License Agreement BAILEY COMPANIES, INC HORSESTATS TERMS OF SERVICE AND DATA LICENSE This BAILEY COMPANIES, INC HORSESTATS TERMS OF SERVICE AND DATA LICENSE ("Agreement") contains the terms and conditions that apply to a company and/or user, as applicable ("User", "you" or "your") of the horse record keeping and reporting tools and services and related software and programming (collectively, the "Services") provided by BAILEY COMPANIES, INC. ("HORSESTATS") through its web site at http://www.HORSESTATS.COM. Your use of the Services includes the obligation of you to license data to HORSESTATS and affilates of HORSESTATS as described below. Please read this Agreement carefully. By clicking on the "I ACCEPT" button, you acknowledge that you have agreed to all of the terms of this Agreement and that you have agreed to become a party to, and legally bound by, this Agreement. If you do not agree to all of the terms of this Agreement, click on the "I DECLINE" button. You will not be able to register for or use the Services if you click on the "I DECLINE" button. If you have any questions regarding this Agreement, please contact info@HORSESTATS.com. This Agreement was last revised on August 1, 2002. 1. Description of Services and Grant of License. The Services currently allow you to perform horse management and reporting. HORSESTATS hereby grants to you a non-exclusive, non-transferable, non-sublicenseable, world-wide license to use the Services for internal business purposes only subject to the restrictions in this Agreement. HORSESTATS reserves any rights not expressly granted herein. You shall be solely responsible for hardware and interconnections and telecommunications to access the Services. 2. License Restrictions. You may not: (a) copy the Services or any software or programming related thereto; (b) permit other individuals or companies to use the Services; (c) modify, translate, reverse engineer, decompile, disassemble or create derivative works based upon the Services or any software or programming related thereto; (d) rent, lease, transfer, resell and/or or otherwise transfer rights to the Services; or (e) delete or write over any portion of any software relating in any manner to the Services. You also agree that you shall only use the Services in a manner that complies with all applicable laws in the jurisdictions in which you use the Services, and that you shall not violate or infringe the rights of any third party. Any such forbidden use shall immediately and automatically terminate your license to use the Services without notice, and all license fees shall become immediately due and payable. 3. Data License from You to HORSESTATS. You hereby agree to deliver to HORSESTATS the complete farm data and index files as required by HORSESTATS and in an electronic media usable by HORSESTATS (the "Data") and as frequently as reasonably requested by HORSESTATS. You also hereby grant HORSESTATS and affiliates of HORSESTATS an irrevocable, royalty-free, world-wide, sublicensable (through multiple-tiers), perpetual license to use the Data for any internal business purpose and for any purpose whatsoever in aggregated form. For purposes of this Agreement, the term "affiliates" means any company that has an ownership interest in HORSESTATS or that is a related entity, including, without limitation, HORSESTATS.COM BAILEY COMPANIES, INC will not share any Data that is personally identifiable to you with any third party. HORSESTATS may share Data that is personally identifiable to you with other HORSESTATS agents, contractors or business partners for the purposes of performing services for HORSESTATS. HORSESTATS also believe it is necessary to share information in order to investigate, prevent, or take action regarding illegal activities, suspected fraud, situations involving potential threats to the physical safety of any person, violations of the Terms of Access, or as otherwise required by law. Except as provided above or in the event of a merger, consolidation, or sale of all or substantially all of HORSESTATS assets or stock, HORSESTATS will not share any of your personally identifiable information with any third party without your permission. 4. Fees and Payment Terms. All charges shall be at the then current prices. Upon entering this Agreement, you must choose to pay either by direct charge to a credit card, debit card or pre-authorized payment. If you desire to pay by credit card, debit card or pre-authorized payments, you hereby authorize HORSESTATS to charge for any charges that may apply to your account as they accrue on yearly recurring basis, as applicable. You must notify HORSESTATS of any changes to your account (including, without limitation, applicable account number or cancellation or expiration of the account), your billing address, or any information that may prohibit HORSESTATS from charging your account. Failure to make any payment as set forth herein shall be deemed to be a material breach of this Agreement and shall be sufficient cause for the immediate termination of this Agreement by HORSESTATS. In the event of collection enforcement, you will be liable for any costs associated with such collection, including, without limitation, reasonable attorneys' fees, court costs and collection agency fees. All charges shall be exclusive of any applicable taxes. You are responsible for the payment of all federal, state, and local sales, use, value added, excise, duty and any other taxes assesses, other than taxes based on HORSESTATS's net income. 5. Term and Termination. The term of this Agreement shall be for a period of twelve (12) months after you have agreed to this Agreement. This Agreement shall automatically renew for consecutive twelve (12) month periods unless terminated earlier within sixty (60) days before the expiration of the then current term. Notwithstanding, HORSESTATS reserves the right to increase any license fees prior to the beginning of the next term and HORSESTATS will give you notice of such fee increase. This Agreement may be terminated by HORSESTATS at any time in its sole and absolute discretion. Furthermore, this Agreement will automatically terminate if you fail to comply with any term hereof. You shall not be entitled to any refund for early termination of this Agreement by either party. No notice shall be required from HORSESTATS to effect such termination. Upon any termination of this Agreement, you shall immediately discontinue use of the Software and shall, within three (3) calendar days, return to HORSESTATS, or certify destruction of, the Software and any related Documentation. Sections 2, 3, 4, 5, 6, 9, 11, 12, 13, 14, 16, and 17 shall survive the termination, cancellation, or discontinuance of this Agreement. Al data entered into the HORSESTATS system shall be destroyed. 6. Registration and Your Information. You agree to (i) provide true, accurate, current and complete transactional information and any information about yourself as prompted by the registration form and (ii) maintain and promptly update such information to keep it true, accurate, current and complete, which may be done by sending an e-mail to info@HORSESTATS.com. 7. Account, Password and Security. You will receive a password and an account identifier (your email address) upon completing the registration process. You are fully responsible for maintaining the confidentiality of your password and account and all activities that occur under your password or account. Your password and account are for your use only, and you are prohibited from allowing any third parties to use your password or account. You agree to immediately notify HORSESTATS of any unauthorized use of your password or account or any other breach of security. 8. Modification Discontinuation of Services. HORSESTATS may, in its sole discretion and at any time, modify the Services, or any part thereof. In such event, you may be requested to accept a modification or new Agreement when you login to your account. If you do not accept the amended Agreement, you will not have access to the modified Services. 9. Proprietary Rights. The Services, including, without limitation, any of HORSESTATS Internet operations, design, content, hardware designs, algorithms, software (in source and object forms), user interface designs, other templates and designs, architecture, class libraries, and documentation (both printed and electronic), know-how, good will, moral rights, trade secrets and any related intellectual property rights throughout the world, and any derivative works, improvements, enhancements or extensions thereof used in connection with the Services are and shall remain the sole and exclusive property of HORSESTATS. 10. Incorporation of Terms of Access. You agree to follow and be bound by all of the terms and conditions contained in the Terms of Access, which bind all users of HORSESTATS web site and are incorporated into and made a part of this Agreement by this reference. 11. User Conduct. You are solely responsible for the contents of your transmissions through the Services. Your use of the Services is subject to all applicable local, state, national and international laws and regulations. 12. Indemnification. You agree to immediately notify HORSESTATS of and indemnify and hold HORSESTATS, its parents, subsidiaries, affiliates, officers and employees, harmless from any claim or demand, including reasonable attorneys fees, made by any third party due to or arising out of your use of the Services, (including the unauthorized use of your account or any other breach of security known to you), the violation of this Agreement by you, or the infringement by you, or another User using your computer, on any intellectual property or other right of any person or entity. 13. Disclaimer of Warranties. You agree that use of the Services is at your sole risk. The Services are provided on an "as is" and "as available" basis, and HORSESTATS assumes no responsibility for the timeliness, deletion, mis-delivery or failure to store any of your communications, data, or personalization settings. HORSESTATS hereby disclaims all warranties of any kind, whether express or implied, including, but not limited to the implied warranties of merchantability, fitness for a particular purpose and non-infringement, quiet enjoyment, title, merchantability of computer programs and informational content. HORSESTATS makes no warranty that the Services will meet your requirements, or that the Services will be uninterrupted, timely, secure, error or virus free; nor does HORSESTATS make any warranty as to the results that may be obtained from the use of the Services or as to the accuracy or reliability of any information obtained through the Services or that defects in the software driving the Services will be corrected. User understands and agrees that any material and/or data downloaded or otherwise obtained through the use of the Services is done at Users own discretion and risk and that User will be solely responsible for any damage to Users computer system or loss of data that results from the download of such material and/or data. No advice or information, whether oral or written, obtained by User from HORSESTATS or through the Services shall create any warranty not expressly made herein. 14. Limitation of Liability. Neither HORSESTATS, nor its parents, subsidiaries, affiliates, officers and employees, shall be liable for any indirect, incidental, special or consequential damages, resulting from or concerning the use or the inability to use the Services or your failure to comply with this Agreement, including but not limited to, damages for loss of profits, use, data or other intangibles, even if HORSESTATS has been advised of the possibility of such damages. In no event shall the total, aggregate liability of the HORSESTATS Companies exceed the amounts paid by you for the Services provided hereunder. Any claim or cause of action made by you under this Agreement must be within one (1) year from the date of the alleged injury. 15. Notices. Unless otherwise provided herein, notices given by HORSESTATS to you will be given by e-mail or by conventional mail. Notices will be sent to the e-mail address or mailing address you provide to HORSESTATS as part of the registration process, or to updated addresses which you provide to HORSESTATS via notice consistent with this paragraph. Notices given by you to HORSESTATS must be given by e-mail to info@HORSESTATS.com, by conventional mail sent to BAILEY COMPANIES, INC. PO Box 497, Milbank, SD 57252, or by telecopied letter sent to 605-623-4694, or such updated address and number as HORSESTATS may provide you consistently with this notice provision. Notwithstanding anything herein to the contrary, it is your sole responsibility to update your address for notices hereunder, and notice sent to the e-mail or conventional mailing address last provided by you to HORSESTATS shall be valid and binding on you regardless of whether such address has been changed, canceled, has expired, has been terminated, or otherwise becomes inoperative. 16. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of South Dakota notwithstanding any conflict of laws provisions. You irrevocably and unconditionally (i) consent to submit to the exclusive jurisdiction of the courts of South Dakota in the City of Milbank or in the next closest federal court (the "South Dakota") for any litigation arising out of or relating to this Agreement, (ii) agree not to commence any litigation arising out of or relating to this Agreement except in the South Dakota Courts and (iii) agree not to plead or claim that such litigation brought therein has been brought in an inconvenient forum. 17. General. If any provision(s) of this Agreement is held by a court of competent jurisdiction to be contrary to law, then such provision(s) shall be construed, as nearly as possible, to reflect the intentions of the parties with the other provisions remaining in full force and effect. HORSESTATSs failure to exercise or enforce any right or provision of this Agreement shall not constitute a waiver of such right or provision unless acknowledged and agreed to by HORSESTATS in writing. The section titles in this Agreement are solely used for the convenience of the parties and have no legal or contractual significance. This Agreement may be assigned in whole or in part by the HORSESTATS Companies. This Agreement may not be assigned in any manner by you without the express, prior written permission of the HORSESTATS Companies.