SETTLEMENT AGREEMENT
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This Settlement Agreement ("Settlement Agreement"), dated as of August 28,
2002 (the "Effective Date") is made by and between Willow International Ventures
Corporation ("Willow") and American Wagering, Inc. ("AWI"). Willow and AWI are
referred to herein collectively as the "Parties" and individually as a "Party".
RECITALS
A. WHEREAS, Willow filed a Declaratory Judgment Action against AWI in
the United States District Court for the District of Nevada, styled Willow
International Ventures Corporation vs. American Wagering, Inc., Case No.
CV-S-01-1164-LRH-RJJ (the "Lawsuit"), praying for Declaratory Judgment (the
"Claims") regarding the marks MEGASPORTS, U.S. Registration number 2316949 and
MEGASPORTS, U.S. Registration number 2335702 (collectively, the "Trademarks");
B. WHEREAS, AWI filed a Counterclaim against Willow within the Lawsuit,
alleging numerous claims related to the Trademarks (the "Counterclaim"); and
C. WHEREAS, pursuant to that certain License Agreement (the "License
Agreement"), dated the 18th day of June, 2002, by and between AWI, Computerized
Bookmaking Systems, Inc. ("CBS") and Megasports (ACT) Pty. Ltd. ("Megasports
Australia"), AWI granted to Megasports Australia " a (a) paid-up, royalty-free,
non-assignable, non-transferable and exclusive license to: (i) use the Domain
name for the provision of Services and (ii) use the Marks in the Territory for
the promotion and marketing of the Services provided through the Domain Name
and...";
D. WHEREAS the initially capitalized terms identified hereinabove from the
License Agreement have the following defined meanings as set forth in the
License
Agreement (and shall have the same meaning ascribed to such terms in this
Agreement): "Domain Name" shall mean the URL xxx.xxxxxxxxxx.xxx.xx and any other
URL utilized by Megasports Australia in connection with their provision of
Services; "Services" shall mean wagering services; "Territory" shall mean
Australia and on websites specifically targeted to persons in Australia; and
"Marks" shall mean the marks MEGASPORTS, MEGASPORTS and Design (as set forth as
Exhibit 1 to the License Agreement) and XXXXXXXXXX.XXX.XX;
E. WHEREAS on July 1, 2002, pursuant to the Share Sale Agreement made the
13th day of June, 2002 between AWI, Megasports Australia and Eurast Limited (ABN
62 009 423 189), ("Eurast"), AWI sold to Eurast all of the capital stock of
Megasports Australia; and
F. WHEREAS, Willow and AWI now deem it to be in their respective best
interests and mutual advantage to settle and resolve all matters presently in
controversy between them including, but not limited to, the Claims and the
Counterclaim of Willow and AWI, upon the terms and conditions recited herein.
NOW THEREFORE, in consideration of the covenants, representations and
warranties contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as
follows:
1. The Recitals set forth above shall be incorporated herein by reference.
2. Subject to Paragraph 4, AWI shall assign to Willow all of AWI's right,
title and interest in and to the Trademarks, and shall execute and deliver to
Willow whatever documents are reasonably requested by Willow in order to effect
a recording in
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the United States Patent and Trademark Office of the assignment of ownership in
the Trademarks to Willow.
3. Subject to Paragraph 4, AWI shall execute and deliver to Willow any other
documents reasonably requested by Willow to be executed in order to effect
registration by Willow of the Trademarks in any country in the world in which
Willow desires to apply for such registration.
4. (a) AWI shall retain all right, title and interest that AWI or AWI's
affiliates, assigns or licensees ("AWI Entities") presently hold (whether
directly or indirectly) in and to the following (collectively the "Australian
Rights"): (i) the domain name xxxxxxxxxx.xxx.xx (the "AU Domain Name"), (ii) all
intellectual property right, title and interest in and to the intangible assets,
if any, emanating from, with respect to, relating to or arising from the AU
Domain Name or the conduct of Services by AWI Entities in the Territory (the
"Australian Intangible Assets", as such defined term is further elaborated
herein below) and (iii) the Marks to the extent such Marks are used in
association with the provision of Services by Australian-based or
Australian-connected operations ("the Australian Marks") and any related trade
dress used by AWI Entities in the Territory; provided, however, that Willow
hereby covenants, represents and warrants that use of the Australian Marks, any
related trade dress and the Australian Intangible Assets as set forth on the AU
Domain Name as of the Effective Date and any additional use in accordance with
or pursuant to the License Agreement shall not be deemed to be a violation of
this Agreement. The Australian Intangible Assets shall include, without
limitation, all material, information, documents, matter, text, software, data,
graphics, computer-generated displays and interfaces, images, photographs and
works of
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whatsoever nature, including, without limitation, all compilations of the
foregoing and all results and/or derivations of the expression of the foregoing,
including, without limitation, all products and services provided, published,
developed, conceived, discovered, reduced to practice, created or otherwise
arising out of AWI Entities' efforts that emanate from, or relate to, or arise
from the AU Domain Name and in the provision of Services by AWI Entities to or
with any natural person, corporation, limited liability company, limited
partnership, partnership, trust, association, organization or other entity of
whatsoever nature (collectively a "Person") in the Territory.
(b) AWI Entities shall be unconditionally entitled to, in any manner
whatsoever and in AWI Entities' sole and absolute discretion, use and otherwise
exploit the Australian Rights in connection with providing Services in the
Territory, including, without limitation, registering the Australian Marks in
Australia in association with the Services.
(c) In the event of any sale, lease, assignment or other transfer (a
"Transfer") of all or any portion of AWI's or any AWI affiliate's right, title
or interest in and to the Australian Rights to any Person (an "Assignee"), AWI
shall require and shall cause such affiliate to require as a condition of such
Transfer that the Assignee agrees to be bound by the terms of Xxxxxxxxxx 0, 0
xxx 0 xxxxxx.
(x) AWI shall cause the corporate name of Megasports, Inc. to be changed to
a name that is not identical, or confusingly similar to, the Trademarks. By way
of clarification, such changed name shall not include the term "Megasports."
(e) Subject to Paragraph 4(a), AWI hereby grants Willow an exclusive
license to use the Australian Marks in Australia in association with products or
services
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in any industry other than the business of providing Services. AWI shall retain
the ability to enforce reasonable quality control with respect to any use of the
Australian Marks by Willow. Any and all goodwill associated with or related to
use of the Australian Marks in the Territory shall inure to the exclusive
benefit of AWI.
(f) Willow shall not directly or indirectly oppose, seek to cancel or
otherwise interfere with, or cause or assist in any manner any Person to oppose,
seek to cancel, or otherwise interfere with, AWI Entities' use, application or
registration in the Territory of the Australian Rights in association with the
Services.
(g) Subject to Paragraphs 4(a), (b), (e) and (f), AWI, its parent,
affiliated, subsidiary and related companies, the officers and directors of each
of them, and its and their successors and permitted assigns, shall not in any
manner contest, raise objection to or attempt to limit the right, title or
interest of Willow, or its affiliates or assignees or licensees (hereinafter the
"Willow Group") in and to the domain name "xxxxxxxxxx.xxx" (the "Megasports
Domain Name"), the Trademarks and all intellectual property right, title and
interest (including but not limited to all copyrights, trade secrets and
patentable and non-patentable subject matters) in and to the intangible assets
(the "Intangible Assets") emanating from, with respect to, related to or
arising, from the Megasports Domain Name and the Trademarks or the conduct of
business by the Willow Group in the rest of the world other than Australia. The
Intangible Assets shall include but not be limited to all material, information,
documents, matter, text software, data, graphics, computer-generated displays,
and interfaces, images, photographs and works of whatsoever nature, all
compilations of the foregoing and all results and derivations of the expression
of the foregoing, all products and services provided, published, developed,
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conceived, discovered, reduced to practice, created or otherwise arising out of
Willow Group's efforts in any manner whatsoever that have been provided either
through the Megasports Domain Name or the Trademarks at any time by Willow
Group.
(h) Subject to Paragraphs 4(a), (b), (e) and (f), the Parties acknowledge
that as between the AWI Entities and Willow and its past, present or future
affiliates or assigns (the "Willow Entities"), all rights to marks anywhere in
the world using the term "Megasports" and in which the AWI Group has or could
have any interest, shall be the sole and exclusive property of the Willow
Entities.
(i) AWI shall use commercially reasonable efforts to enforce the material
terms of the License Agreement regarding the permitted use of the Marks by
Megasports Australia, and shall promptly inform Willow of any alleged material
breach of any of the material terms of the License Agreement. In addition to any
other remedies available to Willow at law or in equity, in the event that AWI
materially breaches any of AWI's obligations under this Paragraph 4(i), Willow
may, at Willow's sole cost and expense, pursue or initiate any enforcement,
action, demand, complaint, request for redress, assertion of a cause of action
or other claim against Megasports Australia related to or arising from the
License Agreement.
5. Immediately upon the fulfillment of the obligations of AWI as set
forth in Paragraphs 2 and 4(d) above;
(a) AWI shall dismiss its Counterclaim against Willow with prejudice and
without costs;
(b) Willow shall dismiss its Lawsuit against AWI with prejudice and
without costs, and
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(c) Each Party shall be responsible for its own costs and attorneys' fees
incurred in connection with the prosecution and defense of the Lawsuit
and of the Counterclaim.
6. Effective upon the fulfillment by AWI of its obligations as set
forth in Paragraphs 2 and 4(d) above and the dismissal of the Claims and
Counterclaim,
(a) each Party hereby releases and forever discharges the other
Party and the other Party's respective predecessors, affiliated
companies, subsidiaries, and the officers, directors, stockholders,
partners, agents, employees, insurers, representatives and assigns of
all of them, from any and all manner of action or actions, cause or
causes of action, in law or equity, and debts, liens, contracts,
liabilities, claims, damages, lawsuits, costs and expenses, of any
nature whatsoever, whether now known or unknown, fixed or contingent,
that any Party now has against the other Party arising out of or
relating in any way to the subject matters asserted or referred to in
the Lawsuit or Counterclaim (the "Release").
(b) The Release shall not extend to or be construed as releasing
any Party from any of such Party's respective responsibilities,
promises, obligations, covenants or agreements under or arising out of
or required to be performed under the terms of this Settlement
Agreement.
(c) To the extent not prohibited by law, the Parties shall, and
shall cause their respective attorneys to, keep the terms of this
Settlement Agreement confidential, as well as the nature of the
Lawsuit and Counterclaim and any discovery conducted therein, and will
not disclose information relating to the terms of this Settlement
Agreement to any Person.
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(d) Notwithstanding Paragraph 6(c), however, the Parties and
their attorneys may:
(i) Disclose that the Lawsuit and Counterclaim have been
settled and that the terms of such settlement are confidential by
agreement of the Parties,
(ii) Make any disclosures as may be required by law,
(iii) Make any disclosures that may be necessary for
legitimate law enforcement or legal compliance purposes; and
(iv) Make any disclosures required or advisable to be made
in federal or state securities filings.
(e) Willow and AWI shall take reasonable commercial efforts to
cause their past, present and future affiliates and permitted assigns
to comply with the terms of this Settlement Agreement as though such
affiliates and assigns were signatories hereto.
7. As further consideration for entry into this Settlement Agreement,
this Settlement Agreement shall be effective as a bar to each and every claim,
demand and cause of action that each Party may have as of the Effective Date
against the other Parties arising out of or relating in any way to the subject
matter of the Lawsuit and Counterclaim, except for the enforcement of this
Settlement Agreement as set forth in Paragraph 6(b) hereof. Furthermore, the
Parties hereby expressly waive any and all rights and benefits conferred by the
provisions of Section 1542 of the California Civil Code ("Section 1542") and by
any similar provision that the states of Nevada, Illinois, Federal or Australian
law may now have in effect or that may come into effect in the
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future, and expressly consent that this Settlement Agreement shall be given full
force and effect according to each and all of its expressed terms and
conditions, including those relating to unknown or unsuspecting claims, demands
and causes of action, if any, as well as those relating to any claims, demands
and causes of action in any way concerning the subject matter of the Claims and
Counterclaim. Section 1542 provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
The Parties acknowledge that each Party may hereafter discover claims or
facts in addition to or different from those which it now knows or believes to
exist with respect to the subject matter of this Settlement Agreement and which,
if known or suspected at the time of executing this Settlement Agreement, may
have materially affected the settlement. Nevertheless, the Parties hereby waive
any rights, claims or causes of action that might arise as a result of such
different or additional claims or facts. The Parties acknowledge that they
understand the significance and potential consequence of such a release of
unknown claims and of the specific waiver of their rights under Section 1542.
The Parties intend that the claims released by each of them in this Settlement
Agreement shall be construed as broadly as possible.
8. This Settlement Agreement shall be construed in accordance with the laws
of the State of Nevada, without regard to its rule and conflicts of law. The
Parties agree to sole jurisdiction and venue in any federal or state court in
Nevada and each Party hereby consents to the jurisdiction of such courts over
itself in any action relating to this Settlement Agreement. The Parties also
agree that any such action if filed in a Nevada
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state court may be removed to the appropriate federal court if the requisite
subject matter jurisdiction exists.
9. The Parties hereto acknowledge that they are executing this Settlement
Agreement voluntarily, and that all facts material to their decision to enter
into this Settlement Agreement are known to them and that, except for those
representations and warranties expressed herein, their execution of this
Settlement Agreement is not made in reliance on any representation, either
affirmative or by omission of either Party at any time, past or present. This
Settlement Agreement shall be regarded as the mutual work product of Willow and
AWI, and shall not be construed against any Party as the drafter hereof.
10. This Settlement Agreement constitutes the entire agreement between
Willow and AWI, and supercedes any other prior or contemporaneous written or
oral agreements, understandings, communications or representations or any kind
between them. This Settlement Agreement may not be altered, modified or amended
except by a writing signed by each of the Parties to be bound thereby.
11. In the event of litigation to enforce the terms of this Settlement
Agreement, the prevailing Party shall be entitled to recover from the
non-prevailing Party, the prevailing Party's reasonable expenses, including
without limitation, reasonable attorneys' fees and costs.
12. Each Party may assign, transfer, convey or otherwise dispose of any
right, title, license or interest of such Party contained in, with respect to,
arising from or related to this Agreement, provided, that AWI must comply with
the provisions of Paragraph
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4(c) hereof; and provided further that none of the Parties may assign its
obligations hereunder.
13. The terms of this Settlement Agreement shall be binding on and inure to
the benefit of the Willow Entities, the AWI Entities and their respective
successors and permitted assigns and may be executed in one (1) or more
counterparts.
14. If any provision of this Settlement Agreement is determined to be
invalid, illegal or unenforceable, the remaining provisions hereof shall remain
in full force and effect. To the extent permitted by law, the Parties hereby
waive any provisions of law that render any provision of this Settlement
Agreement prohibited or unenforceable in any respect.
15. All notices or other communications to be made to any Party hereto
shall be made to that Party via certified United States mail, prepaid, return
receipt requested or by Federal Express or similar nationwide delivery service,
with acknowledgement of receipt by the receiving Party, directed to the address
set forth below unless otherwise modified in writing with their names as
follows, and shall be effective upon receipt:
To: Willow International Ventures Corporation
c/o Xxxxxx Xxxxx, E. Xxxxxxx Xxxxx, Xxxxxx X. XxXxxxxx
Xxxxxx & Xxxxxxxx, LLC
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
To: American Wagering, Inc.
Xxxxxxx Xxxxxxxxx
000 Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
cc: Xxxxxx X. Xxxxxx
Santoro, Driggs, Walch, Kearney,
Xxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx xxxxx
Xxx Xxxxx, Xxxxxx 00000
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16. The Parties hereto acknowledge that they have been represented, or
have had the opportunity to be represented, in the negotiations for and in the
performance of this Settlement Agreement by legal counsel of their own choice;
that they have read this Settlement Agreement; that they have had this
Settlement Agreement fully explained to them by such counsel or have had such
opportunity; and that they are fully aware of the contents hereof and of its
legal effect.
17. By executing this Settlement Agreement, neither Willow nor AWI admits
to any legal liability arising out of the matters asserted in the Lawsuit or
Counterclaim.
IN WITNESS WHEREOF, the Parties hereto have executed this Settlement Agreement
as of the Effective Date.
WILLOW INTERNATIONAL AMERICAN WAGERING, INC.
VENTURES CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
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Its: President Its: CFO, SEC, TREAS
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