Exhibit 10.1

July 29, 2011

Amendment #2

WMS GAMING INC.

800 South Northpoint Boulevard

Waukegan, IL 60085

Attention: Jeff Michel, Esq.

 

Re:

Warner Bros. Consumer Products License Agreement #16076-WOZ (“WIZARD OF OZ”)

Gentlemen:

This letter when fully executed shall formally amend that certain License
Agreement dated October 31, 2006, as amended, relative to certain rights owned
and controlled by Warner Bros. Consumer Products Inc.

By our mutual execution hereof, it is agreed as follows:

 

D.      LICENSED

          PRODUCTS:

  

is hereby deleted in its entirety and replaced with the following:

  

(i)      Gaming devices that generate and/or display wager outcomes, including
without limitation, slot machines (including Class II and Class III), video
lottery terminals, poker machines, server based gaming, handheld mobile gaming
devises that generate and/or display wager outcomes, hardware incorporating
displays, Conversion Kits (as defined in Section 1 of the Standard Provisions)
and ancillary products associated with gaming devices, including, without
limitation, chairs, Internet gaming devices and interactive gaming devices, all
to the extent incorporating Licensed Property.

 

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(ii)     Online/Internet gaming (“Internet Gaming”). Internet Gaming Licensed
Product must be active no later than [*]. The territory for Internet Gaming
shall be the legal gaming jurisdictions within the Licensed Territory, as set
forth in Section E of the License Agreement. Licensor hereby acknowledges that
Licensee has fulfilled its obligation to activate Internet Gaming Licensed
Product by [*].

  

It is understood and agreed that Licensed Products shall specifically EXCLUDE
[*].

F.       LICENSED

          TERM:

  

is hereby deleted in its entirety and replaced with the following:

  

Unless earlier terminated in accordance with the provisions hereof, the license
granted to Licensee commences on the Effective Date of the License Agreement and
continues until December 31, 2020.

G.      ROYALTIES:

          ADVANCE:

  

is hereby deleted in its entirety and replaced with the following:

  

Licensee shall pay Licensor a total of [*] as a fully recoupable advance against
royalties from the exploitation of Licensed Products described in Paragraph D(i)
above from the Effective Date up to and including [*] of the Advance within [*]
of the Effective Date of the License Agreement, [*] on or before [*], [[*] upon
execution of the amendment #1, [*] on or before [*] on or before [*] and [*] on
or before [*].

  

The D(i) Royalties Advance shall be allocated by geographic region as follows:

  

North America:                                       [*]

  

Europe, Middle East and Africa:             [*]

  

Latin America:                                         [*]

  

Asia/Pacific:                                             [*]

* 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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It is understood and agreed that royalties accrued hereunder in any geographic
region shall not offset the Advance allocation in any other geographic region
(i.e. accrued royalties shall not be cross-collateralized across regions).

  

Licensor hereby acknowledges receipt of the [*] D(i) Royalties Advance in full
from Licensee, that said Royalties Advance has been fully recouped by earned
royalties and that Licensee’s obligations with respect to said Royalties Advance
have been fully satisfied.

  

In addition, Licensee shall pay Licensor a total of [*] as a fully recoupable
advance against royalties earned from the exploitation of the Licensed Products
described in Paragraph D(ii) above (the “D(ii) Royalties Advance”) beginning [*]
through the end of the Term of this License Agreement. For the avoidance of
doubt, D(ii) royalties earned before [*] shall not offset the D(ii) Royalties
Advance. Licensee shall pay [[*] on or before [*],[*] on or before [*],[*] on or
before [*] and [*] on or before [*].

  

Licensee shall report such D(ii) Royalties Advance under reference number
#18025-WOZ.

  

In the event any earned D(ii) royalties accrued and paid to Licensor under this
License Agreement on or after [*] exceed the D(ii) Royalties Advance payments
set forth above, Licensee may reduce the total amount of any D(ii) Royalties
Advance payment that becomes due by an amount equal to the earned royalties
previously paid, applying such reduction as a credit against such Advances as
they become due thereafter. For the avoidance of doubt, royalties are
cross-collateralized across all years of the Term.

          SALE:

  

Commencing on the Effective Date of this License Agreement and up to and
including [*], for each D(i) Licensed Product sold by Licensee that is not a
Conversion Kit, Licensee shall accrue a one-time royalty of [*] for Licensed
Products [*], and [*] for Licensed Products [*]. Only sold Licensed Products
that are not Conversion Kits count towards these unit totals.

* 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 each Conversion Kit sold by Licensee, Licensee shall accrue a one-time
royalty of [*] for Conversion Kits [*], and [*] for Conversion Kits [*]. Only
sold Conversion Kits count towards these unit totals.

  

Effective [*] through the end of the Term of this License Agreement the
following royalty ladder shall apply to all sales made on or after [*]:

  

For each D(i) Licensed Product sold by Licensee that is not a Conversion Kit,
Licensee shall accrue a one-time royalty of [*] for Licensed Products [*],[*]
for Licensed Products [*],[*] for Licensed Products [*] and [*] for Licensed
Products [*]. Only sold D(i) Licensed Products that are not Conversion Kits
count towards these unit totals.

  

For each Conversion Kit sold by Licensee, Licensee shall accrue a one-time
royalty of [*] for Conversion Kits [*],[*] for Conversion Kits [*],[*] for
Conversion Kits [*] and [*] for Conversion Kits [*]. Only sold Conversion Kits
count towards these unit totals.

  

Such incremental royalty increases apply only to the number of Licensed Products
that is greater than the number of Licensed Products in the specified lower
range, while the number of Licensed Products in the specified lower range
remains subject to the lower royalty payment rate. For example, if [*]
Conversion Kits were sold, Licensee would pay [*]. For the avoidance of doubt,
Licensed Products sold before [*] shall not count towards establishing the
applicable tier for sales on or after [*].

          RECURRING

           REVENUE

           (PARTICIPATION

  

           OR LEASE):

  

Commencing on the Effective Date of this License Agreement and up to and
including [*], for each D(i) Licensed Product placed with a customer of Licensee
whereby Licensee receives ongoing payments from the operation thereof, Licensee
shall accrue a royalty of [*] per day in operation for consumer use for Licensed
Products [*],[*] per day in operation for consumer use for Licensed Products
[*],[*] in operation for consumer use for Licensed Products [*], and [*] per day
in operation for consumer use for Licensed Products [*].

* 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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Effective [*] through the end of the Term of this License Agreement the
following royalty ladder shall apply to ALL D(i) Licensed Products in operation
on a recurring revenue placement, even if distributed prior to [*]:

  

For each Licensed Product, whether variable (including wide area progressive) or
fixed, placed with a customer of Licensee whereby Licensee receives ongoing
payments from the operation thereof, Licensee shall accrue a royalty of [*] per
day in operation for consumer use for Licensed Products [*],[*] per day in
operation for consumer use for Licensed Products [*],[*] per day in operation
for consumer use for Licensed Products [*] and [*] per day in operation for
consumer use for Licensed Products [*].

          INTERNET

  

          GAMING:

  

To the exclusion of all other Royalties specified in this Section G, Licensee
shall accrue a royalty of [*] from play of D(ii) Licensed Products less any
accruals for or [*].

  

D(ii) royalties shall be deemed to accrue and be allocated to geographic regions
according to the percentage of end users/consumers that play D(ii) Licensed
Products in each geographic region during each relevant royalty reporting
period. For example, if seventy five percent (75%) of play of D(ii) License
Products occurs in Europe during a royalty reporting period and twenty five
percent (25%) of play of Licensed Products on-line occurs in North America
during that same period, seventy five percent (75%) of D(ii) royalties during
that period shall be deemed to accrue and be allocated to Europe and twenty five
percent (25%) of such royalties shall be deemed to accrue and be allocated to
North America.

  

Licensee shall report D(ii) royalties under reference number #18025-WOZ.

* 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 each of the royalty models set forth in this Paragraph G, if a Licensed
Product includes multiple games, then the applicable royalty rate shall be
reduced by multiplying it by the ratio obtained by dividing the number of games
in such Licensed Product that incorporate Licensed Property by the total number
of games in such Licensed Product.

The Parties agree to negotiate in good faith royalty rates and/or royalty
structures in the event that Licensee is able to place Licensed Products by
means of server-based or downloadable gaming systems.

In all other respects, other than as noted above, the subject License Agreement
and all of its terms and conditions shall continue to govern our relationship.

Please show your concurrence with the above by signing all copies and returning
same to Warner Bros. Consumer Products Inc. Upon final execution, one copy will
be sent to you for your files.

This letter shall have no legal effect unless and until signed by all parties
noted below.

 

Sincerely,

  

WARNER BROS. CONSUMER

  

AGREED and ACCEPTED:

PRODUCTS INC.

       

WMS GAMING INC.

By: /s/ Ana M. De Castro

  

By: /s/ Orrin J. Edidin

Sr. Vice President

  

President

Business & Legal Affairs

     

Date: July 25, 2011

Date: July 25, 2011

  

 

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