Document:

Exhibit 10.44 David L. Kennedy Employment Agreement

Exhibit 10.44
Employment Agreement
This Employment Agreement (this “Agreement”) is made as of December 5, 2013 by and between Scientific Games Corporation, a Delaware corporation (the “Company”), and David L. Kennedy (“Executive”).
WHEREAS, the Company and Executive wish to enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual benefits to be derived herefrom and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Company and Executive, the parties hereto agree as follows.
1.Employment; Term.  The Company hereby agrees to employ Executive, and Executive hereby accepts employment with the Company, in accordance with and subject to the terms and conditions set forth in this Agreement.  This term of employment of Executive under this Agreement (the “Term”) shall be the period commencing on November 18, 2013 (the “Effective Date”) and ending on December 31, 2015, as may be extended in accordance with this Section 1 and subject to earlier termination in accordance with Section 4; provided that the Company shall be entitled to elect to cause the Term to expire on December 31, 2014 by giving written notice to Executive prior to the date which is sixty (60) days prior to December 31, 2014.  The Term shall be extended automatically without further action by either party by one (1) additional year (added to the end of the Term), and then on each succeeding annual anniversary thereafter, unless either party shall have given written notice to the other party prior to the date which is sixty (60) days prior to the date upon which such extension would otherwise have become effective electing not to further extend the Term, in which case Executive’s employment shall terminate on the date upon which such extension would otherwise have become effective, unless earlier terminated in accordance with Section 4.
2.    Position and Duties.  During the Term, Executive will serve as President and Chief Executive Officer of the Company and as an officer or director of any subsidiary or affiliate of the Company if elected to any such position by the stockholders or by the board of directors of any such subsidiary or affiliate, as the case may be.  In such capacities, Executive shall perform such duties and shall have such responsibilities as are normally associated with such positions, and as otherwise may be assigned to Executive from time to time by or upon the authority of the board of directors of the Company (the “Board”).  Subject to Section 4(e), Executive’s functions, duties and responsibilities are subject to reasonable changes as the Company may in good faith determine from time to time.  Executive hereby agrees to accept such employment and to serve the Company and its subsidiaries and affiliates to the best of Executive’s ability in such capacities, devoting all of Executive’s business time to such employment.
3.    Compensation. 
(a)    Base Salary.  During the Term, Executive will receive a base salary of one million five hundred thousand U.S. dollars (US$1,500,000) per annum (pro-rated for any partial year), payable in accordance with the Company’s regular payroll practices and subject to such deductions or amounts to be withheld as required by applicable law and regulations or as may be agreed to by Executive.  In the event that the Company, in its sole discretion, from time to time determines to increase Executive’s base salary, such increased amount shall, from and after the effective date of such increase, constitute the “base salary” of Executive for purposes of this Agreement.

1

(b)    Incentive Compensation.  Executive shall have the opportunity annually (beginning in respect of 2014) to earn incentive compensation (“Incentive Compensation”) in amounts determined by the Compensation Committee of the Board (the “Compensation Committee”) in its sole discretion in accordance with the applicable incentive compensation plan of the Company as in effect from time to time (the “Incentive Compensation Plan”).  Under such Incentive Compensation Plan, Executive shall have the opportunity annually to earn up to 100% of Executive’s base salary as Incentive Compensation at “target opportunity” (“Target Bonus”) and up to 200% of Executive’s base salary as Incentive Compensation at “maximum opportunity” on the terms and subject to the conditions of such Incentive Compensation Plan (any such Incentive Compensation to be subject to such deductions or amounts to be withheld as required by applicable law and regulations or as may be agreed to by Executive).
(c)    Eligibility for Annual Equity Awards.  Executive shall be eligible (beginning in 2014) to receive an annual grant of stock options, restricted stock units or other equity awards in the sole discretion of the Compensation Committee and in accordance with the applicable plans and programs of the Company for senior executives of the Company and subject to the Company’s right to at any time amend or terminate any such plan or program, so long as any such change does not adversely affect any accrued or vested interest of Executive under any such plan or program.
(d)    Expense Reimbursement.  Subject to Section 3(g), the Company shall reimburse Executive for all reasonable and necessary travel, business entertainment and other business expenses incurred by Executive in connection with the performance of Executive’s duties under this Agreement, on a timely basis upon timely submission by Executive of vouchers therefor in accordance with the Company’s standard policies and procedures.
(e)    Health and Welfare Benefits.  Executive shall be entitled to participate, without discrimination or duplication, in any and all medical insurance, group health, disability, life insurance, accidental death and dismemberment insurance, 401(k) or other retirement, deferred compensation, stock ownership and such other plans and programs which are made generally available by the Company to senior executives of the Company in accordance with the terms of such plans and programs and subject to the right of the Company (or its applicable affiliate) to at any time amend or terminate any such plan or program.  Executive shall be entitled to paid vacation, holidays and any other time off in accordance with the Company’s policies in effect from time to time.
(f)    Sign-On Award.  In connection with Executive’s execution of this Agreement, the Company will grant to Executive on December 5, 2013 (the “Grant Date”) one hundred fifty thousand (150,000) restricted stock units (the “Sign-On Award”) under the Company’s 2003 Incentive Compensation Plan, as amended and restated (or any successor plan) (the “Plan”), pursuant to an equity award agreement to be provided by the Company and entered into by and between the Company and Executive (the “Equity Award Agreement”).  The Equity Award Agreement shall provide that the Sign-On Award shall vest with respect to twenty-five percent (25%) of the shares of Company common stock subject to such Sign-On Award on each of the first four anniversaries of the Effective Date, subject to any applicable provisions relating to the accelerated vesting and forfeiture provisions as described in this Agreement, the Equity Award Agreement or the Plan.
(g)    Taxes and Internal Revenue Code 409A.  Payment of all compensation and benefits to Executive under this Agreement shall be subject to all legally required and customary withholdings.  The Company makes no representations or warranties and shall have no responsibility regarding the tax implications of the compensation and benefits to be paid to Executive under this Agreement, including under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and applicable administrative 

2

guidance and regulations (“Section 409A”).  Section 409A governs plans and arrangements that provide “nonqualified deferred compensation” (as defined under the Code) which may include, among others, nonqualified retirement plans, bonus plans, stock option plans, employment agreements and severance agreements.  The Company reserves the right to pay compensation and provide benefits under this Agreement (including under Section 3 and Section 4) in amounts, at times and in a manner that minimizes taxes, interest or penalties as a result of Section 409A.  In addition, in the event any benefits or amounts paid to Executive hereunder are deemed to be subject to Section 409A, Executive consents to the Company adopting such conforming amendments as the Company deems necessary, in its reasonable discretion, to comply with Section 409A (including delaying payment until six (6) months following termination of employment).  To the extent any payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A, such payments or other benefits may be deferred if deferral will make such payment or other benefits compliant under Section 409A, or otherwise such payments or other benefits shall be restructured, to the extent permissible under Section 409A, in a manner determined by the Company that does not cause such an accelerated or additional tax.  To the extent any reimbursements or in-kind benefits due to Executive under this Agreement constitute deferred compensation under Section 409A, any such reimbursements or in-kind benefits shall be paid to Executive in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv).  Each payment made under this Agreement shall be designated as a “separate payment” within the meaning of Section 409A.  
4.    Termination of Employment.  Executive’s employment may be terminated at any time prior to the end of the Term under the terms described in this Section 4, and the Term shall automatically terminate upon any termination of Executive’s employment.  For purposes of clarification, except as provided in Section 5.6, all stock options, restricted stock units and other equity-based awards will be governed by the terms of the plans, grant agreements and programs under which such options, restricted stock units or other awards were granted on any termination of the Term and Executive’s employment with the Company.
(a)    Termination by Executive for Other than Good Reason.  Executive may terminate Executive’s employment hereunder for any reason or no reason upon 60 days’ prior written notice to the Company referring to this Section 4(a); provided, however, that a termination by Executive for “Good Reason” (as defined below) shall not constitute a termination by Executive for other than Good Reason pursuant to this Section 4(a).  In the event Executive terminates Executive’s employment for other than Good Reason, Executive shall be entitled only to the following compensation and benefits (the payments set forth in Sections 4(a)(i) – 4(a)(iii), collectively, the “Standard Termination Payments”):
(i)    any accrued but unpaid base salary for services rendered by Executive to the date of such termination, payable in accordance with the Company’s regular payroll practices and subject to such deductions or amounts to be withheld as required by applicable law and regulations or as may be agreed to by Executive; 
(ii)    any vested non-forfeitable amounts owing or accrued at the date of such termination under benefit plans, programs and arrangements set forth or referred to in Section 3(e) in which Executive participated during the Term (which will be paid under the terms and conditions of such plans, programs, and arrangements (and agreements and documents thereunder)); and
(iii)    reasonable business expenses and disbursements incurred by Executive prior to such termination will be reimbursed in accordance with Section 3(d).
(b)    Termination By Reason of Death.  If Executive dies during the Term, the last beneficiary designated by Executive by written notice to the Company (or, in the absence of such designation, 

3

Executive’s estate) shall be entitled only to the Standard Termination Payments, including any benefits that may be payable under any life insurance benefit of Executive for which the Company pays premiums, in accordance with the terms of any such benefit and subject to the right of the Company (or its applicable affiliate) to at any time amend or terminate any such benefit.
(c)    Termination By Reason of Total Disability.  The Company may terminate Executive’s employment in the event of Executive’s “Total Disability.”  For purposes of this Agreement, “Total Disability” shall mean Executive’s (1) becoming eligible to receive benefits under any long-term disability insurance program of the Company or (2) failure to perform the duties and responsibilities contemplated under this Agreement for a period of more than 180 days during any consecutive 12-month period due to physical or mental incapacity or impairment.  In the event that Executive’s employment is terminated by the Company by reason of Total Disability, the Company shall pay the following amounts, and make the following other benefits available, to Executive:
(i)    the Standard Termination Payments; and
(ii)    an amount equal to Executive’s annual base salary, payable in approximately equal installments over a period of twelve (12) months after such termination; provided that such amount shall be reduced with each installment payment being reduced pro rata by the amount of any disability payments to which Executive may be entitled as a result of any disability plan sponsored or maintained by the Company or any of its affiliates providing benefits to Executive.
(d)    Termination by the Company for Cause.  The Company may terminate the employment of Executive at any time for “Cause.”  For purposes of this Agreement, “Cause” shall mean: (i) gross neglect by Executive of Executive’s duties hereunder; (ii) Executive’s indictment for or conviction of a felony, or any non-felony crime or offense involving the property of the Company or any of its subsidiaries or affiliates or evidencing moral turpitude; (iii) willful misconduct by Executive in connection with the performance of Executive’s duties hereunder; (iv) intentional breach by Executive of any material provision of this Agreement; (v) material violation by Executive of a material provision of the Company’s Code of Business Conduct; or (vi) any other willful or grossly negligent conduct of Executive that would make the continued employment of Executive by the Company materially prejudicial to the best interests of the Company.  In the event Executive’s employment is terminated for “Cause,” Executive shall not be entitled to receive any compensation or benefits under this Agreement except for the Standard Termination Payments.
(e)    Termination by the Company without Cause or by Executive for Good Reason.  The Company may terminate Executive’s employment at any time without Cause, for any reason or no reason, and Executive may terminate Executive’s employment for “Good Reason.”  For purposes of this Agreement “Good Reason” shall mean that, without Executive’s prior written consent, any of the following shall have occurred:  (A) a material adverse change to Executive’s positions, titles, offices, or duties following the Effective Date from those set forth in Section 2, except, in such case, in connection with the termination of Executive’s employment for Cause or due to Total Disability, death or expiration of the Term; (B) a material decrease in base salary or material decrease in Executive’s Incentive Compensation opportunity provided under this Agreement; or (C) any other material failure by the Company to perform any material obligation under, or material breach by the Company of any material provision of, this Agreement; provided, however, that a termination by Executive for Good Reason under any of clauses (A) through (C) of this Section 4(e) shall not be considered effective unless Executive shall have provided the Company with written notice of the specific reasons for such termination within thirty (30) days after he has knowledge of the event or circumstance constituting Good Reason and the Company shall have failed to cure the event or condition 

4

allegedly constituting Good Reason within thirty (30) days after such notice has been given to the Company and Executive actually terminates his employment within one (1) year following the initial occurrence of the event giving rise to Good Reason.  In the event that Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason (and not, for the avoidance of doubt, in the event of a termination pursuant to Section 4(a), (b), (c) or (d) or due to or upon the expiration of the Term), the Company shall pay the following amounts, and make the following other benefits available, to Executive.
(i)    the Standard Termination Payments; and
(ii)    an amount equal to (A) two (2) multiplied by (B) the sum of (1) Executive’s base salary and (2) an amount equal to the highest annual Incentive Compensation paid to Executive (if any) in respect of the two (2) most recent fiscal years of the Company but not more than Executive’s Target Bonus for the-then current fiscal year (such amount under this sub-clause (2), the “Severance Bonus Amount”), such amount under this clause (ii) payable over a period of twenty-four (24) months after such termination in accordance with Section 4(h);
(iii)    no later than March 15 following the end of the year in which such termination occurs, in lieu of any Incentive Compensation for the year in which such termination occurs, payment of an amount equal to (A) the Incentive Compensation (if any) which would have been payable to Executive had Executive remained in employment with the Company during the entire year in which such termination occurred, multiplied by (B) a fraction the numerator of which is the number of days Executive was employed in the year in which such termination occurs and the denominator of which is the total number of days in the year in which such termination occurs; 
(iv)    if Executive elects to continue medical coverage under the Company’s group health plan in accordance with COBRA, the monthly premiums for such coverage for a period of twelve (12) months; and
(v)    subject to Section 5.6 and except to the extent otherwise provided at the time of grant under the terms of any equity award made to Executive, full vesting of any unvested stock options and any unvested restricted stock units held by Executive immediately prior to such termination (provided that any such stock options (together with any other vested stock options) held by Executive will cease being exercisable upon the earlier of ninety (90) days after such termination and the scheduled expiration date of such stock options), and, in all other respects, all stock options, restricted stock units and other equity-based awards held by Executive shall be governed by the plans and programs and the agreements and other documents pursuant to which the awards were granted; provided, however, that in the event such termination occurs prior to the Compensation Committee’s determination as to the satisfaction of any performance criteria to which any such stock options and/or restricted stock units is subject, such stock options and/or restricted stock units (as the case may be) will not vest (and, in the case of any such stock options, will not become exercisable) unless and until a determination is or has been made by the Compensation Committee that such criteria have been satisfied, at which time such stock options and/or restricted stock units will vest (and, in the case of any such stock options, will become exercisable) to the extent contemplated by the terms of such award (it being understood and agreed, for the avoidance of doubt, that such stock options or restricted stock units will immediately be forfeited to the extent contemplated by the terms of such award in the event that such criteria are determined not to have been satisfied); provided, further, however, if necessary to comply with Section 409A, settlement of any such equity-based awards shall be made on the date that is six (6) months plus one (1) day following expiration of the Term.

5

(f)    Termination by the Company without Cause or by Executive for Good Reason in connection with a Change in Control.  In the event Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason pursuant to Section 4(e) and such termination occurs upon, or within one (1) year immediately following, a “Change in Control” (as defined below), Executive shall be entitled (without duplication) to the payments and benefits described in Section 4(e), except that, solely in the case of an amount otherwise payable under Section 4(e)(ii), such amount shall be multiplied by three (3) (i.e., an amount equal to three (3) multiplied by the sum of Executive’s base salary and the Severance Bonus Amount, without duplication) and such amount shall be payable over a period of thirty-six (36) months after termination in accordance with Section 4(h) of this Agreement; provided, however, to the extent that such amount under Section 4(e)(ii) is exempt from Section 409A and/or if such Change in Control constitutes a change in ownership, change in effective control or a change in ownership of a substantial portion of the assets of the Company under Regulation Section 1.409A-3(i)(5), such amount otherwise payable under Section 4(e)(ii) shall be paid in a lump sum in accordance with Section 4(h) of this Agreement.  Notwithstanding the foregoing, payments pursuant to this Section 4(f) shall be reduced by the amount necessary, if any, to ensure that the aggregate compensation to be received by the Executive in connection with such Change in Control does not constitute a “parachute payment,” as such term is defined in 26 U.S.C. § 280G.  
For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred if: (i) any “person” as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act but excluding the Company and any subsidiary or affiliate and any employee benefit plan sponsored or maintained by the Company or any subsidiary or affiliate (including any trustee of such plan acting as trustee) or any current stockholder of 20% or more of the outstanding common stock of the Company, directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities of the Company representing at least 40% of the combined voting power of the Company’s then-outstanding securities; (ii) the stockholders of the Company approve a merger, consolidation, recapitalization, or reorganization of the Company, or a reverse stock split of any class of voting securities of the Company, or the consummation of any such transaction if stockholder approval is not obtained, other than any such transaction that would result in at least 60% of the total voting power represented by the voting securities of the Company or the surviving entity outstanding immediately after such transaction being beneficially owned by persons who together beneficially owned at least 80% of the combined voting power of the voting securities of the Company outstanding immediately prior to such transaction; provided that, for purposes of this Section 4(f), such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such 60% threshold is due solely to the acquisition of voting securities by an employee benefit plan of the Company or such surviving entity or of any subsidiary of the Company or such surviving entity; (iii) the stockholders of the Company approve a plan of complete liquidation of the Company, an agreement for the sale or disposition by the Company of all or substantially all of its assets (or any transaction having a similar effect); or (iv) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board, together with any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (ii) or (iii) above) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board.
(g)    Expiration of Term of Agreement.  In the event that Executive’s employment is terminated at the end of the Term as a result of delivery of a notice of non-renewal by the Company (including, for the avoidance of doubt, in the event the Company exercises its right pursuant to the proviso in Section 

6

1 to cause the expiration of the Term to occur on December 31, 2014), Executive shall not be entitled to receive any compensation or benefits under this Agreement except for the Standard Termination Payments; provided, however, that: (i) subject to Section 5.6, any unvested stock options and any unvested restricted stock units comprising the Sign-On Award held by Executive immediately prior to such termination will become fully vested (and, in the case of any such stock options, exercisable) (provided that any such stock options (together with any other vested stock options) held by Executive will cease being exercisable upon the earlier of ninety (90) days after such termination and the scheduled expiration date of such stock options), and, in all other respects, all stock options and restricted stock units held by Executive shall be governed by the plans and programs and the agreements and other documents pursuant to which the awards were granted; provided, however, if necessary to comply with Section 409A, settlement of any such equity-based awards shall be made on the date that is six (6) months plus one (1) day following expiration of the Term; and (ii) no later than March 15 following expiration of the Term, payment (without duplication) of an amount equal to the Incentive Compensation (if any) payable to Executive in respect of the year in which such Term expires.
(h)    Timing of Certain Payments under Section 4.  For purposes of Section 409A, references herein to the Executive’s “termination of employment” shall refer to Executive’s separation of services with the Company within the meaning of Treas. Reg. Section 1.409A-1(h).  If at the time of Executive’s separation of service with the Company other than as a result of Executive’s death, (i) Executive is a “specified employee” (as defined in Section 409A(a)(2)(B)(i) of the Code), (ii) one or more of the payments or benefits received or to be received by Executive pursuant to this Agreement would constitute deferred compensation subject to Section 409A, and (iv) the deferral of the commencement of any such payments or benefits otherwise payable hereunder as a result of such separation of service is necessary in order to prevent any accelerated or additional tax under Section 409A, such payments may be made as follows: (i) no payments for a six-month period following the date of Executive’s separation of service with the Company; (ii) an amount equal to the aggregate sum that would have been otherwise payable during the initial six-month period paid in a lump sum on the first payroll date following six (6) months following the date of Executive’s separation of service with the Company (subject to such deductions or amounts to be withheld as required by applicable law and regulations); and (iii) during the period beginning six (6) months following Executive’s separation of service with the Company through the remainder of the applicable period, payment of the remaining amount due in equal installments in accordance with the Company’s standard payroll practices (subject to such deductions or amounts to be withheld as required by applicable law and regulations).
(i)    No Obligation to Mitigate.  Executive shall have no obligation to mitigate damages pursuant to this Section 4, but shall be obligated to promptly advise the Company regarding obtaining other employment providing health insurance benefits with respect to services provided to another employer during any period of continued payments pursuant to this Section 4.  The Company’s obligation to make continued insurance payments to or on behalf of Executive shall be reduced by any insurance coverage obtained by Executive during the severance period through employment by another entity (without regard to when such coverage is paid).
(j)    Set-Off.  To the fullest extent permitted by law and provided an acceleration of income or the imposition of an additional tax under Section 409A would not result, any amounts otherwise due to Executive hereunder (including any payments pursuant to this Section 4) shall be subject to set-off with respect to any amounts Executive otherwise owes the Company or any subsidiary or affiliate thereof.
(k)    No Other Benefits or Compensation.  Except as may be specifically provided under this Agreement, under any other effective written agreement between Executive and the Company, or under the terms of any plan or policy applicable to Executive, Executive shall have no right to receive any other 

7

compensation from the Company or any subsidiary or affiliate thereof, or to participate in any other plan, arrangement or benefit provided by the Company or any subsidiary or affiliate thereof, with respect to any future period after such termination or resignation.  Executive acknowledges and agrees that he is entitled to no compensation or benefits from the Company or any of its subsidiaries or affiliates of any kind or nature whatsoever in respect of periods prior to the date of this Agreement.  Executive acknowledges and agrees that he shall not receive any fees or other compensation (including equity compensation) for Board service. 
(l)    Release of Employment Claims; Compliance with Section 5.  Executive agrees, as a condition to receipt of any termination payments and benefits provided for in this Section 4 (other than the Standard Termination Payments), that Executive will execute a general release agreement, in a form reasonably satisfactory to the Company, releasing any and all claims arising out of Executive’s employment and the termination of such employment.  The Company shall provide Executive with the proposed form of general release agreement referred to in the immediately preceding sentence no later than two (2) days following the date of termination.  Executive shall thereupon have 21 days to consider such general release agreement and, if he executes such general release agreement, shall have seven (7) days after execution of such general release agreement to revoke such general release agreement.  Absent such revocation, such general release agreement shall become binding on Executive.  If Executive does not revoke such general release agreement, payments contingent on such general release agreement that constitute deferred compensation under Section 409A (if any) shall be paid on the later of 60th day after the date of termination or the date such payments are otherwise scheduled to be paid pursuant to this Agreement.  The Company’s obligation to make any termination payments and benefits provided for in this Section 4 (other than the Standard Termination Payments) shall immediately cease if Executive willfully and materially breaches Section 5.1, 5.2 , 5.3, 5.4, or 5.8.
5.    Noncompetition; Non-solicitation; Nondisclosure; etc.
5.1 Noncompetition; Non-solicitation.
(a)     Executive acknowledges the highly competitive nature of the Company’s business and that access to the Company’s confidential records and proprietary information renders Executive special and unique within the Company’s industries.  In consideration of the amounts that may hereafter be paid to Executive pursuant to this Agreement (including Sections 3 and 4), Executive agrees that during the Term (including any extensions thereof) and during the Covered Time (as defined in Section 5.1(e)), Executive, alone or with others, will not, directly or indirectly, engage (as owner, investor, partner, stockholder, employer, employee, consultant, advisor, director or otherwise) in any Competing Business.  For purposes of this Section 5, “Competing Business” shall mean any business or operations (i) (A) involving the design, development, manufacture, production, sale, lease, license, provision, operation or management (as the case may be) of (1) instant lottery tickets or games or any related marketing, warehouse, distribution, category management or other services or programs; (2) lottery-related terminals or vending machines (whether clerk-operated, self-service or otherwise), (3) gaming machines, terminals or devices (including video or reel spinning slot machines, video poker machines, video lottery terminals and fixed odds betting terminals), (4) lottery, video gaming (including server-based gaming), sports betting or other wagering or gaming systems (including control and monitoring systems, local or wide-area progressive systems and redemption systems); (5) lottery- or gaming-related proprietary or licensed content (including themes, entertainment and brands), platforms, websites and loyalty and customer relationship management programs (including any of the foregoing relating to online play, social gaming or interactive (including internet and mobile) lottery or gaming); (6) prepaid cellular or other phone cards; or (7) ancillary products (including equipment, hardware, software, marketing materials, chairs and signage) or services (including field service, maintenance and support) related to any of the foregoing under sub-clauses (1) through (6) above; or (B) in which the Company 

8

is then or was within the previous 12 months engaged, or in which the Company, to Executive’s knowledge, contemplates to engage in during the Term or the Covered Time, (ii) in which Executive was engaged or involved (whether in an executive or supervisory capacity or otherwise) on behalf of the Company or with respect to which Executive has obtained proprietary or confidential information; and (iii) which were conducted anywhere in the United States or in any other geographic area in which such business was conducted or contemplated to be conducted by the Company. 
(b)      In further consideration of the amounts that may hereafter be paid to Executive pursuant to this Agreement (including Sections 3 and 4), Executive agrees that, during the Term (including any extensions thereof) and during the Covered Time, Executive shall not, directly or indirectly:  (i) solicit or attempt to induce any of the employees, agents, consultants or representatives of the Company to terminate his, her, or its relationship with the Company; (ii) solicit or attempt to induce any of the employees, agents, consultants or representatives of the Company to become employees, agents, consultants or representatives of any other person or entity; (iii) solicit or attempt to induce any customer, vendor or distributor of the Company to curtail or cancel any business with the Company; or (iv) hire any person who, to Executive’s actual knowledge, is, or was within 180 days prior to such hiring, an employee of the Company.
(c)    During the Term (including any extensions thereof) and during the Covered Time, Executive agrees that upon the earlier of Executive’s (i) negotiating with any Competitor (as defined below) concerning the possible employment of Executive by the Competitor, (ii) responding to (other than for the purpose of declining) an offer of employment from a Competitor, or (iii) becoming employed by a Competitor, (A) Executive will provide copies of Section 5 of this Agreement to the Competitor, and (B) in the case of any circumstance described in (iii) above occurring during the Covered Time, and in the case of any circumstance described in (i) or (ii) above occurring during the Term or during the Covered Time, Executive will promptly provide notice to the Company of such circumstances.  Executive further agrees that the Company may provide notice to a Competitor of Executive’s obligations under this Agreement.  For purposes of this Agreement, “Competitor” shall mean any person or entity (other than the Company, its subsidiaries or affiliates) that engages, directly or indirectly, in the United States in any Competing Business.
(d)    Executive understands that the restrictions in this Section 5.1 may limit Executive’s ability to earn a livelihood in a business similar to the business of the Company but nevertheless agrees and acknowledges that the consideration provided under this Agreement (including Sections 3 and 4) is sufficient to justify such restrictions. In consideration thereof and in light of Executive’s education, skills and abilities, Executive agrees that Executive will not assert in any forum that such restrictions prevent Executive from earning a living or otherwise should be held void or unenforceable.
(e)    For purposes of this Section 5.1, “Covered Time” shall mean the period beginning on the date of termination of Executive’s employment (the “Date of Termination”) and ending twenty-four (24) months after the Date of Termination.
5.2    Proprietary Information; Inventions.
(a)Executive acknowledges that, during the course of Executive’s employment with the Company, Executive necessarily will have (and during any employment by, or affiliation with, the Company prior to the Term has had) access to and make use of proprietary information and confidential records of the Company.  Executive covenants that Executive shall not during the Term or at any time thereafter, directly or indirectly, use for Executive’s own purpose or for the benefit of any person or entity other than the Company, nor otherwise disclose to any person or entity, any such proprietary information, unless and to the extent such disclosure has been authorized in writing by the Company or is otherwise 

9

required by law.  The term “proprietary information” means:  (i) the software products, programs, applications, and processes utilized by the Company; (ii) the name and/or address of any customer or vendor of the Company or any information concerning the transactions or relations of any customer or vendor of the Company with the Company; (iii) any information concerning any product, technology, or procedure employed by the Company but not generally known to its customers or vendors or competitors, or under development by or being tested by the Company but not at the time offered generally to customers or vendors; (iv) any information relating to the Company’s computer software, computer systems, pricing or marketing methods, sales margins, cost of goods, cost of material, capital structure, operating results, borrowing arrangements or business plans; (v) any information identified as confidential or proprietary in any line of business engaged in by the Company; (vi) any information that, to Executive’s actual knowledge, the Company ordinarily maintains as confidential or proprietary; (vii) any business plans, budgets, advertising or marketing plans; (viii) any information contained in any of the Company’s written or oral policies and procedures or manuals; (ix) any information belonging to customers, vendors or any other person or entity which the Company, to Executive’s actual knowledge, has agreed to hold in confidence; and (x) all written, graphic, electronic data and other material containing any of the foregoing.  Executive acknowledges that information that is not novel or copyrighted or patented may nonetheless be proprietary information.  The term “proprietary information” shall not include information generally known or available to the public or information that becomes available to Executive on an unrestricted, non-confidential basis from a source other than the Company or any of its directors, officers, employees, agents or other representatives (without breach of any obligation of confidentiality of which Executive has knowledge, after reasonable inquiry, at the time of the relevant disclosure by Executive).  Notwithstanding the foregoing and Section 5.3, Executive may disclose or use proprietary information or confidential records solely to the extent (A) such disclosure or use may be required or appropriate in the performance of his duties as a director or employee of the Company, (B) required to do so by a court of law, by any governmental agency having supervisory authority over the business of the Company or by any administrative or legislative body (including a committee thereof) with apparent jurisdiction to order him to divulge, disclose or make accessible such information (provided that in such case Executive shall first give the Company prompt written notice of any such legal requirement, disclose no more information than is so required and cooperate fully with all efforts by the Company to obtain a protective order or similar confidentiality treatment for such information), (C) such information or records becomes generally known to the public without his violation of this Agreement, or (D) disclosed to Executive’s spouse, attorney and/or his personal tax and financial advisors to the extent reasonably necessary to advance Executive’s tax, financial and other personal planning (each an “Exempt Person”); provided, however, that any disclosure or use of any proprietary information or confidential records by an Exempt Person shall be deemed to be a breach of this Section 5.2 or Section 5.3 by Executive.
(b)    Executive agrees that all processes, technologies and inventions (collectively, “Inventions”), including new contributions, improvements, ideas and discoveries, whether patentable or not, conceived, developed, invented or made by Executive during the Term (and during any employment by, or affiliation with, the Company prior to the Term) shall belong to the Company, provided that such Inventions grew out of Executive’s work with the Company or any of its subsidiaries or affiliates, are related in any manner to the business (commercial or experimental) of the Company or any of its subsidiaries or affiliates or are conceived or made on the Company’s time or with the use of the Company’s facilities or materials.  Executive shall further:  (i) promptly disclose such Inventions to the Company; (ii) assign to the Company, without additional compensation, all patent and other rights to such Inventions for the United States and foreign countries; (iii) sign all papers necessary to carry out the foregoing; and (iv) give testimony in support of Executive’s inventorship.  If any Invention is described in a patent application or is disclosed to third parties, directly or indirectly, by Executive within two (2) years after the termination of Executive’s employment with the Company, it is to be presumed that the Invention was conceived or made during the Term.  Executive agrees that Executive will not assert any rights to any Invention as having been made or 

10

acquired by Executive prior to the date of this Agreement, except for Inventions, if any, disclosed in Exhibit A to this Agreement.
5.3    Confidentiality and Surrender of Records.  Executive shall not, during the Term or at any time thereafter (irrespective of the circumstances under which Executive’s employment by the Company terminates), except to the extent required by law, directly or indirectly publish, make known or in any fashion disclose any confidential records to, or permit any inspection or copying of confidential records by, any person or entity other than in the course of such person’s or entity’s employment or retention by the Company, nor shall Executive retain, and will deliver promptly to the Company, any of the same following termination of Executive’s employment hereunder for any reason or upon request by the Company.  For purposes hereof, “confidential records” means those portions of correspondence, memoranda, files, manuals, books, lists, financial, operating or marketing records, magnetic tape, or electronic or other media or equipment of any kind in Executive’s possession or under Executive’s control or accessible to Executive which contain any proprietary information.  All confidential records shall be and remain the sole property of the Company during the Term and thereafter.
5.4    Non-disparagement.  Executive shall not, during the Term and thereafter, disparage in any material respect the Company, any affiliate of the Company, any of their respective businesses, any of their respective officers, directors or employees, or the reputation of any of the foregoing persons or entities.  Notwithstanding the foregoing, nothing in this Agreement shall preclude Executive from making truthful statements that are required by applicable law, regulation or legal process.
5.5    No Other Obligations.  Executive represents that Executive is not precluded or limited in Executive’s ability to undertake or perform the duties described herein by any contract, agreement or restrictive covenant.  Executive covenants that Executive shall not employ the trade secrets or proprietary information of any other person in connection with Executive’s employment by the Company without such person’s authorization.
5.6    Forfeiture of Outstanding Equity Awards; “Clawback” Policies.  The provisions of Section 4 notwithstanding, if Executive willfully and materially fails to comply with Section 5.1, 5.2, 5.3, 5.4, or 5.8, all options to purchase common stock, restricted stock units and other equity-based awards granted by the Company or any of its affiliates (whether prior to, contemporaneous with, or subsequent to the date hereof) and held by Executive or a transferee of Executive shall be immediately forfeited and cancelled.  Executive acknowledges and agrees that, notwithstanding anything contained in this Agreement or any other agreement, plan or program, any incentive-based compensation or benefits contemplated under this Agreement (including Incentive Compensation and equity-based awards) shall be subject to recovery by the Company under any compensation recovery or “clawback” policy, generally applicable to senior executives of the Company, that the Company may adopt from time to time, including any policy which the Company may be required to adopt under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations of the Securities and Exchange Commission thereunder or the requirements of any national securities exchange on which the Company’s common stock may be listed.
5.7    Enforcement.  Executive acknowledges and agrees that, by virtue of Executive’s position, services and access to and use of confidential records and proprietary information, any violation by Executive of any of the undertakings contained in this Section 5 would cause the Company immediate, substantial and irreparable injury for which it has no adequate remedy at law.  Accordingly, Executive agrees and consents to the entry of an injunction or other equitable relief by a court of competent jurisdiction restraining any violation or threatened violation of any undertaking contained in this Section 5.  Executive waives posting of any bond otherwise necessary to secure such injunction or other equitable relief.  Rights 

11

and remedies provided for in this Section 5 are cumulative and shall be in addition to rights and remedies otherwise available to the parties hereunder or under any other agreement or applicable law.
5.8    Cooperation with Regard to Litigation.  Executive agrees to cooperate reasonably with the Company, during the Term and thereafter (including following Executive’s termination of employment for any reason), by being available to testify on behalf of the Company in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative.  In addition, except to the extent that Executive has or intends to assert in good faith an interest or position adverse to or inconsistent with the interest or position of the Company, Executive agrees to cooperate reasonably with the Company, during the Term and thereafter (including following Executive’s termination of employment for any reason), to assist the Company in any such action, suit, or proceeding by providing information and meeting and consulting with the Board or its representatives or counsel, or representatives or counsel to the Company, in each case, as reasonably requested by the Company.  The Company agrees to pay (or reimburse, if already paid by Executive) all reasonable expenses actually incurred in connection with Executive’s cooperation and assistance including reasonable fees and disbursements of counsel, if any, chosen by Executive if Executive reasonably determines in good faith, on the advice of counsel, that the Company’s counsel may not ethically represent Executive in connection with such action, suit or proceeding due to actual or potential conflicts of interests.
5.9    Survival.  The provisions of this Section 5 shall survive the termination of the Term and any termination or expiration of this Agreement.
5.10    Company.  For purposes of this Section 5, references to the “Company” shall include the Company and each subsidiary and/or affiliate of the Company (and each of their respective joint ventures and equity method investees).
6.    Code of Conduct.  Executive acknowledges that he has read the Company’s Code of Business Conduct and agrees to abide by such Code of Business Conduct, as amended or supplemented from time to time, and other policies applicable to employees and executives of the Company.
7.    Indemnification.  The Company shall indemnify Executive to the full extent permitted under the Company’s Certificate of Incorporation or By-Laws and pursuant to any other agreements or policies in effect from time to time in connection with any action, suit or proceeding to which Executive may be made a party by reason of Executive being an officer, director or employee of the Company or of any subsidiary or affiliate of the Company.
8.    Assignability; Binding Effect.  Neither this Agreement nor the rights or obligations hereunder of the parties shall be transferable or assignable by Executive, except in accordance with the laws of descent and distribution and as specified below.  The Company may assign this Agreement and the Company’s rights and obligations hereunder to any affiliate of the Company, provided that upon any such assignment the Company shall remain liable for the obligations to Executive hereunder.  This Agreement shall be binding upon and inure to the benefit of Executive, Executive’s heirs, executors, administrators, and beneficiaries, and shall be binding upon and inure to the benefit of the Company and its successors and assigns.
9.    Complete Understanding; Amendment; Waiver.  This Agreement constitutes the complete understanding between the parties with respect to the employment of Executive and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof, including, without limitation, the Prior Employment Agreement, and no statement, 

12

representation, warranty or covenant has been made by either party with respect thereto except as expressly set forth herein.  Except as contemplated by Section 3(g), this Agreement shall not be modified, amended or terminated except by a written instrument signed by each of the parties.  Any waiver of any term or provision hereof, or of the application of any such term or provision to any circumstances, shall be in writing signed by the party charged with giving such waiver.  Waiver by either party of any breach hereunder by the other party shall not operate as a waiver of any other breach, whether similar to or different from the breach waived.  No delay by either party in the exercise of any rights or remedies shall operate as a waiver thereof, and no single or partial exercise by either party of any such right or remedy shall preclude other or further exercise thereof.
10.    Severability.  If any provision of this Agreement or the application of any such provision to any person or circumstances shall be determined by any court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Agreement, or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be enforced to the fullest extent permitted by law.  If any provision of this Agreement, or any part thereof, is held to be invalid or unenforceable because of the scope or duration of or the area covered by such provision, the parties agree that the court making such determination shall reduce the scope, duration and/or area of such provision (and shall substitute appropriate provisions for any such invalid or unenforceable provisions) in order to make such provision enforceable to the fullest extent permitted by law and/or shall delete specific words and phrases, and such modified provision shall then be enforceable and shall be enforced.  The parties recognize that if, in any judicial proceeding, a court shall refuse to enforce any of the separate covenants contained in this Agreement, then that invalid or unenforceable covenant contained in this Agreement shall be deemed eliminated from these provisions to the extent necessary to permit the remaining separate covenants to be enforced.  In the event that any court determines that the time period or the area, or both, are unreasonable and that any of the covenants is to that extent invalid or unenforceable, the parties agree that such covenants will remain in full force and effect, first, for the greatest time period, and second, in the greatest geographical area that would not render them unenforceable.
11.    Survivability.  The provisions of this Agreement which by their terms call for performance subsequent to termination of Executive’s employment hereunder, or of this Agreement, shall so survive such termination, whether or not such provisions expressly state that they shall so survive.
12.    Governing Law; Arbitration.
(a)    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be wholly performed within that State, without regard to its conflict of laws provisions.
(b)    Arbitration.  
(i)    Executive and the Company agree that, except for claims for workers’ compensation, unemployment compensation, and any other claim that is non-arbitrable under applicable law, final and binding arbitration shall be the exclusive forum for any dispute or controversy between them, including, without limitation, disputes arising under or in connection with this Agreement, Executive’s employment, and/or termination of employment, with the Company; provided, however, that the Company shall be entitled to commence an action in any court of competent jurisdiction for injunctive relief in connection with any alleged actual or threatened violation of any provision of Section 5.  Judgment may be entered on the arbitrators’ 

13

award in any court having jurisdiction.  For purposes of entering such judgment or seeking injunctive relief with regard to Section 5, the Company and Executive hereby consent to the jurisdiction of any or all of the following courts: (i) the United States District Court for the Southern District of New York; (ii) the Supreme Court of New York County, New York; or (iii) any other court having jurisdiction; provided that damages for any alleged violation of Section 5, as well as any claim, counterclaim or cross-claim brought by Executive or any third-party in response to, or in connection with any court action commenced by the Company seeking said injunctive relief shall remain exclusively subject to final and binding arbitration as provided for herein.  The Company and Executive hereby waive, to the fullest extent permitted by applicable law, any objection which either may now or hereafter have to such jurisdiction, venue and any defense of inconvenient forum.  Thus, except for the claims carved out above, this Agreement includes all common-law and statutory claims (whether arising under federal state or local law), including, but not limited to, any claim for breach of contract, fraud, fraud in the inducement, unpaid wages, wrongful termination, and gender, age, national origin, sexual orientation, marital status, disability, or any other  protected status.
Any arbitration under this Agreement shall be filed exclusively with, and administered by, the American Arbitration Association in New York, New York before three arbitrators, in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association in effect at the time of submission to arbitration.  The Company and Executive hereby agree that a judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  The Company shall pay all costs uniquely attributable to arbitration, including the administrative fees and costs of the arbitrators.  Each party shall pay that party’s own costs and attorney fees, if any, unless the arbitrators rule otherwise.  Executive understands that he is giving up no substantive rights, and this Agreement simply governs forum.  The arbitrators shall apply the same standards a court would apply to award any damages, attorney fees or costs.  Executive shall not be required to pay any fee or cost that he would not otherwise be required to pay in a court action, unless so ordered by the arbitrators. 
EXECUTIVE INITIALS: DLK                    COMPANY INITIALS: JBS
(c)    WAIVER OF JURY TRIAL.  BY SIGNING THIS AGREEMENT, EXECUTIVE AND THE COMPANY ACKNOWLEDGE THAT THE RIGHT TO A COURT TRIAL AND TRIAL BY JURY IS OF VALUE, AND KNOWINGLY AND VOLUNTARILY WAIVE THAT RIGHT FOR ANY DISPUTE SUBJECT TO THE TERMS OF THIS ARBITRATION PROVISION.
13.     Titles and Captions.  All paragraph titles or captions in this Agreement are for convenience only and in no way define, limit, extend or describe the scope or intent of any provision hereof.
14.    Joint Drafting.  In recognition of the fact that the parties had an equal opportunity to negotiate the language of, and draft, this Agreement, the parties acknowledge and agree that there is no single drafter of this Agreement and, therefore, the general rule that ambiguities are to be construed against the drafter is, and shall be, inapplicable.  If any language in this Agreement is found or claimed to be ambiguous, each party shall have the same opportunity to present evidence as to the actual intent of the parties with respect to any such ambiguous language without any inference or presumption being drawn against any party hereto.
15.    Notices.  All notices and other communications to be given or to otherwise be made to any party to this Agreement shall be deemed to be sufficient if contained in a written instrument delivered in 

14

person or duly sent by certified mail or by a recognized national courier service, postage or charges prepaid, (a) to Scientific Games International, Inc., c/o Scientific Games Corporation, Attn: Legal Department, at 750 Lexington Avenue, 25th Floor, New York, NY 10022, (b) to Executive, at the last address shown in the Company’s records, or (c) to such other replacement address as may be designated in writing by the addressee to the addressor.
16.    Interpretation.  When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation,” unless the context otherwise indicates.  When a reference in this Agreement is made to a “party” or “parties,” such reference shall be to a party or parties to this Agreement unless otherwise indicated or the context requires otherwise.  Unless the context requires otherwise, (a) the terms “hereof,” “herein,” “hereby,” “hereto”, “hereunder” and derivative or similar words in this Agreement refer to this entire Agreement, (b) the word “or” is disjunctive but not exclusive and (c) words in this Agreement using the singular or plural number also include the plural or singular number, respectively, and the use of any gender herein shall be deemed to include the other genders.  References in this Agreement to “dollars” or “$” are to U.S. dollars.  When a reference is made in this Agreement to a law, statute or legislation, such reference shall be to such law, statute or legislation as it may be amended, modified, extended or re-enacted from time to time (including any successor law, statute or legislation) and shall include any regulations promulgated thereunder from time to time.  The headings used herein are for reference only and shall not affect the construction of this Agreement.
[remainder of page intentionally left blank]

15

IN WITNESS WHEREOF, each of the parties has duly executed this Agreement as of the date above written.
	
		
	 
	SCIENTIFIC GAMES CORPORATION

	 
	 

	 
	By:  /s/ Jack B. Sarno _______________
Name:  Jack B. Sarno
Title:  Vice President – Worldwide Legal Affairs and Corporate Secretary

	 
	 

	 
	

EXECUTIVE

	 
	/s/ David L. Kennedy ________________
Name:  David L. Kennedy

	 
	 

16Exhibit 10.48 Game Manufacturer Cashless License

Exhibit 10.48

GAME MANUFACTURER CASHLESS LICENSE AGREEMENT

THIS GAME MANUFACTURER CASHLESS LICENSE AGREEMENT (hereinafter “Agreement”) is entered into this 12th day of November, 2012 (hereinafter “Effective Date”) by and between IGT, a Nevada corporation, with a principal office at 6355 S. Buffalo Dr., Las Vegas Nevada 89113 (hereinafter “Licensor”), and Scientific Games Corporation, a Delaware corporation, with principal offices at 750 Lexington Avenue, 25th Floor, New York, NY  10022 (hereinafter “Licensee”).

WHEREAS  Licensor has authority to license certain intellectual property rights, such rights being offered as an Intellectual Property Package ("IPP")(defined below);

WHEREAS  Licensee is desirous of obtaining a license to use the intellectual property rights contained in the IPP; and

WHEREAS Licensor is desirous of granting Licensee a license to such IPP.

NOW  THEREFORE,  in consideration of the foregoing, the covenants hereafter set forth, for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1.    DEFINITIONS

(1.1)    "Cashless Gaming System" means a system employing tickets, coupons, tokens, cards or. other instruments of identification to add credits or funds to or from a Gaming Machine in order to eliminate or reduce the use of government issued bills and/or coins.

(1.2)    "End User" means the legally licensed gaming establishments at which Royalty Bearing Products are Placed.

(1.3)        "Gaming Machine" means, (i) slot machines such as those described in NRS 463.0155, .0191, as well as all other gaming devices such as those described in all other relevant provisions of the Nevada Gaming Control Act (NRS Chapter 463), and comparable provisions of other jurisdictions where such machines, devices and terminals are legal, and (ii) other gaming devices including without limitation video lottery terminals, class II and  class III machines as defined by statutes or regulations in other jurisdictions.

(1.4)    "Intellectual Property Package" or "IPP" means the patents set forth on Schedule A attached hereto, as well as any continuations, continuations-in-part, divisionals, reissues, reexaminations, and foreign counterparts thereof.

(1.5)        "IPP Parties" means the owners of, or holders of the right to license, the patents comprising the IPP.

1

(1.6)    "License Fee(s)" means the royalty fee charged pursuant to Section 3.1 and 3.3 of this Agreement.  License Fees do not include Transfer Fees (defined in Section 3.2).

(1.7)    "License Tag" means a physical tag for which a License Fee is paid or payable for display on Royalty Bearing Products.

(1.8)    "Licensed  Cashless Gaming System" means a Cashless Gaming System that has been licensed under the IPP.

(1.9)    "Place,"  "Placed," "Placement" (or any  form  of  the word "Place")  means  any sale,  installation,  lease,  participation  or recurring-revenue,  conversion,  or combination thereof of a Royalty Bearing Product at an End User location.

(1.10) "Royalty Bearing Product(s)" means a Gaming Machine that either alone, or in connection   with   a  Cashless   Gaming   System,   would,   absent   a  license   under  this Agreement, infringe one or more claims of any patent within the IPP.  [*]

* Information has been omitted from this document and filed separately with the Securities and Exchange Commission under a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

2

(1.11)      All references to the "United States" and "Canada" shall include their respective possessions, protectorates and territories.

2.     GRANT

(2.1)   Subject to the limitations in this Agreement, and Licensee's payment of the corresponding  License  Fees, Licensor  grants to Licensee  and its wholly-owned subsidiaries, during the term of this Agreement (subject to Section 4.3), a limited, non­ exclusive,  non-transferable  license,  without  the  right  to  sublicense,  under  the  IPP  to make, use, offer to Place, Place, and have Placed Royalty Bearing Products.   Licensee and  its  wholly-owned   subsidiaries   agrees  that  it  will  incorporate,   verbatim,  those conditions  and  limitations  set  forth  in  Schedule  B  (unless  otherwise  agreed  upon  in writing  by  the  parties)  in  all  of  its  sales  and  lease  agreements  of  Royalty  Bearing Products.  All rights not expressly granted by Licensor are hereby reserved.

(2.2)    Unlicensed  Gaming  Machines.  It is understood and agreed between the parties that with regard to any Gaming Machine for which a License Fee is not paid by Licensee, that such machine is not licensed under the IPP, and that this Agreement and license herein does not extend to any such Gaming Machine.   If Licensee fails to pay a License Fee for a Royalty Bearing Product Licensor may terminate this Agreement (subject to the notice and cure in Section 4.2) and, in any case, Licensee shall not be entitled to correct such infringement by asserting the right to obtain a license under this Agreement.  In the event  Licensee   is  involved   in  any  infringement   action,  whether  involving  patents comprising the IPP or otherwise, Licensee shall not disclose the terms of this Agreement or tender copies of this Agreement or any drafts to any third party, unless compelled to do so  by  law  or by  a requirement  of a regulatory  or other  law  enforcement  agency, provided,  however, that Licensee shall notify Licensor  of the request or requirement so that Licensor  may seek a protective order or take other appropriate  action, and provided further  that if a protective  order or other remedy is not obtained, Licensee will disclose only that portion of this Agreement that is legally required to be disclosed and will use reasonable efforts to obtain reliable assurance that confidential treatment will be accorded such  information.     In  the  event  that  a  court  makes  a  finding  of  infringement,  the minimum  damages for such infringement  are agreed to be [*].

(2.3)    License  Limitations.     Licensee  acknowledges   and  agrees  that  (i)  use  of  an unlicensed  Gaming  Machine  with a licensed  Cashless  Gaming  System or (ii) use of a Royalty   Bearing   Product   with   an  unlicensed   Cashless   Gaming   System   are   both unlicensed  uses  and  that no  rights  or  license  contained  in  this  Agreement  permits  or licenses such use by them or any other person.

* Information has been omitted from this document and filed separately with the Securities and Exchange Commission under a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

3

3.     LICENSE FEES

(3.1)    Computation of License Fee.  Licensee agrees to pay Licensor a License Fee of [*] for each Placement of a Royalty Bearing Product in the United States and Canada unless the Royalty Bearing Product is covered by a license, as evidenced by the License Tag, obtained under Section 3.3.  For each Royalty Bearing Product Placed outside of the United States and Canada, Licensee agrees to pay Licensor a License Fee of [*].

[*]

(3.2)    Transfer   Fee for  Participation   Games.     The licenses   granted hereunder for recurring-revenue Royalty Bearing Products are granted only for a single serial number at a single End User location.   Notwithstanding  this, Licensee shall be permitted to move (from  one End User  location  to another  location  of the same End User) such Royalty Bearing Products that are owned by Licensee and used by Licensee as recurring-revenue products, provided  that Licensee shall remit to Licensor a transfer fee of [*] per such Royalty  Bearing  Product  per  move  ("Transfer   Fee").    A  recurring-revenue   Royalty Bearing  Product  is one which  Licensee  places  in End  User  locations  on  a recurring­ revenue model (e.g. lease or participation) and to which Licensee retains, at all times, title and ownership.

(3.3)    Optional Discount for Prepayment.       In addition to obtaining individual licenses as set forth in the Section 3.1 of this Agreement, Licensee shall have the right but not the obligation  to  obtain  from  Licensor  pursuant  this  Agreement  additional  licenses,  as evidenced  by  License  Tags,  to  Place  Royalty  Bearing  Products  in bulk  lot(s)  of [*] by prepaying in full the Licensee Fee of [*].

The License Fee prepaid by Licensee under this Section 3.3 shall be nonrefundable, and the transfer of the License Tags shall be final.   None of the licenses or License Tags obtained pursuant to this section can be returned for a partial or whole refund of the prepayment amount. License Tags are non-transferable to entities other than End Users. License Tags shall not be transferred without remittance of the License Fee to Licensor. Any transfer of License Tags to any entity other than an End User or without remittance of the License Fee voids the License Tags and is a breach of this Agreement.

Prior to prepaying for a bulk lot, Licensee shall contact Licensor to obtain the method and form of payment and to make arrangements to receive the License Tags.  Licensor shall deliver to Licensee the bulk lot(s) of License Tags within fifteen (15) business days after Licensor's receipt of final payment.   All other terms and conditions of this Agreement apply to the licenses and License Tags, obtained under this section.

* Information has been omitted from this document and filed separately with the Securities and Exchange Commission under a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

4

(3.4)    License Tag.   Licensor shall provide to Licensee a License Tag to be affixed to the Royalty Bearing Products.  Licensee shall promptly affix the License Tag adjacent to the serial number tag on the specified Royalty Bearing Product.   Licensee agrees not to affix a License Tag to any Gaming Machine for which the applicable License Fee is not paid or payable and agrees to affix the supplied License Tag only to the specified Royalty Bearing Product.

(3.5)    Payment  and Reporting  Schedule.   Licensee will pay all License Fees owed to Licensor within fifteen calendar days following the end of the calendar month in which the Royalty Bearing Product was transferred to or Placed, including but not limited to distributors and/or End Users.    All License Fees in this Agreement will be paid by Licensee to Licensor in United States dollars. Any amount due Licensor hereunder that is not paid will thereafter bear interest until paid at a rate of interest equal to the lesser of 18 percent  per  annum  or  the maximum  interest  rate  allowed  by applicable  law.    Within fifteen  calendar  days following  the end of each  calendar  month, and at the same time Licensee  makes  payment  of  the  License  Fees  hereunder,  Licensee  shall  furnish  to Licensor a full and complete statement in an electronic format (which will be provided by Licensor),  duly certified by an officer of Licensee to be true and accurate, showing:   (a) the number of Royalty Bearing Products that Licensee transferred to or Placed, including but not limited to distributors  and End Users, during the calendar month in question; (b) the theme name, License Tag number, and serial number of each such Royalty Bearing Product Placed; (c) the End User and the distributor, if applicable, that purchased each Royalty  Bearing  Product;  (d)  the  End  User  property  at  which  the  Royalty  Bearing Product  was  Placed;  (e)  the  amount  of  License  Fees  due  for  the  reporting  period, including reporting  periods in which no License Fees are due; (f) an inventory count of License  Tags  in  the  Licensee's possession  at  the  end  of  the  reporting  period;  (g)  a certification  that  all  Royalty  Bearing  Product  Placements  included  the  language  in Schedule B of this Agreement; (h) the number  prepaid licenses and associated License Tags used during the period; (i) the number prepaid licenses and associated License Tags remaining  in  Licensee's inventory;  and  (j)  the  number  prepaid  License  Tags  being returned with the report to signify the application of a prepaid license to a subsequent Placement.   In the event that the Licensor identifies Royalty Bearing Products that have been  Placed  for  which  a  License  Fee  has  not  been  paid,  then  Licensor  will  notify Licensee  of (i) the date that such was identified;  (ii) the property at which the Royalty Bearing  Product  is Placed;  and  (iii)  the serial  number  of  each  such  Royalty  Bearing Product;   in which  case Licensee  will be charged  by Licensor, and Licensee  agrees to pay, a surcharge of [*] (the "Surcharge")  in addition to the applicable License Fee. Moreover,  Licensor   reserves  any  and  all  rights  and  remedies  it  may  have  against Licensee.

* Information has been omitted from this document and filed separately with the Securities and Exchange Commission under a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

5

(3.6)    Previously  Placed  Machines.  With  respect  to  any  Gaming  Machine  that  was Placed or transferred by Licensee prior to the Effective Date of this Agreement, for which Licensee  would  have  or  should  have  paid  a  Licensee  Fee  or  paid  a Transfer  Fee  in accordance with the terms of this Agreement, Licensee will provide Licensor with a comprehensive  list of such Gaming Machines  (the "Machines  To Be Licensed")  within 90 days of the execution  of this Agreement.   In return, Licensor will provide Licensee with License Tags for such Gaming Machines and will invoice Licensee the applicable License  Fee under Section 3.3 and/or Transfer Fee under Section 3.2 for such, payable net 30.  Provided that said invoice is paid net 30, then no Surcharges or interest charges will be assessed for such previous placements.  Additionally, as a material obligation of this Agreement, Licensee shall have exactly 90 days from the receipt of the License Tags for the Machines To Be Licensed in which to apply the License Tags to the Machines To Be Licensed and then shall promptly report the timely completion of such to Licensor. Additionally,  with respect  to such application  of License  Tags, Licensee  shall provide written evidence to Licensor that the End User at which each Machine To Be Licensed was Placed has received written notice of the license restrictions pursuant to Schedule B hereof.   For all Machines  To Be Licensed that are licensed pursuant to this Section 3.6, said licenses will cover such Gaming Machines as if they were purchased at the time of original Placement by Licensee- and shall be subject to Schedule B hereof, as well as all other applicable terms and conditions of this Agreement.   If there are no such Machines To Be Licensed, then Licensee shall report this fact, certified by an officer of Licensee, to Licensor within 90 days of the Effective Date of this Agreement.

(3.7)    Taxes.   License Fees, and any other charges described in this Agreement do not include  federal,  state  or  local  sales,  use,  property,  excise,  service,  or  similar  taxes ("Taxes")  now or hereafter levied, all of which shall be for Licensee's  account and shall be paid by Licensee.  If Licensor is required to pay Taxes as a result of this license grant, Licensor shall invoice Licensee for such Taxes.  Licensee hereby agrees to indemnify and hold harmless Licensor for any Taxes and related costs, interest and penalties paid or payable by Licensor.  Licensee shall not be required to pay for any of Licensor's income taxes from Licensee's payment of License Fees.

(3.8)   Field Trials.    For Royalty Bearing Products Placed for field trial purposes, License Fees will be reported and paid as described above.  However, if field trial units are  removed  from  service  or  otherwise  returned  to  Licensee  within  60  days  of  the installation, and no remuneration has been paid by Licensees'  End User for such units, a corresponding credit of the License Fee will be reported and applied against License Fees owed to Licensor.

6

(3.9)    Multi-Player  Devices.    With respect to Sections 3.1 and 3.3 above, for multi­ player gaming products comprising more than one player station, Licensee agrees to pay Licensor a separate License Fee for each player station.  (By way of example, for a multi­ player roulette game which is designed to accommodate up to 5 players, 5 License Fees under Section 3.1 or 3.3 as applicable or [*] respectively shall be paid by Licensee to Licensor.)

4.     TERM AND TERMINATION

(4.1)    Term. Unless terminated  sooner in accordance with this Section 4, Section 7 or Section 8 below, the term of this Agreement  will commence on the Effective Date and will continue in full force and effect until the earlier of (i) the last to expire of the IPP patents  or  (ii)  for  an  initial  term  of  3-years,  and  shall  be automatically  renewed  for additional  1-year periods unless terminated  by one of the parties  in writing at least 30 days prior to the expiration of the then-present term.

(4.2)    Termination.   If Licensee breaches any of its obligations under this Agreement, and fails to cure such breach within 30 days after receiving written notice from Licensor specifying such breach, Licensor may, in addition to any and all other rights and remedies Licensor may have against Licensee, terminate this Agreement as of the date specified in such   notice.   Further,  if  Licensee   brings  any   legal   or  administrative   proceeding challenging  the validity, enforceability,  or non-infringement  of the intellectual  property within  the  IPP,  or  aids  or  assists  in  any  manner  with  the  prosecution  of  any  such challenge, Licensor may, at its option, terminate this Agreement.

(4.3)    End User Rights Upon Termination.   The termination of this Agreement for any reason shall not impair the right of any End User with which Royalty Bearing Products have been Placed prior to such termination, provided that Licensee has paid the License Fee and Transfer Fees, as applicable, to Licensor for such Royalty Bearing Products and provided that the distributor or End User is in compliance with all terms and license restrictions and conditions stated in Schedule B.

(4.4)    No  Refund.    In  the  event  of  termination  of  this  Agreement  for  any  reason, Licensor shall have no obligation to refund any amounts paid to it under this Agreement.

(4.5)    Unpaid  Royalty.    Upon termination of this Agreement, Licensor may, at its option, compel immediate payment of the unpaid License Fees or Transfer Fees for any Royalty Bearing Product Placed during the term of the Agreement.

* Information has been omitted from this document and filed separately with the Securities and Exchange Commission under a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

7

5.    PROPRIETARY RIGHTS

Licensee  acknowledges  that  no  ownership  of  or  title  in  and  to  the  patents  listed  in
Schedule A are conveyed to Licensee.

6.     WARRANTIES

(6.1)    General Warranty.  Each party represents and warrants that it has the right, power and authority to enter into this Agreement and that the persons executing this Agreement have the authority to act for and to bind each respective party.

(6.2)    Further Warranty. Licensor warrants that the IPP Parties have authorized Licensor to grant the license rights described herein. 

7.     REGULATORY LICENSES AND APPROVALS

Performance of this Agreement is contingent on any necessary initial and continuing licenses and approvals from any regulatory authorities having jurisdiction over the parties or the subject matter of this Agreement.

Each party shall promptly apply to the appropriate regulatory authorities for any licenses and approvals, if any, necessary for that party to perform under this Agreement.    Each shall diligently  pursue  its applications  and pay all associated  costs and fees for its application,  and shall  otherwise  cooperate  with  any  requests,  inquiries,  or  investigations   of  any  regulatory authorities or law enforcement agencies in connection with each party, their affiliates, or this Agreement.     If  any  license  or  approval  necessary  for  either  party  to  perform  under  this Agreement  is denied,  suspended,  or revoked,  this Agreement  may be terminated  by the other party for cause pursuant to Section 4 hereof; provided, however, that if the denial, suspension, or revocation  affects  performance  of  the  Agreement  in  part  only,  the  parties  may  by  mutual agreement continue to perform under this Agreement to the extent it is unaffected by the denial, suspension, or revocation.

8.    COMPLIANCE PROGRAM

Each Party acknowledges  that the other conducts business in a highly regulated industry under  privileged  licenses  issued  by  lottery  and  gaming  regulatory  authorities  both domestic and international.   Each Party maintains a compliance program that has been established to protect and preserve the name, reputation, integrity, and good will of the Party and its affiliates and to monitor compliance with the requirements established by gaming regulatory authorities in various jurisdictions around the world.   Performance of this Agreement is contingent upon the following.

a)  Regulatory  Compliance.   Each Party agrees to cooperate with requests, inquiries, or investigations  of  any  lottery  or  gaming  regulatory  authorities  or  law  enforcement agencies  in  connection   with  the  performance   of  this  Agreement,  including  the disclosure of information to such agencies that would otherwise be considered confidential under other sections of this Agreement.  If any approval and/or license necessary for performance  of this  Agreement is denied, suspended, or revoked, this Agreement  shall terminate  immediately  and neither party shall have any additional rights hereunder;  provided,  however,  that  if  the  denial,  suspension,  or  revocation affects performance  of  this  Agreement  in  part  only,  the  parties  may  by  mutual agreement continue to perform under this agreement to the extent it is not affected by the denial, suspension, or revocation;

8

b)  Due Diligence Investigations.  Each Party agrees to fully cooperate with the other in the  completion   of  a  due  diligence  background  investigation  and  to  provide  the information necessary in order to conduct the due diligence background investigation and  any  information   reasonably   necessary   in  order  to  determine  the  continued suitability  of the respective Party throughout  the term of this Agreement.   Payments by Licensee to Licensor under the terms of this Agreement shall not be made until such time as the Licensor has successfully completed a due diligence background investigation of the Licensee.

c)      Maintaining Compliance Approval.   This agreement is contingent upon continued compliance approval.    If either Party receives a written or oral opinion, recommendation  or  indication  from  a  lottery  or  gaming  regulatory  authority (including a representative thereof) or if the Party determines, based upon facts and evidence  that  would  reasonably  be  accepted  by  lottery  or  gaming  regulatory authorities or other licensed gaming entities, that continuation of this Agreement would jeopardize the gaming licenses, permits or status of that Party or any of its affiliates with any gaming regulatory authority or similar law enforcement authority ("Regulatory Development"), if reasonable and appropriate, the Party receiving such notice  may  provide  notice  to  the  other  party  of  the  Regulatory Development, including details of the opinion, recommendation, indication or asserted facts (to the extent  known  by  Licensor),  providing  a  reasonable  timeframe  to  that  Party  to comment on and take action to cure the basis for said Regulatory Development.  If such Regulatory Development is not cured to the other Party's satisfaction, such that a reasonable risk remains that jeopardizes the status of the first Party with any lottery or gaming regulatory authority, said Party may terminate such portion of this Agreement which would cure the Regulatory Development (leaving the remainder of this Agreement in force and effect), and if such can not be effected, may terminate this entire Agreement immediately.

d)  Transfer/Assignment/Changes in Ownership or Control.  The Agreement cannot be transferred or assigned by Licensee without prior notice to Licensor and the successful completion of a background due diligence investigation of the transferee/assignee prior to the transfer or assignment of the Agreement by Licensee.  Prior notice must also be provided to Licensor of any proposed material change in ownership and/or management of Licensee and the successful completion of a background due diligence investigation of the proposed new owner and/or manager must occur prior to the change in ownership or management.

9.     DISCLAIMER

LICENSOR EXPRESSLY DISCLAIMS ALL, AND LICENSEE ACKNOWLEDGES AND AGREES THAT THERE ARE NO WARRANTIES, GUARANTEES, CONDITIONS, COVENANTS OR REPRESENTATIONS PROVIDED UNDER THIS AGREEMENT OR OTHERWISE BY LICENSOR OR THE IPP PARTIES AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OR OTHER ATTRIBUTES, WHETHER EXPRESS OR IMPLIED (IN LAW OR IN FACT), ORAL OR WRITTEN, AND  IN NO EVENT SHALL LICENSOR OR THE IPP PARTIES BE LIABLE TO LICENSEE OR ANY THIRD PARTY FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES.

9

10.    RETENTION OF RECORDS AND AUDIT

(10.1)  Records.   Licensee shall keep at Licensee's principal  office for the term of this Agreement  and for [*] thereafter or for the number of years required by the gaming jurisdictions  under which Licensee operates, whichever term is longer, full and accurate books  of  account  and  copies  of  all  documents  and  other  materials  relating  to  this Agreement,  including, but not limited to all lease or sale agreements of Royalty Bearing Products.

(10.2)  Audit.    Licensee  and  its  wholly-owned   subsidiaries  agrees  to  keep  true  and accurate records for the purpose of making the reports described in Section 3.5 of the Agreement.    Licensor  shall  have  the  right  to  nominate  an  auditor  acceptable  to  and approved  by  Licensee,  which  approval  shall  not be unreasonably  withheld,  who  shall have the right to inspect and make copies of the records (both electronic and hard copy) of Licensee  during  reasonable  business  hours  for the purpose  of verifying  compliance with the reporting  obligations  set forth in Section 3.5 as well as such other books and records (both electronic and hard copy) as are reasonably required to verify Licensee's compliance  with each and every term and condition  of this Agreement.   Licensor shall provide  Licensee  with  no  less  than  2  weeks  written  notice  of  its  intent  to  audit  the Licensee's books  and records as provided  under this Agreement,  and Licensee  and its wholly-owned  subsidiaries  shall be ready for such audit - meaning  that Licensee  shall have all records required hereunder ready for inspection upon the arrival of the audit team and Licensee and its wholly-owned subsidiaries shall also promptly provide additional documentation  as may be reasonably required.  Such notice shall indicate the period to be audited,  the  identity  of  the  auditor  and  the  scope  for  the  audit.    If such audit or examination of Licensee's books and records reveals that Licensee or its wholly-owned subsidiaries have failed to properly account for and pay Licensee Fees owing to Licensor hereunder, such owed amount will bear interest until paid at a rate of interest equal to the lesser of 18 percent compounded 

* Information has been omitted from this document and filed separately with the Securities and Exchange Commission under a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

10

per annum or the maximum interest rate allowed by applicable law.   If:   (i) the unpaid amount exceeds the total amount reported under the reporting  obligations set forth in Section 3.5 by [*] or more in any given year under the Agreement;  (ii) Licensee or its wholly-owned  subsidiaries  are not ready for the audit as outlined herein; (iii) Licensee or its wholly-owned subsidiaries do not timely comply with supplemental  records  requests and audit responses;  or (iv) in the reasonable  opinion of the auditor, Licensee or its wholly-owned  subsidiaries are not cooperating with the audit process, then Licensee will reimburse Licensor for [*].

11.    PATENT MARKINGS

Licensee shall affix to each Royalty Bearing Product a patent marking notice consistent with 35 U.S.C. §287 that identifies all applicable patent numbers.   Licensee also agrees to mark all Royalty Bearing Products with any other applicable proprietary legends as may be reasonably requested  by  Licensor  to  ensure  that  the  rights  under  the  IPP  are  fully  protected  under  all applicable laws.

12.     RELATIONSHIP OF PARTIES

The relationship between the parties under this Agreement is one of licensor-licensee. Nothing in this Agreement shall be construed or interpreted to create a relationship between Licensor and Licensee of partner, joint venturer, principal and agent, or employer and employee.

13.     ASSIGNMENT

This Agreement shall be binding on the parties and their respective permitted successors and assigns.  However, Licensee may not assign or transfer this Agreement or any of its rights or duties hereunder without the prior written consent of the Licensor in Licensor's  sole and absolute discretion; provided, however, that if the entire ownership interest in or business of Licensee is purchased by a third party, or if Licensee merges with a third party, the rights and obligations of the  Licensee  shall  inure  to  the  third  party  or  to  the  entity  formed  by  the  merger  with  the Licensee.    However,  if  such  third  party  is presently  challenging  or  has  ever  challenged  the validity  or  enforceability  of  any  of  the  patents  within  the  IPP  in  a  legal  or  administrative proceeding, then Licensor shall have the right to immediately terminate this Agreement.

* Information has been omitted from this document and filed separately with the Securities and Exchange Commission under a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

11

14.     AMENDMENT/WAIVER

No amendment or waiver of any term or condition of this Agreement will be valid or binding on a party unless the same has been mutually assented to in writing by both parties.  The failure of a party to enforce at any time any of the provisions of this Agreement, or the failure to require at any time performance by the other party of any of the provisions of this Agreement, will in no way be construed to be a past, present or future waiver of such provisions, nor in any way affect the ability of a party to enforce each and every provision thereafter.

15.     GOVERNING  LAW

This Agreement  shall be deemed to be executed  and performed in the State of Nevada and shall  be governed  by and construed  in accordance  with the laws of the State of Nevada, without regard to any conflicts of law provisions, as to all matters, including, but not limited to, matters of validity, enforceability, construction, effect and performance.   Any suit, action or proceeding  between or among the Parties hereto arising out of or related to this Agreement will be brought  solely  in  the federal  or state  courts  in the  State of Nevada,  and Licensee  hereby submits to and irrevocably consents to the personal jurisdiction thereof and agrees to such courts as the appropriate venue.

16.     ATTORNEYS' FEES

In the event of any legal proceeding between the parties arising out of or related to this Agreement, the prevailing party shall be entitled to recover, in addition to any other relief awarded or granted, its costs and expenses including, without limitation, reasonable attorneys' fees and costs incurred in connection with any such proceeding.

17.    SEVERABILITY

If any provision of this Agreement is found or held to be invalid or unenforceable, the meaning of said provision will be construed, to the extent feasible, so as to render the provision enforceable,  and if no feasible  interpretation  shall save such provision,  it will be severed from the remainder of this Agreement,  as appropriate.   The remainder of this Agreement shall remain in full force and effect unless the severed provision is essential and material to the rights or benefits received by either party.  In such event, the parties will use their best efforts to negotiate, in good faith, a substitute, valid  and  enforceable  provision  or agreement,  which most  nearly affects the parties' intent in entering into this Agreement, as appropriate.

18.     CONFIDENTIALITY OF AGREEMENT

The terms and conditions of this Agreement shall be deemed confidential as to Licensee and Licensee shall not reveal said terms and conditions to any third party without the express written consent of Licensor, unless required by law or regulatory authority, in which case Licensee shall promptly notify Licensor so that Licensor shall have the opportunity to seek a protective order, file a motion to quash or seek other appropriate remedy, as applicable.

19.     USE OF LICENSOR'S NAME

Licensee shall not use the name of Licensor in publicity, advertising or similar activity without obtaining the prior written consent of Licensor.

12

20.     ENTIRE AGREEMENT

This Agreement, including any exhibits and attachments referred to herein and attached hereto, each of which is incorporated herein, constitutes the entire agreement between the Parties with respect to the subject matter hereof.  There are no agreements, representations, warranties, promises, covenants, commitments or undertakings other than those expressly set forth herein with respect to the subject matter of this Agreement.  This Agreement supersedes all prior or contemporaneous agreements, representations, warranties, promises, covenants, commitments or undertakings, whether written or oral, with respect to the subject matter contained in this Agreement.  No amendment, modification, change, waiver, or discharge hereof shall be valid unless in writing and signed by an authorized representative of the Party against which such amendment, modification, change, waiver, or discharge is sought to be enforced.

21.     COUNTERPARTS

This Agreement may be signed in counterparts, including by facsimile, each of which shall be deemed an original and which shall together constitute one Agreement.

22.     NOTICE

Any notice, consent, approval,  request, waiver or statement given, made or provided for under  this  Agreement  shall  be  in  writing  and  deemed  to  have  been  duly  given  when  (i) personally delivered or mailed by pre-paid certified or express mail service of the United States postal service, by Federal Express or similar overnight delivery service, with acknowledgement of receipt, fees prepaid, to the Licensee and Licensor as identified at the addresses below, or (ii) if sent by facsimile or e-mail, with an original sent within twenty-four (24) hours by an overnight delivery  service  with  next  day  delivery  to  the  Licensee  and  Licensor  as  identified  in  this Agreement at the addresses set forth below:

To Licensee:                    To Licensor:
Scientific Games                IGT
Attn: William Huntley, President        Attn: General Counsel
          Lottery Systems            6355 South Buffalo Drive
1500 Bluegrass Lakes Pkwy.            Las Vegas, Nevada  89113
Alpharetta, GA  30004

With Copies to:                With Copies to:
Scientific Games                IGT
Attn:  General Counsel            Attn: Vice President, Intellectual Property
1500 Bluegrass Lakes Pkwy.            9295 Prototype Dr.
Alpharetta, GA  30004            Reno, Nevada  89251

13

*****

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers or representatives:

LICENSEE                        LICENSOR
By: /s/ William Huntley                By: /s/ Edwin Soriano
Name: William Huntley                Name: Edwin Soriano
Title: President, SG Lottery Sys            Title: Director - IP Licensing
Date: 11/12/12                        Date: 11-13-12

14

SCHEDULE A

PATENTS COMPRISING THE IPP

	
				
	INVENTOR
	PATENT NO.
	ISSUE DATE
	TITLE

	Dickinson, et al.
	5,265,874
	11/30/1993
	Cashless  Gaming  Apparatus Method

	Bittner,  et al.
	5,290,033
	03/0111993
	Gaming Machine and Coupons

	Raven, et al.
	5,429,361
	7/4/1995
	Gaming  machine  information, communication and display system

	LeStrange, et al.
	5,470,079
	11/28/1995
	Game machine  accounting and monitoring system

	Bums,  et al.
	6,048,269
	4/11/2000
	Coinless  Slot Machine System  and
Method

	Burns,  et al.
	6,729,957
	5/4/2004
	Gaming  method  and host computer with ticket-in/ticket-out capability

	Bums,  et al.
	6,729,958
	5/4/2004
	Gaming  system  with ticket-in/ticket- out capability

	Bums,  et al.
	6,736,725
	5/18/2004
	Gaming  method and host computer with ticket-in/ticket-out capability

	Bums,  et al.
	7,275,991
	10/02/2007
	Slot machine  with ticket-in/ticket- out capability

15

SCHEDULE B

Each gaming machine obtained hereunder with cashless capability (a "Licensed Cashless Gaming Machine") is provided under a limited license to one or more of the following U.S.  Patent Nos.  5,290,033;  5,265,874; 5,429,361;  5,470,079;  6,048,269;  6,729,957;
6,729,958; 6,736,725 and 7,275,991, as well as any continuations, continuations-in-part, divisionals, reissues, reexaminations, and foreign counterparts thereof.   Any use of a
Licensed Cashless Gaming Machine constitutes the acknowledgement of and agreement to the following "Limited License":

1.       Licensed Cashless Gaming Machine License Rights.  Licensed Cashless Gaming Machines are licensed for use solely i) in connection with a cashless gaming system that is separately licensed under these patents (a "Licensed Cashless Gaming System")  or ii) on a stand alone basis (not connected to a  cashless gaming system).   The use of a Licensed Cashless Gaming Machine with an unlicensed gaming system that has cashless capability is an unlicensed use.

		
	2. 
	Other License Limitations.   Each Limited License is expressly limited to the original Licensed Cashless Gaming Machine (i.e., one serial number per license). A license may not be transferred from one gaming machine to another.   Any unauthorized transfer voids this license.

16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00228-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00228-of-00352.parquet"}]]