EXHIBIT 4.37
SOFTWARE LICENSE AGREEMENT
THIS AGREEMENT is entered into this 23 day of May 2000.
BETWEEN:
INTERNET EMPIRE ENTERTAINMENT LTD., with registered offices in St.
John's Antigua, West Indies
(hereinafter referred to as the "Licensee")
AND
STARNET SYSTEMS INTERNATIONAL INC., (formerly known as Softec Systems
Caribbean Inc.) with registered offices at 1589 Newgate Street, St.
John's Antigua, West Indies.
(hereinafter referred to as "SSII")
WHEREAS,
A. Softec Systems Caribbean Inc. changed its name to Starnet Systems
International Inc. pursuant to Section 161(2) of the International
Business Corporations Act, Cap.222, by Special Resolution dated 19th
day of July 1999;
B. SSII owns rights to Internet casino software (the "Software");
C. SSII wishes to license the Software to other companies;
D. SSII wishes to provide a complete computer hardware and software
package that the Licensee may use to operate an Internet Gaming site;
and,
E. The Licensee wishes to license the Software and make use of SSII'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
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 SSII for use in connection
with the licensed programs. The Licensed Software
shall consist of not more than 2 casinos, based on
themes selected by the Licensee (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 SSII
in its absolute discretion, located at its offices in
St. John's Antigua, or other locations designated by
SSII 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 SSII which is not generally available
to or used by others or the utility or value of which
is not generally known or recognized as
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standard practice, including, without limitation, all
financial business and personal data relating to
SSII's clients, any non-public information about
affiliates, subsidiaries, consultants and employees
of SSII 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
SSII 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 SSII to inspect and audit all
SSII's business, accounting and supporting records
that are necessary for purposes determining SSII's
compliance with the terms of this Agreement. SSII
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, SSII 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 SSII 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, SSII 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
SSII's fiscal years prior to the date SSII receives
notice of an impending audit.
1.3 INDEMNIFICATION
1.3.1 The Licensee acknowledges and agrees that neither
SSII 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
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Hardware or any other information, material or
services provided by SSII to the Licensee under this
Agreement. If, despite the foregoing limitations,
SSII 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 SSII, 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 SSII for the six months prior to the
loss.
1.3.2 The Licensee shall indemnify and save harmless SSII
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 SSII
is found guilty of fraud in executing its'
obligations under this Agreement, the Licensee shall
not 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 SSII can be temporarily disrupted. The
Licensee acknowledges and agrees that neither SSII
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 SSII 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.
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1.4.2 The Licensee acknowledges that SSII's ability to
perform its obligations under this Agreement are
subject to government licensing in whatever
jurisdiction SSII may choose to operate. SSII 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 SSII. Violation of this
section is grounds for immediate termination of this
Agreement. SSII will not unreasonably withhold its
consent to the Licensee's requests to sub-license the
Licensed Software to a third party subject to the
following obligations of the Licensee and limitations
of SSII:
(a) that the Licensee will have first provided
SSII with a copy of its draft sub-licensing
agreement with the proposed sub-licensee
(the "Sublicensee"), such agreement must
contain the following provisions (the
"Sub-licensing Agreement"):
(1) that Licensee is responsible
for all communication with the
Sublicensee and SSII will have no
responsibility in this regard;
(2) that the Sublicensee will have
presented the Licensee with a
current criminal check confirming
that Sublicensee has no criminal
record;
(3) the Sublicensee shall obtain no
rights in the Licensed Software
other than those specifically
granted in the Sub-licensing
Agreement;
(4) the Licensee is responsible for all
technical support and customer
service support of the Sublicensee
and the Sublicensee's customers and
the Licensee will be responsible
for establishing its own methods of
communication in this regard;
(5) the Sublicensee shall not own the
Customer Information generated in
respect of the Sublicensee's
customers and, during the term of
this Agreement ownership of such
Customer Information will be
retained by the Licensee and
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will not in any circumstances be
transferred by the Licensee to the
Sublicensee;
(6) that the Licensee is responsible
for paying all of the additional
production costs associated with
producing a copy of the software
and a report generator for each of
the Licensee's sublicensees
approved by SSII under this
Agreement (see attached Fee
Schedule);
(7) that the Licensed Software is the
sole property of SSII, and that
Licensee has only the specific
rights to sub-license that are
granted to it under this Agreement;
and,
(8) that the cost of any upgrades to
the Licensed Software that are
sublicensed to the Sublicensee will
be borne by the Licensee.
1.5.2 Copyright, trademarks and other proprietary rights of
SSII (SSII's Intellectual Property) 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 SSII's
Intellectual Property to the Licensed Software, and
any copies threreof, and all documentation, code and
logic, which describes and/or comprises the Licensed
Software remains the sole property of SSII.
1.5.4 SSII 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 SSII'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 SSII will license
the Licensed Software to as many other parties as are
willing to enter into a licensing agreement with
SSII.
1.5.7 INTENTIONALLY DELETED
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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 SSII 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 gaming servers are located.
1.5.10 It is the policy of SSII 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, SSII 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 SSII to ensure that persons residing in
Canada are not able to wager utilizing the Licensed
Software.
1.6 TERMS 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 SSII 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, SSII
shall not give notice of termination in the first
year of this Agreement.
1.6.3 SSII 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 SSII. The Licensee shall be allowed to
cure the breach during the notice period, thus
pre-empting SSII'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 SSII.
For the purposes of this section, material shall mean
anything greater than 5% of the previous month's
fees.
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1.6.4 SSII 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 SSII 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 SSII
is materially in breach of this Agreement for more
than 30 days. SSII 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 SSII may terminate this Agreement at any time upon
five days notice if SSII, 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 SSII any and all of
SSII's materials which SSII 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 he given to the Licensee and SSII
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 SSII 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:
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o $50,000 within five (5) business days upon
signing this Agreement; and
o $50,000 upon completion of the installation
of the software.
1.7.2 The Licensee shall pay to SSII 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 INTENTIONALLY DELETED
1.7.4 All monthly payments shall be delivered to SSII 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 SSII in
each instance.
1.8.2 SSII shall not disclose, publish, or disseminate
Customer Information to anyone other than those of
its employees with a need to know, and SSII agrees to
take reasonable precautions to prevent any
unauthorized use, disclosure, publication, or
dissemination of Customer Information. SSII 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 SSII or the Licensee,
remains the property of SSII 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
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new material which may be protected by copyright,
patent and/or trade secret.
1.8.4 Notwithstanding, anything in this Section 1.8, SSII
shall be allowed to use Customer Information for the
purpose of fulfilling its reporting obligations as a
public company. SSII 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 SSII and its parent company,
Starnet Communications International Inc.
2. OBLIGATIONS OF THE LICENSOR
2.1 HARDWARE
2.1.1 SSII shall supply the Hardware as defined in this
Agreement.
2.1.2 SSII shall maintain the Hardware and pay all costs
for maintaining. and/or upgrading the Hardware.
2.1.3 SSII shall supply the office space required to house
the Hardware. SSII WILL USE ALL REASONABLE EFFORTS TO
ENSURE THAT THE OFFICE SPACE HOUSING THE HARDWARE IS
MAINTAINED TO A HIGH LEVEL OF SECURITY.
2.1.4 The Hardware shall, at all times, remain the property
of SSII.
2.1.5 SSII 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 SSII will use reasonable efforts to establish a
redundant site in St. Kitts, West Indies, or any
other jurisdiction, provided that SSII will be
required to maintain a gaming license at all times
in any jurisdiction in which redundant Servers are
located. If SSII proposes to establish a redundant
site in a jurisdiction other than St. Kitts, SSII
shall first obtain the approval of the Licensee shall
not be required to maintain a redundant site.
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2.1.7 SSII shall make all reasonable efforts to repair and
correct any problems arising under SSII'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 SSII 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 SSII shall install the Licensed Software on the
Hardware.
2.2.2 SSII 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 SSII 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 SSII shall supply to the Licensee a single Master CD
containing the Downloadable Software.
2.2.5 SSII 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 SSII 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
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2.2.9 the Licensee, at market rates, plus a $100.00 U.S.
administration fee. SSII retains the right to refuse
to make the requested changes.
2.2.10 SSII shall only be required to provide the Licensed
Software in the English language and other language
that becomes available.
2.2.11 SSII will provide all upgrades of the Licensed
Software that do not require changes to the graphical
interface, at no charge to the Licensee.
2.2.12 All upgrades are to be made available to the Licensee
within 30 days of the completion of testing.
2.2.13 The Licensee may operate the Casino on as many
separate URL's as the Licensee wants, with no
additional licensing fee to be paid.
2.2.14 SSII 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.
2.2.15 INTENTIONALLY DELETED
2.3 FINANCIAL TRANSACTIONS
2.3.1 SSII 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 SSII's discretion, at a cost to
the Licensee to be agreed upon at the time.
2.3.2 SSII 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
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2.4.1 SSII shall supply 24-hour 7-days per week technical
support for the Licensee's customers and for the
Licensee.
2.4.2 SSII shall make the Technical support available via
the Internet and via toll free telephone lines.
2.4.3 SSII 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 and other languages that become
available, including Chinese (mandarin). Technical
support offered via the Internet shall be in all
languages in which the Licensed Software is
available.
2.5 ACCOUNTING
2.5.1 SSII shall maintain records of all transactions and
wagers placed utilizing the Licensed Software.
2.5.2 No fees are payable for regular accounting
information provided to the Licensee for the purpose
of calculating Net Revenue.
2.5.3 SSII shall supply a complete accounting record, as
defined by SSII 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 SSII shall provide daily interim accounting reports,
as defined by SSII from time to time. The daily
interim accounting records shall be delivered either
by facsimile or by e-mail.
2.5.5 SSII 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 SSII shall archive and maintain the accounting
information for a period of 2 fiscal years.
2.5.7 SSII, at its discretion, may destroy any portion of
the accounting information that SSII 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.
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2.6 CUSTOMER DATA
2.6.1 SSII shall maintain a database containing the
Customer Information.
2.6.2 The Customer Information shall remain the property of
the Licensee.
2.6.3 SSII shall provide daily interim Customer Information
reports, as defined by SSII from time to time.
2.6.4 The Licensee shall pay no fees for additional
Customer Information, provided that such requests are
reasonable. Administration fees shall be paid out at
market prices.
2.6.5 SSII 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 SSII utilize
the Customer Information in the marketing of any
gaming site being operated by a subsidiary of Starnet
Communications International Inc., SSII's parent
company.
2.6.6 SSII shall archive and maintain the Customer
Information for a period of two years.
2.6.7 SSII in its discretion, may destroy any portion of
the Customer Information that SSII 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 SSII in its sole discretion.
2.7.2 SSII 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 tithe, in its sole discretion. The
Licensee may choose zero as a betting limit.
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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 SSII 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 SSII 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 SSII shall only supply the Games that the Licensee
has appropriate licenses to operate.
3. OBLIGATIONS OF THE LICENSEE
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 SSII maintains Hardware.
3.1.2 SSII 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 and 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, SSII may make
merchant numbers available to the Licensee through
another subsidiary of Starnet Communications
International Inc. ("SSII"), neither SSII 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.
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3.3.3 SSII 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, the entry web page for the casino
and sportsbook, as well on any compact disks
containing the License Software, shall display all
proprietary rights symbols such as Copyright and
Trademark, as supplied by SSII (the "Symbols"). The
Symbols shall be of the exact same size and font as
supplied by SSII.
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. It is understood that the
Licensee will not accept wagers from Canada, and SSII
will program the Casino to provide the necessary
blocks and filters to prevent CANADIAN wagers.
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 SSII 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").
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The Licensee shall pay for any and all Uniform
Resource Locators ("URL's") that the Licensee deems
necessary to properly market the Licensed Software.
3.6.2 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 SSII (the
"Symbols"). The Symbols shall be of the exact same
size and font as supplied by SSII.
3.6.3 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.
3.6.4 The Licensee shall have the right to make any changes
to the Web Sites the Licensee feels appropriate. All
changes that are effected by SSII will be charged to
the Licensee at market rates.
3.6.5 If requested, SSII 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.
3.6.6 SSII shall not in any way be responsible for the
design of the Web Sites utilized by the Licensee.
3.6.7 The Licensee shall include in their Terms and
Conditions of Play for the Licensed Software the
Terms and Conditions that are recommended by SSII.
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, SSII shall not be responsible to the
Licensee, notwithstanding anything in this Agreement.
3.6.8 To enhance the credibility of the Licensee's gaming
operation, the Licensee is required to utilize the
SSII intermercial provided and designed by SSII, and
display the SSII Seal of Approval icon on the
website's homepage.
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
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personally within twenty-four hours thereafter, or mailed by prepaid
registered post addressed to SSII at their respective addresses set
forth below or at such other than current address as is specified by
notice.
To SSII: Newgate Street
P.O. Box 1589 St. John's, Antigua,
WI Attention: General Counsel Fax
(268) 480-1656
To the Licensee: Registered 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 SSII 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 SSII 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.
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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
SSII.
4.11 BENEFIT
This Agreement shall enure 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.
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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 SSII 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 or
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 of 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. Notwithstanding the above, if there is any
uncertainty in the interpretation of this Agreement, the uncertainty
shall be interpreted in SSII's favour.
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IN WITNESS WHEREOF the parties have executed this Agreement on the date
first written.
STARNET SYSTEMS INTERNATIONAL INC.
Per: Per:
------------------------------ ----------------------------
Name: Name:
----------------------------- ---------------------------
Title: Title:
---------------------------- --------------------------
INTERNET EMPIRE ENTERTAINMENT LTD.
Per:
------------------------------
Name:
-----------------------------
Title:
----------------------------
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SCHEDULE A
The Licensee agrees to pay SSII monthly fees according to the following:
THE LICENSEE'S NET MONTHLY FEES PAYABLE
REVENUE (U.S. DOLLARS)
[*]
The above table should be read with the following understanding: If the Licensee
has net monthly revenues of [*] then the fee payable is calculated as follows:
[*]
* This information has been omitted and is subject to a request for confidential
treatment with the Securities and Exchange Commission.
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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:----------------------------------------------[*]
Video editing:--------------------------------------------[*]
Graphic design:-------------------------------------------[*}
Programming:----------------------------------------------[*}
Quality Assurance and testing:----------------------------[*]
* This information has been omitted and is subject to a request for confidential
treatment with the Securities and Exchange Commission.
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Schedule of Merchant Number Terms
o Monthly processing limit: [*]
o Merchant discount: [*]
o Rolling reserve; [*] for [*] days if chargeback are less than
[*]
o [*] if chargebacks exceed [*] - but will be subject to review
o Transaction fee: [*] per transaction applied to both debit
and credit transactions
o Fraud Screen fee: [*] 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: [*]
o Chargeback: [*] per chargeback transaction
o Payout processing fee is [*] per bank draft.
SSII 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.
* This information has been omitted and is subject to a request for confidential
treatment with the Securities and Exchange Commission.
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