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EXHIBIT 10.4
PATENT LICENSE AGREEMENT
This Agreement, effective as of July 1, 1996, is made by and between
Xxxxxxxx Electronics Games, Inc. ("Xxxxxxxx"), a Delaware corporation having an
office at 0000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, WMS Gaming
Inc. ("Gaming"), a Delaware corporation having an office at 0000 Xxxxx
Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, and Midway Games Inc. ("Midway"), a
Delaware corporation having an office at 0000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000.
WHEREAS Xxxxxxxx, Gaming and Midway are separate corporations engaged
in the design and manufacture of coin-operated pinball games, gaming devices
and coin-operated video games, respectively; and
WHEREAS Xxxxxxxx, Gaming and Midway are all majority owned
subsidiaries of WMS Industries Inc.; and
WHEREAS Xxxxxxxx, Gaming and Midway desire to use the inventions
developed by each corporation by its employees;
NOW, THEREFORE Xxxxxxxx, Gaming and Midway hereby understand and agree
as follows:
1. License Grants
(a) Xxxxxxxx grants to Midway a royalty-free,
non-exclusive license to make, use and sell any invention described or claimed
in any patent owned by or assigned to Xxxxxxxx, provided that such invention
was conceived and prototyped prior to the Separation Date (as defined below).
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(b) Xxxxxxxx grants to Gaming a royalty-free,
non-exclusive license to make, use and sell any invention described or claimed
in any patent owned by or assigned to Xxxxxxxx, provided that such invention
was conceived and prototyped prior to the Separation Date.
(c) Midway grants to Xxxxxxxx a royalty-free,
non-exclusive license to make, use and sell any invention described or claimed
in any patent owned by or assigned to Midway, provided that such invention was
conceived and prototyped prior to the Separation Date.
(d) Midway grants to Gaming a royalty-free, non-exclusive
license to make, use and sell any invention described or claimed in any patent
owned by or assigned to Midway, provided that such invention was conceived and
prototyped prior to the Separation Date.
(e) Gaming grants to Xxxxxxxx a royalty-free,
non-exclusive license to make, use and sell any invention described or claimed
in any patent owned by or assigned to Gaming, provided that such invention was
conceived and prototyped prior to the Separation Date.
(f) Gaming grants to Midway a royalty-free, non-exclusive
license to make, use and sell any invention described or claimed in any patent
owned by or assigned to Gaming, provided that such invention was conceived and
prototyped prior to the Separation Date.
As to each of the licenses granted in Paragraphs (a) through (f)
above, the "Separation Date" shall mean the date on which the majority
ownership of the licensor and the majority ownership of the licensee ceases to
be the same.
2. Term and Territory. The licenses granted in Paragraphs 1(a)
through (f) above shall continue for the life of the patents which are the
subject matter thereof (unless earlier terminated in accordance with Paragraph
6 hereof) and shall be effective in all of the territories
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in which such patents may be granted (whether granted before or after the
applicable Separation Date.)
3. Sublicenses. Each of the licensees hereunder may exercise its
rights under a license granted to it hereunder through (a) any entity directly
or indirectly controlling, controlled by, or under common control with it (such
entity being an "Affiliate"), and (b) third parties which manufacture
components or products which are to be sold, leased or otherwise disposed of by
the licensee or its Affiliates, or incorporated into products which will be
sold, leased or otherwise disposed of by the licensee or its Affiliates.
Except as otherwise expressly provided in this Xxxxxxxxx 0, xxxx of the
licensees hereunder may sublicense its rights under the licenses granted to it
hereunder.
4. Improvements. As to each license granted in Paragraphs 1(a)
through (f) above, the licensee grants to the licensor a royalty- free,
non-exclusive license to any patents obtained on any improvements made by the
licensee or its Affiliates relating to the subject matter of the license, which
shall last for the term of the patents obtained on the improvements and shall
include all territories in which such patents on the improvements may be
granted. For the avoidance of doubt, the licenses granted under this Paragraph
4 are subject to Paragraphs 3, 5 and 6 hereof.
5. Notice. Each licensee hereunder shall affix on all products
embodying patents licensed to it hereunder a notice to the public of the
patent, or, if this cannot be done, the licensee shall fix the notice on the
packaging for the product.
6. Termination. As to each invention for which a license is
granted hereunder, if the licensee fails after fifteen (15) days' written
notice from the licensor to comply with the
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licensee's material obligations under this Agreement as they relate to such
license, the licensor may terminate such license for such invention. If a
party (the "Bankrupt Party") shall be unable to pay its liabilities when due,
or shall make any assignment for the benefit of creditors, or shall file any
petition under any federal or state bankruptcy statute, or be adjudicated a
bankrupt or insolvent, or if any receiver is appointed for its business or
property, or if any trustee in bankruptcy shall be appointed under the laws of
the United States or any state, and in the case of an involuntary filing only,
such impediment is not removed within thirty (30) days from the inception of
same, either of the other parties may terminate the licenses it has granted
hereunder to the Bankrupt Party upon thirty (30) days' written notice.
7. General.
(a) Each party shall have the right, at its election, to
assign this Agreement to any of its Affiliates or to any entity acquiring
substantially all of its assets. Except as expressly provided in this
Agreement, each party shall have no right to assign or sublicense any of its
rights or obligations hereunder without the prior, written approval of the
other parties hereto.
(b) The entire understanding between the parties hereto
relating to the subject matter hereof is contained herein and supersedes all
other agreements relating to the subject matter hereof, including, without
limitation, the Agreement dated August 1, 1988 between Xxxxxxxx and Midway.
This Agreement cannot be changed, modified, amended or terminated except by an
instrument in writing executed by all of the parties hereto.
(c) No waiver, modification or cancellation of any term
or condition of this Agreement shall be effective unless executed in writing by
the party charged therewith. No
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written waiver shall excuse the performance of any act other than those
specifically referred to therein and no waiver shall be deemed or construed to
be a waiver of such terms or conditions for the future or any subsequent breach
thereof.
(d) This Agreement does not constitute and shall not be
construed as constituting a partnership or joint venture between parties and no
party shall have any right to obligate or bind either of the other parties in
any manner whatsoever, and nothing herein contained shall give or is intended
to give any rights of any kind to any third persons.
(e) This Agreement shall be governed by the laws of the
State of Illinois applicable to contracts made and to be wholly performed in
the State of Illinois.
(f) If any provision of this Agreement is or becomes or
is deemed invalid, illegal or unenforceable under the applicable laws or
regulations of any jurisdiction, either such provision will be deemed amended
to conform to such laws or regulations without materially altering the
intention of the parties or it shall be stricken and the remainder of this
Agreement shall remain in full force and effect.
(g) In the event of litigation or arbitration between the
parties arising out of or relating to this Agreement, the prevailing party will
be entitled to recover court or arbitration costs and reasonable fees of
attorneys, accountants and expert witnesses incurred by such a party in
connection with the action or arbitration.
(h) Each of the parties hereto consents to the exclusive
jurisdiction and venue of the state and federal courts of the State of
Illinois, located in Chicago, with respect to any matter relating to this
Agreement, and each party hereto consents to the personal jurisdiction of such
courts and shall subject itself to such personal jurisdiction. The parties
agree that service
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of process may be made upon them in any manner permitted by the rules of such
courts and the laws of the State of Illinois.
(i) None of the parties shall be liable to the other
parties for incidental, consequential, special or other indirect damages
arising out of or relating to this Agreement, even if informed of the
possibility thereof.
(j) Any notice, consent, approval, request, waiver or
statement to be given, made or provided for under this Agreement shall be in
writing and deemed to have been duly given (i) by its delivery personally or by
express mail; (ii) by its being sent by telefax or telex (confirmed in
writing); or (iii) five days after its being mailed, registered or certified,
return-receipt requested in a U.S. Post Office addressed to the party's address
as the party may designate by notice given as aforesaid. A copy of any notice
sent to Gaming or Xxxxxxxx shall also be sent to Vice President and General
Counsel, WMS Industries Inc., 0000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000.
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IN WITNESS WHEREOF, the parties have executed this agreement through
their duly authorized representatives.
XXXXXXXX ELECTRONICS GAMES, INC.
By:
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Name:
Title:
WMS GAMING INC.
By:
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Name:
Title:
MIDWAY GAMES INC.
By:
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Name:
Title:
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