AGREEMENT
BETWEEN
DCI INC., A BODY CORPORATE, WITH A HEAD OFFICE LOCATED IN THE
CITY OF ROSEAU, IN THE COMMONWEALTH OF DOMINICA (HEREINAFTER
REFERRED TO AS THE "MASTER LICENSEE")
AND
ICRYSTAL INC., A PUBLICLY TRADED COMPANY WITH A TRADING SYMBOL
ICRS, TRADING ON THE NASD OTC BB, (HEREINAFTER REFERRED TO AS
THE "SOFTWARE PROVIDER")
WHEREAS the Master Licensee has an ongoing internet casino operation located
in the city of Roseau in the Commonwealth of Dominica complete with 24 hour
customer support and all necessary technical, e-commerce and server equipment
necessary to sustain multiple Internet casino sites;
AND WHEREAS the Software Provider is in the business of creating and
developing unique and proprietary internet gaming and website software;
AND WHEREAS there is an existing Agreement currently between the two parties
dated April 8, 1999;
AND WHEREAS the Master Licensee is desirous of licensing 3 themed Internet
Casino sites, hereinafter referred to as the "Casinos", which are based upon
a concept or themes more fully described below, but which are operated by the
Master Licensee based upon software licensed from the Software Provider;
THEREFORE the parties hereto hereby agree to the following terms and
conditions;
1. COMPENSATION: The Master Licensee shall pay the Software Provider the sum of
$100,000.00 USD (one hundred thousand dollars) to be paid in the following
manner;
$ 17,000.00 Deposit Previously Received
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50,000.00 Upon execution of this Agreement
33,000.00 On or before date which casino number 3 is ready for operation
---------
$100,000.00 TOTAL
The Master Licensee shall receive 60% of the NET GAMING REVENUE for the first
$100,000.00 US of the total monthly NET GAMING REVENUE derived from the
Internet casinos, more fully described in Clause 4.a. of this Agreement and
70% of the NET GAMING REVENUE for all monthly NET GAMING REVENUE in excess of
$100,000.00 US. Example is listed in Schedule A hereto attached. NET GAMING
REVENUE is fully defined in Clause 5 of this Agreement. It is understood by
all parties that monthly NET GAMING REVENUE totals shall be derived from the
accumulated totals from all Casinos, save Bingo, operated by, or associated
with, the Master Licensee.
2. DUTIES AND OBLIGATONS OF THE MASTER LICENSEE: The Master Licensee shall be
responsible for, but not limited to, the following duties and obligations;
a. To provide 24 hour live customer service and support for the Casinos.
b. To maintain all hardware and servers associated with the Casinos.
c. To provide e-cash services and credit card processing for the customers
of the Casinos.
d. To pay, as required, the Software Provider's portion of NET GAMING
REVENUE by the l6th day of the following month from which the revenue
was received.
e. To be responsible for the bandwidth charges relating to the operation
of the Casinos.
f. To provide direction and insight into the development of the theme of
the websites.
g. To be responsible for the promotion and advertising for the Casinos.
h. To be responsible for payment with regard to the promotion and
advertising for the Casinos.
i. To be responsible for bandwidth charges relating to the operation of
the Bingo Site as per Clause 21 of this Agreement.
3. DUTIES AND OBLIGLIONS OF THE SOFTWARE PROVIDER: The Software Provider
shall be responsible for, but not limited to, the following duties and
obligations;
a. To create a complete website for the 3 Casinos based upon the following
themes and styles;
Casino 1 - Blackjack Castle, consisting of 8 versions of Blackjack,
3 video poker 3 Triple Play video poker, and 3 slot
machines (when available)
Casino 2 - Triple Play Casino, consisting of 15 versions of Triple
Play video Poker and up to five other games
Casino 3 - Slot Machine casino, consisting of up to 20 slot
machines, along with 4 other games.
The cost of the website creations are included in the compensation that
is
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described in Paragraph 1 of this Agreement. Any modifications to the
websites or Casino sites that are requested by the Master Licensee, and
that are agreed to by the Software Provider, after the completion of the
websites or casino sites shall be charged out to the Master Licensee at
the Software Provider's hourly rate, which is currently $40.00 US.
b. To provide a games package to each Casino site consisting of the games
specified in Clause 4.a above. Any changes to the games package after the
Casino site has been must have the written approval of the Software
Provider and will be implemented at an additional cost to the Master
Licensee.
c. To provide technical support regarding the software at all times at no
charge. The Software Provider also has taken all necessary steps to ensure
the software is Y2K compliant.
4. NET GAMING REVENUE: Net Gaming Revenue is described as follows;
Customer Purchases LESS Customer Payouts
LESS E-Commerce Charges (currently 10%) LESS Bank Card Holdback (currently 5%
for 180 days) LESS Chargebacks
LESS Jurisdiction Tax Dominica = 5%)
= NET GAMING REVENUE
IT SHOULD BE NOTED THAT THE ABOVE E-CASH CHARGES ARE SUBJECT TO CHANGE AND THAT
THE HOLDBACK AMOUNT WILL BE AVAILABLE FOR DISTRIBUTION AS SOON AS IT IS RELEASED
BY THE CREDIT CARD PROCESSOR.
RELATIONSHIP: There is an existing Master Licensee Agreement in place between
the Software Provider and the Master Licensee. It is agreed by all parties
that once the websites are completed and the Casino sites delivered, the
obligations, other than ongoing technical support, of the Software Provider
will have been deemed to be completed and the fees earned in their entirety.
5. GAMES PACKAGES: Once the Games Packages have been agreed upon by both
parties, they shall be signed off by both parties and become an integral part
of this Agreement. It is understood by both parties hereto that the Games
Packages shall consist of a variety of games comprised from the various
versions of video poker, slot machines, blackjack and other games which will
be made available from time to time.
6. ADVERTISING EXPENDITURE: The Master Licensee agrees to spend A minimum of
10% of the previous month's NET GAMING REVENUE on advertising and promotional
expenditures on any calendar month.
7. TERM: This Agreement shall be binding upon, and endure to the benefit of
the
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parties hereto for a ten year period from the date of execution. Provided
there is no breach, the Master Licensee may extend this Agreement for a
further ten-year period provide that the manager gives the Software Provider
written notice of its intent at least 60 days prior to the expiry of the
first ten year period. At the expiry of the second 10 year period, provided
the Master Licensee is not in breach of this Agreement, such breach as
determined by a court justice or independent arbitrator, the Master Licensee
shall have the option to extend this Agreement for further ten-year periods,
and so on, indefinitely.
8. NON-EXCLUSIVE: It is understood by all parties hereto that the Software
Provider is in the business of licensing it's proprietary software and that
the software provided for either the websites or the Casinos are of a
non-exclusive nature and that the Software Provider will be licensing out
similar or identical software or games to other parties at its sole
discretion.
9. DELIVERY DATE: It is recognized and understood by all parties that the
Software Provider shall make every effort to deliver both the websites and
the Casinos on an expedited basis but, as input from the Master Licensee will
be required, there is no guarantee as to the expected completion date.
12. TERMINATION: Either party may terminate this Agreement upon breach by the
other party by giving 60 days written notice of the details of the breach and
allowing the offending party the opportunity to cure such breach during the
60 day notice period. If either party receives notice from the other party of
an alleged breach, the breach must be a breach as determined by court justice
or the independent arbitrator as set forth in Clause 13 of this Agreement.
Both parties address for formal notice are written below. In the event the
address changes for any of the parties, it is the responsibility of that
party to notice the other party.
Software Provider
ICrystal Inc.
0000 Xxxx Xxxxxx Xxx.
Xxxxx 000 X
Xxxxxx, XX Xxxxxx, X0X 0X0
Master Licensee
DCI Inc.
00 Xxxxxxxxxxxx Xx.
Xxxxxx, Xxxxxxxx
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13. ARBITTRATION: Any dispute regarding this Agreement shall be settled by
binding independent arbitration in effect for the province of British
Columbia Canada and both parties hereto agree to accept and abide by the
decision of the arbitrator.
14. SITUS: This Agreement shall be interpreted under the laws of the province
of British Columbia, Canada and if any part of this Agreement should be found
to be unenforceable, then the remainder of the Agreement shall remain
unaffected and shall remain in force.
15. PREAMBLE: The preamble is and forms an integral part of this Agreement.
16. OWNERSHIP: It is understood by all parties that the Master Licensee is
the owner of the Casino sites and that in the event of termination or expiry
of this Agreement, ownership of the Casino and websites, subject to the
previous agreement in place between the Master Licensee and the Software
Provider, remains with the Master Licensee.
17. TIME: Time is of the essence hereof
18. BINDING: This Agreement shall be binding upon the heirs, assigns,
trustees, assessors or court appointed agents or insolvency agents or
representatives of any of the parties hereto.
19. ASSIGNMENTS: This Agreement may be assigned by the Master Licensee but
not without prior written approval of the Software Provider, such written
approval will not be unresonablely withheld.
20. PROFITABILITY: There is no guarantee as to the profitability of the
Casinos and it is totally understood by the parties that the ultimate
profitability of the Casinos shall be determined by the marketing skills of
the Master Licensee.
21. BINGO SOFTWARE: It is understood by both parties that the Software
Provider is in the process of developing an interactive Bingo application and
that the Master Licensee shall have the rights to license and market one
Bingo site at no charge. The Master Licensee shall have, for the price of
$200,000.00 US, the right to manage a second bingo site provided that the
Master Licensee pays an initial deposit of $10,000.00 US by Dec 31, 1999, a
further deposit of $40,000.00 US by Jan.31, 2000 and the balance of
$150,000.00 US by the date the software is completed, BETA tested, and an
attested report provided to the Master Licensee. It is understood that the
Software Provider has the intent to license only two Bingo sites. A formal
agreement regarding the Bingo sites
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will be drafted on or before December 31, 1999, and will contain, but is not
limited to, the following clauses;
a. The Master Licensee shall receive 60% of NET GAMING REVENUE of the
bingo site.
b. The Master Licensee shall be responsible for all bandwidth or
telephone charges and hardware or equipment charges associated with
the operation of the site.
c. The Master Licensee shall be entitled to an advertising rebate base
upon the conditions in Clause 22 of this Agreement.
d. In the event the second bingo site does not achieve and maintain
monthly NET GAMING REVENUE of$1,000,000.00 US within 12 months of
commencement of operations, the Software Provider will have the option
to license the bingo software to additional parties. In the event the
Master Licensee fails to achieve the above NET GAMING REVENUE within
the allocated time period, the Master Licensee shall not lose the
rights associated with the operation of either of the Bingo sites and
shall be allowed to continue operating the Bingo sites.
e. If the Master Licensee fails to meet it's financial obligations as
detailed in Clause 21 of this Agreement, all licensing rights
associated with the second Bingo site shall be forfeited. All or any
deposits paid to the Software Provider are deemed to have been earned
at the time the deposit was paid and are non-refundable under any
circumstances. The first Bingo site shall remain unaffected by any
financial breach of the Master Licensee with respect to the second
bingo site.
22. ADVERTISING REBATE: The Master Licensee shall be entitled to an
advertising rebate of 10% of monthly NET GAMING REVENUE for all hard
advertising costs associated with the marketing or promotion of the Casino
sites. Hard advertising costs shall include Internet banner ads, print
media, television commercials, radio commercials, and other allowable
expenses. Soft costs such as wages, consulting fees, webmaster services
etc. will not be applicable. The Master Licensee must submit copies of
paid advertising expenses no later than 60 days from the date of said
invoices.
23. ADDITIONAL CASINOS: Notwithstanding the April 8, 1999 Agreement between
the parties, The Master Licensee shall have the right to manage future
Casinos, under the same terms and conditions contained herein, at no
additional charge to the Master Licensee, except for that contained in
Clause 23.b, provided always that;
a. The style, theme, and game selection of any additional casino sites
shall have the written approval of the Software Provider.
b. The Master Licensee shall be responsible for the hard costs
associated with
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the development and operation of the sites. Hard costs will include
all out of pocket expenses and hardware or equipment necessary for
the operation or development of the sites or casinos. As of the date
of this Agreement, hard costs are estimated to be no more than
$10,000.00 US for a standard, usual, or normal casino site.
C. The Master Licensee demonstrates, to the satisfaction of the
Software Provider, the ability and the wherewithall to adequately
market each additional site.
d. There is no breach of this Agreement.
This Agreement supercedes any other agreements, written or verbal, and there are
no other agreements, guarantees, conditions, clauses, or warrantees except those
expressed herein.
Dated this ____ day of October, 1999 in the cities of Vancouver, British
Columbia and Roseau Dominica. The parties hereto have hereby executed this
Agreement and affixed their corporate seal where applicable.
MASTER LICENSEE SOFTWARE PROVIDER
ICRYSTAL INC
/S/ XXXXX MAXIMEA /S/ XXXXX XXXXX
--------------------------- ------------------------------
XXXXX MAXIMEA XXXXX XXXXX
VICE-PRESIDENT - OPERATIONS CEO
SCHEDULE A
EXAMPLE ONLY
GROSS REVENUE $200,000.00
Less E-Cash(10%) 20,000.00
Less Holdback (5%) 10,000.00
Less Chargebacks 2,000.00
Less Tax (5%) 10,000. 00
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NET GAMING REVENUE $158,000.00
MASTER LICENSEE'S PROCEEDS
60% of first $100,000.00 NET GAMING REVENUE = $ 60,000.00
70% of balance $58,000.00 NET GAMING REVENUE = 40,600.00
TOTAL = $ 100,600.00 *
- THE ABOVE DOES NOT INCLUDE THE MANAGER'S ADVERTISING REBATE WHICH IS IN
ADDITION TO AMOUNT INDICATED.
