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EXHIBIT 10.8
AGREEMENT
AGREEMENT made this 21st day of May, 1993, by and between Random Games,
Inc., a Michigan corporation, doing business as Random Games & Toys, with its
principal place of business at 416 West Huron Street, Ann Arbor, Michigan 48103
acting as the agent of Garrett J. Donner and Michael S. Steer, two individuals
(hereinafter collectively referred to as LICENSOR), and Third Quarter
Corporation (Fundex Games) an Indiana corporation with an office at 3750 W.
16th Street, Indianapolis, Indiana 46222 (hereinafter "LICENSEE").
WITNESSETH:
WHEREAS, LICENSOR warrants and represents that it (or its principal) is
the copyright proprietor and/or patent rights owner or agent of the patent
rights owner and has the authority to sell, grant, convey, or Otherwise
exchange the manufacturing and/or marketing rights to an original product known
as "Phase 10 Dice" (hereinafter "Product"), and described in Exhibit "A",
attached, samples of which have been supplied to LICENSEE, and
WHEREAS, LICENSOR desires to have this Product manufactured, promoted,
marketed, and merchandised by an experienced manufacturer, and
WHEREAS, LICENSEE is in the business of manufacturing and marketing and
desires to manufacture and market the Product,
NOW, THEREFORE, in consideration of the premises set forth above and
promises set forth below, LICENSEE and LICENSOR agree as follows:
1. LICENSOR hereby grants to LICENSEE the exclusive right to manufacture
and/or market the Product and any accessories or other versions of the Product
throughout the World, and in addition, grants LICENSEE the exclusive right to
make, use and sell the subject matter of all patents and patent applications
whether pending or subsequently filed on the Product, and to sublicense such
rights. LICENSOR represents and warrants that it has not granted and shall not
grant the rights to the Product for these territories to any other party during
the term of this Agreement and that LICENSOR owns and controls all rights to
the Product throughout the territories covered by this Agreement. LICENSOR also
represents and warrants that the Product is its own original creative work and
that no adverse claim exists with respect to the Product. All rights not
specifically granted to LICENSEE remain with LICENSOR.
2. LICENSEE agrees to devote its best efforts to preparing the Product for
production, display, and offering for sale no later than the 1994 New York Toy
Fair and to use reasonable efforts to manufacture, promote, and sell the
Product. LICENSEE will provide two dozen production samples of each different
version of the Product to LICENSOR as soon as possible after the first
production run.
3. Any and all trademarks, whether registered or not, used by LICENSEE in
association with the manufacture, advertising, and distribution of the Product
shall remain the property of LICENSEE and their use and the goodwill founded
thereon shall inure to the benefit of LICENSEE and not LICENSOR.
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4. LICENSEE agrees to pay LICENSOR an advance royalty payment of Two
Thousand Five Hundred Dollars ($2,500.00), within ten (10) days of the
execution of this agreement. This advance royalty payment shall be
non-refundable, and shall be credited and set off against the royalties earned
hereunder.
5. LICENSEE agrees to pay LICENSOR a royalty of five percent (5%) of the
net wholesale selling price of all units of any versions of the Product shipped
during each calendar quarter. LICENSEE shall make royalty payments on or before
the 25th day of the month following said quarter on all net shipments made
during the quarter. Such royalty payments shall be accompanied by a statement
setting forth the gross sales, returns, and credits (including cash and trade
discounts, trade allowances and customer allowances). Net wholesale selling
price is defined as LICENSEE's billed price, less cash and trade discounts and
trade allowances and bona fide returns and customer allowances, not to exceed,
in the aggregate, Eight Percent (8%). No cost incurred in the manufacture,
sale, distribution or exploitation of the Product, its improvements, or
accessories, shall be deducted from any royalties payable to LICENSOR.
6. In the case of sales by Letter of Credit (L.C.) LICENSOR shall receive
a royalty of six Percent (6%) of the L..C. selling price for sales of all items
Freight on Board (F.O.B.) from their country of origin. There shall be no
discounts from this price.
7. In the case of premium or advertising specialty sales of the Product,
LICENSEE agrees to pay LICENSOR a royalty of three percent (3%) of the net
wholesale selling price of all units of the Product shipped as a premium or
advertising specialty. The premium or advertising specialty markets are the
markets in which Products may be sold and used for the purpose of increasing
the sale of another item or promoting or publicizing any product or service.
8. As soon as possible LICENSEE shall apply to register claims to
copyright the various versions of the Product. All applications for
registration of claims to copyright shall identify LICENSOR or its designee as
the copyright claimant. At LICENSEE's request, LICENSOR shall execute
assignments in favor of LICENSEE of any and all copyrights relating to the
Product without further consideration. LICENSEE warrants that it will affix
copyright notices on the Product as will protect the Product and LICENSOR
acknowledges and accepts that said copyright notice may be in the name of
LICENSEE, but only as LICENSOR's licensee and not as a copyright owner.
9. Outside of North America, LICENSEE shall have the right to sublicense
the Product for production and sale upon any terms and conditions which it
wishes to grant and establish; provided, however that in the event that
LICENSES does so grant sublicenses on the Product, then and in the event,
LICENSEE shall pay to LICENSOR Fifty Percent (50%) of all monies received by it
from such sublicense or grant or Two and one half Percent (2.5%) of the
sublicensee's net sales, whichever is greater. Such royalty shall be due to
LICENSOR within twenty-five (25) days after the close of the calendar quarter
in which the royalty payments are received by LICENSEE.
10. LICENSOR shall have the right to review any sublicensing agreement
with respect to the Product.
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11. If at the time of the termination of this Agreement there is
outstanding any unexpired sublicense granted hereunder by LICENSEE, LICENSOR
agrees upon request to continue such sublicense throughout the unexpired
portion of its term.
12. LICENSOR shall have the right through its representative, to examine
the books of accounts and sales of LICENSEE at reasonable times, during normal
business hours, to determine the correctness of royalty payments.
13. LICENSOR agrees to indemnify and hold harmless LICENSEE, its officers,
agents, and employees from and against any lawsuit, claim, or demand (and
reasonable attorney's fees related thereto) arising out of the authorized use
of the Product under this Agreement, provided that LICENSOR is given prompt
notice of such claim, and provided that such claims arise out of a breach of
one or more of the warranties made by LICENSOR in Paragraph 1 of this
Agreement. LICENSEE shall be entitled to place all royalties accrued into an
escrow fund from the date of such claim until such time that the claim is
settled or otherwise disposed of. If the judgement or settlement of such claim
should be against LICENSOR, LICENSOR will be liable for all amounts up to the
amount of royalties accrued in escrow. Any excess in such escrow account shall
be paid to LICENSOR. However, LICENSOR shall have no further liability under
such claim. If LICENSOR and LICENSEE are represented by separate counsel, then
each shall bear the cost of its own attorney's fees and costs. In the case of
such a demand, claim or lawsuit, LICENSEE shall have the final decision
concerning disposal of inventory and works in progress.
14. LICENSEE agrees to indemnify and hold harmless LICENSOR, its officers,
agents, and employees from and against any lawsuit, claim, or demand (and
reasonable attorney's fees related thereto) arising out of the breach of any
warranty of LICENSEE herein or the failure of LICENSEE fully to perform any of
its obligations herein set forth, or arising out of any defects or alleged
defects in the Product. This indemnity shall survive termination of this
agreement.
15. LICENSEE shall maintain at its own expense in full force and effect at
all times during which the Product is being sold by LICENSEE at least a One
Million Dollar products liability insurance policy with respect to the Product.
LICENSOR shall be named as an additional insured with LICENSEE on such
policy and such policy shall provide for at least ten days' prior written
notice to LICENSOR of the cancellation or any substantial modification of the
policy. This insurance may be obtained for LICENSOR by LICENSEE in conjunction
with a policy which covers products other than the Product. LICENSEE shall,
from time to time upon reasonable request by LICENSOR, promptly furnish or
cause to be furnished to LICENSOR evidence in form and substance satisfactory
to LICENSOR of the maintenance of the insurance required above, including, but
not limited to, copies of policies, certificates of insurance (with applicable
riders and endorsements) and proof of premium payments.
16. In the case of any infringement or unfair use of the Product by a
third party, the parties shall cooperate with each other in preventing or
stopping such infringement or unfair use.
17. If either party breaches any of its obligations under this Agreement,
the other party shall have the right, without prejudice to any other rights
which it may have, to terminate
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this Agreement by giving thirty (30) days' notice to the breaching party, and
this notice will automatically become effective unless the breaching party
completely remedies the breach within the thirty-day period.
18. This Agreement shall continue in effect until it is terminated
pursuant to paragraph 17, or the end of one (1) year beyond the date of the
last sale (as per LICENSEE's invoice date) made by LICENSEE of any one of the
versions of the Product under this contract.
19. This Agreement does not constitute and shall not be construed as
constituting a partnership or joint venture between the parties.
20. The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver or deprive or
limit that party of the right thereafter to insist upon strict adherence to
that term in the particular instance or that term or any other term of this
Agreement in any instance.
21. No change, modification, or waiver of any of the provisions hereof
shall be valid unless made in writing and signed by both parties.
22. It is understood and agreed that, in the event of an act of
government, war conditions, fire, flood, or other natural disaster, or labor or
manufacturing problems which prevent the performance by LICENSEE of the
provisions of this Agreement, such nonperformance by LICENSEE will not be
considered a breach of this Agreement, and such nonperformance will be excused
while, but no longer than, the conditions described herein prevail.
23. If any provision of this Agreement is for any reason declared to be
invalid, the validity of the remaining provisions shall not be affected
thereby.
24. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns.
25. This Agreement shall be interpreted in accordance with and governed by
the laws of the State of Michigan.
26. All notices, consents and the like required to be given hereunder
shall be invalid unless in writing and sent by registered or certified mail to
the addresses of the parties set forth below, or the such changed addresses as
they shall in writing request:
Random Games & Toys
416 West Huron
Ann Arbor, MI 48103
Third Quarter Corporation (Fundex Games)
3750 W. 16th Street
Indianapolis, IN 46222
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27. Any controversy or claim arising out of or relating to this Agreement
or the breach thereof, shall be settled by arbitration in accordance with the
Commercial Arbitration Rules, then obtaining, of the American Arbitration
Association before a single arbitrator and judgment upon the award rendered may
be entered in any court having jurisdiction thereof. Such arbitration shall be
a condition precedent to any suit or action on this contract. Arbitration under
this agreement shall he held in the state of Michigan.
IN WITNESS WHEREOF, the parties hereby have executed this Agreement.
LICENSEE: LICENSOR:
Third Quarter Corporation Random Games & Toys
By: s/s Chip Voigt By: s/s Michael S. Steer
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Title: President Title: Vice President
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Fed. ID # 38-2047524
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By: /s/ Garrett J. Donner
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Garrett J. Donner
Soc. Sec. ###-##-####
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By: /s/ Michael S. Steer
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Michael S. Steer
Soc. Sec. ###-##-####
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EXHIBIT "A"
PHASE 10 DICE 03-29-93
(C) 1993 by Garrett J. Donner and Michael S. Steer
NUMBER OF PLAYERS: One or more.
EQUIPMENT: 10 special PHASE 10 DICE and one scorepad.
0BJECT: To win the game by being first to get through the 10 Phases, and with
the highest overall score.
THE PHASE 10 DICE: Six of the dice contain all the high numbers. Each of these
dice is numbered 5, 6, 7, 8, 9, 10 in the various four colors. The other four
dice contain all the low numbers and the Wild (W) faces. Each of these dice is
numbered 1, 2, 3, 4, W, W in the various four colors.
PLAY: To see who plays first, each player rolls one of the dice numbered 5 to
10. The player with the highest roll plays first, and so on, down to the player
with the lowest roll, who plays last. Each player takes a separate column on
the scorepad. The player with first turn uses the left-most column, the next
player uses the next column, and so on, so that turns pass in order from one
player's column to the next. Each player's name is written at the top of the
player's column. When each player has had a turn, the first player begins the
next turn, and so on.
In a turn, the player starts by rolling all ten dice. The player may then set
aside any dice the player wishes to keep. The player makes a second roll with
the remaining dice. The player may' set aside some of these dice, adding them
to those already set aside. The player may also take back some of the. dice
previously set aside. Then the player may make a third and final roll with any
dice the player wishes to roll. The player then takes the score, if any, and
ends the turn.
SCOREPAD TERMS: Sets, runs, and all one color are explained as follows:
SETS: A set is made by several dice with all the same number. For example,
three 10's make a set of three. One or more Wild (W) dice may be used in place
of natural numbers. For example, 10, W, W make a set of three 10's.
RUNS: A run is made by several dice with all consecutive numbers. For example,
7, 8, 9, 10 make a run of four. One or more Wild (W) dice may be used in place
of natural numbers. For example, 6, W, W, 9 make a run of four.
ALL ONE COLOR: The dice needed must all be the same color. A Wild (W) of a
different color may not be used in completing this score. For example, 2, 4, W,
5, 8, 9, 10 all orange make 7 all one color.
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THE PHASES: In a player's scoring column are ten scoring spaces. Each one of
these is a Phase. For example, the first one (Phase 1) is labeled "2 sets of
3", meaning that the player must, in the turn, end up with three of one number
and three of another number, or two sets of three of the same number.
Throughout play the player must always do the ten Phases in order, starting
with Phase 1 and working up through Phase 10. If a player fails to make a Phase
in a turn (which will almost always happen to all players at some point), then
the player ends the turn without taking a score. The player will have to try
and complete that Phase again next turn.
SCORING: At the end of the turn, the player scores points for the Phase the
player is working on, only if the player makes that Phase. The score is the
total of all the dice used to make that Phase. Dice not needed for the Phase
are not scored. Also any Wilds (W's) used in the Phase score zero points each.
For example, the player is in Phase 1 and ends up with 8, 8, 8 and 10, W, W.
The player's score is 8, 8, 8, 10, or 34. The player enters 34 in the space for
"2 sets of 3". STRATEGY HINT: If a player completes a Phase in one or two
rolls, the player may want to keep rolling the rest of the turn, to try to
replace any Wilds (W's) in the Phase with natural numbers, since natural
numbers score their value instead of zero.
Note that as each Phase is completed, the score is totaled, so that the player
always knows his/her total score in the game, as of that particular Phase.
FIVE PHASE BONUS: After Phase 5, the game is half over. If the player's total
at this point is over 220 (22) or more), then the player is awarded a bonus of
40 points, which is then added to the score.
FIRST FINISH BONUS: The first player to finish the game gets to add 40 points
to his/her score. Other players may qualify for this 40 point bonus too, but
only if they are already in Phase 10, successfully complete this Phase, and
also did not start the game ahead of the player who was first to finish Phase
10.
ENDING THE GAME: The first player to complete Phase I0 causes the end of normal
game play. At this point, each of the remaining players gets one last try at
completing all their remaining Phases. For example, player B has just completed
Phase 10, while player A is still on Phase 7. Now, player A gets a normal turn
of three rolls to complete Phase 7. If unsuccessful, player A is done, and
player A's current total score becomes player A's final score. If successful,
however, player A adds the Phase 7 score to his/her score, and gets another
turn, to try and make Phase 8, and so on, until player A finally fails to make
the next Phase, or finishes Phase 10.
WINNER: When each player's score is final, the player with highest Grand Total
is the winner.
SOLITAIRE PLAY: You can play solitaire, and see how high a score you can get.
All rules remain the same except you must keep track of each time you fail to
make a Phase. At the end of the game, you must subtract 5 points off your final
score for each failure to make the Phase. Also, to get your 40 point First
Finish Bonus, you must make Phase 10 on your first try.
HIGHEST POSSIBLE SC0RE: The highest possible score is 649. Please write the
company if you make a score over 600 (requires signature of at least one adult
witness, other than player).
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