Structure of contractual relationships in a typical Fund4Games project
A separate limited liability partnership (LLP) is established to hold the intellectual property (IP) created during the development of the game.
The LLP contracts with the Publisher to deliver a specified computer game.
The LLP contracts with the Developer to develop the game, in accordance with the publishing contract. F4G is a partner in this LLP, and its role is to project manage the development of the games, and to fund the process.
F4G manages the arrangements with Developers and Publishers by means of various contracts. The principal contracts are:
- The Project Management and Facility Agreement. This governs the relationship between all of the parties and specifies their responsibilities. This contract also determines the timing of key events and the processes for dealing with variations and exceptions.
- The Publishing Agreement between the LLP and the Publisher. This defines deliverables, milestones, license fees and royalties.
- The Development Services agreement between the LLP and the Developer. This defines what the Developer must do to deliver the game.
F4G Software only manage and fund projects where the Developer and Publisher have entered into legally binding contracts, under which the Publisher guarantees to pay the project management and funding costs. F4G Software reserves the right to replace sub-contractors who fail to perform to satisfactory levels, and to find alternate Publishers should a Publisher fail to meet its contractual obligations.
The funding provided by F4G Software to the LLP is secured against the future licence fee and royalties. This funding is used by the LLP to make progress payments to the Developer. These are made on a regular basis subject to satisfactory progress on the project.
When the game is completed, the LLP delivers it to the Publisher and receives the license fee. If sales of the game exceed an agreed level, then the Publisher will make royalty payments to the LLP. The LLP then repays F4G from the license fee following delivery of the game.
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