Exhibit 10.1


SOFTWARE DISTRIBUTION LICENSE AGREEMENT


This
Software Distribution License Agreement (this “Agreement”) is made this 26th
day of September, 2007 (the “Effective Date”) by and between
Progressive Gaming International Corporation, a Nevada corporation, with a
primary business address of 920 Pilot Road, Las Vegas, Nevada 89119, and its
Affiliates (jointly and severally “PGIC” or “Licensor”), on the
one hand, and Shuffle Master, Inc., a Minnesota corporation, with a primary
business address 1106 Palms Airport Drive, Las Vegas, Nevada 89119, and its
Affiliates (jointly and severally “SMI” or “Licensee”), on the
other hand, for the purpose of granting Licensee a limited license to use and
distribute the Licensed Software.


WHEREAS, PGIC
and SMI are parties (collectively the “Parties” and individually a “Party”) to
that certain Purchase Agreement dated the same day hereof (as amended,
restated, modified or supplemented from time to time, the “Purchase
Agreement”), pursuant to which PGIC agreed to sell certain assets relating
to the Table Games Division (“TGD”) (such sold assets shall be referred
to herein as the “PGIC Transferred Products” as defined below) to SMI and an
Amended and Restated License Agreement (the “Progressive License”),
pursuant to which PGIC agreed to license certain patents related to the TGD to
SMI;


WHEREAS,
under the terms of the Purchase Agreement, it is contemplated that PGIC and SMI
execute this Agreement, and deliver an executed version to the other
concurrently with the execution of the Purchase Agreement; and


WHEREAS, this
Agreement states the entire agreement by which SMI obtains from PGIC a license
to use and distribute the Licensed Software and PGIC Non-CJS System.


NOW THEREFORE,
in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as follows:


1.              DEFINITIONS.  Any
capitalized terms not expressly otherwise defined in this Agreement shall have
the same meaning as set forth in the Purchase Agreement.  As used in this Agreement:


“Affiliate” of any
particular Party means any current or future Person controlling, controlled by
or under common control with such Party. 
For purposes of this definition, “control” (including the terms “controlling,”
“controlled by” and “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise, and such “control” will be
presumed if any Person owns 50% or more of the voting capital stock, assets or
other ownership interests, directly or indirectly, of any other Person.


“Casinolink®” means
PGIC’s central server system which may be configured with different modules to,
among other things, do the following on slot machines and/or Table Games:  control progressives and perform player
tracking, accounting and/or reporting.



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“Change of Control” means, with respect to
a party, the occurrence of any of the following events: (a) any consolidation
or merger of such party with or into any other entity in which the holders of
such party’s outstanding shares immediately before such consolidation or merger
do not, immediately after such consolidation or merger, retain stock
representing a majority of the voting power of the surviving entity or stock
representing a majority of the voting power of an entity that wholly owns,
directly or indirectly, the surviving entity; (b) the sale, transfer or
assignment of securities of such party representing a majority of the voting
power of all of such party’s outstanding voting securities to an acquiring
party or group; or (c) the sale of all or substantially all of such party’s
assets.  Notwithstanding the foregoing,
any financing of a party by one or more venture capital firms, lenders or
similar institutions will not be considered a “Change of Control” of such
party.


“CJS” means PGIC’s
Casinolink® Jackpot System and/or Casinolink® Jackpot module of Casinolink® for
Table Games, and as developed in the future by PGIC.  CJS is software on a central server which
utilizes Casinolink®.  CJS includes the
device known as the watchman which connects CJS to the Aquarius
Controller.  Some of the computer code
for CJS may be presently installed in some of the PGIC Transferred Products.


“Cross Over Code” means Licensor’s computer code that is both
a part of the Licensed Software and a part of the PGIC Transferred Products.  For the avoidance of doubt, Licensor is
transferring ownership to Licensee of certain Intellectual Property Rights
pursuant to the terms provided in the Purchase Agreement, some of which is
contained in the Licensed Software.  To
the extent there is any such cross over, Licensor shall receive the
non-exclusive license rights to such Cross Over Code from Licensee as provided
in Section 2.6.  Examples of such Cross
Over Code contained within the Licensed Software include, but are not limited
to, part of the code on: the item commonly referred to as the “Aquarius
Controller,” the item commonly referred to as the “Game Manager,” and the items
commonly referred to as the “Dealer Key Pad.”


“Customizations” means the
modifications to the PGIC Non-CJS Systems developed by either party for SMI or
modifications to the PGIC CJS Systems developed by PGIC pursuant to this
Agreement, and all subsequent Updates to such modifications and all systems,
programming and user documentation related to any of the foregoing.


“Design” means as to
Table Hardware the documentation which refers to any of the following: physical
dimensions, circuit board layout, materials used, electronic components, and
bill of materials.


“Excluded Table Games” means one or more of the following: (i) any
Purchased Table Games (as defined in the Purchase Agreement), (ii) any SMI Game
Play (including, without limitation, any versions, updates, improvements or
additional orders of such SMI Game Play) as of the Effective Date in existence,
on order and/or in inventory, unless a PGIC System is later incorporated into
such SMI Game Play, in which case, PGIC shall earn the royalty for use of the
PGIC System as provided in Section 5.2(h); and (iii) SMI Game Play using a
third party Progressive System not using the Licensed Software (as otherwise
permitted in this Agreement).



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“End User” means any customer that is a legal casino gaming
venue or other lawful gaming establishment to whom either party or its
authorized agents lease, distribute or place the Licensee Products and/or PGIC
Systems, as applicable.


“Escrow Agreement” means the Three Party Escrow Service
Agreement attached hereto as Exhibit E.


“Executable Code” means the fully compiled version of a
software program that can be executed by a computer and used by an end user
without further compilation.


“Field of Use” means Game Play
for Table Games.


“GAAP Recurring Revenue” means, for any applicable period and in accordance with GAAP, (a) the
difference between amounts earned by either Party on a Table Game before the
PGIC System is added, as compared to the revenue earned by such Party on such
Table Game after the addition of such PGIC System, and which is demonstrably
and directly attributable to such PGIC System (“Incremental Recurring Revenue”),
less (b) System Costs.  Attached hereto
as Exhibit “D” are examples of Incremental Recurring Revenue.  Any service or maintenance fees attributable
to an End User by either Party after the installation of a PGIC System or Game
Manager onto Table Games are not a part of GAAP Recurring Revenue and no
royalties shall be paid from one Party to the other for such amounts received
from End Users.  Such service and
maintenance fees shall be the actual labor and materials cost to the contracting
Party.


“Game Manager” means the Licensor product commonly referred
to in the marketplace as Game Manager that will be acquired by SMI under the
Purchase Agreement, and which constitutes a part of the PGIC Transferred Products.  Game Manager is
licensed back to PGIC pursuant to the terms of this Agreement as well as the
Cross Over Code, all subject to the rights granted to PGIC
under section 2.6 and section 2.7.


“Game Play” means any pay
tables and methods of play for any Table Game; provided that Game Play
shall not include any pay tables or methods of play that are in the public
domain or on any Table Games that otherwise may be used freely without
infringing Intellectual Property Rights 
(collectively, “Public Domain Games”), including, blackjack,
craps, pai gow, roulette, baccarat, sic bo, and poker.  Game Play shall, however, include such Public
Domain Games if a pay table or additional wager is added to such Public Domain
Games, without which a table game supplier (e.g. SMI) would not otherwise
receive royalty amounts from End Users.


“Infringe IP” means copyright
infringement, patent infringement (contributory, direct, inducement or
otherwise), trademark infringement, breach of contract related to ownership
and/or licensing of the Licensed Software and/or misappropriation of trade secrets.


“Improvements” means all
improvements, advances, developments, modifications, enhancements, variations,
revisions, adaptations or extensions of or to any of the Licensed Software,
whether patentable or not, hereafter created or acquired during the Term by
either party.



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“Intellectual Property Rights” means all present and future worldwide
copyrights (registered and unregistered), trademarks (registered and
unregistered), trade secrets, patents, patent applications, moral rights, trade
dress, contract rights, and other proprietary rights.


“Lab Ready” means that in PGIC’s
reasonable discretion, a piece of software or hardware has been sufficiently
tested and/or sufficiently completed to be ready for submission to the
Technology Division of the Nevada State Gaming Control Board and Gaming
Laboratories International.


“Licensee Products” means the Table Games and/or Table Hardware
manufactured by (or on behalf of) Licensee or its suppliers with which the
Licensed Software and/or PGIC Systems may be integrated/bundled and
distributed.  Licensee Products shall
include Table Games incorporating SMI Game Play used within the Field of
Use.  Nothing contained herein grants or
licenses to PGIC any rights to Licensee Products.


“Licensed Software” means the software program or programs that are embodied in and used
with the PGIC CJS Systems, and any modified, updated, or enhanced versions of such programs.


“Licensor Marks” means the trademarks and trade names of
Licensor used to describe the goods or services that relate to a PGIC CJS
System and/or PGIC Non-CJS System except for the following:  (a) Game Manager; or (b) Aquarius Controller.


“Non-SMI Game Play” means any Table Game (whether Game Play or
Public Domain Game) that is, in the present or the future, neither owned,
patented, trade dressed, copyrighted (registered or unregistered), trademarked
(registered or unregistered), leased, sold, distributed or licensed, in the
present or in the future by SMI.


“Parts” means any of the
following components of a Progressive System: 
the electronic components, hardware, integrated circuits, circuit
boards, microchips, sensors, cables, harnesses and light emitting diodes.


“Person” means the same as
in the Purchase Agreement.


“PGIC CJS Systems” means any current or future Progressive
Systems owned by PGIC for use within the Field of Use that are licensed, and/or
leased for use by End Users by PGIC (or SMI pursuant to this Agreement), that
incorporate and/or make use of the Licensed Software, CasinoLink and/or CJS;
and which may also incorporate and/or make use of Table Hardware (pursuant to
the license grant in section 2.10) and/or Cross Over Code, subject to the
rights granted to PGIC in Section 2.6.


“PGIC Non-CJS Systems” means any current or future Progressive
Systems owned by PGIC for use within the Field of Use that are licensed and/or
leased for use by End Users by PGIC (or SMI pursuant to this Agreement), which
may also incorporate or make use of: (1) Only pursuant to the license grant to
PGIC in Section 2.7 and 2.10, Game Manager, Table Hardware;  and/or (2) The Cross Over Code, subject to
the rights granted to PGIC in Section 2.6.


“PGIC Systems” means the PGIC CJS
Systems and the PGIC Non-CJS Systems.


“PGIC Transferred Products” means all assets acquired by and/or
transferred to SMI pursuant to the Purchase Agreement and as further defined in
the appropriate schedule to the 



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Purchase Agreement, and all PGIC assets
licensed by SMI pursuant to the Progressive License and as further defined in
the appropriate schedule to the Progressive License Patents.


“Progressive Systems” means the computer system and/or hardware
used to control and/or network progressive Table Games, which includes but is
not limited to the following functionality: 
the calculating of current progressive amounts and/or the receipt of
wager amounts or information from progressive Table Games in any form including
without limitation coin, chips and cards; provided, however, that the term “Progressive
Systems” does not include any elements that embody Game Play methods or pay
tables in such a computer system, or Table Hardware.  PGIC Systems are an example of Progressive
Systems.


“Public Domain Games” has the meaning ascribed in the definition
of Game Play.


“SMI Game Play” means Game Play
that was or is, in the past, present or the future, either owned, patented,
trade dressed, copyrighted (registered or unregistered), trademarked
(registered or unregistered), leased, sold, distributed, licensed or otherwise
placed, in the past, present or in the future by SMI, or for which SMI has at
least exclusive commercialization rights for legal casino gaming venues or
other lawful gaming establishments in any form in at least one country in the
world or in at least one State in the United States (“Exclusive
Commercialization Rights”); provided that (i) any Game Play,
which in the future, becomes either owned, patented, copyrighted (registered or
unregistered), trademarked (registered or unregistered), leased, sold or
licensed by SMI, or for which SMI obtains Exclusive Commercialization Rights
shall become an SMI Game Play (it being understood however, that SMI has no
obligation (x) to remove any Progressive Systems from a third party provider on
such Game Play, (y) to terminate any agreement regarding a Progressive System from
a third party provider on such Game Play, or (z) to make royalty payments to
PGIC regarding a Progressive System from a third party provider on such Game
Play); and (ii) any SMI Game Play which SMI subsequently either no longer
owns, leases, distributes, licenses or has Exclusive Commercialization Rights,
and to which SMI has lost all of its Intellectua1 Property rights to throughout
the world (whether by transfer, expiration or invalidation) shall, as of such
time, no longer be considered a SMI Game Play (it being understood however,
that any PGIC System already installed or otherwise in use on any such SMI Game
Play that ceases to be an SMI Game Play and which is generating revenue shall continue as if it is still an SMI Game Play until
such PGIC System is removed).  SMI Game
Play does not include any Game Play of any of the Purchased Table Games.


“Software Assistance” means: the programming of Source Code and the
creation of Executable Code in a Lab Ready form; and the changing of hardware
designs and/or components in a Lab Ready form.


“Software Warrant Period” has the meaning ascribed in Section 9.2(a).


“Source Code” means the
human-readable version of a software program that can be compiled into
Executable Code.


“Specifications” means the State of
the Art and the capabilities of a PGIC System as advertised and/or marketed by
PGIC to End Users.  In the case of Game
Play which SMI requests PGIC to implement a PGIC System (“Game
Specifications”), the Game 



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Specifications shall include the dealing
procedures, pay tables and the following with respect to any progressive
award:  the increment rate, the seed
amount, and any other requested distribution of the wager used to fund a
progressive award.


“State of the Art” means all of the following in regards to a PGIC
System:


(a)          Capable of networking at least 100 Licensee Products, including the
ability to have multi-property linkage otherwise known as a wide area
progressive;


(b)         Generate reports of a PGIC System, including user and Licensee Product
information;


(c)          Generate tax reports for each player who wins from the progressive
pool;


(d)         A reasonably skilled technician following a published manual would be
able to manually configure progressive pay tables; and


(e)          PGIC Systems speeds and/or capabilities existing in the most current
version in End User casinos as of August 31, 2007, and not slowed and/or
restricted as a result of Updates, Improvements, Customizations and/or the
connection of more than one Table Game to a PGIC System.


“Successful Install Date” means the successful implementation of a Lab Ready Game Manager version of the applicable Game Specification
pursuant to Section 5.1 of this Agreement.


“System Costs” means, in accordance with GAAP, actual
non-recurring and recurring Table Hardware, shipping, labor, travel, overhead,
compliance/laboratory fees, parts and service costs necessary to implement the
PGIC Systems or Game Manager onto Table Games; provided, however, that such
costs shall not include PGIC System or Game Manager installation costs or service,
which are allocated in good faith by SMI or PGIC relating to the license,
distribution or placement of the PGIC System, Game Manager and Table Hardware.  The
System Costs is further described in Exhibit A with examples, which
certain System Costs shall be subject to the Consumer Price Index (as published
by the United States Department of Labor, Bureau of Labor Statistics) and
adjusted on the anniversary of the Effective Date.


“Table Game” means any table game, including table games
that are live and/or table games that are a multi-seat electronic methods of
playing or simulating any table game (such as those electronic tables that are
similar to SMI’s Table Master product), but which excludes for the sake of
clarity any Progressive Systems.  Provided,
however that, the term Table Game shall be limited to live table games during
the Term until PGIC terminates PGIC’s previous agreements with Table Max
(attached in Exhibit F), including with a release to SMI to SMI’s reasonable
satisfaction, which must occur within 150 days of the Effective Date.


“Table Hardware” means
functionality located on or within the Table Game including but not limited to
the following:


(a)          Non-RFID wagering accepting devices or methods, including but not
limited to slots and spots;



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(b)   Aquarius Controller and/or any similar table controller; but shall
not include: any such controller developed by PGIC as part of the PGIC CJS
System that is not an Aquarius Controller;


(c)   dealer controls;


(d)   keypad assemblies;


(e)   coin return shoots or chutes


(f)    meters and/or other methods of displaying progressive amounts;
and/or


(g)   wiring and/or harnesses to connect (a) through (f)


“Term” has the meaning
ascribed in Section 12.1.


“Territory” means the world.


“Updates” means any and all
bug fixes, patches, error corrections, work-arounds, upgrades, updates,
enhancements, compliance upgrades, major or minor or maintenance versions or
releases, improvements, revisions or other modifications of or to the Licensed
Software and/or SMI Game Play.


“User Documentation” means the user documentation furnished to
Licensee by Licensor for distribution along with the Licensed Software to End
Users or the user documentation for Game Manager and/or Table Hardware
furnished to Licensor by Licensee for distribution along with the Game Manager
and Table Hardware to End Users.


2.                                      LICENSES


2.1                               Licensed Software and User
Documentation.  Licensor grants to Licensee an exclusive
(within the Field of Use; provided, however, that except as otherwise provided
herein, such exclusivity in no way limits PGIC’s rights to develop, make, have
made, use, sell, distribute, offer for sale, lease, import, export, or
otherwise dispose of the PGIC Systems, nor shall it limit PGIC’s ability to
deal directly with End Users for the placement, lease, license, sale,
installation, maintenance, etc. of the PGIC CJS System), non-transferable
(except as permitted under Section 14.2), terminable (but only in
accordance with Section 12.2(a)), royalty-bearing license to reproduce,
use, configure, install, perform, lease, display and/or distribute by all means
now known or hereafter discovered  tangible copies of the Licensed Software, the
software associated with PGIC Non-CJS Systems and User Documentation, in
Executable Code only, on a stand-alone basis or  as integrated/bundled with the Licensee Products and Public Domain
Games, directly to End Users in the Territory pursuant to an End User License
Agreement that satisfies the requirements of Section 2.5 and solely within
the Field of Use.


2.2                               License Restrictions. 
Licensee acknowledges that the Licensed Software and its structure,
organization, and Source Code constitute valuable trade secrets of Licensor and
its suppliers.  Accordingly, except as
expressly allowed under Section 2.1 (if at all), Licensee and except in
regards to the PGIC Transferred Products (including but 



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not
limited to Game Manager and the Table Hardware so transferred) agrees not to
(a) modify, adapt, alter, translate, or create derivative works from the
Licensed Software; (b) merge the Licensed Software with other software; (c)
distribute, sublicense, lease, rent, loan, or otherwise transfer the Licensed
Software (except to assign its rights in accordance with Section 13.1) to
any third party; or (d) reverse engineer, decompile, disassemble, or otherwise
attempt to derive the Source Code for the Licensed Software.  Licensee must reproduce, on all copies made
by or for Licensee, and must not remove, alter, or obscure in any way all
proprietary rights notices (including copyright notices) of Licensor or its
suppliers on or within the copies of the Licensed Software and the User
Documentation furnished by Licensor to Licensee.  If a Release Condition occurs under the
Escrow Agreement, then Licensee may modify the Licensed Software to the extent
necessary to maintain existing installations with End Users.


2.3                               Trademark License. 
Subject to the terms and conditions of this Agreement, Licensor grants
to Licensee a non-exclusive, non-transferable (except as permitted under
Section 13.1), terminable (but only in accordance with Section 11.3),
royalty-free license (without the right to grant sublicenses) to use and
reproduce the Licensor Marks solely in connection with marketing the Licensed
Software in the Territory.  Licensee
agrees to state in appropriate places on all materials using the Licensor Marks
that the Licensor Marks are trademarks of Licensor and to include the symbol TM or ® as appropriate.  Licensor grants no rights in the Licensor
Marks other than those expressly granted in this Section 2.3.  Licensee acknowledges Licensor’s exclusive
ownership of the Licensor Marks. 
Licensee agrees not to take any action inconsistent with such ownership
and to cooperate, at Licensor’s request and expense, in any action (including
the conduct of legal proceedings) which Licensor deems necessary or desirable
to establish or preserve Licensor’s exclusive rights in and to the Licensor
Marks.  Except for any trademarks or
trade names currently being used by or are registered to Licensee, Licensee will
not adopt, use, or attempt to register any trademarks or trade names that are
confusingly similar to the Licensor Marks or in such a way as to create
combination marks with the Licensor Marks. 
Licensee will provide Licensor with samples of all products and
marketing materials that contain the Licensor Marks prior to their public use,
distribution, or display for Licensor’s quality assurance purposes and Licensor
shall approve or disapprove of such samples within fifteen (15) business days
of Licensee’s submission. In the event Licensor fails to disapprove of such
samples within said time period, such use, distribution, or display of Licensor
Marks shall be deemed approved.  Licensee
agrees to make reasonable efforts to submit such samples as far in advance as
possible.   At
Licensor’s request, Licensee will modify or discontinue any use of the Licensor
Marks if Licensor determines that such use does not comply with Licensor’s
then-current trademark usage policies and guidelines.


2.4                               Ownership of Licensed Software. 
Nothing in this Section 2.4 shall limit and/or detract from SMI’s
ownership rights in the PGIC Transferred Products including but not limited to:
Game Manager and the Table Hardware which is a part of the PGIC Transferred
Products. The Licensed Software, the software associated with PGIC Non
CJS-Systems, and User Documentation, and all worldwide Intellectual Property 



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Rights
therein, are the exclusive property of Licensor and its suppliers.  All rights in and to the Licensed Software
and the software associated with the PGIC Non CJS-Systems not expressly granted
to Licensee in this Agreement are reserved by Licensor and its suppliers.  Except as may otherwise be provided in the
Progressive License nothing in this Agreement will be deemed to grant, by
implication, estoppel, or otherwise, a license under any of Licensor’s existing
or future patents; Licensor agrees that it will not assert any of its rights
under such patents against Licensee based upon the use, distribution, and
sublicensing by Licensee or its licensees of the Licensed Software and/or the
software associated with the PGIC Non-CJS Systems as permitted by this
Agreement.


2.5                               End User Agreements. 
Before distributing the Licensed Software and User Documentation to any
End User, Licensee must enter into a binding written agreement with such End
User containing at least the items as provided in Exhibit B (Form
of End User Agreement).  Licensee will
enforce each such agreement with at least the same degree of diligence that
Licensee uses to enforce similar agreements for its own products or other
software products that it distributes, but in no event less than reasonable
efforts.  Licensee will immediately
notify Licensor if Licensee becomes aware of any breach of any such agreement
relating to the Licensed Software.  Upon
the termination of any such agreement, Licensee will use reasonable efforts to
obtain from the End User all copies of the Licensed Software and User
Documentation in such End User’s possession or control.


2.6                               Cross Over Code License.  SMI
hereby grants PGIC a worldwide irrevocable, perpetual, assignable,
sub-licensable limited license to the Cross Over Code only for the limited use
in connection with PGIC Systems. 
Additionally, PGIC shall own the derivative works that PGIC creates from
the Cross Over Code whether created in the past and/or in the future using the
Cross Over Code; provided that such derivative work of the Cross Over Code is
not a part of or related to the PGIC Transferred Products acquired by SMI, in
which event such derivative work will be exclusive property of SMI, with a
license to Licensor as provided above.


2.7                               Game Manager License. 
During the Term of this Agreement, SMI hereby grants PGIC a worldwide,
terminable (but only in accordance with Section 12.2(b), non-assignable,
and non-transferrable (other than to an Acquirer of PGIC during the Term)
sub-licensable (only to an End User) limited license to Game Manager
transferred as part of PGIC Transferred Products (including the Aquarius
Controller) for the limited use in connection with the PGIC Systems Field of
Use.


2.8                               Before distributing Game Manager and/or Table
Hardware and User Documentation to any End User, PGIC must enter into a binding
written agreement with such End User containing at least the items as provided
in Exhibit B (Form of End User Agreement).  PGIC will enforce each such agreement with at
least the same degree of diligence that PGIC uses to enforce similar agreements
for its own products or other software products that it distributes, but in no
event less than reasonable efforts.  PGIC
will immediately notify SMI if PGIC becomes aware of any breach of any such
agreement relating to Game Manager and/or Table Hardware.  Upon the termination 



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of
any such agreement, PGIC will use reasonable efforts to obtain from the End
User all copies of the and User Documentation in such End User’s possession or
control.


2.9                               Derivative Works for Game Manager and Table
Hardware:


Any
derivative works and/or Design created by PGIC pursuant to the licenses granted
in 2.7:


(a)           Shall be owned by SMI;


(b)           Shall be delivered to SMI within 30 days after the Source
Code, Design and/or Executable Code is approved by any United States or
Canadian regulatory agency and/or GLI as a result of a regulatory submission by
PGIC;


(c)           For
which regulatory approval is not required shall be delivered to SMI within 90
days of the installation at an End User.


2.10                        SMI hereby grants PGIC a worldwide
irrevocable, perpetual, assignable, sub-licensable limited license to the Table
Hardware transferred to SMI as a part of the PGIC Transferred Products only for
the limited use in connection with PGIC CJS Systems.  During the Term, PGIC has a license to Table
Hardware for use on PGIC Non CJS Systems.


3.              DELIVERY


3.1                               GENERALLY.  PGIC
shall deliver the Licensed Software to Licensee within five (5) days after the
execution of this Agreement and the Closing of the Purchase Agreement, and
pursuant to Article 5 below, shall work with SMI to have the PGIC Systems
operational with SMI Game Play as provided herein.


3.2                               SMI’S
DELIVERY OBLIGATIONS.  SMI shall provide PGIC with such information
and materials (“SMI Materials”), and at such times, as reasonably
requested by PGIC to enable PGIC to integrate the SMI Game Play with the PGIC
Systems.  The Game Specifications for
several SMI Game Plays have already been provided.  Any failure by SMI to provide such
information or materials shall toll any delivery obligations of PGIC.  In any such case, PGIC shall not be
responsible for any reasonable delay in delivering items described in this
Article 3 to the extent that such delay is directly attributable to SMI’s
failure to provide SMI Materials.  In the
event any such failure to deliver SMI Materials would otherwise result in the
payment obligations to PGIC hereunder to be delayed due to PGIC’s inability to
meet its obligations hereunder, any such delay for twenty (20) days shall
trigger SMI’s payment obligations hereunder and such amount shall be
immediately due and payable.


4.              SUPPORT


4.1                               By Licensee.  Licensee
will be solely responsible for performing, in a manner consistent with good
industry practice, all installation, training, support, and other services
requested or required by End Users who obtain Game Manager and/or Table
Hardware from Licensee.  During the Term
and thereafter for Game Manager and/or 



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Table
Hardware connected to Game Manager under lease to End Users until such Game
Manager and/or such Table Hardware is removed, SMI shall provide maintenance
and service of, and End User training and liaison services with respect to such
Game Manager and/or such Table Hardware to End Users has been distributed
hereunder.


4.2                               By Licensor.  In
consideration for the royalty payments provided for herein, Licensor will be
solely responsible for performing, in a manner consistent with good industry
practice, all installation, training, support, and other services requested or
required by End Users who obtain the PGIC Systems and Table Hardware from
Licensor.  During the Term and thereafter
for PGIC Systems under lease to End Users until such PGIC Systems are removed,
PGIC shall provide, maintenance and service of and End User training and
liaison services with respect to a PGIC System to End Users to whom a PGIC
System has been distributed hereunder by PGIC or SMI.


(a)          During the Term, PGIC shall (at no charge
during the Software Warranty Period, and at PGIC’s then-current rates after the
Software Warranty Period), promptly provide all assistance reasonably requested
by SMI to permit SMI to fully utilize its rights under this Agreement.  Such assistance shall include, without
limitation, the following:  (i) ongoing
telephone and email access to knowledgeable PGIC personnel who shall provide
consultation and advice, as requested from time to time; (ii) onsite training
of SMI personnel and/or End Users by qualified PGIC personnel, as the need
requires; (iii) access to manufacturing equipment and processes at PGIC
locations for observation and testing purposes; (iv) supervision of equipment
installation at SMI’s or End Users’ locations; (v) initial and troubleshooting
inspections by PGIC of equipment and manufacturing processes at SMI’s
locations; and (vi) lists of present and potential suppliers.


(b)         During the Term and thereafter for PGIC
Systems under lease to End Users until such Licensed Products are removed, PGIC
shall provide (at no charge during the Software Warranty Period, and at PGIC’s
then-current rates after the Software Warranty Period), with respect to the
PGIC Systems:  (i) Updates and
Improvements; (ii) any application development that enables the PGIC Systems to
operate as intended (including without limitation the integration and
mobilization of the PGIC Systems to operate the Licensee Products, and the
installation of the infrastructure to enable End Users to utilize the PGIC
Systems with the Licensee Products); (iii) Tier 2 Support Services to SMI
telephonically; (iv) Tier 3 Support Services to SMI and/or any End User for
onsite PGIC Systems; and (v) maintenance and support as reasonably requested by
SMI from time to time.  For purposes of
this Section 4.2, “Tier 2 Support Services” shall mean a Tier 1
Support Service that SMI is unable to resolve with the training provided by
PGIC, and “Tier 3 Support Services” shall mean technical support,
including but not limited to source code changes, provided by PGIC with respect
to any PGIC Systems deficiencies, documentation deficiencies or training
deficiencies.


(c)          Initial Training.  At
no additional cost (except for payment of expenses as provided below in subsection
(d)), PGIC shall provide training on the use of the 



 11
 









PGIC
Systems, including without limitation, any Updates, Customizations and
Improvements, to SMI’s sales representatives, programmers and technical support
personnel at SMI’s location in Las Vegas, Nevada (or as otherwise agreed by the
parties), covering sales, product and technical support topics.  Such training shall be of sufficient quality
and quantity to enable such personnel (i) to use all functions and to
understand all features of the PGIC Systems for each Licensee Product and
Public Domain Game, (ii) to copy, promote, market and distribute the PGIC
Systems for each Licensee Product and Public Domain Game, and (iii) for
technical support employees, to provide support to SMI’s distributors,
resellers and End Users.


(d)         Expenses.  In connection with training
provided by PGIC hereunder, SMI shall pay for all reasonable and documented
travel and lodging expenses, of PGIC personnel.


5.              FEES,
ROYALTIES, AND PAYMENT


5.1                               Advance.  SMI
shall pay PGIC a $3 million, fully recoupable advance (the “Advance”) credited against royalties that are earned and received by SMI and
that are otherwise due to PGIC from SMI.  Such Advance shall be due
and payable by SMI within ten (10) business days after the Effective Date.


5.2                               Royalties.


(a)          SMI Game Play.  For
SMI Game Play using the PGIC Systems or Game Manager, during the Term, provided
that PGIC has not materially breached any of its obligations under this
Agreement and subject to Sections 5.1, 5.2(d) and 5.3(a), SMI
shall pay to PGIC a royalty, calculated on a monthly basis, the greater
of:  (i) fifteen percent (15%) of the
GAAP Recurring Revenue, or (ii) $100 per month per such SMI Game Play (i.e. per
Table Game) leased or licensed for use
by an End User.  Examples of the
SMI Game Play royalty calculations are set forth in Exhibit C.


(b)         Non-SMI Game Play.  For
Non-SMI Game Play using the PGIC Systems or Game Manager during the Term, and
provided that neither Party has materially breached any of its obligations
under this Agreement and subject to Sections 5.1, 5.2(d) and 5.3(a),
each Party shall pay to the other Party a royalty for such Party’s lease or
license of such Non-SMI Game Play using the PGIC Systems or Game Manager.  Such royalty shall be, calculated on a
monthly basis, fifty percent (50%) of the GAAP Recurring Revenue.


(c)          Payments of Royalties.  Each
Party shall pay to the other Party the royalties under Sections 5.2(a)
and 5.2(b), as applicable, within sixty (60) days following the end of each calendar
quarter (i.e., sixty (60) days
after March 30th, June 30th, September 30th and December 31st).


(d)         Purchased Table Games. 
Notwithstanding the foregoing or anything to the contrary in this
Agreement, no royalties shall be paid for any use of any PGIC 



 12
 









System
and/or Game Manager on any Purchased Table Games.  Any payments for Purchased Table Games shall
be addressed in the Purchase Agreement. 
This exclusion from the payment of royalties includes additional
placement of such Purchased Table Games by SMI. 
For example, if SMI places a new Progressive Texas Hold ‘em® game using
PGIC Systems or Game Manager, no royalty payment shall be due from SMI to PGIC
under this Agreement, and shall be addressed in the Purchase Agreement.


(e)          Uncontemplated Situations.  In
cases where an End User’s installation of a Progressive System for which
royalties are due under this Agreement and involves a form of transaction not
contemplated by this Agreement such as a sale as opposed to lease of a
Progressive System, the parties may agree by written amendment to this
Agreement in regards to royalty calculations.


(f)            Installation costs for PGIC CJS Systems.  In a situation where SMI
leases a PGIC CJS System to an End User, PGIC may charge an installation fee
(i.e. time, materials, airfare, etc.) as a pass through to an End User and if
the End User decides not to pay 100% of said installation fee, then: (i) PGIC
may in PGIC’s sole discretion waive all or part of the installation fee; or
(ii) if PGIC fails to waive the installation fee to the satisfaction of the End
User, then the pricing of such PGIC Systems may be considered not to be
competitive as provided for in Section 6.4(c).


(g)         Each Party covenants that it shall price the
Game Play using the PGIC Systems or Game Manager, as applicable, in light of
competitive and market conditions and the other factors that each Party uses to
price its similar Game Play to similarly-situated customers, and not with the
motive of minimizing the amount of the Incremental Recurring Revenue to either
Party.


(h)         SMI will pay to PGIC a royalty, calculated on
a monthly basis, equal to $25 per month per such SMI Game Play (i.e., per Table
Game) leased or licensed for use by an End User in connection SMI’s use of
current inventory on order and in existence for which SMI installs a
Progressive System other than a PGIC System or Game Manager.  Such inventory shall not exceed 110 Table
Games.


5.3                               Reduction In Royalties.


(a)          Royalty Credit. 
After full recoupment of the Advance, SMI shall be credited and shall
deduct fifty percent (50%) of the royalties that are earned and received by SMI
and that are otherwise due to PGIC by SMI until the total of $1.75 million is
recouped by SMI over a maximum of a ten (10) year period (the “Royalty Credit”).



 13















(b)         System Costs. 
System Costs incurred and calculated on a monthly basis and paid by each
Party may, in such Party’s sole discretion, be applied in whole or in part
against the GAAP Recurring Revenue for any period.


(c)          Third Party Licenses and Payments.  SMI
shall be entitled to deduct from any payments due hereunder all royalties or
any such other amounts that it is required to pay in connection with any
license or immunity from suit arising out of any claim of infringement,
misappropriation or other conflict with the Intellectual Property Rights of a
third party that is entered into by SMI in order to exercise any right or
license granted hereunder to SMI.


5.4                               Reporting and Audit Rights.  The
parties shall provide to the other party quarterly  royalty reports sixty (60) days after the end of each
calendar quarter, calculated on a monthly basis, which shall include (i)
Incremental Recurring Revenue, (ii) Systems Costs incurred and deducted from
the Incremental Recurring Revenue, (iii) any offset or recoupment amount
deducted from royalties, and (iv) actual payments of royalties made to a
party.  Each party, through an
independent certified public accounting firm reasonably acceptable to the other
party, shall have the right, at the auditing party’s expense, to audit the
other party’s books and records solely for the purpose of determining the
accuracy of any royalty payments due and payable hereunder; provided that the auditing party provides the other party with ten (10)
business days prior written notice, and such audit is conducted during the
other party’s normal business hours. 
Such audits may be conducted no more than once per twelve (12) month
period.  Any information obtained as a
result of such audits shall be maintained by the independent certified public
accounting firm in confidence, and only disclosed to the auditing party to the
extent necessary for the auditing party to collect any underpayment or to use
such information in an action to enforce any rights or obligations under this
Agreement.


5.5                               Taxes.  Both parties will be
responsible for and will indemnify and hold each other harmless from payment of
all taxes (other than taxes based on a party’s income), fees, duties, and other
governmental charges, and any related penalties and interest, arising from the
payment of fees and royalties to either party under this Agreement or the
delivery, lease, license or other placement of the PGIC Systems.  Both parties will make all payments of fees
and royalties to each party free and clear of, and without reduction for, any
withholding taxes; any such taxes imposed on payments of fees and royalties to
a party will be that party’s sole responsibility, and each party will provide
the other with official receipts issued by the appropriate taxing authority, or
such other evidence as the each party may reasonably request, to establish that
such taxes have been paid.


5.6                               Records.  At all times during the Term,
and for at least three (3) years after the termination of this Agreement,
Licensee and Licensor will maintain at their respective principal places of
business complete and accurate records with respect to Licensor’s and Licensee’s
activities pursuant to this Agreement, including a complete list of all copies
of the Licensed Software, Game Manager, Table Hardware and User Documentation
made or distributed by Licensee and Licensor and a complete list of 



 14
 









End
User names, addresses and primary contacts and all data needed for verification
of amounts to be paid to Licensor and Licensee under this Agreement.


6.              LICENSEE’S
OTHER OBLIGATIONS


6.1                               Intentionally Omitted.


6.2                               Compliance with Laws.  Licensee and Licensor will each
maintain high standards of professionalism and will at all times comply with
all applicable laws and regulations and refrain from any unethical conduct or
any other conduct that tends to damage the reputation of the other party, or
the Licensed Software in marketing and distributing the Licensed Software.


6.3                               Staffing.  Licensee and Licensor will each
maintain a staff of sales and technical support personnel reasonably sufficient
to meet the needs of its End Users and potential customers.  Licensee will ensure that such personnel are
properly trained with regard to Game Manager and Table Hardware.  Licensor will ensure that such personnel are
properly trained with regard to the PGIC Systems, Game Manager and Table
Hardware.


6.4                               SMI Loyalty.


(a)          During the Term and provided that PGIC has not materially breached any
of its obligations under this Agreement, and subject to the other provisions of
this Agreement including without limitation paragraph 6.4(b) hereof SMI shall
use PGIC as its exclusive provider of all Progressive Systems (including PGIC
Systems) placed on Licensee Products leased, licensed, distributed or placed by
SMI or its authorized agents, for all local area progressives and wide area
progressives (“LAP/WAP”), on a worldwide basis; subject however to the
conditions provided below, and provided that, nothing contained herein shall
prohibit SMI from using Game Manager with respect to any Table Games, but
subject to PGIC being paid the royalties to which it is entitled for such use
of Game Manager as provided herein. 
Provided SMI is not otherwise in material breach of this Agreement, PGIC
shall not, during the Term, provide Progressive Systems, including the PGIC
Systems, to any third party gaming supplier for use with Table Games without
the prior written consent of SMI, which consent shall be in SMI’s sole
discretion.  Nothing in this Agreement
shall prohibit PGIC from providing casino customers with Progressive Systems,
including the PGIC Systems.


(b)         Notwithstanding anything contained herein to the contrary, it is
expressly agreed and acknowledged by PGIC (i) that SMI has certain distribution
responsibilities regarding the DEQ Progressive System and that SMI will,
concurrently with the existence of this Agreement, also be selling, leasing,
marketing and exploiting DEQ Progressive System which may also include the
following:  displaying DEQ Progressive
System at gaming shows, and/or printing and/or distributing marketing materials
via the internet, electronically and/or in printed copies, 



 15
 









(ii) that
the ultimate success of the PGIC Systems will be determined by the marketplace
and that SMI has not made and does not hereby make any representations,
warranties or promises that the PGIC Systems or this Agreement will generate
any specific amount of royalties, or any amount, at all, of royalties; (iii)
SMI may, without PGIC’s prior written consent, (x) place Progressive Systems by
other third party providers (including without limitation DEQ products) (1) to
Excluded Table Games, (2) to SMI Game Play and Public Domain Game Play upon any
existing and future End User’s request, or (3) to SMI Game Play and Public
Domain Game Play if PGIC fails to meet the exclusivity provisions contained in
Section 6.4 (c) below, (y) place PGIC Systems on Table Games by third parties,
unless PGIC is providing such PGIC Systems to such third party, and/or (z)
place Progressive Systems on any Table Game using PGIC Transferred Products
including but not limited to Game Manager and/or Aquarius Controller.  Licensee may in its sole discretion give
preferential treatment in regards to the marketing, leasing or otherwise
placing as between Game Manager and PGIC Systems.  For example, if Licensee decides to only show
customers Game Manager as opposed to the PGIC Systems, then Licensee is in full
compliance with Article 6 of this Agreement 
PGIC shall not be entitled to any royalties for placement by SMI of the
DEQ Progressive System or any other Progressive Systems under subsection (iii)
above.  Neither Licensor nor Licensee are
under any obligation to lease or otherwise place a minimum number of PGIC
Systems and any obligation to and any implied obligation to do so is hereby expressly
negated.  Licensee is not obligated to
lease or otherwise place a minimum number of Game Manager and any obligation to
and any implied obligation to do so is hereby expressly negated.


(c)          The exclusivity provisions provided for in this Section 6.4 shall be
subject to each of the following:  (i)
the pricing of such PGIC Systems shall be competitive (which means the pricing
shall be related to the quality of the PGIC Systems as compared to any other
Progressive Systems, and does not necessarily have to be less than a
Progressive System with similar capabilities to a PGIC System (e.g. a Mercedes
priced at $65,000 may be deemed competitive to a Hyundai priced at $30,000 due
to the difference in quality despite having similar or identical features); (ii)
PGIC shall deliver such PGIC Systems on a timely basis and consistent with
first class quality production standards (which means the quality and timing
for delivery of the PGIC Systems shall be comparable to any other Progressive
Systems as currently in the marketplace at the time of installation); (iii)
such PGIC Systems shall be consistent with current State of the Art technology
and meet the End Users’ and SMI’s reasonable development requirements; (iv)
such PGIC Systems shall meet all required regulatory approvals within a
reasonable timeframe (which means the timeframe for regulatory approvals for
the PGIC Systems shall be comparable to any other Progressive Systems seeking
approvals at such time); and (v) existing and future End Users’ preference for Progressive
Systems by third party providers.


(e)          Provided PGIC is not materially in breach of this Agreement, Licensee
agrees that during the Term, except for (i) the DEQ Progressive System, (ii)
Game Manager 



 16
 









(iii)
any Progressive Systems that are placed as an exception to PGIC’s exclusivity
hereunder, and (iv) any existing SMI inventory or Progressive Systems it will
not develop, market, promote, solicit orders for, offer for sale or license, or
distribute in any manner, directly or indirectly, any Progressive Systems that
are competitive with the PGIC Systems. 
For purposes of this Section 6.4(e), any software product (other
than as otherwise permitted above) that is substantially similar to the PGIC
Systems in features and functionality will be considered a competitive product.


6.5                               PGIC Loyalty.


(a)          Provided SMI is not otherwise in material
breach of this Agreement, PGIC shall not, during the Term, provide Progressive
Systems, including the PGIC Systems, Game Manager and Table Hardware, to any
third party gaming supplier for use with Table Games without the prior written
consent of SMI, which consent shall be in SMI’s sole discretion.


(b)         Provided SMI is not otherwise in material
breach of this Agreement, PGIC shall not, during the Term, provide Progressive
Systems, including the PGIC Systems, Game Manager and Table Hardware on a Table
Game using SMI Game Play or on a Table Game using any Game Play which is the
same or substantially similar to any SMI Game Play regardless of whether
Intellectual Property Right are in force in any jurisdiction, without the prior
written consent of SMI, which consent shall be in SMI’s sole discretion


7.              CONFIDENTIALITY


7.1                               Confidential Information.  Each
party (the “Disclosing Party”) may from time to time during the Term disclose
to the other party (the “Receiving Party”) certain information regarding the
Disclosing Party’s business, including technical, marketing, financial,
employee, software, hardware, Design, planning, and other confidential or
proprietary information (“Confidential Information”).  A Receiving Party shall not disclose any
Confidential Information of the Disclosing Party to any third Person, except to
its employees, agents, advisers and consultants who have a reasonable need to
know such information in connection with the performance of this
Agreement.  Before disclosing any
Confidential Information of the Disclosing Party to any such employee, agent,
adviser or consultant, the Receiving Party shall advise such Person of the
confidentiality provisions hereof and obtain the commitment of such Person to
abide thereby.  In any case, the
Receiving Party shall be responsible to the Disclosing Party for any violation
of the terms hereof by any of the employees, agents, advisers or consultants of
the Receiving Party.  In addition to the
foregoing, the Receiving Party shall safeguard the Confidential Information of
the Disclosing Party with the same degree of care that it utilizes to safeguard
its own proprietary information of a similar character, and in any case shall
use reasonable care to safeguard such Confidential Information.  No Receiving Party shall use Confidential
Information of the Disclosing Party except in the furtherance of this
Agreement, unless otherwise expressly authorized to do so in writing by the
Disclosing Party.  If compelled by 



 17
 









subpoena,
requests for the production of documents, court order or requests by a
regulatory body to which a party is subject to produce any Confidential
Information of the Disclosing Party, the Receiving Party shall promptly contact
the Disclosing Party, which notification shall include the nature of the legal
requirement and the extent of the required disclosure, and shall cooperate with
the Disclosing Party to preserve the confidentiality of such information
consistent with applicable laws.  In the
event a party is required by law to disclose any Confidential Information, such
party shall promptly notify the other party in writing.


7.2                               Residuals. 
Nothing in this Agreement is intended to preclude either party from using
Residual Knowledge.  The term “Residual
Knowledge” means ideas, concepts, know-how, or techniques related to the
Disclosing Party’s technology that are retained by the unaided memories of the
Receiving Party’s employees who have had access to Confidential Information
consistent with the terms of this Agreement. 
An employee’s memory will be considered to be unaided if the employee
has not intentionally memorized the Confidential Information for the purpose of
retaining and subsequently using or disclosing it.  The Receiving Party’s use of Residual
Knowledge is subject to valid patents, copyrights, trade secrets and
semiconductor mask work rights of the Disclosing Party.


7.3                               Exceptions.  The
Receiving Party’s obligations under Section 7.1 with respect to any
Confidential Information of the Disclosing Party will terminate if such
information: (a) was already lawfully known to the Receiving Party at the time
of disclosure by the Disclosing Party; (b) was disclosed to the Receiving Party
by a third party who had the right to make such disclosure without any
confidentiality restrictions; (c) is, or through no fault of the Receiving
Party has become, generally available to the public; or (d) was independently
developed by the Receiving Party without access to, or use of, the Disclosing
Party’s Confidential Information.  In
addition, the Receiving Party will be allowed to disclose Confidential
Information of the Disclosing Party to the extent that such disclosure is (i)
approved in writing by the Disclosing Party, (ii) necessary for the Receiving
Party to enforce its rights under this Agreement; or (iii) required by law or
by the order of a court or administrative body, provided that the Receiving
Party notifies the Disclosing Party of such required disclosure promptly and in
writing and cooperates with the Disclosing Party, at the Disclosing Party’s
reasonable request and expense, in any lawful action to contest or limit the
scope of such required disclosure.


7.4                               Return of Confidential
Information.  The Receiving Party will either, at its
option, return to the Disclosing Party or destroy all Confidential Information
of the Disclosing Party in the Receiving Party’s possession or control and
permanently erase all electronic copies of such Confidential Information promptly
upon the written request of the Disclosing Party or the expiration or
termination of this Agreement, whichever comes first.  At the Disclosing Party’s request, the
Receiving Party will certify in writing signed by an officer of the Receiving
Party that it has fully complied with its obligations under this
Section 7.4.



 18
 









7.5                               Confidentiality of Agreement. 
Neither party will disclose any terms of this Agreement to anyone other
than its Affiliates, attorneys, accountants, and other professional advisors
under a duty of confidentiality except (a) as required by law or (b) pursuant
to a mutually agreeable press release or (c) in connection with a proposed
merger, financing, or sale of such party’s business (provided that any third
party to whom the terms of this Agreement are to be disclosed signs a
confidentiality agreement reasonably satisfactory to the other party to this
Agreement).


8.              REGULATORY
COMPLIANCE.


8.1                               Generally.  Performance of this Agreement
in each jurisdiction is contingent upon each Party possessing or receiving any
necessary initial and continuing approvals and licenses from the regulatory
authorities in each of the jurisdictions where the Parties operate and that
have jurisdiction over the Parties or the subject matter of this Agreement.  Notwithstanding any other provision contained
herein to the contrary, where SMI is legally able to do so, SMI with PGIC’s
assistance shall be responsible, at SMI’s sole cost, for obtaining any product
approval, including without limitation compliance upgrades subject to PGIC’s
Software Assistance under Section 14.2, for any applicable laws or from any
regulatory authority in a particular jurisdiction with respect to Game Manager
and Table Hardware.  Notwithstanding any
other provision contained herein to the contrary, where SMI is not legally able
to do so, PGIC shall be responsible, at PGIC’s sole cost, for obtaining any
product approval, including without limitation compliance upgrades, for any
applicable laws or from any regulatory authority in a particular jurisdiction
with respect to Game Manager and Table Hardware.  As to the PGIC Systems, PGIC, at PGIC’s sole
cost, shall be responsible for obtaining any product approval, including
without limitation compliance upgrades, for any applicable laws or from any
regulatory authority in a particular jurisdiction.


8.2                               Obligations.  Each party shall cooperate
with any requests, inquiries, or investigations of any regulatory authorities
or law enforcement agencies in connection with either:  (i) SMI or PGIC; or (ii) this Agreement
requiring any regulatory approval.  If
any gaming license or approval necessary for either party (as opposed to a
product approval) to perform under this Agreement is denied, suspended, or
revoked, this Agreement shall terminate immediately and no party shall have any
additional rights hereunder, provided, however, that if the
denial, suspension, or revocation affects performance of this Agreement in part
only (e.g., in only a small
number of jurisdictions), the parties shall continue to perform under this
Agreement to the extent it is unaffected by such denial, suspension, or
revocation.


8.3                               Compliance.  The parties each acknowledge that each party:
(i) operates under privileged licenses in a highly regulated industry; and (ii)
maintains a compliance program to (a) protect and preserve its name,
reputation, integrity, and goodwill through a thorough review and determination
of the integrity and fitness, both initially and thereafter, of any Person that
performs work for either party, or with which those companies are otherwise
associated, and (b) to monitor compliance with the requirements established by
gaming regulatory authorities in various jurisdictions 



 19
 









around
the world.  Each party shall cooperate
with the other party and its compliance department and/or committee as
reasonably requested and provide the relevant department and/or committee with
such information as it may reasonably request on appropriate written
notice.  Either party may terminate this
Agreement in the event that either party or its respective compliance committee
discovers facts with respect to the other party or to this Agreement that
would, in the reasonable opinion of that party and/or its committee, jeopardize
the gaming licenses, permits, or status of that party, with any gaming
commission, board, or similar regulatory or law enforcement authority.  In any such event, the parties shall provide
written notice of, and attempt to resolve, any problems and concerns relating
to such fact.


8.4                               Excluded Jurisdiction. In no event shall PGIC receive any revenues of any kind generated
from lease or license of PGIC Systems or Game Manager from jurisdictions that
require PGIC to be licensed in order to receive such revenues and where PGIC is
not so licensed (“Excluded Jurisdiction”), unless and until PGIC is licensed by
the gaming authorities in those jurisdictions and is in compliance with all
applicable gaming regulations so that SMI may legally pay PGIC such
revenue.  All revenues from the PGIC
Systems or Game Manager received and earned by SMI from legal gaming entities
in any Excluded Jurisdiction shall be the sole property of SMI, and PGIC shall
have no interest therein unless allowed by law. 
In the event that PGIC becomes licensed in an Excluded Jurisdiction, SMI
shall pay PGIC the royalties earned and received hereunder to the extent
arising after such license becomes effective. 
Additionally, SMI agrees to pay PGIC any royalties earned and received
that would have been paid on Incremental Recurring Revenue collected in an Excluded
Jurisdiction prior to PGIC’s becoming licensed in said jurisdiction if said
payments are confirmed in writing by the jurisdiction as a legal payment.  In no event shall the fact that PGIC may not
be legally able to share revenues in an Excluded Jurisdiction in any way
affect, reduce, modify or amend any of the rights granted to SMI in this
Agreement.  In the event a jurisdiction
becomes an Excluded Jurisdiction, SMI will meet and confer with PGIC to find,
under applicable gaming Laws, a way to share revenue or make payment to PGIC
legally.  Any agreement reached must be
legal.


9.              WARRANTIES


9.1                               Warranties by Both Parties.  Each party warrants that it has
full power and authority to enter into and perform this Agreement, and the
person signing this Agreement on such party’s behalf has been duly authorized
and empowered to enter into this Agreement. 
Additionally, each party shall be responsible for its employees’
compliance with the other party’s policies while such employees are on the
other party’s premises.


9.2                               Licensor’s Warranties


(a)          Performance.  For the term of the End User’s
license to the Licensed Software and the PGIC Systems, (the “Software Warranty
Period”), Licensor warrants that the Licensed Software and/or the PGIC Systems,
when used as permitted under 



 20
 









this
Agreement and in accordance with the instructions in the User Documentation
(including use on a computer hardware and operating system platform supported
by Licensor), shall operate substantially as described in the Specifications.  During the Software Warranty Period, Licensor
warrants that use of the Licensed Software and/or the PGIC Systems shall be
error-free or uninterrupted.  Licensor
shall, at its own expense use commercially reasonable efforts to correct any
reproducible error in the Licensed Software reported to Licensor by Licensee in
writing during the Software Warranty Period. 
Any such error correction provided to Licensee shall not extend the
original Software Warranty Period.  The
Software Warranty Period will be suspended while:  the End User is not paying PGIC and/or SMI
invoices related to the PGIC System within 90 days of receipt of the invoice;
and/or SMI is in material breach of its obligations under Section 5.2 above.


(b)         PGIC’s Ownership of the Licensed
Software.  PGIC
owns all right, title and interest to the Licensed Software, free and clear of
any liens, encumbrances, or claims that would in any way interfere with or
hinder any of SMI’s rights under this Agreement.  The Licensed Software owned by PGIC is not subject
to any restrictions or limitations regarding use or disclosure other than
pursuant to previous written license agreements, which shall in no event
interfere with or hinder SMI’s rights under this Agreement.


(c)          Completeness of the Licensed
Software.  PGIC
represents and warrants that the Licensed Software constitutes all of the
intellectual property and technology which is part of, related to, incidental
to, or otherwise needed to fully practice the Licensed Software.  PGIC has not and will not itself use or
license the Licensed Software to any third party for use on or in connection
with SMI Game Play or on a Table Game using any Game Play which is the same or
substantially similar to any SMI Game Play regardless of whether Intellectual
Property Right are in force in any jurisdiction without prior consent from SMI,
which consent shall be in SMI’s sole discretion.


(d)         No Misuse of or Claims regarding
Licensed Software.  To
the best of PGIC’s Knowledge none of the Licensed Software has been misused, no
claim by any third party contesting the validity, enforceability, use or
ownership of any of the Licensed Software has been made, is currently
outstanding or is threatened, and there are no grounds for the same.


(e)          Maintenance of the Licensed
Software.  PGIC
has taken all necessary and desirable actions to maintain and protect all of
the Licensed Software owned by PGIC and as provided above and subject to other
provisions herein, will continue to maintain and protect all of the Licensed
Software so as not to materially adversely affect the validity or
enforceability thereof.


(f)            No Known Infringement by PGIC.  To the best of PGIC’s Knowledge
PGIC has not infringed, misappropriated or otherwise conflicted with, and the
use of the Licensed Software as currently conducted or as contemplated for use
hereunder 



 21
 









by
SMI will not infringe, misappropriate or otherwise conflict with, any
Intellectual Property of any third party, and there are no facts that indicate
a likelihood of any of the foregoing and PGIC has not received any notices
regarding any of the foregoing (including, without limitation, any demands or
offers to license any Intellectual Property from any third party).  Additionally, to the best of PGIC’s Knowledge
no loss or expiration of any of the Licensed Software is threatened, pending or
reasonably foreseeable.


(g)         No Indemnification to Third
Parties.  PGIC
has not agreed to indemnify any third party for or against any interference,
infringement, misappropriation or other conflict with respect to any Licensed
Software.


(h)         No Known Infringement by Third
Parties.  To
the best of PGIC’s Knowledge no third party has infringed, misappropriated or
otherwise conflicted with any of the Licensed Software and there are no facts
that indicate a likelihood of any of the foregoing.


(i)             No Litigation Claims. There is no litigation or claims existing, pending, or to the best of
PGIC’s Knowledge, threatened, regarding or against the Licensed Software.


(j)             Disclaimer of Warranty.  THE
EXPRESS WARRANTIES IN THIS SECTION ARE IN LIEU OF ALL OTHER WARRANTIES, WHETHER
EXPRESS, IMPLIED, OR STATUTORY, REGARDING THE LICENSED SOFTWARE OR THE USER
DOCUMENTATION, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT OF THIRD-PARTY RIGHTS.  LICENSEE ACKNOWLEDGES THAT IT HAS RELIED ON
NO WARRANTIES OTHER THAN THE EXPRESS WARRANTIES IN THIS AGREEMENT AND THAT NO
WARRANTIES ARE MADE BY ANY OF LICENSOR’S SUPPLIERS.


9.3                               Warranties Made by Licensee.  With
respect to such written End User warranties provided to Licensee by Licensor,
Licensee will not make or publish any false or misleading representations,
warranties, or guarantees on behalf of Licensor or its suppliers concerning the
Licensed Software and/or the PGIC Systems that are inconsistent with any End
User warranties and made by Licensor concerning the Licensed Software and/or
the PGIC Systems without Licensor’s specific prior written approval.  Licensee has the right to assume, until
notified otherwise, the truth of 
representations, warranties, and/or guarantees on behalf of Licensor or
its suppliers concerning the Licensed Software and/or the PGIC Systems
contained in the Licensor’s advertising and/or marketing materials.


9.4                               Allocation of Risks.  The
representations, warranties, covenants and agreements made herein, together
with the indemnification provisions in this Agreement, are intended among other
things to allocate the economic cost and the risks inherent in this Agreement
and accordingly, a Party shall be entitled to the indemnifications or 



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other
remedies provided in this Agreement by reason of any breach of any such
representation, warranty, covenant or agreement by another Party
notwithstanding whether any employee, representative or agent of the Party
seeking to enforce such indemnification or any remedy knew or had reason to
know of such breach.


10.       INDEMNIFICATION


10.1                        Indemnification by Licensee. 
Licensee agrees to defend, indemnify and hold harmless Licensor and its
Affiliates from and against any claims, liabilities, losses, suits, damages,
actions or proceedings (including, without limitation, any attorneys’ fees and
costs and expenses (each, a “Loss”) brought by third parties (including any End
User) resulting from or relating to any of the following except if any of the
following relate to the negligence of Licensor:


(a)          any breach by Licensee of its obligations,
duties, or responsibilities under this Agreement;


(b)         any actions or omissions on the part of
Licensee in reproducing, marketing or distributing the Licensed Software or the
PGIC Systems;


(c)          patent infringement (contributory, direct,
inducement or otherwise) as a result of the Licensed Software being combined
with a part of the Table Hardware which has been modified by SMI after the
Effective Date;


(d)         any representations, warranties, guarantees,
or other written or oral statements made by or on behalf of Licensee relating
to the Licensed Software; and /or


(e)          any claims against Licensor made by End Users
who receive the Licensed Software and/or the PGIC Systems from Licensee except
for claims that the Licensed Software and/or PGIC Systems Infringe IP.


10.2                        Indemnification by Licensor. 
Licensor agrees to defend, indemnify and hold harmless Licensee and its
Affiliates from and against any Loss brought by third parties (including any
End User) resulting from or relating to any of the following:


(a)          any breach by Licensor of its obligations,
duties, or responsibilities under this Agreement;


(b)          any actions or omissions on the part of
Licensor in reproducing, coding, manufacturing, marketing or distributing the
Licensed Software or the PGIC Systems which Infringe IP;


(c)          patent infringement (contributory, direct,
inducement or otherwise) as a result of the Licensed Software being combined
with the Table Hardware as the Table Hardware exists as of the Effective Date;


(d)         any representations, warranties, guarantees,
or other written statements made by or on behalf of Licensor relating to the
Licensed Software; and/or



 23















(e)          any claims against Licensee made by End Users
who receive the Licensed Software and/or the PGIC Systems from Licensor.


10.3                        Notice and Procedure for Loss.  Upon
receipt of notice, whether formal or informal, direct or indirect, of any Loss
for which indemnification may be available under this Article 10 the
indemnified party shall promptly notify the indemnifying party of any such Loss
and the indemnifying party, upon notice by the indemnified party, shall
promptly defend and continue the defense of such Loss at the indemnifying party’s
expense.  If the indemnifying party fails
to undertake and continue such defense, the indemnified party shall have the
right (but not the obligation) to make and continue such defense as it
considers appropriate, and the expenses and costs thereof, including but not
limited to attorneys’ fees, out of pocket costs and the costs of an appeal and
bond thereof, together with the amounts of any judgment rendered against the
indemnified party, shall be paid by the indemnifying party upon demand.  Nothing herein shall prevent the indemnified
party from defending, if it so desires in its own discretion, any such Loss at
its own expense through its own counsel, notwithstanding that the defense
thereof may have been undertaken by the indemnifying party.  The indemnifying party shall not settle a
claim or suit against the indemnified party unless such settlement is solely
for money damages for which the indemnified party is fully indemnified.


10.4                        Manner of Payment.  Any indemnification of either
Party pursuant to this Section 10.4 shall be effected by wire transfer of
immediately available funds from either Party to an account designated by the
other Party within ten (10) days after the determination thereof.  Any such indemnification payments shall
include interest at the Applicable Rate calculated on the basis of the actual
number of days elapsed over 360, from the date any such Loss is suffered or
sustained to the date of payment.  Either
Party shall be entitled to (but shall not be required to) set off any amounts
due or payable to the other Party pursuant to this Section 10.4 against any
amounts otherwise due and payable by the other Party in accordance with the
following priority:  (i) first, by
setting off against any royalty payments otherwise due and payable to such
Party pursuant to Sections 5.2(a) and 5.2(b) hereof as specified therein, and
(ii) second, by setting off against any other amounts otherwise due and payable
by such Party.  Such Party’s exercise of
its rights of set-off under this Agreement shall not limit or restrict its
other legal remedies including remedies for breach, indemnification, tort or
any other applicable cause of action or remedy.


11.       Limitation of Liability.  Except for either Party’s
indemnification obligations under Article 10 in no event shall either Party be
liable for any consequential, indirect, exemplary, special or incidental
damages, including any lost data and lost profits incurred by the other Party
arising from or relating to this Agreement.  Each Parties’ suppliers will have no liability
of any kind under or as a result of this Agreement.  The foregoing limitations of liability are
independent of any exclusive remedies for breach of warranty set forth in this
Agreement.



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12.       TERM AND TERMINATION


12.1                        Term. 
Unless earlier terminated pursuant to Section 12.2, the “Initial
Term” of this Agreement will begin on the Effective Date and will conclude
after a period of 5 years.  This
Agreement will automatically be extended for successive “Renewal Terms” of 5
years each unless either party gives written notice of non-renewal at least 90
days before the expiration of the then-current term; provided, however,
Licensor shall not be entitled to terminate this Agreement upon the expiration
of the Initial Term unless SMI has first fully recouped
the Advance as provided in Section 5.1 and the Royalty Credit as provided in
Section 5.3(a) unless it fully reimburses SMI for any such remaining
un-recouped amounts. 
The Initial Term and any Renewal Terms are collectively referred to
herein as the “Term.”


12.2                        Termination.


(a)          Termination by Licensor.  Licensor may terminate this
Agreement, effective immediately upon written notice of such termination (in
compliance with the terms hereof) to Licensee, if (a) Licensee materially
breaches any provision in Section 2.2 and does not cure the breach within
thirty (30) days after receiving written notice thereof from Licensor, (b)
Licensee fails to pay any portion of the fees or royalties when due under this
Agreement within thirty (30) days after receiving written notice from Licensor
that payment is due, (c) Licensee materially breaches any other provision
of this Agreement and does not cure the breach within thirty (30) days after
receiving written notice thereof from Licensor, or (d) Licensee enters into a
Change of Control transaction involving Paltronics, Inc. or any Affiliate or
acquirer of Paltronics, Inc. 
Notwithstanding the above subsections (a) - (c), Licensee shall not be
deemed in default of this Agreement unless there is breach and Licensee fails
to cure such breach as required herein.


(b)         Termination by Licensee.  Licensee may terminate this
Agreement, effective immediately upon written notice of such termination (in
compliance with the terms hereof) to Licensor, if (a) Licensor materially
breaches any provision in Section 2.1 and does not cure the breach within
thirty (30) days after receiving written notice thereof from Licensee, (b)
Licensor fails to pay any portion of the fees or royalties when due under this
Agreement within thirty (30) days after receiving written notice from Licensee
that payment is due, (c) Licensor materially breaches any other provision
of this Agreement and does not cure the breach within thirty (30) days after
receiving written notice thereof from Licensee.


12.3                        Effects of Expiration or
Termination


(a)          Payment; Licenses; Licensed
Software.  Upon
termination or expiration of this Agreement for any reason, any amounts owed to
either Party under this Agreement before such termination or expiration will be
immediately due and payable, all licensed rights granted in this Agreement will
immediately cease to exist, and Licensee must promptly discontinue all further
use of the Licensor 



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Marks
and all further use, reproduction, and distribution of the Licensed Software
and/or the PGIC CJS Systems, except that (i) Licensee may keep one (1)
copy of the Licensed Software and User Documentation solely for use by Licensee
to support existing End Users, (ii) unless Licensor has terminated this Agreement
pursuant to Section 12.2(a), Licensee may fulfill existing orders from End
Users and, for up to 12 months after the effective date of expiration or
termination, distribute its existing inventory of the Licensed Software and/or
PGIC CJS Systems, and (iii) Licensee must destroy or return to Licensor
all copies of the Licensed Software that the Licensee is not entitled to keep
pursuant to this Section 12.3(a) and certify to Licensor in writing signed
by an officer of Licensee that it has fully complied with this
requirement.  Notwithstanding anything
contained herein to the contrary, upon any termination or expiration of this
Agreement (whether prior to or at the end of the Initial Term), any PGIC System
and/or Game Manager already installed or otherwise in use and which is
generating revenue at the time of any termination or expiration shall remain
installed or otherwise continue in use, provided that each Party continues to
pay the applicable royalties pursuant to Article 5 for such PGIC System and/or
Game Manager.


(b)         Upon termination or
expiration of this Agreement for any reason, PGIC must promptly discontinue all
further use, reproduction, and distribution of Game Manager, except that
(i) PGIC may keep one (1) copy of any software and Design associated with
Game Manager solely for use by PGIC to support existing End Users, (ii) unless
SMI has terminated this Agreement pursuant to Section 12.2(b), PGIC may
fulfill existing orders from End Users and, for up to 12 months after the
effective date of expiration or termination, distribute its existing inventory
of Game Manager, and (iii) PGIC must destroy or return to SMI all copies
of the Design and software that PGIC is not entitled to keep pursuant to this
Section 12.3(b) and certify to SMI in writing signed by an officer of PGIC
that it has fully complied with this requirement.


(c)          End User Agreements.  End
User agreements granted by Licensee or its Licensor in accordance with this
Agreement shall survive the expiration or termination of this Agreement in accordance
with their terms of such End User agreements.


(d)         Survival. 
Article 1 (Definitions), Section 2.2 (License Restrictions), Section 2.4
(Ownership of Licensed Software), Article 7 (Confidential Information), Article
9 (Warranties), Article 10 (Indemnification), Article 11 (Limitation of
Liability), Section 12.3 (Effects of Termination), Article 13 (Escrow
Agreement) and Article 14 (General) shall survive expiration or termination of
this Agreement for any reason.  In
addition, the expiration or termination of this Agreement shall not affect in
any way the survival of any right, duty or obligation of any Party that is
expressly stated elsewhere in this Agreement to survive the expiration or
termination hereof.



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13.       Escrow Agreement.  Within fifteen (15) business days after mutual execution of this
Agreement, the parties shall enter into an Escrow Agreement in a form
substantially similar to that attached as Exhibit E (the “Escrow Agreement”).  Licensor shall deposit all the Licensed
Software in accordance with the Escrow Agreement.  Within forty-five days after completion of an
approved version of the Licensed Software, Licensor shall deposit all Licensed
Software that meets all of the following criteria: (1) the Source Code is
approved by any United States or Canadian regulatory agency and or GLI; and (2)
has not been deposited.  Licensee shall
equally share the cost of the escrowing of the Licensed Software and Licensee
shall invoice Licensor for Licensor’s fifty percent share of the monies charged
to Licensee by Iron Mountain under the Escrow Agreement.


14.       GENERAL


14.1                        Export and Import Laws.  Each
Party will comply with all applicable export and import control laws and
regulations in its use of the Licensed Software and/or the PGIC Systems and, in
particular, Neither Party will export or re-export the Licensed Software and/or
the PGIC Systems without all required United States and foreign government
licenses.  Each Party understands that
the Licensed Software may contain encryption technology that may require an
export license from the U.S. State Department.   Each
Party will defend, indemnify, and hold harmless the other Party from and
against all fines, penalties, liabilities, damages, costs, and expenses
incurred by a Party as a result of any violation of such laws or regulations by
the other Party or any of its agents or employees.


14.2                        Assignments.  Licensee may not assign or
transfer, by operation of law or otherwise, any of its rights under this
Agreement (including its licenses with respect to the Licensed Software) or
delegate any of its duties under this Agreement except for service obligations to any third party, other than Licensee’s
Affiliates,  without Licensor’s prior written consent, which consent shall not be
unreasonably withheld, except: (1) pursuant to a transfer of all or
substantially all of Licensee’s business and assets, or a line of Licensee’s
business, whether by merger, sale of assets, sale of stock; (2) Change in
Control and/or (3) otherwise subject to the limitations provided herein.  Any attempted assignment or transfer in
violation of the foregoing will be void. Any attempted assignment or transfer
in violation of the foregoing will be void.


14.3                        Notices.  All
notices, requests, demands or other communications hereunder, unless otherwise
specifically set forth in this Agreement, shall be in writing, and shall be
deemed to have been duly given if delivered in person, or when received if
mailed by certified mail with return receipt requested, or otherwise actually
delivered which includes the use of email. 
Notice shall be sent:


To SHFL:


Shuffle Master Inc.

Attn:
General Counsel

1106
Palms Airport Drive

Las
Vegas, Nevada 89119-3730



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To PGIC:


Progressive Gaming
International Corporation

Attn:
General Counsel

920 Pilot
Road

Las
Vegas, Nevada 89119


Either SMI or PGIC may change the address at
which it receives written notice by so notifying the other Party in writing.


14.4                        Governing Law and Venue.  This Agreement shall be
construed and interpreted in accordance with the laws of the state of New York,
without regard to conflict of law provisions. 
Each of the parties submits to the exclusive jurisdiction of the courts
located in the County of Manhattan in the state of New York in any action or
proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding shall be heard and determined in
any such court.  Each party also agrees
not to bring any action or proceeding arising out of or relating to this
Agreement in any other court.  Nothing in
this Section14.4, however, shall affect the right of any party to serve legal process
in any other manner permitted by law or at equity.  Each party agrees that a final judgment in
any action or proceeding so brought shall be conclusive and may be enforced by
suit on the judgment or in any other manner provided by law or at equity.


14.5                        Remedies. 
Except as provided in Article 9 (Warranties) and Article 10
(Indemnification), the parties’ rights and remedies under this Agreement are
cumulative.  Licensee acknowledges that
the Licensed Software and/or the PGIC CJS Systems contains valuable trade
secrets and proprietary information of Licensor, that any actual or threatened
breach of Section 2.2 (License Restrictions) or Section 2.3 (Trademark
License) or (as it relates to both Licensor and Licensee) Article 7
(Confidentiality)  will constitute immediate, irreparable harm
to Licensor and Licensee, as applicable, for which monetary damages would be an
inadequate remedy, and that injunctive relief without the requirement of
posting a bond is an appropriate remedy for such breach.  If Licensee continues to distribute the
Licensed Software after its right to do so has terminated or expired, Licensor
will be entitled to immediate injunctive relief without the requirement of
posting bond, including an order directing that any copies of the Licensed
Software and/or any PGIC CJS Systems, or any portions thereof, that Licensee
attempts to import into any country or territory be seized, impounded, and
destroyed by customs officials.  If any
legal action is brought to enforce this Agreement, the prevailing Party will be
entitled to receive its attorneys’ fees, court costs, and other collection
expenses, in addition to any other relief it may receive.


14.6                        Amendments/Waivers.  No modification, amendment, supplement to or waiver shall be binding
upon the Parties unless made in a writing signed by the Parties.  A failure of a Party to exercise any right
provided for herein shall not be deemed to be a waiver of any right hereunder.



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14.7                        Severability.  If
any provision of this Agreement is unenforceable, such provision will be
changed and interpreted to accomplish the objectives of such provision to the
greatest extent possible under applicable law and the remaining provisions will
continue in full force and effect. 
Without limiting the generality of the foregoing, Licensee agrees that
Article 11 (Limitation of Liability) will remain in effect notwithstanding
the unenforceability of any provision in Section 9.2 (Licensor’s Warranties).


14.8                        Construction.  The
headings of Sections of this Agreement are for convenience and are not to be
used in interpreting this Agreement.  As
used in this Agreement, the word “including” means “including but not limited
to.”  The Parties have participated
jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if
jointly drafted by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring a Party by virtue of the authorship of any
provision of this Agreement.


14.9                        Counterparts and Facsimile.  This
Agreement may be executed in counterparts, each of which will be considered an
original, but all of which together will constitute the same instrument.  This Agreement may be executed by facsimile.


14.10                 Force Majeure.  Any
delay in the performance of any duties or obligations of either party (except
the payment of money owed) will not be considered a breach of this Agreement if
such delay is caused by a labor dispute, shortage of materials, fire,
earthquake, flood, or any other event beyond the control of such Party,
provided that such Party uses reasonable efforts, under the circumstances, to
notify the other Party of the circumstances causing the delay and to resume
performance as soon as possible.


14.11                 Independent Contractors. 
Licensee’s relationship to Licensor is that of an independent
contractor, and neither Party is an agent, partner or fiduciary of the other.  Neither Party shall have any right to
obligate or bind the other Party in any manner whatsoever, and, nothing herein
contained shall give or is intended to give any rights of any kind to any third
persons.


14.12                 Software Assistance. 
Licensor will provide Licensee with up to 300 hours of Software
Assistance in regards to Game Manager and Table Hardware from the Effective
Date through the end of calendar year 2008. 
Any additional Software Assistance beyond this initial 300 hours of
Software Assistance through 2008 shall be billed at PGIC’s then-current
rates.  Any amount of time not used
through 2008 shall not carry-over after 2008.


14.13                 Expenses. 
Except as otherwise specifically provided in this Agreement, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Party incurring such costs or
expenses.



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14.14                 Entire Agreement.  This
Agreement constitutes the entire agreement between the Parties regarding the
subject hereof and supersedes all prior or contemporaneous agreements,
understandings, and communication, whether written or oral with regard to the
subject of this Agreement. 
Notwithstanding the foregoing or anything to the contrary in this
Agreement, nothing in this Agreement supersedes, terminates or alters the terms
and conditions of the Purchase Agreement or the Progressive License.


14.15                 Retained Rights.  The licensed rights granted
herein (including the license of the Cross Over Code, Game Manager, Aquarius
Controller and Table Hardware to Licensor) shall be deemed licenses of the “intellectual
property” for purposes of the United States Code, Title 11, Section
365(n).  In the event of Licensor’s or
Licensee’s bankruptcy (whichever the case may be) and a subsequent rejection or
disclaimer of this Agreement by a bankruptcy trustee or by such Licensor or
Licensee as a debtor-in-possession (whichever the case may be), whether under
the law of the United States or elsewhere, or in the event of a similar action
under applicable law, the Licensee or the Licensor (whichever the case may be)
may elect to retain its licensed rights, subject to and in accordance with the
provisions of the United States Code, Title 11, Section 365(n) or other
applicable law.


14.16                 Assignment by Licensor.  Licensor may assign all (but not less than all) of its rights, duties
and obligations under this Agreement provided that the Licensor’s assignee
meets the qualifications regarding licensing and other regulatory matters
necessary to perform Licensor’s obligations under this Agreement, is
financially able to perform Licensor’s obligations under this Agreement,
and such Licensor’s assignee agrees in writing in advance of such
assignment to assume all of the rights, duties and obligations of Licensor
under this Agreement and promptly provides a copy thereof to Licensee.  Any attempted assignment of this Agreement by
Licensor not in accordance with this subsection shall be null and void.


 


IN WITNESS WHEREOF, the Parties have executed this Agreement as
of the Effective Date.


	
  LICENSOR:

  	
  Progressive
  Gaming

  International Corporation

  	
  LICENSEE:

  	
  Shuffle Master, Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Jerry Smith

  
	
  By:

  	
  /s/ Robert B. Ziems

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Jerry Smith

  
	
  Name: Robert
  B. Ziems

  	
   

  
	
   

  	
  Title: Senior Vice President and General

  
	
  Title: Executive
  Vice President, General

  Counsel and Secretary

  	
  Counsel

  
							



 



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