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EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of April 23, 1999, by and among NTN
Communications, Inc., a Delaware corporation ("Buyer"), and Sikander, Inc., a
Nevada corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Buyer desires to purchase from Seller and Seller desires to
sell to Buyer certain of the assets of Seller relating to the Internet/Game
Kiosk business (the "Assets") in exchange for cash, a promissory note and
options to purchase shares of common stock of Buyer from Buyer; and
WHEREAS, the parties desire to enter into this Asset Purchase Agreement
to set forth their mutual agreements concerning the above matter;
NOW, THEREFORE, in consideration of the mutual promises of the parties
hereto, and of good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, it is mutually agreed by and between the parties
hereto as follows:
ARTICLE 1
SALE AND TRANSFER OF ASSETS; CLOSING
1.1 Exchange. (a) Sale of Assets. Subject to the terms and conditions
of this Agreement, at the closing of the transactions contemplated hereby (the
"Closing"), Seller will sell, convey, assign and transfer the Assets to Buyer,
and Buyer will purchase the Assets from Seller. The Assets shall be free and
clear of any liens, royalty payments or other liabilities, and shall include,
without limitation, the following:
(i) all of Seller's right, title and interest in intellectual
properties, trademarks and associated goodwill, patents, service marks,
copyrights, any pending applications for trademarks or patents or service marks
or copyrights, trade secrets, design know-how, and engineering and other plans,
drawings and diagrams, including, without limitation, all right, title and
interest of Seller in and to the software relating to the items listed on
Exhibit A whether owned, leased or licensed by Seller and including without
limitation all such software for which Seller holds "a right to use", including
without limitation all source codes, object codes, data and related
documentation (the "Proprietary Technology").
(ii) all of the tangible personal property of Seller
including, but not limited to, countertop units, floor units and all other fixed
assets, equipment, computers, inventory, manuals and other such tangible
personal property (a complete listing of such tangible assets is attached hereto
as Exhibit A);
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(iii) all real and personal property of any kind,
including, without limitation, leasehold interests, licenses and sublicenses
granted and obtained with respect thereto, contracts and agreements of any kind,
accounts, notes and other receivables, deposits, prepayments, refunds, causes of
action, rights of recovery, franchises, permits, licenses, registrations and
similar rights obtained from governmental agencies; and
(iv) all of Seller's right to operate the Assets as a
business, including all licenses, consents, certificates, authorizations and
privileges.
(b) Taxes. Seller shall pay all federal, state and local taxes and
fees related to the transfer of the Assets to Buyer.
(c) Liability relating to Assets. Buyer shall not assume any
liabilities of or relating to Seller or the Assets.
1.2 Consideration. In consideration of the transfer by Seller of the
Assets to Buyer, Buyer at Closing shall deliver to Seller:
(a) $40,000 payable by Buyer's check;
(b) a 10% promissory note for $360,000 payable in twelve equal
quarterly installments of $30,000 plus interest commencing on June 30, 1999 and
containing such other terms as set forth in the form of promissory note attached
hereto as Exhibit B (the "Note");
(c) Buyer shall grant Seller options to purchase up to 600,000
shares of common stock of Buyer at a price of $.625 per share (the "Earn Out
Options"), subject to the terms described in Exhibit C hereto. All
determinations in calculating and determining the number of shares subject to
the Earn Out Options shall be made by the Board of Directors of Buyer in its
good faith discretion. In the event Seller disputes any such determination, the
final determination which shall be binding on all parties shall be made by KPMG
Peat Marwick. All of the Earn Out Options will expire on April 30, 2006.
(d) The aggregate consideration set forth in paragraphs (a)
through (c) of this Section 1.2 is referred to herein as the "Purchase Price."
1.3 Closing. The Closing will take place at the offices of Xxxx & Xxxxx
at 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxx Xxxxxxx, XX 00000, at 10:00 a.m.
(local time) on April 28, 1999, or at such other time and place as the parties
may agree (the "Closing Date").
1.4 Closing Obligations. At Closing, Buyer and Seller shall take the
following actions, in addition to such other actions as may otherwise be
required under this Agreement:
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(a) Conveyance Instruments. Seller shall deliver to Buyer such
warranty deeds, bills of sale, assignments, and other instruments of conveyance
and transfer as Buyer may reasonably request to effect the assignment to Buyer
of the Assets.
(b) Assumption Agreement. Buyer shall deliver to Seller an
assumption agreement, pursuant to which Buyer assumes all of the benefits to the
contracts which Buyer in its sole discretion determines to assume.
(c) Certificates. Each party shall deliver the certificates as to
the accuracy of the representations and warranties contained herein, the
compliance with the covenants and agreements contained herein, and the
satisfaction of the conditions to Closing contained herein.
(d) Consideration. Buyer will deliver to Seller the Purchase Price
specified in Section 1.2 above.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that, except as provided
in a Disclosure Schedule provided by Seller to Buyer:
2.1 Organization. Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Nevada with the
power and authority to conduct its business and to own and lease its properties
and assets (including the Assets).
2.2 Power and Authority. Seller has the power and authority to execute,
deliver, and perform this Agreement and the other agreements and instruments to
be executed and delivered by it in connection with the transactions contemplated
hereby and thereby, has taken all necessary company action (including approval
of its shareholders) to authorize the execution and delivery of this Agreement
and such other agreements and instruments and the consummation of the
transactions contemplated hereby and thereby. This Agreement is, and when such
other agreements and instruments are executed and delivered, the other
agreements and instruments to be executed and delivered by Buyer in connection
with the transactions contemplated hereby and thereby shall be, the valid and
legally binding obligations of Buyer, enforceable in accordance with their
respective terms.
2.3 No Conflict. Neither the execution and delivery of this Agreement
and the other agreements and instruments to be executed and delivered in
connection with the transactions contemplated hereby or thereby, nor the
consummation, of the transactions contemplated hereby or thereby, will violate
or conflict with: (a) any federal, state, or local law, regulation, ordinance,
zoning requirement, governmental restriction, order, judgment or decree
applicable to Seller or the Assets; (b) any provision of any charter, bylaw or
other
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governing or organizational instruments of Seller; or (c) any mortgage,
indenture, license, instruments trust, contract, agreement, or other commitment
or arrangement to which Seller is a party or by which Seller or any of the
Assets is bound.
2.4 Required Government Consents. No approval, authorization,
certification, consent, variance, permission, license, or permit to or from, or
notice, filing, or recording to or with, federal, state, or local governmental
authorities is necessary for the execution and delivery of this Agreement and
other agreements and instruments to be executed and delivered in connection with
the transactions contemplated hereby or thereby by Seller or the consummation by
Seller of the transactions contemplated hereby or thereby, or the ownership and
use of the Assets and the conduct of the Seller's business.
2.5 Required Contract Consents. No approval, authorization, consent,
permission, or waiver to or from, or notice, filing, or recording to or with,
any person is necessary for: (a) the execution and delivery of this Agreement
and the other agreements and instruments to be executed and delivered in
connection with the transactions contemplated hereby or thereby by Seller or the
consummation by Seller of the transactions contemplated hereby; or (b) the
ownership and use of the Assets and the conduct of Seller's business.
2.6 Title to Assets; Sufficiency, etc. Seller has good and marketable
title to, or a valid leasehold interest in, the properties and assets used by or
in connection with its business (real, personal and mixed, tangible or
intangible), shown on the most recent balance sheet or acquired after the date
thereof, free and clear of all liens, security interests, encumbrances or other
restrictions on transfer, except for properties and assets disposed of in the
ordinary course of business since the date of the most recent balance sheet.
Seller owns or leases all buildings, machinery, equipment, and other tangible
assets necessary for the conduct of its business as presently conducted and as
presently proposed to be conducted.
2.7 Title to Intellectual Property.
(a) Buyer shall receive title to the Proprietary Technology at
Closing, free and clear of all liens or encumbrances.
(b) Seller owns all Proprietary Technology necessary for the
operation of its business utilizing the Assets as presently conducted and as
presently proposed to be conducted. Seller has provided Buyer with a list
(Exhibit A) of all patents, trade names, copyrights, trademarks and service
marks owned by Seller relating to the Assets. Seller has taken all necessary and
desirable action to maintain and protect each item of Proprietary Technology.
(c) Seller does not interfere with, infringe upon, misappropriate,
or otherwise come into conflict with any proprietary technology rights of third
parties, and has never received any charge, complaint, claim, demand, or notice
alleging any such interference, infringement, misappropriation, or violation
(including any claim that Seller
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must license or refrain from using any proprietary technology rights of any
third party) in connection with the conduct of its business. No third party has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Proprietary Technology rights of Seller.
(d) Seller has delivered to Buyer correct and complete copies of
all items of Proprietary Technology (Exhibit A). With respect to each item of
Proprietary Technology (i) Seller possesses all right, title, and interest in
and to the item, free and clear of any security interest, license, or other
restriction; (ii) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge; (iii) no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand is pending or, to
the knowledge of Seller, its the directors and officers (and employees with
responsibility for Proprietary Technology matters), is threatened, which
challenges the legality, validity, enforceability, use, or ownership of the
item; and (iv) Seller has never agreed to indemnify any person (other than its
customers) for or against any interference, infringement, misappropriation, or
other conflict with respect to the item.
2.8 Financial Statements. Seller has provided the following financial
statements (the "Financial Statements"): unaudited balance sheet as of March 31,
1999, and a statement of income for the ten months ended March 31, 1999. The
Financial Statements, including the notes thereto, are true and correct in every
material respect and properly reflect all assets and assumed liabilities as then
in existence. The Financial Statements, including the notes thereto, fairly
present the results of operation and the financial position of Seller as of the
date thereof and the period then ended in conformity with GAAP consistently
applied with the principles and procedures employed in prior periods by Seller.
2.9 Conduct of Business. (a) Ordinary Course of Business: No Removal or
Disposal of Assets. Since December 31, 1998, Seller has operated its business in
the ordinary course consistent with past practices, and has not removed or
disposed of any assets except in the ordinary course.
(b) No Material Adverse Change. Since December 31, 1998 there has
been no material adverse change in the Assets or in the financial condition,
operations, or prospects of the Seller's business.
(c) Absence of Particular Events. Since December 31, 1998 Seller
has not: (i) suffered any damage or destruction adversely affecting its business
or involving the Assets; (ii) incurred any liability or obligation other than in
the ordinary course consistent with past practice; (iii) made any change in any
method, practice, or principle of accounting; or (iv) paid, loaned, or advanced
any material monetary amount or other asset to, or sold, transferred, or leased
any asset to, any employee except for normal compensation involving salary and
benefits.
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(d) Absence of Joint Ventures, etc. Seller is not a party to any
joint venture or other similar agreement or arrangement that involves any
sharing of profits or is similar to or competitive with its business.
2.10 Major Vendors and Customers. There is no distributor, supplier of
property or services to, or licensee, end-user, or customer of, Seller, to whom
Seller paid or billed in the aggregate $10,000 or more during the ten months
ended March 31, 1999.
2.11 Legal Compliance. The Seller has all permits, licenses, orders and
approvals of all foreign, federal, state or local governmental or regulatory
bodies required for it to conduct its business as presently conducted. Seller
has complied with all applicable laws (including environmental laws) of federal,
state, provincial, local, and foreign governments.
2.12 Litigation. No claim, action, suit, proceeding, inquiry, hearing,
arbitration, administrative proceeding, or investigation is pending, or, to
Seller's best knowledge threatened against Seller, or any party to any contract,
affecting, involving, or relating to its business or any of the Assets.
2.13 Hardware. Exhibit A includes a complete list of the countertop
units, floor units and additional hardware which are part of the Assets, all of
which, to the best knowledge of Seller, are merchantable. Exhibit A also sets
forth an estimate of the cost of Seller's hardware, which estimate is within 5%
of the actual cost of such hardware.
2.14 Contracts. There are no material contracts relating to the Assets
to which Seller is a party.
2.15 Product Warranty; Liability. To the best knowledge of Seller, each
product manufactured, sold, leased, or delivered by Seller in connection with
the operation of its business has been in conformity with all applicable
contractual commitments and all express and implied warranties, and Seller does
not have any liability (and there is no basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim, or demand
against any of them giving rise to any liability) for replacement or repair
thereof or other damages in connection therewith. To the best knowledge of
Seller, no product manufactured, sold, leased, or delivered by Seller is subject
to any guaranty, warranty, or other indemnity beyond the applicable standard
terms and conditions of sale or lease.
2.16 Environmental, Health and Safety Matters.
(a) Seller has obtained and complied with, and is in compliance
with, all material permits, licenses and other authorizations that are required
pursuant to environmental, health, and safety laws, rules and regulations for
the occupation of its facilities and the operation of its business.
(b) Seller has not received any written or oral notice, report or
other information regarding any actual or alleged material violation of any
environmental, health,
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and safety regulations, or any liabilities or potential liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise), including any
investigatory, remedial or corrective obligations, relating to any of them or
its facilities arising under environmental, health, and safety laws, rules and
regulations.
2.17 Tax Matters. (a) Seller has filed or caused to be filed all tax
returns that it was required to file pertaining to the Assets. All such tax
returns were correct and complete in all respects. All taxes owed by Seller
pertaining to the Assets (whether or not shown on any tax return) have been
paid. Seller is not the beneficiary of any extension of time within which to
file any tax return. No claim has ever been made by an authority in a
jurisdiction where Seller does not file tax returns that Seller is or may be
subject to taxation by that jurisdiction. There are no security interests on any
of the Assets that arose in connection with any failure (or alleged failure) to
pay any Tax.
(b) Seller has withheld and paid all taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or third party.
(c) Neither Seller or any director of officer of Seller expects
any authority to assess any additional taxes for any period for which tax
returns have been filed. There is no dispute or claim concerning any tax
liability of Seller either (A) claimed or raised by any authority in writing or
(B) as to which Seller and the directors and officers (and employees responsible
for tax matters) of Seller has knowledge based upon personal contact with any
agent of such authority. Seller has delivered to Buyer correct and complete
copies of all tax returns, examination reports, and statements of deficiencies
assessed against or agreed to by Seller since December 31, 1997.
(d) Seller has not waived any statute of limitations in respect of
taxes or agreed to any extension of time with respect to a tax assessment or
deficiency.
2.18 Share Ownership. Seller has authorized 20 million shares of $.001
par value common stock ("Seller's Common Stock") of which 4,516,670 are issued
and outstanding. Seller warrants that all outstanding shares of Seller are duly
authorized, fully paid and non assessable and free and clear of any preemptive
rights, liens, claims, charges or encumbrances and no preemptive or similar
rights will arise as a result of the transactions contemplated by this
Agreement. Seller further warrants that it has only one class of common stock,
and there are no outstanding commitments to purchase, reacquire or redeem any of
its capital stock, nor are there any declared but unpaid dividends on such
capital stock.
2.19 Broker's or Finder's Fees. Seller has not authorized any person to
act as broker or finder or in any other similar capacity in connection with the
transactions contemplated by this Agreement in any manner that may or will
impose liability on Buyer.
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2.20 Disclosure. No representation, warranty, or statement made by
Seller in this Agreement or in any document or certificate furnished or to be
furnished to Buyer pursuant to this Agreement contains or will contain any
untrue statement or omits or will omit to state any fact necessary to make the
statements contained herein or therein not misleading. Seller has disclosed to
Buyer all facts known or reasonably available to Seller that are material to the
financial condition, operation, or prospects of Seller's business and the
Assets.
2.21 Unregistered Stock. Seller and the shareholders of Seller set
forth in Exhibit D (the "Shareholders") understand and acknowledge that (i) the
Earn Out Options being issued in connection with this Agreement as set forth in
Section 1.2 and the shares of Buyer's Common Stock issuable upon conversion or
exercise thereof (the "Underlying Shares", together with the Earn Out Options
("Buyer's Securities"), have not been registered under the Securities Act of
1933, as amended (the Securities Act") and are therefore restricted securities;
(ii) Buyer's Securities may not be sold or transferred unless they are
registered under the Securities Act or an exemption from such registration is
available; and (iii) a legend to that effect will be placed on the certificates
representing Buyer's Securities.
2.22 Investor Representations. Seller and each Shareholder who receives
Buyer's Securities in connection with the transactions contemplated by this
Agreement warrants and represents that (i) it or he is an accredited investor as
defined in Regulation D under the Securities Act, or by reason of his business
and financial experience, and the business and financial experience of those
persons unaffiliated with Buyer retained by him, if any, to advise him with
respect to his investment in Buyer's Securities, such Shareholder together with
such advisers have such knowledge, sophistication and experience in business and
financial matters as to be capable of evaluating the merits and risk of the
prospective investment, and (ii) that it or he is acquiring Buyer's Securities
for his own account or for one or more separate accounts maintained by him, if
any, for investment and not with a view to the distribution thereof except in
compliance with the Securities Act or an exemption available thereunder.
2.23 Truth at Closing. All of: (a) the representations, warranties, and
agreements of Seller contained in this Article 2 and (b) the representations,
warranties and agreements of Seller contained in the Exhibits attached hereto
shall be true and correct and in full force and effect on and as of the Closing
Date.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
3.1 Organization. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware with the
power and authority to conduct its business and to own and lease its properties
and assets.
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3.2 Power and Authority. Buyer has the power and authority to execute,
deliver, and perform this Agreement and the other agreements and instruments to
be executed and delivered by it in connection with the transactions contemplated
hereby and thereby, and Buyer has taken all necessary action to authorize the
execution and delivery of this Agreement and such other agreements and
instruments and the consummation of the transactions contemplated hereby and
thereby. This Agreement is, and, when such other agreements and instruments are
executed and delivered, the other agreements and instruments to be executed and
delivered by Buyer in connection with the transactions contemplated hereby and
thereby shall be, the valid and legally binding obligations of Buyer,
enforceable in accordance with their respective terms.
3.3 Buyer's SEC Filings. Buyer has provided Seller with a copy of
Buyer's Annual Report on Form 10-K for the year ended December 31, 1998. Such
Report on Form 10-K complies in all material respects with the rules and
regulations promulgated by the Securities and Exchange Commission and does not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
3.4 Broker's or Finder's Fees. Buyer has not authorized any person to
act as broker, finder, or in any other similar capacity in connection with the
transactions contemplated by this Agreement.
3.5 No Conflict. Neither the execution and delivery by Buyer of this
Agreement and of the other agreements and instruments to be executed and
delivered by Buyer in connection with the transactions contemplated hereby or
thereby, nor the consummation by Buyer of the transactions contemplated hereby
or thereby will violate or conflict with: (a) any federal, state, or local law,
regulation, ordinance, governmental restriction, order, judgment or decree
applicable to Buyer; or (b) any provision of any charter, bylaw, or other
governing or organizational instrument of Buyer.
3.6 Truth at Closing. All of: (a) the representations, warranties, and
agreements of Buyer contained in this Article 3 and (b) the representations,
warranties and agreements of Buyer contained in the Exhibits attached hereto
shall be true and correct and in full force and effect on and as of the Closing
Date.
ARTICLE 4
COVENANTS OF SELLER PRIOR TO CLOSING
4.1 Course of Business. Prior to the Closing Date, Seller shall conduct
its business diligently and substantially in the same manner heretofore
conducted, and Seller shall not institute any new methods of accounting or
operation or engage in any transaction or activity, enter into any agreement, or
make any commitment, except in the ordinary course of such business and
consistent with past practice, and except as would not reasonably be expected to
have a material adverse effect on its business.
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4.2 Prohibited Actions. In no event, without the prior written consent
of Buyer, shall Seller:
(a) Liens. Permit any of the Assets to be subjected to any
mortgage, pledge, lien, or encumbrance.
(b) Disposition of Assets. Waive any claims or rights of
substantial value respecting the Assets, or sell, transfer, or otherwise dispose
of any of the Assets, except in the ordinary course of business and consistent
with past practice.
(c) Licenses. Other than in the ordinary course of its licensing
activities and consistent with past practice, dispose of, license, or permit to
lapse any rights in any intellectual property.
4.3 Access. From the date of this Agreement to the Closing Date, Seller
shall: (a) provide Buyer with such information as Buyer may from time to time
reasonably request; (b) provide the Buyer and its officers, counsel, and other
authorized representatives access during regular business hours and upon
reasonable notice to its books, records, and offices, as Buyer may from time to
time reasonably request; and (c) permit Buyer to make such inspections thereof
as it may reasonably request. Any investigation shall be conducted in such a
manner as not to interfere unreasonably with the operation of Seller's business.
4.4 Non-Solicitation. Until the completion or termination of the
transactions contemplated by this Agreement, neither Seller nor any of its
representatives will solicit, offer or encourage any sale of any of the Assets.
ARTICLE 5
CONDITIONS TO SELLER'S OBLIGATIONS
Each of the obligations of Seller to be performed hereunder shall be
subject to the satisfaction (or waiver by Seller) at or prior to the Closing
Date of each of the following conditions:
5.1 Representations and Warranties True at Closing Date. Buyer's
representations and warranties contained in this Agreement shall be true on and
as of the Closing Date with the same force and effect as though made on and as
of such date.
5.2 Litigation. No Litigation shall be threatened or pending against
Buyer or Seller before any court or governmental agency that, in the reasonable
opinion of counsel for Seller, could result in the restraint or prohibition of
any such party, or the obtaining of damages or other relief from such party, in
connection with this Agreement or the consummation of the transactions
contemplated hereby.
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5.3 Documents Satisfactory in Form and Substance. All agreements,
certificates, and other documents delivered by Buyer to Seller hereunder shall
be in form and substance satisfactory to counsel for Seller, in the exercise of
such counsel's reasonable judgment.
ARTICLE 6
CONDITIONS TO BUYER'S OBLIGATIONS
Each of the obligations of Buyer to be performed hereunder shall be
subject to the satisfaction (or the waiver by Buyer) at or prior to the Closing
Date of each of the following conditions:
6.1 Representations and Warranties True at Closing Date. Seller's
representations and warranties contained in this Agreement shall be true on and
as of the Closing Date with the same force and effect as though made on and as
of such date.
6.2 Performance. Seller, shall have performed and complied with all
agreements, obligations, and conditions required by this Agreement to be
performed or complied with by it on or prior to the Closing.
6.3 Consents. All required approvals, consents and authorizations shall
have been obtained, including, without limitation, those of federal, state and
local regulatory authorities and all Required Contract Consents.
6.4 No Litigation. No Litigation shall be threatened or pending against
Buyer or Seller before any court or governmental agency that, in the reasonable
opinion of counsel for Buyer, could result in the restraint or prohibition of
any such party, or the obtaining of damages or other relief from such party, in
connection with this Agreement or the consummation of the transactions
contemplated hereby.
6.5 No Material Adverse Change. From the date of this Agreement until
the Closing Date, Seller shall not have suffered any material adverse change
(whether or not such change is referred to or described in any supplement to the
Exhibits), or the financial condition, operations, or prospects of Seller.
ARTICLE 7
COVENANTS OF SELLER AND BUYER FOLLOWING CLOSING
7.1 Allocation of Purchase Price; Post Closing Adjustment. The purchase
price shall be allocated to the Assets, based on mutual agreement between Seller
and Buyer and all tax returns and reports filed or prepared by Seller and Buyer
with respect to the transactions contemplated by this Agreement shall be
consistent with that allocation.
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7.2 Transfer Taxes. All sales, transfer, and similar taxes and fees
(including all recording fees, if any) incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne by Seller, and
Seller shall file all necessary documentation with respect to such taxes.
7.3 Non-Competition Covenant. For a period of three years after the
termination of the employment of Xxxxxx Xxxxxxxxxx, Xx. Xxxxxxxxxx agrees to
refrain from carrying on a business similar to that sold to Buyer hereunder in
any state or locality in which Seller presently conducts business in the United
States. Xxxxxx Xxxxxxxxxx also agrees to refrain from soliciting any customers
or employees of Buyer during such three-year period. This Section will be of no
force and effect in the event Xx. Xxxxxxxxxx'x employment with Buyer is
terminated without cause. It is understood that Buyer may compete with any
business retained by Seller.
7.4 Further Assurances. Subject to the terms and conditions of this
Agreement, each party agrees to use all of its reasonable efforts to take, or
cause to be taken, all actions and to do or cause to be done, all things
necessary and proper or advisable to consummate and make effective the
transactions contemplated by this Agreement (including the execution and
delivery of such further instruments and documents) as the other party may
reasonably request.
7.5 Registration Rights. Within ninety days after exercise of the
Earnout Options Buyer will use its best efforts to register all the issued and
outstanding Underlying Securities.
7.6 Xxxxxxxxxx Employment. On the Closing Date Xx. Xxxxxxxxxx will be
employed full time on an "at will" basis by Buyer at a salary of $1,000 per week
and shall be granted options to purchase 400,000 shares of Buyer's Common Stock
pursuant to Buyer's Stock Option Plan.
ARTICLE 8
INDEMNITY; OFFSET
8.1 Indemnification by Seller. Seller shall indemnify, defend, and hold
harmless Buyer at, and at any time after, the Closing, from and against any and
all demands, claim, actions, or causes of action, assessments, losses, damages,
liabilities, costs, and expenses, including reasonable fees and expenses of
counsel, other expenses of investigation, handling, and litigation, and
settlement amounts, together with interest and penalties (collectively, a "Loss"
or "Losses"), asserted against, resulting to, imposed upon, or incurred by
Buyer, directly or indirectly, by reason of, resulting from, or arising in
connection with any of the following:
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(a) Breach or Obligation. Any breach of any representation,
warranty, or agreement of Seller contained in or made pursuant to this
Agreement, including the agreements and other instruments contemplated hereby.
(b) Liabilities. Any of Seller's liabilities or obligations of any
kind or nature whatsoever, whether accrued, absolute, contingent or otherwise,
known or unknown.
(c) Incidental Matters. To the extent not covered by the
foregoing, any and all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, costs, and expenses, including
reasonable fees and expenses of counsel, other expenses of investigation,
handling, and litigation and settlement amounts, together with interest and
penalties, incident to the foregoing.
8.2 Indemnification by Buyer. Buyer shall indemnify, defend, and hold
harmless Seller at, and at any time after, the Closing, from and against any and
all demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, costs, and expenses, including reasonable fees and expenses of
counsel, other expenses of investigation, handling, and litigation, and
settlement amounts and including any net income tax amount associated with all
such indemnification recoveries (collectively, a "Loss" or "Losses"), asserted
against, resulting to, imposed upon, or incurred by the Seller Group, to the
extent arising from any of the following:
(a) Breach of Obligation. Any breach of any representation,
warranty, or agreement of Buyer contained in or made pursuant to this Agreement,
including the agreements and other instruments contemplated hereby.
(b) Incidental Matters. To the extent not covered by the
foregoing, any and all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, costs, and expenses, including
reasonable fees and expenses of counsel, other expenses of investigation,
handling, and litigation, and settlement amounts, together with interest and
penalties, incident to the foregoing.
8.3 Offset by Buyer Against the Note. Buyer shall be entitled to the
following offset: In the event any amounts are owed to Buyer to indemnify Buyer
for a Loss or Losses pursuant to Section 8.1 of this Agreement, Buyer shall have
the right to offset the amount of such Loss or Losses against any amounts owing
to Seller pursuant to the Note.
ARTICLE 9
CONFIDENTIALITY
9.1 Confidentiality Obligation of Buyer Prior to Closing. Until
Closing, Buyer shall, and shall use its best efforts to cause its personnel and
agents to, hold in strict confidence, not disclose to any person without the
prior written consent of Seller, and not use
14
in any manner except in connection with the transactions contemplated hereby,
any confidential business or technical information obtained from Seller in
connection with the transactions contemplated hereby concerning Seller or the
Assets. This obligation shall cease to apply to Buyer upon the occurrence of
Closing. In the event this Agreement terminates for any reason, Buyer shall
return to Seller or destroy all materials in its possession containing any such
confidential information, including all copies, extracts, adaptations, and
transcriptions thereof.
9.2 Confidentiality Obligation of Seller Following Closing. For a
period of three years from the date hereof, Seller shall, and shall use its best
efforts to cause its personnel and agents to, hold in strict confidence, not
disclose to any person without the prior written consent of Buyer, and not use
in any manner whatsoever (except as otherwise provided herein), any confidential
business or technical information remaining in its possession concerning Buyer's
business or assets. Such confidential information specifically includes all
technical documentation, including any proposed design and specifications for
future products and products in development, marketing plans, and all other
technical and business information concerning Buyer's business and assets. In
the event that this Agreement terminates for any reason, Seller shall surrender
to Buyer or destroy all materials remaining in its possession containing any
such confidential information, including all copies, extracts, adaptations, and
transcriptions thereof.
9.3 Permitted Disclosures. Notwithstanding Sections 9.1 and 9.2, either
party may disclose confidential information where such disclosure is required of
law.
9.4 Scope of Confidential Information. For purposes of this Agreement,
information shall not be deemed confidential (1) if such information is
available in full from public sources; (2) if such information is received from
a third party not under an obligation to keep such information confidential; or
(3) if the recipient can conclusively demonstrate that such information was
independently developed by the recipient.
ARTICLE 10
MISCELLANEOUS
10.1 Entire Agreement. This Agreement (including the Exhibits), and the
other certificates, agreements, and other instruments to be executed and
delivered by the parties in connection with the transactions contemplated hereby
constitute the sole understanding of the parties with respect to the subject
matter hereof. No amendment, modification, or alteration of the terms or
provisions of this Agreement shall be binding unless the same shall be in
writing and duly executed by the parties hereto.
10.2 Parties Bound by Agreement; Successors and Assigns. The terms,
conditions, and obligations of this Agreement shall inure to the benefit of and
be binding upon the parties hereto and the respective successors and assigns
thereof.
15
10.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
10.4 Headings. The headings of the Sections and paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
10.5 Modification and Waiver. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party that is entitled to
the benefits thereof. No waiver of any of the provisions of this Agreement shall
he deemed to or shall constitute a waiver of any other provision hereof (whether
or not similar).
10.6 Expenses. Seller and Buyer shall each pay all costs and expenses
incurred by it or on its behalf in connection with this Agreement and the
transactions contemplated hereby, including fees and expenses of its own
financial consultants, accountants, and counsel.
10.7 Notices. All notices, requests, demands, claims, and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given: when received, if
personally delivered; when transmitted, if transmitted by telecopy, electronic
or digital transmission method; five business days after such notice, request,
demand claim or other communication is sent, if sent by registered or certified
mail, return receipt requested, postage prepaid, and addressed to the intended
recipient as set forth below:
SIKANDER, INC.
0000 Xxxx Xxxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxxx
Fax:
if to Buyer to:
NTN COMMUNICATIONS, INC.
0000 Xx Xxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means, but no such notice, request, demand, claim, or other communication
shall be deemed to have been duly given unless and until it actually is received
by the intended recipient. Any party may change
16
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
10.8 Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of California without giving effect
to the principles of conflicts of law thereof.
10.9 Public Announcements. Seller and Buyer shall consult with each
other before issuing any press releases or otherwise making any public
statements with respect to this Agreement and the transactions contemplated
hereby. Neither Seller nor Buyer shall issue any such press release or make any
public statement without the agreement of the other party, except as such
party's counsel advises in writing and as may be required by law.
10.10 References. Whenever reference is made in this Agreement to any
Article, Section, paragraph or Exhibit, such reference shall be deemed to apply
to the specified Article, Section or paragraph of this Agreement or the
specified Exhibit to this Agreement.
10.11 Survival of Agreements. All covenants, agreements,
representations, and warranties made herein shall survive the execution and
delivery of this Agreement and the Closing.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf on the date indicated.
*NTN COMMUNICATIONS, INC.
By: /s/ XXXXXXX X. XXXXXX
-----------------------------
Title: CEO
*SIKANDER, INC.
By: /s/ XXXXXX XXXXXXXXXX
-----------------------------
Xxxxxx Xxxxxxxxxx
Title: President
* The effective delivery of this Agreement is subject to the approval of
the Board of Directors of NTN Communications, Inc. on or before April
28, 1999.
17
EXHIBIT A
1.0 TANGIBLE ASSETS (per paragraph 1.1(a)(ii))
-----------------------------------------------------------------------------------------------------------------------------
50 PlayNet counter top 14" touchscreen display, dollar xxxx validator, modem, Pentium 133 mhz processor, 1.2 GB hard
units drive, coin acceptor, cash box, credit card reader. Valued at $2,500 each. Located as follows:
NTN 1
Frontier Music 22
Atcom 1
Xxxxx' Club 1
HTS Tustin 1
Xxxxxxxxxx 1
Open Domain 1
Storage (San Xxxxx) 22
-----------------------------------------------------------------------------------------------------------------------------
8 EMF floor models 13.8" flat panel touchscreen, dollar xxxx validator, modem, Pentium 200+ mhz processor, 4 GB
hard drive, smart card reader. Valued at $5,000 each. Located as follows:
Buffalo Joes (SD) 1
Xxxxxxxx Park 1
Frontier Music 1
Sports City 1
Xxxxxxxx'x Tavern 1
Xxxxxxxxxx office 1
Open Domain 2
-----------------------------------------------------------------------------------------------------------------------------
2.0 INTANGIBLE ASSETS (per paragraph 2.7(b))
-----------------------------------------------------------------------------------------------------------------------------
PlayNet Game License Perpetual license for Balloon Bash, Beer Blast, Clear 21, Dot Quads, Dragon Flip, Draw Poker,
Elevators, Hex, Link 4, Memory Match, Marble master, Paper Scissors Rock, Play Ball, Poker
Puzzle, Scarab, Slider, Solitaire, Speed Unscramble, Yachtzee. Valued at $250,000.
Source Code (3 disks) located at HTS, Tustin.
-----------------------------------------------------------------------------------------------------------------------------
Purple Vision License Perpetual license for 15 MS-DOS based touchscreen games (Triple Crowns, TriAtholon, Run Around,
Raw Poker, Russian Rummy, Zoom 21, Solo Solitaire, Tarot Teller, Star Chart Astrology
(including: Astro-Light, The 200 +1 Stars, ExixTrology, OzTrology), The Psychic Ching. Who
Am I?, Visual OnLine Trivia, JigSaw Xxxxx (including: Jig Saw Jamboree, Jiggy-Jam), Jigglin'
Xxxxx & Zoom Oray. Valued at $1.00. Royalty of 5% of the gross revenue generated from the games.
Master Disk located at NTN & HTS Tustin.
-----------------------------------------------------------------------------------------------------------------------------
18
SOFTWARE LICENSE
PURPLEVISION IS WILLING TO LICENSE THE TOUCHSCREEN GAME SOFTWARE (WHOSE NAMES
ARE ATTACHED ON EXHIBIT A, HERETO), (THE "SOFTWARE") CURRENTLY IN SIKANDER'S
POSSESSION ONLY UPON THE CONDITION THAT SIKANDER ACCEPTS ALL OF THE TERMS OF
THIS LICENSE (THE "LICENSE"). BY SIGNING THIS AGREEMENT, SIKANDER ACKNOWLEDGES
THAT IT UNDERSTANDS, ACCEPTS AND AGREES TO THE TERMS AND CONDITIONS OF THIS
LICENSE.
THIS LICENSE ONLY APPLIES TO THE SOFTWARE CURRENTLY IN SIKANDER'S POSSESSION:
1. GRANT OF LICENSE. In consideration of the promise to pay quarterly
royalties in the amount of 5% of the gross revenue generated by these games
(i.e. 5% of $.25), Purplevision. As Licensor grants Sikander as "Licensee"
an exclusive right to use the Software on all systems sold, leased or
operated by Sikander. This License does not grant to Sikander any express
or implied license to any other Purplevision software. Purplevision
reserves all rights not expressly granted to Licensee.
2. OWNERSHIP OF SOFTWARE. Sikander owns the magnetic or other physical media
on which the Software is originally or subsequently recorded or fixed, but
Purplevision or its suppliers retain title, ownership and copyrights to the
Software recorded on the original media and all subsequent copies of the
Software, regardless of the form or media in or on which the original and
other copies may exist. This License is not a sale of the original Software
or any copy.
3. COPY RESTRICTIONS. Unauthorized copying of the Software, including Software
that has been modified, merged, or included with other software, or of the
written materials is expressly forbidden. Sikander may be held legally
responsible for any infringement that is caused or encouraged by Sikander's
failure to abide by the terms of this License. Subject to these
restrictions, Sikander may make copies of the Software solely for its own
commercial purposes. Any permitted copies must include the same proprietary
and copyright notices as were affixed to the original.
4. USE RESTRICTIONS. Sikander may physically transfer the Software from one
system to another, provided that the Software is deleted from the former
system. At any given point in time, the Software must not be installed on
more than the number of systems to be sold, leased or operated by Sikander.
Sikander may access the Software from a hard disk so long as Sikander
complies with this License.
5. TRANSFER RESTRICTIONS. The Software is licensed only to Sikander for use by
Sikander, Sikander's customers, suppliers and assigns, and may not be
transferred to any other party without the prior written consent of
Purplevision. Any authorized transferee of the Software shall be bound by
the terms and conditions of this Agreement. In no event may Sikander
transfer, assign, rent, lease, sell, or otherwise dispose of the Software
on a temporary or permanent basis except as expressly provided herein.
6. TERMINATION. This Perpetual License is effective until terminated. This
License will terminate automatically without notice from Purplevision if
Sikander fails to comply with any provision of this License. Upon
termination Sikander shall destroy the written materials and all copies of
the Software, including modified copies, if any.
7. UPDATE POLICY. Purplevision may create, from time to time, update versions
of the
19
Software. At its option, Purplevision will make such updates available to
Sikander and transferees who have paid an update fee, to be determined in
Purplevision's sole discretion. All such updates shall be subject to the
terms and conditions of this License.
8. WARRANTY. PURPLEVISION WARRANTS THAT IT HAS GOOD AND CLEAR TITLE TO THE
SOFTWARE. IN NO EVENT WILL PURPLEVISION BE LIABLE FOR INDIRECT, SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING FROM THE USE OF THE SOFTWARE,
OR DAMAGES FOR LOST PROFITS, BUSINESS GOODWILL, COMPUTER DATA OR PROGRAMS.
9. SOLE AND EXCLUSIVE REMEDY. IN THE EVENT OF A BREACH OF WARRANTY,
PURPLEVISION'S ENTIRE LIABILITY AND SIKANDER'S EXCLUSIVE REMEDY SHALL BE
THE RETURN OF THE PURCHASE PRICE.
10. DISCLAIMER. THE ABOVE IS THE ONLY WARRANTY OF ANY KIND THAT IS MADE BY
PURPLEVISION. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY
PURPLEVISION, ITS DEALERS, DISTRIBUTORS, AGENTS, OR EMPLOYEES SHALL CREATE
A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF THIS WARRANTY AND SIKANDER
MAY NOT RELY ON ANY SUCH INFORMATION OR ADVICE. (SOME STATES IN THE UNITED
STATES OF AMERICA DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES SO THE
PRECEDING EXCLUSION MAY NOT APPLY.) IN THAT EVENT, ANY IMPLIED WARRANTIES
ARE LIMITED TO FIVE DAYS FROM THE DATE OF DELIVERY OF THE SOFTWARE. THIS
WARRANTY GIVES SIKANDER SPECIFIC LEGAL RIGHTS. SIKANDER MAY HAVE OTHER
RIGHTS, WHICH VARY FROM STATE TO STATE IN THE UNITED STATES OF AMERICA.
11. LIMITATION OF LIABILITY. REGARDLESS OF WHETHER ANY REMEDY SET FORTH HEREIN
FAILS OF ITS ESSENTIAL PURPOSE, IN NO EVENT WILL PURPLEVISION BE LIABLE FOR
ANY DIRECT, INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES IN
CONNECTION WITH OR ARISING OUT OF THE EXISTENCE, FURNISHINGS, FAILURE OR
USE OF THE SOFTWARE, EVEN IF SIKANDER HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES. IN PARTICULAR, PURPLEVISION SHALL HAVE NO LIABILITY FOR
ANY TEXT OR DATA STORED IN OR USED WITH THIS SOFTWARE, INCLUDING THE COST
OF RECOVERING OR REPRODUCING THIS TEXT OR DATA. (SOME STATES DO NOT ALLOW
THE EXCLUSION OR LIMITATION OF ACCIDENTAL OR CONSEQUENTIAL DAMAGES SO THE
ABOVE EXCLUSION MAY NOT APPLY.)
12. JURISDICTION AND SEVERABILITY. This Agreement and this License is governed
by the laws of the State of Pennsylvania, USA without regard to or
application of choice of law rules or principles. If for any reason a
court of competent jurisdiction finds any provision, or portion thereof, to
be unenforceable, the remainder of this License shall continue in full
force and effect.
13. AUTHORITY. Each party signing this agreement warrants that it has been
properly authorized to do so.
Dated:
/s/ XXXXXX XXXXXXXXXX
-------------------------------------- ---------------------------------------
For Purplevision: Xxxxxx Xxxxxxx For Sikander, Xxxxxx Xxxxxxxxxx
20
[FUN-E-BUSINESS LETTERHEAD]
October 20, 1998
Mr. Xxxxxx Xxxxxxx
President
Purple Vision Technologies
Xxx Xxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, XX 00000
Re: Binding Letter of Intent
Dear Xxxxxx,
Pursuant to our conversations and our meeting today, this is to act as a
binding Letter of Intent regarding the licensing and use of your current
fifteen games ("PVT Games") as follows:
ROYALTY. 5% of the net game proceeds; calculated as gross proceeds less
returns and allowances. Royalty will be paid in arrears by the 20th of each
following month.
TERM. You agree to grant us a perpetual non-exclusive license to use the PVT
Games whose names are included on page 2 herein.
DELIVERABLES. In addition to requiring that all games run under Windows NT and
that we have the ability to modify content (e.g. backgrounds, icons, color
schemes, sound and text files), we will provide you with a definitive written
list of deliverables ("Statement of Work"). You acknowledge that the
deliverables are a condition precedent to our obligation to perform. We will
use our best efforts to assist you in completion of the Deliverables per the
Statement of Work.
EXTRA'S. We understand that in addition to the deliverables, you will make
other modifications to the PVT games ("Extras") including, but not limited to,
providing us the necessary information to easily capture high score data for
each PVT Game. We agree to pay for all pre-authorized Extras by November 9,
1998.
ADVANCE AGAINST ROYALTIES. The payment for all Extra's is to be considered an
advance against royalties. Any payment for Extras is not in addition to any
royalties. Our mutual goal is to agree upon the Statement of Work and Extras,
including the total cost to us no later than November 2, 1998.
GOLDEN MASTER. You agree to provide us with one "Golden Master" including the
source code, which we hereby acknowledge is covered by the Non-Disclosure
Agreement entered into between our two firms. Our mutual goal is for you to
deliver the Golden Master no later than November 18, 1998.
TIME IS OF THE ESSENCE. You acknowledge that our goal is to include the PVT
Games on systems that we install beginning in November.
NEW GAMES. We acknowledge that this Letter of Intent only includes the fifteen
PVT Games.
21
[FUN-E-BUSINESS LETTERHEAD]
FORMAL AGREEMENT. We agree to enter into a Formal Agreement by November 15th.
The Formal Agreement will supersede this agreement in its entirety. We will take
responsibility for drafting the Formal Agreement.
AUTHORITY. We hereby acknowledge to the other that we have the authority to
enter into this agreement and the formal agreement.
If the above is acceptable to you, please sign and return one copy to me no
later than Friday, October 23, 1998. Otherwise please call me at your earliest
convenience. We look forward to a long and mutually profitable relationship.
Sincerely,
/s/ XXXXXX XXXXXXXXXX
Agreed and accepted this 20 day of October, 1998
For and on behalf of Purple Vision Technologies
/s/ XXXXXX XXXXXXX
------------------------------------------------
Mr. Xxxxxx Xxxxxxx, President
THE PVT GAMES
1. Triple Crowns
2. TriAtholon
3. Run Around
4. Raw Poker
5. Russian Rummy
6. Zoom 21
7. Solo Solitaire
8. Tarot Teller
9. Star Chart Astrology, Astro-Light, The 2000 & 1 Stars, ErixTrology,
OzTrology
10. The Psychic Ching
11. Who Am I
12. Visual Online Trivia
13. JigSaw Xxxxx, JigSaw Jamboree, Jiggy-Jam
14. Jigglin' Xxxxx
15. Zoom Oray
22
EXHIBIT A DESCRIPTION OF PROPERTY
All personal property including, but not limited to all general intangibles,
trademarks, tradenames, servicemarks, know how, copyrights and patents which
Xxxxx & Company may have obtained as the result of PlayNet Properties, Inc.'s
Chapter 7 Bankruptcy (case #98-01198-PJW) filed in the District of Delaware,
including but not limited to the video games as set forth below by name and
title:
Balloon Bash
Beer Blast
Clear 21
Dot Quads
Dragon Flip
Elevators
Memory Match
Marble Master
Play Ball
Poker Puzzle
Scarab
Slider
Solitaire
Speed Unscramble
Trivia
23
ASSIGNMENT & LICENSE AGREEMENT
This Assignment & License Agreement dated April 14, 1999 by and between
Sikander, Inc., a Nevada corporation ("Sikander"), XxxxXxx.xxx, Inc., a
California corporation ("XxxxXxx.xxx") and Xxxxx & Co., a New York corporation
("Xxxxx"):
WHEREAS, Xxxxx may have rights to certain personal property stemming from
its earlier investment in a company known as PlayNet Technologies, Inc. (the
rights are collectively referred to as "Property"), which Property is more
particularly described in Exhibit A attached hereto and made a part hereof, and
WHEREAS, Sikander and XxxxXxx.xxx desire to jointly and independently use
said Property in a manner that will be mutually beneficial, and
WHEREAS, Xxxxx desires to reap certain licensing fees, rights or benefits
associated with the use of the Property and is willing to do so as set forth
below.
NOW THEREFORE, the parties hereby agree as follows:
1) ASSIGNMENT OF PROPERTIES TO XXXXXXX.XXX: For the sum of $1.00 and other
consideration ("other consideration") to be tendered to Xxxxx before May
15, 1999, Xxxxx hereby promises to sell, assign and transfer whatever
rights, title and interest it may have in the Property, in an "as is"
condition, to XxxxXxx.xxx.
2) GRANT OF LICENSE TO SIKANDER: In exchange for 250,000 shares of Sikander's
Common Stock (valued at $250,000), XxxxXxx.xxx will grant an exclusive
license to the Property to Sikander. Sikander will immediately issue a
certificate for said shares in the name of "XxxxXxx.xxx". Sikander will
deliver said certificate to Xxxxx to hold until XxxxXxx.xxx tenders the
other consideration to Xxxxx.
3) ASSIGNMENT OF PROPERTIES TO SIKANDER: In the event that XxxxXxx.xxx does
not deliver the other consideration to Xxxxx before May 15, 1999, the
assignment to XxxxXxx.xxx will be null and void. XxxxXxx.xxx acknowledges
that it will have no rights to the Property. Xxxxx will return the
XxxxXxx.xxx certificate to Sikander. Xxxxx hereby promises to sell, assign
and transfer whatever rights, title and interest it has in the Property to
Sikander in exchange for the 250,000 shares of Sikander common stock.
Sikander will issue the 250,000 shares of stock to Xxxxx by June 1, 1999.
4) WARRANTY & LICENSE: Xxxxx makes no representations as to the suitability
of said Property, the merchantability of the Property or the fitness for a
particular purpose. Xxxxx warrants and represents that it has good and
merchantable title to said Property and that such Property is not
encumbered, used or infringed upon by any other party. Xxxxx shall not be
obligated to assist or prosecute any third parties who may now or hereafter
use the Property in violation of the owner's rights therein. The license,
attached as Exhibit B hereto,
IN WITNESS WHEREOF, THE PARTIES HEREBY EXECUTE THIS AGREEMENT WITH THE
INTENT TO BE LEGALLY SOUND.
XXXXXXX.XXX, INC. SIKANDER, INC. XXXXX & CO.
/s/ XXXXX XXXXXXXX /s/ XXXXXX XXXXXXXXXX
--------------------------------------------------------------------------------
Xxxxx Xxxxxxxx Xxxxxx Xxxxxxxxxx Xxxxx Xxxxx
24
EXHIBIT B SOFTWARE LICENSE
XXXXXXX.XXX IS WILLING TO LICENSE THE PLAYNET TECHNOLOGIES SOFTWARE
(THE "SOFTWARE") IN SIKANDER'S POSSESSION ONLY UPON THE CONDITION THAT SIKANDER
ACCEPTS ALL OF THE TERMS OF THIS LICENSE (THE "LICENSE"). BY SIGNING THIS
AGREEMENT, SIKANDER ACKNOWLEDGES THAT IT UNDERSTANDS, ACCEPTS AND AGREES TO THE
TERMS AND CONDITIONS OF THIS LICENSE.
THIS LICENSE ONLY APPLIES TO THE PLAYNET TECHNOLOGIES SOFTWARE OBTAINED
CURRENTLY IN SIKANDER'S POSSESSION:
1. GRANT OF LICENSE. In consideration of payment of the License fee of 250,000
shares of Sikander common stock, XxxxXxx.xxx. ("Licensor") grants Sikander
("Licensee") an exclusive right to use the Software on all systems sold,
leased or operated by Sikander. This License does not grant to Sikander
any express or implied license to any other XxxxXxx.xxx software.
XxxxXxx.xxx reserves all rights not expressly granted to Licensee.
2. OWNERSHIP OF SOFTWARE. As Licensee, Sikander owns the magnetic or other
physical media on which the Software is originally or subsequently
recorded or fixed, but XxxxXxx.xxx or its suppliers retain title, ownership
and copyrights to the Software recorded on the original disk copy(ies) and
all subsequent copies of the Software, regardless of the form or media in
or on which the original and other copies may exist. This License is not a
sale of the original Software or any copy.
3. COPY RESTRICTIONS. Unauthorized copying of the Software, including
Software that has been modified, merged, or included with other software,
or of the written materials is expressly forbidden. Sikander may be held
legally responsible for any infringement that is caused or encouraged by
Sikander's failure to abide by the terms of this License. Subject to these
restrictions, Sikander may make copies of the Software solely for its own
commercial purposes. Any permitted copies must include the same
proprietary and copyright notices as were affixed to the original.
4. USE RESTRICTIONS. As the Licensee, Sikander may physically transfer the
Software from one system to another, provided that the Software is deleted
from the former system. At any given point in time, the Software must not
be installed on more than the number of systems to be sold, leased or
operated by Sikander. Sikander may access the Software from a hard disk so
long as Sikander complies with this License.
5. TRANSFER RESTRICTIONS. The Software is licensed only to Sikander for use
by Sikander, Sikander's customers, suppliers and assigns, and may not be
transferred to any other party without the prior written consent of
XxxxXxx.xxx. Any authorized transferee of the Software shall be bound by
the terms and conditions of this Agreement. In no event may Sikander
transfer, assign, rent, lease, sell, or otherwise dispose of the Software
on a temporary or permanent basis except as expressly provided herein.
6. TERMINATION. This Perpetual License is effective until terminated. This
License will terminate automatically without notice from XxxxXxx.xxx if
Sikander fails to comply with any provision of this License. Upon
termination Sikander shall destroy the written materials and all copies of
the Software, including modified copies, if any.
7. UPDATE POLICY. XxxxXxx.xxx may create, from time to time, update versions
of the Software. At its option, XxxxXxx.xxx will make such updates
available to the Licensee
25
and transferees who have paid an update fee, to be determined in
XxxxXxx.xxx's sole discretion. All such updates shall be subject to the
terms and conditions of this License.
8. WARRANTY. PLAYNET WARRANTS THAT IT HAS GOOD AND CLEAR TITLE TO THE
SOFTWARE. IN NO EVENT WILL XXXXXXX.XXX BE LIABLE FOR INDIRECT, SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING FROM THE USE OF THE SOFTWARE,
OR DAMAGES FOR LOST PROFITS, BUSINESS GOODWILL, COMPUTER DATA OR PROGRAMS.
9. SOLE AND EXCLUSIVE REMEDY. IN THE EVENT OF A BREACH OF WARRANTY,
XXXXXXX.XXX'S ENTIRE LIABILITY AND SIKANDER'S EXCLUSIVE REMEDY SHALL BE THE
RETURN OF THE PURCHASE PRICE.
10. DISCLAIMER. THE ABOVE IS THE ONLY WARRANTY OF ANY KIND THAT IS MADE BY
XXXXXXX.XXX, EITHER EXPRESS OR IMPLIED, AND XXXXXXX.XXX EXPRESSLY DISCLAIMS
ALL OTHER WARRANTIES INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. NO ORAL OR WRITTEN
INFORMATION OR ADVICE GIVEN BY XXXXXXX.XXX, ITS DEALERS, DISTRIBUTORS,
AGENTS, OR EMPLOYEES SHALL CREATE A WARRANTY OR IN ANY WAY INCREASE THE
SCOPE OF THIS WARRANTY AND SIKANDER MAY NOT RELY ON ANY SUCH INFORMATION OR
ADVICE. (SOME STATES IN THE UNITED STATES OF AMERICA DO NOT ALLOW THE
EXCLUSION OF IMPLIED WARRANTIES SO THE PRECEDING EXCLUSION MAY NOT APPLY.)
IN THAT EVENT, ANY IMPLIED WARRANTIES ARE LIMITED TO FIVE DAYS FROM THE
DATE OF DELIVERY OF THE SOFTWARE. THIS WARRANTY GIVES SIKANDER SPECIFIC
LEGAL RIGHTS. SIKANDER MAY HAVE OTHER RIGHTS, WHICH VARY FROM STATE TO
STATE IN THE UNITED STATES OF AMERICA.
11. LIMITATION OF LIABILITY. REGARDLESS OF WHETHER ANY REMEDY SET FORTH HEREIN
FAILS OF ITS ESSENTIAL PURPOSE, IN NO EVENT WILL XXXXXXX.XXX BE LIABLE FOR
ANY DIRECT, INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES IN
CONNECTION WITH OR ARISING OUT OF THE EXISTENCE, FURNISHINGS, FAILURE OR
USE OF THE SOFTWARE, EVEN IF SIKANDER HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES. IN PARTICULAR, XXXXXXX.XXX SHALL HAVE NO LIABILITY FOR ANY
TEXT OR DATA STORED IN OR USED WITH THIS SOFTWARE, INCLUDING THE COST OF
RECOVERING OR REPRODUCING THIS TEXT OR DATA. (SOME STATES DO NOT ALLOW THE
EXCLUSION OR LIMITATION OF ACCIDENTAL OR CONSEQUENTIAL DAMAGES SO THE ABOVE
EXCLUSION MAY NOT APPLY.)
12. JURISDICTION AND SEVERABILITY. This Agreement and this License is governed
by the laws of the State of California, USA without regard to or
application of choice of law rules or principles. If for any reason a court
of competent jurisdiction finds any provision, or portion thereof, to be
unenforceable, the remainder of this License shall continue in full force
and effect.
26
EXHIBIT A NAMES OF LICENSED GAMES
1. Triple Crowns
2. TriAtholon
3. Run Around
4. Raw Poker
5. Russian Rummy
6. Zoom 21
7. Solo Solitaire
8. Tarot Teller
9. Star Chart Astrology, Astro-Light, The 200 & 1 Stars, ErixTrology,
OzTrology
10. The Psychic Ching
11. Who Am I
12. Visual OnLine trivia
13. JigSaw Xxxxx, JigSaw Jamboree, Jiggy-Jam
14. Jigglin' Xxxxx
15. Zoom Oray