GALAXY II PURCHASE AND LICENSE AGREEMENT TERMS AND CONDITIONS
1. General Provisions. These terms and conditions (this “Agreement”) govern all orders from Arachnid Inc.’s customer (“Buyer”) to Arachnid, Inc. (“Arachnid”) for, and sales and the grant of related licens-
es by Arachnid to Buyer of, the Arachnid product referred to as the “GALAXY II” and its software (the “Product”). With respect to the Products, the terms and conditions of this Agreement shall (i) super-
sede any conflicting or additional terms contained in any advertisement, quotation, purchase order, confirmation, acknowledgment or other document or communication heretofore or hereafter between Buyer
and Arachnid, and (ii) apply whether or not Arachnid or Buyer or both specifically reference this Agreement in any document concerning any order for or sale of the Products, unless Arachnid and Buyer
expressly otherwise agree in a writing signed and delivered by each of them to the other which specifically references this Agreement by date and describes which terms and conditions of this Agreement
are excepted and superseded. Arachnid’s acceptance of any order by Buyer for a Product is expressly conditioned upon the applicability of this Agreement. All orders are subject to Arachnid’s approval,
including approval of credit terms. EXCEPT TO THE EXTENT LICENSED IN SECTION 2 BELOW, BUYER IS NOT ACQUIRING FROM ARACHNID ANY OWNERSHIP OR OTHER RIGHTS IN AND TO
ANY OF THE SOFTWARE OR OTHER INTELLECTUAL PROPERTY USED TO OPERATE, OR COMPRISING ANY PART OF, THE PRODUCTS. Unless otherwise specified by Arachnid, payment is due
30 days from the date of Arachnid’s invoice. Shipments shall be F.O.B. Rockford, Illinois, and at the risk of Buyer after delivery to the carrier. Arachnid will make all reasonable efforts to meet any shipment
schedule specified in Buyer’s purchase orders, but shall not be liable for failure to do so. In addition, Arachnid shall not be liable for any damage to or loss of the Products or any delay in or failure to ship,
deliver, service, repair or replace the Products arising from any circumstances beyond Arachnid’s control. The Products are sold for installation and interconnection by Buyer or its customers and Arachnid
shall have no obligation in connection therewith.
2. License Provisions
. Subject to the terms and conditions of this Agreement, Arachnid grants Buyer a non-exclusive license (referred to in this Agreement as the “License”) to use the operating game
software supplied as part of the Products (“Game Software”). Arachnid is either (i) the owner of all rights in and to the Game Software, including, but not limited to, copyrights and trade secret rights, or (ii)
a licensee of certain components of the Game Software and is authorized to include such components in the Products. This Agreement does not convey to Buyer ownership of any of the software in the
Product and Arachnid or Arachnid’s licensors retain all title and ownership in such software and any modifications, updates or enhancements thereof. The Game Software shall only be used on a single
Product at one time. Buyer shall not transfer or distribute the Game Software or the License to others, except that Buyer may transfer to only the customer purchasing or using the Product a sublicense for
that Product only to use the Game Software embedded in the Product on the terms and conditions set forth herein. Except to the extent provided in the next sentence, neither Buyer nor its customers nor
any subsequent transferees shall have any right to copy, reproduce, distribute, transmit, remove, download, decompile, reverse engineer or modify the Game Software, nor the right to remove, obstruct or
alter copyright, patent, trademark and software license notices on or accompanying the Product or its Game Software. The owner and licensee of the Product shall have the right to copy for installation into
the Product and to install into the Product updated Game Software that may be distributed to such owner and licensee from time to time by Arachnid. Neither the Products nor any of its Game Software
shall be exported or re-exported in violation of any export provisions of the United States or any other applicable jurisdiction. Except to the extent expressly permitted under this Section 2, any attempt to
sublicense, assign or transfer any of the rights, duties or obligations hereunder is void. In the case of the United States Government or an agency thereof as licensee, the following additional terms and
notices apply:
Restricted Computer Software, as defined in the Rights in Data-General clause at Federal Acquisition Regulations 52.227_14; and as applicable,
RESTRICTED RIGHTS LEGEND
Use, duplication, or disclosure by the Government is subject to restrictions as set forth in subparagraph (c)(1)(ii) of the Rights in Technical Data and Computer Software clause at DFARS
252.227_7013.
Arachnid may without notice or demand terminate the right to use the Game Software (or any part thereof) and may also disable use of the Game Software (or any part thereof) if Buyer
or its customer or any subsequent transferee or other user of the Product breaches any of the terms and conditions of this Agreement or any other agreement between Arachnid and any
other owner/licensee of the Product in question (including without limitation any agreement governing or relating to any of the advertising programs referred to in Section 3 below). Upon
termination of this License for any reason, Buyer or its customer or any subsequent transferee shall immediately delete the Game Software from the Product and return to Arachnid any
form of the Game Software which is capable of being returned. All restrictions regarding use of and protecting Arachnid’s rights in the software in the Product survive termination of
Buyer’s or any subsequent owner’s or user’s right to use the Game Software. Arachnid shall at all times while the Products are in use have and be granted access to the Product (whether
electronically, including by modem or any other electronic data transmission and reception connector which comprises a part of each Product, or otherwise), at reasonable times and upon
reasonable intervals, for the purposes of inspecting the Product, collecting usage information (including without limitation its location) and exercising and protecting Arachnid’s rights in
connection with the provisions set forth in this Section 2. Buyer shall not, and shall not permit any subsequent owner or user to, obscure, attach or remove any notice, informational plate
or sticker affixed by Arachnid to the Product or which Arachnid creates to appear on any screen display of the Product. Buyer shall cause its customers and all subsequent transferees (if
any) to be bound by the provisions of this Section 2 and Sections 3, 4 and 5 of this Agreement for the benefit of Arachnid (Arachnid shall be a third party beneficiary with the right of
enforcement).
3. Future
Advertising. Neither Buyer nor any other person or entity is as a result of Buyer’s purchase of the Product acquiring any license or other rights in and to the software (if any) in the Product
which enables or may enable the Product to display advertising. Arachnid may (but is not hereby obligated to do so) enter into arrangements with the owner/ licensee of a Product pursuant to which the
Product may display advertisements; provided, that in the event any such arrangements are made, then (i) any such license to use the software in the Product for any purpose other than game operation
shall be terminable at will by Arachnid and Sections 2, 4, 5 and 6 of this Agreement shall apply with respect to that license (and for such purpose, the phrase “Game Software” as used in this Agreement
shall also refer to the software of the Product to the extent used in connection with advertising displayed by the Product), and ii) Arachnid shall not be liable to Buyer for, and Buyer shall indemnify and hold
Arachnid harmless against and shall upon request defend Arachnid against, any claims, losses, damages, costs or expenses arising out of or in connection with any such advertising, including without lim-
itation claims for infringement of copyright, tradename, trademark or service mark, and defamation claims.
4. W
arranty. Subject to the terms and conditions of this Section 4, for the applicable Warranty Period (as hereinafter defined), Arachnid will repair or replace at its plant in Rockford, Illinois, any of the fol-
lowing parts of the Product which Arachnid determines is defective in manufacture or workmanship under normal use and service: the Electronic Package; the darthead assembly (consisting of the spider,
segments and matrix); and the cabinet and components of the cabinet. “Electronic Package” means only (i) the power supply chassis and the parts mounted directly thereon, (ii) the main computer print-
ed circuit board, (iii) to the extent installed by Arachnid, the modem (if any), and the light dimmer board. The “Warranty Period” starts on the date of delivery and means (i) 90 days with respect to the
Electronic Package, (ii) 9 months for the monitor, (iii) one year with respect to the darthead assembly, and (iv) 30 days with respect to the cabinet and cabinet components. The Product will not be defec-
tive if it substantially fulfills the performance specifications. This warranty shall not apply to any of the Products or parts thereof repaired or altered by anyone but Arachnid, operated or installed contrary to
instructions or contrary to this Agreement, or subjected to abuse, misuse, accident or improper environment. This warranty applies only for the benefit of the original purchaser of the Product and is not
transferable. For this warranty to apply, Buyer must (i) give Arachnid written notice of any warranted defect within 10 days after discovery and, in any event, not later than the date on which this warranty
expires, and (ii) deliver the Product into Arachnid’s possession within 15 days following the date on which the warranty claim notice is given to Arachnid. Any Product which is the subject of a warranty claim
must be shipped to Arachnid freight prepaid. Prior to repair or replacement, Arachnid shall have the right to examine the part at Arachnid’s plant in Rockford, Illinois. If Arachnid determines that this war-
ranty is inapplicable, Arachnid will notify Buyer, and labor and parts furnished at Buyer’s request shall be paid for by Buyer at Arachnid’s then current rates and prices. Arachnid neither assumes nor author-
izes anyone to assume for it any obligation or liability in connection with the Product which is not expressly provided for under this Agreement. Arachnid’s liability under this warranty shall be limited to repair-
ing or replacing warranted Products and the expense of the lowest transportation costs for return to Buyer or, if the Product in question cannot be repaired or replaced by Arachnid, to the return of the pur-
chase price paid for the defective or nonconforming warranted Product in question; provided, that Buyer shall first return to Arachnid, and Arachnid shall have the right to thereafter retain as its own prop-
erty, those Products for which a refund of the purchase price is to be made. Notwithstanding anything to the contrary in this Section 4, Arachnid does not warrant that the operation of the Game Software
will be uninterrupted or error-free. THE WARRANTY SET OUT IN THIS SECTION 4 IS THE ONLY WARRANTY APPLICABLE TO THE ORDER OR THE PRODUCTS. ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE DISCLAIMED.
5. Limitation of Liability
. NEITHER ARACHNID NOR ITS DEALER OR REPRESENTATIVE, IF ANY, SHALL BE LIABLE, WHETHER IN CONTRACT, IN TORT, UNDER ANY WARRANTY, IN NEG-
LIGENCE, OR OTHERWISE, FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PURELY PECUNIARY DAMAGES OR FOR LOSS OF DATA OR FOR COSTS OF REMOVAL OR SHIPMENT. UNDER
NO CIRCUMSTANCES SHALL ARACHNID’S LIABILITY OR BUYER’S REMEDY FOR DAMAGES AGAINST ARACHNID EXCEED THE AMOUNT OF THE PURCHASE PRICE OF THE PRODUCTS
WITH RESPECT TO WHICH CLAIM IS MADE. IN THE EVENT THAT ARACHNID’S WARRANTY, IF ANY, OR ANY OTHER OBLIGATION OF ARACHNID APPLICABLE TO THE PRODUCTS FAILS OF
ITS ESSENTIAL PURPOSE, BUYER’S EXCLUSIVE REMEDY SHALL BE LIMITED TO RETURN OF OR CREDIT FOR SO MUCH OF THE PURCHASE PRICE AS IS APPLICABLE TO THE PROD-
UCTS WHICH ARE NONCONFORMING OR DEFECTIVE, PROVIDED SUCH PRODUCTS ARE RETURNED TO ARACHNID F.O.B. ARACHNID’S PLANT IN ROCKFORD, ILLINOIS, U.S.A. NO ACTION
ARISING OUT OF THE ORDER OR PERTAINING TO THE PRODUCTS IN QUESTION MAY BE BROUGHT BY BUYER MORE THAN ONE YEAR AFTER THE DATE OF SHIPMENT, OR, IN THE CASE
OF WARRANTY CLAIMS, WITHIN ONE YEAR AFTER THE CLAIM WAS OR SHOULD HAVE BEEN DISCOVERED, BUT IN NO EVENT MORE THAN TWO YEARS AFTER SHIPMENT. BUYER’S
REMEDIES PROVIDED IN THIS AGREEMENT ARE ITS SOLE AND EXCLUSIVE REMEDIES.
6. Other Provisions
. Upon Buyer’s failure to pay or otherwise perform in accordance with this Agreement or any order governed by this Agreement, all amounts owing to Arachnid by Buyer under the
order in question and any other order or obligation of Buyer to Arachnid shall, at Arachnid’s option and without notice, become immediately due and payable. Any payment not received by Arachnid on its
due date shall be subject to a late charge of 1.5% per month until paid, unless applicable law limits this charge, in which event, the applicable late charge shall be the maximum monthly charge permitted
by applicable law. Buyer shall pay Arachnid all attorneys’ and paralegal fees and all court costs and out-of-pocket disbursements incurred by Arachnid to effect collection. Arachnid’s rights and Buyer’s
obligations under Sections 2, 3, 4, 5 and this Section 6 of this Agreement shall survive any termination of this Agreement. This Agreement is made in and it and all matters pertaining to the Products shall
be governed by the internal laws (without reference to the conflicts of laws principles thereof) of the State of Illinois. The invalidity of any term contained in this Agreement shall not affect any other of the
terms of this Agreement. The failure of any party to enforce or declare a default or breach with respect to any particular term or condition of this Agreement or any purchase order governed by this Agreement
shall not be considered a waiver of that party’s right to enforce or declare a default or breach with respect to any other term or condition or, on a subsequent occasion, with respect to that particular term or
condition.
#Galaxy II v1 --12/3/01
