EXHIBIT 10.1
SOFTWARE LICENSE AGREEMENT
This Agreement made as of the 27 day of October, 2006
BETWEEN:
RNG GAMING LTD.
9 Myrtle Street, Douglas, Isle of Man ("GRNG")
AND
GOLDEN PALACE LIMITED
a company organized under the laws of Antigua & Barbuda
("LICENSEE")
WHEREAS
A. GRNG has all
the rights in the intellectual property as set forth herein.
B. GRNG is the
owner and developer and/or has all rights to license to third
parties the object code version of a computer software application
that
allows multiple users to participate in online blackjack games,
including
any
additions, modifications, alterations, enhancements and
upgrades
thereto, and the user interface related thereto (i.e. gaming
client), as
well
as the Internet gaming server software required to run the
foregoing
(i.e. gaming server), as more particularly described in SCHEDULE B
(the
"SOFTWARE"); and
C. Licensee
desires to obtain a non-transferable, limited license (without
the
right to sublicense, except as otherwise provided herein) to use
the
Software according to the terms and conditions of this Agreement,
and GRNG
has
agreed to grant Licensee such license on the terms and conditions
of
this
Agreement; and
D. GRNG is
willing to provide the Software to Licensee subject to the
terms
set
forth herein.
NOW, THEREFORE, in consideration of the premises and mutual
covenants in this
Agreement, and for other good and valuable consideration, the
receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
1.
DEFINITIONS.
Except as defined elsewhere in this Agreement, terms that are used
in this
Agreement are defined in SCHEDULE A.
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2. GRANT OF
LICENSE - SUPPORT
2.1. LICENSE. Subject to the terms and conditions of this
Agreement, GRNG grants
to
Licensee, subject to any restrictions and limitations set forth
herein
or
in applicable law, a perpetual (subject only to termination in
accordance with the terms set forth herein) non-transferable
(except as
provided herein)
license to use, perform, present, and operate the Software
for
the purpose of displaying, managing and operating Online
Gaming,
through itself or through affiliates and "white label" web sites
(the
foregoing shall not be deemed to constitute a sublicense) subject
to the
terms of this Agreement including the exhibits (the "LICENSED
RIGHTS").
Accordingly, all rights granted to Licensee pursuant to this
Agreement
shall be deemed to also be granted to any affiliate of Licensee.
The
Licensed Rights shall be granted for the duration of the Term.
Licensee
shall further have the right to distribute and transmit the gaming
client
portion of the Software to Players, and to grant to Players the
right to
use the gaming client
portion of the Software. GRNG will continue to have
the
right to use, modify, upgrade or license the Software, as it
desires,
provided that the rights of Licensee hereunder shall not be damaged
or
diminished in any way. GRNG shall provide Licensee with standard
and
regular modifications, upgrades or enhancements to the Software as
agreed
between the Parties from time to time, and shall be obligated to
license
all
modifications, upgrades or enhancements to the Software to Licensee
at
no
additional cost to Licensee. For clarity, Licensee will not receive
the
source code for the Software, but such source code shall be
deposited in
escrow in accordance with the terms set forth herein. In addition,
the
Licensed Rights shall extend to any new software applications
released by
GRNG
during the Term and such new software shall be made available
to
Licensee upon the same terms and conditions as set out herein, save
and
except that there shall be no Royalty Advance, implementation costs
or
technical support costs applicable thereto. Notwithstanding
anything else
contained herein, Licensee shall be permitted (without the prior
consent of
GRNG) to grant a sublicense of the Licensed Rights to the entity
which owns
and
operates www.get21.com.
2.2. RESERVATION OF RIGHTS. Other than the rights explicitly
granted herein,
Licensee shall have no other rights, express or implied, in the
Software or
any
component thereof. Without limiting the generality of the
foregoing,
Licensee acknowledges that the Software, including, without
limitation, any
updates, upgrades and modifications thereto provided by GRNG, and
the
Documentation, is commercially valuable and proprietary to GRNG,
and
Licensee agrees and undertakes not to, except as permitted in
this
Agreement: (i) use the Software, or part thereof, in a service
bureau or
outsourcing arrangement in support of any third-party; (ii) sell,
lease,
sublicense or distribute the Software, or part thereof, or
otherwise
transfer the Software other than as expressly permitted herein;
(iii)
reverse engineer, decompile, disassemble, or otherwise reduce
to
human-perceivable form the Software's source code, or part thereof;
(iv)
modify, revise, enhance, or alter the Software other than for
internal use
purposes in accordance with the terms set forth herein which shall
include
modifications required in order to properly install and integrate
the
Software with Licensee's technical infrastructure; and (vi) use any
backup
or
archival copies of the software components within the Software, or
allow
any
third party to use such copies, for any purpose other than to
replace
an
original copy in the event of the destruction of such foregoing
software
components, if the Software becomes defective, in any other
computer system
other than Licensee's, without GRNG's express prior written
authorization.
The rights set forth
herein may not be pledged, mortgaged or otherwise
encumbered by Licensee in whole or in part, except with the prior
written
approval of GRNG, such approval not to be unreasonably
withheld.
Notwithstanding the foregoing, nothing set forth herein shall
prevent
Licensee from creating or marketing products or services that
are
unrelated, or made without reference to, or use the Deliverables
(as
defined in Section 2.3 below) ("LICENSEE'S IP"); PROVIDED, HOWEVER,
that,
during the course of Licensee's development, formulation and
marketing
efforts with respect to Licensee's IP, Licensee does not violate
any of the
terms and conditions of this Agreement.
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2.3. DELIVERY OF SOFTWARE AND DOCUMENTATION. Within one hundred
(100) days from
the
execution of this Agreement, GRNG shall deliver to Licensee in
electronic form (i) a complete copy of the machine executable
object code
of
the Software (the "EXECUTABLE CODE"); and (ii) Documentation
relating to
the
Software necessary to run, maintain, support, and troubleshoot
the
Software (which, together with the Code shall constitute the
Deliverables).
Licensee may make copies of the Documentation for internal purposes
only,
and
only as necessary to facilitate Licensee's use of the Software
subject
to
the terms and conditions of this Agreement, and such copies shall
remain
GRNG's Confidential Information and Intellectual Property. Licensee
shall
have
unrestricted `read' access to all Software files and databases.
GRNG
shall keep all documentation of Software files, lay-outs and
database
schemas up to date throughout the Term, and shall provide same to
Licensee
upon
request from time to time throughout the Term.
2.4. INTEGRATION & SET-UP Subject to payment as further
detailed in SCHEDULE C,
GRNG
shall integrate the Software with Licensee's technical
infrastructure
in
accordance with Licensee's then current Application Programming
Documentation (API). GRNG acknowledges that it has received a
current copy
of
Licensee's API, and Licensee agrees that it shall provide written
notice
to
GRNG of any changes thereto. Upon the completion of a successful
and
satisfactory integration to Licensee's satisfaction, in its
sole
discretion, Licensee shall provide GRNG with written confirmation
of its
acceptance of the Software ("ACCEPTANCE").
2.5. ESCROW. Not later than 20 days following Acceptance and
following any
upgrades, modifications or enhancements to the Software or new
releases of
the
Software, GRNG shall deposit the source code of the Software
(or
upgrade, modification, enhancement or new release, as the case may
be) in
the
hands of a reputable escrow agent, in accordance with reasonable
terms
to
be agreed upon by the parties and such escrow agent. The source
code
held
in escrow shall include everything required to turn the source
code
into
a binary/executable code, including but not limited to build
scripts
and
documentation of environmental requirements such as special
compiler
switches, operating systems, etc. Licensee shall automatically
and
immediately have the right to have access to, and use such source
code (for
the
sole permitted use of utilizing the Software pursuant to the terms
and
conditions set forth herein, and in accordance with all limitations
agreed
to
by Licensee pursuant to this Agreement) solely in the event of:
(a)
GRNG's bankruptcy (that remains unstayed for a period of greater
than 30
days); (b) GRNG's cessation as a going concern; (c) GRNG's
demonstrated
inability to repay its debts in the normal course of business or
(d) GRNG's
material breach of this Agreement such that Licensee is not able to
use the
licensed Software in accordance with the terms of this Agreement.
In the
event that any of the foregoing conditions ceases to be in effect,
the
source code shall be returned to escrow and Licensee's access to
such
source code shall immediately cease (following which Licensee shall
certify
that
it has returned such source code and that it does not retain
any
copies thereof, in any form). Licensee acknowledges that the source
code
shall remain, at all times, the confidential and proprietary
information of
GRNG
and that GRNG shall maintain and shall hold all intellectual
property
rights with respect thereto.
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2.6. USE. Licensee's sole purpose for licensing the Software will
be to use it
as
part of its offering of Online Gaming.
2.7. OPERATION. Licensee shall be responsible for all aspects of
operation of
the
Software and Online Gaming service vis-a-vis the Player, including
but
not
limited to Player registration, Player support, financial services
such
as
debit, credit and credit card clearance, credit card fraud
prevention
and
Player collusion fraud prevention.
2.8. SUPPORT. Throughout the Term (as defined in Section 5.2) and
in
consideration of the technical support fee to be paid by Licensee
to GRNG
as
stipulated in SCHEDULE C hereto, GRNG will provide Licensee with
support
services, as set out in SCHEDULE D.
2.9. GRNG ENHANCEMENTS. GRNG will have the obligation to license to
Licensee any
enhancements, additions or improvements developed by GRNG for the
Software,
which and when they become available to GRNG's other licensees, at
no
additional cost to Licensee.
2.10. PLAYER SUPPORT. Licensee shall have the sole responsibility
to make
available and provide to Players all customer support relating to
the
Software (or any part thereof).
2.11. INSTALLATION. GRNG shall assist Licensee in the installation
and
configuration of simple network management protocol (SNMP) agents
on all
server platforms, including Licensee's database management system.
GRNG
shall recommend trigger levels for various metrics that require
further
attention by either Licensee or GRNG.
2.12. REQUIRED SERVICE LEVEL. GRNG will provide Licensee with the
specifications
for
all hardware platforms, operating systems, database management
systems
and
any other ancillary products and services required to operate
the
Software to achieve a satisfactory level of service to eight
thousand
(8,000) concurrent logged-in Players. To the extent that Licensee
discovers
after launching the Games that additional servers or products are
necessary
to
achieve a satisfactory level of service at the indicated
number(as
determined by the parties, acting reasonably), GRNG will pay fifty
percent
(50%) of the cost of the additional platforms, software or servers
acquired
by
the Licensee in order to achieve the required service level.
2.13. SKINS. GRNG shall develop `skins' of the Software, as
requested by
Licensee and to the extent stipulated in SCHEDULE C. With respect
to any
skins which Licensee requests after Acceptance of the Software,
GRNG shall
develop such skins within fourteen (14) working days of request
by
Licensee.
3. RESTRICTIONS
ON LICENSED RIGHTS
COMPLIANCE WITH LAWS/EXPORT RESTRICTIONS. Licensee will comply with
all
applicable laws, regulations and rules applicable to its use of
the
Software, and will not operate or allow the Software to be operated
or used
in
contravention of applicable laws, rules or regulations. For
avoidance of
doubt, Licensee warrants and represents that the Software shall not
be used
in
the USA and/or offered for use to US residents.
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Furthermore, Licensee warrants and represents that to ensure that
Software
is
unavailable to US residents, Licensee shall:
o
Block any
US option of real money registration.
o
Block the
US player payment method (credit cards and any additional
payment instruments).
o
IP block -
any player, whose IP, as provided by his ISP, is originated
in the US will be blocked from depositing money.
4. FEES
4.1 FEES. In
consideration of the grant of the Licensed Rights, Licensee
will
pay
to GRNG fees in accordance with SCHEDULE C, including but not
limited
to a
revenue share ("ROYALTY"). All payments of the Royalty shall be
paid
on a
monthly basis by wire transfer, to an account designated in writing
by
GRNG, and shall be due, for each calendar month within fourteen
(14) days
after the end of each such calendar month.
4.2 ROYALTY ADVANCE.
Notwithstanding s.4.1, Licensee shall pay to GRNG an
advance on the Royalty ("ROYALTY ADVANCE"), in accordance with
SCHEDULE C.
The
Royalty Advance shall be applied towards the Royalty otherwise due
and
payable in accordance with s.4.1 herein, and no Royalty shall be
payable by
Licensee until the Royalty Advance has been fully applied.
4.3 ROYALTY
ADJUSTMENT. Notwithstanding anything else contained herein, it
is
understood and agreed that the Software is being licensed by
Licensee on a
`most favoured licensee' basis. Accordingly, if, at the end of any
calendar
year
during the Term, it is determined that one or more licensees of
GRNG
have
paid an effective average royalty over such calendar year which
is
less
than the Royalty percentage paid by Licensee (the "Lowest
Royalty
Percentage"), Licensee shall be entitled to an adjustment
("Adjustment") of
the
Royalty paid for such calendar year equal to the difference between
the
Royalty paid by Licensee and the royalty which would have been
payable by
Licensee at the Lowest Royalty Percentage. The Adjustment shall be
payable
by
way of set-off against future Royalties owing for the ensuing
calendar
year
or, upon termination of the Agreement, by way of immediate payment
by
GRNG
to Licensee. Throughout the Term, GRNG shall provide to Licensee
all
information, documentation and records required for Licensee to
confirm
whether an Adjustment is required.
4.4 TAXES. Licensee is
solely responsible for payment of any applicable taxes
assessed upon and payable by Licensee (including sales or use
taxes,
intangible taxes, and property taxes) resulting from its acceptance
of this
license or from its possession and use of the Software.
4.5 LATE PAYMENTS.
Failure to pay any amount in accordance with this Agreement,
on
the due date, will be subject to a late charge of 1.0% per month
(12%
per
year), or the maximum lawful rate, whichever is less,
compounded
monthly, until paid in full.
4.6 OTHER EXPENSES
RELATED TO USE OF SOFTWARE. Licensee will be solely
responsible for all costs arising out of or in connection with its
use of
the
Software (including without limitation payment processing,
payment
fraud, collusion prevention, Player service, marketing and chat
and
Blackjack room management).
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4.7 REPORTS. Together
with each payment of Royalties, Licensee shall submit to
GRNG
a Royalty report in a form mutually agreed by the parties which
shall
be
certified by an authorized representative of Licensee and shall
state
the
breakdown of the Rake.
4.8 RECORDS. It is
agreed by the parties hereto that all computations relating
to
determination of the amounts of Royalties due and payable pursuant
to
this
Agreement shall be made in accordance with internationally
recognized
and
generally accepted accounting principles.
4.9 AUDIT. During the
Term of this Agreement and for one (1) year after
termination of this Agreement, GRNG shall be entitled to audit
books and
records of Licensee which pertain to this Agreement at any time,
but no
more
than once a year, for the sole purpose of confirming the accuracy
of
payments due hereunder. Any such audit shall be performed upon no
less then
5
days' prior written notice, and during normal business hours and
at
GRNG's expense by recognized regional or national accounting firms
with a
presence in the UK; provided, however, if such audit reveals an
underpayment of five percent (5%) or more of the amount that should
have
been
paid to GRNG for the period audited, then Licensee shall bear
the
reasonable expense of such audit in addition to the deficiency. In
the
event of any underpayment of Royalties, Licensee shall promptly
remit to
GRNG
all amounts due. In the event of any overpayment of Royalties,
GRNG
shall promptly remit to Licensee the amount of such overpayment.
All
individuals or entities participating in the audit pursuant to this
Section
shall execute a confidentiality agreement, which shall be
reasonably
approved by Licensee.
5. TERM &
TERMINATION
5.1 INITIAL TERM. The
initial term of this Agreement shall be four (4) years
commencing on the Effective Date and terminating 4 years later,
unless or
until otherwise terminated pursuant to the terms set forth herein
(the
"Initial Term").
5.2 RENEWAL TERMS.
This Agreement shall automatically renew for successive
renewal terms of one (1) year each ("Renewal Terms"), unless
Licensee in
its
sole discretion gives written notice, not less than one hundred
twenty
(120) days prior to the end of the then-current term, of its
intention to
terminate this Agreement at the end of the then-current term. The
Initial
Term
and any Renewal Terms shall be referred to as the "Term".
5.3 TERMINATION. This
Agreement may be terminated only: (i) by Licensee, upon
providing no less than six (6) months' prior written notice to the
other
party; (ii) by either party in the event the other party has
committed a
material breach including but not limited to payment of any amounts
due
pursuant to SCHEDULE C, infringement of Intellectual Property or
breach of
confidentiality obligations of Licensee set forth in this
Agreement, all
provided that such breach has not been cured within 30 days after
written
notice thereof has been delivered by the non-breaching party to
the
breaching party; (ii) by Licensee, upon material breach of GRNG of
this
Agreement such that Licensee is not able to use the licensed
Software in
accordance with the terms of this Agreement; or (iii) by mutual
written
agreement of the parties.
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5.4 NO TERMINATION
LIABILITY. In the event of termination by either party in
accordance with any of the provisions of this Agreement, neither
party
shall be liable to the other, as a result of such termination,
for
compensation, reimbursement or damages on account of the loss
of
prospective profits or anticipated sales or on account of
expenditures,
inventory, investments, leases or commitments in connection with
the
business or goodwill of either party.
5.5 CONSEQUENCES OF
TERMINATION. Upon termination of this Agreement, the
license granted to Licensee in this Agreement shall terminate and
Licensee
shall immediately discontinue all further use of the Software
promotion,
marketing or sale, leasing, licensing or any other distribution of
the
Software. Without limiting the generality of the foregoing,
upon
termination Licensee shall (i) promptly (within 5 days) return to
GRNG any
tangible property representing disclosed Confidential Information
divulged
by
GRNG and all copies thereof; and (ii) immediately erase/delete any
such
Confidential Information held by it in electronic form, and certify
as to
such
return and/or destruction. Notwithstanding the aforementioned,
Licensee may continue, to provide maintenance and support services
to its
existing users.
5.6 TERMINATION
FOLLOWING BREACH OF CONFIDENTIALITY. If Licensee breaches
Section 12.8, GRNG may terminate the Licensed Rights and this
Agreement
with
immediate effect, by giving Licensee written notice of the
breach.
5.7
INSOLVENCY/BANKRUPTCY. Either party hereto may terminate this
Agreement
with
immediate effect, by providing the other party with written notice,
if
the
other party has experienced an event of Insolvency.
5.8 NON-EXCLUSIVE
REMEDIES. The remedies set forth in this Section 5 are
non-exclusive and any waiver of any of such rights and remedies
shall not
constitute a waiver of any other rights or remedies that either
party may
hold.
6. INTELLECTUAL
PROPERTY OWNERSHIP
6.1 SOFTWARE. GRNG
DOES NOT SELL OR TRANSFER TITLE IN THE SOFTWARE, OR ANY PART
THEREOF, TO LICENSEE, OR ANY THIRD PARTY. Other than the Licensed
Rights
and
as further set forth herein, Licensee acquires no rights whatsoever
in
connection with the Software and the Documentation. Licensee shall
not
assert any claim of ownership of, or any claim to the Software
or
Intellectual Property of GRNG by reason of Licensee's use thereof
or
otherwise and shall not challenge or allow any party to challenge
the
validity of the Software or Intellectual Property or GRNG's
ownership of
the
Software or Intellectual Property. It is expressly agreed that
the
ownership of all right, title and interest in the Software and any
copies
thereof, as well as any updates or new releases thereto, and
any
Intellectual Property associated therewith, is and shall remain
vested
solely in GRNG and shall be owned solely and exclusively by GRNG.
Nothing
in
this Agreement shall constitute a waiver of GRNG's Intellectual
Property
Rights under any law, or be in any way construed or interpreted as
such.
Licensee shall retain sole right, title and interest to Licensee's
IP, and
nothing in this Agreement shall constitute a waiver of
Licensee's
Intellectual Property Rights in and to Licensee's IP, under any
law, or be
in
any way construed or interpreted as such. GRNG shall not assert
any
claim of ownership of any rights with respect to Licensee's IP and
shall
not
challenge the validity of Licensee's IP or Licensee's ownership
thereof. Notwithstanding the above, any derivative works made
pursuant to
the
request or specifications of Licensee by either party hereto
(hereinafter: "Derivative Works") shall be jointly owned by the
parties and
no
party shall act with respect to Derivative Works without the
prior
written consent of the other party.
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6.2 FURTHER
ASSURANCES. At GRNG's reasonable request and sole expense,
Licensee
shall cooperate with and provide reasonable assistance to GRNG
(including,
without limitation, execution and delivery of affidavits,
declarations,
oaths, sample
