EXHIBIT 6.1
SOFTWARE LICENSE AGREEMENT
THIS AGREEMENT is entered into this 31st day of July, 1999,
BETWEEN:
NET-FORCE ENTERTAINMENT INC., with registered offices in St. John's
Antigua, West Indies;
(hereinafter referred to as the "Licensee")
AND
SOFTEC SYSTEMS CARIBBEAN INC. with offices at 1589 Newgate Street, St.
John's Antigua, West Indies;
(hereinafter referred to as "Softec")
WHEREAS,
A. Softec owns rights to Internet casino software (the "Software");
B. Softec wishes to license the Software to other companies;
C. Softec wishes to provide a complete computer hardware and software
package that the Licensee may use to operate an Internet gaming site;
and,
D. The Licensee wishes to license the Software and make use of Softec's
computer hardware in order to operate an Internet gaming site.
NOW THEREFORE, in consideration of the premises and mutual covenants herein set
forth, the parties agree as follows:
1. GENERAL PROVISIONS
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1.1 DEFINITIONS
1.1.1 "Licensed Software" shall mean a licensed data processing
program or micro program consisting of a series or sequence of
signals, or instructions, statements, or fonts stored on any
media in machine readable form, and any related licensed
materials such as, but not limited to, graphics, flow charts,
logic diagrams, manuals, and listing made generally available
by Softec for use in connection with the licensed programs.
The Licensed Software shall consist of not more than 2
casinos, one with an adult theme (where a license is
available), and one with a non-adult theme (collectively, the
"Casino"). The Casino shall have various games of chance which
includes, but are not limited to, blackjack, roulette, pai gow
poker, video poker and slot machine and other games as added
from time to time, based on a theme chosen by the Licensee, a
sportsbook web site within the gaming site, an HTML version of
the sportsbook, and a lottery ticket distribution web site.
1.1.2 "Net Monthly Revenue" shall mean, for any given calendar
month, the total amount wagered in the casino, horse track and
the sportsbook, less winnings in the Casino, horse track and
the sportsbook, PLUS, total sales of lottery tickets, less the
invoiced cost for purchasing lottery tickets for the lottery
ticket sales, PLUS, any membership fees or additional fees
that may be charged by the Licensee that are not related to
currency conversion or transaction processing.
1.1.3 "Hardware" shall mean all the necessary computers, routers,
cabling, monitors, hard drives, back-up systems, and other
equipment, as determined by Softec in its absolute discretion,
located at its offices in St. John's Antigua, Vancouver,
Canada, or other locations designated by Softec as may be
required in order to properly store, distribute and run the
Licensed Software.
1.1.4 "Games" shall mean the casino style games, sportsbook,
lottery, and pari-mutuel games that are played using the
Licensed Software and are available from time to time.
1.1.5 "Downloadable Software" shall mean the portion of the Licensed
Software that must be resident on a customer's computer in
order for the customer to access and play the Games.
1.1.6 "Master CD" shall mean the compact disc containing the
Downloadable Software that may be used to mass-produce compact
discs for delivery to the Licensee's customers.
1.1.7 "Customer Information" shall mean all data collected and
stored on customers including, without limiting the generality
of the foregoing, name, address, phone and fax number, e-mail
address, credit card numbers and expiration dates or
information on other types of payments, amounts wagered and
frequency of wagering.
1.1.8 "Confidential Information" shall mean material in the
possession of Softec which is not generally available to or
used by others or the utility or value of which is not
generally known or recognized as standard practice, including,
without limitation, all financial business and personal data
relating to Softec's clients, any non-public information about
affiliates, subsidiaries, consultants and employees of Softec
or its affiliates, business and marketing plans, strategies
and methods, studies, charts, plans, tables and compilations
of business industrial information, computer software and
computer technology whether patentable, copyrightable or not,
which is acquired or developed by or on behalf of Softec or
its affiliates from time to time.
1.2 RIGHT TO AUDIT
1.2.1 The Licensee shall, within reason, have the right, without
prior notice to Softec to inspect and audit all Softec's
business, accounting and supporting records that are necessary
for purposes of determining Softec's compliance with the terms
of this Agreement. Softec shall fully co-operate with any
independent chartered accountants or certified public
accountants hired by the Licensee to conduct any such
inspection or audit. If any such inspection or audit discloses
an under statement of less than 3% for any period, Softec
shall pay, within ten days after receipt of the inspection or
audit report, the sums due on account of such understatement
with interest calculated at U.S. prime plus one percent.
Further, if such inspection or audit is made necessary by
failure of Softec to furnish invoice reports or any other
documentation as herein required, or if an understatement for
any period is determined by such inspection or audit to be 3%
or greater, Softec shall, on demand and in any event within
the said ten days, in addition to paying the sums due on
account of such understatement, also reimburse for the cost of
such inspection or audit, including without limitation, the
charges of any independent chartered accountants or certified
public accountants retained by the Licensee in connection with
such audit or inspection and the reasonable travel expenses,
room, board and compensation of employees of the Licensee.
1.2.2 The Licensee's right to audit records shall only extend to
records that date back no more than two of Softec's fiscal
years prior to the date Softec receives notice of an impending
audit.
1.3 INDEMNIFICATION
1.3.1 The Licensee acknowledges and agrees that neither Softec nor
any of its members, shareholders, directors, officers,
employees or representatives will be liable to the Licensee or
any of the Licensee's customers for any special, indirect,
consequential, punitive or exemplary damages, or damages for
loss of profits or savings, in connection with this Agreement,
the services or the Hardware or any other information,
material or services provided by Softec to the Licensee under
this Agreement. If, despite the foregoing limitations, Softec
or any of its shareholders, directors, officers, employees or
representatives should become liable to the Licensee or any
other person (a "Claimant") in connection with this Agreement,
then the maximum aggregate liability of Softec, its members,
shareholders, directors, officers, employees and
representatives for all such things and to all such parties
will be limited to the lesser of the actual amount of loss or
damage suffered by the Claimant or the amount of the
Licensee's fees payable by the Licensee to Softec for the six
months prior to the loss.
1.3.2 The Licensee shall indemnify and save harmless Softec and its
members, shareholders, directors, officers, employees, agents,
contractors, representatives, parent company, or subsidiaries
(together, the "Indemnified Parties") from and against all
damages, losses, costs and expenses (including actual legal
fees and costs), fines and liabilities incurred by or awarded
asserted or claimed against any of the Indemnified Parties by
any licensing or government agency who licenses, regulates, or
otherwise governs the licensing or use of Internet gambling in
connection with the Licensee's activities under this
Agreement, including claims brought by a person using or
relying upon any advice given or publication produced and
distributed by the Licensee.
1.3.3 Notwithstanding anything in this Section 1.3, if Softec is
found guilty of fraud in executing its' obligations under this
Agreement, the Licensee shall not be responsible for any
indemnification of the Indemnified Parties to the extent that
the fraud has caused there to be damages.
1.4 DISRUPTIONS
1.4.1 The Licensee acknowledges that from time to time, as a result
of Hardware failure, supplier failures, or acts of God, the
services provided under this Agreement by Softec can be
temporarily disrupted. The Licensee acknowledges and agrees
that neither Softec nor any of its members, shareholders,
directors, officers, employees or representatives will be
liable to the Licensee or any of the Licensee's customers for
any special, indirect, consequential, punitive or exemplary
damages, or damages for loss of profits or savings, in
connection with these temporary disruptions. For the purpose
of this section, if the services provided under this Agreement
by Softec are temporarily disrupted for seven days within any
one-month period, the minimum monthly fees as calculated in
section 1.7.3 shall be reduced on a pro rata basis.
1.4.2 The Licensee acknowledges that Softec's ability to perform its
obligations under this Agreement are subject to government
licensing in whatever jurisdiction Softec may choose to
operate. Softec shall not be held liable for any damages of
any kind whatsoever that may result from changes in government
legislation or policy.
1.5 CONDITIONS OF LICENSE
This license is granted under the following conditions:
1.5.1 The Licensee acknowledges that its rights in and to the
Licensed Software may not be assigned, licensed or otherwise
transferred by operation of law without the prior written
consent of Softec. Violation of this section is grounds for
immediate termination of this Agreement.
1.5.2 Copyright and other proprietary rights of Softec protect the
Licensed Software. The Licensee may be held directly
responsible for acts relating to the Licensed Software which
are not authorized by this Agreement.
1.5.3 All right, title and interest in and to the Licensed Software,
and any copies thereof, and all documentation, code and logic,
which describes and/or comprises the Licensed Software remains
the sole property of Softec.
1.5.4 Softec shall not be responsible for failure of performance of
this Agreement due to causes beyond its control, including,
but not limited to, work stoppages, fires, civil disobedience,
riots, rebellions, acts of God, and similar occurrences.
1.5.5 The sportsbook "format" shall remain standard, and will not be
materially altered from Softec's standard sportsbook
facilities. Format shall refer to the tabular presentation of
the sports information making up the sportsbook look and feel
and shall not include the graphics that may be added in order
to personalize it.
1.5.6 The Licensee acknowledges that this is a non-exclusive
agreement and that Softec will license the Licensed Software
to as many other parties as are willing to enter into a
licensing agreement with Softec.
1.5.7 The Licensee shall supply to Softec an irrevocable letter of
credit in the amount of $100,000 U.S. An appropriate amount of
these funds shall be released to Softec in the event the
Licensee should become unable or unwilling to pay for any
legitimately invoiced amounts. This security shall only be
used to remedy non-payment of legitimate invoices, and cannot
be applied by Softec to any other alleged breaches of this
Agreement. This section shall only become effective upon the
Licensee achieving in any one month Net Monthly Revenue of
$1,000,000 or greater.
1.5.8 The Licensee shall be responsible for ensuring that they are
operating the Licensed Software in compliance with any and all
applicable state, provincial, national, and international
laws.
1.5.9 The Licensee shall provide Softec with all documentation
necessary to show that the Licensee has obtained any and all
necessary licenses in order to operate an Internet casino
and/or Sportsbook in the jurisdiction in which the Licensee
chooses to operate.
1.5.10 It is the policy of Softec to prevent the use of the Licensed
Software for use as a "money laundering" vehicle. The Licensee
warrants that they will undertake all reasonable efforts to
prevent persons from using the Licensed Software for use as a
money-laundering vehicle. If it is revealed that the Licensee
is purposely allowing or is willfully blind to money
laundering, Softec may terminate this agreement without
notice.
1.5.11 The Licensee shall not accept wagers from persons residing in
Canada and shall implement all measures stipulated by Softec
to ensure that persons residing in Canada are not able to
wager utilizing the Licensed Software.
1.6 TERM AND TERMINATION
1.6.1 This Agreement shall commence and be deemed effective on the
date when fully executed (the "Effective Date"). This
Agreement is in effect for a period of one-year (the "Term")
and shall be automatically renewed indefinitely with
additional one year terms unless the Licensee gives written
notice of termination of this Agreement at least 45 days prior
to the end of any one year period.
1.6.2 Softec may terminate this Agreement by giving written notice
to the Licensee at least six months prior to the end of any
one year term provided, however, Softec shall not give notice
of termination in the first year of this Agreement.
1.6.3 Softec may terminate this Agreement at any time upon five days
notice if the Licensee is more than 30 days in arrears in
paying any material monthly fees due and owing to Softec. The
Licensee shall be allowed to cure the breach during the notice
period, thus pre-empting Softec's ability to terminate this
Agreement in accordance with this section. The arrears
contemplated in this section must be of a material amount for
this section to be used by Softec. For the purposes of this
section, material shall mean anything greater than 5% of the
previous month's fees.
1.6.4 Softec may terminate this Agreement at any time upon five days
notice if the Licensee becomes bankrupt or insolvent or ceases
carrying on business for any reason.
1.6.5 The Licensee may terminate this Agreement at any time upon
five days notice if Softec becomes bankrupt or insolvent or
ceases carrying on business for any reason.
1.6.6 The Licensee may, inter alia, terminate this Agreement at any
time upon five days notice if Softec is materially in breach
of this Agreement for more than 30 days. Softec shall be
allowed to cure the breach during the notice period, thus
pre-empting the Licensee's ability to terminate this Agreement
in accordance with this section.
1.6.7 Softec may terminate this Agreement at any time upon five days
notice if Softec, or any of its principals, officers or
Directors becomes the subject of third party civil or criminal
litigation as a result of the Licensee's operations under this
Agreement. The litigation contemplated herein must be
material, and found to be of a serious nature by independent
legal counsel.
1.6.8 Upon termination of this Agreement, the Licensee shall
immediately return to Softec any and all of Softec's materials
which Softec has a proprietary right in that are in the
Licensee's possession and/or in the possession of the
Licensee's agents, servants and employees.
1.6.9 Upon termination of this Agreement, all Customer Information
shall be given to the Licensee and Softec shall not make use
of or disclose any Customer Information to any third party.
1.6.10 Upon termination of this Agreement for any reason, any
security given by the Licensee shall be returned to the
Licensee within thirty days of termination, provided however
that if there are any outstanding invoiced amounts (as per
section 1.5.7) against the Licensee, sufficient security shall
be retained in order to pay for those claims.
1.7 Remuneration
1.7.1 The Licensee shall pay to Softec a non-refundable one-time fee
of $100,000 U.S. for the development of the graphical front
end of the gaming site and all set-up costs. This payment
shall be paid in accordance with the following schedule:
o $ 10,000 per month for ten months with the first payment
being made three months from the date of the 3
acceptance of the first wager using the Licensed
Software.
1.7.2 The Licensee shall pay to Softec a monthly fee based on a
percentage of the Net Monthly Revenue. The fee shall be paid
in accordance with Schedule A of this Agreement. The fees
shall commence when the Licensee accepts a wager utilizing the
Licensed Software.
1.7.3 Notwithstanding any amount due and owing in accordance with
Schedule A of this Agreement, the Licensee shall pay to Softec
a minimum of $25,000 per month. This section shall come into
effect 120 days from the acceptance of the first wager
utilizing the Licensed Software.
1.7.4 All monthly payments shall be delivered to Softec by the 15th
of each month in payment for the previous month's activity.
1.8 CONFIDENTIALITY
1.8.1 The Licensee shall not disclose, publish, or disseminate
Confidential Information to anyone other than those of its
employees or others with a need to know, and the Licensee
agrees to take reasonable precautions to prevent any
unauthorized use, disclosure, publication, or dissemination of
Confidential Information. The Licensee agrees not to use
Confidential Information otherwise for its own or any third
party's benefit without the prior written approval of an
authorized representative of Softec in each instance.
1.8.2 Softec shall not disclose, publish, or disseminate Customer
Information to anyone other than those of its employees with a
need to know, and Softec agrees to take reasonable precautions
to prevent any unauthorized use, disclosure, publication, or
dissemination of Customer Information. Softec agrees not to
use Customer Information otherwise for its own or any third
party's benefit without the prior written approval of an
authorized representative of the Licensee in each instance.
1.8.3 All Confidential Information, and any Derivatives thereof
whether created by Softec or the Licensee, remains the
property of Softec and no license or other rights to
Confidential information is granted or implied hereby. For
purposes of this Agreement, "Derivatives" shall mean: (a) for
copyrightable or copyrighted material, any translation,
abridgement, revision or other form in which an existing work
may be recast, transformed or adapted; (b) for patentable or
patented material, any improvement thereon; and (c) for
material which is protected by trade secret, any new material
derived from such existing trade secret material, including
new material which may be protected by copyright, patent
and/or trade secret.
1.8.4 Notwithstanding anything in this Section 1.8, Softec shall be
allowed to use Customer Information for the purpose of
fulfilling its reporting obligations as a public company.
Softec shall also be allowed to use Customer Information in a
statistical form so long as it does not identify individuals
or specific companies.
1.8.5 The Licensee shall not disclose the contents of this Agreement
to any third party who is not bound to maintain
confidentiality between the parties. The Licensee acknowledges
that disclosure of the terms of this Agreement to third
parties would cause considerable damage to Softec and its
parent company, Starnet Communications International Inc.
2. OBLIGATIONS OF THE LICENSOR
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2.1 HARDWARE
2.1.1 Softec shall supply the Hardware as defined in this Agreement.
2.1.2 Softec shall maintain the Hardware and pay all costs for
maintaining and/or upgrading the Hardware.
2.1.3 Softec shall supply the office space required to house the
Hardware.
2.1.4 The Hardware shall, at all times, remain the property of
Softec.
2.1.5 Softec shall supply an appropriate connection to the Internet
with sufficient bandwidth to properly operate the Licensed
Software. The Licensee shall pay for all bandwidth associated
only with those customers that are not playing the Games using
real money and for the downloading of the Licensed Software
via the Internet, and for any related marketing via the
Internet. Bandwidth shall be charged to the Licensee at market
rates.
2.1.6 Softec shall not be required to maintain a redundant site.
2.1.7 Softec shall make all reasonable efforts to repair and correct
any problems arising under Softec's areas of responsibility
that may arise from time to time which would cause it to be
unable to perform its' obligations under this Agreement (see
section 1.5.4).
2.1.8 Softec shall notify the Licensee of any problems that may
arise from time to time and shall keep the Licensee apprised
of any efforts undertaken to rectify the problem.
2.1.9 The Hardware shall be located only in places where Internet
gambling may be operated legally and where the Licensee has
obtained all necessary licenses to conduct online gaming.
2.2 THE LICENSED SOFTWARE
2.2.1 Softec shall install the Licensed Software on the Hardware.
2.2.2 Softec shall allow all of the Licensee's customers and all
persons who seek to be licensee's customers Internet access to
the Licensed Software.
2.2.3 Softec shall allow the Licensee's customers to download
directly from the server the Downloadable Software necessary
for the Licensee's customer to play the Games.
2.2.4 Softec shall supply to the Licensee a single Master CD
containing the Downloadable Software.
2.2.5 Softec may from time to time, at its discretion, create
additional games, which can be added to the Licensed Software.
If additional games become available, the Licensee may request
to have the additional games added to the Licensed Software at
no additional licensing cost to the Licensee.
2.2.6 Softec may from time to time, at its discretion, translate
part or all of the Games into other languages, which can be
added to the Licensed Software. If additional languages become
available, the Licensee may request to have the additional
languages added to the Licensed Software at no cost to the
Licensee.
2.2.7 Notwithstanding anything stated in this section 2.2, any
changes requested by the Licensee to be made to the graphics
portion of the Licensed Software, shall be charged to the
Licensee at market rates.
2.2.8 Notwithstanding anything stated in this section 2.2, any
changes made to the Master CD at the Licensee's request will
be billed to the Licensee at market rates, plus a $100.00 U.S.
administration fee. Softec retains the right to refuse to make
the requested changes.
2.2.9 Softec shall only be required to provide the Licensed Software
in the English language only.
2.2.10 Softec will provide all upgrades of the Licensed Software that
do not require changes to the graphical interface, at no
charge to the Licensee.
2.2.11 All upgrades are to be made available to the Licensee within
30 days of the completion of testing.
2.2.12 The Licensee may operate the Casino on as many separate URL's
as the Licensee wants, with no additional licensing fee to be
paid.
2.2.13 Softec warrants that the Licensed Software correctly
implements algorithms, which are in accordance with the rules
and payouts, which may be displayed on the screen at any time
by the player. Pseudo-random numbers used by the software for
the purposes of choosing game outcomes and shuffling cards are
generated in an unbiased manner.
2.2.14 Notwithstanding anything in this Agreement, the Licensee shall
not operate more than two casinos with different names and/or
different graphics.
2.3 FINANCIAL TRANSACTIONS
2.3.1 Softec shall provide a transaction processing system that will
allow the Licensee's customers to deposit funds for use of the
Games (the "Transaction Processing System"). The Licensee's
customers will be able to deposit funds via the Internet
through the use of Visa, Master Card, or American Express
credit cards. Other methods of payment may be made available
from time to time at Softec's discretion, at a cost to the
Licensee to be agreed upon at the time.
2.3.2 Softec shall only be responsible for processing credit card
debits and credits for which the Licensee holds the
appropriate merchant number accounts.
2.3.3 The Licensee shall be responsible for all aspects of
collecting and paying funds, in accordance with this
Agreement.
2.3.4 The Licensee shall have no rights whatsoever in the
Transaction Processing System.
2.4 TECHNICAL SUPPORT
2.4.1 Softec shall supply 24-hour technical support for the
Licensee's customers and for the Licensee.
2.4.2 Softec shall make the Technical support available via the
Internet and via toll free telephone lines.
2.4.3 Softec shall determine the number of people acting as
technical support and the number of incoming telephone lines
for technical support in its absolute discretion.
2.4.4 Technical support offered via the telephone shall be in
English language only.
2.5 ACCOUNTING
2.5.1 Softec shall maintain records of all transactions and wagers
placed utilizing the Licensed Software.
2.5.2 The Licensee shall pay a flat fee of $100.00 US plus all
reasonable hourly administration fees and disbursements,
including printing, photocopying and shipping costs, each time
accounting information is requested. Administration fees shall
be paid at market prices. No fees are payable for regular
accounting information provided to the Licensee for the
purpose of calculating Net Revenue.
2.5.3 Softec shall supply a complete accounting record, as defined
by Softec from time to time, of the previous month's activity
relating to the Licensed Software within ten working days of
the end of each month. The accounting records shall be
delivered either by facsimile or by e-mail.
2.5.4 Softec shall provide daily interim accounting reports, as
defined by Softec from time to time. The daily interim
accounting records shall be delivered either by facsimile or
by e-mail.
2.5.5 Softec shall have the right to utilize the accounting
information for statistical and reporting purposes provided
specific information about the Licensee is not disclosed.
2.5.6 Softec shall archive and maintain the accounting information
for a period of 2 fiscal years.
2.5.7 Softec, at its discretion, may destroy any portion of the
accounting information that Softec deems to be no longer
relevant.
2.5.8 The Licensee shall be given thirty days written notice prior
to the destruction of any accounting information. The Licensee
may choose to archive information about to be destroyed, at
its own facilities.
2.6 CUSTOMER DATA
2.6.1 Softec shall maintain a database containing the Customer
Information.
2.6.2 The Customer Information shall remain the property of the
Licensee.
2.6.3 Softec shall provide daily interim Customer Information
reports, as defined by Softec from time to time.
2.6.4 The Licensee shall pay a fee of $100.00 US plus all reasonable
hourly administration fees and disbursements, including
printing, photocopying and shipping costs, each time
additional Customer Information is requested. Administration
fees shall be paid out at market prices.
2.6.5 Softec shall have the right to utilize the Customer
Information for any purpose that does not conflict with the
Licensee's marketing of the Licensed Software. Under no
circumstances shall Softec utilize the Customer Information in
the marketing of any gaming site being operated by a
subsidiary of Starnet Communications International Inc.,
Softec's parent company.
2.6.6 Softec shall archive and maintain the Customer Information for
a period of two years.
2.6.7 Softec, in its discretion, may destroy any portion of the
Customer Information that Softec deems to be no longer
relevant.
2.6.8 The Licensee shall be given thirty days written notice prior
to the destruction of any Customer Information. The Licensee
may choose to archive information about to be destroyed, at
its own facilities.
2.7 THE GAMES
2.7.1 The lottery tickets and play options available in the lottery
web site shall be determined from time to time by Softec in
its sole discretion.
2.7.2 Softec shall determine the odds for the casino from time to
time. The Licensee shall be responsible for setting the odds
for the sportsbook and the HTML sportsbook, from time to time,
in its sole discretion.
2.7.3 The Licensee shall determine the betting limits for both the
casino sportsbook and the HTML sportsbook, from time to time,
in its sole discretion. The Licensee may choose zero as a
betting limit.
2.7.4 The Licensee, in its sole discretion, shall determine the
betting limits for the Games. The Licensee may choose zero as
a betting limit.
2.7.5 Softec shall determine the games available in the casino and
both versions of the sportsbook, from time to time, in its
sole discretion.
2.7.6 Softec shall determine the lottery tickets available in the
casino as well as the forms of play, from time to time, in its
sole discretion.
2.7.7 Softec shall only supply the Games that the Licensee has
appropriate licenses to operate.
3. OBLIGATIONS OF THE LICENSEE
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3.1 LICENSES
3.1.1 The Licensee shall be responsible for obtaining and
maintaining all necessary licenses for the operation of an
Internet Casino and an Internet Sportsbook operation, or
whichever the Licensee intends to operate, in a location where
Softec maintains Hardware.
3.1.2 Softec shall recommend a lawyer in Antigua that can assist the
Licensee in obtaining, an Internet casino license as required
by the Antigua Free Trade Zone.
3.2 MERCHANT NUMBERS
3.2.1 The Licensee shall be responsible for obtaining and
maintaining appropriate merchant numbers for the processing of
Visa, Master Card American Express credit cards and any other
credit card the Licensee may obtain merchant numbers for (the
"Merchant Numbers").
3.2.2 Notwithstanding that from time to time, Softec may make
merchant numbers available to the Licensee through another
subsidiary of Starnet Communications International Inc.
("SCII"), neither Softec nor SCII, nor any other subsidiary of
SCII shall be responsible for maintaining or continuing to
provide merchant numbers.
3.3 MARKETING
3.3.1 The Licensee shall be responsible for all marketing of the
services offered through the Licensed Software.
3.3.2 The Licensee shall spend on a monthly basis, a minimum of 15%
of the previous month's Net Revenue on marketing and promoting
the Licensee's gaming site.
3.3.3 Softec is not responsible for tracking or maintaining any
records or data with respect to marketing. The Licensee shall
be allowed access to the Hardware for the purpose of tracking
and maintaining marketing data.
3.3.4 The Licensee shall be responsible for all aspects of customer
service, including, but not limited to dealing with customer
complaints and paying out winnings, provided that the Licensee
has and is using its own credit card merchant accounts.
3.4 DISTRIBUTION OF SOFTWARE
3.4.1 The Licensee shall be responsible for the production and
distribution of compact discs containing the Downloadable
Software.
3.4.2 The Licensee shall not alter the Licensed Software as supplied
on the Master CD in any way.
3.4.3 The Licensee shall ensure that the packaging for the Licensed
Software, as well as any logo imprinted on the compact disk,
shall display all proprietary rights symbols such as Copyright
and Trademark, as supplied by Softec (the "Symbols"). The
Symbols shall be of the exact same size and font as supplied
by Softec.
3.5 REGULATORY ISSUES
3.5.1 The Licensee shall be solely responsible for determining which
jurisdictions they choose to market to and receive wagers
from.
3.5.2 The Licensee shall be responsible for determining the legality
of accepting wagers in whichever jurisdictions they choose to
market to and receive wagers from.
3.5.3 The Licensee shall indemnify Softec for any reasonable legal
costs, and fines that arise as a result of the Licensee
choosing to accept wagers from any jurisdiction that
determines or has determined that Internet wagering is
illegal.
3.6 THE WEB SITE
3.6.1 The Licensee shall construct and maintain the entire web
site(s) where the Downloadable Software is to be made
available to the Licensee's customers (the "Web Sites").
3.6.2 The Licensee shall pay for any and all Uniform Resource
Locators ("URL's") that the Licensee deems necessary to
properly market the Licensed Software.
3.6.3 The Licensee shall ensure that the Web Sites shall display a
statement that the software is licensed, as well as all
proprietary rights symbols such as Copyright and Trademark, as
supplied by Softec (the "Symbols"). The Symbols shall be of
the exact same size and font as supplied by Softec.
3.6.4 The Licensee shall have the right to add as many URL's that
are dedicated solely to the promotion of the Licensee's gaming
site as the Licensee deems necessary.
3.6.5 The Licensee shall have the right to make any changes to the
Web Sites the Licensee feels appropriate. All changes that are
effected by Softec will be charged to the Licensee at market
rates.
3.6.6 If requested, Softec shall construct and maintain any and all
additional web sites the Licensee deems necessary for the
marketing of the Licensed Software. All work done to build
additional web sites shall be charged to the Licensee at
market rates.
3.6.7 Softec shall not in any way be responsible for the design of
the Web Sites utilized by the Licensee.
3.6.8 The Licensee shall include in their Terms and Conditions of
Play for the Licensed Software the Terms and Conditions that
are recommended by Softec. The Licensee may embellish or add
to these Terms and Conditions. If the Licensee does not
implement the minimum required Terms and Conditions, in so far
as the Terms and Conditions would have protected the Licensee,
Softec shall not be responsible to the Licensee,
notwithstanding anything in this Agreement.
4 STANDARD CLAUSES
------------------
4.1 NOTICES
Unless otherwise provided in this Agreement, any notice provided for
under this Agreement shall be in writing and shall be sufficiently given
if delivered personally, or if transmitted by facsimile with an original
signed copy delivered personally within twenty-four hours thereafter, or
mailed by prepaid registered post addressed to Softec at their
respective addresses set forth below or at such other than current
address as is specified by notice.
To Softec: Newgate Street
P.O. Box 1589
St. John's, Antigua
West Indies
Attention: General Counsel
Fax: (268) 480-1656
To the Licensee: Hill & Hill legal offices in
St. John's, Antigua
4.2 Entire Agreement and Schedules
- --- ------------------------------
The parties agree that this Agreement and its Schedule, if any,
constitute the complete and exclusive statement of the terms and
conditions between the Licensee and Softec covering the performance
hereof and cannot be altered, amended or modified except in writing
executed by an authorized representative of each party. The Licensee
further agrees that any terms and conditions of any purchaser order or
other instrument issued by the Licensee in connection with this
Agreement which are in addition or inconsistent with the terms and
conditions of this Agreement shall not be binding on Softec and shall
not apply to this Agreement.
4.3 Governing Law and Arbitration
- --- -----------------------------
Any dispute in connection with this Agreement shall be settled by
arbitration in accordance with any Arbitration Act agreed upon between
the parties; provided, however, should any dispute arise under this
Agreement, the parties shall endeavor to settle such dispute amicably
between themselves. In the event that the parties fail to agree upon an
amicable solution, such dispute shall be finally determined by
arbitration as aforesaid.
4.4 GOOD FAITH
The parties acknowledge to one another that each respectively intends to
perform its obligations as specified in this Agreement in good faith.
4.5 PARTIES TO ACT REASONABLY
The parties agree to act reasonably in exercising any discretion,
judgment, approval or extension of time that may be required to effect
the purpose and intent of this Agreement. Whenever the approval or
consent of a party is required under this Agreement, such consent shall
not be unreasonably withheld or delayed.
4.6 GOVERNING LAW
This agreement and all Schedules shall be governed by and construed in
accordance with the laws of the Country of Antigua, and the Licensee
hereby attorns to the jurisdiction of the courts of Antigua
notwithstanding any other provision expressed or implied in either this
agreement or the Schedules.
4.7 TIME TO BE OF THE ESSENCE
Time is of the essence.
4.8 NUMBER AND GENDER
In this Agreement the use of the singular number includes the plural and
vice versa the use of any gender includes all genders, and the word
"person" includes an individual, a trust, a partnership, a body
corporate and politic, an association and any other incorporated or
unincorporated organization or entity.
4.9 CAPTIONS
Captions or descriptive words at the commencement of the various
sections are inserted only for convenience and are in no way to be
construed as a part of this Agreement or as a limitation upon the scope
of the particular section to which they refer.
4.10 NON-ASSIGNABILITY
This Agreement is personal to the Licensee, except as provided in S.
4.11, and the Licensee may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent or
Softec.
4.11 BENEFIT
This Agreement shall ensure to the benefit of and be binding upon the
Licensee, its successors and assigns. The Licensee may delegate the
performance of any of its obligations hereunder to any corporation which
controls, is controlled by or is under common control with the Licensee.
4.12 WAIVER
No condoning, excusing or waiver by any party hereto of any default,
breach of non-observance by any other party hereto, at any time or times
with respect to any covenants or conditions herein contained, shall
operate as a waiver of that party's rights hereunder with respect to any
continuing or subsequent default, breach or nonobservance, and no waiver
shall be inferred from or implied by any failure to exercise any rights
by the party having those rights.
4.13 FURTHER ASSURANCE
Each of the parties hereto hereby covenants and agrees to execute such
further and other documents and instruments and to do such further and
other things as may be necessary to implement and carry out the intent
of this Agreement.
4.14 CUMULATIVE RIGHTS
All rights and remedies of Softec are cumulative and are in addition to
and shall not be deemed to exclude any other rights or remedies allowed
by law except as specifically limited hereby. All rights and remedies
may be exercised concurrently.
4.15 PRIOR AGREEMENTS
Except as specifically provided for herein, this Agreement, including
its Schedules, contains all of the terms agreed upon by the parties with
respect to the subject matter herein and supersedes all prior
agreements, arrangements and understandings with respect thereto,
whether oral or written.
4.16 SEVERABILITY
If any part of this Agreement is unenforceable because of any rule of
law or public policy, such unenforceable provision shall be severed from
this Agreement, and this severance shall not affect the remainder of
this Agreement.
4.17 NO PARTNERSHIP
Notwithstanding anything in this Agreement, no part of this Agreement,
nor the Agreement as a whole shall be construed as creating a
partnership or agency relationship between the parties. If any part of
this Agreement should become construed as forming a partnership or
agency relationship, that part shall be amended such that no partnership
or agency relationship is created, but that part achieves what it was
originally intended to achieve.
4.18 DOLLAR AMOUNTS
All references to money or specific dollar amounts in this Agreement are
in United States Dollars.
4.19 INTERPRETATION
In the interpretation of this Agreement or any provision hereof, no
inference shall be drawn in favor of or against any party by virtue of
the fact that one party or its agents may have drafted this Agreement or
such provision.
IN WITNESS WHEREOF the parties have executed this Agreement on the date first
written.
SOFTEC SYSTEMS CARIBBEAN INC.
Per: /s/ "Christopher Zacharias" Per: /s/ "Mark Dohlen"
Name: Christopher H. Zacharias Name: Mark N. Dohlen
Title: In House Counsel Title: CEO
THE LICENSEE: NET-FORCE ENTERTAINMENT INC.
Per: /s/ "Terry Bowering"
Name: Terry G. Bowering
Title: President, Director
SCHEDULE A
- ----------
The Licensee agrees to pay Softec monthly fees according to the following:
THE LICENSEE'S NET MONTHLY FEE PAYABLE
REVENUE (U.S. DOLLARS)
> $0.00 but < or = to $500,000 25%
> $500,000 but < or = to $1,000,000 20%
> $1,000,000 but < or = to $5,000,000 15%
> $5,000,000 to $10,000,000 12.5%
> $10,000,000 plus 10%
The above table should be read with the following understanding: If the licensee
has a Net Monthly Revenue of $550,000, the fee payable is calculated as follows:
25% on the first $500,000 = $125,000
20% on the next $50,000 = $ 10,000
---------
For a total fee payable = $135,000
SCHEDULE OF MARKET RATES
------------------------
The Market rates as set out in this schedule and referred to in this
Agreement are subject to change without notice to the Licensee.
3D graphics:-------------------------------------------------$150.00 per hour
Video editing:-----------------------------------------------$100.00 per hour
Graphic design:----------------------------------------------$75.00 per hour
Programming:-------------------------------------------------$150.00 per hour
Quality Assurance and testing:-------------------------------$40.00 per hour
SCHEDULE OF MERCHANT NUMBER TERMS
---------------------------------
o Monthly processing limit: $100,000
o Merchant discount: 5.50%
o Rolling reserve: 5% for 180 days if chargeback are less than
5%
o 25% if chargebacks exceed 5% - but will be subject to review
o Transaction fee: $1.60 per transaction applied to both debit
and credit transactions
o Fraud Screen fee: $0.60 per transaction applied to all sales
transaction regardless of the response, (accept or reject).
This system is essential to keep the chargeback ratio down.
o Settlement: 30 days following the month end (e.g. All
September transactions will be settled by October 30th 1998)
o Chargeback: $25 per chargeback transaction
o Payout processing fee is $5.00 per bank draft.
Softec makes no guarantee as to the availability of the merchant
numbers contemplated in this Schedule. Please refer to section 3.2.2 of
this Agreement for clarification.