Document:

Exhibit 10.1

 

COOPERATION
AGREEMENT

between

CHINA
LEISURE SPORTS ADMINISTRATIVE CENTER

and

WORLD
POKER TOUR ENTERPRISES, INC.

Dated August 7, 2007

 

TABLE OF
CONTENTS

	
   

  	
   

  	
  Page

  
	
  1.

  	
  DEFINITIONS AND
  INTERPRETATION

  	
  1

  
	
  2.

  	
  GRANT OF RIGHTS

  	
  3

  
	
  3.

  	
  PAYMENTS TO CLSAC

  	
  7

  
	
  4.

  	
  REPRESENTATIONS
  AND WARRANTIES; INDEMNIFICATIONS

  	
  8

  
	
  5.

  	
  RESPONSIBILITIES
  OF THE PARTIES

  	
  11

  
	
  6.

  	
  ONLINE OPEN
  PRELIMINARY

  	
  12

  
	
  7.

  	
  IMAGES OF
  PARTICIPANTS

  	
  13

  
	
  8.

  	
  PRIORITY RIGHT TO
  OTHER POKER SPORT COMPETITIONS

  	
  13

  
	
  9.

  	
  TERM AND
  TERMINATION

  	
  14

  
	
  10.

  	
  CONFIDENTIALITY

  	
  15

  
	
  11.

  	
  FORCE MAJEURE

  	
  15

  
	
  12.

  	
  DISPUTES
  RESOLUTION

  	
  16

  
	
  13.

  	
  COSTS

  	
  17

  
	
  14.

  	
  ENTIRE AGREEMENT

  	
  17

  
	
  15.

  	
  VARIATION

  	
  17

  
	
  16.

  	
  WAIVER

  	
  18

  
	
  17.

  	
  NOTICE

  	
  18

  
	
  18.

  	
  SEVERABILITY

  	
  19

  
	
  19.

  	
  COUNTERPARTS

  	
  19

  
	
  20.

  	
  GOVERNING LAW

  	
  19

  
	
  21.

  	
  MISCELLANEOUS

  	
  19

  

 

SCHEDULES

SCHEDULE 1                        DEFINITIONS

SCHEDULE 2                        LIST OF PARTNERSHIP PROTECTION CATEGORIES

SCHEDULE 3                        MATCH SCHEDULE

SCHEDULE 4                        RIGHTS TO BE GRANTED TO LOCAL ORGANIZERS

 

THIS
COOPERATION AGREEMENT (this “Agreement”) is made on the 7th day of August 2007

BETWEEN:

(1)                                  CHINA LEISURE SPORTS
ADMINISTRATIVE CENTER (“CLSAC”), an institutional legal person under the China State
Sports Administration, located at 9 Tiyuguan Road, Chongwen District, Beijing
100763, the People’s Republic of China (“China” or the “PRC”);
and 

(2)                                  WORLD POKER TOUR ENTERPRISES,
INC. (“WPTE”),
a company organized under the laws of the State of Delaware, the United States
of America, located at 5700 Wilshire Blvd., Suite 350, Los Angeles, CA
90036-3659, United States of America.

RECITALS:

(1)                                  CLSAC desires, in accordance with the
terms and conditions of this Agreement, to grant to WPTE the right to be the
Exclusive Marketing Partner (as defined below) and the Commercial Sanctioning
Body (as defined below) in connection with the China National Tractor Poker
Tour(中国升级扑克 (拖拉机)冠军赛).

(2)                                  WPTE desires to accept such grant and to
enjoy the exploitation of the rights granted hereunder on the terms and
conditions set forth herein.

AGREEMENT:

1.                                      DEFINITIONS AND INTERPRETATION

1.1.                              Definitions. 
As used in this Agreement the capitalized terms shall have the
respective meanings indicated on Schedule 1 attached hereto unless this
Agreement otherwise requires.

1.2.                              Interpretation. 
In this Agreement, where the context so admits, the following references
and expressions shall have the following meanings:

(a)          Statutory Provisions.  Any
references, express or implied, to statutes or statutory provisions shall be
construed as references to those statutes or provisions as respectively amended
or re-enacted or as their application is modified from time to time by other
provisions (whether before or after the date hereof) and shall include any
statutes or provisions of which they are re-enactments (whether with or without
modification) and any orders, regulations, instruments or other subordinate
legislation under the relevant statute or statutory provision.  References to sections of consolidating
legislation shall, wherever necessary or appropriate in the context, be
construed as including, without limitation, references to the sections of the
previous legislation from which the consolidating legislation has been
prepared.

 

1

 

(b)         Law.  References to
“law” shall include all applicable laws, regulations, rules and orders
of any Government Authority, securities exchange or other self-regulating body,
including any common or customary law, constitution, code, ordinance, statute
or other legislative measure and any regulation, rule, treaty, order, decree or
judgment; and “lawful” shall be construed accordingly.

(c)          Documents.  References to
any document (including without limitation this Agreement) are references to
that document as amended, consolidated, supplemented, novated or replaced from
time to time.

(d)         Sections.  References in
this Agreement to the Preamble, Recitals, Sections and  Schedules are to the clauses in and preamble,
recitals and schedules to this Agreement (unless the context otherwise
requires).  The Preamble, Recitals and
Schedules to this Agreement shall be deemed to form part of this Agreement.

(e)          Headings.  Headings are
inserted for convenience only and shall not affect the construction of this
Agreement.

(f)            Successors.  References to
the Parties, CLSAC and their Affiliates include their respective successors and
permitted assigns.

(g)         Writing.  References to
writing shall include any method of reproducing words in a legible and
non-transitory form.

(h)         Gender; Number.  The masculine
gender shall include the feminine and neuter and the singular number shall
include the plural and vice versa.

(i)             Losses.  References
herein to “losses” include all liabilities, loss, damages, compensation,
penalties, costs, disbursements and expenses arising from any claim, demand,
action or proceedings.

(j)             Include not Limiting.  “Include,”
“including,” “are inclusive of” and similar expressions are not
expressions of limitation and shall be construed as if followed by the words “without
limitation.”

(k)          Language.  This
Agreement is written in both Chinese and English. Both Chinese and English
versions shall govern this Agreement and shall have equal validity. In case of any difference between the two language versions, the
Chinese version shall control.

(l)             Time.  If a period
of time is specified and dates from a given day or the day of a given act or
event, such period shall be calculated exclusive of that day.  If the day on or by which something must be
done is not a Business Day, that thing must be done on or by the Business Day
immediately following such day.

(m)       Agreement of Parties.  Any
agreement, consent or approval to be given by a Party must be given in a timely
fashion, be in writing and be signed by it or a duly authorized person on its
behalf to be effective under this 

 

2

 

Agreement.  No agreement, consent or approval under this Agreement
may be withheld or delayed unreasonably or arbitrarily.  Notwithstanding the foregoing, failure by a
Party to give any agreement, consent or approval shall be deemed to be a
denial.

2.                                      GRANT OF RIGHTS

2.1.                              Grant of Exclusive Rights. 
CLSAC hereby appoints WPTE to be the Exclusive Marketing Partner and the
Commercial Sanctioning Body of the Tour, and, subject to the conditions
hereinafter provided, grants to WPTE the following exclusive world-wide rights:

(a)                                  CLSAC shall own the official word and
logo trademarks to the title “China National Tractor Tour (中国升级扑克(拖拉机)冠军赛)” (the “CLSAC
Trademarks”) and WPTE shall have
the right to use the CLSAC Trademarks during the Term hereof;

(b)                                 WPTE shall further have the right to
develop the official commercial title to the Tour which
shall comprise of a combination of the CLSAC  Trademarks
and new word and logo trademarks.  This
new trademark will be registered and owned by WPTE, and be designated as the “Official
Tour Logo”. 

(c)                                  The Official Tour Logo shall include the
words “WPTE China National Tractor Poker Tour”, “WPT China
National Tractor Poker Tour”, or other similar representing title as agreed to
by the Parties;

(d)                                 In the efforts to promote, organize and
publicize the Tour, CLSAC shall use the official title and the Official Tour
Logo to the Tour in any letterhead, press releases, television programming,
printed and published materials, advertising, marketing and promotion;

(e)                                  CLSAC shall provide consents and supporting documents required for the
registration of the Official Tour Logo and provide any defense necessary to
defend the Official Tour Logo;

(f)                                    WPTE shall have the right to use  in any or all
media now known or hereafter developed, all content, names, likenesses and
logos associated with the Tour for purposes of promoting, advertising and
publicizing the Tour and generating profits therefrom;

(g)                                 WPTE shall have the right to reproduce
the Official Tour Logo on Merchandise or license merchandise manufacturers to
manufacture or sell Merchandise; 

(h)                                 the trophy of the Tour shall be entitled
as the “World Poker Tour Cup (世界扑克巡回赛杯)” or any other title mutually agreed upon by the Parties, with appropriate versions to be
presented to the city, provincial, online and national champions;

 

3

 

(i)                                     WPTE shall have the right to hold other
matches outside of China in association with the Tour, subject to CLSAC’s prior
approval and execution of a separate memorandum of understanding or
supplemental agreement;

(j)                                     WPTE shall have the worldwide right to
distribute and sell content in any and all media subject to the restrictions
set forth in Section 2.1(p);

(k)                                  WPTE shall have the right to collect and
own the data relating to the Tour, including the names, addresses and email
addresses of all the participants in the Tour, and CLSAC shall assist in the
collection of such data and the Tour results, to be used by WPTE at its sole
discretion;

(l)                                     WPTE shall have the right to use the
images of the participants in the Tour free of charge in any and all media, including in the Merchandise, now known or hereafter developed, to the
extent permitted by the relevant PRC laws and subject to the participants’ consent; 

(m)                               WPTE shall have the right to utilize the names, logos and trademarks of the Tour for operating WPTE’s websites with a range of online assets
and activities in association with the Tour, including  the Tour results, online games,
Tour schedule or other such
content;  provided,
however, the official website of the China State Sports
Administration (www.sport.org.cn) or other websites may provide general
information limited to the Tour release and general news, but shall not sell
any sponsorship right related to the Tour;

(n)                                 WPTE shall have the right to advertise
and promote the Tour and license third parties to use the Official Tour Logo in
any advertisement or promotion, subject to WPTE’s obligation to ensure that all
such advertising and promotion is conducted in compliance with applicable laws
and regulations;

(o)                                 WPTE shall have the right to approve and
generate profits from television and radio broadcasts, motion pictures and
other media events emanating from or produced at the Tour;

(p)                                 WPTE shall have the right to own the tapes and all broadcasting-related materials and to post-edit and sell all shows and contents
related to the Tour in any and all media, including online, mobile, domestic
and international television, DVD, digital streaming, downloads, etc. now known
or hereafter developed in any and all territories; 

(q)                                 WPTE and CLSAC agree not to charge any
royalty or other fee to any local Chinese television broadcaster in the
Territory for the first 36 months commencing from the date hereof in order to
better promote the Tour; and

 

4

 

(r)                                    WPTE shall own all revenues generated
from the promotion of WPTE’s branded property and website in China.  

                                                CLSAC hereby agrees that WPTE shall have
the right to exercise all or part of the above rights through WPTE’s affiliates or other companies designated
by WPTE.

2.2.                              Pass Through Rights. 
As the Exclusive Marketing Partner, WPTE
has the
exclusive right to repackage, resell and otherwise monetize or generate profits
from selling and/or marketing related rights to third parties seeking to be
affiliated with the Tour; to designate
Persons seeking to be affiliated with the Tour as third party sponsors of the
Tour (“Third Party Sponsors”) and to license any and all of the rights
noted in Section 2.1 above to the Third Party Sponsors for use within the
Territory (the “Pass Through Rights”). 
The Pass Through Rights shall include the following exclusive rights:

(a)                                  to designate the Supporting Sponsor,
grant Third Party Sponsors the right to use the Official Tour Logo and the
title and approve all on-site event elements to be used by the Third Party
Sponsors; 

(b)                                 to grant on-site benefits to Third Party
Sponsors, including but not limited to advertising, sample distribution, booths
set-up, placement of Third Party Sponsor’s logos on signage and advertising, or
other promotional activities related to the Tour;

(c)                                  to designate preferred beverages for the
Tour regardless of any preferred beverages of any venue on the Tour;

(d)                                 to grant Third Party Sponsors with
franchise rights to franchised Merchandise, market Merchandise such as playing
cards, apparels, drinks or computer games, use the logos, names, likenesses,
etc. of the Tour to monetize Merchandise and grant approval to Third Party
Sponsors to monetize such logos, names, likenesses, etc.;

(e)                                  to re-package and sell the contents and
images of the Tour, including photos, Internet contents, film or other such
programs which may be sold, licensed or leased to third parties;

(f)                                    to license communications operators with
joint mobile phone and communications rights throughout the Territory,
including downloadable contents (e.g., show contents, ring tones, etc.),
free and pay-to-play games, etc.; and

(g)                                 to own and re-sell at WPTE’s sole
discretion all inventory
surrounding the promotion of the Tour on television, including but not limited to the broadcast
right of the grand finale of the Tour on any domestic television outlets.  

2.3.                              Exclusivity.  CLSAC hereby agrees and acknowledges that
WPTE shall enjoy the following exclusive rights, which shall be in addition to
the other rights of WPTE stipulated in this Agreement:

 

5

(a)                                  WPTE’s
Pass Through Rights shall apply to all preliminaries and the grand finale and CLSAC shall cause each
Local Preliminary Organizer to facilitate WPTE’s exercise of such Pass Through
Rights.  No local sponsor may be signed or brought onto the
competition site of the Tour by CLSAC or any Local Preliminary Organizer
without the prior written permission of WPTE. 

(b)                                 CLSAC agrees not to engage in any
activity which may result in commercial benefits to any third party (including
the Local Preliminary Organizers) other than Third Party Sponsors designated by
WPTE, including creating partnership, selling sponsorship packages, engaging in
barter or in-kind agreements or licensing of Merchandise to generate
income.  

(c)                                  CLSAC shall provide written guidelines to
Local Preliminary Organizers to specify the rights granted to Third Party
Sponsors for the preliminaries of the Tour. 
The Parties agree that no Local Preliminary Organizer shall enjoy any of
the rights reserved as WPTE’s Pass Through Rights pursuant to Section 2.2
unless such Local Preliminary Organizer is specifically and expressly
designated rights as referred in Section 3.1(d)(ii) as a Third Party Sponsor by
WPTE in writing.  WPTE further agrees to
assist CLSAC to create the guidelines necessary for the Tour entry form,
branding requirements, processes for capturing data and media requirements,
etc.  

2.4.                              WPTE’s Ownership Rights. 
Notwithstanding any other provision of this Agreement, WPTE shall be the
exclusive owner of all rights, titles and interests to (a) all intellectual
properties developed by WPTE or its Affiliates in connection with the Tour, (b)
subject to Section 2.1(q), all material and the right to post-edit and sell all shows and contents related to
the Tour in any and all media now known or hereafter developed, (c) all
adaptations, compilations, collective works, derivative works, variations or
names of any and all CLSAC IP used in connection with the Tour heretofore or
hereafter created by or for WPTE or any of WPTE’s Affiliates, including the
Official Tour Logo, and (d) all broadcast material and related content prepared
in conjunction with the Tour.  CLSAC
shall have the right to approve the Official Tour Logo, such approval shall not
be unreasonably withheld.  Furthermore,
CLSAC shall use its commercially reasonable best efforts to assist WPTE in
registering the Official Tour Logo as a registered trademark in the PRC to the
extent permitted by the relevant laws of the PRC.

2.5                                 Notice of
Commercial Agreements. 
With respect to the above commercial rights granted to WPTE, WPTE shall
provide written copies of all relevant material commercial agreements to CLSAC.
Such commercial agreements shall not violate any relevant laws of the PRC and
shall be in compliance with all media
and news regulations implemented by the relevant Government Authority of the
PRC.  CLSAC may notify WPTE at any
time if any foregoing commercial activities have violated such relevant laws
and regulations, and WPTE shall use its best efforts to correct such
violations.

 

6

 

 

3.                                      PAYMENTS TO CLSAC

3.1.                              Partnership Fee.

(a)                                  The Partnership Fee for each year shall
cover at least 15 preliminaries (including the online open preliminary) and the
annual grand finale.  Seven of these
preliminaries are classified as Full Sponsorship Preliminaries, and eight are
classified as Partial Sponsorship Preliminaries as defined in Section 3.1(d).

(b)                                 Rates.  WPTE shall
pay to CLSAC an annual Partnership Fee in the aggregate amount of US$505,000 in
the first year of the Term, payable as follows: 

(i)                                     25% payable upon the signing of this
Agreement by the Parties;

(ii)                                  30% payable at the completion of the
first preliminary of the Tour;

(iii)                               35% payable at the completion of the
seventh preliminary of the Tour; and

(iv)                              10% payable at completion of the grand
finale of the Tour.

(c)                                  Adjustments. 
After the first year of the Term, the Partnership Fee shall increase at
an annual rate of 10% for each remaining year of the Term (including any
renewal period), payable as follows in each year:

(i)                                     25% payable before April 15; 

(ii)                                  30% payable at the completion of the
first preliminary of the Tour; 

(iii)                               35% payable at the completion of the
seventh preliminary of the Tour; and

(iv)                              10% payable at the completion of the
grand finale of the Tour.

(d)                                 Additional Preliminaries. 
The Partnership Fee set forth in Sections 3.1(b) and (c) above is
calculated on the basis of and subject to no less than fifteen preliminaries
(including the online open preliminary) and one grand finale for each year
within the Term. At any time after the end of the first year of the Term, WPTE
can request CLSAC to increase the number of preliminaries in each year.  Upon the approval by CLSAC of such proposed
increase, WPTE shall pay additional Partnership Fee to CLSAC, as follows:

(i)                                     US$30,000 of Partnership Fee for each
Full Sponsorship Preliminary shall be paid to CLSAC no later than 60 days prior
to the preliminary in exchange for the full sponsorship exclusivity right to be
the Exclusive Marketing Partner and the Commercial Sanctioning Body of the
newly increased primary 

 

7

 

preliminary (each of such
preliminaries hereinafter referred to as a “Full Sponsorship Preliminary”);
or

(ii)                                  US$20,000 of Partnership Fee for each
Partial Sponsorship Preliminary shall be paid to CLSAC no later than 60 days
prior to the preliminary in exchange for the partial sponsorship exclusivity
right to be the Exclusive Marketing Partner and the Commercial Sanctioning Body
of the newly increased secondary preliminary (each of such preliminaries
hereinafter referred to as a “Partial Sponsorship Preliminary”).  The details regarding the rights to be granted
to the local promoters are attached hereto as Schedule 4. Both
preliminary categories must follow the requirements of the Tour name and logo,
advertisement allocation on site and sponsorship category protection.  All other rights shall be retained by WPTE.  For the avoidance of doubt, the Parties agree
that the only rights granted to the Third Party Sponsors are those specifically
designated by WPTE). At any time, WPTE at
its sole discretion, may convert a Partial Sponsorship Preliminary to a Full
Sponsorship Preliminary by paying the incremental cost of US$10,000 for that
preliminary to CLSAC.

(iii)                               After the first two years of the Term, in
each of the third, fourth and fifth year of the Term,  the annual fee for each Full Sponsorship
Preliminary and Partial Sponsorship Preliminary shall be increased by 10% on a
year on year basis.

(e)                                  Refund.  As noted in
Sections 3.1(a), (b) and (c), in the event any scheduled preliminary or grand
finale is not held within the same year, WPTE shall be entitled to a refund
proportionate to the number of scheduled preliminaries or grand finale that are
not held within the same year. In the event that the transactions contemplated
hereunder or a portion hereof is deemed to be illegal in the PRC, or the Tour
is shut down by any Government Authority in the PRC, WPTE shall be entitled to
a refund proportionate to the number of scheduled preliminaries or grand finale
that are not yet held and shall have no further obligation to pay any
additional Partnership Fee.

(f)                                    Late Fee.  In the event
WPTE fails to pay any amount due and payable under this Agreement when such
amount becomes due and payable, CLSAC may exercise the rights under Section
9.2(f) and shall also be entitled to charge WPTE a late fee at the rate of 1%
of the overdue amount per month.

3.2.                              Currency.  All payments
hereunder shall be made by WPTE in United States dollars.

4.                                      REPRESENTATIONS AND WARRANTIES; INDEMNIFICATIONS

4.1.                              Representations and Warranties of CLSAC. 
CLSAC hereby represents and warrants to WPTE as follows:

 

8

 

 

(a)                                  CLSAC is a legal person duly organized,
validly existing and in good standing under the laws of the PRC and is a
Government Authority under the administration of the State Sports
Administration of China.

(b)                                 CLSAC has all requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby.  The execution and
delivery of this Agreement, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary actions on the
part of CLSAC, and no further action is required on the part of CLSAC to
authorize this Agreement or the transactions contemplated hereby.  The execution and delivery by CLSAC of this
Agreement does not, and the performance and consummation of the transactions
contemplated hereby will not, result in any conflict with or breach of (i) any
provision of the charter documents of CLSAC; (ii) any material contract or
other agreement to which CLSAC or any of its assets, including the CLSAC IP,
are subject, or (iii) any judgement, order, decree, statute, law, ordinance,
rule or regulation applicable to CLSAC. 
No consent, waiver, approval, order or authorization of, or
registration, declaration or filing with, any Government Authority or any other
Person is required by or with respect to CLSAC in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.

(c)                                  CLSAC hereby further represents and
warrants that CLSAC is the sole PRC Government Authority authorized to sanction
and grant the rights granted under this Agreement and owns all commercial
rights to the Tour.

(d)                                 CLSAC owns all of the CLSAC IP and has
the right to license and/or grant to WPTE all of the CLSAC IP on the terms and
subject to the conditions set forth herein; 

(e)                                  the CLSAC IP associated with this
Agreement has not been pledged or otherwise encumbered by CLSAC; 

(f)                                    the rights granted herein encompass or
will encompass all proprietary rights in CLSAC IP necessary for the operation,
promotion and exploitation of the Tour as contemplated by this Agreement; and

(g)                                 none of the CLSAC IP is, (i) subject to
any restriction or limitation on use; (ii) subject to the right of any party
other than Licensor to receive a royalty or other fee for the use by Licensee
of such property; or (iii) at the date hereof, the object of any pending or
threatened legal proceeding questioning the ownership thereof.  

4.2.                              Representations and Warranties of WPTE. 
WPTE hereby represents and warrants to CLSAC as follows:

(a)                                  WPTE is a corporation duly incorporated
and in good standing under the laws of the State of Delaware, the United States
of America.

 

9

 

(b)                                 WPTE has all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby.  The execution and
delivery of this Agreement, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
actions on the part of WPTE, and no further action is required on the part of
WPTE to authorize this Agreement or the transactions contemplated hereby.  The execution and delivery by WPTE of this
Agreement does not, and the performance and consummation of the transactions contemplated
hereby will not, result in any conflict with or breach of (i) any provision of
the certificate of incorporation or bylaws of WPTE; (ii) any material contract
or other agreement to which WPTE or any of its assets are subject; or (iii) any
judgement, order, decree, statute, law, ordinance, rule or regulation
applicable to WPTE.  No consent, waiver,
approval, order or authorization of, or registration, declaration or filing
with, any governmental body or any other Person is required by or with respect
to WPTE in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.

(c)                                  WPTE owns the WPT® Logos and
Trademarks.

(d)                                 All advertising, and all promotional
literature and material, produced by WPTE or on its behalf shall comply with
all applicable laws and shall not infringe the rights of any other person or
entity; provided that WPTE shall not be deemed to have violated its
warranty pursuant to this Section 4.2(d) so long as WPTE properly uses the
Official Tour Logo in accordance with this Agreement.  CLSAC’s authorization for the use or manner
of use of any proposed advertising or promotional literature or material
hereunder shall not constitute an opinion as to the legal appropriateness or
adequacy of such use or manner of use, and WPTE’s use of any proposed
advertising shall be made on its own sole responsibility.

4.3.                              Indemnification. 
CLSAC shall indemnify, defend and hold WPTE, its agents, officers,
directors, shareholders and employees harmless from and against any liabilities
or damages for infringement arising directly or indirectly out of its proper
use in accordance with this Agreement and the guidelines established pursuant
hereto of any of the CLSAC IP licensed to WPTE pursuant to this Agreement.  In addition, each Party shall defend,
indemnify and hold the other Party, its Affiliates and the officers, directors,
agents and employees of each, harmless from and against any and all claims,
suits, damages, liabilities, costs and expenses (whether based on tort, breach
of contract, patent, copyright, trade name, trademark or service mark
infringement or otherwise), including reasonable counsel fees, arising directly
or indirectly out of or resulting, either in whole or in part, from any
wrongful or negligent act or omission of the indemnifying Party, anyone
directly or indirectly employed by such indemnifying Party or anyone for whose
acts such indemnifying Party may be liable, or from any failure of such
indemnifying Party to adhere to all the terms and conditions of this Agreement.

 

10

 

5.                                      RESPONSIBILITIES OF THE PARTIES

5.1.                              CLSAC’s Responsibilities.  In
addition to its other obligations and responsibilities set forth in this
Agreement, CLSAC hereby undertakes to do the following during the Term:

(a)                                  organize all preliminary and grand finale
competitions of the Tour in association with the Local Preliminary Organizers;

(b)                                 arrange for qualified referees and officers for the
Tour;

(c)                                  provide necessary security for the Tour and the
related promotion activities;

(d)                                 procure necessary insurance for the participants
and officers during the Tour;

(e)                                  organize press conferences and relevant ceremonies
of the Tour;

(f)                                    provide the venue for the grand finale of the Tour;

(g)                                 conduct the Tour pursuant to the match schedule
attached hereto as Schedule 3;

(h)                                 arrange the television broadcasting of the grand
finale of the Tour in accordance with WPTE’s television broadcast technical
guidelines;

(i)                                     enter into an agreements with provincial or city television stations, for live or taped broadcasting of the grand finale
of the Tour during the grand finale period of each year of the Term;

(j)                                     use its best efforts to, (a) with respect to the
television broadcast of the grand finale to be held during the Term, negotiate
with television broadcasters on WPTE’s behalf, with the television broadcast of
the first year to be provided by Beijing TV (BTV), in accordance with the
television broadcast technical guidelines to be provided by WPTE, which shall
be attached to each broadcast contract, and shall include the following: (i)
promotion and exposure of WPTE’s website address and brand (during the
television broadcast of the grand finale show); (ii) exclusive promotion of
WPTE’s branded sites and trademarks during the television broadcast of the show
and strict prohibition of any partnership between the broadcaster and any
Person classified in the Partnership Protection Category (listed on Schedule
2); and (iii) prohibition against the broadcaster’s sale of any sponsorship
right of the Tour or sale of any commercial spot to companies in direct
competition with WPTE’s major sponsors, as set forth in the notice delivered by
WPTE to the broadcaster at least 30 days prior to the date of the relevant
match; and (b) negotiate the television production budget and cost with the
television broadcaster responsible for television broadcast on behalf of WPTE
during the Term, at a minimum be consistent with other national sports programming,
and shall follow WPTE technical guidelines;

 

11

 

(k)                                  provide the necessary preparation and training
necessary for all officials, dealers, and other relevant operators of the Tour;

(l)                                     lend support in advertising and promotion of the
Tour; and

(m)                               assist WPTE in applying for and obtaining the
permits and licenses required for operating a website business in the PRC.

5.2.                              WPTE’s Responsibilities .  WPTE
hereby undertakes to do the following during the Term:

(a)                                  produce, deliver and install the advertising boards
and banners on the sites of the Tour in accordance with the requirements of
CLSAC;

(b)                                 produce and deliver the trophies necessary for the
preliminaries and the grand finale of the Tour;

(c)                                  production and deliver the tablecloths and playing cards to be used in all matches of the Tour (the specific style of the
playing cards shall be examined and approved by CLSAC);

(d)                                 produce and deliver the badges bearing the Official
Tour Logo for all participants, referees and officers in the Tour;

(e)                                  design the new Official Tour Logo and trademarks of
the Tour;

(f)                                    after the Tour achieves profitability in the
Territory, WPTE has the right to develop tractor poker competitions outside of
the Territory for the purpose of expanding the Tour into a world-wide poker
tour; and

(g)                                 timely and fully make payments to CLSAC as provided
in this Agreement.

6.                                      ONLINE OPEN PRELIMINARY

6.1.                              Initial Online Partner.  The
Parties agree that www.ourgame.com (联众网络游戏世界网站) will be selected as the official partner for the
online open preliminary of the Tour (“Online Partner”) for the first year of the Term.  Online Partner shall have the right to host the online preliminary matches and assign winning
teams for the grand finale of the Tour. 
It is expressly understood that as long as the laws of the PRC permits, the online rights are
owned by WPTE and that in the subsequent years of the Term, WPTE may operate such online preliminary on its own website established in the
PRC or through other  online partners.  

6.2.                              Compliance with Requirements.  CLSAC  will negotiate with the Online Partner in accordance with WPTE’s
online partnership guidelines  to ensure
compliance with  WPTE’s
requirements,  including
but not limited to the following:

(a)                                  Online
Partner must refer to the Official
Tour Logo on its website
and in its advertising or promotional activities.  The
Official Tour Logo 

 

12

 

must be presented in all of Online Partner’s
web pages related to the Tour.

(b)                                 Online Partner shall provide links to WPTE’s
branded website based in China or other websites designated by WPTE. CLSAC will
negotiate on behalf of WPTE regarding such links.

(c)                                  Online
Partner shall provide to WPTE the entry data  of all the participants of the online open
preliminary for all the participants who agree to share such information and
all relevant information regarding the qualifiers for the grand finale of the
Tour. Online Partner agrees to provide such information to WPTE within 15 days
of receiving a written request from WPTE.

(d)                                 Online Partner shall not sell any Tour sponsorship or
advertising right to any third party without the prior written approval of WPTE.

(e)                                  Online
Partner shall provide certain media value benefits to the Third Party Sponsors, the details of which shall be determined through
further negotiations between WPTE and Online Partner.

7.                                      IMAGES OF PARTICIPANTS

The Parties shall require each participant of the Tour
to attach a duly signed personal image statement to his or her entry form,
which shall state the following:

(a)                                  Each participant shall grant WPTE and
Third Party Sponsors the right to use such participant’s images associated with
the Tour, free of charge, in photos, broadcasts or products and any other
media, both known and yet to be developed.

(b)                                 Each participant shall wear proper attire
to the competitions as required by the Parties and the patches bearing the
Official Tour Logo at the preliminaries and the grand finale of the Tour.

(c)                                  During the preliminaries and grand finale
of the Tour, each participant shall refrain from wearing any advertisement,
brand, trademark of any Person other than WPTE at the preliminaries and the
grand finales of the Tour, unless expressly approved in writing by WPTE.

8.                                      PRIORITY RIGHT TO OTHER POKER SPORT COMPETITIONS

As the Exclusive Marketing Partner and Commercial
Sanctioning Body of the Tour, WPTE shall have the first right of negotiation,
for a period of 30 days, and the last right to match an
offer for an agreement with CLSAC on the same terms and conditions regarding
other Poker Sport Competitions hosted by CLSAC.  

 

13

 

9.                                      TERM AND TERMINATION

9.1.                              Term.  This
Agreement shall have an initial term of five years, commencing on the date
hereof (the “Term”).   After the
expiration of this Agreement, WPTE shall have the right to renew this Agreement
on the same terms and conditions for a further five year term, provided that
the Partnership Fee for the first year of
the renewed term shall be increased by 25% from the fifth year of the Term.

9.2.                              Termination. 
Upon the occurrence of any of the following events either Party may
terminate this Agreement effective immediately or as otherwise designated by
the Party upon the delivery of a written notice to such effect to the other
Party:

(a)                                  the other Party materially breaches this
Agreement and fails to cure such breach within 30 days after the first Party
has given it written notice of such breach;

(b)                                 the other Party suffers an Event of
Bankruptcy; 

(c)                                  the dissolution of the other Party;

(d)                                 CLSAC (i) fails to submit an application
to the relevant Government Authority to obtain any permit, approval, license,
consent or similar document (collectively, “Permits”) required to
perform any of CLSAC’s obligations under this Agreement within 30 days after
WPTE has given Company written notice of such requirement, or (ii) fails to
obtain any such Permit within three months after such notice is given;

(e)                                  any such Permit is revoked, expires and
is not renewed or reissued or is otherwise no longer valid; or

(f)                                    WPTE fails to pay any amount due and
payable under this Agreement within 60 days of the date when such amount
becomes payable.

9.3.                              Effect of Termination. 
Upon expiration or termination of this Agreement, each Party will
destroy or return all copies and extracts of the other Party’s confidential
information in its possession.  The
obligations and rights of the Parties under Sections 10, 11, 12, 14, 15, 16,
17, 18, 19, 20 and 21 and all rights to payment for any invoiced or accrued
amounts under Section 3 prior to the effective date of any such termination
will survive the termination or expiration of this Agreement.

9.4.                              No Consequential or Punitive Damages. 
Notwithstanding anything to the contrary in this Agreement, neither
Party shall, in any event, be liable to the other Party hereunder or in
connection herewith for any indirect or consequential loss or damages including
(but not limited to) loss of profit or goodwill.  Each Party agrees that it will not seek
punitive damages as to any matter under, relating to or arising out of this
Agreement or the transactions contemplated hereunder.  Each Party hereby waives, to the fullest
extent it 

 

14

 

may do so, any rights or remedies for recovery of
indirect, consequential or punitive damages that may arise under any applicable
law.  

9.5.                              Exercise of Rights. 
No delay or omission of either Party to exercise any right or remedy
provided for herein shall impair any such right or remedy or constitute a
waiver of any such right or remedy or an acquiescence in any matter giving rise
thereto.  Every right and remedy given by
this Section 9 or by law to either Party may be exercised from time to time,
and as often as may be deemed expedient, by WPTE or by CLSAC, as the case may
be.  

10.                               CONFIDENTIALITY 

                                                WPTE and CLSAC shall hold in strictest
confidence and secrecy any and all of the other Party’s proprietary or
confidential information and trade secrets and, without the prior written
consent of the other Party (which consent may be withheld in its sole
discretion), WPTE and CLSAC shall not disclose any such information to any
Person other than (a) to its employees, agents and contractors who agree to be
or are otherwise bound by the provisions of this Section 10, (b) to the other
Party or its Affiliates and their employees and representatives or (c) as
required by law under the terms of a subpoena or order issued by a court of
competent jurisdiction or by another governmental agency or body.  In the event that either Party receives a
request to disclose all or any part of the information referred to in the
preceding sentence under the terms of a subpoena or order issued by a court of
competent jurisdiction or by another governmental agency or body, that Party
agrees (i) to promptly notify the other Party of the existence, terms and
circumstances surrounding such a request, so that it may seek an appropriate
protective order (and, if the other Party seeks such an order, to provide such
co-operation as it shall reasonably request) and (ii) in the absence of such a
protective order, to disclose only such of the information that is required to
be disclosed in the opinion of counsel, who shall be reasonably satisfactory to
the other Party, and to exercise its reasonable efforts to obtain an order or
other reliable assurance that confidential treatment will be accorded to such
of the disclosed information which the other Party so designates.  The provisions of this Section 10  shall survive the expiration or earlier
termination of this Agreement.

11.                               FORCE MAJEURE

11.1.                        Events of Force Majeure. 
Neither Party shall be liable for failure of performance or delay if
occasioned by an event of force majeure, such as war, civil disturbance, fire,
flood, earthquake, storm, typhoon, the acts or omissions of architects,
consultants, contractors or vendors (or their respective agents, employees,
consultants or subcontractors), interruption of transportation, embargo,
explosion, inability to procure (or shortage of supply of) materials or any
other cause beyond the reasonable control of such Party (“Force Majeure”);
provided that each Party shall promptly upon becoming aware of the same
notify the other Party of the occurrence of any such event, specifying in
reasonable detail the nature and extent of any anticipated failure of
performance or delay on its part resulting or likely to result therefrom.

 

15

 

11.2.                        Curing of Events of Force Majeure. 
Each Party shall exert its best efforts and  co-operate with the other Party to cure any
event of Force Majeure.  If any event of
Force Majeure occurs that cannot be cured, and neither Party elects to
terminate this Agreement, then the Parties shall use reasonably diligent
efforts to mitigate the adverse impact of such event; provided that the
objectives and general spirit of this Agreement are protected and preserved to
the extent possible in light of such event.

12.                               DISPUTES RESOLUTION

12.1.                        Consultation.  Any dispute, controversy or claim arising out of, or
relating to, this Agreement, or the performance, interpretation, breach,
termination or validity hereof, shall be resolved through friendly
consultation.  Such consultation shall
begin immediately after one Party has delivered to the other Party a written
request for such consultation stating specifically the nature of the dispute,
controversy or claim.  If within 30 days
following the date on which such notice is given the dispute cannot be
resolved, any Party shall have the right to submit the dispute to China International Economic and Trade Arbitration Commission and the dispute shall be finally resolved
by arbitration.

12.2.        Arbitration.

(a)                                  The arbitration shall be conducted in
Beijing under the auspices of the China International Economic and Trade Arbitration Commission and in accordance with its
Arbitration Rules.   

(b)                                 There shall be three arbitrators.  Each Party shall appoint one arbitrator. All
selections of arbitrators by the Parties shall be made within 30 days after the
selecting Party gives or receives the demand for arbitration.  Such arbitrators shall be freely selected,
and the Parties shall not be limited in their selection to any prescribed
list.  If any arbitrator to be appointed
by a Party has not been appointed and consented to participate within 30 days
after the selection of the first arbitrator, the relevant appointment shall be
made by the appointing authority of the Arbitration Center.  In all cases, the third arbitrator shall act
as the presiding arbitrator and shall be appointed by agreement of the two
selected arbitrators.  If no agreement on
such appointment can be reached within 15 days after the date on which the
later of the first two arbitrators to be appointed is appointed, the appointing
authority of the Arbitration Center shall make the appointment.  In
each case in which the appointing authority of the Arbitration Center makes an
appointment of an arbitrator, whether to appoint the third arbitrator or
otherwise, the arbitrator appointed must not be of the same nationality as any
Party to the dispute.

(c)                                  The arbitration proceedings shall be
conducted in both Chinese and English.
The arbitrators shall decide any dispute strictly in accordance with the
governing law specified in Section 20. 
Judgment upon any arbitral award rendered hereunder may be entered in
any court having jurisdiction, or application may be made to such court for a
judicial 

 

16

acceptance of the award and an order of enforcement,
as the case may be. 

12.3.                        Injunction.  In order to
preserve its rights and remedies, any Party shall be entitled to seek
preservation of property in accordance with Law from any court of competent
jurisdiction or from the arbitration tribunal pending the final decision or
award of the arbitration tribunal. 
During the period when the dispute is being resolved, except for the
matters being disputed, the Party shall in all other respects continue their
implementation of this Agreement. In the event of any breach by WPTE of any of its  obligations under this Agreement, the rights
and remedies of CLSAC shall be limited to the right to recover damages, if any,
in an action at law, and CLSAC hereby waives the right to seek injunctive or
other equitable relief to enjoin, restrain or otherwise impair in any manner
the production, distribution, exhibition, promotion or other exploitation of
the rights granted to WPTE hereunder, in particular, in relation to the
Official Tour Logo, the Tour, television and radio broadcasts, motion pictures and other media
events produced or distributed in connection with
this Agreement or any parts or elements thereof.

12.4.                        Service.  Each Party
irrevocably consents to the service of process, notices or other paper in
connection with or in any way arising from the arbitration or the enforcement
of any arbitral award, by use of any of the methods and to the addresses set
forth for the giving of notices in Section 17. 
Nothing contained herein shall affect the right of any Party to serve
such processes, notices or other papers in any other manner permitted by
applicable law.  If there is conflict
between the above provisions and the Arbitration Rules, the Arbitration Rules
shall prevail.

13.                               COSTS

                                                Each Party shall bear and pay its own
costs and disbursements of and incidental to the preparation and execution of
this Agreement.

14.                               ENTIRE AGREEMENT

                                                This Agreement constitutes the whole
agreement between the Parties and supersedes any previous agreements,
arrangements or understandings between them relating to the subject matter
hereof, including the Memorandum of Understanding between the Parties signed in
April 2007.  Each of the Parties acknowledges
and agrees that it is not relying on any statements, undertakings, warranties
or representations given or made by any of them relating to the subject matter
hereof, save for those statements, undertakings, warranties or representations
expressly set out in this Agreement.

15.                               VARIATION

                                                No amendment or variation of this
Agreement shall be effective unless in writing signed by one or more duly
authorized Persons on behalf of each Party.

 

17

 

16.                               WAIVER

                                                No waiver by either Party, whether express
or implied, of any provision of this Agreement shall constitute a continuing
waiver of such provision or a waiver of any other provision of this
Agreement.  No waiver by either Party,
whether express or implied, of any breach or default by another Party shall
constitute a waiver of any other breach or default of the same or any other
provision of this Agreement.  No failure
by either Party to exercise rights to monitor or inspect shall excuse any
breach or default by the other Party, whether or not such breach or default
might have been discovered through the exercise of such rights.

17.                               NOTICE  

17.1.                        Delivery.  All notices,
requests, demands, consents and other communications (“Notices”)
required to be given by either Party to the other Party shall be served by:

(a)                                  hand delivery or courier (with receipt
thereof acknowledged in writing); or

(b)                                 prepaid registered letter sent through
the post (airmail if to any address in a country other than the country in
which the sender is situated), return receipt requested; or

(c)                                  facsimile transmission to the applicable
Party, at the address indicated below:

	
  if to CLSAC:

  	
  9 Tiyuguan Road

  
	
   

  	
  Chongwen District,
  Beijing 100763

  
	
   

  	
  the PRC

  
	
   

  	
  Attention:  Mr. Xing Xiaoquan

  
	
   

  	
  Facsimile:
  86-10-67133577

  
	
   

  	
   

  
	
  if to WPTE:

  	
  5700 Wilshire Blvd.

  
	
   

  	
  Suite 350, Los Angeles,
  CA 90036-3659

  
	
   

  	
  United States of
  America

  
	
   

  	
  Attention:  Jon Kaplowitz

  
	
   

  	
  Facsimile:
  1-323-3309902

  

 

                                                or, as to each Party, at such other
address as shall be designated by such Party in a Notice to the other Party
complying as to delivery with the terms of this Section 17.

17.2.                        Deemed Service of Notice. 
Any Notice served:

(a)                                  by hand delivery or courier shall be
deemed to have been served on delivery;

 

18

 

(b)                                 by prepaid registered letter shall be
deemed to have been served 48 hours (120 hours if to an address in a country
other than the country in which the sender is situated) after the time at which
it was posted; and

(c)                                  by facsimile transmission shall be deemed
to have been served when sent.

17.3.                        Proof.  In proving
service it shall be sufficient:

(a)                                  in the case of service by hand delivery
or courier, to prove that the Notice was properly addressed and delivered;

(b)                                 in the case of service by prepaid
registered letter, to prove that the Notice was properly addressed and posted;
and

(c)                                  in the case of service by facsimile
transmission, to prove that the transmission was confirmed as sent by the
originating machine.

18.                               SEVERABILITY

18.1.                        Severability. 
If any provision or part of this Agreement, shall be, or be found by any
authority of competent jurisdiction to be, invalid or unenforceable in whole or
in part, such invalidity or unenforceability shall not affect the other
provisions of this Agreement, all of which shall remain in full force and
effect.

18.2.                        Modifications to Ensure Validity. 
It is hereby agreed and declared that if any of the restrictions or
provisions hereunder shall be adjudged to be void but would be valid if part of
the wording thereof were deleted or the periods thereof reduced or the range of
activities or area dealt with thereby reduced in scope the said restriction or
provision shall apply with such modifications as may be necessary to make it
valid and effective.

19.                               COUNTERPARTS

                                                This Agreement may be entered into on
separate engrossments each of which, when so executed and delivered, shall be
an original but all the duly executed engrossments shall together constitute
one and the same instrument and shall take effect from the time of execution of
the last engrossment.  

20.                               GOVERNING LAW

                                                This Agreement shall be governed by and
construed in accordance with the laws of the PRC.

21.                               MISCELLANEOUS

21.1.                        Successors and Assigns. 
All terms and provisions of this Agreement shall be binding upon the
Parties and their respective successors and Permitted Assignees.  WPTE shall have the right to assign this
Agreement and all rights, privileges, duties and obligations of WPTE to one or
more of its Permitted Assignees without the approval of CLSAC.  Within 30 days of its assignment to one or
more Permitted Assignees, WPTE shall notify CLSAC of such 

 

19

 

assignment in writing. 
Except as expressly provided to the contrary in this Agreement, this
Agreement and all rights, privileges, duties and obligations of WPTE are
non-assignable by any act of WPTE or by operation of law, and WPTE shall not
license (except to the limited extent permitted by Section 2.1), assign,
delegate, mortgage, hypothecate or otherwise encumber this Agreement or any of
its rights, privileges, duties and obligations hereunder without the prior
written approval of CLSAC.

21.2.                        No Partnership. 
Nothing contained or implied in this Agreement shall constitute or be
deemed to constitute a partnership between the Parties and save as expressly
agreed herein neither Party shall have any authority to bind or commit the
other Party.

21.3.                        Good Faith Performance. 
The Parties undertake to perform their obligations under this Agreement
in good faith and to refrain from taking any actions or measures that would
hinder the proper performance of the provisions set forth herein.

21.4.                        Parties in Interest. 
Nothing in this Agreement, whether express or implied, is intended to
nor shall it be construed as to confer upon or give to any person (other than
the Parties and their respective successors and Permitted Assignees) any rights
or remedies under or by reason of this Agreement, or any term, provision,
condition, undertaking, warranty, representation, indemnity, covenant or
agreement contained herein.

 

IN
WITNESS WHEREOF this
Agreement has been entered into by the Parties on the day and year first above
written.

 

	
  CHINA LEISURE SPORTS ADMINISTRATIVE CENTER

  
	
   

  
	
  By: 

  	
  /s/ Xing Xiaoquan

  
	
  Name: 

  	
  Xing Xiaoquan

  
	
  Title: 

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
  WORLD POKER TOUR ENTERPRISES, INC.

  
	
   

  
	
  By:  

  	
  /s/ Adam Pliska

  
	
  Name: 

  	
  Adam Pliska

  
	
  Title: 

  	
  General Counsel

  
			

 

 

20

 

SCHEDULE 1

DEFINITIONS

 

“Affiliate”
means in relation to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person, where “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise, and includes (a) ownership directly or indirectly of 50%
or more of the shares in issue or other equity interests of such Person, (b)
possession directly or indirectly of 50% or more of the voting power of such
Person or (c) the power directly or indirectly to appoint a majority of the
members of the board of directors or similar governing body of such Person, and
the terms “controlling” and “controlled” have meanings
correlative to the foregoing.  

“Agreement”
means this Cooperation Agreement as amended or varied from time to time in
accordance with Section 15.

“Arbitration
Center” means the China International Economic and Trade Arbitration
Commission located in Beijing.

“Arbitration
Rules” means the arbitration rules of the Arbitration Center.

“China” or
the “PRC” has the meaning set forth in the Preamble.

“CLSAC” has
the meaning set forth in the Preamble.

“CLSAC IP”
means all present and future copyrights, trademarks, service marks, trade
names, patents, know how, designs which in any case now or hereafter belong to
CLSAC or its Affiliates or as to which CLSAC or its Affiliates now or hereafter
has rights to license.

“CLSAC
Trademarks” has the meaning set forth in Section 2.1(a).

“Commercial
Sanctioning Body” means the commercial brands or entities authorized by
CLSAC to support CLSAC in the development, organization, codification of rules
and the commercial exploitation of the Poker Sport Competitions, including the
Tour.

“Dispute”
means any dispute or difference of any kind whatsoever arising under, out of or
in connection with the interpretation or implementation of this Agreement or
the exercise of any rights, or the performance of any obligations arising,
under this Agreement.

“Event
Entitlement” means the commercial brand name used as the primary name of
the Tour as “World Poker Tour China National Tractor Poker Tour” or any similar
name as agreed upon by the Parties, for so long as the Chinese characters for “China
(中国)” or “National (全国)” are included in the Tour’s primary name.

 

“Event of
Bankruptcy” means an order being made or an effective resolution being
passed for the winding-up, insolvency, administration, reorganization,
reconstruction, dissolution or bankruptcy of a Party, or for the appointment of
a liquidator, receiver, administrator, trustee or similar officer of a Party,
for all or a substantial part of its respective businesses or assets other than
a bona fide reorganization or reconstruction of a Party while it is solvent.

“Exclusive
Marketing Partner” means a company or brand name authorized by CLSAC as its
sole marketing partner for the Poker Sport Competitions, including the Tour.

“Force Majeure”
has the meaning set forth in Section 11.1.“Full Sponsorship Preliminaries”
has the meaning set forth in Section 3.1(d)(i).

“Government
Authority” means any government authority or subdivision thereof, any
department, agency or instrumentality of any government authority or
subdivision thereof, any court or arbitral tribunal and the governing body of
any securities exchange.

“Local
Preliminary Organizer” means each of the local preliminary organizers of
the Tour.

“Merchandise”
means all merchandises publications, sound recordings, audio-visual materials,
goods, apparel, souvenirs, stationery, housewares and other consumer products
and similar items.

“Notices”
has the meaning set forth in Section 17.1.

“Official Tour
Logo” means the official trademarks for the Tour as defined and determined
in accordance with Section 2.1(b).  

“Online Partner”
has the meaning set forth in Section 6.1.“Partial Sponsorship Preliminaries”
has the meaning set forth in Section 3.1(d)(ii).

“Parties”
means CLSAC and WPTE, and “Party” means either one of them.

“Partnership
Fee” means the sum paid by WPTE for the commercial rights of the Tour.

“Partnership
Protection Categories”  means any
media or gaming company engaged in the development, production and/or marketing
of poker sport competitions or games, including television programming, live
events, online competitions, licensing and sale of consumer products and
sponsorships as specified in  Schedule
2.  

“Pass Through
Rights” has the meaning set forth in Section 2.2.

“Permits”
has the meaning set forth in Section 9.2(d).

 

“Permitted Assignee”
of a Party means any Affiliate of such Party for so long as such entity remains
an Affiliate.

“Person”
means any individual, any form of body corporate, unincorporated association,
firm, partnership, joint venture, consortium, association, organization or
trust (in each case whether or not having a separate legal personality).

“Poker Sport
Competition” means the poker competition officially sanctioned by CLSAC
where two or more persons or teams engage for the purpose of leisure,
entertainment or competing for prizes, award or recognition, and is deemed a
legal sport by PRC law.

“Supporting
Sponsor” means supporting sponsors designated by WPTE to support the Event
Entitlement, in a format such as “World Poker Tour China Tractor Poker Tour —
Presented by China Mobile”.

“Term”
means the term of this Agreement as established pursuant to Section 9.1.

“Termination”
means either the expiration of this Agreement or its termination as provided in
Section 9.

“Territory”
means the mainland China, excluding Hong Kong and Macao Special Administrative
Zones and Taiwan.

“Third Party Sponsors”
has the meaning set forth in Section 2.2.

                “Tour” means the China
National Tractor Poker Tour (中国升级扑克  (拖拉机) 冠军赛), including all preliminary and grand
final matches sanctioned as part of the Tour, and all matches organized by the
province, city, worker’s union, industrial sports association, or online or
through mobile network and other matches similar of nature.

“WPTE” has
the meaning set forth in the Preamble.

 

SCHEDULE 2

LIST OF PARTNERSHIP
PROTECTION CATEGORIES

 

World Series of Poker

European Poker Tour

Party Gaming

 

 

SCHEDULE 3

 

MATCH SCHEDULE

 

 

SCHEDULE 4

 

RIGHTS TO BE GRANTED TO LOCAL
ORGANIZERSEXHIBIT 10.2

MATERIAL TERMS OF ANDY A.
GOETSCH  EMPLOYMENT 

EFFECTIVE SEPTEMBER 10, 2007

•    Hired as the Company’s Executive Vice
President — Online Gaming, effective September 10, 2007.

•    Annual salary of $335,500.

•    Received a one-time starting
bonus of $100,000.

•    Eligible
for a performance-based annual bonus calculated as a percentage of the Company’s
net online gaming revenue, calculated by taking the Company’s online gaming
revenue less all operational, marketing and general and administrative costs directly
associated with the Company’s Online Gaming Division, as follows:

	
  Net Operating Income Range

  	
   

  	
  Bonus Percentage

  	
   

  
	
  $1 - $100,000

  	
   

  	
  3.0%

  	
   

  
	
  $100,001 - $300,000

  	
   

  	
  4.0%

  	
   

  
	
  $300,001 - $1,000,000

  	
   

  	
  5.0%

  	
   

  
	
  $1,000,001 - $3,000,000

  	
   

  	
  5.5%

  	
   

  
	
  $3,000,001 and above

  	
   

  	
  6.0%

  	
   

  

 

 

•    In
fiscal 2008, if the above bonus is less than $133,000, the performance based
bonus for 2008 will be calculated by achieving threshold levels of annual gross
gaming revenue as follows:

	
  Gross Gaming Revenue Range 

  	
   

  	
  % of Total Bonus

  	
   

  	
  Bonus Amount

  	
   

  
	
  Less than $7,200,000

  	
   

  	
  0%

  	
   

  	
  $ - 0 -

  	
   

  
	
  $7,200,001 - $8,400,000
  (60%)

  	
   

  	
  75%

  	
   

  	
  $99,750

  	
   

  
	
  $8,400,001 - $9,600,000
  (70%)

  	
   

  	
  80%

  	
   

  	
  $106,400

  	
   

  
	
  $9,600,001 - $10,800,000
  (80%)

  	
   

  	
  95%

  	
   

  	
  $126,350

  	
   

  
	
  $10,800,001 and above

  	
   

  	
  100%

  	
   

  	
  $133,000

  	
   

  

 

 

•    Eligible
for a business development bonus for securing additional “white label” gaming
websites, equal to 5% of the first 12 months net revenue derived from the
website.  This would be a one-time bonus
payment per white label site.

•    Granted an
option to purchase 220,000 shares of the Company’s common stock, at an exercise
price equal to the common stock’s market price on the date of grant of $3.50.
The option vests in equal installments over a three year period, beginning on
the first anniversary of the September 10, 2007 grant date and continuing on
each subsequent anniversary date until fully vested.

 

•   Eligible
to receive severance equal to six (6) months of annual salary if terminated
without cause.

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