FIRST ADDENDUM TO LICENSE AND APPLICATION SUPPORT AGREEMENT
Exhibit
10.4
***Text
Omitted and Filed Separately
with
the Securities and Exchange Commission.
Confidential
Treatment Requested
Under
17 C.F.R. Sections 200.80(b)(4)
and
240.24b-2.
FIRST
ADDENDUM TO LICENSE AND APPLICATION SUPPORT AGREEMENT
This
First Addendum to License and Application Support Agreement (the "First Addendum") is made and
entered into as of this September 4, 2009 to be effective as of June 1, 2009
(the "Effective Date"),
by and between Las Vegas Gaming, Inc., (LVGI), a Nevada corporation,
with a primary business address of 0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxx
Xxxxx, Xxxxxx 00000, and IGT (IGT), a Nevada corporation
with a primary business address of 0000 Xxxxxxxxx Xxxxx, Xxxx, XX 00000 (each a
"Party" and collectively
the
"Parties").
WITNESSETH
WHEREAS, IGT and LVGI entered
into that certain License and Application Support Agreement, dated September 30,
2008 (the "Original Agreement"
and, as amended herein, the "Agreement"); and
WHEREAS, IGT and LVGI desire
to amend the Original Agreement as
provided herein; and
WHEREAS, IGT has agreed to
extend the due date of its advance to LVGI pursuant to that certain IGT-LVGI
Binding Term Sheet dated on or about February 13, 2009, which extension is
evidenced by that certain Secured Promissory Note executed on the date hereof
(the "Secured Promissory
Note"), and is also consideration of IGT under this First
Addendum.
NOW, THEREFORE, in
consideration of IGT's additional funding and of the premises and the mutual
promises and covenants contained herein, the Parties agree as
follows:
1.
All capitalized
terms used in this First Addendum that are not defined herein will have the
meaning ascribed thereto in the Original Agreement.
2.
The Original Agreement is hereby amended by adding the following
Definitions:
"IGT EGM Peripherals" means
IGT's Secondary Displays, card reader systems and hardware, patented bezel
systems and hardware, brackets necessary for attaching said card reader system
and bezel systems to an EGM and speakers connected with either the card reader
system and lighted bezels, the EGM, or both.
"Secondary Display" means
display or screen used in connection with a gaming device which is not the
primary display generally provided as a part of the gaming device, and which is
not generally used to provide the primary information to the player about a
game
being
played on the gaming device. Rather, the Secondary Display is generally only
used to display information about internal casino promotions, customer service,
property event advertising, property venue advertising, bonusing, and other like
activities and programs provided by the casino operator which the casino chooses
to communicate to the player.
"IGT SPC Protocol" means IGT's
standardized peripheral communications protocol (“SPC”).
3.
The Original Agreement is hereby amended by adding the following new Articles
2.3 and 2.4:
2.3 IGT SPC Protocol License
Grant. Subject to LVGI's continuing performance of the terms
and conditions of this Agreement, including without limitation, strict
observance of the “Restriction on Placements of Secondary Displays,” IGT hereby
grants to LVGI a qualified, non-exclusive, nontransferable, non-assignable,
non-sub-licensable, world-wide license to implement and use the IGT SPC Protocol
in order to interface with the IGT Advantage® card reader
assembly. Any other installation or use of the IGT SPC Protocol that does not
interface with the IGT Advantage® card reader assembly is unlicensed under this
Agreement. Notwithstanding any provision in this Agreement to the contrary, the
protocol license grant of this section 2.3 shall not survive any change of
control or corporate restructuring of LVGI.
2.4 Restriction on Placements of
Secondary Displays. LVGI agrees that it shall not, at any time
beginning on the Effective Date, provide, supply, facilitate, sell, market,
support, engineer, lease, or place any Secondary Display in any location or
casino in which there is an "IGT System" - which is defined for purposes of this
Section 2.4 to include any Advantage® or Casinolink® system. LVGI further agrees
to never represent or intimate that an LVGI Secondary Display is compatible with
any IGT System. LVGI agrees that the foregoing restriction is appropriate and
necessary in the context of this Agreement and of IGT's agreement to extend the
due date of its advance to LVGI as evidenced by the Secured Promissory Note, and
LVGI agrees that it shall never challenge this restriction for any reason and on
any basis, including, without limitation, that it is unduly burdensome or
restrictive in duration, scope, or geography. IGT agrees to consider, on a
property by property basis and in its sole discretion, exception(s) to the
prohibitions of this Section 2.4. IGT will promptly respond to any request for
such exception(s) by LVGI, and, if in its sole discretion, IGT agrees to such
exception(s), such exception(s) shall only become effective when expressly
agreed to in a written amendment or addendum to this Agreement.
4.The
Original Agreement is hereby amended by adding the following new Article
5.7:
5.7 LVGI Provided Development
Support. LVGI will provide development support for any and all
IGT sb applications as requested by IGT ("IGT Requested
Applications”). LVGI's obligation of
required support for such IGT Requested Applications will be capped for any
given time at […***…] of
LVGI's then available
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Treatment Requested
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development
resources. LVGI will xxxx for the development time dedicated to IGT Requested
Applications at LVGI's published engineering development rate, less a […***…]
discount. All IGT Requested Applications developed by LVGI will
remain the property of LVGI.
5.
Article 6.1 of the Original Agreement is hereby amended to increase the
identified distribution fee from […***…] to […***…]. IGT and LVGI agree that, of
this increased […***…] distribution fee, a minimum of […***…]and up to […***…]
(i.e., no less than […***…] and up to a maximum of […***…] of the […***…]) shall
be paid as commissions or bonuses to IGT's sales employees.
6.The
Original Agreement is hereby amended by adding the following new Article
6.5:
6.5 Most Favored
Distributor. LVGI hereby grants to IGT status as a “most
favored distributor” ("Most
Favored Distributor"). IGT's status as Most
Favored Distributor entitles it to receive the most favorable terms available on
all of LVGI's software distributor rates for all of LVGI's server-based
applications.
7.
Article 7.2 of the Original Agreement is hereby amended to require LVGI to
exercise its best efforts to use IGT's sb Media Manager as the default
infrastructure for delivery of LVGI's PlayerVision® applications, where such is
applicable and technically feasible.
8.
The Original Agreement is hereby amended by adding the following new Article
7.4:
7.4. Source Code
Escrow. In order to secure continuous use of the LVGI
Developed Applications, LVGI will, at its own expense, deposit the source code
to any such LVGI Developed Applications, any new versions, updates, or patches
thereof, together with the relevant documentation of such software (altogether
the "Escrowed Source
Code"), with a professional escrow agency in Nevada within 20 business
days after the date of delivery of the LVGI Developed Application, new version,
update, or patch. IGT will have the right to obtain, and LVGI will oblige the
escrow agency to provide, the Escrowed Source Code to IGT in the event that LVGI
(a) files bankruptcy or similar insolvency proceeding, either voluntarily or
involuntarily, or has a receiver appointed which bankruptcy or receivership
intends or results in the liquidation of its business; (b) discontinues the
whole or a substantial portion of its business related to the LVGI Developed
Application for which the associated Escrowed Source Code has been deposited in
escrow; or (c) commits a material breach of this Agreement without cure. Once
released to IGT, IGT will have unlimited rights to use the Escrowed Source
Code.
9.
The Original Agreement is hereby amended by adding the following new Articles
8.3 and 8.4:
8.3 No Direct Competition Against
IGT. LVGI represents and warrants that it will
***Confidential
Treatment Requested
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not
compete against IGT in marketing, offering for use or sale, or installing any
IGT EGM Peripherals and the IGT SPC Protocol for use with such IGT EGM
Peripherals. Selling an IGT EGM Peripheral and using the IGT SPC Protocol with
such IGT EGM Peripheral in a third party's previously installed and existing
system shall not be considered competing against IGT for purposes of this
Section
8.4 Purchase of Patented IGT EGM
Peripherals. LVGI represents and warrants that it may
purchase, but shall
not be required to purchase, any IGT EGM Peripherals for use in installations
authorized by this Agreement. If LVGI decides to purchase such IGT EGM
Peripherals, it shall do so from IGT or its affiliates.
10.
Unless otherwise expressly granted herein, nothing in this Agreement grants to
LVGI any rights or license to any IGT Intellectual Property, including the IGT
bezels.
11.
Except as amended herein, the Original Agreement remains in full force and
effect. and IGT and LVGI ratify the Original Agreement as amended
herein.
12.
Except as otherwise provided in the Original Agreement, the laws of the State of
Nevada will govern the validity, construction, performance, and effect of this
First Addendum.
13.
This First Addendum may be executed in any number of counterparts, each of which
shall be deemed an original and all of which together will constitute one and
the same instrument.
IN WITNESS WHEREOF, the
Parties have executed this First Addendum on the day and year first written
above.
LVGI
By:
/s/ Las Vegas Gaming,
Inc.
Name:
Xxxxx
Xxxxxxx
Title
Chief Financial
Officer
IGT
By:
/s/ Xxxxx
Xxxxxxxx
Name:
Xxxxx
Xxxxxxxx
Title:
VP of Corp
Fin
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