Document:

EX-10.4

 

Exhibit 10.4

NEW HORIZONS WORLDWIDE, INC.

RESTRICTED STOCK AGREEMENT

     THIS RESTRICTED STOCK AGREEMENT is made on July 5, 2006, between New Horizons Worldwide, Inc.,
a Delaware corporation (the “Company”), and Mark A. Miller (the “Executive”).

WITNESSETH:

     WHEREAS, the Company desires to provide certain of its officers, directors and key personnel
with an equity-based incentive to maintain and enhance the performance and profitability of the
Company; and

     WHEREAS, the Committee has determined that the Executive should be granted restricted stock
upon the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, the Company and the Executive agree as follows:

     1. Definitions. Capitalized terms shall have the following meanings:

	 	(a)	 	“Act” means the federal Securities Act of 1933, as
amended.
	 
	 	(b)	 	“Adjusted EBITDA” means, with respect to any fiscal
period, the sum of, without duplication, (i) net income for that fiscal period,
plus (ii) any extraordinary or non-operating loss reflected in such net
income, minus (iii) any extraordinary or non-operating gain reflected
in such net income, plus (iv) interest expense of the Company for that
fiscal period, plus (v) the aggregate income tax expense of the Company
for that fiscal period (whether or not payable during that fiscal period),
plus (vi) depreciation and amortization expense of the Company for that
fiscal period, plus (vii) all other non-cash, extraordinary expenses of
the Company for that fiscal period, in each case as determined in accordance
with generally accepted accounting principles, consistently applied, and in the
case of items (iv), (v), (vi) and (vii), only to the extent reflected in the
determination of net income for that fiscal period, plus (viii) to the
extent deducted in determining net income for such fiscal period, non-cash
charges of the Company during such fiscal period relating to the Company’s
compliance with Financial Accounting Standards Board Statement No. 142,
plus (ix) to the extent deducted in determining net income for such
fiscal period, non-cash charges recorded against earnings in the Company’s
financial statements for such fiscal period with respect to the write-down of
leasehold estates as a result of the sublease of such leasehold estates,
plus (x) non-cash charges associated with Options.

 

 

	 	(c)	 	“Affiliate” means any person or entity which, at the
time of reference, directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, the Company.
	 
	 	(d)	 	“Agreement” means this instrument, as in effect on the
date of this Agreement, and as may be amended from time to time.
	 
	 	(e)	 	“Change in Control” shall have the meaning provided to
it in the Executive’s Employment Agreement with the Company.
	 
	 	(f)	 	“Code” means the Internal Revenue Code of 1986, as
amended, and any successor statute.
	 
	 	(g)	 	“Committee” means the Compensation Committee of the
Board of Directors of the Company.
	 
	 	(h)	 	“Company” means New Horizons Worldwide, Inc., a
Delaware corporation, and any successor thereto.
	 
	 	(i)	 	“Disability” or “Disabled” shall have the
meaning provided to it in Executive’s Employment Agreement with the Company.
	 
	 	(j)	 	“Shares” means shares of the $.01 par value common
stock of the Company, or any security into which such shares may be converted
by reason of any transaction or event of the type referred to in Section 9
hereof.

     2. Grant of Shares. The Company shall issue to the Executive, subject to the terms
and conditions set forth in this Agreement, Three Hundred Fifty Thousand (350,000) Shares (the
“Grant”). In consideration of the Grant to the Executive, the Executive agrees that the
Shares shall be subject to the vesting provision set forth in Section 3 of this Agreement.

     3. Vesting Restriction.

     (a) Except as otherwise provided in Sections 3(a) and 3(b) below, in the event that the
Executive continues to remain employed by the Company or an Affiliate and the Company achieves the
Adjusted EBITDA targets set forth in this Section 3(a), the Executive will be entitled to a
nonforfeitable right to a portion of the Shares in accordance with the following schedule. In the
event that the Executive ceases to be employed by the Company on or after the date hereof for any
reason prior to achieving the targets set forth below, the Executive will forfeit any and all
rights to the portion of the Shares that have not vested in accordance with the following schedule.

2

 

	 	 	 	 	 
	Company Adjusted EBITDA Target	 	Vested Shares
	(i) $5,000,000 in Adjusted EBITDA during any consecutive
twelve (12) month period ending on or before June 30, 2009,
or (ii) $1,250,000 in Adjusted EBITDA during the three (3)
months ending June 30, 2009.
	 	175,000 Shares
	 
	 	 	 	 
	$7,000,000 in Adjusted EBITDA during any consecutive twelve
(12) month period ending on or before June 30, 2011.
	 	175,000 Shares

     (b) If the Executive dies or becomes Disabled while employed by the Company prior to achieving
the targets set forth in Section 3(a), the Shares shall nevertheless vest if such target(s) are
achieved (i) with respect to any twelve (12) month target, for any calendar twelve (12) month
period ending during the calendar (12) month period immediately following such death or Disability,
or (ii) with respect to the three (3) month target, for any calendar three (3) month period ending
during the calendar three (3) month period immediately following such death or Disability.

     (c) If, while the Executive is employed by the Company, a Change in Control occurs, all Shares
granted hereunder shall immediately vest regardless of whether such Shares would have vested
pursuant to the schedule set forth in Section 3(a).

     4. Escrow. The certificate or certificates representing the Shares will remain in the
possession of the Company to be held by it in escrow until the Shares vest in accordance with
Section 3 hereof.

     5. Shareholder Rights. During the period the Shares are held in escrow and registered
in the Executive’s name, and after execution and delivery of the Irrevocable Stock Powers to the
Company in accordance with Section 7 of this Agreement, the Executive will be entitled to vote the
Shares and to receive dividends on the Shares. Any common shares distributed with respect to such
Shares shall be deemed to be Shares subject to the restrictions in this Agreement.

     6. Issuance of Shares; Restrictive Legends. The Committee may provide that one or
more Share certificates representing the Shares shall be registered in the Executive’s name. All
certificates representing Shares shall have affixed thereto legends in substantially the following
form, in addition to any other legends that may be required under federal or state securities laws:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF

3

 

1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS A REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS WITH RESPECT TO SUCH SECURITIES SHALL BE EFFECTIVE OR
UNLESS SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION UNDER THE ACT AND SUCH
LAWS IN THE OPINION OF COUNSEL TO THE HOLDER, WHICH OPINION AND COUNSEL MUST
BE REASONABLY SATISFACTORY TO THE COMPANY.”

     7. Irrevocable Stock Powers. To facilitate the escrow of the Shares and any
reconveyance of the Shares to the Company upon forfeiture, sale of the Shares or any other event,
the Executive has delivered to the Company the Irrevocable Stock Power attached as Exhibit
A hereto, with respect to the Shares, executed by the Executive in blank as of the date of this
Agreement. The Executive will execute such additional Irrevocable Stock Powers as may be required
by the Company. As soon as practicable after the vesting of any Shares, the Company shall issue or
reissue to the Executive (or to the Executive’s designated beneficiary in the event of the
Executive’s death), one or more certificates for the Shares represented by the Grant.

     8. Restriction on Transfer. No Share issued pursuant to the Grant may be assigned,
transferred, otherwise encumbered or disposed of by the Executive until such Share has vested in
accordance with the schedule set forth in Section 3.

     9. Adjustment Upon Changes in Capitalization. The number of Shares which may be
purchased pursuant to the Grant shall be appropriately adjusted as the Committee may determine for
any change after the date of the Agreement in the number of issued Shares resulting from the
subdivision or combination of Shares or other capital adjustments, or the payment of a stock
dividend, or other change in the Shares effected without receipt of consideration by the Company;
provided, that any fractional Shares resulting from any such adjustment shall be
eliminated. Adjustments under this Section 9 shall be made by the Committee, whose determination
as to the adjustments to be made, and the extent thereof, shall be final, binding and conclusive.

     10. Investment Representations.

     The Executive represents, warrants and covenants as follows:

          (a) The Executive is purchasing the Shares for his own account for investment only, and not
with a view to, or for sale in connection with, any distribution of the Shares in violation of the
Act, or any rule or regulation under the Act.

          (b) The Executive has had such opportunity as he has deemed adequate to obtain from
representatives of the Company such information as is necessary to permit him to evaluate the
merits and risks of his investment in the Company.

4

 

          (c) The Executive has sufficient experience in business, financial and investment matters to
be able to evaluate the risks involved in the issuance of the Shares pursuant to this Agreement and
to make an informed investment decision with respect to such issuance.

          (d) The Executive can afford a complete loss of the value of the Shares and is able to bear
the economic risk of holding such Shares for an indefinite period.

          (e) The Executive understands that (i) the Shares have not been registered under the Act and
are “restricted securities” within the meaning of Rule 144 under the Act, (ii) the Shares cannot be
sold, transferred or otherwise disposed of unless they are subsequently registered under the Act or
an exemption from registration is then available; (iii) in any event, the exemption from
registration under Rule 144 will not be available for at least one year and even then will not be
available unless a public market then exists for the common shares of the Company, adequate
information concerning the Company is then available to the public, and other terms and conditions
of Rule 144 are complied with; and (iv) there is now no registration statement on file with the
Securities and Exchange Commission with respect to any stock of the Company and the Company has no
obligation or current intention to register the Shares under the Act.

     11. Company Representations. The Company represents and warrants that the issuance,
sale and delivery of the Shares, upon the terms and conditions set forth herein, have been duly
authorized by all requisite action of the Board of Directors of the Company. When issued upon the
terms and conditions of this Agreement, the Shares will be validly issued, fully paid and
nonassessable.

     12. Withholding Taxes; Section 83(b) Election.

          (a) The Executive acknowledges and agrees that the Company has the right to deduct from
payments of any kind otherwise due to the Executive any federal, state or local taxes of any kind
required by law to be withheld with respect to the issuance of the Shares by the Company.

          (b) The Executive has reviewed with the Executive’s own tax advisors the federal, state, local
and foreign tax consequences of this investment and the transactions contemplated by this
Agreement. The Executive is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. The Executive understands that the Executive
(and not the Company) shall be responsible for the Executive’s own tax liability that may arise as
a result of this investment or the transactions contemplated by this Agreement. The Executive
understands that it may be beneficial in many circumstances to elect to be taxed at the time the
Shares are granted rather than when and as the Shares vest pursuant to Section 2 hereof by filing
an election under Section 83(b) of the Code with the IRS within 30 days from the date of the grant
of the Shares.

     THE EXECUTIVE ACKNOWLEDGES THAT IT IS THE EXECUTIVE’S SOLE RESPONSIBILITY AND NOT THE
COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(B).

5

 

     13. Miscellaneous.

          (a) No Rights To Employment. Nothing contained in this Agreement shall be construed
as giving the Executive any right to be retained, in any position, as an employee or Director of
the Company. The Executive acknowledges and agrees that the vesting of the Shares pursuant to
Section 3 hereof is earned only by continuing service as an employee at the will of the Company
(not through the act of being hired or purchasing shares hereunder). The Executive further
acknowledges and agrees that the transactions contemplated hereunder and the vesting schedule set
forth herein do not constitute an express or implied promise of continued engagement as an employee
for the vesting period, for any period, or at all.

          (b) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
and each other provision of this Agreement shall be severable and enforceable to the extent
permitted by law.

          (c) Waiver. Any provision for the benefit of the Company contained in this Agreement
may be waived, either generally or in any particular instance, by the Board of Directors of the
Company.

          (d) Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the Company and the Executive and their respective heirs, executors, administrators, legal
representatives, successors and assigns.

          (e) Notice. All notices required or permitted hereunder shall be in writing and
deemed effectively given upon personal delivery or five days after deposit in the United States
Post Office, by registered or certified mail, postage prepaid, addressed to the other party hereto
at the address shown beneath his or its respective signature to this Agreement, or at such other
address or addresses as either party shall designate to the other in accordance with this Section
13(e).

          (f) Pronouns. Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns
and pronouns shall include the plural, and vice versa.

          (g) Entire Agreement. This Agreement constitutes the entire agreement between the
parties, and supersedes all prior agreements and understandings, relating to the subject matter of
this Agreement.

          (i) Amendment. This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Executive.

          (j) Governing Law. This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of Delaware, without regard to any applicable conflict of
laws principles, and in accordance with applicable federal law.

(Signature Page Follows)

6

 

     IN WITNESS WHEREOF, the parties hereto have executed this Restricted Stock Agreement as of the
day and year first above written.

	 	 	 	 	 
	 	NEW HORIZONS WORLDWIDE, INC.

 	 
	 	/s/ Curtis Lee Smith, Jr.
 	 
	 	By: 	Curtis Lee Smith, Jr. 	 
	 	Its: 	
Chairman
 	 
	 
	 	EXECUTIVE

 	 
	 	/s/ Mark A. Miller
 	 
	 	Signature 	 
	 	 	 
	 
	 	Mark A. Miller 
Printed Name

 	 
	 	 	 
	 	 	 
	 	 	 
	 

7Exhibit 4.1

    Exhibit
      4.1
 

    

    

    

    AGREEMENT

    

    INTERNATIONAL
      GAMING AND ENTERTAINMENT LIMITED

    

    and

    

    MAHJONG
      SYSTEMS LIMITED 

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    MEMORANDUM
      OF AGREEMENT

    

    

    

    entered
      into between:

    

    

    INTERNATIONAL
      GAMING AND ENTERTAINMENT LIMITED

    

    A
      company
      duly incorporated under the laws of Antigua

    

    

    

    and

    

    

    

    MAHJONG
      SYSTEMS LIMITED 

    

    A
      company
      domiciled in the Turks and Caicos Islands that offers a centralised Mahjong
      Gaming System and manages the settling of winnings and losses between
      participants.

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    RECITALS

    

    WHEREAS
      Intertops operates a gaming web site as part of their business

    

    AND
      WHEREAS Mahjong
      Systems Limited is a company established to operate a centralised gaming engine
      and settlement system for the provision of games to customers of its
      partners;

    

    AND
      WHEREAS
      Intertops wishes to integrate a multi player mahjong game into its existing
      gaming web site ;

    

    NOW
      THEREFORE
      the
      Parties agree to the following:

    

    
      	1.	
              DEFINITIONS
                

            

    

     

    
      Unless
        the contrary is clearly indicated, the following words and/or phrases, shall
        have the following meaning:

    

    

      
        	
                1.1
                  “this / the Agreement” 

              	
                shall
                  mean this written document together with all written appendices,
                  annexures, exhibits or amendments attached to it from time to time
                  by
                  written agreement between the parties;

              
	
                 

              	 
	
                1.2
                  “Commencement Date”

              	
                 shall
                  mean the date on which he
                  duly authorized representatives of the Parties affixes their signatures
                  to the Agreement;

              
	
                 

              	
              
	
                1.3
                  “Confidential Information” 

              	
                shall
                  mean the personal information
                  of the Introduced Players, including personal information and play
                  history;

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	
                 

              	 
	
                1.4
                  “Currency”

              	
                 shall
                  mean (not limited to) United States
                  Dollars or EUROs;

              
	
                 

              	 
	
                1.5
                  "Rake" 

              	
                shall
                  mean the share, in the Currency,
                  of the winnings paid in each game that is collected by MSL as a
                  fee for
                  its service; 

              
	
                 

              	 
	
                1.6
                  "MSL"

              	
                shall
                  mean a company with
                  registered address Mahjong
                  Systems Limited, Britannic House, Providenciales, Turks and Caicos
                  Islands, B.W.I represented by the member of the Board Ian
                  Sherrington;

              
	
                 

              	 
	
                1.7
                  "Introduced Players" 

              	
                shall
                  mean players of the Mahjong Games, introduced by Intertops as recorded
                  by
                  the mahjong system;

              
	
                 

              	 
	
                1.8
                  "Mahjong Games"

              	
                 shall
                  mean the multi player Mahjong game and any other games that MSL
                  may make
                  available from time to time;

              
	
                 

              	 
	
                1.9
                  “Parties” 

              	
                shall
                  mean Intertops and MSL;

              
	 	 
	
                1.10
                  “Partners” 

              	
                shall
                  mean all gaming systems that
                  provide players and integrate with MSL in a manner similar to that
                  contemplated in this agreement;

              
	 	 

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	
                1.11 “Float”
                  

              	
                shall
                  mean the funds held as Deposit by MSL and adjusted in the monthly
                  settlement;

              
	 	 
	
                1.12
                  “Float Amount” 

              	
                The
                  amount of Float that is agreed
                  between MSL and Intertops, as adjusted from time to time, and held
                  by MSL
                  to cover possible losses by Players;

              
	 	 
	
                1.13
                  “Intertops”

              	
                shall
                  mean International Gaming and Entertainment Limited, a company
                  duly
                  incorporated under the laws of Antigua, having its address for
                  service
                  under this Agreement at 60 Nevis Street, St John,
                  Antigua;

              

      

    

    
 

    1.14   Any
      reference to the singular includes the plural and vice versa;

    

    1.15   Any
      reference to natural persons includes legal persons and vice versa;

    

    1.16   Any
      reference to a gender includes other genders;

     

    
      
        1.17   The
          clause
          headings in this agreement have been inserted for convenience only and
          shall not
          be taken into account in its interpretation.

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.   DURATION

    

    2.1    The
      Agreement shall commence on the Commencement
      Date.

    
       

      2.2    The
        Agreement
        will continue in force for a period of ten (10) years calculated from the
        Commencement
        Date
        and
        thereafter be renewed for further periods of ten (10) years 

      subject
        to
        either
        of the Parties’ right to terminate the Agreement by giving one (1) months prior
        written notice after the expiry of the initial ten (10) year term.

       

      2.3    In
        the event
        that MSL is sold the purchaser will honour all terms of this
        agreement.

      3.     RIGHT
        OF
        PARTICIPATION IN REVENUE SHARING

    

     

      3.1   The
        Parties agree that
        other Partners may participate in revenue sharing with MSL in a similar manner
        to that contemplated in this Agreement. 

    

     

    

    4.   RIGHT
      AND OBLIGATIONS OF MSL

     

         MSL
      shall:

    

    
      	4.1      
                	
              Have
                the right to use third parties to perform any of these rights and
                obligations;

            

    

    

    
      	4.2      
                	
              Ensure
                that it is legally authorized to provide the Mahjong
                Games;

            

    

    

    
      	4.3      
                	
              Ensure
                that all transactions in respect of its obligations in terms of this
                Agreement are conducted in the Currency as defined in the systems
                specifications;

            

    

    

    
      	4.4       
                	
              Settle
                all net differences between Partners on a monthly basis within 30
                days of
                the end of each month by, 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	4.4.1    
                	
              in
                the event that the Float is less than the Float Amount, instructing
                a
                Partner to remit funds to return the Float to the Float Amount;
                

            

    

    
      	4.4.2    
                	
              in
                the event that the Float is greater than the Float Amount, paying
                the
                Partner the excess amount;

            

    

    

    
      	4.5       
               	
              Pay
                the Intertops commissions, as a percentage of the Rake, to Intertops
                as
                defined in Schedule 1, these commissions settled in the same transactions
                as the settlement defined in 4.4;

            

    

    

    
      	4.6       
                	
              Provide
                monthly report of Float movements and commissions due to Intertops
                and
                provide real-time access to financial and game
                information;

            

    

    

    
      	4.7        
               	
              Hold
                the Float Amount in trust for Intertops and return all amounts that
                are
                not spent in the case of cancellation to
                Intertops

            

    

    

    
      	4.8        
               	
              Monitor
                the Float Amount and inform Intertops if it is insufficient for the
                current play rate

            

    

    

    
      	4.9       
                	
              Keep
                full and proper books of accounts and records showing clearly all
                transactions relating to MSL's obligations in respect of this
                Agreement;

            

    

    

    
      	4.10     
                	
              Allow
                any person authorized by Intertops to have access at all reasonable
                times
                to MSL's premises for the purposes of inspecting the books and records
                to
                the extent that this is necessary to ensure Intertops’s interests are
                being protected as provided for in this
                Agreement;

            

    

    

    
      	4.11     
                	
              Provide
                all computer components, equipment and software needed to provide
                the
                electronic system to operate the Mahjong Games, including back office
                systems that may be accessed by Intertops support staff to provide
                player
                support;

            

    

    

    
      	4.12     
                	
              Provide
                systems and make best endeavors to prevent collusion, and update
                these
                systems on an ongoing basis where
                appropriate;

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	4.13     
                	
              Provide
                support and service as follows to Intertops for technical and software
                issues:

            

    

    

    
      	4.13.1     	
              Respond
                to problem notifications within two (2) hours of being advised of
                a
                problem. MSL will make best endeavors to solve the problem within
                twelve
                (12) hours of receiving notification of a
                problem;

            

    

    

    
      	4.13.2     	
              MSL
                has no right to communicate with, nor ownership of, Introduced
                Players

            

    

    

    5.   RIGHTS
      AND OBLIGATIONS OF INTERTOPS

    

    Intertops
      shall:

    

    
      	
               5.1

            	
              Promote
                the Mahjong Games and be responsible for all associated
                costs;

            

    

    

    
      	5.2          	
              Not
                bring MSL into disrepute by marketing or selling the Mahjong Games
                in any
                fashion deemed to be illegal or
                undesirable;

            

    

    

    
      	
               5.3

            	
              Use
                best endeavors to ensure that its activities do not violate the laws
                of
                any country;

            

    

    

    
      	5.4          	
              Inform
                MSL as soon as possible of any legal difficulties that are encountered
                in
                respect of the promotion of the Mahjong
                Games;

            

    

    

    
      	5.5       
                	
              Be
                responsible for all costs incurred by Intertops in the software
                integration;

            

    

    

    
      	5.6       
                	
              Be
                responsible for and bear all costs with relation to the player
                relationship including:

            

    

    

    
      	5.6.1    
                	
              Acquiring
                funds into players’ accounts that may be subsequently used for the Mahjong
                Game,

            

    

    
      	5.6.2    
                	
              Providing
                customer support to players,

            

    

    
      	5.6.3    
                	
              Settlement
                of player withdrawals,

            

    

    
      	5.6.4       	
              Managing
                and funding where necessary any shortfalls through charge backs or
                fraud,

            

    

    
      	5.6.5    
                	
              Provision
                of all software and hardware systems associated with the player
                relationship;

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	5.7       
                	
              Pay
                an initial and annual License Fee as per Schedule
                1;

            

    

    

    
      	5.8       
                	
              Deposit
                funds with MSL to establish the Float. The Float will cover the expected
                maximum deficit that would be realized in the course of one month,
                such
                float to be adjusted where necessary during the course of the month
                in
                good time to avoid players being refused games. The initial float
                amount
                is set as per Schedule 1.

            

    

    

    6.    INTELLECTUAL
      PROPERTY RIGHTS

    

    
      	6.1       
                	
              Intertops
                shall not acquire any right, title or interest in any copyright or
                other
                intellectual property rights in the Mahjong Games by virtue of this
                Agreement;

            

    

    

    
      	6.2       
                	
              MSL
                shall not acquire any right, title or interest in any copyright or
                other
                intellectual property rights in Intertops’s trademarks, trade names,
                copyrights and other rights used or embodied in or in connection
                with its
                activities.

            

    

    

    7.    VALIDITY 

    

    
      	
              7.1

            	
              If
                any provision of this Agreement
                is found or held to be invalid or unenforceable, the validity and
                enforceability of all the other provisions of this Agreement
                will not be affected thereby.

            

    

    

    8. CONFIDENTIALITY 

    

    
      	
              8.1

            	
              MSL
                shall hold in confidence all Confidential
                Information
                received and not divulge the Confidential
                Information
                to any person, including any of its personnel, save for Parties directly
                involved with the execution of this
                Agreement;

            

    

    

    
      	8.2           	
              Intertops
                shall have full rights to and access to the Confidential
                Information.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

       

    

    
      	
              8.3          

            	
              The
                parties shall prevent disclosure of the Confidential
                Information,
                except as may be required by law.

            

    

    

    
      	8.4            	
              MSL
                shall ensure that each staff member or external party having access
                to
                Confidential Information is bound by individual non-disclosure
                agreements.

            

    

    

    9.    TERMINATION
      OF AGREEMENT

    

    
      	
              9.1

            	
              This
                Agreement may be terminated with immediate effect by MSL in the event
                of
                Intertops not complying with the MSL requirements in terms of clause
                5.2.
                This clause shall not be unreasonably
                invoked.

            

    

     

    
      	9.2        
               	
              Each
                party may terminate this Agreement by written notice to the other
                Party in
                accordance with clause 2.2 after the initial
                period.

            

    

     

    

     

    
      	9.3        
               	
              Either
                Party may terminate this Agreement by written notice if the other
                is in
                breach of any of the obligations of this Agreement and fails to remedy
                such breach within thirty (30) days after written notice to do so
                has been
                dispatched by the other Party.

            

    

     

    

     

    
      	9.4        
               	
              Either
                Party may terminate this Agreement immediately and without notice
                if:

            

    

     

    
      	9.4.1     
               	
              the
                other enters into a composition with its
                creditors;

            

    

     

    
      	9.4.2     
               	
              an
                order is made for the winding up of the
                other;

            

    

     

    
      	9.4.3     
               	
              an
                effective resolution is passed for the winding up of the other (other
                than
                for the purposes of amalgamation or reconstruction on terms approved
                by
                the first Party (such approval not to be unreasonably withheld));
                or

            

    

     

    
      	9.4.4     
               	
              the
                other has a receiver, manager, administrative receiver or administrator
                appointed in respect of it.

            

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    9.5   Effect
      of Termination

     

    The
      termination of the Agreement, for whatever reason, shall not affect the rights
      of either of the parties:

     

    
      	9.5.1     
               	
              that
                may have accrued before the termination of the Agreement;
                or

            

    

     

    
      	9.5.2       	
              which
                specifically or by their nature survive the termination of the
                Agreement.

            

    

     

    
      	9.6        
               	
              On
                termination, MSL will provide, in an electronic format acceptable
                to
                Intertops, a copy of all the Confidential Information relating to
                Intertops.

            

    

     

    
      	9.7        
               	
              MSL
                shall destroy all copies of Confidential Information relating to
                Intertops
                once it is no longer required to be
                kept.

            

    

     

    

    10.    DOMICILIUM
      

    

    The
      Parties elect the following addresses as their respective domicilium
      citandi et executandi:

    

    
      	10.1        
              	
              International
                Gaming and Entertainment Limited:

            

    

    60
      Nevis
      Street

    St
      John

    Antigua   

    

    10.2   MSL:   

    Mahjong
      Systems Limited

    Britannic
      House

    Providenciales

    Turks
      and
      Caicos Islands

    B.W.I

    

    
      	
              10.3

            	
              Either
                of the Parties may change its
                domicilium citandi et executandi to
                another address within the same country, by way of a notice to the
                other
                party to this Agreement, provided that such a notice is received
                by the
                addressee, at least 7 (seven) calendar days prior to such a change
                taking
                effect.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11.   NOTICES
      

    

    The
      Parties elect the following addresses at which all notices and other
      communications must be delivered for the purposes of this Agreement:

    

    11.1   International
      Gaming and Entertainment Limited:

    

    11.1.1  by
      hand
      at 60 Nevis Street, St John, Antigua for the attention of the Chief Executive
      Officer;

    

    11.1.2   by
      post
      at 60 Nevis Street, St John, Antigua marked for the attention of the Chief
      Executive Officer;

    

    11.1.3   by
      facsimile at +43 662 845 955 marked for the attention of the Chief Executive
      Officer.

    

    11.2   MSL:

    

     

    11.2.1  by
      hand
      at Mahjong Mania, 284 Notre Dame West, #200, Montreal, Quebec, H2Y 1T7, marked
      for the attention of Chief Executive Officer.

    

     

    11.2.2  by
      post
      at Mahjong Mania, 284 Notre Dame West, #200, Montreal, Quebec, H2Y 1T7, marked
      for the attention of the Director of the Board. 

    

     

    11.2.3  by
      facsimile at +1 (514) 288 0164 marked for the attention of the Director of
      the
      Board. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    
      	
              11.3
                

            	
              Any
                notice or communication required or permitted to be given in terms
                of this
                Agreement
                shall only be valid and effective if it is in
                writing.

            

    

    

    
      	
              11.4
                

            	
              Any
                notice addressed to either of the Parties and contained in a correctly
                addressed envelope and sent by registered post to it at its chosen
                address
                or delivered by hand at its chosen address to a responsible person
                on any
                day of the week between 09h00 and 16h00, excluding Saturdays, Sundays
                and
                public holidays, shall be deemed to have been received, unless the
                contrary is proved, if sent by registered post, on the 14 (fourteenth)
                calendar day after posting and, in the case of hand delivery, on
                the day
                of delivery.

            

    

    

    
      	
              11.5
                

            	
              Any
                notice sent by telefax to either of the Parties at its telefax number
                shall be deemed, unless the contrary is proved, to have been
                received:

            

    

    

    11.5.1  if
      it is
      transmitted on any day of the week between 09h00 and 16h00, excluding Saturdays,
      Sundays and public holidays, within 2 (two) hours of transmission;

    

    11.5.2  if
      it is
      transmitted outside of these times, within 2 (two) hours of the commencement
      of
      the next day of the week between 09h00 and 16h00, excluding Saturdays, Sundays
      and

    public
      holidays, after it has been transmitted.

    

    12.    FORCE
      MAJEURE

    

    
      	
              12.1
                

            	
              Neither
                of the Parties shall be liable for a failure to perform any of its
                obligations insofar as it proves:

            

    

    

    12.1.1  that
      the
      failure was due to an impediment beyond its control;

     

    12.1.2  that
      it
      could not reasonably be expected to have taken the impediment and its effects
      upon the party’s ability to perform into account at the time of the conclusion
      of this

    Agreement;
      and

     

    12.1.3  that
      it
      could not reasonably have avoided or overcome the impediment or at least its
      effects.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              12.2
                

            	
              An
                impediment, as aforesaid, may result from events such as the following,
                this enumeration not being
                exhaustive:

            

    

    

    12.2.1  war,
      whether declared or not, civil war, civil violence, riots and revolutions,
      acts of sabotage;

    12.2.2  natural
      disasters such as violent storms, cyclones, earthquakes, tidal waves, floods,
      destruction by lightning; 

    12.2.3  explosions,
      fires, destruction of machines, factories and any kind of
      installations;

    12.2.4  boycotts,
      strikes and lock-outs of all kinds, go-slows, occupation of factories and
      premises and work stoppages;

    12.2.5  acts
      of
      authority, whether lawful or unlawful, apart from acts from which the party
      seeking relief has assumed the risk by virtue of any other provisions of this
      Agreement. 

    

    
      	
              12.3
                

            	
              For
                the purposes of this clause “impediment” does not include lack of
                authorisations, of licences, of permits or of approvals necessary
                for the
                performance of this Agreement
                and to be issued by the appropriate public
                authority.

            

    

    

    
      	
              12.4
                

            	
              Relief
                from liability for non-performance by reason of the provisions of
                this
                clause shall commence on the date upon which the party seeking relief
                gives Notice
                of the impediment relied upon and shall terminate upon the date upon
                which
                such impediment ceases to exist; provided that if such impediment
                continues for a period of more than sixty (60) days either of the
                Parties
                shall be entitled to terminate this Agreement.

            

    

    

    13.   ENTIRE
      AGREEMENT AND VARIATIONS 

    

    
      	
              13.1
                

            	
              This
                Agreement
                including schedule 1 constitutes the whole agreement between the
                Parties
                and supersedes all prior verbal or written agreements or understandings
                or
                representations by or between the Parties
                regarding the subject matter of this Agreement,
                and the Parties
                will not be entitled to rely, in any dispute regarding this Agreement,
                on any terms, conditions or representations not expressly contained
                in
                this Agreement.

            

    

    

    
      	
              13.2
                

            	
              No
                variation of or addition to this Agreement
                will be of any force or effect unless reduced to writing and signed
                by or
                on behalf of the Parties.

            

    

    

    
      	
              13.3 

            	
              Neither
                party to this Agreement
                has given any warranty or made any representation to the other party,
                other than any warranty or representation that may be expressly set
                out in
                this
                Agreement.

            

    

    

    14.   RELAXATION
      

    

    No
      indulgence, leniency or extension of a right, which either of the Parties
      may have in terms of this Agreement,
      and which either party (“the grantor”) may grant or show to the other party,
      shall in any way prejudice the grantor, or preclude the grantor from exercising
      any of the rights that it has derived from this Agreement,
      or be construed as a waiver by the grantor of that right.

    

    15.   WAIVER

    

    No
      waiver
      on the part of either party to this Agreement of any rights
      arising from a breach of any provision of this Agreement
      will constitute
      a
      waiver of rights in respect of any subsequent breach of the same or any other
      provision.

    

    16.   SEVERABILITY

    

    In
      the
      event that any of the terms of this Agreement
      are found to be invalid, unlawful or unenforceable, such terms will be severable
      from the remaining terms, which will continue to be valid and
      enforceable.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    17.   DRAFTING
      COSTS 

    

    Each
      of
      the Parties shall bear its own cost incurred as a result of the negotiation,
      drafting and finalisation of this Agreement, which shall include, but not be
      limited to, all legal fees.

    

    18.   GOVERNING
      LAW 

    

    The
      validity and interpretation of this Agreement
      will be governed by the laws of the Turks and Caicos Islands.

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    I,
      Mag.
      Ingrid Weinberger, the undersigned, herewith confirm that my position within
      International Gaming and Entertainment Limited is that of CFO and state that
      I
      am duly authorized to enter into this
      Agreement,
      which I herewith do, on this the 19 May 2004 by signing this
      Agreement,
      for and on behalf of International Gaming and Entertainment
      Limited.

    

    

    Witnesses:

    
      	
              1.........................................................
                

            	 	 
	 	 	...................................................................................... 
	
              2..........................................................
                

            	 	
              Signature
                on behalf of International Gaming and Entertainment
                Limited

            
	 	 	 

    

    

    

    

    I,
      Ian
      Sherrington, the undersigned, herewith confirm that my position within the
      Mahjong Systems Limited is that of Director and state that I am duly authorized
      to enter into this
      Agreement,
      which I herewith do,  on
      this
      the 19 May 2004 by signing this
      Agreement,
      for and on behalf of the Mahjong Systems Limited.

    

    

    Witnesses:

    
      	
              1....................................................
                

            	 	 
	 	 	........................................................... 
	
              2....................................................
                

            	 	
              Signature
                on behalf of MSL

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Schedule
      1 

    

    
      	
               

              Revenue
                Share, License Fees and Deposit

            
	
               

              Initial
                Deposit

            	
               

              US$
                5,000

            
	
               

              First
                Year License Fee

            	
               

              US$
                5,000

            
	
               

              Subsequent
                Annual License Fees

            	
               

              US$
                5,000

            
	
               

              Revenue
                Share 

              (share
                of House Rake paid to partner)

            	
               

              5,000
                for first two years from the date that Intertops begin using the
                Mahjong
                games operationally

              5,000
                thereafter

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]