AGREEMENT
AGREEMENT
THIS
AGREEMENT (“Agreement”) is entered into this 6th
day of
May
2005
by and
among Alladdin Limited, Alladdin Lotteries Limited and New Media Lottery
Services, Inc. (each a "Party" and together the "Parties").
As
used
in this Agreement, capitalized terms have the meanings ascribed to them above
and in Section 1 below, except as otherwise expressly provided.
WITNESSETH
WHEREAS,
Licensor and ALL currently perform certain services for Licensee similar to
the
Alladdin Services on an oral basis without the benefit of a written
agreement;
and
WHEREAS,
Licensee
desires to engage Licensor and ALL to perform the Alladdin Services on the
basis
set forth in this Agreement and Licensor and ALL accept the engagement by
Licensee to perform the Alladdin Services; and
WHEREAS,
Licensor
desires to engage Licensee to provide the NMLS Services on the basis set forth
in this Agreement and Licensee accepts
the
engagement by Licensor to perform the NMLS
Services; and
WHEREAS,
Licensor has developed the Software which is useful in the operation of Internet
lotteries; and
WHEREAS,
Licensee desires to acquire the right to Use, re-write and Enhance the Software
from Licensor and Licensor desires to grant that right in the Software to
Licensee.
NOW,
THEREFORE, in consideration of the mutual agreements contained in
this
Agreement,
intending to be legally bound hereby, the Parties
agree as
follows:
SECTION
1. CERTAIN
DEFINITIONS
AND
INTERPRETATION
1.1 Definitions.
“Affiliated
Companies"
means
in
relation to any Person
(i) any
corporation that owns, directly or indirectly, more than fifty (50) percent
of
the outstanding capital stock of the
Person
entitled
to vote in the election of directors; (ii) any corporation of which the
Person
owns,
directly or indirectly, more than fifty (50) percent of the outstanding capital
stock entitled to vote in the election of directors; and (iii) any other
corporation of which a corporation described in clause "(i)" above owns,
directly or indirectly, more than fifty (50) percent of the outstanding capital
stock entitled to vote in the election of directors.
“ALL”
means
Alladdin Lotteries Limited, a corporation organized and existing pursuant to
the
laws of England and Wales.
“Alladdin
Services”
means
the services to be rendered by Licensor or ALL in favor of Licensee contemplated
by Section 3 below and described on Schedule B.
“Developments”
means
the modifications and/or enhancements to the Software to be carried out by
Licensee contemplated by Section 2.1(c) below.
“Documentation”
means
the documentation and operating instructions for the Software
as
described on Schedule A.
“Enhance”
means
to create Developments to the Software.
“Excluded
Territory"
means
the UK and the Republic of Ireland and any additional country in which Licensee
makes available for purchase by the general public an official, state regulated
lottery, provided that Licensee shall give written notice to Licensor at least
(3) three months prior to the proposed date of the sale to the general public
of
the first chance or entry to such lottery. Licensor agrees that it shall, within
(3) months of the launch of such a lottery by Licensee, cease to operate any
competing lottery, if any, in such country, except in the case were Licensor
has
been operating such lottery for (9) nine months or if otherwise agreed by the
Parties.
“GBP”
means
British Pound Sterling, the currency of Great Britain.
“Internet”
means
the collection of networks of computers and related devices around the world
linked by telecommunications and related methods and any development(s) thereto
and successor(s) thereof.
“Legal
Proceeding”
means
any action, suit, litigation, arbitration proceeding, or other similar
proceeding
of any
nature
(including any civil, criminal, administrative, or appellate
proceeding).
“License”
means
the license in
relation to
the
Software granted by Licensor
to Licensee under Section 2.1 of this
Agreement.
“Licensee”
means
New
Media Lottery Services, Inc., a Delaware corporation.
“Licensor”
means
Alladdin Limited, a corporation organized and existing pursuant to the laws
of England
and Wales.
“NMLS
Services”
means
the services to be rendered by Licensee in favor of Licensor contemplated by
Section 4 below and described on Schedule C.
“Person”
means
any individual, corporation, partnership, venture, estate, trust, association,
entity, governmental body, or governmental authority.
“Proprietary
Right”
means
any trademark,
trade name, service xxxx, trade secret, patent
right, copyright,
or other proprietary right.
“Securities”
means
the Shares, the Additional Shares, the Warrants and the shares
of
Common Stock issuable upon exercise of the Warrants (all
as
defined in Section 5 below).
“Software”
means
the proprietary computer software program developed
and utilized by Licensor and described in the Documentation as existing at
the
date of this Agreement (the “Original Version”) and as re-written by Licensee
pursuant to the rights as in Section 2.1(b) (the “Re-written Version”),
including any corrections or amendments made to such program (in whatever
version) not being Developments.
“Territory”
means
anywhere in the entire world.
“Use”means
operate,
reproduce, transmit
(by electronic means or otherwise), make available, perform and
display.
“VAT”
means
value added, sales, use or similar UK tax.
1.2 Interpretation.
In this
Agreement unless otherwise specified, reference to:-
(a) a
statute
or statutory instrument or any of its provisions is to be construed as a
reference to that statute or statutory instrument or such provision as the
same
may have been or may from time to time hereafter be amended or
re-enacted;
(b) sections
or schedules are to sections and schedules to this Agreement. The schedules
form
part of the operative provisions of this Agreement and references to this
Agreement shall include references to the schedules.
SECTION
2. GRANT
OF
LICENSE
2.1. Grant
of License.
Subject
to the terms of this Agreement, Licensor hereby grants to Licensee, and Licensee
hereby accepts, a non-transferable, non-exclusive, perpetual (subject
to Section 6.1(b) below), royalty-free
license:-
(a) to
Use
the Software in the Territory. Licensee may
(subject
to Section 2.6) sublicense
Use
of
the
Software to such Persons in
the
Territory
and on
such terms as Licensee, in its discretion, determines to be
appropriate.;
and
(b) to
re-write the Software and create a Re-written Version (being such re-write
producing the same functionality as exists in the Original Version);
and
(c) to
Enhance the Software so as to create additional functionality not present in
the
Original Version and thereby create Developments.
2.2. Reservation
of Rights.
All
other rights in the Software are expressly reserved to Licensor.
2.3. Delivery
of Software and Documentation.
Within
ten (10) days from the date of this Agreement, Licensor shall deliver (by
physical delivery or electronic transmission) to Licensee: one (1) copy of
the
source
code of
the most current version of the Software in computer readable form; and
one (1)
copy of the Documentation.
2.4. Effect
of Merger or Like Transaction.
This
Agreement and all rights
and obligations
of the
Parties
shall
remain in full force and effect following any merger of either
Party
with or
into another Person
and
following any transfer of all or any portion of the outstanding stock or of
all
or any portion of the assets of either
Party.
2.5. Developments.
(a) Licensee
is free to make any Developments, at its own cost, which Licensee, in its
discretion, determines to be appropriate. For the avoidance of doubt, a
Development is the addition of functionality and not replication or correction
of functionality present in the Software.
(b) Licensee
shall deliver to Licensor within ten (10) days of each of 31 March, 31 July,
and
30 November of each year (by physical delivery or electronic transmission):
one
(1) copy of the source code of the most current version of the Software (whether
the Original Version or the Re-written Version) and of any Developments in
computer readable form; and one (1) copy of documentation and operating
instructions for the Software altered by any Developments,
except
in the case where there have been no Developments since the last delivery
pursuant to this Section 2.5(b), in which case the Licensee shall instead
deliver on each such date a notice to Licensor in the form set out at Schedule
F.
(c) Licensee
hereby grants to Licensor, and Licensor hereby accepts, a non-transferable,
non-exclusive, perpetual, royalty-free license to Use and Enhance the
Developments anywhere in the Territory except
in
the Excluded Territory.
2.6. Sub-Licensing.
(a)
Licensee. Subject to the provisions of subsection 2.6(c) below, Licensee shall
be entitled to sub-license any version of the Software in any form without
restriction, provided, however, that (i) Licensee shall advise Licensor of
its
intention to provide any such sub-license; and (ii) prior to granting any
sub-license, Licensee shall provide Licensor with a current version of the
Software being sub-licensed.
(b) Licensor.
Subject to the provisions of subsection 2.6(c) below, Licensor may sub-license
any version of the Development(s) without restriction to Affiliated Companies
of
Licensor and/or ALL. For the avoidance of doubt, Licensor may license and/or
sub-license the Software in any form to any Person anywhere in the Territory
and
the provisions of subsection 2.6(c) below do not apply in respect of any such
license and/or sub-license by the Licensor of the Software.
(c) Any
sub-license granted as permitted in this Section 2.6 shall be subject to the
following provisions:-
(i) the
sub-license shall be only in relation object code and only in relation to Use
(and not for the avoidance of doubt to Enhance or in relation to source
code);
(ii) the
Party
granting the sub-license provides expressly in any sub-license that there can
be
no further sub-licensing; and
(iii) the
Party
agrees to be primarily liable for the performance by the sub-licensee of its
obligations under such sub-license.
SECTION
3. ALLADDIN
SERVICES
3.1. Engagement
of Licensor and ALL.
Licensee hereby engages Licensor and ALL to perform
the
Alladdin
Services,
on the
terms set out in this Section 3 and Schedule B,
and
Licensor and ALL hereby accept such engagement.
3.2. Standard
of Service.
Licensor and ALL shall perform the Alladdin Services with reasonable care and
skill and in conformity with all laws and regulations applicable to the business
in which it engages.
3.3. Term.
Licensor’s
and
ALL’s duty to perform
the
Alladdin
Services
shall commence as of the date hereof and shall extend for a term of two
(2)
years (“Initial Term”). After expiry of the Initial Term, the Alladdin Services
will continue automatically for additional one (1) year term(s) (each a “Renewal
Term”) unless or until terminated by Licensee or Licensor or ALL upon at least
ninety (90) days’ prior written notice to expire at the end of the Initial Term
or a Renewal Term.
Notwithstanding the foregoing, this Agreement
may be
terminated as provided in Section
6
below.
3.4. Independent
Contractor.
Licensor and ALL shall provide
the
Alladdin
Services
solely
as
independent contractors and nothing contained in
this Agreement
shall be
construed as giving rise to an employment or agency relationship, joint venture,
partnership or other form of business relationship.
3.5. No
Authority to Bind Licensee.
Licensor
and ALL shall have no authority to take, nor shall it take, any action
committing or obligating Licensee in any manner, and they shall not represent
themselves to others as having such authority.
SECTION
4. NMLS
SERVICES
4.1. Engagement
of NMLS.
Licensor hereby engages Licensee to perform the NMLS Services, on the terms
set
out in this Section 4 and Schedule C, and Licensee hereby accepts such
engagement.
4.2. Term.
Licensee’s duty to perform the NMLS Services shall commence as of the date
hereof and shall extend for a term of two (2) years (“Initial Term”). After
expiry of the Initial Term, the NMLS Services will continue automatically for
additional one (1) year term(s) (each a “Renewal Term”) unless or until
terminated by Licensor or ALL or Licensee upon at least ninety (90) days’ prior
written notice to expire at the end of the Initial Term or a Renewal Term.
Notwithstanding the foregoing, this Agreement
may be
terminated as provided in Section 6 below.
4.3. Independent
Contractor.
Licensee shall provide the NMLS Services solely as an independent contractor
and
nothing contained in this Agreement
shall be construed as giving rise to an employment or agency relationship,
joint
venture, partnership or other form of business relationship.
4.4. No
Authority to Bind Licensor or ALL.
Licensee shall have no authority to take, nor shall it take, any action
committing or obligating Licensor or ALL in any manner, and it shall not
represent itself to others as having such authority.
SECTION
5. CONSIDERATION
5.1. Consideration
for
License.
(a)
Definitions.
For
purposes of the Section 5
only,
capitalized terms used in this Section shall have the meaning set forth
below.
(i)
“Actual Value” means the Stock Price multiplied by 275,000.
(ii)
“Additional Shares" means any shares of Common Stock which may be issued to
Licensor in order to cover the deficit between the Ascribed Value and the Actual
Value.
(iii)
“Ascribed
Value” means US$225,000.
(iv)
“Common
Stock” means the
class
of common stock of Licensee, par value US$0.001 per share.
(v)
“Securities Act”
means
the
U.S.
Securities Xxx 0000, as amended.
(vi)
“Shares” means
275,000
shares of Common
Stock, subject to adjustment as provided in Section 5.1.(c),
below.
(vii)
“Stock
Price” means the average of the closing price of the
Common
Stock over the five trading days prior to the date
on
which Licensor
may
first sell Shares
pursuant
to Rule 144 under the Securities Act. For the avoidance of doubt this is the
first day not being a Saturday or Sunday after the day on which the Shares
are
received by Licensor.
(viii)
“U.S.” means the United States of America.
(ix)
“Valuation Date” means the fifth day after the date
on
which Licensor
may
first sell the
Shares pursuant
to Rule 144 under the Securities Act. For the avoidance of doubt this is the
first day not being a Saturday or Sunday after the day on which the Shares
are
received by Licensor.
(x)
“US$”
means the currency of the U.S.
(b)
In
consideration for the grant of the License, Licensee
shall
issue Shares
to
Licensor
or its
designees (all of which shall be subject to the applicable provisions of this
Agreement relating to Shares) upon the execution of this Agreement. Licensee
may be
obligated to deliver to Licensor
Additional Shares pursuant to Section
5.1(c) below.
(c)
In
the event that the Actual Value of the Shares is less than Ascribed Value on
the
Valuation Date (“Deficiency”), Licensee
shall
deliver to Licensor
within 5 days of the Valuation Date,
cash
and/or Additional Shares in an amount equal to the difference between the
Ascribed Value and the Actual Value. The mix of cash and shares of Common Stock
which Licensee
is
required
to deliver to Licensor
to
offset any Deficiency
shall be in the sole discretion of Licensee.
To the
extent that Licensee
issues
shares of Common Stock to offset any portion of the
Deficiency,
Licensee
shall
deliver to Licensor
a number
of Additional Shares as shall be calculated by dividing the US$
amount
of the Deficiency to be paid by the issuance of shares
of Common
Stock by the Stock Price. Any Common Stock delivered to Licensor under this
Section 5.1.(c)
shall
be subject to the provisions of this Section 5.1
and
Sections 9.9, 10.9 and 12 below and all of the representations, warranties
and
covenants of Licensor
and
Licensee
with
respect to the Shares included elsewhere in this Agreement.
(d)
Licensee shall pay all costs and expenses related to (to be paid by Licensee
within 5 days of the completion of the visit) a visit by an officer of Licensor
to Licensee’s offices in Calgary, Canada to be undertaken before the end of the
month of February 2005. Licensee shall make available suitably senior personnel
during regular business hours during the visit to meet with the officer of
Licensor.
5.2. Compensation
for Services.
In
consideration of and as complete compensation for the
Alladdin
Services
Licensee
shall:
(a)
pay
to Licensor or ALL
or their
designees
a sum
equal to 2% of all card deposits run under the Barclaycard Business
merchant
accounts
designated as GeLotto ID 2806107 and Rehab ID 2201036 (“Card
Deposits”),
said
payment to be made the 10th
day of
each month. Licensee
guarantees a minimum payment of US$8,000
per
month ("Minimum Payment") to Licensor
or
ALL
or their
designees
in
connection with procuring
the
Alladdin
Services and
that
in the event that 2% of Card
Deposits
equals
more than the Minimum
Payment in
any
month, Licensee
shall
pay to Licensor
the
amount of any such difference by the 5th
day of
the
following month. All monetary amounts payable under this Section 5.2(a) are
net
of any VAT which may be added if appropriate, and, if added, the VAT amount(s)
shall be billed on a proper tax invoice. Licensor or its designees may charge
Licensee daily interest on late payment of amounts due under this Section
5.2.(a) (both before and after judgment) at a rate of 5% per annum above the
Bank of England Base Rate (as at the date the payment was due), from the due
date until the date of actual payment. If Licensee fails to pay amounts due
to
Licensor or its designees under this Section 5.2(a) by the due date, Licensee
shall reimburse Licensor or its designees all reasonable expenses incurred
by
Licensor or its designees in recovering such amount. The
Minimum Payment shall be recalculated every 31st January, 30th April, 31st
July
and 31st October by multiplying GBP4,200 by the spot US$/GBP foreign exchange
rate quoted by Investec Bank (UK) Limited, or such other bank as the Parties
may
determine, at noon on said dates and rounded up to the nearest US$. For
the
avoidance of doubt, any foreign exchange or other banking fees or expenses
which
may be charged to Licensor in the event that any payment is received by Licensor
in a currency other than GBP shall be immediately reimbursed to Licensor by
Licensee;
and
(b)
upon
the execution hereof, issue to Licensor
or its
designees warrants
(“the
Warrants”)
to
purchase up to two
hundred
thousand (200,000)
shares
of Common Stock on
terms
and conditions no
less
favorable than
the most
favorable terms and conditions of warrants
to
purchase Common
Stock
granted
by Licensee
to its
management
or any
other third party
and the
anti dilution provisions of which shall apply and operate from the date hereof
and not the date of issue of the Warrants, if later.
5.3. Survival
Upon Termination.
This
Section 5 shall survive the expiry or earlier termination of this
Agreement.
SECTION
6. TERMINATION
6.1. Termination.
(a)
Termination
by Licensee.
(i)
License.
The
consideration paid for the License as
described in Section 5.1 above
is
tendered in full payment for the License
and the License
may be
terminated only in accordance with Section 6.1.(b) below.
(ii) Alladdin
Services.
If
Licensor or ALL is
in
material breach of
its
obligations to
provide the Alladdin Services
and such
breach
continues for thirty (30)
days
after written notice served by Licensee specifying in reasonable detail the
basis thereof, Licensee's obligation to make payments under Section
5.2(a) above
shall be
suspended during the period beginning thirty (30)
days
after the delivery of such notice to Licensor and ending when such breach
has been cured by Licensor or ALL in all respects. In the event that Licensor
or
ALL
effects
a
cure of any material breach Licensee shall immediately make the payments
previously suspended, subject to a right of set-off for any amounts paid during
such time as Licensor or ALL failed to provide the Alladdin Services. In the
event that Licensor or
ALL
is
unable
to cure any material
breach
within ninety (90)
days
of
the notice described in the foregoing sentence, Licensee
may
serve notice in writing on Licensor terminating the provision of the Alladdin
Services and Licensee's
obligation to make payments for
the
Alladdin Services.
(iii)
NMLS
Services.
Licensee may by serving notice in writing on Licensor terminate the NMLS
Services (i) if Licensor becomes bankrupt or insolvent or is unable to pay
its
debts or enters into compulsory or voluntary liquidation other than for the
purpose of any corporate restructuring or reorganisation not in consequence
of
debt or compounds with or convenes a meeting of its creditors or has a receiver
or manager or an administrative receiver or an administrator is appointed over
its assets or ceases for any reason to carry on business or takes or suffers
any
similar or analogous action in any jurisdiction of the Territory
or (ii)
by reason of the operation of Section 6.1(a)(ii) above, in which cases, for
the
avoidance of doubt, Licensee shall adhere to the Migration Plan as set out
in
Section 6.3 below.
(b)
Termination
by Licensor or ALL.
(i)
License.
Licensor or ALL may by serving notice in writing on Licensee terminate the
License if:
(A) Licensee
fails to comply within thirty (30) days of the date of performance with any
of
the provisions set out in Section 5.1 above; and
(B) Licensee
is in material breach of any obligation in this Agreement relating to the
License (including those set out in Section 2 above and Section 8 below) and
fails to remedy such breach (if capable of remedy) within thirty (30) days
of a
written notice served by Licensor or ALL specifying the breach.
(ii)
Alladdin
Services. (A).
In
the event that Licensee fails to perform any of Licensee’s obligations set out
in Section 5.2 above within thirty (30) days of the date due for
performance,
Licensor or ALL shall be entitled by
serving notice in writing on Licensee to suspend performance of the Alladdin
Services (but without prejudice to Licensee’s obligations to pay the
consideration under Section 5.2 above) until such time as Licensee performs
such
obligation. If Licensee fails to perform any of such obligations, within a
period of ninety (90) days of the date due for performance, Licensor
or ALL shall be entitled by
serving notice in writing on Licensee to terminate the rendering of the Alladdin
Services.
(B)
If
a
Development is deployed which contravenes or in Licensor’s or ALL’s reasonable
opinion may contravene any law, regulation or other rule or code of conduct
in
Great Britain, Licensor or ALL shall be entitled by serving notice in writing
on
Licensee to suspend performance of the Alladdin Services (but without prejudice
to Licensee’s obligations to pay the consideration under Section 5.2 above)
until the Development has been removed. If it has not been removed within ninety
(90) days of the date of being deployed, Licensor or ALL shall be entitled
by
serving notice in writing on Licensee to terminate the rendering of the Alladdin
Services.
(C)
If
a
claim is
asserted or any Legal Proceeding is commenced
against
Licensor or Licensee alleging that any Development infringes or has infringed
any Proprietary Right of any Person, Licensor or ALL shall be entitled by
serving notice in writing on Licensee to suspend performance of the Alladdin
Services (but without prejudice to Licensee’s obligations to pay the
consideration under Section 5.2 above) until such time as the claim or Legal
Proceeding is settled. If the claim or Legal Proceeding is not settled within
ninety (90) days of having been commenced, Licensor or ALL shall be entitled
by
serving notice in writing on Licensee to terminate the rendering of the Alladdin
Services.
(iii) NMLS
Services.
Licensor or ALL may by serving notice in writing on Licensee terminate the
NMLS
Services if:
(A) Licensee
is in material breach of any obligation in this Agreement relating to the NMLS
Services (including those set out in Sections 4 or Schedule C) or in breach
of
any obligation in Section 5 and fails to remedy such breach (if capable of
remedy) within ninety (90) days of a written notice served by Licensor or ALL
specifying the breach; or
(B) Licensee
becomes bankrupt or insolvent or is unable to pay its debts or enters into
compulsory or voluntary liquidation other than for the purpose of any corporate
restructuring or reorganisation not in consequence of debt or compounds with
or
convenes a meeting of its creditors or has a receiver or manager or an
administrative receiver or an administrator is appointed over its assets or
ceases for any reason to carry on business or takes or suffers any similar
or
analogous action in any jurisdiction of the Territory.
6.2. Consequences
of Termination.
(a) If
the
License terminates for any reason, Licensee shall immediately cease to Use
or
Enhance the Software and/or any Developments and shall deliver to Licensor
within ten (10) days of the date of such termination (by physical delivery
or
electronic transmission): one (1) copy of the source code of the most current
version of the Software (whether the Original Version or the Re-written Version)
and of any Developments in computer readable form; and one (1) copy of
documentation and operating instructions for the Software altered by any
Developments. The remedies of Licensor or ALL pursuant to this Section
6.2(a)
are not
exclusive and shall not limit or otherwise affect any of the rights or remedied
otherwise
available to Licensor or ALL granted
by law
and under this Agreement, including recovery of damages.
(b) Sections
of this Agreement which are expressed or intended to survive termination of
this
Agreement (in whole or in part) shall survive.
(c) The
termination of this Agreement howsoever caused shall not affect the rights
and
obligations of the Parties that have accrued prior to termination.
6.3 Migration
Plan.
(a)
Licensee acknowledges that Licensor may wish to have continuity of the NMLS
Services following termination of the NMLS Services (for whatever reason).
Licensee agrees to co-operate with Licensor and/or any new service provider
appointed by Licensor to provide the NMLS Services or any part of them (“New
Service Provider”) to ensure smooth migration and continuity of the NMLS
Services during the Migration Period.
(b)
For
the purposes of this Section 6.3, “Migration Period” means the period commencing
on the date one Party gives written notice to the other terminating this
Agreement and/or the NMLS Services and shall end on the date the NMLS Services
have been successfully migrated or (if later) ninety (90) days after the date
of
the notice.
(c)
As
part of the migration, and to the extent reasonably required by Licensor,
Licensee shall:
|
(i)
|
perform
the NMLS Services up to the end of the Migration Period in accordance
with
this Agreement;
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(ii)
|
provide
a comprehensive list of tasks and/or issues outstanding (if any)
at the
end of the Migration Period;
|
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(iii)
|
provide
any technical assistance reasonably required by Licensor and/or New
Service Provider to enable the smooth migration of the NMLS Services;
and
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(iv)
|
promptly,
on request, do all other things and acts that may reasonably be required
to ensure a smooth migration of the NMLS
Services.
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(d)
As
part of the migration, and to the extent reasonably required by Licensee,
Licensor shall promptly, on request, do all other things and acts that may
reasonably be required to ensure a smooth migration of the NMLS
Services.
SECTION
7. ADDITIONAL
OBLIGATIONS OF THE PARTIES
7.1. Technical
Assistance.
Licensor
shall make itself available to Licensee (at reasonable times and locations
and
upon reasonable notice), to consult with, instruct, and assist Licensee
and Affiliated
Companies with respect to the Use
of
the Software. Licensee shall make itself available to Licensor and its designees
(at reasonable times and locations and upon reasonable notice), to consult
with,
instruct, and assist Licensor and its designees with respect to the Use of
Developments.
7.2. Confidentiality.
The
Parties and each of their respective employees, agents and representatives
shall
keep strictly and permanently confidential all information obtained in
connection with this Agreement and the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, neither Licensor,
ALL, Licensee nor any of their respective employees, agents and representatives
shall use or disclose to any other Person (i) any non-public
information regarding the business operations or financial or other affairs
of
the
Parties
or
(ii)
any of
the terms and provisions of this Agreement.
This
Section 7.2 shall survive the expiry or earlier termination of this Agreement
for a period of two years from such termination.
SECTION
8. CLAIMS
AND LEGAL PROCEEDINGS
8.1. Infringement
Claims.
If any
claim is asserted or any Legal Proceeding is commenced against either
Party
that the
Software
and/or
Developments or their Use or Enhancement
infringes or has infringed any Proprietary
Right of any Person (each an “Infringement Claim”), then the defense of such
Infringement Claim shall be under the control of the Party responsible for
it as
defined in Section 8.2 (the “Responsible Party”).
8.2. Responsible
Party.
(a) Infringement
Claims relating only to the Original Version of the Software or the Alladdin
Materials (as defined in Schedule C below) shall be the responsibility of
Licensor;
(b) Infringement
Claims relating only to the Re-written Version of the Software and/or
Developments shall be the responsibility of Licensee;
(c) other
Infringement Claims shall be the joint responsibility of the Parties and dealt
with in accordance with Section 8.5 (a “Joint Responsibility
Claim”).
8.3. Claims
brought against non-Responsible Party.
If the
Infringement Claim (other than a Joint Responsibility Claim) is made against
the
Party who is not the Responsible Party, the other Party (the “Other
Party”)
shall
immediately provide the
Responsible Party
with
written notice of the assertion of such Infringement
Claim
and
shall immediately furnish to the
Responsible Party
copies
of all correspondence, pleadings and other materials relating to such claim
or
Legal Proceeding. The
Responsible Party shall assume the defense of any such claim
or
Legal Proceeding,
and the
following provisions shall apply:
(a)
the
Responsible Party
shall
have the exclusive right to control the defense of such Infringement
Claim
with
counsel of its own choosing;
(b)
the
Other
Party
shall,
at the
Responsible Party’s reasonable
expense,
provide the
Responsible Party
with
such information and assistance as the
Responsible Party
may
request regarding such Infringement
Claim;
(c)
the
Other Party
shall
not enter into any settlement with respect to such Infringement
Claim
without
the consent of the
Responsible Party;
(d)
the
amount payable to the complaining party in connection with any settlement of
such Infringement
Claim,
and the
amount of any damages or costs awarded to the complaining party by any court,
arbitrator, or other trier of fact, shall be borne and paid exclusively by
the
Responsible Party;
(e)
all
reasonable expenses incurred by the
Other
Party
in
connection with such Infringement
Claim
(including costs of investigation and attorneys' fees, only
where
incurred
in
respect of such Legal Proceeding where these have been incurred
after
the commencement of any such Legal Proceeding) shall be borne and paid
exclusively
by the
Responsible Party.
8.4. Claims
brought against Responsible Party.
If the
Infringement Claim (other than a Joint Responsibility Claim) is made against
the
Responsible Party, then:
(a) the
other
Party (the “Other Party”)
shall,
at the
Responsible Party’s reasonable
expense,
provide the
Responsible Party
with
such information and assistance as the
Responsible Party
may
reasonably
request
for the purpose of enabling the
Responsible Party
to
defend such Infringement
Claim;
(b) the
Responsible Party
shall
have the exclusive right to control the defense of such Infringement
Claim
with
counsel of its own choosing, and shall have the exclusive right to settle such
Infringement
Claim
(without
the need to obtain any consent or approval of the
Other
Party
or any
other Person and provided that such settlement forecloses the possibility of
future action as to any matter settled against the Other Party) on such terms
as
the
Responsible Party,
in its
discretion, determines to be appropriate;
(c) the
amount payable to the complaining party in connection with any settlement of
such Infringement
Claim,
and the
amount of any damages or costs awarded to the complaining party by any court,
arbitrator or other trier of fact, shall be borne and paid exclusively by
the
Responsible Party;
(d) all
reasonable expenses incurred by the
Responsible Party
in
connection with such Infringement
Claim
(including costs of investigation and attorneys' fees, whether incurred before
or after the commencement of any such Legal Proceeding) shall be borne and
paid
exclusively by the
Responsible Party.
8.5. Joint
Responsibility Claims.
If a
Joint Responsibility Claim is brought, then:-
(a) if
the
Joint Responsibility Claim is brought against Licensee, Licensee shall
immediately provide Licensor with written notice of the assertion of such
Infringement Claim and shall immediately furnish to Licensor copies of all
correspondence, pleadings and other materials relating to the Infringement
Claim;
(b) Licensor
shall control the defense of such Infringement Claim with counsel of its own
choosing;
(c) Licensor
and Licensee shall always consult fully with each other and obtain the other
Party’s prior written approval (not to be unreasonably withheld or delayed)
before taking any material step in relation to such actions or
proceedings;
(d) Neither
party shall settle the Infringement Claim without the other Party’s prior
written consent (such consent not to be unreasonably withheld or
delayed);
(e) Each
Party shall, at its own expense, provide all such information and assistance
as
may reasonably required for the purpose of defending the Infringement
Claim;
(f) the
amount payable to the complaining party in connection with any settlement of
such Infringement Claim, and the amount of any damages or costs awarded to
the
complaining party by any court, arbitrator or other trier of fact and all
expenses incurred by Licensor in connection with such Infringement Claim
(including costs of investigation and attorneys' fees, whether incurred before
or after the commencement of any such Legal Proceeding) shall be shared between
the Parties equally unless:-
(i) the
Infringement Claim fails in respect of the Original Version of the Software
and
the Alladdin Materials (as defined in Schedule C below) but succeeds in respect
of the Re-written Version of the Software and/or a Development, in which case
all such amounts and expenses will be borne by Licensee;
(ii) the
Infringement Claim fails in respect of the Re-written Version of the Software
and/or a Development but succeeds in respect of the Original Version of the
Software and the Alladdin Materials (as defined in Schedule C below), in which
case all such amounts and expenses will be borne by Licensor.
8.6. Survival
Upon Termination.
This
Section 8 shall survive the expiry or earlier termination of this
Agreement.
SECTION
9. LICENSOR
REPRESENTATIONS
AND WARRANTIES
Licensor
hereby represents and warrants to Licensee as follows:
9.1. Corporate
Organization.
Licensor
is duly organized,
and
validly
existing under
the
laws of England
and Wales
and has
full corporate power and authority to carry on its business as it is now being
conducted and to own the properties and assets it now owns.
9.2. Authorization.
Licensor
has full corporate power and authority to enter into this Agreement and to
carry
out the transactions contemplated hereby. The Board
of
Directors and stockholders
of
Licensor have taken all
necessary
action
required by law, their Memorandum and Articles of Association or otherwise
to be
taken by them to authorize the execution and delivery of this Agreement and
the
consummation of the transactions contemplated hereby, and
this
Agreement is a valid and binding agreement of Licensor enforceable in accordance
with its terms.
9.3. No
Violation.
Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will violate any provision of the Memorandum
and Articles of Association of Licensor, or will violate, or be in conflict
with, or constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) under, or result in the termination of,
or
accelerate the performance required by, or cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the creation or
imposition of any security interest, lien or other encumbrance upon any property
or assets of Licensor under, any agreement or commitment to which Licensor
is a
party or by which Licensor is bound, or to which the property of Licensor is
subject, or violate any statute or law or any judgment, decree, order,
regulation or rule of any court or governmental authority.
9.4. Title
to Software.
Licensor owns
all
legal
and
beneficial
title
to
the
Software free and clear of all title defects or objections, liens, claims,
charges, security interests or other encumbrances of any nature whatsoever
including, without limitation
conditional sales contracts, collateral security arrangements and other title
or
interest retention arrangements, which would prevent Licensor from entering
into
this Agreement or consummating the transactions contemplated
hereby.
9.5. Representations
Relating to the Intellectual Property.
(a)
Licensor is the sole owner of all title and interest in the Proprietary
Rights in the Software
and has full right to grant the License.
(b)
To
the best of Licensor's knowledge: (i) the Software does not infringe nor
conflict with any Proprietary Right or other right of any Person and;
(ii)
neither
Licensor nor
any
other Person
has
received any written notice
alleging
that the Software infringes or conflicts with, or will infringe or conflict
with, any Proprietary Right or other right of any Person, and there is no basis
for the assertion of any such claim.
(c)
To
the best of Licensor's knowledge, the Use
of the
Software will not require the unauthorized use of any Proprietary
Right,
and,
without having conducted any special investigation,
such use
will not involve infringement or claimed infringement of
any
Proprietary Right of any Person.
9.6. Litigation.
There
are
no
Legal Proceedings
pending
or threatened against or involving Licensor or which questions or challenges
the
validity of this Agreement or any action taken or to be taken by Licensor
pursuant to this Agreement or in connection with the transactions contemplated
hereby; nor is there and Licensor does not know or have any reason to know
of
any valid basis for any such Legal
Proceeding.
9.7. Consents.
No
consent of any Person
not
being a Party is necessary to the consummation of the transactions contemplated
by
this
Agreement,
including, without limitation, consents from parties to loans, contracts, leases
or other agreements and consents from national or local government or any agency
thereof.
9.8. Non-contravention.
Neither
the execution and delivery of this Agreement nor the performance of this
Agreement will result (with or without notice or lapse of time) in (i) a
violation of any law, rule, regulation, judgment, order, or decree to which
Licensor or the Software is subject; or (ii) a breach or violation of any
agreement or understanding (whether oral, written, express, or implied) to
which
Licensor is a party or by which Licensor is bound.
9.9. Representations
Relating to the Securities.
(a)
Legend
on Certificates Evidencing the Securities.
(i)
Licensor acknowledges and agrees, and shall to
the
extent required by law cause
each Person
to whom
Securities are issued or transferred to acknowledge and agree, that the
Securities are “restricted
securities”
as
defined by Rule 144 of the Rules and Regulations promulgated under the
U.S. Securities
Act of 1933, as amended (the “Securities Act”), and that each certificate
evidencing the Securities
shall be
imprinted with a restrictive legend substantially in the following
form:
"“[NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE/CONVERSION OF THESE
SECURITIES HAVE BEEN REGISTERED] THESE
SECURITIES HAVE NOT BEEN REGISTEREDWITH
THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE
IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.”
(ii)
Licensor acknowledges and agrees, and shall cause each Person
to whom
Securities are issued or transferred to
acknowledge and agree, that
such
Securities
may be
disposed of only pursuant to an effective registration statement under the
Securities Act or pursuant to an available exemption from or in a transaction
not subject to the registration requirements thereof;
and
(iii)
in
connection with any transfer of any Securities other than pursuant to an
effective registration statement, Licensee
may require
the transferor thereof to provide to Licensee with an opinion of counsel
selected by the transferor, the form and substance of which opinion shall be
reasonably satisfactory to Licensee, to the effect that such transfer does
not
require registration under the Securities Act. Licensee shall not be obligated
to register or recognize any transfer of Securities if such transfer is not
affected as provided in this Section 9.9 and shall not be liable to any party
other than Licensor in connection therewith.
9.10 Full
Disclosure.
This
Agreement does not in relation to the Software or Licensor contain any untrue
statement of fact or omit to state any fact necessary to make any of the
representations or any of the other statements or information contained in
this
Section 9 or therein not misleading.
9.11 Survival
Upon Termination.
This
Section 9 shall survive the expiry or earlier termination of this
Agreement.
SECTION
10. LICENSEE
REPRESENTATIONS AND WARRANTIES
Licensee
hereby represents and warrants to Licensor as follows:
10.1. Corporate
Organization.
Licensee is duly organized, validly existing and in good standing under the
laws
of the U.S. State of Delaware and has full corporate power and authority to
carry on its business as it is now being conducted and to own the properties
and
assets it now owns.
10.2. Authorization.
Licensee has full corporate power and authority to enter into this Agreement
and
to carry out the transactions contemplated hereby. The Board of Directors and
stockholders of Licensee have taken all necessary action required by law, its
Certificate of Incorporation, By-Laws or otherwise to be taken by them to
authorize the execution and delivery of this Agreement and the consummation
of
the transactions contemplated hereby, including the issue of the Securities
and
this Agreement is a valid and binding agreement of Licensee enforceable in
accordance with its terms.
10.3. No
Violation.
Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby including the issue of the Securities will
violate any provision of the Certificate of Incorporation or By-Laws of
Licensee, or, will violate, or be in conflict with, or constitute a default
(or
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
required by, or cause the acceleration of the maturity of any debt or obligation
pursuant to, or result in the creation or imposition of any security interest,
lien or other encumbrance upon any property or assets of Licensee under, any
agreement or commitment to which Licensee is a party or by which Licensee is
bound, or to which the property of Licensee is subject, or violate any statute
or law or any judgment, decree, order, regulation or rule of any court or
governmental authority.
10.4. Title
to Developments.
At the
time of any transfer of a Development to Licensor, Licensee will have good,
valid and marketable title to such Development free and clear of all title
defects or objections, liens, claims, charges, security interests or other
encumbrances of any nature whatsoever including, without limitation leases,
chattel mortgages, conditional
sales contracts, collateral security arrangements and other title or interest
retention arrangements, which would prevent Licensee from entering into this
Agreement or consummating the transactions contemplated hereby.
10.5. Representations
Relating to the Intellectual Property.
(a)
Licensee will be the sole owner or will obtain sole ownership of all title
and
interest in the Re-written Version of the Software and the Developments (subject
to the rights of Licensor in the Original Version of the Software) and will
have
full right to grant to Licensor the license described in Section 2.5(c),
above.
(b)
the
Re-written Version of the Software and/or Developments will not infringe nor
conflict with any Proprietary Right or other right of any Person and there
will
be no basis for the assertion of any such claim.
(c)
The
Use and Enhancement of the Re-written Version of the Software and/or
Developments will not require the unauthorized use of any Proprietary Right,
and
such use will not involve infringement or claimed infringement of any
Proprietary Right of any Person.
10.6. Litigation.
There
are no Legal Proceedings pending or threatened against or involving Licensee
or
which questions or challenges the validity of this Agreement or any action
taken
or to be taken by Licensee pursuant to this Agreement or in connection with
the
transactions contemplated hereby; nor is there and Licensee does not know or
have any reason to know of any valid basis for any such Legal
Proceeding.
10.7. Consents.
No
consent of any Person not
being
a Party is
necessary to the consummation of the transactions contemplated by this
Agreement, including, without limitation, consents from parties to loans,
contracts, leases or other agreements and consents from national or local
government or any agency thereof.
10.8. Non-contravention.
Neither
the execution and delivery of this Agreement nor the performance of this
Agreement will result (with or without notice or lapse of time) in (i) a
violation of any law, rule, regulation, judgment, order, or decree to which
Licensee or any Development is subject; or (ii) a breach or violation of any
agreement or understanding (whether oral, written, express, or implied) to
which
Licensee is a party or by which Licensee is bound.
10.9. Representations
Relating to Securities.
(a)
Only
class of shares. Common Stock is the only class of equity securities authorized
and issued by Licensee;
and
(b)
The
Securities have been duly authorized and when issued in accordance with the
terms of this Agreement will be duly and validly issued and outstanding, fully
paid and non-assignable and will not have been deemed in violation of any
pre-emptive rights of any person.
10.10. Full
Disclosure.
This
Agreement does not in relation to Licensee contain any untrue statement of
fact
or omit to state any fact necessary to make any of the representations or any
of
the other statements or information contained in this Section 10 or therein
not
misleading.
10.11. Survival
Upon Termination.
This
Section 10 shall survive the expiry or earlier termination of this
Agreement.
SECTION
11.
LIMITATION OF LIABILITY
11.1 Alladdin
Services.
(a) Subject
to Section 11.4 below, neither Licensor, ALL, nor any Affiliated Company of
Licensor or of ALL, shall be liable for:-
(i) any
loss
of anticipated savings, loss of business, loss of profits, loss of revenue,
and/or
(ii) any
loss
of availability, business interruption, loss of or corruption of data;
and/or
(iii) any
additional operational and/or administrative costs and expenses; or
(iv) any
indirect or consequential loss or damage;
arising
out of or in connection with the Alladdin Services and all such liability is
hereby excluded howsoever arising whether arising in contract, in tort
(including in negligence), for breach of statutory duty or
otherwise.
(b)
Subject to Section 11.4 below, the maximum aggregate combined liability of
Licensor, ALL and any Affiliated Company of Licensor or ALL to Licensee or
any
Affiliated Company of Licensee howsoever arising (whether arising in contract,
tort (including negligence) or otherwise) in connection the Alladdin Services
relating to events in any calendar year shall not exceed the aggregate of the
consideration paid or payable to Licensor by Licensee under Section 5.2(a)
during such year.
11.2. NMLS
Services.
(a)
Subject to Section 11.4 below, neither Licensee nor any Affiliated Company
of
Licensee shall be liable for:-
(i) any
loss
of anticipated savings, loss of business, loss of profits, loss of revenue,
and/or
(ii) any
loss
of availability, business interruption, loss of or corruption of data;
and/or
(iii) any
additional operational and/or administrative costs and expenses; or
(iv) any
indirect or consequential loss or damage;
arising
out of or in connection with the NMLS Services and all such liability is hereby
excluded howsoever arising whether arising in contract, in tort (including
in
negligence), for breach of statutory duty or otherwise.
(b)
Subject to Section 11.4 below, the maximum aggregate combined liability of
Licensee and any Affiliated Company of Licensee to Licensor or any Affiliated
Company of Licensor howsoever arising (whether arising in contract, tort
(including negligence) or otherwise) in connection with the NMLS Services
relating to events in any calendar year shall not exceed the aggregate of the
consideration paid or payable to Licensor by Licensee under Section 5.2(a)
during such year.
11.3. Force
Majeure.
Neither
of the Parties will be liable for or be regarded as being in breach of any
of
the provisions of this Agreement by reason of any failure to perform any
obligation under this Agreement, if such failure is the direct or indirect
result of any cause beyond its reasonable control including, without limitation:
Act of God; refusal, failure to grant, suspension or withdrawal of any
governmental license or consent or any other act or omission of any government
(including any change in law or regulation in the Territory); fire, floods,
storms; explosion; breakdown of machinery or act of terrorism. In any such
case,
the Party claiming the benefit of this Section will notify the other Parties
of
the existence of the delay, and such notifying Party will use due diligence
to
remove the cause of such delay and take reasonable steps to resume performance
as soon as possible. If performance is not achieved within three (3) months,
either of the other Parties may terminate this Agreement by service notice
in
writing on the other Parties.
11.4. Certain
Exceptions.
Nothing
in this Agreement excludes or limits liability for death or personal injury
caused by negligence nor for fraudulent misrepresentation.
11.5. Survival
Upon Termination.
This
Section 11 shall survive the expiry or earlier termination of this
Agreement.
SECTION
12. REGISTRATION
RIGHTS
12.1(a)
If
Licensee at any time proposes to register the offer and sale of any of its
securities under the U.S. Securities
Act of 1933, as amended (the “Securities
Act”) (other than on a Registration Statement filed under the Securities Act on
Form S-8 or S-4 or any similar or successor forms), whether or not for sale
for
its own account, it will each such time give at least thirty (30) days prior
written notice (the "Notice") to Licensor (so long as Licensor or its designees
still own any Securities, which, for purposes of this Section are referred
to
collectively as the “Registrable Securities”) of its intention to file a
Registration Statement under the Securities Act and of their rights under this
Section 12. Upon the written request of Licensor made within twenty (20) days
of
the date of the Notice (which request shall specify the aggregate number of
Registrable Securities which Licensor wishes to be registered and will also
specify the intended method of disposition thereof, if any), Licensee will
effect the registration under the Securities Act of all securities which
Licensee has been so requested to register by Licensor (an “Incidental
Registration”); provided, that if, any time after giving written notice of its
intention to register securities and prior to the effective date of the
Registration Statement filed in connection with such registration, Licensee
shall determine for any reason not to register any of Licensee’s securities,
Licensee shall give written notice of such determination to Licensor and,
thereupon, shall be relieved of its obligation to register any securities in
connection with such registration (but not from its obligation to pay the
registration expenses incurred prior to the date of Licensee’s determination in
connection therewith). The Licensee will pay all expenses in connection with
any
Incidental Registration other than any underwriting discounts or commissions
with respect to securities sold by Licensor. Licensor may not participate in
any
underwritten registration unless Licensor (i) agrees to sell its securities
on
the basis provided in any underwriting arrangements approved by the persons
who
have selected the underwriter and (ii) accurately completes in a timely manner
and executes all questionnaires, powers of attorney, underwriting agreements,
escrow agreements, indemnification agreements and other documents customarily
required under the terms of such underwriting arrangements; it being understood
and agreed that, Licensor shall not be obligated to make any representation
or
warranty or to agree to any covenant or obligation (including “lockups” and
other similar restrictions) which are not imposed upon or otherwise obtained
from all other participating security holders (other than officers and employees
of Licensee).
(b)
Only
in the event that any registration of the Licensee’s securities is made pursuant
to or in connection with an agreement with Persons other than Licensee
Affiliated Companies who have invested in excess of an aggregate of US$2,500,000
in the Licensee or the Licensee Affiliated Companies and such Persons do not
approve the inclusion of the Registrable
Securities in any such Registration Statement, Licensee shall be entitled to
exclude the Registrable
Securities from such Registration Statement.
12.2. Licensee
agrees that until a period of two (2) years after Licensor has exercised the
last of its Warrants Licensee will make publicly available the information
required by Rule 144(c) of the Securities Act.
12.3. Licensor
agrees to comply with all relevant provisions of US securities laws and any
reasonable requirements of Licensee in connection with the sale of the
Registrable
Securities
registered on Licensor’s behalf.
SECTION
13. MISCELLANEOUS
PROVISIONS
13.1. Notices.
Any
notice, demand, consent, request, or other communication required or permitted
to be delivered under
this Agreement
to
either Party
(“Receiving Party”)
shall
be in writing and shall be deemed properly delivered, given, and received on
the
earlier of (i) the date of actual delivery of such notice, demand, consent,
request, or other communication to the Receiving
Party
at the
address set forth beneath the name of the Receiving
Party
below
(or at such other address as the Receiving
Party
shall
have specified in a written notice delivered to the other Party);
or
(ii) the date four
business
days after the date on which such notice, demand, consent, request, or other
communication is deposited in the mail
as
registered or certified mail, postage prepaid, with return receipt requested,
addressed to the Receiving
Party
at the
address set forth beneath the name of the Receiving
Party
below
(or at such other address as the Receiving
Party
shall
have specified in a written notice delivered to the other Party):
Licensor:
Alladdin
Limited
00
Xx
Xxxxx’x Xxxxxx
Xxxxxx
XX0X 0XX
Attn.:
Mr
Andrew della Casa
Facsimile:
(44)
(000) 000 0000
Copied
to: Mr
Andrew
della Casa, 00 Xxxxxxx Xxxxxx, Xxxxxx XX00 0XX
ALL:
Alladdin
Lotteries Limited
00
Xx
Xxxxx’x Xxxxxx
Xxxxxx
XX0X 0XX
Attn.:
Mr
Andrew della Casa
Facsimile:
(44)
(000) 000 0000
Copied
to: Mr
Andrew
della Casa, 00 Xxxxxxx Xxxxxx, Xxxxxx XX00 0XX
Licensee:
New
Media
Lottery Services, Inc.
000
Xxxx
Xxxxxx
Xxxxx
X
Xxxxxxxxxxxx,
XX 00000
Attn.:
Xx. Xxxxxxxx Xxxxxxxx
Facsimile:
(1)
(000)
000 0000
Copied
to: Mr
W Ruffa,
Ruffa & Ruffa, 000 Xxxx 00 Xxxxxx, Xxx Xxxx 00000
13.2. Headings.
The
underlined headings contained in this Agreement are for convenience of reference
only, shall not be deemed to be a part of this Agreement and shall not be
referred to in connection with the construction or interpretation of this
Agreement.
13.3. Counterparts.
This
Agreement may be executed in several counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute
one agreement.
13.4. Governing
Law
and
Jurisdiction.
This
Agreement shall be construed and interpreted in accordance with, and shall
be
governed in all respects by, the laws of England
and the Parties hereby irrevocably consent and submit to the exclusive
jurisdiction of the English courts.
13.5. Assignment. (A)
Licensor may, at its election and upon three (3) months prior written notice
to
Licensee, assign any or all of its rights or delegate any or all of its
obligations under this Agreement (i) to ALL, (ii) to any of its or ALL’s
Affiliated Companies; or (iii) to any Person that acquires or otherwise succeeds
to (whether by merger, acquisition of assets, or otherwise) all or any portion
of Licensor's or ALL’s assets or business.
In the
event Licensor assigns its rights and delegates its obligations under this
Agreement as permitted by this Section 13.5(A),
Licensor
shall automatically (and without the necessity of any further action on the
part
of the
Parties)
be
fully and unconditionally released and discharged from all of its obligations
under this Agreement.
(B)
ALL
may, at its election and upon three (3) months prior written notice to Licensee,
assign any or all of its rights or delegate any or all of its obligations under
this Agreement (i) to Licensor, (ii) to any of its or Licensor’s Affiliated
Companies; or (iii) to any Person that acquires or otherwise succeeds to
(whether by merger, acquisition of assets, or otherwise) all or any portion
of
Licensor's or ALL’s assets or business.
In the
event ALL assigns its rights and delegates its obligations under this Agreement
as permitted by this Section 13.5(B),
ALL
shall automatically (and without the necessity of any further action on the
part
of the
Parties)
be
fully and unconditionally released and discharged from all of its obligations
under this Agreement.
(C)
Licensee may, at its election
and upon
three (3) months prior written notice to Licensor
and
ALL,
assign
any or all of its rights or delegate any or all of its obligations under this
Agreement (i) to any of its Affiliated Companies, or (ii) to any Person that
acquires or otherwise succeeds to (whether by merger, acquisition of assets,
or
otherwise) all or any portion of Licensee's assets or business. In
the
event Licensee assigns its rights and delegates its obligations under this
Agreement as permitted by this Section 13.5(C),
Licensee
shall automatically (and without the necessity of any further action on the
part
of the
Parties)
be
fully and unconditionally released and discharged from all of its obligations
under this Agreement.
13.6. Successors
and Assigns.
Subject
to the provisions of Section 13.5
above,
this
Agreement shall inure to the benefit of Licensor, to the benefit of ALL and
to
the benefit of Licensee.
Subject
to the provisions of Section 13.5
above,
this
Agreement shall be binding upon (a) Licensor and its successors and assigns;
(b)
ALL and its successors and assigns; and (c) Licensee and its successors and
assigns. The
provisions of this Agreement are not intended to, and shall not, provide any
rights or remedies to any sublicensee
or to
any other Person.
13.7. Severability.
In the
event that any provision of this Agreement, or the application of such provision
to any Person or set of circumstances, shall be determined to be invalid,
unlawful, void, or unenforceable to any extent, the remainder of this Agreement,
and the application of such provision to Persons or circumstances other than
those as to which it is determined to be invalid, unlawful, void, or
unenforceable, shall not be affected and shall continue to be valid and
enforceable to the fullest extent permitted by law.
13.8. Entire
Agreement.
This
Agreement sets forth the entire understanding of the Parties
with
respect to the subject matter of this Agreement and supersedes all prior
agreements,
representations
and
understandings (other
than fraudulent misrepresentations) between
the Parties
relating
to the subject matter of this Agreement.
All
implied terms, conditions and warranties (whether implied by statute, common
law, a course of dealings, or otherwise) are excluded to the maximum extent
permitted by law.
13.9 Third
Party Rights.
A
Person who is not a party to this Agreement has no right under the Contracts
(Rights of Third Parties) Xxx 0000 or otherwise to enforce any term of this
Agreement.
13.10. Waiver.
No
failure on the part of either of
the
Parties
to
exercise any power, right, privilege, or remedy hereunder, and no delay on
the
part of either of
the
Parties
in
exercising any such power, right, privilege, or remedy, shall preclude any
other
or further exercise thereof or of any other power, right, privilege, or
remedy.
13.11. Variations
of Pronouns.
Whenever
the context so requires, the singular number shall include the plural, and
vice
versa; the masculine gender shall include the feminine and neuter genders;
and
the neuter gender shall include the masculine and feminine genders.
13.12. Additional
Documents and Actions.
The
Parties agree
to
execute and deliver, or cause to be executed and delivered, such agreements,
instruments, and documents (including, without limitation, a memorandum of
license suitable for recording in the U.S. Patent and Trademark Office and
satisfactory in form and substance to the
submitting Party),
and to
take such other actions, as a
Party
reasonably determines to be necessary or appropriate for the purpose of
effectuating, evidencing, implementing, or facilitating the consummation of
any
of the transactions contemplated by this Agreement or for the purpose of
enabling a
Party
to
enforce any of its rights under this Agreement.
13.13. Non-exclusivity.
The
rights and remedies of the
Parties
under
this Agreement are not exclusive of or limited by or in limitation of any other
rights or remedies (including, without limitation, any rights of set off) which
the
Parties
may
have, whether at law, in equity, by contract
or otherwise, all of which shall be cumulative. Without limiting the generality
of the foregoing, the rights and remedies of the
Parties
under
this Agreement, and the obligations and liabilities of the
Parties
under
this Agreement, are in addition to their respective rights, remedies,
obligations, and liabilities under the law of unfair competition,
misappropriation of trade secrets, and the like. This Agreement does not limit,
and is not limited by, the terms of any covenant not to compete, employment,
confidentiality, invention, or similar agreement which the
Parties
may
contemporaneously herewith or hereafter enter into.
SCHEDULE
A
Documentation
1. Documents
forming Documentation:
|
1.
|
Lottery-Interfaces-Database
|
|
2.
|
Business
Process Diagrams
|
|
3.
|
Draft
Functional Spec
|
|
4.
|
Lottery-Server-Environment
|
|
5.
|
Draw
Procedures
|
|
2.
|
For
the purposes of Section 2.3 above, a copy of the Documentation has,
as of
the date of this Agreement, been delivered to Licensee by
Licensor.
|
SCHEDULE
B
Alladdin
Services
Ongoing
activity undertaken by Alladdin in respect of NMLS
|
1.
|
Regulatory
responsibility for Rehab UK, OldOppos, Xxxxxx-eÔ
|
|
2.
|
Reconciliations
- Rehab Lotteries, Rehab UK, OldOppos, Xxxxxx-eÔ
|
|
3.
|
Gaming
Board returns - OldOppos/Xxxxxx-eÔ,
Rehab UK
|
|
4.
|
Beneficiary
relationship management - 2 charities (Rehab Lotteries, Rehab UK),
12
charities (Xxxxxx-eÔ),
4 charities
(OldOppos)
|
|
5.
|
Beneficiary
receipts - 1 charity (Rehab UK), 12 charities
(Xxxxxx-eÔ),
4 charities (OldOppos)
|
|
6.
|
merchant
ID accounts management
-
GeLotto ID 2806107 and Rehab ID
0000000
|
|
7.
|
bank
and bank accounts management - for above
lotteries/societies
|
|
8.
|
sales
reports for above lotteries in accordance with applicable
law
|
|
9.
|
withdrawal
processing and management - Euro and GBP, all above
accounts
|
|
10.
|
advise
on statutory requirements in Britain / regulatory
management
|
|
11.
|
monitor
current sites for compliance with statutory requirements - Rehab
UK,
OldOppos, Xxxxxx-eÔ
|
|
12.
|
monitor
current Terms & Conditions for compliance with statutory requirements
- Rehab UK, OldOppos, Xxxxxx-eÔ
|
|
13.
|
monitor
UK marketing of above lotteries for compliance with statutory
requirements
|
|
14.
|
processes
monitoring and management
|
|
15.
|
liaising
with Calgary, New Jersey,
Harrisonburg
|
SCHEDULE
C
NMLS
Services
1. Definitions.
For
purposes of Section 4 and this Schedule C only, capitalized terms shall have
the
meaning set forth below:
“Alladdin
Materials” means the trade marks, colours, style, graphics, and other aspects of
appearance owned or controlled by or licensed to Licensor by its licensors
provided by Licensor to Licensee for inclusion on the Hosted Site;
“Alladdin
URL” means xxx.xxxxxx-x.xx.xx
and
xxx.xxxxxx-x.xx.xx/xxxxx/xxxxx.xxx;
“Customisation
Requirements” means the document attached as schedule one which indicates how
the Lottery Engine will be customised for Licensor;
“Database”
means the compilation of data about Users collected by Licensee whilst operating
the Hosted Site;
“Hosted
Site” means the web sites, constituting the Lottery Engine with the Alladdin
Materials, to be operated, maintained and hosted by Licensee in accordance
with
Section 4 and this Schedule C, to which the Alladdin URLs point;
“Lottery
Engine” means the Software and any Developments which are accepted by Licensor
under paragraph 2(g) below;
“Service
Level Agreement” means the service level agreement set out in Schedule
D.
“User”
means a person using the Hosted Site.
2. Operation,
Maintenance and Hosting of the Hosted Site.
(a) Licensee
shall be responsible for operating, maintaining and hosting the Hosted Site
in
accordance with the provisions of Section 4 above and this Schedule
C.
(b) Licensee
shall operate and maintain the Hosted Site to operate and provide the same
visual appearance and functionality as exists at the date of this
Agreement.
(c) Licensee
shall use reasonable endeavors to correct or make good any errors in the Hosted
Site which Licensor notifies to Licensee within a reasonable period of
time.
(d) Licensee
shall operate and host the Hosted Site on secure and virus free computer servers
operated and maintained by Licensee or its Internet service provider
sub-contractor(s) and shall be responsible for all costs associated with
hosting, operating and maintaining the Hosted Site, including all system
operation software costs, hardware costs, and network costs.
(e) Licensee
shall host, operate and maintain the Hosted Site consistent with the Service
Level Agreement and, without prejudice to this requirement, the Hosted Site
shall meet response performance standards (including but not limited to up-time
continuity and speed of processing) that are no less than those achieved for
other websites operated by Licensee. Licensee shall ensure that the Hosted
Site
is on average available on the Internet for at least the same percentage of
time
(measured over each year of the NMLS Services) as its own websites.
(f) Licensee
shall provide Licensor with as much advance warning as is reasonably possible
of
all scheduled maintenance with respect to the Hosted Site which is likely to
result in it being unavailable. Licensee shall use reasonable endeavors to
minimise the duration of any unavailability.
(g) Whenever
Licensee completes a new Development, it shall inform Licensor and if Licensor
requires, Licensee shall within a reasonable time incorporate the new
Development into the Hosted Site.
(h) Licensee
agrees to indemnify and hold Licensor and ALL harmless from and against any
and
all claims, damages and costs arising out of any claim brought by any User
or
other person arising out of a failure by Licensee to provide the NMLS Services
in accordance with this Agreement.
(i) Licensor
grants to Licensee a non-exclusive and non-transferable license to use the
Alladdin Materials on the Hosted Site throughout the Territory during the term
of the NMLS Services. Except as stated in this Section 4.3.(i), Licensee shall
not make any other use of the Alladdin Materials. The license granted in this
Section 4.3.(i) shall terminate automatically on termination of the NMLS
Services. All use of the Alladdin Materials shall inure to the sole benefit
of
Licensor.
3. Database
of Users.
(a) Licensee
shall ensure that the Database is segregated from the databases Licensee
operates for other instances of the Lottery Engine. However, Licensee is not
obliged to dedicate any separate hardware to the Hosted Site and this
segregation may be achieved on the same hardware as used by Licensee for itself
or for other licensees of Licensee. Licensee shall use reasonable endeavors
to
ensure that the data contained in the Database is kept integral and
secure.
(b) Licensee
shall not use the Database for any purpose other than as directed by Licensor,
and shall give Licensor a copy of the Database in any format reasonably
specified by Licensor on request. Licensee shall take all appropriate technical
and organisational measures against unauthorised access and loss or damage
of
any personal data within the Database.
(c) All
Proprietary Rights in the Database shall vest in Licensor.
SCHEDULE
D
Service
Level Agreement
1 INTRODUCTION
The
service levels for the NMLS Services (“Service Levels”) set out at paragraph 4
of this Schedule D will be measured over a rolling 1 month period.
Licensee
will provide the NMLS Services in accordance with these Service
Levels.
2 OBLIGATIONS
ON FAILURE
If
Licensee fails to provide the NMLS Services in accordance with the Service
Levels, Licensee shall:
|
1.1
|
notify
Licensor as soon as practicable of the failure;
and
|
|
1.2
|
take
such steps as Licensor may reasonably require to remedy the failure
including (but not limited to):
|
1.2.1 arranging
such additional personnel as are necessary to perform the NMLS Services as
soon
as practicable;
1.2.2 remedying
the failure within a timeframe specified by Licensor;
1.2.3 re-performing
any non-conforming NMLS Service; and/or
1.2.4 putting
any other reasonable measures in place to ensure that the NMLS Services are
performed in accordance with the Service Level in the future.
3 OTHER
REMEDIES
|
3.1
|
If,
during any rolling 1 month period, Licensee fails to perform a particular
part of the Service Level for more than 15 days during that 1 month
period
for reasons other than Force Majeure, then Licensor shall, in addition
to
any other remedies available to it under this Agreement, be entitled
to:
|
|
(a)
|
terminate
this Agreement and/or the NMLS Services immediately by giving written
notice to Licensee; and/or
|
|
(b)
|
procure,
at its own expense, the provision or rectification of the NMLS Services
(or part of it) from a third party which Licensee has failed to provide
to
the Service Level, in which case Licensee
shall:
|
(i) not
unreasonably refuse to manage the delivery of the NMLS Services (or part of
it)
by the third party on Licensor’s behalf; and
(ii) compensate
Licensor for any amount Licensor may be required to pay that third party for
a
period of no longer than three (3) months.
4 SERVICE
LEVELS
|
The
following table details the different classes of support for the
NMLS
Services and how Licensee will
respond.
|
|
Critical
Problem
(Priority
1)
|
Involves
fundamental functionality of Lottery Engine and/or Hosted Site (as
defined
in Schedule C), precluding productive use of Lottery Engine and/or
Hosted
Site.
|
|
Response
Time
|
Within
30 minutes during Business Hours. Best endeavours will be made outside
Business Hours.
|
|
Resolution
|
Continuous
efforts to resolve during Business Hours.
If
there is a problem with the hosting solution, Licensee will make
best
endeavours to resolve on a 24x7 basis.
These
issues will normally be resolved within 4 hours.
|
|
Significant
Problem
(Priority
2)
|
Involves
functionality of Lottery Engine and/or Hosted Site, but does not
preclude
productive use of Lottery Engine and/or Hosted Site.
|
|
Response
Time
|
Within
4 hours during Business Hours.
|
|
Resolution
|
Best
endeavours to resolve during Business Hours. These issues will normally
be
resolved within 2 business days.
|
|
Minor
Appearance or Functionality Changes
(Priority
3)
|
Does
not preclude productive use of Lottery Engine and/or Hosted
Site.
|
|
Response
Time
|
As
soon as work schedules allow.
|
|
Resolution
|
Licensee
will resolve these issues or fixes or documentation as required during
Business Hours or may implement in a Development.
|
Notes:
|
1.
|
Business
Hours are 8AM to 4PM Mountain Standard Time (Greenwich Mean Time
less 7
hours)
|
|
2.
|
Response
times quoted are start times for appropriately skilled personnel
to
commence work on resolving the support
request.
|
|
3.
|
For
Critical Problems (Priority 1) contact telephone number is 00 0
000 000 0000 x 000
during normal office hours. Outside these hours contact telephone
number
is the help desk on a 24x7 basis on the Support mobile number [xxxxxxxxxxxxxxxxx].
|
SCHEDULE
E
Form
of Warrant
NEITHER
THIS WARRANT NOR THE SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE HAVE
BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH APPLICABLE
STATE
SECURITIES OR BLUE SKY LAWS.
NEW
MEDIA LOTTERY SERVICES, INC.
WARRANT
Dated_______
2005
New
Media
Lottery Services, Inc., a corporation organized and existing under the laws
of
the State of Delaware (the "Company"), hereby certifies that, for value
received, ,
or its
registered assigns ("Holder"), is entitled, subject to the terms set forth
below, to purchase from the Company up to an aggregate of Two Hundred Thousand
(200,000) shares of Common Stock, US$0.001 par value per share (the "Common
Stock"), of the Company (each such share, a "Warrant Share" and all such shares,
the "Warrant Shares") at an exercise price equal to US$_______ per Warrant
Share
(the “Exercise Price”), at any time and from time to time on or after the date
hereof and through and including (a
period comparable to that granted to the Company’s
management)
(the
"Expiration Date"), and subject to the following terms and
conditions:
1. Registration
of Warrant.
The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the "Warrant Register"), in the name of the record
Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other purposes,
and the Company shall not be affected by notice to the contrary.
2. Registration
of Transfers and Exchanges.
(a) The
Company shall register the transfer of any portion of this Warrant in the
Warrant Register, upon surrender of this Warrant, with the Form of Assignment
attached hereto duly completed and signed, to the Company at its address for
notice specified in Section 11 along with an opinion of counsel to the Holder
reasonably acceptable to the Company that such transfer may be made without
compliance with Federal and state securities laws. Upon any such registration
or
transfer, a new warrant to purchase Common Stock, in substantially the form
of
this Warrant (any such new warrant, a "New Warrant"), evidencing the portion
of
this Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Holder. The acceptance of the New Warrant
by
the transferee thereof shall be deemed the acceptance of such transferee of
all
of the rights and obligations of a holder of a Warrant.
3. Duration
and Exercise of Warrants.
This
Warrant shall be exercisable by the registered Holder on any business day before
5:00 P.M., New York City time, at any time and from time to time on or after
the
date hereof to and including the Expiration Date. At 5:00 P.M., New York City
time on the Expiration Date, the portion of this Warrant not exercised prior
thereto shall be and become void and of no value.
4. Delivery
of Warrant Shares.
a.
To
effect exercises hereunder, the Holder shall not be required to physically
surrender this Warrant unless the aggregate Warrant Shares represented by this
Warrant is being exercised. Upon delivery of the Exercise Notice to the Company
(with the attached Warrant Shares Exercise Log) at its address for notice set
forth herein and upon payment of the Exercise Price multiplied by the number
of
Warrant Shares that the Holder intends to purchase hereunder, the Company shall
promptly (but in no event later than three Trading Days after the Date of
Exercise (both as defined herein) issue and deliver to the Holder, a certificate
for the Warrant Shares issuable upon such exercise which shall be free of
restrictive legends.
b.
"Trading Day" means (i) a day on which the Common Stock is traded on a Trading
Market (being, for the purposes of this Section, any stock exchange, market
or
trading facility on which the Common Stock is traded other than the OTC Bulletin
Board), or (ii) if the Common Stock is not listed on a Trading Market, a day
on
which the Common Stock is traded or quoted in the over-the-counter market,
as
reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted
on a Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding to its functions
of reporting prices); provided, that in the event that the Common Stock is
not
listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day
shall mean a Business Day (being, for the purposes of this Section, any day
other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed).
c.
A
"Date of Exercise" means the date on which the Holder shall have delivered
to
Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to
it),
appropriately completed and duly signed and (ii) payment of the Exercise Price
for the number of Warrant Shares so indicated by the Holder to be
purchased.
5. Payment
of Taxes.
The
Company will pay all documentary stamp taxes attributable to the issuance of
Warrant Shares upon the exercise of this Warrant; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect
of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder, and the Company shall
not
be required to issue or cause to be issued or deliver or cause to be delivered
the certificates for Warrant Shares unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that
such
tax has been paid. The Holder shall be responsible for all other tax liability
that may arise as a result of holding or transferring this Warrant or receiving
Warrant Shares upon exercise hereof.
6. Replacement
of Warrant.
If this
Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction and indemnity, if reasonably satisfactory to it. Applicants
for a New Warrant under such circumstances shall also comply with such other
reasonable regulations and procedures and pay such reasonable charges as the
Company may prescribe.
7. Reservation
of Warrant Shares.
The
Company covenants that it will at all times reserve and keep available out
of
the aggregate of its authorized but unissued Common Stock, solely for the
purpose of enabling it to issue Warrant Shares upon exercise of this Warrant
as
herein provided, the number of Warrant Shares which are then issuable and
deliverable upon the exercise of this entire Warrant, free from preemptive
rights or any other actual contingent purchase rights of persons other than
the
Holder (taking into account the adjustments and restrictions of Section 8).
The
Company covenants that all Warrant Shares that shall be so issuable and
deliverable shall, upon issuance and the payment of the applicable Exercise
Price in accordance with the terms hereof, be duly and validly authorized,
issued and fully paid and nonassessable.
8. Certain
Adjustments.
The
Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this Section
8. Upon each such adjustment of the Exercise Price pursuant to this Section
8,
the Holder shall thereafter prior to the Expiration Date be entitled to
purchase, at the Exercise Price resulting from such adjustment, the number
of
Warrant Shares obtained by multiplying the Exercise Price in effect immediately
prior to such adjustment by the number of Warrant Shares issuable upon exercise
of this Warrant immediately prior to such adjustment and dividing the product
thereof by the Exercise Price resulting from such adjustment.
(a) If
the
Company, at any time while this Warrant is outstanding, (i) shall pay a stock
dividend or otherwise make a distribution or distributions on shares of its
Common Stock (as defined below) or on any other class of capital stock (and
not
the Common Stock) payable in shares of Common Stock, (ii) subdivide outstanding
shares of Common Stock into a larger number of shares, or (iii) combine
outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock (excluding Treasury Shares, if any) outstanding
before such event and of which the denominator shall be the number of shares
of
Common Stock (excluding Treasury Shares, if any) outstanding after such event.
Any adjustment made pursuant to this Section shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after
the
effective date in the case of a subdivision or combination, and shall apply
to
successive subdivisions and combinations.
(b) In
case
of any reclassification of the Common Stock, any consolidation or merger of
the
Company with or into another person, the sale or transfer of all or
substantially all of the assets of the Company in which the consideration
therefor is equity or equity equivalent securities or any compulsory share
exchange pursuant to which the Common Stock is converted into other securities
or property, then the Holder shall have the right thereafter to exercise this
Warrant only into the shares of stock and other securities and property
receivable upon or deemed to be held by holders of Common Stock following such
reclassification, consolidation, merger, sale, transfer or share exchange,
and
the Holder shall be entitled upon such event to receive such amount of
securities or property of the Company's business combination partner equal
to
the amount of Warrant Shares such Holder would have been entitled to had such
Holder exercised this Warrant immediately prior to such reclassification,
consolidation, merger, sale, transfer or share exchange. The terms of any such
consolidation, merger, sale, transfer or share exchange shall include such
terms
so as to continue to give to the Holder the right to receive the securities
or
property set forth in this Section 8(b) upon any exercise following any such
reclassification, consolidation, merger, sale, transfer or share
exchange.
(c) If
the
Company, at any time while this Warrant is outstanding, shall distribute to
all
holders of Common Stock (and not to holders of this Warrant) evidences of its
indebtedness or assets or rights or warrants to subscribe for or purchase any
security (excluding those referred to in Sections 8(a), (b) and (d)), then
in
each such case the Exercise Price shall be determined by multiplying the
Exercise Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution by a
fraction of which the denominator shall be the Exercise Price determined as
of
the record date mentioned above, and of which the numerator shall be such
Exercise Price on such record date less the then fair market value at such
record date of the portion of such assets or evidence of indebtedness so
distributed applicable to one outstanding share of Common Stock as determined
by
a nationally recognized or major regional investment banking firm or firm of
independent certified public accountants of recognized standing (which, in
all
events, may be the firm that regularly examines the financial statements of
the
Company) (an "Appraiser") mutually selected in good faith by the holders of
a
majority in interest of the Warrants then outstanding and the Company. Any
determination made by the Appraiser shall be final.
(d) If,
at
any time while this Warrant is outstanding, the Company shall issue or cause
to
be issued rights or warrants to acquire or otherwise sell or distribute shares
of Common Stock to all holders of Common Stock for a consideration per share
less than the Exercise Price then in effect, then, forthwith upon such issue
or
sale, the Exercise Price shall be reduced to the price (calculated to the
nearest cent) determined by dividing (i) an amount equal to the sum of (A)
the
number of shares of Common Stock outstanding immediately prior to such issue
or
sale multiplied by the Exercise Price, and (B) the consideration, if any,
received or receivable by the Company upon such issue or sale by (ii) the total
number of shares of Common Stock outstanding immediately after such issue or
sale.
(e) For
the
purposes of this Section 8, the following clauses shall also be
applicable:
(i)
Record
Date.
In case
the Company shall take a record of the holders of its Common Stock for the
purpose of entitling the holders of Common Stock (A) to receive a dividend
or
other distribution payable in Common Stock or in securities convertible or
exchangeable into shares of Common Stock, or (B) to subscribe for or purchase
Common Stock or securities convertible or exchangeable into shares of Common
Stock, then such record date shall be deemed to be the date of the issue or
sale
of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case
may
be.
(ii)
Treasury
Shares.
The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition
of any such shares shall be considered an issue or sale of Common
Stock.
(f) All
calculations under this Section 8 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be.
(g) If:
(i)
the
Company shall declare a dividend (or any other distribution) on its Common
Stock; or
(ii)
the
Company shall declare a special nonrecurring cash dividend on or a redemption
of
its Common Stock; or
(iii)
the
Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights; or
(iv)
the
approval of any stockholders of the Company shall be required in connection
with
any reclassification of the Common Stock of the Company, any consolidation
or
merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, or any compulsory share exchange
whereby the Common Stock is converted into other securities, cash or property;
or
(v)
the
Company shall authorize the voluntary dissolution, liquidation or winding up
of
the affairs of the Company,
then
the
Company shall cause to be mailed to each Holder at their last address as they
shall appear upon the Warrant Register, at least 30 calendar days prior to
the
applicable record or effective date hereinafter specified, a notice stating
(x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock
of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up; provided,
however,
that
the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice.
9. Payment
of Exercise Price.
The
Holder may exercise this Warrant by tendering to the Company cash
or
certified or official bank check or checks in an amount calculated by
multiplying the Exercise Price per share by the number of Warrant Shares the
Holder desires to purchase.
10. Fractional
Shares.
The
Company shall not be required to issue or cause to be issued fractional Warrant
Shares on the exercise of this Warrant. The number of full Warrant Shares which
shall be issuable upon the exercise of this Warrant shall be computed on the
basis of the aggregate number of Warrant Shares purchasable on exercise of
this
Warrant so presented. If any fraction of a Warrant Share would, except for
the
provisions of this Section 10, be issuable on the exercise of this Warrant,
the
Company shall, at its option, (i) pay an amount in cash equal to the Exercise
Price multiplied by such fraction or (ii) round the number of Warrant Shares
issuable, up to the next whole number.
11. Notices.
Any and
all notices or other communications or deliveries hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at
the
facsimile telephone number specified in this Section 11, (ii) three business
days following the date of mailing, if sent by internationally recognized
overnight courier service, or (iii) upon actual receipt by the party to whom
such notice is required to be given. The addresses for such communications
shall
be:
If
to the
Company, to:
New
Media
Lottery Services, Inc.
000
Xxxx
Xxxxxx - Xxxxx X
Xxxxxxxxxxxx,
XX 00000
Attn.: Xx.
Xxxxxxxx X. Xxxxxxxx
Facsimile: (000)
000-0000
If
to the
Holder, to the Holder at the address or facsimile number appearing on the
Warrant Register or such other address or facsimile number as the Holder may
provide to the Company in accordance with this Section 11.
12. Warrant
Agent.
(a) The
Company shall serve as warrant agent under this Warrant. Upon thirty (30) days'
notice to the Holder, the Company may appoint a new warrant agent.
(b) Any
corporation into which the Company or any new warrant agent may be merged or
any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder's last address as shown
on
the Warrant Register.
13. Miscellaneous.
(a) This
Warrant shall be binding on and inure to the benefit of the parties hereto
and
their respective successors and permitted assigns. This Warrant may be amended
only in writing signed by the Company and the Holder.
(b) Subject
to Section 12(a), above, nothing in this Warrant shall be construed to give
to
any person or corporation other than the Company and the Holder any legal or
equitable right, remedy or cause under this Warrant; this Warrant shall be
for
the sole and exclusive benefit of the Company and the Holder.
(c) This
Warrant shall be governed by and construed and enforced in accordance with
the
internal laws of the State of Delaware without regard to the principles of
conflicts of law thereof.
(d) The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
(e) In
case
any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its
authorized officer as of the date first indicated above.
NEW
MEDIA LOTTERY SERVICES, INC.
By: _______________________________
Name: _______________________________
Title: _______________________________
EXERCISE
NOTICE
NEW
MEDIA LOTTERY SERVICES, INC.
WARRANT
DATED [ ], 2005
In
accordance with the Warrant enclosed with this Form of Election to Purchase,
the
undersigned hereby irrevocably elects to purchase [___________] shares of Common
Stock ("Common Stock"), US$0.001 par value per share, of New Media Lottery
Services, Inc. and encloses herewith US$________ in cash or certified or
official bank check or checks, which sum represents the aggregate Exercise
Price
(as defined in the Warrant) for the number of shares of Common Stock to which
this Form of Election to Purchase relates, together with any applicable taxes
payable by the undersigned pursuant to the Warrant.
Pursuant
to this Exercise Notice, the Company shall deliver to the holder _______________
Warrant Shares in accordance with the terms of the Warrant.
|
Dated:
____,
_____
|
Name
of Holder:
|
|
|
(Print)
______________________
|
||
|
By:
________________________
|
||
|
Name:
______________________
|
||
|
Title:
_______________________
|
||
|
Print
social security or tax identification number if US resident:
_________________________________________
|
||
|
_________________________________________
(Signature
must conform in all respects to name of holder as specified on the
face of
the Warrant)
|
WARRANT
SHARES EXERCISE LOG
|
Date
|
Number
of Warrant Shares
Available
to be Exercised
|
Number
of Warrant
Shares
Exercised
|
Number
of Warrant Shares Remaining to be Exercised
|
|
|
FORM
OF ASSIGNMENT
[To
be
completed and signed only upon transfer of Warrant]
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________ the right represented by the within Warrant
to
purchase ____________ shares of Common Stock of NEW MEDIA LOTTERY SERVICES,
INC.
to which the within Warrant relates and appoints ________________ attorney
to
transfer said right on the books of the Company with full power of substitution
in the premises.
Dated: _______________,
____
____________________________________
(Signature
must conform in all respects to name of holder as specified on the face of
the
Warrant)
____________________________________
Address
of Transferee
____________________________________
____________________________________
In
the
presence of:
__________________________
SCHEDULE
F
Notice
New
Media
Lottery Services, Inc.
000
Xxxx
Xxxxxx
Xxxxx
X
Xxxxxxxxxxxx
XX
00000
XXX
NOTICE
This
notice is issued by New Media Lottery Services, Inc. (“NMLS”)
under
the terms of the Agreement between NMLS, Alladdin Limited (“Alladdin”)
and
Alladdin Lotteries Limited dated 6th May
2005
(“the
Agreement”).
The
defined
terms of the Agreement shall have the same meanings and interpretations in
this
notice.
In
accordance with Section 2.5(b) of the Agreement, NMLS hereby certifies that
no
Development(s) has(have) been made
since
the last delivery to Alladdin of source code of the most current version of
the
Software and the documentation and operating instructions for the Software
altered by any such Development(s) pursuant to Section 2.5(b) of the
Agreement.
The
issue
of this notice does not in any way prejudice the respective rights and remedies
of the Parties available under the Agreement or otherwise at law.
SIGNED
FOR AND ON BEHALF OF
NEW
MEDIA LOTTERY SERVICES, INC.
______________________
Signature
______________________
Name
please
print
______________________
Date
IN
WITNESS WHEREOF, Licensor, Licensee and ALL have caused this Agreement to be
executed as of the date first above written.
Licensor:
ALLADDIN
LIMITED
By: ___________________
Print
name: Andrew della Casa
ALL:
ALLADDIN
LOTTERIES LIMITED
By: ___________________
Print
name: Xxxxx Xxxx
Licensee:
NEW
MEDIA
LOTTERY SERVICES, INC.
By: ___________________
Print
name: Xxxxxxxx Xxxxxxxx
