SOFTWARE LICENSE
AGREEMENT
This Software License Agreement
(“Agreement”) is entered into as of this 16th day of
August 2005 by and between Fortuna UK a to-be-formed UK Corporation
(the “Licensee”) located at 7 College Mansions,
Winchester Ave. London, England, NW67TYand Mobile Gaming Now, Inc.,
a British Columbia corporation (the “Licensor”) located
at #1505–409 Granville Street, United Kingdom Building,
Vancouver, BC, Canada, V6C 1T2.
Recitals
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A.
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Licensor licenses certain
computer software utilized for the operation of Internet and
Wireless gaming services (the "Software”).
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B.
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Licensee desires to operate an
Internet / Mobile Gaming Operation and desires to obtain a limited
license to utilize the Software.
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C.
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Accordingly, Licensor hereby
licenses the Software to Licensee and Licensee hereby licenses the
Software from Licensor upon the terms and conditions set forth
herein.
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Agreement
In consideration of the foregoing
and following terms, covenants, promises, premises and conditions,
and for other good and valuable consideration, the sufficiency,
adequacy and receipt of which are hereby acknowledged, the parties
hereby agree as follows:
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1.
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Recitals
. Recitals are a material part of this
Agreement.
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2.
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Definitions
. For purposes of this Agreement,
the following terms shall have the following meanings:
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a.
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Authorized Client
Provider :
“Authorized Client Provider” shall mean a person who
has, by virtue of a Client Provider Authorization issued by the
Commission, been authorized to conduct interactive gaming and
interactive gaming related activities within or from the
Territories.
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b.
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Confidential
Information .
“Confidential Information” shall mean, without
limitation, material, information, documents, software, plans,
strategies, customer and vendor lists, marketing information,
studies and other information owned, licensed, developed or
otherwise proprietary in nature in the possession of Licensor,
Licensee or their agents, respectively, which is not generally
available to or used by others or the utility or value of which is
not generally known or recognized as a standard practice, whether
or not the underlying details are in the public domain.
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c.
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Games . “Games” shall mean Texas Holdem
Poker. (Games are subject to change)
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d.
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Hardware
. “Hardware” shall mean
all the necessary computers, servers, routers, cabling, monitors,
hard drives, back-up systems, and other equipment, as required to
properly store, distribute and run the Software. Provision and
maintenance of all Hardware shall be the sole responsibility of the
Licensee.
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e.
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Interactive Gaming
License .
“Interactive Gaming License” shall mean a license
issued by the Kahnawake Gaming Commission for hosting at certified
premises for the purpose of conducting interactive gaming or
interactive gaming related activities wholly situated within the
Mohawk Territory of Kahnawake.
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f.
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Internet / Mobile Gaming
Operation . A
comprehensive term used to describe the Licensee’s complete
online gaming business as set forth under this
Agreement.
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g.
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MGN Mobile Gaming
Platform. “MGN
Mobile Gaming Platform software” shall mean a stand alone,
turn-key gaming system that facilitates the playing, administration
and management of games of chance or skill online or on a mobile
handset.
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h.
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Software.
As described in Schedule A which
includes all software and related application as well as any data
that the Licensor agreed on in the terms of this agreement. And
will use the language that is selected on Schedule A. Any
additional request from the Licensee on the software development,
new games or new marketing systems must have a separate agreement
and quote for development.
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i.
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User. An individual that utilizes the Software
operated by the Licensee.
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j.
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Website
. A wireless interface website
created by the Licensor - if so desired by the Licensee - that
serves as the Licensee’s primary portal to the Software. The
URL for the Website is listed in Schedule B of this
Agreement.
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3.
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Software
License . Licensor hereby licenses to Licensee the
Software on the terms and conditions contained herein for the
period of this Agreement. Such Software License is granted on a
non-exclusive, non-transferable, non-assignable basis. See
Schedules A through H. Other schedules may be attached.
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Schedule A – General
Description of Software
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Schedule B – Schedule of
Hardware, Software and Support Fees
Schedule C - Fees
Schedule D - Security
Schedule E - Customer Support
Schedule F - Pricing and Revenue Model
Schedule G - Transaction Processing
Schedule H - Kahnawake Interactive Gaming License / Forms B, C and
D
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4.
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Indemnification .
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a.
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Limitation on
Indemnification . Except
as otherwise provided herein, Licensee acknowledges and agrees that
neither Licensor nor its agents, nor any of their respective
members, shareholders, vendors, suppliers, directors, officers,
employees or representatives (collectively the “Licensor
Parties”) will be liable to the Licensee or any of the
Licensee’s customers for any special, indirect,
consequential, punitive or exemplary damages, or damages for lost
profits or savings, in connection with this Agreement, its
performance or breach. If despite the foregoing limitations, any of
the Licensor Parties should become liable to Licensee or any other
person (a “Claimant”), the maximum aggregate liability
of the Licensor Parties shall be limited to the lesser of the
actual amount of loss or damage suffered by Claimant or the sum of
Licensee’s fees payable by the Licensee to Licensor within
the two (2) months immediately preceding the loss.
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b.
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Activities of
Licensor . Licensor shall
indemnify, defend and save harmless Licensee and its members,
shareholders, vendors, suppliers, directors, officers, employees,
agents, contractors, representatives, parent company, and
subsidiaries (together, the “Licensee Indemnified
Parties”) from and against all damages, losses, costs and
expenses (including actual legal fees and costs), fines and
liabilities incurred by or awarded asserted or claimed against any
of the Licensee Indemnified Parties by any third party, including,
without limitation, any licensing or government agency who
licenses, regulates, or otherwise governs the licensing or use of
Internet gambling in connection with the Licensor's activities
under this Agreement, including claims brought by a person using or
relying upon any advice given or publication produced and
distributed by the Licensor.
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c.
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Activities of
Licensee . Licensee shall
indemnify, defend and save harmless Licensor and its members,
shareholders, vendors, suppliers, directors, officers, employees,
agents, contractors, representatives, parent company, and
subsidiaries (together, the “Indemnified Parties”) from
and against all damages, losses, costs and expenses (including
actual legal fees and costs), fines and liabilities incurred by or
awarded asserted or claimed against any of the Indemnified Parties
by any third party, including, without limitation, any licensing or
government agency who licenses, regulates, or otherwise governs the
licensing or use of Internet gambling in connection with
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the Licensee's activities under this Agreement,
including claims brought by a person using or relying upon any
advice given or publication produced and distributed by the
Licensee.
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5.
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Disruptions
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a.
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Defects
. Licensor will use reasonable
efforts to guarantee the long term quality and integrity of the
Software. However, Licensor can not guarantee that the
Software is error-free. Licensee acknowledges hereby that
such complete freedom of programming errors is unattainable
within the software industry. If the Software fails
to substantially conform to its defined specifications,
Licensee may report defects (”Defects”) to Licensor in
writing. Within ninety (90) days of such written notice,
although with reasonable efforts to minimize such time
period, Licensor shall, at its option, complete one of the
following: (1) substantially correct such Defects provided that
the Software has not been altered or reconfigured in any
manner by Licensee or its agents, or (2) replace such portion
of the Software or entire Software so long as the replacement
remains within the noted specifications of the Software. If
Licensor fails to substantially correct Defects within sixty (60)
days of written notice by Licensee, then as Licensee’s
sole remedy Licensee may terminate this Agreement with respect to
such release of the Software. In the event that Licensee
elects to terminate the Agreement, Licensee may recover fees paid
to Licensor in accordance with the Agreement up to a maximum
amount equivalent to the fees paid to Licensor by Licensee
during the two months prior to termination.
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b.
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Temporary
Disruptions . Licensee
acknowledges that from time to time, as a result of numerous
reasons, including, without limitation, Hardware failure,
Software failure, Software maintenance, Software bugs,
Software upgrades, supplier failures, or acts of God, the
services and product performance provided under this
Agreement by Licensor may be temporarily disrupted. Licensee
acknowledges and agrees that neither Licensor, its agents nor
any Licensor Parties will be liable to Licensee or any of
Licensee’s customers or Licensee Parties for
any special, indirect, consequential, punitive or exemplary
damages, or damages for loss of profits or savings, or
any other damages, costs or expenses incurred by Licensee,
Licensee Parties or Licensee Users in connection with any such
temporary disruptions.
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6.
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Government Issues.
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Licensor shall
not be held liable for any damages of any kind that result from any
government or quasi- government legislation, policy or
action.
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7.
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Conditions of License.
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a.
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Ownership of
Software . All right,
title and interest in and to the Software, and any copies and/or
derivatives thereof and all documentation, code and logic, which
describes and/or composes such software or any such derivatives
shall remain the sole and exclusive property of Licensor or its
agents, as the case may be, pursuant to the terms of
Licensor’s agreement with its agents, if any, and Licensee
shall not edit, reverse engineer, copy, emulate, create derivatives
of, compile or decompile or otherwise edit, tamper or modify the
Software in any way. In the event of any such editing, reverse
engineering, copying, emulation, creation of derivative,
compilation, decompilation, editing, tampering or modification of
the Software by Licensee, Licensee shall unconditionally assign and
transfer any intellectual property created by any such
non-permitted act to Licensor.
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b.
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Force Majeure
. Except as otherwise specifically
provided herein, Licensor and its agents shall not be responsible
for failure of performance of this Agreement due to causes beyond
their control, including, without limitation, work stoppages,
communications outages, fires, civil unrest, riots, rebellions,
acts of God and similar occurrences.
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c.
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Software Format
. The Software format shall remain
standard as determined in Licensor’s sole
discretion.
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d.
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Non-Exclusive
Agreement . Subject only
to the right of first refusal set out in sub-paragraph 12. b.1
hereof, Licensee acknowledges that this is a non-exclusive
agreement and that Licensor will enter into further licensing
agreements with an undefined number of other parties, and that
Licensor may continue any and all such competitive and related
activities without any liability to Licensee hereunder.
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e.
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Compliance
with Applicable Law .
Licensee shall be responsible for ensuring that Licensee, and any
of its Associates, are operating the Software in compliance with
any and all applicable state, provincial, national, and
international laws. Licensee shall bear the sole responsibility of
determining which jurisdictions have declared Internet and or
mobile gaming illegal. Further, Licensee shall be solely
responsible for determining which jurisdictions to accept wagers
from and for which jurisdictions to market to. As such, Licensee
shall stay abreast of the legality of online gaming in
jurisdictions from which it accepts wagers.
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f.
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Money-Laundering . Licensor has a zero-tolerance policy for
money-laundering activities with respect to the use and operation
of the Software and Licensee hereby represents and warrants that it
will take all actions as necessary to ensure that no
money-laundering activities occur through Licensee's, and
Licensee’s Associates, operation of the Software.
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g.
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User Bonus
Restrictions. Licensee
shall be solely responsible for any bonuses, incentives, comps, or
free game credits given to Users by Licensee.
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h.
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User Loyalty
Programs . Licensee shall
be solely responsible for any costs associated with operating any
player loyalty or incentive programs. Such costs may include, but
not be limited to, redemptions by Users for any prizes or rewards.
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8.
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Term and
Termination.
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a.
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Term .
Subject only to subparagraphs 8. c. and d.hereof, this Agreement
shall commence and be deemed effective on the date when fully
executed (the “Effective Date”). This Agreement shall
remain in effect for a period of three (3) years from the Effective
Date (the “Term”) and shall be automatically renewed
indefinitely for additional one (1) year terms.
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b.
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In the event
Licensor completes the sale of its business interests and/or shares
to a third party,and pursuant to the provision of the Assignment
paragraph 8 (g), Licensee will have the option to continue to be
licensed by the Licensor’s successor organization and/or
receive a complete copy and full working version of the
Licensor’s Software and
systems as defined in Schedule A at a price to be determined by an
outside valuator. By acquiring the Software and systems defined in
Schedule A, Licensee will be permitted to operate as a stand alone
business without further obligations to Licensor.
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c.
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Licensee
Default . In the event
that Licensee is in default of any provision of this Agreement and
has failed to cure such default, Licensor may terminate this
Agreement upon written notice to Licensee effective
immediately.
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d.
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Party
Default . This Agreement
may be terminated forthwith at any time by either party upon
written notice to the other party:-
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(a)
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if the other
party commits a material breach of this Agreement and if such
breach is curable, fails to cure the breach within thirty (30) days
of receiving notice of such breach from the non- breaching
party;
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(b)
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if a distress
or execution is levied upon or against any of the chattels or
property of the other party and the same is not paid within seven
(7) days of the levying of the same;
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(c)
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if a resolution
is passed for the winding-up of the other party, or a petition for
the liquidation of the other party is presented, or an event
analogous to the foregoing occurs (otherwise than for the purpose
of reconstruction or amalgamation) in any jurisdiction where the
other party is resident, or the other party has a receiver or an
administrative receiver appointed; or
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(d)
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if the other
party shall cease or threaten to cease to carry on its
business.
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e.
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Any notice of
termination pursuant to this Agreement shall be in writing and sent
to the other party
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f.
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Immediately upon termination for
any reason whatsoever, Licensee shall return any and all copies of
the Software, the Derivative Works, and any documents or materials
provided by Licensor to Licensee under this Agreement. Licensee
shall immediately destroy and delete all electronic copies of the
same and confirm such destruction upon oath to Licensor.
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g.
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Assignment. Neither party may
assign any of its rights or delegate any of its duties under this
Agreement without the prior written consent of the non-assigning
party, such consent not to be unreasonably withheld. In the event
of any merger, consolidation, take-over or other corporate
restructuring including, without limitation, continuance into any
jurisdiction involving the requesting party or any sale or other
transfer of all or substantially all of the assets of the
requesting party or any change in control of the requesting party,
this Agreement and the rights and duties hereunder shall be
assignable by the requesting party without the prior consent of the
other party.
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9.
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Remuneration .
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a.
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Fees . A fee schedule is provided in Schedule C
listing all fees associated with the setup and operation of the
license by the Licensee.
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a.
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Initial
Fee .
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Subject to sub-paragraphs 12. (d)
and 13, (e) hereof, Licensee shall pay Licensor a one-time, non
– refundable, Licensing Acquisition Fee as the "Initial Fee"
in consideration of Licensor’s consent to enter into this
Agreement to Licensor’s Bank Account in accordance with
Schedule C.
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b.
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Monthly
Merchant Fee .
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At such time Licensee is
authorized to conduct interactive gaming and interactive gaming
related activities within or from the Territories by virtue of
receiving a Client Provider Authorization status issued by the
Commission, Licensee shall commence paying to Licensor, a monthly
merchant fee (the “Monthly Merchant Fee”). The fee
schedule shall be in accordance with Schedule C and based on the
total number of players registered with the Licensee. A report
shall be provided to the Licensor on the 1 st of each
month for the total number of players registered with the Licensee
the previous month. This number is used to invoice the Licensee for
the Monthly Merchant Fee.
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c.
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Changes in
Fees
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All fees set out in this Clause 9
(b) and Schedule C payable to Licensor shall be subject to changes
by Licensor at the end of the initial term of three years and
thereafter, at the end of every year , Both parties shall review
proposed changes and negotiate fee increases that are fair and
equitable. If any such dispute on fee increases cannot be settled
amicably through ordinary negotiation by appropriate
representatives of Licensor and Licensee, the matter shall be
settled by arbitration in accordance with an Arbitration Act
mutually agreed upon by the parties.
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d.
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Taxes and
other Governmental Fees .
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Any charges, taxes, duties, fees,
excises, tariffs or governmental fees, if any, in connection with
the Licensee’s activities under this Agreement shall be the
sole responsibility of the Licensee.
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11.
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Confidentiality
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a.
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General Statement
. The parties shall not disclose,
publish, or disseminate Confidential Information to anyone other
than those of its employees or others with a need to know, and the
parties agree to take reasonable precautions to prevent any
unauthorized use, disclosure, publication, or dissemination of
Confidential Information.
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The parties agree not to use
Confidential Information otherwise for its own or any third
party’s benefit without the prior written approval of an
authorized representative of the other party in each
instance.
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b.
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Power of Attorney
. Additionally, Licensee grants to
Licensor a power of attorney to execute any such documents as may
be required to fully assign and vest any propriety rights created
by Licensee regarding the Software during the term and within the
scope of this Agreement to Licensor. Such power of attorney is a
power coupled with an interest and is irrevocable.
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c.
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Further Actions
. On Licensor's request, Licensee
agrees to execute such additional documents as may be necessary to
appropriately and completely assign and vest in Licensor any
property rights to the Software, as Licensor’s sole and
exclusive property, which became vested in or inured to the benefit
of Licensee during the Term of this Agreement.
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d.
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Return of Confidential
Information . On
termination of this Agreement, or at the request of Licensor before
termination, Licensee shall deliver to Licensor all material in
Licensee's possession relating to Licensor's business and the
Software.
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e. Confidentiality of
Agreement . Licensee shall not disclose the contents of this
Agreement or any Confidential Information to any third party who is
not bound to maintain confidentiality between the parties. Licensee
acknowledges that disclosure of the terms of this Agreement to
third parties would cause considerable damages, which would be
extremely difficult to determine, and irreparable harm to
Licensor.
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12.
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Obligations of Licensor
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a.
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Software Implementation
Support . The Licensor
through Illuminated Technologies shall provide Licensee technical
support for the installation and implementation of Software onto
Licensee’s Hardware.
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b.
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Additions to
Software . Licensor may
from time to time, at its sole discretion and election, create
additional games and/or Software features, which may be added to
the Software. If additional Games or features are made available as
a standard part of the Software, Licensor, upon Licensee's written
request, shall provide to Licensee such additional Games or
features at no additional cost to Licensee. Such additional games
or features shall be provided to Licensee’s Associates, if
any, at Licensor’s then prevailing rates. Further, such
additions or features shall not apply to unique products or
features created by Licensor, or its agents, for other licensees or
parties that may have contracted with Licensor for the
development of a specific product or feature.
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b.
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1 Right of First Refusal.
Licencee is hereby granted a three month right of first refusal in
respect of all additional games referred to in subparagraph 12. b.
herein and in Numbers 6 and 7 of Schedule A attached hereto which,
without limiting the generality of the foregoing, means that any
and all additional games shall be added, at no charge to
Licensee’s software and website no less than three months
prior to the same additional games being offered or added to other
the websites of other licensees of Licensor. Thereafter, such
additional games may be offered to other licensees.
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Website Design and Software
Customization . In
accordance with Licensee’s design preferences, Licensor shall
provide for the graphic design customization for the Software and
Website of the Licensee gaming site. Licensee shall be responsible
for the selection and payment of the URL for such Website in each
language as set out in Schedule A. Additional web design services,
including website development for Licensee in any additional
languages agreed between the parties in writing from time to time,
may be made available to Licensee in accordance with the fee
schedule noted in Schedule C or as the fee schedule may be revised
by Licensor from time to time.
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Licensor shall have the right at
any time to change the contents, format, design or any other
elements within the Software at its sole discretion. If Licensee
makes specific requests regarding additional contents to be
included in the Software, the Licensor shall discuss with Licensee
regarding the feasibility of the same and if Licensor agrees to the
additional contents, it shall make such additions to the Software
in accordance with the fee schedule set out in Schedule C (or as it
may be revised from time to time).
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d.
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Kahnawake Gaming
License. The Licensor
will file to obtain an Interactive Gaming License and become a
License Holder with the Kahnawake Gaming Commission. In the event
that an Interactive Gaming License is not obtained by Licensor on
or before November 1, 2005, Licensee shall, upon written request
made by Licensee to Licensor, forthwith be entitled to a refund
from Licensor in the amount of $50,000.
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e.
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Customer
Acquisition. T
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