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JOINT VENTURE AGREEMENT

Joint Venture JV Agreement

JOINT VENTURE AGREEMENT | Document Parties: New Media Lottery Service | New Media Lottery Services Inc.  | Cybercyte Sistemas e Servišos Ltda. You are currently viewing:
This Joint Venture JV Agreement involves

New Media Lottery Service | New Media Lottery Services Inc. | Cybercyte Sistemas e Servišos Ltda.

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Title: JOINT VENTURE AGREEMENT
Date: 7/29/2005

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JOINT VENTURE AGREEMENT

 

THIS AGREEMENT is entered into effective the 28 th of October 2004 by and between New Media Lottery Services Inc. (“NMLS”), a Virginia corporation, with its offices at 1400 Technology Drive, Harrisonburg, Virginia 22802, USA, contact: Mr. Randolph H. Brownell III, voice (1) 540-437-1688, fax (1) 540-574-0491, e-mail rbrownell@nmlsinc.com , and Cybercyte Sistemas e Serviços Ltda. (“CYBERCYTE”), a Brazilian corporation with its offices at Rua Barão do Triunfo, 550 - sala 92, São Paulo, SP, CEP 04602-002, Brazil, contact: Mr. Ari Célia, voice (5511) 5092-5883, fax (5511) 5533-6526, e-mail ari.celia@cybercyte.com.br .

 

WHEREAS NMLS possesses extensive experience in the establishment, operation and management of lotteries and has developed and operated a number of Internet lottery programs;

 

WHEREAS CYBERCYTE and its associated companies possess extensive expertise in the Brazilian lottery marketplace, operate a number of lottery/gaming websites, hold two state lottery licenses awarded by the Brazilian States of Pará and Santa Catarina and are actively involved in bingo hall ownership and operation; and

 

WHEREAS NMLS and CYBERCYTE desire to enter into a business relationship to establish a joint venture in accordance with the terms and conditions set out in this agreement to combine their expertise and to jointly pursue a number of lottery projects in Brazil.

 

NOW THEREFORE , the parties agree as follows:

 

1.

Establishment of a joint venture company. The parties shall form a new company that shall be called New Media Digital Services Ltda. (“NMD”). NMD will be a limited liability company established as a ‘sociedade empresária limitada’ in the Brazilian State of São Paulo, with ownership shared between the parties below (the “Members”) as follows:

 

  CyberCyte

 

 

50.00

%

  NMLS

 

 

50.00

%

  Total

 

 

100.00

%

 

2.

Purpose of NMD. The purpose of NMD is to launch an Internet lottery program in Brazil under the existent lottery license issued by the Brazilian State of Pará to WJM Entretenimentos e Participações Ltda.   Cybercyte, who owns 50% of WJM confirms that the holder of the license agrees to the terms and conditions of the Joint Venture Agreement. It is also agreed that the parties will pursue additional state and federal Internet lottery programs.

 

NMD will subsequently put in place a business and financial plan to be agreed upon by the Parties (such agreement not to be unreasonably withheld) to:

 

 

(i)

develop opportunities to utilize its Internet lottery on video lottery machines (“VLMs”) currently situated at Bingo Tijuca in Rio de Janeiro;

 


 

 

Page 1 of 7


 

 

 

(ii)

develop opportunities to utilize its Internet lottery on VLMs in bingo halls throughout Brazil;

 

 

(iii)

seek its own state lottery licenses from any and all Brazilian State lottery programs;

 

 

(iv)

develop its Internet lottery website into an Internet lottery portal for Brazil.

 

3.

Obligations of NMLS to NMD. NMLS shall, among other obligations:

 

 

(i)

design the lottery games, design the web interface API that allows NMD to operate these games from a website and assist in the integration of the NMD website and the lottery games;

 

 

(ii)

provide to NMD free of charge limited rights to its Internet lottery/gaming systems;

 

 

(iii)

ensure any third party licenses required to operate its Internet lottery/gaming systems are maintained operational and in good order;

 

 

(iv)

provide to NMD free of charge the management of its Internet lottery/gaming systems;

 

 

(v)

provide to NMD free of charge access to existing computer systems (software and hardware) on which to operate the lottery games intended for Brazil, however if and when a decision is made to set up full Brazilian operation all of these costs will become part of NMD ;

 

 

(vi)

validate winners and maintain appropriate accounting records through its Internet lottery/gaming systems;

 

 

(vii)

provide free of charge to NMD lottery expertise and some general operational management;

 

 

(viii)

provide free of charge to NMD personnel of sufficient caliber and experience to deliver the obligations set out above.

 

4.

Obligations of CYBERCYTE to NMD. CYBERCYTE shall, among other obligations:

 

 

(i)

using NMLS templates, assist NMLS in the design of the lottery games and the website intended for Brazil and provide free of charge to NMD all requisite local language translation services;

 

 

(ii)

provide to NMD free of charge the rights to its registration and financial transaction systems;

 

 

(iii)

ensure any third party licenses required to operate its registration and financial transaction systems are maintained operational and in good order without cost to NMD;

 

 

(iv)

ensure the extant lottery license issued by the Brazilian State of Pará to WJM Entretenimentos e Participações Ltda. is maintained operational and in good order;

 

 

Page 2 of 7


 

 

 

(v)

provide to NMD free of charge the management of its registration and financial transaction systems;

 

 

(vi)

establish on behalf of NMD bank accounts with appropriate banks in order to facilitate player deposits and payouts;

 

 

(vii)

provide customer support to NMD’s Internet lottery players;

 

 

(viii)

provide free of charge to NMLS advice and guidance on Brazilian business procedures, funds repatriation and taxation issues;

 

 

(ix)

provide free of charge to NMD local lottery expertise;

 

 

(x)

provide the management of one NMD employee manager, reporting to Ari Celia, and general operational management;

 

 

(xi)

provide serviced office accommodation to house one NMD employee manager;

 

 

(xii)

provide access to its database of non current Internet users for the purpose of marketing the lottery games and the website intended for Brazil. For these purposes, non current Internet users are defined as users which have not visited the websites of CYBERCYTE and its associated companies for 2 months; and

 

 

(xiii)

provide free of charge to NMD personnel of sufficient caliber and experience to deliver the obligations set out above.

 

5.

Lottery Customer Data. NMLS and CYBERCYTE each acknowledge and agree that all data relating to a customer of NMD’s Internet lotteries, including names, addresses and any other personal information (“Lottery Customer Data”) is the property of NMD.

 

6.

Representations and Warranties of NMLS and CYBERCYTE. NMLS and CYBERCYTE each represents and warrants that:

 

 

(i)

it has the right and corporate authority to enter into this agreement and has all the necessary rights to perform its obligations under this agreement;

 

 

(ii)

it has sufficient rights to the technology and the systems covered by this agreement and the right to transfer such rights for transactions as contemplated under this agreement;

 

 

(iii)

it will use and process Lottery Customer Data only in accordance with this agreement; and

 

 

(iv)

its entry into this agreement does not breach any other agreement to which it is a party.

 

CYBERCYTE represents and warrants that:

 

 

(i)

two State lottery licences have been awarded by the Brazilian States of Pará and Santa Catarina respectively to its associated company, WJM Entretenimentos e Participações Ltda.;

 

 

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(ii)

it legally and validly manages and maintains one bingo hall in Rio de Janeiro through its associated company, Hunter Representação e Locaç


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