AGREEMENT

 

AGREEMENT

 

THIS AGREEMENT (“Agreement”) is entered into this 6 ^th day of May 2005 by and among Alladdin Limited, Alladdin Lotteries Limited and New Media Lottery Services, Inc. (each a "Party" and together the "Parties").

 

As used in this Agreement, capitalized terms have the meanings ascribed to them above and in Section 1 below, except as otherwise expressly provided.

 

WITNESSETH

 

WHEREAS, Licensor and ALL currently perform certain services for Licensee similar to the Alladdin Services on an oral basis without the benefit of a written agreement; and

 

WHEREAS, Licensee desires to engage Licensor and ALL to perform the Alladdin Services on the basis set forth in this Agreement and Licensor and ALL accept the engagement by Licensee to perform the Alladdin Services; and

 

WHEREAS, Licensor desires to engage Licensee to provide the NMLS Services on the basis set forth in this Agreement and Licensee accepts the engagement by Licensor to perform the NMLS Services; and

 

WHEREAS, Licensor has developed the Software which is useful in the operation of Internet lotteries; and

 

WHEREAS, Licensee desires to acquire the right to Use, re-write and Enhance the Software from Licensor and Licensor desires to grant that right in the Software to Licensee.

 

NOW, THEREFORE, in consideration of the mutual agreements contained in this Agreement, intending to be legally bound hereby, the Parties agree as follows:

 

SECTION 1.   CERTAIN DEFINITIONS AND INTERPRETATION

 

1.1   Definitions .

 

“ Affiliated Companies " means in relation to any Person (i) any corporation that owns, directly or indirectly, more than fifty (50) percent of the outstanding capital stock of the Person entitled to vote in the election of directors; (ii) any corporation of which the Person owns, directly or indirectly, more than fifty (50) percent of the outstanding capital stock entitled to vote in the election of directors; and (iii) any other corporation of which a corporation described in clause "(i)" above owns, directly or indirectly, more than fifty (50) percent of the outstanding capital stock entitled to vote in the election of directors.

 

“ ALL ” means Alladdin Lotteries Limited, a corporation organized and existing pursuant to the laws of England and Wales.

 

“ Alladdin Services ” means the services to be rendered by Licensor or ALL in favor of Licensee contemplated by Section 3 below and described on Schedule B.

 

“ Developments ” means the modifications and/or enhancements to the Software to be carried out by Licensee contemplated by Section 2.1(c) below.

 

 

 

 

“ Documentation ” means the documentation and operating instructions for the Software as described on Schedule A.

 

“ Enhance ” means to create Developments to the Software.

 

“ Excluded Territory " means the UK and the Republic of Ireland and any additional country in which Licensee makes available for purchase by the general public an official, state regulated lottery, provided that Licensee shall give written notice to Licensor at least (3) three months prior to the proposed date of the sale to the general public of the first chance or entry to such lottery. Licensor agrees that it shall, within (3) months of the launch of such a lottery by Licensee, cease to operate any competing lottery, if any, in such country, except in the case were Licensor has been operating such lottery for (9) nine months or if otherwise agreed by the Parties.

 

“ GBP ” means British Pound Sterling, the currency of Great Britain.

 

“ Internet ” means the collection of networks of computers and related devices around the world linked by telecommunications and related methods and any development(s) thereto and successor(s) thereof.

 

“ Legal Proceeding ” means any action, suit, litigation, arbitration proceeding, or other similar proceeding of any nature (including any civil, criminal, administrative, or appellate proceeding).

 

“ License ” means the license in relation to the Software granted by Licensor to Licensee under Section 2.1 of this Agreement.

 

“ Licensee ” means New Media Lottery Services, Inc., a Delaware corporation.

 

“ Licensor ” means Alladdin Limited, a corporation organized and existing pursuant to the laws of England and Wales.

 

“ NMLS Services ” means the services to be rendered by Licensee in favor of Licensor contemplated by Section 4 below and described on Schedule C.

 

“ Person ” means any individual, corporation, partnership, venture, estate, trust, association, entity, governmental body, or governmental authority.

 

“Proprietary Right ” means any   trademark, trade name, service mark, trade secret, patent right, copyright, or other proprietary right.

 

“ Securities ” means the Shares, the Additional Shares, the Warrants and the shares of Common Stock issuable upon exercise of the Warrants (all as defined in Section 5 below).

 

“ Software ” means the proprietary computer software program developed and utilized by Licensor and described in the Documentation as existing at the date of this Agreement (the “Original Version”) and as re-written by Licensee pursuant to the rights as in Section 2.1(b) (the “Re-written Version”), including any corrections or amendments made to such program (in whatever version) not being Developments.

 

“ Territory ” means anywhere in the entire world.

 

“ Use ”means operate, reproduce, transmit (by electronic means or otherwise), make available, perform and display.

 

 

 

 

“ VAT ” means value added, sales, use or similar UK tax.

 

1.2   Interpretation. In this Agreement unless otherwise specified, reference to:-

 

(a)   a statute or statutory instrument or any of its provisions is to be construed as a reference to that statute or statutory instrument or such provision as the same may have been or may from time to time hereafter be amended or re-enacted;

 

(b)   sections or schedules are to sections and schedules to this Agreement. The schedules form part of the operative provisions of this Agreement and references to this Agreement shall include references to the schedules.

 

SECTION 2.   GRANT OF LICENSE

 

2.1.   Grant of License . Subject to the terms of this Agreement, Licensor hereby grants to Licensee, and Licensee hereby accepts, a non-transferable, non-exclusive, perpetual (subject to Section 6.1(b) below), royalty-free license:-

 

(a)   to Use the Software in the Territory. Licensee   may (subject to Section 2.6) sublicense Use of the Software to such Persons in the Territory and on such terms as Licensee, in its discretion, determines to be appropriate . ; and

 

(b)   to re-write the Software and create a Re-written Version (being such re-write producing the same functionality as exists in the Original Version); and

 

(c)   to Enhance the Software so as to create additional functionality not present in the Original Version and thereby create Developments.

 

2.2.   Reservation of Rights . All other rights in the Software are expressly reserved to Licensor.

 

2.3.   Delivery of Software and Documentation . Within ten (10) days from the date of this Agreement, Licensor shall deliver (by physical delivery or electronic transmission) to Licensee: one (1) copy of the source code of the most current version of the Software in computer readable form; and one (1) copy of the Documentation.

 

2.4.   Effect of Merger or Like Transaction . This Agreement and all rights and obligations of the Parties shall remain in full force and effect following any merger of either Party with or into another Person and following any transfer of all or any portion of the outstanding stock or of all or any portion of the assets of either Party.

 

2.5.   Developments .

 

(a)   Licensee is free to make any Developments, at its own cost, which Licensee, in its discretion, determines to be appropriate. For the avoidance of doubt, a Development is the addition of functionality and not replication or correction of functionality present in the Software.

 

(b)   Licensee shall deliver to Licensor within ten (10) days of each of 31 March, 31 July, and 30 November of each year (by physical delivery or electronic transmission): one (1) copy of the source code of the most current version of the Software (whether the Original Version or the Re-written Version) and of any Developments in computer readable form; and one (1) copy of documentation and operating instructions for the Software altered by any Developments, except in the case where there have been no Developments since the last delivery pursuant to this Section 2.5(b), in which case the Licensee shall instead deliver on each such date a notice to Licensor in the form set out at Schedule F.

 

 

 

 

(c)   Licensee hereby grants to Licensor, and Licensor hereby accepts, a non-transferable, non-exclusive, perpetual, royalty-free license to Use and Enhance the Developments anywhere in the Territory except in the Excluded Territory.

 

2.6.   Sub-Licensing .

 

(a) Licensee. Subject to the provisions of subsection 2.6(c) below, Licensee shall be entitled to sub-license any version of the Software in any form without restriction, provided, however, that (i) Licensee shall advise Licensor of its intention to provide any such sub-license; and (ii) prior to granting any sub-license, Licensee shall provide Licensor with a current version of the Software being sub-licensed.

 

(b)   Licensor. Subject to the provisions of subsection 2.6(c) below, Licensor may sub-license any version of the Development(s) without restriction to Affiliated Companies of Licensor and/or ALL. For the avoidance of doubt, Licensor may license and/or sub-license the Software in any form to any Person anywhere in the Territory and the provisions of subsection 2.6(c) below do not apply in respect of any such license and/or sub-license by the Licensor of the Software.

 

(c)   Any sub-license granted as permitted in this Section 2.6 shall be subject to the following provisions:-

 

(i)   the sub-license shall be only in relation object code and only in relation to Use (and not for the avoidance of doubt to Enhance or in relation to source code);

 

(ii)   the Party granting the sub-license provides expressly in any sub-license that there can be no further sub-licensing; and

 

(iii)   the Party agrees to be primarily liable for the performance by the sub-licensee of its obligations under such sub-license.

 

SECTION 3.   ALLADDIN SERVICES

 

3.1.   Engagement of Licensor and ALL . Licensee hereby engages Licensor and ALL to perform the Alladdin Services, on the terms set out in this Section 3 and Schedule B, and Licensor and ALL hereby accept such engagement.

 

3.2.   Standard of Service . Licensor and ALL shall perform the Alladdin Services with reasonable care and skill and in conformity with all laws and regulations applicable to the business in which it engages.

 

3.3.   Term . Licensor’s and ALL’s duty to perform the Alladdin Services shall commence as of the date hereof and shall extend for a term of two (2) years (“Initial Term”). After expiry of the Initial Term, the Alladdin Services will continue automatically for additional one (1) year term(s) (each a “Renewal Term”) unless or until terminated by Licensee or Licensor or ALL upon at least ninety (90) days’ prior written notice to expire at the end of the Initial Term or a Renewal Term. Notwithstanding the foregoing, this Agreement may be terminated as provided in Section 6 below.

 

 

 

 

3.4.   Independent Contractor . Licensor and ALL shall provide the Alladdin Services solely as independent contractors and nothing contained in this Agreement shall be construed as giving rise to an employment or agency relationship, joint venture, partnership or other form of business relationship.

 

3.5.   No Authority to Bind Licensee . Licensor and ALL shall have no authority to take, nor shall it take, any action committing or obligating Licensee in any manner, and they shall not represent themselves to others as having such authority.

 

SECTION 4.   NMLS SERVICES

 

4.1.   Engagement of NMLS . Licensor hereby engages Licensee to perform the NMLS Services, on the terms set out in this Section 4 and Schedule C, and Licensee hereby accepts such engagement.

 

4.2.   Term . Licensee’s duty to perform the NMLS Services shall commence as of the date hereof and shall extend for a term of two (2) years (“Initial Term”). After expiry of the Initial Term, the NMLS Services will continue automatically for additional one (1) year term(s) (each a “Renewal Term”) unless or until terminated by Licensor or ALL or Licensee upon at least ninety (90) days’ prior written notice to expire at the end of the Initial Term or a Renewal Term. Notwithstanding the foregoing, this Agreement may be terminated as provided in Section 6 below.

 

4.3.   Independent Contractor . Licensee shall provide the NMLS Services solely as an independent contractor and nothing contained in this Agreement shall be construed as giving rise to an employment or agency relationship, joint venture, partnership or other form of business relationship.

 

4.4.   No Authority to Bind Licensor or ALL . Licensee shall have no authority to take, nor shall it take, any action committing or obligating Licensor or ALL in any manner, and it shall not represent itself to others as having such authority.

 

SECTION 5.   CONSIDERATION

 

5.1.   Consideration for License .

 

(a) Definitions . For purposes of the Section 5 only, capitalized terms used in this Section shall have the meaning set forth below.

 

(i) “Actual Value” means the Stock Price multiplied by 275,000.

 

(ii) “Additional Shares" means any shares of Common Stock which may be issued to Licensor in order to cover the deficit between the Ascribed Value and the Actual Value.

 

(iii) “Ascribed Value” means US$225,000.

 

(iv) “Common Stock” means the class of common stock of Licensee, par value US$0.001 per share.

 

 

 

 

(v) “Securities Act” means the U.S. Securities Act 1933, as amended.

 

(vi) “Shares” means 275,000 shares of Common Stock, subject to adjustment as provided in Section 5.1.(c), below.

 

(vii) “Stock Price” means the average of the closing price of the Common Stock over the five trading days prior to the date on which Licensor may first sell Shares pursuant to Rule 144 under the Securities Act. For the avoidance of doubt this is the first day not being a Saturday or Sunday after the day on which the Shares are received by Licensor.

 

(viii) “U.S.” means the United States of America.

 

(ix) “Valuation Date” means the fifth day after the date on which Licensor may first sell the Shares pursuant to Rule 144 under the Securities Act. For the avoidance of doubt this is the first day not being a Saturday or Sunday after the day on which the Shares are received by Licensor.

 

(x) “US$” means the currency of the U.S.

 

(b) In consideration for the grant of the License, Licensee shall issue Shares to Licensor or its designees (all of which shall be subject to the applicable provisions of this Agreement relating to Shares) upon the execution of this Agreement. Licensee may be obligated to deliver to Licensor Additional Shares pursuant to Section 5.1(c) below.

 

(c) In the event that the Actual Value of the Shares is less than Ascribed Value on the Valuation Date (“Deficiency”), Licensee shall deliver to Licensor within 5 days of the Valuation Date, cash and/or Additional Shares in an amount equal to the difference between the Ascribed Value and the Actual Value. The mix of cash and shares of Common Stock which Licensee is required to deliver to Licensor to offset any Deficiency shall be in the sole discretion of Licensee. To the extent that Licensee issues shares of Common Stock to offset any portion of the Deficiency, Licensee shall deliver to Licensor a number of Additional Shares as shall be calculated by dividing the US$ amount of the Deficiency to be paid by the issuance of shares of   Common Stock by the Stock Price. Any Common Stock delivered to Licensor under this Section 5.1.(c) shall be subject to the provisions of this Section 5.1 and Sections 9.9, 10.9 and 12 below and all of the representations, warranties and covenants of Licensor and Licensee with respect to the Shares included elsewhere in this Agreement.

 

(d) Licensee shall pay all costs and expenses related to (to be paid by Licensee within 5 days of the completion of the visit) a visit by an officer of Licensor to Licensee’s offices in Calgary, Canada to be undertaken before the end of the month of February 2005. Licensee shall make available suitably senior personnel during regular business hours during the visit to meet with the officer of Licensor.

 

5.2.   Compensation for Services . In consideration of and as complete compensation for the Alladdin Services Licensee shall:

 

(a) pay to Licensor or ALL or their designees a sum equal to 2% of all card deposits run under the Barclaycard Business merchant accounts designated as GeLotto ID 2806107 and Rehab ID 2201036 (“Card Deposits”), said payment to be made the 10 ^th day of each month. Licensee guarantees a minimum payment of US$8,000 per month ("Minimum Payment") to Licensor or ALL or their designees in connection with procuring the Alladdin Services and that in the event that 2% of Card Deposits equals more than the Minimum Payment in any month, Licensee shall pay to Licensor the amount of any such difference by the 5 ^th day of the following month. All monetary amounts payable under this Section 5.2(a) are net of any VAT which may be added if appropriate, and, if added, the VAT amount(s) shall be billed on a proper tax invoice. Licensor or its designees may charge Licensee daily interest on late payment of amounts due under this Section 5.2.(a) (both before and after judgment) at a rate of 5% per annum above the Bank of England Base Rate (as at the date the payment was due), from the due date until the date of actual payment. If Licensee fails to pay amounts due to Licensor or its designees under this Section 5.2(a) by the due date, Licensee shall reimburse Licensor or its designees all reasonable expenses incurred by Licensor or its designees in recovering such amount. The Minimum Payment shall be recalculated every 31st January, 30th April, 31st July and 31st October by multiplying GBP4,200 by the spot US$/GBP foreign exchange rate quoted by Investec Bank (UK) Limited, or such other bank as the Parties may determine, at noon on said dates and rounded up to the nearest US$. For the avoidance of doubt, any foreign exchange or other banking fees or expenses which may be charged to Licensor in the event that any payment is received by Licensor in a currency other than GBP shall be immediately reimbursed to Licensor by Licensee; and

 

 

 

 

(b) upon the execution hereof, issue to Licensor or its designees warrants (“the Warrants”) to purchase up to two hundred thousand (200,000) shares of Common Stock on terms and conditions no less favorable than the most favorable terms and conditions of warrants to purchase Common Stock granted by Licensee to its management or any other third party and the anti dilution provisions of which shall apply and operate from the date hereof and not the date of issue of the Warrants, if later.

 

5.3.   Survival Upon Termination . This Section 5 shall survive the expiry or earlier termination of this Agreement.

 

SECTION 6.   TERMINATION

 

6.1.   Termination .

 

(a) Termination by Licensee .

 

(i) License . The consideration paid for the License as described in Section 5.1 above is tendered in full payment for the License and the License may be terminated only in accordance with Section 6.1.(b) below.

 

(ii)  Alladdin Services . If Licensor or ALL is in material breach of its obligations to provide the Alladdin Services and such breach continues for thirty (30) days after written notice served by Licensee specifying in reasonable detail the basis thereof, Licensee's obligation to make payments under Section 5.2(a) above shall be suspended during the period beginning thirty (30) days after the delivery of such notice to Licensor and ending when such breach has been cured by Licensor or ALL in all respects. In the event that Licensor or ALL effects a cure of any material breach Licensee shall immediately make the payments previously suspended, subject to a right of set-off for any amounts paid during such time as Licensor or ALL failed to provide the Alladdin Services. In the event that Licensor or ALL is unable to cure any material breach within ninety (90) days of the notice described in the foregoing sentence, Licensee may serve notice in writing on Licensor terminating the provision of the Alladdin Services and Licensee's obligation to make payments for the Alladdin Services.

 

 

 

 

(iii) NMLS Services . Licensee may by serving notice in writing on Licensor terminate the NMLS Services (i) if Licensor becomes bankrupt or insolvent or is unable to pay its debts or enters into compulsory or voluntary liquidation other than for the purpose of any corporate restructuring or reorganisation not in consequence of debt or compounds with or convenes a meeting of its creditors or has a receiver or manager or an administrative receiver or an administrator is appointed over its assets or ceases for any reason to carry on business or takes or suffers any similar or analogous action in any jurisdiction of the Territory or (ii) by reason of the operation of Section 6.1(a)(ii) above, in which cases, for the avoidance of doubt, Licensee shall adhere to the Migration Plan as set out in Section 6.3 below.

 

(b) Termination by Licensor or ALL .

 

(i) License . Licensor or ALL may by serving notice in writing on Licensee terminate the License if:

 

(A)   Licensee fails to comply within thirty (30) days of the date of performance with any of the provisions set out in Section 5.1 above; and

 

(B)   Licensee is in material breach of any obligation in this Agreement relating to the License (including those set out in Section 2 above and Section 8 below) and fails to remedy such breach (if capable of remedy) within thirty (30) days of a written notice served by Licensor or ALL specifying the breach.

 

(ii) Alladdin Services .   (A). In the event that Licensee fails to perform any of Licensee’s obligations set out in Section 5.2 above within thirty (30) days of the date due for performance, Licensor or ALL shall be entitled by serving notice in writing on Licensee to suspend performance of the Alladdin Services (but without prejudice to Licensee’s obligations to pay the consideration under Section 5.2 above) until such time as Licensee performs such obligation. If Licensee fails to perform any of such obligations, within a period of ninety (90) days of the date due for performance, Licensor or ALL shall be entitled by serving notice in writing on Licensee to terminate the rendering of the Alladdin Services.

 

(B) If a Development is deployed which contravenes or in Licensor’s or ALL’s reasonable opinion may contravene any law, regulation or other rule or code of conduct in Great Britain, Licensor or ALL shall be entitled by serving notice in writing on Licensee to suspend performance of the Alladdin Services (but without prejudice to Licensee’s obligations to pay the consideration under Section 5.2 above) until the Development has been removed. If it has not been removed within ninety (90) days of the date of being deployed, Licensor or ALL shall be entitled by serving notice in writing on Licensee to terminate the rendering of the Alladdin Services.

(C) If a claim is asserted or any Legal Proceeding is commenced against Licensor or Licensee alleging that any Development infringes or has infringed any Proprietary Right of any Person, Licensor or ALL shall be entitled by serving notice in writing on Licensee to suspend performance of the Alladdin Services (but without prejudice to Licensee’s obligations to pay the consideration under Section 5.2 above) until such time as the claim or Legal Proceeding is settled. If the claim or Legal Proceeding is not settled within ninety (90) days of having been commenced, Licensor or ALL shall be entitled by serving notice in writing on Licensee to terminate the rendering of the Alladdin Services.

 

(iii)   NMLS Services . Licensor or ALL may by serving notice in writing on Licensee terminate the NMLS Services if:

 

 

 

 

(A)   Licensee is in material breach of any obligation in this Agreement relating to the NMLS Services (including those set out in Sections 4 or Schedule C) or in breach of any obligation in Section 5 and fails to remedy such breach (if capable of remedy) within ninety (90) days of a written notice served by Licensor or ALL specifying the breach; or

 

(B)   Licensee becomes bankrupt or insolvent or is unable to pay its debts or enters into compulsory or voluntary liquidation other than for the purpose of any corporate restructuring or reorganisation not in consequence of debt or compounds with or convenes a meeting of its creditors or has a receiver or manager or an administrative receiver or an administrator is appointed over its assets or ceases for any reason to carry on business or takes or suffers any similar or analogous action in any jurisdiction of the Territory.

 

6.2.   Consequences of Termination .

 

(a)   If the License terminates for any reason, Licensee shall immediately cease to Use or Enhance the Software and/or any Developments and shall deliver to Licensor within ten (10) days of the date of such termination (by physical delivery or electronic transmission): one (1) copy of the source code of the most current version of the Software (whether the Original Version or the Re-written Version) and of any Developments in computer readable form; and one (1) copy of documentation and operating instructions for the Software altered by any Developments. The remedies of Licensor or ALL pursuant to this Section 6.2(a) are not exclusive and shall not limit or otherwise affect any of the rights or remedied otherwise available to Licensor or ALL granted by law and under this Agreement, including recovery of damages.

 

(b)   Sections of this Agreement which are expressed or intended to survive termination of this Agreement (in whole or in part) shall survive.

 

(c)   The termination of this Agreement howsoever caused shall not affect the rights and obligations of the Parties that have accrued prior to termination.

 

6.3   Migration Plan .

 

(a) Licensee acknowledges that Licensor may wish to have continuity of the NMLS Services following termination of the NMLS Services (for whatever reason). Licensee agrees to co-operate with Licensor and/or any new service provider appointed by Licensor to provide the NMLS Services or any part of them (“New Service Provider”) to ensure smooth migration and continuity of the NMLS Services during the Migration Period.

 

(b) For the purposes of this Section 6.3, “Migration Period” means the period commencing on the date one Party gives written notice to the other terminating this Agreement and/or the NMLS Services and shall end on the date the NMLS Services have been successfully migrated or (if later) ninety (90) days after the date of the notice.

 

(c) As part of the migration, and to the extent reasonably required by Licensor, Licensee shall:

 

 

 

 

 

 

 

 

(d) As part of the migration, and to the extent reasonably required by Licensee, Licensor shall promptly, on request, do all other things and acts that may reasonably be required to ensure a smooth migration of the NMLS Services.

 

SECTION 7.   ADDITIONAL OBLIGATIONS OF THE PARTIES

 

7.1.   Technical Assistance . Licensor shall make itself available to Licensee (at reasonable times and locations and upon reasonable notice), to consult with, instruct, and assist Licensee and   Affiliated Companies with respect to the Use of the Software. Licensee shall make itself available to Licensor and its designees (at reasonable times and locations and upon reasonable notice), to consult with, instruct, and assist Licensor and its designees with respect to the Use of Developments.

 

7.2.   Confidentiality . The Parties and each of their respective employees, agents and representatives shall keep strictly and permanently confidential all information obtained in connection with this Agreement and the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, neither Licensor, ALL, Licensee nor any of their respective employees, agents and representatives shall use or disclose to any other Person (i) any non-public information regarding the business operations or financial or other affairs of the Parties or (ii) any of the terms and provisions of this Agreement. This Section 7.2 shall survive the expiry or earlier termination of this Agreement for a period of two years from such termination.

 

SECTION 8.   CLAIMS AND LEGAL PROCEEDINGS

 

8.1.   Infringement Claims . If any claim is asserted or any Legal Proceeding is commenced against either Party that the Software and/or Developments or their Use or Enhancement infringes or has infringed any Proprietary Right of any Person (each an “Infringement Claim”), then the defense of such Infringement Claim shall be under the control of the Party responsible for it as defined in Section 8.2 (the “Responsible Party”).

 

8.2.   Responsible Party .

 

(a)   Infringement Claims relating only to the Original Version of the Software or the Alladdin Materials (as defined in Schedule C below) shall be the responsibility of Licensor;

 

(b)   Infringement Claims relating only to the Re-written Version of the Software and/or Developments shall be the responsibility of Licensee;

 

(c)   other Infringement Claims shall be the joint responsibility of the Parties and dealt with in accordance with Section 8.5 (a “Joint Responsibility Claim”).

 

8.3.   Claims brought against non-Responsible Party . If the Infringement Claim (other than a Joint Responsibility Claim) is made against the Party who is not the Responsible Party, the other Party (the “Other Party”) shall immediately provide the Responsible Party with written notice of the assertion of such Infringement Claim and shall immediately furnish to the Responsible Party copies of all correspondence, pleadings and other materials relating to such claim or Legal Proceeding. The Responsible Party shall assume the defense of any such claim or Legal Proceeding, and the following provisions shall apply:

 

 

 

 

(a) the Responsible Party shall have the exclusive right to control the defense of such Infringement Claim with counsel of its own choosing;

 

(b) the Other Party shall, at the Responsible Party’s reasonable expense, provide the Responsible Party with such information and assistance as the Responsible Party may request regarding such Infringement Claim;

 

(c) the Other Party shall not enter into any settlement with respect to such Infringement Claim without the consent of the Responsible Party;

 

(d) the amount payable to the complaining party in connection with any settlement of such Infringement Claim, and the amount of any damages or costs awarded to the complaining party by any court, arbitrator, or other trier of fact, shall be borne and paid exclusively by the Responsible Party;

 

(e) all reasonable expenses incurred by the Other Party in connection with such Infringement Claim (including costs of investigation and attorneys' fees, only where incurred in respect of such Legal Proceeding where these have been incurred after the commencement of any such Legal Proceeding) shall be borne and paid exclusively by the Responsible Party.

 

8.4.   Claims brought against Responsible Party . If the Infringement Claim (other than a Joint Responsibility Claim) is made against the Responsible Party, then:

 

(a)   the other Party (the “Other Party”) shall, at the Responsible Party’s reasonable expense, provide the Responsible Party with such information and assistance as the Responsible Party may reasonably request for the purpose of enabling the Responsible Party to defend such Infringement Claim;

 

(b)   the Responsible Party shall have the exclusive right to control the defense of such Infringement Claim with counsel of its own choosing, and shall have the exclusive right to settle such Infringement Claim (without the need to obtain any consent or approval of the Other Party or any other Person and provided that such settlement forecloses the possibility of future action as to any matter settled against the Other Party) on such terms as the Responsible Party, in its discretion, determines to be appropriate;

 

(c)   the amount payable to the complaining party in connection with any settlement of such Infringement Claim, and the amount of any damages or costs awarded to the complaining party by any court, arbitrator or other trier of fact, shall be borne and paid exclusively by the Responsible Party;

 

(d)   all reasonable expenses incurred by the Responsible Party in connection with such Infringement Claim (including costs of investigation and attorneys' fees, whether incurred before or after the commencement of any such Legal Proceeding) shall be borne and paid exclusively by the Responsible Party.

 

 

 

 

8.5.   Joint Responsibility Claims . If a Joint Responsibility Claim is brought, then:-

 

(a)   if the Joint Responsibility Claim is brought against Licensee, Licensee shall immediately provide Licensor with written notice of the assertion of such Infringement Claim and shall immediately furnish to Licensor copies of all correspondence, pleadings and other materials relating to the Infringement Claim;

 

(b)   Licensor shall control the defense of such Infringement Claim with counsel of its own choosing;

 

(c)   Licensor and Licensee shall always consult fully with each other and obtain the other Party’s prior written approval (not to be unreasonably withheld or delayed) before taking any material step in relation to such actions or proceedings;

 

(d)   Neither party shall settle the Infringement Claim without the other Party’s prior written consent (such consent not to be unreasonably withheld or delayed);

 

(e)   Each Party shall, at its own expense, provide all such information and assistance as may reasonably required for the purpose of defending the Infringement Claim;

 

(f)   the amount payable to the complaining party in connection with any settlement of such Infringement Claim, and the amount of any damages or costs awarded to the complaining party by any court, arbitrator or other trier of fact and all expenses incurred by Licensor in connection with such Infringement Claim (including costs of investigation and attorneys' fees, whether incurred before or after the commencement of any such Legal Proceeding) shall be shared between the Parties equally unless:-

 

(i)   the Infringement Claim fails in respect of the Original Version of the Software and the Alladdin Materials (as defined in Schedule C below) but succeeds in respect of the Re-written Version of the Software and/or a Development, in which case all such amounts and expenses will be borne by Licensee;

 

(ii)   the Infringement Claim fails in respect of the Re-written Version of the Software and/or a Development but succeeds in respect of the Original Version of the Software and the Alladdin Materials (as defined in Schedule C below), in which case all such amounts and expenses will be borne by Licensor.

 

8.6.   Survival Upon Termination . This Section 8 shall survive the expiry or earlier termination of this Agreement.

 

SECTION 9.   LICENSOR REPRESENTATIONS AND WARRANTIES

 

Licensor hereby represents and warrants to Licensee as follows:

 

9.1.   Corporate Organization . Licensor is duly organized , and validly existing under the laws of England and Wales and has full corporate power and authority to carry on its business as it is now being conducted and to own the properties and assets it now owns.

 

9.2.   Authorization . Licensor has full corporate power and authority to enter into this Agreement and to carry out the transactions contemplated hereby. The Board of Directors and stockholders of Licensor have taken all necessary action required by law, their Memorandum and Articles of Association or otherwise to be taken by them to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and this Agreement is a valid and binding agreement of Licensor enforceable in accordance with its terms.

 

 

 

 

9.3.   No Violation . Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will violate any provision of the Memorandum and Articles of Association of Licensor, or will violate, or be in conflict with, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or cause the acceleration of the maturity of any debt or obligation pursuant to, or result in the creation or imposition of any security interest, lien or other encumbrance upon any property or assets of Licensor under, any agreement or commitment to which Licensor is a party or by which Licensor is bound, or to which the property of Licensor is subject, or violate any statute or law or any judgment, decree, order, regulation or rule of any court or governmental authority.

 

9.4.   Title to Software . Licensor owns all legal and beneficial title to the Software free and clear of all title defects or objections, liens, claims, charges, security interests or other encumbrances of any nature whatsoever including, without limitation conditional sales contracts, collateral security arrangements and other title or interest retention arrangements, which would prevent Licensor from entering into this Agreement or consummating the transactions contemplated hereby.

 

9.5.   Representations Relating to the Intellectual Property .

 

(a) Licensor is the sole owner of all title and interest in the Proprietary Rights in the Software and has full right to grant the License.

 

(b) To the best of Licensor's knowledge: (i) the Software does not infringe nor conflict with any Proprietary Right or other right of any Person and; (ii) neither Licensor nor any other Person has received any written notice alleging that the Software infringes or conflicts with, or will infringe or conflict with, any Proprietary Right or other right of any Person, and there is no basis for the assertion of any such claim.

 

(c) To the best of Licensor's knowledge, the Use of the Software will not require the unauthorized use of any Proprietary Right, and, without having conducted any special investigation, such use will not involve infringement or claimed infringement of any Proprietary Right of any Person.

 

9.6.   Litigation . There are no Legal Proceedings pending or threatened against or involving Licensor or which questions or challenges the validity of this Agreement or any action taken or to be taken by Licensor pursuant to this Agreement or in connection with the transactions contemplated hereby; nor is there and Licensor does not know or have any reason to know of any valid basis for any such Legal Proceeding.

 

9.7.   Consents . No consent of any Person not being a Party is necessary to the consummation of the transactions contemplated by this Agreement, including, without limitation, consents from parties to loans, contracts, leases or other agreements and consents from national or local government or any agency thereof.

 

9.8.   Non-contravention . Neither the execution and delivery of this Agreement nor the performance of this Agreement will result (with or without notice or lapse of time) in (i) a violation of any law, rule, regulation, jud