Exhibit 10.13
WMS GAMING INC.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement") is made as of the 15th day of
December, 1999, by and between WMS GAMING INC., a Delaware corporation with
offices at 0000 X. Xxxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 ("Licensor") and
MULTIMEDIA GAMES, INC., a Texas corporation with offices at 0000 Xxxxx Xxxxx
Xxxx., Xxxxx 000, Xxxxxx, XX 00000. ("Licensee").
W I T N E S S E T H:
WHEREAS, Licensor owns or controls all the rights in Licensor's gaming
device trademarks and logos associated therewith and audio-visual works,
including without limitation sounds, music, graphics, characters and game play,
embodied therein, all as more specifically described on Exhibit A and Exhibit B
hereto; and
WHEREAS, Licensee is engaged in the business of manufacturing, distributing
and selling gaming devices (herein such articles embodying and utilizing the
Licensed Property (as defined below) shall be referred to as the ("Licensed
Products"); and
WHEREAS, Licensee desires to use Licensor's gaming device trademarks and
logos associated therewith and audio-visual works, including sounds, music,
characters and game play, embodied therein as specifically set forth on
Schedules A and B attached hereto (the "Licensed Property") in connection with
the lawful manufacture, distribution and sale of the Licensed Products at tribal
casinos within the State of Washington, located on "Indian lands," as defined in
Title 25, Section 2703(4) of the United States Code, and operating under
tribal/state compacts (or other arrangement) with the State of Washington;
NOW THEREFORE, the parties hereto agree as follows:
1. GRANT OF LICENSE:
-----------------
1.01 Licensor hereby grants and Licensee hereby accepts, for the term of
this Agreement and subject to the terms hereinafter set forth, the limited
exclusive license without the right to sublicense, to utilize the Licensed
Property to manufacture, market, distribute and sell the Licensed Products
solely to Indian tribes on Indian lands in the Territory (as defined below)
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only through direct sales. In the event Licensor desires to offer the Licensed
Property on a lease or revenue participation basis, Licensee shall first contact
Licensor and receive written authority to offer the Licensed Property on a lease
or revenue participation basis. It is understood that this license does not
include any rights to subsequent versions of the Licensed Property and that
Licensee is acquiring rights only to the Licensed Products and that no ancillary
rights, or rights to any other medium of commercial exploitation of the Licensed
Property.
1.02 Notwithstanding any other terms hereof to the contrary, the
obligations of Licensor and Licensee hereunder are subject to Licensor obtaining
all gaming licenses, permits and approvals necessary for Licensor to consummate
the transactions contemplated hereunder (the "Licensor Approvals"). In no event
shall Licensee market, distribute, lease, sell or place into operation any
Licensed Product, and in no event shall Licensee be required to meet the
guaranteed minimum requirements of Section 5 below, until all Licensor Approvals
have been obtained. In the event all Licensor Approvals are not obtained by June
1, 2000, or in the event the Washington State Gambling Commission ("the
Commission") does not render its approval of this Agreement by such date, either
party may elect to terminate this Agreement, in which event Licensee shall
return all of the Licensed Property to Licensor and shall terminate any and all
use of the Licensed Property. Pending receipt of the Licensor Approvals or until
such time as the Commission shall otherwise approve the receipt of such funds by
Licensor, the Advance (as hereafter defined) shall be held in an interest
bearing escrow account for the benefit of Licensor. Such funds shall be returned
to Licensee only in the event of a termination pursuant to this Section 1.02.
2. TERRITORY:
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The Licensee shall be entitled to market, distribute, sell and maintain the
Licensed Products only throughout the state of Washington (the "Territory") to
tribal casinos (the "Tribal Casinos") located on Indian land, and operating
under tribal/state compacts (or other arrangement) with the State of Washington.
3. TERM:
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The license granted hereunder shall become effective on November 1, 1999,
and, unless sooner terminated in accordance with the terms and conditions
hereof, shall expire December 31, 2001 (the "Term"); provided, however, that for
so long as Licensee is not in breach of this Agreement, the license hereunder
shall continue on a non-exclusive basis after the Term for as
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long as Licensee or the Tribal Casinos are utilizing the Licensed Products.
4. CONSIDERATION:
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4.01 Licensee shall pay Licensor the sum of $100,000 as a non-refundable
advance against License fees payable to Licensor under this Agreement (the
"Advance"). The Advance shall be payable upon execution of this Agreement and
shall be applied on a prorated basis toward the license fee for the first 250
Licensed Products sold by Licensee.
4.02 Licensee shall pay to Licensor a License fee of $2,500.00 per unit for
each unit of the Licensed Products invoiced, distributed, placed for trial or
sold by Licensee ("License Fees"). License Fees shall be due and payable to
Licensor on all Licensed Products distributed by Licensee, even if not billed or
if not billed at regular price, such as, but not limited to, introductory offers
or trials; provided, however, that no License Fees shall be payable on a
reasonable number of Licensed Products (not to exceed four (4) units of a
particular Licensed Product) furnished for free for promotional purposes only.
Licensee is not permitted to sell or distribute Licensed Products through
sub-licensees or affiliates without the prior written approval of Licensor.
Notwithstanding anything to the contrary in this Agreement, where Licensee
provides Licensed Products to a customer without charge or at a reduced price
for the purpose of "price protection" or another purpose relating to other
products of Licensee, such Licensed Products shall be deemed to have been sold
at the regular price and all License Fees due Licensor are to be paid by
Licensee.
5. GUARANTEED MINIMUM:
-------------------
Licensee guarantees to Licensor a minimum purchase of one thousand 1,000
units of Licensed Products during the one year period commencing on the later to
occur of (i) the Licensor Approvals, and (ii) the date on which the Commission
issues its approval of this Agreement (the "First Year"), and Licensee shall
purchase a minimum of two hundred fifty (250) units of Licensed Products during
each quarter of the First Year. In addition, Licensee shall use commercially
reasonable efforts to purchase an additional one thousand (1,000) units of
Licensed Products during the one year period following the First Year (the
"Second Year"), at a rate of 250 units of Licensed Property each quarter;
provided, that, if Licensor sells less than 1,000 units of Licensed Property
during the Second Year, Licensee shall pay Licensor the amount of $500 times the
difference between 1000 units and the amount actually sold by
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Licensee, with such payment being due within fifteen (15) days after the end of
the Second Year. To the extent that Licensee sells over 1,000 units of the
Licensed Property prior to the end of the Second Year, Licensee shall have the
right to apply such excess units of Licensed Property to its obligations for the
Second Year.
6. ACCOUNTING:
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6.01 Licensee agrees to forward to Licensor, within thirty (30) days after
the end of each calendar quarter during the Term (the "License Period")
commencing with the first calendar quarter during which any unit of the Licensed
Products is sold or distributed, a report of the number of units of the Licensed
Products sold or distributed by Licensee within such License Period, the License
Fee due therefor, all information necessary to calculate such License Fee, the
number of units returned and any License Fees credit claimed for units so
returned. Licensee agrees that accompanying each such report shall be payment of
the License Fees due to Licensor, if any, earned by Licensor during such License
Period, less the portion of the Advance paid to Licensor to date and not yet
recouped by Licensee. Such reports shall be required to be submitted with
respect to sales and distributions of the Licensed Products whether or not any
amounts are due under the terms hereof. All payments under this Agreement shall
be made in U.S. dollars. Unless otherwise agreed in writing between the parties
hereto, payment shall be made by wire transfer of immediately available funds or
corporate check to Licensor payable (30) days after shipment from Licensee's
factory.
6.02 Licensee agrees to keep accurate books of account and records covering
all sales and License Fees due under this Agreement and to permit Licensor at
its own expense to inspect and copy such books of account and records during
reasonable business hours (upon prior reasonable written notice) for the sole
purpose of verifying the reports to be provided hereunder. Licensor shall keep
any information obtained from any such inspection in confidence and shall
require that its accountants do so as well, provided that Licensor shall not be
liable for disclosure of any confidential information if the same is disclosed
to any employee, officer, or other individuals of Licensor's affiliates or
licensors; is disclosed to Licensor's attorneys or other advisors; is disclosed
pursuant to a judicial order; was or becomes generally known to the industry
through no fault of Licensor; was known to Licensor at the time of disclosure by
Licensee; is disclosed inadvertently despite the exercise of the same degree of
care as a reasonable person takes to preserve and safeguard their own
proprietary information; is disclosed
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with prior approval; becomes known to Licensor from a source other than
Licensee; or is disclosed in the exercise of Licensor's rights under this
Agreement. In the event that any audit by Licensor's accountants reveals that
Licensee has underpaid License Fees by five percent (5%) or more with respect to
any License Period which is the subject of such audit, Licensee agrees that it
shall reimburse Licensor for the reasonable costs for any such audit. All books
of accounts and records relating to each report to be provided under this
Agreement shall be retained by Licensee for at least two (2) years after the
termination or expiration of this Agreement and Licensor's audit rights shall
survive termination or expiration of this Agreement. Licensee shall pay to
Licensor the amount of any deficiency discovered by Licensor, with interest from
the date such deficiency was originally due, within fifteen days after receipt
of notice thereof from Licensor. Licensee agrees that Licensor may delegate its
audit right to Licensor's licensors or affiliates. Licensee shall not interfere
with Licensor's auditors in the performance of their duties.
6.03 If Licensee fails to timely submit accurate reports and License Fees,
Licensee shall pay interest on overdue amounts at the monthly rate of one and
one-half percent (1.5%) or the highest rate permitted by law, whichever is
lower.
6.04 Licensee shall be solely responsible for and shall pay any and all
taxes, levies, duties or other fees or charges which may be imposed by any
governmental jurisdiction including tribal, as a result of the parties'
performance under this Agreement; provided, however, that Licensor shall be
solely responsible for taxes on Licensor's income and fees and other impositions
relating to Licensor's licensing in any jurisdiction which may be required due
to this Agreement, including without limitation background investigations. If
Licensee is required by a governmental authority to pay withholding taxes on any
License Fees payable to Licensor, Licensee will promptly provide to Licensor
copies of documents evidencing the withholding and payment of such taxes.
Licensee will cooperate in all reasonable ways with Licensor to minimize such
withholding taxes.
7. QUALITY OF LICENSED PRODUCTS:
-----------------------------
7.01 The Licensed Products and any packaging therefor which contains any
Licensed Property as manufactured, advertised, sold, distributed or otherwise
disposed of by Licensee under this Agreement, shall be of a high quality.
Licensor shall have the right to determine in its reasonable discretion whether
the Licensed Products and such packaging meets Licensor's high
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standards of merchantability. Licensee agrees to furnish Licensor free of cost
for Licensor's written approval as to quality and style, up to six (6)
stand-alone, demonstration player stations of each of the Licensed Products
capable of running a demonstration of the applicable game(s), but not able to
play any applicable game(s), and all packaging therefor, before the manufacture,
sale or distribution (whichever first occurs) of such Licensed Products and the
Licensed Products shall not be sold or distributed by Licensee without such
written approval. Such demonstration player stations shall be submitted for
approval in final form (including all applicable artwork and sound). Licensor
may retain such demonstration player stations at its option. In addition,
Licensee shall furnish up to six (6) free demonstration player stations for each
Licensed Product to Licensor at the time of commencement of sale of each of the
Licensed Products. License Fees shall not be paid by Licensee on such
demonstration player stations. Licensee acknowledges that Licensor's approval
may be conditioned upon the approval of Licensor's licensors or the approval of
governmental regulatory authorities having jurisdiction over Licensor. Licensee
shall include such notices, waivers or other similar documents as reasonably
requested by Licensor with the packaging of the Licensed Products.
7.02 If Licensor shall disapprove of any item submitted by Licensee for
approval hereunder, Licensor shall furnish at the time notice of disapproval is
given to Licensee an explanation of the reason(s) for such disapproval and
recommendations for suggested changes and Licensee shall resubmit such item
after changes have been made for Licensor's approval.
7.03 In the event that the quality of any Licensed Products or packaging
approved by Licensor shall become less than that approved by Licensor and
Licensee shall fail to raise the quality to the approved level within thirty
(30) days after receiving written notice from Licensor, the license granted
under this Agreement shall automatically terminate and shall remain terminated
until Licensor shall subsequently renew its approval of the Licensed Product and
packaging.
7.04 If approval is not received by Licensee within fifteen (15) business
days after Licensor's receipt of the item submitted for approval, Licensor's
approval shall be deemed to have been granted. Subsequent to final approval,
Licensor may require Licensee to send a production sample (but in any event not
more than six (6)) to Licensor at the time quarterly License accounting reports
are sent in order to ensure quality control. Should Licensor require additional
samples, up to a maximum of 10, for any reason other than resale or any other
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commercial exploitation by Licensor, Licensee shall be required to sell the
required units of each Licensed Products to Licensor at its cost; provided that
such sales are legal in the applicable jurisdiction(s). License Fees shall not
be due on any samples submitted for approval or purchased by Licensor at
Licensee's cost.
8. TRADEMARK AND COPYRIGHT:
------------------------
8.01 "Notice" as used in this paragraph shall mean the notice provided to
Licensee on applicable artwork accompanying the Licensed Property. Licensee
shall also use the (R) and/or the (TM) , as applicable, with the marks on
attached Schedules A and B, and the (R) or (TM) with the other trademarks of
Licensor and its licensors and affiliates, as Licensor may specify. Licensor
shall have the right to change the Notice by written notice to Licensee.
Licensee shall also prominently display Licensor's logo on the screen
representation of the Licensed Product and on all materials relating to the
Licensed Product, including manuals and promotional materials.
8.02 Licensee shall print the Notice on each label, advertisement and
promotional release concerning any Licensed Product, all in accordance with
written instructions from Licensor. The Notice shall be displayed on the title
screen of the Licensed Products and in manual packaged with the Licensed
Product. A copy of the final artwork of the form of such Notice to be used by
Licensee shall be submitted to Licensor for its written approval. Licensee
agrees to execute and deliver to Licensor, in such form as Licensor may
reasonably request, all instruments necessary to effectuate trademark and
copyright protection or to record Licensee as a registered user of any
trademarks included in the Licensed Property or to cancel such registration upon
the termination of the license granted hereunder and if Licensee fails to
execute such instruments, Licensee hereby appoints Licensor as Licensee's
attorney-in-fact to do so on Licensee's behalf. Licensee shall also furnish
Licensor for Licensor's written approval and prior to use, final samples of all
advertising or promotional or other materials (including, without limitation,
non-print material) relating to the Licensed Products, which shall bear the
Notice. Such material shall be submitted for approval in final form (including
color), with non-print advertising material being submitted in script or tape
form. Any changes to such materials shall be made within thirty (30) days from
Licensor's request, and such materials shall then be re-submitted for approval.
8.03 Subject to the terms of this Agreement, Licensee acknowledges and
agrees that: All copyrights, trademarks and service marks and rights to same
listed on Schedules A and B
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attached hereto in the name of and/or owned by Licensor or its licensors or
affiliates shall be and remain the sole and complete property of Licensor or its
licensors or affiliates; that all such copyrights, trademarks and service marks
and rights to same and rights in the name of or owned by any copyright
proprietor other than Licensor, its licensors and affiliates or Licensee shall
be and remain the sole and complete property of such copyright proprietor; that
all copyrights, trademarks and service marks which, and/or the right to use
which, arise out of the license hereby granted to use the Licensed Property
shall be and remain the sole and complete property of Licensor and its licensors
and affiliates; that Licensee shall not at any time acquire or claim any right,
title or interest of any nature whatsoever in any such copyright, trademark or
service xxxx by virtue of this Agreement or of Licensee's uses thereof in
connection with the Licensed Products; and that any right, title or interest in
or relating to any such copyright, trademark or service xxxx, which comes into
existence as a result of, or during the term of, the exercise by Licensee of any
right granted to it hereunder shall immediately vest in Licensor and/or its
licensors and/or affiliates, as the case may be. Under no circumstances may
Licensee apply for registration of any such trademark, copyright or service
xxxx.
8.04 Licensee agrees to assist Licensor and its affiliates and licensors,
at their expense and to the extent necessary, to protect any of their rights to
the Licensed Property, Licensed Products and related materials, and Confidential
Information (as defined below). Licensee shall notify Licensor in writing of any
infringements or imitations by others of the Licensed Property on articles
similar to those covered in this Agreement which may come to the Licensee's
attention, or any other unauthorized use of the Licensed Property, Licensed
Products or related materials or Confidential Information or any portion
thereof. Licensor or its licensors or affiliates shall have the right to
commence action to enforce their proprietary rights and prosecute any such
infringements, and Licensee agrees to fully cooperate, at Licensor's expense, in
any such action. However, Licensee shall not incur any such expense reimbursable
by Licensor without Licensor's prior express written approval and all recoveries
resulting from any such action shall belong solely to Licensor and its licensors
and affiliates. In the event Licensor declines to pursue any such action,
Licensee may, with Licensor's written permission, institute such an action, and
Licensor, at Licensee's expense, shall cooperate in such action instituted by
Licensee and all recoveries resulting from any such action shall belong solely
to Licensee.
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8.05 Licensee recognizes the great value of the good will associated with
the Licensed Property and the identification of the Licensed Products with the
Licensed Property, and acknowledges that the Licensed Property and all rights
therein and good will pertaining thereto belong exclusively to Licensor and its
licensors and affiliates, and have a secondary meaning in the mind of the
public. Licensee acknowledges and agrees that the use of the Licensed Property
shall accrue exclusively to the benefit of Licensor and its licensors and
affiliates, and all ownership, copyrights, trademarks and other rights in the
Licensed Property and in all artwork, packaging, copy, literary text and
advertising and promotional material of any sort incorporating or based on the
Licensed Property, including all such material developed by Licensee, shall be
in Licensor's name or as otherwise directed by Licensor.
9. MATERIALS:
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9.01 Notwithstanding anything contained in this Agreement to the contrary,
all artwork, designs, copy, literary text, advertising and promotional material
(including, without limitation, translations of copy or text of the Licensed
Property and other localizations of the Licensed Property made by Licensee), or
other works of authorship incorporating or based on the Licensed Property which
are designed, developed and/or created by or on behalf of Licensee (or any of
its contractors), shall be and remain Licensor's or Licensor's designee's sole
and exclusive property, inclusive of all copyrights and right to copyright
therein and thereto for the life of the copyright therein; provided, that during
the term of this Agreement, Licensee shall have the right, license and privilege
to use all such above described materials in connection with its exploitation,
sale and distribution of the Licensed Products within the Territory; provided,
however, that nothing in this sentence shall be construed to abridge Licensor's
rights to further license the Licensed Property outside the Territory or to
license within the Territory subsequent to the Term. Upon any expiration or
termination of this Agreement, Licensee shall immediately deliver to Licensor
all copies possessed by Licensee of the artwork, designs, packaging, copy,
literary text, advertising and promotional material, or other works of
authorship incorporating or based on the Licensed Property. During the Term and
thereafter, Licensee shall execute and deliver such additional documents and
take such other actions as Licensor or its designee may reasonably request to
accomplish the purposes of this Paragraph 9.01, including without limitation,
evidencing and vesting in Licensor or its designee the ownership of all rights
in all
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artwork, designs, packaging, copy, literary text, advertising and promotional
material and other works of authorship incorporating or based on the Licensed
Property.
9.02 Licensor shall make available to Licensee artwork relating to the
Licensed Property which Licensor possesses for Licensee's use in connection with
the exploitation of the Licensed Property.
10. MANUFACTURE, MARKETING AND DISTRIBUTION:
----------------------------------------
10.01 The first shipment of units of each Licensed Product by Licensee in
the Territory shall occur no later than sixty (60) days after the later of (i)
Licensor's approval under Section 7 hereof or (ii) the approval of the State of
Washington and the approval of the first tribal authority. If such shipment has
not occurred within this time frame, Licensor shall have the immediate right to
terminate this Agreement.
10.02 Licensee agrees that it will diligently and continuously manufacture,
distribute and sell the Licensed Products and that it will make and maintain
adequate arrangements for the distribution of the Licensed Products. Licensee
shall arrange for the manufacturing, marketing and distribution of the Licensed
Products using its best efforts to effect distribution as widely as possible
throughout the Territory.
10.03 Licensee agrees that it will sell and distribute the Licensed
Products at a competitive price, and only to tribal casino operators within the
Territory having compacts (or other arrangements) with the State of Washington.
In the event any sale is made at a special price to any of Licensee's
subsidiaries or to any other person, firm or corporation related in any manner
to Licensee or its officers, directors or major stockholders, there shall be
full License Fees paid on such sales.
10.04 Licensee shall develop data contained in the Licensed Product (to the
extent it is permitted to do so), all artwork, designs, packaging, copy,
literary text, other computer software, and advertising and promotional material
of any sort incorporating or based on the Licensed Property using its own
employees, not independent contractors, sublicensees or affiliates, unless
Licensee has received the prior written approval of Licensor to use such
independent contractors, sublicensees or affiliates. If Licensee wishes to use
sublicensees, affiliates or contractors to do so, Licensee shall first obtain
the written consent of Licensor, which consent may be conditioned upon such
third party complying with Licensor's compliance program and executing an
agreement acceptable to Licensor protecting the rights and interests of Licensor
and its affiliates
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and licensors under this Agreement. Manufacture of the Licensed Products,
packaging, advertising and promotional material shall be at Licensee's sole
expense.
11. REPRESENTATIONS AND WARRANTIES:
-------------------------------
11.01 Licensee hereby represents and warrants that it is free to enter into
and fully perform this Agreement; that Licensee is a corporation validly
existing under the laws of the State of Texas and qualified to conduct business
in the State of Washington; that Licensee has all licenses and permits required
to allow Licensee to sell the Licensed products in the Territory; that all
ideas, creations, materials and intellectual property furnished by Licensee in
connection with the Licensed Products will either be Licensed Property or
Licensee's own and original creation (except for matters in the public domain)
or used under a valid license agreement between and that any intellectual
property of Licensee used by Licensee in connection with the Licensed Property
(other than the Licensed Property) will not infringe upon or violate any rights
of any third party of any nature whatsoever or any applicable federal, state or
local law or regulation; and that it will be solely responsible for and shall
pay all sums due any other parties entitled to receive compensation in
connection with the same.
11.02 Licensor hereby represents and warrants that Licensor has the full
and exclusive right and power to enter and fully perform this Agreement; that
Licensor is a corporation validly existing under the laws of the State of
Delaware; that Licensor is the owner of the Licensed Property and has the full
and exclusive power to grant the rights and licenses to the Licensed Property as
described herein; that Licensor has not heretofore granted such rights to the
Licensed Property to any other person or entity for use in the Territory; that
Licensor is free to enter into this Agreement; that Licensor will be solely
responsible for and shall pay all sums due any other parties entitled to receive
any compensation in connection with the Licensed Property; and that the Licensed
Property used pursuant to the license granted herein will not infringe upon or
violate any rights of any third party of any nature whatsoever or any applicable
federal, state or local law or regulation; and that it will be solely
responsible for and shall pay all sums due any other parties entitled to receive
compensation in connection with the same.
12. INDEMNIFICATION:
---------------
12.01 Each party hereto agrees to indemnify and hold the other (including
officers, directors, agents and employees of such party or its subsidiaries,
affiliates and licensors) harmless against any loss, damage, expense or cost
(including reasonable attorneys' fees) arising
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out of any claim, demand, suit or judgment resulting from any breach of any
warranty or representation set forth in Paragraph 11 above. Each party shall
promptly inform the other in writing of any such claim, demand, suit or
judgment.
12.02 Licensee additionally agrees to indemnify and hold Licensor
(including officers, directors, agents and employees of such party or its
subsidiaries, affiliates and licensors) harmless from any and all claims,
damages, liabilities, costs and expenses, including reasonable attorneys' fees,
arising out of Licensee's manufacture, marketing, advertising, promotion, use
and sale of the Licensed Products, including claims of product liability and the
unauthorized use by Licensee of any trademark, copyright, patent or other
proprietary rights of others; provided, however, that Licensor shall remain
liable for any infringement on the rights of third parties arising from the use
of the Licensed Property, which shall be included in Licensor's indemnification
under Paragraph 12.01 above. In the event that Licensee shall be obligated to
Licensor pursuant to the terms hereof or in the event that a suit, action,
investigation, claim or proceeding is begun, made or instituted as a result of
which Licensee may become obligated to Licensor hereunder, Licensor shall give
prompt written notice to Licensee of the occurrence of such event.
12.03 In connection with any such claim, demand or suit referred to above,
the party so indemnifying (the "Indemnitor") agrees to defend, contest or
otherwise protect the indemnified party (the "Indemnitee") against any such
suit, action, investigation, claim or proceeding at the Indemnitor's own cost
and expense. The Indemnitee shall have the right, but not the obligation to
participate, at its own expense, in the defense thereof by counsel of its own
choice. In the event that the Indemnitor fails timely to defend, contest or
otherwise protect against any such suit, action, investigation, claim or
proceeding, the Indemnitee shall have the right upon twenty (20) days' written
notice to the Indemnitor to defend, contest or otherwise protect against the
same and make any compromise or settlement thereof and recover the entire cost
thereof from the Indemnitor, including without limitation, reasonable attorneys'
fees, disbursements and all reasonable amounts applied as a result of such suit,
action, investigation, claim or proceeding or compromise or settlement thereof,
provided, Licensor shall control all infringement litigation brought against
third parties involving or affecting the Licensed Property. The obligations
hereunder shall survive the termination or expiration of this Agreement.
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12.04 Licensee agrees that it will obtain and maintain during the Term at
its own expense, general liability insurance (including coverage for product
liability) from a recognized and qualified insurance company naming Licensor as
additional insured in the amount of at least $3 million per occurrence against
any claims, suits, losses or damages, including attorneys' fees, arising out of
any alleged defects in the Licensed Products or packaging or the manufacture,
marketing, distribution, sale or use of the Licensed Products. Such policy shall
be non-cancelable except after thirty (30) days' prior written notice to
Licensor. As proof of such insurance, a fully paid certificate of insurance will
be submitted to Licensor by Licensee for Licensor's prior written approval
before any Licensed Product is distributed or sold, and at the latest within
thirty (30) days after the date of this Agreement.
12.05 Licensor, its affiliates and licensors shall not be liable for any
incidental, consequential, punitive or indirect damages arising out of or in
connection with this Agreement or other damages, losses or claims in any way
incurred by Licensee in manufacturing, marketing, advertising and selling the
Licensed Product, except as provided in Paragraph 12.02. Licensor, its
affiliates and licensors shall not be liable for any damages, loss or claim
relating to the functioning of the Licensed Property or Licensed Products,
including, without limitation, consequential, special, punitive or actual
damages.
13. RESERVATION OF LICENSOR'S RIGHTS:
---------------------------------
13.01 Licensor shall not be prevented from granting to third parties the
right to use the Licensed Property in any manner whatsoever except that Licensor
shall grant no other licenses effective during the term of this Agreement for
the use of the Licensed Property in connection with the sale or exploitation of
any Licensed Products in the Territory. Licensee shall have the exclusive right
to use the Licensed Products in the Territory.
14. EVENTS OF DEFAULT AND TERMINATION:
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14.01 Licensee shall be deemed to be in default of this Agreement, and
Licensor shall have the right to immediately terminate this Agreement, in the
event Licensee fails after fifteen (15) days' written notice to Licensee to make
any payment due and owing under the terms of this Agreement, furnish any
statement in accordance herewith, or completely comply with any other of
Licensee's material obligations hereunder.
14.02 If during the Term of this Agreement Licensee shall be unable to pay
its liabilities when due, or shall make any assignment for the benefit of
creditors, or shall file any petition
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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, Licensor may
terminate this Agreement upon written notice.
14.03 If during the Term of this Agreement any of Licensee's gaming
licenses is suspended, revoked or otherwise impacted by any gaming regulatory
agency, Licensor shall have the right to terminate this Agreement.
14.04 Licensor shall be deemed to be in default of this Agreement, and
Licensee shall have the right to immediately terminate this Agreement, in the
event Licensor fails, after fifteen (15) days' written notice to Licensee, to
completely comply with any of Licensor's material obligations hereunder. If,
during the Term of this Agreement, Licensor 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, Licensor may terminate this Agreement upon written notice.
Further, if during the Term of this Agreement any of Licensor's gaming licenses
are suspended, revoked or otherwise impacted by any gaming regulatory agency, or
if Licensor is determined by a court of competent jurisdiction not be the owner
of any of the Licensed Property, Licensee shall have the right to terminate this
Agreement.
15. EXPIRATION OR TERMINATION OF AGREEMENT:
---------------------------------------
15.01 Upon expiration or termination of this Agreement, all rights granted
to Licensee herein shall forthwith revert to Licensor; provided, however, that
for so long as Licensee is not in default, Licensee and the Tribal Casinos shall
have the right to continue to use and maintain the Licensed Products, along with
the associated Licensed Property, already in operation, along with the following
consequences:
(a) all License Fees and guaranteed minimums shall be immediately due and
payable;
(b) Licensor shall thereafter be free to license others to use the
Licensed Property in connection with the manufacture, advertisement,
distribution and sale of gaming
14
devices, including devices identical or similar to the Licensed Products in
the Territory;
(c) Licensee shall (i) within thirty (15) days following termination or
expiration, deliver a preliminary accounting and inventory to Licensor of
all Licensed Products on hand and all Licensed Products sold up to the date
of termination or expiration; (ii) within forty-five (45) days following
such termination or expiration, deliver a final accounting and inventory to
Licensor of all Licensed Products on hand and all Licensed Products sold up
to the date of termination or expiration; (iii) make payment to Licensor of
all monies then outstanding under this Agreement within fifteen (15) days
following termination or expiration; (iv) certify within forty-five (45)
days following termination or expiration full compliance with this
Agreement, including but not limited to the provisions of this paragraph;
(v) allow Licensor and its agents and representatives or its licensors to
conduct a physical inspection and inventory of the Licensed Products and
reasonably cooperate with their efforts and (vi) at Licensor's election,
deliver to Licensor all unsold copies of the Licensed Products in inventory
or destroy the remaining inventory and certify as to the remaining
inventory's destruction (subject to subparagraph (d) below);
(d) in the event of expiration or termination of this Agreement, other than a
termination by Licensor as a result of a material breach of this Agreement
by Licensee, subject to the provisions of Paragraph 4 hereof, Licensee may
continue to sell for a period of ninety (90) days (subject to termination
by Licensor as a result of a material breach of this Agreement by Licensee)
after the effective date of termination ("Sell-Off Rights") all approved
copies of the units of the Licensed Products produced prior thereto. Within
fifteen (15) days following the expiration or termination of the Sell-Off
Rights, Licensee shall (i) deliver a final accounting to Licensor
containing the information specified for periodic statements; (ii) make
payment of all monies due hereunder to Licensor; and (iii) deliver the
remaining inventory to Licensor or, at Licensor's election, destroy the
remaining inventory and certify as to the remaining inventory's
destruction.
In the event this Agreement expires or is terminated as a result of a breach of
this
15
Agreement by Licensee or otherwise at the expiration of the Sell-Off Rights, all
of Licensor's and its affiliates' and licensors' materials, including, without
limitation, the Confidential Information, shall be returned to Licensor by
Licensee and no further disposition or use of the Licensed Products may be made
without the prior written approval of Licensor.
15.02 Licensee acknowledges that its failure (except with respect to its
Sell-Off Rights) to cease the manufacture, sale or distribution of the Licensed
Products immediately upon the termination or expiration of this Agreement will
result in immediate and irreparable injury to Licensor, its licensors and
affiliates and any subsequent distributor appointed by any of them. Licensee
acknowledges and admits that there is no adequate remedy at law for such failure
and agrees that in the event of such failure Licensor and its licensors shall be
entitled to equitable relief by way of temporary or permanent injunctions
without the necessity of posting bond or other security and any such further
relief as any court with jurisdiction may deem just and proper.
16. NOTICES:
--------
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 Licensor's or Licensee's address as set forth on page
one hereof (to the attention of President), or to such other address as either
party may designate by notice given as aforesaid. A copy of any notice sent to
Licensor shall also be sent to Vice President and General Counsel, WMS
Industries Inc., 0000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
17. CONFIDENTIAL INFORMATION/NON-SOLICITATION:
------------------------------------------
Licensee shall keep in confidence, not disclose to any third party and not
use for any purpose except its performance under this Agreement, without the
written permission of Licensor, the terms of this Agreement and the information
of Licensor, its affiliates or licensors made known to Licensee under this
Agreement (collectively "Confidential Information"). The foregoing requirement
of confidentiality shall not apply to information that is (a) in the public
domain through no wrongful act of Licensee, (b) disclosed to Licensee by a third
party which is under no obligation of confidentiality with respect to such
information and which does not place
16
Licensee under such an obligation, or (c) required to be disclosed by applicable
rules and regulations of government agencies or judicial bodies. This obligation
of confidentiality: (i) shall survive termination of this Agreement and (ii)
shall extend to any subcontractor of Licensee and Licensee agrees to obtain from
each such subcontractor a written agreement to abide by the foregoing
confidentiality requirements. Each party agrees not to make any public
statements or to issue any press release regarding this Agreement without the
prior consent of the other party.
18. SPECIFIC UNDERTAKINGS:
----------------------
18.01 During the term of this Agreement and thereafter, Licensee:
(a) will not challenge the ownership or rights of Licensor or its
licensors or affiliates in and to the Licensed Property, Licensed
Products and related materials or Confidential Information, or any
copyright, patent or trademark pertaining thereto developed by or for
Licensor or its licensors or affiliates, nor attack the validity of
the license granted hereunder or participate in any challenge thereto;
(b) will manufacture, market, sell and distribute Licensed Products of
merchantable quality and which are safe for public use in an ethical
and lawful manner and in compliance with all applicable treaties,
laws, ordinances and governmental rules and regulations and in
accordance with the terms and intent of this Agreement, and will
comply with any regulatory agencies which have jurisdiction over
Licensee or the Licensed Products including tribal;
(c) will not create any expenses chargeable to Licensor without Licensor's
prior written approval, and will not harm, misuse or bring into
disrepute the reputation of Licensor, its affiliates and licensors;
(d) will not except as set forth in this Agreement, either directly or
indirectly, use or display or authorize others, with the exception of
the Tribal Casinos, to use or display the Licensed Property in
connection with any advertising, assembly, manufacture, distribution,
use, sale or lease of any goods, other than in connection with the
manufacture and sale of the Licensed Products under this Agreement;
and
(e) shall be responsible for obtaining any and all approvals required to
offer the Licensed Property for sale within the Territory. This
requirement specifically
1
refers to but is not limited to obtaining all required approvals from
the State of Washington Gambling Control Board or its predecessor.
19. COMPLIANCE WITH LAWS:
---------------------
(a) Licensee intends that the Licensed Property hereunder are to be
operated by tribal casinos under federal law and tribal/state compacts
(or other arrangements) with the State of Washington and any
applicable tribal regulations and in compliance with all other
governmental or municipal laws governing this Agreement. Licensee and
all purchasers of Licensed Property from Licensee are responsible for
the operation of each game containing the Licensed Property in
accordance with all applicable laws and regulations. Licensee's
factory settings for games may require adjustment in order to comply
within application laws and regulations. Licensor agrees that it is
the responsibility of Licensee to determine whether adjustments are
necessary and, if such adjustments are necessary, to make such
adjustments prior to operating the game.
(b) Licensee will be solely responsible for obtaining any business
permits, authorizations or similar licenses required by any
governmental authority or otherwise and will be solely responsible for
compliance with all laws, rules and regulations and other governmental
requirements applicable to the use, operation or sale of games within
the Territory and all shipment instructions made by the Licensee shall
be in compliance with all rules and regulations of the governments
within the Territory, or any political subdivision thereof or other
governmental agency, or any commission, board, bureau or
instrumentality and Licensed Property will only be warehoused, stored,
sold and/or operated by Licensee in jurisdictions where legal to do
so.
(c) Licensee shall promptly provide Licensor with all information
reasonably requested by the Compliance Committee of Licensor's
ultimate parent corporation, WMS Industries Inc. ("WMS"), with respect
to Licensee's (including Licensee's officers', directors' and
controlling shareholders') financial condition, litigation,
indictments, criminal proceedings, and the like, in which they are or
may have been involved, if any, in order for the WMS Compliance
Committee to
18
determine that no such information would disclose any fact which would
jeopardize, in any manner, any gaming licenses or permits held by WMS
or its affiliates with any gaming commission, board or similar
regulatory agency. In the event that Licensee shall fail to so provide
all such requested information, or if such information with respect to
Licensee as provided by Licensee or as obtained as a result of WMS'
own investigation, discloses facts concerning Licensee which could, in
the sole opinion of the WMS Compliance Committee, jeopardize the
obtaining of such gaming licenses or permits or the maintaining of
such gaming licenses or permits with any gaming commission, board, or
similar regulatory agency; then, Licensor shall have the right upon
ten (10) days written notice to Licensee to terminate this Agreement,
in which case, it will have no further affirmative obligations to
Licensee, other than to give Licensee reasonable access to information
disclosed. Licensee shall remain liable to Licensor and its affiliates
for all obligations incurred prior to such termination, except for the
Licensee's obligations under Section 5.
(d) Licensor shall promptly provide Licensee with all information
reasonably requested by Licensee's Compliance Committee, with respect
to Licensor's (including Licensor's officers', directors' and
controlling shareholders') financial condition, litigation,
indictments, criminal proceedings, and the like, in which they are or
may have been involved, if any, in order for Licensee's Compliance
Committee to determine that no such information would disclose any
fact which would jeopardize, in any manner, any gaming licenses or
permits held by Licensee or its subsidiaries and affiliates with any
gaming commission, board or similar regulatory agency. In the event
that Licensor shall fail to so provide all such requested information,
or if such information with respect to Licensor as provided by
Licensor or as obtained as a result of Licensee's own investigation,
discloses facts concerning Licensor which could, in the sole opinion
of Licensee's Compliance Committee, jeopardize the obtaining of such
gaming licenses or permits or the maintaining of such gaming licenses
or permits with any gaming commission, board, or similar regulatory
agency; then, Licensee shall have the right upon ten (10) days written
notice to Licensor to terminate this Agreement, in
19
which case, it will have not further affirmative obligations to
Licensor, other than to give Licensor reasonable access to information
disclosed. Licensor shall remain liable to Licensee and its affiliates
for all obligations incurred prior to such termination.
20. SURVIVAL AT TERMINATION:
------------------------
Unless otherwise provided herein, the expiration or termination of this
Agreement shall not affect one party's obligation to the other hereunder which
by the nature thereof are intended to survive any such expiration or
termination.
21. MISCELLANEOUS:
--------------
21.01 Licensor shall have the right, at its election, to assign any of its
rights or obligations hereunder, in whole or in part, to any subsidiary,
affiliate, or related company, or to any person, firm or corporation owning or
acquiring a substantial portion of Licensor's stock or assets, and to the extent
of such assignment, Licensor shall thereafter be relieved of its obligations
hereunder. Licensee shall have no right to assign or sublicense any of its
rights or obligations hereunder without the written approval of Licensor.
21.02 The entire understanding between the parties hereto relating to the
subject matter hereof is contained herein. This Agreement cannot be changed,
modified, amended or terminated except by an instrument in writing executed by
both Licensee and Licensor.
21.03 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 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. Licensor and Licensee make no warranties to other
except those specifically expressed herein.
21.04 This Agreement does not constitute and shall not be construed as
constituting a partnership or joint venture between Licensor and the Licensee
,and the Licensor and Licensee shall have no right to obligate or bind the other
party in any manner whatsoever, and nothing herein contained shall give or is
intended to give any rights of any kind to any third persons.
21.05 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.
20
21.06 This Agreement shall not be deemed effective, final or binding upon
Licensor or Licensee until signed by each of them.
21.07 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.
21.08 In the event of litigation 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.
21.09 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 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.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above written.
MULTIMEDIA GAMES, INC. WMS GAMING INC.
By: By:
-------------------------- -----------------------------
Title: Its:
------------------------ -----------------------------
21
Schedule A
2257723--Stroke of Luck 2114790--Twice the Ice
----------------------- ----------------------
2254313--Something for Nothing 2072652--Night & Day
------------------------------ --------------------
2251935--Xfactor 2072651--Jitterbug
---------------- ------------------
2251931--Palace of Riches 2072650--Big Money Board
------------------------- ------------------------
2245975--Mermaid's Gold 2072649--Pirate's Thunder
----------------------- -------------------------
2241976--Multi-Pay Plus Bar 2067428--Short Circuit
--------------------------- ----------------------
2239586--Big Bang Piggy Bankin' 0000000--Platinum FX Series
------------------------------- ---------------------------
2237570--Filthy Rich 2008263--Reel `Em In
-------------------- --------------------
2223212--Play That Plays 1971778--American Spirit
------------------------ ------------------------
2166338--Heat Wave 1959320--Wild and Loose
------------------ -----------------------
2154293--Winning Streak 1955374--Extra Point
----------------------- --------------------
2152963--Two Dollar Xxxx 1935978--Heavy Hitter
------------------------ ---------------------
2131215--Wild Zone 1920998--Multi Magic
------------------ --------------------
2131213--Quick Bucks 1890610--Midas Magic
-------------------- --------------------
2129481--Easy Money 1876030--Colour of Money
------------------- ------------------------
2127796--Shopping Spree 1857795--Multi-Pay Poker
----------------------- ------------------------
2127795--Silver Streak
----------------------
2114793--Pay'n Double
---------------------
2114792--Triple Treat
---------------------
Schedule B
75-692596--Cast for Cash 75-650094--Rampup
------------------------ -----------------
75-691903--Socks `N Such 75-643523--We Make Gaming Fun
------------------------ -----------------------------
75-689744--Sudden Riches 75-639243--Winning Bid
------------------------ ----------------------
75-679792--Chairman of the Board 75-622923--Game Stack
-------------------------------- ---------------------
75-668081--Cash Advance 75-622424--Perfect Match
----------------------- ------------------------
75-668080--Super Scatter 75-616817--Auction House
------------------------ ------------------------
75-570741--Money Fever 75-386014--Rocket to Riches
----------------------- ---------------------------
75-540606--Jackpot Limbo 75-385909--The Finer Things
------------------------ ---------------------------
75-498141--Reel Big Fish 75-385908--Road to Riches
------------------------ -------------------------
75-498140--Reel Big Pigs 75-385906--Real Reel Bonus Series
------------------------ ---------------------------------
75-497874--Reel Big Progressives 75-380338--Boom
-------------------------------- ---------------
75-497872--Reel Wild Progressives 75-377396--Rock & Roll Bowl
--------------------------------- ---------------------------
75-482022--Copy Cat 75-375059--American Reels Plus
------------------- ------------------------------
75-477777--Simply Wild 75-374184--Mega Multiplier 125
---------------------- ------------------------------
75-472272--River Belle 21 75-349931--Top Banana
------------------------- ---------------------
75-460640--On a Roll 75-342751--Instant Winner
-------------------- -------------------------
75-453337--Build a Fortune 75-338729--Multi-Keno
-------------------------- ---------------------
75-453336--Roll a Fortune 75-338718--Multi-Pay Keno
------------------------- -------------------------
75-451860--Roll and Win 75-320449--American 7's Plus
----------------------- ----------------------------
75-445752--Once Around 75-748626--WMS Gaming Inc.
---------------------- --------------------------
75-440566--Big Money Wheel 75-294770--Times Machine
-------------------------- ------------------------
75-435603--Creature Comforts 75-294623--Grab for Cash
---------------------------- ------------------------
75-431423--Roll in the Dough 75-290301--Pay `N Triple
---------------------------- ------------------------
75-431397--Real Estate 75-269965--Top Cat
---------------------- ------------------
75-431396--Life of Luxury 75-169289--Magic Show
------------------------- ---------------------
75-424880--Reel Rich 75-162924--Mermaid's Treasure
-------------------- -----------------------------
75-424875--Reels of Riches 75-112661--Cash Machine
-------------------------- -----------------------
75-424874--Make me Rich
-----------------------
75-402372--Jackpot Party
------------------------
75-390682--Buy-a-Pay
--------------------
75-390672--Multiplier Mayhem
----------------------------
75-390668--Party Pooper
-----------------------
ADDENDUM TO WMS GAMING INC. LICENSE AGREEMENT
THIS ADDENDUM TO WMS GAMING INC. LICENSE AGREEMENT, dated December 15, 1999
(this "Addendum") is entered into and effective this 7th day of September, 2000,
by and between WMS GAMING INC., a Delaware corporation with offices at 0000 X.
Xxxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 ("Licensor"); and MULTIMEDIA GAMES, INC., a
Texas corporation with offices at 0000 Xxxxx Xxxxx Xxxx., Xxxxx 000, Xxxxxx, XX
00000 ("Licensee"). Licensor and Licensee will hereafter collectively be
referred to as the "Parties".
The purpose of this Addendum is to address and clarify certain issues
raised in a letter dated January 4, 2000, from MGAM's counsel on behalf of
Xxxxxxx Xxxx and Xxxx Xxxxxx to Xxxxx X. Xxxxxx. All provisions of the WMS
Gaming Inc. License Agreement between the Parties (the "Base Agreement") not
modified herein shall remain in full force and effect. All capitalized terms not
defined herein shall have the meaning set forth in the Base Agreement.
1. Sale and Distribution of Licensed Products. Pursuant to Section 4.02 of
------------------------------------------
the Base Agreement, Licensor hereby approves and consents to the sale and
distribution of the Licensed Products, including without limitation on a
purchase, lease/purchase, or rental basis as set forth in Section 3 herein,
through Licensee's wholly owned subsidiary MegaBingo, Inc., a Delaware
corporation ("MBI"). Licensee shall remain subject to its obligations under the
Base Agreement.
2. Outside Contractor. The Parties agree that MGAM and/or MBI, as
------------------
applicable, may utilize the services of Potentia Software Solutions, Inc.
("Potentia"), and its principals, Xxxx Xxxx ("Xxxx") and Xxx Xxxxxxxxx
("Xxxxxxxxx"), to assist their software engineers in the development of various
games' designs, systems development and other developments related to the
Licensed Products. Pursuant to Section 10.04 of the Base Agreement, Licensor
hereby consents to the use of Potentia, Xxxx and Xxxxxxxxx for such purposes;
provided, however, that, pursuant to Section 17 of the Base Agreement, Potentia,
Xxxx and Xxxxxxxxx shall execute an agreement to abide by the confidentiality
provisions contained in said Section 17.
3. Revenue Participation. Pursuant to Section 1.01 of the Base Agreement,
---------------------
Licensor hereby approves and consents to the offer by Licensee of the Licensed
Property on a "lease or revenue participation basis" subject to the terms and
conditions contained in this Addendum. In the event an Indian tribe within the
State of Washington desires to acquire the Licensed Property on a "purchase" or
"lease/purchase" basis under MBI's form of Equipment
24
Agreement, then the provisions of Section 4.02 of the Base Agreement shall
continue to bind the Parties and shall be unmodified by this Addendum, and
Licensee shall pay Licensor the License fee of $2,500.00 per unit under the Base
Agreement for each unit invoiced, distributed, placed for trial or sold by
License on either a "purchase" or "lease/purchase" basis; provided, however,
that any such "lease/purchase basis shall only be used to finance the purchase
price of the Licensed Property on commercially reasonable terms, and that any
other form of "lease/purchase" basis shall be subject to the "rental" provisions
set forth below. If however, an Indian tribe within the State of Washington
desires to acquire the Licensed Property on a "rental" basis under the
applicable form of MBI Equipment Agreement, then Licensee shall continue to pay
$2,500.00 per unit under the Base Agreement for each unit placed on a "rental"
basis and the units of the License Products placed under such "rental"
agreements shall continue to be credited toward the Guaranteed Minimum as set
forth in Section 5 of the Base Agreement, but the payments in Section 4.02 of
the Base Agreement shall be modified as follows:
(a) The "Rent" as defined under the applicable Equipment Agreement shall be
paid as between Licensor and Licensee as follows:
(i) Prior to any "split" of the Rent between Licensor and Licensee as set
forth in clause (ii) immediately below, Licensee shall first recover
from the payments of Rent (1) the License Fee paid to Licensor under
Section 4.02 of the Base Agreement and (2) MBI's maintenance fee of
$45 per player station per month on an ongoing basis.
(ii) Subsequent to Licensee's receipt of the amounts set forth above,
Licensor shall receive Fifty Percent (50%) of the Rent from
Licensor/MBI. MBI shall retain the remaining Fifty Percent (50%) of
the Rent.
(iii) MBI shall have the right to change its rental fee and maintenance
fees after thirty (30) days' prior written notice to Licensor.
This Addendum may be executed in two or more counterparts, each of which
shall be deemed an original and all of which, taken together, shall constitute
one and the same instrument. Any such counterpart may be executed by facsimile
signature with only verbal confirmation, and when so executed and delivered
shall be deemed an original and such counterpart(s) together shall constitute
only one original.
25
IN WITNESS WHEREOF, the Parties have caused this Addendum to be executed by
their duly authorized representatives as of the day and year first above
written.
MEGABINGO, INC. WMS GAMING, INC.
By: By:
------------------------- ----------------------------
Name: Name:
----------------------- ---------------------------
Title: Title:
----------------------- -------------------------
26
ADDENDUM TO WMS GAMING INC. LICENSE AGREEMENT
THIS ADDENDUM TO WMS GAMING INC. LICENSE AGREEMENT, dated December 15, 1999
(this "Addendum") is entered into and effective this 7th day of September, 2000,
by and between WMS GAMING INC., a Delaware corporation with offices at 0000 X.
Xxxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 ("Licensor"); and MULTIMEDIA GAMES, INC., a
Texas corporation with offices at 0000 Xxxxx Xxxxx Xxxx., Xxxxx 000, Xxxxxx, XX
00000 ("Licensee"). Licensor and Licensee will hereafter collectively be
referred to as the "Parties".
The purpose of this Addendum is to address and clarify certain issues raised in
a letter dated January 4, 2000, from MGAM's counsel on behalf of Xxxxxxx Xxxx
and Xxxx Xxxxxx to Xxxxx X. Xxxxxx. All provisions of the WMS Gaming Inc.
License Agreement between the Parties (the "Base Agreement") not modified herein
shall remain in full force and effect. All capitalized terms not defined herein
shall have the meaning set forth in the Base Agreement.
1. Sale and Distribution of Licensed Products. Pursuant to Section 4.02 of the
------------------------------------------
Base Agreement, Licensor hereby approves and consents to the sale and
distribution of the Licensed Products, including without limitation on a
purchase, lease/purchase, or rental basis as set forth in Section 3 herein,
through Licensee's wholly owned subsidiary MegaBingo, Inc., a Delaware
corporation ("MBI"). Licensee shall remain subject to its obligations under the
Base Agreement.
2. Outside Contractor. The Parties agree that MGAM and/or MBI, as applicable,
------------------
may utilize the services of Potentia Software Solutions, Inc. ("Potentia"), and
its principals, Xxxx Xxxx ("Xxxx") and Xxx Xxxxxxxxx ("Xxxxxxxxx"), to assist
their software engineers in the development of various games' designs, systems
development and other developments related to the Licensed Products. Pursuant to
Section 10.04 of the Base Agreement, Licensor hereby consents to the use of
Potentia, Xxxx and Xxxxxxxxx for such purposes; provided, however, that,
-----------------
pursuant to Section 17 of the Base Agreement, Potentia, Xxxx and Xxxxxxxxx shall
execute an agreement to abide by the confidentiality provisions contained in
said Section 17.
3. Revenue Participation. Pursuant to Section 1.01 of the Base Agreement,
---------------------
Licensor hereby approves and consents to the offer by Licensee of the Licensed
Property on a "lease or revenue participation basis" subject to the terms and
conditions contained in this Addendum. In the event an Indian tribe within the
State of Washington desires to acquire the Licensed Property on a "purchase" or
"lease/purchase" basis under MBI's form of Equipment Agreement, then the
provisions of Section 4.02 of the Base Agreement shall continue to bind the
Parties and shall be unmodified by this Addendum, and Licensee shall pay
Licensor the License fee of $2,500.00 per unit under the Base Agreement for each
unit invoiced, distributed, placed for trial or sold by License on either a
"purchase" or "lease/purchase" basis; provided, however, that any such
"lease/purchase basis shall only be used to finance the purchase price of the
Licensed Property on commercially reasonable terms, and that any other form of
"lease/purchase" basis shall be subject to the "rental" provisions set forth
below. If however, an Indian tribe within the State of Washington desires to
acquire the Licensed Property on a "rental" basis under the applicable form of
MBI Equipment Agreement, then Licensee shall continue to pay $2,500.00 per unit
under the Base Agreement for each unit placed on a "rental" basis and the units
of the License Products placed under such "rental" agreements shall continue to
be credited toward the
1
Guaranteed Minimum as set forth in Section 5 of the Base Agreement, but the
payments in Section 4.02 of the Base Agreement shall be modified as follows:
(a) The "Rent" as defined under the applicable Equipment Agreement shall be
paid as between Licensor and Licensee as follows:
(i) Prior to any "split" of the Rent between Licensor and Licensee as set
forth in clause (ii) immediately below, Licensee shall first recover
from the payments of Rent (1) the License Fee paid to Licensor under
Section 4.02 of the Base Agreement and (2) MBI's maintenance fee of
$45 per player station per month on an ongoing basis.
(ii) Subsequent to Licensee's receipt of the amounts set forth above,
Licensor shall receive Fifty Percent (50%) of the Rent from
Licensor/MBI. MBI shall retain the remaining Fifty Percent (50%) of
the Rent.
(iii) MBI shall have the right to change its rental fee and maintenance
fees after thirty (30) days' prior written notice to Licensor.
This Addendum may be executed in two or more counterparts, each of which shall
be deemed an original and all of which, taken together, shall constitute one and
the same instrument. Any such counterpart may be executed by facsimile signature
with only verbal confirmation, and when so executed and delivered shall be
deemed an original and such counterpart(s) together shall constitute only one
original.
IN WITNESS WHEREOF, the Parties have caused this Addendum to be executed by
their duly authorized representatives as of the day and year first above
written.
MEGABINGO, INC. WMS GAMING, INC.
By: By:
------------------------------------ -------------------------------------
Name: Name:
---------------------------------- -----------------------------------
Title: Title:
--------------------------------- ----------------------------------
2
