Software License Agreement

EXHIBIT 10.2


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SOFTWARE LICENSE AGREEMENT
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This SOFTWARE LICENSE AGREEMENT ("Agreement") is entered into as of the 27th day of June, 1998, by and between ADVANCED CASINO SYSTEMS CORPORATION ("ACSC"), ADVANCED CASINO SYSTEMS INTERNATIONAL, INC. ("ACSI"), COMPUTERIZED MANAGEMENT SYSTEMS INTERNATIONAL, INC. ("CMSI"), and GREATE BAY HOTEL AND CASINO, INC., t/a "Sands Hotel & Casino" ("Greate Bay").


W I T N E S S E T H:


WHEREAS, ACSC is a corporation duly organized and existing under the laws of the State of Delaware and maintains its principal place of business at 200 Decadon Drive, Egg Harbor Township, New Jersey 08234-3899; and,


WHEREAS, Greate Bay is a corporation duly organized and existing under the laws of the State of New Jersey and maintains its principal place of business at Indiana Avenue and Brighton Park, Atlantic City, New Jersey 08401; and


WHEREAS, ACSI and CMSI are wholly owned subsidiaries of Greate Bay; and


WHEREAS, ACSC presently licenses and Greate Bay presently utilizes a number of custom software systems and interfaces including but not limited to the following casino management systems: (i) an IBM AS/400 Casino Accounting and Management Application ("the Casino Accounting & Management System"), (ii) an IBM AS/400 Slot Accounting & Management Application (the "Slot Accounting System"), (iii) a Casino Player Tracking System, (iv) a Casino Sales and Marketing System, (v) a Table Marketing System, and (vi) a Slot Marketing System consisting of certain software programs (the "SMS Software") and certain proprietary hardware components ("the SMS Hardware") and intellectual property rights in the configuration of the SMS Software with and into the SMS Hardware and other commercially available hardware components ("the Configuration") (the SMS Software and the SMS Hardware and the Configuration are collectively referred to as the "the SMS"); and


WHEREAS, both ACSC and Greate Bay desire to formalize the licensing of the systems as set forth below;


NOW, THEREFORE, in consideration of the foregoing recitals and the promises, representations, warranties, and undertakings set forth in this Agreement, and intending to be legally bound thereby, ACSC, ACSI, CMSI and Greate Bay do hereby promise and agree as follows:


1. DEFINITION OF THE SOFTWARE AND THE SMS. For purposes of this Agreement, the "Software" shall consist of (i) the Casino Accounting & Management System as generally described on Exhibit "A"; (ii) the Slot Accounting System as generally described on Exhibit "B"; (iii) the Casino Player Tracking System as generally described on Exhibit "C"; (iv) the Casino Sales and Marketing System as generally described on Exhibit "D"; (v) the Table Marketing System as generally described on Exhibit "E", (vi) all other software systems and interfaces owned by ACSC and utilized by Greate Bay on its IBM AS/400 or on other hardware platforms as of the date of this Agreement, including by way of example and not limitation the Security Incident Reporting System, MIS Resource Request System, Cross System Backup, Data Acquisition, Employee Time and Attendance and Casino Analysis as generally described on Exhibit "F", and (vii) any trade secret or confidential information in relation to the Software. For purposes of this Agreement, "the SMS" shall consist of the SMS Software and the SMS Hardware as generally described on Exhibit "G" and the Configuration, and any and all communication protocol(s) now or hereafter developed by or on behalf of or used by ACSC to enable, facilitate or improve communications between the SMS and the slot machines of any and all slot machine manufacturers that are in ACSC's possession or control and for which ACSC has the legal right to provide to third parties ("the SMS Protocol"), and any trade secret or confidential information in relation to the SMS. Any and all intellectual property rights in the Software and the SMS, including any derivative modifications and extensions, shall hereafter be collectively referred to as "the Intellectual Property Rights". The Intellectual Property Rights expressly do not include Greate Bay's rights in any internal controls developed or hereafter developed by Greate Bay relating to the electronic drop feature of the SMS.


2. QUITCLAIM ASSIGNMENT/RELEASE. Greate Bay, CMSI and ACSI, on behalf of themselves, their predecessors, successors and assigns (collectively, the "Releasing Parties"), do hereby quitclaim and assign to ACSC any and all ownership rights the Releasing Parties may have in the Intellectual Property Rights, if any, without any warranty or covenants of title, and release ACSC and all of its affiliates from any claims any of the Releasing Parties may have related to the transfer by the Releasing Parties, or the assumption by ACSC, of the Intellectual Property Rights. Further, the Releasing Parties will cooperate with ACSC by communicating to ACSC any facts known to them regarding any such rights in the Intellectual Property Rights and by executing additional documents to evidence this assignment. The assignment and release in this Paragraph 2 shall survive the termination or breach of this Agreement.


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3. LICENSE GRANT.


(a) License Rights Granted. Subject to the terms and conditions of this Agreement, ACSC hereby grants to Greate Bay and Greate Bay hereby accepts a perpetual, non-exclusive and transferable license under the Intellectual Property Rights owned or otherwise licensable by ACSC to use the Software and the SMS.


(b) Geographical Restriction. Except as set forth in this Paragraph 3(b), Greate Bay may only use the Software and the SMS on machines, gaming equipment and computer equipment located and to be located, without limitation as to number, at Greate Bay's casino/hotel and Greate Bay's associated administrative properties in Atlantic City, New Jersey, as existing and configured as of the date of this Agreement and/or as may be reconfigured, added, expanded, constructed and/or reconstructed provided the same require not more than one casino license to operate (without regard to any management company) (collectively "the Licensed Facilities") from time to time during the term of this Agreement, or, for backup and disaster recovery purposes, at either a third party's location or a location controlled by Greate Bay, which location may be outside of Atlantic City. Nothing in this Agreement shall prohibit Greate Bay from using the Software and the SMS with alternate computer equipment at alternate computer installations in the event of processing failure or for the purpose of testing of such alternative computer equipment and installations regardless of location. In addition, nothing in this Agreement shall preclude Greate Bay from making a copy of the Software or the SMS Software and operating it on alternative processors for program development and testing purposes.


(c) Responsibility of the Parties. Greate Bay shall be exclusively responsible for the supervision, management and control of the use of the Software and the SMS and any equipment in connection with which Greate Bay uses the Software or the SMS.


4. TERM OF LICENSE/AGREEMENT. The license granted under this Agreement is effective Nunc Pro Tunc from the first date ACSC or any predecessor in interest to ACSC claimed to acquire any ownership or other interest in the Intellectual Property Rights and shall remain in force in perpetuity. This license is non-cancelable, in whole or in part, by ACSC or any successor, in whole or in part, of the interest or business of ACSC, and any such successor must, as a condition of succession, expressly assume the obligations of this Agreement and, in the absence of an express assumption, any such successor will be deemed to have made such an assumption. Greate Bay may terminate the license granted under this Agreement and discontinue the use of the Software and/or the SMS, in whole or in part, or may discontinue the use of the Software and/or the SMS, or may elect not to use the services of ACSC, in whole or in part, as described in Paragraphs 6(c) and 6(d) without obligation to ACSC.


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5. OPERATING PROVISIONS. All use of the Software and the SMS (other than by or on behalf of any gaming authority) will be solely by Greate Bay's personnel or its agents or contractors, shall be subject to the obligations of confidentiality as set forth in Paragraph 10 of this Agreement, and distribution of the Software or the SMS, or any part thereof, or reference materials, including derivative modifications or extensions of them, is expressly prohibited, except for the Licensed Facilities and except as respects a gaming authority or persons acting on behalf of a gaming authority. Greate Bay shall not make or permit or otherwise allow others to print, copy, or divulge, in whole or in part, the Software or the SMS Software or the Configuration, in any form without the prior express written consent of ACSC.


6. PROVISION OF MATERIALS, UPDATES, HARDWARE, MAINTENANCE AND SUPPORT SERVICES AND SUPPLIER LISTS/EQUITABLE REMEDIES.


(a) Terms for the period through Plan Confirmation/Sale. From the date of the signing of this Agreement until the date of the Confirmation of a Plan of Reorganization or a sale by Greate Bay of substantially all of its assets in Greate Bay's currently pending Chapter 11 proceeding, Case No. B98- 10001 ("the Chapter 11 Proceeding"), ACSC agrees to continue to provide the materials and updates as provided in paragraph 6(c), and hardware, and maintenance and Support Services, as hereinafter defined in Paragraph 6(d), for the Software and the SMS and such other requested services as are currently being provided by or through ACSC under the same economic terms and conditions as presently exist between ACSC and Greate Bay, so long as Greate Bay has paid all fees and expenses then due and owing to ACSC for services rendered after Greate Bay's initial filing of a petition in the Chapter 11 Proceeding ("Post Petition") within 45 days of receipt of an invoice therefor and less any sums owed to Greate Bay by ACSC for services provided or expenses incurred Post Petition on behalf of ACSC.


(b) Terms for the period commencing with Plan Confirmation/Sale. Commencing with the date a Plan of Reorganization in the Chapter 11 Proceeding is confirmed by the Bankruptcy Court or an order is entered in the Chapter 11 Proceeding approving a sale by Greate Bay of substantially all its assets, ACSC agrees, for so long as ACSC provides such services to third parties or any of its affiliates, to provide the materials and updates, as hereinafter described in Paragraph 6(c), and the hardware, maintenance and Support Services as hereafter defined in paragraph 6(d), and the supplier lists described in Paragraph 6(e) and such other services as may now or hereafter be provided by ACSC to Greate Bay or affiliates or third parties as may be requested by Greate Bay under economic terms the same as, and other terms and conditions no less favorable than extended, in that certain Supplemental Agreement dated July 16, 1997 by and between Logical Solutions International, Inc. and Caesars World, Inc. (the "Caesars Agreement") without regard to quantity and volume discounts and without discrimination as to Greate Bay,


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and, if such services are not provided for in the Caesars Agreement, then on terms no less favorable than would be offered by or through ACSC to ACSC's most favored customer and without discrimination as to Greate Bay.


(c) Provision of Materials and Updates. Greate Bay may retain and, upon the signing of this Agreement to the extent Greate Bay is not in possession, ACSC shall provide Greate Bay with all basic materials, documentation manuals in printed and magnetic format, source codes, including but not limited to the source code for all systems and application programs running on the AS/400 and in the "HASS" file servers, the "Gearbox" PC's, the "Collector" Logic Board, and any other processor utilized in the SMS and the Software, and other documentation integral to the SMS Protocol or to the source codes or otherwise delineating and explaining the structure, organization, sequencing and operation of the source codes relating to the Software and the SMS (collectively the "Source Code") that are in ACSC's possession or control and for which ACSC has the legal right to provide copies to third parties. All Source Code will be provided in the highest form that allows modification. Notwithstanding the foregoing, the Source Code for the Operating System of the "Collector" Logic Board shall be placed in Escrow as provided in Paragraph 7 of this Agreement. During the term of this Agreement, ACSC shall make available to Greate Bay upon their completion copies of all modifications, improvements, or updates ("Updates") to the Software and/or the SMS at the same time or prior to the date on which ACSC makes such updates available to other customers of ACSC, and shall further provide Greate Bay no later than 10 days after request by Greate Bay, with copies of the Source Code for such Updates and revised copies of the Source Code for the entire Software and SMS which includes the Source Code for such Updates. Greate Bay shall have the right within the Licensed Facilities or at other locations authorized under this Agreement to full and unfettered use of the Source Code and may permanently install and maintain the Source Code in its computer system for its own internal use.


(d) Provision of Hardware and Maintenance and Support Services. During the term of this Agreement and as may be requested by Greate Bay from time to time, ACSC shall provide Greate Bay, with SMS Hardware Components and Support Services for Software and SMS. Support Services means providing Updates, Required Additions and/or Changes (as defined below), providing Error Corrections (as hereinafter defined) in the Software and/or SMS and/or in the communication between the Software and/or SMS and other systems covered by this Agreement or as may be mutually agreed upon the parties, providing telephone support and providing programming and project management services and such other services as may be required via telephone and at Licensed Facilities to install, integrate, maintain and support the Software and SMS. The term Required Additions and/or Changes means all changes and additions that must be made to Software and/or SMS to keep it in compliance with statutory,


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regulatory, and accounting practices changes. The term Error Correction means a modification, change or improvement to the Software or SMS that corrects an Error (as defined below). The term Error means a defect, deficiency or other problem with the Software or SMS that causes the Software or SMS to fail to operate in accordance with the documentation for the Software or SMS, to produce incorrect results, to damage data, to incorrectly store, retrieve, sort, present or calculate data, or to have a commercially unacceptable response time (i.e. time from input to producing a response). ACSC agrees that when Greate Bay reports an Error, ACSC will immediately commence work on an Error Correction and provide an Error Correction (i) as soon as reasonably possible if no commercially acceptable workaround is available to Great Bay or (ii) within a reasonable period of time if a commercially acceptable workaround is available or (iii) with the next Update or release of the Software or SMS if the Error is cosmetic or not material to the use of the Software or the SMS. ACSC agrees to provide Required Additions and/or Changes no later than two weeks prior to the effective date of such statutory, regulatory and/or accounting practices changes.


(e) Provision of Supplier Lists. Upon the signing of this Agreement, ACSC shall provide Greate Bay with a list of SMS Hardware component suppliers and shall, upon any addition or change to such supplier list, provide Greate Bay with an updated list. In consideration of being provided with a list of SMS Hardware component suppliers, Greate Bay promises not to purchase SMS Hardware components directly from such suppliers absent a default by ACSC of its obligations under this Paragraph 6.


(f) Equitable Remedies. The obligations of ACSC in this Paragraph 6 shall be specifically enforceable and ACSC agrees that (i) any breach of ACSC's obligations under this Paragraph 6 would cause irreparable injury to Greate Bay; (ii) Greate Bay would have an inadequate remedy at law for any such breach; (iii) the balance of interests and hardships would favor an injunction in favor of Greate Bay; (iv) the public interest would favor an injunction in favor of Greate Bay, and (v) ACSC will make no legal arguments that equitable relief is not an appropriate remedy in favor of Greate Bay in the event of a breach of ACSC's obligations under this Paragraph.


7. ESCROW OF THE "COLLECTOR" LOGIC BOARD SOURCE CODE. The Escrow Agent for the Source Code for the operating system of the "Collector" Logic Board shall be Greate Bay's General Counsel. ACSC shall cause the Source Code for the operating system of the "Collector" Logic Board to be deposited with the Escrow Agent within seven (7) days of signing this Agreement. The Escrow Agent shall acknowledge receipt of the Source Code and shall keep same in a safe secure location. Except as set forth below, the Escrow Agent shall not allow or permit any party or third party to have access to, copies ...