Last updated 6 Nov 2003


Contract Between John Smith and Generic Game Company


This License Agreementt is made and entered into the ___ day of __________, _______, by and between John Smith (hereinafter called "Author") with an address of Some Lane, Someplace, CA, 99999, and Generic Game Company, (hereinafter called the "Licensee"), whose principal place of business is Main Street, Somewhere, California, 99999, with respect to licensing for games.

In consideration of the mutual agreements herein contained, both parties agree that Author grants to Licensee the exclusive right to manufacture, advertise, promote, sell and distribute "Generic Game", hereinafter called the "Work". Licensee accepts such grant and agrees to use its best efforts in the sale of the Work in order to maximize royalty payments to Author under this agreement.


Author warrants to be the inventor of the Work, and to be the sole owner of all intellectual and/or industrial property according to the Work. Author guarantees the Work does not infringe any rights of third parties. Author further agrees not to undertake any kind of competition by way of manufacture and distribution of the Work.


The title, design, format and parts of the Work are left to the discretion of Licensee and/or eventual sub-licenses. Author may make suggestions to Licensee, which will be reasonably considered by Licensee. Licensee is not obligated to adhere to Author suggestions. Licensee shall be entitled to file and acquire any kind of intellectual or industrial property right as to the title, rules, parts/format and design/layout of the Work.

Licensee shall be entitled to use the title, the theme, or the presentation/layout of the Work for other products, free of any royalty to Author, provided the system and/or function of those products differ substantially from the Work.

Derivative works using the same mechanics of the Work shall be subject to the payment and royalties specified in this contract.


Author represents and warrants that Licensee owns or controls the exclusive rights to the Work including any and all copyrights thereon for the duration of this contract. The Work shall bear the following copyright notice;

2002 Generic Game Company


Each copy of the Work shall bear the Author's name somewhere within the item.


Licensee determines the date of the commencement of commercialization, the quantity of copies of the first and subsequent editions and the sale price of each edition.

Licensee is completely free in all business matters and decisions concerning the Work. With respect to the best commercialization of the Work, Licensee shall further be entitled to translate and adapt the Work in other languages, dialects, versions or wording, if necessary, in the different countries of the contractual territory.

Licensee may also publish special editions for book clubs, chains of retail traders, promotion/advertising measures and other special distribution editions.

Licensee shall be entitled, but not obligated, to exploit the license under this agreement in his own publishing business. However, Licensee will use different channels of exploitation if suitable. The Author hereby gives his/her prior general consent to any kind of adaptations, modifications, alterations or rearrangements necessary for those kinds of exploitations.

Licensee may grant sub-licenses, including all types of enterprises doing business in the media area. Licensee agrees to inform Author about such agreements concerning third party agreements.


License fees shall be based on the net invoice billings of Licensee for the Work sold within the contractual territory to wholesale and retail customers. Net invoiced billings shall mean actual billings to customers for articles sold less an allowances or discounts deducted from the normal selling price. Uncollectable accounts shall not be subject to any royalties.

Upon signing this agreement, Author will receive an advance payment in the amount pursuant to the Schedule to Licensing Agreement. This advance payment shall be offset against subsequent royalty payments. In the event Licensee decides that the Work will not be produced, the Author shall keep the royalty advance, provided the non-publishing is not caused by default of the Author. In the event the Work is not produced by default of the Author, then the Author is responsible for reimbursement of the advance to the Licensee.

If the Work will be sublicensed pursuant to Commencement of Commercialization, Author will receive 33% of licensing fees or royalties paid to the Licensee by the Sub-Licensee.


Licensee agrees to keep separate records of the sales of the Work.

Licensee agrees to submit a royalty report within 30 days of the close of the Royalty Payment Date. This report will indicate the total sales and unit quantities for said quarter. When the advance is completely offset, payments will be sent to the Author with the Royalty Report.

Licensee agrees to have all records pertinent to sales and payments referred to in this agreement available for inspection by Author or its duly authorized certified accounts. Author shall give Licensee a reasonable notice for said inspection. The costs of the inspection shall be solely born by the Author.


Upon completion of manufacturing of the Work, Licensee agrees to send Author 5 samples of the Work free of charge. Author may purchase additional copies of the Work at wholesale.


Either party has the right to terminate this agreement by giving the other party written notice, if at any time during the term of this agreement any of the following events occur:

  1. Licensee shall fail within a period of two (2) years to sell or manufacture any of the Work.

  2. Licensee fails to make payment of any money due to the Author under the terms of this agreement and if after the period of fourteen (14) working days has elapsed after Author has given Licensee written notice of such failure.

  3. Licensee shall be in materials breach of its performance of any of its obligations under the terms of this agreement.

  4. Should the sales of the Work decline or become non-profitable for the Licensee, or should Licensee decide to withdraw the Work from its program for any other reasons.

In the event the terms of this Licensing Agreement are terminated, Licensee has eighteen (18) months from the date of termination to sell of any of the Work remaining in inventory. After the expiration of the agreed upon eighteen (18) months, all rights of the Work revert back to the Author.


Each party shall have the right to terminate this agreement immediately if either party breaches any of the terms and provisions of this agreement. The party in breach must be notified in writing by the other party specifying the particular breach. If the party in breach fails to cure the breach within 30 days after receiving written notice from the other party, the other party has the right to terminate this agreement.


This agreement shall be in full force and effect upon execution of this Licensing Agreement for the term pursuant to Schedule to Licensing Agreement. At the end of the initial term of this agreement, Licensee may choose to extend this agreement for successive periods of one (1) year. At the end of any renewal period, either party has the right to terminate this agreement with 90 days written notice to the other party.


In the event a third party alleges the manufacturing and/or distribution of the Work infringes its intellectual or industrial property rights, Licensee has the right to withhold any royalty payments due to Author until said allegations have been cleared. Any legal fees for costs incurred by the Licensee in connection with any allegations or related legal action will be the sole responsibility of the Licensee.


Licensee shall be solely responsible for, and shall defend, hold harmless and indemnify Author, its directors, officers, employees and agents against any Claims arising out of any claim that the use of the licensed marks as authorized by this Agreement violates or infringes upon the trademark, copyright, or other intellectual property rights of a third party in or to the Licensed Marks. If, as a result of indemnification, Licensee has to destroy all remaining inventory, Licensee will be responsible for all costs associated with said destruction.


All notices and/or changes to this agreement that may be required by Licensee must be made in writing and sent to Author at the address noted in the heading of this contract, or other address as designated by the Author. All notices and/or changes that may be required by Author must be made in writing and sent to Licensee and the address noted in the heading of this contract or other address designated by the Licensee.

Should any provision of this agreement become invalid or unenforceable or should the contract contain an omission, the remaining provisions shall be valid and enforceable. In the event of an invalid provision, a valid provision is presumed to be agreed upon by the parties, which comes economically closest to the one actually agreed upon; the same shall apply in the case of an omission.

This agreement shall be governed and construed according to the laws of the State wherein the headquarters of the Licensee are located.

Agreed to this day;

____________________________ 		_______________________________
Author					Owner, Generic Game Company

1. Name: Generic Game

2. Term: Contract expires after 2 years of non-production or sale of the Work.

3. Territory: Worldwide

4. Advance: $1000

5. Royalty Rate (against wholesale): 6%

6. Royalty Payment Date; December 31st of each year that contract is in effect.

7. Sublicense royalty; 33%