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.

[*]



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(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 ...