Exhibit 10.16
SNAP2 CORPORATION
10641 Justin Drive
Des Moines, Iowa 50322
Tel: (515) 331-0560 Fax: (515) 331-3901
("SNAP2")
IN-FLIGHT ENTERTAINMENT SOFTWARE LICENSE AGREEMENT
Customer: LanChile Airlines
Av. Americo Vespucio 901
Renca, Santiago, Chile
Contact: Roberto Cabrera [Confidential Treatment has been requested for this
portion of this Exhibit]
SNAP2 hereby grants Customer, and Customer hereby accepts from SNAP2, a
non-exclusive and non-transferable right to use the computer programs described
in Section 1 below (the "Products") on the designated hardware described in
Section 2 below (the "Designated Hardware"), for the term specified herein,
subject to the terms and conditions specified below.
GENERAL TERMS AND CONDITIONS
1. PRODUCTS
"Products" means (i) the machine-readable object code version of the computer
programs described in the Product Schedule, whether embedded on disc, tape or
other media, for use on the computer platform specified in the Product Schedule
(the "Software"), (ii) the published user manuals and documentation that SNAP2
makes generally available for the Software (the "Documentation"), (iii) the
fixes, updates, upgrades or new versions of the Software or Documentation that
SNAP2 may provide to Customer under this Agreement (the "Enhancements") and (iv)
any copy of the Software, Documentation or Enhancements. Nothing in this
Agreement will entitle Customer to receive the source code of the Software or
Enhancements, in whole or in part.
2. DESIGNATED HARDWARE
"Designated Hardware" means the hardware equipment installed in the designated
aircraft, each as specified in the Product Schedule. Customer may use the
Products as described in Section 3 only on the Designated Hardware while it
possesses and operates the Designated Hardware. Any other use or transfer of the
Products will require SNAP2's prior approval, which (i) shall not be
unreasonably withheld or delayed and (ii) may be subject to additional charges
should any revision to the Products be required as a result of the alternative
use or transfer.
3. USE
Customer may use the Products only in and for Customer's own internal purposes
in providing in-flight entertainment to its passengers. Customer will not permit
any other person to use the Products, whether on a time-sharing or other
multiple user arrangement. Customer may install the Software or Enhancements on
a network or other multi-user computer system specified in the Product Schedule
and use the Designated Hardware to provide file services to Customer's in-flight
entertainment consoles, up to the number of seats specified in the Product
Schedule. Customer may make a reasonable number of back-up archival copies of
the Software and Enhancements. Customer will reproduce all confidentiality and
proprietary notices on each of these copies and maintain an accurate record of
the location of each of these copies. Customer will not otherwise copy,
translate, modify, adapt, decompile, disassemble or reverse engineer the
Products, except as and to the extent expressly authorized by applicable law or
with the prior written approval of SNAP2.
4. PAYMENT
Customer will pay to SNAP2 the License Fee specified in the Product Schedule and
by the date specified in the Product Schedule. The License Fee is based upon the
per aircraft basis with access to an in-flight entertainment console on the
designated aircraft as described in the Product Schedule. Any increase in usage
may be subject to additional charges. All amounts specified in the Product
Schedule are exclusive of any applicable use, sales, service, property or other
taxes or contributions, which Customer will pay in addition to the amount due
and payable. If, under local law or applicable treaty, Customer is required to
withhold any tax on such payments, then the amount of the payment will be
automatically increased to totally offset such tax, so that the amount actually
remitted to SNAP2, net of all taxes, equals the amount invoiced or otherwise
due. Customer will promptly furnish SNAP2 with the official receipt of payment
of these taxes to the appropriate taxing authority. Any amount not paid when due
will accrue interest at the rate of 1.5% per month. Customer will pay such
interest when remitting the principal amount to SNAP2.
5. SHIPMENT
SNAP2 will, at its own cost, ship the Products from its distribution center to a
mutually agreed third party in the United States, subject to delays beyond
SNAP2's control. Should Customer desire shipment outside of the United States,
then SNAP2 will select the method of shipment for Customer's account and obtain
all licenses required to export the Products from the country of origin.
Customer shall pay or reimburse SNAP2 for the cost of shipment of the Products
to the port of entry at Customer's country of domicile. Customer will (i) obtain
all licenses required to import the Products into its country of domicile, (ii)
clear the Products through local customs and (iii) pay all customs duties and
other charges assessed on such importations, if applicable. Risk of loss will
pass to Customer upon arrival of the Products at the port of entry in Customer's
country of domicile.
6. MAINTENANCE AND SUPPORT
(a) Maintenance. During the warranty period specified in Section 7(a), SNAP2
will provide Customer, at no additional charge, with the fixes and updates that
SNAP2 may make generally available as part of its standard maintenance services
(the "Updates"). Customer may elect to continue receiving Updates for the
remainder of the Term (as defined in Section 12(a)) after the Warranty Period
(the "Maintenance Period") as long as the Agreement is in effect.
(b) "Hot-Line" Support. During the Warranty Period and any Maintenance Period
for which Customer has paid, SNAP2 will provide Customer, at no additional
charge, with advice, consultation and assistance to use the Product and diagnose
and correct problems that Customer may encounter (the "Hot-Line Support"). SNAP2
will offer the Hot-Line Support remotely by telephone, fax or other electronic
communication during its business hours, 8:00 am to 5:00 pm C.S.T. Customer will
bear all telephone and other expenses that it may incur in connection with the
Hot-Line Support. SNAP2 may offer on-site support to Customer at additional
charges.
Hot-Line Contact Information:
Contact: Tony Hoffman
Address: SNAP2 Corp.
10641 Justin Drive
Des Moines, IA 50322
Phone: (515) 331-0560
Fax: (515) 331-3901
Email: tonyh@snaptwo.com
(c) Limitation. The Updates will not include any upgrade or new version of the
Products that SNAP2 decides, in its sole discretion, to make generally available
to its customer base as a separately priced item. This Section will not be
interpreted to require SNAP2 to (i) develop and release Enhancements or (ii)
customize the Enhancements to operate in conjunction with any Customer
Modification or otherwise satisfy Customers' particular requests. If an
Enhancement replaces the prior version of the Product, Customer will destroy
such prior version upon installing the Enhancement.
7. WARRANTIES AND REMEDIES
(a) Limited Warranty. SNAP2 warrants that (i) the Software will conform to
SNAP2's published specifications in effect on the date of delivery, (ii) the
Software will perform substantially as described in the accompanying
Documentation for 90 days after delivery of the Product, (iii) the Software has
been designed considering its use for in-flight entertainment and as such is
certified as to be safe and reliable, and (iv) from the date of delivery of the
Product by SNAP2 until December 31, 2000, the Products will record, store,
process and present calendar dates falling on or after December 31, 1999 in the
same manner and with substantially the same functionality as such Products
record, store, process and present calendar dates falling before December 31,
1999, (iv) it will perform any maintenance and support services pursuant to
Section 6 with reasonable care and skill. Customer acknowledges that (i) the
Products may not satisfy all of Customer's requirements, (ii) the use of the
Products may not be uninterrupted or error-free and (iii) this limited warranty
will be not apply in case of any Customer Modifications. Customer further
acknowledges that (i) the License Fee and other charges contemplated under this
Agreement are based on the limited warranty, disclaimers and limitation of
liability specified in Sections 7, 8 and 9 and (ii) such charges would be
substantially higher if any of these provisions were unenforceable.
(b) Remedies. In case of breach of warranty or any other duty related to the
quality of the Products, SNAP2 or its representative will, at its own cost
promptly correct or replace any defective Software or, if not practicable, SNAP2
will accept the return of the defective Software and refund to Customer (i) the
amount actually paid to SNAP2 for the defective Software, less depreciation
based on a 5-year straight line depreciation schedule, and (ii) a pro rata share
of any maintenance fees that Customer actually paid to SNAP2 for the period that
such Software was not usable. Customer acknowledges that this Paragraph sets
forth Customer's exclusive remedy, and SNAP2's exclusive liability, for any
breach of warranty or other duty related to the quality of the Products.
(c) Limitations. The warranty provided in this Section 7 will not apply to the
extent that the breach of warranty or Product defect is not brought to the
attention of SNAP2 during the applicable warranty period or arises SNAP2 as a
result of (i) failure to properly install or use the Product in accordance with
its documentation, (ii) failure of the operating environment or hardware
failure, (iii) modification of the Products other than by SNAP2, (iv) failure to
promptly install an Update provided to the Customer by SNAP2 that would have
eliminated the defect, (v) use of the Products with ambiguous date related data
or in a Year 2000 non-compliant operating environment or (vi) the combination of
the Products with other items not provided by SNAP2, but only if the breach
would not have occurred from use of the Product alone with the Designated
Hardware existing as of the date of this Agreement.
(d) Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL WARRANTIES,
CONDITIONS, REPRESENTATIONS, INDEMNITIES AND GUARANTEES WITH RESPECT TO THE
PRODUCTS, WHETHER EXPRESS OR IMPLIED, ARISING BY LAW, CUSTOM, PRIOR ORAL OR
WRITTEN STATEMENTS BY SNAP2, ITS AGENTS OR OTHERWISE (INCLUDING, BUT NOT LIMITED
TO ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE, SATISFACTORY
QUALITY AND NON-INFRINGEMENT) ARE HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED.
8. INDEMNITY
(a) Indemnity. If an action is brought against Customer claiming that a Product
infringes a presently issued U.S. patent, or a copyright or trade secret, SNAP2
will defend Customer at SNAP2's expense and, subject to this Section and Section
9, pay the damages and costs finally awarded against customer in the
infringement action, but only if (i) Customer notifies SNAP2 promptly upon
learning that the claim might be asserted, (ii) SNAP2 has sole control over the
defense of the claim and any negotiation for its settlement or compromise and
(iii) Customer provides SNAP2 with full cooperation in the investigation,
defense and settlement of such claim as SNAP2 may reasonably require, providing
that Customer shall be reimbursed all of its reasonable out of pocket expenses
incurred as a result.
(b) Alternative Remedy. If a claim described in Section 8(a) may be or has been
asserted, Customer will permit SNAP2, at SNAP2's option and expense, to (i)
procure the right to continue using the Product, (ii) replace or modify the
Product to eliminate the infringement while providing functionally equivalent
performance or (iii) if SNAP2 determines that the remedies specified in (i) and
(ii) are unavailable to SNAP2 on commercially reasonable terms, accept the
return of the Product and refund to Customer the amount actually paid to SNAP2
for such Product, less depreciation based on a 5-year straight-line depreciation
schedule and a pro rata share of any maintenance fees that Customer actually
paid to SNAP2 for the period that such Product was not usable.
(c) Limitation. SNAP2 shall have no indemnity obligation to Customer under this
Section if the infringement claim results from (i) a correction or modification
of the Product not provided by SNAP2, such as a Customer
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Modification, (ii) the failure to promptly install an Update provided to
Customer by SNAP2 or (iii) the combination of the Product with other items not
provided by SNAP2, unless the infringement would have occurred from use of the
Product alone.
9. NO CONSEQUENTIAL DAMAGES
UNDER NO CIRCUMSTANCES WILL SNAP2 OR ITS LICENSORS BE LIABLE FOR ANY
CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES OR LOST
PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON CUSTOMER'S CLAIMS OR
THOSE OF ITS PASSENGERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA,
GOODWILL, USE OF MONEY OR USE OF THE PRODUCTS, INTERRUPTION IN USE OR
AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER ASSETS OR
EQUIPMENT), ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR IMPLIED WARRANTY,
BREACH OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, WILLFUL MISCONDUCT, STRICT
LIABILITY IN TORT OR OTHERWISE, EXCEPT IN THE CASE OF DEATH OR PERSONAL INJURY.
IN NO EVENT WILL THE AGGREGATE LIABILITY WHICH SNAP2 OR ITS LICENSORS MAY INCUR
IN ANY ACTION OR PROCEEDING EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY CUSTOMER
FOR THE SPECIFIC PRODUCT THAT DIRECTLY CAUSED THE DAMAGE. THIS SECTION WILL NOT
APPLY ONLY WHEN AND TO THE EXTENT THAT APPLICABLE LAW SPECIFICALLY REQUIRES
LIABILITY, DESPITE THE FOREGOING EXCLUSION AND LIMITATION.
10. OWNERSHIP
All trademarks, service marks, patents, copyrights, trade secrets and other
proprietary rights in or related to the Products are and will remain the
exclusive property of SNAP2 or its licensors, whether or not specifically
recognized or perfected under applicable law. Customer will not take any action
that jeopardizes SNAP2's or its licensor's proprietary rights or acquire any
right in the Products, except the limited use rights specified in Section 3.
SNAP2 or its licensor will own all rights in any copy, translation,
modification, adaptation or derivation of the Products, including any Customer
Modification or other improvement or development of the Products. Customer will
obtain, at SNAP2's reasonable request and expense, the execution of any
instrument that may be appropriate to assign these rights to SNAP2 or its
designee or perfect these rights in SNAP2's or its licensor's name.
11. CONFIDENTIALITY
(a) Confidentiality. Customer acknowledges that the Products incorporate
confidential and proprietary information developed or acquired by or licensed to
SNAP2. Customer will take all reasonable precautions necessary to safeguard the
confidentiality of the Products, including (i) those taken by Customer to
protect Customer's own confidential information and (ii) those which SNAP2 or
its authorized representative may reasonably request from time to time. Customer
will not allow the removal or defacement of any confidentiality or proprietary
notice placed on the Products. The placement of copyright notices on these items
will not constitute publication or otherwise impair their confidential nature.
(b) Disclosure. Customer will not disclose, in whole or in part, any item of the
Products that has been designated as confidential to any individual, entity or
other person, except (i) to those of Customer's employees or consultants who (x)
require access for Customer's authorized use of the Products and (y) agree to
comply with the use and non-disclosure restrictions applicable to the Products
under this Agreement. Customer shall cause any employee or consultant who has
access to the source code of the Software to expressly acknowledge its
confidential and proprietary nature. Customer acknowledges that any unauthorized
use or disclosure of the Products may cause irreparable damage to SNAP2, its
licensors and SNAP2. If an unauthorized use or disclosure occurs, Customer will
immediately notify SNAP2 and take, at Customer's expense, all steps which may be
available to recover the Products and to prevent their subsequent unauthorized
use or dissemination.
(c) Limitation. Customer will have no confidentiality obligation with respect to
any portion of the Products that (i) Customer knew or independently developed
before receiving the Products under this Agreement, (ii) Customer lawfully
obtained from a third party under no confidentiality obligation, (iii) became
available to the public other than as a result of any act or omission by
Customer or any of Customer's employees or consultants, or (iv) its disclosure
has been requested by any competent court or governmental authority.
12. TERM AND TERMINATION
(a) Term. This agreement will become effective as of the date set forth below
and continue in effect for an initial term of 12 months (the "Term"), unless
otherwise terminated pursuant to Section 12(b). This Agreement will
automatically renew for additional terms of 12 months each, unless either party
provides the other with written notice of its intention not to renew at least 30
days prior to the expiration of the Term or any renewal thereof.
(b) Termination for Convenience. Customer may terminate this Agreement, without
right to refund, by notifying SNAP2 of such termination.
(c) Termination for Cause. Customer may terminate this Agreement, immediately
upon notice to the other party and without judicial or administrative
resolution, if the other party or any of its employees or agents breach any term
or condition hereof and such breach is not cured within 60 days after receipt of
notice specifying the breach and demanding its cure; provided, however, that a
cure period shall be applicable to a breach of Sections 10 or 11 only if such
breach is, in the non-breaching party's opinion, reasonably capable of cure.
This Agreement will terminate automatically if either party becomes insolvent or
enters into bankruptcy, suspension of payments, moratorium, reorganization or
any other proceeding that relates to insolvency or protection of creditors'
rights. Upon the termination of this Agreement for any reason, all rights
granted to Customer hereunder will cease, and Customer will promptly (i) purge
the Software and Enhancements from the Designated Hardware and all of Customer's
other computer systems, storage media and other files, (ii) destroy the Products
and all copies thereof and (iii) deliver to SNAP2 a letter signed by an officer
of Customer which certifies that Customer has complied with these termination
obligations. Upon termination of this Agreement by Customer pursuant to Section
12(c), SNAP2 shall refund to Customer the pro-rated amount of the then-paid
license fee or maintenance fee for the remaining term of the Agreement. The
provisions of Sections 7, 8, 9, 10, and 11 will survive the termination of this
Agreement.
13. INSPECTION
During the term of this Agreement, SNAP2 or its representative may, upon
reasonable prior written notice to Customer, inspect the files, computer
processors, equipment, aircraft and facilities of Customer during normal working
hours to verify Customer's compliance with this Agreement. While conducting such
inspection, SNAP2 or its representative will be entitled to copy any item that
Customer may possess in violation of this Agreement.
14. ASSIGNMENT
Customer shall not assign, delegate or otherwise transfer this Agreement or any
of its rights or obligations hereunder without SNAP2's prior written approval.
SNAP2 agrees and understands that services and/or products provided by SNAP2
pursuant to this Agreement may be associated with, used or form
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part of an aircraft to be operated by or on behalf of Ladeco S.A., a Chilean
corporation duly formed and existing in accordance with the laws of the Republic
of Chile (hereinafter "Ladeco") and/or Lan Peru S.A.., a Peruvian corporation
duly formed and existing in accordance with the laws of the Republic of Peru
(hereinafter " Lan Peru") and/or any special purpose company designated by
Customer associated with the leasing, purchase or sale of aircraft by Customer
and/or its subsidiary companies (hereinafter "SPC"). Notwithstanding the
non-assignability restrictions set for the herein Customer will expressly assume
the license upon transfer. Any assignment is subject to the restriction of
Section 15.
15. EXPORT CONTROLS
Customer acknowledges that the Products and all related technical information,
documents and materials are subject to export controls under the U.S. Export
Administration Regulations. Customer will (i) comply strictly with all legal
requirements established under these controls, (ii) cooperate fully with SNAP2
in any official or unofficial audit or inspection that relates to these controls
and (iii) not export, re-export, divert or transfer, directly or indirectly, any
such item or direct products thereof to Cuba, Iran, Iraq, Libya, North Korea,
Sudan, Syria or any country that is embargoed by Executive order, unless
Customer has obtained the prior written authorization of SNAP2 and the U.S.
Commerce Department. Upon notice to Customer, SNAP2 may modify this list to
conform to changes in the U.S. Export Administration Regulations.
16. MISCELLANEOUS
All notices or approvals required or permitted under this Agreement must be
given in writing. Any waiver or modification of this Agreement will not be
effective unless executed in writing and signed by the parties. This Agreement
will bind the parties' successors-in-interest. This Agreement will be governed
by and interpreted in accordance with the laws of the State of Iowa, U.S.A. The
parties hereby exclude application of the U.N. Convention on Contracts for the
International Sale of Goods from this Agreement and any transaction between them
related thereto. If any provision of this Agreement is held to be unenforceable,
in whole or in part, such holding will not affect the validity of the other
provisions of this Agreement, unless either party in good faith deems the
unenforceable provision to be essential, in which case such party may terminate
this Agreement effective immediately upon notice to the other party. Any press
release or other public statement regarding this Agreement shall be mutually
agreed to between the parties. Either party SNAP2 may use the other's name in
its advertising collateral, subject to the prior approval of the other party,
which shall not be unreasonably withheld or delayed. This Agreement constitutes
the complete and entire statement of all conditions and representations of the
agreement between SNAP2 and Customer with respect to its subject matter and
supersedes all prior writings or understandings. It is expressly acknowledged
and agreed by the parties that their relationship is that of an independent
contractor. Except as expressly authorized by this Agreement, neither party
shall not enter into any contract or commitment, nor bring, initiate,
participate or prosecute any litigation whatsoever in the name of or on behalf
of the other party.
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THIS AGREEMENT IS NOT EFFECTIVE UNTIL SIGNED ON BEHALF OF BOTH PARTIES.
SNAP2 Corporation LanChile Airlines
- -----------------------------------------------------------------------------------------------------
("SNAP2") ("Customer")
By: Mark Malinak By: Luis Ernesto Videlab and Francisco Garcias
---------------------------------------- -------------------------------------------------
(Signature) (Signature)
Name: Mark Malinak Name: Luis Ernesto Videlab and Francisco Garcias
-------------------------------------- -------------------------------------------------
Title: VP Sales Title: President and CEO and Corporate Information Technology Services Director
------------------------------------- --------------------------------------------------------------------------
Date: 10/6/00 Date: 9/26/00
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PRODUCT SCHEDULE
Software: SNAP2 AifSoft(TM)Travel Kit Game Suite consisting of
[Confidential Treatment has been requested for this
portion of this Exhibit]:
[Confidential Treatment has been requested for this
portion of this Exhibit]
Computer Platform: Rockwell Collins TES Core D
Designated Hardware (S/N): Rockwell Collins TES
Designated Aircraft:
Maximum Number of Seats: Full cabin deployment
Annual License Fee: Aircraft pricing per year based on cumulative
quantity purchased.
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[Confidential Treatment has been requested for this portion of
this Exhibit]
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[Confidential Treatment has been requested for this portion of
this Exhibit]
Installation Fee: [Confidential Treatment has been requested for this
portion of this Exhibit]
Payment Due Date: Upon receipt of invoice
Content Updates are subject to Rockwell Collins restrictions and integration
fees. LanChile is responsible for all Rockwell Collins related integration and
rack costs.
Custom Content Services: [Confidential Treatment has been requested for this
portion of this Exhibit]
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