Sure here you go:
Royalty Agreement
Subject to the terms and conditions of this Agreement, Marvel shall be entitled to the following Royalties for each Title, with the Royalties for each Title starting at Tier 1. References in this Section 9 to “the Title” shall be deemed references to each Title separately and individually. The Unit Sales and Net Sales used to calculate the applicable Royalty Tiers for each Title and the Additional Content for each Title shall be separate and shall not be cross collateralized (e.g., sales of Units of Title #1 shall not be counted in the Unit Sales for Title #2 for the purposes of Table 1; Net Sales of Additional Content for Title #1 shall not be counted in the Net Sales for Title #2 for the purposes of Table 2).
Physical Units sales and Full Digital Distribution of the Title via Distribution Channels:
(# of Unit Sales) | From | To | Physical Unit Rate (% of Net Sales) | Full Digital Distribution Rate (% of Net Sales) |
Tier 1 | 0 | 3 million | 9% | 19% |
Tier 2 | 3 million | 3.5 million | 11% | 21% |
Tier 3 | 3.5 million | 4 million | 12% | 21% |
Tier 4 | 4 million | 5 million | 13% | 21% |
Tier 5 | 5 million | 6 million | 15% | 24% |
Tier 6 | 6 million | 7 million | 16% | 26% |
Tier 7 | 7 million+ | | 18% | 26% |
The royalty rates set forth above for each Tier apply to Physical Unit sales and Unit sales via Full Digital Distribution, as applicable, within each range of Unit Sales. For example, if the first three million (3,000,000) of total Unit sales are comprised of one million (1,000,000) Physical Units and two million (2,000,000) Units sold via Full Digital Distribution, then a 9% royalty rate will apply to the one million (1,000,000) Physical Units and a 19% royalty rate will apply to the two million (2,000,000) Units sold via Full Digital Distribution. The following Unit sold would then be subject to the Tier 2 rates: 11% if a Physical Unit; 21% if a Unit sold via Full Digital Distribution.
Net Sales of Additional Content for the Title:
(Net Sales of Additional Content) | From | To | Rate (% of Net Sales) |
Tier 1 | 0 | $2.8 million | 19% |
Tier 2 | $2.8 million | $5.25 million | 21% |
Tier 3 | $5.25 million | $10.5 million | 23% |
Tier 4 | $10.5 million+ | | 26% |
Hardware Bundles: Licensee shall have the right to make available for sale in the Territory during the Term bundles consisting of (each such bundle, a “Bundled Unit”): (i) one (1) Physical Unit or one (1) code redeemable for a digital Unit of the Title (and may also include Additional Content, subject to Marvel’s approval in each instance (email sufficing)), (ii) one (1) Authorized Device, and (iii) one or more other Games, as approved by Marvel in each instance (email sufficing).
For the avoidance of doubt, except as otherwise approved in advance in writing by Marvel at its sole and absolute discretion on a case-by-case basis, Licensee shall be permitted to make available for sale only two (2) SKUs of each Bundled Unit (one physical and one digital).
In accordance with Section 3.1 of the Additional Terms and Conditions, Licensee shall submit to Marvel for its review and approval all aspects of the Bundled Units, including, but not limited to all packaging, creative, and marketing and promotional materials. For the avoidance of doubt, except as otherwise approved in advance in writing by Marvel at its sole discretion on a case-by-case basis, Licensee shall not use or authorize any third party to use any Marvel character to market or promote the Bundled Unit(s) except to the extent such characters appear: (i) on the packaging of the Bundled Unit, and (ii) in images depicting gameplay within the Title, each of (i) and (ii) as approved by Marvel on a case-by-case basis in accordance with the Agreement. In no event shall the Bundled Unit include any other Games or third party products (e.g., accessories) unless otherwise approved in advance in writing by Marvel, at Marvel’s sole and absolute discretion.
Licensee shall pay to Marvel Royalties in connection with the sale of Bundled Units (“Bundled Unit Sales”), calculated by multiplying the Royalties owed in connection with the sale of the Unit of the Title (as calculated using Table 1 above) by the applicable percentage of the per Unit wholesale price (“Wholesale Unit Price”), with such percentages set forth in Table 3 below.
(# of Bundled Unit Sales) | From | To | % of Wholesale Unit Price |
Tier 1 | 0 | 500K | 35% |
Tier 2 | 500K | 1 million | 40% |
Tier 3 | 1 million | 1.5 million | 45% |
Tier 4 | 1.5 million+ | | 50% |
For the avoidance of doubt, sales of all Bundled Units, whether including a Physical Unit (each such unit, a “Physical Bundled Unit”) or a code redeemable for a digital Unit (each such unit, a “Digital Bundled Unit”), shall apply towards the calculation of Bundled Unit Sales for each Tier. All Bundled Unit Sales (whether physical or digital) shall also apply towards the calculation of total Unit sales for each Tier for purposes of Table 1 above.
By way of example, if Licensee initially sells 400,000 Bundled Units (comprised of 200,000 Physical Bundled Units and 200,000 Digital Bundled Units), thereby increasing total sales of Units of the Title to 3,400,000 Units, the Royalties owed in connection with those sales shall be calculated as follows:
Physical Bundled Unit Royalties:
Number of Bundled Units: 200,000
Wholesale Unit Price: $50/Unit
Applicable % of Wholesale Unit Price Owed: 35% (Tier 1 in Table 3)
Applicable Royalty Rate: 11% (then-applicable Royalty Rate for Physical Unit Sales as set forth in Tier 2 of Table 1)
Physical Bundled Unit Royalties: $385,000 (i.e., 200,000 x $50 x 35% x 11%)
Digital Bundled Unit Royalties:
Number of Bundled Units: 200,000
Wholesale Unit Price: $30/Unit
Applicable % of Wholesale Unit Price Owed: 35% (Tier 1 in Table 3)
Applicable Royalty Rate: 21% (then-applicable Royalty Rate for Sales via Full Digital Distribution as set forth in Tier 2 of Table 1)
Digital Bundled Unit Royalties: $441,000 (i.e., 200,000 x $30 x 35% x 21%)
Licensee shall pay to Marvel Royalties in connection with the sale of any Additional Content included with any Bundled Unit, using the current retail price charged to End Users for such Additional Content at the time such Additional Content is sold as part of the Bundled Unit and the then-applicable Royalty Rate set forth in Table 2, multiplied by the then-applicable percentage set forth in Table 3.
Licensee shall ensure that the Bundled Units: (a) receive a stand-alone marketing campaign; (b) have significant placement in Licensee’s “Always On” campaigns; and (c) receive priority messaging status throughout Licensee’s owned media channels (both online and at retail stores). In addition, Licensee shall first offer Marvel the opportunity to participate in additional event and featuring opportunities, including on-stage reveals and pre-order campaigns.
Notwithstanding anything contained in this Agreement, including any obligation to exercise rights or actively exercise a license, Licensee shall not be obligated to offer for sale any Bundled Units.
Title and Additional Content Bundles: Licensee shall have the right to bundle one (1) Unit of the Title with Additional Content for the Title, subject to the following:
- “Deluxe” Editions: where the Unit of the Title and the Additional Content are offered as two separately packaged and marketed SKUs/items that are being sold together (e.g., the launch Version of the Title sold together with Additional Content for the Title), the Royalties payable for the Unit of the Title and the Additional Content shall be calculated as if sold separately at the then-prevailing price of the applicable Unit and Additional Content, and shall be counted separately for the purposes of the Royalty Tiers for the Title and Additional Content for the Title.
- “GOTY” (or similar designation) Editions: where the Unit of the Title and the Additional Content are offered together as a newly marketed/packaged SKU (e.g., a “Game of the Year” Version of the Title that includes different cover art and includes Additional Content for the Title), Marvel shall be entitled to the following Royalties on sales of Units of the GOTY bundles: (i) for a bundle consisting of one (1) Physical Unit of the Title and Additional Content, nineteen percent (19%) of Net Sales, using the physical sales calculations for Gross Revenue (i.e., the wholesale price of the physical GOTY bundle x Units sold) and Deductions, and (ii) for a bundle consisting of one (1) digital Unit of the Title and Additional Content, twenty-six percent (26%) of Net Sales, using the digital sales calculations for Gross Revenue (i.e., the price charged to each End User for each Unit of the digital GOTY bundle) and Deductions.
Limited Edition PlayStation Console: The parties agree to discuss in good faith the potential creation and distribution of a limited edition PlayStation console related to each Title, it being understood that any terms and conditions (including economic terms) would be set forth in a separate written agreement executed by the parties. For the avoidance of doubt, no party shall have any obligation or liability in the event that such an agreement is not reached.
For all Units of the Title and Additional Content sold during the Limited Rights Term, including any Bundled Unit Sales, Marvel shall be entitled to the following Royalty Rates:
- For Physical Units: 18% of Net Sales
- For Full Digital Distribution of the Title: 26% of Net Sales
- For Additional Content: 26% of Net Sales
All Royalties payable under this Schedule #1 shall be payable in accordance with the payment schedule set forth in the Additional Terms and Conditions. Any alternative form(s) of media or distribution for any Title not otherwise set forth above shall be subject to Marvel’s prior written approval in each instance, which may be conditioned on a separately negotiated royalty rate.
Guarantee
Licensee shall pay Marvel a nonrefundable advance guarantee of Title #1 Royalties in the amount of Nine Million U.S. Dollars (US $9,000,000) (the “Title #1 Guarantee”) as follows:
- Three Million U.S. Dollars ($3,000,000) upon full execution of this Agreement;
- Three Million U.S. Dollars ($3,000,000), to be paid by Licensee no later than thirty (30) days following the first anniversary of the first payment date; and
- Three Million U.S. Dollars ($3,000,000), to be paid by Licensee no later than thirty (30) days following the earlier of: (i) the Title #1 Release Date or (ii) December 31, 2025.
Licensee shall pay Marvel a nonrefundable advance guarantee of Title #2 Royalties in the amount of Nine Million U.S. Dollars (US $9,000,000) (the “Title #2 Guarantee”) as follows:
- Three Million U.S. Dollars ($3,000,000) no later than thirty (30) days following the earlier of: (i) receipt by Licensee of written notice from Marvel that the “design” milestone of the Milestone Delivery Schedule for the Title is approved; and (ii) December 31, 2027;
- Three Million U.S. Dollars ($3,000,000), to be paid by Licensee no later than thirty (30) days following the first anniversary of the first payment date; and
- Three Million U.S. Dollars ($3,000,000), to be paid by Licensee no later than thirty (30) days following the earlier of: (i) the Title #2 Release Date or (ii) December 31, 2029.
Licensee shall pay Marvel a nonrefundable advance guarantee of Title #3 Royalties in the amount of Nine Million U.S. Dollars (US $9,000,000) (the “Title #3 Guarantee”) as follows:
- Three Million U.S. Dollars ($3,000,000) no later than thirty (30) days following the earlier of: (i) receipt by Licensee of written notice from Marvel that the “design” milestone of the Milestone Delivery Schedule for the Title is approved; and (ii) December 31, 2031;
- Three Million U.S. Dollars ($3,000,000), to be paid by Licensee no later than thirty (30) days following the first anniversary of the first payment date; and
- Three Million U.S. Dollars ($3,000,000), to be paid by Licensee no later than thirty (30) days following the earlier of: (i) the Title #3 Release Date or (ii) December 31, 2033.
The Title #1 Guarantee, Title #2 Guarantee, and Title #3 Guarantee may each be referred to individually as a “Title Guarantee” and collectively as the “Title Guarantees.” The Title Guarantees may each be referred to individually as a “Guarantee” and jointly as the “Guarantees.” Each Title Guarantee is solely recoupable by Royalties payable by Licensee in connection with the applicable Title (e.g., Title #1 for the Title #1 Guarantee) that are generated during the Full Rights Term in accordance with the terms and conditions of this Schedule #1. The Guarantees shall not be cross-collateralized, with solely the Royalties payable in connection with the applicable Title recouping the applicable Publishing Agreement Guarantee (e.g., Royalties payable in connection with Title #2 cannot be used to recoup the Title #1 Guarantee).