EXHIBIT 10.21
HEADS OF AGREEMENT
AGREEMENT made the day of 25th day of November, 1994.
PARTIES SEGA AUSTRALIA NEW DEVELOPMENT, a division of SEGA OZISOFT PTY
LIMITED A.C.N. 056 032 476 a company duly incorporated in the
State of New South Wales and having its registered office at 000
Xxxxxx Xxxxxx, Xxxxxx in the said State (hereinafter "SAND") of
the first part.
AND EAT CYBERFIST PTY LIMITED A.C.N. 065 701 975 a company duly
incorporated in the State of New South Wales and having its
registered office at 00 Xxxx Xxxxxx, Xxxxxxxxxxx in the said
State (hereinafter "FIST") of the second part.
WHEREAS
A. FIST is the owner of the story concept named Cyberswine and its
related characters as hereinafter defined and fully owns all the
proprietary rights in the story concept and its related
characters including but not limited to trademarks and copyright.
B. SAND intends to engaged in the research and development of
computer software for interactive entertainment, educational and
business purposes for the use in various formats.
C. SAND wishes to obtain a license of the proprietary rights owned
by FIST in the story concept named Cyberswine and its related
characters, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and to exploit the
various interactive systems rights herein defined in cartridge
and CD-based video console games and PC and Mac CD-ROM computer
software that shall be researched and developed by SAND.
D. SAND and FIST also wish to express their intention to enter into
a Joint Venture whereby FIST will grant a license to the Joint
Venture of the rights herein defined, in consideration of the
mutual covenants herein contained, the receipt and sufficiency of
which are hereby acknowledged, and to exploit those various
proprietary rights including merchandising, film and television
rights, as well as other rights referred to in Clause 2.2 of this
Agreement, being proprietary rights that are owned by FIST in the
story concept named Cyberswine and its related characters.
IT IS AGREED:
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1. DEFINITIONS
1.1 In this Agreement the following words or expressions shall have the
meanings hereinafter mentioned.
"comic book works" means any literary, and artistic work specifically
written or designed for publication within a comic magazine(s) or graphic
novel.
"Cyberswine" means the story concept and design including all related
characters and works fully owned by FIST.
"formats" means all present and future formats used for any interactive
entertainment, educational and business purposes.
"Products" means all computer software programs that incorporate either the
Cyberswine story concept, design and/or characters for the operation on all
formats in which Sega Enterprises Limited of Japan and Sega Ozisoft Pty
Limited of Australia provides software and/or hardware including but not
limited to cartridge and CD-based video console games and PC and Mac CD-ROM
software programs.
"rights" means all exclusive proprietary rights including but not limited
to trademarks, copyrights and design rights in the Cyberswine story
concept, design and characters fully owned by FIST.
1.2 NUMBER GENDER AND PERSONS. Except to the extent that such
interpretation shall be excluded by or be repugnant to the context,
reference to any party shall include its successors and permitted assigns;
words importing the singular number or plural number shall include the
plural number and singular number respectively; reference to any gender
includes all genders.
1.3 CURRENCY. Unless specifically provided otherwise hereto any reference
to money shall be a reference to Australian currency.
2. GRANT & EXPLOITATION OF RIGHTS
2.1 INTERACTIVE SYSTEMS RIGHTS.
FIST hereby covenants to grant to SAND a license to exclusively exploit for
purpose, the rights in Cyberswine including all cartridge and CD-based
video console game and PC and Mac CD-ROM computer software rights but
limited to the right the operation on all formats in which Sega Enterprises
Limited of Japan and Sega Ozisoft Pty Limited of Australia provides
software and/or hardware (hereinafter "ISR").
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2.2 MERCHANDISING, FILM AND TELEVISION RIGHTS. FIST hereby agrees to
grant a license to the Joint Venture to exploit the following exclusive
rights;
(a) to appoint licensees to produce products bearing the Cyberswine
artwork including characters, images or logo's,
(b) to grant the exclusive cinematograph film rights, including but not
limited to the production of any short or full length feature film(s) and
the respective soundtrack(s),
(c) animated television series rights including but not limited to the
production of one or more animated television shows,
(d) television show rights including but not limited to production of
television shows with audience participation.
2.3 COMIC BOOK & GRAPHIC NOVEL RIGHTS. At all times FIST shall retain the
rights in Cyberswine for all comic book works including graphic novel
rights.
2.4 ATTRIBUTION RIGHTS. SAND agrees to incorporate a recognition of the
design creator(s) of Cyberswine into any computer program that uses
Cyberswine, the size and length of that recognition to be negotiated and
set down in the formal ISR licensing agreement.
3. PROTECTION OF RIGHTS
3.1 FIST warrants that they have done or if necessary will do, all things
necessary to ensure that the ISR including but not limited to the copyright
and trademarks in Cyberswine is owned solely by FIST and FIST undertakes to
retain full ownership for the life of the ISR subject to Clause 5.2.
3.2 FIST hereby indemnifies SAND from any and all legal actions, claims or
demands in respect of a breach of warranty in Clause 3.1.
4. TERM OF LICENSES
4.1 The grant of the license referred to in Clause 2.1 of this Agreement
shall be subject to the execution of a formal licensing agreement between
the parties and shall continue for the full life of the ISR subject to
Clause 4.2 of this Agreement.
4.2 The grant of the license referred to in Clause 2.1 of this Agreement
shall be on the proviso that SAND undertakes to complete the research and
development of a Cyberswine cartridge and/or CD-based video console game,
and/or PC and/or Mac CD-ROM computer game within a four year period from
the full execution of the ISR licensing agreement, or the rights granted
under the ISR licensing agreement shall unconditionally revert back to FIST
in full.
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4.3 The grant of the license referred to in Clause 2.2 of this Agreement
shall be subject to the execution of a formal Joint Venture Agreement and
shall continue for the term of the Joint Venture Agreement subject to the
exercise-of any options contained in that agreement.
5. ASSIGNMENT OF ISR
5.1 FIST may not assign, transfer, convey or sublicense the ISR in
Cyberswine under this Agreement to any person, firm, corporation or other
entity prior to the execution of the formal ISR licensing agreement to
SAND.
5.2 The ISR licensing agreement shall inure to the benefit of SAND and
FIST and their respective successors and assigns. SAND may assign,
transfer, convey or sublicense the ISR in Cyberswine under the ISR
licensing agreement in its sole discretion. FIST may not assign any of the
ISR in Cyberswine under the ISR licensing agreement to any person, firm,
corporation or other entity for the term of the agreement without the prior
written authorization of SAND.
6. FINANCIAL OBLIGATIONS
6.1 GUARANTEED PAYMENTS
(a) In consideration for the granting of the ISR license to SAND from
FIST, SAND guarantees the payment to FIST of an initial sum of CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION Dollars ($CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION) upon the execution of this
Agreement and a further CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION Dollars
($CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION) on the date CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION (CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION) CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION after the full execution of this
Agreement or upon the full execution of the ISR licensing agreement
whichever is the earlier.
(b) SAND further undertakes to make additional guaranteed payments to FIST
for the ISR license based on the sales performance of the video console
game Cyberswine upon the following criteria;
(i) upon the sale of CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION game units to
trade, a bonus payment of $CONFIDENTIAL
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INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION will be paid by SAND to FIST,
(ii) upon the sale of CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION game units to
trade, a further bonus payment of $CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION will
be paid by SAND to FIST.
(c) The guarantee payments shall be recoupable by SAND from the
royalties set forth in Clause 6.2 hereinbelow prior to any direct
payment of royalties to FIST.
6.2 ROYALTIES
(a) Royalties shall be paid at a rate of CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION% of the
gross revenue received by SAND its successors or assigns as a consequence
of the exploitation of Cyberswine by SAND its successors or assigns subject
to sub-clause 6.1 (c) of this Agreement.
(b) SAND shall account to FIST with regard to transactions hereunder
within thirty (30) days following the conclusion of each calendar quarter.
SAND hereby warrants that such statements of account to be prepared shall
be true and correct. The accounts shall show in detailed form the
appropriate calculations relating to the computation of the royalties and
the recoupment of the guaranteed payments as well as the costs for
manufacture and production of the Products incurred by SAND.
(c) SAND shall pay all Royalties due to FIST in Australian Dollars which
shall be deposited into the bank account of FIST, the details of which
shall be provided to SAND by FIST and the statement indicating such amount
to be due shall be simultaneously sent to a postal address, the details of
which shall be provided to SAND by FIST. Statements shall be provided to
FIST whether or not the guaranteed payments have been recouped and whether
or not royalties are due and owing.
6.3 BOOKS OF ACCOUNT AND AUDITS
(a) SAND shall keep books of account relating to the distribution of the
Products on the basis of generally accepted accounting principles and shall
be maintained for a minimum period of two (2) years after the termination
of the ISR license agreement.
(b) FIST may upon reasonable notice and at its own expense, audit the
applicable records at the registered office of SAND in order to verify
statements rendered. Any
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such audit shall take place during reasonable business hours and in such a
manner so as not to interfere with the normal business activities of SAND.
(c) All information contained in the books and records of SAND shall be
kept confidential and FIST agrees that such information inspected and/or
copied on behalf of FIST shall be used only for the purpose of determining
the accuracy of the statements and shall be revealed only to such officers,
directors, employees, agents and/or representatives of FIST as is necessary
to verify the accuracy of the statements.
(d) SAND shall reimburse FIST for the full out-of-pocket costs including
travel costs and expenses for any audit of the books and records of SAND
that determines a short fall of ten percent (10%) or more in royalties
reported for any calendar quarter.
7. JOINT VENTURE. The Joint Venture agreement to be entered shall be
upon the following terms;
(a) the Joint Venture shall be for the exploitation of the rights
mentioned in Clause 2.2 of this Agreement,
(b) all revenue moneys are to be shared equally between the parties after
the payment of expenses,
(c) all costs and expenses for the setting up of the Joint Venture and the
day to day running of the Joint Venture shall be construed as part of the
direct expenses under the Joint Venture agreement.
(d) all costs and expenses of the Joint Venture are to be approved in
advanced by the parties by way of annual budgets.
8. OTHER WORKS. Other works that are requested by SAND from FIST which
are not directly related to the aims and goals of the Joint Venture shall
be upon a contractual basis, separate from the obligations of the parties
contained in the Joint Venture agreement.
9. RELATED CONTRACTING. Any and all contracts or agreements entered into
between SAND and any related companies shall be entered into in good faith
and upon an arms length basis. Copies of all such contractual agreements
shall be made available for perusal by FIST or their authorized
representative upon the premises of SAND subject to reasonable written
notice to SAND by FIST and such perusal shall take place during reasonable
business hours and in such manner so as not to interfere with normal
business activities of SAND.
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10. INTENTION TO BE BOUND. This agreement expresses the intention of the
parties to be bound to the terms and conditions hereof prior to the
execution of the abovementioned format agreements.
11. NON-EXERCISE OF MORAL RIGHTS. FIST undertakes not to exercise or use
the moral rights of the author relating to Cyberswine to the detriment of
SAND or any third party designated by SAND for the term of the ISR
licensing agreement.
12. AUTHORIZED REPRESENTATIVE. The representative signing on behalf of
either of the parties to this Agreement warrants to the other party that he
is duly authorized to sign this Agreement on behalf of the company and bind
the company to the terms and conditions of this Agreement.
13. SEVERANCE. Any term or condition of this Agreement that proves not to
be enforceable for any reason, shall neither limit nor impair the
operation, enforceability or validity of any of the other terms or
conditions of this Agreement.
14. WAIVER. No waiver by either party whether express or implied of any
provisions of this Agreement or of any breach or default of either party
shall constitute a continuing waiver or a waiver of any other provision of
this Agreement unless made in writing and signed by the party against whom
the waiver would otherwise be enforced.
15. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New South Wales.
WITNESS WHEREOF the parties hereto have executed this Agreement on the day
and year herein before written.
SIGNED for and on behalf of
SEGA AUSTRALIA NEW DEVELOPMENT
a division of SEGA OZISOFT PTY LIMITED
/s/ Xxxxx Xxxxxxxxxx
_______________________________
in the presence of:
/s/ Damien Pembroke
_______________________________
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SIGNED for and on behalf of
EAT CYBERFIST PTY LIMITED
/s/
_______________________________
in the presence of:
/s/
_______________________________
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