EXHIBIT 10.16
LICENSING AND DISTRIBUTION AGREEMENT
This Agreement is made effective as of September 15, 2006 (the "Effective
Date") by and between uWink, Inc., a Utah corporation with offices at 00000 Xxxx
Xx. Xxx Xxxx, XX 00000 ("Licensor") and Snap Leisure LLC, a Washington limited
liability company with offices at 0000 Xxxxx Xxxxx XX, Xxxxxx XX 00000
("Licensee"). Licensor and Licensee are sometimes referred to herein
individually as, "Party" and collectively as, the "Parties."
RECITALS
A. Licensee is engaged in the business, inter alia, of manufacturing,
distributing and marketing computer interactive entertainment software products
for deployment on public-use entertainment terminals in the form of computer
programs and written documentation relating to their use.
B. Licensor desires to grant certain rights in the Licensed Products (as defined
below) which it has developed, and Licensee desires to obtain said rights from
Licensor under the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements set forth herein, Licensee and Licensor agree as follows:
SECTION 1
DEFINITIONS
The following definitions shall apply throughout this Agreement:
1.1 Programs. "Programs" shall mean all versions of the software programs
listed in Schedule "A" and other mutually agreed upon program titles. Unless
expressly indicated to the contrary herein, the term "Program(s)" also includes
"Upgrades."
1.2 Platform. "Platform" shall mean the hardware platforms for which the
Programs have been developed by Licensor
1.3 Collateral Materials. "Collateral Materials" shall mean source code,
programming documentation, development records, instruction manuals (user's
guide), packaging, labels, promotional and advertising materials which are or
have been developed by Licensor for use in the sale and promotion of the
Programs.
1.4 Licensed Products. "Licensed Products" shall mean the Programs,
together with associated Collateral Materials.
1.5 Upgrades. "Upgrades" shall mean revisions, modifications, updates,
corrected and new versions, new editions, and add-ons whether developed either
by Licensee or Licensor during the term of this Agreement.
1.6 Trademarks. "Trademarks" shall mean any trademarks, service marks or
trade names of Licensor as set forth in Schedule "C" and as are associated with
the Programs or as designated by Licensor.
1.7 Amusements Market: "Amusements Market" shall mean the business of
designing, selling, operating, distributing and manufacturing "pay-to-play"
products that deliver abbreviated audiovisual entertainment experiences in
public places
1.8 Territory. "Territory" shall mean the World
SECTION 2
RIGHTS GRANTED TO LICENSEE
2.1 Grant. In accordance with the terms and conditions of this Agreement,
Licensor hereby grants to Licensee in perpetuity the following license and
related rights with respect to the Licensed Products in the Territory:
(a) to reproduce or have reproduced on its behalf the Licensed
Products;
(b) to sell and distribute the Licensed Products during the term of the
Agreement. Licensee shall have exclusive rights to wholesale and retail
distribution, OEM licensing and retail direct marketing of the Licensed
Programs for the Amusements Market.
(c) to affix the Trademarks to the Licensed Products and use the
Trademarks in the promotion and distribution of the Licensed Products;
provided that (1) Licensee shall only have the right to affix and use
the trade name "uWink" or any derviation thereof for a period of 1 year
following the date hereof, after which point Licensee shall no longer
have any right to affix or use the trade name "uWink" or any derivation
thereof for any purpose on new manufacturing, distribution or placement
of Licensed Products and (2) no Licensed Product shall carry the trade
name "uWink" or any derivation thereof following the 5th anniversary of
the date hereof; provided that Licensee complies in all respects with
any commercially reasonable guidelines or directions provided by
Licensor with respect to proper usage of the Trademarks. At the request
of Licensor, Licensee will submit to Licensor any and all materials
bearing or including any Trademarks. Upon the request of Licensor,
Licensee will discontinue the use of (i) any Trademarks being used by
Licensee in a manner determined by Licensor to be inconsistent with the
guidelines set forth above or (ii) any trademark, service xxxx, or
trade name deemed by Licensor to create a likelihood of confusion with
a Trademark.
(d) to publicly display and perform the Licensed Products.
(e) to modify and adapt Licensed Products and to create derivative
works based on Licensed Products
2.2 Upgrades. From time to time during the term of this Agreement, Licensee
may create, at its own expense, Upgrades for the Program. Nothing contained in
this Agreement shall be construed to obligate either Licensor or Licensee to
create any Upgrades or Licensee to publish them.
SECTION 3
LICENSOR'S OBLIGATIONS
3.1 Deliverables. Licensor shall prepare and deliver to Licensee for
reproduction master copies of all versions of all Licensed Products in CD-ROM
format or other media as appropriate.
3.2 Product Quality. All Licensed Products are being licensed as-is.
Licensor has no obligation under this Agreement to provide technical support or
correct material errors or defects which may be discovered in the Programs. or
titles published by Licensee
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SECTION 4
OBLIGATIONS OF LICENSEE
4.1 Marketing. Licensee will use reasonable efforts to promote and market
the Licensed Products. Licensee will bear the cost of all marketing and
advertising expenses in connection with the promotion of Licensed Products in
Licensee's channels of distribution.
4.2 Product Support and Warranty. Licensee shall be solely responsible for
providing technical support for all end-users of the Licensed Products
distributed by Licensee. Warranty support and coverage shall be provided in
accordance with the end-user license and warranty which shall be included with
the Licensed Product. Provisions of such warranty support and coverage shall be
the sole discretion of Licensee
4.3 Promotional Copies. Licensee shall have the right to distribute copies
of the Licensed Products royalty free solely for internal and promotional use by
Licensee and Licensee's customers or prospective customers.
4.4 Notices. Licensee will maintain any copyright and trademark notices
which are included on and in the Licensed Products.
SECTION 5
PROPRIETARY RIGHTS
5.1 Ownership. Notwithstanding any provision herein to the contrary, as
between Licensee and Licensor, Licensor shall retain and own all worldwide
right, title and interest in and to the Licensed Products and the Trademarks and
all intellectual property and other rights therein, including but not limited to
copyrights, patents, and trade secrets in the Programs (both object code and
source code form), Program masters, and the Collateral Materials, including all
copies and all portions thereof, and nothing in this Agreement will vest title
in Licensee to any rights therein, except as expressly set forth in this
Agreement.
5.2 Licensee Developed Materials. Licensee may, at its own expense, adopt
and apply its own trademarks, artwork, copy and packaging in marketing and
promoting the Licensed Products.
SECTION 6
CONFIDENTIALITY
6.1 Confidential Information. All documentation and information designated
by the party disclosing the information (the "Disclosing Party") as proprietary
or confidential, including without limitation drawings, source code, computer
program listings, techniques, algorithms and processes and technical and
marketing information ("Confidential Information") which is supplied by the
Disclosing Party in connection with this Agreement shall be treated
confidentially by the recipient of the confidential information ("Recipient")
and its employees and contractors and shall not be disclosed by the Recipient,
except as required in order to exercise the rights and obligations set forth in
this Agreement, without the Disclosing Party's prior written consent. Recipients
of Confidential Information shall disclose Confidential Information only to
employees, contractors, and sublicensees who have a need to know and have
executed written agreements requiring them to comply with the nondisclosure
obligations set forth herein.
6.2 Limitations. Information shall not be considered to be Confidential
Information if it (1) is already or otherwise becomes publicly known through no
act of Recipient; or (2) is lawfully received from third parties subject to no
restriction of confidentiality; or (3) can be shown by Recipient to have been
independently developed by it; or (4) is authorized by the Disclosing Party to
disclose, copy or use; or (5) is disclosed by the Disclosing Party to third
parties without restriction on subsequent disclosure; or (6) is required to be
disclosed in the context of an administrative or judicial proceeding.
6.3 Survival. The duty of confidentiality with respect to source code,
which is disclosed pursuant to this Section 6, if any, shall survive the
termination of the license granted in Section 2.1 for so long as the materials
remain confidential and proprietary. The duty of confidentiality with respect to
all other confidential information shall survive the termination or expiration
of the license granted in Section 2.1 for a period of three (3) years.
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SECTION 7
WARRANTIES, COVENANTS AND INDEMNIFICATION
7.1 Warranties and Covenants of Licensor. Licensor represents, warrants and
covenants to Licensee the following:
(a) Licensor has the full power to enter into this Agreement;
(b) Licensor's performance of the terms of this Agreement and of
Licensor's obligations hereunder shall not breach any separate agreement by
which Licensor is bound.
7.2 Warranties and Covenants of Licensee. Licensee represents, warrants and
covenants to Licensor the following:
(a) Licensee has the full power and authority to enter into this
Agreement and to fulfill its obligations hereunder;
(b) any promotional materials, packaging, documentation or other
materials developed by Licensee for use with the Programs, to the extent said
materials are not based upon materials provided by Licensor, do not infringe
upon, or misappropriate, any copyright, trademark, trade secret or other
proprietary rights of any third party; and
(c) Licensee's performance of the terms of this Agreement and of
Licensee's obligations hereunder shall not breach any separate agreement by
which Licensee is bound.
7.3 Licensee's Indemnity. Licensee agrees to indemnify, hold harmless and
defend Licensor from all claims, defense costs (including reasonable attorneys,
fees), judgments and other expenses arising out of or on account of claims of:
(a) any actions or omissions on the part of Licensee in reproducing,
distributing or marketing the Licensed Products in Licensee's distribution
channel in accordance with this Agreement.
(b) any statements, claims, representations or warranties made by
Licensee or its employees, agents, sublicensees or representative, relating to
the Licensed Products, other than as authorized by Licensor in writing or made
in Licensor's own writings;
(c) the breach of any representation, covenant or warranty set forth in
Section 7.2 above.
(d) alleged infringement or violation of any copyright, trademark,
patent, trade secret or other intellectual property right to the extent said
claims arise from packaging and other materials provided by Licensee or
modifications or additions to the Licensor materials made by Licensee.
7.4 Licensor's Obligation. Licensor shall notify Licensee promptly of any
claim as to which indemnification will be sought and provide Licensee reasonable
cooperation in the defense and settlement thereof.
SECTION 8
ROYALTIES
8.1 Rate and Payment. In consideration for the rights granted Licensee
under Section 2 of this Agreement, and for the other obligations imposed upon
Licensor, Licensee shall pay to Licensor on a calendar quarterly basis, the
amounts per Licensed Product set forth in Schedule "A" attached. At the request
of Licensor, Licensee will provide unaudited gross sales reports to substantiate
tendered royalties.
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8.2 Payment Schedule. Royalties payable to Licensor under this Agreement
shall be paid to Licensor within forty-five (45) days of the end of each
calendar quarter in which revenues are received by Licensee accompanied by a
statement of units sold, samples and returns and any revenues from sublicensing.
Any payments due under this Agreement shall be offset and first applied by
Licensee against any obligation owing from Licensor to Licensee so long as any
such obligation remains unsatisfied
8.3 Records. Licensee will keep accurate books of account and records at
its principal place of business covering all transactions subject to royalty or
other payments under this Section 8. Upon reasonable notice of not less than ten
(10) business days, Licensor shall have the right to inspect such books of
account and records to confirm that the correct amount owing Licensor under this
Section 8 has been paid. Licensee shall maintain such books of account and
records for at least one (1) year after the expiration or termination of this
Agreement.
SECTION 9
TERM; TERMINATION
9.1 Term. The term of this Agreement shall be perpetual unless terminated
for cause as provided herein below.
9.2 This Agreement may be terminated 30 days after either party gives the
other party written notice of a material breach by the other party of any
material term or condition of this Agreement, unless the breach is cured before
that day.
9.3 This Agreement may be terminated 30 days after the terminating party
gives the non-terminating party written notice of termination because the
non-terminating party has been for more than sixty (60) days the subject of any
voluntary or involuntary proceeding relating to bankruptcy, insolvency,
liquidation, receivership, composition of or assignment for the benefit of
creditors. Notice of termination under this Section 9.3 is discretionary, not
mandatory.
SECTION 10
DISTRIBUTION AFTER TERMINATION
Licensee shall be entitled to continue to hold the right to distribute and sell
Licensed Products manufactured prior to the date of termination pursuant to the
terms of this Agreement notwithstanding termination of the licenses granted in
Section 2. 1. Licensed Products sold during this post-termination period shall
be subject to royalty payments under Section 8. However, Licensee shall not
manufacture or reproduce Licensed Products after the termination of the licenses
granted in Section 2.1.
SECTION 11
GOVERNING LAW AND DISPUTE RESOLUTION
9.4 This Agreement shall be governed by and construed in accordance with
the laws of the State of California, without regard to its choice of law
principles. The parties consent to exclusive jurisdiction and venue in the
federal and state courts sitting in Los Angeles, California. In any action or
suit to enforce any right or remedy under this Agreement or to interpret any
provision of this Agreement, the prevailing party shall be entitled to recover
its reasonable attorney's fees, costs and expenses as ordered by the Court.
SECTION 12
MISCELLANEOUS PROVISIONS
12.1 Notices. For purposes of all notices and other communications required
or permitted to be given hereunder, the addresses of the parties hereto shall be
as indicated below. All such communications shall be in writing and shall be
deemed to have been duly given if sent by facsimile, the receipt of which is
confirmed by return facsimile, or if delivered personally with receipt
acknowledged, or sent by first class registered or certified mail or equivalent,
return receipt requested, if available, postage paid, or commercial carrier
(e.g. Federal Express or UPS), addressed to the parties at their addresses
respectively set forth below:
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If to Licensor: uWink,Inc.
00000 Xxxx Xxxxxx
Xxx Xxxx XX 00000
Attention: Chief Financial Officer
If to Licensee: S. Xxxxxxx Xxxxxxxx
0000 Xxxxx Xxxxx XX
Xxxxxx, XX 00000
12.2 The Designated Person to Send and Receive Material. The parties agree
that all materials exchanged between the parties for formal approval shall be
communicated between single designated persons, or a single alternate designated
person for each entity.
12.3 Entire Agreement. This Agreement, including any attached schedules,
constitutes the entire agreement between the parties with respect to the
services and all other subject matter hereof and merges all prior and
contemporaneous oral or written communications, agreements, representations
and/or understandings. It shall not be modified nor any provision waived or
departed from except by a written agreement dated subsequent to the date of this
Agreement and signed on behalf of the parties by their respective duly
authorized representatives; and then such waiver or consent shall be effective
only in the specific instances of and for the specific purposes given.
12.4 Force Majeure. Neither party shall be responsible for any failure to
perform due to unforeseen, non-commercial circumstances beyond its reasonable
control, including but not limited to acts of God, war, riot, embargoes, acts of
civil or military authorities, fire, floods, earthquakes, accidents, strikes,
fuel or energy. In the event of any such delay, any applicable period of time
for action by said party may be deferred for a period equal to the time of such
delay.
12.5 Severability. In the event that any one or more of the provisions of
this Agreement is found to be illegal or unenforceable, then notwithstanding
such illegality or unenforceability, this Agreement shall remain in full force
and effect, and such term or provision shall be deemed stricken. However, if the
stricken provision is of fundamental importance to a party, then that party may
immediately terminate the Agreement and any remaining payment or similar
remaining performance obligations shall be prorated accordingly.
12.6 Contract Assignment. Licensee may not assign its rights and duties
under this Agreement without the written consent of Licensor; provided that once
Licensee is no longer affixing or using the trade name "uWink" or any derivation
thereof in any new manufacturing, distribution or placement of Licensed Product
in accordance with Section 2.1(c) (1), Licensee may assign this agreement
without the written consent of Licensor.
12.7 Waivers and Amendments. No waiver, amendment, or modification of any
provision of this Agreement shall be effective unless consented to by both
parties in writing. No failure or delay by either party in exercising any
rights, powers, or remedy under this Agreement shall operate as a waiver of any
such right, power, or remedy.
12.8 The parties are separate and independent legal entities. Nothing in
this Agreement shall constitute a partnership nor make either party the agent or
representative of the other. Neither party has the authority to bind the other
or to incur any liability on behalf of the other, nor to direct the employees of
the other.
12.9 Titles and Headings. The titles and headings of each section are
intended for convenience only and shall not be used in construing or
interpreting the meaning of any particular clause or section.
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12.10 Contract Interpretation. Ambiguities, inconsistencies, or conflicts
in this Agreement shall not be strictly construed against the drafter of the
language but will be resolved by applying the most reasonable interpretation
under the circumstances, giving full consideration to the parties' intentions at
the time this Agreement is entered into.
12.11 No Third Party Rights. This Agreement is not for the benefit of any
third party, and shall not be considered to grant any right or remedy to any
third party whether or not referred to in this Agreement.
12.12 Singular and Plural Terms. Where the context of this Agreement
requires, singular terms shall be considered plural, and plural terms shall be
considered singular.
12.13 Confidentiality of Agreement. The parties consider the terms of this
Agreement to be confidential. Neither party shall disclose this Agreement or its
terms to any third party except (1) to the extent, if any, required by law or by
the legal, accounting, investment, or banking requirements of a party; or (2)
with the prior written consent of the other party (such consent not to be
unreasonably withheld).
12.14 LIMITATION ON LIABILITY; REMEDIES. NEITHER PARTY SHALL BE LIABLE TO
THE OTHER PARTY FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES
OF ANY KIND OR NATURE, INCLUDING, WITHOUT LIMITATION, THE BREACH OF THIS
AGREEMENT OR ANY TERMINATION OF THIS AGREEMENT, WHETHER SUCH LIABILITY IS
ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING NEGLIGENCE OR STRICT
LIABILITY), OR OTHERWISE, EVEN IF EITHER PARTY HAS WARNED OR BEEN WARNED OF THE
POSSIBILITY OF ANY SUCH LOSS OR DAMAGE. MOREOVER, IN NO EVENT SHALL LICENSOR'S
LIABILITY TO LICENSEE OR ANY THIRD PARTY EXCEED THE AMOUNTS PAYABLE TO LICENSOR
AS SET FORTH IN SCHEDULE "A".
12.15 Survival. Without limitation, the Royalty and Indemnity provisions of
this Agreement, Sections 8 and 7, shall survive the termination of the licenses
granted in Section 2.1. The Confidentiality provisions of Section 6 shall
survive the termination or expiration of the licenses granted in Section 2.1 as
provided in Section 6.3.
12.16 Counterparts. This Agreement may be executed in counterparts, and a
facsimile copy of this Agreement, signed by either party and transmitted to the
other party, shall constitute a binding signature to this Agreement.
IN WITNESS WHEREOF, this Agreement is executed as of the Effective Date set
forth above.
LICENSOR LICENSEE
By:/S/__________________________ By:/S/_____________________________
Its: CFO S. Xxxxxxx Xxxxxxxx, Managing Member
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