlement to which Paramount may agree. Only if any such infringement
is in the nature of imitation of the Licensed Articles or Packaging
and Promotional Material, may Licensee, with Paramount's prior written
consent and at Licensee's expense, commence an action or join in
Paramount's action against the infringer.
14. WARRANTIES AND INDEMNIFICATION:
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(a) Licensee represents and warrants that it is duly organized under
applicable law; that it has the unencumbered right and authority to
enter into and perform its obligations under this Agreement and under
all collateral agreements to be entered into by it in furtherance of
the provisions hereof.
(b) Paramount represents and warrants that it is duly organized under
applicable law; that it has the right and authority to enter into and
perform this Agreement and to grant the rights granted hereunder.
Paramount makes no representation or warranty as to the amount of
receipts Licensee will derive hereunder or as to the quality or
success of the Picture or reception it will receive by the public,
nor shall Paramount be obligated to continue the exhibition,
distribution or other exploitation of the Picture or continue the use
of any element of the Property.
(c) Licensee shall indemnify, hold harmless, and defend Paramount, its
parent, affiliated and subsidiary companies, and its and their
officers, directors, agents and employees ("Paramount Indemnitees")
from and against any and all liabilities, claims, causes of action,
suits, losses, damages, fines, judgments, settlements and expenses
which may be suffered, made or incurred by any of such Paramount
Indemnitees arising out of any breach or alleged breach of any of the
covenants, warranties, representations and agreements made by Licensee
herein, including without limitation, claims relating to or based upon
(i) unauthorized use of, or infringement of any patent, trademark,
design, copyright or other proprietary right of any third party
by Licensee;
(ii) libel or slander against, or invasion of the right of privacy,
publicity or property of, or violation or misappropriation of
any other right of any third party;
(iii) defects in the Licensed Articles, despite Paramount's approval
thereof, it being understood and agreed that any governmental
order of recall or injunction against distribution and/or sale
shall, as between Paramount and Licensee, be deemed conclusive
proof of such defect for the purpose of invoking the
indemnifications set forth in this subparagraph 14(c); and/or
(iv) agreements or alleged agreements made or entered into by Licensee
to effectuate the terms of this Agreement.
Paramount shall give Licensee prompt written notice of the institution
of any action or the making of any claim alleging a breach hereunder.
Paramount shall have the right to control all aspects of the
disposition of such claim, and Licensee shall cooperate with Paramount
in connection therewith.
(d) Paramount shall indemnify, hold harmless and defend Licensee from and
against any and all liabilities, claims, causes of action, suits,
losses, damages, fines, judgments and expenses which may be suffered,
made or incurred by Licensee Indemnitees arising solely out of use by
Licensee of the Property as authorized in this Agreement or as a
result of Paramount's conducting an action against an infringing party
in Licensee's name without Licensee's participation therein. Licensee
shall give Paramount prompt written notice of the institution of any
action or the making of any such claims. Paramount shall control all
aspects of the disposition of such claims and Licensee shall cooperate
fully with Paramount in connection therewith.
15. INSURANCE:
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Licensee shall obtain and maintain throughout the Term, at Licensee's sole
expense, standard Product Liability Insurance and Advertiser's Liability
Insurance from a reputable insurance company qualified to do business in
the State of California, naming Paramount, its parent company, and their
respective subsidiaries and affiliated companies, including all directors,
officers, employees, agents and representatives, as additional insureds.
Each policy will provide full indemnification and defense against any
claims, liabilities, demands and causes of action arising out of the
Licensed Articles, the creation or production thereof, and any
advertising, promotion and publicity of same, and their use and/or any
defects in, or the reasonably foreseeable use or misuse thereof. Coverage
under each policy will be a minimum of One Million Dollars ($1,000,000) for
each instance and Three Million Dollars ($3,000,000) in the aggregate. Each
such policy shall require that Paramount receive at least thirty (30) days
written notice of the cancellation, amendment or endorsement thereof.
Licensee shall furnish Paramount upon execution of this Agreement by
Licensee with certificates of insurance and certified policy endorsements
envidencing that the insurance coverage is in full force and effect.
16. TERMINATION:
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(a) In the event Licensee fails to perform any of its obligations under
this Agreement, including without limitation the active marketing and
distribution of any and/or all the Licensed Articles; or breaches any
covenant, representation, warranty or agreement contained herein,
files a petition in bankruptcy or is adjudged a bankrupt, or if a
petition in bankruptcy is filed against Licensee, or if Licensee
becomes insolvent, or makes an assignment for the benefit of
creditors, or if Licensee discontinues its business or if a receiver
is appointed for Licensee or Licensee's business who is not discharged
within thirty (30) days, Paramount may terminate this Agreement on
thirty (30) days prior written notice [*].
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[*] Time is of the essence of this Agreement.
(b) In the event of termination of this Agreement by Paramount for any of
the reasons set forth in Subparagraph 16(a) above, no creditor, agent,
representative, receiver or trustee of Licensee shall have the right
to dispose of any units of the Licensed Articles without the prior
written consent of Paramount; until payment of all monies due to
Paramount from Licensee, Paramount shall have a lien on any units of
the Licensed Articles not then disposed of by Licensee at any time in
respect of sales of the Licensed Articles; and on any monies due
Licensee from any jobber, wholesaler, distributor, sub-licensee, or
other third parties, in respect of sales of the Licensed Articles;
Paramount may treat all of the aforesaid third parties as Paramount's
direct licensees with no obligation to the Licensee.
(c) In the event of termination of this Agreement by Paramount due to
breach of any of the terms or conditions hereof by Licensee, Licensee
shall have no right to sell, distribute or otherwise dispose of any
units of the Licensed Articles without Paramount's prior written
(d) Upon the expiration of the Term or earlier termination of this
Agreement:
(i) All rights, licensee and privileges granted to Licensee
...
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