By and Between
RCA THOMSON LICENSING CORPORATION
and
WELLS-GARDNER ELECTRONICS CORPORATION
dated as of
January 1, 1995
AGREEMENT, dated as of January 1, 1995, between RCA THOMSON LICENSING
CORPORATION (hereinafter called "RCA"), a Delaware, U.S.A., corporation having
an office at Two Independence Way, Princeton, New Jersey 08540, U.S.A., and
WELLS-GARDNER ELECTRONICS CORPORATION (hereinafter called "Licensee"), having
an office at 2701 North Kildare Avenue, Chicago, Illinois 60639.
WITNESSETH:
In consideration of the premises and of the covenants herein contained, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following terms are defined:
SECTION 1.
"Contract Apparatus" means "Color Display Monitors" and shall include both
complete Color Display Monitors as well as such monitors which are complete
except for cabinets or other permanent housings.
SECTION 2.
(a) "Chromatic Colors" means colors such as reds, oranges, yellows, greens,
and blues, as distinguished from the achromatic colors of black, white and
grays.
(b) "Color Cathode Ray Tube" means an Electron Tube in which electrical
impulses are converted into a visible representation thereof and in which such
visible representation may be produced in two or more Chromatic Colors.
(c) "Color Display Monitor" means color display apparatus designed or
adapted to provide color display of alphanumeric and/or graphic information
from computers, character generators, word processors or other similar types of
equipment. However, the term "Color Display Monitor" shall not include any
apparatus capable of receiving and processing standard broadcast television
signals.
(d) "Electron Tube" means a device comprising two or more electrodes and
an envelope which is to any extent evacuated or contains gas, vapor or liquid
under any degree of pressure, and which operates by the passage of an electric
current through such vacuum, gas or vapor to change the form of, control or
modify energy supplied thereto.
SECTION 3.
(a) (i) "Patents" means letters patent, certificates of utility and
utility models, rights (by license or otherwise) with respect to or under
letters patent, certificates of utility and utility models, applications for
letters patent, certificates of utility and utility models which have been
opened for public inspection, and all reissues, divisions, continuations and
extensions thereof. The term "Patents" does not include copyrights or
trademarks.
(ii) "RCA's Patents" means Patents (as hereinabove defined) owned,
controlled and/or acquired by RCA at any time duringthe term of this Agreement,
with respect to which and to the extent to which, and subject to the conditions
under which, RCA shall have the right to grant or cause to be granted licenses
to Licensee during the term of this Agreement.
(b) "Subsidiary of either party is any corporation (which term includes
any legal entity similar to a corporation), or other kind of business
organization, in which such party now or hereafter has a "controlling interest".
"Controlling interest" means, in the case of a corporation, direct or indirect
ownership or control by such party, at any time during the term of this
Agreement, of that number of the shares thereof representing the right to elect
a majority of the directors of the corporation or persons performing similar
functions; and, in the case of any other kind of business organization, it means
that direct or indirect ownership or control, at any time during the term of
this Agreement, of the capital thereof, or other interest therein, by or through
which such party exercises, or has the power to exercise, in any manner,
directly or indirectly, control or direction thereof. Any such corporation or
other kind of business organization shall constitute a Subsidiary only for a
period during the term of this Agreement that such controlling interest exists.
ARTICLE II
LICENSES
SECTION 1.
RCA hereby grants to Licensee a non-exclusive, non-transferable, non-
assignable, indivisible license, right and privilege under all of RCA's Patents
of Canada, Mexico and the United States to make Contract Apparatus, and a non-
exclusive, nontransferable, non-assignable, and indivisible license, right and
privilege under all of RCA's Patents of all countries of the world to use, sell,
lease or otherwise dispose of such Contract Apparatus.
SECTION 2.
Anything in this Agreement to the contrary notwithstanding, no license is
herein granted, and no act or acts hereunder shall be construed as or result in
conveying any license, to Licenses or to any third party, expressly or by
implication, estoppel or otherwise:
(a) with respect to Color Cathode Ray Tube; and
(b) other than the licenses herein expressly granted
to Licensee pursuant to Section 1 of this Article II.
SECTION 3.
At any time during the term of this Agreement, upon written request of
Licensee, RCA agrees to grant or cause to be granted to Licensee, in a standard
form or forms in which RCA then grants or causes to be granted such license or
licenses, a non-exclusive license or licenses for the manufacture of Contract
Apparatus under RCA's Patents of other countries of the world.
ARTICLE III
COMPENSATION
SECTION 1.
Licensee shall pay as compensation to RCA the sum of U.S. $1.25 with
respect to each unit of Contract Apparatus licensed under Article II, Section 1
of this Agreement.
SECTION 2.
(a) Within thirty (30) days after March 31, June 30, September 30 and
December 31 of each year during the term of this Agreement, Licensee shall
furnish RCA with a written statement specifying the number of units of Contract
Apparatus licensed hereunder and used, sold, leased or otherwise disposed of by
Licensee during the preceding calendar quarter, and the total net compensation
payable with respect thereto. The first such statement furnished by Licensee to
RCA shall include such information for all Contract Apparatus licensed hereunder
and used, sold, leased or otherwise disposed of by Licensee from the effective
date of this Agreement to the last day of the calendar quarter covered by such
statement. At the time of furnishing such statements, Licensee shall also make
the payments prescribed therefor in Section 1 of this Article III in the manner
set forth in Section 5 of this Article III.
(b) A similar statement shall be rendered and payment made to RCA within
thirty (30) days after, and as of, the date of any termination of this Agreement
covering the period from the end of that covered by the last preceding statement
to the date of such termination and including all Contract Apparatus
manufactured during the term of this Agreement, or actually in manufacture upon
the date of termination of this Agreement, and not used, sold, leased or
otherwise disposed of prior to such termination, which Contract Apparatus, for
the purpose of computing the payments to be made under Section 1 of this Article
III, shall be considered as having been used, sold, leased or otherwise disposed
of by Licensee prior to termination of this Agreement.
(c) Contract Apparatus shall be considered as used, sold, leased or
otherwise disposed of, as the case may be, when billed out, delivered, shipped
or mailed to a customer, or when used or set aside for future use by Licensee,
whichever shall first occur.
SECTION 3.
Licensee shall keep true and accurate records, files and books of account
containing all the data reasonably required for the full computation and
verification of the amounts to be paid and the information to be given in the
statements provided for herein. Licensee shall, during usual business hours,
permit RCA or its duly authorized representatives adequately to inspect the same
for the sole purpose of determining the amounts payable by Licensee pursuant to
Section 1 of this Article III. In lieu of such inspections by RCA or its duly
authorized representatives, Licensee shall have the option to have such
inspections made at Licensee's expense by independent chartered or certified
public accountants mutually acceptable to RCA and Licensee (which acceptance
shall not be unreasonably withheld). Such inspections shall be made under RCA's
instructions and the results thereof shall be made available to RCA and Licensee
when completed. Such option may be exercised at any time during the term of
this Agreement in respect of any period for which an inspection has not been
made to verify the amounts so payable. Exercise of such option by Licensee
shall be in writing.
SECTION 4.
Licensee shall pay interest to RCA from the date due to the date of payment
upon any and all amounts overdue and payable hereunder at a rate equal to four
percent (4.0%) over the published prime rate of the Chase Manhattan Bank, New
York, New York, as in effect from time to time during the period that any such
amount is overdue.
SECTION 5.
All payments hereunder by Licensee to RCA shall be made at such places as
RCA may direct in writing from time to time without any deductions for taxes or
charges of any kind, which taxes and charges, if any, are assumed by Licensee.
Notwithstanding the foregoing, in the event such payment is made from, and with
respect to Contract Apparatus manufactured in, a country other than the United
States, any tax which may be imposed on RCA by the Government of the country
from which payment is made (or any political subdivision thereof), and required
by such Government or political subdivision to be withheld by Licensee, with
respect to the compensation payable to RCA pursuant to Section 1 of this Article
III, may be deducted by Licensee before payment of such compensation; provided,
however, that if any such tax shall be imposed at a rate in excess of the United
States corporation income tax applicable to RCA on such compensation for the
taxable period for which such compensation is payable, then Licensee shall
assume the excess of such tax over and above such United States corporation
income tax on such compensation, and shall pay such excess to or for the account
of RCA; and provided, further, that Licensee shall furnish RCA with certified
statements and receipts and with such other supporting data as may be required
by the United States Tax Authorities to establish that any such tax has been
withheld.
ARTICLE IV
TERM AND TERMINATION
SECTION 1.
This Agreement shall be effective from the date first above written and
shall continue in effect, unless sooner terminated as elsewhere provided in this
Agreement, until December 31, 1999.
SECTION 2.
(a) If Licensee shall at any time default in rendering any of the
statements which may be required hereunder, or in the payment of any moneys
which may be due hereunder, or in fulfilling any of the other obligations or
conditions hereof, and such default shall not be cured within thirty (30) days
after written notice from RCA to Licensee specifying the nature of the default,
RCA shall have the right to terminate this Agreement by giving written notice of
termination to Licensee, and this Agreement shall terminate upon the giving of
such notice.
(b) RCA shall also have the right, to the full extent permitted by law,
to terminate this Agreement by giving written notice of termination to Licensee
at any time upon or after the filing by Licensee of a petition in bankruptcy or
insolvency, or upon or after any adjudication that Licensee is bankrupt or
insolvent, or upon or after the filing by Licensee of any petition or answer
seeking reorganization, readjustment or arrangement of the business of Licensee
under any law relating to bankruptcy or insolvency, or upon or after the
appointment of a receiver for all or substantially all of the property of
Licensee, or upon or after the making by Licensee of any assignment or attempted
assignment for the benefit of creditors, or upon or after the institution of any
proceedings for the liquidation or winding up of Licensee's business or for the
termination of its corporate charter, and this Agreement shall terminate upon
the giving of such notice.
(c) In the event of the direct or indirect taking over, or assumption of
control, of Licensee by any superior authority, RCA shall have the right to
terminate this Agreement at any time thereafter upon giving written notice
thereof to Licensee, and upon the giving of such notice of termination this
Agreement shall terminate forthwith.
SECTION 3.
Upon termination of this Agreement, by expiration or otherwise, all
licenses, rights and obligations hereunder shall cease and determine except that
the licenses granted under Section 1 of Article II hereof shall continue as to
all specific units of Contract Apparatus manufactured by Licensee during the
term of this Agreement, or actually in manufacture on the date of termination of
this Agreement, for the full terms of the Patents under which such Contract
Apparatus is licensed hereunder to be made and used, sold, leased or otherwise
disposed of, and except that no termination of this Agreement, by expiration or
otherwise, shall release Licensee from any of its obligations accrued hereunder
(including its obligations to furnish statements, to pay compensation, and
permit inspection of its records, files, and books of account, with respect to
Contract Apparatus manufactured during the term of this Agreement of Licensee),
or rescind anything done or any payment made or other consideration given to
either party hereunder, prior to the time such termination becomes effective.
SECTION 4.
No failure or delay on the part of RCA in exercising its right of
termination hereunder for any one or more defaults shall be construed to
prejudice its right of termination for such or for any other or subsequent
default.
ARTICLE V
FORCE MAJEURE
Anything contained in this Agreement to the contrary notwithstanding if a
party is prevented from performing any of its obligations hereunder by laws,
orders, regulations and directions of any Government having jurisdiction over
the parties hereto, or any department, agency, corporation or court thereof, or
by war, acts of public enemies, strikes or other labor disturbances, fires,
floods, acts of God, or any causes of like or different kind beyond the control
of either party, then, except as hereinafter provided in this Article V, such
party shall be excused from any failure to perform any such obligation to the
extent such failure is caused by any such law, order, regulation, direction or
contingency. If Licensee is prevented by any such law, order, regulation
direction or contingency (each of which is hereinafter referred to as a
"mandatory restriction") from furnishing the statements or making the payments
provided for in Article III of this Agreement at the times and in the manner
prescribed by such Article III, all such statements not furnished and payments
not made during the continuance of any such mandatory restriction shall be
furnished and made immediately upon the discontinuance of such mandatory
restriction.
ARTICLE VI
FURTHER ASSURANCES, NOTICES
AND MISCELLANEOUS PROVISIONS
SECTION 1.
(a) This Agreement shall be binding upon and inure to the benefit of the
Subsidiaries and successors of Licensee and RCA and the assigns of RCA. It
shall not be assignable by Licensee, in whole or in part, to any other party
whatsoever, nor shall the rights herein of Licensee otherwise be or become in
any way, directly or indirectly, transferable or available to, or divisible or
capable of being shared with, or inure to the benefit of, any other party
without the prior written consent of RCA, which consent shall not be
unreasonably withheld.
(b) Licensee shall be responsible for, and hereby assumes full liability
in respect of, all royalty reports and payments for all Contract Apparatus made
and used, sold, leased or otherwise disposed of by its Subsidiaries, and
Licensee shall take all actions necessary to cause its Subsidiaries to comply
with their obligations under this Agreement. Within thirty (30) days after
written request therefor by RCA, Licensee shall supply RCA with a complete list
in writing of its Subsidiaries engaged, as of the date of the request from RCA,
in the manufacture and sale of Contract Apparatus and shall thereafter notify
RCA in writing of any changes therein within thirty (30) days after each such
change.
SECTION 2.
RCA shall not be held responsible by Licensee for the validity of any of
RCA's Patents or for the termination of any such Patents should such Patents be
terminated for any cause whatsoever, and RCA shall not be required to secure any
Patent or Patent rights.
SECTION 3.
Nothing contained in this Agreement shall be construed as imposing on
either party any obligation, or as conferring on Licensee any right, to
institute any suit or action for infringement of any of RCA's Patents, or to
defend any suit or action brought by a third party which challenges or concerns
the validity of any of RCA's Patents.
SECTION 4.
It is expressly agreed by the parties that all matters relating to the
construction and interpretation of this Agreement shall be construed, and that
the legal relations hereunder between the parties shall be determined, according
to the laws of the State of New York, U.S.A., exclusive of the choice of law
provisions.
SECTION 5.
Any notice or request required or permitted to be given under or in
connection with this Agreement or the subject matter hereof shall be deemed to
have been sufficiently given when, if given to RCA, it shall be addressed to RCA
Thomson Licensing Corporation, at its postal address: P. O. Box 2023,
Princeton, New Jersey 08543-2023, U.S.A., or its courier address: Two
Independence Way, Princeton, New Jersey 08540, U.S.A., and when, if given to
Licensee, it shall be addressed to Licensee at its address set forth on the
first page hereof, and in each case either delivered at such address to an
officer of the party to which given, or sent by registered airmail. If mailed,
the date of mailing shall be deemed to be the date on which such notice or
request has been given. Either party may be given written notice of a change of
address and, after notice of such change has been received, any notice or
request shall thereafter be given to such party as above provided at such
changed address.
SECTION 6.
This Agreement sets forth the entire agreement and understanding between
the parties as to the subject matter hereof and merges all prior discussions
and negotiations between them, and neither of the parties shall be bound by any
conditions, definitions, warranties, understandings or representations with
respect to such subject matter other than as expressly provided herein or as
duly set forth on or subsequent to the date hereof in writing and signed by a
proper and duly authorized officer or representative of the party to be bound
thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers or representatives as of the day and year
first above written.
WELLS-GARDNER ELECTRONICS RCA THOMSON LICENSING
CORPORATION CORPORATION
By: /s/ RICHARD L. CONQUEST By: /s/ HERBERT L. JACOBSON
Richard L. Conquest Herbert L. Jacobson
Date: March 23, 1995 Date: April 5, 1995