Activator Studios - Master Service Agreement - Terms and ConditionsRev. 1.3.4
Last Updated: March 12, 2018
1. Initiation and Scope of Engagement
- These are the terms and conditions which establish and govern the provision of services for a client, named in the signature portion of this document, henceforth “the Client,” by the Company, Activator Studios, henceforth interchangeable with “the Company” for the purposes of this agreement. Either may be referred to in context as “a Party” or collectively they may be referred to henceforth as “the Parties” to this Agreement.
- This document defines the contractual relationship between the Client and Activator Studios. Upon the signature of both parties confirming the acknowledgment of these terms, these terms and conditions are immediately in effect, and the Company and Client are bound to their respective contractual obligations in those roles. It is to be noted that there are terms concerning intellectual property, non-disclosure, royalties, right to collect payment, and legal jurisdiction for disputes, which survive the completion of all work to be performed by the Company AND termination of this contract for any other permissible reason. The duration of those surviving obligations is indicated in their respective clauses.
- It is the responsibility of the Company to furnish a copy of these terms and the responsibility of the Client to read and understand them, seeking legal counsel if desired. This document, together with any and all addendums and Scopes Of Work, constitute the entirety of the terms and conditions governing the relationship between the Company and Client.
2. Agreement to Non-Disclosure of Proprietary or Privileged Information
- In order to engage in a specific business endeavor, henceforth interchangeable with “the Authorized Purpose”, it is often necessary to disclose sensitive information between the parties involved, which either or both parties have a vested interest in protecting and keeping private and undisclosed to unauthorized third parties. It is understood that the Company and Client both will have such information, which they may disclose to the other, and therefore, this agreement makes each liable for the maintenance of confidence of any proprietary information which is disclosed by the other which pertains to the Authorized Purpose for which they are engaging in business. It is understood that Proprietary or Privileged information may or may not be designated or marked as such.
- The set of limitations to this obligation to confidence for proprietary or privileged information is that the obligation does not cover information which falls within the following three categories:
- Information that is already or becomes known publicly other than as a result of any disclosure, act or omission by either the Client or the Company, or any party whose knowledge or possession of such information traces back to either the Client or Company as the origin of that information.
- Information that is lawfully obtained by either the Client or the Company on a non-confidential basis, from a third party entitled to disclose such information.
- Information which is already known by either the Client or Company at the time of such information disclosure by the other party, as evidenced by written records or other tangible media evidence of the Client or the Company, whoever is accused of disclosure, dated prior to the time of disclosure.
- The Client and Company may each have the need to disclose the proprietary or privileged information provided by the other to third parties in order to conduct the Authorized Purpose for which they are engaging in business. Should such disclosure be deemed necessary for conducting the Authorized Purpose, the party wishing to disclose proprietary or privileged information which belongs to the other must first inform the other party in writing of the need for such disclosure and have explicit written permission from the other party for such disclosure to the stated third party.
- It is required that any such third party also respect the proprietary and confidential nature of the information and only utilize such information for the Authorized Purpose of the agreed-upon scope of work. Any subcontractors, suppliers, vendors, or other related entities must be notified of this requirement of non-disclosure and be bound by an agreement of equivalent terms. Records of such third-party agreements regarding the Proprietary or Privileged information specific to this Authorized Purpose or a general confidentiality agreement must be kept on file to provide to the other party, the Client or Company, should a breach of confidence need to be resolved. The parties directly engaged as Client and Company shall be held fully liable for any breaches in confidence by any subcontractor, supplier, vendor, or other related business entity or affiliate as it pertains to the Authorized Purpose.
- Both Parties agree to be bound to the terms of non-disclosure included here for a duration of:
- A period of six(6) months for all work executed under a Provisional Design Exploration (PDE) scope of work. During this period the client may opt to either license, purchase, or extend their rights to first-option on the work.
- For all work not completed under a PDE: a period not to exceed five(5) years from the establishment of this agreement as memorialized by the signatures and date on these terms and conditions, unless otherwise agreed to in a terms addendum to a particular scope of work.
- The plaintiff in any dispute regarding disclosure of Proprietary or Privileged information directly relating to the authorized business purpose shall be entitled to the following remedies if guilt is proven by a court of law:
- If the Company is proven guilty in a court of law of appropriate jurisdiction of the accused breach in confidence or fiducial responsibility, the Company forfeits claim to:
- Any and all payments paid by the Client and will fully refund the Client for all payments made toward the authorized estimate
- A damages compensation amount not to exceed an additional 100% of the quoted fee for the entire scope of the estimate, OR the Client’s legal fees incurred in relation to the dispute, whichever is greater.
- If it is proven in a court of law of appropriate jurisdiction that the Client is guilty of negligence or misconduct, the Client is liable for:
- All payments due for the project in its entirety, and:
- Up to an additional 100% of the authorized quoted project value as compensation as determined by the court, or the Company’s legal fees incurred in relation to the dispute, whichever is greater.
- The terms of this agreement supersede any prior non-disclosure agreements between the two parties which relate to the proprietary or privileged information regarding this scope of work and Authorized Purpose for engaging in business. This agreement, and any written addendums signed by both parties and added to it, constitutes the entirety of the obligations to non-disclosure of each party with relation to the counterparty.
- These terms are the standard terms for nondisclosure under which Activator Studios engages in work for clients. However, the authorized business purpose which the Company and Client are discussing or pursuing, the consultation pertaining to it, and any modifications or addendums to this document and the contents of any Client-authorized or Company offered estimate shall also be privileged information, also to be held in confidence—unless the Parties agree in writing not to require confidentiality regarding specific details of their arrangement for some mutually agreeable purpose.
3. Terms of Payment
- There are often multiple payment structures available for clients to choose from depending upon the structure and nature of the Scope of Work required. On deliverable based scopes, projects begin with a deposit toward some portion of the scope of work, and a balance due upon delivery of completed work materials or completion of services rendered to the Client, henceforth referred to collectively as “deliverables”, or as part of a payment schedule. Deposits are due prior to the commencement of work, and where a project is broken into multiple phases, prior to the commencement of each subsequent phase after the first.
- On subscription based scopes, payment is due upon the first day of the month, and is not dependent on deliverable completion. Where monthly contracts are started mid-month, payment is due upon contract commencement.
- Upon completion of a deliverable phase, milestone, or other occasion upon which a payment by the client becomes due, and/or upon the completion of the entirety of the scope of work; which may all be collectively referred to as “Invoice Events” payment of the balance due is expected within fifteen (15) days of receipt of invoice by the Client.
- Payments not received within 30 of invoice are subject to a 1.5% late fee monthly.
- The Client has five (5) business days from receipt of deliverables to reject those deliverables or request a correction or revision to the deliverables, after which the deliverables are deemed accepted by the Client for invoicing and payment purposes. The Client is responsible for any costs of collection or legal fees incurred by the Company in the pursuit of payments overdue by more than 90 business days.
- Regarding Royalties:
- Royalties, if any have been specified in the Scope of Work, are to be paid annually no later than January 30th for the prior calendar year.
- Royalties are to be calculated as a portion of annual gross revenue from ALL income derived from the project or product, including income from the sale of intellectual property generated by the Company for the Client.
- The Company retains the right to request and obtain a 3rd-party audit of the Client’s finances, at the Company’s expense if either:
- The Client fails to report royalties due by the stated deadline, or
- If the Company has a reasonable doubt that royalties are not being paid in full.
- In the case of such an audit, the Client agrees to furnish any and all required documentation for the investigation in a reasonable period of time, not to exceed 10 business days from the date of request by the 3rd party.
- If the 3rd party investigation confirms that royalties are owed to the Company, and the Client does not make corrective payment within twenty (20) business days after the completion of the audit AND the Client has been made aware in writing of the discrepancy, then the Company may seek legal action to collect punitive damages and compensation for legal costs and the investigation costs, in addition to collecting the amount owed.
4. Revisions To Work Completed
- Requests for revision to work completed may be made within five (5) days after the completion of a deliverable phase. These requests are to be documented in writing and agreed upon by both the Client and Company and are to be attached as an amendment to the original agreed-upon Scope of Work.
- A Revision is defined as a deliverable phase interjected into the project between the last phase completed and the commencement of the next phase from the original contract. All deadlines for following deliverable phases are postponed by the duration of the revision phase, plus 5 additional business days.
- Revisions are to be treated like any other deliverable phase concerning scheduling and payment.
5. Corrections to Work Completed
- If it comes to light that the Company or any subcontracting party has committed an error in the work, meaning that the work does not reflect the Scope of Work, then the Company is responsible for correcting this error upon the Client’s request.
- Once the Client notifies the Company of the error, then it is the responsibility of the Company to remedy the error within a time period equivalent to the original permitted duration for that deliverable phase or five (5) business days, whichever is longer.
- These corrections will be carried out at no labor cost to the Client for Activator Studios efforts; however, any additional materials or outside services required for the correction may be billed to the Client at the Company’s discretion.
6. Disclaimers and Warranties
- Activator Studios warrants that all work performed is being performed by competent professionals in their respective fields who have value to contribute to the scope of work requested by the Client. If the Client is not satisfied with the quality of work provided there are acceptable causes for work termination available to the Client as listed in these terms and conditions.
- Activator Studios warrants that all work performed is novel and is not in violation of any other intellectual property rights to the best of the Company’s knowledge.
- If, in the course of completing a Scope of Work for a Client, the Company becomes aware of any conflicting intellectual property claims which may be infringed in the course of completing the Scope of Work—thereby prohibiting the Company from completing the Scope of Work for the Client—the Company will notify the Client immediately to negotiate an alternative Scope of Work if possible. If it is not possible to amend the Scope of Work appropriately to avoid infringement, then the Company will be required to terminate the Scope of Work.
- If Activator Studios subsequently becomes aware of any conflicting intellectual property claims which would impact the Client AFTER the completion of the entirety of a scope of work for the Client, Activator Studios will make a reasonable effort to inform the Client of the discovery of such conflicting claims.
- The Client agrees to indemnify and hold the Company innocent and not liable for any claimed infringement of intellectual property rights with regard to their prior services rendered to the Client.
- The Company warrants that all work performed has been honestly represented in scope and duration to the best of their ability and has been priced and scheduled accordingly.
- The Company disclaims any obligation to provide itemized or incremental reporting to a Client on the work being performed within any scope of work, but will endeavor to provide such as needed for the smooth progression of the project.
7. Intellectual Property Ownerships and Transfer
- Until final payment, the Company retains any and all intellectual property generated during the course of the work. Upon receipt of final payment for a project, the rights to any and all intellectual property generated by the Company for the scope of that project are automatically transferred to the Client per this section, and the Company forfeits claim of ownership to the generated intellectual property that has been delivered. Upon receipt of final payment, the Company agrees to sign any additional documentation if required by the client to confirm or acknowledge this assignment of intellectual property ownership.
- On Provisional Design Exploration Scopes of Work, the Client is granted an exclusive option to purchase the intellectual property generated for a period of six months following final payment, after which date the Client forfeits any and all claims or rights to the work and the Company may seek to utilize the work produced in any manner as they see fit.
- For all other Scopes of Work, any and all Intellectual Property generated in the course of the work will be transferred in an appropriate format to suit the Client, within reasonable expectations of what the Company can offer, upon receipt of final payment. Tangible deliverable formats such as prototypes and printed media will be finished to the degree indicated in the Scope of Work, and digital materials will be provided in the highest available quality of export from the source formats via a file transfer service, unless otherwise specified and agreed to in the Scope of Work.
- Unless an explicitly stated otherwise within a Scope of Work, the Client implicitly agrees to grant an irrevocable, permanent, global, non-exclusive, non-transferable license to the Company to display and use some portion, up to the entirety, of any and all intellectual property generated during the project as the Company deems fit for the noncommercial purpose of self-promotion.
- This license for use for self-promotional activity is subject to a blackout period which begins with the initial deposit toward the Scope of Work and lasts until either a) the work has been publicly displayed, broadcast, or hosted online in a publicly accessible format in some form or fashion, b) Client’s product has been sold or licensed to at least one other entity by the Client, or c) a period of six(6) months has elapsed in the case of Provisional Design Exploration scopes of work, or five(5) years have passed from final deliverable phase completion in the case of all other scopes of work; whichever happens first.
- The exercise of the rights granted by this license cannot be construed as a breach of the confidentiality clauses of this same contract by the Client.
- Any restrictions to the methods of usage or restriction in scope of the produced materials that may be displayed must be provided by the Client to the Company within thirty (30) business days of completion of the final deliverable phase of the project, otherwise, the Company is granted license to use the entirety of the work performed and materials produced in accordance with the limitations of this section.
8. Acceptable Causes for Termination Of Engagement
- Neither the Client nor the Company may terminate the obligations of this contract without due cause: there are appropriate causes for termination by either party, and these are outlined below with the appropriate recourse for each. As previously stated, receipt of a deliverable for review is NOT to be construed as the transfer or license of intellectual property.
- The Company is entitled to terminate the work during the project for the following reasons:
- The Company may terminate work towards the Scope of Work if any invoice is unpaid for more than 30 business days. The Company may terminate the remaining deliverable phases and seek to collect all payments due for work completed, plus any costs of collection and legal costs incurred, which will be the liability of the client. The Company retains all intellectual property rights with regard to work completed until all outstanding payments have been collected, and may pursue injunctions and/or punitive damages against any client found to be using the Company’s intellectual property without license, which the Client agrees will be recovered at the Client’s expense if found guilty of contractual breach in a court of law.
- The Company may terminate the Scope of Work if the Company is unable to complete the quoted scope of work for reasons outside its control and outside the scope of its responsibilities: these are factors which may be due to, but not limited to, failure by the client or client-contracted 3rd parties to provide feedback or resource materials in a timely fashion, or other such negligence by the client or third parties for which the Company is not responsible nor liable.
Upon reaching an impasse on the ability to continue without the required resources, feedback, or other limitation, the Company will provide the Client with written notice of intention to terminate the engagement under this term, and provide explicit instruction regarding the required remedy to prevent such termination.
The Client will be granted a period of at least fifteen(15) business days from the receipt of such notice to resolve the problems which have halted or impaired Company progress toward the Scope of Work. If the Client successfully makes the required remedy within the time allotted, then the Company will continue with the scope of work, but with all current and subsequent deliverable deadlines extended by the time allotted for resolution plus an additional five(5) business days.
If the Client does not make the required remedy in the time allotted with delivery of written notice, then the Company’s obligations to the current and all future scheduled phases of work to be completed are nullified, and the Client is immediately liable for payment towards all work completed to date, with payment due within 15 business days of the end of the remedy period. Upon receipt of this payment, the intellectual property generated to date toward the work completed will be transferred to the client per the terms of the section regarding Intellectual Property Ownerships and Transfer.
- The Company may terminate the Scope of Work if the Company determines it will be unable to complete the quoted scope of work due to factors internal to the Company or within its realm of responsibilities—such as force majeure events, complications or failures on the part of contractors or employees, or other Company equipment or resources. If the Company must terminate the Scope of Work for such a reason, the Company owes a complete refund for all work completed to date and any currently held deposit for the current deliverable phase to the Client, all due within 15 business days from the issuance of notice for termination. Under such termination, the Client receives no intellectual property rights on any work performed by the Company and receives the refund in full on their deposit instead.
- The Company reserves the right to terminate retainer agreements with a 30 day written notice.
- The Company may terminate the contract if the Client engages another Company for the same stated purpose of this contract or substantively similar. If the Client is found to have done so without notice and written agreement from the Company, the Company is entitled to all payments due for all deliverable phases completed to date and also payment in full for any work currently underway at the time of the discovery of contractual breach, which the Company will no longer be obligated to complete. The Company may seek to collect payment due plus any costs of collection and legal costs incurred, which will be the liability of the Client. Under such a cause for termination, the Company retains all intellectual property rights for work completed to date and transfers no rights or license to the client.
- The Client is entitled to terminate the work during the project for the following reasons:
- The Client may terminate the contract if they are unsatisfied with the Company’s performance, and they wish to terminate the engagement or seek an alternative Company to perform the work. Upon written notice to the Company of intent to terminate, the Client is responsible for paying the remainder of the contract in full. The Company will transfer all intellectual property generated for the project up until the date of termination notice to the client, but is released from the obligation to complete any further work. The Company may seek to collect payment due plus any costs of collection and legal costs incurred, which will be the liability of the Client.
- If the Client abandons their contractual obligations without proper notice or for a reason other than laid out above, the client is fully responsible for paying for the remainder of the contract in full.
9. Intellectual Property Transfer and Non-Disclosure under a case of termination
- In the event of a termination of the engagement, the Client is entitled to intellectual property as stipulated by the individual cases in section regarding Acceptable Causes for Termination Of Engagement, or more generally, this is defined as any intellectual property generated in deliverable phases which have been completely paid for, and not refunded nor under obligation to refund. This intellectual property transfer is to be handled under the same terms as transfer upon final payment, including the provision of a license for non-commercial use to the Company for promotional purposes.
- In the case of termination for any reason, this transfer is limited in scope to only the intellectual property to which the client is entitled through payment in full, and the client forfeits in perpetuity any claim to rights toward any substantively similar current or future work which the Company may pursue on its own or for other clients.
- Upon termination of engagement the two parties are entitled to keep copies of any documentation of proprietary information exchanged for record-keeping and aiding in the resolution of any potential disputes. However, at the request of the other party, any proprietary objects exchanged between the parties will be returned or certified in writing as destroyed as appropriate within fifteen (15) business days of receipt of such notice. The obligation for both parties to maintain privileged or proprietary information in confidence will survive termination for the full non-disclosure period of five (5) years from initiation of the Scope of Work.
- Travel and lodging expenses will be invoiced as incurred and due net 10 days from invoice date. All other invoices will be due net 30 days from invoice date.
- NOTE: Client is responsible for any taxes incurred, such as Sale & Use Tax, VAT, Excise Tax, or any other tax that may be imposed.Once travel is booked Client is responsible for all travel costs and/or fees associated with any cancellation.
- Activator Studios will follow Client travel policy guidelines, except that the following travel terms will prevail over the Agreement:
- Travel: Coach class airfare or auto mileage for domestic travel. Business class airfare for international flights.
- Auto Rental: Full-size car.
- Meals: Up to $75 per Activator Studios consultant assigned, per day, in the USA. As incurred, internationally.
- Hotel: A 3 star hotel.
- Misc.: Tolls, porters, mileage to airports, airport parking, ground transportation, etc.
- Shipping: All workshop materials and equipment, to and from event.
- Schedule changes: Activator Studios will book travel as soon as possible after confirmation of the Engagement date(s). Client is responsible for paying all rescheduling fees due to date changes made after the Engagement date(s) have been confirmed.
11. Additional Notes, Definitions and Clarifications
- In the event that any portion of this contract is deemed illegal, invalid, or unenforceable by a court of law of the appropriate jurisdiction, it renders only the unacceptable or unenforceable portion null and void. The remainder of these Terms remains in full force and effect.
- The court of law of appropriate jurisdiction is defined for the purposes of this contract as being a court within Washoe County, in the State of Nevada, to be governed by the laws of the State of Nevada.
- This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same document.
Contact Activator Studios:
PO Box 33671
Reno, NV 89533