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3.21 Form: Master Joint Development Agreement
This Master Joint Development Agreement ("Agreement") is made by
and between Multimedia Associates, Inc., a New York corporation
having a principal place of business at Broadway, New York, New
York ("Producer") and Developer Inc., a Washington corporation
having a principal place of business at Ashford Avenue, Seattle,
Washington ("Developer").
WHEREAS, Producer is in the business of publishing, distributing,
and selling print and videocassette publications;
WHEREAS, Developer is in the business of developing interactive
multimedia titles; and
WHEREAS, Producer and Developer wish to cooperate jointly to
create and exploit interactive multimedia titles combining elements of
the Producer Works (as hereinafter defined) together with elements of
the Developer Works (as hereinafter defined) into Products (as
hereinafter defined).
NOW, THEREFORE, in consideration of the promises and covenants
recited below, it is hereby agreed by and between Producer and
Developer as follows:
1. Definitions
1.1. Product
"Product" as used herein shall mean an application which is identified
on a Product Schedule executed by the Parties in the form annexed
hereto as Exhibit A ("Product Schedule").
1.2. Development Costs
"Development Costs" as used herein shall mean any sum of money
advanced to Developer by Producer pursuant to a Product Schedule
(the "Development Fees"), together with any sum expended by
Producer to forward the creation or development of a Product.
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1.3. Developer Works
"Developer Works" as used herein shall mean computer software or
documentation in hard copy, source, and object code form used in the
creation of, or included in, any Product, including but not limited to
development tools and product drivers and all associated
documentation and related materials.
1.4. Joint Effort
"Joint Effort" as used herein shall mean the cooperative, joint effort of
Producer and Developer, subject to the terms and conditions of this
Agreement, to jointly develop, market, sell or otherwise exploit
Products and copies thereof.
1.5. Management Committee
"Management Committee" shall mean a committee composed of five
(5) individuals, three (3) of whom shall be designated by Producer and
two (2) of whom shall be designated by Developer.
1.6. Producer Works
"Producer Works" as used herein shall mean any Publications,
photographs, illustrations, graphics, video or audio segments including
but not limited to any copies or derivative versions thereof such as
digitized copies, which Producer owns or controls the rights to use in
conjunction with a particular Product.
1.7. Producer Trademarks
"Producer Trademarks" as used herein shall mean the registered and
unregistered trademarks identified on Exhibit B hereto.
1.8. Platform
"Platform" as used herein shall mean a particular combination of CPU
hardware, operating system software and data access devices.
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1.9. Publications
"Publications" shall mean magazines, periodicals, newsletters, books
and videocassettes published by Producer and any copies or portions
thereof, including, without limitation, any photographic images, text,
animation, video, graphics, trademarks or trade names incorporated
therein or appurtenant thereto.
1.10. Term
"Term" as used herein shall mean the period beginning on the date
hereof and ending on the date that is seven (7) years from the date
thereof, unless terminated earlier, or renewed by Producer, in
accordance with the terms and conditions contained in this Agreement.
1.11 Territory
"Territory" as used herein shall mean the world.
2. Joint Effort
2.1. Producer's Contribution
Producer, as its contribution to the development portion of the Joint
Effort, grants to Developer the Producer License (as hereinafter
defined), and agrees, subject to the terms and conditions of this
Agreement and at Producer's expense, to provide Developer with the
Producer Works identified on any Product Schedule.
2.2. Developer's Contribution
Developer, as its contribution to the development portion of the Joint
Effort, grants to Producer the Developer License (as hereinafter
defined), and agrees, subject to the terms and conditions of this
Agreement and subject to the payment terms set forth in the applicable
Product Schedule, to use its best efforts to design, develop and
complete each Product, in consultation with Producer and to
Producer's satisfaction, in the manner and time frame set forth on any
Product Schedule (the "Services"). Developer shall not subcontract to
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third parties to perform any of the Services without the prior express
written consent of the Management Committee.
2.3. Marketing
The Management Committee will develop a marketing plan and a
budget for each Product (the "Marketing Plan") which shall be set
forth on the Product Schedule applicable to such Product. Developer
hereby agrees and acknowledges that Producer shall be the sole
marketer of record of the Products or copies thereof and, as such,
Producer, except as provided in the Marketing Plan or as otherwise
authorized by the Management Committee, will have the exclusive
right to establish channels of distribution, procedures for order
fulfillment and the like in accordance with the Marketing Plan. Unless
otherwise stated in the Marketing Plan, Producer shall have the right to
assign to or sublicense to any third party the right to assist Producer in
any aspect of the Marketing Plan, including, without limitation,
activities associated with advertising, promotion, sales or distribution
of copies of Products.
2.4. The Producer License
Subject to the terms and conditions herein Producer hereby grants to
Developer an exclusive, non-transferable, limited license for the
duration of the Term to duplicate and use the Producer Trademarks in
connection with the development of the Products and, in any manner
now known or hereinafter to become known, to duplicate, market, sell,
exhibit, perform, transmit, broadcast, distribute, sublicense,
redistribute and otherwise exploit in the Territory copies of the
Producer Works, or any portions thereof, solely in connection with the
development of, or as embodiments in, Products (the "Producer
License"). Nothing herein shall be interpreted to mean and Producer
does not grant to Developer any right or license to enter into
sublicenses or redistribution agreements with respect to any portion of
the Producer Works.
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2.5. The Developer License
Subject to the terms and conditions of this Agreement, Developer
hereby grants to Producer for the duration of the Term a non-exclusive
license, in any manner now known or hereinafter to become known, to
duplicate, market, sell, exhibit, perform, transmit, broadcast, distribute,
sublicense, redistribute and otherwise exploit in the Territory copies of
the Developer Works, or any portions thereof as embodied in any
Product (the "Developer License").
3. Trademarks
3.1. Ownership
The Developer acknowledges that the Producer Trademarks are
trademarks owned by Producer. Developer shall not use or authorize
any third party to use the Producer's trademarks except as approved in
advance by Producer.
3.2. Trademark Notices
All items or materials using the Producer Trademarks shall bear the
trademark notices set forth on Exhibit B. Notices will appear on any
and all Products, advertising, and promotional materials, cartons,
containers, jewel cases, wrapping material, display material, or other
materials which utilize the Producer Trademarks and such notice will
be placed in juxtaposition with such Producer Works and/or on the
Producer Property (as defined herein).
3.3. Quality Standards
Developer shall use the Producer Trademarks only in the same
logotype as used on Exhibit B or as otherwise specified by Producer.
Developer agrees to maintain such quality standards as shall be
prescribed by Producer in the conduct of the business operations with
which the trademarks are used.
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3.4. Good Will
Developer agrees that all use by Producer of the Producer Trademarks
shall inure to Developer's benefit. In those countries where Producer,
in its sole opinion, deems it necessary, Developer will be recorded as a
registered user of the Trademark at Producer's control and expense and
Developer will cooperate with Producer to effect such a recordal.
Developer shall not use the Producer Trademarks or any part thereof
as its corporate name nor use any name, mark or other designation
similar to the Producer Trademarks. Developer agrees not to register in
any country any mark similar to the Producer Trademarks. If any
application for registration is, or has been filed in any country by
Developer which relates to any mark which, in the sole opinion of
Producer, is similar, deceptive or misleading with respect to the
Producer Trademarks, Developer shall reimburse Producer for the
costs and expenses of any opposition or related legal proceedings,
including attorneys fees, brought by Producer or its authorized
representatives to challenge, oppose or cancel such application or
registration.
3.5. Infringement
In the event that Developer learns of any infringement, threatened
infringement, or passing-off of the Producer Trademarks or that any
third party claims or alleges that the Producer Trademarks are liable to
cause deception or confusion to the public, Developer shall notify
Producer giving particulars thereof and Developer shall provide
necessary information (for which Producer shall reimburse
Developer's actual out-of-pocket expense thereof) and assistance to
Producer in the event that Producer decides that proceedings should be
commenced or defended.
4. Verification
Prior to the manufacture of any Product, Developer shall have the
affirmative responsibility and obligation to use best efforts to verify
that the Product incorporates complete and accurate representations of
the Producer Works and the Developer Works.
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5. Reservation of Rights
5.1. Producer Reservation
The Producer reserves all other rights with respect to the Producer
Trademarks and the Producer Works (and any derivative works
thereof, including digitized forms), whether now existing or which
may hereafter come into existence which are not expressly licensed to
Developer, including but not limited to the exclusive rights of print
publication, electronic publication in all media and formats other than
those addressed herein, transmission, downloading, broadcast,
performance, exhibit or display through electronic, telephonic, optical
or any other means now known or hereafter to become known.
5.2. Developer Reservation
The Developer reserves all other rights with respect to the Developer
Trademark and the Developer Work (and any derivative works thereof,
including digitized forms), whether now existing or which may
hereafter come into existence which are not expressly licensed to
Producer, including but not limited to the exclusive rights of print
publication, electronic publication in all media and formats other than
those addressed herein, transmission, downloading, broadcast,
performance, exhibit or display through electronic, telephonic, optical
or any other means now known or hereafter to become known.
6. Additional Products; Non-Compete; Renewal
6.1. Additional Products Developer Rights
During the Term of this Agreement, Developer shall have the right of
first negotiation in the manner set forth in this paragraph with respect
to exploiting the Producer Works in Products. Should Producer wish to
contract with a third party to incorporate the Producer Works or
elements thereof in Products to be developed by said third party,
Producer shall negotiate with Developer with respect to such rights for
a thirty (30) day negotiation period. In the event Developer offers to
develop such Product(s) pursuant to the terms of this Agreement,
including substantially similar royalty terms, Producer shall make a
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reasonable, good faith effort to negotiate and execute applicable
Product Schedule(s) with Developer in connection therewith. Upon the
expiration of such good faith negotiation period, if an agreement has
not been reached through execution of Product Schedule(s) by the
Parties, or if the period is not extended by mutual, written agreement,
Producer shall be entitled to negotiate with other third parties with
respect to such rights.
6.2. Covenant Not to Compete
In recognition of the promises and covenants set forth in this
Agreement and considering that this Agreement is a condition to the
development and sale of Products from which Developer will derive
substantial benefits, Developer covenants and agrees that for the Term
of this Agreement, Developer shall not, and shall cause its employees,
officers and shareholders not to, directly or indirectly:
(a) engage in, or be employed by, hold any interest in, or provide
advice, act as a consultant or render any services to, any person,
corporation, partnership or other business entity which is currently
engaged in or currently has plans to engage in (including without
limitation any promotional or marketing activities) the business of
developing, marketing, promoting or otherwise exploiting products
which are directly competitive with any Products produced hereunder; or
(b) solicit a business relationship with any person, corporation,
partnership or other business entity which is, at the time of such
solicitation, currently engaged in or currently has plans to engage in
(including without limitation, any promotional or marketing activities),
the business of developing, promoting or otherwise exploiting
products which are directly competitive with any Products produced
hereunder.
6.3. Producer's Right of Renewal
Producer shall have the right, upon written notice to Developer sixty
(60) days prior to the date of expiration of the Term, to renew this
Agreement for an additional five (5) year renewal period, which
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renewal period or any other renewal period agreed to by the Parties
shall be deemed part of the Term.
7. Development Fees, Marketing Costs, Royalties and Losses
7.1. Development Fees
In the event Producer agrees to pay Developer any Development Fees
in connection with a Product, such Development Fees, if any, shall be
identified on the Product Schedule applicable to that Product. Such
Development Fees shall be fixed and shall be paid in accordance with
the milestone payments set forth on the applicable Product Schedule.
7.2. Marketing Costs
The Marketing Plan shall set forth, without limitation, a budget
itemizing anticipated costs associated with the initial start-up,
introduction phase of bringing a Product to market, together with the
anticipated ongoing costs of marketing, promoting, advertising,
distributing and selling such Product (collectively, the "Marketing
Costs"). The Marketing Plan shall also set forth, without limitation,
anticipated costs associated with the manufacturing and/or duplication
of copies of Products (the "Manufacturing Costs"). To the extent that
the Joint Effort exceeds either the Marketing Costs or the
Manufacturing Costs projected for a Product, and such overrun(s) are
authorized or ratified by the Management Committee, then such
overruns shall be tallied, deemed Marketing Costs or Manufacturing
Costs, as the case may be, and excluded from Producer Net Profits.
The Management Committee must give unanimous consent before
Marketing Costs for all Products can exceed ten percent (10%) of
projected gross revenue from the sale of copies of all Products. Either
of the Parties may elect to purchase copies of Products from the Joint
Effort for promotional purposes by paying to the other the sum of
money which the non-purchasing party would have received under this
Agreement in the event the copies of Products had been purchased by
a third party at the highest discount provided to any third-party
wholesale customer of the Joint Effort within the prior twelve (12)
months.
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7.3. Royalties
During the Term of this Agreement, for each Product developed by
Developer in consultation with Producer hereunder and passes the
Acceptance Test (as defined herein), Producer agrees to pay to
Developer, from Producer Net Profits, the royalties (the "Royalties")
designated on the applicable Product Schedule. Notwithstanding
anything to the contrary set forth in this Agreement, the Royalties
provided for in a Product Schedule represent the aggregate Royalties
payable in connection with sales of copies of the Product identified in
that Product Schedule.
7.4. Burden of Losses
If the undertaking of the Joint Effort by the Parties results in a loss for
Producer, the Parties shall be obligated equally for such loss.
7.5. Royalty Accounting
Producer will compute Developer's Royalties, if any, four (4) times per
year, at the end of each calendar quarter. Within sixty (60) days after
the last day of a calendar quarter, Producer will send Developer a
statement (each, a "Royalty Statement") covering such Royalties
indicating the calculation of Producer Net Profits and the Royalties
due Developer, if any.
7.6. Recordings and Inspection
Producer agrees to maintain and keep for a period of at least two (2)
years from the termination or expiration of this Agreement, books and
records, in a form in accordance with generally accepted accounting
principles, which pertain to the expenses incurred by Producer in
connection with the Joint Effort with regard to manufacturing,
production costs, marketing and otherwise and to the sales, distribution
and shipment of the Products and the revenues received by Producer
therefrom. Developer, at its sole cost and expense, shall have the right,
upon reasonable written notice to Producer, to inspect those of
Producer's books and records which pertain to the Joint Effort, at
Producer's premises and during Producer's normal business hours.
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Developer may only exercise this right one (1) time each calendar year
during the Term of this Agreement and one (1) time within the year
following termination or expiration of this Agreement. All information
to which Developer is provided access during such examination is
confidential information of Producer which is subject to the
confidentiality restrictions contained in Section 10 hereof.
8. Management Committee; Project Manager
8.1. Composition
As of the date hereof, the Management Committee shall consist of at
least the following named employees of Producer and Developer,
respectively: from Producer, Jane Smith; from Developer, Jack Brown.
Either of the Parties may, at any time during the Term, designate
employees to replace their respective representatives on the
Management Committee upon prior written notice to the other;
provided, however, that any individual named to the Management
Committee by either of the Parties shall have the authority to make
binding decisions on behalf of their respective employers with respect
to the Joint Effort. Members of the Management Committee shall not
receive any compensation from the Joint Effort in consideration for
serving as a representative on the Management Committee. No
representative to the Management Committee shall be liable to the
Parties by reason of his or her acts as a representative, except in the
case of his gross negligence or actual fraudulent conduct.
8.2. Management Committee Powers
In addition to the powers of the Management Committee expressly
enumerated elsewhere in this Agreement, the Management Committee
shall decide any policy and make any decision with respect to the Joint
Effort which it deems appropriate. Decisions of the Management
Committee shall be binding on each of the Parties.
8.3. Management Committee Meetings
The Management Committee shall meet at least one time per calendar
quarter, with the first meeting within thirty (30) days of the date
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hereof, to act on necessary matters pertaining to the Joint Effort. Such
meetings will take place at a time and site designated by the
chairperson of the Management Committee and mutually agreed upon
by the Parties in their reasonable discretion. A good faith, reasonable
attempt will be made by both Parties to rotate the location of these
meetings. Producer and Developer shall each bear their own expenses
associated with attendance of Management Committee meetings by
their respective representatives. Members of the Management
Committee shall use reasonable efforts to attend the meetings of the
Management Committee in person, but if personal attendance is not
possible, a member may attend meetings by telephone conference or
delegate his or her authority to attend meetings to other employees of
either Producer or Developer, as the case may be. A representative
from Producer shall function as the chairperson of the Management
Committee and shall call and chair meetings of the Management
Committee. A representative from Producer shall take minutes of
meetings of the Management Committee and distribute them to
members of the Management Committee to be approved at subsequent
Management Committee meetings.
8.4. Project Managers
The general day-to-day supervision and management of the Joint
Effort and any and all matters relating to it shall be under the general
charge and control of two project managers (the "Project Managers"),
subject to the powers vested in the Management Committee. Each of
the Parties shall appoint one of the Project Managers, who shall serve
at that party's pleasure. The Project Managers shall be given such
specific powers as the Management Committee may from time to time
delegate. As of the date hereof, Producer hereby appoints Eva Brown
as a Project Manager. As of the date hereof, Developer hereby
appoints Laura Gorden as a Project Manager. Either Project Manager
may at his or her reasonable discretion, from time to time and upon
notice to the other Project Manager, delegate specific aspects of their
day-to-day duties with respect to the Joint Effort to another employee
of Producer or Developer, respectively.
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9. Delivery and Acceptance
9.1. Delivery
Each Product specified on a Product Schedule must be delivered to
Producer on or before the milestone dates set forth therein. Producer
shall not be required to pay the portion of the Development Fee, if any,
associated with a particular milestone on a Product Schedule until such
milestone is met. Developer warrants and represents that each
milestone submission of the Product set forth in a Product Schedule
will be delivered to Producer by Developer after such submission has
been thoroughly tested by Developer and is certified by Developer to
be free of known errors (commonly known as "bugs"). In the event
Developer fails to timely deliver milestone submissions Alpha, Beta,
or Final or any equivalent milestones identified on a Product Schedule,
and in the event such failure to meet a milestone on the part of
Developer continues for a period of ninety (90) days or more, then
Producer, at its sole discretion, may terminate the Product Schedule
associated with such Product upon written notice to Developer and
shall be entitled to recoup any expenses it has incurred with respect to
such Product and to deduct such expenses from Royalties, if any, due
Developer for any Product. Notwithstanding the foregoing, Developer
may request Producer to extend a milestone date in writing, specifying
the reason(s) for such request, at least three (3) business days before
such milestone date. Any milestone date extension granted by
Producer hereunder shall be in Producer's sole discretion, but shall not
be unreasonably denied in the event that the failure to meet the
milestone has been caused, through no fault of Developer, by a delay
in the release of any operating environment, software utility or
extension on which such Product is dependent (and the dependency
thereon is set forth in the appropriate Product Schedule), or
unanticipated technical failures or deficiencies of any operating
environment software utility or extension on which such Product is
dependent (and the dependency thereon is set forth in the appropriate
Product Schedule), or unanticipated technical problems encountered
by Developer in the development of the Product, which technical
problems shall be communicated to Producer in detail and in writing.
In the event of any such delay, the milestone date extension shall be
granted in an amount of time reasonably sufficient for the cause of
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such delay to be corrected provided that Developer works diligently
and to the Management Committee's reasonable satisfaction to find
acceptable alternatives to any problems caused by failures associated
with third party products or to correct any such unanticipated technical
problems.
9.2. Acceptance Test
Within five (5) business days after receipt of interim milestone
submissions of any Product and within ten (10) business days after
receipt of the final milestone submission of any Product, the Parties,
together with third-party testers selected by the Management
Committee, shall test and evaluate Developer's milestone submission
of the Product (the "Acceptance Test"). The Acceptance Test shall be
jointly developed by Producer and Developer and shall be set forth in
the applicable Product Schedule. The Acceptance Test shall be
designed by the Parties to demonstrate the successful implementation
of the design of the Product as set forth in the applicable Product
Schedule (the "Product Requirements"). In the event that the milestone
submission of the Product passes the Acceptance Test as determined
by the Management Committee in its reasonable discretion, and after
the Developer Source Code for that milestone is deposited into escrow
in accordance with Section 10.5 hereof, Producer shall pay to
Developer that portion of the Development Fee, if any, due for the
completion of the applicable milestone. If the milestone submission
shall fail the Acceptance Test, the parties shall work together to
identify instances of failure of the milestone submission to meet the
Product Requirements (the "Punch List") and Developer shall have a
technologically and commercially reasonable period of time, as
determined by the Management Committee in its reasonable
discretion, to correct, at no cost to Producer, the items identified on the
Punch List and deliver a corrected milestone submission.
9.3. Producer's Option
In the event any milestone submission of the Product fails to pass the
Acceptance Test, and in the event Developer cannot correct all of the
failures within the cure periods set forth herein, or in the event
Developer fails to maintain the Product as warranted herein, then, in
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addition to any of Producer's other rights and remedies available to it
under this Agreement, Producer may, with the advice and consent of
the Management Committee, engage a consultant to assess the failures
and to devote immediate efforts to resolve the problems. Developer
agrees to fully cooperate with the consultant by providing access to all
necessary Developer Works (pursuant to Section 10.5 hereof),
development tools, documentation, specifications and other materials
necessary for such consultant to assess the failures and recommend
solutions; provided, however, such consultant shall be provided the
foregoing materials and information only pursuant to an appropriate
executed confidentiality agreement which protects ownership and
proprietary rights in and to the Developer Works and which assigns all
rights, title and interests in and to any modifications made to the
Developer Works by such consultant to Developer, as the case may be.
Developer agrees that such consultant shall be paid for by setting-off
such amounts that may be due to Developer hereunder, which may
include a percentage of Developer's Royalties.
9.4. Payment of Development Fees
Any payment to Developer of any Development Fees hereunder shall
not be construed or constitute acceptance of the Product, or any
milestone submission thereof. Acceptance of the Product by the
Management Committee shall only be accomplished pursuant to the
terms and conditions of this Agreement.
10. Ownership, Copyrights and Credits, Derivative Works
10.1. Ownership
Developer agrees and acknowledges that, subject only to Developer's
ownership of all rights, title and interest in and to the Developer
Works, Producer shall own all right, title and interest in and to each
and every Product, including, but not limited to, the copyright rights
thereto throughout the Territory and the artistic, pictorial and
audiovisual displays and representations, scenes, characters, character
names, sound recordings or reproductions, rules of play, data and
game design contained, implemented or generated in or by a Product,
and any and all documentation, manuals and related materials
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associated with any Product, including, without limitation, all
derivative products and translations of the foregoing (collectively, the
"Producer Property"). Notwithstanding Developer's ownership of all
rights, title and interest in and to the Developer Works, Developer
agrees that under no circumstances will it use the Developer Works to
create any separate software products or other works which infringe or
violate in any respect the ownership interests of Producer in the
Producer Property. Notwithstanding Producer's ownership of all rights,
title and interest in and to digitized video images incorporated in
Products, Producer agrees that it will not incorporate such digitized
video images, in the form developed by Developer and included in any
Product, into products other than the Products.
10.2. Copyrights
Developer hereby irrevocably assigns all right, title and interest it may
have in any Product and/or the Producer Works (but specifically
excluding the Developer Works), to Producer. As such, and, pursuant
to the terms of the Developer License, Producer will have the right to
register, in the office of the Register of Copyrights of the United
States, any Product in Producer's name as the owner and author of
such Product, but without making any claim to copyright rights in and
to the Developer Works. Producer hereby irrevocably assigns all right,
title and interest it may have in the Developer Works to Developer.
Developer will, upon request by Producer, promptly execute,
acknowledge, or deliver any papers deemed reasonably necessary by
Producer to document, enforce, protect, and otherwise perfect
Producer's copyright rights in the Producer Works or any Product.
Producer will, upon request by Developer, promptly execute,
acknowledge, or deliver any papers deemed reasonably necessary by
Developer to document, enforce, protect, and otherwise perfect
Developer's copyright rights in the Developer Works. Developer
warrants that any Product (other than the Producer Works) are wholly
original works of authorship developed by Developer's employees or
contractors and do not infringe upon the copyrights, patent rights, trade
secret rights, or other property rights of any person, firm or
corporation. Producer warrants that the Producer Works (other than
any contributions of Developer thereto, if any) are wholly original
works of authorship developed by Producer's employees or contractors
and do not, to Producer's knowledge and belief, infringe upon the
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copyrights, patent rights, trade secret rights, or other property rights of
any person, firm or corporation.
10.3. Producer's Notice
This Agreement is specifically conditioned upon Developer's full
observance and performance of Producer's instructions regarding
protection of Producer's copyright ownership of all elements of the
Producer Works utilized in connection with the Products and regarding
the Producer Property. Copyright notices will appear in juxtaposition
with any and all elements of the Producer Works utilized on the
Products, with any Producer Property, and on any and all advertising
and promotional material, cartons, containers, wrapping material,
display material, or other materials which utilize the Producer Works,
or any portion thereof as follows:
copyright (year of publication) Producer, Inc. All Rights Reserved.
or such other copyright designation as Producer in its sole discretion
may direct. Except for the express rights of Developer to use the
Producer Works herein, Developer shall not at any time acquire any
other rights in the Producer Works by virtue of any such use
hereunder.
10.4. Developer's Notice
This Agreement is specifically conditioned upon Producer's full
observance and performance of Developer's instructions regarding
protection of Developer's copyright ownership of all elements of the
Developer Works utilized in connection with the Products. Copyright
notices will appear in juxtaposition with any and all elements of the
Developer Works utilized on the Products or on any and all advertising
and promotional material, cartons, containers, wrapping material,
display material, or other materials which utilize the Developer Works,
or any portion thereof as follows:
copyright (year of publication) Developer, Inc. All Rights Reserved.
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or such other copyright designation as Developer in its sole discretion
may direct. Except for the express rights of Producer to use the
Developer Works herein, Producer shall not at any time acquire any
other rights in the Developer Works by virtue of any such use
hereunder.
10.5. Notification of Infringement
Producer will promptly notify Developer of any possible or potential
infringement of Developer's rights in and to the Developer Works.
Developer will promptly notify Producer of any possible or potential
infringement of Producer's rights in and to the Producer Works or any
Product. Producer will have the sole discretionary right to determine if
any legal action is to be taken, and to take such action, with respect to
infringements of any of Producer's rights in and to a Product or the
Producer Works, without any liability to Developer for such decisions.
In the event that Producer elects to bring an action based on an
infringement of its copyright rights or other rights in a Product,
Producer and Developer will share the proceeds from such action, if
any, based on the proportion of associated legal expenses that they
each have assumed. Nothing herein shall prevent Developer from
bringing an action based solely on an infringement of its rights in the
Developer Works; provided, however, that Developer first gives
written notice of such infringement to Producer and Producer does not
bring an action with respect to such infringement within thirty (30)
days of receiving such notice.
11. New Initiatives; Confidentiality
11.1. New Initiatives
The Parties anticipate that during the Term of the Agreement, they
will, from time to time, discuss and exchange with each other ideas,
concepts or information to be used in connection with the creation or
development of possible future Products or other new initiatives,
ventures or products not contemplated by this Agreement. The Parties
agree that this Agreement is in no way intended to limit such
discussions or exchanges and that such ideas, concepts or information
referred to in the previous sentence shall, without limitation, except as
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set forth in Section 11.2, constitute Confidential Information (as
defined herein).
11.2. Confidentiality
The Parties will each regard and preserve as strictly confidential all
information and material, including, but not limited to, the Producer
Works and the Developer Works and all other material or information,
including without limitation, customer or client information, provided
to one another in connection with the Joint Effort (hereinafter,
"Confidential Information"). The Parties agree that, except as provided
in this Agreement or as otherwise agreed between them in writing,
they shall not use the Confidential Information for their own benefit or
for the benefit of any third party. The Parties further acknowledge and
agree that, in the event of a breach or threatened breach of this Section
11.2, the non-breaching party may have no adequate remedy in money
damages, and accordingly, may be entitled to appropriate injunctive
relief against such breach. The Parties agree that they each will have
no obligation in connection with specific Confidential Information of
the other to the extent, but only to the extent that: such Confidential
Information is already known to them, free from any obligation to
keep such Confidential Information confidential at the time it is
obtained from the other party; such Confidential Information is or
becomes publicly known in the trade or otherwise through no wrongful
act of the receiving party; or such Confidential Information is
rightfully received by the receiving party from a third party without
restriction and without breach of this Agreement. Upon the request of
either of the Parties following the completion of the Joint Effort, or
upon termination or expiration of this Agreement as otherwise
provided herein, all tangible copies of any Confidential Information of
the Parties will be returned to one another.
12. Warranties and Representations
12.1. Developer Warranties and Representations
Developer warrants and represents to Producer that:
20
(a) Developer has the right, power and authority to enter into this
Agreement, to grant the Developer License to Producer, and to fully
perform all of its obligations hereunder, including, without limitation,
the Services;
(b) the Developer Works do not contain any pre-programmed devices
such as "viruses" or other such devices that will cause any Product to
be erased, to become inoperable or incapable of processing or to
otherwise damage or negatively affect the performance of any Product
in any manner;
(c) no aspect of the Products other than the Producer Works shall
contain any libelous material or any material which constitutes an
invasion of any right of privacy or publicity or infringes upon any
trademark, copyright, trade secret or other intellectual property right;
(d) all credits and/or attributions provided by Producer for inclusion in
a Product will be duly included in the Product;
(e) to the extent that Developer is required to obtain rights,
permissions and credit and/or attribution information for the
incorporation of any Developer Works in a Product, Developer will do
so accurately and completely, and the Product shall incorporate the
necessary credit and/or attribution information;
(f) upon execution of this Agreement and for as long as this
Agreement is in effect, at no charge to Producer, Developer will
promptly correct any defects in any Products released for sale;
(g) Developer has not entered into any separate agreement or
arrangement with any third party that is inconsistent with any of the
rights herein granted to Producer;
(h) Developer will not, during the Term of this Agreement or at any
time thereafter, attack, dispute, or contest, directly or indirectly,
Producer's exclusive right and title to the Producer Works or the
validity of Producer's copyrights, trademarks, and service marks or
design patents, nor will Developer assist or aid others to do so; and
(i) Developer has provided Producer with copies of all documents
from any third parties effecting the transfer of any rights from those
third parties to Developer which rights are required for Developer to
enter into, and perform its obligations under, this Agreement.
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12.2. Producer Warranties and Representations
Producer warrants and represents to Developer that:
(a) Producer has the right, power and authority to enter into this
Agreement, to grant the Producer License to Developer, and to fully
perform all of its obligations hereunder;
(b) upon execution of this Agreement and for as long as this
Agreement is in effect, at no charge to Developer, Producer will
promptly correct any defects in any Producer Works;
(c) the Producer Works shall not contain any libelous material or any
material which as used for the purposes set forth herein constitutes an
invasion of any right of privacy or publicity or infringes upon any
trademark, copyright, trade secret or other intellectual property right;
(d) to the extent that Producer is required to obtain rights, permissions
and credit and/or attribution information with respect to the Producer
Works, Producer will do so accurately and completely.
(e) Producer has not entered into any separate agreement or
arrangement with any third party that is inconsistent with any of the
rights herein granted to Developer; and
(f) Producer will not, during the Term of this Agreement or at any time
thereafter, attack, dispute, or contest, directly or indirectly Developer's
exclusive right and title to the Developer Works or the validity of
Developer's copyrights, nor will Producer assist or aid others to do so.
13. Indemnification
13.1. Indemnification by Producer
Producer shall indemnify, defend and hold Developer harmless from
any claims, demands, liabilities, losses, damages, judgments or
settlements, including all reasonable costs and expenses related thereto
including attorneys' fees, directly or indirectly resulting from any
claimed breach of warranty, Producer Works malfunction or defect, or
infringement or violation of any copyright, patent or other intellectual
property right or right of publicity or privacy with respect to the
Producer Works, so long as the Producer Works are used in
accordance with the documentation and specifications provided by
Producer and Developer has adhered to its obligations under this
22
Agreement. Following notice of a claim or a threat of actual suit,
Producer shall, at its option: (i)\x11procure for Developer the right to
continue to use and distribute the Producer Works at no additional
expense to Developer; or (ii)\x11provide Developer with a non-
infringing version of the Producer Works.
13.2. Indemnification by Developer
Developer shall indemnify, defend and hold Producer harmless from
any claims, demands, liabilities, losses, damages, judgments or
settlements, including all reasonable costs and expenses related thereto
including attorneys' fees, directly or indirectly resulting from any
claimed breach of warranty, Developer Works malfunction or defect,
or infringement or violation of any copyright, patent or other
intellectual property right or right of publicity or privacy with respect
to the Developer Works, so long as the Developer Works are used in
accordance with the documentation and specifications provided by
Developer, and Producer has adhered to its obligations under this
Agreement. Following notice of a claim or a threat of actual suit,
Developer shall, at its option: (i) procure for Producer the right to
continue to use and distribute the Developer Works at no additional
expense to Producer; or (ii) provide Producer with a non-infringing
version of the Developer Works.
13.3. Conditions For Indemnification
Notwithstanding paragraphs 13.1 and 13.2 of this Agreement, the
indemnifying party is under no obligation to indemnify and hold the
other party harmless unless: (i) the indemnifying party shall have been
promptly notified of the suitor claim by the indemnified party and
furnished by the indemnified party with a copy of each
communication, notice or other action relating to said claim; (ii) the
indemnifying party shall have the right to assume sole authority to
conduct the trial or settlement of such claim or any negotiations related
thereto at the party's own expense; and (iii) the indemnified party shall
provide reasonable information and assistance requested by the
indemnifying party in connection with such claim or suit.
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14. Limitation of Liability
WITH THE EXCEPTION OF INDEMNIFICATION
OBLIGATIONS, NEITHER OF THE PARTIES SHALL IN ANY
CIRCUMSTANCES BE LIABLE FOR ANY LOSS OF BUSINESS
OR PROFITS, OR FOR ANY CONSEQUENTIAL, INCIDENTAL,
PUNITIVE OR SIMILAR DAMAGES, OR, OTHER THAN AS SET
FORTH HEREIN, FOR CLAIMS OF DAMAGES MADE BY ANY
THIRD PARTY FOR ANY CAUSE WHATSOEVER,
REGARDLESS OF THE FORM OF ACTION, WHETHER IN
CONTRACT OR IN TORT, INCLUDING NEGLIGENCE, EVEN IF
IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. WITH THE EXCEPTION OF INDEMNIFICATION
OBLIGATIONS, IN NO EVENT SHALL EITHER PARTY'S
LIABILITY HEREUNDER EXCEED $______________ DOLLARS
OR, IF A CLAIM BY DEVELOPER FOR ROYALTIES, SUCH
CLAIM SHALL NOT EXCEED THE AMOUNT OF ROYALTIES
THEN DUE AND PAYABLE.
15. Termination
15.1. Termination in the Event of Material Breach
In the event of a material breach of this Agreement, the non-breaching
party may terminate this Agreement by giving thirty (30) days prior
written notice to the other. Notwithstanding the foregoing, this
Agreement will not terminate thirty (30) days after the breaching party
receives such notice if the breaching party has cured the breach before
the end of such thirty (30) day cure period.
15.2. Additional Termination Rights
In addition to other termination rights set forth herein, either party may
terminate this Agreement:
(a) if the other party is declared insolvent or bankrupt;
(b) if a petition is filed in any court and not dismissed in ninety (90)
days to declare the other party bankrupt or for a reorganization under
24
the Bankruptcy Law or any similar statute; or
(c) if a trustee in bankruptcy or a receiver or similar entity is appointed
for the other party.
15.3. Producer Rights Upon Termination
Upon termination or expiration of this Agreement, Producer shall
automatically have the right to continue to sell copies of any Product
previously ordered or manufactured for a period of six (6) months
from the date of such termination or expiration (the "Sell-off Period").
In addition, upon expiration or termination of this Agreement and
unless such termination is effected by Developer due to a material
breach of the Agreement by Producer, Producer, in its sole discretion,
may extend the term of the Developer License into perpetuity (the
"Extended Developer License") by continuing to pay Royalties to
Developer. As additional consideration for continued payment of such
Royalties, Developer agrees to provide Producer with any materials or
Services required by Producer for Producer to continue to exploit any
and all Products.
16. General
16.1. Independent Contractor
The Parties agree that Developer is an independent contractor and
Developer is not Producer's employee or agent. Developer will not be
entitled to compensation for its Services except as provided herein.
Developer, and not Producer, will be responsible for, among other
things, payment of its workers' compensation, disability benefits,
unemployment insurance, and for withholding income taxes and social
security. Developer will not be entitled to receive any benefits
provided by Producer to its own employees. Developer will not have
any authority to make any agreements or representations on Producer's
behalf or to hold itself out to be Producer's employee, agent, or
servant. Nothing contained herein will be construed to constitute the
parties as partners or joint venturers or constitute either party as agent
of the other, nor will any similar relationship be deemed to exist
between them.
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16.2. Entire Agreement
This Agreement, including any Product Schedule, sets forth the entire
agreement between the Parties in connection with the subject matter
hereof and it incorporates, replaces, and supersedes all prior
agreements, promises, proposals, representations, understandings and
negotiations, written or not, between the Parties. The making,
execution, and delivery of this Agreement have been induced by no
representations, statements, warranties or agreements other than those
expressed herein.
16.3. Force Majeure
Neither party will be liable for any delay or failure to perform under
this Agreement if, and to the extent, such failure is reasonably beyond
the control and without the fault or negligence of the party claiming
excusable delay. The party claiming excusable delay must promptly
notify the other party of such delay. Except as set forth in Sections 9.1
or 9.2, if the delay continues for more than thirty (30) days and
involves a material obligation, the party not claiming excusable delay
may terminate this Agreement by giving fourteen (14) calendar days
written notice to the other party; provided that the Agreement will not
terminate if the party claiming excusable delay substantially performs
the obligation which has been delayed within fourteen (14) days after
receipt of notice of such termination.
16.4. Notice
All notices will be in writing and will be delivered personally or sent
by confirmed facsimile transmission, overnight letter or United States
certified mail, proper postage prepaid at the addresses specified below:
If to Producer at:
If to Developer at:
Either party may change the person or the address to which notices are
directed by giving written notice to the other party. Personally
delivered or confirmed facsimile notices will be deemed given when
26
delivered. Notices sent by United States certified mail, return receipt
requested, will be deemed given four (4) business days after dispatch.
Notices sent by overnight letter will be deemed given on the next
business day after dispatch. Notwithstanding the foregoing, notices of
change of address will be deemed given only upon receipt by the party
to whom it is directed.
16.5. Choice of Law
This Agreement has been entered into in the State of New York and
will be governed by those laws of the State of New York which are
applicable to contracts entered into and performed entirely within the
State of New York without regard to conflict of laws principles. Any
disputes which arise under this Agreement, even after the termination
of this Agreement, that cannot be resolved through good faith
discussions, will be heard only in the State or Federal courts located in
the City of New York, State of New York. Developer expressly agrees
to submit itself to the jurisdiction of the foregoing courts in the City of
New York, State of New York. Developer expressly waives any rights
it may have to contest the jurisdiction, venue or authority of any cou
sitting in the State of New York.
16.6. Modification
No modification, amendment, supplement to or waiver of any
provision of this Agreement shall be binding upon the Parties hereto
unless made in writing and duly signed by both Parties.
16.7 Waiver
A failure of either party to exercise any right provided for herein shall
not be deemed to be a waiver of any right hereunder.
16.8. Severability
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited or invalid under applicable law, such provision shall be
27
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining
provisions of this Agreement. Any unenforceable provision will be
replaced by a mutually acceptable provision which comes closest to
the intention of the Parties at the time the original provision was
agreed upon.
16.9. Headings
The headings in this Agreement are for purposes of reference only.
16.10. Attorneys' Fees
In the event of the bringing of any action, insolvency proceedings or
bankruptcy suit by a party hereto against the other party hereunder, or
by reason of any breach of any representation, warranty or condition
on the part of the other party, arising out of or relating to this
Agreement, then the party in whose favor the final judgment or award
shall be entered shall be entitled to have and recover from the other
party the costs and expenses incurred in connection therewith, in
addition to its reasonable attorneys' fees, at all trial and appellate
levels.
16.11. Non-Solicitation
Neither party shall solicit for employment, or hire the other's current or
future employees, either directly or indirectly, during the Term of this
Agreement, without obtaining the other's prior written consent.
16.12. Survival
The following sections shall survive termination of this Agreement:
2.4, 2.5, 3, 5, 7.7, 10, 11.2, 12, 13, 14, 15.3 and 16.
16.13. No Assignment
This Agreement, including without limitation, the Producer License,
will remain personal to Developer and will not be assignable by
Developer without the express written consent of Producer. Any
28
attempted unauthorized assignment by Developer will be null and void
and Producer will have the right to immediately terminate this
Agreement in addition to all other rights and remedies it may obtain
due to Developer's breach. Producer may assign this entire Agreement,
including, without limitation the Developer License and the Developer
Works License, to a subsidiary or affiliate of Producer provided
Producer shall continue to remain primarily responsible for its
obligations under this Agreement. This Agreement will inure to the
benefit of and be binding upon Producer, its successors, and assigns.
IN WITNESS WHEREOF, the Parties have signed this Agreement as
of the date hereof
MULTIMEDIA ASSOCIATES, INC. DEVELOPER,
INC.
By:__________________________By:___________________
Title:_________________________
Title:__________________
PRODUCT SCHEDULE
Exhibit A
This Exhibit A is issued pursuant to and incorporates herein, the
Master Joint Development Agreement between
____________("Producer") and _____ ("Developer") (the
"Agreement"). Any word or phrase not otherwise defined herein will
have the same meaning ascribed to them in the Agreement.
Product:
Platform:
Producer Project Manager/Telephone Number:
Developer Project Manager/Telephone Number:
Producer Works:
Developer Works:
Royalties:
29
Milestones and Development Fee Payment Schedule:
Description Date_____________________
Payment_______________________ 1. 2.
3. ALPHA: All levels $_____Producer Acceptance
4. BETA: Final bugs fixed $_____ and Producer Acceptance
5. FINAL $_____
Acceptance Test:
Marketing Plan:
Marketing Costs:
Manufacturing Costs:
MULTIMEDIA ASSOCIATES, INC.
DEVELOPER, INC.
By:__________________________ By:___________________
Title:________________________ Title:__________________
