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EXHIBIT 10.12
AMENDED AND RESTATED
INTERNET GAME DEVELOPMENT AGREEMENT
This Internet Game Development Agreement (the "Agreement") is effective
as of July 24, 2000 (the "Effective Date"), by and between ▇▇▇▇▇▇▇ Television,
Inc. ("PTV Inc."), a New York corporation with its principal place of business
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇▇▇▇ Television
Netherlands ("PTV Netherlands"), a branch of ▇▇▇▇▇▇▇ Television France EURL;
▇▇▇▇▇▇▇ Television Holdings, Inc.; ▇▇▇▇▇▇▇ Television North America, Inc.;
▇▇▇▇▇▇▇ Television Limited, and their respective subsidiaries (collectively,
"Pearson"); and Uproar Inc. ("Uproar"), a Delaware corporation with its
principal place of business at ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, formerly
trading as E-Pub(Holdings) Ltd.
WHEREAS, Uproar develops, operates and maintains interactive games on
sites on the world-wide-web portion of the Internet currently located at the URL
(as hereinafter defined) "▇▇▇.▇▇▇▇▇▇.▇▇▇" (with related web pages at other
URLs); and
WHEREAS, Pearson is the owner of certain television game shows and the
rights to develop derivative works based on such game shows; and
WHEREAS, the parties entered into an agreement dated January 12, 1999
(the "1999 Agreement") whereby Pearson licensed to Uproar the right to develop,
and agreed to cooperate with Uproar to develop, Internet Versions (as
hereinafter defined) of certain specified television game shows, and
WHEREAS, the parties wish to extend the 1999 Agreement and amend
certain terms thereof by entering into this Agreement, which amends and restates
the provisions of the 1999 Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1 Definitions. When used in this Agreement each of the following shall
have the following respective meanings:
1.1 "Advertising" shall include but shall not be limited to
sponsorships, promotions, banners (including banners that
scroll along with text and banners appearing between moving
streams of headlines, so called "tickers"), animated type,
animated images, interactive trivia, pop-up windows, road
blocks, intermercials (animated commercials), interstitials,
logo placements and other relationships, materials or devices
to be developed or agreed upon by the parties and used on the
Site or any Affiliate web sites.
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1.2 "Affiliate" shall mean any corporation or other business
entity that directly or indirectly controls, is controlled by,
or is under common control with a party. Control means direct
or indirect ownership of or other beneficial interest in fifty
percent (50%) or more of the voting stock, other vesting
interest, or income of a corporation or other business entity.
1.3 "Uproar Production and Marketing Information" shall mean
knowledge or information acquired, developed, or possessed by
Uproar (with the right to disclose the same to others) at any
time during the term of this Agreement, or prior thereto,
which relates to (i) the development, production and marketing
of the Licensed Internet Games; (ii) the integration of the
Licensed Internet Games into the Site; (iii) the design,
hosting and maintenance of the Site; (iv) the integration of
advertising into the Site; (v) the rotation of advertising
throughout the Site, electronic commerce conducted on or
through the Site; (vi) the hyperlinking of the Site to other
web sites; and (vii) information acquired by Pearson from
Uproar pursuant to the financial and business relationships
established under this Agreement, as well as any information
pertaining to the marketing, advertising or sale of the
Licensed Internet Games as Uproar may in its sole discretion
choose to make available to Pearson.
1.4 "Games" shall mean the following television game shows
(including Game Show Formats):
a) Family Feud (aka Family Fortunes) ("Family Feud")
b) To Tell the Truth ("To Tell the Truth")
c) Match Game (aka Blankety Blank) ("Match Game")
d) 100% ("100%")
1.5 "Game Show Format" shall mean rules, procedures, "look and
feel" and such other elements of the Games as Pearson shall
make available to Uproar for development. The Game Show Format
shall not include talent, guests, or television advertisements
(except in the event that any rights to such material are
explicitly granted to Uproar in writing by Pearson) and
Pearson shall make reasonable efforts to include artwork,
photographs, question banks from previously televised shows,
scripted celebrity banter and four episodes (not for
transmission via the Internet) of each Game for use in the
development process.
1.6 "Launch" shall mean making available to all users of the Site
a version of a Licensed Internet Game that reasonably conforms
to the Specifications and has been beta-tested and all
material bugs thereby revealed have been substantially removed
such that the version is intended, and is promoted, as a
fully-functioning version of the Licensed Internet Game. For
the avoidance of doubt, the making available of a Licensed
Internet Game through the Site in a form to which access is
deliberately restricted to a
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subset of the users of the Site is not for the purposes of
this definition the making available of such Game to all users
of the Site.
1.7 "Local FF" shall mean a first-run English language television
show owned, produced and/or distributed by Pearson in a local
television market of any English speaking country which is
based on or substantially similar to Family Feud.
1.8 "Local FF Internet Version" shall mean an Internet Version of
a Local FF.
1.9 "Local 100%" shall mean a first-run English language
television show owned, produced and/or distributed by Pearson
in a local television market of any English speaking country,
which is based on or substantially similar to 100%.
1.10 "Local 100% Internet Version" shall mean an Internet Version
of a Local 100%.
1.11 "Local Match Game" shall mean a first-run English language
television show owned, produced and/or distributed by Pearson
in a local television market of any English speaking country,
which is based on or substantially similar to Match Game.
1.12 "Local Match Game Internet Version" shall mean an Internet
Version of a Local Match Game.
1.13 "Local Truth" shall mean a first-run English language
television show owned, produced and/or distributed by Pearson
in a local television market of any English speaking country,
which is based on or substantially similar to To Tell the
Truth
1.14 "Local Truth Internet Version" shall mean an Internet Version
of a Local Truth.
1.15 "Licensed Internet Games" shall mean collectively the Internet
Versions of the Games;
1.16 "Internet" shall mean a global network of interconnected
computer networks, each using the Transmission Control
Protocol/Internet Protocol and/or such other standard network
interconnection protocols as may be adopted from time to time,
which is used to transmit content that is directly or
indirectly delivered to a computer or other digital electronic
device for display to an end-user.
1.17 "Internet Version" shall mean, subject to Section 3.5 below,
the authorized derivative work based on a Game Show Format
that is a single-player or multi-player game primarily
comprised of a combination of text, graphics and animation
(i.e., is not merely an animated version of the television
show upon which the Internet Version is based) distributed on
the World Wide Web portion of the Internet through Internet
Protocols (including proprietary languages of Internet service
providers such as, by way of example and not by way of
limitation, "Rainman") for execution on an Internet hosting
server, provided however that Internet Versions shall not
include:
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a) stand-alone hand-held games or any other stand-alone
game-console platforms or CD-Roms,
b) enhanced or interactive television games (whether
primarily text and graphics based or video based and
whether intended for play along synchronously with a
television programme or on a stand-alone basis) being
games capable of receipt only through "Walled Garden"
television services by subscribers to such services
as proprietary content, and which therefore are not
capable of receipt through the World Wide Web portion
of the Internet, it being understood that games
re-purposed for receipt from the World Wide Web
portion of the Internet through a television receiver
are included in the definition of Internet Version,
c) games distributed through WAP service or any other
service primarily intended to be received through a
mobile phone, Personal Digital Assistant or other
wireless receiver, or
d) games distributed in a format that may be downloaded
or copied by a recipient and played when the
recipient is not connected to the Internet.
1.18 "Licensed Marks" shall mean the trademarks and service marks
that are listed on the attached Exhibit B, as well as such
other indicia of origin as Pearson may from time to time
designate by written notice served upon Uproar.
1.19 "Coverage" shall mean the average quarterly percentage of
United States households (as reported by ▇▇▇▇▇▇▇ Media
Research ("▇▇▇▇▇▇▇")) that can receive a television show,
whether via broadcast or cable transmission. Pearson shall
inform Uproar from time to time and on no less than a monthly
basis of the coverage levels provided by ▇▇▇▇▇▇▇.
1.20 "Gross Revenue" shall mean all revenues received by Uproar
that are directly related to the exploitation of the Licensed
Internet Games including without limitation (i) revenue from
the sale of Advertising on pages of the Site and affiliated
web sites on which any of the Licensed Internet Games appear;
(ii) revenue from advertising linked to pages on which
Licensed Internet Games appear (such as jump pages or
interstitials); (iii) subscription revenues; (iv) revenues
from sub-licensing or syndicating versions of the Licensed
Internet Games; and (v) any commission or other revenue based
on merchandise sales related to the Licensed Internet Games;
but excluding advertising agency commissions. Goods or
services received in barter arrangements shall not be included
in Gross Revenue, provided however that Uproar shall not
accept any Advertising on a barter basis for the Licensed
Internet Games without the prior written approval of Pearson.
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1.21 "Net Revenue" shall mean the Gross Revenue received by Uproar
less: (i) fifteen percent (15%) format royalty (of gross
revenue) payable to PTV Netherlands; (ii) site maintenance
costs of $120,000.00 per annum; (iii) prizes (not to exceed
the greater of $10,000.00 per month, per game or five percent
(5%) of gross revenue); (iv) music and talent (including
clearance) cost for rights for use in the Licensed Internet
Games which have been negotiated for Uproar by Pearson; (v)
direct marketing costs; (vi) question research and development
(namely cost of sorting and selecting old questions and
developing new questions); (vii) traffic and usage research
and ratings related to the Licensed Internet Games; (viii)
actual registration and filing fees (if any) related to
gaming; and (ix) sales commissions of fifteen percent (15%)
payable to Uproar.
1.22 "Television Broadcast Year" shall mean the period of twelve
(12) consecutive months during the Term (as defined in Section
2, below) of this Agreement beginning on the launch date of
any U.S. Local Television Show (as hereinafter defined), and
each subsequent Television Broadcast Year to begin at the
expiration of the preceding Television Broadcast Year.
1.23 "Pearson Production and Marketing Information" shall mean
knowledge or information acquired, developed, or possessed by
Pearson (with the right to disclose the same to others) at any
time during the Term of this Agreement, or prior thereto,
which relates to the development, production and marketing and
distribution of the Licensed Internet Games and such other
information necessary for, or useful in, the production,
development of the Licensed Internet Games, as well as any
knowledge or information pertaining to the marketing,
advertising, or sale of the Licensed Internet Games as
Pearson, in it sole discretion, may choose to make available
to Uproar.
1.24 "Territory" shall mean the entire world.
1.25 "UPROAR" shall mean an Uproar service ▇▇▇▇, U.S. service ▇▇▇▇
Application Serial No. 75/370,336.
1.26 "URL" shall mean a Universal Resource Locator (which may or
may not include a domain name) used to access objects via the
Internet.
1.27 "UK Version" shall mean a version of a Licensed Internet Game
designed to tie into the version of the Game that is broadcast
in the United Kingdom or is otherwise tailored for the United
Kingdom market.
1.28 "US Version" shall mean a version of a Licensed Internet Game
designed to tie into the version of the Game that is broadcast
in the USA or is otherwise tailored for the US market.
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1.29 "U.S. Local Television Show" shall mean a syndicated first-run
English language television show created, produced and/or
distributed by Pearson in U.S. television markets, which is
based on or substantially similar to Family Feud, To Tell the
Truth, 100% or Match Game.
1.30 "Best Internet Games" shall have the meaning ascribed thereto
in Section 5.2 below.
1.31 "Guaranteed Minimum" for a given year and/or Game shall mean
the amount specified in Section 14.3 as the payment Uproar
guarantees to PTV Netherlands for such year and/or Game.
1.32 "Pearson Income", in respect of a Game, shall mean,
collectively, the royalty payable in respect of the Internet
Versions of such Game pursuant to Section 14.1 below and the
share of Net Revenues in respect of the Internet Versions of
such Game pursuant to Section 14.2 below.
1.33 "Year" shall mean, as the context requires, the First Year,
the Second Year, the Third Year, the Fourth Year or the Fifth
Year, as such terms are defined in Section 14.3 below.
1.34 "Site" shall mean the Uproar web site the home page of which
is located at the URL ▇▇▇.▇▇▇▇▇▇.▇▇▇, and all linked and
related Uproar web pages.
2 Term. This Agreement shall be effective on the date of execution, and
shall continue until 30th June 2005, subject to Section 14.3(h) below.
3 Grant.
3.1 License. PTV Netherlands hereby grants to Uproar and its
Affiliates (the "Uproar Grantees"), during the Term of this
Agreement, and subject to the provisions hereof, the sole and
exclusive worldwide right and license to create, produce,
copy, use, perform, display and transmit (via the Internet)
the English language Internet Versions of the Games, and to
use the Licensed Marks with respect to the creation,
production, performance and display of the English language
version of the Licensed Internet Games, but only so long as
such Licensed Internet Games are made available on the world
wide web portion of the Internet and produced in accordance
with this Agreement.
3.2 Launch Schedule. It is understood and agreed that Uproar shall
launch the Licensed Internet Games in accordance with the
schedule set forth on Exhibit A, it being acknowledged that
the US Versions of Family Feud and 100% have been launched
prior to this Agreement. Without limiting any other remedy
that may be available to Pearson, Section 14.3(g) below sets
out certain rights that will be available to Pearson in the
event that certain Licensed Internet Games are not launched by
the dates
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specified in Exhibit A. Further in the event that:
a) the multi-player US Version of To Tell the Truth has
not been launched by 1st January 2001, Pearson may by
giving written notice to Uproar to such effect,
obtain immediate reversion of all rights granted to
Uproar in respect of To Tell the Truth, and Uproar
shall be relieved of its obligation to pay the
Guaranteed Minimum for such Game under Section 14.3
below;
b) any of the multi-player US Versions and UK Versions
of the Games has not been launched by 31st March
2001, Pearson may by giving written notice to Uproar
to such effect, obtain immediate reversion:
i) in the event that it is the US Version of a
Game that has not been launched, of all
rights granted hereunder to Uproar in
respect of such Game, and Uproar shall be
relieved of its obligation to pay the
Guaranteed Minimum for such Game under
Section 14.3 below, and
ii) in the event that it is only the UK Version
of a Game that has not been launched, of all
rights granted hereunder to Uproar in
respect of such UK Version, and Uproar shall
not be relieved of its obligation to pay the
Guaranteed Minimum for such Game under
Section 14.3 below.
3.3 Removal of Games. In the event that any multi-player US
Version or UK Versions of any of the Games is not available on
the Site, once it has been launched, (i) for any period of 30
consecutive days during the Term, or (ii) for an aggregate of
90 days in any 12 month period during the Term, then without
limiting any other rights or remedies that may be available to
Pearson, Pearson may by giving written notice to Uproar to
such effect, obtain immediate reversion:
a) in the event that it is the US Version of a Game that
has been unavailable, of all rights granted hereunder
to Uproar in respect of such Game, and Uproar shall
be relieved of its obligation to pay the Guaranteed
Minimum for such Game under Section 14.3 below, and
b) in the event that it is only the UK Version that has
been unavailable, of all rights granted hereunder to
Uproar in respect of such UK Version, and Uproar
shall not be relieved of its obligation to pay the
Guaranteed Minimum for such Game under Section 14.3
below.
3.4 Reversion of Rights in Password. Uproar acknowledges and
agrees that all rights granted to it in respect of a certain
television game show known as 'Password' under the 1999
Agreement hereby reverts to Pearson, and that Uproar shall
consequently have no further interest in such game or any
rights relating to such game.
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3.5 Reservation of Rights Pearson reserves to itself rights in the
formats not explicitly granted to Uproar hereunder including
without limitation all television (subject to Section 1.17
above), video, non-theatric, video-on-demand and
near-video-on-demand, and all on-line rights other than those
granted above, including without limitation the right to
promote other versions of the format on-line whether on the
Internet or otherwise, and to transmit video and/or audio
versions of the format on line. Without limiting the
foregoing, Pearson further reserves the right:
a) to feature the Games and the Game Show Formats (but
not Internet Versions) on Pearson web sites and on
appropriate broadcaster sites, and
b) to license members of the general public who have
acquired stand-alone hand-held games or other
stand-alone game-console or CD-Rom games based on the
MatchGame Game Show Format to compete against each
other contemporaneously on a 'peer-to-peer' basis in
playing such games through the medium of the
Internet.
3.6 Additional Materials from the Games. In the event that Uproar
wishes to incorporate in the Internet Versions music, sound
clips, still photographs, pictures of the host or any other
material derived from a local television version of a Game,
Pearson shall provide Uproar with access to such material
without cost, unless Pearson does not have rights to such
material in which case Uproar shall request Pearson to
negotiate on its behalf access to such material. Pearson
agrees to use reasonable endeavours to secure access to such
material for Uproar; however, Pearson cannot provide any
assurance that such access will be granted by third parties.
The cost of such access to and use of the third-party material
shall be paid by Uproar, including without limitation any
residuals, reuse fees and other costs payable to talent,
composers and music publishers, provided that Pearson shall
not conclude a deal to give Uproar access to such material
unless Uproar has first approved in writing of the terms of
such deal. Uproar shall not use any such material unless it
has first acquired the right do so as aforesaid.
3.7 Existing Enhanced Television Games. Notwithstanding anything
contained in this Agreement, Pearson agrees that Uproar shall
be entitled to continue until 30th September 2001 exploitation
of interactive television versions of Family Fortunes on cable
television systems in the United Kingdom, and any income
derived therefrom shall be accounted for as if it were income
from an Internet Version.
3.8 Receipt of Internet Games Through the Television. In the event
that Uproar wishes to do a marketing or distribution deal with
an interactive television service, whereby the interactive
television service would provide a prominent link to one of
the Licensed Internet Games on the electronic programming
guide or Internet home page or portal of such interactive
television service that is received through the television
screen, Uproar must first obtain ▇▇▇▇▇▇▇'▇ written approval.
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3.9 Release of Licensed Internet Games Outside UK and US. In the
event that Uproar has not launched a version of a Licensed
Internet Game designed to tie into the version of the Game
that is broadcast in a predominantly English speaking
territory other than the US and UK within two years of:
a) the date of this Agreement or, if later,
b) the date on which Pearson gives Uproar notice of the
first terrestrial transmission of the local version
of the Game in such territory,
then Pearson shall be entitled by giving written notice to
Uproar to such effect to immediately revert the rights granted
hereunder to Uproar in such Game for such territory.
4 Communication of Production and Marketing Information. Beginning upon
the Effective Date of this Agreement, each party shall furnish, and
from time to time shall continue to furnish upon request, such
Production and Marketing Information (as defined in Sections 1.3 and
1.23) in its discretion, may deem reasonably necessary or useful in
view of the state of the development of the business and nature and
extent of the markets related to the Licensed Internet Games. In this
regard, Pearson agrees to use reasonable efforts to obtain and secure
for Uproar the right to use, reuse, perform, display and transmit over
the Internet (with respect to the Licensed Internet Games), questions
previously used in televised episodes of Family Feud, To Tell the
Truth, 100% and Match Game; provided that Uproar shall pay any costs
associated with such use of previously televised questions (such costs
to be deducted from Gross Revenue pursuant to Section 1.20 of this
Agreement). Pearson shall make reasonable efforts to supply such
Production and Marketing Information in the form reasonably requested
by Uproar to enable Uproar to create, produce, host, serve and market
the Licensed Internet Games on the Internet as well as sell Advertising
related to said Licensed Internet Games throughout the Territory during
the Term of this Agreement. Without limiting the foregoing, Uproar
shall send to Pearson monthly reports no later than 30 days following
the last day of each month detailing the traffic to each of the
Internet Versions for the said month and advertising revenue generated.
The reports shall detail, at least, total ad impressions, total unique
users (to the extent that Uproar collects such data) and implied
cost-per-thousand advertising rates.
5 Licensed Internet Game Development and Uproar Content.
5.1 Pearson Participation. Uproar shall make reasonable efforts to
include Pearson in all major aspects (including, without
limitation, all business, design, editorial, and artistic
processes) related to the development of the Internet Versions
of the Games. Uproar shall make reasonable efforts to notify
Pearson in writing or by e-mail of all major meetings, tests,
and decisions related to the development process and to
include at least one Pearson employee (to be designated by
Pearson) in all major meetings and discussions of the business
or creative development and maintenance of the Licensed
Internet Games and shall provide Pearson with the option of
participating in (and
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provide any non-confidential information which Pearson may
reasonably request related to) the process of developing and
marketing the Site, provided however that all written
approvals of Preliminary Representations or Descriptions
granted pursuant to Section 5.4 shall be deemed final. Pearson
shall, however, retain the right, upon reasonable advance
notice to Uproar, to require changes or replacements for any
content or editorial elements of the Licensed Internet Games
that Pearson reasonably determines may devalue, degrade or
diminish the value of the Game Show Formats.
5.2 The Web Pages. Each local Licensed Internet Game will include
a multi-player game that is updated weekly, chat, e-mail,
banners and click through advertisements, the number, size,
placement and content of which must be approved in writing in
advance by Pearson. In addition, each local Licensed Internet
Game will include a prominently displayed link to a URL
nominated by Pearson on which Pearson is maintaining a
promotional website for the local television show
corresponding to the relevant local Licensed Internet Game,
such links to be put in place within 30 days of Pearson
notifying Uproar of the relevant URL address. Uproar shall use
reasonable efforts to develop and maintain customized web
pages for the Licensed Internet Games that reasonably meet or
exceed the performance, technical and design standards of
Uproar's best Internet games as agreed upon by the parties
(the "Best Internet Games"), but in any case that at least
meet such standards achieved for the multi-player US Version
of Family Feud. Said Web Pages will include the Licensed
Marks, and such other content as agreed to by the parties
hereto (the "Web Pages").
5.3 Specifications. Uproar shall develop and submit to Pearson
specific and detailed preliminary representations of the Web
Pages that will achieve the business requirements described in
Paragraph 5.2 above ("Preliminary Representations") in
sufficient time to enable Uproar to meet the launch timetable
set forth in Exhibit A hereto. Such Preliminary
Representations shall comprise text descriptions of
approximately one paragraph describing the content, questions,
tone and highlights of the Licensed Internet Games. Once
Pearson approves the Preliminary Representations, Uproar shall
prepare detailed descriptions ("Descriptions") for each of the
Licensed Internet Games. The Descriptions shall specify
interactive and multimedia components, graphic elements and
content of each Web Page, as well as, overall structure and
hierarchy. Once Pearson or its representative approves the
Descriptions in writing, the Descriptions shall become the
approved specifications for the Licensed Internet Games (the
"Specifications").
5.4 Acceptance. If Uproar has not been notified by Pearson in
writing of an adverse examination of either the Preliminary
Representations or Descriptions, within thirty (30) days after
receipt by Pearson of the same, such Preliminary
Representation and/or Description shall be deemed accepted by
Pearson. In the event that Pearson rejects the Preliminary
Representations or Descriptions, Uproar shall submit revised
Preliminary Representations or Descriptions for ▇▇▇▇▇▇▇'▇
review within twenty-one (21) days of receipt of notice of
such rejection. The process of review and revision shall
continue until Pearson has approved the Preliminary
Representations or
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Descriptions in writing. Once the Preliminary Representations
or Descriptions have been approved by Pearson in writing, they
shall be deemed accepted and final.
5.5 Testing.
a) Technical Testing. Uproar shall conduct beta testing
for each Web Page to assure that each Web Page
reasonably conforms to the Specifications. Uproar
shall submit to Pearson in sufficient time to enable
Uproar to meet the launch timetable set forth in
Exhibit A, such digitized version(s) of the Web Pages
as described in the Specifications. Uproar shall, at
its sole cost, correct any Defect in any Web Page
reasonably identified by Pearson in writing within
forty-eight (48) hours after Uproar's delivery of the
same. "Defect(s)," for purposes of this Agreement,
means material non-compliance with the
Specifications. Once Pearson approves the digitized
version, or modified digitized version, as the case
may be, Uproar shall assemble the Web Pages into the
Licensed Internet Games in a manner that conforms in
all material respects to the Specifications.
b) Market Testing. Uproar shall make reasonable efforts
to conduct such pre-launch market testing as the
parties may reasonably deem appropriate for each of
the Licensed Internet Games.
5.6 Support. During the Term, Uproar will provide technical
support to maintain the Web Pages of the same quality and
frequency as provided by Uproar to maintain Uproar's Best
Internet Games as defined in Section 5.2 above distributed by
Uproar on the Site. Such support shall include e-mail support
for Users and a designated contact person for Pearson in the
event that Pearson is contacted by Users or in some way
becomes aware of any problems with the Licensed Internet
Games.
5.7 Residence. The Licensed Internet Games shall reside on Uproar
servers that shall be maintained and operated by Uproar in
accordance with standards to be set forth on Exhibit C.
5.8 Creative Approval. Pearson shall retain the full right to
reasonably approve the creative and design aspects of the
Licensed Internet Games. As used in this Agreement, "Creative
Approval" means all rights of final approval over all aspects
of the look, feel, sound and appearance of the Licensed
Internet Games as it relates to the user's experience of the
Format. Pearson shall have the right to veto any changes in
design or implementation of the Licensed Games that Pearson
determines, in its sole discretion may devalue or negatively
affect general perceptions of the Game Show Formats or the
Licensed Marks.
5.9 Material Deemed Objectionable by Pearson.
a) In the event that Pearson finds offensive or
objectionable any game or other material on the Site
or on any web site to which Uproar links, Pearson
shall notify
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Uproar senior management. If Uproar shall concur, then Uproar
shall use reasonable efforts to modify or remove such material
or links.
b) In the event that Uproar does not agree to modify or remove
such material or links from Uproar, Pearson may request that
the Uproar Board of Directors vote on whether such material or
links are objectionable and should be removed. The parties
agree to accept and abide by the decision of the Board of
Directors.
c) In the event that Uproar develops or acquires a new web site
or other property that Pearson reasonably believes is likely
to damage, devalue or negatively affect the Pearson name
because such property contains, promotes or is associated with
content deemed by Pearson to be objectionable, Pearson shall
notify Uproar senior management and request that Uproar change
or divest itself of such property.
d) In the event that Uproar does not accept or agree that the
material or property complained of by Pearson is likely to
damage, devalue or negatively affect the Pearson name, the
parties shall submit the issue to arbitration under the
auspices and according to the rules of the American
Arbitration Association (AAA), the cost of such arbitration to
be borne by Pearson.
e) In the event that the arbitrator(s) decide that the material
or property complained of by Pearson is damaging to or is
likely to damage, devalue or negatively affect the Pearson
name, Pearson shall be released from the provisions of
Sections 16.3 (c) - (e), and shall have the right to divest
itself immediately of all of the Shares.
6 Marketing and Advertising Material.
6.1 Approval. Uproar shall submit to Pearson, for approval in the manner
which Pearson shall direct, all advertising, and other material on
which the Licensed Marks appear, or are intended to be used in relation
to the Licensed Internet Games. Pearson agrees to examine such material
as promptly as feasible. If Uproar has not been notified in writing by
Pearson of an adverse examination within thirty (30) days after
dispatch of the material to Pearson, such material shall be deemed
satisfactory (for purposes of this subparagraph "dispatch" shall mean
facsimile delivery, overnight courier delivery or mailed - air mail,
postage prepaid). Should Pearson ever notify Uproar that any of the
material is unacceptable, Uproar shall replace or amend to the
satisfaction of Pearson such material not approved by Pearson. Without
detracting from the generality of the foregoing, the marketing legends
for use in association with the Licensed Internet Games which Pearson
considers appropriate in the circumstances would read: "Produced and
Distributed under License from ▇▇▇▇▇▇▇ Television" and on each Web
Page: "Uproar in association with Pearson TV," along with the U.S.
Local Television Show logos or Pearson television logos.
6.2 Other Marks. Other than Uproar's service ▇▇▇▇ UPROAR, and the Licensed
Marks, Uproar shall not use any other service ▇▇▇▇ or trademark on or
in association with the
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Licensed Internet Games, and shall not use the Licensed Marks in any
medium other than the Internet without the prior written approval of
Pearson on or in connection with any other goods or service other than
the Licensed Internet Games. Uproar specifically agrees not to produce,
or distribute, directly or indirectly, any other game, whose trademark,
service ▇▇▇▇, trade name, URL or other designation is confusingly
similar to the Licensed Marks. The use of the Licensed Marks by Uproar
shall be exclusive in respect to English Language Internet Games in the
Territory.
7 Licensed Marks.
7.1 Recognition of ▇▇▇▇▇▇▇'▇ Rights. Uproar recognizes ▇▇▇▇▇▇▇'▇ ownership
of the Licensed Marks and the validity of ▇▇▇▇▇▇▇'▇ registrations
thereof or applications therefor in the Territory and Uproar will not
dispute or put at issue such ownership or validity. Uproar shall not at
any time apply for or obtain the registration of any Licensed ▇▇▇▇ or
any URL containing, or confusingly similar to, the names of the Games
in any country or do or suffer to be done any act or thing which might
in any way impair the rights of Pearson in and to the Licensed Marks,
and shall not claim any right or interest in the Licensed Marks, except
as such rights as are expressly granted herein. SEEMS OK
7.2 Impairment of Licensed Marks. Uproar hereby covenants that it will not
directly or indirectly undertake any action anywhere which in any
manner might infringe, or impair the validity, scope, or title of
Pearson in the Licensed Marks, or any of them, or in any other
trademarks, service marks or URLs which may be owned by Pearson at any
time during the Term, and Uproar agrees to cease using the Licensed
Marks immediately upon expiration or termination of this Agreement.
7.3 Protection of Licensed Marks. Pearson reserves the right to prosecute
and defend, at its own expense, all suits involving any of the Licensed
Marks and to take any action or proceedings that it deems desirable for
the protection thereof; and at ▇▇▇▇▇▇▇'▇ discretion may do so in its
own name or in the name of Uproar, or in the joint names of Pearson and
Uproar, and Uproar shall claim no rights against Pearson as the result
of any such action. Uproar agrees to notify Pearson promptly of any
infringement of the Licensed Marks or of any pending or threatened
litigation involving such Licensed Marks. Uproar shall fully cooperate
in any such litigation if requested by Pearson to do so, provided
however that Pearson shall pay Uproar's reasonable attorney's fees and
out-of-pocket expenses associated with such litigation. Uproar further
agrees that this license is personal to Uproar and shall not be
assigned or otherwise transferred by Uproar without the prior written
consent of Pearson.
8 Covenants of Pearson.
8.1 Promotion of ▇▇▇.▇▇▇▇▇▇.▇▇▇ on Pearson Games. PTV Inc. agrees to
advertise and promote in the United States the Licensed Internet Games
in accordance with the following provisions and all applicable laws and
regulations. For the period until
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September 30, 2001 and provided that Uproar is launching the Licensed
Internet Games in accordance with the schedule set forth on Exhibit A,
this marketing campaign shall include:
a) Reasonable efforts to mention the URL ▇▇▇.▇▇▇▇▇▇.▇▇▇ by a host
or in a voice-over at the close of each United States Local
FF, and United States Local Truth;
b) Inclusion of ▇▇▇.▇▇▇▇▇▇.▇▇▇ in the closing credits of each
United States Local FF and United States Local Truth;
c) Inclusion of ▇▇▇.▇▇▇▇▇▇.▇▇▇ in all Major Press Advertising
relating to each United States Local FF and United States
Local Truth (as used herein, Major Press Advertising shall
mean any print advertising of 1/8 page or larger);
d) Inclusion of ▇▇▇.▇▇▇▇▇▇.▇▇▇ in all written sales material,
press kits, media guides, and sales and demonstration tapes
for each United States Local FF and United States Local Truth;
e) Reasonable efforts to include in each United States Local FF
and United States Local Truth, where possible, Uproar prizes,
or sponsorship to include prizes related to Uproar; and
f) Inclusion of a ten (10) second commercial message promoting
the URL ▇▇▇.▇▇▇▇▇▇.▇▇▇ and referring to the name of the US
Version of Family Feud and the US Version of To Tell the Truth
at the end of each United States Local FF and United States
Local Truth, such message to be produced by Uproar at its sole
cost, consistent with PTV Inc.'s technical and production
standards, and in consultation with PTV Inc.
9 Intentionally Deleted.
10 Uproar's Warranties. Uproar hereby warrants and covenants to Pearson as
follows:
10.1 Warranty of Performance. The Licensed Internet Games (and each
individual Web Page) will be free from material reproducible
programming errors and from material defects in workmanship and
materials, and will operate in material conformity with the performance
capabilities and business requirements described in the Specifications.
If any material non-conformities or material programming errors are
discovered, Uproar shall promptly remedy them at no expense to Pearson.
The Licensed Internet Games shall be designed for use by individuals
with limited or general understanding of the Internet. Uproar shall use
reasonable efforts to develop and maintain the Internet Games in a high
quality so that the performance of the Internet Games meets or exceeds
the performance of the Best Internet Games developed by Uproar for the
Site. Uproar shall use reasonable efforts to ensure that the design and
look and feel of the Licensed Internet Games shall be distinctive and
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that there are as many versions of the Licensed Internet Games
available (rotated as frequently) as for its Best Internet Games on the
Site. Uproar shall make reasonable efforts to make the look and feel of
the Licensed Internet Games distinctive and shall not use any editorial
or design elements which are specific to the Licensed Internet Games on
other games it develops or uses on the Site or any other Internet Site
without the prior written approval of Pearson.
10.2 Warranty of Title. Except for the Licensed Marks and materials provided
by Pearson for use in connection with the Licensed Internet Games (the
"Pearson Materials"), Uproar's trademarks, service marks, URL's,
software and all other materials used by Uproar in connection with the
Licensed Internet Games (the "Uproar Materials"), shall not infringe
upon the intellectual property rights of any third party, including
without limitation, claims of copyright infringement, trademark
infringement, false designation of origin, disparagement, violation of
patent or shop rights, piracy or plagiarism. Uproar warrants that it
owns or has the full right and authority to use all materials used on
the Site.
10.3 Warranty Against Disablement. No portion of the Licensed Internet Games
licensed hereunder will contain any protection feature designed to
prevent its use. This includes, without limitation, any computer virus,
worm, software lock, drop dead device, Trojan horse routine, trap door,
Uproar bomb or any other codes or instructions that may be used to
access, modify, delete, damage or disable same once uploaded to any
computer system.
10.4 Warranty of Expertise. Uproar represents and warrants that it has the
technical and production knowledge necessary to provide, and will
provide, services required for the creation, production, and
distribution in connection with the Licensed Internet Games as
contemplated herein. In connection therewith, all of the services to be
performed by Uproar hereunder will be rendered using sound,
professional practices, and in a competent and professional manner, by
knowledgeable, trained and qualified personnel. Uproar acknowledges
that Pearson is relying upon the skill and expertise of Uproar for the
development, integration, maintenance and marketing of the Licensed
Internet Games.
10.5 Warranty of Millennium Compliance. Uproar represents and warrants that
all Software supplied by Uproar or obtained by Uproar from a
third-party vendor and used in connection with the Licensed Internet
Games on the Site shall be Millennium Compliant. As used herein,
"Millennium Compliant" means that it can provide all of the following
functions:
a) handle date information before, during, and after January 1,
2000, including but not limited to accepting date input,
providing date output, and performing calculations on dates or
portions of dates;
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b) function accurately and without interruption before, during,
and after January 1, 2000, without any change in operations
associated with the advent of the new century;
c) respond to two-digit year-date input in a way that resolves
the ambiguity as to century in a disclosed, defined, and
predetermined manner; and
d) store and provide output of date information in ways that are
unambiguous as to century.
10.6 Corporate Authority. Uproar has the full right, power, legal capacity
and authority to enter into this Agreement and to carry out the terms
hereof.
10.7 No Conflicts. There are no undisclosed liens, claims, encumbrances,
legal proceedings, restrictions, agreements or understandings that
might materially conflict or interfere with, limit, or be inconsistent
with or otherwise affect any of the provisions of the Agreement or the
enjoyment by Pearson of any rights in the Licensed Internet Games or
any elements thereof.
10.8 Technology Update. During the Term of this Agreement, Uproar shall, at
no additional cost to Pearson, make reasonable efforts to ensure that
the Server, the Web Site and the Licensed Internet Games are maintained
so as to be compatible with, and accessible to, Users using the
then-current developments, versions and updates of Internet-related
technology, within a reasonable time after such technology becomes
commercially available. Without limitation of the foregoing, Uproar
agrees that at all times during the Term of this Agreement, and at no
extra cost to Pearson, the Licensed Internet Games will be compliant
with the most recent HTML specifications used on its Best Internet
Games.
10.9 New Technology. If during the Term Uproar plans to replace, enhance,
upgrade or otherwise modify the software or technology used to produce,
maintain, host or deliver any Internet Version of any game produced for
the Site in conjunction with any third party ("New Technology"), Uproar
shall make reasonable efforts to make such New Technology available for
use in the Licensed Internet Games at the same time that such New
Technology is used in any other Internet Version of any Uproar game.
11 ▇▇▇▇▇▇▇'▇ Warranties. Pearson hereby warrants and covenants to Uproar as
follows:
11.1 Licensed Pearson Materials. The use by Uproar of such PTV Netherlands
Licensed Marks in any English-speaking country in the manner
contemplated by this Agreement shall not infringe upon any copyright,
trademark, patent, trade secret or other proprietary right. Pearson
warrants that it owns or has the full right and authority to use and
license the Licensed Marks and the Game Show Formats.
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11.2 License of Pearson Content. The use of the Game Show Format, the
Pearson Materials, and/or use of any question by Uproar as content
provided by Pearson hereunder used by Uproar in the manner contemplated
by this Agreement, shall not infringe upon any copyright, patent, trade
secret, trademark, right of publicity, or privacy or other proprietary
right.
11.3 Corporate Authority. Pearson has the full right, power, legal capacity
and authority to enter into this Agreement and to carry out the terms
hereof. ▇▇▇▇▇▇▇ Television Holdings, Inc., ▇▇▇▇▇▇▇ Television North
America, Inc., and ▇▇▇▇▇▇▇ Television Limited each agrees that where
any obligation to be undertaken hereunder is to be undertaken by one of
its subsidiaries, that it will ensure that such subsidiary undertakes
such obligation.
11.4 No Conflicts. There are no undisclosed liens, claims, encumbrances,
legal proceedings, restrictions, agreements or understandings that
might materially conflict or interfere with, limit, or be inconsistent
with or otherwise affect any of the provisions of this Agreement or the
enjoyment by Uproar of any of the rights granted to Uproar by Pearson
hereunder.
11.5 Warranted Marks. Pearson is the owner of the marks set forth on Exhibit
B (the "Warranted Marks"), together with the goodwill of the business
connected with the use of and symbolized by the registrations or
applications therefor. Such Warranted Marks and the registrations or
applications therefor exist and are subsisting and have not been
abandoned, and to the best of ▇▇▇▇▇▇▇'▇ knowledge no other firm,
corporation, association or person has the right to use such Warranted
Marks in any English-speaking country either in identical form thereof
or in such near resemblance thereto as to be likely, when used on or in
association with the licensed Internet Versions of the Games, to cause
confusion or to cause mistake or to deceive.
12 Advertising and Promotion.
12.1 Volume of Sales. Uproar agrees to expend its best efforts to achieve a
large and increasing volume of sales of Advertising on the Licensed
Internet Games in the Territory.
12.2 Promotion. Uproar shall promote each of the Licensed Internet Games on
the Site via buttons and text links at least as often and as
prominently as Uproar promotes any other game. Uproar shall make
reasonable efforts to place Game Logos on the home page of the Site.
Uproar shall not incur any expenses relating to the marketing,
promotion, or advertising of the Licensed Internet Games for which
Pearson shall in any way be responsible, except where specific prior
permission, in writing, shall have been received from Pearson in each
instance.
12.3 Production. Uproar shall produce and distribute the Licensed Internet
Games in an ethical manner and with good taste. The production and
distribution of the Licensed
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Internet Games will reasonably comply with local community standards of
good taste and decency in all communities from which the Licensed
Internet Games may be accessed, with all applicable national and local
laws, rules and regulations in the Territory.
13 Advertising. Uproar shall use its best efforts to sell Advertising on each
and every local Licensed Internet Game.
13.1 Net Revenue Split. The Net Revenue shall be split fifty percent (50%)
for Uproar and fifty percent (50%) for PTV Netherlands.
13.2 Intentionally Deleted
13.3 Intentionally Deleted.
14 Payments.
14.1 Format Royalty. No later than thirty (30) days after each calendar
quarter, Uproar shall pay to PTV Netherlands fifteen percent (15%) of
Gross Revenues (less any taxes that Uproar may be legally required to
withhold) as a royalty for the rights and license to use the Game Show
Formats.
14.2 Net Revenues. No later than thirty (30) days after each calendar
quarter, Uproar shall pay PTV Netherlands its share (as set forth in
Section 13) of any Net Revenues received by Uproar (less any taxes that
Uproar may be legally required to withhold) during such calendar
quarter.
14.3 Guaranteed Minimum.
a) In relation to the period from 1 July 2000 until 30 June 2001
(the "First Year") Uproar hereby guarantees payment to PTV
Netherlands, subject to Section 14.3(g) below, of a minimum
of:
i) Pearson Income of $200,000 in respect of Family Feud,
and
ii) Pearson Income of $150,000 in respect of To Tell the
Truth, and
iii) Pearson Income of $200,000 in respect of 100%, and
iv) Pearson Income of $150,000 in respect of Match Game
provided that Uproar shall be entitled to cross-collateralise
(i.e. apply) Pearson Income received in relation to any Game
in excess of the Guaranteed Minimum for such Game for the
First Year against unrecouped Guaranteed Minimum for the
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First Year for any other Game or Games.
b) In relation to the period from 1 July 2001 until 30 June 2002
(the "Second Year") Uproar hereby guarantees payment to PTV
Netherlands of a minimum of:
i) Pearson Income of $200,000 in respect of Family Feud,
and
ii) Pearson Income of $200,000 in respect of To Tell the
Truth, and
iii) Pearson Income of $200,000 in respect of 100%, and
iv) Pearson Income of $200,000 in respect of Match Game
provided that Uproar shall be entitled to cross-collateralise
Pearson Income received in relation to any Game in excess of
the Guaranteed Minimum for such Game for the Second Year
against unrecouped Guaranteed Minimum for the Second Year for
any other Game or Games.
c) In relation to the period from 1 July 2002 until 30 June 2003
(the "Third Year") Uproar hereby guarantees payment to PTV
Netherlands, subject to Section 14.3(h) below, without any
cross-collateralisation, of a minimum of:
i) Pearson Income of $300,000 in respect of Family Feud,
and
ii) Pearson Income of $300,000 in respect of To Tell the
Truth, and
iii) Pearson Income of $300,000 in respect of 100%, and
iv) Pearson Income of $300,000 in respect of Match Game
d) In relation to the period from 1 July 2003 until 30 June 2004
(the "Fourth Year") Uproar hereby guarantees payment to PTV
Netherlands, subject to Section 14.3(h) below, without any
cross-collateralisation, of a minimum of:
i) ▇▇▇▇▇▇▇ Income of $650,000 in respect of Family Feud,
and
ii) ▇▇▇▇▇▇▇ Income of $650,000 in respect of To Tell the
Truth, and
iii) ▇▇▇▇▇▇▇ Income of $300,000 in respect of 100%, and
iv) ▇▇▇▇▇▇▇ Income of $300,000 in respect of Match Game.
e) In relation to the period from 1 July 2004 until 30 June 2005
(the "Fifth Year") Uproar hereby guarantees payment to PTV
Netherlands, subject to Section 14.3(h)
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below, without any cross-collateralisation, of a minimum of:
i) ▇▇▇▇▇▇▇ Income of $900,000 in respect of Family Feud,
and
ii) ▇▇▇▇▇▇▇ Income of $900,000 in respect of To Tell the
Truth, and
iii) ▇▇▇▇▇▇▇ Income of $400,000 in respect of 100%, and
iv) ▇▇▇▇▇▇▇ Income of $400,000 in respect of Match Game.
f) In the event that by the statement in respect of the last
quarter of a Year the ▇▇▇▇▇▇▇ Income earned in respect of a
Game for such Year is less than Guaranteed Minimum for such
Game for such Year, then subject to the
cross-collateralisation provisions set out in Sections 14.3(a)
and (b) above, Uproar shall concurrently with the delivery of
such statement pay to PTV Netherlands the difference between
the ▇▇▇▇▇▇▇ Income earned in respect of the Game for such Year
and the Guaranteed Minimum for such Game for such Year.
g) Without limiting any other rights or remedies that may be
available to ▇▇▇▇▇▇▇, in the event that:
i) The single player US Version of To Tell the Truth has
not been launched by 30 September 2000, then the
cross-collateralisation provisions set out in Section
14.3(a) shall not apply to To Tell the Truth.
ii) The single player US Version of To Tell the Truth has
been launched by 30 September 2000 but the
multi-player US Version of To Tell the Truth has not
been launched by 31 October 2000, then the
cross-collateralisation provisions set out in Section
14.3(a) shall not apply to To Tell the Truth.
iii) The single player US Version of To Tell the Truth has
not been launched by 30 September 2000 and the
multi-player US Version of To Tell the Truth has not
been launched by 31 October 2000, then, in addition
to the cross-collateralisation provisions set out in
Section 14.3(a) not applying to To Tell the Truth,
the Guaranteed Minimum for To Tell the Truth for the
First Year shall be deemed increased to $250,000.
iv) The multi-player US Version of To Tell the Truth has
still not been launched by 30 November 2000, then, in
addition to the cross-collateralisation provisions
set out in Section 14.3(a) not applying to To Tell
the Truth ,the Guaranteed Minimum for To Tell the
Truth for the First Year shall be deemed increased to
$300,000.
v) The multi-player US Version of Match Game has not
been launched by 28th February 2001, then the
cross-collateralisation provisions set out in Section
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14.3(a) shall not apply to Match Game.
For the avoidance of doubt, in the event that any one of the
launch dates specified above in respect of To Tell the Truth
has not been met, the cross-collateralisation provisions set
out in Section 14.3(a) shall not apply to To Tell the Truth
even if the other launch dates have been met.
h) Uproar shall be entitled, by giving written notice to ▇▇▇▇▇▇▇
to such effect no later than 30 days prior to the commencement
of the Third Year, Fourth Year of Fifth Year, to elect to
revert its rights in any Game, in which case all rights
granted to Uproar under this Agreement in respect of such Game
shall revert to ▇▇▇▇▇▇▇ on the last day of the Year in which
the notice was given, and Uproar shall thereon be relieved of
its obligation to pay the Guaranteed Minimum for such Game in
all subsequent Years. For the avoidance of doubt the giving of
such notice shall not relieve Uproar of its obligation to pay
the Guaranteed Minimum for such Game in respect of the Year in
which such notice was given.
14.4 Statements. Uproar shall no later than thirty (30) days following the
end of each calendar quarter provide to ▇▇▇▇▇▇▇ a full and accurate
statement of account ("Statement") showing all ▇▇▇▇▇▇▇ Income and other
monies due and owing under this Agreement in respect of such quarter.
Such Statement shall be accompanied by payment of the ▇▇▇▇▇▇▇ Income
and any other monies due without reserve, payment to be made by
electronic transfer to such ▇▇▇▇▇▇▇ bank account as shall be notified
to Uproar by ▇▇▇▇▇▇▇ in writing. All Uproar's own bank charges relating
to payments in favor of ▇▇▇▇▇▇▇ shall be borne by Uproar. The
Statements shall be in such form as the parties shall agree, but as a
minimum shall show for the relevant quarter, separately for each local
version of each Game all details to be taken into account in
calculating the format royalty and the Net Revenue payable in respect
of such local version of such Game, the amount of Minimum Guarantee
remaining unrecouped, any allowable cross-collateralisation and the
amount payable to ▇▇▇▇▇▇▇. The Statements shall further show the
cumulative amount of ▇▇▇▇▇▇▇ Income for each local version of each Game
accrued since the beginning of the Term. Uproar shall continue to send
Statements and make payments to ▇▇▇▇▇▇▇ notwithstanding expiration or
termination of this Agreement until all amounts due to ▇▇▇▇▇▇▇ have
been paid.
14.5 Audit. ▇▇▇▇▇▇▇ shall have the right at its expense to audit (or
designate a third party to audit) Uproar's books and records for the
purpose of verifying Gross and Net Revenue and operating expenses. Such
audits shall be made not more than once per year, on not less than ten
(10) days written notice, during regular business hours. If the
auditor's figures reflect ▇▇▇▇▇▇▇ Income higher than that reported by
Uproar, Uproar shall pay the difference. If the auditor's figures vary
more than five percent (5%) or $1,000.00, whichever is less, from the
figures provided by Uproar in any Statement, Uproar shall also pay the
reasonable cost of the audit. Uproar shall not be
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obligated to keep said books and records created hereunder for more
than two (2) years after the termination or expiration of this
Agreement,.
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15 Reporting.
15.1 Delay. In case of delay of thirty (30) days or more by Uproar in making
payments, interest at the rate of one and one-half percent (1.5%) per
month, assessed from the first day of the first month following the
relevant quarterly period, shall be due PTV Netherlands from Uproar
without special notice.
15.2 Taxes. If required to do so by law, Uproar may, after consultation with
PTV Netherlands, withhold from payments due PTV Netherlands any taxes
required to be paid in respect thereof, provided that any such
deductions for the payment of such taxes are supported by duly executed
receipts. Uproar shall provide PTV Netherlands with all reasonable
assistance requested in any attempts made to reclaim or set off such
taxes deducted, provided that PTV Netherlands shall reimburse Uproar
for all costs and expenses it incurs in providing such assistance.
15.3 Records. Uproar shall keep complete and accurate records of its
activities under this Agreement which shall be open to inspection by
authorized representatives of ▇▇▇▇▇▇▇.
16 Uproar Securities.
16.1 Issuance of Shares by Uproar. The parties acknowledge that pursuant to
the 1999 Agreement PTV Inc. subscribed for 50,000 shares of Uproar
Stock, which shares were subsequently split such that at the date of
this Agreement PTV Inc. holds 2,000,000 shares of Uproar Stock
("▇▇▇▇▇▇▇'▇ Securities"). PTV Inc. paid for the ▇▇▇▇▇▇▇ Securities, as
follows:
a) 500 shares (pre-split; now 20,000 shares) of ▇▇▇▇▇▇▇'▇
Securities were issued in consideration for the payment by PTV
Inc. to Uproar of the US Dollar equivalent of 1,500,000
Austrian Schillings (the dollar value of which was determined
according to the applicable daily foreign exchange rates set
forth in the Wall Street Journal on the Effective Date); and
b) 49,500 shares (pre-split; now 1,980,000 shares) of ▇▇▇▇▇▇▇'▇
Securities were issued in consideration for the rights granted
under Sections 8.1(a) through 8.1(f) of the 1999 Agreement to
Uproar thereunder.
16.2 Intentionally Deleted.
16.3 ▇▇▇▇▇▇▇'▇ Warranties and Representations. ▇▇▇▇▇▇▇ hereby represents and
warrants to Uproar, as follows:
a) ▇▇▇▇▇▇▇ acquired ▇▇▇▇▇▇▇'▇ Securities (hereinafter referred to
as the "Shares") solely for ▇▇▇▇▇▇▇'▇ own account.
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b) ▇▇▇▇▇▇▇ has no intention of distributing or reselling
the Shares or any part thereof, or interest therein,
in any transaction which would be in violation of the
applicable laws of any governmental authority having
jurisdiction over the issuance, transfer or sale
thereof.
c) During the period commencing on execution of this
Agreement and terminating on 12th September 2000,
▇▇▇▇▇▇▇ shall not publicly sell, transfer, convey or
otherwise dispose of all or any part of the Shares.
If, after such period, ▇▇▇▇▇▇▇ desires to publicly
sell, transfer, convey or otherwise dispose of all or
any part of the Shares, ▇▇▇▇▇▇▇ may do so, provided
that it fully complies with all applicable laws
and/or regulations of each governmental authority
having jurisdiction over the issuance, sale or other
disposition thereof.
d) During the period commencing on execution of this
Agreement and terminating on January 30, 2001,
▇▇▇▇▇▇▇ shall not purchase, in open market
transactions, or otherwise, an amount of shares of
Uproar Stock which, when added to the Shares and any
shares of Uproar Stock beneficially held by any
person or persons acting in concert with ▇▇▇▇▇▇▇,
shall be greater than 20% of the total number of
shares of Uproar Stock then outstanding.
16.4 ▇▇▇▇▇▇▇'▇ Board Representation. Until 30 September 2001 (the
"Directorship Period"), ▇▇▇▇▇▇▇ shall have the right to
continue to designate a person to be appointed to serve as a
member of Uproar's Board (the "▇▇▇▇▇▇▇ Appointee"), and upon
providing Uproar with the name of the ▇▇▇▇▇▇▇ Appointee and
the particulars about his or her background and experience,
Uproar shall undertake all actions as shall be necessary to
cause the ▇▇▇▇▇▇▇ Appointee to be appointed to Uproar's Board
of Directors. If, until the expiration of the Directorship
Period, Uproar shall hold any meetings of its shareholders at
which members of its Board of Directors shall be elected, or
shall seek the election of such directors in some other
permissible manner, Uproar shall undertake all actions as
shall be necessary to cause the ▇▇▇▇▇▇▇ Appointee to be
included among management's slate of proposed directors, and
Uproar shall cause its officers who hold shares of Uproar
securities to vote all of such shares respectively held by
them in favor of the election of the ▇▇▇▇▇▇▇ Appointee in each
such instance. No later than 30 June 2001 the parties shall
hold discussions in good faith with a view to extending the
Directorship Period, and if they agree to do so, the
Directorship Period shall be deemed extended for such period
as is agreed in writing.
16.5 Uproar's Warranties and Representations. Uproar represents and
warrants to ▇▇▇▇▇▇▇ as follows:
a) Organization and Authority. At the date of execution
of the 1999 Agreement, Uproar was a company duly
organized, validly existing and in good standing
under the laws of Bermuda. Set forth on Exhibit D is
a list of jurisdictions in
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which Uproar was at that date qualified or licensed
to do business as a foreign corporation. Uproar was
at that date duly qualified or licensed and in good
standing as a foreign corporation in each
jurisdiction in which (i) the nature of the business
conducted by it or the character or location of the
properties owned or leased by it made such
qualification or licensing necessary and (ii) the
failure to so qualify would, if not remedied, have
materially impaired title to its properties or its
rights to enforce contracts against others or expose
it to a material liability in any such jurisdiction.
Uproar at that date had all necessary corporate power
and authority to own, lease and operate all of its
properties and assets and to carry on its businesses
as then conducted and as proposed to be conducted.
b) Uproar Capitalization. Each of the issued and
outstanding shares of Uproar Stock had at the date of
execution of the 1999 Agreement been duly authorized
and validly issued, was fully paid and non-assessable
and was issued by Uproar in compliance with all
applicable securities laws and all applicable rules
and regulations thereunder. Except as set forth on
Exhibit E to the 1999 Agreement or as otherwise
contemplated by the 1999 Agreement, there were at the
date of execution of the 1999 Agreement no
outstanding options, warrants, convertible or
exchangeable securities, subscription or other
rights, agreements or commitments to subscribe for or
purchase or acquire from Uproar any securities of
Uproar nor any agreement or understanding to issue
any such instruments. Except as set forth on Exhibit
E to the 1999 Agreement or as otherwise contemplated
by the 1999 Agreement, Uproar had at the date of
execution of the 1999 Agreement not reserved any
shares of capital stock for issuance upon the
exercise or conversion of any of its securities.
There were at the date of execution of the 1999
Agreement no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the
voting or transfer of, any shares of Uproar Stock
pursuant to the Memorandum of Association or Bye-Laws
of Uproar or otherwise. Uproar had at the date of
execution of the 1999 Agreement delivered to ▇▇▇▇▇▇▇
true, complete and correct copies of its Memorandum
of Association and Bye-Laws which were in full force
and effect on the date of the 1999 Agreement.
c) Subsidiaries. Set forth on Exhibit F of the 1999
Agreement are the only corporations (the
"Subsidiaries") with respect to which Uproar, at the
date of execution of the 1999 Agreement, beneficially
owned, directly or indirectly, any of the outstanding
stock or other equity interests, the holders of which
were entitled to vote for the election of a majority
of the board of directors or other governing body.
Each Subsidiary was at the date of execution of the
1999 Agreement duly organized, validly existing and
in good standing under the laws of its jurisdiction
of incorporation, which jurisdictions were set forth
on Exhibit F to the 1999 Agreement. Each Subsidiary
had at the date of execution of the 1999 Agreement
the corporate power and authority to own, lease and
operate all of its properties and assets and to carry
on its business as then conducted and as then
proposed to be conducted. Exhibit F to the 1999
Agreement set forth the jurisdictions in which each
Subsidiary was at the date of execution of the 1999
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Agreement qualified or licensed to do business as a
foreign corporation. Each Subsidiary was at the date
of execution of the 1999 Agreement duly qualified or
licensed and in good standing as a foreign
corporation in each jurisdiction in which (i) the
nature of the business conducted by it or the
character or location of the properties owned or
leased by it made such qualification necessary and
(ii) the failure so to qualify would, if not
remedied, materially impair title to its properties
or its rights to enforce contracts against others or
expose it to a material liability in any such
jurisdiction. Set forth on Exhibit F to the 1999
Agreement was a list of each partnership and joint
venture agreement or arrangement (such arrangements
or entities created thereby, the "Joint Ventures") to
which Uproar or any Subsidiary was at such date a
party. Uproar and each Subsidiary had at the date of
execution of the 1999 Agreement good title to all
shares of stock or other equity interest in the
Subsidiaries and Joint Ventures then owned by it,
free and clear of all liens, charges, encumbrances,
equities and claims whatsoever, and subject to no
restrictions on transferability, except as such
transferability may be restricted by the provisions
of applicable securities laws. The capitalization of
each such Subsidiary and Joint Venture was set forth
on Exhibit F to the 1999 Agreement.
d) Financial Statements. Uproar had at the date of
execution of the 1999 Agreement furnished ▇▇▇▇▇▇▇
with copies of the audited consolidated financial
statements of Uproar and the Subsidiaries for each of
the three fiscal years ended December 31, 1997,
including in each case a consolidated balance sheet,
the related consolidated statements of operations,
stockholders' equity and of cash flows for the period
then ended, the accompanying notes, the report
thereon of Coopers & ▇▇▇▇▇▇▇, and the unaudited
consolidated financial statements of Uproar and the
Subsidiaries for each of the fiscal quarters of
Uproar ended March 31, 1998, June 30, 1998 and
September 31, 1998, consisting in each case solely of
a consolidated statement of operations. Such audited
financial statements, and to the best knowledge of
Uproar's Board of Directors at such time, all such
unaudited financial statements (i) were, as of the
respective dates thereof, correct and complete in all
material respects and were prepared from the books
and records of Uproar and the Subsidiaries, (ii) were
prepared in accordance with generally accepted
accounting principles consistently applied throughout
the periods covered ("GAAP"), (iii) as of the
respective dates thereof, reflected, and provided
adequate reserves in respect of, all liabilities of
Uproar and the Subsidiaries in accordance with GAAP,
including all contingent liabilities as of their
respective dates, and (iv) as of the respective dates
thereof, presented fairly in all material respects
the consolidated financial condition of Uproar and
the Subsidiaries and the results of their operations
for the periods then ended.
e) Disclosure Materials. Uproar had at the date of
execution of the 1999 Agreement disclosed to ▇▇▇▇▇▇▇
all material information and provided all appropriate
disclosure materials concerning Uproar and the Uproar
Stock: (i) which ▇▇▇▇▇▇▇ requested Uproar to provide;
and (ii) necessary, in Uproar's judgment, for ▇▇▇▇▇▇▇
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to base its decision to make the subscription in
Uproar Stock provided for therein. Such material
information and disclosure materials (the "Disclosure
Materials") included those items set forth on Exhibit
G to the 1999 Agreement. None of the information
concerning Uproar, the Subsidiaries and the Uproar
Stock set forth in such Disclosure Materials or
incorporated therein by reference contained any
untrue statement of a material fact or omitted to
state a material fact required to be stated therein
or necessary in order to make the statements made
therein, in light of the circumstances under which
they were made, not misleading.
f) Offering of the Securities. The offering and sale of
Uproar Stock to ▇▇▇▇▇▇▇ provided for in the 1999
Agreement was made in accordance with, and in full
compliance with, all applicable securities laws,
including all U.S. Federal and state securities or
blue sky laws. Neither Uproar nor anyone acting on
its behalf has taken or will take any action which
would subject the issuance and sale of the Uproar
Stock or any other securities of Uproar to the
provisions of Section 5 of the U.S. Securities Act of
1933, as amended (the "Securities Act"), and to the
registration or qualification requirements of any
securities or blue sky laws of any applicable
jurisdiction.
g) The Securities. Upon issuance to ▇▇▇▇▇▇▇ of the
Uproar Stock and payment therefor in accordance with
the terms of the 1999 Agreement, the Uproar Stock was
duly authorized, validly issued, fully-paid and
nonassessable, and had been issued by Uproar in
compliance with all applicable laws and all
applicable rules and regulations thereunder with no
personal liability attaching to the ownership
thereof, and none of the Uproar Stock is or will be
subject to any preemptive right or any lien, charge
or encumbrance or any other claim of any third party
and ▇▇▇▇▇▇▇ received good title thereto free and
clear of all liens, charges, encumbrances, equities
and claims whatsoever.
16.6 Indemnification. Uproar shall indemnify ▇▇▇▇▇▇▇ and hold it
harmless from and against: (i) any and all loss, liability,
damage or deficiency resulting from any misrepresentation,
breach of warranty, negligent or wrongful act, or
nonfulfillment of any covenant or agreement on the part of
itself under the terms of the 1999 Agreement and this
Agreement, any document or instrument executed by such party
in connection with the 1999 Agreement or this Agreement or in
the Disclosure Materials; (ii) any and all actions, suits,
proceedings, claims, demands, assessments, judgments, costs,
and expenses including without limitation reasonable
attorney's fees and court costs incident to the foregoing
clause (i), to the extent any of the foregoing is not paid or
reimbursed by insurance. Anything contained in this Agreement
to the contrary notwithstanding, Uproar's obligation to
indemnify ▇▇▇▇▇▇▇ pursuant to the provisions of this Agreement
shall not exceed, in the aggregate, the sum of $5,000,000.
16.7 Definitions Related to Registration Rights. Unless the context
otherwise requires, the terms defined in this Section 16.7
shall have the meanings herein specified for all
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purposes of this Agreement, applicable to both the singular
and plural forms of any of the terms herein defined.
a) "Commission" means the United States Securities and
Exchange Commission.
b) "Uproar Stock" means, with respect to any date
subsequent to January 25, 2000, Common Stock of
Uproar Inc., a Delaware corporation, par value $.01
per share, and, with respect to any date from January
12, 1999 through January 25, 2000, Ordinary Shares of
Uproar Ltd., a Bermuda company.
c) "Exchange Act" means the U.S. Securities Exchange Act
of 1934, as amended.
d) "Holder" means the record or beneficial owner of any
Registrable Security.
e) "Holders of a Majority of the Registrable Securities"
means the Person or Persons who are the Holders of
greater than 50% of the shares of Registrable
Securities then outstanding.
f) "IPO" means Uproar's initial public offering of
securities pursuant to an effective registration
statement under the Securities Act.
g) "Person" includes any natural person, corporation,
trust, association, company, partnership, joint
venture and other entity and any government,
governmental agency, instrumentality or political
subdivision.
h) The terms "register," "registered" and "registration"
refer to a registration effected by preparing and
filing a registration statement in compliance with
the Securities Act or the Exchange Act, and the
declaration or ordering of the effectiveness of such
registration statement.
i) "Registrable Securities" means (a) all Uproar Stock
purchased or otherwise acquired by Pearson, and (b)
any securities issued or issuable with respect to the
Uproar Stock referred to in clause (a) above by way
of a stock dividend or stock split or in connection
with a combination of shares, reclassification,
recapitalization, merger or consolidation or
reorganization; provided, however, that such shares
of Uproar Stock shall only be treated as Registrable
Securities if and so long as they (i) have not been
sold to or through a broker or dealer or underwriter
in a public distribution or a public securities
transaction; or (ii) have not been sold in a
transaction exempt from the registration and
prospectus delivery requirements of the Securities
Act under Section 4(1) thereof so that all transfer
restrictions and restrictive legends with respect to
such Uproar Stock are removed upon the consummation
of such sale and the seller and purchaser of such
Uproar Stock receive an opinion of counsel for Uproar
which shall be in form and content reasonably
satisfactory to the seller and buyer and their
respective counsel, to the effect that such Uproar
Stock in the hands of the purchaser is freely
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transferable without restriction or registration
under the Securities Act in any public or private
transaction.
j) "Rule 144" means Rule 144 promulgated by the
Commission pursuant to the Securities Act or any
similar successor rule.
k) "Securities Act" means the U.S. Securities Act of
1933, as amended.
16.8 Intentionally Deleted
16.9 ▇▇▇▇▇▇▇'▇ Demand Registration Rights. If any registration
statement filed by Uproar or any or its Affiliates under the
Exchange Act shall be declared effective by the Commission,
then, subject to the provisions of subsections (b), (c) and
(d) of this Section 16.9, on two occasions only during the
period of three years following the expiration of the one year
period described in Section 16.3(c) hereof, the Holder or
Holders (the "Requesting Holder" or "Requesting Holders," as
the case may be) of a Majority of the Registrable Securities
shall be entitled to request registration under the Securities
Act of at least such number of the shares of Registrable
Securities then held by them (a "Demand Registration"). Such
request for registration must specify the number of
Registrable Securities requested to be registered, the
anticipated price per share for such offering and whether such
registration is to be in the form of an underwritten offering.
a) Selection of Underwriter(s). If the Requesting Holder
or Requesting Holders, as the case may be, elect to
have the offering of Registrable Securities pursuant
to the Demand Registration be in the form of an
underwritten offering, Uproar shall use its best
efforts to select and obtain the investment banker or
investment bankers and manager or managers reasonably
acceptable to Pearson to administer the offering.
b) Priority on Underwritten Demand Registration. If the
Demand Registration is an underwritten offering and
the managing underwriter thereof advise Uproar in
writing that in its opinion the number of Registrable
Securities requested to be included in such offering
exceeds the number of Registrable Securities that can
be sold therein without adversely affecting the
marketability of the offering, Uproar will include in
such registration the number of Registrable
Securities requested to be included that, in the
opinion of such managing underwriter, can be sold
without adversely affecting the marketability of the
offering, allocated in proportion, as nearly as
practicable, to the respective number of shares of
Registrable Securities held by such Holders at the
time of filing the registration statement. If all of
the Registrable Securities requested to be included
in a Demand Registration have been included, Uproar
shall be entitled to include that number of shares of
its unissued Uproar Stock or other securities as are
consented to by the managing underwriter.
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c) Limitations on Demand Registration. Notwithstanding
any other provision in this Agreement, Uproar shall
not be required to effect the Demand Registration (a)
during the period of time during which its IPO
Registration Statement shall remain effective; (b)
during the 12 consecutive months following the
effective date of a registration statement filed in
connection with any previous registration in which
the Holders of Registrable Securities exercised any
piggyback rights pursuant to this Agreement; or (c)
at any time when another registration statement
(other than on Form ▇-▇, ▇-▇ or a registration
statement on Form S-1 covering solely an employee
benefit plan) of Uproar (i) is reasonably foreseen by
Uproar's Board of Directors to be filed with the
Commission within 30 days after the date of request
for the Demand Registration, (ii) has been filed and
not yet become effective, or (iii) has become
effective less than six months prior to the date of
the request for the Demand Registration.
d) Special Audits. Notwithstanding any other provision
of this Agreement, Uproar shall not be required to
undergo or pay for any special audit to effect a
Demand Registration, and if such a special audit
(other than its normal fiscal year-end audits) would
be required in order to file or effect a registration
statement hereunder, Uproar shall be entitled to
delay the filing or effectiveness of such
registration statement until a reasonable period of
time following completion of such audit in the
ordinary course of Uproar's business; provided,
however, that Uproar shall not be entitled to delay
the filing or effectiveness of such registration
statement if the Holders who have requested
registration of Registrable Securities shall agree to
pay for the cost of such audit.
16.10 ▇▇▇▇▇▇▇'▇ Piggyback Registration Rights. If (i) any
registration statement filed by Uproar or any or its
Affiliates under the Exchange Act shall be declared effective
by the Commission, and (ii) at any time during the period of
five years following the expiration of the two year period
described in Section 16.3(d) hereof, Uproar shall determine to
file a registration statement under the Securities Act (other
than an IPO registration statement or a registration statement
on Form ▇-▇, ▇-▇ or on Form S-1 covering solely an employee
benefit plan), Uproar agrees promptly to give written notice
of its determination to all Holders. Upon the written request
of a Holder given within 30 days after the receipt of such
written notice from Uproar, Uproar agrees to use its best
efforts to cause all of such Holder's Registrable Securities
to be included in such registration statement and registered
under the Securities Act, all to the extent requisite to
permit the sale or other disposition of the Registrable
Securities to be so registered. All registrations of
Registrable Securities referred to in this Section 16.10 may
be referred to as "Piggyback Registrations."
a) Underwritten Piggyback Registration. If the
registration of which Uproar gives written notice
pursuant to Section 16.10 is for a public offering
involving an underwriting, Uproar agrees to so advise
the Holders as a part of its written notice.
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b) Priority on Piggyback Registration. Notwithstanding
any other provision of this Section 16.10, if the
managing underwriter of a Piggyback Registration that
is an underwritten distribution advises Uproar and
the Holders participating in such Piggyback
Registration in writing that, in its good faith
judgment, the number of shares of Registrable
Securities requested to be registered exceeds the
number of shares of Registrable Securities which can
be sold in such offering without adversely affecting
the marketability of the offering, then (a) the
number of shares of Registrable Securities so
requested to be included in the offering shall be
reduced to that number of shares which in the good
faith judgment of the managing underwriter can be
sold in such offering, and (b) such reduced number of
shares shall be allocated among all participating
Holders in proportion, as nearly as practicable, to
the respective number of shares of Registrable
Securities held by such Holders at the time of filing
the registration statement; provided, however, that,
in all events, the shares to be issued by Uproar
shall have priority over the shares of Registrable
Securities requested to be registered.
c) Registration Procedures. If and as often as Uproar is
required by the provisions of Sections 16.7(c) and
(d) hereof to include shares of Registrable
Securities held by various Holders in a registration
statement filed under the Securities Act, Uproar, as
expeditiously as possible, agrees that it shall:
(i) Registration Statement; Period of
Effectiveness. In accordance with the
Securities Act and all applicable rules and
regulations, prepare and file with the
Commission a registration statement with
respect to such securities and use its best
efforts to cause such registration statement
to become and remain effective for a period
of nine months (or, if such registration
statement has been filed on Form S-3, for a
period of one year) and prepare and file
with the Commission such amendments and
supplements to such registration statement
and the prospectus contained therein as may
be necessary to keep such registration
statement effective and such registration
statement and prospectus accurate and
complete during such period of time;
(ii) Underwriting Agreement. If the offering is
to be underwritten in whole or in part,
enter into a written underwriting agreement
in form and substance reasonably
satisfactory to the managing underwriter of
the public offering and Uproar;
(iii) Copies of Registration Statement,
Prospectus, Other Documents. Furnish to the
Holders of Registrable Securities
participating in such registration and to
the underwriters of the securities being
registered such number of copies of the
registration statement and each amendment
and supplement thereto, preliminary
prospectus, final prospectus and such other
documents as such underwriters and Holders
may reasonably request in order to
facilitate the public offering of such
securities;
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(iv) Blue Sky Qualification. Use its best efforts
to register or qualify the securities
covered by such registration statement under
such state securities or blue sky laws of
such jurisdictions as such participating
Holders and underwriters may reasonably
request within twenty (20) days prior to the
original filing of such registration
statement, except that Uproar shall not for
any purpose be required to execute a general
consent to service of process or to qualify
to do business as a foreign corporation in
any jurisdiction where it is not so
qualified, or to subject itself to taxation
in any such jurisdiction;
(v) Notification of Effectiveness and Filing.
Notify the Holders participating in such
registration, promptly after it shall
receive notice thereof, of the date and time
when such registration statement and each
post-effective amendment thereto has become
effective or a supplement to any prospectus
forming a part of such registration
statement has been filed;
(vi) Preparation of Amendments and Supplements at
Holders' Request. Prepare and file with the
Commission, promptly upon the request of any
such Holders, any amendments or supplements
to such registration statement or prospectus
which, in the opinion of counsel for such
Holders, is required under the Securities
Act or the rules and regulations thereunder
in connection with the distribution of the
Registrable Securities by such Holders;
(vii) Correction of Statements or Omissions.
Prepare and file promptly with the
Commission, and promptly notify such Holders
of the filing of, such amendments or
supplements to such registration statement
or prospectus as may be necessary to correct
any statements or omissions if, at the time
when a prospectus relating to such
securities is required to be delivered under
the Securities Act, any event has occurred
as the result of which any such prospectus
or any other prospectus as then in effect
would include an untrue statement of a
material fact or omit to state any material
fact required to be stated therein or
necessary to make the statements therein not
misleading;
(viii) Amendment of or Supplement to Non-Complying
Registration Statement or Prospectus. In
case any of such Holders is required to
deliver a prospectus at a time when the
prospectus then in circulation is not in
compliance with the Securities Act or the
rules and regulations of the Commission,
prepare promptly upon request such
amendments or supplements to such
registration statement and such prospectus
as may be necessary in order for such
prospectus to comply with the requirements
of the Securities Act and such rules and
regulations;
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(ix) Stop Orders, Proceedings. Advise such
Holders, promptly after it shall receive
notice or obtain knowledge thereof, of the
issuance of any stop order by the Commission
suspending the effectiveness of such
registration statement or the initiation or
threatening of any proceeding for that
purpose and promptly use its best efforts to
prevent the issuance of any stop order or to
obtain its withdrawal if such stop order
should be issued; and
(x) Inspection. Make available for inspection
upon request by any Holder covered by such
registration statement, by any managing
underwriter of any distribution to be
effected pursuant to such registration
statement and by any attorney, accountant or
other agent retained by any such Holder or
any such underwriter, all financial and
other records, pertinent corporate documents
and properties of Uproar, and cause all of
Uproar's officers, directors and employees
to supply all information reasonably
requested by any such Holder, underwriter,
attorney, accountant or agent in connection
with such registration statement.
16.11 Expenses. Subject to the provisions of Section 16.9(d), with
respect to the first inclusion of shares of Registrable
Securities in a registration statement pursuant to Section
16.9 hereof and all inclusions of shares of Registrable
Securities in a registration statement pursuant to Section
16.10 hereof, Uproar agrees to bear all fees, costs and
expenses of and incidental to such registration and the public
offering in connection therewith; provided, however, that the
Holders participating in any such registration agree to bear
their pro rata share of any applicable underwriting discount
and commissions. In the event of a second inclusion of shares
of Registrable Securities in a registration statement pursuant
to Section 16.9 hereof, Pearson agrees to bear all fees, costs
and expenses of and incidental to such registration and the
public offering in connection therewith; provided, however,
that the Holders participating in any such registration agree
to bear their pro rata share of any applicable underwriting
discount and commissions. The fees, costs and expenses of
registration to be borne as provided in the preceding two
sentences shall include, without limitation, all registration,
filing, listing, and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for Uproar, fees and
disbursement of counsel for the underwriter or underwriters,
if any, of the securities to be offered (if Uproar and/or
selling Holders who have requested registration of their
Registrable Securities are otherwise required to bear such
fees and disbursements), all legal fees and disbursements and
other expenses of complying with state securities or blue sky
laws of any jurisdictions in which such securities are to be
registered or qualified, reasonable fees and disbursements of
one firm of counsel for the Holders who have requested
registration of their Registrable Securities, to be selected
by the Holders of a majority of the shares of Registrable
Securities to be included in such registration, and the
premiums and other costs of policies of insurance against
liability arising out of such public offering.
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16.12 Underwriting Agreements. In the event any Demand Registration
or Piggyback Registration under this Agreement is an
underwritten offering, the right of any Holder to participate
therein, and the inclusion of such Holder's Registrable
Securities therein, shall be subject to such Holder's agreeing
to enter into, together with Uproar, an underwriting agreement
with and reasonably satisfactory to the underwriter or
underwriters selected by Uproar for such underwriting.
16.13 Indemnification.
a) Indemnification by Uproar. Uproar hereby agrees to
indemnify and hold harmless each Holder (including
Holder's officers, directors, legal counsel,
accountants, and controlling Persons) of Registrable
Securities which are included in a registration
statement pursuant to the provisions of these
Sections 16.7 - 16.14 from and against, and agrees to
reimburse such Holder with respect to, any and all
claims, actions (actual or threatened), demands,
losses, damages, liabilities, costs or expenses to
which such Holder may become subject under the
Securities Act or otherwise, insofar as such claims,
actions, demands, losses, damages, liabilities, costs
or expenses arise out of or are based upon any untrue
statement or alleged untrue statement of any material
fact contained in such registration statement, any
prospectus contained therein, or any amendment or
supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances in which they were made, not
misleading; provided, however, that Uproar will not
be liable in any such case to the extent that any
such claim, action, demand, loss, damage, liability,
cost or expense is caused by an untrue statement or
alleged untrue statement or omission or alleged
omission so made in strict conformity with written
information furnished by such Holder specifically for
use in the preparation thereof.
b) Indemnification by Holders. Each Holder of shares of
Registrable Securities which are to be included in a
registration statement pursuant to the provisions of
these Sections 16.7 - 16.14 shall be required to
agree, severally and not jointly, as a condition of
Uproar's obligation to prosecute such registration to
completion, to indemnify and hold harmless Uproar,
its officers, directors, legal counsel and
accountants and each Person who controls Uproar
within the meaning of the Securities Act, from and
against, and agrees to reimburse Uproar, its
officers, directors, legal counsel, accountants and
controlling Persons with respect to, any and all
claims, actions, demands, losses, damages,
liabilities, costs or expenses to which Uproar, its
officers, directors, legal counsel, accountants or
such controlling Persons may become subject under the
Securities Act or otherwise, insofar as such claims,
actions, demands, losses, damages, liabilities, costs
or expenses are caused by any untrue statement of any
material fact contained in such registration
statement, any prospectus contained therein or any
amendment or supplement thereto, or are caused by the
omission or the alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements
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therein, in light of the circumstances in which they
were made, not misleading, in each case to the
extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or
alleged omission was so made in reliance upon and in
strict conformity with written information furnished
by such Holder specifically for use in the
preparation thereof. Notwithstanding the foregoing,
no Holder shall be obligated hereunder to pay more
than the net proceeds realized by it upon its sale of
Registrable Securities included in such registration
statement.
c) Indemnification Procedure. Promptly after receipt by
a party indemnified pursuant to the provisions of
Section 16.13(a) or (b) of notice of the commencement
of any action involving the subject matter of the
foregoing indemnity provisions, such indemnified
party will, if a claim therefor is to be made against
the indemnifying party pursuant to Section 16.13(a)
or (b), notify the indemnifying party of the
commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any
liability which it may have to an indemnified party
otherwise than under this Section 16.13 and shall not
relieve the indemnifying party from liability under
this Section 16.13 unless such indemnifying party is
prejudiced by such omission. In case any such action
is brought against any indemnified party and it
notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may
wish, jointly with any other indemnifying parties
similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such
action include both the indemnified party and the
indemnifying party, and the indemnified party shall
have reasonably concluded that there may be legal
defenses available to it and/or other indemnified
parties which are different from or additional to
those available to the indemnifying party, the
indemnified party or parties shall have the right to
select separate counsel (in which case the
indemnifying party shall not have the right to direct
the defense of such action on behalf of the
indemnified party or parties). Upon the permitted
assumption by the indemnifying party of the defense
of such action, and approval by the indemnified party
of counsel, the indemnifying party shall not be
liable to such indemnified party under Section
16.3(a) or Section 16.3(b) for any legal or other
expenses subsequently incurred by such indemnified
party in connection with the defense thereof (other
than reasonable costs of investigation) unless: (a)
the indemnified party shall have employed separate
counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next
preceding sentence; (b) the indemnifying party shall
not have employed counsel satisfactory to the
indemnified party to represent the indemnified party
within a reasonable time; (c) the indemnifying party
and its counsel do not actively and vigorously pursue
the defense of such action; or (d) the indemnifying
party has authorized the employment of counsel for
the indemnified party at the expense of the
indemnifying party. No indemnifying party shall be
liable to an indemnified party for any settlement of
any action or claim without the consent of the
indemnifying party, and no indemnifying party may
unreasonably withhold its consent to any
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such settlement. No indemnifying party will consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability with respect to
such claim or litigation.
16.14 Contribution.
a) If the indemnification provided for in Section 16.13(a) or (b)
is held by a court of competent jurisdiction to be unavailable
to a party to be indemnified with respect to any claims,
actions, demands, losses, damages, liabilities, costs or
expenses referred to therein, then each indemnifying party
under any such Section, in lieu of indemnifying such
indemnified party thereunder, hereby agrees to contribute to
the amount paid or payable by such indemnified party as a
result of such claims, actions, demands, losses, damages,
liabilities, costs or expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the
other in connection with the statements or omissions which
resulted in such claims, actions, demands, losses, damages,
liabilities, costs or expense, as well as any other relevant
equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates
to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent
such statement or omission. Notwithstanding the foregoing, the
amount any Holder shall be obligated to contribute pursuant to
this Section 16.14 shall be limited to an amount equal to the
per share public offering price (less any underwriting
discount and commissions) multiplied by the number of shares
of Registrable Securities sold by such Holder pursuant to the
registration statement which gives rise to such obligation to
contribute (less the aggregate amount of any damages which
such Holder has otherwise been required to pay in respect of
such claim, action, demand, loss, damage, liability, cost or
expense or any substantially similar claim, action, demand,
loss, damage, liability, cost or expense arising from the sale
of such Registrable Securities).
b) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution pursuant to this Section 16.14 from
any person who was not guilty of such fraudulent
misrepresentation.
16.15 Violation of Standstill Provisions -- Divestiture. In the event that
Pearson, or any person acting in concert with Pearson, shall violate
the warranty and representation set forth in Section 16.3(e) hereof, it
shall immediately thereafter be required to divest itself of such
number of shares of Uproar Stock as shall be necessary to reduce its
holdings thereof to not more than 20% of the total number of shares of
Uproar Stock
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then outstanding. The shares of Uproar Stock to be so divested shall
not include any portion of the Shares which, at the time of such
divestiture, shall be subject to the restrictions imposed by Section
16.3 (c) or (d) hereof. If Pearson fails or refuses, for any reason, to
undertake such divestiture within five (5) business days after its
receipt of notice from Uproar demanding that it do so, and/or if having
timely commenced such divestiture, Pearson fails to complete same
within 30 days thereafter, Uproar shall, in either of such events, be
entitled to commence judicial proceedings in the appropriate state or
federal courts in the State of New York seeking specific performance of
the provisions of this paragraph, and Pearson shall be obligated to pay
all reasonable counsel fees and disbursements incurred by Uproar in
connection therewith. Furthermore, Pearson shall not be entitled to
vote any of the Shares on any matter that shall come before the holders
of Uproar Shares for a vote at any time while ▇▇▇▇▇▇▇'▇ holdings of
Uproar Stock shall exceed 20% of the total number of shares of Uproar
Stock then outstanding. Anything contained in this Section 16.15 to the
contrary notwithstanding, in the event that:
a) any person or entity acting solely or in concert with any
other person or entity (other than Pearson or any affiliate of
Pearson) shall acquire 20% or more of the then issued and
outstanding shares of Uproar Stock either in open market
transactions, or pursuant to any tender offer or similar
transaction which shall not be endorsed or approved by
Uproar's Board of Directors, the provisions of Sections
16.3(c), (d) and (e) of this Section shall thereupon be deemed
to have been terminated, but this Agreement shall otherwise
continue in full force and effect; and
b) any person or entity acting solely or in concert with any
other person or entity (other than Pearson or any affiliate of
Pearson) shall acquire 20% or more of the then issued and
outstanding shares of Uproar Stock from Uproar and/or any
affiliate of Uproar, or pursuant to any tender offer or
similar transaction which shall be endorsed or approved by
Uproar's Board of Directors, Pearson shall thereupon have the
right, but not the obligation, to terminate this Agreement. If
Pearson elects to exercise such right of termination, it shall
do so by giving not less than 90 days' prior written notice of
termination to Uproar.
16.16 Stop Transfer Instructions; Restrictive Legend. Upon original issuance
thereof, and until such time as the same is no longer required under
this Agreement, and/or the applicable requirements of the applicable
laws and regulations of each governmental authority having jurisdiction
over the issuance, sale, transfer or other disposition of the Shares,
a) Uproar shall issue "stop transfer" instructions to the
transfer agent of the Uproar Stock, and such other
instructions as Uproar may deem advisable to prevent the sale,
assignment, transfer or other disposition of any of the
Shares;
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b) any certificate or certificates evidencing ▇▇▇▇▇▇▇'▇ ownership
of the Shares (and all certificates issued in exchange
therefor or substitution thereof) shall bear the following
legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED OR OTHERWISE QUALIFIED FOR SALE BY THE HOLDER
HEREOF UNDER THE APPLICABLE LAWS AND/OR REGULATIONS OF ANY
GOVERNMENTAL AUTHORITY HAVING JURISDICTION WITH RESPECT
THERETO. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR QUALIFICATION OR AN EXEMPTION
THEREFROM UNDER SAID LAWS OR REGULATIONS"
and
c) in the event that the transfer agent of the Uproar Stock shall
fail or refuse for any reason to implement the "stop transfer"
instructions set forth in sub-section (a) hereof, or to place
the legend set forth in sub-section (b) hereof upon each of
the Global Certificates evidencing the Shares, Pearson shall
enter into an escrow agreement with Uproar and the Custodian
which shall provide that the Custodian shall hold all of the
Shares in accordance with, and subject to, the various
restrictions and limitations on transfer of the Shares imposed
by Section 16 of this Agreement.
17 Indemnification.
17.1 Indemnification of Uproar by Pearson against Certain Liability.
Pearson, at its own expense, shall indemnify, defend and hold harmless
Uproar and its Affiliates and their officers, directors, employees and
agents (collectively, the "Uproar Indemnitees"): (a) from and against
all demands, claims, threatened claims, actions or causes of action,
assessments, losses, damages, liabilities, costs and expenses,
including without limitation, interest, penalties and reasonable
outside attorneys' fees and expenses which shall be based upon a claim
brought by a third party that (1) Uproar's use pursuant to this
Agreement (including any advertising or promotional use of such
materials) of the Licensed Marks in English speaking countries, the
Game Show Formats, or other Pearson Materials in the Territory (without
the addition of any Uproar Materials) when used by Uproar as
contemplated in this Agreement infringes any copyright, trademark,
trade secret, rights of publicity or privacy, or other proprietary
right of any third party or is libelous or slanderous; (2) if true,
would constitute a breach of any of ▇▇▇▇▇▇▇'▇ representations,
warranties or agreements hereunder; (3) arises out of the improper use
or transmission by Pearson of the User Information and/or Summarized
User Data; (4) arises out of any Advertisement placed by Pearson on the
Site; or (5) arises out of the negligence or willful misconduct of
Pearson. Pearson shall have the right at all times, in its sole
discretion,
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and at its sole cost, to retain or resume control of the conduct of the
defense of any matter to which the foregoing indemnity applies; (b)
from and against any tax liability of Pearson for which Uproar and/or
any Affiliate of Uproar may have been determined to have had a
withholding obligation as a consequence of the issuance pursuant hereto
of Shares by Uproar including any interest and/or penalties relating
thereto.
17.2 Repair or Replacement of Licensed Game Show. If a court of competent
jurisdiction imposes an injunction prohibiting Uproar from continued
use of any Licensed Internet Game and/or Licensed ▇▇▇▇ or portion
thereof as a result of material provided by Pearson, Pearson shall at
▇▇▇▇▇▇▇'▇ expense and election and as approved by Uproar:
a) Procure for Uproar the right to continue to use the material
pursuant to this Agreement; or
b) Replace or modify the infringing material in the Licensed
Internet Game and/or Licensed ▇▇▇▇, as the case may be, to
make it non-infringing, provided that the modifications or
substitutions will not materially and adversely affect the
continued use or transmission of such Licensed Internet Game
on the Internet or lessen its utility to Uproar (both as
reasonably determined by Uproar); or
c) If Pearson is unable to comply with either paragraphs (a) or
(b) above within 90 days of the imposing of the injunction,
Uproar may, at its election, terminate this Agreement insofar
as it relates to such Game, in which event Uproar shall be
relieved of its obligation to pay any future Guaranteed
Minimums for such Game under Section 14.3 above (or, if such
Game is enjoined in less than all applicable jurisdictions,
the Guaranteed Minimum for such Game shall be reduced
appropriately by agreement between the parties to reflect the
extent to which such Game is enjoined). If, subsequent to such
termination but during the term of this Agreement, the
aforementioned injunction is removed or the use of any
enjoined Licensed Internet Game and/or Licensed ▇▇▇▇ or
portion thereof by Uproar is otherwise no longer prohibited,
Pearson shall offer to Uproar a license for such Licensed
Internet Game and/or Licensed ▇▇▇▇ or portion thereof upon the
same terms and conditions as applied thereto under this
Agreement and for such period of time as, under this
Agreement, Uproar was prohibited from the use thereof. Uproar
shall have 30 days to accept or decline such offer.
d) If all Game Show Formats offered under this Agreement in the
United States are enjoined at any time before 30th September
2001, then Pearson shall return to Uproar for cancellation the
pro-rata amount of ▇▇▇▇▇▇▇'▇ Securities equal to the product
derived by multiplying the total number of shares by a
fraction, the numerator of which is the number of days
remaining between the date on which all the Game Show Formats
were enjoined and 30th September 2001, and the denominator of
which is 972 (being the total number of days in the Initial
Term under the 1999 Agreement).
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17.3 Indemnification of Pearson by Uproar against Certain Liability. Uproar,
at its own expense, shall indemnify, defend and hold harmless Pearson,
its parent, subsidiaries and Affiliates, and its officers, directors,
employees and agents (collectively, the "Pearson Indemnitees"), from
and against all losses which shall be based upon a claim or threatened
claim that (1) Uproar's or ▇▇▇▇▇▇▇'▇ use of any of the materials or
services supplied or obtained by Uproar including, without limitation,
the Site, the Software, and the technology used to develop and maintain
the Site and used by Uproar as contemplated in this Agreement infringes
any copyright, trademark, trade secret, rights of publicity or privacy,
or other proprietary right of any third party or is libelous or
slanderous, (2) if true, would constitute a breach of any of Uproar
representations, warranties or agreements hereunder; (3) arises out of
the negligence or willful misconduct of Uproar; (4) arises out of a
sweepstakes conducted by Uproar or a prize awarded by Uproar in
connection with any Licensed Internet Game; (5) arises out of any
activity of Uproar in relation to the Licensed Internet Games or the
Site (including, without limitation, Uproar's collection of User
Information or improper use or transmission of User Information and/or
Summarized User Data); (6) arises out of any hyperlink, advertisement,
or third-party material placed on the Site by Uproar; (7) arises out of
the improper use, distribution or transfer of the Game Show Formats or
other Pearson Materials by Uproar; or (8) any misuse of the Licensed
Internet Games or the Site by any User of which Uproar had actual
knowledge. Uproar shall have the right at all times, in its sole
discretion and its sole cost, to retain or resume control of the
conduct of the defense of any matter to which the foregoing indemnity
applies.
18 Limitation of Liability.
18.1 Limitation of Liability. EXCEPT IN RELATION TO ANY BREACH OF THE
WARRANTIES SET FORTH IN SECTION 10.2 HEREUNDER, NEITHER PARTY SHALL BE
LIABLE TO THE OTHER FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY
DAMAGES (EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES) SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED
PROFITS OR LOST BUSINESS. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE
OTHER FOR ANY CLAIM ARISING OUT OF ANY DOWNLOADING OR OTHER USE OF ANY
OF THE LICENSED INTERNET GAMES BY USERS OF THE LICENSED INTERNET GAMES.
18.2 Disclaimer. EXCEPT AS SET FORTH HEREIN, BOTH PARTIES HEREBY
SPECIFICALLY DISCLAIM ANY REPRESENTATIONS REGARDING THE LICENSED
INTERNET GAMES, INCLUDING ANY IMPLIED REPRESENTATION REGARDING
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED
WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.
WITHOUT
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LIMITING THE FOREGOING, AND EXCEPT AS OTHERWISE AGREED, NEITHER PARTY
MAKES ANY WARRANTY THAT THE MATERIALS IT PROVIDES WILL BE ERROR-FREE OR
THAT USER ACCESS THERETO WILL BE UNINTERRUPTED.
18.3 Insurance. Uproar shall obtain all necessary and adequate insurance
with respect to production, transmission, and hosting of the Licensed
Internet Games, including without limitation, liability insurance,
workers' compensation and errors and omissions insurance in amounts and
with carriers reasonably approved by Pearson, each with limits of at
least one million ($1,000,000.00) dollars on account of any one
occurrence and one million ($1,000,000.00) dollar for each occurrence
of property damage. Pearson will be named an additional insured in all
such insurance policies and copies of such policies and certificates of
insurance (or Binders), shall be delivered to Pearson within ten (10)
days after issuance. Said certificates will include provisions whereby
fifteen (15) days notice must be received by Pearson prior to coverage
cancellation by either Uproar or Insurer, or non-payment of premium by
Uproar.
19 Confidentiality.
19.1 Confidentiality Obligations. Each party acknowledges that it shall
receive Confidential Information (as hereinafter defined) of the other
party relating to its technical, marketing, product and/or business
affairs. During the term of this Agreement and for a period of one (1)
year thereafter, all Confidential Information of the other party shall
be held in strict confidence and shall not be disclosed or used without
the express written consent of the other party, except as may be
required by law. Each party shall use reasonable measures and make
reasonable efforts to provide protection for the other party's
Confidential Information including measures at least as strict as such
party uses to protect its own Confidential Information.
19.2 Confidentiality of this Transaction. Except as may be required by law,
regulation or rule, neither Party shall make any announcement or other
disclosure to any third party of the transaction contemplated by the
Agreement or any of the details of any of Uproar's plans for the
Licensed Internet Games, the Games, or the Local Television Shows or
any related products or services, until such plans have actually been
implemented, except with the prior written consent of the other party.
The form, substance and timing of any announcement referring directly
or indirectly to any of the Licensed Internet Games, the Local
Television Shows, or any related products or services, until such plans
have actually been implemented, except with the prior written consent
of the other party. The form, substance and timing of any announcement
referring directly or indirectly to any of the Licensed Internet Games,
or the Games, by either party shall be subject to the prior written
approval of both parties, such consent not to be unreasonably withheld.
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19.3 Confidential Information Defined. Confidential Information shall mean
and include the Production and Marketing Information of either party
and any information relating to or disclosed in the course of the
performance of this Agreement except for any information that (i) is or
becomes generally available to the public without breach of this
Agreement; (ii) is in the possession of a party prior to its disclosure
by the other party; (iii) becomes available from a third party not in
breach of any obligation of confidentiality to which such third party
is subject; (iv) was independently developed by a party; and (v) must
be disclosed due to judicial or governmental requirement or order,
provided that, the party in receipt of the requirement or order has
given the other party notice of such requirement or order to permit the
other party of reasonable opportunity to object to the requirement or
order or seek a protective order or other appropriate remedy.
19.4 Public Information. Each party will submit to the other party, for its
prior written approval, which shall not be unreasonably withheld or
delayed, any public documents including without limitation, financial
documents, press releases or marketing, advertising or promotional
materials related to the activities described herein and/or referencing
the other party and/or its trade names, trademarks and service marks.
Notwithstanding the foregoing, either party may issue such documents as
required by law or regulation (and only to the extent that such
information is required by law or regulation) without the consent of
the other party.
19.5 User Information.
a) With respect to each of the Licensed Internet Games, Uproar
will create a User registration page, which page will include
optional identification and demographic questions for each
person who visits the Web page containing a Licensed Internet
Game (a "User"). The registration page will contain an
acknowledgment that information obtained as a result of such
questions will be shared by Uproar with Pearson only and
neither of them will sell or otherwise disseminate the user's
name or address to any unaffiliated third party. All
information collected will be used by Uproar and Pearson
solely for their own internal use, except that Pearson and its
Affiliates and local television licensees may e-mail Users who
do not object to receiving information about the Games and
related products.
b) It is understood and agreed that Uproar and Pearson will not
sell or otherwise disseminate any User's name, and that no
User's name or identifying information will be retained by
Uproar or Pearson if the User so requests. Pearson will adhere
and be bound by the obligations, if any, set forth in the
Uproar privacy statement published on the URL ▇▇▇▇▇▇.▇▇▇.
Uproar shall use reasonable efforts to post site-specific
privacy and data collection policies on each of the different
national versions of the Site (in the United States, the
United Kingdom, Canada and Australia).
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c) Uproar's data collection policy for each Site shall include
the creation and provision of notice to Users describing any
demographic and/or tracking information that is being
collected (providing Users the option of withholding or
correcting such data). Uproar shall provide the name and
address of a contact person to whom inquiries or complaints
about data collection may be addressed, and shall store all
personally identifiable information off-line in a secure
environment.
d) Any User registration name, and/or demographic information
collected in connection with the local Licensed Internet Games
shall be the exclusive property of Uproar.
e) Summarized User Data from all parts of the Site (including
data that compares traffic on the Licensed Internet Games to
traffic on other games on the Site) will be shared quarterly
with Pearson in a form set forth in Exhibit G.
20 General Provision.
20.1 Ownership of Certain Intellectual Property.
a) Pearson acknowledges and agrees that Uproar has and will
retain all right, title, interest and ownership in and to all
software developed by Uproar and used in the Licensed Internet
Games (the "Software"). Pearson further acknowledges and
agrees that the source code for the Software constitutes
Confidential Information (as defined in Section 19.3) of
Uproar whether or not any portion thereof is or may be the
subject of a valid copyright or patent.
b) Computer Programming. Subject to Section 20.1(a) above, all
computer programming files developed or prepared by Uproar in
connection with the Licensed Internet Games are the exclusive
property of Uproar (the "Code"). The parties specifically
acknowledge and agree that Uproar owns all rights with respect
to the domain name ▇▇▇▇▇▇.▇▇▇.
c) Uproar acknowledges and agrees that Pearson owns and will
retain all right, title, interest and ownership in and to the
Game Show Formats, the Games, the U.S. Local Television Shows
and all other Pearson Materials.
d) Reversion of Rights. Uproar acknowledges and agrees that
except for the Software and the Code, all artistic, editorial
and design elements (including without limitation "look and
feel") and format-specific questions created for the Licensed
Internet Games which are based on, specific to, or derivative
or transformative works of, the Game Show Formats (the "Game
Content"), are and shall remain the property of Pearson. All
rights, title and interest therein shall revert to Pearson
upon termination or expiration of this license.
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e) Intentionally Deleted
f) Transition Obligation. Upon expiration or any termination of
this Agreement by either party, Uproar shall provide all
reasonably requested support in the transitioning of the
hosting services to Pearson or a third party vendor selected
by Pearson in its sole discretion, including without
limitation, the transfer and any necessary conversion of all
software and Code, and consulting regarding technology hosting
requirements. Pearson shall pay Uproar for such services at
its then-current rates and shall pay all expenses incurred by
Uproar in supplying such services.
20.2 Entire Agreement / Termination of 1999 Agreement.
a) Subject to Section 20.2(b) below, this Agreement together with
all Exhibits, Specifications and attachments, if any, which
are incorporated herein by reference, is the sole and entire
agreement between the parties relating to the subject matter
hereof. This Agreement supersedes all prior understandings,
agreements and documentation relating to such matter. No
supplement, modification, or amendment of this Agreement shall
be binding, unless executed in writing by both parties. In the
event of a conflict between provisions of this Agreement and
any attached Exhibits, Specifications or other material, this
Agreement shall take precedence.
b) This Agreement amends and restates the 1999 Agreement such
that from the date of execution of this Agreement, to the
extent that the provisions of this Agreement differ from the
1999 Agreement, the provisions of this Agreement shall prevail
provided that such amendment and restatement shall not affect
any rights (including without limitation rights of action) of
a party arising prior to the date of such amendment and
restatement .
20.3 Assignment. Each party may assign this Agreement or all or any part of
its rights hereunder to an Affiliate or to any entity that succeeds to
all or substantially all of its capital stock, or that is otherwise its
successor in interest generally, and this Agreement shall inure to the
benefit of, and be binding upon such assignee or successor in interest,
provided however that in the event that any such assignee of Uproar is
divested by Uproar, this Agreement shall be re-assigned, prior to such
divestment, to Uproar or any of its other Affiliates. Pearson shall,
except as set forth above, have the right to terminate this Agreement
with thirty (30) days notice upon any change in control of Uproar
(whether by merger, stock transfer or otherwise) provided that Pearson
shall notify Uproar of its intention to terminate no later than ninety
(90) days after the date on which such change of control takes effect.
For purposes of the preceding sentence, a "change in control" shall
be deemed to occur if: (i) any "person" (as such term is defined in the
Securities Exchange Act of 1934, as amended) other than Uproar or any
of its subsidiaries or a trustee or any fiduciary
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holding securities under an employee benefit plan of Uproar or any of
its subsidiaries, acting singly or in concert with one or more other
persons, acquires securities representing 50% or more of the combined
voting power of Uproar's then outstanding securities; (ii) during any
one year period, individuals who at the beginning of such period
constitute the Board of Directors of Uproar and any new director whose
election by the Board of Directors or nomination for election by
Uproar's shareholders was approved by a vote of at least a majority of
the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute a
majority thereof; (iii) the shareholders of Uproar approve a merger or
consolidation of Uproar with any other corporation, other than (a) a
merger or consolidation which would result in the voting securities of
Uproar outstanding immediately prior thereto continuing to represent,
in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of Uproar or any of
its subsidiaries, at least 50% of the combined voting power of the
voting securities of Uproar or such surviving entity outstanding
immediately after such merger or consolidation, or (b) a merger or
consolidation effected to implement a recapitalization of Uproar (or
similar transaction) in which no person acquires more than 50% of the
combined voting power of Uproar's then outstanding securities; or (iv)
the shareholders approve a plan of complete liquidation of Uproar or an
agreement for the sale or disposition by Uproar of all or substantially
all of its assets.
20.4 Waiver. No term or provision of this Agreement shall be deemed waived
and no breach excused unless such waiver or consent is in writing and
signed by the party claimed to have waived or consented. A waiver by
either of the parties of any of the covenants, conditions or agreements
to be performed by the other hereunder shall not be construed to be a
waiver of any succeeding breach thereof.
20.5 Survival. The following provisions of this Agreement shall survive the
completion, expiration, termination or cancellation of this Agreement:
Sections 7, 10.1-10.7, 11, 14, 15, 16, 17, 18 19.1-19.4, 19.5(b),
19.5(d), and 20.
20.6 Force Majeure. Neither party shall be liable for delay or failure in
the performance of its obligations hereunder if such delay or failure
arises from the occurrence of events beyond the reasonable control of
such party, which events could not have been prevented by the exercise
of due care and could not have been foreseen at the time of entering
into this Agreement, such as fire, explosion, flood, storm, acts of
God, war, embargo, or riot, provided that the party suffering the delay
or failure and acts diligently to remedy the cause of such delay or
failure.
20.7 No Joint Venture. Nothing contained herein will be construed as
creating any partnership, joint venture or other form of joint
enterprise between the parties.
20.8 Independent Contractor. The parties acknowledge that Uproar will
perform its obligations hereunder as an independent contractor. The
manner and method of
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performing such obligations will be under Uproar's sole control and
discretion. It is also expressly understood that Uproar employees and
agents, if any, are not ▇▇▇▇▇▇▇'▇ employees or agents, and have no
authority to bind Pearson by contract or otherwise.
20.9 Notice. All notices and other communications required or permitted
under this Agreement shall be deemed given when delivered personally,
or one day after being deposited with Federal Express or other
recognized overnight courier service, or five (5) days after being
mailed by registered or certified mail, postage prepaid, addressed as
follows, or to such other address as each party may designate in
writing:
If to Uproar:
General Counsel
Uproar Inc.
▇▇▇ ▇.▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
If to Pearson:
President
▇▇▇▇▇▇▇ Television Enterprises
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
With a copy to:
EVP Business & Legal Affairs
▇▇▇▇▇▇▇ Television Enterprises
▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
20.10 Recruitment. During the term of this Agreement and for eighteen (18)
months thereafter, each party agrees that neither it nor any of its
Affiliates shall, without the other party's written consent (which
shall not be unreasonably withheld), employ or solicit for employment,
or cause any third party to employ or solicit for employment, any
employee of the other party or its Affiliates who is, or at any time
during the preceding year was, involved in projects pursuant to this
Agreement.
20.11 Intentionally Deleted
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20.12 Additional Rights of Pearson. In the event that Uproar develops a game
site for any content aggregator, whether such a site is located on the
Internet or on any other computer network (such as AOL and Internet
search engines or portals), Uproar shall make reasonable efforts to
include the Licensed Internet Games on such site no later than and on
terms no less favorable than those made available for any other
computer games.
20.13 Applicable Law; Jurisdiction. This Agreement will be governed by the
laws of the State of New York without regard to its conflict of laws
principles. Both parties consent and agree that all legal proceedings
relating to the subject matter of this Agreement shall be maintained in
courts sitting within the State of New York and both parties consent
and agree that jurisdiction and venue for such proceedings shall be
exclusively with such courts.
20.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of
which together shall constitute a single instrument.
20.15 Facsimile Execution. This Agreement may be executed by facsimile
signatures by either party hereto and such signature shall be deemed
binding for all purposes hereof, without delivery of an original
signature being thereafter required.
20.16 Severability. If any provision of this Agreement is found illegal or
unenforceable, it will be enforced to the maximum extent permissible,
and the legality and enforceability of the other provisions of this
Agreement will not be affected.
20.17 Headings Not Controlling. The headings in this Agreement are for
reference purposes only and shall not be construed as a part of this
Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement by their duly
authorized representatives.
▇▇▇▇▇▇▇ Television Holdings, Inc. Uproar Inc.
By:__________________________________ By:______________________________
Name:________________________________ Name:____________________________
Title:_________________________________ Title: __________________________
Date:_________________________________ Date: ___________________________
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▇▇▇▇▇▇▇ Television Limited
By:____________________________________
Name:__________________________________
Title:_________________________________
Date:__________________________________
▇▇▇▇▇▇▇ Television North America, Inc.
By:____________________________________
Name:__________________________________
Title:_________________________________
Date:__________________________________
▇▇▇▇▇▇▇ Television, Inc.
By:____________________________________
Name:__________________________________
Title:_________________________________
Date:__________________________________
▇▇▇▇▇▇▇ Television Netherlands
By:____________________________________
Name:__________________________________
Title:_________________________________
Date:__________________________________
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EXHIBIT A
GAME PRODUCTION SCHEDULE
DEADLINE DESCRIPTION
------------------------------------------------ -----------------------------------------------------------
First Broadcast of To Tell the Truth Gameshow on To Tell the Truth Single Player Internet Version Launch (US
US syndication TV (est 30 September 2000 Version)
30th October 2000 To Tell the Truth Multi Player Internet Version Launch (US
Version)
28th February 2001 Match Game Multi Player Internet Version Launch (US Version)
1st January 2001 Family Fortunes Multi Player Internet Version Launch (UK
Version)
1st March 2001 To Tell the Truth Multi Player Internet Version Launch (UK
Version)
1st January 2001 100% Multi Player Internet Version Launch (UK Version)
1st June 2001 Blankety Blanks Multi Player Internet Version Launch (UK
Version)
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EXHIBIT B
THE LICENSED MARKS
FAMILY FEUD (U.S. Registration)
FAMILY FORTUNES
MATCH GAME (U.S. Registration)
100% (U.S. Application)
TO TELL THE TRUTH (U.S. Registration)
BLANKETY BLANK (U.K. Registration)
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EXHIBIT C
UPROAR SERVER STANDARDS
1. UPROAR games are hosted on Servers capable of running the Internet Protocol,
TCP/IP.
2. Servers are connected to the Internet 24 hours a day, seven days a week.
3. Internet connections will be only made via Internet Service Providers who can
provide a minimum average uptime of 99%.
4. A Cisco Local Director or similar such device that provides multiple
fail-over and load balancing is used to connect Servers to the Internet.
5. All Servers have either remote reboot or auto-reboot capabilities.
6. Player account information is stored on RAID-5 or similar redundant disk
storage devices.
7. Servers are physically located in a facility with air conditioning and at
least temporary back-up power.
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EXHIBIT D
Uproar (Holdings) Limited was not licensed to operate as a foreign corporation
in any jurisdictions.
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EXHIBIT E
An Employee Stock Ownership Plan (the "Plan") was established by resolutions
adopted by the Board of Directors of Uproar (Holdings) Limited on July 27, 1997.
Pursuant to the Plan, up to 25,000 ordinary shares, par value (pound)1.00 each,
of Uproar (Holdings) Limited could be issued. At the date of execution of the
1999 Agreement, no shares had been issued under the Plan, and one option to
purchase 333 shares at an exercise price of (pound)66.00 was outstanding.
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EXHIBIT F
At the date of execution of the 1999 Agreement, Uproar (Holdings) Ltd. had the
following subsidiaries:
1. Uproar Services Limited (Ireland) - capitalization IR(pound)279, 365
2. Uproar KFT. (Hungary) - capitalization HUF 2,000,000
3. Uproar, Inc. (United States) - capitalization $100
4. Uproar Limited (United Kingdom) - capitalization (pound)1000
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EXHIBIT G
FAMILY FEUD 100% BINGOBLITZ
--------------------------------------------------- ------------------------ ------------- ------------------------
Ad Imps 407,782,266 60,408,489 296,004,558
Percentage of Total Impressions 19% 3% 13%
Ad Clicks 9,571,938 1,132,507 2,711,041
Click Through Rate 2.35% 1.87% 0.92%
Average Time Spent in Game This data is not tracked 1,203 seconds This data is not tracked
Unique Registered Users for the game 329,329 847,770 1,042,844
Unique Registered Users for all games for the site* 958,641 2,246,233 2,246,233
Percentage of Total Active Reg Users 34.35% 37.74% 46.43%
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