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Agreement of Strategic Relationship

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EXHIBIT 10(f)


AGREEMENT OF STRATEGIC RELATIONSHIP


[Information below, marked with [**], has been omitted pursuant to a request for confidential treatment. A complete copy of this document has been supplied to the Securities and Exchange Commission under separate cover.]


This AGREEMENT OF STRATEGIC RELATIONSHIP (the "agreement") is made and entered into as of October 14, 1997, between Lucasfilm Ltd., a California corporation ("Lucasfilm"), on the one hand, located at P. O. Box 2009, San Rafael, CA 94912 and Hasbro, Inc., a Rhode Island corporation, located at 1027 Newport Avenue, Pawtucket, RI 02862 ("Hasbro"), on the other hand.


WHEREAS:


A. Lucasfilm is a California corporation engaged in the production of theatrical motion pictures and the licensing of intellectual property rights related to such theatrical motion pictures;


B. Lucasfilm owns or controls rights in respect of the Property (as hereinafter defined);


C. Hasbro is engaged in the manufacture, distribution and sale of consumer products in the form of toys including, without limitation, toys based on entertainment intellectual properties licensed from third parties;


D. Lucasfilm and Hasbro have a longstanding relationship with respect to the licensing of such rights; and


E. Lucasfilm and Hasbro wish to establish a strategic relationship whereby Hasbro would acquire the opportunity to license certain rights in and to theatrical motion pictures produced by Lucasfilm for the manufacture, distribution and sale of Products in the Territory, subject to the terms and conditions of this Agreement.


NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:


1. GRANT OF RIGHTS.


Subject to the terms and conditions of this agreement, and in
consideration for all of Hasbro's obligations hereunder, including,
without limitation, Hasbro's agreement to grant to Lucasfilm a warrant as
provided in Paragraph 4 hereinbelow, Lucasfilm grants to Hasbro an
exclusive, non-transferable, non-assignable right of first negotiation
(the "First Negotiation Right") and, as more specifically provided in
Subparagraph 3.3 hereinbelow, right of first refusal (the "First Refusal
Right") during the Term and throughout the Territory to license the
Property as provided in Paragraph 3 hereinbelow:


1.1. to develop, design, manufacture, distribute, advertise, publicize,
market and sell the Products, for sale to retail Customers through all
channels of wholesale and retail distribution permitted hereunder; and


1.2. for reproduction on containers, packaging, display and promotional
material and in Advertising and Advertising Materials for the Products.


The First Negotiation Right and First Refusal Right shall be exercised by
Hasbro in accordance with the terms and conditions contained in this
agreement.


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Agreement Between Lucasfilm Ltd. and Hasbro, Inc. dated October 14, 1997


2. TERM AND TERRITORY.


2.1. Term. The term of Hasbro's rights pursuant to this agreement with
respect to the First Negotiation Right and First Refusal Right (the
"Term") shall consist of the time period commencing as of the date hereof
and ending on December 31, 2007.


2.2. Territory. The territory of Hasbro's rights hereunder (the
"Territory") consists of the world excluding China.


3. EXERCISE OF FIRST NEGOTIATION RIGHT AND FIRST REFUSAL RIGHT.


The First Negotiation Right and in certain situations First Refusal Right
as to each theatrical motion picture which is an element of the Property
shall be exercisable by Hasbro in accordance with the following procedure:


3.1. If Lucasfilm desires to license the rights referenced in
Subparagraphs 1.1 and 1.2 hereinabove with respect to any theatrical
motion picture which is an element of the Property, then Lucasfilm shall
notify Hasbro in writing. Lucasfilm shall concurrently make available to
Hasbro at Lucasfilm's premises all materials then extant regarding such
motion picture, including script, artwork, casting, to the extent
available.


3.2. Hasbro shall thereafter have thirty (30) days from the date of such
notice (the "First Negotiation Period") to negotiate and enter into a
written agreement (the "Agreement"), which agreement shall incorporate no
less than all of the terms and conditions of that certain license
agreement between Hasbro and Lucas Licensing Ltd. dated as of October 14,
1997 (the "Toy Agreement") with the exception of Royalties (Paragraph 8),
Advance (Paragraph 7), Term (Paragraph 2), [**] (Subparagraph 4.3),
Minimum Sales Levels (Subparagraph 4.2), and the definition of Licensed
Property (Subparagraph 24.68) (collectively the "Excluded Terms");
provided, however, that neither party shall be obligated to conclude an
Agreement with respect to a particular theatrical motion picture which is
an element of the Property. During the First Negotiation Period, the
parties shall negotiate with respect to the Excluded Terms, provided that
the Royalty Percentage shall be no less than ten percent (10%) of Net
Sales and no more than the rates specified in Paragraph 8 of the Toy
Agreement.


3.3. If the parties fail to enter into an Agreement with respect to such
theatrical motion picture during the First Negotiation Period, then
Lucasfilm shall be free to negotiate with and conclude an agreement with
any third party with respect to the rights that are incorporated in the
First Negotiation Right provided, that with respect to those theatrical
motion pictures set forth in Subparagraphs 5.2(a)(i), (ii), (iii), and
(iv) ("First Refusal Pictures"), Lucasfilm shall not conclude an agreement
with a third party with respect to such rights on terms that are less
favorable to Lucasfilm than those terms last offered by Hasbro without
giving notice of such third party offer to Hasbro and providing Hasbro
with a ten (10) day period (the "First Refusal Period") within which to
enter into an Agreement with Lucasfilm on the same terms and conditions
contained in the third party offer (the "First Refusal Right"). If Hasbro
fails to execute such Agreement within such


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Agreement Between Lucasfilm Ltd. and Hasbro, Inc. dated October 14, 1997


First Refusal Period with respect to a First Refusal Picture or within the
First Negotiation Period with respect to all other theatrical motion
pictures included within the Property, then Lucasfilm shall be free to
enter into an agreement with such third party with respect to a First
Refusal Picture or with any third party with respect to all other
theatrical motion pictures subject to the First Negotiation Right and such
theatrical motion picture shall be deleted from the definition of the
Property hereunder.


3.4. Lucasfilm makes no representation or warranty that any rights which
otherwise would be subject to the First Negotiation Right and First
Refusal Right as to any theatrical motion picture produced by Lucasfilm
following the date hereof and during the Term will be owned or controlled
by Lucasfilm or that Lucasfilm will retain the right or ability to include
such theatrical motion picture as an element of the Property,
notwithstanding the fact that at any point in time, Lucasfilm may have
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