INTERNET LICENSE AGREEMENT
THIS LICENSE AGREEMENT is made as of the 7th day of October,
1999,
BETWEEN:
RACINGO INVESTMENTS LTD.,
a company incorporated under the laws of the State of
Delaware
(hereinafter called the "Licensor")
OF THE FIRST PART
-and-
PLAYANDWIN, INC.,
a corporation incorporated under the laws of the State of
Nevada,
(hereinafter called "PWIN")
OF THE SECOND PART
WHEREAS the Licensor is the Exclusive
licensee of certain intellectual property rights and know-how to
a pari-mutuel bingo-type wager game known as RACINGO and
variations thereof, as more fully described in this Agreement,
pursuant to a licence (the "Master License") granted by P.E.S.T.
Creative Gaming Corporation, PacCanUs Inc., and Winning Games
Inc. (collectively known as the "Master Licensors") on October
7th, 1999;
AND WHEREAS the Licensor desires to grant to PWIN a license
to use and to sub-license the use of said intellectual property
rights and know-how, as more fully described in this Agreement;
AND WHEREAS PWIN desires to receive a license to use and to
sub-license the use of such intellectual property rights and
agrees to pay a fee for such rights pursuant to the terms and
conditions set forth in this Agreement;
AND THEREFORE, in consideration of the foregoing, which are
a part hereof, and of the mutual covenants and agreements
hereinafter set forth, the parties agree as follows:
1. 1. DEFINITIONS
(a) "Dollars" or "$" shall mean United States dollars.
(b) "Effective Date" shall mean the 7th day of October, 1999.
(c) "Jackpot" shall mean the pool or pools of funds (as
applicable), funded in accordance with this Agreement and the
RACINGO game rules attached hereto as Schedule "B" and, from
which prize moneys will be disbursed to winners in the RACINGO
game in accordance with the RACINGO rules attached hereto as
Schedule "B".
(d) "Licensed Product" shall mean the intellectual property
rights and know-how of the Licensor identified under the terms
"RACINGO", "RACINGO Copyrights", "RACINGO Patent" and "RACINGO
Trademarks" below as they apply to On-Line wagering utilizing the
RACINGO Copyrights, the RACINGO Patent and the RACINGO
Trademarks, and shall specifically not include the previously
licensed products and other venues identified in Schedule "C"
hereto.
(e) "Licensor" shall mean Racingo Investments Ltd..
(f) "Master Licence" shall mean the licence over the
intellectual property rights and know-how of the Licensor
identified under the terms "RACINGO", "RACINGO Copyrights",
"RACINGO Patent" and "RACINGO Trademarks" below granted by the
Master Licensors to Racingo Investments Ltd. on October 7th,
1999.
(g) "Master Licensors" shall mean P.E.S.T. Creative Gaming
Corporation, PacCanus Inc. and Winning Games Inc..
(h) "Offer" shall have the meaning set forth in Section 8(b)
below.
(i) "On-Line" shall mean activities taking place via the
Internet, by which is meant the worldwide network of computers
utilizing the TCP/IP protocol, commonly understood to provide
some or all of the following features, among others: electronic
mail, file transfers through File Transfer Protocol, Telnet
access to local and remote computers, UseNet Newsgroups, Gopher
access to information on local and remote computers, Wide Area
Information Servers, and World Wide Web access.
(j) "PWIN's Right of First Refusal" shall have the meaning set
forth in Section 8(b) below.
(k) "RACINGO" means the pari-mutuel bingo-type wager game and
lottery identified by the RACINGO Trademarks and all associated
RACINGO Copyrights, know-how, intellectual property and other
materials utilized in the execution of the RACINGO game as held
by the Licensor, including United States Patent No. 5,518,239
issued to Xxxxxxx X. Xxxxxxxx on May 21, 1996, regarding a
lottery racing sweepstakes game, which patent has been licensed
to Licensor, and also including the RACINGO game developed by
P.E.S.T. Creative Gaming Corp. that was test marketed in
Connecticut, the rules and regulations of which are appended
hereto as Schedule "B".
(l) "RACINGO Copyrights" means the copyright assets more fully
identified in Schedule "D" hereto, and their respective
documentation.
(m) "RACINGO Patent" means the United States Patent No.
5,518,239 dated May 21, 1996, regarding a lottery racing
sweepstake issued to Xxxxxxx X. Xxxxxxxx and owned by Winning
Games Inc.;
(n) "RACINGO Trademarks" means the trademark RACINGO owned by
Winning in the United States and the subject of his application
to register the trademark, Application No. 75/331,278; and the
Canadian trademark RACINGO (the subject of an application by PEST
to register the trademark, application number 767,826), the
Canadian trademark SUPER RACINGO (the subject of an application
by PEST to register the trademark, application number 767,827),
the Canadian trademark RACINGO HORSHOE DESIGN (the subject of an
application by PEST to register the trademark, application number
856,030), the Canadian trademark RACINGO GOIN' BIG TIME (the
subject of an application by PEST to register the trademark,
application number856,029), and the Canadian trademark SULKY
DESIGN (the subject of an application by PEST to register the
trademark, application number 767,828), all owned by PEST in
Canada; and the European trademark RACINGO owned by PEST, the
subject of an application by PEST to register the trademark,
application number 642,728, which trademarks have been
exclusively licensed by Xxxxxxx X. Xxxxxxxx and P.E.S.T. Creative
Gaming Corp. to Licensor.
(o) "Territory" shall mean the entire geographical area of the
world excluding the venues identified in Schedule "C" hereof.
2. GRANT OF LICENSE
(a) The Licensor hereby grants PWIN an exclusive right to use or
to sub-license the use of the Licensed Product in connection with
and to facilitate On-Line wagering.
(b) The Licensor hereby grants PWIN an exclusive licence to use
or sub-license the use of the RACINGO Trademarks in connection
with the advertising, promotion, and sale of the Licensed Product
in the Territory throughout the term of this agreement, and to
conduct On-Line sales of merchandise branded with the RACINGO
Trademarks provided that any use of the RACINGO Trademarks
(including by a licensee of PWIN) shall be subject to the quality
control provisions set out in subsection 4(c)(xi) of this
Agreement.
(c) The Licensor hereby grants PWIN the exclusive right to
display, reproduce, copy, transmit or license the works covered
by the RACINGO Copyrights in connection with the Licensed
Product, and the exclusive right to create derivative works from
the RACINGO Copyrights for use in connection with the Licensed
Product, provided that such use (including use by a licensee of
PWIN)shall be subject to the quality control provisions set out
in subsection 4(c)(xi) of this Agreement.
(d) The rights granted in subsections 2(a), 2(b), and 2(c) above
include the right to manage, develop, market, promote and create
derivative works of the Licensed Product, provided that such
rights are subject to the quality control provisions set out in
subsections 4(c)(xi) and 4(c)(xii) of this Agreement. Any
derivative works so created, including improvement patents,
software, copyrights, trademarks and all right, title interest
thereto shall enure to and be assigned to the Licensor or as
directed by the Licensor as required by the Master License.
(e) The Licensor expressly acknowledges and agrees that the
exclusive license granted above precludes the Licensor's use or
sub-licensing of the use of the Licensed Product in connection
with or to facilitate On-Line wagering throughout the Territory
throughout the term of this Agreement. The Licensor retains the
right to use or to license the use of the Licensed Product in
connection with any goods, services and activities other than On-
Line wagering in the Territory, including but not limited to On-
and Off-Track RACINGO hereto or In-Home use of RACINGO (as such
terms are defined in Schedule "C").
(f) Notwithstanding subsections 2(a) to 2(d) above, the Licensor
grants no license or right thereunder that it is not licensed to
grant under the Master License.
(g) PWIN acknowledges that the Licensor retains all rights to
the Licensed Product provided hereunder, subject to the Master
License, and that the licence granted by the Licensor herein does
not convey any proprietary interest in the Licensed Product to
PWIN other than the license as specified herein.
3. PAYMENT
(a) PWIN shall pay the Licensor for the rights to the Licensed
Product granted hereunder in accordance with the formula and
pursuant to the terms set forth in Schedule A below.
(b) PWIN shall maintain complete, clear, accurate records of all
payments received by PWIN, its affiliates, or any other party
with whom it has contracted in regard to the RACINGO game in
connection with its use of the Licensed Product. Such records
shall be maintained by PWIN relating to PWIN's use of the
Licensed Products. The Licensor shall have the right at its
expense to have an inspection and audit of all the relevant
accounting and sales books and records of PWIN conducted by an
auditor reasonably acceptable to all parties. Such audit shall be
performed under strict confidentiality pursuant to a written
agreement consistent with the confidentiality obligations set
forth in Section 7 below. Any such audit shall be conducted only
upon reasonable written notice during normal business hours.
4. REPRESENTATIONS, WARRANTIES AND CONVENANTS
(a) Each party represents, warrants and covenants to the others
that:
i. It is a corporation duly organized, validly existing and in
good standing under the laws of the state or province or country
of its incorporation and has all requisite power and authority to
enter into and perform its obligations under this Agreement;
ii. This Agreement when executed will become the legal, valid
and binding obligation of the party which shall be enforceable
against the party in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization and other similar laws relating to the rights of
creditors generally;
iii. To the best of each party's present knowledge, there is no
material action, suit or proceeding pending against it nor, to
the best of its knowledge; threatened against it which is likely
to materially adversely affect its performance of its obligations
hereunder, nor, to the best of its knowledge, are there any
existing acts or conditions which are reasonably expected to be a
proper basis for any such action, suit or proceeding;
iv. This Agreement creates no agency relationship between the
parties hereto, and nothing herein contained shall be construed
to place the parties in the relationship of partners or joint
venturers, and neither party shall have the power to obligate or
bind the other in any manner whatsoever; and
v. It is not insolvent or bankrupt.
(b) The Licensor represents, warrants and covenants to PWIN that
to the best of the Licensor's present knowledge:
i. The Licensed Product shall perform in accordance with its
written specifications, if any;
ii. The Licensor is the exclusive licensee of the entire and
unencumbered exclusive license in and to the RACINGO Trademarks
and has the full right to use, license, and protect its rights in
the RACINGO Trademarks for the term of this Agreement;
iii. The Licensor is the exclusive licensee of the entire and
unencumbered exclusive license in and to the RACINGO Copyright
and has the full right to use, license, and protect its rights in
the RACINGO Copyrights for the term of this Agreement;
iv. The Licensor is the exclusive licensee of the entire and
unencumbered exclusive license in and to the Licensed Product,
including the RACINGO Patent, and has the right to grant PWIN the
licence to use the Licensed Product free of any liens, claims or
encumbrances for the term of this Agreement, and there is no
litigation pending against the Licensor which would limit,
restrict or prevent PWIN quiet use and enjoyment of the Licensed
Product;
v. applications to register the RACINGO Trademarks have been
duly made and are in good standing under the laws of the
jurisdictions where they have been applied for, and the Licensor
hereby agrees to register said trademarks and maintain them in
good standing under all applicable laws;
vi. The RACINGO Patent has been duly applied for by and issued
by the relevant authorities to, and is owned by, Winning Games
Inc., and the RACINGO Patent remains valid and enforceable;
vii. The RACINGO Copyrights have been duly registered and are in
good standing under the laws of their respective jurisdictions as
set out in Schedule "D" hereto;
viii. To the best of the Licensor's knowledge, aside from the
possible infringement with regard to a bingo betting game called
Bingo Bet being conducted in Arkansas, and the software developed
by Autotote Systems Inc. for P.E.S.T. Creative Gaming Corporation
for a computer application of RACINGO, no person or company is
infringing on the Licensor's right, title and interest in and to
the RACINGO Trademarks, RACINGO Copyrights, RACINGO Patent or the
Licensed Product in the Territory, and the Licensor's use of the
RACINGO Trademarks, RACINGO Copyright or the Licensed Product in
the United States and Canada does not infringe on the
intellectual property rights of any other person or company;
ix. The Licensor shall indemnify and hold PWIN and its
directors, officers and employees harmless from and against any
losses, damages and expenses with respect to any claim, action or
proceeding taken or threatened by any person, firm, corporation
or other entity relating to the business of the Licensor or
relating to any breach by the Licensor of any provisions of the
Agreement;
(c) PWIN further represents, warrants and covenants that:
i. PWIN will not challenge the Licensor's or the Master
Licensors' rights in and to the RACINGO Trademarks, RACINGO
Copyrights, RACINGO Patent or Licensed Product during the term of
this Agreement and for a period of two (2) years thereafter;
ii. PWIN agrees that it will not during the term of this
Agreement, or for a period of two (2) years thereafter, challenge
the license or any rights of the Licensor or the Master Licensors
in and to the RACINGO Trademarks, RACINGO Copyrights, RACINGO
Patent or Licensed Product, or attack the validity of this
license;
iii. PWIN further agrees that upon the expiry of the RACINGO
Patent it will continue to use the Licensed Product and the
patented matter contained therein only pursuant to this
Agreement, or, in the event this Agreement is terminated,
pursuant to a license from the Licensor or its Master Licensors;
iv. PWIN shall develop, as soon as is reasonable, practical
business and marketing plans for On-Line RACINGO, and shall use
commercially reasonable efforts to promote and facilitate the
commercial and financial viability of On-Line RACINGO;
v. PWIN shall, using commercially reasonable efforts, continue
to develop the business and marketing plans for On-Line RACINGO
to place itself in a situation to take advantage of opportunities
in the On-Line gaming market. PWIN shall report on its efforts
to the Licensor on a quarterly basis, and annual consultation
meetings shall be held between PWIN and the Licensor for the
purpose of reviewing and planning the development of On-Line
RACINGO;
vi. PWIN assumes the risk as to the quality and performance of
any software which has been or will be created by PWIN or on its
behalf for the facilitation and operation of the Licensed
Product;
vii. PWIN shall indemnify and hold the Licensor and its
directors, officers and employees harmless from and against any
losses, damages and expenses with respect to any claim, action or
proceeding taken or threatened by any person, firm, corporation,
governmental or regulatory body (of any level of government) or
other entity relating to the business of PWIN or relating to any
breach by PWIN of any provisions of the Agreement;
viii. PWIN will identify itself as an authorized licensee of
the Licensed Product (including the patents contained therein)
and of the RACINGO Trademarks, RACINGO Patent and RACINGO
Copyrights, and not as the owner of the Licensed Product, RACINGO
Copyrights, RACINGO Patent or the RACINGO Trademarks;
ix. During the term of this Agreement, PWIN shall be considered
a "related company" to the Licensor and the Master Licensors for
the purpose of establishing and maintaining rights in the RACINGO
Trademarks and any new marks developed by PWIN for use in
connection with the Licensed Product, and all rights in these
marks shall enure to the benefit of the Licensor and the Master
Licensors;
x. PWIN will pay any and all sales and use taxes levied or
based upon the price of the Licensed Product and any and all
license fees payable related to the Licensed Product;
xi. PWIN shall use the RACINGO Trademarks only in connection
with the Licensed Product and in a manner which complies with the
standards of quality and service which are usual for and are
followed by PWIN in offering and providing similar services,
which standards of quality are hereby expressly acknowledged,
affirmed and adopted by Licensor as being acceptable standards
for the offering, sale, provision and use of the Licensed
Product. Licensor shall have the right to examine the nature and
manner in which PWIN offers and provides the Licensed Product to
ensure material conformity with these standards of quality.
xii. PWIN agrees to maintain the quality of the advertising,
promotion, and packaging of the Licensed Product at a level
consistent with the quality of the Licensor's present use,
advertising, promotion and packaging thereof, which quality
standards have been mutually agreed upon by the Parties. Said
quality standards shall be reviewed and, if agreed by the
Parties, amended once per year on each anniversary of the
Effective Date. At each such review, PWIN shall provide to the
Licensor samples of all advertising, promotion or packaging
materials used in the preceding year or proposed to be used in
the following year. In the event said samples do not conform
with the accepted standards of quality and use, Licensor shall
advise PWIN, which will take reasonable steps to conform its use
of the RACINGO Trademarks or the Licensed Product to these
standards. If Licensor does not advise PWIN of any such
nonconformity within forty-eight (48) hours of its receipt of
said materials for inspection, this will constitute express
acceptance of and acknowledgement that the materials conform to
the aforesaid standards. When using the RACINGO Trademarks or
the Licensed Product under this Agreement, PWIN agrees to comply
substantially with all laws pertaining to the use of trademarks
in force in the Territory.
xiii. PWIN agrees to assist Licensor, at the Licensor's
expense, to the extent necessary, in the procurement of any
protection or registration for the RACINGO Trademarks or the
Licensed Product, or to protect any of Licensor's rights to the
RACINGO Trademarks or the Licensed Product. If PWIN so desires,
Licensor shall commence or prosecute any claims or suits
necessary to protect the RACINGO Trademarks or the Licensed
Product and the Parties' rights thereto, either in its own name
or in the name of PWIN or with PWIN joined as a party thereto.
The Parties shall notify each other in writing of any
infringements or imitations by others in the RACINGO Trademarks
or the Licensed Product for goods or services which are the same
as or similar to those covered by this Agreement which may come
to either Party's attention. PWIN shall not institute any suit
or take any action on account of any such infringements or
imitations without first obtaining the written consent of the
Licensor so to do, which consent shall not be unreasonably
withheld.
xiv. PWIN shall guarantee adequate funding for the market launch
of the Licensed Product including but not limited to:
(1) the costs of software development;
(2) an initial Jackpot guarantee of $250,000;
(3) sufficient marketing capital to successfully
launch the Licensed Product once at least fifteen
(15) On-Line licensed betting establishments have
agreed to host On-Line RACINGO on their Internet
sites; and
(4) pay all out-of-pocket expenses of said market
launch, including expenses incurred by the
Licensor and the Master Licensors that have been
pre-approved by PWIN.
xv. PWIN shall establish a permanent office in the United States
of America and employ, at its own expense, such personnel as are
necessary to carry out PWIN's duties hereunder;
xvi. PWIN agrees that all Jackpots will be co-mingled where
commercially feasible and permitted by law;
xvii. Insofar as PWIN is not otherwise contractually
restricted from doing so, PWIN hereby covenants that it will, if
so requested in writing by the Licensor, negotiate in good faith
with any person or company which is licensed by the Licensor to
deliver the RACINGO game through a non-On-line medium ("Other
Licensed Party") including without limitation, Other Licensed
Parties licensed with regard to the venues outlined in Schedule
"C" hereto, with the aim of concluding a sublicense or hyperlink
arrangement for On-line RACINGO with such Other Licensed Party,
within PWIN's usual sublicense or hyperlink format. "Hyperlink
arrangement" shall mean an arrangement whereby PWIN's On-Line
facility for On-Line RACINGO shall be made accessible to users of
the Other Licensed Party's On-Line facility.
(d) Except as expressly provided in this agreement, the Licensor
and PWIN make no warranty, express or implied, including any
warranty of merchantability or fitness for a particular purpose,
with respect to the rights to the Licensed Product or the RACINGO
Trademarks granted hereunder including any warranties which may
be implied by the United Nations Convention on Contracts for the
International Sale Of Goods, which implied warranties are hereby
specifically excluded from this Agreement.
5. INTELLECTUAL PROPERTY INDEMNITY
(a) During the term of this Agreement, the Licensor will defend
and hold PWIN harmless from any claim, suit or proceeding brought
against PWIN based on a claim that the Licensed Product, RACINGO
Copyrights or RACINGO Trademarks or PWIN's use of the Licensed
Product, RACINGO Copyrights, or RACINGO Trademarks infringes any
third party's trademark, copyright, patent or other intellectual
property right, or misappropriates a third party's trade secrets
("Claim"), and PWIN shall provide all reasonable information and
assistance requested by the Licensor (at the Licensor's expense)
to handle the defence or settlement of any such Claim.
(b) If the Licensed Product is held to infringe or
misappropriate the rights of any third party and its use is
enjoined, or the Licensor reasonably believes such use may become
enjoined, the Licensor may, at its own expense and at its option,
within a commercially reasonable time frame: (i) procure for PWIN
the right to continue use of the Licensed Product, (ii) replace
the Licensed Product with a non-infringing product of
substantially equivalent function or (iii) modify the Licensed
Product so it becomes non-infringing without substantially
detracting from its function. If none of the foregoing is
reasonably acceptable to PWIN and the use of the Licensed Product
enjoined, PWIN may terminate the Agreement, and PWIN shall cease
use of the Licensed Product.
(c) Licensor shall defend and hereby agrees to hold PWIN
harmless against any claims, suits or proceedings arising solely
out of the use by PWIN of the RACINGO Trademarks, RACINGO
Copyrights or the patent contained in the Licensed Product as
authorized in this Agreement, and PWIN shall provide all
reasonable information and assistance required by the Licensor
(at the Licensor's expense) to handle the defence or settlement
of any such claim, suit or proceeding.
(d) PWIN shall defend and hereby agrees to hold Licensor
harmless against any losses, including any award of damages, the
cost of litigation and attorney fees, incurred by reason of any
claims by third parties against Licensor based on or involving
PWIN's advertising, offering, sale, performance, or use of the
Licensed Product or any other goods or services under the RACINGO
Trademarks.
(e) The foregoing states the Licensor's entire liability and
PWIN's sole and exclusive remedy with respect to any infringement
or misappropriation of any patent, trademarks, trade secrets or
other intellectual property rights of any third party by PWIN.
6. LIMITATION OF LIABILITY
In no event shall any party be liable to the other party for any
indirect, special or consequential damages including, without
limitation, those based on loss of business opportunities,
whether or not the Licensor or PWIN had or should have had any
knowledge, actual or constructive, that such damages might be
incurred. Notwithstanding anything to the contrary, the
limitations of liability set forth in this section will not apply
to (i) a breach by the Licensor or PWIN of the confidentiality
obligations set forth in section 7 below resulting in a material
adverse effect on PWIN, (ii) fraud, acts of gross negligence, or
wilful misconduct, or (iii) the indemnification obligations set
forth in section 5 above.
7. CONFIDENTIALITY
(a) The Licensor acknowledges and agrees that the information
PWIN has provided or will provide in connection with this
Agreement, including, without limitation, the terms and
conditions of this Agreement, are and shall be confidential and
proprietary to PWIN. Such confidential information includes, but
is not limited to, any information of any kind whatsoever
regarding PWIN's business. The Licensor agrees not to use or
disclose to any third party the confidential information of PWIN
with the prior written consent of PWIN. Moreover, the Licensor
agrees to restrict dissemination of particular confidential
information to only those persons in its organization who must
have access to such confidential information in order for the
Licensor to perform its obligations under this Agreement. The
Licensor's obligations with regard to any confidential
information shall not apply in respect of such information that
(i) PWIN authorizes the Licensor to disclose to third parties by
prior written authorization, (ii) is or becomes available in the
public domain, other than by an act or omission of the Licensor
or any employee, agent or other person acting for or on behalf of
the licensor, (iii) is lawfully acquired by the Licensor from
another source without restriction or (iv) is ordered to be
disclosed by a court, administrative agency or other governmental
body with jurisdiction over the parties, provided the licensor
will first have provided PWIN with prompt written notice of such
required disclosure and will take reasonable steps to allow PWIN
to seek a protective order with respect to the confidentiality of
the information required to be disclosed. The Licensor will
promptly co-operate with and assist PWIN in connection with
obtaining such protective order, at PWIN's expense.
(b) The Licensor shall cause every employee or third party to
whom the Licensor discloses confidential information in order to
perform its obligations hereunder to abide by the foregoing
confidentiality provisions.
(c) Upon the termination of this Agreement, the Licensor shall
promptly return such confidential information (and any copies,
extracts and summaries thereof) to PWIN or, with PWIN's written
consent, shall promptly destroy such confidential information
(and any copies, extracts and summaries thereof) and, with
respect to electronically stored copies, delete such records from
any storage unit.
(d) PWIN acknowledges and agrees that the information and
Licensed Product the Licensor has provided or will provide in
connection with this Agreement, including, without limitation,
the terms and conditions of this Agreement, contain and/or are
confidential and proprietary information belonging to the
Licensor. Such confidential information includes, but is not
limited to, any information of any kind whatsoever regarding the
Licensor's business. PWIN agrees not to use or disclose to any
third party the confidential information of the Licensor without
the prior written consent of the Licensor. Moreover, PWIN agrees
to restrict dissemination of particular confidential information
to only those persons in its organization who must have access to
such confidential information in order for PWIN to perform their
obligations under this Agreement. PWIN's obligations with regard
to any confidential information shall not apply in respect of
such information that (i) the Licensor authorizes PWIN to
disclose to third parties by prior written authorization, (ii) is
or becomes available in the public domain, other than by an act
or omission of PWIN or any employee, agent or other person acting
for or on behalf of PWIN (iii) is lawfully acquired by PWIN from
another source without restriction or (iv) is ordered to be
disclosed by a court, administrative agency or other governmental
body with jurisdiction over the parties, provided that PWIN will
first have provided the Licensor with prompt written notice of
such required disclosure and will take reasonable steps to allow
the Licensor to seek a protective order with respect to the
confidentiality of the information required to be disclosed.
PWIN will promptly cooperate with and assist the Licensor in
connection with obtaining such protective order, at the
Licensor's expense.
(e) PWIN shall cause any employee or third party to whom PWIN
discloses confidential information in order to perform its
obligations hereunder to abide by the foregoing confidentiality
provisions.
(f) Upon the termination of this Agreement, PWIN shall promptly
return such confidential information (and any copies, extracts
and summaries thereof) to the Licensor or, with the Licensor's
written consent, shall promptly destroy such confidential
information (and any copies, extracts and summaries thereof) and,
with respect to electronically stored copies, delete such records
from any storage unit.
(g) The restrictions in this section 7 shall continue for a
period of two (2) years after the termination of this Agreement.
8. TERMINATION
(a) The term of this Agreement shall begin on the Effective Date
and shall continue for a period of ten (10) years, unless
terminated earlier pursuant to this Section 8. Such term shall,
at PWIN's discretion, automatically renew for an additional
period of ten (10) years on the same terms save this right of
renewal.
(b) The Parties may by mutual agreement further extend the term
of this Agreement beyond the twenty years provided for. If the
parties are unable to agree on new terms and conditions for any
such further renewal term, the Licensor agrees to give PWIN
written notice of any bona fide offer by a third party to license
the Licensed Product received by the Licensor, with such notice
to include the terms of such offer (the "Offer"). PWIN shall
then have thirty (30) days from its receipt of such notice to
elect to match the Offer ("PWIN's Right of First Refusal"). If
PWIN elects not to match the Offer or fails to respond to the
Licensor within thirty (30) days, the Licensor shall be free at
that time to pursue a license arrangement with such third party.
If a license arrangement with such third party is not entered
into by the Licensor, any subsequent bona fide offers by third
parties to license the Licensed Product received by the Licensor
shall be subject to PWIN's Right of First Refusal described
above. If PWIN elects to match an Offer, the parties shall
promptly negotiate in good faith a definitive agreement which
incorporates the terms of such offer.
(c) If one or more of the following events of default shall
occur, the non-defaulting party shall have the right to terminate
this Agreement:
i. A party breaches any material term or condition of this
Agreement in any material respect, and such breach remains
uncured or no steps have been taken to cure such breach
within ninety (90) days after the defaulting party has
written notice of such uncured breach; or
ii. PWIN applies for or consents to the appointment of a
receiver, trustee or similar office for it or any
substantial part of its property or assets, or any such
appointment is made without such applications of consent by
such party and remain undischarged for a period of ninety
(90) days; or
iii. PWIN consents to the institution of a petition, application,
answer, consent, default or otherwise of any bankruptcy,
insolvency or reorganization and any such proceeding as
instituted against such party remains undischarged for a
period of ninety (90) days; or
iv. PWIN fails to satisfy its payment obligations to the
Licensor, as more specifically detailed in Schedule A
hereto, and such payment obligation remains outstanding
sixty (60) days after the defaulting party has written
notice of such outstanding debt;
provided that if there is a dispute as to the applicability or
application of this section, this Agreement shall not be
terminated until the final decision of the arbitrators
provided for in subsection 9(m) hereof has been delivered to
the Parties.
(c) In the event this Agreement is terminated for an uncured
material breach of its terms, including the events of default set
out in subsection 8(c) above, the licenses granted in section 2
hereof shall terminate forthwith, PWIN's Right of First Refusal
shall be null and void, and PWIN shall have no further right to
continue to use the Licensed Product or the RACINGO Trademarks.
(d) Upon the termination of this Agreement for any reason, (i)
the terminating party shall promptly return or destroy all
confidential information pursuant to Section 7 above and (ii)
PWIN shall pay the Licensor all fees and expenses due and owing
at the time of such termination.
(e) Neither the Licensor or PWIN shall be considered in breach
of this Agreement or liable for any expense, loss or damage
resulting from delay or prevention of performance caused by any
act beyond its reasonable control, including if such lack of
control is related to acts of God, strikes, acts of terrorism, or
any other cause whatsoever, whether similar or dissimilar to
those enumerated above, beyond the reasonable control of the
party. In the event of any delay arising by reason of the
foregoing, the time for performance shall be extended for the
duration of the delay.
9. MISCELLANEOUS
(a) Notice. All notices, demands, requests, reports, approvals
and other communications which may be or are required to be
given, served or sent pursuant to this Agreement shall be in
writing and shall be hand delivered, telefaxed/telecopied to the
below listed numbers with the originals to follow thereafter or
sent by recognised overnight carrier or mailed by first class,
registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Licensor:
Racingo Investments Ltd.
c/o CorpAmerica Inc.
00 Xxx Xxxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
XXX
Facsimile: (000)000-0000
With an additional copy to:
Xxxxxxx Xxxxx
Xxxxxxxx, X'Xxxxx, Xxxxxxxx
6300 Sears Tower, 000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With an additional copy to:
Xxxxx X. XxXxxxxxx
Xxxxxxxxxx, Thompson, Phelan, O'Brien
Suite 3000, Royal Bank Plaza, South Tower
000 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx X0X 0X0
Telephone: (000)000-0000
Facsimile: (000) 000-0000
If to PWIN:
c/o Xxxxx Xxxxxxxxxxxx
Playandwin, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Telephone: (416) 368-6665 ext. 14
Facsimile: (000) 000-0000
With an additional copy to:
Xxxx X. Xxxxxxx
Xxxxxxx & Associates
Xxxxx 000, X.X. Xxx 000
0 Xxxxx Xxxxxxxx Xxxxx, 000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notices shall be effective when properly sent and received.
Any party can notify the others of an address change pursuant
to this notice provision.
(b) Severability. In the event any one or more of the
provisions of the Agreement shall for any reason be held to be
invalid, illegal or unenforceable, the remaining provisions of
this Agreement shall be unimpaired and the parties will
negotiate in good faith to substitute a provision of like
economic intent and effect.
(c) Relationship of the Parties. The parties to this agreement
expressly state and understand that the obligations and rights
hereunder in no way constitute them as partners, joint ventures
or otherwise related in any way and that no party has any power
to bind or commit the other party in any way to a third party or
parties under this Agreement. However, during the term of this
Agreement, PWIN will shall be considered a "related company" to
the Licensor and the Master Licensors for the purpose of
establishing and maintaining rights in the RACINGO Trademarks and
any new marks developed by PWIN for use in connection with the
Licensed Product.
(a) Severability. In the event any one or more of the
provisions of the Agreement shall for any reason be held to be
invalid, illegal or unenforceable, the remaining provisions of
this Agreement shall be unimpaired and the parties will
negotiate in good faith to substitute a provision of like
economic intent and effect.
(b) Relationship of the Parties. The parties to this agreement
expressly state and understand that the obligations and rights
hereunder in no way constitute them as partners, joint ventures
or otherwise related in any way and that no party has any power
to bind or commit the other party in any way to a third party or
parties under this Agreement. However, during the term of this
Agreement, PWIN will shall be considered a "related company" to
the Licensor and the Master Licensors for the purpose of
establishing and maintaining rights in the RACINGO Trademarks and
any new marks developed by PWIN for use in connection with the
Licensed Product.
(c) Binding Agreement This Agreement shall be binding upon and
shall inure to the benefits of the parties hereto and their
respective successors and permitted assigns. It is the explicit
intention of the parties hereto that no person or entity, other
than the parties hereto, is or shall be entitled to bring any
action or enforce any provision of this Agreement against either
of the parties hereto, and that the covenants, undertakings and
agreements se forth in this Agreement shall be solely for the
benefit of and shall be enforceable only by the parties hereto or
their respective successors or permitted assigns.
(d) Assignment. PWIN may assign this Agreement to one of PWIN's
affiliates or subsidiaries without the consent of the Licensor,
so long as PWIN continues to guarantee to the Licensor the due
performance (including but not limited to the payment of money)
of PWIN's obligation hereunder by the assignee. In such a case,
the term PWIN used herein shall include PWIN's assignee.
Otherwise, neither the Licensor nor PWIN may assign this
Agreement or any of its rights or obligations hereunder without
the prior written consent of the other party and any attempted or
purported assignment, delegation or other transfer in violation
of this paragraph shall be void.
(e) Sub-License. PWIN may sub-license its rights hereunder to
the Licensed Product, RACINGO Trademarks, RACINGO Patent or
RACINGO Copyrights to any third party without the consent of the
Licensor, provided that such sub-license shall be on the same
terms and conditions as the license granted herein and subject to
the quality control provisions set out in subsection 4(c)(xi) of
this Agreement.
(f) Amendment; No Waiver. This Agreement may not be amended,
altered or modified except by an instrument in writing signed by
both parties. No failure or delay by any party in exercising any
right hereunder shall operate as a waiver thereof and no single
or partial exercise of any right shall preclude any other or
further exercise thereof or the exercise of any other right
hereunder.
(g) Restriction. This license is solely for the use of RACINGO
and the RACINGO Trademarks in On- and Off-Track wagering in the
Territory.
(h) Survival. The provisions of section 1 (Definitions),
Section 3 (Payment), Section 4 (Representations, Warranties and
Covenants), Section 5 (Intellectual Property Indemnity), Section
6 (Limitation of Liability), Section 7 (Confidentiality), Section
8 (Term/Termination), and Section 9 (Miscellaneous) will survive
the termination of this Agreement. If no survival period is
specified in said sections, the provisions thereof shall survive
the termination of this Agreement for a period of four (4) years.
(i) Entire Agreement. This Agreement and all Exhibits attached
hereto set forth the entire understanding of the parties with
respect to the subject matter hereof and supersede any prior
agreements and understandings, both written and oral, which may
have existed between the parties with respect to the subject
matter hereof.
(j) Governing Law. The parties agree that this Agreement is
made in and under the laws of the Licensor's incorporating
jurisdiction, but for convenience to both parties this Agreement
shall be governed by the laws of the State of Delaware, USA,
which will be the proper forum for any controversy arising in
connection with this Agreement and the courts of which will be
the exclusive forum for all such suits, actions or proceedings.
(k) Counterparts. This Agreement may be executed in counterparts
which, taken together, shall constitute one Agreement and any
party may execute this Agreement by signing such counterpart.
(l) Arbitration. Any dispute, disagreements or conflicts which
cannot be worked out to a mutually acceptable conclusion between
the parties shall be submitted to mandatory binding, final
arbitration under the provisions of the Delaware Voluntary
Alternative Dispute Resolution Act.
(m) Time of the Essence. Time shall be of the essence of this
Agreement.
(n) Effective on Signing. This Agreement shall take effect upon
the signing of this Agreement by the appropriate Parties.
IN WITNESS WHEREOF, authorized officers of the undersigned
have caused this Agreement to be duly executed on their behalf,
as to the day and year first herein set forth.
PLAYANDWIN, INC.
Per:
_____________________________
Xxxxxxx Xxxxxx
RACINGO INVESTMENTS LTD.
Per:
_____________________________
Xxxx Xxxxxx
RACINGO INVESTMENTS LTD.
Per:
_____________________________
Xxxxxxx Xxxxxx
RACINGO INVESTMENTS LTD.
Per:
_____________________________
Xxxxxxx X. Xxxxxxxx
G:\Corp\P\PWIN\Racingo\Licences to PWIN\License agr landbased
6oct99.doc
SCHEDULE A
Payment Formula
The license fee to be paid by Playandwin, Inc. ("PWIN") to the
licensor for the use of the Licensed Product in the Territory
during the term of this Agreement shall be one half of one
percent (0.5%) of gross revenues derived by PWIN that result from
or are attributable to use of the Licensed Product by PWIN for On-
and Off-Track wagering in the Territory, as further described by
the following formula:
License Fee = 0.005 x PWIN Gross Licensed Product Revenues
Licensed Product Revenues include income derived by PWIN from:
(i) the sale of On- and Off-Track RACINGO tickets; (ii)
television or promotion rights relating to On- and Off-Track
RACINGO; and the sale of merchandise branded with the RACINGO
Trademarks and do not include On-Line (as that term is defined in
Schedule "C" hereto) sales of RACINGO or merchandise branded with
the RACINGO Trademarks. Payment of the fees to the Licensor will
be calculated and paid quarterly by PWIN to the Licensor, with a
year-end reconciliation. All fees and accounts payable hereunder
shall be due and payable by PWIN within thirty (30) days
following the end of such quarter. The parties acknowledge and
agree that PWIN shall pay the fees as directed by the Licensor.
PWIN shall be notified of such bank account in writing signed by
the Licensor, prior to the date the first payment is due. Any
substitution of such bank account shall be upon written notice to
PWIN, signed by the Licensor. Payment by PWIN in accordance with
such instructions shall satisfy the PWIN's obligation to pay the
licensor under Article 3 of this Agreement. All charges under
this Agreement shall be paid in U.S. dollars and exclude all
taxes other than customs, duties or charges of any kind
(including, without limitation, withholding or value added taxes)
imposed by any federal, state or local governmental entity for
products or services provided under this Agreement.
SCHEDULE "B"
RACINGO GAME RULES
SCHEDULE "C"
PRODUCTS EXCLUDED
FROM THE DEFINITION OF "LICENSED PRODUCTS" IN THE LICENSE
AGREEMENT
The license granted over the Licensed Products in this
Agreement shall not include any intellectual property rights
and know-how of the Licensor identified under the terms
"RACINGO", "RACINGO Patent", "RACINGO Copyrights" and
"RACINGO Trademarks" as they apply to wagering utilizing
RACINGO, the RACINGO Copyrights, RACINGO Patent and the
RACINGO Trademarks in or delivered by the following venues:
(i) any cruise ship, other than one travelling on the
Mississippi river;
(ii) any betting establishment located on an
Indian/Native/Aboriginal/First Nations reserve;
(iii) any in-flight betting establishment, owned and
operated by an airline;
(iv) any bingo hall or group of bingo halls linked by a local
area network, duly licensed by the relevant governmental
authority of the jurisdiction in which it is located;
(v) On-Line RACINGO (previously licensed product); or
(vi) In-Home RACINGO;
all of which are sometimes collectively referred to as
"Other Venues".
"On-Line" shall mean via the Internet, by which is meant the
worldwide network of computers commonly understood to
provide some or all of the following features, among others:
electronic mail, file transfers through File Transfer
Protocol, Telnet access to local and remote computers,
UseNet Newsgroups, Gopher access to information on local and
remote computers, Wide Area Information Servers, and World
Wide Web access. "Internet" shall mean the world-wide
network of computers commonly understood to provide some or
all of the following features, among others: electronic
mail, file transfers through File Transfer Protocol, Telnet
access to local and remote computers, UseNet Newsgroups,
Gopher access to information on local and remote computers,
Wide Area Information Servers, and World Wide Web access.
"In-Home" shall mean within the private residence of
individuals residing in the territory delivered by The TV
Games Network, through its existing wagering platforms (as
to be agreed upon between PWIN and the Licensor).
SCHEDULE "D"
RACINGO COPYRIGHTS
TITLE COUNTRY REGISTERED
Sulky and Rider Canada Jan. 20,
1995
Racingo Game Card Canada Jan. 20, 1995
Racingo Rules Canada Feb. 23, 1995
Racingo Races Card Canada Sept. 11, 1996
Racingo Rules and Canada Sept. 11, 1996
Regulations
Racingo In The Money Canada` Sept. 11, 1996
Card
Super Racingo Race Card Canada Sept. 11, 1996
Racingo Play for the Canada Sept. 11, 1996
Day Card
Sulky and Rider U.S. Jan. 24, 1995
Racingo Rules U.S. Jan. 24, 1995
Racingo Rules and U.S. Sept. 24, 1996
Regulations
