Computer Game License Agreement

EXHIBIT 10.45


COMPUTER GAME LICENSE AGREEMENT


This Computer Game License Agreement ("AGREEMENT") is made and entered into by and between TSR, Inc., a Wisconsin corporation having a principal place of business at 201 Sheridan Springs Road, Lake Geneva, WI 53147 ("TSR") and Interplay, a California corporation having a principle place of business at 17922 Fitch Avenue, Irvine, CA 92714 ("LICENSEE").


The following will set forth our mutual understanding and agreement with respect to the grant of rights by TSR to LICENSEE to develop, manufacture, distribute, promote, and sell products using the copyrights, trademarks, trade names and other intellectual property listed in Schedule A ("LICENSED PROPERTY").


1. Grant of License. Subject to and in accordance with all of the terms and conditions of this AGREEMENT, TSR grants LICENSEE a license during the TERM to develop, manufacture, distribute, promote; and sell the products identified in Schedule B ("LICENSED PRODUCTS") using the LICENSED PROPERTY through wholesale and retail channels (but not, without TSR's prior written consent, by way of premiums Or giveaways or in connection with the sale or promotion of any other products) in the countries identified in Schedule C ("TERRITORY"). This license is non-exclusive except as may be designated in Schedules A, B, and C. Material, products, and countries may be added to or deleted from the LICENSED PROPERTY, LICENSED PRODUCTS, and TERRITORY, respectively, by mutual agreement of the parties in writing. TSR may delete material, products, and countries from the LICENSED PROPERTY, LICENSED PRODUCTS, and TERRITORY, respectively, at any time if required by court order or otherwise in all countries other than those in North America and Europe and in Japan and Australia. If any deletion occurs pursuant to the foregoing sentence, TSR and LICENSEE agree to negotiate in good faith a modification to the advance and royalty payments described herein.


2. Sublicensing. LICENSEE may enter into sublicenses provided that. Each sublicense: (1) includes provisions for the protection of TSR's copyrights, trademarks, and goodwill equivalent to the terms of Paragraphs 6-9, 17-18, 20-24, 26-27, and 34, of this AGREEMENT; (2) terminates immediately upon the expiration or earlier termination of this AGREEMENT; and (3) prohibits the sublicensee from itself sublicensinq any rights. LICENSEE will promptly provide TSR with one (1) fully-executed original of each sublicense entered into. Any LICENSED PRODUCTS produced or sold under a sublicense are subject to all terms and conditions of this AGREEMENT and LICENSEE will take best efforts to ensure compliance therewith. _____________ * Portions omitted pursuant to a request for confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.


3. Best efforts. LICENSEE agrees to use its best efforts to actively, aggressively and effectively develop, manufacture, promote to the consumer and to the trade, distribute and sell the LICENSED PRODUCTS in the TERRITORY. LICENSEE will bear all costs in connection with those activities.


4. Prior activity. To the extent LICENSEE has engaged in any activity with respect to the LICENSED PROPERTY relating to the LICENSED PRODUCTS prior to the execution of this AGREEMENT, all such activity will be governed by the terms, and subject to the conditions of this AGREEMENT.


5. Development. LICENSEE has the sole responsibility and obligation for the cost of development, manufacturing, packaging, distribution, promotion and sale of the LICENSED PRODUCTS. "Cost of development" includes, without limitation, the cost of artwork, photography and related art services, from concept stage to final product, whether such materials and services are furnished directly by LICENSEE or by TSR at LICENSEE's expense. TSR may, at its option, loan materials to LICENSEE free of charge. LICENSEE will promptly return such loaned materials to TSR in their original condition when they are no longer needed by LICENSEE.


6. Approvals.


(a) In order to assure that the quality of all LICENSED PRODUCTS, packaging, promotional material, or other use of the LICENSED PROPERTY is consonant with, and does not reflect adversely upon, the goodwill of the LICENSED PROPERTY and TSR. LICENSEE will consult with TSR during the development of each LICENSED PRODUCT and will obtain TSR's prior approval, such approval not to be unreasonably withheld, of each use of the LICENSED PROPERTY prior to release or distribution. LICENSEE will not change the text or contents of any approved use of the LICENSED PROPERTY without obtaining TSR's prior approval. TSR has sole right to grant or withhold its approval of any use of the LICENSED PROPERTY and may take into consideration such esthetics and other considerations as TSR deems appropriate. TSR and LICENSEE will adhere to the following approval procedures:


(i) LICENSEE will provide a sample of the material, design and artwork for each LICENSED PRODUCT and its packaging for TSR's approval and any other information requested by TSR concerning the LICENSED PRODUCT at the following four stages (as appropriate for _____________ * Portions omitted pursuant to a request for confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.


each LICENSED PRODUCT) and will not proceed beyond each stage until it has received TSR's approval:


* concept;


* preliminary design;


* final design;


* pre-production sample; and


* production sample.


(ii) LICENSEE will provide samples of any advertisements, point- of-sale, or other promotional material for TSR's approval and will not publish distribute or otherwise use the material until it has received TSR's approval.


(iii) All samples will be provided by LICENSEE without cost to TSR. LICENSEE will submit English translations of all samples containing text not in the English language.


(iv) TSR will notify LICENSEE of its approval or disapproval of each sample in writing within ten (10) business days after TSR receives the sample and any requested additional information from LICENSEE, or such longer period of time as the parties may agree. If TSR does not approve or disapprove of a sample within eight (8) business days after TSR receives the sample, LICENSEE may request approval or disapproval by facsimile, and, if TSR does not thereafter approve or disapprove of the sample within two (2) business days, the sample will be deemed approved. If TSR disapproves of any sample, TSR will inform LICENSEE in writing of the reasons for its disapproval.


(v) All samples and other communication relating to this approval procedure will be directed to the persons designated by each party in Schedule J (the "DESIGNATED PERSON" and "ALTERNATE PERSON"). The persons so designated may be changed by the respective party upon written notice to the other party.


7. Recall of Unapproved Material. If LICENSED PRODUCTS or other materials using the LICENSED PROPERTY are distributed to third parties in violation of this AGREEMENT, LICENSEE will use its best efforts to promptly withdraw and withhold such LICENSED PRODUCTS or other materials from further distribution and to recover the LICENSED _____________ * Portions omitted pursuant to a request for confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.


PRODUCTS or materials that have already been distributed. LICENSEE is not, however, obligated to retrieve any such LICENSED PRODUCTS or other material already in the possession of ultimate consumers.


8. Complaints. LICENSEE will diligently address all legitimate complaints brought to its attention regarding the LICENSED PRODUCTS. LICENSEE will advise of any category of recurring complaint and of any complaint which LICENSEE believe might result in legal or administrative action against LICENSEE or TSR.


9. Compliance with Laws. LICENSEE will comply with all sovereign, state and any other local laws, regulations and rules, including without limitation all trademark, patent and copyright laws of the United States and of any foreign country or countries in the TERRITORY applicable to the subject matter of this AGREEMENT other than the registration of intellectual property rights, and LICENSEE will bear all costs associated with its compliance with such laws, regulations, and rules.


10. Advance. Upon execution of this AGREEMENT and as otherwise provided in Schedule E, LICENSEE will pay TSR as advances against royalties the amounts set forth in Schedule E ("ADVANCES"). ADVANCES for each LICENSED PRODUCT are deductible against royalties for that LICENSED PRODUCT only and are non- refundable in all circumstances. The foregoing will not be interpreted as limiting any action for damages in the event TSR is in default of its representations or obligations hereunder.


11. Royalties. LICENSEE will pay TSR the ROYALTIES provided in Schedule H of LICENSEE's income from LICENSED PRODUCTS. [*] LICENSEE may establish a reserve for returns of not more than [*] of products sold which reserve will be liquidated each quarter and may deduct any credit for actual returns from the royalty payment for [*] in which the returns were accepted. "On-line Charges" means the amount received by LICENSEE for use of the on-line system in connection with the LICENSED PRODUCTS. "Sublicense Revenues" means all monies actually received by Interplay pursuant to a sublicense, including any advances received for sublicenses.


12. Payment of Royalties. Within [*] of the end of [*], LICENSEE will: (1) send to TSR by facsimile or first class or air mail a royalty statement in the form of Exhibit A showing the complete computations made in calculating royalties for that [*]; and (2) wire transfer to an account designated by TSR or send by first class or air mail the royalty payment for [*]. If no sales of LICENSED PRODUCTS are made in [*], LICENSEE will inform TSR of such fact in writing within [*] _____________ * Portions omitted pursuant to a request for confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.


of the end of [*]. All payments will be made in United States currency. Any payment not made when due will bear interest from its due date to the date of payment at [*], or at such lower rate of interest as may be required by law. Such interest is in addition to, and not in lieu of, any other remedy to which TSR is entitled. LICENSEE will give such further explanatory details of sales and the computation of royalties or other payments as TSR may reasonably request.


13. Tax Treatment. Whenever possible, LICENSEE will take the necessary steps to secure exemption from any obligation to withhold amounts for taxes payable by TSR to any governmental body in the TERRITORY, and TSR will cooperate with LICENSEE in such endeavor. If such endeavor is not successful, LICENSEE may deduct the amount paid by LICENSEE in taxes charged directly against TSR and in TSR's name PROVIDED that LICENSEE provides TSR with original documentation of such payment. All other taxes payable in the TERRITORY are LICENSEE's sole responsibility and will be paid entirely by LICENSEE.


14. Records. LICENSEE will maintain accurate and complete books and records relating to the manufacture, distribution, and sale of the LICENSED PRODUCTS during the TERM and for [*] thereafter. During this period, TSR's Certified Public Accountant ("CPA") may, during regular business hours and on [*] written notice to LICENSEE, examine and make extracts or copies of LICENSEE's books and records to determine the accuracy of the statements furnished to TSR. LICENSEE will cooperate and assist TSR's CPA in understanding LICENSEE's books and records. LICENSEE will promptly pay any deficiency plus interest as set forth in Paragraph 12. LICENSEE will pay the cost of the examination if the deficiency is [*] of the royalty payment or greater.


15. Minimum Guarantee. If the actual royalty earned and received by TSR during the ORIGINAL TERM, the 1ST OPTION TERM or the 2ND OPTION TERM is less than the sums provided therefore in Schedule F ("MINIMUM GUARANTEES"), LICENSEE will pay TSR the difference between the actual royalty earned and the MINIMUM GUARANTEE for that TERM within [*] of the end of the TERM.


16. Marketing Date. LICENSEE will release its first LICENSED PRODUCT by the date specified in Schedule a ("MARKETING DATE"). If LICENSEE does not comply with this provision TSR may terminate this AGREEMENT and retain all payments made to TSR as of the date of termination, it being understood and agreed that such payments constitute liquidated damages and not a penalty. _____________ * Portions omitted pursuant to a request for confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.


17. Samples. Promptly upon the start-up of LICENSEE's initial production run, LICENSEEE will furnish to TSR without cost [*] samples of each LICENSED PRODUCT including any packaging, labels, hang-tags, catalogs, advertising, or other promotional material. Annually on the anniversary date of this AGREEMENT during the TERM, LICENSEE will furnish to TSR without cost [*] samples from recent production of each LICENSED PRODUCT including any packaging, labels, hang-tags, catalogs, advertising, or other promotional material. TSR may purchase from LICENSEE at LICENSEE's lowest selling price such royalty-free units of any LICENSED PRODUCT as TSR may request for sale in TSR's mail order catalog business or for other use. The amounts due to LICENSEE from TSR for such purchases may be deducted from any royalties owed to TSR by LICENSEE.


18. Ownership of Related Works. LICENSEE acknowledges and agrees that, except for development tools, all works developed by LICENSEE for use in connection with the LICENSED PRODUCTS, including without limitation video and computer game play elements, cluebooks, artwork, packaging, advertisements , text and translations ("RELATED ...