well they still have a lawsuit to settle with Net Gaming (NGQ.vse), that was launched last Feb.
Network Gaming International Corp. -
US lawsuit against Multimedia Games
Network Gaming International Corp.
NGQ
Shares issued 11,805,695
1998-02-02 close $0.14
Monday Feb 2 1998
Mr Keith Folkestad reports
Due to breaches of its US distribution agreement with Multimedia Games, a
lawsuit has been commenced by Network in US Federal Court in Oklahoma
against Multimedia to recover estimated damages in a calculated amount of
approximately US$62 million plus unspecified further damages.
Pursuant to the agreement, Multimedia had agreed to use commercially reasonable
efforts to place purchase orders or revenue sharing orders towards the installation
of 5,000 MB-1000 electronic bingo player stations for the 12 months ended
October 31 1997, and 5,000 further units for the year ended October 31 1998.
This key commitment, together with other purchase and marketing commitments
contained in the agreement, represented the basis for Network to grant exclusive
distribution rights with respect to its software to Multimedia for specific US
markets, and for Network to make available, in confidence and without any right
to use for Multimedia's sole use, Network's technical know-how with electronic
bingo systems.
Management believes that Multimedia has acted in bad faith by, among other
things, misappropriating for its own purposes the trade secrets, and other technical
information of Network; by creating its own electronic bingo software based on
the misappropriated intellectual property; by, directly or indirectly, causing its
clients to substitute this illegally developed software for Network's software; and
by creating delays in informing Network of US regulatory changes required for its
software, thereby creating a false basis for substituting its own software for the
Network software.
At the time of the US distribution agreement being entered into, the parties also
entered into a Canadian distribution agreement whereby Multimedia granted
Network an exclusive licence to distribute the MegaBingo system in Canada and
China, and Multimedia agreed to fully assist in securing Megabingo contracts in
such jurisdictions. Management believes that Multimedia has acted in bad faith
with respect to this second agreement by, among other things, not providing a
working MegaBingo system for demonstration to prospective Canadian
purchasers, and not responding to formal requests for product quotations and
marketing assistance.
As a result, Network is suing for extensive damages. Multimedia is a Nasdaq
OTC listed company which has a current market capitalization of approximately
US$50 million. Accordingly, Network expects to be able to collect payment on a
successful judgement.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
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