TECHNOLOGY AGREEMENT
Exhibit
10.2
This
techonology Agreement
(this
“Agreement”) is entered into effective June 28, 2006 (“Effective
Date”), by and between Bally Gaming Inc., a Nevada corporation (“Bally”) and
Spectre Gaming, Inc., a Minnesota corporation (“Spectre”). Bally and Spectre may
be referred to individually as a “Party” and collectively as the
“Parties.”
WHEREAS,
Spectre desires to obtain, and Bally desires to grant to Spectre, a license
to
use the Licensed Technology and the right to develop certain games using
Licensed Technology (as defined below), to manufacture and create
jurisdictionally compliant redemption games and redemption gaming systems in
a
territory.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, covenant and agree
as
follows:
| 1. |
DEFINITIONS
|
|
a)
|
“Alpha
Board” means
a computer firmware circuit board developed by Bally incorporating
Bally’s
Alpha Game Platform.®
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|
b)
|
“Bally
Cabinet” means
a new or used gaming device, player station, cabinet or similar equipment
on which a Redemption Games may be operated or played, which cabinet
is
manufactured by Bally.
|
|
c)
|
“Confidential
Information”
means all data and information of a confidential nature, including
know-how and trade secrets, relating to the business, the affairs,
any
development projects or other equipment, programs, software, products
or
services of either party, whether developed by or for Bally or Spectre
or
any of their respective Licensor’s, contractors or successors-in-interest.
Confidential Information may be communicated to the other party orally,
in
writing or in any other recorded or tangible form. Data and information
shall be considered to be Confidential Information: (i) if marked
as such;
(ii) if a party has been advised of their confidential nature, orally
or
in writing; or (iii) if, due to their character or nature, they should
be
treated as secret and confidential.
|
|
d)
|
“Intellectual
Property Rights” means
and include all United States and other patents, copyrights, designs,
mask
work rights, Trademarks, trade secrets and other proprietary rights,
any
applications
therefor,
any registrations thereof, and any applications for registration
thereof.
|
|
e)
|
“Licensed
Technology”
means Bally’s Alpha Board
and the limited rights to license and use Bally’s technology protected
under the U.S. patents listed in Exhibit A to this Agreement. Licensed
Technology specifically excludes any rights to possess and use Bally
software and associated source and object code directly or indirectly
used
in Redemption Games.
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|
f)
|
“Redemption
Games” means
games in which the user xxxxxx money and, if the outcome is such
that the
game dispenses or displays a coupon or other representation of value
that
is redeemable for cash or merchandise, where (i) the retail value
of the
merchandise redeemable using any such coupon or other representation
of
value is materially greater than the value of cash redeemable using
such
coupon, (ii) the maximum wholesale value of merchandise available
from a
single play of the game or device is no more than the maximum value
allowed by applicable law in the respective jurisdiction, and (iii)
the
game is not a Class III game, Class II game, bingo-based, electronic
pull-tab or charitable game, or a game that is operated in a private
home
or on a personal wireless digital device. (as those terms are defined
in
the Indian Gaming Regulatory Act, at 25 U.S.C. § 2703), or not otherwise a
gaming device found in casino environments.
|
|
g)
|
“Redemption
Product License” or “RPL” means
an individual license granted by Bally to Spectre in order to allow
Spectre to use the Licensed Technology with a gaming device, player
station, cabinet or similar equipment produced by Bally
and purchased or leased by Spectre,
on which Redemption Games developed by Spectre will used. This
is a
license to use Bally products only and does not include any Bally
products, including but not limited to Alpha
Boards.
|
|
h)
|
“Territory”
means
the United States of America.
|
|
2.
|
CONDITIONS
PRECEDENT
|
This
Agreement is subject to the following conditions being met before the Agreement
can take effect:
|
a)
|
The
Parties shall contemporaneously execute a Termination and Settlement
Agreement, dated June 28, 2006, setting forth particular terms
and
conditions under which the Parties will terminate the Redemption
Technology and Supply Agreement dated May 24, 2005, as
amended, and
waive all claims against each other arising out of that agreement.
Should
this condition not be met then the
Agreement
is
void.
|
|
b)
|
This
Agreement shall become effective upon Spectre’s performance under Section
4(d)(i) and 4(d)(iii) of this Agreement by no later than June 30,
2006. In
the event Spectre does not so perform, as contemplated under Section
4(d)(i) or 4(d)(iii), this Agreement shall not become effective,
however
the Purchase Order dated June 28, 2006, for Spectre’s obligation to
purchase 175 Bally Cabinets at the price of $8,250 per Bally Cabinet
shall
remain in force and effect.
|
| 3. |
GRANT
OF LICENSE TO USE THE LICENSED
TECHNOLOGY
|
|
a)
|
Bally
hereby grants to Spectre a perpetual non-exclusive license to use
the
Licensed Technology specifically only under each individual Redemption
Product License purchased by Spectre, strictly for the production
and
distribution of jurisdictionally compliant Redemption
Games and no other purpose, including all
rights to sublicense. Spectre’s license to use the Licensed Technology
shall be strictly limited to
use with Redemption Games for the conduct of redemption or amusement
with
prize gaming activities in legal jurisdictions within the Territory
and
for no other purposes whatsoever.
|
2
|
b)
|
No
right is granted hereunder, and Spectre agrees not, to (i) use
any
Licensed Technology in connection with the development of any games
other
than Redemption Games, or (ii) market or distribute or permit any
of its
sublicensees or subdistributors to market or distribute any Licensed
Technology
that does
not include a Redemption Game or for use in any location, business
or
establishment.
Spectre
shall evidence its purchases of each Redemption Product License
through
permanently affixing an “RPL” license decal on each Bally Cabinet used by
Spectre in creating Redemption Games.
|
| c) |
Spectre or Spectre's customers
shall, at
its or their sole expense, be responsible for obtaining any regulatory
approval to operate Redemption Games incorporating the Licensed Technology
within the Territory.
|
|
d)
|
In
the event that the Redemption Games developed and carried on by Spectre
fall under the definition of licensed cashless gaming systems or
licensed
cashless games, as those terms are defined in Exhibit B, Spectre
agrees to
abide by the license requirements set forth in Exhibit B. Bally reserves
all rights not expressly granted
hereunder.
|
4. CONSIDERATION
| a) |
Bally
Cabinet Purchase Order. Spectre
shall send a signed, written purchase order to Bally on or before
full
execution of this Agreement for 175 Bally Cabinets, which shall include
Bally’s Alpha Board. Spectre shall pay Bally $8,250 per Bally Cabinet.
|
| b) |
First Redemption
Product License Purchase Order. In
addition to Spectre’s purchase order for Bally Cabinets (and
corresponding Redemption Product Licenses) described
in Section 4(a)
above, Spectre shall send a signed, written purchase order to Bally
on or
before full execution of this Agreement for 500 Redemption Product
Licenses at the price of $3,000 per Redemption Product License,
and Bally will accept such purchase order.
Any Redemption Product License ordered by Spectre that will be
used with a
ticket printer incorporated into a Bally Cabinet shall be provided
for an
additional fee in the amount of $400 per ticket printer, if such
ticket
printer(s) are required.
|
|
c)
|
Second Redemption
Product License Purchase Order. In
addition to Spectre’s purchase order for Bally Cabinets (and corresponding
Redemption Product Licenses) described in Sections 4(a) above, and
in
addition to the purchase order described in Section 4(b) above, Spectre
shall send a signed, written purchase order to Bally on or before
July 10,
2006 for 375 additional Redemption Product Licenses at the total
price of
$600,000, and Bally will accept such purchase order. Any Redemption
Product License ordered by Spectre that will be used with a ticket
printer
incorporated into a Bally Cabinet shall be provided for an additional
fee
in the amount of $400 per ticket printer, if such ticket printer(s)
are
required.
|
3
| d) |
Payment
Terms.
Spectre must pay Bally in full for all amounts owed (i)
as
set forth in Sections 4(a)
and 4(b) above no later than June 30, 2006, (ii) as set forth in
Section
4(c) above no later than July
13,
2006, or (iii)
as an alternative to the foregoing clauses (i) and/or (ii),
Spectre must provide Bally with an adequate written guaranty of
such
payments by a third-party financing source that is acceptable to
Bally, in
Bally’s reasonable
discretion. For any other Redemption Product Licenses or any other
products ordered by Spectre, except as otherwise provided herein,
payment
of Bally’s invoice for such products shall be due within thirty (30) days
after Spectre’s receipt
and acceptance.
Late fees shall accrue with respect to any amounts not paid when
due
hereunder at the rate of one and a half percent (1.5%) per month
or, if
lower, the highest rate permitted under applicable law. Spectre
shall pay or, at Bally’s option, to reimburse Bally for, any sales, use,
or other tax, duty or assessment that may become due or owing in
connection with the transactions contemplated under this Agreement,
other
than taxes based on Bally’s net income.
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5.
|
ORDERS
|
|
a)
|
Written
Orders.
Any future orders for Alpha Boards, Bally Cabinets or Redemption
Product
Licenses shall be placed by Spectre's central purchasing point and
shall
be in writing. All orders shall be for shipment immediately or as
soon as
product is available. Spectre may not cancel or change any order
after
Bally’s acceptance.
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|
b)
|
Bally
Cancellation.
Bally reserves the right to cancel any orders placed by Spectre and
accepted by Bally as set forth above, or to refuse or delay shipment
thereof or require payment on delivery, and Bally further reserves
the
right to refuse to accept orders notwithstanding its obligations
under
this Section 5, if Spectre unreasonably (i) fails to make any payment
as
provided herein or under the terms of payment set forth in any invoice
or
otherwise agreed to by Bally and Spectre, (ii) fails to meet reasonable
credit or financial requirements established by Bally, including
any
limitations on allowable credit, or (iii) otherwise fails to comply
with
the terms and conditions of this Agreement.
|
| 6. |
SHIPPING
|
|
a)
|
Shipment.
All Bally Cabinets will be shipped by Bally F.O.B. Las Vegas, Nevada
or
any other U.S. point of origin as designated by Bally. Bally will
select
the mode of shipment and the carrier unless otherwise instructed
in
writing by Spectre. Spectre will pay all shipping costs or, if Bally
advances such costs, will reimburse Bally therefor. Spectre will
bear all
costs of shipping and the risk of loss or damage in transit upon
shipment
by Bally.
|
| 7. |
DUTIES
OF SPECTRE
|
|
a)
|
Except
as expressly set forth herein to the contrary, Spectre will
not:
|
4
|
i)
|
Reverse
engineer, disassemble, decompile, copy, modify, or otherwise change
any
Alpha Board
or
Licensed Technology, in whole or in part, nor assist in any way,
directly
or indirectly, in any effort to do so, and under no circumstances
have any
right to receive source code for any software included in any Bally
Cabinet,
provided,
however,
that Spectre may modify Alpha Boards as appropriate, or upgrade
them, to
address reliability or performance-related issues.
|
|
ii)
|
Disclose
the terms of this Agreement to any third party, except as required
by
applicable law (including applicable securities laws) or with, and
only to
the extent permitted by, the express prior written approval of Bally.
Whenever possible, prior to making any disclosure required by any
governmental agency in connection with this Agreement, Spectre shall
advise Bally of the proposed disclosure, and may allow Bally to contribute
suggestions concerning the text of the draft, as it applies to
representations concerning Bally. Nothing
in this Agreement shall prohibit disclosure to Spectre’s legal, financial
or business advisors who agree to maintain the confidentiality of
the
terms of this Agreement. Bally
understands that Spectre is a public reporting company and files
periodic
disclosure reports with the United States Securities and Exchange
Commission, and that this Agreement will need to be filed with such
commission by Spectre in one or more of its periodic
reports.
|
| 8. |
WARRANTY
|
| a) |
Scope.
In
the event Bally provides Bally Cabinets or Alpha Boards to Spectre,
Bally
warrants that each Bally Cabinet
and Alpha Board
supplied hereunder shall be free of defects in materials and workmanship
for a period of ninety (90) days from shipment thereof. This warranty
for
Bally Cabinets or Alpha Boards shall not be extended in any manner
to any
third party fabrications or construction of any Redemption Games.
Minor
deviations from any specifications or standards that do not materially
affect the performance of the Bally Cabinets
|
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b)
|
Exclusive
Remedy. If
Spectre reports any breach of the foregoing warranty to Bally during
the
warranty period for such Bally Cabinet or Alpha Board, Spectre
shall ship
such Bally Cabinet or Alpha Board to Bally at Spectre’s expense. Spectre
shall bear the risk of loss or damage in transit to Bally. Bally
shall
inspect and test such Bally Cabinet or Alpha Board and, if it is
able to
confirm the defect reported by Spectre, Bally shall make commercially
reasonable efforts to repair or replace the defective Bally
Cabinet
or
Alpha Board.
If Bally confirmed the defect, it shall ship the Bally Cabinet
or Alpha
Board back to Spectre or its customer at Bally’s sole expense, Bally shall
reimburse Spectre for the original return shipping costs, and Bally
shall
bear any risk of loss or damage in transit to Spectre or its customer.
If
Bally does not confirm the defect, it shall ship the Bally Cabinet
or
Alpha Board back to Spectre or its customer at Spectre’s sole expense, and
Spectre shall bear any risk of loss or damage in transit to Spectre
or its
customer.
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5
|
c)
|
Warranty
of Licensed Technology. Bally
hereby represents and warrants to Spectre that Bally (1) is the lawful
owner of the Licensed Technology and its underlying intellectual-property
rights, (2) will enforce and maintain such rights to the Licensed
Technology in full force and effect at all times during the Term
hereof,
and (3) it has the right to grant Spectre the license rights as provided
herein. Bally further represents and warrants to Spectre that (i)
there is
no claim, litigation or proceeding pending or threatened against
Bally
with respect to the Licensed Technology or any component thereof,
alleging
infringement of any third party’s intellectual property rights, (ii)
neither the performance of Bally’s obligations hereunder (or any other
term or provision hereof) will in any way infringe or otherwise violate
any third party’s intellectual property rights or a non-disclosure
obligation by which Bally is bound.
|
| d) |
Disclaimer.
Except to the extent expressly provided in this Section 8, Bally
makes no
warranties hereunder of any type or nature. Without limiting the
generality of the foregoing, Bally disclaims all implied warranties,
including without limitation any warranty of merchantability, fitness
for
a particular purpose, title or non-infringement, as well as any warranty
that might otherwise arise from the course of dealing between the
parties
or usage of trade.
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| 9. |
TERM
OF AGREEMENT AND
TERMINATION
|
|
a.
|
Agreement
Term.
The Term of this Agreement (the “Term”) shall commence on the Effective
Date and shall continue for two
(2)
years.
|
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b.
|
Termination
for Cause.
This Agreement may be terminated at any time by either party upon
written
notice to the other party in the event of such other party's failure
to
perform any provision of this Agreement, provided such failure to
perform
has continued for not less than thirty (30) days after written notice
of
such failure. Additionally, Bally may terminate this Agreement, effective
upon written notice of termination, upon Spectre’s inability to pay after
a thirty day notice and cure period, for any products which have
been
delivered or to pay any other fees in a timely manner when due. In
the
event of the appointment of a trustee or receiver or the equivalent
for
either party, or upon the institution of voluntary proceedings relating
to
either party’s dissolution, liquidation, winding up, bankruptcy,
insolvency or relief from creditors, if such proceedings are not
terminated or discharged within ninety (90) calendar days of their
inception, the other party may terminate this Agreement, upon written
notice of termination.
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c.
|
Effect
of Termination. Upon
termination of this Agreement for any reason the following events
shall
occur.
|
|
1.
|
Spectre
shall cease all marketing or promotion of any Bally Cabinets
not placed with Spectre customers at the time of such
termination..
|
6
|
2.
|
Spectre
shall have no further right to purchase new
Bally Cabinets,
any
Alpha Boards or the Licensed Technology, unless mutually agreed-upon
by
the parties.
|
|
3.
|
Spectre
shall retain the right to maintain and use the licenses granted in
this
Agreement for the Licensed Technology incorporated with Redemption
Product
Licenses already paid for by Spectre and then in Spectre’s inventory or
previously distributed into use with Redemption Games.
|
|
d.
|
No
Liability.
In
no event will either party be liable to the other for any additional
compensation or other payment on account of termination of this Agreement
for any reason provided that the Agreement terminates in accordance
with
the terms hereof. Termination of this Agreement, however, shall not
relieve the parties of any obligations accrued prior to termination.
Each
party acknowledges and agrees that it will not be entitled to any
compensation, damages, or payments in respect of goodwill that has
been
established or for any damages on account of prospective profits
or
anticipated sales, and that each party shall not be entitled to
reimbursement in any amount for any training, advertising, market
development, technology development, investments, leases, or other
costs
that shall have been incurred by either party before the termination
of
this Agreement. Each party hereby waives its rights, if any, under
applicable laws for any such compensation, damages or
payments.
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e.
|
Survival.
Sections 7, 8, 9(c)
and 9(d),
and 10 through 13
inclusive, shall survive any termination or expiration of this
Agreement
and shall remain fully enforceable thereafter in perpetuity, except
that
Bally's indemnity obligations shall only apply with respect to
claims
relating solely to the use of the Licensed
Technology and the distribution of Bally Cabinets under this Agreement.
|
|
10.
|
INTELLECTUAL
PROPERTY
|
| (a) |
As
between Spectre or any affiliate thereof and Bally, Bally shall own
all
Intellectual Property Rights (including, without limitation, Trademarks,
as defined below) in or relating to any Licensed Technology or Bally
information supplied by Bally hereunder and any aspect the Licensed
Technology incorporated in any derivative works based to any extent
on any
of the foregoing, and any work product created by Bally in providing
services hereunder. Spectre for itself and its affiliates, employees
and
agents hereby waives any ownership or other proprietary interest
or
intellectual property right in any of the foregoing, which Spectre
intends
to remain always with Bally or its licensors. Spectre for itself
and its
affiliates, employees and agents hereby assigns and transfers all
such
rights to Bally, and agrees that it will promptly execute and deliver
any
document requested by Bally to fully effect, perfect and evidence
such
assignment to, or vesting of rights in,
Bally.
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7
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b)
|
Each
party shall promptly notify the other of any and all confirmed or
potential infringement, imitation, misappropriation, illegal use
or misuse
by any person of any Confidential Information or of any Intellectual
Property Right in or relating to intellectual property of that party
which
comes to its attention; provided, however, that neither party will
not
take any legal action relating to the protection of any Confidential
Information or any such Intellectual Property Rights without the
prior
written approval of the other party (which party may grant or withhold
in
the exercise of its sole and absolute discretion); and provided further
that the other party shall use its best efforts to provide any support
or
assistance or take other actions approved by infringed party to protect
and defend the infringed party’s Confidential Information and Intellectual
Property Rights in the Territory.
|
In
the
event of any infringement or other illegal use by a third-party of any
Confidential Information, Intellectual Property or the Enabling Technology,
Bally shall have the sole right, exercisable in its absolute and sole
discretion, to defend or prosecute any infringement or illegal use claim. All
fees, costs and expenses for such defense or prosecution shall be the burden
of
Bally, and Bally shall retain any award for any such claim.
|
c)
|
During
the term of this Agreement, each party may disclose Confidential
Information to the other solely to permit the other party to perform
its
obligations under this Agreement. Each party shall refrain from using
or
exploiting any Confidential Information for any purposes or activities
other than those specifically authorized by the other party in this
Agreement. All files, lists, records, documents, notes, drawings,
specifications, equipment, computer programs and other materials
that
incorporate or refer to all or a portion of the Confidential Information
shall remain the sole property of the disclosing party. Such materials
shall be promptly returned to the disclosing party: (1) upon the
disclosing party’s request or (2) upon termination of this Agreement,
whichever is earlier. Neither party shall disclose the Confidential
Information to any individual or entity not employed or controlled
by or
under contract to the other party, and may only provide the Confidential
Information to such individuals or entities on a need-to-know basis
and
only if such individuals or entities have agreed in writing to refrain
from using or disclosing the Confidential Information except as permitted
hereunder pursuant to a form of nondisclosure agreement approved
in form
and substance by the disclosing party. A party may disclose Confidential
Information to the extent required by any statutory or regulatory
provision or court order, provided that prior to any such disclosure,
that
party shall provide the other with a proposed draft of the disclosure,
shall reasonably cooperate with the party in any efforts to obtain
protective orders or otherwise protect the confidentiality of such
Confidential Information, and shall make such disclosure only after
receiving that party's consent, which shall not be unreasonably
withheld.
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8
|
d)
|
“Trademark”
means any trade name, trademark, service xxxx, trade dress, logo
or other
designation of source, origin, sponsorship, endorsement or certification
used, licensed or owned by Bally and any confusingly similar designation
or xxxx. Spectre agrees to use the Trademarks (as defined above)
solely
for the purpose of identifying Bally as the source of the Bally Cabinets
or of any related services provided by Bally. All uses of any Trademark,
whether on Bally Cabinets, any advertising or promotional materials
relating thereto, or otherwise, shall be subject to Bally’s prior written
approval. Spectre shall market, promote and advertise the Bally Products
and related services under the Trademarks and Spectre’s trademark and
under no other trademark, service xxxx, logo, trade name, or other
designation of source, origin, sponsorship, endorsement or certification.
Spectre's use of the Trademarks shall be in accordance with applicable
laws and any policies regarding advertising and trademark usage supplied
by Bally, as established and amended from time to time. Spectre shall
not
register or attempt to file any trademark or similar application
with
respect to any Trademark (or similar marks) of Bally with any agency
or
association anywhere in the world, and shall, at the request of Bally,
assign or otherwise transfer the ownership and ancillary rights to
such
applications to Bally or any person designated by Bally. Spectre
agrees
that the Trademarks are and will remain the sole property of Bally,
and
agrees not to do anything inconsistent with that ownership or to
contest
ownership of the Trademarks. Spectre agrees always to identify the
Trademarks as being the property of Bally. Spectre agrees that all
use of
the Trademarks by Spectre or its sublicensees or contractors will
inure to
the sole benefit of, and be on behalf of, Bally.
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|
e)
|
Each
party agrees that it shall be required to obtain the written approval
of
the other party prior to that party issuing any press releases, public
statement, or other publicly disclosed media information related
to this
Agreement and the other party, including but not limited to any uses
of
the other party’s Trademarks or other proprietary branding property in
such media releases. Each party shall provide the other with a copy
of the
proposed media release(s) for review, as a condition of that party
granting approval of the proposed media release.
|
| 11. |
INDEMNIFICATION;
INSURANCE
|
| (a) |
Subject
to the limitations set forth in this Agreement, Bally will defend,
at its
own expense, any claim, suit or proceeding brought against Spectre
to the
extent it is based upon a claim that the Licensed Technology infringes
any
patent, trademark, copyright or trade secret of any third party.
Spectre
agrees that it shall promptly notify Bally in writing of any such
claim or
action and give Bally full information and assistance in connection
therewith. Bally will pay all damages, costs and expenses finally
awarded
from a court of competent jurisdiction from which no appeal lies
to third
parties against Spectre in such action or any settlement of such
claims
made by Bally. Bally shall have the exclusive right to settle or
compromise any such claim or action, subject to Spectre’s consent which
shall not be unreasonably withheld. If Spectre itself settles or
purports
to settle any such claim or action, then, without limiting Bally’s other
rights or remedies, Bally shall have no obligations whatsoever under
this
Section 11. If a Bally Product is, or in Bally's opinion might be,
held to
infringe as set forth above, Bally may, at its option, replace or
modify
such Bally Product so as to avoid infringement, in which event Spectre
will cease all further use or distribution of the replaced version
of the
Bally Product, or procure the right for Spectre to continue to exploit
the
Bally Product as provided herein.
|
9
| b) |
Limitations.
Bally will not have any liability for any claim of infringement arising
as
a result of use of the Bally Products in combination with any items
not
supplied by Bally, any modification of the Bally Products by Spectre
or
third parties if the Bally Products would not have been infringing
but for
such modifications, or the use of other than the most recent release
of
the Bally Products provided by Bally to Spectre, if such claim would
have
been avoided by the use of the most recent
release.
|
| c) |
Entire
Liability.
The foregoing states the entire liability of Bally concerning infringement
or misappropriation of any Intellectual Property Right, including
without
limitation any U.S. or other patent, trademark, copyright, or trade
secret.
|
| d) |
Spectre
Indemnity.
Spectre agrees to indemnify and hold Bally harmless from and against
any
claims, damages, expenses or costs arising as a result of the use
of or
otherwise in connection with the Bally Products or any distribution
or
other exploitation of the foregoing by Spectre or any of its
subdistributors, dealers or other contractors or other exercise by
any of
the foregoing of any rights under this Agreement; provided that the
foregoing indemnity shall not apply to any claims, damages, expenses
or
costs based solely on or arising solely as a result claims of infringement
that are subject to indemnification under Section
14(a).
|
| 12. |
LIMITATION
OF LIABILITY
|
(a)
(i) In no event shall either party be liable for any incidental, special,
indirect, punitive, exemplary or consequential damages of whatever nature
arising out of or in connection with this Agreement, even if such party has
been
notified of the possibility of such damages,
and (ii) in no event shall Bally’s liability arising out of or relating to this
Agreement, whether arising under contract, tort or any other theory of
liability, exceed the amounts actually paid by Spectre to Bally under this
Agreement , and in no event shall Spectre’s liability to Bally exceed the
amounts contemplated to be paid by Spectre to Bally under this
Agreement.
(b)
The
parties acknowledge and agree that the provisions hereof that limit liability,
disclaim warranties or exclude consequential damages or other damages or
remedies are essential terms of this Agreement that are fundamental to the
parties' understanding regarding allocation of risk. Accordingly, such
provisions shall be severable and independent of any other provisions and shall
be fully enforced regardless of any breach or other occurrence hereunder.
Without limiting the generality of the foregoing, the
parties agree that all limitations of liability, disclaimers of warranties
and
exclusions of consequential damages or other damages or remedies shall remain
fully valid, effective and enforceable in accordance with their respective
terms, even under circumstances that cause any exclusive remedy under this
Agreement to fail of its essential purpose.
10
|
13.
|
COMPLIANCE
WITH LAWS
|
| a) |
Compliance
Program. Spectre
acknowledges that Bally Technologies, Inc. (Bally's parent company),
as a
company operating under privileged licenses in a highly regulated
industry, maintains the “Bally Technologies Compliance Program” as part of
a compliance program to protect and preserve the name, reputation,
integrity, and good will of Bally and its subsidiaries and affiliates
through a thorough review and determination of the integrity and
fitness,
both initially and thereafter, of any person or company that performs
work
for those companies or with which those companies are otherwise
associated, and to monitor compliance with the requirements established
by
gaming regulatory authorities in various jurisdictions around the
world
(the "Compliance Committee"). Spectre shall cooperate with the
Compliance
Committee as requested by Alliance or the Committee and provide
the
Committee with such information as it may request. If Bally, acting
on the
reasonable recommendation of the Compliance Committee, withdraws
its
approval of this Agreement or Spectre for reasons reasonably related
to
Spectre's suitability, then (1)
this Agreement shall be void and neither Party shall have any rights
hereunder, with the exception of Spectre’s applicable termination rights
set forth in Section 9(c),
and (2) to the extent Bally does not honor and perform under an
open
purchase order from Spectre that is contemplated herein, Bally
shall
return all sums provided by Spectre to Bally pursuant to this
Agreement.
In addition, Spectre shall promptly provide Bally with all information
reasonably requested by the Compliance Committee of Bally with
respect to
Spectre's (including Spectre'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 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 Bally or its affiliates
with any
gaming commission, board or similar regulatory
agency.
|
|
14.
|
GENERAL
PROVISIONS
|
| a) |
Notices.
All
notices hereunder shall be in writing and shall be deemed to have
been
given or made when (i) delivered by hand; (ii) delivered by facsimile
or
overnight delivery service; or (iii) delivered or mailed by registered
or
certified mail, postage prepaid, addressed as follows, until notice
of
another address and/or facsimile number shall have been received
by the
other Party.
|
If
to
Bally:
Bally
Gaming, Inc.
ATTN:
General Counsel
0000
Xxxxx Xxxxxxx Xxxx
Xxx
Xxxxx, XX 00000
Telephone:
(000) 000-0000
Facsimile
No.: (000) 000-0000
11
If
to
Spectre:
Spectre
Gaming, Inc.
Attn:
Xxxxxxx Mix
and
Xxxxx Xxxxx
00000
00xx Xxxxxx Xxxxx
Xxxxxxxxxxx,
XX 00000
Telephone:
( 000)
000-0000
Facsimile
No.: ( 000) 000-0000
| b) |
Governing
Law.
This Agreement shall be construed and enforced in accordance with
the
internal laws of the state of Nevada applicable to contracts entered
into
and wholly performed in Nevada by residents thereof. Any
action or proceeding brought by either party against the other under
or
relating to this Agreement or the Bally Products shall be brought
in a
state or federal court of competent jurisdiction located in Nevada,
and
each party hereto hereby submits to the personal jurisdiction of,
and
consents to venue in, such courts for purposes of any such action
or
proceeding.
|
| c) |
Entire
Agreement.
This Agreement, including the Exhibits hereto, constitutes the entire
agreement between the parties relating to the subject matter hereof
and
supersedes any prior or contemporaneous oral or written communication
relating to the subject matter hereof. No purported amendment to
this
Agreement shall be valid or enforceable unless it is in writing and
signed
by an authorized representative of each of the parties
hereto.
|
| d) |
No
Waiver.
To
the maximum extent permitted by applicable law, the failure of either
party to require performance of any provision hereof will not affect
in
any way the right to require such performance at any time thereafter,
nor
will the waiver by either party of a breach of any provision of this
Agreement be construed as a waiver of any future breach, nor will
any
waiver be deemed effective unless it is in a writing signed by the
party
charged therewith.
|
| e) |
Severability.
If
any term, covenant or condition of this Agreement is held to be invalid
or
unenforceable for any reason, the remainder of this Agreement will
continue in full force and effect as if this Agreement has been executed
without the invalidated provision. In addition, the parties agree
to
substitute for the invalidated provision a valid provision that most
closely approximates the intent and economic effect of the invalidated
provision.
|
| f) |
Assignment.
Neither
party shall transfer this Agreement or any of its rights, obligations
or
duties of performance hereunder by assignment, sublicense, delegation
or
any other means, without the prior written consent of the other
party.
|
| g) |
Counterparts.
This Agreement 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.
|
12
IN
WITNESS WHEREOF,
the
parties to this Agreement have executed this Agreement as of the date first
set
forth above.
|
Bally
: Bally Gaming Inc.
by: ___________________________
name:
title:
|
Spectre:
Spectre Gaming, Inc.
by: ___________________________
Name:
Title:
|
13
EXHIBIT
A
These
are
the patents licensed to Spectre for the limited use as described in this
Agreement for the production and distribution of Redemption Games. Spectre
shall
have no rights to any software or other tangible media incorporating the
technology and Intellectual Property encompassed under these
patents.
Licensed
Patents (existing claims under these patent numbers only)
Patent
Title: Prize Redemption System For Games
Patent
Number: 5,816,918
Patent
Title: Skill-Based Prize Games For Wide-Area Networks
Patent
Number: 6,007,426
Patent
Title: Prize Redemption System For Games
Patent
Number: 6,015,344
Patent
Title: Graphical User Interface For Providing Games and Prize Redemption
Capabilities
Patent
Number: 6,306,035
14
EXHIBIT
B
Licensed
Cashless Gaming Systems and Games
|
a.
|
Each
gaming system obtained hereunder with cashless capability (a “Licensed
Cashless Gaming System”) is provided under a limited license to one or
more of the following U.S. Patent Nos. 5,290,033; 5,265,874; 6,048,269;
5,429,361; 5,470,079; 6,729,957; 6,729,958 and 6,736,725. Any use
of a
Licensed Cashless Gaming System constitutes the acknowledgement of
and
agreement to the following “Limited
License”:
|
|
i.
|
Licensed
Cashless Gaming System License Rights. Licensed Cashless Gaming Systems
are licensed solely for use to facilitate the cashless aspects of
gaming
machines that are separately licensed under
these patents (“Licensed Gaming Machines”). The use of a Licensed Cashless
Gaming System to facilitate cashless transactions by an unlicensed
gaming
machine is an unlicensed use.
|
|
ii.
|
Other
License Limitations. Each Limited License is expressly limited to
the
original Licensed Cashless Gaming System (i.e., one serial number
per
license). A license may not be transferred from one gaming system
to
another. Any unauthorized transfer voids this license.
|
|
iii.
|
Transferred
Cashless Gaming Machines. Any Cashless Gaming Machine (other than
a Bally
Licensed Cashless Gaming Machine or an IGT Licensed Cashless Gaming
Machine) transferred to Spectre from an Affiliated Property must
have a
transfer authorization certificate issued by IGT before such Cashless
Gaming Machine can be considered a Licensed Cashless Gaming Machine
and
connected to a Licensed Cashless Gaming System; without such transfer
authorization certificate such Cashless Gaming Machines shall be
deemed an
unlicensed Cashless Gaming Machine. Any Cashless Gaming Machine (other
than a Bally Licensed Cashless Gaming Machine or an IGT Licensed
Cashless
Gaming Machine) acquired by Spectre from a non-Affiliated Property
shall
be deemed an unlicensed Cashless Gaming Machine, even if such Cashless
Gaming Machine was previously licensed because such license is not
transferable between non-Affiliated Properties. For purposes of this
Limited License, Affiliated Properties are properties with a common
owner
who has a majority interest in both
properties.
|
15
|
b.
|
Each
gaming machine
obtained hereunder with cashless capability (a “Licensed Cashless Gaming
Machine”) is provided under a limited license to one or more of the
following U.S. Patent Nos. 5,290,033; 5,265,874; 6,048,269; 5,429,361;
5,470,079; 6,729,957; 6,729,958; and 6,736,725. Any use of a Licensed
Cashless Gaming Machine constitutes the acknowledgement of and agreement
to the following “Limited License”:
|
|
i.
|
Licensed
Cashless Gaming Machine License Rights.
Licensed Cashless Gaming Machines are licensed for use solely in
connection
with a cashless gaming system that is separately licensed under these
patents (a “Licensed Cashless Gaming System”). The use of a Licensed
Cashless Gaming Machine with an unlicensed gaming system that has
cashless
capability is an unlicensed use.
|
|
ii.
|
Other
License Limitations.
Each Limited License is expressly limited to the original Licensed
Cashless Gaming Machine (i.e.,
one serial number per license). A license may not be transferred
from one
gaming machine to another. Any unauthorized transfer voids this
license.
|
16
