Exhibit 10.14
BALLY GAMING INC.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (this "Agreement") is made as of the ____ day of
_________, 2001, by and between BALLY GAMING INC., a Nevada corporation with
offices at 0000 Xxxxx Xxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx 00000 ("Licensor or
Bally") and MULTIMEDIA GAMES, INC., a Texas corporation, with offices at 0000
Xxxxx Xxxxx Xxxx., Xxxxx 000, Xxxxxx, XX 00000. ("Licensee or MGAM"). Licensor
and Licensee may be referred to individually as a "Party" and collectively as
the "Parties."
W I T N E S S E T H:
WHEREAS, Licensor owns or licenses the rights in the game themes set
forth on Exhibit "A" attached hereto and made a part hereof, as supplemented by
the Parties from time to time. The game themes listed on Exhibit "A" consist of
the game play, graphical artwork and/or video images, and audio features for
each game theme listed on Exhibit A, including without limitation all gaming
device trademarks, logos and other intellectual property associated therewith
(the "Bally Games");
WHEREAS, Licensee manufactures a gaming system and certain types of
equipment that may be associated with the Bally Games;
WHEREAS, Licensor is engaged in the business of manufacturing,
distributing and selling gaming devices; and
WHEREAS, Licensee desires to license the Bally Games and/or purchase
certain equipment from Licensor to be used in connection with the lawful
development, manufacture, distribution and sale of its casino gaming systems at
Indian tribal casinos within the State of Washington, located on "Indian lands,"
as defined in Title 25, Section 2703(4) of the United States Code, and operating
under tribal/state compacts (or other arrangements) with the State of Washington
(the "Compacts");
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. GRANT OF LICENSE:
1.01 Licensor hereby grants and Licensee hereby accepts, for the Term of this
Agreement (as defined in Section 3 hereof) and subject to the terms and
conditions hereinafter set forth, the exclusive license (with the limitations
provided below) to utilize the Bally Games in the manufacture of the Licensed
Products (as defined below) and further to market, sell, maintain, rent or
otherwise distribute the Bally Games in Licensed Products at Licensee's
discretion, only on Indian lands in the Territory (as defined below) under
agreements to be negotiated by Licensee and subject to the terms and conditions
of this Agreement. This license shall include the right of Licensee to offer the
Bally Games in Licensed Products, as provided herein, on a
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lease and/or revenue participation basis. This exclusive license granted herein
is limited to use in Bally Cabinets and MGAM Cabinets (as defined below) only in
the Territory.
1.02 "Licensed Products" shall mean the gaming software and gaming devices,
player stations, cabinets and other equipment manufactured, sold, rented, or
otherwise distributed by Licensee to Tribal Casinos in the Territory hereunder,
which gaming devices embody and utilize the Bally Games. As used in this
Agreement, the Bally Games and the Cabinets (as defined below) shall be included
in the meaning of the term "Licensed Products."
1.03 The Parties acknowledge and agree that Licensor has entered into that
certain Agreement dated April 20, 1999 with Oasis Technologies, Inc., a Nebraska
corporation (the "Oasis Agreement"), and that this Agreement with Licensee is
contingent upon the termination or amendment of the Oasis Agreement in order to
allow Licensor to grant the rights provided hereunder to Licensee. Therefore, it
is an express condition precedent to this Agreement that the Oasis Agreement is
terminated or appropriately amended (the "Condition Precedent"). In the event
the Oasis Agreement is amended to grant Oasis Technologies, Inc. the
non-exclusive license to use, market, sell, maintain, or rent Bally Games in the
Territory, Licensee agrees that its exclusive license granted hereunder is
subject to the rights granted Oasis Technologies, Inc.
1.04 Notwithstanding any other terms and conditions hereof to the contrary, the
obligations of the Parties hereunder are subject to the Parties obtaining and
maintaining all gaming licenses, permits and approvals necessary to consummate
the transactions contemplated hereunder, in particular the approval of the Bally
Games in the Licensed Products by the State of Washington (the "Approvals"). In
no event shall Licensee market, distribute, lease, sell or otherwise place into
operation any Licensed Products, and in no event shall Licensee be required to
meet the guaranteed minimum requirements of Section 6.01 hereof, until all
Approvals have been obtained. In the event all Approvals are not obtained by
July 1, 2001, or in the event the Washington State Gambling Commission (the
"Commission") does not render its approval of this Agreement or the Bally Games
in the Licensed Products by such date, both Parties shall use their best efforts
to obtain the Approvals within ninety (90) days thereafter. In the event all
Approvals are not obtained by November 1, 2001, or in the event the Commission
does not render its approval of this Agreement or the Bally Games in the
Licensed Products by such date, either Party may elect to terminate this
Agreement, in which event Licensee shall return all of the Licensed Products to
Licensor and shall terminate any and all use of the Licensed Products. The
Advance shall be returned to Licensee in the event of a termination pursuant to
this Section 1.04 or in the event that the Condition Precedent is not met by
Licensor. MGAM shall, at its sole expense, be responsible for obtaining
regulatory approval of the Bally Games and the Cabinets within the State of
Washington. Bally will provide MGAM with all reasonable assistance in obtaining
such approvals.
1.05 Notwithstanding any other terms and conditions hereof to the contrary, the
obligations of the Parties hereunder are contingent upon Licensee's approval of
the Bally Cabinets (as defined in Section 4.02 hereof) for compatibility with
the software for the Bally Games to be developed by Licensee under this
Agreement. Subsequent to the execution of this Agreement, Licensee shall provide
Licensor the specifications necessary for Licensor to make its Bally Cabinets
compatible with Licensee's software. Licensor shall submit the first two Bally
Cabinets to Licensee for evaluation by Licensee. Licensee shall have a period of
sixty (60) days from the submission of such Bally Cabinets to evaluate the Bally
Cabinets for software compatibility. In the event that Licensee finds that the
Bally Cabinets are not compatible with the software,
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Licensee shall provide specifications to Licensor for the redesign of the Bally
Cabinets to comply with the uses required under this Agreement. Licensor shall
have sixty (60) days from the date it receives the specifications to modify the
Bally Cabinets to comply with the specifications. Licensor shall then submit the
modified Bally Cabinets to Licensee for approval. In the event that the Bally
Cabinets do not meet the approval of Licensee for specifications on or before
July 1, 2001, both Parties will use their best efforts to obtain approval of the
Bally Cabinets as soon as possible thereafter; provided, however, that, if the
Parties are unable to obtain approval of the first two Bally Cabinets by
November 1, 2001, then either Party shall have the right to terminate this
Agreement pursuant to the provisions of Section 1.04 hereof. The same procedures
for approval of the first two Cabinets shall be followed for all other Cabinet
approvals during the Term of this Agreement.
2. TERRITORY:
Licensee shall be entitled to use, market, distribute, sell, rent,
and/or maintain the Licensed Products only throughout the state of Washington to
gaming enterprises operated by Indian tribes (the "Tribal Casinos") located on
"Indian lands," as defined in 25 U.S.C. ss. 2703(4) and operating under the
Compacts, and other markets as may be added in the future by amending this
Agreement (the "Territory").
3. TERM:
The license granted hereunder shall become effective upon the execution
of this Agreement by the Parties and shall continue for period of three (3)
years commencing on the date of Approvals unless earlier terminated pursuant to
the terms and conditions hereof (the "Initial Term"). Subsequent to the Initial
Term, this Agreement may be extended from year to year upon mutual agreement of
the Parties. The Initial Term and any such subsequent extension thereof shall be
collectively referred to as the "Term."
4. DUTIES OF THE PARTIES:
4.01 Licensee shall select games that it will develop for the Territory from the
list of the Bally Games set forth in Exhibit "A." The first two Bally Games
shall be approved by Licensor for development contemporaneously with the
execution of this Agreement, and the Cabinets for such Bally Games shall be
approved by Licensee pursuant to Section 1.05 hereof. Exhibit "A" may be
supplemented from time to time with additional games that are developed by Bally
in the sole discretion of Licensor. Licensee shall be solely responsible for
developing and marketing the chosen Bally Games for sale in the Territory. All
such games developed by Licensee shall comply with Appendix X of the Compacts.
Licensee shall develop all Bally Games consistent with the design and quality
standards of Licensor and the Compacts, and Licensor shall have final authority
for approval of all Bally Games used in the Licensed Products, which approval
shall not be unreasonably withheld, and subject to the requirements of the
Compacts. Licensor reserves the right to withdraw any of the Bally Games listed
on Exhibit "A" that are also listed on Exhibit "C," attached hereto and made a
part hereof, if Licensor is unable to obtain the consent of such third party
licensor to the terms and conditions of this Agreement.
4.02 Licensor shall design and manufacture the 19-inch video game cabinets (the
"Bally Cabinets") for the Licensed Products, as more specifically set forth on
Exhibit "B" attached hereto and made a part hereof, which cabinets shall support
Licensee's hardware and software
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and which shall display a Bally Game developed by Licensee under this Agreement,
except as provided in Section 6.04 hereof. The Bally Cabinets shall consist of
all components, including but not limited to the glass, wood or metal casing,
monitor, art work and computer components such as the motherboard, as listed on
the specifications set forth on Exhibit "B." Licensee shall have final authority
for approval of all the Bally Cabinets, which approval shall not be unreasonably
withheld. Further, Licensor shall supply Licensee with any and all
specifications for the Bally Games necessary for Licensee to perform under this
Agreement. The failure to provide such specifications shall extend any deadlines
or payment obligations of Licensee under this Agreement for the length of time
that such failure persists.
4.03 Licensor shall make available to Licensee spare and replacement parts for
the Bally Cabinets at Licensor's current price list for such spare or
replacement parts.
4.04 Licensor will provide Licensee its standard limited warranty, as set forth
on Exhibit "D" attached hereto and made a part hereof, on all Bally Cabinets
supplied by Licensor. Licensee may, at its option, purchase extended warranties
for the Cabinets for additional periods of time at a rate of one percent (1%) of
the cost of the applicable Cabinets for each ninety (90) days of extended
warranty period purchased by Licensee. Such warranties shall be assignable by
Licensee to the applicable Tribal Casino.
5. CONSIDERATION:
5.01 Licensee shall pay Licensor the sum of Two Hundred Fifty Thousand Dollars
($250,000) as an advance against royalties payable to Licensor under this
Agreement (the "Advance"). The Advance shall be payable upon execution of this
Agreement and shall be applied on a prorated basis toward the fees paid
hereunder for the first two hundred (200) Licensed Products sold by Licensee.
The Advance shall be refundable only in the event that the Approvals are not
obtained or the Condition Precedent is not fulfilled.
5.02 Licensee shall pay to Licensor a fee in the amounts as set forth on Exhibit
"B" for each gaming device component of the Licensed Products invoiced,
distributed, placed for trial, rented or sold by Licensee ("Royalties").
Royalties shall be due and payable to Licensor on all Licensed Products
distributed by Licensee, even if not billed or if not billed at regular price,
such as, but not limited to, introductory offers or trials; provided, however,
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that no Royalties shall be payable on a reasonable number of Licensed Products'
gaming devices (not to exceed six (6) units of a particular Bally Game)
furnished for free for promotional purposes only. Licensee shall have the right
to sell or distribute Licensed Products through its wholly-owned subsidiaries or
affiliates, including without limitation MegaBingo, Inc., a Delaware corporation
which is a wholly-owned subsidiary of Licensee.
5.03 Licensee shall pay Licensor, as an additional royalty, twenty-five percent
(25%) of the "Daily Fees" received by Licensee attributable to Licensed Products
operating the Bally Games within the Territory ("Daily Fees"). "Daily Fees"
shall be limited to the fees charged by Licensee to the Tribal Casinos for the
Bally Games under its software agreements within the Territory, and shall not
include any rents, hardware maintenance fees or other payments charged by
Licensee under its equipment agreements, hardware maintenance agreements or
other agreements within the Territory. In addition to the foregoing, the Daily
Fees paid by Licensee to Licensor during any month shall not exceed 1.75% of the
"Net Revenues" for the applicable Tribal Casino. "Net Revenues" shall mean gross
revenues from the Bally Games running on the
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Licensed Products at the Tribal Casinos, less prizes paid and refunds (i.e, bona
fide return of xxxxxx due to game or system malfunction which are paid by either
Licensee or the Tribal Casinos according to reasonable and customary business
practices). Further, Licensee shall pay certain additional royalty fees which
Licensor may be obligated to pay to third parties, as further specified on
Exhibit "C." All Daily Fees under this Section 5.03 shall be paid to Licensor by
Licensee on the last day of the month for any and all Daily Fees accruing during
the prior month.
5.04 All goods provided by Licensor under this Agreement shall be made available
to Licensee on terms and conditions which are no less favorable than those under
which such goods are provided by Licensor to third parties at comparable
volumes. Such goods shall include, without limitation, the prices charged for
the Bally Cabinets, as well as the delivery schedule of the Bally Cabinets and
supplying spare parts.
6. GUARANTEED MINIMUM; CONVERSION PRIVILEGES:
6.01 Licensee guarantees to Licensor a minimum purchase of one thousand (1,000)
Bally Cabinets during the twenty-four month period commencing the first day of
the first month after the later to occur of (i) the Approvals; (ii) the date on
which the Commission issues its approval of this Agreement; and (iii) the
fulfillment of the Condition Precedent (the "Guaranteed Minimum Period"). To
reach this 1,000-unit minimum purchase, Licensee shall purchase a minimum of
five hundred (500) units of the Bally Cabinets during both twelve-month periods
during the Guaranteed Minimum Period. In the event that Licensor sells less than
500 units of the Bally Cabinets during either twelve-month period during the
Guaranteed Minimum Period, Licensee shall, in lieu of purchasing the Bally
Cabinets for that twelve-month period, pay Licensor the amount of $500 times the
difference between the 500 units and the amount of units actually purchased by
Licensee, with such payment being due within 30 days after the applicable
twelve-month period; provided, that in the event that License fails to reach the
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1,000-unit minimum purchase set forth above during the Guaranteed Minimum Period
then the exclusive license granted herein to the Bally Games shall revert to a
non-exclusive license; provided, however, any Bally Games developed by Licensee
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shall remain exclusive to Licensee. To the extent that Licensee sells over 500
units of the Bally Cabinets during the first twelve-month period of the
Guaranteed Minimum Period, Licensee shall have the right to apply such excess
units to its obligations for the second twelve-month period during the
Guaranteed Minimum Period. Subsequent to the Guaranteed Minimum Period, there
shall be no guaranteed minimum payment required.
6.02 Licensee shall develop a minimum of two Bally Games during each three-month
period during the first year of the Guaranteed Minimum Period and a minimum of
one Bally Game during each three-month period during the second year of the
Guaranteed Minimum Period; provided, however, that Licensee's time for
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development for any Bally Game shall be extended for an amount of time equal to
the time during which Licensor is modifying the Cabinets to comply with the
specifications of Licensee, as provided in Section 1.05 hereof. Subsequent to
the Guaranteed Minimum Period, Licensee shall provide for the development of
Bally Games as it believes such games to be economically feasible within the
Territory.
6.03 Licensee may, in its discretion, convert any MGAM Cabinets, as defined
herein, in the Territory to Bally Games for the price of Fifteen Hundred Dollars
($1,500.00), payable to Licensor on the last day of the month following the
month in which the conversion took place.
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Any MGAM Cabinet converted under this section shall be subject to the Daily Fees
provided in Section 5.03. "MGAM Cabinets" shall mean any and all existing
cabinets not manufactured by Bally. The MGAM Cabinets and the Bally Cabinets may
be collectively referred to as "Cabinets."
6.04 Licensee may, in its discretion, purchase Cabinets to be utilized with
games other than the Bally Games at the prices listed on Exhibit "B." Licensee
shall provide Licensor with the necessary specifications and Licensor may, in
its sole discretion, elect to manufacture and sell such Cabinets to Licensee
upon mutually agreeable prices.
6.05 Licensee may, in its discretion, purchase one or more additional Bally
Games, including without limitation glass and other game-required conversion
components (i.e., "game kits"), to be installed on Bally Cabinets or MGAM
Cabinets converted to Bally Games under Section 6.03 hereof. The cost of such
Bally Games shall be $300 per unit, plus 50% of the sales price over $300
charged to the Tribal Casino, but less payments for game kits, if any, made by
Licensee to Oasis Technologies, Inc. under any agreement related to the
Condition Precedent; provided, however, in the event a player station is offered
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to Tribal Casino on a rental basis, the cost of such Bally Games for a rental
unit shall be $500 per unit. Licensee will provide Licensor with a schedule of
conversions under Section 6.03 and of game upgrades under this Section 6.05.
7. ACCOUNTING:
7.01 Licensee agrees to forward to Licensor, within thirty (30) days after the
end of each month during the Term (the "Royalty Period") commencing with the
first month during which any unit of the Licensed Products is sold or
distributed, a report of the number of units of the Licensed Products sold or
distributed by Licensee within such Royalty Period, the Royalties due therefor,
all information necessary to calculate such Royalties, the number of units
returned and any Royalties credit claimed for units so returned. Licensee agrees
that accompanying each such report shall be payment of the Royalties due to
Licensor, if any, earned by Licensor during such Royalty Period, less the
portion of the Advance paid to Licensor to date and not yet recouped by
Licensee. Such reports shall be required to be submitted with respect to sales
and distributions of the Licensed Products whether or not any amounts are due
under the terms hereof. All payments under this Agreement shall be made in U.S.
dollars. Unless otherwise agreed in writing between the Parties, payment shall,
at the option of Licensee, be made by corporate check or wire transfer to
Licensor.
7.02 Licensee agrees to keep accurate books of account and records covering all
sales, Daily Fees, and Royalties due under this Agreement and to permit Licensor
at its own expense to inspect and copy such books of account and records during
reasonable business hours (upon prior reasonable written notice) for the sole
purpose of verifying the reports to be provided hereunder. Licensor shall keep
any information obtained from any such inspection in confidence and shall
require that its accountants do so as well. In the event that any audit by
Licensor or its accountants reveals that Licensee has underpaid Royalties or
Daily Fees by two percent (2%) or more with respect to any Royalty Period which
is the subject of such audit, Licensee agrees that it shall reimburse Licensor
for the reasonable costs for any such audit. All books of accounts and records
relating to each report to be provided under this Agreement shall be retained by
Licensee for at least two (2) years after the termination or expiration of this
Agreement, and Licensor's audit rights shall survive termination or expiration
of this Agreement. Licensee shall pay to Licensor the amount of any deficiency
discovered by Licensor's audit, with interest from the
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date such deficiency was originally due, within fifteen days of notice of such
deficiency. Licensee has the right to review Licensor's audit findings.
7.03 If Licensee fails to timely submit accurate reports, Daily Fees and
Royalties, Licensee shall pay interest on overdue amounts at the monthly rate of
one and one-half percent (1.5%) or the highest rate permitted by law, whichever
is the lower.
7.04 Licensee shall be solely responsible for and shall pay any and all taxes,
levies, duties or other fees or charges which may be imposed by any governmental
jurisdiction including tribal, as a result of the Parties' performance under
this Agreement; provided, however, that Licensor shall be solely responsible for
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taxes on Licensor's income and fees and other impositions relating to Licensor's
licensing in any jurisdiction which may be required due to this Agreement,
including without limitation background investigations. If Licensee is required
by a governmental authority to pay withholding taxes on any Royalties payable to
Licensor, Licensee will promptly provide to Licensor copies of documents
evidencing the withholding and payment of such taxes.
8. QUALITY OF LICENSED PRODUCTS:
8.01 Licensor shall have the right to determine in its reasonable discretion
whether the Licensed Products meet Licensor's standards of merchantability.
Licensee agrees to furnish Licensor free of cost for Licensor's written approval
as to quality and style, up to two (2) stand-alone, demonstration player
stations of each of the Bally Games, up to maximum of six demonstration stations
for the Bally Games, capable of running a demonstration of the applicable Bally
Game(s), but not able to play any applicable game(s), before the manufacture,
sale or distribution (whichever first occurs) of such Licensed Products and the
Licensed Products shall not be sold or distributed by Licensee without such
written approval. Such demonstration player stations shall be submitted for
approval in final form (including all applicable artwork and sound). Licensor
may retain such demonstration player stations at its option. Royalties shall not
be paid by Licensee on such demonstration player stations. Licensor agrees that
it shall use all commercially reasonable efforts to expedite its approval of the
first two Licensed Products submitted to it by Licensee under this Agreement.
Licensor reserves the right to rescind at any time its approval of any Bally
Games used in the Licensed Products, if Licensor determines that Licensee's use
does not meet Licensor's reasonable quality standards and Licensee has not cured
the deficiency within thirty (30) days of notice to Licensee of the deficiency.
8.02 Licensor shall supply Licensee with up to two Cabinets for each of the
Cabinet types listed on Exhibit "B." Licensee and Licensor shall evaluate these
Cabinets pursuant to the provisions of Section 1.05. Licensee may retain such
Cabinets at its option.
8.03 If Licensor disapproves of any item submitted by Licensee for approval
hereunder, Licensor shall furnish at the time notice of disapproval is given to
Licensee a written explanation of the reason(s) for such disapproval and
recommendations for suggested changes, and Licensee shall resubmit such item
after changes have been made for Licensor's approval.
8.04 If approval is not received by Licensee within fifteen (15) business days
after Licensor's receipt of the Licensed Product submitted for approval,
Licensor's approval shall be deemed to have been granted.
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9. INTELLECTUAL PROPERTY RIGHTS:
Licensor shall retain all right, title and interest in and to all
intellectual property associated with all Bally Games, except as granted to
Licensee hereunder. All Bally Games developed for use in the Territory shall be
considered the intellectual property of Licensee, subject to Licensee's payments
of the Royalties and Daily Fees set forth in Sections 5.02 and 5.03 hereof,
which payments shall survive the termination, for any cause, or expiration of
this Agreement.
10. MANUFACTURE, MARKETING AND DISTRIBUTION:
10.01 The first shipment of units of each Licensed Product by Licensee in the
Territory shall occur no later than sixty (60) days after the later of (i)
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Licensor's approval under Section 4.01 hereof or (ii) the approval of the State
of Washington and the approval of the first tribal authority.
10.02 Licensee agrees that it will manufacture, distribute and sell the Licensed
Products and that it will make and maintain adequate arrangements for the
distribution of the Licensed Products. Licensee shall arrange for the
manufacturing, marketing and distribution of the Licensed Products using
commercially reasonable efforts to effect distribution throughout the Territory.
10.03 Licensee shall develop data contained in the Licensed Product (to the
extent it is permitted to do so), all artwork, designs, copy, literary text,
other computer software, and advertising and promotional material of any sort
incorporating or based on the Bally Games using its own employees or independent
contractors or affiliates. Such affiliates or contractors will comply with
Licensee's compliance program.
11. REPRESENTATIONS AND WARRANTIES:
11.01 Licensee hereby represents and warrants that it is free to enter into and
fully perform this Agreement; that Licensee is a corporation validly existing
under the laws of the State of Texas and qualified to conduct business in the
state of Washington; that Licensee has all licenses and permits required to
allow Licensee to sell the Licensed Products in the Territory, including without
limitation any required by the Commission.
11.02 Licensor hereby represents and warrants that it is free to enter into and
fully perform this Agreement; that Licensor is a corporation validly existing
under the laws of the State of Nevada; that Licensor is the sole owner or
licensee of the Bally Games and has the full and exclusive power to grant the
rights and licenses to the Bally Games as described herein, subject to the
Condition Precedent; and that Licensor has obtained all necessary gaming or
other licenses under the laws of the state of Washington, including without
limitation any required by the Commission, to perform the terms and conditions
of this Agreement.
12. INDEMNIFICATION:
12.01 Each Party agrees to indemnify and hold the other (including officers,
directors, agents and employees of such Party or its subsidiaries, affiliates
and licensors) harmless against any loss, damage, expense or cost (including
reasonable attorneys' fees) arising out of any claim,
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demand, suit or judgment resulting from any breach of any warranty or
representation set forth in Section 11 above. Each Party shall promptly inform
the other in writing of any such claim, demand, suit or judgment.
12.02 In connection with any such claim, demand or suit referred to above, the
party so indemnifying (the "Indemnitor") agrees to defend, contest or otherwise
protect the indemnified party (the "Indemnitee") against any such suit, action,
investigation, claim or proceeding at the Indemnitor's own cost and expense. The
Indemnitee shall have the right, but not the obligation to participate, at its
own expense, in the defense thereof by counsel of its own choice. In the event
that the Indemnitor fails timely to defend, contest or otherwise protect against
any such suit, action, investigation, claim or proceeding, the Indemnitee shall
have the right upon twenty (20) days' written notice to the Indemnitor to
defend, contest or otherwise protect against the same and make any compromise or
settlement thereof and recover the entire cost thereof from the Indemnitor,
including without limitation, reasonable attorneys' fees, disbursements and all
reasonable amounts applied as a result of such suit, action, investigation,
claim or proceeding or compromise or settlement thereof. The obligations
hereunder shall survive the termination or expiration of this Agreement.
12.03 Licensee agrees that it will obtain and maintain during the Term at its
own expense, general liability insurance (including coverage for product
liability) from a recognized and qualified insurance company naming Licensor as
additional insured in the amount of at least Three Million Dollars
($3,000,000.00) per occurrence against any claims, suits, losses or damages,
including attorneys' fees, arising out of any alleged defects in the Licensed
Products or the manufacture, marketing, distribution, sale or use of the
Licensed Products. Such policy shall be non-cancelable except after thirty (30)
days' prior written notice to Licensor. As proof of such insurance, a fully paid
certificate of insurance will be submitted to Licensor by Licensee for
Licensor's prior written approval before any Licensed Product is distributed or
sold, and at the latest within thirty (30) days after the date of this
Agreement.
12.04 MGAM and Bally shall each notify the other promptly upon learning of any
infringing, unauthorized use of the other's intellectual property which is the
subject of this Agreement.
13. EVENTS OF DEFAULT AND TERMINATION:
13.01
(a) Licensee shall be deemed to be in default of this Agreement, and Licensor
shall have the right to immediately terminate this Agreement or notify Licensee
that Licensor has revoked the exclusive license granted herein and that such
license grant under this Agreement is now a non-exclusive license, in the event
Licensee fails after thirty (30) days' written notice to Licensee to make any
payment due and owing under the terms of this Agreement, furnish any statement
in accordance herewith, or completely comply with any other of Licensee's
obligations hereunder.
(b) If during the Term of this Agreement Licensee shall be unable to pay its
liabilities when due, or shall make any assignment for the benefit of creditors,
or shall file any petition under any federal or state bankruptcy statute, or be
adjudicated a bankrupt or insolvent, or if any receiver is appointed for its
business or property, or if any trustee in bankruptcy shall be appointed under
the laws of the United States or any state, and in the case of an involuntary
filing only, such
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impediment is not removed within thirty (30) days from the inception of same,
Licensor may terminate this Agreement upon written notice.
(c) If during the Term of this Agreement any of Licensee's gaming licenses is
suspended, revoked or otherwise made ineffective by any gaming regulatory
agency, or Alliance Gaming Corporation's Compliance Committee disapproves or
withdraws its approval as provided in Section 15.02 hereof, Licensor shall have
the immediate right to terminate this Agreement; provided that the provisions of
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Section 6 shall not be applicable or operative in this event.
13.02
(a) Licensor shall be deemed to be in default of this Agreement, and Licensee
shall have the right to immediately terminate this Agreement, in the event
Licensor fails, after thirty (30) days' written notice to Licensee, to
completely comply with any of Licensor's obligations hereunder.
(b) If, during the Term of this Agreement, Licensor shall be unable to pay its
liabilities when due, or shall make any assignment for the benefit of creditors,
or shall file any petition under any federal or state bankruptcy statute, or be
adjudicated a bankrupt or insolvent, or if any receiver is appointed for its
business or property, or if any trustee in bankruptcy shall be appointed under
the laws of the United States or any state, and in the case of an involuntary
filing only, such impediment is not removed within thirty (30) days from the
inception of same, Licensor may terminate this Agreement upon written notice.
(c) If during the Term of this Agreement any of Licensor's gaming licenses are
suspended, revoked or otherwise made ineffective by any gaming regulatory
agency, or Licensee disapproves or withdraws its approval as provided in Section
15.03 hereof; Licensee shall have the immediate right to terminate this
Agreement; provided that the provisions of Section 6 shall not be applicable or
--------
operative in this event.
14. EXPIRATION OR TERMINATION OF AGREEMENT:
14.01 Upon any termination of this Agreement, Licensee and the Tribal Casinos
shall have the right to continue to use and maintain the Licensed Products,
along with the associated Bally Games and the Cabinets, already in operation,
but subject to the continued payment of Royalties or Daily Fees, along with the
following consequences:
(a) all guaranteed minimums incurred prior to the date of termination shall be
due and payable at the end of the applicable time period (except as provided in
Section 13.01.C.).
(b) Licensor shall thereafter be free to license others to use the Bally Games
in the Territory;
(c) Licensee shall (i) within thirty (30) days following termination of this
Agreement, deliver a preliminary accounting and inventory to Licensor of all
Licensed Products on hand and all Licensed Products sold up to the date of such
termination; (ii) within forty-five (45) days following such termination,
deliver a final accounting and inventory to Licensor of all Licensed Products on
hand and all Licensed Products sold up to the date of termination of this
Agreement; (iii) make payment to Licensor of all monies then outstanding under
this Agreement within thirty (30) days following such termination; (iv) certify
within forty-five (45) days following such termination full compliance with this
Agreement, including but not limited to the provisions of
10
this section; and (v) at Licensor's election, deliver to Licensor all unsold
---
copies of the Licensed Products in inventory or destroy the remaining inventory
and certify as to the remaining inventory's destruction (subject to subsection
(d) below);
(d) in the event of termination of this Agreement, other than a termination by
Licensor as a result of a breach of this Agreement by Licensee, subject to the
provisions of Section 5 hereof, Licensee may continue to sell for a period of
ninety (90) days (subject to termination by Licensor as a result of a material
breach of this Agreement by Licensee) after the effective date of termination
("Sell-Off Rights") all approved copies of the units of the Licensed Products
produced prior thereto. Within fifteen (15) days following the termination of
the Sell-Off Rights, Licensee shall (i) deliver a final accounting to Licensor
containing the information specified for periodic statements; (ii) make payment
of all monies due hereunder to Licensor; and (iii) deliver the remaining
inventory to Licensor or, at Licensor's election, destroy the remaining
inventory and certify as to the remaining inventory's destruction.
14.02 In the event this Agreement is terminated as a result of a breach of this
Agreement by Licensee or subsequent to the Sell-Off Rights, all of Licensor's
and its affiliates' and licensors' materials, including, without limitation, the
Confidential Information (as defined below), shall be returned to Licensor by
Licensee and no further disposition or use of the Licensed Products, other than
the use and maintenance of the Licensed Products by Licensee or the Tribal
Casinos which began prior to such expiration or termination, may be made without
the prior written approval of Licensor.
15. COMPLIANCE WITH LAWS:
15.01 This Agreement is contingent on any necessary initial and continued
approvals and licenses from any regulatory authorities having jurisdiction over
the Parties or the subject matter of this Agreement. Each Party shall promptly
apply to the appropriate regulatory authorities for any licenses and approvals
necessary for that Party to perform under this Agreement, shall diligently
pursue its applications and pay all associated costs and fees, and shall
otherwise cooperate with any requests, inquiries, or investigations of any
regulatory authorities or law enforcement agencies in connection with Licensee,
Licensor or their affiliates, or this Agreement. If any license or approval
necessary for either Party to perform under this Agreement is denied, suspended,
or revoked, this Agreement shall be void effective the date of the denial,
suspension, or revocation, provided, however, that if the denial, suspension, or
revocation affects performance of the Agreement in part only, the Parties may by
mutual agreement continue to perform under this Agreement to the extent it is
unaffected by the denial, suspension, or revocation.
15.02 Licensee acknowledges that Alliance Gaming Corporation (Licensor's parent
company), as a company operating under privileged licenses in a highly regulated
industry, maintains the "Alliance Compliance Program" as part of a compliance
program to protect and preserve the name, reputation, integrity, and good will
of Alliance and its subsidiaries and affiliates (including Licensor) 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. This Agreement and Licensor's
association with Licensee are contingent on the continued approval under the
Alliance Compliance Program of Alliance and its compliance committee. Licensee
11
shall cooperate with Alliance and its compliance committee as reasonably
requested by Alliance or the committee and provide the committee with such
information as it may request. If Alliance, acting on the recommendation of the
committee, withdraws its approval of this Agreement or Licensee for reasons
related to Licensee's suitability, then this Agreement shall be void and neither
Party shall have any rights hereunder. In addition, Licensee shall promptly
provide Licensor with all information reasonably requested by the Compliance
Committee of Licensor with respect to Licensee's (including Licensee's
officers', directors' and controlling shareholders') financial condition,
litigation, indictments, criminal proceedings, and the like, in which they are
or may have been involved, if any, in order for the Licensor's Compliance
Committee to determine that no such information would disclose any fact which
would jeopardize, in any manner, any gaming licenses or permits held by Licensor
or its affiliates with any gaming commission, board or similar regulatory
agency. It shall be an event of default under Section 13.01(c) hereof if
Alliance Gaming Corporation or its compliance committee obtains from any source
information with respect to Licensee or this Agreement that would, in the
opinion of Alliance or the committee or both, jeopardize the gaming licenses,
permits, or status of Alliance or any of its subsidiaries or affiliates
(including Licensee), with any gaming commission, board, or similar regulatory
or law enforcement authority.
15.03 Licensor acknowledges that Licensee (and its wholly-owned subsidiary MBI),
as a company operating under privileged licenses in a highly regulated industry,
maintains a compliance program to protect and preserve the name, reputation,
integrity, and good will of Licensee and its subsidiaries and affiliates
(including MBI) 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. This Agreement and
Licensee's association with Licensor are contingent on the continued approval
under Licensee's compliance program. Licensor shall cooperate with Licensee as
reasonably requested by Licensee and provide Licensee with such information as
it may request. Licensee, acting under its compliance program, shall have the
right to withdraw its approval of this Agreement or Licensor for reasons related
to Licensor's suitability, in which case this Agreement shall be void and
neither Party shall have any rights hereunder. In addition, Licensor shall
promptly provide Licensee with all information reasonably requested by the
Compliance Committee of Licensee with respect to Licensor's (including
Licensor's officers', directors' and controlling shareholders') financial
condition, litigation, indictments, criminal proceedings, and the like, in which
they are or may have been involved, if any, in order for the Licensee to
determine that no such information would disclose any fact which would
jeopardize, in any manner, any gaming licenses or permits held by Licensee or
its subsidiaries or affiliates with any gaming commission, board or similar
regulatory agency. It shall be an event of default under Section 13.02(c) hereof
if Licensee obtains from any source information with respect to Licensor or this
Agreement that would, in the opinion of Licensee, jeopardize the gaming
licenses, permits, or status of Licensee or any of its subsidiaries or
affiliates (including MBI), with any gaming commission, board, or similar
regulatory or law enforcement authority.
16. CONFIDENTIAL INFORMATION/NON-SOLICITATION:
(a) Licensee shall keep in confidence, not disclose to any third party and not
use for any purpose except its performance under this Agreement, without the
written permission of Licensor, the terms of this Agreement and the information
of Licensor, its affiliates or licensors
12
made known to Licensee under this Agreement. The foregoing requirement of
confidentiality shall not apply to information that is (a) in the public domain
through no wrongful act of Licensee, (b) disclosed to Licensee by a third party
which is under no obligation of confidentiality with respect to such information
and which does not place Licensee under such an obligation, or (c) required to
be disclosed by applicable rules and regulations of federal, state, local or
tribal government agencies or judicial bodies. This obligation of
confidentiality: (i) shall survive termination or expiration of this Agreement
and (ii) shall extend to any affiliates, agents or subcontractors of Licensee.
(b) Licensor shall keep in confidence, not disclose to any third party and not
use for any purpose except its performance under this Agreement, without the
written permission of Licensee, the terms of this Agreement and the information
of Licensee, its affiliates or licensors made known to Licensor under this
Agreement. The foregoing requirement of confidentiality shall not apply to
information that is (a) in the public domain through no wrongful act of
Licensor, (b) disclosed to Licensor by a third party which is under no
obligation of confidentiality with respect to such information and which does
not place Licensor under such an obligation, or (c) required to be disclosed by
applicable rules and regulations of federal, state, local or tribal government
agencies or judicial bodies. This obligation of confidentiality: (i) shall
survive termination or expiration of this Agreement and (ii) shall extend to any
affiliates, agents or subcontractors of Licensor.
(c) The Parties agree that this Agreement shall be confidential and not
disclosed to any third parties for any reason without the prior written consent
of the other party. Upon the execution of this Agreement, the Parties shall
agree on the form and content of any announcement(s) relating to the Agreement,
it being understood that MGAM and Licensor's parent corporation are public
companies subject to making public reports under applicable law.
17. MISCELLANEOUS:
17.01 Each of the parties hereto consents to the exclusive jurisdiction and
venue of the state and federal courts of the State of Washington, with respect
to any matter relating to this Agreement, and each party hereto consents to the
personal jurisdiction of such courts and shall subject itself to such personal
jurisdiction. The parties agree that service of process may be made upon them in
any manner permitted by the rules of such courts and the laws of the state of
Washington.
17.02 A waiver of a default under this Agreement shall not be a waiver of any
other or a subsequent default.
17.03 Each Party shall be solely responsible for all expenses incurred by it in
the performance of this Agreement. Neither Party shall have the authority,
express or implied, to bind the other Party with respect to any matter. The
Parties acknowledge and agree that this Agreement does not create, nor is it
intended to create, a partnership, joint venture, agency or any other
relationship between the Parties.
17.04 In any litigation or arbitration arising under or out of this Agreement,
or in any action brought to compel the arbitration or to enforce the arbitration
award, the prevailing Party shall be entitled to reasonable attorneys' fees and
costs (including without limitation appellate fees and costs) from the
non-prevailing Party.
13
17.05 This Agreement shall not be assignable by either Party, in whole or in
part, without the prior written consent of the other Party.
17.06 This Agreement constitutes the entire agreement and understanding and
supersedes and cancels any and all prior oral or written agreements and
understandings of the Parties relating to the subject matter hereof. This
Agreement shall not be amended or modified in whole or in part except by a
writing signed by the Parties. No waiver by any Party of any violation of any
provision of this Agreement shall be effective unless given in a signed writing,
nor shall any such waiver be deemed a waiver of any further violation of this
Agreement unless expressly so stated in a signed writing. The section headings
of this Agreement are for convenience of reference only, and shall not
constitute any part of this Agreement. In all cases, the language in all parts
of this Agreement shall be construed simply according to its fair meaning and
not strictly for or against any Party. This Agreement has been made and shall be
interpreted in accordance with the applicable laws of the state of Washington.
The Parties shall each use their respective reasonable best efforts to obtain
the consent or approval of each person or entity, if any, whose consent or
approval shall be required in order to permit it to consummate the transactions
contemplated hereby, and to execute and deliver such instruments and to take
such other action as may be required to carry out the transactions contemplated
by this Agreement.
17.07 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 Licensor: Alliance Gaming Corporation
Attn: Legal Dept.
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
If to Licensee: Xxxx Xxxxxx, Executive Vice President
Multimedia Games, Inc.
0000 Xxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
17.08 If any one or more of the provisions or part of a provision contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
this Agreement in any other jurisdiction or any other provision or part of a
provision of this Agreement, but this Agreement shall be reformed and construed
in such jurisdiction to give effect to the intent of the Parties so that it
would be valid, legal and enforceable in such jurisdiction to the maximum extent
possible.
17.09 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
14
confirmation, and when so executed and delivered shall be deemed an original and
such counterpart(s) together shall constitute only one original.
17.10 Each Party represents to and agrees with the other that it will comply
with all applicable United States laws including all Export Administration
regulations regarding the export of Software and Supporting Equipment and
technology from the United States.
17.11. Neither Party shall be liable to the other Party or any third party for
the failure of the Licensed Products to operate due to an act of God; fire;
casualty; government codes, ordinances, laws, rules, regulations or
restrictions; war or civil disorder; act or decision of a governmental
authority; injunction; technical difficulties; failure of satellite
communications or electrical or telephone power transmission lines or
facilities; strike or labor dispute; or any other cause whether or not beyond
the control of either Party or its contractors, sub-contractors, representatives
and agents. In the event of any such occurrence(s) the performing Party, at its
option, may terminate this Agreement or suspend and defer its performance
hereunder without incurring any liability to the non-performing Party or any
entities or individuals whose claims are predicated upon the operation of the
Licensed Products.
IN WITNESS WHEREOF, the Parties have signed this Agreement as of the day and
year first above written.
MULTIMEDIA GAMES, INC. BALLY GAMING, INC.
By: ________________________ By: ________________________
Name: ______________________ Name: ______________________
Title: _____________________ Its: _______________________
15
EXHIBIT "A"
GAMES INCLUDED IN THE AGREEMENT
XXXXX BOOP (subject to approval by King Features)
ALL AMERICAN GIRL
BETTY'S BIG HIT
BORN TO BOOP
DOUBLE JACKPOT
RESPIN ROUND UP
LOVE MACHINE
SWING TIME XXXXX
BLONDIE (subject to approval by King Features)
BIG DOUGH
BIG SPENDER
MEAL TICKET
BLAZING 7'S
BLAZING 7'S TIMES PAYS
TRIPLE BRAZING 7'S DIAMOND LINE
POKER GAMES
ALL AMERICAN POKER
BONUS DEUCES WILD
BONUS POKER
DEUCES WILD
DOUBLE BONUS POKER
FOUR PLAY BONUS POKER
JOKER JOKER POKER
JOKER POKER (KINGS OR BETTER)
SUPER BONUS JOKER POKER
SUPER BONUS POKER
TRIPLE PLAY POKER
TRIPLE POKER
WHITE LIGHTNING POKER
KENO GAMES
ALPHABET KENO
PATTERN KENO
15 WAY KENO
BABY BOOMER
BLACK AND WHITE DOUBLE JACKPOT MULTIPLIER
BLACK GOLD
BLACK GOLD MULTIPLIER
XXXXX XXXX (TRADITIONAL)
XXXXX XXXX BONUS
CALIFORNIA DREAMING
CASH ENCOUNTERS (subject to approval by PTT, Inc.)
DIAMONDS AND DEVILS
FIVE TIMES TEN TIMES PAY
GOAL
GOLD DOWN UNDER
HOT HOT HOT (subject to approval by PTT, Inc.)
16
KRAZY KOPS
LATIN PASSION
MAGIC SYMBOLS
MONEY BARS
NAUGHTY XXXXXXX
PAYS OF OUR LIVES
PLATYPUS (subject to approval by PTT, Inc.)
PLAY THE MARKET
POOL SHARKS (8 WAY)
QUICK HITS
RAT RACE
RIDES TO RICHES
SWING TIME
TRIFECTA
WAKE THE GENIE
WISHING WELL
The following games are not included in this agreement and must be negotiated
separately:
99 BOTTLES OF BEER
BLACK AND WHITE
BLACK AND WHITE CAR CAROUSEL
BLAZING 7'S
BOX CAR BONUS
DOUBLE DOUBLE BONUS POKER
DOUBLE JACKPOT TRIPLE BLAZING 7'S
GOLD MINE POKER
GOLD MINE SLOT
IN THE MONEY
ISLAND WINS
MONEY POPPERS
PRINCE OF PERSIA
SIVER & GOLD
WILD ROSE
WIZARD OF ODDS
BALL OF FIRE
DOUBLE BLACK & WHITE
BLAZING SEVENS DOUBLE JACKPOT
ROARING 20'S
DOUBLE HIGH LOW BONUS POKER
PICK A PEARL POKER
MULTIMEDIA GAMES, INC. BALLY GAMING, INC.
Initials _____________________ Initials ____________________
Date _________________________ Date ________________________
17
EXHIBIT "B"
PLAYER TERMINAL EQUIPMENT PRICES TO MGAM*
TYPE OF UNIT PRICE**
------------ -----
WITH BALLY GAME WITHOUT BALLY GAME
--------------- ------------------
CASINO SLANT TOP*** $7,500 $6,250
UPRIGHT ROUND TOP*** $6,750 $5,500
UPRIGHT SQUARE TOP*** $6,750 $5,500
ANGLED BAR TOP UNITS*** $TBD $TBD
FLAT BAR TOP UNITS*** $TBD $TBD
SLIMLINE*** $TBD $TBD
GAME CONVERSION KITS****
. INCLUDING GLASS $300 plus 50% of sales price over $300
. GAME CONVERSION KITS FOR LEASE $500
. GLASS ONLY $150
*Note 1. Prices subject to change upon 90 days' prior written notice to
Licensee.
**Note 2. The price of the Bally Cabinets and all spare parts and component
parts supplied by Licensor to Licensee under this Agreement shall include a
minimum discount of 20% off Licensor's published retail price in its catalogues.
Such prices shall be subject to change upon 90 days' prior written notice to
Licensee.
***Note 3. The specifications for and the pricing of the Bally Cabinets, as set
forth in this Exhibit "B," are further detailed in the Bally marketing brochure,
which is attached to and made a part of this Exhibit "B." The specifications for
the Bally Cabinets will be subject to modifications mutually agreed upon by the
Parties, including without limitation the modifications described in Section
1.05 hereof.
****Note 4. See Section 6.5.
SPECIFICATIONS FOR BALLY CABINETS (see Section 4.02)
. Computer specifications for installation in Bally Cabinets.
CPU Case, MMI Design, Grentek
Cable, Serial, (COM2)
Motherboard, #KD815EEAALPAK10, Intel
CPU PIII 800, #BX80526C800256E, FC, 133
Memory, 64 MB, 133 MHZ, SDRAM, DIMM
Video Card, 32 MEG, TNT2-64, PWRCLR
Tie Wraps, .100"W x 4"L, 00X000
Xxxx Xxxxx, XXX, 00 XX, 0000 RPM, WD
MS Windows 98 License
Harness, CPU Reset Cable
Power Supply 235W Fortron
Cable, Power External Parts
Utility Board, MFG#PCI-7250
Serial Card, 2 Port, LA VA Port-PCI
Bracket, expansion slot, #84N1060
Label, FCC compliance
Appropriate screws and fasteners.
MULTIMEDIA GAMES, INC. BALLY GAMING, INC.
Initials __________________ Initials __________________
Date ______________________ Date ______________________
18
EXHIBIT "C"
GAMES REQUIRING ADDITIONAL THIRD PARTY ROYALTY FEES
GAME ADDITIONAL ROYALTY FEE
---- ----------------------
XXXXX BOOP
. ALL AMERICAN GIRL $TBD
. BETTY'S BIG HIT $TBD
. BORN TO BOOP $TBD
. DOUBLE JACKPOT $TBD
. RESPIN ROUND UP $TBD
. ROARING 20'S $TBD
. SWING TIME XXXXX $TBD
BLONDIE
. BIG DOUGH $995
. BIG SPENDER $995
. MEAL TICKET $995
CASH ENCOUNTERS $500
PLATYPUS $500
HOT HOT HOT $500
MULTIMEDIA GAMES, INC. BALLY GAMING, INC.
Initials ________________________ Initials ____________________
Date ____________________________ Date ________________________
19
EXHIBIT D
STANDARD WARRANTY
-----------------
For a period of ninety (90) days following installation or for any additional
warranty period purchased by Licensee under Section 4.04, Bally offers the
standard warranty set forth below.
STANDARD LIMITED WARRANTY
ALL BALLY products are precision built, tested and inspected prior to
shipment, and have been manufactured in compliance with all applicable laws and
regulations of the United States. Bally warrants and guarantees to the original
customer, and any Tribal Casino assignees pursuant to Section 4.04, that all of
its new gaming devices will be free from defects in material and workmanship,
which materially and adversely affect the performance of the gaming device,
throughout the entire warranty period. Minor deviations from any specifications
or standards, which do not so affect the performance of the gaming devices, are
not considered to be defects in materials or workmanship.
The sole and exclusive remedy in the event of defect is expressly
limited to the adjustment, repair or replacement of defective parts, at the sole
discretion of Bally, to return the product to good working condition. All
component parts not manufactured by Bally are excluded from this warranty. In no
event shall Bally or any of its affiliates, subsidiaries, representatives, or
agents be liable for any direct, indirect, special, incidental or consequential
damages, including loss of use or revenue. This warranty is valid under all
normal use and service of the gaming devices, but is void if the product is not
operated and maintained in accordance with the Bally product literature and
manuals.
Some states do not allow limitations on how long an implied warranty
lasts, and some states do not allow the exclusion or limitation of incidental or
consequential damages, so the above limitation and exclusion may not apply. This
warranty grants specific legal rights, but original customer and permitted
assignees may also have other rights which vary from state to state.
EXCEPT AS SPECIFICALLY SET FORTH HEREIN, ALL OTHER WARRANTIES, WHETHER
EXPRESS OR IMPLIED, ARE EXCLUDED FROM THIS AGREEMENT, INCLUDING WARRANTIES OF
FITNESS FOR A PARTICULAR USE AND MERCHANTABILITY, AS WELL AS THOSE WHICH MAY
ARISE UNDER USAGE OF TRADE, COURSE OF DEALING, OR COURSE OF PERFORMANCE. NO
AFFIRMATION OF FACT INCLUDING, BUT NOT LIMITED TO, STATEMENTS CONCERNING
SUITABILITY OF USE, PERFORMANCE, PERCENTAGE OF HOLD, OR PAR VALUE OF A BALLY
PRODUCT SHALL BE DEEMED TO BE A WARRANTY OR GUARANTEE FOR ANY PURPOSE.
MULTIMEDIA GAMES, INC. BALLY GAMING, INC.
Initials ______________________ Initials ___________________
Date __________________________ Date _______________________
20
