EXHIBIT 10.11
GATEWAY INFORMATION PROVIDER AGREEMENT
This agreement, dated as of December 13, 1994, is made and entered into by and
between VISUAL INFORMATION SERVICES CORP. ("VISCORP") with offices at 0000 Xxxxx
Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 and NTN Communications, Inc. ("NTN"), a
Delaware corporation, with offices at 0000 Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxxxx 00000.
INTRODUCTION
VISCORP and NTN each desire that NTN provide the non-exclusive online computer
service described in Paragraph 1.1.2. below (the "Gateway Online Service") on
the VISCORP network (the "Network"), subject to the terms and conditions set
forth in this Agreement.
TERMS
1. GATEWAY ONLINE SERVICE. NTN grants and VISCORP accepts a non-exclusive
worldwide license to promote, market and develop the Gateway Online Service
during the term hereof, for use on the VISCORP platform as it presently exists
or may be otherwise modified or enhanced in the future, including any
derivations thereof.
1.1. Duties of NTN. NTN shall provide the Gateway Online Service, at its
own expense, including, without limitation, the following:
1.1.1 Providing all computer, telephone, and other equipment
necessary to access the Network in accordance with the Schedule
attached as Addendum 1.
1.1.2 Creating the Gateway Online Service with the following
content: NTN's two-way interactive computerized broadcast games (the
"Games") that involve broadcast of data to multiple locations, play by
multiple participants at each location and retrieval and processing of
data entered by the players.
The Games shall include:
1.1.2.1 Trivia games such as Countdown, Showdown, Sports Trivia
Challenge, Spotlight, Passport, Playback, including all updates,
revisions and enhancements, and other standard trivia games that
exist or may be developed by NTN for general electronic
distribution to all platforms, in the future during the Initial
Term and any Renewal Term of this Agreement; subject to
Addendum 2.
1.1.2.2 Play-along games: QB1, Diamondball, Powerplay, Brackets,
Hoops, DreamTeam, Undercover, Wipeout, Scatter, Triples, Xxxxx
Xxxxx (e.g., Academy Awards), Uppercut, including all updates,
revisions and enhancements, and other standard play-along games
that exist or may be developed by NTN for general electronic
distribution to all platforms in the future during the Initial
Term and any Renewal Term of this Agreement ("Play-Along Games"),
subject to Addendum 2.
1.1.3 Software Development
1.1.3.1 Developing the software necessary for the operation of
the Gateway Online Service (the "Software"). The Software and
the Gateway Online Service will be capable of supporting all
Network users without noticeable degradation in response time,
throughput or reliability;
1.1.3.2 Developing the Software so that the Gateway Online
Service will operate through a telecommunications link between
the NTN and VISCORP host computer systems that utilizes TCP/IP
communications protocols (the "Telecommunications Link").
1.1.4 Operations
1.1.4.1 Monitoring the Software and the Gateway Online Service to
ensure that it operates as designed. NTN recognizes that time is
of the essence and will make all reasonable efforts to re-start
the Software in the event that the Software ceases to operate.
1.1.5 Cooperating and assisting VISCORP in promptly answering
questions and complaints from VISCORP or from customers, subscribers
and end-users regarding the Gateway Online Service.
1.1.6 Cooperating and assisting VISCORP in supplying material for
VISCORP marketing and promotional activities.
1.1.7 International Preference. If VISCORP develops a PAL system
NTN will present it to Licensees as a preferred NTN ready platform.
1.2. Duties of VISCORP
1.2.1 VISCORP shall Provide NTN with reasonable technical
assistance as requested in writing by NTN to assist NTN in a timely
manner with the successful completion of its duties as outlined in
Section 1.1 of this Agreement, including documentation of and
assistance with the RMG;
1.2.2 Provide NTN executives with Overhead Accounts;
1.2.3 Make every reasonable effort to develop the Gateway Online
Service on the VISCORP network in accordance with the Schedule
attached as Addendum 1;
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1.2.4 Design, implement and document the online screens that will
be incorporated into the Gateway Online Service. VISCORP will make
all necessary changes to the online screens as requested by NTN to
assist in the design, implementation, debugging and maintenance of the
Software and the Gateway Online Service;
1.2.5 Pay for the costs of the Telecommunications Link between
VISCORP and NTN. This will be a standard leased line of at least
9.6KB with a preference of 56.4KB
1.2.6 Make every reasonable effort to promote and market NTN and
NTN products and include NTN and NTN products in advertising.
1.2.7 VISCORP agrees not to attempt to create or derive source
code, derivative works or improvements to any of the NTN products
provided to VISCORP by disassembly, reverse engineering or any other
method, and to take reasonable steps necessary to prevent third
parties, including without limitation, end-users, from disassembly,
reverse engineering, and the like.
1.3. Joint Responsibilities of VISCORP and NTN. Each party will submit
marketing, advertising, and all other promotional materials related to the
Gateway Online Service and/or referencing the other party and/or the
trademarks of the other party to the other party (the "Materials") for such
party's prior written approval, prior to the use or distribution of such
Materials. Each party shall solicit and reasonably consider the views of
the other party in designing and implementing such Materials. Approval
shall not be unreasonably withheld or delayed, and once approved, the
Materials may be reused until such approval is reasonably withdrawn with
reasonable prior notice.
1.4. Exclusivity. The Gateway Online Service shall be provided by NTN on a
non-exclusive, worldwide basis for services originating in the United
States. For services originating outside of the United States, NTN will
present VISCORP as a preferred affiliation.
1.5. Grant of Service Rights to VISCORP. NTN hereby grants VISCORP the
right during the Initial and any Renewal Term of this Agreement (as defined
in Section 6 below) to distribute the Gateway Online Service through the
Network and to market and promote the Gateway Online Service and, only in
connection with such distribution, marketing and promotion, to use the
following trade names and trademarks of NTN: those pertinent to the
games/NTN products being advertised, distributed or promoted, subject to
any existing restrictions on such use.
1.6. If NTN is unable to provide programming content, then VISCORP may
provide this same programming for the term of this Agreement unless
restricted by another agreement between NTN and a third party.
2. PAYMENTS
2.1. Usage Royalties.
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2.1.1 For the Trivia Games described in Section 1.1.2.1 of this
Agreement, VISCORP will pay NTN a percentage of the Online Usage
Revenue, as defined herein, generated by the Trivia Games on the
Network. The percentage of Online Usage Revenue VISCORP will pay NTN
will be thirty percent (30%). Until VISCORP receives one hundred and
twenty five thousand ($125,000) in revenues, usage royalties will be
split on 85% VISCORP and 15% NTN basis. Thereafter, the permanent
split will revert to the normal 70% /30% basis. Two years after the
expected activation date of NTN programming on VISCORP'S gateway
online service, VISCORP will pay NTN a minimum annual royalty of
$24,000. The settlement of this minimum amount will occur at the end
of the year on the anniversary of the Gateway Online Service. Gateway
Online Service initiation is expected to be 1 May 1995. The first
minimum royalty payment, if required, would be on 31 May 1998.
2.1.2 For the Play-Along Games described in Section 1.1.2.2 of
this Agreement, VISCORP will pay NTN thirty percent (30%) of Online
Usage Revenue, as defined herein, generated by the Play-Along Games on
the Network. The terms of this Section 2.1.2 are subject to
renegotiation as it applies to any one of the Play-Along Games, in the
event that NTN must pay a licensing fee to a third party which would
make the provision of said game economically detrimental to NTN (i.e.
NTN; tangible costs versus anticipated revenues, in NTN's
determination);
2.1.3 Online Usage Revenue shall mean the greater of a specific
charge per event or a prorated percentage of subscription fees based
on usage, excluding amounts received for taxes, duties, or valid
charges. VISCORP shall provide NTN with monthly statements detailing
the amount of usage of the Gateway Online Service for that month;
2.1.4 VISCORP will continue to keep NTN advised as to any change
in hourly or other charges and as to any free hours.
2.2. Advertising Revenues.
2.2.1 In the event that either VISCORP or NTN sell sponsorship of
any portion of the Gateway Online Service to a third party
("Advertising Revenues"), the party which sells such a sponsorship
shall receive a royalty to be mutually agreed upon, but not to be less
than 70 percent of the Advertising Revenue derived from the sale of
that sponsorship. Neither party shall sell nor solicit the sale of
any sponsorship of any portion of the Gateway Online Service without
the reasonable prior written approval of the other party.
2.2.2 Prior to the sale of any sponsorships, VISCORP and NTN shall
cooperatively set and agree in writing to the rates to be charged for
sponsorship of any portion of the Gateway Online Service.
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2.2.3 Each party reasonably reserves the right to refuse any
sponsorship which, in its discretion, it determines to be not suitable
for the Network or the Gateway Online Service.
2.3. VISCORP and NTN agree to pay the other party all monies earned and
received within thirty (30) days of the end of the month in which such
monies were earned and received.
2.4. License Fees and Conversion Charges. VISCORP will pay NTN two hundred
thousand dollars ($200,000) upon the signing of this agreement and
compliance with Steps 1 and 2 of the Schedule by NTN and fifty thousand
dollars ($50,000) when the system is live, but not later than December 31,
1995.
3. Prizes. Five percent (5%) of online usage revenue will be reserved for
prizes before royalty computation.
4. Confidentiality. Each party acknowledges and agrees that any and all
information emanating from the other party's business and not publicly known,
including, without limitation, the contents of this Agreement, technical
processes and formulas, source codes, product designs, customer lists, sales,
cost and other unpublished financial information, product plan, and marketing
data, is confidential and proprietary information. Each party agrees that it
shall take reasonable steps, at least substantially equivalent to the steps as
it takes to protect its own proprietary information, during and after the
Initial Term and any Renewal Term, to prevent the duplication or disclosure of
any such confidential and proprietary information, other than by or to its
employees or agents who must have access to such information to perform such
party's obligations hereunder, who shall treat such information as provided
herein. If such information is publicly known, already known by a party, is
thereafter rightly obtained by the non-disclosure party from a source other than
the disclosing party, or is required to be disclosed by law, regulation, or
court order, then there shall be no restriction on the use of such information.
5. LIMITATION OF LIABILITY; DISCLAIMER; INDEMNIFICATION.
5.1. Liability. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY OR ANY USER OF THE GATEWAY ONLINE SERVICE FOR INDIRECT,
INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES EXCEPT AS SPECIFIED
IN SECTION 5.3 ENTITLED "INDEMNITY", (EVEN IF SUCH OTHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES) FOR REASONS SUCH AS, BUT NOT
LIMITED TO, LOSS OF REVENUE, LOSS OF PROFITS OR LOST BUSINESS.
5.2. Warranties.
5.2.1 VISCORP MAKES NO, AND NTN ACKNOWLEDGES THAT VISCORP HAS NOT
MADE ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING
THE NETWORK OR THE OPERATION OF THE GATEWAY ONLINE SERVICE ON THE
NETWORK, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
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FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM
COURSE OF DEALING OR COURSE OF PERFORMANCE. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, VISCORP SPECIFICALLY DISCLAIMS ANY
WARRANTY REGARDING THE PROFITABILITY OF THE GATEWAY ONLINE SERVICE AS
OPERATED ON THE NETWORK.
5.2.2 NTN MAKES NO, AND VISCORP ACKNOWLEDGES THAT NTN HAS NOT MADE
ANY, REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING
NTN'S PRODUCTS OR THEIR OPERATION ON THE NETWORK, INCLUDING ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR
COURSE OF PERFORMANCE. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, NTN SPECIFICALLY DISCLAIMS ANY WARRANTY REGARDING THE
PROFITABILITY OF THE GATEWAY ONLINE SERVICE AS OPERATED ON THE
NETWORK.
5.3. Indemnity. If either party breaches any of its obligations under this
Agreement, it will defend, indemnify, save and hold harmless the other
party and the officers, directors, agents and employees of the other party
from any and all claims, demands, liabilities, judgments, cost or expense,
including reasonable attorneys' fees ("Liabilities"), resulting from such
breach, except where Liabilities result solely from the negligence or
knowing and willful misconduct of the other party. Without limiting the
generality of the foregoing, NTN shall defend, indemnify, and hold harmless
VISCORP against Liabilities arising out of (i) any injury to person or
property caused by any products sold or otherwise distributed in connection
with the Gateway Online Service, (ii) any defamatory or illegal, or
allegedly defamatory or allegedly illegal material placed on the Gateway
Online Service, and (iii) any material infringing or allegedly infringing
on the proprietary rights of a third party including patents, copyrights,
trademarks and trade secrets. Each party agrees to (A) promptly notify the
other party in writing of any indemnifiable claim and give the other party
the opportunity to defend or negotiate a settlement of any such claim at
that party's expenses, and (B) cooperate fully with the other party, at
that other party's expense, in defending or settling such claim. VISCORP
reserves the right, at its own expense, to assume the exclusive defense and
control of any matter otherwise subject to indemnification by NTN
hereunder, and in such event, NTN shall have no further obligation to
provide indemnification or any damages or settlement for such matter
hereunder.
6. RENEWAL AND TERMINATION. The initial term of this Agreement shall be seven
(7) years from the date of this Agreement ("Initial Term"). This Agreement
shall be automatically extended for a period equal to the length of the Initial
Term (each a "Renewal Term") unless the agreement has been terminated in
accordance with the following. Either party may terminate this Agreement (i) at
any time in the event of a material breach by the other party which remains
uncured after sixty (60) days notice thereof; or (ii) at any time for any reason
on sixty (60) days prior written notice, such termination to be effective after
the end of the Initial Term and on the commencement of the next Renewal Term
hereof. Neither party is precluded
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from complying with existing contractual obligations and commitments by the
termination of this agreement.
7. General Provisions.
7.1. Excuse. Neither party shall be liable for, or be considered in breach
of or in default under this Agreement on account of, any delay or failure
to perform as required by this Agreement as a result of any causes or
conditions which are beyond such party's reasonable control and which such
party is unable to overcome by the exercise of reasonable diligence.
7.2. Independent Contractors. The parties to this Agreement are
independent contractors. Neither party is an agent, representative, or
partner of the other party. Neither party shall have any right, power or
authority to enter into any agreement for or on behalf of, or incur any
obligation or liability of, or to otherwise bind, the other party. This
Agreement shall not be interpreted or construed to create an association,
joint venture or partnership between the parties or to impose any
partnership obligation or liability upon either party.
7.3. Notice. Any notice, approval, request, authorization, direction or
other communication under this Agreement shall be given in writing and
shall be deemed to have been delivered and given for all purposes (i) on
the delivery date if delivered by facsimile; (ii) on the delivery date if
delivered personally to the party to whom the same is directed; or (iii)
two business days after the mailing date, whether or not actually received,
if sent by U.S. mail postage and charges prepaid or another means of rapid
mail delivery for which a receipt is available, to the address of the party
to whom the same is directed as set forth in the introductory paragraph of
this Agreement. Either party may change its address specified above by
giving the other party notice of such change. Notices of default shall be
addressed to an officer of each party.
7.4. No Waiver. The failure of either party to insist upon or enforce
strict performance by the other party of any provision of this Agreement or
to exercise any right under this Agreement shall not be construed as a
waiver or relinquishment to any extent of such party's right to assert or
rely upon any such provision or right in that or any other instance;
rather, the same shall be and remain in full force and effect.
7.5. Return of Information. Upon the expiration or termination of this
Agreement, each party shall promptly return all information, documents,
manuals and other materials belonging to the other party.
7.6. Survival. Sections 3,4,5,6, and 7.5, and all other provisions of this
Agreement which may reasonably be interpreted or construed as surviving the
completion, expiration, termination or cancellation of this Agreement,
shall survive the completion, expiration, terminations or cancellation of
this Agreement.
7.7. Entire Agreement. This Agreement sets forth the entire agreement, and
supersedes any and all prior agreements of the parties with respect to the
transactions set
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forth herein. Neither party shall be bound by, and each party specifically
objects to, any term, conditions or other provision which is different from
or in addition to the provisions of this Agreement (whether or not it would
materially alter this Agreement) and which is proffered by the other party
in any correspondence or other document, unless the party to be bound
thereby specifically agrees to such provision in writing. Notwithstanding
the foregoing, NTN shall also be bound by the Network Terms of Service
except as such Network Terms of Service are specifically amended by this
Agreement.
7.8. Amendment. No change, amendment or modification of any provision of
this Agreement shall be valid unless set forth in a written instrument
signed by the party to be bound thereby.
7.9. Construction. In the event that any provision of this Agreement
conflicts with the law under which this Agreement is to be construed or if
any such provision is held invalid by a court with jurisdiction over the
parties to this Agreement, such provision shall be deemed to be restated to
reflect as nearly as possible the original intentions of the parties in
accordance with applicable law, and the remainder of this Agreement shall
remain in full force and effect.
7.10. Applicable Law; Jurisdiction. This Agreement shall be
interpreted, construed and enforced in all respects in accordance with the
laws of the state of California.
7.11. Counterparts. This agreement may be executed in counterparts,
each of which shall be deemed as original and all of which together shall
constitute one and the same document.
7.12. Binding Arbitration. Any dispute between the parties over
interpretation, breach, default or enforcement of this Agreement shall be
submitted to binding arbitration. The panel shall consist of three
arbitrators. The parties shall each select one arbitrator and the two
arbitrators shall select a neutral arbitrator. The decision of the
arbitrator shall be final, may include injunctive relief, and may be
enforced by either party in any court of competent jurisdiction.
7.13. This Agreement is binding upon the successors and assignees of
either party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
VISUAL INFORMATION SERVICES CORP. NTN Communications, INC.
BY: BY:
___________________________________ ___________________________________
___________________________________ ___________________________________
(Print Name) (Print Name)
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____________________________________ ___________________________________
(Title) (Title)
Date________________________________ Date_______________________________
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XXXXXXXX 0
XXXXXXXX
XXXXXXX ONLINE SERVICE
DEVELOPMENT SCHEDULE
STEP DATE TO BE COMPLETED
--------------------------------------------------------------------------------
1. NTN delivers packet architecture to VISCORP Date of receipt of license
payment
2. NTN delivers artwork to VISCORP Date of receipt of license
payment
3. Communications link established between March 1, 1995
NTN and VISCORP
4. Beta test March 15, 1995
5. System Live May 1, 1995
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ADDENDUM 2 TO GATEWAY INFORMATION PROVIDER AGREEMENT
1.1.2.1. VISCORP shall not be entitled to any Games with respect to which
VISCORP declines to contribute its proportional share of the funding required by
NTN and/or a third party to acquire and develop new Games, for which the
acquisition or licensing of rights from a third party is required.
VISCORP's proportional contribution shall be measured by the anticipated
relative benefits as determined by number of units, revenues and actual number
of subscribers or users, to be calculated by NTN.
1.1.2.2. VISCORP shall not be entitled to any Games with respect to which
VISCORP declines to contribute its proportional share of the funding required by
NTN and/or a third party to acquire and develop new Games, for which the
acquisition or licensing of rights from a third party is required.
VISCORP's proportional contribution shall be measured by the anticipated
relative benefits, as determined by number of units, revenues and actual number
of subscribers or users, to be calculated by NTN.
ACCEPTED AND AGREED TO:
VISUAL INFORMATION SERVICES CORP NTN COMMUNICATIONS, INC.
__________________________________ ______________________________________
Date:_____________________________ Date:_________________________________
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