Exhibit 10.1
Joint Venture Agreement
JOINT VENTURE AGREEMENT
THIS JOINT
VENTURE AGREEMENT (the "Agreement") is made as of September 30,
2005 (the "Effective Date") by and between
SOLIDUS NETWORKS, INC., dba
PayByTouch Solutions, a Delaware
corporation ("PBT"), and WINWIN GAMING, INC., a
Delaware corporation ("Winwin").
RECITALS
A. The
parties desire to establish a framework for cooperation through
joint marketing and other efforts in order
to gain mutual benefit by taking
advantage of the relationships and
synergies between their respective
businesses.
B. To provide
Winwin with additional resources to conduct its business
while the parties negotiate the terms of a
potential further PBT investment in
Winwin, PBT is willing to loan funds to
Winwin, subject to the conditions
specified herein.
AGREEMENT
In
consideration of the foregoing, and the representations,
warranties,
covenants and conditions set forth below,
Winwin and PBT, intending to be
legally bound, hereby agree as follows:
1. AMOUNT AND TERMS OF THE LOAN. Subject to
the terms of this Agreement, PBT
AGREES to lend to Winwin at the Closing (as
hereinafter defined) the sum of one
million dollars ($1,000,000) (the "Loan
Amount") against the issuance and
delivery by Winwin of a Secured Promissory
Note in substantially the form
attached hereto as EXHIBIT A (the "Note")
and the execution and delivery of a
Security Agreement substantially in the
form attached hereto as Exhibit B (the
"Security Agreement") and the UCC-1
Financing Statement and other documents
required thereunder (the "Perfection
Documents").
2. THE CLOSING.
2.1
Closing Date. The closing of the sale and purchase of the Note
(the
"Closing") shall be held on September 30,
2005 (the "Closing Date").
2.2
Delivery. At the Closing, the parties shall execute and deliver
the
Security Agreement, PBT shall deliver a
check or wire transfer funds in the
amount of the Loan Amount (less estimated
expenses as provided in Section 7.6
below) to Winwin, Winwin shall issue and
deliver the Note to PBT, and Winwin
shall execute the Perfection Documents and
deliver them to PBT.
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3. REPRESENTATIONS AND WARRANTIES OF
WINWIN.
Winwin
hereby represents to PBT as of the date of this Agreement as
set
forth below.
3.1
Organization, Good Standing and Qualification. Winwin is a
corporation
duly organized, validly existing and in
good standing under the laws of the
State of Delaware. Winwin has all requisite
corporate power and authority to own
and operate its properties and assets, to
execute and deliver this Agreement, to
issue and sell the Note, and to carry out
the provisions of this Agreement and
to carry on its business as presently
conducted. Winwin is duly qualified to do
business and is in good standing as a
foreign corporation in all jurisdictions
in which the nature of its activities and
of its properties (both owned and
leased) makes such qualification necessary,
except for those jurisdictions in
which failure to do so would not have a
material adverse effect on Winwin or its
business.
3.2
Authorization; Binding Obligations. All corporate action on the
part
of Winwin, its officers, directors and
stockholders necessary for the
authorization of this Agreement and the
Security Agreement, the performance of
all obligations of Winwin hereunder at the
Closing and the authorization, sale,
issuance and delivery of the Note has been
taken. This Agreement, the Security
Agreement and the Note constitute valid and
binding obligations of Winwin
enforceable in accordance with their terms.
The sale of the Note are not subject
to any preemptive rights or rights of first
refusal that have not been properly
waived or complied with.
3.3
Financial Statements. All financial statements included in
Winwin's
filings with the Note and Exchange
Commission since January 1, 2005 have been
prepared in accordance with generally
accepted accounting principles applied on
a consistent basis throughout the periods
indicated, except as disclosed
therein, and present fairly the financial
condition, results of operations, cash
flows and stockholders' equity of Winwin as
of the dates and for the periods
stated therein.
3.4
Liabilities. Winwin has no material liabilities and, to the best
of
its knowledge, knows of no material
contingent liabilities not disclosed in the
financial statements included in its
Quarterly Report on Form 10-QSB for the
quarterly period ended June 30, 2005 (the
"Financial Statements"), except
current liabilities incurred in the
ordinary course of business subsequent to
June 30, 2005 (the "Statement Date") which
have not been, either in any
individual case or in the aggregate,
materially adverse.
3.5
Changes. Since the Statement Date, there has not been to
Winwin's
knowledge:
(a)
Any change in the assets, liabilities, financial condition or
operations of Winwin from that reflected in
the Financial Statements, other than
changes in the ordinary course of business,
none of which individually or in the
aggregate has had a material adverse effect
on such assets, liabilities,
financial condition or operations of
Winwin;
(b) Any resignation or termination of any officer, key employee
or
group of employees of Winwin;
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(c) Any material change, except in the ordinary course of
business,
in the contingent obligations of Winwin by
way of guaranty, endorsement,
indemnity, warranty or otherwise;
(d) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely
affecting the properties, business or
prospects or financial condition of
Winwin;
(e) Any waiver by Winwin of a valuable right or of a material
debt
owed to it;
(f) Any material change in any compensation arrangement or
agreement
with any employee, officer, director or
stockholder;
(g) Any labor organization activity related to Winwin;
(h) Any sale, assignment, or exclusive license or transfer of
any
patents, trademarks, copyrights, trade
secrets or other intangible assets;
(i) Any change in any material agreement to which Winwin is a
party
or by which it is bound that materially and
adversely affects the business,
assets, liabilities, financial condition or
operations of Winwin;
(j) Any other event or condition of any character that, either
individually or cumulatively, has
materially and adversely affected the
business, assets, liabilities, financial
condition or operations of Winwin; or
(k) Any arrangement or commitment by Winwin to do any of the
acts
described in subsection (a) through (j)
above.
3.6 Title
to Properties and Assets; Liens, Etc. Winwin has good and
marketable title to its properties and
assets and good title to its leasehold
estates, in each case subject to no
mortgage, pledge, lien, lease, encumbrance
or charge, other than (a) those resulting
from taxes which have not yet become
delinquent, (b) minor liens and
encumbrances that do not materially detract from
the value of the property subject thereto
or materially impair the operations of
Winwin, and (c) those that have otherwise
arisen in the ordinary course of
business. Winwin is in compliance with all
material terms of each lease to which
it is a party or is otherwise bound.
3.7
Intellectual Property.
(a) Winwin owns or possesses sufficient legal rights to (i) all
trademarks, service marks, trade names,
copyrights, trade secrets, licenses,
information and other proprietary rights
and processes and (ii) to Winwin's
knowledge, all patents, in each instance as
necessary for its business as now
conducted and as presently proposed to be
conducted, without any known
infringement of the rights of others. There
are no outstanding options, licenses
or agreements of any kind relating to the
foregoing proprietary rights, nor is
Winwin bound by or a party to any options,
licenses or agreements of any kind
with respect to the patents, trademarks,
service marks, trade names, copyrights,
trade secrets, licenses, information and
other proprietary rights and processes
of any other person or entity other than
such licenses or agreements arising
from the purchase of "off the shelf" or
standard products.
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(b) Winwin has not received any communications alleging that
Winwin
has violated or, by conducting its business
as presently proposed, would violate
any of the patents, trademarks, service
marks, trade names, copyrights or trade
secrets or other proprietary rights of any
other person or entity.
(c) Winwin is not aware that any of its employees is obligated
under
any contract (including licenses, covenants
or commitments of any nature) or
other agreement, or subject to any
judgment, decree or order of any court or
administrative agency, that would interfere
with their duties to Winwin or that
would conflict with Winwin's business as
proposed to be conducted. Each
employee, officer and consultant of Winwin
has executed a proprietary
information and inventions agreement in the
form(s) as delivered to PBT. No
employee, officer or consultant of Winwin
has excluded works or inventions made
prior to his or her employment with Winwin
from his or her assignment of
inventions pursuant to such employee,
officer or consultant's proprietary
information and inventions agreement.
Winwin does not believe it is or will be
necessary to utilize any inventions, trade
secrets or proprietary information of
any of its employees made prior to their
employment by Winwin, except for
inventions, trade secrets or proprietary
information that have been assigned to
Winwin.
3.8
Compliance with Other Instruments. Winwin is not in violation
or
default of any term of its charter
documents, each as amended, or of any
provision of any mortgage, indenture,
contract, agreement, instrument or
contract to which it is party or by which
it is bound or of any judgment,
decree, order or writ other than any such
violation that would not have a
material adverse effect on Winwin. The
execution, delivery, and performance of
and compliance with this Agreement and the
Security Agreement, and the issuance
and sale of the Note pursuant hereto will
not, with or without the passage of
time or giving of notice, result in any
such material violation, or be in
conflict with or constitute a material
default under any such document, or
result in the creation of any mortgage,
pledge, lien, encumbrance or charge upon
any of the properties or assets of Winwin
or the suspension, revocation,
impairment, forfeiture or nonrenewal of any
permit, license, authorization or
approval applicable to Winwin, its business
or operations or any of its assets
or properties. To its knowledge, Winwin has
avoided every condition, and has not
performed any act, the occurrence of which
would result in Winwin's loss of any
material right granted under any license,
distribution agreement or other
material agreement.
3.9
Litigation. There is no action, suit, proceeding or
investigation
pending or, to Winwin's knowledge,
currently overtly threatened against Winwin
that questions the validity of this
Agreement or the right of Winwin to enter
into this Agreement or to consummate the
transactions contemplated hereby or
thereby, or that would reasonably be
expected to result, either individually or
in the aggregate, in any material adverse
change in the assets, condition,
affairs or prospects of Winwin, financially
or otherwise, nor is Winwin aware
that there is any basis for any of
