Document:

Exhibit 10.1

 

SERVICES AGREEMENT

 

This Services Agreement (together with all Schedules hereto, this “Agreement”) is dated as of [ · ] (the “Effective Date”), by and between Scientific Games Corporation, a Nevada corporation (“SGC”), Scientific Games International, Inc., a Delaware corporation (“SGI”), and Bally Gaming, Inc., a Nevada corporation (“Bally”) (each of SGC, SGI, and Bally individually a “Provider” and, together with any other entities that join this Agreement pursuant to Section 2.1(d), the “Providers”), and SciPlay Holding Company, LLC, a Nevada limited liability company (“SciPlay” or “Recipient” and, together with Providers, the “Parties,” and each, a “Party”).

 

RECITALS

 

WHEREAS, Recipient desires to engage Providers to provide certain services to Recipient and its Affiliates, and Providers are willing to provide such services to Recipient and its designated Affiliates in consideration of certain fees;

 

AGREEMENT

 

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the Parties, intending to be legally bound, hereby agree as follows:

 

ARTICLE 1
 DEFINED TERMS; USAGE

 

1.1          DEFINED TERMS

 

For the purposes of this Agreement, the following terms and variations on them have the meanings specified in this Section 1.1:

 

“Affiliates” means, with respect to a Person, a corporation or other entity directly or indirectly controlled by, controlling or under common control with such Person; provided, however, (a) Providers’ Affiliates shall not include Recipient and its Affiliates as described in clause (b) of this definition, and (b) Recipient’s Affiliates shall be limited to SciPlay Corporation, SciPlay Parent Company, LLC, Phantom EFX, LLC, C.O.A.S. Company Ltd, SpiceRack Media, LLC, Dragonplay Ltd, and any of their respective Subsidiaries.

 

“Agreement” is defined in the preamble.

 

“Business Day” means any day other than a day, which is Saturday or Sunday, or other day on which commercial banks in New York City, New York are authorized or required to be closed.

 

“Confidential Information” is defined in Section 4.2(b).

 

“Disclosing Party” is defined in Section 4.2(a).

 

“Due Date” is defined in Section 3.2(b).

 

“Effective Date” is defined in the preamble.

 

 

“Expenses” is defined in Section 3.1(b).

 

“Force Majeure Event” means any event that hinders, limits or prevents the performance by a Party of its obligations hereunder or makes such performance commercially impracticable or impossible and that is beyond the reasonable control of such Party, including death, disability, fire, explosion, action of the natural elements, riot, war, acts of terrorism, equipment failure, shortages or unavailability of transportation or raw materials, changes in laws or regulations, orders or decrees and similar events.

 

“Initial Term” is defined in Section 5.1.

 

“Joinder” is defined in Section 2.1(d).

 

“Nominated Representative” is defined in Section 7.1.

 

“Parties” or “Party” is defined in the preamble.

 

“Person” means an individual or an entity, including a corporation, share company, limited liability company, partnership, trust, association, governmental body or any other body with legal personality separate from its equity holders or members.

 

“Personnel” means the Provider Personnel or Recipient Personnel, as the context requires.

 

“Provider” is defined in the preamble.

 

“Provider Personnel” means, with respect to any Provider, the employees, agents or other personnel of such Provider that perform work in connection with any Services.

 

“Receiving Party” is defined in Section 4.2(a).

 

“Recipient” is defined in the preamble.

 

“Recipient Personnel” means any employees, agents or other personnel of Recipient or its Affiliates that support or receive any work in connection with any Services.

 

“Schedules” means the schedules hereto.

 

“Service Fees” is defined in Section 3.1(a).

 

“Service Modification” means a modification to the terms and conditions relating to the performance of or payment for a previously agreed-upon Service to reflect, among other things, new procedures, processes or other methods of providing such Service; provided that the mere transfer of provision of a Service to a new Provider who executes a Joinder, without any other changes to the terms and conditions relating to such Service, is not considered a Service Modification.

 

“Services” is defined in Section 2.1(a)(i).

 

“Subsidiary” means, with respect to any Person on any date, any other Person (i) the accounts of which would be consolidated with and into those of the applicable Person in such Person’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date or (ii) of which securities or other ownership interests representing more than fifty percent (50%) of the

 

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equity or more than fifty percent (50%) of the ordinary voting power or, in the case of a partnership, more than fifty percent (50%) of the general partnership interests or more than fifty percent (50%) of the profits or losses of which are, as of such date, owned, controlled or held by the applicable Person or one or more subsidiaries of such Person.

 

“Term” is defined in Section 5.1.

 

“Term Extension” is defined in Section 5.1.

 

“Third Party Service Provider” means, with respect to any Provider, any third-party subcontractor of such Provider who provides Services hereunder.

 

“Transition Plan” is defined in Section 2.1(a)(ii).

 

1.2          USAGE; GENERAL RULES OF CONSTRUCTION

 

Any reference in this Agreement to an “Article,” “Section” or “Schedule” refers to the corresponding Article, Section or Schedule of or to this Agreement, unless the context indicates otherwise.  The headings of Articles and Sections are provided for convenience only and will not affect the construction or interpretation of this Agreement.  All words used in this Agreement should be construed to be of such gender or number as the circumstances require.  The terms “include” and “including” indicate examples of a foregoing general statement and not a limitation on that general statement.  “Herein,” “hereof” and “hereto” are references to this Agreement.  Any definition of or reference to any law, agreement, instrument or other document herein will be construed as referring to such law, agreement, instrument or other document as from time to time amended, supplemented or otherwise modified.  Any definition of or reference to any statute will be construed as referring also to any rules and regulations promulgated thereunder.  Any reference to a Party refers to such Party and its successors and permitted assigns.

 

ARTICLE 2
 SERVICES

 

2.1          SERVICES

 

(a)           Provision of Services.

 

(i)            Subject to Section 2.1(a)(ii), beginning on the Effective Date, Providers will provide Recipient (or, if requested by Recipient, Recipient’s Affiliates) each of the services set forth on Schedule A (each a “Service” and collectively, the “Services”).    For the avoidance of doubt, any tasks necessary to accomplish the Services, even if such tasks are not expressly set forth on Schedule A, shall be deemed to be part of the “Services” to be performed hereunder.  If there is any inconsistency between the terms of the body of this Agreement and any applicable Schedule, the terms of this Agreement will govern, unless the applicable Schedule explicitly states that it is intended to supersede the body of this Agreement.

 

(ii)           If requested by Recipient, the Parties will develop a plan for the transition of specified Services to Recipient (the “Transition Plan”).  The Transition Plan will provide for the transition of Services to Recipient within 90 days from written notice by Recipient to the applicable Providers, and will include appropriate support mechanisms, training, and other services, as agreed to by the Parties.

 

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The planning and implementation of the Transition Plan will be considered a “Service” for the purposes of this Agreement, and will be provided by the applicable Providers at commercially reasonable rates, agreed by the Parties individually for each specific Transition Plan, and invoiced and paid in accordance with Article 3.  Upon successful implementation of a Transition Plan for any Service, Providers shall no longer provide this Service.  For clarity, a Transition Plan may address an entire Service as set forth in Schedule A or a portion of a Service that will result in a reduction of the Service Fee paid by Recipient to Providers.

 

(b)           Standard of Care.  Providers will deliver or cause to be delivered the Services that they are obligated to provide hereunder to Recipient (or, if requested by Recipient, Recipient’s Affiliates):

 

(i)            in accordance with this Agreement and applicable law; and

 

(ii)           in a timely and workmanlike manner.

 

(c)           Service Modifications.  During the Term, any Provider shall have the right to make a Service Modification upon notice to Recipient if the Service Modification results from any changes that such Provider is implementing in connection with the operation of its business generally, provided that such Service Modification shall not occur prior to ninety (90) days after Recipient receives written notice of such Service Modification from the Providers and that such Service Modification will not require any increase the Service Fees unless Recipient will benefit from such Service Modification and confirms in writing to Providers that it will accept such Service Fee increase.  Any other Service Modifications desired by either Party shall require the written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed.  The Nominated Representatives may provide such a consent.  If a Service Modification is approved in accordance with this Section 2.1(c), then Schedule A and the definition of the Services, as applicable, will be amended in accordance with Section 7.5 below as agreed by the Parties to reflect the implementation of the Service Modification and any other agreed-upon terms or conditions relating thereto.  For clarity, if Recipient decides it no longer desires to receive a Service from Providers, it may so inform Providers on ninety (90) days’ notice and the Service Fees will be adjusted accordingly.

 

(d)           Additional Providers.  In the event that one or more Providers determine that an Affiliate of a Provider, who is not then a Party hereto, will be providing Services hereunder, Recipient hereby consents to the provision of such Services by such Affiliate, provided that such Affiliate executes a joinder in the form of Schedule B to become a Party hereto and obligated hereby (the “Joinder”).  Upon execution of such Joinder, such Affiliate shall be deemed to be a Provider hereunder.  In the event that there is also a Service Modification (if, for example, there are certain other changes relating to the applicable Services, or if the new Provider will be providing a new Service), then the provisions of Section 2.1(c) shall apply, and the Service Modification will need to be approved and Schedule A amended in accordance therewith.

 

(e)           Personnel.  As between Providers and Recipient, Providers will have the sole and exclusive responsibility for all of their respective Provider Personnel, including but not limited to responsibility for the payment of any and all compensation, unemployment insurance, worker’s compensation, disability insurance, employee benefits and other employment-related charges and deductions with respect to the Provider Personnel.

 

(f)            Books and Records.  Providers shall keep books and records of the Services provided and commercially reasonable supporting documentation of all charges and expenses incurred in

 

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providing such Services, including books and records and reasonable supporting documentation for the calculation of the applicable Service Fees.  Providers shall make such books and records available to Recipient, upon reasonable notice, during normal business hours.

 

(g)           Subcontractors.  Providers shall not be permitted to engage any Third Party Service Providers to perform any or all of its obligations under this Agreement without the prior written consent of Recipient, which consent may not be unreasonably withheld, conditioned or delayed.  Notwithstanding the foregoing, and without Recipient’s consent, (i) any Provider shall be permitted to engage a Third Party Service Provider to perform any functions that constitute a Service or that otherwise are in support of a Service if such Provider has also engaged such Third Party Service Provider to perform such functions on behalf of Provider in support of Provider’s operation of its own business, (ii) any Provider may subcontract to any Third Party Service Providers who are currently providing services to such Provider or any of its Affiliates, and (iii) any Provider may subcontract to any Third Party Service Providers to perform any functions that constitute a Service or that otherwise are in support of a Service in the ordinary course of business.  To the extent any Provider uses any Third Party Service Providers for any purpose, such Provider shall remain primarily responsible for all of its obligations hereunder with respect to the scope of the Services, the manner in which such Services are performed as set forth in Section 2.1(b) hereof and the content of the Services provided to Recipient.  Furthermore, to the extent Third Party Service Providers require representations on behalf of personnel who work for Recipient or its Affiliates, Provider Personnel shall not be liable for errors, omissions or delays related to such information provided.

 

2.2          OTHER RESPONSIBILITIES

 

(a)           General Obligations.  Where input or other information from Recipient or any of its Affiliates is reasonably necessary in connection with the provision of the Services, Recipient will, and will cause its Affiliates to, deliver such input or other information to the applicable Provider in a general format and level of detail and at the general times as agreed by such Provider and Recipient.  If Recipient or any of its Affiliates fail to comply with the foregoing, the applicable Provider will be relieved of its obligations under Sections 2.1(a) and 2.1(b), as appropriate, until such time as Recipient or any of its Affiliates complies, to the extent such failure to comply renders performance of the Services or the achievement of such standards described in such Sections impractical or impossible.

 

(b)           Provision of Access.

 

(i)            Subject to Providers’ compliance with Recipient’s and its Affiliates’ policies and procedures governing access to and use of its premises, facilities and equipment, the Provider Personnel will have such access to Recipient’s and its Affiliates’ premises, facilities, equipment (including access to telephones, photocopying equipment and the like), software and personnel, during normal business hours and in a manner that does not interfere with Recipient’s and its Affiliates’ ability to operate their business, as is reasonably necessary to provide the Services in accordance with the terms of this Agreement.

 

(ii)           Subject to Recipient’s and its Affiliates’ compliance with Providers’ policies and procedures governing access to and use of their premises, facilities and equipment, Recipient Personnel will have such access to Providers’ premises, facilities, equipment (including access to telephones, photocopying equipment and the like), software and personnel, during normal business hours and in a

 

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manner that does not interfere with Providers’ ability to operate their business, as is reasonably necessary to support or receive the Services in accordance with the terms of this Agreement.

 

ARTICLE 3
 PAYMENT

 

3.1          FEES / EXPENSES

 

(a)           The fees for the provision of each Service are set forth for such Service on Schedule A (the “Service Fees”).  Recipient shall pay the Service Fees to the Providers in accordance with Section 3.2 for the provision of the Services.  The Fees charged pursuant to Schedule A are intended to reflect the actual costs of Providers to provide the Services to recipients.  Either Party may request that the rates charged pursuant to Schedule A be reviewed no more than once each calendar year by either Party with the cost of such review being borne by the Party requesting such review.  In the event that a review determines that the costs of Schedule A are not reflective of the actual costs related to the Services, Schedule A shall be revised prospectively to reflect such costs.

 

(b)           Recipient will reimburse each Provider for any reasonable, documented expenses, incurred by such Provider solely in connection with the performance of the Services (“Expenses”).

 

(c)           In the event the year over year Service Fee expenses charged to Recipient increases by ten percent (10%) or more, Either Party may request a review the Service Fees and confirm that the Service Fee remains accurate or adjust as necessary, with the cost of such review being borne by the party requesting such review.  For example, if Provider begins costly initiatives that do not benefit Recipient, Recipient will not pay a percentage of those initiatives.

 

3.2          PAYMENTS / BILLING DISPUTES

 

(a)           Invoices. Promptly following the end of each calendar month during the Term, Providers will provide Recipient with an invoice specifying the Service Fees and Expenses for the Services provided by Providers during such month, and setting forth in reasonable detail a description of the Services performed and expenses incurred, and the Service Fees due for the performance of such Services.

 

(b)           Payment Terms.  All invoiced amounts will be payable by Recipient within sixty (60) days after receipt of the invoice (the “Due Date”).  All payments shall be made in U.S. dollars to an account or accounts designated by Providers’ Nominated Representative from time to time.  Any such invoiced amounts that are undisputed and unpaid after such sixty (60) day period will accrue interest at a rate of 1% per month from the Due Date until they are paid.

 

(c)           Billing Disputes.  Recipient must timely make all undisputed payments under Section 3.2(b).  If Recipient in good faith disputes any invoiced amounts, Recipient shall notify the Providers with reasonable specificity of the basis of the dispute, and the Parties will promptly address and attempt to resolve the dispute in accordance with the procedures set forth in Section 7.10.

 

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ARTICLE 4
 ADDITIONAL COVENANTS

 

4.1          INTELLECTUAL PROPERTY

 

All intellectual property rights, trade secrets or other proprietary rights of a Provider that are used in providing the Services and in any ideas, concepts, inventions or techniques of a Provider that such Provider may use, conceive or first reduce to practice in connection with the Services, including any report, computer program (source code and object code) or programming documentation, manual, chart, specification, formula, database architecture, template, system model, copyright, diagram, description, screen display, schematic, blueprint drawing, listing, record or other materials, are and will remain the exclusive property of such Provider.  Each Provider in turn will grant Recipient a worldwide, non-exclusive, irrevocable license, with the right to sublicense, to make, have made, use, sell, offer for sale, import, copy, maintain, modify, enhance, and create derivative works of such intellectual property rights solely to the extent necessary for Recipient or its designated Affiliates to receive the Services as contemplated hereunder; provided that, for the avoidance of doubt, Recipient and its Affiliates shall treat any trade secrets licensed to it hereunder as the Confidential Information of the applicable Provider, and shall abide by all obligations in Section 4.2 with respect thereto, which obligations shall continue for so long as such intellectual property remains a trade secret (notwithstanding anything to the contrary in Section 4.2(e)).  The Parties will execute any assignments or other instruments that may be appropriate or necessary to give full legal effect to this Section 4.1.

 

4.2          CONFIDENTIALITY

 

(a)           General.  Each Provider and Recipient (in each case, as applicable, the “Receiving Party”) will maintain all Confidential Information of the other (the “Disclosing Party”) in strict confidence, and the Receiving Party will use and disclose such Confidential Information only as authorized under this Agreement or as otherwise authorized in writing by the Disclosing Party.  The Receiving Party further agrees to take the same care with the Disclosing Party’s Confidential Information as it does with its own, but in no event less than a reasonable degree of care.

 

(b)           Definition of Confidential Information.  For purposes of this Agreement, “Confidential Information” means the following types of information and other information of a similar nature of the Disclosing Party, whether set forth in a writing, disclosed by the Disclosing Party’s representatives orally or in any other manner: (a) all non-public information and material of the Disclosing Party (and of companies with which the Disclosing Party has entered into confidentiality agreements) which the Receiving Party obtains knowledge of or access to; (b) non-public intellectual property of the Disclosing Party; and (c) business and financial information of the Disclosing Party including but not limited to pricing, business plans, forecasts, revenues, expenses, earnings projections, sales data and any and all other non-public financial information.

 

(c)           Exceptions.  Notwithstanding any of the foregoing, Confidential Information does not include information which:  (a) has been made generally available to the public (other than by acts of the Receiving Party or its Affiliates or their respective employees, attorneys, agents, consultants, advisors or representatives in violation of this Agreement), (b) becomes available to the Receiving Party on a non-confidential basis from a source other than the Disclosing Party, provided that the source of such information was not bound by a confidentiality agreement with the Disclosing Party, (c) was within the possession of the Receiving Party on a non-confidential basis prior to its being furnished to the

 

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Receiving Party by or on behalf of the Disclosing Party, or (d) is independently developed by the Receiving Party or one of its employees, attorneys, agents, consultants, advisors or representatives without reference to or use of the Confidential Information.  Notwithstanding anything to the contrary herein, neither the Receiving Party nor any of its employees, attorneys, agents, consultants, advisors or representatives shall be precluded from disclosing Confidential Information (a) to its Affiliates on a need-to-know basis, (b) pursuant to the order of any court or administrative agency or in any pending legal or administrative proceeding as required by applicable law, (c) upon the request or demand of any regulatory authority having jurisdiction over such Person or any of its Affiliates, (d) to any prospective purchaser of, or investor in, any or all of the assets, stock or the business of the Receiving Party or any of its subsidiaries, or to any current or prospective lender to the Receiving Party or any of its subsidiaries, provided that such Person executes and delivers a confidentiality agreement containing obligations of confidentiality that are at least as protective, in all material respects, of the Disclosing Party’s Confidential Information as those set forth in this Section 4.2, or (e) as otherwise set forth herein.  If the Receiving Party is requested to disclose any of the Disclosing Party’s Confidential Information pursuant to any judicial or governmental order, the Receiving Party will promptly notify the Disclosing Party of such order so that the Disclosing Party, in its sole discretion, may seek an appropriate protective order and/or take any other action to prevent or minimize the breadth of such disclosure.

 

(d)           No Implied License.  No license or conveyance of any rights to any intellectual property is granted to the Receiving Party by the disclosure of Confidential Information pursuant to this Agreement.

 

(e)           Survival.  The obligations contained in this Section 4.2 will survive the termination or expiration of this Agreement for a period of three (3) years; provided, however, that notwithstanding the expiration of such three (3) year period, (i) for Confidential Information that comprises trade secrets, these obligations shall continue for so long as such Confidential Information remains a trade secret, and (ii) all Confidential Information also received or disclosed pursuant to any other agreement between the Parties to this Agreement or their Affiliates will continue to be governed by the confidentiality provision of any such agreement, to the extent applicable.

 

(f)            Termination.  Upon termination of a Service, the Parties shall, upon prior written request, return to the other Party or destroy (at the Disclosing Party’s option) all Confidential Information of the applicable Services, unless such Confidential Information is required for performance of the remaining Services except to extent and for the period in which a Party is required to hold the Confidential Information in order to comply with surviving obligations in this Agreement or applicable law.  Upon termination of the Agreement, the Parties shall, upon prior written request, return to the other Party or destroy (at the Disclosing Party’s option) all Confidential Information, except to extent and for the period in which a Party is required to hold the Confidential Information in order to comply with surviving obligations in this Agreement or applicable law.

 

4.3          AUDIT ASSISTANCE

 

If either Party is subject to (i) a request from or audit by a governmental authority, standards organization or customer or (ii) legal or arbitration proceedings in which such Party requests access to or an audit of books, records, documents or accounting practices and procedures pursuant to applicable laws, rules, regulations, standards or contract provisions and such examination or audit relates to the Services, the other Party will provide, at the sole cost and expense of the requesting Party, all reasonable assistance requested by the Party that is subject to the audit or proceedings in responding to

 

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such audits, requests for information, or legal or arbitration proceedings, to the extent that such assistance or information is (a) within the reasonable control of the cooperating Party and (b) related to the Services.

 

ARTICLE 5
 TERM AND TERMINATION

 

5.1          TERM

 

This Agreement will commence on the Effective Date and, unless earlier terminated pursuant to Section 5.2, shall remain in effect for a period of two (2) years (the “Initial Term”).  The Initial Term will automatically extend for additional one (1) year periods (each, a “Term Extension”) unless either Party gives at least thirty (30) days’ notice to the other Party of its intent not to renew the Agreement.  The Initial Term, together with all Term Extensions, if any, are referred to hereunder as the “Term.”

 

5.2          TERMINATION

 

(a)           Termination of Specific Services.

 

(i)            By Recipient.  Recipient may require that a Provider cease providing all or any part of the Services that such Provider is required to provide hereunder by providing notice to such Provider’s Nominated Representative which identifies the specific Services to be terminated and the date on which they must be terminated.  Unless a shorter period is specified for a particular Service in Schedule A, notice of early termination by Recipient must be provided at least thirty (30) days prior to the effective date of such termination.  Except as otherwise provided in Schedule A, with respect to the termination of a particular Service, within fifteen (15) days of receipt of such notice of termination, the applicable Provider shall provide written notice to Recipient if termination of the specified Services would require the termination of any other Services.  Within fifteen (15) days of receipt of such notice from such Provider, Recipient shall have the option, upon written notice to Provider, to rescind its original cancellation notice.

 

(ii)           By Providers.  Any Provider may terminate the provision of a Service hereunder, without any liability to Recipient resulting from such termination, if such Provider provides Recipient at least ninety (90) days’ advance notice of such termination, in order to provide Recipient with a reasonable period of time to in-source such Service or engage a new service provider.

 

(b)           Termination of the Agreement.  This Agreement may be terminated:

 

(i)            by mutual agreement of the Parties in writing;

 

(ii)           automatically, upon termination of all of the Services in accordance with Section 5.2(a);

 

(iii)          by Providers, upon ten (10) days advance written notice to Recipient, if any of the Providers determine that (a) the provision of Services under this Agreement would cause any of the Providers to violate, trigger a default or event of default under, or require any determination or opinion that has not previously been obtained in order to comply with, any of the debt agreements of Providers or their respective Affiliates, or (b) Recipient is unable to meet their payment obligations under Section 3.2.

 

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(iv)          by Providers upon the dissolution of Recipient or any of its Affiliates.

 

5.3          EFFECT OF TERMINATION

 

If this Agreement is terminated pursuant to Section 5.2(b), all of the Parties’ obligations hereunder will terminate, except with respect to any surviving Services, if any, and except that, in any event, Sections 4.1, 4.2 (for three (3) years only), 4.3, 7.2, 7.5 through 7.14 as well as Articles 1,  3 and 6, and this Section 5.3, will survive and the Parties’ rights to pursue all legal remedies for breaches of the Agreement will survive unimpaired.  Following expiration or termination of this Agreement, each Party remains responsible for paying to the other Party all accrued but unpaid Service Fees or Expenses, as applicable, through the date of termination, in accordance with Section 3.2.  The termination of this Agreement will not be deemed to be an election of remedies by a terminating Party.

 

ARTICLE 6
 WARRANTIES; LIMITATION OF LIABILITY

 

6.1          WARRANTIES; DISCLAIMER

 

EXCEPT AS EXPRESSLY SET FORTH IN SECTION 2.1(B), NEITHER PARTY MAKES ANY WARRANTY IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND EACH PARTY HEREBY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE REGARDING SUCH SUBJECT MATTER.  To the extent that a Party may not as a matter of applicable law disclaim any implied warranty, the scope and duration of such warranty will be the minimum permitted under such law.

 

6.2          LIMITATION ON LIABILITY

 

(a)           Consequential and Other Damages.  NEITHER PARTY SHALL BE LIABLE, WHETHER IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), OR OTHERWISE, FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR DIMINUTION OF VALUE WHATSOEVER WHICH IN ANY WAY ARISE OUT OF, RELATE TO, OR ARE A CONSEQUENCE OF, ITS PERFORMANCE OR NONPERFORMANCE HEREUNDER, OR THE PROVISION OF OR FAILURE TO PROVIDE ANY SERVICE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS, BUSINESS INTERRUPTIONS AND CLAIMS OF CUSTOMERS, EXCEPT IN THE EVENT OF CONFIDENTIALITY OBLIGATIONS, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

(b)           Liability Cap.  THE AGGREGATE LIABILITY OF EACH PARTY WITH RESPECT TO THIS AGREEMENT (OTHER THAN WITH RESPECT TO SUCH PARTY’S OBLIGATION TO PAY FEES) OR IN CONNECTION WITH THE PERFORMANCE, DELIVERY OR PROVISION OF ANY SERVICE PROVIDED UNDER THIS AGREEMENT SHALL BE LIMITED TO (i) IN THE CASE OF ANY PROVIDER, THE FEES PREVIOUSLY PAID TO IT  BY THE SERVICE RECIPIENT HEREUNDER, AND (ii) IN THE CASE OF RECIPIENT, ANY UNPAID AMOUNTS OWED BY IT TO THE APPLICABLE PROVIDER HEREUNDER; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATION OF LIABILITY SHALL NOT APPLY TO A PARTY’S CONFIDENTIALITY OBLIGATIONS, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

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ARTICLE 7
 GENERAL PROVISIONS

 

7.1          NOMINATED REPRESENTATIVES

 

Each Party will appoint a representative (a “Nominated Representative”) to facilitate communications and performance under this Agreement during the Term.  Each Party may treat an act of a Nominated Representative of the other Party as being authorized by such Party without inquiring behind such act or ascertaining whether such Nominated Representative had authority to so act.  As of the Effective Date, Providers’ Nominated Representative shall be Michael A. Quartieri, and Recipient’s Nominated Representative shall be Michael Cody.  Each Party will have the right at any time and from time to time to replace its Nominated Representative by giving notice in writing to the other Party setting forth the name of the Nominated Representative to be replaced and the name of his or her replacement.

 

7.2          NOTICES

 

All notices, consents, waivers and other communications under this Agreement must be in writing and will be deemed given to a Party when (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid), (b) sent by facsimile with confirmation of transmission by the transmitting equipment, or (c) received by the addressee, if sent by certified mail, return receipt requested, in each case to the following addresses, OR facsimile numbers and marked to the attention of the individual (by name or title) designated below (or to such other address, facsimile number, e-mail address or individual as a Party may designate by notice to the other Party):

 

If to Recipient:

 

SciPlay Holding Company, LLC

6650 S. El Camino Road

Las Vegas, NV 89118

Attention: General Counsel

Facsimile: (702) 532-7699

 

If to any Provider:

 

c/o Scientific Games Corporation

6650 S. El Camino Road

Las Vegas, NV 89118

Attention: Chief Legal Officer

Facsimile: (702) 532-7699

 

7.3          FORCE MAJEURE EVENT

 

Neither Party will be liable or deemed to be in breach of this Agreement for failure or delay of performance caused by a Force Majeure Event as long as the Party whose performance is affected the by the Force Majeure Event notifies the other Party as promptly as practicable thereof and takes commercially reasonable efforts to overcome it and resume performance hereunder as soon as possible.  If a Party’s performance is affected by a Force Majeure Event, the time for that Party’s performance will be extended or, as appropriate, suspended for the duration of the Force Majeure Event without liability, except as otherwise provided in this Agreement.  Each Provider shall treat Recipient or its designated

 

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Affiliates in the same manner as any other external recipient for the affected Services, if any, in connection with the resumption of performance.  During the period of a Force Majeure Event affecting performance by any Provider of any Service(s), Recipient (a) shall be relieved of the obligation to pay Service Fees for such Services(s) throughout the duration of such Force Majeure Event, and (b) shall be entitled to seek an alternative service provider with respect to such Service(s).

 

7.4          FURTHER ACTIONS

 

Upon the request of either Party, the other Party will (a) furnish to the requesting Party any additional information, (b) execute and deliver, at its own expense, any other documents and (c) take any other actions as the requesting Party may reasonably require to more effectively carry out the intent of this Agreement.

 

7.5          ENTIRE AGREEMENT AND MODIFICATION

 

This Agreement supersedes all prior agreements between the Parties with respect to its subject matter and constitutes a complete and exclusive statement of the terms of the agreement between the Parties with respect to its subject matter.  This Agreement may not be amended, supplemented or otherwise modified except in a written document executed by the Party against whose interest the modification will operate.

 

7.6          DRAFTING AND REPRESENTATION

 

The Parties have participated jointly in the negotiation and drafting of this Agreement.  No provision of this Agreement will be interpreted for or against a Party because that Party or its legal representative drafted the provision.

 

7.7          SEVERABILITY

 

If a court of competent jurisdiction or arbitral tribunal holds any provision of this Agreement invalid or unenforceable, the other provisions of this Agreement will remain in full force and effect.  Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.  If the final judgment of a court of competent jurisdiction declares that any term or provision of this is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or other limit of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.

 

7.8          ASSIGNMENT; SUCCESSORS; THIRD-PARTY RIGHTS

 

Except as otherwise set forth herein, no Party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of the other Party, which shall not be unreasonably withheld, conditioned, or delayed.  Notwithstanding the foregoing, any Provider may freely assign any of its rights under this Agreement or delegate any of its obligations under this Agreement to an Affiliate.  Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of each Party’s respective successors and permitted assigns.

 

12

 

7.9          WAIVER

 

The rights and remedies of the Parties are cumulative and not alternative.  Neither any failure nor any delay by either Party in exercising any right, power or privilege under this Agreement or any of the documents referred to in this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.  To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement or any of the documents referred to in this Agreement can be discharged by one Party, in whole or in part, by a waiver or renunciation of the claim or right unless in a written document signed by the other Party, and (b) no waiver that may be given by a Party will be applicable except in the specific instance for which it is given.

 

7.10        RESOLUTION OF DISPUTES

 

(a)           Dispute Resolution Procedures.  The Parties will cooperate in good faith and use commercially reasonable efforts to informally resolve any disputes under this Agreement.  All disputes shall be promptly referred to the Nominated Representatives for resolution.  If the Nominated Representatives are unable to resolve any dispute within thirty (30) Business Days, the dispute shall be referred to senior executives of the Parties for resolution.  If the senior executives are unable to resolve the dispute within forty (40) Business Days following the referral of the dispute to them, then either Party may bring an action to resolve the dispute in accordance with Section 7.10(b).

 

(b)           Consent to Jurisdiction.  Subject to Section 7.10(a), each of the Parties irrevocably submits to the exclusive jurisdiction of the state and federal courts located in Clark County, Nevada for the purposes of any action or proceeding arising out of this Agreement or any transaction contemplated hereby.  Subject to Section 7.1(a), each of the Parties irrevocably and fully waives the defense of an inconvenient forum to the maintenance of such action or proceeding, and waives any objection it might otherwise have to service of process under law.  Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any action or proceeding arising out of this Agreement or the transactions contemplated hereby in such courts, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

 

7.11        WAIVER OF JURY TRIAL

 

THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE PARTIES AGREE THAT EITHER OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION PURSUANT TO SECTION 7.10(B) BY A JUDGE SITTING WITHOUT A JURY.

 

13

 

7.12        CONTINUED PERFORMANCE

 

Providers agree to continue performing their obligations under this Agreement while any dispute is being resolved unless and until such obligations are terminated by the termination or expiration of the Agreement.

 

7.13        GOVERNING LAW

 

This Agreement will be governed by and construed under the laws of the State of Nevada without regard to conflicts of laws principles that would require the application of any other law.

 

7.14        COUNTERPARTS

 

This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when each Party shall have received a counterpart hereof signed by the other Parties.  For the convenience of the Parties, any number of counterparts hereof may be executed, each such executed counterpart shall be deemed an original and all such counterparts together shall constitute one and the same instrument.  Facsimile transmission (including the e-mail delivery of documents in Adobe PDF format) of any signed original counterpart and/or retransmission of any signed facsimile transmission shall be deemed the same as the delivery of an original.

 

[The remainder of this page is intentionally blank.]

 

14

 

The Parties have executed and delivered this Agreement as of the date indicated in the first sentence of this Agreement.

 

PROVIDERS:

 

 

	
Scientific   Games Corporation
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
Michael A. Quartieri
    	
 
    
	
 
    	
Title:
    	
Executive Vice President, Chief Financial   Officer, Treasurer and Corporate Secretary
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Scientific   Games International, Inc.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
Michael A. Quartieri
    	
 
    
	
 
    	
Title:
    	
Executive Vice President, Chief Financial   Officer, Secretary and Treasurer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Bally   Gaming, Inc.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
Michael A. Quartieri
    	
 
    
	
 
    	
Title:
    	
President, Treasurer and Secretary
    	
 
    

 

15

 

RECIPIENT:

 

	
SciPlay   Holding Company, LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    

 

16

 

Schedule A

 

Services

 

Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in Services Agreement.

 

1.             Corporate Services: The Providers shall provide the Services set forth in Table 1 below.  Unless otherwise specified, these Services shall be consistent with similar services provided by the Providers within the designated corporate level functional group(s) to or on behalf of Scientific Games Corporation and its Affiliates. The Service Fee applicable to each Service set forth in Table 1 below per calendar month shall be equal to (a) the total corporate level functional group selling, general and administrative expenses and research and development expenses of Scientific Games Corporation and its Affiliates for such month for such Services multiplied by (b) the corresponding percentage set forth under “Applicable Percentage” in Table 1 below.

 

Table 1

 

	
Services
    	
 
    	
Applicable

Percentage
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Finance
    	
 
    	
5.7
    	
%
    
	
Corporate   Development
    	
 
    	
20.0
    	
%
    
	
Human Resources
    	
 
    	
5.0
    	
%
    
	
Legal
    	
 
    	
5.0
    	
%
    
	
Compliance /   Security
    	
 
    	
5.0
    	
%
    
	
Facilities
    	
 
    	
2.3
    	
%
    
	
Information   Technology
    	
 
    	
5.0
    	
%
    
	
Purchasing
    	
 
    	
5.0
    	
%
    

 

2.             Corporate Direct Costs: From time to time, Providers incur costs that are wholly attributable to Recipient and its Affiliates, such as leases, audit fees, special projects and other expenses. Providers shall be entitled to include these costs in the calculation of the Service Fee as they are incurred, to the extent not duplicative with the Corporate Services allocations listed in Section 1 above. These costs include allocable expenses directly attributable to Recipient, which could include liability related to litigation awards based on the social business, allocable costs for software seat licenses or other costs for which Recipient is solely responsible.

 

3.             Social Gaming Personnel: Providers and their respective Affiliates employee personnel whose primary responsibilities are to support the business of Recipient and / or its Affiliates (meaning such personnel spend at least ninety percent (90%) of their time focused on Social Gaming responsibilities) (the “Social Gaming Personnel”). Providers shall be entitled to include all payroll expenses and expenses incidental to the employment of such Social Gaming Personnel (including, but not limited to, travel and related costs, training and similar expenses) (such expenses, the “Social Gaming Personnel Expenses”) in the calculation of the Service Fee as they are incurred, to the extent not duplicative with the Corporate

 

 

Services allocations listed in Section 1 above. Recipient acknowledges and agrees that Scientific Games India Private Limited, which is an Affiliate of Scientific Games Corporation, may employ Social Gaming Personnel, and Providers shall be entitled to include all Social Gaming Personnel Expenses in the calculation of the Service Fee, and (b) upon the approval of the relevant authorities in India, Scientific Games India Private Limited, who is an Affiliate of Scientific Games Corporation, may employ Social Gaming Personnel, and Providers shall be entitled to include all Social Gaming Personnel Expenses in the calculation of the Service Fee.

 

4.             Social Gaming Attributed Rent: Providers and their respective Affiliates own or lease certain real property where Recipient and its Affiliates are located. Providers shall be entitled to include in the Service Fee attributed rent for the use of such property in its entirety if the expense is solely related to Social Gaming or based on a proportionate headcount allocation if the property is shared.

 

5.             Stock-based compensation: Providers and their respective Affiliates employ personnel who engage in providing the Services to Recipient and which employees engaging in providing the Services receive stock-based compensation based on the stock of Scientific Games Corporation. On a monthly basis such stock-based compensation amounts shall be allocated by Provider to Recipient in a stock-based compensation charge separate from the Service Fee, and not reimbursed in cash. The Applicable Percentage for such charge shall be 4.2% of the allocable stock-based compensation pool.

 

18

 

Schedule B

 

Joinder

 

                , a                 company (“New Provider”), hereby joins in the Services Agreement by and between Scientific Games Corporation, Scientific Games International, Inc., and Bally Gaming, Inc. as Providers, and SciPlay Holding Company, LLC as Recipient, and certain other parties, dated as of [ · ] (as amended, restated, or otherwise modified from time to time, the “Services Agreement”) as a Provider in order to provide certain Services to Recipient, which Services are identified on Exhibit 1 hereto.  Capitalized terms not defined herein shall have the meaning ascribed to them in the Services Agreement.  In furtherance of the foregoing, New Provider hereby acknowledges that it has received a copy of the Services Agreement and has read and is familiar with the provisions thereof, and in consideration of Recipient’s agreement, among other things, to pay Service Fees to New Provider pursuant to the Services Agreement for Services provided by New Provider following execution of this Joinder, New Provider hereby agrees as follows:

 

1.              New Provider shall be deemed to be a Provider under the Services Agreement.

 

2.              New Provider agrees to be bound by all of the terms and conditions of the Services Agreement.

 

3.              For purposes of Section 7.1 of the Services Agreement, New Provider’s Nominated Representative shall be:

 

 

4.              For purposes of Section 7.2 of the Services Agreement, New Provider’s address and contact information for receipt of notices, consents, waivers and other communications is as follows:

 

[ · ]

[ · ]

[ · ]

Attention: [ · ]

Facsimile: [ · ]

E-mail: [ · ]

 

IN WITNESS WHEREOF, New Provider has duly executed this Joinder as of the date set forth below.

 

	
 
    	
[New Provider]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title
    
	
 
    	
 
    	
Date
    

 

 

Exhibit 1 to Joinder

 

ServicesExhibit 10.2

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (this “Agreement”) is made as of [ · ] (the “Effective Date”) by and between Bally Gaming, Inc., a Nevada corporation (“Licensor”), and SG Social Holding Company I, LLC, a Nevada limited liability company (“Licensee”) (each of Licensor and Licensee, a “Party” and together, the “Parties”).

 

RECITALS

 

WHEREAS, Licensee desires to obtain from Licensor a license to use certain intellectual property rights in its business;

 

WHEREAS, Licensor desires to grant Licensee a license to use such intellectual property in its business;

 

NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, the Parties hereby agree as follows.

 

AGREEMENT

 

1.                                      DEFINITIONS.  For purposes of this Agreement, the following definitions shall apply:

 

1.1                               “Affiliate” means, with respect to a Person, any current or future corporation or other entity directly or indirectly controlled by, controlling or under common control with such Person; provided, however, that if Licensee assigns this License Agreement to SciPlay Corporation or one of its subsidiaries, (a) Licensor’s Affiliates shall not include Licensee (following such assignment) and its Affiliates as described in clause (b) of this definition, and (b) Licensee’s Affiliates shall be limited to SG Social Holding Company II, LLC, SG Social Holding Company, LLC, SciPlay Corporation, SciPlay Parent Company, LLC, SciPlay Holding Company, LLC, Phantom EFX, LLC, C.O.A.S. Company Ltd, SpiceRack Media, LLC and Dragonplay Ltd.  For the avoidance of doubt, in the event that an Affiliate of Licensee is no longer directly or indirectly controlled by, controlling or under common control with Licensee, then it shall no longer be considered an Affiliate.

 

1.2                               “Approval Team” means, the Trademark Approval Team or the Product Approval Team, as applicable.

 

1.3                               “Change of Control” means (a) any consolidation or merger, which is not initiated by Licensor or any of its Affiliates, of any of Licensee, SciPlay Parent Company, LLC, or SciPlay Holding Company, LLC. (each, a “Designated Entity”) with or into any other

 

 

corporation or other entity or Person, or any other corporate reorganization not initiated by Licensor or any of its Affiliates, in either case which the equity holders of such Designated Entity immediately prior to such consolidation, merger or reorganization own, control or otherwise have less than fifty percent (50%) of such Designated Entity’s voting power immediately after such consolidation, merger or reorganization, or (b) any transaction or series of related transactions that is not initiated by Licensor or any of its Affiliates in which the equity holders of any Designated Entity immediately prior to such transaction or series of related transactions own, control or otherwise have less than fifty percent (50%) of such Designated Entity’s voting power immediately after such transaction or series of related transactions.  Notwithstanding the foregoing, (i) the sale by Licensor or its Affiliates of any ownership interests in Licensee or its Affiliates, either privately or through additional public offerings, or (ii) any decrease in the percentage ownership of Licensor or any of its Affiliates in any Designated Entity through additional issuances of stock of such Designated Entity, in each case, as a result of a single transaction or series of related transactions, will not in and of itself trigger a Change of Control or provide any right to terminate the Agreement under any circumstances.

 

1.4                               “Clearance” means: (i) with respect to Trademarks, Licensee’s timely submission of a separate written trademark search request, which uses the format requested by Licensor and provides the requested information, to Licensor’s designated trademark attorneys and paralegals (the “Trademark Approval Team”) for game names, meta game names, feature names or other Trademarks (including any other words or phrases that will be used prominently) which Licensee desires to use in Licensed Products and the Approval Team’s approval to use the same in a written response to such request, and (ii) with respect to Licensed Products (other than with respect to Trademarks), Licensee’s timely submission to Licensor’s designated intellectual property attorneys and paralegals (the “Product Approval Team”) of a written and complete list and set of all content and assets (including, without limitation, all talent, voiceover artists, session musicians, stock and other licensed music, sound effects, stock images/video, Third Party artwork by game content studios, etc.) which Licensee desires to use in a Licensed Product, including specifically identifying which of the assets are owned by or include Third Party rights, and the Product Approval Team’s written response identifying which of the assets and content are clear for use and identifying which of the listed assets require Licensee to obtain and/or pay for any Third Party rights and approvals.

 

1.5                               “Copyrights” means any and all works of authorship (whether or not published) and copyrights (including any registrations therefor and any applications for registration thereof).

 

1.6                               “Enforcement Efforts” means any reasonable efforts designed to stop or seek redress for infringement of the Licensed Property, including, without limitation, filing a lawsuit, seeking injunctive relief, sending a cease and desist letter, entering into negotiations with regards to resolving a claim of infringement, or communicating with a Third Party regarding any of the foregoing.

 

 

1.7                               “Europe” means the following countries Albania, Andorra, Armenia, Austria, Azerbaijan, Belarus, Benelux, Bosnia-Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Italy, Jersey, Kazakhstan, Kosovo, Kyrgyzstan, Latvia, Liechtenstein, Lithuania, Macedonia, Malta, Moldova, Monaco, Montenegro, Norway, Poland, Portugal, Romania, Russian Federation, Serbia, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Tajikistan, Turk. Rep. of Northern Cyprus, Turkey, Turkmenistan, Ukraine, United Kingdom and Uzbekistan.

 

1.8                               “Intellectual Property” means intellectual property, including, but not limited to: (a) Patents, (b) Trademarks, (c) Copyrights, (d)  trade secrets and confidential business information (including research and development, ideas, know-how, inventions, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, research records, records of inventions, test information, customer and supplier lists, customer data, pricing and cost information, and business and marketing plans and proposals), (e) rights of publicity and privacy, (f) moral rights and droit moral, and (g)  software, and all electronic data, databases and data collections.

 

1.9                               “Licensed Property” means all Intellectual Property that is: (a) owned by Licensor or an Affiliate of Licensor, (b) is Third Party Licensed Property, or (c) for the preceding categories (a)-(b) that Licensor creates or acquires in the future, and for the avoidance of doubt, Licensed Property includes all Intellectual Property in any Improvements (as defined below in Section 2.2), (but for all of the above, only to the extent Licensor has the right to sublicense such Third Party or Affiliate Intellectual Property to Licensee in accordance with the terms hereof) provided, however, “Licensed Property” excludes all Intellectual Property created, licensed or acquired by Licensor or an Affiliate of Licensor after the date hereof solely for use in the development of a land-based slot machine unless and until such land-based slot machine has been submitted by Licensor or its applicable Affiliate to a regulator or independent third party for regulatory testing (it being understood and agreed that such intellectual property shall not be excluded from “Licensed Property” if Licensor or its applicable Affiliate delays any such submission in bad faith past the third anniversary of the Effective Date for the purpose of excluding the relevant Intellectual Property from being licensed to Licensee pursuant to Section 2.1(a)).

 

1.10                        “Licensed Products” means Licensee’s Social Games using Licensed Property.

 

1.11                        “Licensed Trademarks” means the Trademarks included within the Licensed Property.

 

1.12                        “Licensor Competitor” means any entity, taking into account annual revenue, geographic scope and the portfolio of products, that can reasonably be

 

 

considered to directly compete with the products, services or operations of Licensor or its Affiliates.

 

1.13                        “Patents” means all national and multinational statutory invention registrations, patents, patent applications and provisional patent applications, and all reissues, divisions, continuations, continuations-in-part thereof and any applications or patents that claim priority from such patents and applications, including, without limitation, any foreign counterparts thereof.

 

1.14                  “Person” means an individual or an entity, including a corporation, share company, limited liability company, partnership, trust, association, governmental body or any other body with legal personality separate from its equity holders or members.

 

1.15                        “Social Games” means software-generated games that: (a) simulate the style of games featured in casinos, such as slot machines, video poker, or casino style table games (e.g., Three Card Poker or blackjack) and are solely for entertainment (i.e., purely for-fun) and not intended for actual (i.e., real money) gambling, wagering or betting (but for clarity which shall include functionality that makes virtual currency available free of charge and makes virtual currency available for purchase); (b) are developed for mobile platforms (e.g., cellular telephones, wireless tablets, etc.), social media platforms (e.g., Facebook, Twitter, Snapchat, etc.), internet platforms, or other interactive platforms; and (c) are distributed solely via digital delivery.

 

1.16                        “Term” shall have the meaning set forth in Section 5.1.

 

1.17                        “Territory” means the world, except: (a) to the extent with respect to any Licensed Product or Licensed Property, a different Territory is specified in writing by Licensor for such Licensed Product or Licensed Property; (b) to the extent of any limitations set forth in license agreements between Licensor and its Third Party licensors on the use of Third Party Licensed Property and (c) any jurisdiction where and to the extent the exploitation or marketing of the Licensed Products is prohibited by law.

 

1.18                        “Third Party” means a Person that is not Licensor, Licensee or any of their Affiliates.

 

1.19                        “Third Party Licensed Property” means all Intellectual Property owned by a third party and licensed or sublicensed by Licensor (but only to the extent Licensor has the right to sublicense such Third Party or Affiliate Intellectual Property to Licensee in accordance with the terms hereof).

 

1.20                        “Trademarks” means all trademarks, service marks, trade dress, logos, trade names, corporate names, and business names, whether or not registered, including all common law rights, and registrations, applications for registration and renewals thereof.

 

 

2.                                      LICENSES.

 

2.1                         Licenses.

 

(a)                                 Exclusive License.

 

(i)                                    For Licensed Property that: (a) is Third Party Licensed Property that Licensor licenses from a Third Party on or before the third anniversary of the Effective Date, or (b) is created or acquired by Licensor or its Affiliates on or before the third anniversary of the Effective Date (collectively, the “Exclusively Licensed IP”), Licensor hereby grants on behalf of itself and its Affiliates, to Licensee and Licensee hereby accepts, for the Territory, a fully paid up (solely with respect to Licensor’s owned Intellectual Property), non royalty-bearing (solely with respect to Licensor’s owned Intellectual Property), sublicensable (to the extent provided in Section 2.7), non-transferable and non-assignable (except as provided in Section 9.5), perpetual (solely with respect to Licensor’s owned Intellectual Property), exclusive license (except for the Exceptions to Exclusivity) to utilize such Licensed Property on and in connection with the design, development, manufacture, marketing, advertisement, promotion, distribution, sale, or other exploitation of the Licensed Products.  For clarity, Licensee shall be responsible for all costs, fees and other payments related to exploitation of Third Party Licensed Property in the Licensed Products and all advertising thereof and the license terms of Licensor’s license with such Third Party will control the scope and time frame of Licensee’s exploitation of Third Party Licensed Property.

 

(ii)                                Licensor shall not itself use, nor grant any other Third Party the right to use, the Exclusively Licensed IP on Social Games other than as permitted pursuant to Section 2.1(a)(iii) below.  The exclusivity hereunder applies only to Social Games and to no other goods or services, and Licensor is free to use the Exclusively Licensed IP and to authorize others to use the Exclusively Licensed IP other than with respect to Social Games (subject to the Exceptions to Exclusivity) solely as set forth herein.

 

(iii)                            Notwithstanding anything to the contrary in this Section 2.1(a), Licensor has and shall continue to have: (i) the right to create and permit interactive real money gaming customers to create and utilize demo versions of games, or free to play versions of existing real money gambling games that are available on real money gaming websites, which do not permit any type of compensation such as payment to play or the use of purchased virtual currency; (ii) the right to create itself and to permit lotteries to create, and the right to have created and use free to play promotional games and second chance games; (iii) the right to continue to offer the licenses contained in existing (i.e., executed prior to the Effective Date) remote game server style agreements for social content, provided that those agreements are not expanded in scope or content; (iv) the right to continue to offer the licenses contained in existing (i.e., executed prior to the Effective Date) agreements that provide for the creation of certain games based on legacy NYX content from Nextgen Gaming Pty Ltd.; (v) the right to license, the Exclusive Licensed IP for use other than on Social Games; and (vi) the right to license Exclusive Licensed IP

 

 

on Licensed Products and other Social Games solely to land based casino customers (the “Operators”), in connection with the SG Universe product line (or its successor products), provided that all such licenses for SG Universe incorporate the following restrictions within twelve (12) months of the execution hereof:

 

(1)                                 The Social Games may only be marketed to Operators’ existing player databases and not for user acquisition, except that Operators may conduct geographically targeted advertisements intended to bring customers into their land based casinos and place advertisements on Operator owned and controlled general use websites (such as websites promoting the Operator’s land based casino and not principally designed to drive traffic to the SGU product) and Operator owned and controlled social media pages (such as Facebook pages) and channels.

 

(2)                                 With respect to the play for fun portion of the SG Universe product, outside of the SG Universe product itself, Operators may only market Licensor product line Trademarks, such as Bally, WMS, Barcrest and Shuffle Master, and not game specific Trademarks such as Zeus, Jackpot Party or Blazing 7s, other than as incidental appearance in screen shots.

 

(3)                                 The play for fun portion of the SG Universe product on mobile applications must be incorporated into and launched from within the Mobile Concierge (or successor products) product, and may not be the initial landing page upon application opening.

 

(4)                                 Operators may not list the Mobile Concierge app, in the “Games” category of any app store, but shall instead list it in the “Entertainment” or similar category.

 

(5)                                 All licenses to Operators for Licensed Products shall include provisions that provide for the termination of the agreement in the event that Licensor transfers exclusive rights to Licensee.

 

(b)                                 Non-Exclusive License.  For Licensed Property that: (i) is Third Party Licensed Property that Licensor licenses from a Third Party starting after the third anniversary of the Effective Date, or (ii) is created or acquired by Licensor or its Affiliates after the third anniversary of the Effective Date and is utilized by Licensee within Licensee’s available games as of the Effective Date (solely consisting of Jackpot Party Casino, Gold Fish Casino, Hot Shot Casino, 88 Fortunes Slots, Quick Hit Slots, Monopoly Slots, Bingo Showdown and Blazing 7s), Licensor hereby grants on behalf of itself and its Affiliates, to Licensee and Licensee hereby accepts, for the Territory, a fully paid up (solely with respect to Licensor’s owned Intellectual Property), non royalty-bearing (solely with respect to Licensor’s owned Intellectual Property), sublicensable (to the extent provided in Section 2.7), non-transferable and non-assignable (except as provided in Section 9.5), perpetual (solely with respect to Licensor’s owned Intellectual Property), non-exclusive license to utilize such

 

 

the Licensed Property on and in connection with the design, development, manufacture, marketing, advertisement, promotion, distribution, sale, or other exploitation of the Licensed Products.  For clarity, Licensee shall be responsible for all costs, fees and other payments related to exploitation of Third Party Licensed Property in the Licensed Products and all advertising thereof and the license terms of Third Party Licenses will control the scope and time frame of Licensee’s exploitation of Third Party Licensed Property.

 

2.2                               Localizations and Improvements.  Licensee, at its own expense, will make or have made such changes to the Licensed Products as are required under any laws or regulations applicable to any portion of the Territory or as Licensee determines are appropriate to adapt the Licensed Products for use in any portion of the Territory (the “Localizations”).  Subject to any limitations imposed by Third-Party licensors of Licensor, Licensee also has the right to make, develop, prepare or create any other improvements to, modifications of, enhancements to, or derivative works of the Licensed Property (together with any Localizations, the “Improvements”).  Subject to the rights granted herein, as between Licensor and Licensee, Licensor (or its licensor) shall be deemed to own and hold all right, title and interest in and to the Improvements and all Intellectual Property rights therein (including, for the avoidance of doubt, any Improvements created by sublicensees, vendors and/or contractors of Licensee).  Licensee shall use reasonable commercial efforts to not include in the audio-visual aspects of any Improvements any content or materials for which Licensee cannot convey all ownership rights free and clear of any Third Party rights or restrictions on Licensor’s ownership and use of the same.  Unless Licensee can convey the ownership rights free and clear, Licensee shall not permit any Third Party to recreate or directly modify elements of the Licensed Property beyond a mere combination of those elements with Third Party materials. For clarity, any Third Party materials must be separated and/or separable from the Licensed Property (e.g., it would be permissible to add a stock image to Licensor’s artwork, but impermissible to create, for example, a new version of the Heidi character from Licensor’s Bierhouse games unless all of the ownership rights to the new depiction of the character could be conveyed to Licensor free and clear of all Third Party rights).  Notwithstanding the foregoing, if Licensee desires to incorporate materials that recreate or directly modify elements of the Licensed Property beyond a mere combination of those elements with Third Party materials, and cannot convey all rights to the same to Licensor free and clear of all Third Party rights, Licensee shall discuss the same with Licensor who will consider allowing such Improvement in good faith. In the event Licensee incorporates content or materials in the audio-visual aspects of the Improvements for which Licensee cannot convey ownership rights free and clear, it will identify in writing in accordance with the Clearance process such content or materials to Licensor.  Improvements shall be deemed to be included in the Licensed Property.  The Parties agree that, in accordance with the foregoing exceptions, such Improvements are a “work made for hire” for Licensor under the U.S. Copyright Act and any and all similar provisions of law under other jurisdictions, and that Licensor is the author of such works for all purposes. To the maximum extent permitted by applicable law, Licensee hereby waives and releases in favor of Licensor and its

 

 

licensors all rights (if any) of “droit moral,” moral rights, rental rights and similar rights in and to the Improvements and agrees that Licensor and its licensors shall have the right to revise, condense, abridge, expand, adapt, change, add to, subtract from, re-title, redraw, re-color, or otherwise modify the Improvements without the consent or approval of Licensee, provided that the use by Licensor and its licensors of such Improvements does not violate the exclusive license.  To the extent that any portion of the Improvements do not qualify as a “work made for hire” under applicable law, or the extent that notwithstanding any of the foregoing, ownership of any portion of the Improvements does not vest in Licensor, Licensee hereby irrevocably assigns to Licensor and its successors and assigns, without further consideration, all of Licensee’s right, title, and interest in any such Improvements and all Intellectual Property therein.  For clarity, it is understood by the Parties that while Licensee shall transfer all of its ownership interests in the Improvements to Licensor, there may be content or materials for which it does not possess ownership interests and cannot transfer them to Licensor (e.g., material identified in writing in accordance with the Clearance process).  Upon Licensor’s request, Licensee agrees to confirm such assignment, without further consideration, and execute all documents and materials, and make all recordings and affirmations, in each case out of pocket costs shall be at Licensor’s expense, reasonably required by Licensor in furtherance thereof. Licensee acknowledges that it neither owns nor acquires any rights in and to the Improvements other than the license with respect to the same expressly granted by this Agreement.  Licensee further acknowledges that Licensor and its licensors retain the right to use the Improvements for any purpose in their sole discretion. Licensee shall secure similar waivers, releases and assignments from any sublicensees, vendors, contractors or other Third Parties it utilizes to create Improvements to ensure that ownership of all such Improvements fully vests in Licensor.

 

2.3                               Right of First Negotiation.   Licensor shall provide Licensee with a right of first negotiation to convert the non-exclusive licenses granted in Section 2.1(b) to exclusive licenses as well as a right of first negotiation to license the Licensed Property identified in Section 2.1(b) solely for use in Social Games, either on an exclusive basis or non-exclusive basis, outside of Licensee’s currently available games (consisting of Jackpot Party Casino, Gold Fish Casino, Hot Shot Casino, 88 Fortunes Slots, Quick Hit Slots, Monopoly Slots, Bingo Showdown and Blazing 7s).  In the event that Licensor intends to offer such licenses to third parties, it shall so inform Licensee in writing.  Provided that if the Parties negotiate for no less than 60 days (and Licensor will not negotiate with any other party during that time) and fail to reach mutual agreement on all material terms for such license, and to subsequently enter into a definitive binding written agreement within thirty (30) days of having reached such mutual agreement on all material terms for such license , then Licensor may approach other parties to enter such licenses and shall have no obligation to continue to negotiate with Licensee.

 

 

2.4                               Usage of Licensed Trademarks; Quality Control Restrictions.

 

(a)                                 Licensee acknowledges that the Licensed Trademarks have established value and reputation, are well recognized among Licensor’s customers and the general public, and it is of great importance to the Parties that these high standards be maintained.  Accordingly, the quality of the Licensed Products and associated marketing and advertising materials created by, provided or used by Licensee that bear (or are provided under or in connection with) the Licensed Trademarks shall be substantially equivalent to or stricter than those high standards maintained by Licensor and subject to Licensor’s reasonable approval.  In the event Licensee’s use of the Licensed Trademarks does not meet Licensor’s reasonable approval, Licensor shall inform Licensee of the deficiencies and changes that will allow Licensor to grant such approval, and Licensee shall implement such changes as soon as reasonably practical to bring the quality of the Licensed Products and associated marketing and advertising materials to the level required by Licensor set forth herein.

 

(b)                                 The Licensed Products and advertising and promotional materials distributed under this Agreement shall be of high quality.  Before public distribution, at no charge to Licensor, Licensee agrees to furnish to Licensor for approval as to quality and style (which approval shall not be unreasonably withheld), versions of the Licensed Products inclusive of all artwork and all components of the Licensed Product, as well as all advertising and promotional materials for Licensed Products that incorporate Third Party material.  Licensor shall endeavor to approve or disapprove of any materials submitted by Licensee for approval within fifteen (15) business days.   Licensor shall furnish, at the time notice of disapproval is given to Licensee, an explanation of the reason(s) for such disapproval or a request for further changes, and recommendations for suggested changes, which if made will be sufficient for Licensor to grant approval.  Licensee shall resubmit such item after changes have been made for Licensor’s approval and Licensor shall again endeavor to approve or disapprove any materials submitted by Licensee for approval within fifteen (15) business days.  Failure to affirmatively grant approval shall be deemed disapproval.  Further, Licensee expressly acknowledges that Licensor may need to obtain Third Party approvals and the timing for the same may be uncertain and may be granted or withheld in the Third Party’s sole and absolute discretion.  Once a Licensed Product has been approved, Licensee may not make any changes to the Licensed Product without obtaining Licensor’s approval.  Under no circumstances may any Licensed Product be used unless it has been fully approved in writing by Licensor.  Notwithstanding the foregoing, Licensed Products released to the public by Licensee prior to the Effective Date shall be deemed approved, but such deemed approval shall not be deemed to mean that the same have been Cleared for purposes of any representations, warranties or indemnification.  If a Licensed Product has been approved and is not released to the public for a period greater than twelve (12) months, Licensee must resubmit the Licensed Product for Clearance before any further use.  In the event that Licensor identifies advertising material that has not been submitted for approval or clearance as being of insufficient quality or standard or not complying with Third Party Licenses, Licensee will use reasonable commercial efforts to remove such material from publications as soon as reasonably practical and to either discontinue use

 

 

of such material or incorporate revisions suggested by Licensor to bring the advertising material up to acceptable quality.

 

2.5                               Right to Remove.  In the event that Licensor receives a complaint, cease and desist letter, demand letter or similar communication from a Third Party alleging that the Licensed Property or Licensed Product infringes the rights of a Third Party, or if Licensor in good faith believes that the use or continued use of the Licensed Property or Licensed Product would be detrimental to Licensor or Licensee, including based on unasserted Third Party rights, Licensor shall promptly notify Licensee of the same and the Parties will discuss in good faith the appropriate response to the circumstances and take appropriate steps to address the issue.  The Parties may determine that Licensee must immediately cease all such use of such Licensed Property or Licensed Product, the risk of use may shift to Licensee or Licensee’s use may continue after modifications are made.  For clarity, and notwithstanding anything to the contrary contained herein, Licensor shall have the right to require Licensee to cease use of or modify the Licensed Property or Licensed Product where Licensor believes in good faith that continued use will damage Licensor’s Intellectual Property rights or, where one or both Parties will increase potential liability, where the Licensed Property or Licensed Product includes content provided by Third Party licensors, that continued use may harm Licensor’s relationship with such Third Party licensors or increase a Party’s liability.

 

2.6                               Goodwill.  The Parties recognize the great value of the publicity and goodwill associated with the Licensed Trademarks and acknowledge that, as between the Parties, such goodwill is exclusively owned by Licensor.  Any goodwill created in connection with Licensee’s use of the Licensed Trademarks shall inure to the benefit of Licensor.

 

2.7                               Sublicenses.  Licensee may sublicense the licenses granted to Licensee hereunder (i) to its Affiliates, with the right to further sublicense in accordance with clause (ii), and (ii) to third parties, solely on and in connection with the design, development, manufacture, marketing, advertisement, promotion, distribution, sale, or other exploitation of the Licensed Products, provided that such sublicense supports Licensee’s and its Affiliates’ distribution, sale or other exploitation of the Licensed Products (and is not a sublicense for sublicensee to independently sell, distribute or otherwise exploit Licensed Products), and, in each case of the foregoing (i) and (ii), (a) Licensee shall require its sublicensees to agree to terms and conditions consistent with this Agreement (including, without limitation, by obtaining from all sublicensees a full assignment, waiver, and grant of all rights in the Improvements as required by Section 2.2 of this Agreement), (b) Licensee shall be primarily responsible and liable for all sublicensees’ acts and omissions, and  (c) aside from sublicenses granted by Licensee’s Affiliates in compliance with subsection (ii) herein, such sublicensees shall not have the right to grant further sublicenses without the prior written consent of Licensor.  Licensee acknowledges that Third Party licenses may require additional measures for Third Party Licensed Property beyond those set forth in this Paragraph.

 

 

 

2.8                               Contractors.  Licensee may delegate aspects of its performance under this Agreement to third parties hired as contractors, solely to assist in developing the Licensed Products and advertising material, provided that (a) Licensee shall require its contractors to agree to terms and conditions consistent with this Agreement (including, without limitation, by obtaining from all contractors a full assignment, waiver, and grant of all rights in the Improvements as required by Section 2.2 of this Agreement), (b) Licensee shall be primarily responsible and liable for all contractors’ acts and omissions, and (c) such contractors shall not have the right to further delegate their performance without the prior written consent of Licensor.  Licensee acknowledges that Third Party licenses may require additional measures for Third Party Licensed Property beyond those set forth in this Paragraph.

 

2.9                               Ownership and Proprietary Rights.

 

(a)                                 Subject to the rights granted herein, as between Licensor and Licensee, Licensor owns and retains all right, title and interest in and to the Licensed Property, and Licensee acknowledges that it neither owns nor acquires any rights in and to the Licensed Property, except as expressly granted by this Agreement.  Licensee further acknowledges that Licensor and its licensors retain the absolute right to use the Licensed Property in their sole discretion for any purpose other than with respect to the rights granted exclusively to Licensee herein.  Licensee shall not at any time do or cause to be done, and shall exercise its reasonable commercial efforts to ensure that none of its sublicensees, contractors, agents or representatives does or causes to be done, any act or thing impairing or tending to impair any part of any right, title or interest of Licensor or its licensors in or to any Licensed Property.  All rights not expressly granted to Licensee hereunder are reserved to Licensor; no licenses, implied or otherwise, are granted to the Licensee other than those expressly granted pursuant to this Article 2.  Except for the Licensed Property and all elements thereof, including without limitation (a) Intellectual Property contained therein, as well as (b) all functional elements of Licensed Products such as code, routines, tools, algorithms, activities, and any other functional features, ideas and inventions either created by, or for Licensor or its licensors, the Parties agree that Licensee shall retain all right, title, and interest to the Licensed Products, including without limitation (y) all functional elements of Licensed Products such as code, routines, tools, algorithms, activities, and any other functional features, and (z) any Trademarks created by Licensee for use in connection with the Licensed Products, all to the extent not based upon or derivative of the Licensed Property.  Licensee shall not challenge or enable third parties to challenge the ownership or validity of the Licensed Property.  Licensee shall not adopt, register, apply to register or otherwise use substantially similar or confusingly similar Trademarks or content to the Licensed Property.

 

(b)                                 Licensee acknowledges that a certain portion of the Licensed Property is (or may be) licensed to Licensor from Third Parties and is being sublicensed to Licensee under this Agreement.  Licensee further acknowledges that the license agreements between Licensor and the applicable Third Party licensors may impose certain

 

 

requirements or limitations on the use and sublicensing of such Licensed Property that are different from or are in addition to the terms and conditions of this Agreement, and may be more restrictive or inconsistent with the terms and conditions set forth herein.  Licensee agrees that, notwithstanding anything to the contrary in this Agreement, Licensee’s use of such Third Party Licensed Property shall be subject to the terms and conditions of this Agreement and, to the extent any Third Party license imposes different or more restrictive terms and conditions with respect to such Third Party Licensed Property, specifically including but not limited to any approval processes, temporal or geographical limitations, termination or expirations, notice requirements, royalty and use reporting requirements, audit terms, or the like contained in such licenses, such Third Party agreements. Furthermore, Licensee shall be responsible for fulfilling all performance obligations applicable to the social channel set forth in the license agreements for Third Party Licensed Property, provided that after the Effective Date Licensor shall not agree to any future Third Party performance obligations applicable to the Social Gaming channel without Licensee’s express written consent.  Licensee shall be responsible for payment of all costs and fees for the utilization of Third Party Licensed Property in Licensed Products and the allocable share of minimum guarantee payments due under such Third Party agreements. Licensor shall endeavor to apprise the Licensee of any additional terms and conditions that apply to Licensee’s use of Third Party Licensed Property, and Licensee agrees to either abide by such additional terms and conditions or refrain from using such Third Party Licensed Property.

 

2.10                        Intellectual Property Notices.  Licensee shall cause to be incorporated into the Licensed Products, and the advertising and marketing material therefor, legal notices with respect to any applicable Patents, Trademarks, and Copyrights as are provided by or requested by Licensor.  The size and location of such notices shall be subject to Licensee’s reasonable discretion, provided that if Licensor believes the size and location selected by Licensee to be inappropriate, Licensee will cooperate in good faith with Licensor to resolve the difference of opinion, and further provided that the size and location of such notices may be subject to the requirements of Third Party licensors in their sole discretion.

 

2.11                        Maintenance of Trade Secrets.  The Parties shall maintain the confidentiality of all trade secrets and other confidential Intellectual Property disclosed to the other Party in relation to this Agreement, and shall only disclose such trade secrets or Intellectual Property as is and only to the extent necessary to its contractors, advisors and sublicensees.  The Parties shall contractually require any such contractors, advisors or sublicensees to similarly maintain the confidentiality of such trade secrets or other Intellectual Property.

 

2.12                        Protection of Licensor’s Intellectual Property.  Licensee will not take or fail to take any action that materially damages or is likely to materially damage Licensor’s Intellectual Property or the Intellectual Property of a Third Party licensed to Licensor or damage or harm Licensor’s reputation in any material respect.

 

 

3.                                      LICENSE FEES AND PAYMENTS.

 

3.1                               License Fees. In consideration of the licenses granted to Licensee hereunder, Licensee shall pay Licensor a one-time payment of [ · ] million dollars to Licensor for the license grant with respect to the Licensor owned Intellectual Property.  In addition, Licensee shall pay to Licensor all costs, fees and expenses related to Third Party licenses for Licensee’s use of Third Party Licensed Property.

 

3.2                               Reporting.  Within twenty-five (25) days following the end of each calendar month, Licensee shall provide to Licensor a report detailing the use of Licensed Products for the prior calendar month, as well as the computation of any and all payments due and owing to Licensor’s licensors, if any, including any reconciliation from the prior months, and inclusive of all information that Licensor is required to report to its licensors.  Licensee shall provide said reports whether or not any royalties are owed.    All payments shall be made in U.S. dollars to an account or accounts designated by Licensor from time to time.

 

3.3                               Taxes.  All amounts payable hereunder by the Licensee shall be made in full and without deduction or withholding, unless deduction or withholding is required by a governmental or other regulatory agency, for or on account of any present or future income, all applicable sales, use, value-added and other taxes and all applicable export and import fees, levies, customs duties and similar charges imposed by the jurisdiction of tax residence of Licensee.  Licensee shall be responsible for payment of all such taxes (other than taxes based on Licensor’s income), fees, duties and charges, and any related penalties and interest, arising from the payment of any royalties hereunder and the grant of license rights hereunder.

 

3.4                               Payments and Taxes. Licensee shall make all payments required hereunder to Licensor free and clear of, and without reduction for, any taxes unless required to deduct or withhold tax by a governmental or regulatory authority.  If Licensee is required to deduct or withhold tax from a payment made to Licensor under this Agreement, Licensee will cooperate with Licensor to minimize the amount of any such required withholding.  Licensee will use reasonable efforts to remit any tax deducted by Licensee from a payment made to Licensor to the proper tax authority in a timely manner. Licensee shall, upon Licensor’s request, provide Licensor with official receipts issued by the appropriate taxing authority, or such other evidence as Licensor may reasonably request, to establish that such taxes have been paid.

 

3.5                               Record Keeping and Audit. Licensee shall make and maintain such sufficient books, records, and accounts relating to the performance of its obligations under this Agreement, including without limitation the payments to be made to Third Party licensors, in order for Licensor to be able to confirm Licensee’s performance of its obligations and the accuracy of payments. Such records shall be available, subject to Licensee’s standard security practices and protocols, at reasonable times during normal business hours, on a minimum of thirty (30) days advance written notice, for inspection

 

 

by Licensor.  Licensor shall not undertake such inspections more than once per calendar year and shall undertake inspections that cover a specific time period only one time, unless a discrepancy is found in which case such period is subject to a subsequent audit. Licensee shall maintain such records for at least three (3) years following the end of the calendar quarter to which they pertain, unless a longer period is required with respect to Third Party content.  If an audit reveals that Licensee has underpaid Licensor, then Licensee shall pay Licensor the uncontested amount owed within ten (10) business days of receipt of notice of such audit results.  Similarly, if an audit reveals that Licensee has overpaid Licensor, Licensor agrees to repay Licensee any uncontested overpayment of royalties paid hereunder within ten (10) business days of notice of the audit results.  Any underpayment payable pursuant to this audit provision shall accrue interest at a rate of eight tenths of one percent (0.8%) per month commencing the date such underpayments were due.  Such audits shall be at Licensor’s expense unless such audit shows underpayments of ten percent (10%) or greater with respect to the period of such audit, in which case Licensee shall reimburse Licensor for the cost of the audit.

 

4.                                      DISCLAIMER; EXCLUSIONS AND LIMITATIONS OF LIABILITY.

 

4.1                               Disclaimer.  THE LICENSED PROPERTY IS PROVIDED TO LICENSEE WITHOUT WARRANTY OR CONDITION OF ANY KIND OTHER THAN THOSE WARRANTIES SET FORTH IN SECTION 6.1.  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, LICENSOR EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES AND CONDITIONS, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OR CONDITION OF TITLE, NONINFRINGEMENT, MERCHANTABILITY, MERCHANTABLE QUALITY, FITNESS OR SUITABILITY FOR ANY PARTICULAR PURPOSE (EVEN IF ON NOTICE OF SUCH PURPOSE), OR CUSTOM OR USAGE IN THE TRADE.  LICENSOR DOES NOT WARRANT THAT ANY USE OF SUCH INTELLECTUAL PROPERTY WILL BE ERROR-FREE OR UNINTERRUPTED.

 

4.2                               Exclusions of Remedies; Limitation of Liability.  EXCEPT FOR LIABILITY RELATED TO INDEMNIFICATION AND DEFENSE OBLIGATIONS, CONFIDENTIALITY OBLIGATIONS, GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY OF THEIR RESPECTIVE AFFILIATES FOR ANY INCIDENTAL, INDIRECT, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, REGARDLESS OF THE NATURE OF THE CLAIM, INCLUDING, WITHOUT LIMITATION, LOST PROFITS (WHETHER DEEMED DIRECT OR INDIRECT), COSTS OF DELAY, ANY FAILURE OF DELIVERY, BUSINESS INTERRUPTION, COSTS OF LOST OR DAMAGED DATA OR DOCUMENTATION, EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.  THIS LIMITATION UPON DAMAGES AND CLAIMS IS INTENDED TO APPLY WITHOUT REGARD TO WHETHER OTHER PROVISIONS OF THIS AGREEMENT HAVE BEEN BREACHED OR HAVE PROVEN INEFFECTIVE.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, HASBRO, INC. AND HASBRO INTERNATIONAL, INC. SHALL HAVE NO LIABILITY TO LICENSEE OR ITS AFFILIATES.  FURTHER, AND NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, LICENSOR’S TOTAL LIABILITY WITH

 

 

RESPECT TO EACH CLAIM UNDER SECTION 7.1(b) SHALL NOT EXCEED ONE MILLION DOLLARS.

 

4.3                               Essential Basis of Agreement.  THE PARTIES ACKNOWLEDGE AND AGREE THAT THE DISCLAIMERS, EXCLUSIONS AND LIMITATIONS OF LIABILITY SET FORTH IN THIS ARTICLE 4 FORM AN ESSENTIAL BASIS OF THIS AGREEMENT, AND THAT, ABSENT ANY OF SUCH DISCLAIMERS, EXCLUSIONS OR LIMITATIONS OF LIABILITY, THE TERMS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE ECONOMIC TERMS, WOULD BE SUBSTANTIALLY DIFFERENT.

 

5.                                      TERM AND TERMINATION.

 

5.1                               Term.  This Agreement shall commence on the Effective Date and, shall continue in perpetuity for licenses related to the Licensed Property, unless expiring sooner with respect to Third Party Licensed Property, and unless earlier terminated pursuant to Section 5.2.

 

5.2                               Termination for Cause.  Either Party may, at its option, terminate this Agreement at any time by giving written notice to the other Party upon the occurrence of any of the following events:

 

(a)                                 A Party fails or neglects to perform its material obligations or covenants or otherwise breaches any material term or condition or this Agreement if such default is not corrected within thirty (30) days after receiving written notice from the other Party with respect to such default;

 

(b)                                 Termination occurs pursuant to Section 9.3.

 

5.3                               Licensor may terminate this Agreement at any time by giving written notice to the Licensee upon the occurrence of any of the following events:

 

(a)                                 Licensee fails to pay any amounts owed Licensor and fails to fully cure such default within thirty (30) days after receipt of notice of such delinquency;

 

(b)                                 There is a cessation of operations by Licensee or the institution by or against Licensee of any proceeding (whether voluntary or judicially-ordered) in bankruptcy or for dissolution, liquidation, winding up, reorganization, arrangement, or the appointment of a receiver, trustee, or judicial administrator (or the equivalent thereof in the Territory), or any other proceeding under any law for the relief of debtors which is not cleared within thirty (30) days of inception;

 

(c)                                  Licensee makes an assignment for the benefit of, or composition or arrangement with, creditors, or admits in writing its inability to pay its debts as they become due;

 

 

(d)                                       Licensee violates Section 9.5, including by assigning (other than as permitted herein), mortgaging, sublicensing (other than as permitted herein), or taking other action to otherwise encumber this Agreement without the prior written consent of Licensor, provided, however, that in the event that one or more of Licensee’s Affiliates undergoes a Change of Control, Licensor will have the right to terminate this Agreement only with respect to any such Affiliate that undergoes a Change of Control.

 

5.4                               Effect of Termination.

 

(a)                                 Upon any termination of this Agreement, the licenses granted under this Agreement shall cease immediately, and Licensee shall (i) promptly discontinue all use of the Licensed Property and Licensee shall return to Licensor or destroy all Licensed Property in all tangible forms, including written and pictorial form, then held by Licensee, its Affiliates or by any employee or agent of Licensee or its Affiliates who shall have received any such Intellectual Property, directly or indirectly, from Licensee, and (ii) promptly pay to Licensor, all amounts due and payable hereunder.

 

(b)                                 In the event this Agreement is terminated on or before the fifth anniversary of the Effective Date, Licensor shall pay, within thirty (30) days of such termination, a break fee as set forth in the following table:

 

	
Time Frame
    	
 
    	
Break fee
    
	
On or before the first anniversary of the Effective   Date
    	
 
    	
$[ ·   ] million dollars
    
	
On or before the second anniversary of the Effective   Date
    	
 
    	
$[ ·   ] million dollars
    
	
On or before the third anniversary of the Effective   Date
    	
 
    	
$[ ·   ] million dollars
    
	
On or before the fourth anniversary of the Effective   Date
    	
 
    	
$[ ·   ] million dollars
    
	
On or before the fifth anniversary of the Effective   Date
    	
 
    	
$[ ·   ] million dollars
    

 

5.5                               Survival.  The provisions of Article 1, Section 2.9(a), Section 2.11, Section 2.12, Article 3 (with respect to payments due as of the end of the Term, record keeping and audit, and with respect to any surviving sublicenses), Article 4, Section 5.4, Article 7

 

 

 

and Article 9 shall survive the termination or expiration of this Agreement.  The remaining provisions shall survive to the extent intended by their nature to survive.

 

6.                                      REPRESENTATIONS AND WARRANTIES.

 

6.1                               Representations, Warranties, and Covenants.

 

(a)                                 Licensor represents, warrants, and covenants that: (i) it has the full and exclusive right and power to enter into this Agreement and grant the rights and licenses described herein; (ii) it is free to enter into this Agreement; (iii) Licensor shall, in connection with this Agreement, comply with all applicable laws, rules and regulations, including, but not limited to, those relating to anti-corruption, anti-money laundering and competition; and (iv) Licensor has not offered or paid, and will not offer or pay, directly or indirectly, (a) anything of value to any public official or candidate for political office, or any relative or agent thereof, for purposes of obtaining any official action or benefit relating in any way to this Agreement, or (b) any illegal commission or finder’s or referral fee.  Licensor further represents and warrants that: (i) with respect to Licensed Products submitted by Licensee to Licensor for Clearance after the Effective Date, as well as for Licensed Products in use prior to the Effective Date to the extent the content in such games is used in accordance with all Third Party agreements and with respect to Trademarks, subject to such Trademarks having been approved through the Trademark process set forth in Section 1.3(i),  Licensor has or will conduct reasonable due diligence in clearing the content for its intended use and state that within the scope of the approval issued that, other than as expressly stated in response to the submission, to the best of Licensor’s knowledge Licensor is not aware that the content infringes any Third Party rights; and (ii) that the Trademarks specifically approved through the Trademark Clearance process as set forth in Section 1.3(i), solely as approved by Licensor for use by Licensee under this license, whether or not registered, will not infringe Third Party rights in the United States, Canada, Mexico, Australia or Europe.  Notwithstanding anything to the contrary contained herein, Licensee shall be responsible for securing all needed rights and approvals to Third Party content for which Licensor does not have the necessary rights to pass through to Licensee for use in Licensed Products, and Licensee shall be solely responsible for paying all associated costs and expenses, including but not limited to any guild or union fees, performing rights fees, music licenses, stock photography, video or clip rights, voice overs and fonts.  For clarity, Licensed Products, or portions thereof, which have not been submitted for Clearance in accordance with Section 1.3 or which have been submitted for Clearance but which are used by Licensee other than as expressly approved in response to the submission, are not included within the scope of Licensor’s representations and warranties of non-infringement. Additionally, any Licensed Products, or portions thereof, which were designed or developed by Third Party developers (e.g., High 5 Games) or contain Third Party content (e.g., Third Party music) which are used by Licensee outside the scope of the written agreement pursuant to which the content was created or authorized (or in the absence of being able to locate any such agreement), shall be at Licensee’s sole risk and the use of such content shall not be within

 

 

the scope of Licensor’s representations and warranties of non-infringement.  Furthermore, Licensee’s use of all Improvements shall be at Licensee’s sole risk.

 

(b)                                 Licensee represents, warrants and covenants that: (i) this Agreement has been duly authorized, executed, and delivered by Licensee; (ii) it has the full power and authority to enter into and perform its obligations hereunder; (iii) this Agreement constitutes the valid and binding obligation of Licensee, enforceable in accordance with its terms; (iv) the making of this Agreement does not violate any agreement, right, or obligation existing between Licensee and any other person or entity; (v) all information furnished by Licensor to Licensee in connection with Licensee’s due diligence and compliance review process is complete and accurate; (vii) Licensee shall, in connection with this Agreement, comply with all applicable laws, rules and regulations, including, but not limited to, those relating to anti-corruption, anti-money laundering and competition; (viii) Licensee has not offered or paid, and will not offer or pay, directly or indirectly, (a) anything of value to any public official or candidate for political office, or any relative or agent thereof, for purposes of obtaining any official action or benefit relating in any way to this Agreement, or (b) any illegal commission or finder’s or referral fee; (ix) all Improvements and other materials used in connection with the Licensed Property created by or for Licensee shall be created in accordance with Section 2.2 and not infringe or otherwise violate any Third Party’s rights; and (x) Licensee shall not incur any obligations or payments for which Licensor is responsible for Licensee’s use of the Licensed Products.

 

7.                                      THIRD PARTY CLAIMS.

 

7.1                               Third Party Claims.

 

(a)                                 Indemnification for Third Party Claims against Licensee.  Licensor will defend or settle at its expense any claim asserted by a Third Party against Licensee alleging that Licensor’s breach of any of its warranties, representations, or undertakings under Section 6.1(a) has injured or will injure such Third Party.  Licensor has the sole right to control and direct the defense and settlement of any such claim, including without limitation the sole right to select and appoint legal counsel to defend against such claim.  Licensor shall not enter any settlement, consent judgment, or other voluntary final disposition of a claim eligible for indemnification on terms which would materially impair the scope or value of the license rights granted herein, without Licensee’s prior written consent, which consent shall not be unreasonably withheld or delayed.  Notwithstanding the foregoing, and for the avoidance of doubt, Licensor has no obligation relating to any claim arising from, (i) material modifications made to the Licensed Property by any party other than Licensor unless made at Licensor’s direction; (ii) Licensee’s non-compliance with the Clearance procedures, including but not limited to identifying elements of Licensed Products requiring Third Party payments or rights; (iii) use of the Licensed Property other than as provided for under this Agreement;  (iv) use or combination by Licensee of the Licensed Property with software, hardware, products, content, materials, deliverables or services that are not provided by Licensor pursuant to this Agreement,

 

 

solely to the extent that the claim would not exist but for such combination; (v) use of any Licensed Property, Licensed Products, or any materials other than as expressly and specifically stated in Licensor’s responses to Licensee with respect to content submitted for Clearance, (vi) arising out of Improvements, (vii) Licensee’s failure to secure any required permission, license or rights from a Third Party or make any required payments or reports; or (vii) any failure to abide by the terms and conditions of this Agreement.

 

(b)                                 Indemnification for Third-Party Claims against Licensor.  Licensee will defend or settle at its expense any claim asserted by a Third Party against Licensor alleging that: (i)  Licensee’s breach of any of its warranties, representations, or undertakings under Section 6.1(b), or Licensee’s breach of any additional terms and conditions that apply to Licensee’s use of Third Party Licensed Property as referred to in Section 2.8, has injured or will injure such Third Party, (ii) that Licensee’s use or combination of the Licensed Property with software, hardware, products, content, materials, deliverables or services that are not provided by Licensor pursuant to this Agreement infringes or otherwise violates the rights of such Third Party, solely to the extent that the claim would not exist but for such combination, and (iii) for any claims for product liability or injury to person, including death.  Licensor’s Clearance or approval of any Licensed Product shall not remove or diminish Licensee’s responsibility with respect to all aspects and attributes of the Licensed Product or otherwise diminish Licensee’s representations, warranties or indemnification obligations hereunder.  Licensee has the sole right to control and direct the defense or settlement of any such claim, including without limitation the sole right to select and appoint legal counsel to defend against such claim.  Licensee shall not enter into any settlement, consent judgment, or other voluntary final disposition of a claim eligible for indemnification without Licensor’s prior written consent, which shall not be unreasonably withheld, and no disposition of any claim may impair or otherwise harm the value or rights in and to any of Licensor’s or its licensors’ Intellectual Property or bind or obligate Licensor to any remedy other than the payment of damages which are to be paid solely by Licensee.

 

(c)                                  A Party seeking indemnification under this Section (“Indemnitee”) shall (i) promptly notify in writing the indemnifying Party (“Indemnitor”) of any claim eligible for indemnification (provided, however, that the failure to give such notice shall not relieve the indemnifying Party from its obligations hereunder, except to the extent that the indemnifying Party is prejudiced by such delay); (ii) permit Indemnitor to both answer and defend such claim; and (iii) provide Indemnitor, at Indemnitor’s expense, with such information and assistance as Indemnitor may reasonably request to help Indemnitor to defend such claim.

 

8.                                      INFRINGEMENT.

 

8.1                         Infringement.

 

(a)                                 Licensee shall promptly notify Licensor of any suspected infringement(s) of the Licensed Property and shall inform Licensor of any evidence of such infringement(s).

 

 

(b)                                 Licensor shall have the sole first right but not the obligation, under its own control and at its own expense, to undertake Enforcement Efforts.  Any and all damages, profits, and other monetary awards resulting from such Enforcement Efforts shall be the sole property of Licensor.  If required by law, Licensee shall permit any Enforcement Efforts under this Section to be brought in its name, including being joined as a party-plaintiff, provided that Licensor shall both hold harmless Licensee from and indemnify Licensee against, and shall pay any and all costs, expenses, and liabilities that Licensee incurs in connection with such Enforcement Efforts.  In the event that Licensor elects not to pursue an Enforcement Effort and Licensee desires to undertake such Enforcement Efforts itself, the Parties will discuss options in good faith and determine whether Licensee will take such Enforcement Effort on its own, at its own expense.  In any Enforcement Efforts undertaken by Licensee, Licensee shall obtain prior written approval from Licensor as to counsel, general litigation strategy, and any settlement or other voluntary disposition of the Enforcement Efforts and provided further that Licensee shall both hold harmless Licensor from and indemnify Licensor against, and shall pay any and all costs, expenses, and liabilities that Licensor incurs in connection with such Enforcement Efforts.  In the event that Licensee does undertake Enforcement Efforts on its own, any and all damages, profits, and other monetary awards resulting from such Enforcement Efforts shall be the sole property of Licensee.

 

9.                                      GENERAL PROVISIONS.

 

9.1                               Entire Agreement and Modification.  This Agreement supersedes all prior agreements between the Parties with respect to its subject matter and constitutes a complete and exclusive statement of the terms of the agreement between the Parties with respect to its subject matter.  This Agreement may not be amended, supplemented or otherwise modified except in a written document executed by the Party against whose interest the modification will operate.

 

9.2                               Notices.  All notices, requests and other communications to any Party hereunder shall be in writing and shall be given (i) by personal delivery to the appropriate address as set forth below (or at such other address for the Party as shall have been previously specified in writing to the other Party), or (ii) by reliable overnight courier service (with confirmation) to the appropriate address as set forth below (or at such other address for the Party as shall have been previously specified in writing to the other Party):

 

	
 
	
(a)
    	
if to Licensor, to:
    
	
 
	
 
    	
Bally Gaming, Inc.
    
	
 
	
 
    	
c/o Scientific Games Corporation
    
	
 
	
 
    	
6601 Bermuda Road
    
	
 
	
 
    	
Las Vegas, NV 89119
    
	
 
	
 
    	
Attention: Chief Legal Officer
    
	
 
	
 
    	
 
    
	
(b)
    	
if to Licensee, to:
    
	
 
    	
SG Social Holding Company I, LLC
    
	
 
    	
6601 Bermuda Road
    
	
 
    	
Las Vegas, NV   89119
    
	
 
    	
Attention: Legal Department
    
			

 

 

with a copy to:

SciPlay Corporation

6601 Bermuda Road

Las Vegas, NV 89119

Attn: General Counsel

 

All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. (Pacific Standard Time) and such day is a business day at the place of receipt.  Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day.

 

9.3                               Compliance with Laws; Regulatory Compliance.  In the exercise of their respective rights and in the performance of their respective obligations under this Agreement, Licensee and Licensor shall, at all times, comply with all applicable laws, regulations and orders.  Licensee specifically acknowledges that Licensor is subject to the gaming and licensing requirements of various jurisdictions and is obliged to take reasonable efforts to determine the suitability of its business associates.  Licensee agrees to cooperate fully with Licensor in providing it with any reasonable information, of whatever nature, that  Licensor  deems necessary or appropriate in assuring itself that Licensee possesses the good character, honesty, integrity, and reputation applicable to those engaged in the gaming industry and Licensee specifically represents that there is nothing in Licensee’s background, history, or reputation that would be deemed unsuitable under the standards applicable to the gaming industry. If, during the term of the Agreement, Licensor is notified in writing by any regulatory agency that the conduct of business with Licensee will jeopardize Licensor’s, or its Affiliates’, license or ability to be licensed or if Licensor concludes that Licensee fails to meet the above criteria, the Agreement shall terminate upon written notice by Licensor and Licensor shall owe no further affirmative duty to Licensee.

 

9.4                               Confidential Information.  Each Party shall keep in confidence and not disclose to any Third Party, without the prior written permission of the other, any or all of: any proprietary information of the other made known to it with respect to the Licensed Property or the Licensed Products, provided that each Party may disclose this Agreement and such information to its Affiliates, sublicensees, independent contractors, and/or gaming authorities on a need-to-know basis only.  Proprietary information shall include, but not be limited to any or all of: (i) information of a technical nature, such as “know-how,” secret processes, inventions, or research projects; (ii) information of a business nature, such as information about costs, profits, markets, marketing plans, sales, suppliers, manufacturers, or lists of customers; (iii) plans for future developments or

 

 

future products; and (iv) other information of a similar nature to the extent not available to the public.  This requirement of confidentiality shall not apply to information that is (a) in the public domain through no wrongful act of the receiving Party; (b) rightfully received by the receiving Party from a Third Party who is not bound by a restriction of nondisclosure; (c) already in the receiving Party’s possession without restriction as to disclosure; or (d) required to be disclosed by applicable rules and regulations of the SEC, other government agencies, judicial bodies, or as otherwise legally required.  Notwithstanding anything to the contrary in this Agreement, Licensor understands that Licensee may have to file this agreement as a “material agreement” pursuant to SEC regulations.

 

9.5                               Assignment; Delegation.  Licensor may, upon written notice to Licensee, assign any of its rights or delegate any of its duties hereunder without the prior written consent of Licensee.  Licensee may assign this Agreement or assign any of its rights or delegate any of its duties hereunder to any of its Affiliates, including SciPlay Holding Company, LLC, without the consent of Licensor.  Licensee shall provide written notice to Licensor of such assignment.  This Agreement and all rights and duties hereunder are otherwise personal to Licensee and its permitted assignees and shall not be assigned, or sublicensed by Licensee or its permitted assignees other than as permitted herein or by operation of law, without the prior written consent of Licensor, not to be unreasonably withheld or delayed. An assignment of this agreement to a Licensor Competitor or a potential Licensor Competitor shall be a reasonable basis to withhold approval.  For purposes of this Agreement, the terms “assigned” or “assignment” shall, in addition to the transfer of this Agreement or the rights or obligations hereunder (other than permitted sublicenses), whether voluntarily, involuntarily, by operation of law or otherwise, including by merger, be deemed to include a Change of Control.  Subject to the foregoing, this Agreement shall be binding on and shall inure to the benefit of the Parties and their respective permitted successors and assigns.

 

9.6                               No Third Party Beneficiary.  This Agreement will not confer any rights or remedies upon any person other than Licensor and Licensee, and their Affiliates and their respective heirs, executors, successors and permitted assigns. Notwithstanding the foregoing, Hasbro, Inc. and Hasbro International Inc. are Third Party beneficiaries with respect to all Intellectual Property and Licensed Products which utilize Hasbro, Inc. or Hasbro International Inc.’s Intellectual Property.

 

9.7                               Independent Contractors.  The relationship between Licensor and Licensee established by this Agreement is that of independent contractors, and nothing in this Agreement shall be construed to constitute the Parties as principal and agent, employer and employee, partners, joint venturers, co-owners or otherwise as participants in a joint undertaking. The Parties understand and agree that, neither Party grants to the other Party the power or authority to make or give any agreement, statement, representation, warranty or other commitment on its behalf, or to enter into any contract or otherwise incur any

 

 

liability or obligation, express or implied, on its behalf, or to transfer, release or waive any of its right, title or interest.

 

9.8                               Severability.  If any provision of this Agreement is invalid or unenforceable for any reason in any jurisdiction, such provision shall be construed to have been adjusted to the minimum extent necessary to cure such invalidity or unenforceability.  The invalidity or unenforceability of one or more of the provisions contained in this Agreement shall not have the effect of rendering any such provision invalid or unenforceable in any other case, circumstance or jurisdiction, or of rendering any other provisions of this Agreement invalid or unenforceable whatsoever.

 

9.9                               Waiver.  Any delay or forbearance by either Party in exercising any right hereunder shall not be deemed a waiver of that right. Neither the failure of either Party to insist upon the strict performance of any of the provisions of this Agreement, nor the failure of either Party to exercise any right, option or remedy hereby reserved, shall not be construed as a waiver of the future enforcement of any such provision, right, option or remedy, or as a waiver of any subsequent breach thereof.

 

9.10                        Remedies.  The remedies of the Parties under this Agreement are cumulative and shall not exclude any other remedies to which a Party may be lawfully entitled.

 

9.11                        Governing Law; Venue.  This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Nevada, excluding conflicts of law rules. Any dispute between the Parties arising from or relating to the validity, performance, interpretation or construction of this Agreement that cannot be resolved amicably shall be submitted to the exclusive jurisdiction of the Federal and state courts located in Clark County, Nevada.  Notwithstanding the foregoing, either Party shall have the right to seek equitable relief in any court of competent jurisdiction.

 

9.12                        Further Assurances.  Each Party hereby covenants and agrees that it shall execute and deliver such deeds and other documents as may be required to implement any of the provisions of this Agreement.

 

9.13                        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 any one or more of acts of war, terrorism, civil unrest, strike, fire, Act of God, earthquake, flood, lockout, embargo, governmental acts or orders or restrictions, failure of suppliers, or any other reason where failure to perform is both beyond the reasonable control and not caused by the negligence, intentional conduct or misconduct of the nonperforming Party, and the nonperforming Party has also exerted all reasonable efforts to avoid or remedy any force majeure; provided, however, that in no event shall a Party be required to settle any labor dispute or disturbance.

 

 

9.14                        Fees; Expenses.   Unless otherwise provided in this Agreement, each Party shall bear all fees and expenses incurred in performing its obligations under this Agreement.

 

9.15                        Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one Agreement.  Delivery of an executed counterpart in electronic fashion, such as a PDF file transferred by email or facsimile transmission, shall be deemed to have the same legal effect as delivery of an original executed counterpart of this Agreement for all purposes.

 

9.16                        Headings.  The headings in this Agreement are inserted merely for the purpose of convenience and shall not affect the meaning or interpretation of this Agreement.

 

*SIGNATURE PAGE TO FOLLOW*

 

 

IN WITNESS WHEREOF, the Parties have caused their duly authorized representatives to execute this document as of the Effective Date.

 

	
LICENSOR
    	
 
    
	
 
    	
 
    
	
Bally Gaming, Inc.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
Michael A. Quartieri
    	
 
    
	
Title:
    	
Treasurer and Secretary
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
LICENSEE
    	
 
    
	
 
    	
 
    
	
SG Social Holding Company I,   LLC,
    	
 
    
	
 
    	
 
    
	
By: SG Social Holding Company   II, LLC, its sole member
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
Michael A. Quartieri
    	
 
    
	
 
    	
Title:
    	
President, Chief Financial Officer and Secretary

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