GALAXY 3 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 licenses by Arachnid to Buyer of, the Arachnid product referred
to as the “GALAXY 3” and its software (the “Product”). With respect to the Products, the terms and conditions of this Agreement
shall (i) supersede 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 super-
seded. 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 SEC-
TION 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 PROD-
UCTS. 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, distrib-
ute, 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 with-
out 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 exer-
cising 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 adver-
tising. 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 limitation claims for infringement of copyright, tradename, trademark or service mark, and
defamation claims.
4. Warranty.
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 following parts of the Product which Arachnid determines
is defective in manufacture or workmanship under normal use and service: the Electronic Package; the darthead assembly (con-
sisting of the spider, segments and matrix); and the cabinet and components of the cabinet. “Electronic Package” means only (i)
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