NET-FORCE SYSTEMS INC.
Draft dated: [insert month here], [day], [year]
SOFTWARE AND MARKETING LICENSE AGREEMENT
Agreement dated oo.
Between:
Netforce Entertainment Inc.
with registered offices at
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇.
▇▇. ▇▇▇▇'▇, Antigua, W.I.
("Licensor")
and
o o
o o [insert address]
o o
("Licensee")
Whereas:
A. Licensor licenses the casino software;
B. Licensee wishes to the market and promote wagering on Games on the Casino
by prospective customers utilizing software licensed from the Licensor;
C. Licensor has agreed to license the casino software to Licensee in a
non-exclusive agreement, in accordance with the provisions of this
Agreement;
NOW THEREFORE, in consideration of the premises and mutual covenants herein set
forth, the parties agree as follows:
1. Definitions
(a) "Casino" the Internet gaming software offered for licensing by Licensor;
(b) "Royalty" has the meaning attributed thereto in section 6(a);
(c) "Confidential Information" means any information concerning the property,
business or affairs of Licensor including, without limitation, all
information relating to existing and potential customers (including
Customer Information), suppliers, markets, marketing and advertising
arrangements, contracts, products, financial information, technology, trade
secrets, formulae, applications, methodologies and know-how, relating to
any part of the Licensor's business, whether reduced to written form, or
Registration Statement Page 137
NET-FORCE SYSTEMS INC.
ascertained by inspection or verbal communication or demonstration, or
otherwise made available, but excluding information which was known to the
Licensee prior to the time of disclosure thereof, information which was
generally available to the public or was otherwise part of the public
domain at the time of disclosure; or information which becomes generally
available to the public or otherwise part of the public domain after
disclosure, other than through any act or omission of the Licensee.
(d) "Customer Information" shall mean all data collected or stored respecting
Licensor's customers including, without limiting the generality of the
foregoing, name, address, phone and fax number, e-mail address, credit card
numbers and expiration dates or information on other types of payments,
amounts wagered and frequency of wagering;
(e) "Downloadable Software" shall mean the portion of the Software that must be
resident on a customer's computer in order for the customer to access the
Casino and play the Games;
(f) "Games" shall mean the casino style games, sportsbook, lottery, pari-mutuel
and other games that are played on the Casino using the Software.
(g) "Master CD" shall mean the compact disc containing the Downloadable
Software that may be used to mass-produce compact discs for delivery to the
Operator's customers.
(h) "Net Monthly Revenue" shall mean, with respect to Licensee's Customers, for
any given calendar month:
the total of:
(i) the total amount wagered on Games in the Casino, less winnings on
Games;
(ii) membership or other fees that may be charged to customers by the
Operator that are not related to currency conversion or
transaction processing;
less the total of:
(iii) all taxes, fees or other amounts imposed by any government or
regulatory body;
(iv) any bonus amount or complementary amount credited to Licensee's
Customers.
but shall not include any tax credits or other concessions received by
Operator.
(i) "Licensee's Customers" those customers of the Licensee who make ▇▇▇▇▇▇ on
Games on an account opened by Licensee;
(j) "Software" shall mean the computer programs and system that enable
customers to access the Casino, play the Games and make ▇▇▇▇▇▇ on the
Casino, and without limitation includes the Downloadable Software and Java
applets that are used to play the Games.
2. Grant of Software and Marketing License
(a) Licensor grants a non-exclusive non-transferable right and license to
Licensee to market and promote wagering on Games on the Casino to customers
throughout the world (subject to section 5(e)) in accordance with the
provisions of this Agreement. Licensee acknowledges that Licensor will
continue to directly market and promote the wagering on Games on the Casino
software to prospective customers and that it will continue to enter into
licensing and other arrangements with third parties to market and promote
the wagering on Games on the Casino, during the term of this Agreement.
(b) Licensor grants to Licensee the non-exclusive, non-transferable right and
license to distribute to Licensee's Customers, in accordance with the
provisions of this Agreement, any part of the Software that Licensor
designates and provides to Licensee for that purposes, including the
Downloadable Software and Java applets and graphical artwork or text
designated for use by Licensee. Licensee shall not under any circumstances
modify in any way, reverse engineer, disassemble, decompile, or otherwise
attempt to render source code from the Software or Downloadable Software,
or to reproduce or distribute the Software or Downloadable Software in
source code format. Licensee acknowledges and agrees that part or all of
the Software and Downloadable Software is the proprietary property of
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NET-FORCE SYSTEMS INC.
Licensor or others that have licensed its use to Licensor, that it embodies
substantial creative rights, confidential and proprietary information,
copyrights, trademarks and trade secrets, all of which shall remain the
exclusive property of Licensor, such party and/or their respective
licensors. Licensee agrees to include such proprietary rights notices,
markings or legends on any advertisements or promotional materials for the
Software or Downloadable Software as Licensor shall reasonably specify from
time to time.
3. Fees Payable by Licensee
(a) Licensee shall pay a one-time non-refundable license fee to Licensor in the
amount of $oo US, upon the signing of this Agreement by Licensor.
(b) Licensee shall pay a monthly standby fee ("Standby Fee") to Licensor in the
amount of $oo US during the term of this Agreement, payable on the first
day of each calendar month, commencing with the second calendar month
following the calendar month during which the first wager is made on the
Casino by one of Licensee's Customers. The Standby Fee shall be prorated
for any period, which is less than a complete calendar month. If the Net
Monthly revenue for a calendar month exceeds $oo US, Licensor will refund
the Standby Fee paid by Licensee to Licensor in respect of such month. The
refund shall be paid at the same time as the Commission for such month is
paid, pursuant to section 6.
4. Presentation of Casino Software by Licensor
(a) Licensor will, at its own expense, offer the Games and the Casino software
in the manner that it determines is appropriate, in its sole discretion,
having regard to the requirements imposed by any software licensing
requirements, the terms of any license issued by a governmental authority
or any governmental requirements, and any legal requirements in any
relevant jurisdiction applicable to operation of the Games, the Casino or
to customers wagering on Games on the Casino. Licensor will in its sole
discretion determine, without notice to Licensee:
(i) the configuration and graphical interface of the Casino and which
Games will be available on the Casino; and
(ii) the transaction processing, banking and other operating
arrangements for the operation of Casino and transactions with
customers and Licensee;
Licensor will provide reasonable notice and information to Licensee of any
resulting change in operation of the Casino; it is understood that the
timing thereof will depend on the circumstances. Licensee acknowledges that
certain aspects of the operation of the Casino and of the Games will be
determined by governmental authorities, Licensor or pursuant to software
license requirements, including the odds for the Games.
(b) Licensor will at its own expense provide to Licensee a copy of the current
version of the Downloadable Software in the form of a single copy of a
version of the Master CD and may also provide access to Java applets for
use by Licensee's Customers on Licensee's website. Licensor will arrange
for the Games to be operated so that customers wagering on Games on the
Casino on an account opened by Licensee can be identified as Licensee's
Customers. Licensor will also provide to Licensee a copy of any revision or
upgrade of the Downloadable Software or Java applet, subject to Licensee
reimbursing Licensor for any fee or charge directly related to Licensee,
imposed on Licensor for doing so. Licensee acknowledges that other parties
or Licensor may own the Software and that Licensee will acquire no rights
in the Software pursuant to this Agreement or otherwise, except as
expressly provided in this Agreement.
(c) Licensor will arrange for Licensee to have access to the database and other
information concerning Licensee's Customers. All Customer Information shall
be the property of Licensor and Licensee will be entitled to use such
information only in accordance with this Agreement.
(d) Licensee acknowledges that there could be interruptions in the operation of
the Casino. Notwithstanding anything in this Agreement, Licensor shall not
be responsible or liable for any loss of income or loss of ability to
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NET-FORCE SYSTEMS INC.
produce income, on the part of Licensee, arising from any interruption of
operation of or access to the Casino, for any reason whatsoever, whether
Licensor or a third party is at fault.
5. Obligations of the Licensee
(a) Licensee will, at its own expense, use its best efforts to market and
promote prospective customers to open an account with the licensee's casino
web-site and make ▇▇▇▇▇▇ on Games on the Casino, in accordance with the
provisions of this Agreement.
(b) Licensee will, at its own expense, implement and maintain a website(s), and
all uniform resource locators related thereto, to promote and market the
Games and Casino, to provide a method for a prospective customer to apply
to open an account with the Licensee and to provide a method for a customer
to download from Licensee's web-site the part of the Software that Operator
designates and provides to Licensee for that purposes, pursuant to section
2(b). Licensee shall remove from each website operated by Licensee any part
of the Software (including Java applets) as directed by Licensor.
(c) Licensee will be solely responsible for its website(s) and for the material
appearing on them. Licensee represents and warrants that it will not use on
the website(s) or otherwise use in its operations any material which is
libelous, unlawful or otherwise unsuitable. Unsuitable material includes
but is not limited to material which target persons under 18 years of age,
displays child pornography or other illegal acts, promotes violence,
promotes discrimination based on race, sex, religion, nationality,
disability, sexual orientation or age, promotes illegal activities,
constitutes false advertising or violates or infringes upon the
intellectual property rights of others.
(d) Licensee shall ensure that such website(s), any promotional material
distributed by Licensee in electronic or other form and any banner
advertising, web links or other arrangements made by Licensee to promote
the Games and Casino will comply with all of Licensor's requirements
including displaying any statement required by Licensor concerning the
Software, the proprietary rights of Licensor or other parties therein and
any use of the names of Licensor or other parties. The application
information for a prospective customer shall meet all of Licensor's
requirements. Licensee shall display on the web sites the Terms and
Conditions of Play that are required by Licensor. All advertising,
marketing and promotion used by License and the content of each web site
shall, at the option of Licensor, be revised or modified as directed by
Licensor.
(e) Licensee will, at its own expense, reproduce and distribute to Licensee's
Customers duplicate copies of each Master CD (and updates thereof) provided
by Licensor to Licensee. Licensee shall ensure that the packaging for the
copies of the Master CD, as well as any logo imprinted on the compact disk,
shall display all proprietary rights symbols such as copyright and
trademark, as required by Licensor.
(f) Licensor acknowledges that governmental authorities impose certain
conditions on the operation of the Games and Casino and the use of the
Software. Licensor may adopt reasonable policies or requirements concerning
the marketing and promotion of the Games and Casino, the acceptance of or
dealing with customers, and other aspects of the operation of the Games and
Casino. Licensee will conduct itself and its operations in strict
compliance with all such policies or requirements of Licensor. Licensee
will conduct all aspects of its operations in strict compliance with all
applicable laws of all relevant jurisdictions. Licensor may adopt policies
that it will not allow Licensee to accept ▇▇▇▇▇▇ from any person resident
in specific countries and to prevent persons from using the Software,
Games, or the Casino as a money-laundering vehicle. Licensee will comply
with such policies.
(g) Licensee will conduct its business as an independent contractor and will
enter into all arrangements for the purchase of goods and services in
connection with its business operations in its own name and not in the name
of or on behalf of Licensor. Licensee will upon request by Licensor provide
full particulars of each commitment or arrangement made by Licensee for the
purchase of goods or services, including arrangements for banner
advertising, web linking arrangements or other Internet marketing
arrangements. Licensee will provide evidence satisfactory to Licensor that
Licensee has satisfied all of its liabilities therefor. If Licensor, acting
reasonably, determines that Licensee has been delinquent in satisfying such
obligations and that may prejudice the Licensor or the operation or the
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NET-FORCE SYSTEMS INC.
Casino, then Licensor may, after providing notice to licensee and providing
that Licensee does not submit evidence of payment to Licensor within 48
hours, make payments of any liabilities of Licensee to third parties, on
behalf of Licensee, and may deduct from any amount payable by Licensor to
Licensee the amount of such payments, plus a reasonable administrative
processing charge therefor.
(h) Licensee may enter into "reseller" arrangements pursuant to which Licensee
may share with a third party ("Reseller") a portion of the Commission,
subject to the approval of Licensor, which shall not be unreasonably
withheld. Licensee will prevent each Reseller from entering into any
similar arrangement with another party, pursuant to which Reseller shares
any revenue arising from the Commission with another party. Licensee may
enter into arrangements with Resellers for the referral of other Resellers
provided that Licensor approves such arrangements.
(i) Licensee will indemnify and save harmless Licensor, its officers,
directors, employees and contractors from all liabilities, losses, expenses
or claims, including legal fees, arising from the operations of Licensee or
from any breach by Licensee of any obligation to Licensor.
(j) Licensor will not be liable to Licensee for any indirect, special, or
consequential damages, including lost profits, whether based upon a claim
or action of contract, warranty, negligence, or other tort or breach of any
statutory duty, indemnity or contribution, or otherwise arising out of this
Agreement, the playing of or wagering on the Games or the use of the
Casino, or any act or omission relating to the Games or Casino or the
marketing and promotion thereof.
(k) Licensee shall pay to Licensor all expenses incurred by Licensor that are
attributable to Licensee's Customers including:
(i) royalty or other payments to third parties in connection with the
use of Software;
(ii) fees for processing of payments for Licensee's Customers;
(iii) a reasonable charge for customer service provided to Licensee's
Customers; and
(iv) a reasonable charge for other expenses arising from services
provided to Licensee's Customers including telephone and
telecommunication expenses.
Licensee acknowledges that Licensor may arrange for telephone numbers and
accounts for customer support access by Licensee's Customers and Licensee
shall pay that all expenses incurred by Licensor in connection therewith.
Such telephone numbers and accounts and accounts shall be the property of
Licensor and Licensor may make use thereof following termination of this
Agreement. Any tax credits or similar concessions in connection with such
accounts shall not be part of Net Monthly Revenue.
(l) The Licensee shall be responsible for obtaining and maintaining all
necessary licenses for the operation of an Internet Gaming business in the
jurisdiction in which the Licensee chooses to operate.
6. Payment of Royalty
(a) Licensee will pay a Royalty ("Royalty") to Licensor for the use of the
casino software, based on the Net Monthly Revenue of the Casino, for each
calendar month, attributable to ▇▇▇▇▇▇ made on the Casino by Licensee's
Customers, computed in accordance with Schedule A.
(b) The Royalty for a particular month will be payable no later than 31 days
following the end of such month. Licensor will provide a statement showing
the computation of the Royalty.
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NET-FORCE SYSTEMS INC.
7. Term and Termination
(a) The term of this Agreement commenced effective on [ ] and shall
continue in effect until [ ]. The term shall be automatically
renewed indefinitely for one year periods unless Licensee gives written
notice to Licensor of termination of this Agreement, at least 90 days prior
to the end of any period. Licensor may terminate this Agreement by giving
written notice to Licensee at least [90 days] months prior to the end of
any term. Provided, however, Licensor shall not give notice of termination
in the first term of this Agreement.
(b) Notwithstanding any other provision of this Agreement this Agreement shall
at the option of Licensor terminate upon the termination of any agreement
for the use by Licensor of the Software.
(c) Licensor may terminate this Agreement at any time upon five days notice if
the Licensee is more than 15 days in arrears in paying the Standby Fee or
is in arrears in paying any third party supplier of goods or services a
material amount. Licensee shall be allowed to cure such breach during the
notice period. For purposes of this section, a material amount shall be an
amount in excess of $5,000 US.
(d) Licensor may terminate this Agreement at any time upon 15 days notice if
the Licensee becomes bankrupt or insolvent or ceases carrying on business
for any reason.
(e) Licensor may terminate this Agreement at any time upon five days notice if
Licensee conducts its operations in a manner which in the opinion of
Licensor, acting reasonably, would result in the termination of any
agreement concerning the Software, the loss of any license issued by a
governmental body concerning the wagering on Games or operation of the
Casino, or otherwise materially prejudices or impairs the conduct by
Licensor of its operations or business.
(f) Upon termination of this Agreement:
(i) Licensee shall immediately return to Licensor any and all of
materials (including Software, Downloadable Software and Java
applets in all forms, graphical or text elements provided by
Licensor and all media containing same,) in which Licensor or
other party has any rights, that are in the possession of
Licensee, his agents, and employees;
(ii) Representative will remove all banners and text links;
(iii) All rights and licenses granted to Licensee under this Agreement
shall terminate.
(g) Upon termination of this agreement Licensor shall pay all amounts due to
Licensee within 90 days of termination of this agreement (or as soon
thereafter as practical having regard to paragraph 6) and Licensee shall
pay Licensor any amounts due to Licensor prior to payment of any balance
due by Licensor.
8. Licensee's Relationship with Customers and Employees/Contractors
(a) Licensee will not during the term of this Agreement and following the
termination of this Agreement directly or indirectly solicit, interfere
with or endeavor to direct or entice away from Licensor any customer of
Licensor, including the Licensee's Customers. This provision shall not
apply to any dealing by Licensee with Licensee's Customers in connection
with accounts with Licensor opened by Licensee, provided that Licensee has
not in any manner used Confidential Information in connection therewith and
otherwise complies with all of the provisions of this Agreement.
(b) Licensee will not during the term of this Agreement and for a period of two
(2) years following the termination of this Agreement interfere with,
entice away, or otherwise attempt to obtain the withdrawal of any employee
or independent contractor of Licensor.
Registration Statement Page 142
NET-FORCE SYSTEMS INC.
9. Licensor's Relationship with Customers and Employees/Contractors
Licensor will not during the term of this Agreement:
(a) use any of the database or other information provided by Licensee pursuant
to this Agreement concerning Licensee's Customers, referred to in section
4(c), to directly or indirectly solicit, interfere with or endeavor to
direct or entice away from Licensee, Licensee's Customers;
(b) interfere with, entice away or otherwise attempt to obtain the withdrawal
of any employee or independent contractor of the Licensee.
10. Regulatory Issues
(a) The Licensee warranties to the Licensor that it will, to the best of its
abilities, conduct its Internet Gaming business in legal jurisdictions. The
Licensee acknowledges that Netforce Entertainment Inc. bears no
responsibility nor provides any specific direction, consultation, or
interpretation as to what specific jurisdictions or target markets may be
considered legal or otherwise for Internet Gaming operators.
(b) The licensee shall be solely responsible for determining which
jurisdictions they choose to market to and from where ▇▇▇▇▇▇ are received.
(c) The Licensee shall be solely responsible for determining the legality of
accepting ▇▇▇▇▇▇ from whichever jurisdictions they choose to market to and
from where ▇▇▇▇▇▇ are received.
(d) The Licensee shall indemnify Netforce Entertainment Inc. for any legal
costs and fines that arise from any legal action taken by a governmental
agency or authority as a result of the Licensee choosing to accept ▇▇▇▇▇▇
from any jurisdiction that determines or has determined, or may determine
in the future, that Internet wagering is illegal.
11. Confidentiality
(a) Licensee shall not disclose, publish, or disseminate Confidential
Information or to anyone and Licensee agrees to take reasonable precautions
to prevent any unauthorized use, disclosure, publication, access to or
dissemination thereof. Licensee agrees not to use Confidential Information
for its own or any third party's benefit without the prior written approval
of an authorized representative of the Licensor in each instance.
(b) Licensee shall not disclose the terms or contents of this Agreement to any
third party. Notwithstanding the foregoing, Licensee may make such
disclosure to its professional advisors, who are bound to maintain the
confidentiality thereof, or as required by applicable law, provided that it
provides notice to Licensor of the particulars thereof. Licensee
acknowledges that disclosure of the terms of Agreement to third parties
would cause considerable damage to Licensor with respect to the present or
future dealings it has or may have with any other parties with which it has
or proposes to have a business relationship concerning the marketing or
promotion of the Casino. Accordingly, if Licensee breaches the provisions
of this section, Licensor shall be entitled to terminate this Agreement
forthwith upon notice to Licensee.
12. Notices
Unless otherwise provided in Agreement, any notice provided for under Agreement
shall be in writing and shall be sufficiently given if delivered by courier, if
transmitted by facsimile with an original signed copy delivered within
twenty-four hours thereafter, or mailed by prepaid registered post addressed to
Licensor or Licensee at their respective addresses set forth below or at such
other than current address as is specified by notice.
To Licensor: ▇▇▇▇▇ #▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇-▇▇▇
St John's, Antigua, WI
Fax: ▇▇▇.▇▇▇.▇▇▇▇
Copy by E-Mail (for information purposes only):
▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇
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NET-FORCE SYSTEMS INC.
To Licensee: o o o
Fax: o o o
Copy by E-Mail (for information purposes only):
o o o
Notice shall be deemed to be effective upon delivery, if delivered, upon
facsimile transmission if transmitted by facsimile, or five business days
following mailing, if mailed.
13. Entire Agreement and Schedule
The parties agree that Agreement and its Schedule constitute the complete and
exclusive statement of the terms and conditions between the parties covering the
performance hereof and cannot be altered, amended or modified except in writing
executed by an authorized representative of each party.
14. Arbitration
All disputes arising in connection with this Agreement shall be finally settled
under the Rules of Conciliation and Arbitration of the International Chamber of
Commerce by a single arbitrator appointed in accordance with such rules, and the
place of arbitration shall be St. John's, Antigua, West Indies, or as otherwise
agreed by the parties. Provided, however, should any dispute arise under this
Agreement, the parties shall endeavor to settle such dispute amicably between
them. In the event that the parties fail to agree upon an amicable solution,
such dispute shall be determined by arbitration as aforesaid.
15. Parties to Act Reasonably
The parties agree to act reasonably in exercising any discretion, judgment,
approval or extension of time that may be required to effect the purpose and
intent of Agreement. Whenever the approval or consent of a party is required
under Agreement, such consent shall not be unreasonably withheld or delayed.
16. Time to be of the Essence
Time is of the essence.
17. Number and Gender
In this Agreement the use of the singular number includes the plural and vice
versa the use of any gender includes all genders, and the word "person" includes
an individual, a trust, a partnership, a body corporate and politic, an
association and any other incorporated or unincorporated organization or entity.
18. Captions
Captions or descriptive words at the commencement of the various sections are
inserted only for convenience and are in no way to be construed as a part of
Agreement or as a limitation upon the scope of the particular section to which
they refer.
19. Non-assignability
This Agreement is personal to the Licensee and the Licensee may not assign or
transfer any of its rights or obligations under Agreement without the prior
written consent of Licensor.
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NET-FORCE SYSTEMS INC.
20. Benefit
This Agreement shall enure to the benefit of and be binding upon the parties and
their respective successors and permitted assigns.
21. Waiver
No condoning, excusing or waiver by any party hereto of any default, breach of
non-observance by any other party hereto, at any time or times with respect to
any covenants or conditions herein contained, shall operate as a waiver of that
party's rights hereunder with respect to any continuing or subsequent default,
breach or nonobservance, and no waiver shall be inferred from or implied by any
failure to exercise any rights by the party having those rights.
22. Further Assurances
Each of the parties hereto hereby covenants and agrees to execute such further
and other documents and instruments and to do such further and other things as
may be necessary to implement and carry out the intent of Agreement.
23. Cumulative Rights
All rights and remedies of Licensor are cumulative and are in addition to and
shall not be deemed to exclude any other rights or remedies allowed by law
except as specifically limited hereby. All rights and remedies may be exercised
concurrently.
24. Prior Agreements
This Agreement, including its Schedules, contains all of the terms agreed upon
by the parties with respect to the subject matter herein and supersedes all
prior agreements, arrangements and understandings with respect thereto, whether
oral or written.
25. Severability
If any part of Agreement is unenforceable because of any rule of law or public
policy, such unenforceable provision shall be severed from Agreement, and this
severance shall not affect the remainder of the Agreement.
26. No Partnership
Notwithstanding anything in this Agreement, no part of this Agreement, nor the
Agreement as a whole shall be construed as creating a partnership or agency
relationship between the parties. If any part of this Agreement should become
construed as forming a partnership or agency relationship, that part shall be
amended such that no partnership or agency relationship is created, but, that
part achieves what it was originally intended to achieve.
27. Dollar Amounts
All references to money or specific dollar amounts in this Agreement are in
United States Dollars.
28. Interpretation
In the interpretation of this Agreement or any provision hereof, no inference
shall be drawn in favor of or against any party by virtue of the fact that one
party or its agents may have drafted this Agreement or such provision.
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NET-FORCE SYSTEMS INC.
In witness whereof the parties have executed Agreement.
Netforce Entertainment Inc.
Per:
--------------------------------
President
Witness [ ]
[Licensee ]
Per:
--------------------------------
[Title ]
Witness [ ]
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NET-FORCE SYSTEMS INC.
SCHEDULE A
Licensee will pay the Royalty to Licensor, based on the Net Monthly Revenue of
the Licensee's Casino, for each calendar month, attributable to ▇▇▇▇▇▇ made on
the Casino by Licensee's Customers as follows:
Net Monthly Revenue of Licensee's Customers Royalty Payable To Licensor
as % of Net Monthly Revenue
of Licensee's Customers
----------------------------------------------- ----------------------------
0 to $500,000 40%
$500,001 to $1,000,000 35%
$1,000,001 to $5,000,000 30%
$5,000,001 to $10,000,000 27.5%
In excess of $10,000,000 25%
The following transaction costs and fees will be payable by Licensee. Such
costs, fees and the following reserve will be in addition to monthly royalty
fees paid by Licensee:
Expenses incurred by Pursuant to section 5(j)
Operator that are
attributable to Licensee's
Customers
-------------------------- -----------------------------------------------------------
Merchant costs: Discount rate 6.0%
Reserve (on a rolling
basis): 10% if chargebacks are less than 5% of Commission
25% for 180 days if chargebacks exceed 5% of Commission
Transaction fee: $1.60 per transaction applied to both debit and credit
transactions
Alternative Processors Determined at the discretion of Netforce Entertainment Inc.
Chargeback: $25.00 per chargeback transaction
Payout processing fee: $5.00 per payout
The above costs and fees are subject to change, based on market rates.
Registration Statement Page 147