[********] Certain confidential information contained in this document, marked
by brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended.

 

DISTRIBUTION AGREEMENT

 

PokerTek, Inc.

 

(“PokerTek”)

 

and

 

Aristocrat International Pty. Limited and its Affiliates

 

(“Aristocrat”)

 

Dated: January 20, 2006

 

Page 1

--------------------------------------------------------------------------------

DISTRIBUTION AGREEMENT

 

THIS AGREEMENT is made on the 20th day of January 2006.

 

BETWEEN:    ARISTOCRAT INTERNATIONAL PTY. LIMITED (ABN 46 000 148 158) and its
Affiliates of 71 Longueville Road, Lane Cove, New South Wales, Australia, 2066
(“Aristocrat”) AND:    POKERTEK, INC. a North Carolina corporation with its
principal office at 1020 Crews Road, Suite J, Matthews, NC 28106 (“PokerTek”)
RECITALS:     

 

A. PokerTek is the designer of the Products.

 

B. Aristocrat wishes to distribute, market, enter into Licensing Agreements, and
with the consent of Pokertek manufacture the Product in the Territory.

 

C. PokerTek has agreed to grant and Aristocrat accepts, the right to distribute,
market, enter into Licensing Agreements, and with the consent of Pokertek to
manufacture the Product in the Territory on the terms of this Agreement.

 

It is agreed as follows:

 

1. Definitions and Interpretation

 

1.1 Definitions

 

The following definitions apply unless the context requires otherwise:

 

Affiliates means Related Bodies Corporate of Aristocrat International Pty.
Limited

 

Agreement means this agreement and attached schedules as may be amended or
updated from time to time between the parties under this agreement.

 

Approval means any licence, permit, consent, agreement, requirement, approval,
authorisation or form of good standing of any kind required by any Regulator or
Gaming Authority whether relating to all or any Product or this Agreement or the
laws of any country into which the Product will be imported, rented or from
which the Product will be exported.

 

Page 2

--------------------------------------------------------------------------------

Aristocrat Group means Aristocrat and any of its Related Bodies Corporate.

 

Aristrocrat’s Documentation means written information drawings, technical,
operating and service manuals, diagrams, drawings, and any other documents
created by Aristocrat relating to or used in connection with the manufacture,
distribution, marketing and sale of the Product and whether produced in a
visible form or stored or recorded in another manner.

 

Aristocrat’s Intellectual Property Rights means any and all intellectual and
industrial property rights in Aristocrat’s Documentation and contained in
Aristocrat’s distribution of the Product throughout the world including
copyright (including future copyright and rights analogous to copyright), moral
rights, inventions (including patents), trade marks, service marks, designs and
circuit layouts whether or not now existing and whether or not registrable
including any right to apply for the registration of such rights and all
renewals and extensions.

 

Business Day means a weekday on which banks are open for business in the city
specified in the “Address” section of Aristocrat’s details in the Party
Information.

 

Commencement Date means the date of this Agreement.

 

Confidential Information means all information, data and materials, whether
recorded or embodied in electronic, written or three dimensional form or
otherwise relating to the Product and Aristocrat’s Documentation or Pokertek’s
Documentation, proposed new designs or products, existing and prospective
clients, sales, know how, pricing, trade secrets, marketing or promotion plans,
the terms of this Agreement and any other information relating in any way to the
business affairs of Aristocrat or Pokertek, excluding information that is in the
public domain other than as a result of breach of this Agreement.

 

Control for the purposes of this Agreement means the capacity of one entity to
determine the outcome of decisions about the financial, operating and management
policies of another entity (whether by ownership of securities or partnership or
other ownership interests, by contact or otherwise) and includes any ability to
exert significant influence.

 

Customer means any person or entity who expresses an interest in or actually
acquires for use the Product.

 

Event of Default means:

 

(a) Subject to the provisions of clause 15.1 (b), a breach of the terms of this
Agreement by a party;

 

  (b)

if either party has an insolvency officeholder appointed over its undertaking or
assets or any part thereof, or goes into liquidation (other than for the

 

Page 3

--------------------------------------------------------------------------------

 

purpose of and followed by a solvent reconstruction or amalgamation) or takes
any steps, or has any steps taken against it or in respect of it, in relation to
its winding up, deregistration or dissolution or is unable to pay its debts as
and when they fall due or stops or suspends or threatens to stop or suspend
payment of all or a class of its debts or enters into or proposes any
composition or arrangement with its creditors or any of them or any event occurs
analogous to the foregoing; or

 

  (c) a change of Control in relation to a party.

 

Fault and Faulty means:

 

(b) in relation to a Product any material failure of any item of that Product
which substantially effects its operation or its ability to comply with the
requirements of any applicable Gaming Authority or Regulator; and

 

(c) in relation to services, the negligent performance of the relevant services.

 

Gaming Authority means a government or governmental body, agency or authority of
any kind with power to approve rights in respect of:

 

  (i) manufacture, distribution, marketing, and sale or use of gaming machines;

 

  (ii) gaming, wagering, lotteries or similar activities; or

 

  (iii) the business activities of a party.

 

Law means any principle at common law or in equity and any requirement under any
legislation, rule, instrument, code of practice, proclamation, ordinance or by
law, present or future, whether State, Commonwealth or otherwise.

 

Licensing Agreement means the agreement between Aristocrat and the Customer for
the use and installation of the Product by the Customer.

 

Licensing Schedule means the licensing schedule attached to this Agreement.

 

Marks means the trade marks, service marks, logos or other intellectual property
notified to Aristocrat in accordance with clause14

 

Parts means parts and components of the Products.

 

Party Information means each party’s address for service set out in Schedule 1.

 

PokerTek’s Documentation means written information drawings, technical,
operating and service manuals, diagrams, drawings, and any other documents
created by PokerTek relating to or used in connection with the Product and
whether produced in a visible form or stored or recorded in another manner.

 

Page 4

--------------------------------------------------------------------------------

PokerTek’s Intellectual Property Rights means any and all intellectual and
industrial property rights in the Product and PokerTek’s Documentation
throughout the world including copyright (including future copyright and rights
analogous to copyright), moral rights, inventions (including patents), trade
marks, service marks, designs and circuit layouts whether or not now existing
and whether or not registrable including any right to apply for the registration
of such rights and all renewals and extensions.

 

Product means the items listed in the Product Schedule and any other hardware
and software and related products manufactured, distributed or supplied by
PokerTek during the Term to enhance or work in concert with the items listed in
the Product Schedule.

 

Product Schedule means the Product schedule attached to this Agreement.

 

Regulator includes a government or a governmental, semi-governmental or judicial
entity or authority. It also includes a self-regulatory organisation established
under statute or the rules of a stock exchange with power over a party.

 

Related Bodies Corporate means, when used with reference to a party, any entity
that directly or indirectly Controls or is Controlled by or is under common
Control with that party.

 

Securities Purchase Agreement means the securities purchase agreements dated on
or about the date of this Agreement between Aristocrat and certain shareholders
of PokerTek.for the acquisition by Aristocrat of approximately nine hundred and
forty six thousand eight hundred (946,800) Pokertek shares.

 

Term means the period of six (6) months or as extended under clauses 3(b) and
3(c) unless terminated or extended in accordance with the terms of this
Agreement.

 

Territory means the world other than Canada and the United States. The Territory
may be added to by written amendment to this Agreement in the sole discretion of
the parties, including the determination as to whether the grant of distribution
rights in such additional regions shall be exclusive or non-exclusive.

 

1.2 Interpretation

 

Headings are for convenience only and do not affect interpretation. The
following rules apply unless the context requires otherwise.

 

(a) The singular includes the plural, and the converse also applies.

 

(b) If a word or phrase is defined, its other grammatical forms have a
corresponding meaning.

 

Page 5

--------------------------------------------------------------------------------

(c) A reference to a person includes a corporation, trust, partnership,
unincorporated body or other entity, whether or not it comprises a separate
legal entity.

 

(d) A reference to a clause is a reference to a clause of this Agreement.

 

(e) A reference to an agreement or document (including a reference to this
Agreement) is to the agreement or document as amended, supplemented, novated or
replaced, except to the extent prohibited by this Agreement or that other
agreement or document.

 

(f) A reference to writing includes any method of representing or reproducing
words, figures, drawings or symbols in a visible and tangible form.

 

(g) A reference to a party to this Agreement or another agreement or document
includes the party’s successors, permitted substitutes and permitted assigns
(and, where applicable, the party’s legal personal representatives).

 

(h) A reference to legislation or to a provision of legislation includes a
modification or re-enactment of it, a legislative provision substituted for it
and a regulation or statutory instrument issued under it.

 

(i) A reference to conduct includes an omission, statement or undertaking,
whether or not in writing.

 

(j) A reference to dollars and $ is to the currency of the United States of
America.

 

(k) A reference to a right or obligation of any two or more people comprising a
single party confers that right, or imposes that obligation, as the case may be,
on each of them severally and each two or more of them jointly. A reference to
that party is a reference to each of those people separately (so that, for
example, a representation or warranty by that party is given by each of them
separately).

 

(l) Mentioning anything after includes, including, for example, or similar
expressions, does not limit what else might be included.

 

(m) Nothing in this Agreement is to be interpreted against a party solely on the
ground that the party put forward this Agreement or a relevant part of it.

 

(n) A reference to an amount for which a person is contingently liable includes
an amount that that person may become actually or contingently liable to pay if
a contingency occurs, whether or not that liability actually arises.

 

Page 6

--------------------------------------------------------------------------------

2. Appointment

 

(a) PokerTek appoints Aristocrat for the Term and on the terms of this
Agreement, to be its sole and exclusive distributor of the Product within the
Territory and to market and distribute the Product within the Territory.

 

(b) If any Regulator withdraws, suspends or fails to approve any of the Product,
this Agreement will continue to apply to the remaining Product for the remainder
of the approved jurisdictions in the Territory.

 

3. Term of Appointment

 

(a) This Agreement commences on the Commencement Date and will continue for the
Term unless terminated in accordance with this Agreement.

 

(b) The Term will be automatically extended to ten (10) years on the basis
Aristocrat enters into and completes the Securities Purchase Agreement in
accordance with its terms.

 

(c) On the expiry of the Term, this Agreement will continue until terminated by
either party on the giving of one (1) month’s written notice to the other or
until terminated in accordance with this Agreement.

 

4. Aristocrat’s Obligations

 

4.1 Obligations

 

Aristocrat must, at its own expense:

 

(a) use reasonable endeavours to promote and enter into Licensing Agreements for
the Products in the Territory, it being understood that failure to promote the
Products consistent with the level of promotion and support Aristocrat provides
for its own products shall constitute less than reasonable endeavours;

 

(b)

manufacture or procure the manufacture of the Products ordered by Customers
under Licensing Agreements for the Products and advise PokerTek of the cost of
each Product, install, set up and test any Products supplied to Customers in the
Territory in a proper and efficient manner for the benefit of Customers if
requested by a Customer. Aristocrat and PokerTek will work together to identify
the most efficient and highest quality manufacturer(s), with the selection of
the manufacturer(s) being subject to the approval of both parties. Should
Aristocrat and PokerTek agree that PokerTek will be the source of manufacture of
any portion

 

Page 7

--------------------------------------------------------------------------------

 

of the Products for Aristocrat, the terms of such arrangement will be the
subject of a separate written agreement between the parties, it being understood
that should PokerTek supply Products to Aristocrat, such supply will be at cost.

 

(c) provide Customers who have acquired the Product with an after sale repair
and maintenance service in respect of any Products in the Territory during the
Term; and maintain a sufficient number of trained post-sales repair engineers
necessary to repair and maintain Products supplied by Aristocrat under a
Licensing Agreement in a timely and orderly manner.

 

(d) in consideration of the appointment made in clause 2 (a), Aristocrat agrees
to make payments to PokerTek as set forth in the Licensing Schedule. Aristocrat
shall furnish PokerTek, along with each payment made to PokerTek as required by
this Agreement, a written certificate signed by an executive officer of
Aristocrat providing a list of Customers, the receipts from such Customers and
the cost of the manufacture and supply of such Products relating to such
Customers. During the term of this Agreement, and for one (1) year thereafter,
PokerTek may, upon reasonable request and notice to Aristocrat, audit
Aristocrat’s records relating to Licensing Agreements and costs and receipts
associated therewith. Such an audit shall be conducted during normal business
hours at a time and place acceptable to both parties. Such audit will be
conducted at PokerTek’s expense, unless the audit reveals that Aristocrat has
underpaid fees by more than five percent (5%) of the fees actually paid to
PokerTek, in which case Aristocrat shall in addition to the deficiency, also pay
PokerTek’s reasonable costs of conducting the audit. PokerTek shall not be
entitled to perform such audits more than once every twelve (12) months.

 

4.2 Authority

 

Nothing in this Agreement:

 

(a) gives either party the power to bind the other to any contract or
arrangement of any kind;

 

(b) will constitute or create a partnership, agency, employment or joint venture
relationship between Aristocrat and PokerTek;

 

(c) will prevent Aristocrat from manufacturing, selling, promoting, distributing
or entering into any other commercial arrangements in relation to products which
do not compete directly with the Product; except that during the Term and for a
period of two(2) years thereafter, neither Aristocrat, nor any of its Affiliates
or Related Bodies Corporate, will manufacture, sell, promote or

 

Page 8

--------------------------------------------------------------------------------

distribute any other product which competes directly with the Product, it being
understood that any player banked electronic poker table would compete directly
with the Product.

 

4.3 Marketing

 

Aristocrat will, at its own expense and in its sole discretion:

 

(a) investigate distribution opportunities in the Territory, visit Customers and
potential Customers to increase the distribution of the Product;

 

(b) submit a written report at the end of every 6 month period to PokerTek
showing details of Product distribution and forecasts and suggestions concerning
the Products and activities of competitors within the Territory;

 

(c) develop and carry on satisfactory promotional programmes, including mailing
list, advertising and participation in trade, professional and other meetings,
exhibitions and fairs; and

 

(d) train its sales force to sell the Products effectively.

 

4.4 Licensing Agreements

 

Aristocrat must ensure that each Customer who is supplied with a Product enters
into and is bound by a Licensing Agreement which contains terms which are
consistent with Product recall provisions and regulatory and compliance
obligations under this Agreement that materially conforms to PokerTek’s form
end-user license agreement attached to this Agreement as Exhibit A.

 

4.5 Duty to Disclose

 

Aristocrat must advise PokerTek of any claims or complaints concerning the
Products and, if requested by PokerTek, forward a written report setting out all
its knowledge concerning any claim or complaint

 

4.6 Regulatory Approvals

 

Aristocrat must at its own cost apply for, obtain and maintain such Approvals as
are required to allow Aristocrat to fulfil its obligations under this Agreement.

 

5. PokerTek’s Rights

 

5.1 Right to vary the Products

 

PokerTek may vary the Product Schedule at any time either by:

 

Page 9

--------------------------------------------------------------------------------

(a) other than in respect of the Product known as PokerPro, deleting a specified
product or class of products from the Product Schedule if PokerTek ceases to
manufacture that product or class of products; or

 

(b) the addition to the Product Schedule of a further product or class of
Products.

 

5.2 Right to Terminate

 

PokerTek may terminate the Distribution Agreement (i) should Aristocrat fail to
install a minimum of [********] ([********]) units of the Product within the
first twenty-four (24) months of the Commencement Date, (ii) if thereafter
Aristocrat fails to use reasonable endeavours to promote and enter into
Licensing Agreements pursuant to Section 4.1(a), or (iii) should Aristocrat
enter into one or more Licensing Agreements that provide for a monthly payment
of less than [********] dollars ($[********]) per individual Product for at
least [********] ([********]) Products in the aggregate. In any such case,
termination shall be effective thirty (30) days after notice of termination is
received by Aristocrat.

 

6. PokerTek’s Obligations

 

6.1 General obligations

 

PokerTek will at its own expense:

 

(a) provide Aristocrat with training in the installation, operation, maintenance
and servicing of the Products as may be reasonably required by Aristocrat at a
location mutually agreed between the parties;

 

(b) provide Aristocrat with English, Spanish, French and German language
versions of sales literature and brochures regarding the Products, as are
reasonably required by Aristocrat and provide Aristocrat with equivalent
language versions of installation, maintenance, service and operating manuals
and other technical information regarding the Products as are reasonably
required by Aristocrat;

 

(c) advise Aristocrat of all new developments, updates and improvements relating
to the Products and provide them in a timely manner to Aristocrat;

 

(d) obtain and maintain all current approvals of any Regulator which is in
existence at the date of this Agreement; and

 

(e)

at its expense make any reasonably necessary changes to the Product, in a timely
and effective manner, as may be advised by Aristocrat or required by any Gaming
Authority in order to obtain any Approval or otherwise to enable Aristocrat to

 

Page 10

--------------------------------------------------------------------------------

discharge its obligation to market and enter into Licensing Agreements for the
Products in the Territory. In order to establish these requirements the Parties
will jointly agree an annual business plan by no later than 1 December in any
one year for the sales of the following calendar year. Once the annual business
plan has been agreed, PokerTek agrees to provide the necessary resources, at its
costs and in a timely and effective manner, required for Aristocrat to achieve
the annual business plan, if so requested by Aristocrat. In jointly developing
the annual business plan, the parties will consider changes to the Product that
would be necessary to market the Product in the different jurisdictions in the
Territory and PokerTek will not be required to make any such changes where
PokerTek forms the view, based on reasonable enquiries and after providing such
information as may reasonably be requested by Aristocrat, that the cost of such
changes outweigh the reasonably anticipated benefits of being able to market the
Product in the relevant jurisdiction in the Territory. The parties agree that
this provision will not apply during the first twenty four (24) months after the
Commencement Date. The parties further agree that in this event the annual
business plan will be modified to take account of the change in circumstances.

 

7. Orders

 

All Parts provided by Aristocrat to a Customer will be sourced by Aristocrat
from one or more manufacturers chosen by the parties in accordance with
Section 4.1(b) or in the alternative, with the consent of PokerTek, manufactured
by Aristocrat. In any case, the Product must be manufactured to PokerTek’s
specifications. At agreed periodic reporting intervals, Aristocrat will inform
PokerTek in writing of its forecast of the number of each type of the Product
which it expects to be supplied to a Customer.

 

8. Regulatory Matters

 

8.1 Compliance

 

(a) Aristocrat is licensed by or otherwise subject to the authority of various
Regulators and Gaming Authorities. PokerTek will provide Aristocrat with
documentation, information and assurances regarding itself, any directors,
officers, principal employees, brokers, agents or others as may be necessary in
order for Aristocrat to comply with the requests or requirements of any
Regulator or Gaming Authority.

 

Page 11

--------------------------------------------------------------------------------

(b) This Agreement:

 

  (i) is intended to authorise and facilitate the distribution of Product in a
lawful manner only and is subject to and conditional upon compliance with all
applicable laws dealing with the Product in the Territory; and

 

  (ii) will be deemed not to require or authorise any act or transaction except
as may be in full compliance with all legal requirements in the Territory or
elsewhere.

 

(c) PokerTek will cooperate with any licensing proceedings, governmental
investigations and approvals required of it by the Regulator or Gaming
Authority.

 

8.2 Co-operation

 

(a) PokerTek acknowledges and agrees that:

 

  (i) Aristocrat is and its Related Bodies Corporate are subject to various
gaming laws and regulations imposed by Gaming Authorities and accordingly is
obliged to conduct its affairs in a manner which is both ethical and in
accordance with the laws, regulations, policies and requirements imposed by the
Gaming Authorities;

 

  (ii) Aristocrat may be required or requested by a Gaming Authority to disclose
details of this Agreement and Aristocrat’s dealings with PokerTek under this
Agreement; and

 

  (iii) PokerTek must fully cooperate with Aristocrat and, at Aristocrat’s
request, with any Gaming Authority in relation to any information reasonably
requested or otherwise required to be disclosed to a Gaming Authority including
providing the Gaming Authority with copies of all documents and other
information in the possession, custody or control of PokerTek, its officers,
directors, employees or agents.

 

8.3 Termination Rights

 

(a) Aristocrat may immediately terminate this Agreement, without penalty or
liability, by written notice to PokerTek, on:

 

  (i) PokerTek’s failure to apply for, obtain or maintain any material licences,
permits and approvals from any Regulator or Gaming Authority necessary for
PokerTek to perform this Agreement or comply with applicable laws;

 

Page 12

--------------------------------------------------------------------------------

  (ii) the making of an order or recommendation by any Regulator or Gaming
Authority requiring or recommending the termination of this Agreement;

 

  (iii) the reasonable belief of Aristocrat that the continuation of this
Agreement will have a detrimental impact on the ability of Aristocrat and its
Related Bodies Corporate (or any of them) to be qualified or to hold or maintain
any licence, permit or approval issued or to be granted by any Regulator or
Gaming Authority;

 

  (iv) the commission of any act or anything that is or will be an offence
involving moral turpitude under federal, state or local laws, or which in the
opinion of Aristocrat brings PokerTek into public disrepute, contempt, scandal
or ridicule, or which insults or offends the community;

 

  (v) disapproval of this Agreement by any Regulator or Gaming Authority having
jurisdiction over such matters;

 

  (vi) PokerTek’s insolvency within the meaning of any state or federal law;

 

  (vii) any involuntary petition for bankruptcy filed against PokerTek, or
PokerTek files for bankruptcy or is adjudicated a bankrupt under any state or
federal law; or

 

  (viii) PokerTek’s assignment for the benefit of creditors or PokerTek enters
into any similar arrangement for the disposition of its assets for the benefit
of creditors.

 

(b) For the purpose of clause 8.3(a), Aristocrat’s right to terminate without
liability means that Aristocrat may terminate without any liability to PokerTek
for any damages, losses, costs charges or expenses suffered or incurred directly
or indirectly by PokerTek as a result of or in connection with such termination
regardless of whether such liability might otherwise arise in contract, tort,
for negligence, under Law (to the maximum extent permitted) or otherwise and
whether that damage is direct, indirect, consequential, special or otherwise
including but not limited to lost profits, lost opportunity, lost savings, lost
contract, business interruption. Without limitation, this exclusion applies to
all liability for consequential losses, lost profits, lost opportunity, loss of
goodwill and all other direct and indirect losses of any kind.

 

Page 13

--------------------------------------------------------------------------------

(c) PokerTek may immediately terminate this Agreement, without penalty or
liability, by written notice to Aristocrat, on:

 

  (i) Aristocrat’s failure to apply for, obtain or maintain any material
licences, permits and approvals from any Regulator or Gaming Authority necessary
for Aristocrat to perform this Agreement or comply with applicable laws;

 

  (ii) the making of an order or recommendation by any Regulator or Gaming
Authority requiring or recommending the termination of this Agreement;

 

  (iii) the reasonable belief of PokerTek that the continuation of this
Agreement will have a detrimental impact on the ability of PokerTek to be
qualified or to hold or maintain any licence, permit or approval issued or to be
granted by any Regulator or Gaming Authority;

 

  (iv) the commission of any act or anything that is or will be an offence
involving moral turpitude under federal, state or local laws, or which in the
opinion of PokerTek brings Aristocrat into public disrepute, contempt, scandal
or ridicule, or which insults or offends the community;

 

  (v) disapproval of this Agreement by any Regulator or Gaming Authority having
jurisdiction over such matters;

 

  (vi) Aristocrat’s insolvency within the meaning of any state or federal law;

 

  (vii) any involuntary petition for bankruptcy filed against Aristocrat, or
Aristocrat files for bankruptcy or is adjudicated a bankrupt under any state or
federal law; or

 

  (viii) Aristocrat’s assignment for the benefit of creditors or Aristocrat
enters into any similar arrangement for the disposition of its assets for the
benefit of creditors.

 

(d)

For the purpose of clause 8.3(c), PokerTek’s right to terminate without
liability means that PokerTek may terminate without any liability to Aristocrat
or any of its Related Bodies Corporate for any damages, losses, costs charges or
expenses suffered or incurred directly or indirectly by Aristocrat or any of its
Related Bodies Corporate as a result of or in connection with such termination
regardless of

 

Page 14

--------------------------------------------------------------------------------

 

whether such liability might otherwise arise in contract, tort, for negligence,
under Law (to the maximum extent permitted) or otherwise and whether that damage
is direct, indirect, consequential, special or otherwise including but not
limited to lost profits, lost opportunity, lost savings, lost contract, business
interruption. Without limitation, this exclusion applies to all liability for
consequential losses, lost profits, lost opportunity, loss of goodwill and all
other direct and indirect losses of any kind.

 

(e) PokerTek acknowledges that an Approval may require Aristocrat to provide
maintenance support for the Product for a period of time after the installation
of the Product. Notwithstanding the termination of this Agreement by PokerTek
pursuant to the provisions of this sub-clause, such termination will not impede
or prevent Aristocrat from complying with the terms of any Approval and PokerTek
will provide reasonable assistance to Aristocrat to enable compliance with the
terms of any such Approval.

 

9. Intellectual Property

 

9.1 PokerTek’s Intellectual Property

 

Aristocrat agrees:

 

(a) that the Product, PokerTek’s Documentation and PokerTek’s Intellectual
Property Rights are owned or licensed by PokerTek;

 

(b) to only use PokerTek’s Intellectual Property Rights in conjunction with the
normal operation of the Product and as specified in PokerTek’s Documentation;

 

(c) not to copy, modify, adopt, disassemble, decompile, reverse engineer or
otherwise attempt to derive any source code comprising the Product or merge
PokerTek’s Intellectual Property Rights with any other computer software,
hardware or any other matter;

 

(d) not to distribute, supply, give, sell, sub-licence or otherwise dispose of
PokerTek’s Intellectual Property Rights separately from the Product or remove
any of PokerTek’s Intellectual Property Rights from the Product;

 

(e) not to remove, alter or otherwise tamper with any proprietary notice, serial
number, compliance plate or any other seal affixed to the Product or any media
on which same is stored or recorded;

 

Page 15

--------------------------------------------------------------------------------

(f) to take all reasonable care of the Product while it is in Aristocrat’s
possession, including without limitation to take all reasonable steps to ensure
that all of PokerTek’s Intellectual Property Rights are secure; and

 

(g) at the request of PokerTek and at PokerTek’s expense, to provide reasonable
assistance to PokerTek in taking all steps to defend PokerTek’s Intellectual
Property Rights in the Territory.

 

9.2 Aristocrat’s Intellectual Property

 

PokerTek agrees:

 

(a) that Aristocrat’s Documentation and Aristocrat’s Intellectual Property
Rights are owned or licensed by Aristocrat; and

 

(b) at the request of Aristocrat and at Aristocrat’s expense, to provide
reasonable assistance to Aristocrat in taking all steps to defend Aristocrat’s
Intellectual Property Rights in the Territory.

 

10. Aristocrat’s Warranties

 

Aristocrat represents and warrants during the Term that:

 

(a) it has sufficient resources to perform its duties including the assignment
of adequately trained personnel who are fully conversant with the Product and
all aspects of the relationship created by this Agreement and will obtain the
equipment and tools necessary to install and repair the Product; and

 

(b) it has the authority to enter into this Agreement.

 

11. PokerTek’s Warranties

 

PokerTek represents and warrants during the Term that:

 

(a) it has the authority to enter this Agreement and grant the rights to
Aristocrat pursuant to this Agreement;

 

(b) the Product is:

 

  (i) free from any lien or encumbrance;

 

  (ii) when delivered, PokerTek will be compliant with the requirements of the
Gaming Authority for the applicable jurisdiction within the Territory; and

 

  (iii) PokerTek makes no other warranty, express or implied with respect to the
Product.

 

Page 16

--------------------------------------------------------------------------------

(c) the distribution or use of the Product does not and will not infringe any
intellectual property rights of any third party in the Territory.

 

13. Continuity of Supply

 

(a) If Aristocrat notifies PokerTek in writing within the Term that the relevant
Product is Faulty as a result of faulty design (but not faulty manufacturing),
PokerTek will at its cost and at Aristocrat or the Customer’s option (as the
case may be), repair or replace the relevant Product and Aristocrat will, if
requested by PokerTek, return the relevant Product to PokerTek at Aristocrat’s
cost.

 

(b) PokerTek agrees to deposit a copy of the source code relating to all
computer software incorporated in the Product with the escrow agent named in
PokerTek’s current source code escrow agreement (the “Escrow Agent”). PokerTek
shall deposit with the Escrow Agent, updated versions of the source code within
thirty (30) days of delivery of each new release, if any, to Aristocrat. Upon
written request, PokerTek shall deliver to Aristocrat a copy of the current
source code escrow agreement. In the event PokerTek (i) ceases operations,
initiates or becomes subject to bankruptcy or receivership proceedings seeking
liquidation, reorganization or other relief with respect to its debt not
dismissed within thirty (30) days, (ii) suspends or discontinues its business
operations, or (iii) ceases to market or offer the Product, Aristocrat will be
entitled to obtain a copy of the source code from the Escrow Agent provided at
that time Aristocrat is then in compliance in all material respects with its
obligations to PokerTek under this Agreement.

 

14. Trade Marks

 

(a) PokerTek grants to Aristocrat the non-exclusive right in the Territory to
use the Marks or artwork owned by PokerTek or licensed to PokerTek with rights
to sublicense, and identified by Aristocrat to PokerTek in writing in advance in
the promotion, advertisement and distribution of the Product for the Term in
accordance with this Agreement.

 

(b) Aristocrat must not, without the prior written consent of PokerTek, alter or
make any addition to the labelling of the Product displaying the Marks, and must
not alter, deface or remove in any manner any reference to the Trade Marks, any
reference to PokerTek or any other name attached or affixed to the Product or
their labelling, unless otherwise required by a Gaming Authority.

 

Page 17

--------------------------------------------------------------------------------

(c) All rights not specifically granted in this Agreement are reserved to
PokerTek. Nothing in this Agreement or anything done by PokerTek under this
Agreement conveys or vests any interest in any of PokerTek’s Intellectual
Property Rights to Aristocrat.

 

(d) PokerTek may in its absolute discretion take such steps to obtain trade mark
registrations in respect of the Marks as it may deem necessary. Aristocrat
undertakes (at the reasonable cost of PokerTek) to execute any and all such
documents and do all such acts which it may be required for the purpose of such
registration. Aristocrat will, at PokerTek’s request, and expense, give all
reasonable assistance to Aristocrat in any action, claim or proceedings brought
or threatened in respect of the Marks.

 

15. Termination

 

15.1 Termination by either party

 

During the Term, either party may terminate this Agreement following:

 

(a) termination of the Securities Purchase Agreement for any reason;

 

(b) a breach of any material provision of this Agreement capable of remedy by
the other party, by giving the other party written notice of its intention to
terminate the Agreement, requiring the party in breach to remedy the breach
within twenty (20) Business Days of the notice. If the breach is not remedied
within that time, the termination will be effective on the expiration of the
twenty (20) Business Day period;

 

(c) a breach by the other party of a material provision of this Agreement not
capable of remedy.

 

15.2 Immediate Termination

 

Either party may immediately terminate this Agreement if the other party:

 

(a) commits or has committed any criminal offence or an offence under relevant
gaming Law;

 

(b) is subject to or commits an Event of Default; or

 

(c) has had its Approval, licence or authorities required by the Law of the
Territory, revoked or suspended.

 

Page 18

--------------------------------------------------------------------------------

15.3 Consequences of Termination

 

In the event of termination of this Agreement by PokerTek:

 

(a) Aristocrat will immediately discontinue and refrain from all conduct and
activity which would give the appearance that it is still authorised to act on
behalf of PokerTek or take orders for any of its Product and will promptly
deliver to PokerTek, freight prepaid, all written material, Product and Parts
and any other material supplied by PokerTek to Aristocrat;

 

(b) each party will immediately pay to the other party any outstanding payments
accrued in accordance with this Agreement; and

 

(c) each party will immediately cease using the intellectual property rights of
the other.

 

15.4 Survival

 

Clauses 13, 15.3, 15.4, 16, 17, 18 and 19 will survive any termination or expiry
of this Agreement.

 

16. Exclusion of Indirect & Consequential Loss

 

To the extent permitted by Law neither party is liable to make payment for any
indirect, consequential, special, punitive or other loss, lost profits (actual
or anticipated), lost opportunity, lost savings, lost contract, business
interruption or loss of data;

 

17. Indemnification

 

PokerTek agrees to fully indemnify Aristocrat and any Customer against all
claims, liabilities, damages, judgments, decrees, costs and expenses, including
reasonable legal fees, resulting from the alleged infringement by the Product
(so long as the Product is manufactured in accordance with PokerTek’s
specifications) of a third person’s intellectual property rights and that it
will, at its own expense, defend any suit or action which may be brought against
Aristocrat or any Customer by reason of any alleged infringement. PokerTek will
indemnify and hold harmless Aristocrat from and against any expense incurred by
Aristocrat resulting from any such third party’s claims or any settlement in
favor of such third party alleging that the Product infringes or violates any
(a) patent, (b) trademark, (c) copyright, or (d) trade secret provided that
Aristocrat gives PokerTek prompt written notice of any claim under this
paragraph. PokerTek has the right to (i) assume the defense of such claim and
select counsel and (ii) consent to the entry of judgment with respect to, or

 

Page 19

--------------------------------------------------------------------------------

otherwise settle such claim and Aristocrat cooperates in the defense or
prosecution of such claim. In the defense or settlement of any such claim,
PokerTek may obtain the right to continue using the Product, or may replace or
modify the Product so it becomes non-infringing. PokerTek shall not have any
liability if the alleged infringement is based upon the use, license or sale of
the Product in combination with other products or use of an outdated version of
the Product, if use of a more recent version would have avoided the
infringement.

 

18. Confidentiality

 

(a) All Confidential Information and information concerning the intellectual
property rights of either party or its Related Bodies Corporate must not be
disclosed to any person or used other than to the extent required to perform a
party’s obligations under this Agreement.

 

(b) Clause18does not apply to:

 

  (i) the disclosure of information after it becomes generally available to the
public other by a breach of this Agreement or of any obligation of confidence to
any third party; or

 

  (ii) the disclosure of information in order to comply with any applicable Law
or legally binding order of any Regulator or Gaming Authority.

 

19. General

 

19.1 Dispute Resolution

 

(a) A dispute relating to or arising out of this Agreement (Dispute) exists when
a party gives notice (Dispute Notice) to the other party that there is a
Dispute, setting out in detail the subject matter of the Dispute.

 

(b) The parties must use all reasonable efforts to resolve any Disputes which
arise between them in connection with this Agreement in accordance with the
procedures set out in this clause19.1

 

(c) When a Dispute exists the nominees of the Chief Executive Officer of each
party will meet to discuss a resolution of the Dispute. If these persons resolve
the Dispute then the resolution will be set out in a binding statement signed by
the Chief Executive Officer of each party.

 

Page 20

--------------------------------------------------------------------------------

(d) If a Dispute is not resolved within fifteen (15) Business Days after the
Dispute Notice has been given to the other party, then the Dispute must be
referred for consideration to the Chief Executive Officers of the parties. If
these persons resolve the Dispute then the resolution will be set out in a
binding statement signed by the Chief Executive Officer of each party.

 

(e) If there is no unanimous resolution of the Dispute within ten (10) Business
Days, or such longer period as agreed in writing by the parties, after the Chief
Executive Officers of the parties have met to consider the Dispute pursuant to
clause 19.1(d) then either party may commence legal proceedings in any court or
tribunal in respect of the subject matter of the Dispute.

 

(f) Notwithstanding the foregoing provisions of this clause19.1, pending the
resolution of any Dispute the parties to this Agreement must without delay
continue to perform their respective obligations under this Agreement to the
maximum extent possible.

 

(g) Nothing in this clause 19.1will prohibit a party from seeking injunctive or
other interlocutory relief.

 

19.2 Notices

 

(a) Any notice, demand, consent or other communication (a Notice) given or made
under this Agreement:

 

  (i) must be in writing and signed by the sender or a person duly authorised
by;

 

  (ii) must be addressed and delivered to the intended recipient at the address
or fax number specified in the Party Information for the intended recipient or
the address or fax number last notified by the intended recipient to the sender
after the date of this Agreement,

 

will be taken to be duly given or made when delivered, received or left at the
fax number or address specified in the Party Information.

 

  (iii) in the case of a posted letter, on the seventh day after posting, and

 

  (iv) in the case of facsimile, on production of a transmission report by the
machine from which the facsimile was sent which indicates that the facsimile was
sent in its entirety to the facsimile number of the recipient.

 

Page 21

--------------------------------------------------------------------------------

  (v) If delivery or receipt occurs on a day that is not a Business Day in the
place to which the Notice is sent or is later than 4pm (local time) at that
place, it will be taken to have been duly given or made at the commencement of
business on the next Business Day in that place.

 

19.3 Assignment

 

Either party , must not, without the other party’s prior written consent (which
may be given or withheld in the other party’s absolute discretion) transfer or
assign any of their rights or obligations under this Agreement, including
assignment by way of charge, mortgage or other security interest.

 

19.4 Mutual Cooperation

 

The parties will cooperate with each other in respect of any documents that need
to be signed, or actions that need to be taken, to affect the intent of this
Agreement.

 

19.5 Severability

 

If any term or provision of this Agreement is declared invalid or unenforceable
by a court of competent jurisdiction, the remaining provisions remain in full
force and effect.

 

19.6 No Waiver

 

The failure of either party to insist upon the performance of any of the terms
and conditions of this Agreement, or the waiver of any breach of any of the
terms and conditions of this Agreement, will not be construed as thereafter
waiving any such terms and conditions, but the same will continue and remain in
full force and effect as if no such forbearance or waiver had occurred.

 

19.7 Governing Law

 

This Agreement is governed by the laws of North Carolina without regard to
conflict of law principles, and the parties submit to the non-exclusive
jurisdiction of the courts of that jurisdiction and courts of appeal from them.

 

19.8 Entire Agreement

 

This Agreement contains the entire agreement of the parties and each party
acknowledges that this Agreement supersedes all oral agreements,
representations, warranties or statements of fact made prior to or at the time
of the signing of this

 

Page 22

--------------------------------------------------------------------------------

Agreement and the parties acknowledge that they have not relied upon the same in
entering into this Agreement. These conditions apply to the exclusion of all
documents submitted by Aristocrat (whether before or after the date of this
Agreement) unless and until PokerTek has expressly agreed to those terms in
writing signed by an authorised officer of PokerTek.

 

19.9 Variation

 

This Agreement may not be varied except in writing signed by an authorised
officer of each party.

 

19.10 Relationship of the Parties

 

The relationship between the parties is that of independent contractors and not
employer-employee, agents, partners or fiduciaries. This Agreement does not set
up or create any franchise or joint venture, each party being individually
responsible only for its obligations as set out in this Agreement. Subject to
the terms of this Agreement, each party shall be responsible for their own
taxes, fees and costs.

 

19.11 Exclusion of Vienna Convention

 

The United Nations Convention on Contracts for the International Sale of Goods
(also known as the Vienna Convention) is expressly excluded.

 

19.12 Excusable Delays

 

Neither party will be liable for any delays in delivery or failure to perform
(except obligations to pay money) due to causes beyond the control of the party.
Such causes include acts of God, acts of a public enemy, acts of governments,
Regulators or Gaming Authority, fires, floods, typhoons, epidemics, quarantine
restrictions, strikes, or embargoes or labour, materials or Parts shortages. A
party is not required, under this clause to settle any labour dispute against
its will or to test the validity or refrain from testing the validity of
Federal, State or local Law, order, rule or regulation. If delay or failure to
perform its obligations pursuant to this clause occurs, the performance of that
party’s obligations are suspended.

 

19.13 Counterparts

 

This Agreement may be executed in a number of counterparts. The counterparts
together contribute one and the same document. A counterpart may be a facsimile.

 

Page 23

--------------------------------------------------------------------------------

Schedule 1

 

Part A - Addresses For Service

 

Name:      PokerTek, Inc. Address:      1020 Crews Road, Suite J        Matthews
NC 28106 Telephone number:      (704) 849-0860 Facsimile number:      (704)
849-9148 Name:      Aristocrat Leisure Ltd Address:      71 Longueville Road  
     Lane Cove NSW 2066 Telephone number:      612 9413 6300 Facsimile number:
     612 9420 1326

 

Page 24

--------------------------------------------------------------------------------

Product Schedule

 

PokerPro being an electronic player banked poker table product.

 

Page 25

--------------------------------------------------------------------------------

Licensing Schedule

 

Aristocrat will pay the following fees to PokerTek for the Product:

 

(a) until Aristrocat has recouped its costs under clause 4.1(b) , [********] per
cent ([********]%) of all payments received by Aristocrat from a Customer
pursuant to a Licensing Agreement, excluding maintenance and service fees in
amounts consistent with industry standards: and

 

(b) on and from the date Aristrocat has recouped its costs under clause 4.1(b),
[********] per cent ([********]%) of all payments received by Aristocrat from a
Customer pursuant to a Licensing Agreement, excluding maintenance and service
fees in amounts consistent with industry standards.

 

For the avoidance of doubt the costs which Aristocrat is entitled to recover
pursuant to clauses 4.1(b) are the actual costs incurred by Aristocrat in the
acquisition of the Product pursuant to individual Licensing Agreements plus all
cost to get the Product to the Customers premises but not including installation
and testing, sales, marketing, overhead or any other cost.

 

Such fees will be paid by Aristocrat to PokerTek within thirty (30) days of
receipt of payment from a Customer to Aristocrat pursuant to a Licensing
Agreement and net of any withholding taxes, value added taxes and the like, the
payment of which shall be the sole obligation of Aristocrat or the Customer. All
payments of such amounts shall be in United States dollars and, in the case of
receipts of Aristocrat in other currencies, based on the exchange rate effective
on the date of receipt by Aristocrat.

 

Page 26

--------------------------------------------------------------------------------

EXHIBIT A

 

POKERTEK FORM END-USER AGREEMENT

 

PokerProTM Software Licensing Agreement

 

THIS PokerProTM SOFTWARE LICENSING AGREEMENT (this “Agreement”) is entered into
on the      day of                     , 200   between PokerTek, Inc.
(“Licensor”), a North Carolina corporation with its principal offices at 1020
Crews Road, Suite J, Matthews, North Carolina 28106, and                     
(“Licensee”), with its offices at                         .

 

RECITALS:

 

WHEREAS, Licensor is the owner of a technology solution that automates poker
table play and various poker room administrative functions known as PokerPro™
(“Client Software”), which contains valuable trade secrets, patents, and
intellectual property; and

 

WHEREAS, Licensor desires to grant and Licensee desires to accept a
non-exclusive, revocable license authorizing Licensee to utilize the Client
Software on PokerPro™ tables; and

 

WHEREAS, at all times during the term of this Agreement, the parties, as may be
necessary for each of them, shall maintain all applicable licenses and permits
required for the lawful operation of Licensee’s casinos (“Casino”), the Client
Devices, and shall abide by all applicable laws, regulations, rules, and
requirements of governmental authorities applicable thereto. Licensor and
Licensee acknowledge that the subject matter of this Agreement does not violate
existing applicable laws. If at any time it is determined that the subject
matter of this Agreement violates a then existing applicable law or regulation,
then in that event, the Agreement may be immediately terminated by Licensor or
Licensee. Performance of this Agreement is contingent upon obtaining any and all
necessary initial and continuing approvals required by any regulatory agency
with jurisdiction over the subject matter of this Agreement;

 

NOW THEREFORE, in consideration of the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Licensor and Licensee hereby agree as follows:

 

1. Definitions.

 

Unless otherwise specifically defined elsewhere in this Agreement, capitalized
terms used in this Agreement have the meaning set forth below:

 

1.1. Agreement. This Agreement, and all exhibits referenced in it, all of which
are incorporated into this Agreement.

 

Page 27

--------------------------------------------------------------------------------

1.2. Client Device. Any poker table, player console, center monitor, server,
workstation, portable, hand-held or other device that operates the Software. All
Client Devices shall be owned by Licensor.

 

1.3. Client Software. The computer software program described in the first
recital of this Agreement, and all Enhancements and Updates to it.

 

1.4. Databases. The databases used by the Software to store, manipulate or
display data, including the structure and format of all tables, indexes, and
relationships in the databases and all stored procedures, triggers, and other
programmatic elements of the databases but not any test data contained in those
databases.

 

1.5. Documentation. Operator manuals, guides, technical specifications and other
printed, recorded, and electronic materials provided to Licensee to assist
Licensee to make the uses of the Software permitted under this Agreement,
including materials used for maintenance, support and other services. All
Updates and Enhancements to the Documentation provided to Licensee become part
of the Documentation as defined in this subsection.

 

1.6. Enhancements. Any addition to, change to, improvement to or deletion from
the Software after the execution of this Agreement, as a result of which the
Software provides a function or feature not originally offered or functions or
performs in an improved manner, if any, provided by Licensor to Licensee under a
separate maintenance and support agreement. Enhancements do not include
(a) computer software programs that Licensor prices separately or (b) Updates.

 

1.7. Event of Default. As set forth in Section 14.2 of this Agreement.

 

1.8. Licensed Materials. The Software and Documentation.

 

1.9. Software. The software programs licensed by Licensor to Licensee under this
Agreement. Software includes (a) Client Software; (b) Databases; and (c) all
data-conversion tools, if any, provided to Licensee under a maintenance and
support agreement with Licensor.

 

1.10. Source Code. All software program code listings (including comments)
comprising the Software and all algorithms, flow charts, logic diagrams,
structure definitions, descriptions or diagrams, data format or layout
descriptions, psuedocode, query definitions, plans, notes, and any other
written, recorded or electronic material, relating to the Software, depicted in
a form that may be read or perceived by humans directly or with the aid of a
device.

 

1.11. Updates. Any addition to, change to, improvement to or deletion from the
Software after the execution of this Agreement to correct defects in the
Software delivered under this Agreement, if any, provided by Licensor to
Licensee under a separate maintenance and support agreement. Updates do not
include Enhancements.

 

1.12. User. A Client Device that has access to the Software.

 

Page 28

--------------------------------------------------------------------------------

2. License.

 

2.1. Grant of License. The Agreement governs the license granted by Licensor to
Licensee for the Licensed Materials. Licensor grants to Licensee a
non-exclusive, non-transferable license to use the Licensed Materials at each
Casino in the manner described in this Agreement. Each Casino location will be
identified in Schedule A.

 

2.2. Permitted Use. Licensee may use the Licensed Materials only as expressly
permitted in this Agreement. Licensee must use the Licensed Materials only in
the manner and for the purposes for which the Licensed Materials were designed
and subject to all of the restrictions set forth in this Section 2.

 

2.3. Source Code and Limitation of License. This License does not entitle
Licensee to receive, use or examine any Source Code or create Documentation
relating to the Software.

 

2.4. Access by Third Parties. At no time shall any parent, subsidiary or
affiliate of Licensee or any of their employees have access to the Licensed
Materials or be deemed third-party beneficiaries under this Agreement.

 

2.5. All Non-Permitted Uses Prohibited. All uses not permitted under subsection
2.2 are prohibited. By way of example and without limitation, in making the uses
permitted under subsection 2.2, Licensee may not disassemble, decompile, reverse
engineer or modify the Software; examine the Software with debugging, memory
inspection or disk inspection tools; rent the Software; permit any third-party
to possess a copy of the Licensed Materials or to use the Licensed Materials for
commercial purposes; transmit an electronic copy of the Software by any means;
use the Software in the operation of a service bureau or time-sharing
arrangement or to provide outsourcing services; or remove or alter any notice of
copyright, trademark, trade secret or other proprietary rights in the Licensed
Materials or any copies of the Licensed Materials.

 

2.6. Sublicensed Software. Licensee’s use of computer software programs (and all
Enhancements and Updates to them) that are among the Software, that are not
owned by Licensor, and that are sublicensed by Licensor to Licensee under this
Agreement shall be subject to this Agreement and the addenda to this Agreement
applicable to the sublicensed Software.

 

3. Term.

 

3.1. The term of this Agreement shall commence on                     
            , 200  , and shall continue for 12 months, and then shall renew
automatically for additional one-year periods unless terminated in writing by
Licensee 30 days prior to renewal. First month payment is due upon signed
agreement with remaining months due no later than 5 days after the beginning of
each month. See Schedule A for pricing. Unless changed by direction of Licensor
in writing, payment shall be mailed or wired on a monthly basis directly to
Licensor at:

 

Page 29

--------------------------------------------------------------------------------

Wiring Information:

 

                                                                               
                                                                           
                                                                             
                                                                               
                                     Routing#:
                                        
                                                       Acct#:
                                        
                                                             Acct Name:
                                        
                                                   Mailing Address:    
PokerTek, Inc.     1020 Crews Rd, Suite J     Matthews, NC 28106    

 

3.2. Licensor at any time during the contract term may request removal of all
Client Devices with no financial or other obligations due to either party. Any
additional Client Devices and Licenses shall be in a Schedule A addendum signed
by both Licensor and Licensee.

 

4. Assignment of Taxes Responsibility.

 

Licensee shall pay all applicable taxes (other than taxes based on Licensor’s
income), duties, import and export fees, and any other charges or assessments
established by any federal, state, local or tribal government agency with
jurisdiction over Licensee which are applicable to its performance under this
Agreement.

 

5. Delivery and Installation.

 

Licensee shall be responsible for providing the required environment for the
Software. Licensor shall be responsible for all preparation of Client Devices on
which the Software will be installed. Licensor shall be responsible for
installation, configuration, all data manipulation, mapping, formatting, and
conversion, and all other steps necessary to cause the Software to operate,
unless Licensor and Licensee agree otherwise.

 

6. Maintenance and Support.

 

Maintenance and support, if any, shall be provided to Licensee only under a
separate maintenance and support agreement.

 

7. Marketing.

 

Licensee agrees to commit a reasonable amount of financial and human resources
toward the launching, marketing, and promotion of the Client Software to the
Casino’s customers in order to accelerate and enhance player acceptance.
Licensee financial resources dedicated to the marketing of the Client Software
will include, but will not be limited to, player promotions

 

Page 30

--------------------------------------------------------------------------------

and other programs developed by Licensee. The purpose of these marketing
programs is to provide additional financial motivation for customers to play on
the Client Devices for the first time. Licensor agrees to work with Licensee’s
management and marketing team to assist in the planning and execution of a
launch strategy for the Client Devices within Licensee’s Casino. Upon Licensee’s
successful evaluation of the Client Software, as evidenced by Licensee’s
decision to negotiate a Commercial License, Licensee agrees to act as a
reference for other customers who have expressed an interest in the Client
Software.

 

8. Ownership of Software and Intellectual Property.

 

Licensee agrees that title to (a) the Software and Updates, Enhancements, Source
Code, and Documentation, all derivative works furnished by Licensor to Licensee
or created for Licensee (except third party software incorporated therein), and
all related technology furnished to or developed for Licensee hereunder, and
(b) all copyright, patent, trade secret and other intellectual and proprietary
rights therein, are and remain the valuable property of Licensor or its vendors.
Licensee shall possess no ownership or proprietary rights in the Licensed
Material. Licensee agrees to retain the proprietary notices of Licensor and its
vendors on all originals and copies of the Licensed Materials, if any are
provided to Licensee. Licensee shall not use any of the names of Licensor or the
names of any Software licensed under this Agreement in any advertising,
promotional or public statement without the prior written consent of Licensor.

 

9. Representations and Covenants.

 

9.1. Compliance with Terms. Licensee shall monitor the Licensed Materials at its
Casino and ensure that the Licensed Materials are used only in compliance with
this Agreement. Licensee shall be responsible and liable for any and all
non-compliance with this Agreement at its Casino by Licensee or by any person or
entity who obtains access to the Licensed Materials through Licensee.

 

9.2. Notification of Defects. Licensee shall notify Licensor of any defect
Licensee believes exists in the Licensed Materials, and Licensee shall provide
to Licensor all information known or reasonably available to Licensee regarding
the alleged defect.

 

9.3. Third-Party Material. With respect to all computer programs and data and
hardware not provided by Licensor and to be used or reproduced during Licensee’s
use of the Software, Licensee represents that it has all necessary rights to use
or reproduce the computer programs and that no use of the Software in connection
therewith shall be made that causes an infringement of the right of any third
party.

 

9.4. Authority. Licensor and Licensee each represent that they have the
authority to enter into this Agreement and have all rights necessary to perform
their obligations under this Agreement. Licensor and Licensee further represent
that upon execution of this Agreement each will have taken all official action
necessary to make this Agreement a valid, binding obligation with respect to
each of Licensor and Licensee in accordance with its terms.

 

Page 31

--------------------------------------------------------------------------------

10. Indemnity.

 

10.1. Indemnity by Licensor. Licensor shall be solely responsible for, and shall
indemnify, defend, and hold harmless Licensee from any claim (including any
suit) brought against Licensee by a third party alleging that any of the
Licensed Materials infringes a United States patent, copyright or mask work
right, and shall pay all costs and damages finally awarded, provided that
Licensee gives Licensor prompt written notice of such claim, and information,
reasonable assistance and sole authority to defend or settle the claim. In the
defense or settlement of the claim, Licensor may obtain for Licensee the right
to continue using the Licensed Materials, may replace or modify the Licensed
Materials so they become non-infringing or, if such remedies are not reasonably
available, may terminate this Agreement. Licensor shall not have any liability
if the alleged infringement is based upon the use, license or sale of (a) the
Licensed Materials in combination with other products (including software) not
furnished by Licensor; or (b) an outdated version of the Licensed Materials, if
use of a more recent version would have avoided the infringement. LICENSOR
DISCLAIMS ANY LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL OR SPECIAL DAMAGES.
LICENSOR’S SOLE OBLIGATION FOR INDEMNIFICATION OR CLAIMS OF INFRINGEMENT IS
DESCRIBED IN THIS SUBSECTION.

 

10.2. Indemnity by Licensee. Except for claims arising under subsection 10.1 or
resulting from Licensor’s own gross negligence or willful or criminal
misconduct, Licensee shall upon request indemnify and hold Licensor, its agents,
directors, officers and employees, harmless against any and all damages, claims,
losses or expenses of whatever kind or nature, including reasonable attorneys’
fees and expenses incurred in defending such claims, resulting from the gross
negligence or willful or criminal misconduct of Licensee, its officers,
directors or employees, in connection with Licensee’s performance of this
Agreement; provided that Licensor gives Licensee prompt written notice of such
claim, and information, reasonable assistance and sole authority to defend or
settle the claim.

 

11. Warranties and Limitation of Liability.

 

11.1. Limited Warranty; No Other Warranty. LICENSOR MAKES NO WARRANTIES OF ANY
KIND REGARDING THE LICENSED MATERIALS OR ITS PERFORMANCE UNDER THIS AGREEMENT,
ALL OF WHICH IS PROVIDED “AS IS.” THERE ARE NO WARRANTIES OF ANY KIND, INCLUDING
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE NOR
OTHER WARRANTIES, EXPRESS OR IMPLIED (BY OPERATION OF LAW OR OTHERWISE), BY
LICENSOR WITH RESPECT TO THE LICENSED MATERIALS OR ANY OTHER GOOD OR SERVICE
PROVIDED UNDER THIS AGREEMENT. NO EMPLOYEE, AGENT OR REPRESENTATIVE OF LICENSOR
HAS THE AUTHORITY TO BIND LICENSOR TO ANY ORAL REPRESENTATION OR WARRANTY
CONCERNING THE LICENSED MATERIALS OR ANY OTHER GOOD OR SERVICE PROVIDED BY
LICENSOR. ANY ORAL OR WRITTEN REPRESENTATION OR WARRANTY NOT EXPRESSLY CONTAINED
HEREIN SHALL NOT BE ENFORCEABLE BY LICENSEE.

 

11.2. Limitation of Liability. NEITHER LICENSOR NOR LICENSEE SHALL HAVE
LIABILITY TO THE OTHER FOR ANY CLAIM ARISING FROM OR RELATED TO THIS

 

Page 32

--------------------------------------------------------------------------------

AGREEMENT OR THE LICENSED MATERIALS, WHETHER IN CONTRACT, TORT OR OTHERWISE.
NEITHER LICENSOR NOR LICENSEE SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL,
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES UNDER ANY CIRCUMSTANCES, EVEN IF EACH
PARTY HAS BEEN ADVISED OF, KNEW OR SHOULD HAVE KNOWN, OF THE POSSIBILITY
THEREOF.

 

11.3. Allocation of Risk. Section 11 of this Agreement allocates the risks under
this Agreement between Licensor and Licensee and Licensee acknowledges that
Licensor and Licensee have entered into this Agreement in reliance upon such
allocation of risk and would not enter into this Agreement in the absence of
such allocation of risk.

 

12. Confidential Information.

 

12.1. Confidential Information. Confidential Information includes any
information, not generally known in the relevant trade or industry, obtained
from Licensee or Licensor or their vendors or licensors or which falls within
any of the following general categories:

 

12.1.1 The Licensed Materials;

 

12.1.2 Information relating to trade secrets of Licensee or Licensor or their
vendors or licensors;

 

12.1.3 Information relating to existing or contemplated products, services,
technology, designs, processes, formulae, computer systems, computer software,
algorithms and research or developments of Licensee or Licensor or their vendors
or licensors;

 

12.1.4 Information relating to the business of Licensee or Licensor or that of
their vendors or licensors, including but not limited to, business forms,
handbooks, policies, and documents, business plans, business processes and
procedures, sales or marketing methods, methods of doing business, customer
lists, customer usages and/or requirements, and supplier information of Licensee
or Licensor or their vendors or licensors; or

 

12.1.5 Information marked “Confidential” or “Proprietary.”

 

12.2. Maintaining Confidentiality. A party receiving Confidential Information
(“Recipient”) from the other party (“Discloser”) agrees to keep such
Confidential Information in the strictest confidence, in the manner set forth
below:

 

12.2.1 Except as expressly permitted by this Agreement, the Recipient shall not
copy, modify, enhance, compile or assemble (or reverse compile or disassemble),
or reverse engineer Confidential Information or any thing containing or
embodying Confidential Information and shall not, directly or indirectly,
disclose, divulge, reveal, report or transfer such Confidential Information of
the other to any third party or to any individual employed by Licensor or
Licensee, other than an employee of Licensor or Licensee having a need to know
such Confidential Information and who has executed a confidentiality agreement
in substantially the form hereof.

 

Page 33

--------------------------------------------------------------------------------

12.2.2 Except as expressly permitted by this Agreement, Recipient shall not use
any Confidential Information of the Discloser or the concepts therein for its
own benefit or for the benefit of a third party or for any purpose other than
the purpose for which such Confidential Information is being disclosed.

 

12.2.3 Recipient shall not remove any proprietary legends or notices, including
copyright notices, appearing on or in the Confidential Information of the
Discloser.

 

12.2.4 Recipient shall take appropriate action with respect to each and every
person permitted access to any Confidential Information of the Discloser to
ensure that each such person complies with the confidentiality provisions
hereof. Recipient shall use its best efforts to enforce the proprietary rights
of the Discloser and the Discloser’s vendors, licensors, and suppliers
(including but not limited to seeking injunctive relief where reasonably
necessary) against any person who has possession of or discloses Confidential
Information in a manner not permitted by this Agreement.

 

12.2.5 Any materials which are or which relate to or derive from any
Confidential Information shall be kept confidential and all such materials shall
be returned to the Discloser or destroyed upon satisfaction of the purpose for
the disclosure of such information.

 

12.2.6 The parties may disclose Confidential Information to their attorneys in
the course of representation on a matter reasonably requiring the attorneys to
receive the Confidential Information and also may disclose Confidential
Information to their certified public accountants to the extent necessary to
enable those accountants to prepare financial statements or reports required by
applicable law.

 

12.2.7 In the event that any demand is made in litigation, or other proceeding
for disclosure of Confidential Information, Recipient shall assert this
Agreement as a ground for refusing the demand, shall not disclose the
Confidential Information, and, if necessary, shall seek a protective order or
other appropriate relief to prevent or restrict and protect any disclosure of
Confidential Information.

 

12.3. Limitation on Confidentiality Obligation. Discloser agrees that Recipient
shall have no obligation with respect to any information that the Recipient can
establish:

 

12.3.1 Was already known to Recipient;

 

12.3.2 Was or becomes publicly known through no wrongful act of Recipient or a
third party;

 

12.3.3 Was rightfully obtained by Recipient from a third party without similar
restriction and without breach hereof;

 

12.3.4 Was used or disclosed by Recipient with the prior written authorization
of the other party;

 

Page 34

--------------------------------------------------------------------------------

12.3.5 Was disclosed pursuant to the requirement or request of a governmental
agency, which disclosure cannot be made in confidence, provided that, in such
instance, Recipient shall first give to the other party notice of such
requirement or request; or

 

12.3.6 Was disclosed pursuant to the order of a court of competent jurisdiction
or a lawfully issued subpoena, provided that the Recipient shall take reasonable
steps to obtain an agreement or order that, to the greatest extent possible,
this Agreement will be applicable to all Recipients of disclosures under the
court order or subpoena.

 

12.4. Unintentional Disclosure. Notwithstanding anything contained herein to the
contrary, in the event that a party is unintentionally exposed to any
Confidential Information of the other party, the unintended recipient agrees
that it shall not, directly or indirectly, disclose, divulge, reveal, report,
use or transfer such Confidential Information to any person or entity or use
such Confidential Information for any purpose whatsoever.

 

13. Assignment.

 

Licensee shall not sublicense, transfer or assign the Licensed Materials or this
Agreement or any portion thereof, or any right or obligation thereunder, unless
Licensee has obtained the prior written consent of Licensor, in Licensor’s sole
and absolute discretion. Any attempted assignment in violation of this
Section 13 shall be void.

 

14. Termination and Default.

 

14.1. Termination. In the event Licensor terminates this Agreement, Licensee
shall return the Client Devices and all Licensed Material to Licensor within
five (5) business days. Either party may terminate this Agreement at any time by
giving three (3) business day’s written notice to the other party.

 

14.2. Default. Notwithstanding any other provision of this Agreement, the
occurrence of any one or more of the following events shall constitute a
non-exclusive Event of Default: (a) any representation or warranty made hereof
proves to be knowingly false or erroneous in any material way when made or shall
fail to be true and correct in all material respects at any time during the term
of this Agreement; or (b) a party’s failure to perform any material obligation
(whether or not expressly identified as material) contained in this Agreement.

 

14.3. Rights upon Default. Upon an Event of Default, the non-defaulting party
shall have the right to (a) terminate this Agreement upon written notice;
(b) cease providing services, including terminating access to the Client
Software; (c) seek all legal and equitable remedies permitted by applicable law
and the terms of this Agreement; and (d) collect remaining months owed under
Section 3.1. To the extent permitted by applicable law, the remedies set forth
in this subsection 14.3 shall be cumulative and not exclusive, and may be
exercised successively or concurrently.

 

Page 35

--------------------------------------------------------------------------------

15. Miscellaneous.

 

15.1. Covenant not to Employ. During the term of this Agreement, and for a
period of one (1) calendar year from the date of its termination, each party
agrees that it shall not employ or solicit the employment of any employee of the
other party, without the prior written consent of the employee’s current
employer.

 

15.2. Notices. Any notice, consent or other communication in connection with
this Agreement shall be effective on the date sent and shall be delivered by
personal service, via facsimile with written confirmation of receipt or by
express overnight delivery. Notices should be addressed as indicated at the
beginning of this Agreement.

 

15.3. Severability. If any provision of this Agreement is held invalid or
unenforceable by a court of competent jurisdiction, such provision will be
deemed modified only to the extent necessary to render that provision valid or
excluded from this Agreement, as the situation may require; and this Agreement
shall be enforced and construed as if such provision had been included as so
modified.

 

15.4. Fees and Expenses. If either party institutes an action to enforce this
Agreement or any of its terms, the prevailing party shall also be entitled to
receive all of its costs, expenses and reasonable attorneys’ fees.

 

15.5. Relationship of the Parties. The relationship of the parties established
by this Agreement is solely that of independent contractors, and nothing
contained in this Agreement shall be construed to make Licensee (or its agents
or employees) the representative, agent or co-venturer of Licensor for any
purpose. No employee, agent or representative of Licensor has the authority to
bind Licensor to any oral representation or warranty concerning the Licensed
Material. Any written representation or warranty not expressly contained herein
shall not be enforceable by Licensee.

 

15.6. Survival of Provisions. The rights and obligations created under Sections
8 through 14, and all accrued and unpaid obligations arising in this Agreement,
shall survive the termination of this Agreement.

 

15.7. Governing Law. This Agreement and the obligations contained herein shall
be governed and construed, performed and enforced in accordance with the
applicable laws of                      without regard to conflict of law
principles.

 

15.8. Dispute Resolution. In the event of any dispute, controversy, claim,
question or difference arising out of or relating to this Agreement or any
breach hereof, upon written notice by any party to the others, the dispute,
claim, question or difference shall be finally settled by a binding proceeding
administered by the                      or as otherwise specifically delegated
under                     . This Agreement is intended to be binding upon the
signatories hereto and their successors and assigns.

 

15.9. Title to Devices. The Devices are provided by Licensor to Licensee only
for the term of this Agreement. The Devices shall remain the sole and exclusive
property of Licensor and shall never become by agreement, act of law or
otherwise, security for any obligation or

 

Page 36

--------------------------------------------------------------------------------

property of Licensee. Should Licensee cease doing business for any reason, fail
to maintain all required gaming licenses, or in the event of default by
Licensee, in addition to any other remedy at law or equity, Licensor may enter
upon the premises of Licensee and retake the Devices. Nothing in this Agreement
will be construed as conveying any ownership right, title or interest in or to
the Devices or the intellectual and proprietary rights associated therewith.
Licensee shall keep the Devices at all times free and clear of any and all
claims, liens, levies, processes, security interests and encumbrances, except
for any security interest granted to Licensor by Licensee. The filing of a
petition by or against Licensee under any applicable bankruptcy laws shall
constitute a default hereunder and Licensor may thereafter terminate this
Agreement. Licensee shall not interfere with the right to remove the Devices in
this event.

 

15.10. Delays or Omissions. Unless specifically limited by the particular
provision giving rise thereto, no delay or omission in exercising any right,
power or obligation accruing to either party hereunder shall impair any such
right, power or obligation; nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence thereto, or of any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default thereto. Any waiver,
permit, consent or approval of any kind or character of any breach or default
hereunder, or any waiver on the part of either party of any provisions or
conditions hereof, must be in writing. All remedies, either hereunder or by
applicable law or otherwise afforded to either party, shall be cumulative and
not alternative.

 

15.11. Compliance with Applicable Laws. Without limiting any other provision of
this Agreement, Licensee shall be solely responsible for complying with all
applicable laws and regulations applicable in any nation, or political
subdivision thereof, in which it engages in business thereunder.

 

15.12. Force Majeure. Neither party shall be liable to the other by reason of
any failure of performance hereunder (except obligations to pay) if such failure
arises out of causes beyond such party’s reasonable control, despite the
reasonable efforts, and without the fault or negligence of such party. A party
experiencing such an event shall give as prompt notice as possible under the
circumstances.

 

15.13. Further Assurances. The parties hereto shall each perform such acts,
execute and deliver such instruments and documents, and do all such other things
as may be reasonably necessary to accomplish the transactions contemplated in
this Agreement.

 

15.14. Entire Agreement; Amendment. The Agreement constitutes the complete and
exclusive agreement of the parties with respect to the licensing of the Licensed
Materials to Licensee, superseding all other communications of any kind by any
means between Licensor and Licensee relating to the subject matter of this
Agreement. The parties have read this Agreement, and they agree to be bound by
its terms. Any amendment or waiver of this Agreement or any exhibit thereto must
be in writing and executed by the parties hereto.

 

15.15. Successors and Assigns. All provisions of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by and against the respective
successors and permitted assigns of the parties.

 

Page 37

--------------------------------------------------------------------------------

Executed and effective this      day of                     , 200  .

 

POKERTEK, INC.:    

 

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

Signature   Signature

 

 

--------------------------------------------------------------------------------

 

 

 

--------------------------------------------------------------------------------

Printed Name   Printed Name

 

 

--------------------------------------------------------------------------------

 

 

 

--------------------------------------------------------------------------------

Title   Title

 

 

--------------------------------------------------------------------------------

 

 

 

--------------------------------------------------------------------------------

Date   Date

 

Page 38

--------------------------------------------------------------------------------

SCHEDULE A

 

Licensed Products:

 

Software/User License Fees:

 

Consulting & Implementation Service Fees:

 

Maintenance Services Fees:

 

Client Devices Purchase:

 

Executed and effective this      day of                     , 200  .

 

POKERTEK, INC.:    

 

 

--------------------------------------------------------------------------------

 

 

 

--------------------------------------------------------------------------------

Signature   Signature

 

 

--------------------------------------------------------------------------------

 

 

 

--------------------------------------------------------------------------------

Printed Name   Printed Name

 

 

--------------------------------------------------------------------------------

 

 

 

--------------------------------------------------------------------------------

Title   Title

 

 

--------------------------------------------------------------------------------

 

 

 

--------------------------------------------------------------------------------

Date   Date

 

Page 39

--------------------------------------------------------------------------------

EXECUTED AS AN AGREEMENT

 

Executed for and on behalf of

Aristocrat International Pty. Limited

by Bruce John Yahl, Company Secretary

/s/ Bruce John Yahl

--------------------------------------------------------------------------------

Signature

 

 

--------------------------------------------------------------------------------

 

 

Executed for and on behalf of

PokerTek, Inc. by Gehrig H. White,

Chief Executive Officer

/s/ Gehrig H. White

--------------------------------------------------------------------------------

Signature

 

 

--------------------------------------------------------------------------------

 

Page 40