EXHIBIT 10.27
WORLDWIDE TECHNOLOGY AND
TRADEMARK SUBLICENSE AGREEMENT
This Worldwide Technology and Trademark Sublicense Agreement ("Agreement")
is entered into as of the 31st day of December, 1995, by and between IWN, Inc.,
a Delaware corporation ("IWN") and IWN, L.P., a limited partnership formed under
the laws of the State of Delaware ("LP").
BACKGROUND
NTN Communications, Inc. ("NTN") has developed and is the sole owner of
certain technology, together with certain inventions and improvements for a two-
way interactive computerized broadcast system and certain other Technology (as
defined herein) which may be utilized for Gaming Applications (as that term is
defined herein). NTN and IWN have previously entered into a certain Technology
License Agreement dated as of November 3, 1993, as amended and restated in the
Amended and Restated Technology and Trademark License Agreement dated as of
December 31, 1995.
IWN and LP have previously entered into a certain Technology Sublicense
Agreement dated as of September 30, 1994 ("Original Sublicense"), as amended and
restated in the Amended and Restated Technology and Trademark Sublicense
Agreement dated as of December 31, 1995, in order to secure the exclusive right
and license to use, develop, manufacture and exploit the Technology and the
Trademarks for Gaming Applications (as that term is defined herein) in the
United States and Canada ("North America Sublicense Agreement"). Prior to the
date hereof, LP has exploited the Technology in order to develop, research,
sell, distribute and market the products and services to businesses throughout
the United States and Canada engaged in Gaming Applications (as that term is
defined herein).
IWN and LP now desire to enter into this Agreement on the terms and
conditions as more fully described. It is intended that LP be the sole and
exclusive sublicensee of the Technology for Gaming Applications.
IWN is also granting to LP an exclusive sublicense of its right to use the
Trademarks (as defined herein) for Gaming Applications (as that term is defined
herein), as more fully described herein.
The sublicenses granted herein and in the Original Sublicense were granted
in partial consideration for IWN's agreement to use its best efforts to
research, develop, sell, distribute, and market the Technology.
NOW, THEREFORE, in consideration of the premises and of the promises and
covenants contained herein, and intending to be legally bound hereby, the
parties agree as follow:
1. SUBLICENSE OF TECHNOLOGY/TERM. Commencing on the date hereof, up
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through and including December 31, 2024 (the "Term"), IWN hereby grants to LP,
subject to the terms herein,
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and as permitted by law, an exclusive, paid-up, royalty-free, right and
sublicense to the Technology for Gaming Applications ("Sublicense") and for no
other purpose whatsoever throughout the Territory as that term is defined
herein. For purposes herein, "Gaming Applications" shall be defined as any
interaction where any sum of money is risked on an uncertain outcome, such as
casino gaming, pari-mutuel wagering, lottery, sports betting, bingo, or other
forms of gaming or wagering. For purposes herein, "Technology" shall mean the
source code, object code, software and written documentation therefor contained
in a manual entitled "The Book of All Knowledge" which relates to interactive
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computerized broadcast systems ("Systems"), use or sale of the Systems,
specifications and data which NTN has heretofore developed or owns, or may
hereafter develop or own, at any time during the Term of this Agreement, to
which Technology IWN is the exclusive licensee for Gaming Applications, as are
more specifically set forth in Exhibit A hereto, except in the event that NTN
does not wholly own such Technology, or in the event that such Technology is
based upon or derived from a third party, such rights and sublicense granted
herein shall be subject to any and all restrictions imposed by such third party.
Absent an event which causes the release of the Technology from escrow to any
entity other than NTN as depositor pursuant to the Escrow Agreement to be
entered into by and among NTN, IWN and Data Securities International Inc.
("Technology Escrow"), as more fully described in Section 9 hereof, the
Technology and Trademarks and all rights and sublicenses granted herein shall
automatically revert back to IWN at the expiration of the Term.
2. TERRITORY. The grant of rights and sublicenses set forth herein are
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made on a worldwide basis. As consideration for the expansion of the territory
in the North America Sublicense and Amendment and Restatement thereof, to
include the remainder of the world beyond the United States and Canada (the
"Territory"), receipt of which is hereby acknowledged, LP shall pay to IWN the
sum of Six Hundred Thousand Dollars ($600,000.00), evidenced by a Promissory
Note executed contemporaneously with the execution of this Agreement.
3. IMPROVEMENTS. IWN and LP agree that for purposes of carrying out the
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terms and conditions of this Agreement, all additions, improvements and
modifications to the Technology, together with the documentation therefor which
is contained in a manual entitled "The Book of All Knowledge" (collectively,
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"Improvements"), IWN shall furnish directly to LP and LP shall have the right
and sublicense to employ such information in its business without cost or
restriction to LP, except that in the event that such Technology and/or
improvements are based upon or derived from a third party other than NTN, such
right and sublicense granted herein shall be subject to any and all restrictions
imposed upon NTN by such third party.
4. SUBLICENSE OF TRADEMARKS. IWN hereby grants to LP an exclusive, paid-
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up, royalty-free right and license ("Trademark License") to use all trademarks,
service marks, trade names, copyrights and identifying slogans, whether
registered or not (collectively, "Trademarks"), which include, without
limitation, those Trademarks listed on Exhibit B attached hereto, for Gaming
Applications in connection therewith throughout the Territory and during the
Term, and LP hereby accepts the Trademark License, except in the event that NTN
does not wholly own such Trademarks , or in the event that NTN's rights in and
to such Trademarks are based upon or derived from a third party, such rights and
sublicense granted herein shall be subject to any and all restrictions imposed
by such third party.
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5. REPRESENTATIONS AND WARRANTIES OF IWN. IWN represents and warrants
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that it is the sole and exclusive licensee of the Technology for which the
Sublicense is granted, that it has the legal right and authority to grant the
sublicenses hereunder under the terms and conditions set forth in this
Agreement, and that to the best of its knowledge, there are no suits or other
actions pending or threatened against IWN for patent infringement or other
claims that may affect LP's right to make, use or otherwise exploit the
Technology in the manner contemplated by this Agreement, with the exception of
those actions disclosed pursuant to the Investment Agreement between NTN, IWN
and Symphony Management Associates, Inc. ("Investment Agreement"). IWN further
represents that to the best of its knowledge, there is nothing that would affect
the validity of its rights in and to the Technology nor would require the
payment of any royalty, license fee or other charge or fee of any kind to any
person or entity, except for the additional sublicensee fee set forth herein,
and IWN has not received any notice of any adverse claim by any third party with
respect thereto, with the exception of those actions disclosed pursuant to the
Investment Agreement. IWN covenants and agrees that throughout the Term of this
Agreement, it will take all steps necessary to maintain and preserve LP's rights
to the Technology and the Sublicense hereunder.
6. REPRESENTATIONS AND WARRANTIES OF LP. LP hereby represents and
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warrants that it shall take all reasonable steps to establish, maintain and
protect NTN's rights in the Technology and Trademarks, including, without
limitation, taking any actions reasonably requested by NTN to confirm or vest
ownership in NTN at NTN's sole cost and expense. LP shall not, directly or
indirectly, nor shall it permit any of its sublicensees, assigns, affiliates (as
defined herein), officers, directors or employees to misuse, misappropriate,
hypothecate or take any other actions which may reasonably be considered to be
inconsistent with the ownership rights of NTN in and to such Technology and
Trademarks and goodwill associated therewith.
7. CONFIDENTIALITY AND NON-COMPETITION.
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(a) IWN hereby acknowledges and agrees that all documents, records,
techniques, processes and other business secrets and confidential information
which has come into its possession relating to Gaming Applications for the
Technology ("Confidential Information") which includes, without limitation, the
identity of customers and confidential information of those customers, contracts
with vendors and suppliers of LP, LP documentation, LP finances and operations,
and applications of Technology to Gaming Applications, is confidential and
proprietary to LP. IWN shall keep confidential and not divulge to any other
person (except for those designated by LP in writing) all of the Confidential
Information.
(b) For so long as this Agreement remains in effect, IWN shall not,
directly or indirectly, as agent, joint venturer or otherwise, have any direct
or indirect financial interest (with the exception of its investment in LP), nor
shall it permit any of its subsidiaries, affiliates (with respect to any
individual or entity regardless of form ("Person"), any other Person directly,
or indirectly through one or more intermediaries, controlling, controlled by or
under common control), directors or officers to engage in any form of business
competing directly or indirectly with any of the businesses of LP anywhere in
the world, which the parties agree for purposes of this provision shall be all
Gaming Applications. Ownership by any of the foregoing of stock listed on a
national
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securities exchange of any corporation conducting such competing business shall
not be deemed to be a violation of this Section 7(b), provided that such person
does not own more than an aggregate of 5% of the stock of such corporation.
(c) In the event of a breach or any threatened breach by IWN of the
provisions of this Agreement, LP shall be entitled to an injunction restraining
IWN from disclosing, in whole or in part, the Confidential Information or from
participation in violation of this Agreement in any business which competes
directly or indirectly with any of the businesses described herein. Nothing in
this Agreement shall be construed as prohibiting LP from pursuing any other
remedies available to it for any such breach or threatened breach, including
without limitation, the recovery of damages from IWN. The covenants contained
in this Agreement shall run in favor of LP and its permissible successors and
assigns.
(d) LP hereby acknowledges and agrees that all documents, records,
techniques, processes and other business secrets and confidential information
which has come into its possession relating to NTN's Systems and the information
contained in "The Book of All Knowledge" ("Proprietary Information"), excepting
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only as such applies to Gaming Applications for the Technology, and which
further includes, without limitation, the identity of customers and confidential
information of those customers, contracts with vendors and suppliers of NTN, NTN
documentation, NTN finances and operations, and applications of Technology to
other than Gaming Applications, is confidential and proprietary to NTN, as the
case may be. LP shall keep confidential and not divulge to any other person
(except for those designated by NTN in writing) all of the Proprietary
Information.
(e) For so long as this Agreement remains in effect, LP shall not,
directly or indirectly, as agent, joint venturer or otherwise, have any direct
or indirect financial interest, nor shall it permit any of its subsidiaries,
affiliates (with respect to any Person, any other Person directly, or indirectly
through one or more intermediaries, controlling, controlled by or under common
control), directors or officers to engage in any form of business competing
directly or indirectly with any of the businesses of NTN anywhere in the world,
which the parties agree for purposes of this provision shall be relating to
NTN's Systems and the information contained in "The Book of All Knowledge",
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other than as such is used in connection with Gaming Applications. Ownership by
any of the foregoing of stock listed on a national securities exchange of any
corporation conducting such competing business shall not be deemed to be a
violation of this Section 7(e), provided that such person does not own more than
an aggregate of 5% of the stock of such corporation.
(f) In the event of a breach or any threatened breach by LP of the
provisions of this Agreement, NTN and/or IWN shall be entitled to an injunction
restraining LP from disclosing, in whole or in part, the Proprietary Information
or from participation in violation of this Agreement in any business which
competes directly or indirectly with any of the businesses described herein.
Nothing in this Agreement shall be construed as prohibiting NTN and/or IWN from
pursuing any other remedies available to it for any such breach or threatened
breach, including without limitation, the recovery of damages from LP. The
covenants contained in this Agreement shall run
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in favor of NTN, IWN and its/their permissible successors and assigns, and shall
bind LP and its permissible successors, assignees and sublicensees.
8. INDEMNIFICATION.
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(a) IWN agrees to indemnify, defend and hold harmless LP and its
permissible assignees from any and all claims brought by any party and any
expenses (including reasonable attorneys' fees). which arise from the Technology
and the Trademarks relating to (i) a breach of any of the representations and
warranties hereunder and (ii) any claim of infringement of a patent or other
proprietary right held by a third party.
(b) In the event of a claim by a third party, LP or its permissible
assignee shall so notify NTN in writing of any claim within twenty (20) days
following receipt of a claim made by a third party with respect to an alleged
infringement of the Technology and the Trademarks. LP or its permissible
assignees, as the case may be, shall be entitled to control the defense and
settlement thereof provided, however, that any such settlement shall not impose
any obligations or restrictions upon IWN without its prior consent.
9. TECHNOLOGY ESCROW. Not later than ninety (90) days after December 31,
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1995, NTN shall deposit into escrow all of the source code relating to the
software, and the documentation therefor which is contained in a manual entitled
"The Book of All Knowledge" relating to the software and hardware used in, or in
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conjunction with, the System and the Technology, NTN, IWN and LP shall enter
into a mutually agreeable Technology Escrow Agreement governing such deposit
into escrow.
10. ASSIGNMENT. This Agreement may not be assigned by IWN or LP without
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the prior written consent of the non-assigning party and NTN, except that LP
shall be permitted to assign its rights herein to a successor to LP, pursuant to
a reorganization of LP for the sole purpose of changing to a corporate form or
other form of business entity, which entity continues the business of LP and is
further subject to the terms and conditions of this Agreement.
11. GOVERNING LAW. This Agreement shall be governed by, construed and
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enforced in accordance with the laws of the State of California without regard
to conflicts of law principles.
12. CONSENT OF NTN TO SUBLICENSE. NTN hereby acknowledges and consents to
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this Sublicense. Provided that there has not been a material breach by LP of
this Agreement, or of the North Sublicense Agreement, which breach is reasonably
capable of being cured and of which LP has been given written notice and has
cured such breach within ten (10) days of receipt of such notice, the License
Agreement shall remain in effect for the Term. In the event of a material
breach by LP of this Agreement, NTN shall have the right, in its sole
discretion, to cancel the License Agreement and all sublicenses thereof, which
right shall further entitle NTN to remove all items deposited into the
Technology Escrow as described in Section 9 hereof. Notwithstanding the
foregoing, NTN hereby agrees to take no action to either cancel this Agreement
or to remove any deposits made by NTN into the Technology Escrow in the event of
a breach by IWN, provided that
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such breach is not directly in violation of this Agreement or the result of any
actions taken by LP or any of its permissible successors, assigns or
sublicensees.
13. NOTICES. Notices, statements, reports or other communications under
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this Agreement shall be in writing and shall be deemed as having been received
as of the date dispatched if sent by telecopier, express mail and addressed as
follows:
If to NTN or IWN:
5966 La Place Court
Carlsbad, California 92008
Attn: Laura Kass, Esquire
Telecopier No. 619-929-5293
With copies to:
Troy & Gould, Professional Corporation
1801 Century Park East, 16th Floor
Los Angeles, California 90067-2367
D. Gould, Esquire
Telecopier No. 310-201-4746
If to LP:
IWN, L.P.
5966 La Place Court
Carlsbad, California 92008
Attn: Colleen Anderson, President
Telecopier No. 619-930-1174
and Symphony IWN Investment LLC
Symphony Management Associates, Inc.
900 Bestgate Road, Suite 400
Annapolis, Maryland 21801
Attn: Richard J. Donnelly
Telecopier No. 410-573-5205
and Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103
Attn: William R. Sasso, Esquire
Telecopier No. 215-564-8120
or to such other addresses and telecopier numbers as the party to whom notice is
to be given may have previously furnished to the other party in writing.
14. MISCELLANEOUS. This Agreement may be executed in several
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same
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instrument. This Agreement, including the exhibits hereto, constitutes the
entire agreement between the parties concerning the subject matter hereof, and
will supersede all previous communications, representations, understandings, and
agreements, either oral or written between the parties. Whenever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of this Agreement. This Agreement shall be
deemed to obligate, extend to, and inure to the benefit of the permitted
successors, transferees, grantees, affiliates, indemnities, agents and
representatives.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
IWN, INC. IWN, L.P.
[SIGNATURE ILLEGIBLE] /s/ Colleen Anderson
By:---------------------------------- By:------------------------
Chairman President & CEO - G.P
Its:--------------------------------- Its:-----------------------
The undersigned acknowledges the terms
and conditions contained in Section 12
hereof and agrees to be legally bound
thereby.
NTN COMMUNICATIONS, INC.
[SIGNATURE ILLEGIBLE]
By:----------------------------------
Chairman
Its:---------------------------------
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EXHIBIT A
- ---------
BROADCAST CENTER ( SERVER ) - CONTROL SOFTWARE
Sender
Queue Manager
Satmon
Operator
Director
Ed Scores
Site Activity
BROADCAST CENTER ( SERVER ) - APPLICATION SOFTWARE
Ref
Emcee
Umpire
Lineman
Commissioner
Judge
Players Plus
HOSPITALITY SITE ( CLIENT ) - CONTROL SOFTWARE
Supervisor
Idsio
HOSPITALITY SITE ( CLIENT ) - APPLICATION SOFTWARE
Trivia ( Countdown/Showdown )
Trivia2 ( Trivial Pursuit )*
Tivia3 ( Sports IQ/Passport/Spotlight)
Qb1*
Diamondball*
Triples
PowerPlay*
Uppercut
Fantasy
ONLINE HOST ( SERVER ) - CONTROL SOFTWARE
Router ( TCP/IP)
Host
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ONLINE HOST (SERVER) - APPLICATION SOFTWARE
Trivia
Qb1*
Fantasy*
ONLINE USER (CLIENT) - APPLICATION SOFTWARE
Trivia
Qb1*
Fantasy*
INTERNATIONAL SITE (CLIENT) UNIQUE APPLICATION SOFTWARE
Ruggers (Rugby)*
ARF (Australian Rules Football)*
CABLE TV HEADEND (SERVER) SOFTWARE
Qb1*
Poker
BlackJack
Reversi
Checkers
Trivia
Uppercut
Triples
REMOTE DATA TERMINAL HARDWARE (PLAYMAKER)
HOME DATA TERMINAL HARDWARE (BASE STATION)
*Rights derived from third party; restricted
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EXHIBIT B
- ---------
NTN COMMUNICATIONS, INC. TRADEMARKS
- -----------------------------------
Brain Buster(R)
Countdown(R)
Dreamteam Baseball and Design(R)
Hoops and Design(R)
Link-up Live and Play The World(R)
Nightside(R)
NTN(R)
NTN DiamondBall(R)*
NTN Entertainment Network(R)
NTN Power Play(R)*
Playmaker(R)
Playersplus(R)
QB1(R)*
Showdown(R)
Sports Trivia(R)
Sports Trivia Challenge(R)
The Face of Entertainment(R)
Triviaoke(R)
Undercover(R)
Uppercut(R)
Viewer's Review(R)
*Rights derived from third party; restricted
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