Exhibit 10.4
CONFIDENTIAL
ATTORNEYS ONLY
MEMORANDUM OF AGREEMENT entered into in the City of Montreal, Province of
Quebec, Canada, this 5th day of July, nineteen hundred and ninety-seven (1997)
BETWEEN: B.C.D. MECANIQUE LTEE, a legal person established
for a private interest under the laws of Canada,
having its head office at 0000, 0xx Xxx, Xxxxx
000, Xxxxx-Xxxxxxx, Xxxxxxxx of Quebec, Canada
(G6W 5M6), herein acting and represented by Mr.
Real Xxxxxx, Its President, duly authorized as he
so declares,
(hereinafter referred to as "BCD");
AND: DEQ CASINO'S INT, a legal person established for a
private interest under the laws of Canada, having
its head office at 0000, 0xx Xxx, Xxxxx 000,
Xxxxx-Xxxxxxx, Xxxxxxxx of Quebec, Canada (G6W
5M6), herein acting and represented by Xx. Xxxxxx
Xxxxx, its President, duly authorized as he so
declares,
(hereinafter referred to as "DEQ");
AND: AMUSEMENTS "EXTRA" INC., a legal person
established for a private interest under the laws
of Canada, having its head office at 0000, 0xx
Xxx, Xxxxx 000, Xxxxx-Xxxxxxx, Xxxxxxxx of Quebec,
Canada (G6W 5M6), herein acting and represented by
Xx. Xxxxxx Xxxxx, its President, duly authorized
as he so declares,
(hereinafter referred to as "AEI");
AND: TEN STIX., INC., a legal person established for a
private interest under the law's of the United
States of America, having its head office at 0000
Xxxxxxxxx Xx., Xxxxx Xxxxxxx, Xxxxx of Xxxxxxxx,
00000, Xxxxxx Xxxxxx of America, herein acting and
represented by Mr Xxxxxx Xxxxxx, its President,
duly authorized as he declares,
(hereinafter referred to as "TSI");
WHEREAS BCD is the sole, true and absolute owner of all the rights, title and
interests in certain inventions entitled "Progressive Jackpot Gaming with Random
Prize Generation" and "Auxiliary Game with Random Prize Generation" (hereinafter
referred to as "BCD's Inventions" more fully described in Schedule "A" annexed
hereto to form an integral part hereof);
WHEREAS BCD is the manufacturer of a management and promotional system entitled
the Extra Match Game (hereinafter referred to as "BCD's Product") using BCD's
Inventions.
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WHEREAS DEQ and AEI are the distributors of BCD's Product;
WHEREAS TSI has developed certain games entitled "Ten Stix 21" and "Shotgun 21"
consisting in more fully described in Schedule "B" annexed hereto to form an
integral part hereof (hereinafter collectively referred to as "TSI's Products")
and of which TSI is the sole, true and absolute owner of all rights, title and
interests as evidenced by the documents annexed hereto in Schedule "C" to form
an integral part hereof;
WHEREAS TSI is the sole, true and absolute owner of all the rights, title and
interest in a certain invention encompassing a certain part known as the
fidelity principle presently embodied in the "Bonus Light System" (hereinafter
referred to as "TSI's Invention"), more fully described in Schedule "D" annexed
hereto to form an integral part hereof;
WHEREAS BCD and TIS have been discussing authorizing TSI to continue to
manufacture, use, operate, sell and/or lease TSI's Products, which are directed
in part to the random prize generation principle in order to attempt to settle
any possible controversy between them involving BCD's position that TSI's
Products might possibly infringe upon certain parts of BCD's Inventions which
are covered by U.S. patent application no. 08/323,672 and U.S. patent
application "Continuation-in-part" no. 08/698,972, Canada patent application no.
2,118,434 and PCT international application no. PCT/CA95/00577;
WHEREAS BCD may obtain a patent relating to random prize generation;
WHEREAS the parties also view that it is likely that patent interferences will
be declared in the U.S. Patent and Trademark Office ("USPTO") and/or patent
infringements by TSI's Product involving patent applications and/or patents
filed by BCD with the USPTO or the Canadian Intellectual Property Office
("CIPO") or with any foreign patent issuing authority relating to random prize
generation;
WHEREAS to amicably settle current and prospective differences with respect to
BCD's Inventions and any possible patent infringement of BCD's Inventions by TSI
and to grant to TSI the right to continue to manufacture, use, operate, sell
and/or lease TSFs Products which might be covered by said patents owned by BCD
with the view of expediting the development and commercial utilization of any
product of BCD or TSI;
WHEREAS BCD is willing to allow TSI certain rights to continue to manufacture,
use, operate, sell and/or lease TSI's Products encompassing certain parts of
BCD's Inventions more fully described in Schedule "E" annexed hereto to form an
integral part hereof under the terms and conditions hereinafter set forth
WHEREAS TSI is willing to do same for BCD, DEQ and AEI under the terms and
conditions hereinafter set forth.
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NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Definitions
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1.1 The preamble shall form an integral part of this Agreement.
1.2 The term "BCD's Inventions" shall mean and include the Progressive
Jackpot Gaming with Random Prize Generation and the Auxiliary Game
with Random Prize Generation, as more fully described in Schedule "A"
hereof.
1.3 The term "TSI's invention" shall mean and include that certain part of
TSI's Invention known as the Bonus Light System, as more fully
described in Schedule "B" hereof.
1.4 "Patent" shall mean:
(a) all U.S., Canadian and/or PCT Patent Applications and Patent
covering products and/or their use in applications encompassing
BCD's Inventions or TSI's Invention which have been filed prior
or contemporaneously to the execution date of this Agreement and
are pending or issued on or before said date, or which are filed
in the USPTO, CIPO or any other foreign patent issuing authority
prior to the termination of this Agreement, as provided in
Article 8 of this Agreement;
(b) any divisions, re-issues, continuations and continuation-in-part,
Patent Applications of the Patents and Patent Applications
contemplated in paragraph (a) to the extent that they claim
subject matter which could have been claimed in a Patent
Application which satisfies the requirement of paragraph (a);
(c) any Patent Application or Patent corresponding to any foreign
patent application and patent to the Patents and Patent
Application contemplated in paragraphs (a), (b); and
(d) any foreign Patent Application and Patent owned by the parties
hereto covering products and/or their use in applications
encompassing BCD's Inventions which do not have any U.S. or
Canadian Patent Application or Patent counterpart which have been
filed prior to the execution date of this Agreement and are
pending or issued on said date or which are filed prior to the
termination of this Agreement as provided for in Article 8 of
this Agreement.
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1.5 "Patent Application" means an application which, if allowed by the
USPTO or CIPO or any foreign patent issuing authority, will result in
the issuance of a Patent.
2. Waiver
------
2.1 BCD hereby waives all of its rights and possible recourses against TSI
world-wide regarding any possible patent infringement of BCD's
Inventions through the manufacture, use, operation, sale and/or lease
by TSI of the Ten Stix Game.
2.2 BCD hereby waives all of its rights and possible recourses against TSI
in the Territory of the United States of America, including its
possessions and protectorates, with regards to any possible patent
infringement of BCD's Inventions through the manufacture, use,
operation, sale and/or lease by TSI of the Shotgun 21 Game.
2.3 Therefore,TIS shall be allowed by BCD to continue to personally
manufacture, use, operate, sell and/or lease TSI's Products in their
respective territory.
3. Grants
------
3.1 In consideration of the above, TSI hereby grants to BCD, DEQ and AEI a
world-wide, irrevocable, non exclusive, royalty-free and personal
license right to use TSI's Invention in all its field of use, current
and future, in any of BCD's present or future products.
3.2 With respect to any modification, improvement, change and derivative,
patentable or not, resulting and/or relating to TSI's Invention
whether or not conceived, developed and/or reduced to practice by TSI
alone or with the assistance of BCD as co-inventor, TSI grants hereby
to BCD, DEQ and AEI the option to take a world-wide, irrevocable, non
exclusive, royalty-free and personal license right to import, make, to
have made, use, operate, manufacture, distribute, sell and sell for
use products encompassing TSI's Invention and in all its field of use,
current and future.Such option shall be exercised by the exercising
parties providing a written notice to TSI
3.3 Taxes : All taxes,duties, deductions or other charges arising out of
or claimed or asserted to arise out of this Agreement shall be borne
by both parties mentioned above in their respective country and/or
territories in which they do business.
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ATTORNEYS ONLY
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4. Scope
-----
4.1 TSI shall develop its best effort to file a Patent Application with
the USPTO before the end of July 1997 for an invention encompassing
the Bonus Light System and provide BCD with a copy of said patent
application.
4.2 Prior to the execution of this Agreement, TSI shall provide copies to
BCD of any copyright title, trademark title to TSI's Products.
4.3 After the execution of this Agreement, 1ST shall provide to BCD copies
of any Patent and/or Patent Application regarding TSI's Invention
within one (1) month of filing an application with the USPTO or any
foreign patent issuing authority, or within one (1) month of acquiring
any patent relating to any invention encompassing the Bonus Light
System.
4.4 TSI shall however not be required to provide to BCD copies of any
Independent Patent acquired by TSI so long as BCD, DEQ and/or AEI does
not have an exercise available for use under the option provided for
in Section 3.2 of this Agreement. When such an exercise becomes
available to BCD, DEQ and/or AEI, copies of all Patents and/or Patent
Applications previously provided for shall then be sent to BCD.
4.5 For the purposes of this Article copies of all continuation,
continuation-in-part and divisional applications will be provided
within thirty (30) days of the issuance date of the USPTO or any
foreign patent issuing authority.
5. Warranties and Indemnification
------------------------------
5.1 TSI hereby agrees and covenants not to convert or use, in any matter,
the rights granted hereunder for its own use or advantage other than
the use in the matter and to the extent authorized pursuant to this
Agreement.
5.2 It is understood between the parties that TSI's Products must stay in
the present form, more fully described in Schedule "F" hereof, annexed
hereto to form integral part of this Agreement, as presented to the
President of AEI, Xx. Xxxxxx Xxxxx, on May 1st and 3,1997.
5.3 TSI hereby covenants and agrees that neither of the two games
hereinabove mentioned be changed or adapted to resemble in any form or
matter whatsoever a certain product of BCD known as the management and
promotional system entitled the "Extra Match Game", more fully
described in Schedule "G" hereof annexed hereto to form an integral
part of this Agreement, and which was disclosed by AEI on behalf of
BCD to TSI and two of its officers, namely Xx. Xxxx Xxxxxxxx and Xx.
Xxxxx Xxxxx, as evidenced in the minutes of the meeting held on May 2,
1997 annexed hereto as Schedule "H" to form an integral part hereof.
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CONFIDENTIAL
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5.4 TIS warrants to BCD, DEQ and AEI that it has the unqualified lawful
right to transmit, exchange or otherwise control and dispose of the
rights granted under this Agreement.
5.5 TSI shall indemnify and hold BCD, DEQ, AEI harmless from any breach of
this warranty.
5.6 No other rights, obligations or warranties, implied or express, or
deemed to arise between the parties out of the performance of this
Agreement other than those expressly recited herein are mutually
agreed upon to in writing and made a part of this Agreement by the
parties.
6. Disclaimers
-----------
6.1 If a patent infringement is called by any third party to this
Agreement, BCD shall have no obligation to defend any claim or suit or
to hold TIS harmless or immune or to indemnify TSI against any loss,
cost, expense, payment or damage arising from any allegation of
infringement or violation of any patent or other right or alleged
right of such third party by reason of TSI's manufacture, use,
operation, sale and/or lease of TSI's Products in their respective
territory, as hereinabove defined, against TSI.
6.2 TSI shall exonerate, hold harmless and indemnify BCD against any kind
of claim or liability whatsoever arising out of any failure or alleged
failure of TSI including, without limiting the generality of the
foregoing, any patent infringement or any rights of any third party
relating to TSI's Invention, claims of customers and users, members of
the public or of any government, or any agency thereof or employees'
claims as a result of the manufacture, use, operation, sale and/or
lease of the TSI's Products in their respective territory, as
hereinabove defined, called against TSI.
7. Termination
-----------
7.1 If TSI shall, at any time, commit any breach of any of the terms and
conditions of this Agreement and shall fail to remedy such default or
breach within thirty (30) days after the receipt of a written notice
thereof from BCD, BCD may then, at its option and in addition to any
other remedies which it may have at law or in equity, terminate this
Agreement and all rights provided to TIS under this Agreement, by
sending a note to TIS, in writing, to such effect.
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7.2 BCD hereby reserves all of its rights to protect any Patent granted to
it in relation to BCD's Inventions and to enforce such a protection by
suing any infringing party, including TSI, upon termination of this
Agreement, should it manufacture, use, operate, sell and/or lease any
product infringing BCD's Inventions or continue to manufacture, use,
operate, sell and/or lease TSI's Products once this Agreement is
terminated for whatever cause.
7.3 Failure on the part of BCD, to notify TSI of any violation of this
Agreement or to terminate this Agreement because of any violation that
would give BCD the right to terminate this Agreement shall not
constitute a waiver of BCD's right to terminate this Agreement and all
rights relating thereto because of such violation and any like or
different subsequent violation.
7.4 No termination of this Agreement for whatever cause shall affect the
disclaimers of BCD under Article 7 of this Agreement or the
obligations of TSI under Articles 3 and 7 of this Agreement
8. No Other Rights
---------------
Title to all inventions shall remain with the party claiming ownership
thereto and no tight, whether express or implied, relating to any invention
is granted to the other party other than the use and to the extent
authorized pursuant to this Agreement.
9. Assignment
----------
This Agreement is personal to the parties and is not transferable or
assignable in whole or in part and any such attempted assignment or
transfer shall be void and shall constitute a breach of this Agreement.
10. Notices
-------
All notices required to be given under this Agreement shall be sent by
registered mail and addressed as follows:
10.1 to BCD:
B.C.D. Mecanique Ltee
0000, 0xx Xxx
Xxxxx 000
Xxxxx-Xxxxxxx (Xxxxxx)
X0X0X0
Attention: Mr. Real Xxxxxx
--------------------------
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10.2 to DEQ:
DEQ CASINO'S INT
0000, Xxx Xxx
Xxxxx 000
Xxxxx-Xxxxxxx (Xxxxxx)
X0X 0X0
Attention: Xx. Xxxxxx Xxxxx
---------------------------
10.3 to AEI:
Amusements "Extra" Inc.
0000, 0xx Xxx
Xxxxx 000
Xxxxx-Xxxxxxx (Xxxxxx)
X0X 0X0
Attention: Xx. Xxxxxx Xxxxx
---------------------------
10.4 to TSI:
TEN STIX, INC.
0000 Xxxxxxxxx Xx.
Xxxxx Xxxxxxx, XX 00000
U.S.A.
Attention: Xx. Xxxxxx X. Xxxxxx, President
------------------------------------------
11. Amendments
----------
This Agreement can only be modified by a written amendment executed by both
parties and made a part hereto by incorporation.
12. Entire Agreement
----------------
This Agreement constitutes the entire agreement between the parties and
replaces and supersedes all other prior agreements, communications,
arrangements, contracts, negotiations made between the parties regarding to
the subject matter hereof
13. Governing Law
-------------
This Agreement shall be construed in accordance with the laws of the
Province of Quebec and of Canada, if applicable, without reference to the
choice of law principles. The parties hereby covenant and agree that any
issue pursuant to or in relation with this Agreement shall be definitely
settled by a court of competent jurisdiction of the judiciary district of
Montreal, Province of Quebec, to which the parties attorn.
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14. Confideatiality
---------------
The parties hereto covenant and agree that they shall not disclose to any
third party the terms and conditions of this Agreement, including any
negotiation, discussion, documents and/or information exchanged between the
parties regarding BCD's Inventions and BCD's Products as of May 1, 1997,
which shall beconsidered confidential information by the parties. Should
any party hereto wish to disclose any of the terms and conditions of this
Agreement, it shall then seek from the other contracting parties prior
written approval of such disclosure to any third party.
15. Acknowledgement
---------------
Each party acknowledges having received adequate explanation and/or counsel
as to the nature and scope of its obligations under this Agreement, to
understand such explanation and to be satisfied with it.
16. Language
--------
The parties acknowledge having expressly requested that this Agreement be
drafted in the English language. Les parties reconnaissent expressement
avoir requis que cette convention soit redigee en langue anglaise.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers as of the date and place first hereinabove
mentioned.
B.C.D. MECANIQUE LTEE
By: /s/ Real Xxxxxx
-------------------------------
Real Xxxxxx, President
DEQ CASINO'S INT
By: /s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx, President
AMUSEMENTS "EXTRA" INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx, President
TEN STIX, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx
President
By: /s/ Xxxx Xxxxxxxx
-------------------------------
Xxxx Xxxxxxxx
Vice President
TS0044
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ATTORNEYS ONLY
SCHEDULE "A"
BCD'S INVENTIONS
TS0045
CONFIDENTIAL
ATTORNEYS ONLY
SCHEDULE "B"
DESCRIPTION OF TEN STIX 21 AND SHOTGUN 21
TS0046
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SCHEDULE "C"
TITLE TO TSI'S PRODUCTS
TS0047
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SCHEDULE "D"
TSI'S INVENTION
TS0048
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SCHEDULE "E"
DESCRIPTION OF PARTS OF TSI'S
PRODUCTS INFRINGING BCD'S INVENTIONS
TS0049
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SCHEDULE "F"
DESCRIPTION OF TEN STIX 21 AND
SHOTGUN 21 GAMES, AS PRESENTED TO AEI'S PRESIDENT
XX. XXXXXX XXXXX ON MAY 1, AND 3, 1997
TS0050
CONFIDENTIAL
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SCHEDULE "G"
DESCRIPTION OF THE PROMOTIONAL SYSTEM KNOWN AS THE
EXTRA MATCH GAME PRESENTED TO TSI AND
TO XXXX XXXXXXXX AND XXXXX XXXXX
ON MAY 2, 1997
TS0051
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SCHEDULE "H"
MINUTES OF A MEETING HELD ON MAY 2, 1997
TS0052
