EXHIBIT 4.2
Zone 4 Play (Israel) Ltd
AND
Gaming Ventures Plc
SERVICES AGREEMENT
Dated as of July 12, 2006
TABLE OF CONTENTS
ARTICLE I - PURCHASE AND SALE OF SERVICES 2
1.1 Purchase and Sale of Services 2
ARTICLE II - SERVICE COSTS; OTHER CHARGES 2
2.1 Service Costs Generally 2
2.4 Cost+ Billing 2
2.5 Benefits Billing 3
2.6 Invoicing and Settlement of Costs 3
2.7 Amended Exhibits 3
ARTICLE III - THE SERVICES 3
3.1 General Standard of Service 3
3.2 Limitation of Liability 3
3.3 Indemnification of Z4P by the Company 3
3.4 Indemnification of the Company by Z4P 4
3.5 Reports 4
ARTICLE IV - TERM AND TERMINATION 4
4.1 Term 4
4.2 Effect of Termination 4
ARTICLE V - MISCELLANEOUS 5
5.1 Confidential Information 5
5.2 No Agency 5
5.3 Subcontractors 5
5.4 Applicable Law 5
5.5 Counterparts 5
5.6 Notices 5
5.7 Force Majeure 6
5.8 Binding Effect; Assignment 6
5.9 Entire Agreement 6
5.10 Exhibits 6
5.11 Expenses 6
5.13 Severability 6
5.14 No Waiver of Rights 6
EXHIBITS
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EXHIBIT A - Services to be Billed on the Cost+ Method
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EXHIBIT B - Services to be Billed on the Benefits Method
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SERVICES AGREEMENT, dated as of July 12, 2006 (this "AGREEMENT"), by and
between ZONE4PLAY (ISRAEL), LTD., an Israeli corporation ("Z4P"), and Gaming
Ventures Plc an Isle of Man Company (together with its wholly owned
subsidiaries, RNG Gaming Limited, an Isle of Man company and Get21 Limited, an
Isle of Man Company "GV" or the "Company", and together with Z4P, the
"PARTIES")."
RECITALS
GV is in the business of development of online gaming applications for
internet platforms (the "Applications"); and Z4P represents that it has
sufficient expertise to develop the software for use by GV in connection with
the Applications (the "Software"); and Company wishes to contract with Z4P, and
Z4P wishes to contract with Company, to engage in the development of the
Software and provide other services described in Xxxxxxxx X,X hereto (the
"SERVICES"), on the terms and subject to the conditions of this Agreement.
AGREEMENT
ARTICLE I
PURCHASE AND SALE OF SERVICES
Section 1.1 PURCHASE AND SALE OF SERVICES. Z4P agrees to provide to GV, and
GV agrees to purchase from Z4P, the services described in Appendix A and B.
ARTICLE II
SERVICE COSTS; OTHER CHARGES
Section 2.1 SERVICE COSTS GENERALLY. Each Service is determined by (i) the
customary billing method ("CUSTOMARY BILLING"), ii) the cost-plus-fixed-fee
billing method ("COST+ BILLING") or (iii) based upon a calculation of certain
costs relating to employee benefit plans and benefit arrangements ("BENEFITS
BILLING" and collectively, "Service Costs"). GV agrees to pay to Z4P in the
manner set forth in Section 2.5 the Service Costs applicable to each of the
Services provided by Z4P.
Section 2.2 CUSTOMARY BILLING. The costs of Services determined by the
Customary Billing method are intended to be the arm's-length cost at which such
Services may be purchased from third party vendors.
Section 2.3 COST+ BILLING. The costs of Services determined by the Cost+
Billing method shall be equal to the costs and expenses incurred by Z4P on
behalf of the Company, plus the fixed percentage of such costs and expenses set
forth on EXHIBIT A. If Z4P incurs costs or expenses on behalf of the Company as
well as other businesses operated by Z4P, Z4P will allocate any such costs or
expenses in good faith between the various businesses on behalf of which such
costs or expenses were incurred as Z4P shall determine in the exercise of Z4P's
reasonable judgment. Z4P shall apply usual and accepted accounting conventions
in making such allocations, and Z4P or its agents shall keep and maintain such
books and records as may be reasonably necessary to make such allocations. Z4P
shall make copies of such books and records available to any business upon
request and with reasonable notice.
Section 2.4 BENEFITS BILLING. (a) Prior to the formation of the Company,
certain employees of the Company participated in certain benefit plans sponsored
by Z4P ("Z4P PLANS"). These Company employees shall continue to be eligible to
participate in the Z4P Plans, subject to the terms of the governing plan
documents.
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(b) The costs payable or incurred by the Company for Services relating to
employee plans and benefit arrangements ("BENEFITS SERVICES") may be charged on
the basis of Customary Billing or Benefit Billing. Benefit Services consists of
those categories of Services which are more fully described on Exhibit B
attached hereto.
(c) Z4P and the Company agree to cooperate fully with each other in the
administration and coordination of regulatory and administrative requirements
associated with the Z4P Plans.
Section 2.5 INVOICING AND SETTLEMENT OF COSTS.
(a) Z4P will invoice the Company for the Service Costs on a monthly basis,
in arrears and in reasonable detail, either directly or through Z4P's
intracompany billing system. Payment will be made 30 days upon receipt of such
invoice from Z4P.
(b) If the Company fails to pay any monthly payment within 60 days of
receipt of the relevant invoice, the Company shall be obligated to pay, in
addition to the amount due, interest on such amount at the rate being charged by
Z4P's principal bank. Z4P will advise the Company of the amount of such rate as
it changes.
Section 2.6 AMENDED EXHIBITS. (a) On a calendar quarterly basis, so long as
the relevant Services continue to be provided under this Agreement, Z4P shall
prepare and deliver to the Company updated versions of Exhibits A and B (to the
extent applicable), setting forth with respect to the Services described in such
exhibits, any proposed changes in billing methodology and, to the extent
available, the Service Costs estimated to be payable for such Services for the
next calendar quarter. The Parties will co-operate with one another, to the
extent practical, in attempting to transition the performance of the Services to
the Company. The Company at any time, on 30 days' prior notice, may suspend the
performance by Z4P of one or more Services in order to provide those Services it
self.
ARTICLE III
THE SERVICES
Section 3.1 GENERAL STANDARD OF SERVICE. Except as otherwise agreed with
the Company or as described in this Agreement, and provided that Z4P is not
restricted by contract with third parties or by applicable law, Z4P agrees that
the nature, quality and standard of care applicable to the delivery of the
Services hereunder will be substantially the same as that of the Services which
Z4P provides from time to time throughout its businesses.
Section 3.2 LIMITATION OF LIABILITY. The Company agrees that Z4P and its
directors, officers, agents, and employees (each, a "Z4P INDEMNIFIED PERSON")
shall have no liability, whether direct or indirect, in contract or tort or
otherwise, to the Company for or in connection with the Services rendered or to
be rendered by any Z4P Indemnified Person pursuant to this Agreement, the
transactions contemplated hereby or any Z4P Indemnified Person's actions or
inactions in connection with any such Services or transactions, except for
damages which have resulted from such Z4P Indemnified Person's gross negligence
or willful misconduct in connection with any such Services, actions or
inactions.
Section 3.3 INDEMNIFICATION OF Z4P BY THE COMPANY. The Company agrees to
indemnify and hold harmless each Z4P Indemnified Person from and against any
damages, and to reimburse each Z4P Indemnified Person for all reasonable
expenses as they are incurred in investigating, preparing, pursuing, or
defending any claim, action, proceeding, or investigation, whether or not in
connection with pending or threatened litigation and whether or not any Z4P
Indemnified Person is a party (collectively, "ACTIONS"), arising out of or in
connection with Services rendered or to be rendered by any Z4P Indemnified
Person pursuant to this Agreement, the transactions contemplated hereby or any
Z4P Indemnified Person's actions or inactions in connection with any such
Services or transactions; provided that the Company will not be responsible for
any damages of any Z4P Indemnified Person that have resulted from such Z4P
Indemnified Person's gross negligence or willful misconduct in connection with
any of the advice, actions, inactions, or Services referred to above.
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Section 3.4 INDEMNIFICATION OF THE COMPANY BY Z4P. Z4P agrees to indemnify
and hold harmless the Company and its directors, officers, agents, and employees
(each, a "COMPANY INDEMNIFIED PERSON") from and against any damages, and will
reimburse each the Company Indemnified Person for all reasonable expenses as
they are incurred in investigating, preparing, or defending any Action, arising
out of the gross negligence or willful misconduct of any Z4P Indemnified Person
in connection with the Services rendered or to be rendered pursuant to this
Agreement.
Section 3.5 REPORTS. Z4P shall provide or shall cause to be provided to the
Company with data or reports requested by the Company relating to (i) benefits
paid to or on behalf of Company employees under Z4P Plans, including but not
limited to financial statements, claims history, and census information, and
(ii) other information relating to the Services that is required to satisfy any
reporting or disclosure requirement binding on the Company.
ARTICLE IV
TERM AND TERMINATION
Section 4.1. TERM. This Agreement shall continue in effect until the first
to occur of (i) one year from the date of this Agreement; (ii) the occurrence of
a material, continuing breach of this Agreement by either Party, but only in the
event that the breaching Party fails to cure same within ninety (90) days of its
receipt of written notice from the other Party identifying such material breach
and specifying the steps necessary to cure the breach; or (iii) thirty (30) days
after notice of termination given by Company to Z4P that it is terminating this
Agreement for convenience.
Section 4.2 EFFECT OF TERMINATION.
(a) Other than as required by law, upon termination of any Service and upon
termination of this Agreement in accordance with its terms, Z4P will have no
further obligation to provide the terminated Service (or any Service, in the
case of termination of this Agreement) and the Company will have no obligation
to pay any fees relating to such Services or make any other payments hereunder;
PROVIDED THAT notwithstanding such termination, the Company shall remain liable
to Z4P for fees owed and payable in respect of Services provided prior to the
effective date of the termination.
(b) Following termination of this Agreement with respect to any Service,
Z4P and the Company agree to cooperate in providing for an orderly transition of
such Service to the Company or to a successor service provider. Without limiting
the foregoing, Z4P agrees to (i) provide, within 30 days of the termination,
copies in a format designated by Z4P, all records relating directly or
indirectly to benefit determinations of the Company employees, including but not
limited to compensation and service records, correspondence, plan interpretive
policies, plan procedures, administration guidelines, minutes, or any data or
records required to be maintained by law and (ii) work with the Company in
developing a transition schedule.
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ARTICLE V
MISCELLANEOUS
Section 5.1 CONFIDENTIAL INFORMATION. The Company and Z4P hereby covenant
and agree to hold in trust and maintain confidential all Confidential
Information relating to the other party. "CONFIDENTIAL INFORMATION" shall mean
all information disclosed by either party to the other in connection with this
Agreement whether orally, visually, in writing or in any other tangible form,
and includes, but is not limited to, economic and business data, business plans,
and the like, but shall not include (i) information which becomes generally
available other than by release in violation of the provisions of this Section
5.1, (ii) information which becomes available on a nonconfidential basis to a
party from a source other than the other party to this Agreement provided the
party in question reasonably believes that such source is not or was not bound
to hold such information confidential, (iii) information acquired or developed
independently by a party without violating this Section 5.1 or any other
confidentiality agreement with the other party and (iv) information that any
Party hereto reasonably believes it is required to disclose by law, provided
that it first notifies the other Party hereto of such requirement and allows
such party a reasonable opportunity to seek a protective order or other
appropriate remedy to prevent such disclosure. Without prejudice to the rights
and remedies of either party to this Agreement, a party disclosing any
Confidential Information to the other party in accordance with the provisions of
this Agreement shall be entitled to equitable relief by way of an injunction if
the other party hereto breaches or threatens to breach any provision of this
Section 5.1.
Section 5.2 NO AGENCY. Nothing in this Agreement shall constitute or be
deemed to constitute a partnership or joint venture between the parties hereto
or, except to the extent provided in Section 4.2, constitute or be deemed to
constitute any party the agent or employee of the other party for any purpose
whatsoever and neither party shall have authority or power to bind the other or
to contract in the name of, or create a liability against, the other in any way
or for any purpose.
Section 5.3 SUBCONTRACTORS. Z4P may hire or engage one or more
subcontractors to perform all or any of its obligations under this Agreement,
PROVIDED THAT Z4P will in all cases remain primarily responsible for all
obligations undertaken by it in this Agreement with respect to the scope,
quality and nature of the Services provided to the Company.
Section 5.4 APPLICABLE LAW. This Agreement and the rights and liabilities
of the Parties shall be governed by and construed in accordance with the laws of
the State of Israel.
Section 5.5 COUNTERPARTS. This Agreement may be executed simultaneously in
any number of counterparts and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
Section 5.6 NOTICES. All notices or other communications which are required
or permitted hereunder shall be in writing and deemed to have been duly given at
the time of receipt if delivered personally or sent by fax (with answer-back
received) or overnight express, or three days after being mailed, registered or
certified mail, postage prepaid, return receipt requested, addressed as follows
(or such other address as the Parties designate from time to time in writing):
If to the Company:
Gaming Ventures Plc
0 Xxxxxx Xxxxxx, Xxxxxxx,
Xxxx of Man
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If to Z4P:
Zone4Play (Israel) Ltd,
Xxxxxx Xxxxxx, Xxxx 0, Xxx Xxxx
Xxxxxx
Tel- x000-0-0000000
Fax- x000-0-0000000
Section 5.7 FORCE MAJEURE. Should any circumstance beyond the reasonable
control of any Party occur which delays or renders impractical the performance
of its obligations under this Agreement on the dates herein provided for, such
obligation shall be postponed for such time as such performance necessarily has
had to be suspended or delayed on account thereof. In either such event, the
Parties shall promptly meet to determine an equitable solution to the effects of
any such event, PROVIDED THAT any Party who fails because of force majeure to
perform its obligations hereunder will upon the cessation of the force majeure
take all reasonable steps within its power to resume with the least practical
delay compliance with its obligations. Events of force majeure shall include,
without limitation, war, revolution, invasion, insurrection, riots, mob
violence, sabotage or other civil disorders, fires, floods or other acts of God
or nature, utility failures, strikes or other labor disputes, acts, laws,
regulations or rules of any government or governmental agency and any other
similar cause or event beyond the reasonable control of the Party, the
obligations of which are affected thereby.
Section 5.8 BINDING EFFECT; ASSIGNMENT. This Agreement shall inure to the
benefit of and be binding upon each of the Parties and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any Party
without the prior written consent of the other Party. Any attempted assignment
or transfer in violation of this Section 5.8 shall be void and without legal
effect.
Section 5.9 ENTIRE AGREEMENT. The terms and conditions herein contained,
together with the terms and conditions of the other documents attached as
exhibits hereto, constitute the entire agreement among the Parties relating to
the subject matter of this Agreement.
Section 5.10 EXHIBITS. The exhibits attached to this Agreement shall be
deemed integral parts of this Agreement and all references in this Agreement to
this Agreement shall encompass such exhibits.
Section 5.11 AMENDMENT. This Agreement and the exhibits attached to this
Agreement may be varied, amended or extended only by the written agreement of
the Parties through their duly authorized officers or representatives.
Section 5.12 EXPENSES. Each Party shall bear its own costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby except as otherwise set forth herein.
Section 5.13 SEVERABILITY. If any provision of this Agreement is held
illegal or unenforceable in a judicial proceeding, such provision shall be
severed from this Agreement and shall be inoperative; and the remainder of this
Agreement shall remain binding on the Parties.
Section 5.14 NO WAIVER OF RIGHTS. No failure or delay on the part of any
Party in the exercise of any power or right hereunder shall operate as a waiver
thereof. No single or partial exercise of any right or power hereunder shall
operate as a waiver of such right or of any other right or power. The waiver by
any Party of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any other or subsequent breach hereunder. All rights
and remedies existing under this Agreement are cumulative with, and not
exclusive of, any rights or remedies otherwise available.
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SIGNATURE PAGE TO
SERVICES AGREEMENT
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the
day and year first above written.
GAMING VENTURES PLC
/s/ Xxx Xxxx
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BY: Xxx Xxxx, CFO
ZONE4PLAY (ISRAEL) LTD
/s/ Xxxxxx Xxxxxx
-----------------
BY: Xxxxxx Xxxxxx, CEO
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EXHIBIT A
SERVICES TO BE BILLED ON THE COST+ METHOD
Development services (provided to RNG):
1. Development of the Multi player xxxxx Xxxx tournaments application
(Cost+10%)
2. Development of other online gaming software as agreed by the parties
(Cost+10%)
Administrative services (Provided to GV and RNG and Get21):
1. Rent and related expense (Cost+10%)
2. Communication services (Cost+10%)
3. Office supplies and related expenses (Cost+10%)
4. Deprecation and amortization (Cost+10%)
Management services: (Provided to GV and RNG and Get21): Cost+10%
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EXHIBIT B
SERVICES TO BE BILLED ON THE BENEFITS METHOD
Amortization of deferred compensation - Cost +0%, (Provided to GV and RNG and
Get21).
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