EXHIBIT 10.5
PURCHASE OF INTELLECTUAL
PROPERTY AGREEMENT PROTECTOR V.2 ANT-CHEATING DEVICE FOR GAMING MACHINE
Company (Insert Name & Address): Agreement No.:_4_____________
IntuiCode, LLC Effective Date: February 15, 2001
000 Xxxxxx Xxxx
Xxxxx 0000
Xxxx Xxxxx, XX 00000
THIS ("Agreement") is made and entered into as of the Effective Date set forth
above by and between iGames Entertainment Inc., a Nevada corporation, with
offices located at 000 Xxxxxx Xxxx Xxxxx 0000, Xxxx Xxxxx, Xxxxxxx 00000
(hereinafter "iGames"), and the Company whose name and office address are shown
above ("Company").
SECTION I. - INTELLECTUAL PROPERTY
1.1 Subject to the terms and conditions of this Agreement, INTUICODE shall
transfer all ownership of intellectual property known as the Protector
V.2 "slot anti-cheating device" for gaming machines including
world-wide patents, trademarks and rights thereto selected by Company
and identified in the Signed Proposal. Unless otherwise specified, all
references to the device shall be deemed to include the associated
documentation and materials provided by INTUICODE.
SECTION II. - OWNERSHIP AND LICENSE
2.1 Effective upon the Acceptance Date (as defined in Section 3.3
hereunder), the Company grants to iGames the exclusive worldwide
rights, trademarks and patents and license to use the protector V.2
anti- cheating device for gaming machine subject to and in accordance
with the provisions of this Agreement.
2.1.1 The rights and ownership of the intellectual property shall
automatically terminate if: (i) iGames fails to pay any fees
or charges when due; or (ii) Company materially breaches any
provision of this Agreement and fails to cure such breach
within ten (10) days of receipt of notice from iGames.
2.2 Company acknowledges and agrees that iGames is the owner of the
intellectual property Protector V.2 anti-cheating device for gaming
machine and is appointed as the exclusive licensor for the product
worldwide.
2.3 The right to use the intellectual property is limited to information
and data processing equipment and interconnected peripherals and
communication devices owned, leased or operated for the sole benefit of
iGames and iGames customers, exclusively in conjunction with the
operation of iGames business of providing and supporting the Protector
V.2 anti-slot cheating devices for its customers. The Protector V.2 may
not be used for or indirectly, any other person, firm or enterprise or
any other business or business operations or activities than as set
forth above. Company shall not modify, adapt, translate, reverse
engineer, decompile, disassemble, sublicense, re-distribute, re-sell or
create derivative works based on the intellectual and all rights not
expressly granted under this Agreement are expressly reserved by iGames
.
SECTION III. - DELIVERY AND TESTING
3.1 Company will schedule the 90 day manufacturing of prototypes program
upon Company's execution of this Agreement. iGames shall have sixty
(60) days after the intellectual property is delivered or otherwise
made available to iGames (the "Test Period") within which to test the
device to verify that the device substantially conforms to its
documentation. iGames will notify Company of any material deficiencies
in the device within the Test Period as soon as they are identified and
Company will use reasonable efforts to correct the same, in which event
the Test Period shall be extended for a maximum period of five (5)
additional days.
3.2 If the device does not substantially conform to its documentation and
Company is unable to correct the material deficiencies iGames notifies
to company before the Test Period expires, either party may then
terminate this Agreement as it relates to such device, upon written
notice to the other party. Upon any such termination, Company shall
refund to iGames any and all fees previously paid by Company for the
device involved; provided, however, iGames shall remain responsible for
any testing, installation or other services performed by Company in
connection with the device at Company's then current rates up to the
effective date of such termination.
3.3 Failure by iGames to either notify Company of any material deficiencies
as required hereunder or to notify Company of acceptance of the device
upon substantial conformance as required hereunder shall be deemed to
constitute the iGames' acceptance of the device. The date on which the
device is accepted by iGames or the date on which any non-testing,
productive use is made of the device by the iGames, if earlier, shall
be the "Acceptance Date."
SECTION IV. - MAINTENANCE AND SUPPORT SERVICES
4.1 In consideration of iGames' payment of the Royalty Fees, Company agrees
to provide the maintenance and support services ("Support Services")
applicable to the device as follows:
4.1.1 Company shall use reasonable efforts to correct any failure of
the device to operate in substantial conformity with its
documentation as soon as reasonably practicable;
4.1.2 Company shall provide iGames with such corrections, updates,
improvements, enhancements, and new releases to the device
which are generally made available to Company from time to
time; and
4.1.3 Company shall provide iGames with telephone-based and on
location technical support during regular maintenance support
hours regarding the operation and use of the device at the
current billable rate. On site technical support or program
customization shall be performed at the current rate of
$75-125 per hour and billed by the first of each month and
shall be paid within five (5) days thereafter.
4.2 Support Services do not include maintenance or support of any other
equipment, software, communications or other items or devices or
materials. All Company warranties and the obligation of Company to
furnish Support Services hereunder shall terminate and be of no further
force or effect if the device is: (i) modified or altered in any way
(other than by iGames or with the specific prior written consent of
iGames); (ii) not updated with the corrections, patches, fixes,
updates, improvements, enhancements or new releases which iGames may
make available from time to time; (iii) not functioning properly or are
damaged due to causes outside the control of iGames including, without
limitation, misuse, improper operation, abuse, neglect or the
introduction of computer viruses, malicious or unauthorized programming
code; and/or (iv) are used in any manner for or in support of, directly
or indirectly, any person, firm or enterprise other than Company or any
other business or business operations or activities than as
specifically permitted by this Agreement.
4.3 Any and all additional support, training, consulting or other services
which are generally available from Company shall be subject to a
separate, mutually agreeable agreement in writing.
SECTION V. - FEES AND TAXES
5.1 The fees and charges applicable to the Support Services for the device
are specified in the attached Schedule A and are due and payable in
accordance with the payment schedule specified therein. Effective at
any time and from time to time, Company may change the fees and charges
applicable for the device and/or Support Services hereunder and the
attached schedule shall be deemed amended to the extent that Company
changes such fees and charges. iGames also agrees to reimburse Company
for all out of pocket expenses incurred when performing services for
the Company not already provided for hereunder, such as any necessary
travel and travel related expenses. Company agrees to invoice iGames
for the fees, charges and expenses due hereunder and each invoice shall
be due and payable by the Company within thirty (30) days.
SECTION VII. - WARRANTIES AND LIMITATION OF LIABILITY
6.1.1 Company represents and warrants that: (i) it has the right to
issue all rights, trademarks, and worldwide patents for the
Anti-cheating Slot Device For Gaming Machines "Protector V.2"
to iGames. In consideration of iGames' payment of applicable
royalty fees, company will use reasonable efforts to correct
and repair any defect or non-conformity which prevents the
device from performing in substantial conformity with the
applicable documentation; (iii) the unaltered device does not
infringe upon any United States registered patent or
copyright; and (iv) provided the device receives correct and
properly formatted date-dependent data, the device will not
cease functioning or produce invalid or incorrect results as a
result of date-dependent data on, during or after February 1,
2002.
6.1.2 iGames represents and warrants that: (i) it has the right to
enter into this Agreement and its obligations are not in
conflict with any other of its obligations; (ii) it has and
will maintain in full force and effect any licensing,
certifications and registrations required to use, possess and
otherwise make available the device through or in connection
with Company's Nevada based gaming business as specifically
permitted hereunder; (iii) neither the use, possession or
availability of the device through or in connection with
iGames gaming business will infringe upon or violate the
rights of any other party or violate or contravene any
federal, state and local laws, regulations, ordinances, and/or
any other applicable codes and rules of conduct; and (iv)
except as specifically provided in this Agreement, it will not
use, possess or otherwise make available the device for or in
support of, directly or indirectly, any person, firm or
enterprise or any business or business operations or
activities.
6.2 EXCEPT AS SPECIFICALLY SET FORTH ABOVE, NEITHER PARTY MAKES ANY OTHER
REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED
INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE.
6.3 IN NO EVENT SHALL IGAMES OR COMPANY BE LIABLE HEREUNDER FOR ANY
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT. IGAMES SHALL HAVE NO LIABILITY,
RESPONSIBILITY OR OBLIGATION WHATSOEVER, REGARDLESS OF THE FORM OF
ACTION OR BASIS OF THE CLAIM (WHETHER IN CONTRACT, TORT, INCLUDING
NEGLIGENCE, OR OTHERWISE), WITH RESPECT TO COMPANY'S CUSTOMERS,
POTENTIAL CUSTOMERS, OR ANY OTHER THIRD PARTIES AS A RESULT OF THE
ACTS, OMISSIONS OR ACTIVITIES OF COMPANY OR ANY OTHER THIRD PARTY IN
CONNECTION WITH OR AS A RESULT OF THIS AGREEMENT OR COMPANY'S GAMING
BUSINES. IN NO EVENT SHALL IGAMES AGGREGATE LIABILITY TO CUSTOMER
ARISING FROM OR IN CONNECTION WITH THIS AGREEMENT EXCEED THE AMOUNTS
ACTUALLY PAID BY THE COMPANY TO IGAMES HEREUNDER IN RESPECT OF THE
GOODS OR SERVICES GIVING RISE TO THE CLAIM OR ACTION, REGARDLESS OF THE
BASIS OF THE CLAIM OR FORM OF ANY ACTION. AND NOT WITHSTANDING THE
FAILURE OF ESSENTIAL PURPOSE OF ANY REMEDY AVAILABLE TO COMPANY.
SECTION VIII. - INDEMNIFICATION
7.1 The Company agrees to defend and/or handle, at its own expense, any
claim or action against iGames based upon a claim that the unaltered
device violate or infringe any United States patent or copyright.
Company shall indemnify and hold harmless iGames from and against any
and all damages, liabilities, losses and any costs and expenses
(including, but not limited to reasonable attorneys' fees) incurred as
a result of any such claim or action. Company shall have the sole right
to conduct the defense of any such claim or action and all negotiations
for its settlement or compromise. iGames shall provide Company with
prompt written notification of any such claim or action and copies of
all materials and papers served upon it, and shall reasonably cooperate
with Company, at Company's sole expense, in the defense of any such
claim or action.
8.1 If the device becomes, or in iGames opinion is likely to become, the
subject of any such claim or action, then company may either: (i)
procure for iGames the right to continue using same as contemplated
hereunder; (ii) modify same to render same non-infringing; or (iii)
replace same with equally suitable, functionally equivalent,
compatible, non-infringing products, materials and/or services; or (iv)
if none of the foregoing are reasonably commercially available,
terminate the agreement and right to use the device and/or other
materials and services involved.
8.2 Company agrees to defend and/or handle, at its own expense, any claim
or action against iGames based upon (i) any information, content,
materials or communications transmitted, received, displayed, used
and/or contained on or through iGames' gaming business and any and all
transactions processed thereby; and (ii) any breach of Company's
representations and warranties hereunder. Company shall indemnify and
hold harmless iGames from and against any and all damages, liabilities,
losses and any costs and expenses (including, but not limited to
reasonable attorneys' fees) incurred as a result of any such claim or
action. Company shall have the sole right to conduct the defense of any
such claim or action and all negotiations for its settlement or
compromise. iGames shall provide Company with prompt written
notification of any such claim or action and copies of all materials
and papers served upon it, and shall reasonably cooperate with Company,
at Company's sole expense, in the defense of any such claim or action.
SECTION IX. - CONFIDENTIALITY
9.1 Each party agrees to regard and preserve as confidential all
information related to the business and activities of the other, their
customers, clients, suppliers and other entities with whom they do
business, that may be obtained by such party from any source or may be
developed as a result of this Agreement, including, without limitation,
Licensed Programs documentation and source code ("Information"). Each
party agrees to hold Information in trust and confidence for the other
and will not disclose such Information to any person, firm or
enterprise, or use (directly or indirectly) any such information for
its own benefit or the benefit of any other party, unless authorized by
the other in writing, and even then, to limit access to and disclosure
of Information to such party's employees on a "need to know" basis
only. Information shall not be considered confidential to the extent
that such information is: (i) already known to the receiving party free
of restriction at the time it is obtained; (ii) subsequently learned
from an independent third party free of restriction and without breach
of this Agreement; (iii) is or becomes publicly available through no
wrongful act; or (iv) is independently developed by one party without
reference to any Information of the other.
9.2 Each party acknowledges and agrees that, in the event of a breach or
threatened breach of the confidentiality obligations above, the other
party will have no adequate remedy in money damages and, accordingly,
shall be entitled to seek injunctive relief against such breach or
threatened breach; provided, however, that no specification of a
particular remedy shall be construed as a waiver, prohibition or
limitation of any other contractual, legal or equitable remedies in the
event of a breach.
SECTION X. - GENERAL
10.1 Term and Termination: This Agreement shall commence as of the Effective
Date and continue in effect until terminated in accordance with the
provisions of this Agreement. iGames reserves the right to immediately
terminate this Agreement and Company's right and royalties and any
iGames services in connection therewith, without notice to Company and
without obligation or liability of any kind, upon receipt of any legal
demand letter, search warrant, other court order or notice from any
government agency, regulatory, law enforcement or judicial entity or
any order compelling the production of information investigating the
legality of any aspect of Company's gaming business or operations, and
Company's or its customer's conduct or activities in connection with
the same. Should this Agreement be terminated for purposes of breach or
failure to perform any terms of this Agreement by the Company, then
iGames shall have the right to retain all rights to the device as
compensation for damages.
10.2 Assignment: This Agreement shall be binding upon the parties, their
successors and permitted assigns. Company may not assign, transfer,
delegate or subcontract this Agreement, or any of its rights or
obligations hereunder
10.3 Governing Law and Interpretation: This Agreement shall be governed by
the substantive laws of the United States, without regard to its
conflicts of laws principles. No modification, course of conduct,
amendment, supplement to or waiver of this Agreement shall be binding
unless made in writing and signed by both parties. At no time shall any
failure or delay by either party in enforcing any provisions,
exercising any option, or requiring performance of any provisions, be
construed to be a waiver, continuing waiver of that or any other term
or condition of this Agreement. If any provisions of this Agreement are
held invalid, illegal or unenforceable, the remaining provisions shall
continue in full force and effect. Headings are for reference only and
shall not affect the meaning of any provision.
10.4 Notices: Unless otherwise specified herein, all notices must be in
writing and delivered personally or sent by overnight or certified
mail, postage prepaid, or sent electronically with the means to confirm
or verify receipt, to the address of the recipient designated above, to
the attention of the undersigned, or such other address or addressee as
the recipient has given the sender in writing. All notices will be
deemed given on delivery or when placed in the mail as specified herein
or when confirmation or verification of receipt is received, whichever
occurs earlier.
10.5 Excusable Delay: Neither party shall be liable for any delay or failure
to perform resulting from acts beyond its control.
10.6 Advertising and Publicity: Neither party shall use the name, brands,
logos or marks, refer to or identify the other in advertising or
publicity, promotional or marketing correspondence to others without
first securing the written consent of such other party; provided that
Company may use and refer to iGames name in a general listing of its
customers. IGames agrees to use it's best efforts in promoting their
operation through any number of mediums such as online advertising;
affiliate programs; print media; cable; television; radio; out-of-home
media; etc.
10.7 Export: The device and performance of obligations under this Agreement
may be subject to laws and regulations concerning the sale,
distribution, use and delivery of goods and services, including,
without limitation, the export of same from the United States ("US") or
by US companies and/or their subsidiaries. Company agrees it shall not
export, re-export or transfer, whether directly or indirectly, the
device, any Documentation or any technical data, specifications or
information or any portion or copies thereof, to anyone outside of the
US, or from its permitted destination outside the US to another
jurisdiction, without first ensuring that all required permits and
licenses have been properly obtained, including, without limitation,
from the US government, any applicable agency or department of the US
government or any other government or governmental agency having
jurisdiction over the subject matter.
10.8 Entire Agreement: This contract and its attached schedules as executed
herein are incorporated and form part of this Agreement as if fully set
forth herein. This Agreement constitutes the entire agreement and
understanding between the parties with respect to the subject matter
and supersedes all prior negotiations, promises, representations,
agreements and understandings, oral or written.
IN WITNESS WHEREOF, the parties duly executed this Agreement as of the Effective
Date.
iGames Entertainment Inc. Intuicode
By: _/s/ Xxxxxxx Rideman___ By: _/s/ Xxxxxx Stein__
Name: _____Michael Rideman___ Name: ____Jeremy Stein___
(Type or Print) (Type or Print)
Title: _______________________ Title: __Pres/CEO_________
Date: _______________________ Date: ____2/15/02________
SCHEDULE A
NOW, THEREFORE, in consideration of the mutual promises and covenants provided
herein below as well as other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, it is agreed as
follows:
1. TRANSFER - Company agrees to sale, transfer, assign, and sell
the IP Protector V.2 anti-slot Cheating device for gaming
machine to iGames.
2. PAYMENT - iGames agrees to pay to Company, in US dollars, as
follows:
A. $100,000 upon execution of this Agreement
3. FOREIGN PATENTS - iGames may, in its sole discretion and at
its own expense, pursue foreign patent applications of the
subject matter of the above named patent. To the degree iGames
exercises this option, Company agrees to cooperate with the
execution of such patent applications.
1) Fees
iGames Entertainment Inc. shall pay to Intuicode the amount of $100,000.00 upon
execution of the Agreement for exclusive world wide rights, patent and all
trademarks to the "anti-cheat slot device" presently known as Protector V.2.
2) Royalties
A. A royalty of fifteen percent (50%) of the gross sale price, as
collected by iGames Entertainment, for each unit sold,
excluding manufacturing and mutually agreed marketing or
miscellaneous costs. The parties acknowledge that such sale
price may vary from time-to-time, or from
customer-to-customer; and
B. 50% of buyout price of product value (determined by
independent third party) if iGames Entertainment or product is
purchased by third party; and
C. $7,500.00 month for 1 year for 2 slot technicians; and
D. $10,000 month for product development for 3 months
E. If Company chooses to sell it's percentages, iGames reserves
first right of refusal to purchase within thirty (30) days
from the offe of third party.
F. If iGames chooses to sell it's percentages, Company reserves
first right of refusal to purchase within thirty (30) days
from the offer from third party.
