IGT/WMS PATENT CROSS-LICENSE AGREEMENT
Exhibit
10.1
IGT/WMS
PATENT CROSS-LICENSE AGREEMENT
This
Agreement, effective February 14, 2008, (“Effective Date”), is entered into by
WMS Gaming Inc., a corporation of Delaware, having its principal place of
business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ and International Game Technology, a corporation
of Nevada, having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇,
▇▇ ▇▇▇▇▇ Each of IGT and WMS is sometimes
referred to herein as a “Party” and together they are sometimes referred to
herein as the “Parties”.
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1.
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DEFINITIONS
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1.1.
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“Affiliate”
means, as to a particular Party, any corporation or other business entity
that directly or indirectly Controls, is Controlled by, or is under common
Control with a Party. “Control” means direct or indirect
ownership of or other beneficial interest in fifty percent (50%) or more
of the voting stock, other ownership interest, or income of a corporation
or other business entity.
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1.2.
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“Agreement
Field of Use” (“Agreement FOU”) means
[*].
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1.3.
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“Alcorn
Patents” means the following US Patents and their foreign counterparts
insofar as they claim authentication technology: [*].
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1.4.
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“Application”
means functionality (including but not limited to hardware, software,
firmware) related to Gambling.
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1.5.
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“Business
Day” means any weekday, Monday through Friday, when banking institutions
are open for business.
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1.6.
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“Competitor”
means an entity selling or buying goods or services related to Gambling
and licensed in a major Gambling
jurisdiction.
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1.7.
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“Computing
Field of Use” (“Computing FOU”) means the following Applications:
[*].
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*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
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1.8.
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“Dollars”
or “$” means United States dollars.
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1.9.
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[*].
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1.10.
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“[*]
Applications” means any one or more of the following Applications:
[*]; (m) personal computers, televisions, personal digital
assistants (PDA’s), cellular devices, other mobile telephones, and like
devices [*]; (n) supporting systems to the extent that they support
devices identified in clause (m); and (o) any and all subject
matter claimed in the following U.S. Patents
[*].
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1.11.
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“Gambling”
means an activity in a jurisdiction where it has not been prohibited
whereby something of value is placed at risk upon an uncertain outcome
predominately determined by chance.
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1.12.
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“Gambling
Machine” means an electronic or electro-mechanical device including the
peripheral components housed in its enclosure that is primarily designed
and used for Gambling, and that has all of the following characteristics:
(a) is used by a player to input the wager amount and otherwise initiate
and direct game play, (b) displays the amount wagered, the outcome of the
wager, and the credit amount available to the player, (c) provides the
outcome of the Gambling event to the player within five minutes of
initiating the wager, and (d) is provided to the player by the
operator. The definition of a Gambling Machine is limited to
the device in close proximity to the player and does not include
supporting software and servers remote from that device. For
avoidance of doubt, and by way of example, personal computers,
televisions, personal digital assistants (PDA’s), and cellular and other
mobile telephones that are not adapted to be primarily used for Gambling
are not Gambling Machines.
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1.13.
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“IGT”
means International Game Technology a corporation of Nevada, having its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇ and its
Affiliates.
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1.14.
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“Licensed
IGT Patents” means any claims of any and all Patents owned or controlled
by IGT to the extent such claims are within the Agreement FOU.
[*]
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*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
2
[*]
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1.15.
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“Licensed
IGT Products” shall mean any IGT product or method practiced by such IGT
product that, in the absence of this Agreement, would infringe one or more
unexpired claims of any Licensed WMS
Patent.
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1.16.
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“Licensed
WMS Patents” means any claims of any and all Patents owned or controlled
by WMS to the extent such claims are within the Agreement
FOU. [*]
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1.17.
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“Licensed
WMS Products” shall mean any WMS product or method practiced by such WMS
product that, in the absence of this Agreement, would infringe one or more
unexpired claims of any Licensed IGT
Patent.
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1.18.
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“Licensed
Product” means the WMS Licensed Products and/or the IGT Licensed Products,
as applicable.
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1.19.
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“Major
Supplier” means a manufacturer or supplier with net revenues attributable
to electronic Gambling systems and/or devices during the most recently
completed fiscal or calendar year in excess of
[*].
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1.20.
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“Patent”
means an existing or future issued patent or patent
application.
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1.21.
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“Permitted
Applications” means only Applications which provide the following
infrastructure functionality as used in an SBGS:
[*]
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*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
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[*].
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1.22.
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“[*]”
means [*] which is an independent [*] for [*] and which provides necessary
infrastructure, directly or indirectly, for all other [*] that act as [*]
for all other [*] or equivalent [*]. For avoidance of doubt,
the following shall not be considered
[*].
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1.23.
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“Place”,
“Placed”, “Placement” (or any form of the word “Place”) means the
provision directly or indirectly of a product to a customer by sale,
lease, participation or recurring revenue, or otherwise, where such
products are bona- fide branded under a WMS or IGT brand or the brands of
their respective Affiliates.
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1.24.
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“Royalty-Bearing
Product” means a Licensed WMS Product [*]. Notwithstanding the foregoing
and except as provided
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*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
4
for in
Section 3.3, any Royalty-Bearing Product for which a royalty has not been paid
shall not be considered a Licensed WMS Product, and the use of such product for
which a royalty has not been paid, and the methods practiced by such products,
shall be considered an unlicensed use.
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1.25.
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“Server
Based Gambling Field of Use” (“SBG FOU”) means Permitted
Applications.
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1.26.
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“Server
Based Gambling System” (“SBGS”) means
[*].
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1.27.
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“[*]
Device” means [*].
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1.28.
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“WMS”
means WMS Gaming Inc., a corporation of Delaware, having its principal
place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
and its Affiliates.
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2.
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LICENSE
GRANTS AND RELEASE
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2.1.
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GRANT OF LICENSE TO
WMS. Subject to the terms and conditions of this
Agreement, IGT hereby grants to WMS a non-exclusive, worldwide,
royalty-bearing license, within the Agreement FOU, under the Licensed IGT
Patents to make, have made, use, import, Place, offer to Place, and have
Placed Licensed WMS Products. To be clear, the license granted
under this Section does not extend to any proprietary IGT features outside
of the Agreement FOU. Notwithstanding anything in this
Agreement to the contrary, this Agreement does not provide either Party
with a license to the [*]. For avoidance of doubt, neither this
Agreement nor negotiations that led to this Agreement provide an implied
license to connected products, connected systems, services, and methods,
other than the license expressly granted
above.
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2.2.
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GRANT OF LICENSE TO
IGT. Subject to the terms and conditions of this
Agreement, WMS hereby grants to IGT a non-exclusive, worldwide license,
within the Agreement FOU, under the Licensed WMS Patents to make, have
made, use, import, Place, offer to Place, and have
Placed Licensed IGT Products. To be clear, the license granted
under this Section does not extend to any proprietary WMS features outside
of the Agreement FOU. Notwithstanding anything in this Agreement to the
contrary, this Agreement does not provide either Party with a license to
the [*]
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*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
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[*].
For avoidance of doubt, neither this Agreement nor negotiations that led to this
Agreement provide an implied license to connected products, connected systems,
services, and methods, other than the license expressly granted
above.
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2.3.
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Restriction on
[*]. Notwithstanding the foregoing, the license rights
granted pursuant to Section 2.1 to offer to Place, Place, and have Placed
products that take the form of [*].
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2.4.
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Other
Restriction. [*].
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2.5.
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Customer
Acknowledgement. Parties agree that prior to deploying
licensed systems that connect to third party [*] Devices, they shall
notify the customer that a license may be required for applicable [*]
Devices and that any use of such system with unlicensed [*] Devices is an
unlicensed use.
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2.6.
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Patent Families
Cross-License. Separate from the licenses set forth
above in Sections 2.1 and 2.2 of this Agreement, the Parties hereby agree
to the following cross-license:
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2.6.1.
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IGT
hereby grants to WMS a perpetual worldwide, royalty-free, non-exclusive
license to make, have made, use, import, Place, offer to Place, and have
Placed products and methods under U.S. Patent No. [*] and its related
Patent Family (the “Licensed IGT [*] Patent
Family”).
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2.6.2.
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WMS
hereby grants to IGT a perpetual worldwide, royalty-free, non-exclusive
license to make, have made, use, import, Place, offer to Place, and have
Placed products and methods under U.S. Patent Nos. [*] entitled “[*]” and
its related Patent Family (the “Licensed WMS [*] Patent
Family”). In the event that U.S. Patent Publication No. [*]
entitled “[*]” is allowed, then WMS will notify IGT and IGT shall have 30
days from such notice to elect to swap the license granted under this
paragraph for a license to U.S. Patent Publication No. [*]
entitled
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*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
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“[*]” and
its related Patent Family (the “Licensed WMS [*] Patent Family”) and if such
election is made then the license to the Licensed WMS [*] Patent Family shall be
void prospectively.
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2.6.3.
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The
respective [*] Patent Families and Licensed WMS [*] Patent Family include
all Patents that are counterparts of, or are directly or indirectly
related by a claim of priority to, at least one of the identified
applicable Patents, including, without limitation, all parents,
provisionals, continuations, continuations-in-part, divisionals, reissues,
reexaminations, and foreign counterparts of such Patents, whether related
to such identified Patents directly or through one or more intervening
U.S. or foreign Patents.
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2.7.
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Mutual
Release. Each Party releases, for itself, its
Affiliates, predecessors, successors and assigns, and their respective
officers, owners, directors, shareholders, attorneys, insurers, agents and
employees (collectively the “Releasing Parties”), the other Party and any
and all of its Affiliates, predecessors, successors and assigns,
suppliers, distributors, resellers, customers, end-users and their
respective officers, directors, agents, servants, owners, employees,
attorneys, licensors and insurers (collectively the “Released Parties”),
from any and all rights, claims, demands, causes of action, obligations,
damages, penalties, fees, costs (including reasonable attorneys’ fees and
costs), expenses, and liabilities of any nature whatsoever which the
Releasing Parties have, had or may have had against the Released Parties,
for infringement of any Patents licensed hereunder by any and all products
Placed by WMS and IGT (excluding all Affiliates other than Affiliates as
of the Effective Date) prior to the Effective Date of this
Agreement.
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2.8.
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Rights of
Affiliates. Except as set forth in Section 2.7, for
purposes of all rights granted herein, the respective rights shall accrue
to all present and future Affiliates of the Parties, until such time as
the Affiliate ceases to be an
Affiliate.
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2.9.
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Sublicensing. Except
as provided for in Section 2.8, neither Party shall have the right to
sublicense the license rights granted to it herein except to the extent
necessary to have Licensed Products made for the Party by third party
contractors, to have Licensed Products Placed through third parties, to
permit third parties to perform support services in connection with
Licensed Products, and to permit customers to use and dispose of Licensed
Products.
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3.
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ROYALTIES
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3.1.
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[*] As
of the Effective Date, [*].
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3.2.
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Royalties. For
each Royalty Bearing Product initially Placed by WMS,
WMS
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*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
7
shall pay
a [*] royalty to IGT of [*]. If WMS does not pay the royalty [*] as
specified in this Agreement, then [*] shall not be subject to any grant of
license by IGT to WMS as set forth in Section 2.1 and [*] shall be treated as a
Failure to Pay Royalties according to Section 3.4. [*]
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3.3.
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[*]
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3.4.
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Effect of Failure to
Pay Royalty. Except as set forth in Section 3.3, and
notwithstanding anything to the contrary elsewhere herein, if WMS does not
pay the royalty for a Royalty Bearing Product, such Royalty Bearing
Product shall be deemed to be unlicensed under the license grant in
Section 2.1 and therefore shall not be entitled to any of the rights,
benefits, or protections provided to Licensed WMS Products under this
Agreement including but not limited to WMS’ right to use this Agreement to
establish a reasonable royalty. [*]However, to be clear, IGT
shall be permitted to bring any action for infringement and seek any
available remedy [*]
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*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
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[*] against
WMS for WMS' unlicensed making, having made, using, selling, offering to sell,
importing, leasing, Placing, offering to Place and having Placed any Gaming
Machine or other device.
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3.5.
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[*]
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3.6.
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[*]
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4.
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ROYALTY
REPORTS AND RECORD KEEPING
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4.1.
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Reports. Within
forty-five (45) days following the end of each calendar quarter when
royalties are due, WMS shall provide to IGT a written report detailing all
Placements of Royalty-Bearing Products for the prior calendar quarter for
which a royalty is being paid, and WMS shall pay to IGT all
royalty amounts due to IGT for such quarter. If WMS pays no
royalties during a calendar quarter, WMS shall furnish a written report to
IGT so stating.
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4.2.
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Trials. The
Parties acknowledge that it is customary in the gaming industry for [*]
Devices to be Placed on a trial basis, meaning that the customer has, for
a limited time period, the right to return the machines and unwind the
transaction (“Trial Period”). For any [*] Devices Placed on
such trial basis and for which WMS has not received any remuneration for
such Placement, the royalty thereon shall be deemed to accrue upon
Placement of such [*] Device.
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4.3.
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Record
Keeping. WMS agrees to keep true and accurate records
for the purpose of making the reports described in Section 4.1 of the
Agreement. WMS shall keep at WMS’ principal office for the term
of five (5) years from the date created, full and accurate books of
account and copies of all documents and other materials relating to this
Agreement, including, but not limited to all Placement agreements and all
sales and revenue records of [*]
Devices. Notwithstanding the foregoing, any documents and other
materials that are the subject of an audit pursuant to Section 4.4 shall
be retained until such audit is
completed.
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4.4.
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Audit. IGT
shall have the right, not exercisable more than once per year, to nominate
an independent certified public accountant (“auditor”) acceptable to
and
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*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
9
approved
by WMS, which approval shall not be unreasonably withheld, who shall have access
to the records of WMS during regular business hours for the purpose of verifying
compliance with the reporting obligations set forth in Section 4.1 as well as
such other books and records as are reasonably required to verify WMS’
compliance with all of its financial obligations under this
Agreement. IGT shall provide WMS with no less than sixty (60) days
written notice of its intent to audit WMS’ books and records as provided under
this Agreement, and WMS shall be ready for such audit. Such notice
shall indicate the period to be audited, the identity of the auditor and the
proposed scope for the audit. The auditor shall only disclose to IGT
information necessary to determine WMS’ compliance with its reporting and
financial obligations under this Agreement. If any audit or examination of WMS’
books and records reveals that WMS has failed to perform its financial
obligations, any underpaid amount will bear interest until paid at a rate per
annum equal to [*] percent ([*]). If the underpaid amount exceeds the total
amount reported under the reporting obligations set forth in Section 4.1 by [*]
or more in any given year under the Agreement, WMS will reimburse IGT for all
reasonable audit costs, audit fees, and audit expenses incurred in conducting
such audit or examination with respect to such year audited, in addition to
paying IGT such past due royalties and any accrued interest. IGT
shall reimburse WMS for any overpaid royalties revealed by the
audit.
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4.5.
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Period for
Examination. WMS’ books and records pertaining to any
particular royalty report may be examined as aforesaid only within [*]
years after the date rendered and WMS shall have no obligation to permit
IGT to so examine such books and records relating to any particular
royalty report more than once for any one report, unless in connection
with a civil action filed by IGT against
WMS.
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5.
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[*]
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*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
10
[*]
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6.
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INTEROPERABILITY
AND SUPPORT SERVICES
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6.1.
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The
Parties agree to work in good faith toward an Open-Architecture with
respect to their [*]. “Open-Architecture” shall mean that the Party
providing the [*] will provide the other Party, upon the other Party’s
request, with access to application interfaces (API), specifications, and
protocols, as may be necessary for the requesting Party to interface with
the Party’s [*]. Where commercially reasonable, these systems will
use industry standard protocols, and interfaces. Except as provided for in
this Agreement or any other agreement the Parties may execute, this
requirement shall expressly exclude access to intellectual property.
Technical expertise shall be limited to a reasonable explanation of
material provided.
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6.2.
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In
some cases, the Party providing the [*] may be required to make
modifications to its [*]. To the extent that such accommodations can
be made without placing a material undue burden on the resources of the
Party, the Parties agree to make such reasonable
accommodations.
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7.
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TERM
AND TERMINATION
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7.1.
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Term and
Renewal. Unless earlier terminated in accordance with
the provisions hereof, this Agreement shall commence on the Effective Date
and continue for a term of ten (10) years after the Effective
Date. Unless earlier terminated in accordance with the
provisions hereof, the Parties agree to negotiate in good faith for an
extension(s) of this Agreement.
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7.2.
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Termination for
Material Breach. Either Party may terminate this
Agreement upon sixty (60) days written notice if the other Party (i) does
not cure any material breach of this Agreement within ninety (90) days of
such breaching Party’s receipt of written notice from the other Party
describing such breach and requesting cure. For a material
breach that cannot be, or after
reasonable
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*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
11
diligence
has not been, cured within ninety (90) days, additional periods of sixty (60)
days may be granted in which to cure such material breach, so long as the
breaching Party is diligently pursuing resolution or cure of the material
breach.
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7.3.
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Bankruptcy. The
license granted herein shall be deemed a license of “intellectual
property” for purposes of the United States Code, Title 11, Section
365(n). In the event of the bankruptcy of a party and a
subsequent rejection or disclaimer of this Agreement by a bankruptcy
trustee or by a party as a debtor-in-possession, or in the event of a
similar action under applicable law, the other party may elect to retain
its license right, subject to and in accordance with the provisions of the
United States Code, Title 11, section 365(n) or other applicable
law.
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7.4.
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Effect of
Termination. In the event that a Party terminates this Agreement in
accordance with any terms permitting such termination, the other Party may
continue to manufacture and Place Licensed Products in the same manner
licensed under this Agreement for one (1) year after the Effective Date of
such termination. Such termination shall have no effect
whatsoever upon: (a) any Licensed Product Placed prior to such termination
or Placed during the above-mentioned one (1) year period, even if title to
the Licensed Product has not passed to a third party; (b) the mutual
release granted and set forth in Section 2.7 of this Agreement; and (c)
the patent licenses set forth in Sections 2.1, 2.2 and 2.6 of this
Agreement with respect to any Licensed Products for which any applicable
royalty was paid. WMS shall continue to pay the royalties as
provided in Section 3.2 for any such post-termination Placements for which
WMS elects to claim a license under Section
2.1.
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8.
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REPRESENTATIONS
AND WARRANTIES
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8.1.
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Mutual Representations
and Warranties. Each Party represents, warrants and
covenants to the other Party throughout the term of this Agreement as
follows:
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8.1.1.
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This
Agreement constitutes the legal, valid and binding obligation of such
Party, enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy laws and other similar laws
affecting creditors’ rights generally and by general principles of
equity.
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8.1.2.
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The
execution, delivery and performance of this Agreement by such Party does
not and will not (a) conflict with, or constitute a breach or default
under, its charter documents or any agreement, contract, commitment or
instrument to which it is a party, or (b) require the consent, approval or
authorization of, or notice, declaration, filing or registration with, any
third party or any governmental or regulatory authority other than the
licenses and certifications required by applicable Gaming
Authorities.
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8.1.3.
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Such
Party has the full and unencumbered right, power and authority to enter
into this Agreement, to grant, assign and transfer the rights
and
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12
licenses
granted under this Agreement, and to otherwise carry out its obligations
hereunder.
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8.1.4.
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There
is no action or proceeding pending or, in so far as such Party knows or
should know, threatened against such Party or any of its Affiliates before
any court, administrative agency or other tribunal that could impact upon
such Party’s right, power and authority to enter into this Agreement, to
grant the rights and licenses granted hereunder, or to otherwise carry out
its obligations hereunder.
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8.1.5.
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It
will perform its obligations hereunder in compliance with applicable laws,
rules and regulations.
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8.2.
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[*]
Representation. [*]
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8.3.
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Disclaimer of
Additional Warranties. EXCEPT FOR THE EXPRESS WARRANTIES
CONTAINED IN THIS AGREEMENT AND ITS APPENDICES, NEITHER PARTY MAKES ANY
WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. ALL SUCH OTHER WARRANTIES ARE HEREBY
DISCLAIMED.
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9.
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REGULATORY
COMPLIANCE
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9.1.
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The
Parties will cooperate in good faith and use their best efforts to comply
with the requirements of all applicable gaming laws and gaming authorities
having jurisdiction over the Parties and the exploitation of their
Products (each a “Gaming Authority”). Upon request by either Party
(“Requesting Party”), the other Party shall promptly provide all
information reasonably requested with respect to its financial condition,
litigation, indictments, criminal proceedings, and the like in which the
other Party or its officers, directors, and controlling shareholders are
or may have been involved, if any, in order for the Vice President of
Compliance or 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 the Requesting Party and/or its Affiliates
with any Gaming Authority.
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9.2.
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In
the event that the other Party shall fail to so provide all such requested
information, or if such information with respect to the other Party as
provided by the other Party or as obtained as a result of the Vice
President of Compliance or Compliance Committee’s own investigation,
discloses facts concerning the other Party which could, in the sole
opinion of the Vice President of Compliance or Compliance Committee,
jeopardize the obtaining of such gaming licenses
or
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*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
13
permits
or the maintaining of such gaming licenses or permits with any Gaming Authority,
or if at any time a Gaming Authority disapproves of the relationship with the
other Party under this Agreement or prohibits or restricts the taking of
any action, including the payment of monies, which prohibition or restriction
frustrates the purpose of this Agreement, the Parties will in good faith attempt
to modify or amend this Agreement, or take other appropriate action, to obtain
the approval of such Gaming Authority to permit payment by WMS of royalties
payable hereunder. If WMS is prevented from paying IGT any royalties by a
Gaming Authority, WMS shall retain its license for Royalty-Bearing Products that
WMS elects to claim a license under Section 2.1 so long as WMS deposits such
royalties into an escrow account established with a mutually agreeable escrow
agent for the benefit of IGT until payment is authorized by such Gaming
Authority or otherwise distributed pursuant to an order of a court of competent
jurisdiction. The funds deposited into the escrow account shall be
invested as directed by IGT, and be at IGT’s risk.
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10.
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MISCELLANEOUS
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10.1.
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Dispute
Resolution.
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10.1.1.
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The
Parties agree that this Section 10.1 shall be used to resolve any disputes
between the Parties under this Agreement arising on or after the Effective
Date.
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10.1.2.
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Cooling Off
Period.
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(a) A
Party shall not institute, file or aid in filing (including being named as a
plaintiff or being voluntarily joined in an action brought by a licensee of such
Party or by any other person) of any claim, demand or cause of action against
the other Party without first bringing its contention to the attention of the
other Party by means of a Notification Letter and engaging in a 90-day
negotiation period with such other Party. In the event such claim,
demand, or cause of action pertains to patent infringement, such Notification
Letter shall include (i) an identification of the claims of the patent or other
intellectual property rights allegedly infringed and (ii) an identification of
the accused device or method.
(b)
During said 90-day negotiation period, the Parties shall negotiate in good faith
toward a resolution of the dispute. All negotiations, statements, and
materials of the Parties during such 90-day negotiation period shall be treated
as Confidential Information under Section 10.6. In addition, all such
statements and negotiations shall be deemed offers to compromise a claim under
Federal Rules of Evidence Section 408 and shall be inadmissible in arbitration,
litigation, or any other future proceedings between the Parties.
14
(c) If
the Parties are unable to amicably resolve the dispute within the 90-day
negotiation period, then the Party that sent the Notification Letter (“Objecting
Party”) may initiate an Arbitration regarding the dispute per Section 10.1.3
below, but in no event shall the Objecting Party pursue an Arbitration prior to
the expiration of the 90-day negotiation period. The 90-day negotiation period
shall not be detrimental to the Objecting Party in terms of laches, estoppel,
waiver, damage limitations, statute of limitations, or any other defenses based
on the passage of time. Rather, the Arbitration shall be treated as
if it were filed when the Notification Letter was sent to the other
Party. The other Party (i.e., the Party to whom the Notification
Letter was sent), however, may not initiate an Arbitration until a minimum of 30
days after the end of the 90-day negotiation period.
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10.1.3.
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Arbitration.
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(a) AAA. The
commercial rules of the American Arbitration Association (“AAA”) shall apply to
the arbitration, except to the extent the provisions of this Agreement provide
otherwise.
(b) Panel. The
arbitration shall be heard and determined by a panel of three arbitrators, who
are not required to be members of the AAA but all of which must be approved by
the Parties. In the event the Parties cannot agree on the three
arbitrators, then each Party shall designate one arbitrator and those two
arbitrators shall designate a third arbitrator. In the event such
claim, demand, or cause of action pertains to patent infringement, such
arbitrators shall be patent attorneys registered to practice before the U.S.
Patent and Trademark Office and experienced in evaluating patent infringement
and validity.
(c) Schedule. The
Parties and the arbitrators shall use their best efforts to complete any such
arbitration within one year after the appointment of the arbitrators, unless a
Party can demonstrate to the arbitrators that the complexity of the issues or
other reasons warrant the extension of the timetable. In such case,
the arbitrators may extend such timetable as reasonably required.
(d) Discovery. The
Parties shall be entitled to discovery of all document and information
reasonably necessary for a full understanding of the allegations and any
defenses raised by the other Party. The Parties may use all methods
of discovery available under the United States Federal Rules of Civil Procedure,
including depositions, requests for admission and requests for production of
documents. The time periods applicable to such discovery methods
shall be set by the panel so as to permit compliance with the above
schedule.
(e) Binding
Decisions. The arbitrators shall issue a decision with
written
15
findings
and the bases therefore, and such decision shall be final, binding and
enforceable in any court of competent jurisdiction. Nothing in this
Agreement shall prohibit either Party from seeking injunctive relief or specific
performance in a court of law subsequent to the decision of the
arbitrators.
(f) Fees and
Expenses. The Parties shall share equally fees and expenses of
the AAA and the arbitrators, including any administrative fees. Each
Party shall bear the cost of its own attorneys’ fees and expert
fees.
(g) Arbitration
Venue. The proceeding before the panel shall be held in Las
Vegas, Nevada, or as otherwise agreed upon by the Parties.
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10.2.
|
Independent
Contractors. This Agreement does not constitute and
shall not be construed as constituting a partnership or joint venture
between the Parties, and each Party 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 parties.
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10.3.
|
Force
Majeure. Neither Party shall lose any rights hereunder,
be held responsible for any delays, or be liable to the other Party for
damages or losses on account of failure of performance by the defaulting
Party if the failure is occasioned by war, terrorism, civil unrest, fire,
Act of God, earthquake, flood, embargo, governmental acts or orders or
restrictions, failure of suppliers, or any other reason where failure to
perform is beyond the reasonable control and not caused by the negligence,
intentional conduct or misconduct of the nonperforming Party and the
nonperforming Party has exerted all reasonable efforts to avoid or remedy
any force majeure.
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|
10.4.
|
Notice. 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 when personally delivered, or mailed by prepaid
certified or express mail service of the United States postal service, by
Federal Express or similar overnight delivery service, with acknowledgment
of receipt, fees prepaid, or if sent by facsimile or e-mail, with an
original sent within twenty four (24) hours by either first class United
States mail, postage prepaid, or by an overnight delivery service with
next day delivery to the Parties as identified in this Agreement, with
copies directed to:
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|
TO
WMS:
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TO
IGT:
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|
▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
|
|
WMS
Gaming Inc.
|
IGT
|
|
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
|
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇
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16
|
With
copies to:
|
With
copies to:
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|
WMS
Gaming Inc.
|
IGT
|
|
Attn: General
Counsel
|
Attn: General
Counsel
|
|
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇
|
|
WMS
Gaming Inc.
|
|
|
Attn: Vice
President, Patents
|
|
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
|
|
|
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
|
10.5.
|
Transfer. This
Agreement shall be mandatorily binding upon and shall inure to the benefit
of the Parties hereto and their respective heirs, legal representatives,
and successors and assigns. The Parties shall have the right to
assign their rights and obligations under this Agreement to any Affiliate
or any Affiliate or successor to all or substantially all of its gaming
business or assets without the prior written consent of the other Party,
provided such successor assumes in writing the obligations of the Party
under this Agreement.
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|
10.6.
|
Confidential
Information.
|
|
10.6.1.
|
Confidential
Information. “Confidential Information” means any
information disclosed by one party (“Disclosing Party”) to the other party
(“Receiving Party”) in connection with this Agreement that is reasonably
understood to be confidential based on the nature of the
information. In any event, the terms and conditions of this
Agreement shall be deemed the Confidential Information of the other Party
with respect to the non-disclosure obligations of this Section
10.6.
|
|
10.6.2.
|
Exceptions. Confidential
Information does not include any information that (a) is, or becomes,
publicly known through no wrongful act on the Receiving Party’s part; (b)
is already known to the Receiving Party, or becomes known to the Receiving
Party without restriction on disclosure; (c) is independently developed by
the Receiving Party without use of or access to the Confidential
Information of the Disclosing Party, which independent development the
Receiving Party will have the burden of proving; or (d) is furnished to
the Receiving Party by a third party without an obligation of
confidentiality.
|
|
10.6.3.
|
Non-Use. The
Receiving Party shall maintain the Confidential Information of the
Disclosing Party in confidence and shall not, without the prior written
consent of the other party, use the Disclosing Party’s Confidential
Information for its own benefit or the benefit of any third party except
for purposes expressly provided for in this Agreement or as
|
17
necessary
to enforce such Party’s rights under this Agreement.
|
10.6.4.
|
Non-Disclosure. The
Receiving Party shall not disclose, confirm or otherwise discuss any
Confidential Information of the Disclosing Party to or with any third
party, except as may be necessary to the Receiving Party’s Affiliates,
legal counsel, accountants, tax advisors, insurance carriers and bankers
under written confidentiality agreements prohibiting further use or
disclosure of such Confidential Information. The Receiving
Party further agrees to use the same degree of care, but no less than a
reasonable degree of care, with respect to the confidentiality of the
Disclosing Party’s Confidential Information as it would with its own
confidential information.
|
|
10.6.5.
|
Legally Required
Disclosures. The Receiving Party may disclose
Confidential Information as required by a court or under operation of law
or order provided that the Receiving Party notifies the Disclosing Party
of such requirement prior to disclosure, that the Receiving Party
discloses only that information required, and that the Receiving Party
allows the Disclosing Party the opportunity to object to such court or
other legal body requiring such
disclosure.
|
|
10.6.6.
|
Agreement Terms and
Conditions. Notwithstanding Section 10.6.4, the Parties
agree that each Party may file summaries or copies of this Agreement as it
in good ▇▇▇▇▇ ▇▇▇▇▇ appropriate with regulatory agencies having
jurisdiction over such Party, including, without limitation, the U.S.
Securities and Exchange Commission, provided that such filing Party takes
reasonable steps to ensure confidential treatment of such filings to the
extent legally permitted.
|
|
10.6.7.
|
Existing
NDA. The Mutual Nondisclosure Agreement entered into by
the Parties on [*] shall remain in
effect.
|
|
10.7.
|
Governing
Law. This Agreement shall be deemed to have been entered
into in the State of Nevada, and shall be interpreted and construed in
accordance with the laws of the State of Nevada without regard to conflict
of laws principles, except that questions affecting the construction and
effect of any patent shall be determined by the law of the country in
which the patent shall have been
granted.
|
|
10.8.
|
Severability. If
any provision of this Agreement is or becomes or is deemed invalid,
illegal or unenforceable under the laws or regulations of any applicable
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.
|
*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
18
|
10.9.
|
Waiver of
Default. The failure of either Party to insist upon the
strict performance of any of the provisions of this Agreement, or the
failure of either Party to exercise any right, option or remedy hereby
reserved, shall not be construed as a waiver for the future of any such
provision, right, option or remedy, or as a waiver of any subsequent
breach thereof.
|
|
10.10.
|
Survival. The
expiration or termination of this Agreement shall not affect those
provisions that by the nature thereof are intended to survive any such
expiration or termination.
|
|
10.11.
|
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, and when so executed and delivered, shall
be deemed an original and such counterpart(s) together shall constitute
only one original.
|
|
10.12.
|
Signature. This
Agreement shall not be deemed effective, final, or binding upon the
Parties until signed by each of them. After signed by both
Parties, this Agreement shall be binding upon and shall inure to the
benefit of both Parties and their respective successors and
assigns.
|
|
10.13.
|
Entire Agreement and
Amendment. This Agreement constitutes the full
understanding between the Parties, and no statements, or agreements, oral
or written, made prior to or at the signing hereof, shall vary or modify
the written terms hereof. No amendment, modification, or
release from any provision hereof shall be effective unless in writing and
signed by duly authorized representatives of both Parties specifically
stating it to be an amendment, modification, or release to this
Agreement. Except for each Party’s Affiliates, there are no
third party beneficiaries of this
Agreement.
|
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
duly authorized officers or representatives.
|
WMS:
|
IGT:
|
|
By:_______________________
|
By:______________________
|
|
Name:_____________________
|
Name:____________________
|
|
Title:______________________
|
Title:_____________________
|
|
Date:______________________
|
Date:_____________________
|
19