TERMINATION AND SETTLEMENT AGREEMENT
Exhibit
10.1
This
Termination and Settlement Agreement (the “Agreement”)
is
entered into as of June 28, 2006 (the date on which both parties have executed
and delivered this Agreement), by and between Spectre Gaming, Inc., a Minnesota
corporation (“Spectre”),
and
Bally Gaming, Inc., a Nevada corporation (“Bally”).
INTRODUCTION
A. Spectre
and Bally are parties to that certain Redemption Technology and Supply Agreement
dated May 24, 2005, as amended (the “Redemption
Technology and Supply Agreement”),
pursuant to which, inter
alia,
Spectre
licensed certain technology from Bally.
B. The
parties wish to terminate the Redemption Technology and Supply Agreement, settle
all claims the parties may have against each other, and provide for Spectre’s
limited license rights and corresponding obligations associated with such rights
as described in a Technology Agreement dated June 28, 2006 (the “Technology
Agreement”).
AGREEMENT
Now,
Therefore, in
consideration of the foregoing facts and premises, which are hereby made a
part
of this Agreement, and the mutual covenants set forth herein, and for other
good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree
as
follows:
1. Termination
of Redemption Technology and Supply Agreement.
On the
terms set forth herein, the parties hereby terminate the Redemption Technology
and Supply Agreement effective immediately, with the exception of survival
of
the parties’ rights and obligations set forth in Sections 14, 15 and 17 of the
Redemption Technology and Supply Agreement. In addition, Bally hereby releases
and discharges Spectre from all of its payment and other obligations owed to
Bally, including but not limited to liabilities under the Promissory Note dated
September 9, 2005, (the “Promissory Note”) delivered to Bally in connection with
the Redemption Technology and Supply Agreement. Accordingly, Bally shall
promptly return the Promissory Note to Spectre. Nevertheless, Bally shall retain
all funds paid by Spectre pursuant to the Redemption Technology and Supply
Agreement as of the date hereof, and Spectre agrees that it shall take no action
to seek recovery of such amounts already paid by Spectre. In the event the
Technology Agreement does not become effective between the parties, this
Agreement shall be of no further force and effect.
2. Mutual
Releases.
As of
the date hereof, the parties hereby provide the following releases, pursuant
to
which each party is releasing the other of and from any and all obligations
to
the other party, of every kind and nature, except those specifically set forth
in this Agreement:
(a) Spectre
hereby releases and forever discharges Bally and its directors, officers,
affiliates and representatives (collectively, the “Bally
Released Parties”)
of and
from any and all past, present and future claims, demands, liabilities,
judgments and causes of action, at law or in equity, known or unknown, asserted
or unasserted, liquidated or unliquidated, absolute or contingent, accrued
or
not accrued, which Spectre ever had, presently has, might have in the future,
claim to have, or claim to have had against the Bally Released Parties arising
out of, touching upon, relating to or in any manner connected with the
Redemption Technology and Supply Agreement or any other relationship, agreement
or arrangement with Bally, prior to and including the date of this Agreement;
provided,
however,
that
Bally’s obligation and liability for the observation and performance of this
Agreement is specifically excluded from the foregoing release.
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(b) Bally
hereby releases and forever discharges Spectre and its directors, officers,
affiliates and representatives (collectively, the “Spectre
Released Parties”)
of and
from any and all past, present and future claims, demands, liabilities,
judgments and causes of action, at law or in equity, known or unknown, asserted
or unasserted, liquidated or unliquidated, absolute or contingent, accrued
or
not accrued, which Bally ever had, presently has, might have in the future,
claim to have, or claim to have had against any of the Spectre Released Parties
arising out of, touching upon, relating to or in any manner connected with
the
Redemption Technology and Supply Agreement or any other relationship, agreement
or arrangement with Spectre, prior to and including the date of this Agreement;
provided,
however,
that
Spectre’s obligation and liability for the observation and performance of this
Agreement is specifically excluded from the foregoing release.
3. Return
of Enabling Technology and Confidential Information.
(a) Each
party, at its own expense, shall promptly return to the other all copies of
materials that constitute, or are composed of any, confidential information
of
the other party. In particular, Spectre shall promptly return to Bally all
copies of the Enabling Technology (as such term is defined in the Redemption
and
Technology Supply Agreement) in Spectre’s possession as of the date of this
Agreement. Spectre will not, however, be obligated hereunder to return any
Alpha
Boards or other hardware incorporating Enabling Technology, and Spectre’s use of
such Alpha Boards or other hardware shall be in accordance with the terms and
conditions of the Technology Agreement.
(b) For
a
period of three years following the date hereof, Spectre shall grant Bally,
or a
third party engaged by Bally, full access, at reasonable times and upon
reasonable notice and at Bally’s sole cost and expense, to any and all Spectre
facilities in order for Bally to conduct an audit to determine and confirm
that
Spectre is in compliance with this Agreement and does not possess and has not
used the Enabling Technology other than as permitted herein.
4. Execution
of the Technology Agreement.
As
consideration for the mutual releases granted herein, the parties shall execute
the Technology Agreement contemporaneously with this Agreement and that the
Technology Agreement becomes effective between the parties.
5. Limitation
on Use of Bally Technology.
Spectre
agrees that it will not use any Bally intellectual property in any Spectre
games, other than Licensed Technology as provided for in the Technology
Agreement, unless the rights to use the Licensed Technology are purchased
directly from Bally or an authorized Bally distributor. For all purposes of
this
Agreement, the parties agree that PDS Gaming Corporation is an “authorized
distributor” of Bally intellectual property, Alpha Boards and Bally gaming
machines. Spectre’s use of any games produced or otherwise manufactured by
Spectre, or any party on behalf of Spectre, utilizing the Licensed Technology
shall comply with the terms and conditions of the Technology
Agreement.
6. Confidentiality.
The
parties agree that the terms of this Agreement shall be strictly confidential
and its terms shall not be disclosed to any third party for any purpose
whatsoever except as required by applicable law, order or rule of court or
governmental agency having competent jurisdiction or as otherwise specifically
provided herein (including applicable SEC regulations). This confidentiality
provision shall not prohibit the parties from disclosing the terms of this
Agreement to tax, financial, legal or tax or accounting advisors.
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7. Representations
and Warranties.
Each
party represents and warrants to the other that: (a) it has full power and
authority to enter into this Agreement and perform all of its obligations under
this Agreement, has duly executed and delivered this Agreement, and this
Agreement is legally binding on it and is enforceable in accordance with its
terms; and (b) no consent or approval from any person, firm or entity, or
any other consent, approval, order or authorization of, or registration,
declaration or filing with any governmental authority or court, is required
in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby. Each party acknowledges, agrees,
represents and warrants to the other party that, after the date hereof and
excluding this Agreement, there are no agreements, understandings or
obligations, whether oral or written, with such other party. All of the
foregoing representations and warranties shall forever survive this Agreement
and the effectiveness of the transactions contemplated hereby.
8. General
Provisions.
(a) This
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective heirs, successors and assigns; provided,
however,
that
this Agreement may not be assigned by any party without the written consent
of
the other party hereto, which consent may be granted or withheld in the sole
and
absolute discretion of such other party.
(b) This
Agreement may be executed in counterparts, all of which will be considered
one
and the same agreement. In addition, signatures to this Agreement may be
delivered by facsimile or other means of electronic transmission, and signatures
so delivered will be valid and binding to the same extent as the delivery of
original signatures.
(c) This
Agreement shall not be modified or amended in any fashion except by an
instrument in writing signed by both parties hereto. No consent or waiver shall
be enforceable unless it is in writing and signed by the party against whom
such
consent or waiver is sought to be enforced. No consent under and no waiver
of
any provision of this Agreement on any one occasion shall constitute a consent
under or waiver of any other provision on such occasion or on any other
occasion, nor shall it constitute a consent under or waiver of the consented-to
or waived provision on any other occasion.
(d) This
Agreement shall be construed in accordance with the laws of the State of Nevada,
without regard to its conflicts-of-law principles. No person, firm or other
entity shall be a third-party beneficiary of any provisions of this
Agreement.
(e) All
parties agree to execute and deliver any documents or instruments (including
legal instruments of conveyance or otherwise) that may be reasonably requested
by another party in order to effectuate the transactions contemplated hereby,
or
to provide reasonable assurance to such requesting party that any of such
transactions has been completed.
(f) If
any
provision of this Agreement or the application of such provision to any party
or
circumstances, shall be held invalid, the remainder of the Agreement, or the
application of such provision to such party or circumstances other than those
to
which it is held invalid, shall not be affected thereby.
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(g) In
view
of the purposes of this Agreement, it is agreed that the remedy at law for
failure of any party to perform would be inadequate and that the injured party
or parties, at its or his option, shall have the right to compel the specific
performance of this Agreement in a court of competent jurisdiction, to the
extent permitted by applicable law and not expressly prohibited by this
Agreement.
In
Witness Whereof,
the
parties have executed this Termination and Settlement Agreement to be effective
as of the date first written above.
| SPECTRE GAMING, INC.: | ||
| |
|
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| By: | ||
|
D. Xxxxxx Xxxx |
||
| President | ||
|
BALLY
GAMING, INC.:
|
||
| |
|
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| By: | ||
|
Xxxx Xxxxxxx |
||
| Executive Vice President-Business Development | ||
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