BINGO COM INC
EXHIBIT 10.7
<DOCUMENT>
<TYPE>EX-10.7
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<FILENAME>o06068ex10-7.txt
<DESCRIPTION>EXHIBIT 10.7
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Exhibit 10.7

              SOFTWARE LICENSE, TECHNICAL SUPPORT, AND OPERATION OF
                    CUSTOMER SERVICE & DATA CENTRE AGREEMENT


THIS AGREEMENT is made as of the 1st day of September, 2001.

BETWEEN:

             CYOP SYSTEMS INC., a limited liability company incorporated under
             the laws of Barbados and having its principal offices at Suite
             29-1st Floor, Beckwith Mall, Lower Broad Street, Bridgetown,
             Barbados

                                                                ("LICENSOR")

AND:

             BINGO.COM (CANADA) ENTERPRISES INC., a limited liability company
             incorporated under the laws of Canada and having its principal
             offices at 3rd Floor--1286 Homer Street, Vancouver, British
             Columbia, Canada

                                                                ("LICENSEE")

BACKGROUND:

A.   Licensor has developed a software program known as "CrediPlay" (the
     "SOFTWARE"), which is an online financial network offering Pay-for-Play
     tournaments, and Pay-per-Use integrated games, products, and services for
     licensed users, and which includes an integrated credit card and financial
     payment processing application that permits licensed users to access and
     utilize the services of credit card organizations and collect, record, and
     distribute financial payments in the course of the licensed users' business
     activities.

B.   Licensee operates and maintains an Internet portal or Website that hosts,
     operates, and organizes skill-based bingo and bingo-like games, tournaments
     and competitions and an online reference for information and activities
     relating to bingo and bingo-like games ("LICENSEE'S BUSINESS").

C.   Licensor has the necessary personnel, resources, experience, skills, and
     background in the operation of a customer service and data centre to
     effectively operate and manage those functions for Licensee's Business.

D.   Licensee has requested Licensor to grant a license for the Software and to
     provide services for the operation of Licensee's customer service and data
     centre.

E.   The parties have agreed to enter into this Agreement on the terms and
     conditions set forth in this Agreement.




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                                                                        Page 2

AGREEMENTS:

In consideration of the mutual covenants and agreements set forth in this
Agreement, the parties agree as follows:

                      PART I--DEFINITIONS & INTERPRETATION

1.       DEFINITIONS

1.1      DEFINITIONS. In this Agreement:

         "ASP" means an application service provider selected by Licensor from
         time to time to host and operate the Software on the ASP's computer
         server for access by Licensee, Sublicensees and Customers;

         "APPROVED FINANCIAL INSTITUTION" means a bank, credit union, trust
         company, investment or brokerage firm, or other financial institution
         which appears on the list attached as Schedule A to this Agreement,
         which Schedule A may be modified by Licensee from time to time;

         "BINGO TOURNAMENT" means a bingo or bingo-like tournament, game or
         competition accessed from Licensee's or Sublicensee's Website,
         regardless of the name or format of such tournament, game or
         competition;

         "CONVERSION RATIO" means, at any time, the ratio then in effect as
         determined or established by the Rules and Regulations for converting
         Customer Payments into Customer Credits and converting Network
         Maintenance Fees into dollar amounts, and vice versa, and which will
         initially be $0.01 for 1 Customer Credit, subject to change under the
         Rules and Regulations;

         "CUSTOMER" means any person who gains access to Licensee's or
         Sublicensee's Website via the Internet for the purpose of participating
         in a Bingo Tournament, and who pays the applicable Network Maintenance
         Fees and/or the applicable Tournament Entrance Fees, and "LICENSEE'S
         CUSTOMER" means a Customers who accesses a Bingo Tournament from
         Licensee's Website, and "SUBLICENSEE'S CUSTOMER" means a Customer who
         accesses a Bingo Tournament from a Sublicensee's Website;

         "CUSTOMER CREDITS" means an electronic unit of participation, which is
         recorded and used by the Software to allow Customers access to and
         participation in a Bingo Tournament;

         "CUSTOMER PAYMENTS" means all funds collected from Customers, whether
         by credit card, debit card, cheque, cash, or any other means;

         "CUSTOMER INFORMATION" means all data relating to Customers collected
         and stored by the Software or by Licensee's or Sublicensee's Website
         including, without limiting the generality of the foregoing, name,
         address, telephone number, telecopier number, e-mail address, credit
         card numbers and expiration dates, information on other types of
         payments or fees, activities on the Internet, activities on the
         Website, and the amount of Customer Payments and Customer Credits;




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         "DOCUMENTATION" means any and all documentation accompanying or
         describing the Software, specifically including any localized version
         of the Documentation created by Licensor or Licensee and all
         supplements and new versions of the foregoing items;

         "DOWNLOADABLE SOFTWARE" means the portion of the Software, if any, that
         must be present on a Customer's computer in order for that Customer's
         computer to have access to a Bingo Tournament and which may be
         downloaded or obtained by the Customer via the Internet as a java
         applet;

         "EFFECTIVE DATE" means the date of this Agreement;

         "ESCROW AGENT" means an independent third party selected, from time to
         time, by Licensee to hold the Software, including without limitation
         all source code materials, pursuant to the Escrow Agreement (if and
         when required by Licensee);

         "ESCROW AGREEMENT" means the agreement to be entered into between
         Licensor, Licensee, and Escrow Agent pursuant to Section 4.3, as
         amended from time to time;

         "INITIAL SET UP FEE" means the sum of $50,000 payable to Licensor for
         services rendered to initialize and make the Software accessible for
         use by Licensee and its Customers;

         "INTERNET" means the worldwide collection of computer networks and
         gateways that use the TCP/IP suite of protocols to communicate with
         one another;

         "LICENSE TERM" has the meaning set out in Section 3.3;

         "LICENSE FEES" means, in respect of any period of time, an amount equal
         to 25% of the Network Maintenance Fees collected by or on behalf of
         Licensee for that period of time for Bingo Tournaments accessed from
         Licensee's Website, subject to adjustment under Section 8.4;

         "LICENSOR'S CASH ACCOUNT" means an account opened and maintained by
         Licensor for the benefit of Licensee and/or a Sublicensee with an
         Approved Financial Institution for the deposit and withdrawal of cash
         payments for and on behalf of Licensee and/or Sublicensee, as the case
         may be;

         "LICENSEE'S CONFIDENTIAL INFORMATION" has the meaning set out in
         Section 10.4;

         "LICENSOR'S CONFIDENTIAL INFORMATION" has the meaning set out in
         Section 10.1;

         "MASTER CD" means a compact disc containing the Downloadable Software,
         which may be used to mass produce compact discs for delivery of
         Downloadable Software to Customers when and if Licensee elects to use
         such delivery mechanism;

         "NETWORK MAINTENANCE FEES" means the fees expressed in Customer Credits
         and determined or established by the Rules and Regulations from time to
         time, which the Customer must pay to Licensee or Sublicensee to
         register with, and to gain access to Bingo Tournaments, but the Network
         Maintenance Fees do not include the Tournament Entrance Fees;




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                                                                        Page 4


         "RESIDUAL NETWORK MAINTENANCE FEES" means, in respect of any period of
         time, the balance of converted Network Maintenance Fees paid by
         Customers during that period of time after deduction and payment of the
         Initial Setup Fee and applicable License Fees, Sublicense Fees, Service
         Fees, Sublicensee Service Fees and Sublicensee Initialization Fees;

         "RULES AND REGULATIONS" means the instructions and guidelines developed
         or modified from time to time by Licensee to govern all aspects of a
         Bingo Tournament, including, without limitation, the rules of play that
         Customers must adhere to, the distribution of the Customer Payments,
         the method and ratio for conversion of Customer Payments into Customer
         Credits and vice versa, the eligibility and entrance requirements and
         criteria for Bingo Tournaments, the amount of Network Maintenance Fees,
         and the allocation and distribution of the Tournament Entrance Fees,
         with the initial Rules and Regulations attached hereto as Schedule B;

         "SERVICE FEES" means, in respect of any period of time, an amount equal
         to 5% of the Network Maintenance Fees collected by or on behalf of
         Licensee for that period of time, for Bingo Tournaments accessed from
         Licensee's Website, subject to adjustment under Section 8.6;

         "SERVICES TERM" has the meaning set out in Section 5.4;

         "SOFTWARE"--further to the description set forth in the recitals--means
         the source code form (in all data formats) of the current and any
         future version of Licensor's software programs known as "CrediPlay" and
         specifically includes the most current release of any localized version
         of the Software by Licensor and any Updates to any such program from
         time to time;

         "SUBLICENSEE" means any party to whom Licensee grants a sublicense to
         use the Software in the Territory for the support or operation of Bingo
         Tournaments accessed from the Sublicensee's Website;

         "SUBLICENSE FEES" means, in respect of any period of time, an amount
         equal to 26% of the Network Maintenance Fees collected by or on behalf
         of a Sublicensee for that period of time for Bingo Tournaments accessed
         from the Sublicensee's Website;

         "SUBLICENSEE INITIALIZATION FEES" means, in respect of any Sublicensee
         appointed by Licensee, a fee to be mutually determined by Licensor and
         Licensee and paid to Licensor for services rendered to initialize and
         make the Software accessible for use by that Sublicensee and its
         Customers;

         "SUBLICENSEE'S PORTION OF RESIDUAL NETWORK MAINTENANCE FEES" means, in
         respect of any period of time for a Sub licensee appointed by Licensee,
         the portion determined by Licensee and advised to Licensor of the
         converted residual Network Maintenance Fees paid by Customers who
         access Bingo Tournament s from the Sublicensee's Website during that
         period of time after deduction and payment of applicable Sublicense
         Fees, Sublicensee Service Fees and Sublicensee Initialization Fees;




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                                                                         Page 5

         "SUBLICENSEE SERVICE FEES" means, in respect of any period of time, an
         amount equal to 10% of the Network Maintenance Fees collected by or on
         behalf of a Sublicensee for that period of time for Bingo Tournaments
         accessed from the Sublicensee's Website;

         "SPECIFICATIONS" means all specifications and requirements for the
         Software set forth in Licensor's standard documentation as modified or
         supplemented in writing and signed or approved by Licensor;

         "SUPERVISOR" means Licensee's Chief Financial Officer;

         "TERRITORY" has the meaning set out in Section 3.2;

         "TRADEMARKS" means all Licensor-owned trademarks related to the
         Software;

         "TOURNAMENT ENTRANCE FEES" means the amount of Customer Credits that
         the Customer elects to pay towards the winner's prize for Bingo
         Tournaments, which amount will be retained in a holding account until
         the completion of the applicable Bingo Tournament, and the sum of all
         Tournament Entrance Fees paid for a specific Bingo Tournament will be
         the prize that Customers compete to win in accordance with the Rules
         and Regulations;

         "UPDATES" means any bug fixes, patches, error corrections,
         enhancements, improvements, supplements, upgrades, and new versions of
         the Software which Licensor makes available at any time to any of its
         customers or business associates with or without charge;

         "WARRANTY PERIOD" means the period during which the grant of license
         and rights made by Licensor to Licensee under this Agreement remains in
         effect;

         "WEB PAGE" means a document or file that is formatted using HTML and
         that is intended to be accessible to Customers with a web browser;

         "WEBSITE" means a series of interconnected Web Pages; and

         "WITHHOLDING" means any deduction or withholding made by an Approved
         Financial Institution from the remittance of converted Network
         Maintenance Fees by Licensor to Licensee or any Sublicensee.

2.       INTERPRETATION

2.1      GENDER AND NUMBER. Words expressed in one gender include all genders,
         and the singular includes the plural and vice versa.

2.2      HEADINGS. Headings have been inserted into this Agreement for
         convenience of reference only and they do not affect the interpretation
         of this Agreement.

2.3      RECITALS AND SCHEDULES. The recitals and schedules to this Agreement
         are incorporated by reference and form part of this Agreement.




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                                                                         Page 6

2.4      CURRENCY. All references to dollar amounts are references to lawful
         currency of the United States of America, unless expressly stated to be
         otherwise.

2.5      AMBIGUITIES. Ambiguities, inconsistencies, or conflicts in this
         Agreement will not be strictly construed against the drafter of the
         language but will be resolved by applying the most reasonable
         interpretation under the circumstances, giving full consideration to
         the parties' intentions at the time this Agreement is entered into.

                  PART II--SOFTWARE LICENSE & TECHNICAL SUPPORT

3.       OWNERSHIP, TERRITORY, AND LICENSE TERM

3.1      OWNERSHIP. As between the parties, Licensor owns and will retain all
         right, title, and interest in and to the Software and the
         Documentation, except for the limited license rights specifically
         granted in this Agreement. In addition, Licensee agrees that any
         derivative software technology or products developed by or on behalf of
         Licensee (with or without the consent of Licensor) using or based upon
         the Software or the Documentation will be the sole property of
         Licensor, and Licensee will, upon request by Licensor, execute an
         assignment and transfer of rights in such derivative software
         technology, products, or documentation in favour of Licensor.

3.2      TERRITORY. The license and rights granted to Licensee will apply
         worldwide (the "TERRITORY").

3.3      LICENSE TERM. The license and rights granted to Licensee will have
         effect from the Effective Date and continue until otherwise terminated
         pursuant to this Agreement (the "LICENSE TERM").

4.       GRANT

4.1      PERPETUAL WORLDWIDE LICENSE. Licensor grants to Licensee an
         irrevocable, worldwide, perpetual license to use the Software in and
         throughout the Territory for the support and operation of Licensee's
         Business. The above license includes the right to concurrently access
         and utilize the Software on all computer systems, servers and Websites
         which host or support Licensee's Business from time to time, to
         distribute and sublicense the Downloadable Software to Customers as
         necessary, and to create and maintain copies of the Software for
         back-up and security purposes. The above license includes the right to
         grant sublicenses to Sublicensees to use the Software in the Territory
         for the support and operation of Bingo Tournaments accessed from the
         Sublicensees' Websites, provided that the terms of the sublicenses
         shall be on such same terms and conditions as Licensee may from time to
         time require. The above license does not include the right to modify,
         improve, or create derivative software, technology, or products from
         the Software, or to use the Software for any activities that are not in
         the ordinary course of Licensee's Business. Licensor covenants and
         agrees that Licensee will, for the duration of this Agreement, have the
         exclusive right to use the Software in the Territory for the support
         and operation of an Internet portal or Website to access Bingo
         Tournaments as conducted by Licensee or its Sublicensees from time to
         time.

4.2      SOFTWARE HOSTING SERVICES. Licensor will engage the services and
         computer facilities of an experienced and competent ASP to host the
         Software on the ASP's computer server




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         for access by Licensee, Sublicensees and Customers. Licensor warrants
         and covenants that the hosting services and facilities of the ASP will
         enable Licensee, Sublicensees and Customers to access Bingo Tournaments
         and utilize the Software at all times, on a 24 hours per day, 7 days
         per week, 365 days per year basis. Licensor will continue to remain
         responsible for the due performance of its obligations under this
         Agreement notwithstanding the engagement of the ASP.

4.3      DELIVERY BY LICENSOR TO ESCROW AGENT. When and if required by Licensee,
         Licensor will enter into an Escrow Agreement on terms and conditions
         reasonably required by Licensee. Upon execution of the Escrow
         Agreement, Licensor will immediately deliver to the Escrow Agent, at no
         additional cost to Licensee, one complete copy of the Software to be
         held pursuant to the Escrow Agreement, which delivery will include all
         source code materials for the Software, and from time to time
         thereafter, Licensor will deliver to the Escrow Agent, at no additional
         cost to Licensee, the following materials to be held pursuant to the
         Escrow Agreement:

         (a)  current versions of the Software, Specifications, and
              Documentation, in such format and on such media as Licensee may
              require to install and operate the Software on Licensee's computer
              systems and servers, and to grant and support Sublicenses of the
              Software in accordance with this Agreement, when and if the same
              are released pursuant to the Escrow Agreement; and

         (b)  a Master CD containing the Downloadable Software (including
              Upgrades thereto).

4.4      INTERNET ACCESS BY CUSTOMERS. Licensor will permit and facilitate
         Customers to:

         (a)  have access to Bingo Tournaments and the Software through the
              Websites of Licensee and Sublicensees; and

         (b)  download and install the Downloadable Software on Customers'
              computers.

4.5      FINANCIAL TRANSACTIONS AND BINGO TOURNAMENT PARTICIPATION. As part of
         the Software, Licensor will provide Licensee and Sublicensees a
         financial transaction processing and Bingo Tournament participation
         system to allow:

         (a)  Customers to deposit, through the use of credit cards, debit
              cards, cheques, cash, or any other method of payment, the Customer
              Payments, to convert the same into Customer Credits at the
              Conversion Ratio, and vice versa, to receive payment of the
              converted amount of Customer Credits and to obtain detailed
              reports on the status of transactions involving Customer Payments
              and Customer Credits;

         (b)  Customers to gain access to and participate in Bingo Tournaments
              in accordance with the Rules and Regulations; and

         (c)  Licensee and Sublicensees to collect, directly or through a
              Software administrator, Network Maintenance Fees, to monitor and
              administer the collection and distribution of Tournament Entrance
              Fees, to pay the Initial Setup Fee and applicable License Fees,
              Service Fees, Sublicense Fees, Sublicensee Service Fees and
              Sublicensee Initialization Fees, and to obtain detailed
              transaction reports on




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              Customer Payments, Customer Credits, Network Maintenance Fees,
              Initial Setup Fee, License Fees, Service Fees, Sublicense Fees,
              Sublicensee Service Fees and Sublicensee Initialization Fees.

4.6      SUPPORT OBLIGATIONS OF LICENSOR. Licensor will, during the License
         Term, provide the following support at no additional cost to Licensee
         or Sublicensees:

         (a)  Licensor will use commercial best efforts to create, acquire or
              develop new Upgrades or Documentation that will implement,
              facilitate and support the effective, timely and accurate
              performance of all services which Licensor has agreed to provide
              herein, and to implement, accommodate and support the Rules and
              Regulations, and to make all new Upgrades and Documentation
              immediately available to Licensee;

         (b)  maintain and upgrade its staff and facilities to enable it to
              carry out its obligations under this Agreement and the Rules and
              Regulations in the most effective, timely, and accurate manner
              that is technologically possible;

         (c)  technical assistance to promptly respond to and resolve
              difficulties encountered by Licensee or Sublicensees with the
              Software, such assistance to be available by e-mail, telecopier,
              and telephone facilities 24 hours per day, 7 days per week, 365
              days per year; and

         (d)  software programming services to promptly correct errors and
              overcome problems with the Software, to enhance the effectiveness
              of the Software and to enable the Software to effectively operate
              on or be accessed from Licensee's and Sublicensee's computer
              systems and Websites.

              PART III--OPERATION OF CUSTOMER SERVICE & DATA CENTRE

5.       ENGAGEMENT OF LICENSOR

5.1      ENGAGEMENT AND RESPONSIBILITIES. Licensee hereby engages Licensor to
         operate the customer service centre and data centre for Licensee's
         Business on the terms and conditions set out in this Agreement.
         Licensor will be responsible to provide and manage all staff,
         equipment, and facilities necessary for the operation of:

         (a)  the customer service centre to receive and promptly and effective
              ly reply to and process requests for information and service from
              present, potential, and future Customers; and

         (b)  the data centre to promptly and accurately process and issue
              financial, management, and Customer reports for Licensee's
              Business (in a form and by such deadlines as the Supervisor may
              reasonably require from time to time) and to issue and process
              payments of funds to Customers based on converted Customer Credits
              in accordance with the Rules and Regulations.

         Licensor hereby accepts the above engagement and agrees to carry out
         the above duties and responsibilities in accordance with this Agreement
         and the reasonable targets and requirements and directions of Licensee
         from time to time. Licensor agrees its duties and




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                                                                         Page 9

         responsibilities may be reasonably modified, reduced, or increased at
         Licensee's request from time to time to meet the requirements of
         Licensee's Business.

5.2      COVENANTS. Licensor will report to the Supervisor. Licensor will comply
         with all lawful instructions and directions given by Licensee. Licensor
         will not represent itself as being a partner of Licensee nor as having
         any proprietary interest in the Licensee's Business or the intellectual
         property developed by Licensee. Licensor will not commit or purport to
         commit Licensee to any financial obligation or liability, without the
         prior approval of the Supervisor.

5.3      INDEPENDENT CONTRACTOR. Licensor is and will be deemed to be an
         independent contractor and will provide or procure its own office,
         equipment, and staff to complete its responsibilities and duties under
         this Part. Licensor will register and pay applicable employer premiums
         under Workers Compensation legislation and will pay all income taxes
         and statutory remittances on payments received from Licensee. Licensor
         may, at its sole cost and liability, contract with subsidiaries,
         affiliates, and third parties to provide portions of the services and
         facilities which Licensor is required to provide under this Part,
         provided that Licensor will continue to remain responsible for the due
         performance of its obligations under this Part.

5.4      RENEWABLE SERVICES TERM. Subject to the provisions for termination set
         forth in this Agreement, the term of Licensee's engagement under this
         Part (the "SERVICES TERM") will be for an initial period of 3 years
         commencing on the Effective Date. Thereafter, the Services Term may be
         renewed by mutual written agreement of the parties for successive 3
         year periods, until:

         (a)  Licensor's engagement under this Part is terminated by either
              party in accordance with this Agreement; or,

         (b)  either party gives written notice to the other party at least 90
              days prior to the end of the initial Services Term or any renewal
              thereof, that the first party elects not to renew the engagement
              of Licensor for a further Services Term and following such notice,
              the engagement of Licensor under this Part will terminate on the
              last day of the current Services Term.

5.5      SERVICES FOR SUBLICENSEES. Licensor will provide the above-stated
         services for the operation of a customer service centre and data centre
         for any Sublicensees appointed by Licensee from time to time.

           PART IV--COLLECTION & DISTRIBUTION OF CUSTOMER PAYMENTS AND
                            LICENSOR'S CASH ACCOUNTS

6.       CUSTOMER PAYMENTS

6.1      LICENSOR'S CASH ACCOUNTS. Licensee authorizes Licensor to establish,
         maintain or operate one or more Licensor's Cash Accounts for the
         deposit of Customer Payments and for the withdrawal of payments
         authorized by this Agreement. When requested by Licensee, Licensor will
         promptly transfer cash amounts between Licensor's Cash Accounts.
         Licensor acknowledges and agrees that Licensee will be the sole owner
         of all Customer Payments made by Licensee's Customers and that all
         funds deposited into




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         Licensor's Cash Accounts as a result of such Customer Payments pursuant
         to this Agreement and the Rules and Regulations will be held in trust
         by Licensor for Licensee, subject to the express provisions of this
         Agreement which entitle Licensor to withdraw interest and fees from
         Licensor's Cash Accounts. At Licensee's request, Licensor will execute
         a form of general security agreement or other agreement prepared by
         Licensee's solicitors to confirm Licensee's beneficial ownership of all
         Customer Payments made by Licensee's Customers, subject to the above
         mentioned rights of withdrawal in favour of Licensor.

6.2      COLLECTION OF CUSTOMER PAYMENTS FOR LICENSEE. Licensee hereby appoints
         Licensor as its agent to use the Software to collect and record the
         Customer Payments made by Licensee's Customers in a timely and accurate
         manner. The Customer Payments will be made and retained in US
         currency. Licensor will deposit the Customer Payments in one or more of
         Licensor's Cash Accounts. Upon deposit into Licensor's Cash Accounts,
         all Customer Payments made by Licensee's Customers will be the property
         of Licensee and will be held in trust by Licensor, provided:

         (a)  all interest earned on the Licensor's Accounts will be for the
              sole benefit of Licensor (and Licensee hereby waives and disclaims
              all rights and title to such interest in favour of Licensor) and
              such interest may be withdrawn from Licensor's Cash Accounts by
              Licensor at any time; and

         (b)  all fees payable to Licensor pursuant to this Agreement may be
              withdrawn from Licensor's Cash Accounts by Licensor as and when
              such fees are due and payable (and Licensee hereby authorizes
              Licensor to make such withdrawals).

         Following such deposit, no Customer will have any property rights in
         the Customer Payments or in Licensor's Cash Accounts. Customers' rights
         will then be limited to the Customer Credits as set out in Article 7 of
         this Agreement and the Rules and Regulations. Licensor agrees to remit
         the Residual Network Maintenance Fees to Licensee as set out in Article
         8 of this Agreement.

6.3      COLLECTION OF CUSTOMER PAYMENTS FOR SUBLICENSEES. Licensor will act as
         agent for each Sublicensee appointed by Licensee from time to time, to
         use the Software to collect and record the Customer Payments made by
         the Sublicensee's Customers in a timely and accurate manner. The
         Customer Payments will be made and retained in US currency. Licensor
         will deposit the Customer Payments in one or more of Licensor's Cash
         Accounts. Upon deposit into Licensor's Cash Accounts, all Customer
         Payments made by the Sublicensee's Customers will be the property of
         that Sublicensee and will be held in trust by Licensor, provided:

         (a)  all interest earned on the Licensor's Accounts will be for the
              sole benefit of Licensor (and Licensee will cause Sublicensee to
              waive and disclaim all rights and title to such interest in favour
              of Licensor) and such interest may be withdrawn from Licensor's
              Cash Accounts by Licensor at any time;

         (b)  all fees payable in to Licensor for the Sublicense to this
              Agreement may be withdrawn from Licensor's Cash Accounts by
              Licensor as and when such fees are due and payable (and Licensee
              will cause Sublicensee to authorize Licensor to make such
              withdrawals).




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                                                                        Page 11


         At Licensee's request, Licensor will execute a form of general security
         agreement or other agreement prepared by Licensee's solicitors to
         confirm the Sublicensee's beneficial ownership of all Customer Payments
         made by that Sublicensee's Customers, subject to the above- mentioned
         rights of withdrawal in favour of Licensor.

6.4      BOOKS AND RECORDS. On the second business day of each month Licensor
         will issue a transaction statement to Licensee detailing the
         calculation, collection, and deposit of the Customer Payments and all
         applicable Licensor's Cash Accounts for the immediately preceding
         month. If Licensee has appointed Sublicensees, Licensor will issue
         separate statements for the Customer Payments relating to each
         Sublicensee's Website. Licensor will maintain books of account and
         records relating to the Customer Payments and all applicable Licensor's
         Cash Accounts and will take reasonable measures to ensure that these
         books and records are accurate. Upon reasonable notice of not less than
         10 days, Licensee or a Sublicensee may, at its expense, inspect such
         books of account and records. If an inspection determines that Licensor
         has not collected or deposited the correct amount of the Customer
         Payments collected or deposited, then Licensor will immediately make
         the necessary adjusting payment. If Licensor has incorrectly collected
         and deposited Customer Payments by a figure of greater than 0.5% for
         the period covered by the inspection, then Licensor will bear the cost
         of that inspection.

6.5      FINANCIAL SERVICE CHARGES AND CHARGE-BACKS. Notwithstanding any other
         provision of this Agreement, Licensor will bear the cost of all fees
         and service charges, however described or named, payable to credit card
         companies, banks, credit unions, trust companies, investment or
         brokerage firms or financial institutions for the collection, deposit,
         investment, handling and remittance of Customer Payments and other
         payments referred to in this Agreement and the operation of Licensor's
         Cash Accounts. If any Customer Payment that is made by credit card or
         debit card is subsequently reversed by the processing financial
         institution (referred to as a "charge-back"), then such charge-back
         will be the responsibility of the Licensee or Sub licensee whose
         Customer Payment is the subject of the charge-back, and Licensor will
         be entitled to withdraw the amount of the charge-back from the funds
         held in trust for the responsible Licensee or Sublicensee in the
         Licensor's Cash Accounts.

7.       CUSTOMER ACCOUNTS

7.1      ESTABLISHMENT OF CUSTOMER ACCOUNTS. Upon receipt of a Customer Payment,
         Licensor will use the Software to establish a separate account for that
         Customer. Licensor will use the Conversion Ratio to determine the
         amount of Customer Credits to be added to that Customer's account in
         respect of the Customer Payment. Licensor will immediately update and
         at all times maintain an accurate record of the amount of Customer
         Credits in a Customer's account, in accordance with the Rules and
         Regulations and this Agreement. The Software's user interface and the
         reports issued to Customers and Licensee may, for ease of reference,
         understanding and operation, show the Customers' accounts in US
         currency, however, this depiction does not grant the Customers' any
         rights in the Licensor's Cash Accounts.

7.2      INCREASING CUSTOMER CREDITS. Licensor will increase the amount of
         Customer Credits in a Customer's account if and to the extent that:




<PAGE>
                                                                        Page 12

         (a)  the Customer is entitled, under the Rules and Regulations, to
              receive all or part of the Tournament Entrance Fees for a specific
              Bingo Tournament;

         (b)  the Customer makes additional Customer Payments;

         (c)  the Customer is entitled, under the Rules and Regulations, to a
              refund of any Network Maintenance Fees or Tournament Entrance Fees
              previously paid by the Customer;

         (d)  a third party transfers his or her Customer Credits to the
              Customer in accordance with the Rules and Regulations ;

         (e)  an entry in required to correct one or more errors in the
              Customer's account; or

         (f)  any other increase is authorized under the Rules and Regulations.

7.3      DECREASING CUSTOMER CREDITS. Licensor will decrease the amount of
         Customer Credits in a Customer's account if and to the extent that:

         (a)  the Customer is required, under the Rules and Regulations, to pay
              Network Maintenance Fees for a specific Bingo Tournament;

         (b)  the Customer, under the Rules and Regulations, elects to pay
              Tournament Entrance Fees for a specific Bingo Tournament;

         (c)  the Customer demands conversion of the Customer Credits in his or
              her account and payment of the converted Customer Credits to the
              Customer's credit card or other account;

         (d)  the Customer transfers his or her credits to a third party in
              accordance with the Rules and Regulations;

         (e)  an entry is required to correct one or more errors in the
              Customer's account; or

         (f)  any other deduction is authorized under the Rules and Regulations.

         Using the Software, Licensor will initiate and record prior notice to
         the Customer of each proposed decrease in the amount of Customer
         Credits and enable the Customer to record his or her approval of such
         decrease by sending the appropriate command through the Software.

7.4      CONVERSION AND WITHDRAWAL OF CUSTOMER CREDITS. At any time, a Customer
         of Licensee or Sublicensee may authorize the conversion and withdrawal
         of the Customer Credits, or a portion of the Customer Credits,
         remaining in the Customer's account. Upon receipt of such
         authorization, Licensor will immediately use the Software to decrease
         the Customer's account by the requested amount of Customer Credits (up
         to the remaining Customer Credits available), and to convert the
         applicable credits into US currency according to the Conversion Ratio,
         and immediately withdraw and remit the converted amount of Customer
         Credits in US currency from funds held in trust in Licensor's Cash
         Accounts for Licensee or Sublicensee, as the case may be, to the
         Customer's credit card




<PAGE>
                                                                        Page 13

         or other account in accordance with the Rules and Regulations, and any
         applicable national, federal, state, provincial, municipal, or other
         laws.

7.5      CUSTOMER ACCOUNT RECORDS. Upon a request by a Customer, Licensor will,
         using the Software, immediately provide that Customer with an accurate
         transaction record of that Customer's account, which will display the
         amount of Customer Credits in that Customer's account, the amount of
         Network Maintenance Fees and Tournament Entrance Fees paid by that
         Customer, the amount of Tournament Entrance Fees deposited to that
         Customer's account for winning a Bingo Tournament as defined in the
         Rules and Regulations, the total deposits made to that Customer's
         account, and the total withdrawals made from that Customer's account.
         Licensor will provide this report in a secure, confidential electronic
         form on Licensee's or Sublicensee's Website, in a format suitable for
         downloading by that Customer via the Internet.

8.       NETWORK MAINTENANCE FEES, LICENSE FEES, SERVICE FEES, SUBLICENSE FEES,
         SUBLICENSEE SERVICE FEES, INITIAL SETUP FEE AND SUBLICENSEE
         INITIALIZATION FEES

8.1      NETWORK MAINTENANCE FEES. Licensee will be the sole owner of all
         Network Maintenance Fees paid by Licensee's Customers and each
         Sublicensee will be the sole owner of all Network Maintenance Fees paid
         by that Sublicensee's Customers, regardless of the place, account, or
         manner in which the Network Maintenance Fees are collected, stored,
         recorded, deposited, or held.

8.2      COLLECTION OF NETWORK MAINTENANCE FEES. Using the Software, Licensor
         will deduct and collect the Network Maintenance Fees from the
         Customers' accounts on behalf of Licensee and Sublicensees. The Network
         Maintenance Fees will be initially expressed in Customer Credits and
         will be recorded in separate accounts for Licensee and each
         Sublicensee. At the end of each month, Licensor will use the Conversion
         Ratio to convert the Network Maintenance Fees in Licensee's and
         Sublicensees' accounts into US currency. Until paid to Licensee or
         Sublicensees, Licensor will hold the converted Network Maintenance Fees
         in trust for Licensee or Sublicensees in a separate account at an
         Approved Financial Institution, with interest accruing on this account
         for the benefit of Licensor. At Licensee's request, Licensor will
         execute a form of general security agreement or other agreement
         prepared by Licensee's solicitors to confirm Licensee's and
         Sublicensee's beneficial ownership of all Customer Payments made by
         their respective Customers, subject to the above mentioned rights of
         withdrawal in favour of Licensor.

8.3      LICENSE FEES AND SUBLICENSE FEES. As consideration for the grant of
         license and rights by Licensor and for the issuance of the warranties
         and representations by Licensor, Licensee hereby agrees to pay, or will
         direct its Software administrator to pay, to Licensor the applicable
         License Fees. Licensee will pay only one set of License Fees regardless
         of the number of computer systems or servers that the Software is
         installed on or utilized in the course of Licensee's Business. Licensee
         will pay, or will direct its Software administrator to pay, Sublicense
         Fees for each sublicense granted by Licensee.

8.4      MINIMUM MONTHLY LICENSE FEES. Commencing on the Effective Date,
         Licensee will pay Licensor a minimum monthly license fee of $60,000 for
         each complete calendar month, inclusive of License Fees and Sublicense
         Fees payable for that month. The




<PAGE>
                                                                       Page 14

         amount by which the minimum monthly license fees for a completed
         calendar month exceeds the License Fees and all Sublicense Fees paid
         for that month, if any, will be paid by Licensee to Licensor within 14
         days of the last day of that month.

8.5      SERVICE FEES AND SUBLICENSEE SERVICE FEES. Licensee will pay, or will
         direct its Software administrator to pay, Service Fees to Licensor. The
         Service Fees will be calculated for each calendar month and paid to
         Licensor within 14 days after the end of the applicable calendar month.
         Licensee will pay, or will direct its Software administrator to pay,
         Sublicensee Service Fees for each sublicense granted by Licensee.

8.6      MINIMUM MONTHLY SERVICE FEES. Commencing on the Effective Date,
         Licensee will pay a minimum monthly service fee of $18,000 for each
         complete calendar month, inclusive of the Service Fees and Sublicensee
         Service Fees payable for that month. The amount by which the minimum
         monthly service fees for a completed calendar month exceeds the Service
         Fees and all Sublicensee Service Fees for that calendar month will be
         paid by Licensee to Licensor within 14 days after the end of the
         calendar month.

8.7      INITIAL SETUP FEE AND SUBLICENSEE INITIALIZATION FEES. Licensee will
         pay Licensor the Initial Setup Fee as the one-time consideration for
         services rendered by Licensor to initialize and make the Software
         accessible for use by Licensee and its Customers. The Initial Setup Fee
         will be due and payable on the date the Software is first initialized
         and made accessible for use by Licensee and its Customers. Licensee
         will pay Licensor a onetime Sublicensee Initialization Fee for each
         Sublicensee appointed by Licensee, payable on the date the Software is
         first initialized for each Sublicensee and its Customers.

8.8      TAXES. The Initial Setup Fee, and all License Fees, Service Fees,
         Sublicense Fees, Sublicensee Service Fees and Sublicensee
         Initialization Fees will be subject to all laws and regulations now or
         hereafter in existence requiring the deduction or withholding of
         payment for income or other taxes and duties payable by or assessable
         against Licensor. Licensee will have the right to make such deductions
         and withholdings and to remit the same to the government or agency
         concerned and such action will fulfill Licensee's obligation to pay the
         applicable amount of License Fees, Service Fees, Sublicense Fees,
         Sublicensee Service Fees, Initial Setup Fee and Sublicensee
         Initialization Fees to Licensor. Licensor will indemnify and save
         Licensee harmless from all such taxes and duties.

8.9      REMITTANCE OF CONVERTED NETWORK MAINTENANCE FEES. Within 14 calendar
         days after the end of each calendar month, commencing 30 days after the
         Effective Date, Licensor will remit from Licensor's Cash Accounts;

         (a)  to Licensor, or as Licensor directs, the Initial Setup Fee and all
              applicable License Fees, Service Fees, Sublicense Fees,
              Sublicensee Service Fees and Sublicensee Initialization Fees, less
              Withholding for the preceding month subject to any adjustments or
              reconciliation payments required from time to time pursuant to
              this Agreement;

         (b)  to each Sublicensee (or as the Sublicensee directs), the
              Sublicensee's Portion of Residual Network Maintenance Fees after
              payment of the fees referred to in subsection 8.9 (a) for the
              preceding month; and




<PAGE>
                                                                       Page 15

         (c)  to Licensee (or as Licensee may direct), the Residual Network
              Maintenance Fees after payment of the fees and amounts referred to
              in subsections 8.9 (a) and (b) for the preceding month.

8.10     BOOKS AND RECORDS. Licensor will issue a monthly statement detailing
         the calculation and payment of the Initial Setup Fee, Network
         Maintenance Fees, License Fees, Service Fees, Sublicense Fees,
         Sublicensee Service Fees and Sublicensee Initialization Fees to
         accompany each payment of converted Network Maintenance Fees to
         Licensee. If Licensee has appointed Sublicensees, Licensor will issue
         separate statements and payments for the Network Maintenance Fees,
         Sublicense Fees, Sublicensee Service Fees and Sublicensee
         Initialization Fees relating to each Sublicensee's Website. This
         statement will be conclusive as to the contents thereof, except for
         manifest errors and omissions. Licensor will maintain books of account
         and records relating to the Initial Setup Fee, Network Maintenance
         Fees, License Fees, Service Fees, Sublicense Fees, Sublicensee Service
         Fees and Sublicensee Initialization Fees, and will take reasonable
         measures to ensure that these books and records are accurate. Upon
         reasonable notice of not less than 10 days, Licensee or Sublicensee
         may, at its expense, inspect such books of account and records. If an
         inspection determines that Licensor has not paid the correct amount of
         Initial Setup Fee, Network Maintenance Fees, License Fees, Service
         Fees, Sublicense Fees, Sublicensee Service Fees or Sublicensee
         Initialization Fees, then the parties will make the necessary adjusting
         payment within 14 calendar days after such determination. If Licensor
         has underpaid the correct amount of the Network Maintenance Fees, or
         overpaid the correct amount of Initial Setup Fee, License Fees, Service
         Fees, Sublicense Fees Sublicensee Service Fees or Sublicensee
         Initialization Fees, by more than 2%, then Licensor will bear the cost
         of the inspection.

8.11     INTEREST ON OVERDUE PAYMENTS. Licensor will pay to Licensee or
         Sublicensee, as the case may be, interest at the rate of 2% per month,
         compounded monthly, on all payments of funds due and owing to Licensee
         or Sublicensee under this Agreement and which have become overdue.
         Interest will accrue at the aforesaid rate on a daily basis until the
         outstanding payments have been made.

8.12     PRE-CONDITION TO WITHDRAWAL OF FEES. Notwithstanding any other
         provision of this Agreement, Licensor will not be entitled to withdraw
         any fees or payments from Licensor's Cash Accounts if Licensor is in
         default of its obligations or breach of its warranties and
         representations under this Agreement.

9.       TOURNAMENT ENTRANCE FEES

9.1      COLLECTION OF TOURNAMENT ENTRANCE FEES. Using the Software, Licensor
         will deduct and collect the Tournament Entrance Fees from Customers'
         accounts. The Tournament Entrance Fees will be initially expressed in
         Customer Credits and will be recorded in a separate account for the
         applicable Bingo Tournament.

9.2      DISTRIBUTION OF TOURNAMENT ENTRANCE FEES. Upon completion of each Bingo
         Tournament, Licensor will cause the collected Tournament Entrance Fees
         to be distributed to Customers, in accordance with the Rules and
         Regulations. Nothing in this Agreement gives Licensee, Licensor, or any
         Sublicensee any property in or rights to the Tournament Entrance Fees,
         and no part of the Tournament Entrance Fees will be distributed to
         Licensee, Licensor, or any Sublicensee.




<PAGE>
                                                                       Page 16


9.3      BOOKS AND RECORDS. On the second business day of each month Licensor
         will issue a statement to Licensee detailing the collection,
         calculation and distribution of the Tournament Entrance Fees for the
         immediately preceding month. Licensor will maintain books of account
         and records relating to the Tournament Entrance Fees and will take
         reasonable measures to ensure that these books and records are
         accurate. Upon reasonable notice of not less than 10 days, Licensee or
         a Sublicensee may, at its expense, inspect such books of account and
         records. If an inspection determines that Licensor has not collected or
         distributed the correct amount of the Tournament Entrance Fees, then
         Licensor will immediately make the necessary adjusting payment to the
         Customers suffering an underpayment. If Licensor has overpaid or
         underpaid out the Tournament Entrance Fees to Customers by a figure of
         greater than 0.5% for the period covered by the inspection, then
         Licensor will bear the cost of that inspection. If Licensee has
         appointed a Sublicensee or Sublicensees, then Licensor will issue
         separate statements for the Tournament Entrance Fees relating to each
         Sublicensee's Website.

            PART V--CONFIDENTIAL, CUSTOMER, & PROPRIETARY INFORMATION

10.      CONFIDENTIALITY

10.1     LICENSOR'S CONFIDENTIAL INFORMATION. The Software, the Documentation,
         and any other source code, computer program listings, techniques,
         algorithms, and processes and technical and marketing plans or other
         sensitive business information, including all materials containing said
         information, which are supplied by Licensor to Licensee is the
         confidential information of Licensor (the "LICENSOR'S CONFIDENTIAL
         INFORMATION").

10.2     RESTRICTIONS ON USE. Licensee agrees that, except as allowed under this
         Agreement or as authorized in writing by Licensor, Licensee will:

         (a)  preserve and protect the confidentiality of all of the Licensor's
              Confidential Information;

         (b)  not disclose to any third party the existence, source, content, or
              substance of the Licensor's Confidential Information or make
              copies of the Licensor's Confidential Information;

         (c)  not deliver any of the Licensor's Confidential Information to any
              third party, or permit the Licensor's Confidential Information to
              be removed from Licensee's premises;

         (d)  not use any of the Licensor's Confidential Information in any way
              other than as provided in this Agreement; and

         (e)  not disclose, use, or copy any third-party information or
              materials received in confidence by Licensee for the purposes of
              this Agreement.

10.3     LIMITATIONS. Information is not considered to be the Licensor's
         Confidential Information if Licensee can demonstrate that it:

         (a)  is already or otherwise becomes publicly known through no act of
              Licensee;




<PAGE>
                                                                        Page 17


         (b)  is lawfully received from third parties subject to no restriction
              of confidentiality;

         (c)  can be shown by Licensee to have been independently developed by
              it without the use of the Licensor's Confidential Information;

         (d)  is required or authorized by applicable law, regulation, or by
              administrative, quasi- judicial, or judicial order or decree to be
              disclosed; or

         (e)  is authorized in writing by Licensor to be disclosed, copied, or
              used.

10.4     LICENSEE'S CONFIDENTIAL INFORMATION. The Customer Information, all
         information, data, specifications, documentation, and software listings
         relating to Licensee's Business, and any other source code, computer
         program listings, techniques, algorithms, and processes and technical
         and marketing plans or other sensitive business information, including
         all materials containing said information, which Licensee may from time
         to time disclose or impart to Licensor is the confidential information
         of Licensee (the "LICENSEE'S CONFIDENTIAL INFORMATION").

10.5     RESTRICTIONS ON USE. Licensor agrees that, except as authorized in
         writing by Licensee, Licensor will:

         (a)  preserve and protect the confidentiality of all of the Licensee's
              Confidential Information;

         (b)  not disclose to any third party the existence, source, content, or
              substance of the Licensee's Confidential Information or make
              copies of the Licensee's Confidential Information;

         (c)  not deliver any of the Licensee's Confidential Information to any
              third party, or permit the Licensee's Confidential Information to
              be removed from Licensor's premises;

         (d)  not use any of the Licensee's Confidential Information in any way
              other than as provided in this Agreement;

         (e)  not disclose, use, or copy any third party information or
              materials received in confidence by Licensor for the purposes of
              this Agreement; and

         (f)  require that each of its employees who work on or have access to
              the materials that are the subject of this Agreement sign a
              suitable confidentiality and work- for-hire/ assignment agreement
              and be advised of the confidentiality and other applicable
              provisions of this Agreement.

10.6     LIMITATIONS. Information is not considered to be the Licensee's
         Confidential Information if Licensor can demonstrate that it:

         (a)  is already or otherwise becomes publicly known through no act of
              Licensor;

         (b)  is lawfully received from third parties subject to no restriction
              of confidentiality;




<PAGE>
                                                                       Page 18


         (c)  can be shown by Licensor to have been independently developed by
              it without the use of the Licensee's Confidential Information;

         (d)  is required or authorized by applicable law, regulation, or by
              administrative, quasi- judicial, or judicial order or decree to be
              disclosed; or

         (e)  is authorized in writing by Licensee to be disclosed, copied, or
              used.

10.7     LICENSEE REPORTS. Licensor will ensure that all reports and statements
         to be provided to Licensee or Sublicensees by the Software are in a
         secure, confidential electronic form in a format suitable for
         downloading by Licensee or Sublicensees via the Internet.

11.      CUSTOMER INFORMATION

11.1     CUSTOMER INFORMATION. Licensor acknowledges and confirms that Licensee
         holds all right, title, and interest in the Customer Information.
         Nothing in this Agreement gives Licensor any property or interest in
         the Customer Information. Licensor will preserve, safeguard, and not
         disclose to any third party any Customer Information that Licensor may
         be in possession of. Licensor may use the Customer Information to
         further the interests of the Licensee's Business.

11.2     CUSTOMER REPORTS. Nothing in this Agreement restricts Licensor from
         recording, storing, manipulating, and extracting Customer Information
         solely for the purpose of producing the Customer reports described in
         Part III.

12.      TRADEMARKS

12.1     RIGHT TO USE. Further to the rights granted to Licensee by Licensor,
         Licensor hereby grants to Licensee and Sublicensees the right to use
         and display Trademarks solely to the extent reasonably necessary to
         disclose to third parties Licensee's rights to use the Software and
         Licensor's ownership interest in the Software and Documentation.
         Licensee will display the Licensor's trademarks on Licensee's and
         Sublicensee's Websites in a manner as agreed between the parties.

13.      NON-DISCLOSURE

13.1     NON-DISCLOSURE. Neither party will disclose any of the terms of this
         Agreement to any third party without first obtaining the consent of the
         other party, save and except where such disclosure is required or
         authorized by applicable law, regulation, or by administrative,
         quasi-judicial, or judicial order or decree to be disclosed.

                              PART VI--WARRANTIES & INDEMNITY

14.      WARRANTIES AND INDEMNITY

14.1     GENERAL WARRANTIES. Licensor warrants as follows:

         (a)  during the Warranty Period the media containing each portion of
              the Software and the Downloadable Software (except for
              modifications made by Licensee) will,




<PAGE>
                                                                        Page 19

              under normal use, be free of defects in materials and workmanship,
              the Software and the Downloadable Software will operate and
              perform in accordance with the Specifications and the
              Documentation, and the media containing the Software and the
              Downloadable Software will allow the Licensee to replicate the
              Software and the Downloadable Software;

         (b)  Licensor is the sole and exclusive owner of all rights, whether
              registered or unregistered, in the Software, the Downloadable
              Software, and the Documentation;

         (c)  the Software and the Downloadable Software are not subject to any
              restriction or to any mortgages, liens, pledges, charges, security
              interests, encumbrances, or claims or to any rights of others or
              any kind or nature whatsoever which may prevent, or may be
              breached by, the grant of license and rights to the Licensee;

         (d)  the Software, the Downloadable Software, and the Documentation do
              not encroach or infringe upon or misappropriate any copyrights,
              trademarks, trade secrets, or any other proprietary or contractual
              rights of third parties;

         (e)  Licensor has not entered into any agreement or arrangement of any
              kind whatsoever which may have any restricting affect upon
              Licensor's rights and authority to grant the license and rights to
              Licensee;

         (f)  Licensor has not entered into any agreement or arrangement of any
              kind whatsoever which may have any restricting affect upon
              Licensor's rights and ability to carry out its responsibilities
              under this Agreement;

         (g)  Licensor will not, for the duration of the License Term, provide
              any management or financial services or support to any third
              parties conducting business competitive to the Licensee's
              Business, other than Sublicensees that propose to operate or
              acquire an internet portal to host bingo tournaments and
              competitions as conducted by Licensee from time to time;

         (h)  Licensor will use best commercial efforts to promote and serve the
              best interests of Licensee and Sublicensees;

         (i)  Licensor will provide to all Sublicensees appointed by Licensee
              from time to time the services and facilities required to be
              provided to Licensee pursuant to this Agreement, subject to such
              enhancements or limitations as Licensee may require;

         (j)  Licensor will not interfere with or interrupt the contractual
              relationship between Licensee and its Sublicensees; and

         (k)  the execution, delivery, and the performance and completion of
              this Agreement by Licensor have been duly authorized by all
              necessary corporate resolutions of the directors and shareholders
              of Licensor, as necessary, and the terms of this Agreement are
              valid and binding obligations of Licensor.

14.2     INDEMNITY AND LIMITATION OF LICENSOR'S LIABILITY. Licensor agrees to
         indemnify, hold harmless, and defend Licensee and its Sublicensees,
         directors, officers, employees, and




<PAGE>
                                                                        Page 20

         agents from and against all claims, defence costs (including reasonable
         attorney's fees and disbursements), judgments, and other expenses
         arising out of or on account of such claims, including without
         limitation claims of:

         (a)  alleged infringement or violation of any trademark, copyright,
              trade secret, right of publicity or privacy (including but not
              limited to defamation), patent, or other proprietary right with
              respect to the Software or Documentation as delivered to Licensee;

         (b)  any use of confidential or proprietary information or trade
              secrets Licensor has obtained from sources other than Licensee;

         (c)  any misrepresentation or breach of warranty by Licensor or any
              negligent act, omission, or breach of Licensor in the performance
              of this Agreement (and for greater certainty, the failure of
              Licensor to provide a Sublicensee the services and facilities
              contemplated in this Agreement or a breach of warranty or
              misrepresentation by Licensor to a Sublicensee shall constitute a
              breach by Licensor of this Agreement); and

         (d)  Licensor's failure to comply with federal, provincial, state, or
              local law.

         Licensee agrees that Licensor's maximum aggregate liability under this
         Section will be limited to the lesser of (i) $5,000,000 and (ii) the
         aggregate amount of the Initial Setup Fee and all License Fees, Service
         Fees, Sublicense Fees, Sublicensee Service Fees and Sublicensee
         Initialization Fees paid or payable by Licensee during the term of this
         Agreement and the term of Licensor's engagement under Part III. Any
         claim for indemnity by Licensee under this Section must be initiated or
         documented in writing prior to the second anniversary of the date on
         which Licensee first becomes aware of circumstances which entitle
         Licensee to claim financial recovery from Licensor under this Section.
         This Section will survive termination of this Agreement or any Part of
         this Agreement.

           PART VII--CANCELLATION, TERMINATION, & DISPUTE RESOLUTION

15.      CANCELLATION AND TERMINATION

15.1     CANCELLATION. If Licensee does not pay the License Fees, the Service
         Fees, the Sublicense Fees or the Sublicensee Services Fees (if the
         Sublicense Fees or Sublicensee Service Fees are applicable at a given
         time), then Licensor may cancel this Agreement and thereafter neither
         party will have any liability or obligation to the other in respect of
         the matters set out in this Agreement.

15.2     TERMINATION. A party may terminate this Agreement by issuing notice in
         writing to the other party, if any of the following events occurs:

         (a)  the other party is in breach of any provision of this Agreement
              and fails to cure such breach within 14 days after notice of such
              breach is received;

         (b)  the other party is subject to voluntary or involuntary proceedings
              which may lead to the dissolution or winding up of its corporate
              existence, to a declaration of




<PAGE>
                                                                       Page 21

              bankruptcy or insolvency against it, to the appointment of a
              receiver or receiver-manager in respect of its assets or to the
              assignment of its assets for the benefit of one or more of its
              secured or unsecured creditors; or

         (c)  the other party ceases to carry on business in the ordinary
              course.

15.3     TERMINATION FOR CONVENIENCE. Licensee or Licensor may at any time
         terminate Licensor's engagement under Part III, on 3 months written
         notice.

15.4     ADDITIONAL RIGHT OF TERMINATION BY LICENSEE. In addition to Sections
         15.2 and 15.3, Licensee may immediately terminate Licensor's engagement
         under Part III of this Agreement at any time by providing written
         notice to Licensor if Licensee has reasonable grounds to believe
         Licensor has committed an act of fraud or dishonesty in the course of
         its engagement under Part III, whether or not such act has resulted in
         actual loss or damage to Licensee.

15.5     EFFECTS. Upon cancellation or termination of this Agreement, the
         parties will remain liable to each other for any defaults that occurred
         prior to the cancellation or termination. Licensee and all Sublicensees
         will immediately cease using the Software and Documentation and return
         all copies of the Software and Documentation, and the Licensor's
         Confidential Information, to Licensor. Licensor will immediately return
         all of the Licensee's Confidential Information, including the Customer
         Information, to Licensee. Licensor will, at Licensee's direction,
         continue to perform its obligations and duties under this Agreement to
         the date of termination and will cooperate fully with Licensee to
         ensure that other staff or contractors of Licensee become familiar with
         the content and status of the services and responsibilities assigned to
         Licensor.

16.      DISPUTE RESOLUTION AND GOVERNING LAW

16.1     ARBITRATION. The parties agree to submit any dispute arising out of or
         in connection with this Agreement to binding arbitration in Vancouver,
         British Columbia before a single arbitrator, appointed by agreement of
         the parties (or, if they are unable to reach agreement within 21
         calendar days, appointed by a justice of the British Columbia Supreme
         Court) pursuant to the provisions of this Section, and to the extent
         not inconsistent with this Agreement, the Commercial Arbitration Act
         (British Columbia), the International Commercial Arbitration Act
         (British Columbia), and the Rules of the British Columbia International
         Commercial Arbitration Centre. The parties agree that such arbitration
         will be in lieu of either party's rights to assert any claim, demand,
         or suit in any court action, provided that either party may elect
         either binding arbitration or a court action with respect to a breach
         by the other party of such party's proprietary rights, including
         without limitation any trade secrets, copyrights, or trademarks. Any
         arbitration will be final and binding and the arbitrator's order will
         be enforceable in any court of competent jurisdiction.

16.2     GOVERNING LAW AND VENUE. The validity, construction, and performance of
         this Agreement will be governed by the laws of British Columbia, and
         the applicable laws of Canada, and, subject to Section 16.1, all claims
         and lawsuits, or either, in connection with this Agreement must be
         brought in the courts of British Columbia.




<PAGE>
                                                                       Page 22

                          PART VIII--GENERAL PROVISIONS

17.      GENERAL

17.1     ENTIRE AGREEMENT, MODIFICATION, AND WAIVER. The Agreement, including
         the recitals and schedules, constitutes the entire agreement between
         the parties and replaces and supersedes any and all representations,
         negotiations, or agreements previously existing between the parties.
         This Agreement may only be modified by the prior written approval of a
         duly authorized representative of each party. The failure by Licensee
         or Licensor to enforce at any time, or for any period of time, the
         provisions of this Agreement, will not be interpreted to be a waiver of
         the right of either party to enforce any such provision.

17.2     NOTICES. All notices or demands under this Agreement will be via
         messenger, overnight delivery services, telecopier, or mail to the
         address of the receiving party specified on page one, above, and will
         be deemed complete upon receipt.

17.3     ASSIGNMENT. Licensee or Licensor may assign or subcontract this
         Agreement or any of their respective rights and obligations under this
         Agreement, or any Part of this Agreement, to another person or entity,
         upon giving the other party 14 days advance notice, which notice will
         include the name of the proposed assignee or subcontractor. Despite the
         foregoing, no such assignment or subcontract will operate to release
         either Licensee or Licensor from responsibility for the due performance
         of its obligations under this Agreement. The terms of this Agreement
         will be fully binding upon, enure to the benefit of, and be enforceable
         by the parties and their respective successors and permitted assigns.

17.4     INJUNCTIVE RELIEF. It is understood and agreed that a breach of any
         provision of this Agreement by either party may cause the other
         irreparable harm for which recovery of money damages would be
         inadequate and that either party will therefore be entitled to obtain
         timely injunctive relief to protect its rights under this Agreement in
         addition to any and all remedies at law.

17.5     TIME OF THE ESSENCE. Time is of the essence in this Agreement and all
         obligations of the parties under this Agreement.

17.6     FURTHER ASSURANCES. The parties agree to do all such further acts and
         execute such further documents as may be reasonably necessary to
         effectively carry out the terms and intent of this Agreement and to
         assure to Licensee all of the rights and privileges in the Software and
         the Documentation.

17.7     PUBLIC DISCLOSURE. Licensor and Licensee are, or will become, either a
         reporting issuer or controlled by a reporting issuer. Accordingly, each
         party will have the right, notwithstanding any other provision
         contained in this Agreement, to make such public disclosure relating to
         this Agreement and Licensee's use of and rights in the Software as may
         be required to comply with Licensor's and Licensee's obligations to
         make full disclosure of its affairs to the public and to regulatory and
         stock exchange officials.

17.8     SEVERABILITY. If any of the terms or provisions of this Agreement are
         determined to be invalid, unlawful, or unenforceable to any extent,
         such term or provision will be severed




<PAGE>
                                                                        Page 23

         from the remaining terms and provisions which will continue to be valid
         to the fullest extent permitted by law.

17.9     COUNTERPARTS. This Agreement may be executed and delivered in
         counterparts and by telecopier with the same effect as if the parties
         had concurrently executed and delivered the same original copy of this
         Agreement.

17.10    FORCE MAJEURE. Neither party will be held responsible for damages
         caused by any delay or default due to any contingency beyond its
         control preventing or interfering with its performance under this
         Agreement.

17.11    NO THIRD PARTY RIGHTS. This Agreement is not for the benefit of any
         third party, and will not be considered to grant any remedy to any
         third party whether or not referred to in this Agreement.

17.12    AGENCY. The parties are separate and independent legal entities. Except
         as expressly set out herein, this Agreement will not constitute either
         Licensee or Licensor as an agent, representative, partner, joint
         venturer, or employee of the other party for any purpose. Neither party
         has the authority to bind the other or to incur any liability on behalf
         of the other, nor to direct the employees of the other.


TO EVIDENCE THEIR AGREEMENT, the parties have executed this Agreement as of the
date written on page one, above.


Accepted and Agreed by Licensee:               Accepted and Agreed by Licensor:

BINGO.COM (CANADA) ENTERPRISES INC.            CYOP SYSTEMS INC.

by:                                            by:

/s/  Randy Peterson                            /s/ Mitch White
------------------------------                 -----------------------------
AUTHORIZED SIGNATORY                           AUTHORIZED SIGNATORY

by:                                            by:

/s/ Tryon Williams
------------------------------                 -----------------------------
AUTHORIZED SIGNATORY                           AUTHORIZED SIGNATORY

WE HAVE AUTHORITY TO BIND THE                  WE HAVE AUTHORITY TO BIND THE
CORPORATION                                    CORPORATION



<PAGE>

                                   SCHEDULE A

List of Approved Financial Institutions.

CIBC
HSBC Bank of Canada
Royal Bank of Canada
Scotia Bank (Bank of Nova Scotia)
TD Canada Trust


<PAGE>


                                                SCHEDULE B

Rules and Regulations.





</TEXT>
</DOCUMENT>
