NON-EXCLUSIVE LICENSE AGREEMENT
THIS AGREEMENT is made and entered into this 3rd day of July,
1997, by and between ATARI, a division of JTS CORPORATION, a
Delaware Corporation, with its principal place of business located
at 000 Xxxxxxxxx Xxxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000 (hereinafter,
"Licensor") and WEBQUEST INTERNATIONAL, INC., a Nevada corporation,
with its principal place of business located at 0000 Xxxxxxxx Xxx,
Xxxxx 000, Xxxx, Xxxxxx 00000 (hereinafter "Licensee").
WITNESSETH:
WHEREAS, Licensor has developed through its research and
development and is the owner of, and possesses certain computer
game software, programs, trade names, trademarks, promotional
material and intellectual property herein commonly known as "Pong"
(hereinafter referred to as the "Property"); and
WHEREAS, Licensor is the owner of certain valuable trade names
and logos relating to the Property, which such trade names were or
are registered in the countries of USA, United Kingdom, Canada,
Japan, Sweden, Germany, Australia, and Austria, and any renewals
thereunder; and
WHEREAS, Licensor has granted a non-exclusive license to
Hasbro Interactive for use of the Property on the Internet; and
WHEREAS, Licensee desires to license the Property to use the
game in connection with its "website" on the World Wide Web
identified with the URL address of "xxx.xxxxx.xxx"; and
WHEREAS, Licensor is willing to grant a limited, non-exclusive
license to Licensee to use the Property under the terms and
conditions provided for herein.
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, and other good and valuable
consideration, receipt whereof is hereby acknowledged, it is hereby
agreed as follows:
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ARTICLE I
GRANT OF LICENSE
1.1 Licensor hereby grants to the Licensee, in accordance with
the terms of this Agreement, a non-exclusive right and license to
use the Property described herein, to be placed for access by the
public on one (1) website located on the World Wide Web, as
identified above, owned and operated by Licensee in connection with
its services and products. Licensor retains all rights to further
license the Property. Notwithstanding anything to the contrary
stated herein, the grant of any right by Licensor to Licensee under
this agreement shall be subject to any and all legal obligations
and requirements with which Licensee is bound by law to comply.
1.2 Unless otherwise terminated under the provisions hereof,
the term of the license granted herein shall be for an initial
period of five (5) years from the date hereof, and shall be
renewable for an additional five (5) year period at the option of
Licensee as long as a minimum royalty of $400,000 has been paid to
Licensor during the original five (5) year license period.
1.3 Subject to the terms of this Agreement, all copies of the
licensed Property made by the Licensee including transactions,
encodings, decodings, compilations, partially modified copies, and
updated works are and shall be the sole property of Licensor.
1.4 The rights and information licensed herein consist of all
existing source codes, enhancements, upgrades, documentation,
flowcharts, design documents, and record and file layouts, in any
medium, relating to the Property and any and all right, title, and
interest therein, proprietary and otherwise, and includes without
limitation, the copyright, trade secret right, patent right, and
rights to publish, reproduce, transmit, adapt, prepare derivative
works, sell, or otherwise make use of the Property as otherwise set
forth herein.
ARTICLE II
LICENSE FEES
2.1 Licensee shall pay to Licensor a royalty, payable in
quarterly installments, in an amount equal to 1/10 of one cent
($0.001) for each player who accesses "Pong" through Licensee's
website. Licensee
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shall pay Licensor a base quarterly royalty in the amount of Five
Thousand Dollars ($5,000) if the number of Pong players fails to
exceed five million (5,000,000) in any one quarter. Payments shall
be made within thirty (30) days of the end of each calendar
quarter.
2.2 Licensee shall pay the first base quarterly royalty in the
amount of Five Thousand Dollars ($5,000) upon execution of this
Agreement, which such initial fee shall be considered non-
refundable regardless of the breach of Licensee of this Agreement.
Thereafter, the quarterly fees (base or otherwise) shall be payable
according to the terms herein.
2.3 Licensee shall keep accurate records and books of account
showing the quantities of players accessing Pong on the Internet.
Licensor, or its representative, shall be given access to such
records and books at all reasonable times at Licensee's place of
business. Licensee shall additionally make this information
available to Licensor annually during the terms of the Agreement,
within sixty (60) days after the first of each year.
ARTICLE III
TERMINATION: REMEDIES
3.1 This Agreement may be terminated in the event of any of
the following, which shall be deemed events of default:
3.1.1 Appointment of a trustee or receiver for Licensee.
3.1.2 Licensee is adjudged bankrupt, becomes
insolvent, or makes an assignment for the benefit
of creditors.
3.1.3 Licensee's failure to pay to Licensor the amounts
payable under the terms hereof whether minimum
annual payments or otherwise, or to furnish the
accounting as set forth herein.
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3.1.4 Licensee's violation or failure to keep or
perform any other obligation, term or condition
contained herein and Licensee fails to cure
within thirty (30) days after written
notification of such failure or default is
received.
3.2 Licensee shall have the right to terminate this
Agreement upon thirty (30) days written notice without cause, and
subject to payment of all amounts due under and performance of the
remaining terms of this Agreement.
3.3 Upon termination of this Agreement for any reason,
Licensee shall cause "Pong" to be removed from Licensee's website
within twenty-four (24) hours of effective termination.
Additionally, Licensee shall discontinue all use of the trade name,
"Pong," as well as any use of the Property described herein, and
all copies of the software and programming known as "Pong" shall be
returned to Licensor or destroyed by Licensee. Licensee shall
certify to Licensor that all copies or partial copies have been
returned to Licensor or destroyed.
3.4 Except as to a claim for accrued royalties due and payable
to Licensor, Licensor's rights and remedies provided for heroin are
Licensor's sole and exclusive remedies for breach of this Agreement
by Licensee regardless of any and all other rights and remedies
which Licensor may have in law or in equity. The waiver by Licensor
of any right of termination for any default or of any breach shall
not constitute a waiver of the right to terminate this Agreement
for any subsequent default or breach.
3.5 In no event shall either party be liable to the other for
any special, indirect, or consequential damages, including damages
for loss of use, economic loss (such as business interruption) or
loss of profits, however the same may be caused, including, without
limitation, the fault, breach of contract, tort (including the
concurrent or sole and exclusive negligence), strict liability or
otherwise of either party, but excluding the intentional or wilful
act of such party.
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ARTICLE IV
ASSIGNMENT
It is agreed that none of the rights of Licensee provided for
herein are transferable or assignable without the express written
approval of Licensor, which such approval is in Licensor's absolute
discretion.
ARTICLE V
INFRINGEMENT
In the event that any infringement of the licensed trade name,
trademark, and/or intellectual property known as "Pong" comes to
the attention of either party, such party shall promptly notify the
other party of the infringement. Each party shall have the option
to prosecute and defend, at their respective cost and expense, any
infringement action arising out of the licensed patents herein.
Each party agrees to cooperate with the other if any such action is
commenced and both parties shall have the right, but not the
obligation, to obtain counsel of their choosing to prosecute or
defend such action. In no event shall either party have the
responsibility or obligation to prosecute or defend any such suit
or be obligated for the cost or expenses of such litigation,
including attorney's fees. It is expressly agreed that each party
shall bear their own attorney's fees and costs which may be
incurred as a result of any such infringement action.
ARTICLE VI
PROPRIETARY RIGHTS AND INFORMATION PROTECTION
6.1 Licensee recognizes that the Property licensed hereunder
constitutes valuable trade secrets of Licensor. Accordingly,
Licensee agrees that it shall protect and hold in confidence all
Property and related information furnished to it by Licensor. All
the Property shall be kept in secure places, under access and use
restrictions not less strict than those used by Licensee to protect
its own similar, valuable trade secret information. Except with
Licensor's prior written consent, Licensee shall not disclose any
Property to any other person, firm, or corporation (including any
stockholder, partner, or joint venturer or any parent, subsidiary,
or affiliated corporation), and shall further restrict circulation
of such material within its own organization except to the extent
necessary to fulfil the herein stated purposes. The fact that the
Property
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has been obtained or becomes available from unauthorized sources
shall in no way relieve Licensee from its obligations hereunder and
unauthorized use of the Property by Licensee shall be deemed to
include any disclosure by Licensee of the Property obtained from
such sources.
6.2 Licensee agrees to respect Licensor's copyright in its
brochures and other materials, provided that during the term of
this Agreement, Licensee may reproduce such promotional brochures
or materials for use in connection with the license granted herein.
The Licensee shall reproduce and xxxx any such copies with any
copyright notice which may appear on the original or on any
packaging material. Notwithstanding anything stated herein to the
contrary, Licensor is not obligated to provide any such material
nor shall the failure to provide such material be considered a
breach of this Agreement; it being the intent of the parties to
make use of such material as may be available to the mutual benefit
of the parties.
ARTICLE VII
INVALIDITY OF TRADEMARK
If any claim of any proprietary interest under which this
license is granted shall be declared invalid by a final decision of
a court of competent jurisdiction, whether an appellate court or a
lower court whose decision becomes final by failure to appeal
therefrom or no certiorari is granted within the period allowed
therefor, or if, as a result of a final decision, any such claim
shall be hereafter awarded to another, Licensee shall be relieved
of all obligations hereunder.
ARTICLE VIII
CONFIDENTIALITY
Licensee hereby agrees, that during the term of this Agreement
and for a period of five (5) yeas after its termination, Licensee
will hold secret and confidential and will not disclose in any
manner to any person or concern (excluding such of its employees or
agents as are required to allow full use of the rights granted
herein and then only under an obligation of secrecy binding upon
such employee or agent for the benefit of Licensor), any method,
process, technique, information, knowledge, trade practice or trade
secret divulged, disclosed or in any way communicated by Licensor
to Licensee. Additionally, Licensee hereby agrees that
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it will not use or employ, either directly or indirectly, any
information, knowledge, trade practice or trade secret acquired
under this Agreement for such period as stated herein.
ARTICLE IX
OWNERSHIP
Licensee hereby recognizes and acknowledges the Licensor's
ownership of the software, trade name and trademarks which are the
subject of this Agreement, to any future, improvement,
modification, invention or design as contemplated herein, and to
any trademark licensed or used in association with the products
herein. Licensee further agrees that it will not at any time do or
cause to be done any act or thing contesting or in any way
impairing or tending to impair Licensor's ownership. In the event
Licensee challenges the ownership of Licensor to any item
contemplated herein in any court having jurisdiction over such
matters, Licensor shall have the right to immediately terminate
this Agreement.
ARTICLE X
TAXABILITY
Licensor and Licensee agree that Licensee will deduct the
payments under the term of this agreement as a business expense by
Licensee for purposes of federal and state income taxation, and
that Licensor shall treat its payment in whatever method is
acceptable under prevailing Internal Revenue Service rules and
regulations as well as federal and state income taxation laws. In
no event, however, is the method of treatment of said payments by
the Internal Revenue Service a condition of the Agreement herein.
ARTICLE XI
NOTICES
All notices required by this agreement shall be mailed by
certified mail, return receipt requested, tothe following
addresses:
Licensor:
Atari, a division of JTS Corporation
Xxxx Xxxxxx
000 Xxxxxxxxx Xxxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
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Licensee:
WebQuest International, Inc.
Xxxxx Xxxx
0000 Xxxxxxxx Xxx, Xxxxx 000
Xxxx, Xxxxxx 00000
Any notice required or permitted to be given under this
agreement by either of the parties heretoshall be deemed to
have been sufficiently given for all purposeshereto on the
date of mailing as described herein above.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES
12.1 Licensee represents and warrants to Licensor that:
12.1.1 Licensee is duly incorporated under the laws of the
State of Nevada and is in good standing.
12.2.2 Licensee's board of directors and shareholders
existing as of the date of the execution hereof have duly
approved all of Licensee's agreements herein, and
Licensee shall provide Licensor with certified copies of
resolutions showing such action.
12.2 Licensor represents and warrants to Licensee that:
12.2.1 Licensor has not entered into any other agreements,
excepting the license agreement with Hasbro Interactive
as noted herein above, for the use and/or sale of the
Property contrary to the rights and interests granted
herein and has the full authority and right to grant the
license granted herein.
12.2.2 Licensor's grant of the license herein is not in
conflict in any way with its grant of a license to Hasbro
Interactive for use of the Property.
12.2.3 Hasbro Interactive has approved this license for use
of the Property and Licensee's use of the Property is non-
infringing upon the license agreement between Licensor
and Hasbro Interactive.
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12.2.4 Licensor has developed and protected said trade name and
has the exclusive right to use and license others to use
such marks.
12.2.5 Licensor has an unrestricted exclusive right to use,
execute and reproduce the original Property, enhancements
and upgrades thereof, and to sell and distribute the
Property without obligation or restriction of any kind and
that there is no other ownership or proprietary interest
in the Property other than those licensed hereunder,
excepting therefrom the rights of Atari Games Corporation
to the use of the Property for coin operated games, and
a non-exclusive right to create derivative works for play
on personal computers and home game systems.
12.2.6 Licensor is the sole and exclusive owner of and has good
and marketable title to the Property and is duly
authorized and empowered to license all rights thereto
without the consent of any other person or entity; and
there are no debts, liens, encumbrance, or obligations
against the Property and Licensor has paid all taxes,
charges, debts, and other assessments as may be attributed
thereto and that all debts and obligations relating
thereto are and will remain fully satisfied throughout the
term hereof. The Property is not subject to any permits,
licenses, or grants of use or any right whatsoever other
than licensed herein and Licensor has not sold or granted
any interest, whether in total or in part, in any portion
of the Property to any person or entity and the use of the
Property does not conflict or otherwise infringe in any
way with the trade-marks, trade-names, copyright, or other
proprietary rights, nondisclosure or other rights or
interest of any other person or entity.
12.2.7 The Property and its use by Licensee has been and is in
compliance with all applicable laws, rules and regulations.
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12.2.8 Licensor is a corporation duly organized, validly
existing, and in good standing under the laws of the
state of its incorporation and has full corporate power
and authority to enter into this Agreement and to carry
out its obligations hereunder. This Agreement constitutes
a valid and binding obligation of Licensor and performance
hereunder will not violate any provision of its Articles
of Incorporation, Bylaws, or other agreements or
commitments.
ARTICLE XIII
LICENSEE'S RIGHT TO MODIFY
If, during the term of this Agreement, Licensee desires to
modify, enhance or alter the Property in order to more effectively
market Licensee's product, Licensee shall provide the software
version to Licensor for approval thereof, which such approval shall
not be unreasonably withheld. Licensee shall not release any such
version to the public without Licensor's prior approval. Subject to
the terms of this Agreement, Licensee shall retain ownership of
such modifications, enhancements or alterations. There shall be no
use of Licensee's modifications or alterations of the software by
any other party without the specific approval of Licensee. It is
initially understood between the parties that Licensee intends to
make the pong game a more exciting game beyond presently existing
format.
ARTICLE XIV
INDEMNIFICATION
14.1 Licensee hereby agrees to indemnify, defend and hold
Licensor harmless from all liabilities, losses, damages, costs,
expenses, causes of action, claims and/or judgments by reason of
any injury or damage to any person or persons, including without
limitation, Licensee, its servants, agents and employees, or
property of any kind whatsoever and to whomsoever belonging,
resulting from any use, sale or other disposition by Licensee of
the Property licensed hereunder. Licensee hereby waives all claims
against Licensor for damages to property of or for bodily injuries
to Lessee, his agents or any other third persons.
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14.2 Licensee agrees to indemnify, defend and hold Licensor
harmless from any and all liability, damages, loss, cost or expense
including, but not limited to, attorney's fees arising out of any
claim or action based upon the use of the trade names or marks by
Licensee.
14.3 Licensor agrees to indemnify, defend and hold Licensee
harmless from any and all liability, damages, loss, cost or expense
including, but not limited to, attorney's fees arising out of any
claim or action based upon the breach of the warranties and
representations of Licensor set forth in this Agreement.
14.4 Licensor agrees to indemnify, defend and hold Licensee
harmless from any and all liability, damages, loss, cost or expense
including, but not limited to, attorney's fees arising out of any
claim or action related to the use of the Property by Hasbro
Interactive pursuant to the License Agreement between Hasbro
Interactive and Licensor.
ARTICLE XV
MISCELLANEOUS PROVISIONS
15.1 This Agreement contains the entire agreement of the
parties and supersedes all prior agreements, understandings and
negotiations regarding the same and shall only be amended by a
written instrument by both parties.
15.2 If any part of this Agreement shall be held unenforceable
by a court of competent jurisdiction, the remainder of the
Agreement shall nevertheless remain in full force and effect.
15.3 This Agreement shall be governed and construed in
accordance with the laws of the State of California. Any action
commenced by either party arising from any disputes hereunder shall
be brought in the State of California, in and for the County of
Santa Xxxxx.
15.5 The waiver by either party of a breach of any provision
contained herein shall be in writing and shall in no way be
construed as a waiver of the present or any succeeding breach of
any such provision or the waiver of the provision itself.
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15.6 In the event of any litigation between the parties
arising out of this Agreement, the prevailing party shall be
entitled to recover its attorney's fees and costs of suit incurred
therein.
15.7 Each of the parties represents to the other parties that
no broker or finder has acted for them in connection with this
Agreement and agrees to indemnify and hold harmless the other
parties against any fee, loss, or expense arising out of claims by
brokers or finders employed or alleged to have been employed by
such party.
IN WITNESS WHEREOF, the parties have hereunto set their hands
the day and year first above written.
LICENSOR:
ATARI, a division of JTS CORPORATION,
a Delaware Corporation
By: /s/Xxxx Xxxxxx
LICENSEE:
WEBQUEST INTERNATIONAL, INC.
By: Xxxxxxx X. Xxxxxxx
Secretary/Treasurer
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