Exhibit 10.1
DATED MAY 27,2005
LITTLEWOODS PROMOTIONS
LIMITED
AND
ZONE4PLAY, INC.
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INTERACTIVE APPLICATIONS
AGREEMENT
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CONTENTS
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1.
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Definitions
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2
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2.
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The
Parties’ Obligations for Providing the
Applications
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3
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3.
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Grant of
License for Distributing Applications
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4
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4.
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Trademark
License
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5.
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Service Level
Agreement
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6
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6.
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Royalty/Revenue-Sharing Payments
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7.
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Promotion,
Publicity and Press Releases
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8.
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Representations
and Warranties
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7
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9.
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Confidentiality
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7
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10.
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Term and
Termination
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8
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11.
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Intellectual
Property Rights
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9
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12.
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Relationship of
the Parties
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9
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13.
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Zone4Play
Indemnification and Insurance
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10
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14.
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Limitations of
Liability
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10
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15.
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Littlewoods
Indemnification
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16.
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Dispute
Resolution
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17.
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No
Exclusivity
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18.
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Entire
Agreement and Amendments
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19.
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Assignment
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20.
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Force
Majeure
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12
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21.
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Severability
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12
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22.
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Governing
Law
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12
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23.
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Notices
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12
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24.
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Expenses
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13
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25.
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Construction
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26.
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Titles,
Headings and Subheadings
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13
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27.
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Counterparts
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13
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28.
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Authority and
Binding Effect
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13
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29.
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No
Waiver
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13
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30.
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Third Party
Rights
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Appendix A
– ITV Fixed Odds Games
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15
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Appendix B
– Multiplayer Games
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16
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Appendix C
– SMS Fixed Odds Games
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17
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Appendix D
– Net Revenue
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18
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Appendix E
– Zone4Play Services and Service Level Agreement
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20
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THIS AGREEMENT is made the 27th day of May 2005
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BETWEEN:
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1.
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LITTLEWOODS PROMOTIONS LIMITED,
a company incorporated under the
laws of England and Wales (registered number 00545018) whose
registered office is located at Sportech House, No.2 Enterprise
Way, Wavertree Technology Park, Liverpool L13 1FB ("
Littlewoods "); and
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2.
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ZONE4PLAY, INC. a company incorporated under the laws of the
state of Delaware, USA having its registered offices at 103 Faulk
Rd. Suite 202, Wilmington, Delaware, USA (“ Zone4Play
”);
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(each, a “ Party
” and together, the “ Parties
”).
WHEREAS , Littlewoods is a provider of interactive games
and other content (including without limitation games and content
for the interactive games service known as 'Littlewoods Game On'
provided on the ITV Channels in the United Kingdom) and is licensed
under a bookmakers' permit to provide online and interactive fixed
odds betting opportunities in connection with such interactive
games;
WHEREAS , Zone4Play is the owner of all rights, title,
and interests in and to one or more client and/or client-server
software applications compatible with mobile wireless platform,
Internet platforms and interactive digital TV platforms;
WHEREAS , Littlewoods desires to license certain
software applications from Zone4play on a non-exclusive basis for
distribution by UK service providers using one or more of the
platforms to Customers (as herein defined);
WHEREAS , Zone4Play desires to grant such a license to
Littlewoods and authorize Littlewoods as a non-exclusive
distributor of Zone4Play software applications;
WHEREAS , Zone4Play has agreed to serve, host and
maintain the said software applications on behalf of Littlewoods;
and
WHEREAS , Littlewoods shall provide for the purpose
hereof, customer support, e-wallet services and infrastructure
(without prejudice to Zone4Play's obligation to provide the
Zone4Play Services - including hosting the Applications as
specified for each Application in the Appendices of this Agreement)
to Littlewoods Game On as further discussed herein.
NOW THEREFORE
, in consideration of the foregoing
premises, and mutual covenants, promises and agreements herein
contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, with the
intention to be legally bound hereby, the Parties agree as
follows:
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1.
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Definitions
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In this Agreement:
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1.1
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" Acceptance Testing " shall mean the
tests on the Applications (devised by Littlewoods and/or an
Operator) to be carried out in order to establish (to Littlewoods'
reasonable satisfaction) that the Applications meet the Technical
Criteria;
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1.2
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" Application " shall mean, subject to
Clause 2.1, software applications that enable Customers to play the
games specified in Appendices A, B, and C, that are owned by
Zone4Play or for which Zone4Play otherwise holds sufficient rights
to grant the licenses set forth herein;
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1.3
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" Associate " shall mean in relation to a
Party any entity that is a subsidiary or a holding company of such
Party or any subsidiary of such holding company (whether direct or
indirect), and the expressions "subsidiary" and "holding company"
shall have the meanings ascribed thereto by section 736 of the
Companies Act 1985;
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1.4
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" Customer " shall mean any person that
is entitled to receive and view the television services (whether
interactive or linear) of any Operator;
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1.5
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" During All Hours " shall mean twenty
four (24) hours per day, three hundred and sixty five (365) days
per year and including 29 February in leap years;
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1.6
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" Effective Date " shall mean the date on
which this Agreement is signed by both of the Parties;
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1.7
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" Gross Win " the total amount of money
collected by Littlewoods from Customers in consideration of
Customers' use of the Applications, less winnings and
chargebacks;
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1.8
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"Intellectual Property Rights
" shall mean all inventions, rights
in designs, patents, copyright, trade marks, service marks,
database rights, trade names, domain names and all other
intellectual property rights and other rights and forms of
protection of a similar nature or effect which may subsist anywhere
in the world for the full term of such rights and any extensions or
renewals thereof subsisting prior to, at or after the Effective
Date (whether or not any of these rights are registered, and
including applications and the right to apply for registration of
any such rights as registered rights, anywhere in the
world);
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1.9
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" Launch Date " means the date on which
the first Application is made available to Customers by
Littlewoods;
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1.10
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" Littlewoods Services " shall mean
customer support, infrastructure and e-wallet services to be
provided by or procured by Littlewoods in connection with the use
which is made by the Customers of the Applications;
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1.11
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" Littlewoods Trademarks " shall mean any
trademarks, service marks, design marks, symbols, logos and/or
other indicia of source owned or used under license by Littlewoods,
and all goodwill associated therewith;
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1.12
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" Net Revenue " has the meaning set out
in Appendix D;
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2
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1.13
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" Operator " any person or entity with
whom Littlewoods or any of its Associates has an agreement for
Littlewoods or its Associate to produce and/or provide interactive
games or applications and any platform provider or multiplex or
cable operator transmitting the said content (and the term
"Operator" shall include ITV Network Limited, Sky Subscriber
Services Limited and Sky Interactive Limited), for their
broadcasting in the United Kingdom;
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1.14
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" Revenue Share " shall mean the share of
Net Revenue to be paid by Littlewoods to Zone4Play and to be
calculated in accordance with Appendices A, B and C;
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1.15
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" STBs " has the meaning given in Clause
8.1;
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1.16
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" Term " the period of time commencing on
the Effective Date and ending on the expiry or termination of this
Agreement;
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1.17
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" Technical Criteria " shall mean all the
technical requirements that an Operator shall make in respect of
interactive applications;
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1.18
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" Zone4Play Services " shall mean the
serving, hosting and maintenance services set out in Appendix E;
and
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1.19
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" Zone4Play Trademarks " shall mean any
trademarks, service marks, design marks, symbols, logos and/or
other indicia of source owned or used under license by Zone4Play,
and all goodwill associated therewith.
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2.
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The Parties’ Obligations for Providing
the Applications.
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2.1
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Zone4Play shall develop the Applications in
accordance with a specification and a timetable (the “
Timetable ”) each of which shall be negotiated in good
faith between the Parties. Zone4Play shall customize the look and
feel of the Applications exclusively for Littlewoods using such of
the Littlewoods Trademarks and such other materials (together, the
“ Littlewoods Materials ”) as shall be notified
by Littlewoods to Zone4Play from time to time (such customization
by Zone4Play being referred to in this Agreement as the “
Customization Work ”). Littlewoods shall have a right
of approval in its sole discretion over the final form of the
Applications following completion of the Customization Work (and,
unless the context otherwise requires, references in this Agreement
to the “ Applications ” shall be deemed to be
references to the Applications following completion of the
Customization Work to Littlewoods' satisfaction under this
Clause).
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2.2
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Zone4Play shall ensure that the Applications
comply in all respects with the Technical Criteria, and Zone4Play
shall integrate the Applications and the Littlewoods Services with
each other and with the technical infrastructure used by the
Operators according to any Operators' Technical Criteria in order
to make the Applications available for access and use by Customers.
Littlewoods and/or Zone4Play and/or any relevant Operator (as
necessary in each case) shall carry out Acceptance Tests on the
Applications (unless both of the Parties and the relevant Operator
all agree that such Acceptance Tests are not required in respect of
SMS games). If in Littlewoods' reasonable opinion an Application
meets the Technical Criteria then Littlewoods shall inform
Zone4Play in writing that it has accepted such Application.
Acceptance by Littlewoods after Acceptance Testing shall be deemed
completion and fulfilment of Zone4Play's obligation to meet the
Technical Criteria, but this shall be subject to and entirely
without prejudice to the representation and warranty provided by
Zone4Play at Clause 8.1(v) and the indemnity at Clause 13.1, both
of which provisions shall continue in full force and effect at all
times during and after this Agreement.
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3
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2.3
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For the avoidance of doubt, Littlewoods shall at
all times retain the sole and absolute discretion as to whether it
shall or shall not distribute any Application via any Operator(s)
to any Customer(s) from time-to-time and nothing herein shall be
construed as an obligation upon Littlewoods actually to launch the
Applications or any of them, or, once launched/if launched, to
maintain them in live usage. The only Application that Littlewoods
will be obliged to launch (subject to Clause 2.4) will be
multi-player poker (as referred to in Appendix B), which (subject
to Clause 2.4) shall remain accessible for a period of no less than
three (3) months from ITV1 via a Littlewoods or Littlewoods branded
menu subject to Clause 2.4. Littlewoods further confirms that it
will use its reasonable endeavours to ensure that ITV launches the
Applications in Appendix C however Littlewoods' failure to do so
will not create any liability whatsoever on the part of
Littlewoods. For the purpose of clarification, notwithstanding any
undertaking contained herein, Zone4Play shall not in any way be
obliged to provide Littlewoods and/or any Operator with any
Application other than multi-player poker as specified in Appendix
B unless, the Parties have agreed on the Timetable and launch date
for such Applications.
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2.4
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For the avoidance of doubt, Littlewoods shall
have no obligation to launch multi-player poker, to make
multi-player poker available on the services of any Operator, or
available to Customers, nor shall Littlewoods be obliged to
continue to make multi-player poker available (if it has been
launched) if Littlewoods has for any reason not been granted the
right to launch and make multi-player poker available as described
in Clause 2.3 by all relevant parties, or if such right has been
withdrawn from Littlewoods.
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2.5
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Zone4Play will provide the reports and materials
to Littlewoods with the frequency set against the relevant item in
the tables further detailed in section 2 of Appendix A.
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2.6
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Littlewoods shall be solely responsible for
providing the Littlewoods Services and for procuring the
availability of the necessary testing environment.
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2.7
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Littlewoods will track the activity and
transactions generated from the provision of the Applications to
the Customers, and will report such activity to Zone4Play in
accordance with Clause 6 below.
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2.8
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Notwithstanding anything to the contrary in this
Agreement, unless and until the Parties have (as set out in Clause
13.2) agreed in writing, the limitation on Zone4Play's liability
for any loss, damage, costs, expenses or other liability arising
directly or indirectly from Zone4Play's breach of Clauses 8.1(v)(a)
and 8.1(v)(b), neither party shall have any obligation to
distribute, use, deploy, configure or make available to any party
(including any Operator or Customer), any of the ITV Fixed Odds
Games (as set out in Appendix A) or the Multiplayer Games (as set
out in Appendix B).
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3.
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Grant of License for Distributing
Applications.
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3.1
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Zone4Play hereby grants to Littlewoods, during
the Term, a non exclusive license and right to distribute, promote,
and sub-license the Applications and to make the Applications
available for access and use by Customers and to deploy on and/or
incorporate the Applications within or in conjunction with the
services of any Operator PROVIDED THAT such right to sub-license
the Applications is subject to the terms of this Agreement and does
not in any way confer on Littlewoods any ownership right in the
Applications other than the Customisation Work. Zone4Play shall be
entitled to grant rights to any third party only in respect of
Applications as they stood prior to the Customisation Work having
been carried out on them and Zone4Play may not use itself nor
permit or authorise any third party to use any Customisation
Work.
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3.2
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Littlewoods hereby grants to Zone4Play, during
the Term, a limited, non-exclusive, non-transferable license to use
the Littlewoods Materials solely to the extent necessary for
Zone4Play to perform its undertakings under this Agreement
including the Customisation Work pursuant to Clause 2.1.
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4.
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Trademark License.
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4.1
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Zone4Play grants to Littlewoods, during the
Term, a worldwide, non-exclusive, royalty-free license to use the
Zone4Play Trademarks in online, print or any other media for the
purposes of promoting, selling, licensing, and distributing the
Applications to Operators and Customers.
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4.2
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Littlewoods acknowledges that all right, title
and interest in and to the Zone4Play Trademarks, including all
goodwill related thereto, are and shall remain owned solely and
exclusively by Zone4Play and that all usage of the Zone4Play
Trademarks by or on behalf of Littlewoods shall inure to the
benefit of Zone4Play.
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4.3
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Littlewoods agrees to comply with any and all
usage guidelines provided by Zone4Play to Littlewoods with respect
to the Zone4Play Trademarks, and shall supply, upon
Zone4Play’s written request, specimens of all advertising,
marketing and/or promotional materials in which a Zone4Play
Trademark appears to Zone4Play for inspection and approval, which
approval shall not be unreasonably withheld, delayed or made
conditional.
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4.4
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If Zone4Play has not indicated its approval or
rejection of such specimens within seven (7) business days after
receiving such specimens, such specimens shall be deemed approved
by Zone4Play. Zone4Play agrees to provide Littlewoods a copy of its
current trademark usage guidelines promptly upon execution of this
Agreement.
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4.5
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Zone4Play acknowledges that all right, title and
interest in and to the Littlewoods Materials (including without
limitation the Littlewoods Trademarks), including all goodwill
related thereto, are and shall remain owned solely and exclusively
by Littlewoods and that all usage of the Littlewoods Trademarks by
or on behalf of Zone4Play shall inure to the benefit of
Littlewoods. Zone4Play agrees to comply with any and all usage
guidelines provided by Littlewoods to Zone4Play with respect to its
use of the Littlewoods Trademarks in the provision of the
Customisation Work.
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4.6
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Zone4Play agrees to comply with any and all
usage guidelines provided by Littlewoods to Zone4Play with respect
to the Littlewoods Trademarks, and shall supply, upon Littlewoods'
written request, specimens of all advertising, marketing and/or
promotional materials in which Littlewoods Trademarks appear, to
Littlewoods for inspection and approval, which approval shall not
be unreasonably withheld, delayed or made conditional.
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5
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5.
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Service Level Agreement.
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Zone4Play shall provide the
Zone4Play Services to Littlewoods in accordance with the Service
Level Agreement attached at Appendix E.
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6.
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Royalty/Revenue-Sharing
Payments.
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6.1
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Revenues arising from the provision of the
Applications shall be shared between the Parties in accordance with
Appendices A, B or C as appropriate to the type of
Application.
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6.2
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In accordance with Littlewoods' accounting
calendar (details of which Littlewoods shall provide to Zone4Play
on Zone4Play's request). Littlewoods shall send Zone4Play a report
detailing the Net Revenue received from the Applications during the
previous Littlewoods accounting cycle, and the Revenue Share due to
Zone4Play in respect of that previous Littlewoods accounting
cycle.
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6.3
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Zone4Play shall invoice Littlewoods accordingly
for the Revenue Share and Littlewoods shall pay such invoice by the
end of the next four (4) or five (5) weekly cycle in Littlewoods'
accounting calendar. Strictly subject to any obligation of
confidentiality owned by Littlewoods or its Associates to any
Operators, Zone4Play shall have the right, at its cost, to audit
Littlewoods' books and accounts during the Term in relation to the
Net Revenue upon reasonable notice to Littlewoods but not more than
once in any twelve (12) month period during the Term.
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6.4
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The Revenue Share shall be paid to Zone4Play on
the basis that no VAT is payable on the Net Revenue or the Revenue
Share. However if subsequently the Parties discover that VAT is
payable on the Net Revenue and/or the Revenue Share then the
Revenue Share due to Zone4Play and the Net Revenue due to
Littlewoods shall be adjusted by the parties such that the VAT
shall be shared by both parties in the same proportion as the
parties share Net Revenue pursuant to Appendix D.
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7.
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Promotion, Publicity and Press
Releases.
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No Party shall publicize the terms
or the existence of this Agreement to any third party without prior
written consent from the other Party after their review and
approval of the form and content of any publicity release or other
press announcement. Zone4Play shall not imply or state to any
person or entity that it is sponsored by, funded by, or in any way
associated with Littlewoods other than as authorized by Littlewoods
pursuant to this Agreement. Similarly, Littlewoods shall not imply
or state to any person or entity that it is sponsored by, funded
by, or in any way associated with Zone4Play other than as
authorized by Zone4Play pursuant to this Agreement. This Clause 7
shall not apply to official filing of reports that either Party is
mandatorily required or compelled to submit to regulatory or
governmental bodies or authority as a public company, nor shall
this Clause 7 in any way prevent Littlewoods from informing any
Operator of the existence of this Agreement.
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8.
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Representations and Warranties.
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8.1
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By Zone4Play .
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Zone4Play hereby represents,
warrants and undertakes to Littlewoods and its Associates that: (i)
Zone4Play has the power and authority to enter into and perform its
obligations according to the terms of this Agreement; (ii)
Zone4Play has no restrictions that would impair its ability to
perform its obligations and grant all rights contemplated by this
Agreement; (iii) Zone4Play has not and will not enter into any
agreement that is inconsistent with its obligations hereunder; (iv)
Zone4Play is the owner or has obtained and currently holds valid
and sufficient rights, including rights in third party Intellectual
Property Rights, to license the rights granted to Littlewoods
herein and Littlewoods’ use and exploitation (and any
Customer’s and/or Operator’s use and/or exploitation)
of the Applications in the manner agreed to by this Agreement shall
not infringe the Intellectual Property Rights or other rights of a
third party; (v) all Applications will comply in all respects with
the Technical Criteria and none of the Applications shall directly
or indirectly: (a) write or seek to write to the flash memory, the
NVRAM or system memory of any or all of the set-top boxes of Sky
Subscriber Services Limited (" STBs "), or (b) have a
material adverse effect on the operation of any STB (including for
the avoidance of doubt on the viewing of any broadcast services or
the use of interactive TV services via such STB); (vi) Zone4Play is
the exclusive legal and beneficial owner of, or a properly
authorised licensee of all Intellectual Property rights in the
Zone4Play Trademarks; (vii) the Applications do not infringe any
applicable law or regulation and (for fixed odds Applications) are
in accordance with Sky Subscriber Services Limited’s policy
on fixed odds applications.
Littlewoods hereby represents,
warrants and undertakes to Zone4Play that it: (i) has the power and
authority to enter into and perform its obligations according to
the terms of this Agreement; (ii) has no restrictions that would
impair its ability to perform its obligations as contemplated by
this Agreement; and (iii) has not and will not enter into any
agreement that is inconsistent with its obligations hereunder; (iv)
Littlewoods and/or its Associates are the exclusive legal and
beneficial owner(s) of, or a properly authorised licensee(s) of all
Intellectual Property rights in the Littlewoods
Trademarks.
EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED IN THIS AGREEMENT, THE FOREGOING WARRANTIES ARE THE ONLY
WARRANTIES GIVEN BY EACH PARTY AND ALL OTHER WARRANTIES OR
CONDITIONS, WHETHER EXPRESS OR IMPLIED BY STATUTE OR OTHERWISE, ARE
SPECIFICALLY EXCLUDED BY THE PARTIES, INCLUDING WITHOUT LIMITATION,
IMPLIED WARRANTIES OF MERCHANTIBILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
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9.
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Confidentiality .
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9.1
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The Parties agree that during the Term there may
be a need to exchange certain confidential or proprietary
information. In this Agreement, “ Confidential
Information ” shall be defined as the terms of this
Agreement and any confidential, trade secret, or other proprietary
information disclosed by any Party (the “ Disclosing
Party ”) to the other Party (the “ Receiving
Party ”) under this Agreement. Confidential Information
shall not include information that (i) is public knowledge at the
time of disclosure, (ii) was known by the Receiving Party before
disclosure by the Disclosing Party, or becomes public knowledge or
otherwise known to the Receiving Party after such disclosure, other
than by breach of the confidentiality obligations of this
Agreement, or (iii) is independently developed by the Receiving
Party by persons without access to Confidential Information of the
Disclosing Party.
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7
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9.2
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The Receiving Party shall during the Term and
following expiry or termination of this Agreement limit disclosure
of Confidential Information to such of its Associates, employees
and agents who have a strict need to know such information in the
performance of the Receiving Party’s duties hereunder, and
shall not disclose the Confidential Information to any third party
other than its professional and legal advisers (or in the case of
Littlewoods to such Operators who have the need to know the
same).
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9.3
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The Receiving Party shall take appropriate
action, by instruction, agreement, or otherwise, with any persons
permitted access to the Disclosing Party’s Confidential
Information in accordance with Clause 9.2 so as to assure that they
will hold such items in confidence. All Receiving Party personnel
who receive or use the Confidential Information of the Disclosing
Party shall, before receipt or use of such information, be
info
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