Exhibit 10.3

EXECUTION COPY

 

 

NON-EXCLUSIVE SOFTWARE LICENSE AGREEMENT made as of January 26, 2005 between Standing Stone Gaming, LLC, a Delaware limited liability corporation, with an address at 5218 Patrick Road, Verona, NY 13478 (“SSG”) and PokerTek, Inc., a North Carolina corporation, with an address at 1020 Crews Road, Suite J, Matthews, NC 28106 (“Customer”).

 

I.	DEFINITIONS

 

(a) The following terms, as used herein, have the following meanings:

 

“Acceptance” means the installation of SSG Licensed Software or an Update at a Client Location.

 

“Agreement” means this agreement, together with all Schedules and Exhibits attached to it.

 

“Authorized User” means an employee of Customer or an independent contractor of Customer operating under a written independent contractor agreement, requiring, among other things, that the independent contractor preserve the confidentiality of the Confidential Information.

 

“Business Hours” means Monday through Friday 8:00 a.m. ET to 5:00 p.m. ET except public holidays.

 

“Client Location” means the physical situs at which the Integrated Product has been deployed during the Term of this Agreement.

 

“Customer Service Location” means the physical situs of SSG Licensed Software, to be serviced by SSG pursuant to this Agreement, or such other physical situs of such SSG Licensed Software as Customer shall, in writing, designate to SSG from time to time.

 

“Documentation” means any printed or electronic materials provided by SSG that document the functions of any SSG Licensed Software.

 

“Effective Date” means the date on which this Agreement is executed by both Parties.

 

“Error” means the material failure of SSG Licensed Software to meet an agreed specification for such SSG Licensed Software.

 

“Force Majeure Event” means a circumstance precluding a Party hereto from performing its obligations under this Agreement (other than the payment of money) resulting from any cause beyond such Party’s reasonable control, including, without limitation, acts of God; blackouts; power failures; inclement weather; fire; explosions;

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floods; hurricanes; tornadoes; earthquakes; epidemics; strikes; work stoppages; labor, component or material shortages; slow-downs; industrial disputes; sabotage; accidents; destruction of production facilities; riots or civil disturbances; war; acts of terrorism; and acts of government or governmental agencies, including changes in law or regulations that materially and adversely impact such Party’s ability to perform its obligations under this Agreement.

 

“Integrated Product” means the product resulting from implementation of SSG Licensed Software with the PokerPro System.

 

“Nation” means the Oneida Indian Nation of New York.

 

“Party” means SSG and Customer or either.

 

“PokerPro System” or “PokerPro Software” means Customer’s automated poker table.

 

“Site License” means a personal, non-transferable, non-exclusive, perpetual license in SSG Licensed Software for each Client Location during the term of this Agreement.

 

“Specified Operating Environment” means such hardware type(s) and other equipment, programming and programs as SSG shall specify from time to time as comprising a minimally suitable platform for the functioning of the SSG Licensed Software.

 

“SSG Licensed Software” means SSG’s Oneida II^® System and subject to Support under this Agreement.

 

“Vendor Licensed Software” means a software program licensed from a party other than SSG to Customer.

 

(b) Each of the following terms is defined in the Section set forth opposite such term:

 

Term		Section
Confidential Information		VII.(c)
Customer		Preamble
Customer License		II.(a)
Initial Integration		II.(a)
License Fee		III.(b)
Term		IV.(a)
SSG		Preamble
Support Term		VIII.(a) IV.(a)
Update		VIII.(a)

 

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II.

SERVICES

 

(a)

Initial Integration

 

SSG hereby grants to Customer a personal, non-transferable, non-exclusive, perpetual license ( the “Customer License”) to the SSG Licensed Software for Initial Integration with the PokerPro System. The Customer License shall survive termination of this Agreement. SSG will provide limited support services for the SSG Licensed Software in accordance with Section VIII of this Agreement.

 

(b)

Subsequent Implementation

 

SSG agrees to grant to Customer a Site License for each subsequent implementation at a Client Location upon SSG’s approval of each Client Location. Customer shall have notified SSG in writing at least thirty (30) days prior to each subsequent implementation at a Client Location. Each Site License shall be deemed granted upon acceptance by SSG of payment therefore under Section III(b). SSG will provide limited support services with respect to each Site License in accordance with Section VIII of this Agreement. Each Site License granted prior to termination of this Agreement shall survive termination of this Agreement.

 

(c)

Hardware

 

SSG will not provide any hardware. Customer shall provide any and all hardware required for the installation and operation of the SSG components supporting the Integrated Product. The hardware shall meet the requirements of the Specified Operating Environment as defined by SSG.

 

III.	COMPENSATION

 

(a)

Initial Integration

 

Customer shall pay to SSG the sum of TWENTY-FIVE THOUSAND AND 0/00 DOLLARS ($25,000.00) for Initial Integration of SSG Licensed Software, due as follows:

 

1.

EIGHT THOUSAND THIRTY-FOUR AND 33/00 DOLLARS ($8,333.34) due on the Effective Date;

 

2.

EIGHT THOUSAND THIRTY-THREE AND 33/00 DOLLARS ($8,333.33) due upon delivery, configuration and training of SSG Licensed Software build 1.1.1; and

 

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3.

EIGHT THOUSAND THIRTY-FOUR AND 33/00 DOLLARS ($8,333.33) due upon final integration of the SSG Licensed Software build 1.2.0 with the PokerPro System.

 

(b)

Subsequent Implementation

 

Customer shall pay to SSG the sum of TWENTY-FIVE THOUSAND AND 0/00 DOLLARS ($25,000.00) for a Site License upon deployment and client acceptance of the Integrated Product at the Seminole location. Customer shall also pay to SSG the sum of TWENTY-FIVE THOUSAND AND 0/00 DOLLARS ($25,000.00) for a Site License upon deployment and client acceptance of the Integrated Product at each subsequent Client Location. The cost of the License Fee shall remain unchanged, unless the parties jointly determine that the SSG Licensed Software should be upgraded, modified or enhanced in any way, at which time the License Fee shall reasonably increase upon mutual agreement of the parties.

 

IV.	TERM; TERMINATION

 

(a)

Term

 

The term of this Agreement (the “Term”) shall commence on the Effective Date and shall continue until terminated in accordance with the provisions of this Section IV. Each Site License granted during the Term of this Agreement shall survive termination of the Agreement.

 

(b)

Termination

 

SSG may terminate this Agreement, with or without cause, upon one-hundred eighty (180) days prior written notice to Customer. In addition, either Party may terminate this Agreement during the Term upon thirty (30) days’ prior written notice to the other Party if:

 

(1)

By mutual agreement of both Parties.

 

(2)

The other Party fails to or refuses to pay any amount due hereunder for more than thirty (30) days after written notice thereto that an invoice for such amount has been submitted to such other Party and has not been paid, and such amount is not being contested in good faith by such other Party.

 

(3)

The other Party materially breaches any provision of this Agreement applicable to it and fails to cure such breach within thirty (30) days after its receipt of written notice of such breach.

 

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(4)

The other Party declares in a sworn writing that a Force Majeure Event has occurred and the material effects of such Force Majeure Event continue in existence for more than sixty (60) days.

 

(5)

The other Party (i) files a voluntary petition in bankruptcy; (ii) shall have filed against it an involuntary petition in bankruptcy which is not vacated within thirty (30) days thereafter; (iii) makes an assignment for the benefit of creditors; (iv) files a petition or an answer seeking an arrangement with creditors, or takes advantage of any insolvency law to protect itself against creditors; (v) applies for or consents to the appointment of a receiver or trustee of all or a substantial part of its assets; or (vi) has entered against it in any court of competent jurisdiction an order, judgment, or decree appointing a receiver of all or a substantial part of its assets, and such order, judgment or decree continues unstayed and in effect for any period of thirty (30) or more consecutive days.

 

(6)

The other Party sells or otherwise disposes of all or substantially all of its business or assets to a third party; or control or ownership of the other Party is transferred to a third party resulting in an assignment or other transfer of a material right or obligation arising under this Agreement to that third party.

 

V.	SSG WARRANTIES; LIMITATION OF LIABILITIES

 

(a)

Warranty for SSG Licensed Software and SSG Service

 

In accordance with Schedule A hereto, SSG warrants that the SSG Licensed Software is free from material defects and conforms in all material respects to the Documentation for a period of one (1) year commencing on the date the last Site License has been granted pursuant to Section II(b) of this Agreement. SSG also warrants that all services rendered pursuant to this Agreement shall be performed in a workmanlike manner consistent with industry standards.

 

(b)

No Warranty for Vendor Licensed Software

 

Customer acknowledges that Customer shall be solely responsible for obtaining licenses to Vendor Licensed Software. SSG MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, AS TO THE QUALITY, CAPABILITIES, OPERATIONS, PERFORMANCE OR SUITABILITY OF VENDOR LICENSED SOFTWARE, INCLUDING THE ABILITY TO INTEGRATE SUCH VENDOR LICENSED SOFTWARE WITH THE SSG LICENSED SOFTWARE

 

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AND/OR HARDWARE. The quality, capabilities, operations, performance and suitability of such Vendor Licensed Software lie solely with Customer and the vendor or supplier of such Vendor Licensed Software.

 

(c)

Exclusivity of Warranties

 

THESE WARRANTIES ARE EXCLUSIVE AND IN LIEU OF ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE, OR ANY OTHER WARRANTY OF QUALITY, WHETHER EXPRESS OR IMPLIED. SSG DOES NOT WARRANT THAT THE SSG LICENSED SOFTWARE WILL MEET CUSTOMER’S FUTURE OR UNDISCLOSED REQUIREMENTS.

 

(d)

Limitation of Liabilities

 

SSG SHALL HAVE NO LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL, EXEMPLARY, SPECIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ANY EVENT, EXCEPT WITH RESPECT TO ITS INDEMNIFICATION OBLIGATIONS UNDER SECTION VII(d), THE LIABILITY OF SSG TO CUSTOMER FOR ANY REASON AND UPON ANY CAUSE OF ACTION OR CLAIM SHALL BE LIMITED TO THE AMOUNT PAID TO SSG BY CUSTOMER HEREUNDER WITH RESPECT TO THE PRODUCT OR SERVICE WHICH IS THE SUBJECT OF THE APPLICABLE ACTION OR CLAIM. THIS LIMITATION APPLIES TO ALL CAUSES OF ACTION OR CLAIMS IN THE AGGREGATE, INCLUDING, WITHOUT LIMITATION, TO BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATIONS, CLAIMS FOR FAILURE TO EXERCISE DUE CARE IN THE PERFORMANCE OF SSG’S SERVICES HEREUNDER AND OTHER TORTS. BOTH PARTIES UNDERSTAND AND AGREE THAT THE REMEDIES, EXCLUSIONS AND LIMITATIONS HEREIN ALLOCATE THE RISKS OF PRODUCT AND SERVICE NONCONFORMITY BETWEEN THE PARTIES AS AUTHORIZED BY THE UNIFORM COMMERCIAL CODE AND/OR OTHER APPLICABLE LAWS. THE FEES HEREIN REFLECT, AND ARE SET IN RELIANCE UPON, THIS ALLOCATION OF RISK AND THE EXCLUSION OF CONSEQUENTIAL DAMAGES AND LIMITATIONS OF LIABILITY SET FORTH IN THIS AGREEMENT.

 

VI.	CERTAIN CUSTOMER RESPONSIBILITIES

 

(a)

Notice of Hazard

 

Customer shall promptly notify SSG if it becomes aware of potentially unsafe conditions or hazardous materials to which SSG’s personnel could be exposed at any Customer Service Location.

 

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(b)

No Assignment

 

Customer agrees not to assign, or otherwise transfer, this Agreement or Customer’s rights under it, delegate its obligations, or resell any product or service, without the prior written consent of SSG; provided, however, that the preceding shall not prevent installation and use of the Integrated Product at a Client Location, whether under lease, purchase or otherwise. Any attempt to so assign, transfer, delegate or resell without such consent shall be a material breach of this Agreement.

 

(c)

Access to Customer Service Location and Remote Access

 

Customer shall provide SSG with sufficient, timely access to any Customer Service Location requiring on-site Support in order for SSG to fulfill its obligations under this Agreement. Customer shall also provide SSG with sufficient and timely remote access to any Customer Service Location in order for SSG to fulfill its obligations under this Agreement.

 

(d)