Document:

Exhibit 10.1

 

*** Confidential Treatment Requested Under 17 C.F.R. Section 240.24b-2.

 

 

DISTRIBUTORSHIP AGREEMENT

 

 

Between

 

“MACHINES GAMES AUTOMATICS, S.A.” (“M.G.A”)

M.G.A. Building - Parc Tecnologic del Valles

C/Fargaires,
1-3

08290 Cerdanyola del Valles (Barcelona)

(hereafter “Distributor”),

 

 

and

 

 

SHUFFLE MASTER GMBH & CO KG

(d.b.a. CARD)

 

duly
organized under the laws of Austria and having its principal place of

business
at Wipplingerstrasse 25, A-1010 Vienna, Austria

(hereafter
“CARD”).

 

 

Date: 17
Mai 2005

 

 

ARTICLE 1

 

DEFINITIONS

 

For purposes of this
Agreement, the following words, terms and phrases, where written with an
initial capital letter, shall have the meanings assigned to them in this Article 1
unless the context otherwise requires:

 

1.1           Products: Shall mean those products of CARD’s or of CARD’s ultimate parent,
Shuffle Master, Inc. (“SMI”) (CARD and SMI are collectively referred to
herein as the “CARD”) listed in Exhibit I attached hereto, which exhibit may
be amended from time to time by the parties.

 

1.2           Territory: Shall mean the countries specifically listed in Exhibit II attached
hereto, but subject to all of the terms and limitations contained herein,
including in Exhibit II, which Exhibit may be amended from time to time
by the parties.

 

1.3           Distribute: For the purpose of this Agreement, Distribute or Distribution shall
mean the sale or lease of Products according to specifications in Exhibits III
and IV.

 

1.4           Distributor Prices: Shall mean the prices then being quoted by
CARD for sales of Products to Distributor, the current Distributor Prices being
set forth in Exhibit III attached hereto.

 

1.5           Company Information: Shall mean all information that is directly
or indirectly disclosed to Distributor by CARD or embodied in Products provided
hereunder regardless of the form in which it is disclosed, relating in any way
to CARD’s markets, customers, Products, patents, inventions, procedures,
methods, designs, strategies, plans, assets, liabilities, costs, suggested
prices, revenues, profits, organization, employees, agents, distributors or
business in general, unless the information was published or was expressly
designated by CARD, in writing, as non-confidential.

 

1.6           Support Services: Shall mean warranty, maintenance and repair
of all Products in the Territory regardless of when placed as well as
continuing customer training and liaison services with respect to the Products.

 

1.7           Support Service Standards: Shall mean that technical support that is available
from Distributor from Monday to Friday during normal business hours, however,
with the added option to reach a Distributor representative twenty-four (24)
hours, seven (7) days a week.

 

1.8           Service Point: Shall mean a minimum of at least one work shop/location
that Distributor sets up in the Territory to service and repair Products.

 

1.9           Retail Prices: Shall mean prices payable by the
customer/end user not including taxes, duties or fees whatsoever.

 

1.10         Control: Shall mean the direct or indirect ownership of more than 50% of the
voting stock of Distributor.

 

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1.11         Initial Contract Year: Shall mean the twelve (12) month period beginning
on the Commencement Date. A “Contract Year” shall be any subsequent twelve (12)
month period.

 

1.12         Affiliates: Shall mean any entities that are controlled by, controlling or under
common control of or with Distributor.

 

1.13         Spare Parts: Shall mean the parts listed in Exhibit V
attached hereto.

 

1.14         Term: Shall mean the period stated in Article 12.1

 

ARTICLE 2

 

APPOINTMENT

 

2.1           Scope: Subject to each of the terms and conditions of this Agreement, CARD hereby
appoints Distributor, and Distributor hereby accepts appointment as CARD’s sole
and exclusive Distributor for the Products in the Territory during the Term,
with the right to distribute Products in the Territory, only under CARD’s name,
logotypes and trademarks, subject to all the terms and conditions of this
Agreement, and provided further that such distributions are only made to lawful
gaming establishments. Distributor’s rights to buy or sell Spare Parts shall be
on a non-exclusive basis and shall only apply during the Term and within the
Territory. Notwithstanding any rights granted to Distributor under this Article 2.1,
CARD shall have all rights under and pursuant to Article 2.3 of this
Agreement.

 

2.2           Distribution outside the Territory: Unless expressly permitted by EU Competition
Defense Regulations, Distributor shall not i) advertise, promote or solicit
customers for Products outside the Territory or establish any offices outside
the Territory through which orders are solicited, ii) set up inventories of
Products or store Products outside the Territory; or iii) make any sales or distributions
of any Products to any customers or subdistributors where Distributor knows or
has a reasonable basis to believe that the Products are either intended for
final distribution outside the Territory or where it is likely that the
Products will be ultimately placed outside the Territory.

 

2.3           Sales by CARD: Notwithstanding any other provision of this Agreement,
in the event that Distributor fails to purchase

 

(i)            at least a quantity of [...***...] products
as set out in Exhibit IV within the first [...***...] period, or 

 

(ii)           at
least a quantity of less than [...***...] of the minimum quantity requirements
but more than [...***...] products as set out in Exhibit IV without any
material reasons, such as in particular but not limited to a lack of necessary
authorisations, licences or approvals by the public authorities or delayed
delivery, for which Distributor may not be held liable, within the first [...***...]
period, or

 

(iii)          at least [...***...] of the minimum quantity
requirements set out in Exhibit IV in any subsequent [...***...] period within
the Term,

 

***Confidential Treatment Requested.

 

3

 

upon written notice to
Distributor, CARD reserves the right to sell Products under CARD’s name, logos
and trademarks directly to those customers in the Territory that request direct
sales from CARD, in which event, after such notice, Distributor shall not
thereafter solicit, sell, lease or distribute any Products to said customers.
Any direct sales by CARD to customers in the Territory shall be credited to
Distributor’s sales for purposes of the minimum quantity requirements set out
in Exhibit IV. In the event of any such sale by CARD under this Article 2.3
where CARD is also hired to perform the service and maintenance of the
Products, then Distributor shall receive five percent (5%) of the actual sales
price received by CARD per Product sold. In the event of any sale by CARD where
CARD is not hired to perform the service and maintenance of the Products, or in
the event of any leasing or licensing by CARD of a Product, then Distributor
shall not be entitled to any compensation or fee whatsoever from CARD, but, in
such latter case, nothing contained herein shall prevent Distributor and
customer from negotiating a service fee which Distributor may earn, but for
which CARD shall not be liable.

 

2.4           Subdistributors: Distributor may, only with the prior written
consent of CARD, appoint one or more subdistributors to promote and/or
distribute Products within the Territory. Each such appointment shall be upon
terms and condition substantially comparable to those set forth in this
Agreement and shall be for a term not to exceed the term of this Agreement as
set forth in Article 12.1 hereof. Notwithstanding such additional
appointments or CARD’s approval thereof, Distributor shall at all times remain
fully liable for the performance of its subdistributors and/or dealers and
hereby agrees to indemnify and hold CARD harmless of all damages, losses, costs
or expenses (including, without limitation, CARD’s attorneys’ fees) arising in
any manner from any act or omission on the part of its subdistributors. CARD
will approve any subdistributor that is an Affiliate and which subdistributor
otherwise meets and otherwise complies with the terms and conditions of this
Agreement. In no event shall CARD be liable for any costs, fees, expenses or
any payments to any subdistributor and Distributor hereby indemnifies and hold
harmless CARD from any and all damages, losses, claims, costs or expenses
(including without limitation, attorneys’ fees) claimed by any subdistributor
in connection with its distribution or sales of any Products. Notwithstanding
any other provision contained herein to the contrary, Distributor shall verify
that, and shall be fully liable and responsible for assuring that any subdistributor
that is approved under this Paragraph 2.4 is fully licensed and qualified with
any gaming regulatory authority or entity in any jurisdiction where said
subdistributor proposes to act. Any such subdistributor shall also comply with
the obligations of Article 3.5 under this Agreement.

 

2.5           Non-Competition: Distributor hereby represents, warrants,
covenants and agrees with CARD that during the term of this Agreement, the Distributor
shall not, without the prior written consent of CARD, sell or otherwise
distribute any automatic video-signal machines based on the Blackjack game that
are the same as or substantially similar to the Product.

 

2.6           [Intentionally Omitted.]

 

2.7           Sales Outside the Territory: Nothing contained in this Agreement shall in
any way prohibit, prevent or hinder CARD, in its sole and absolute

 

4

 

discretion, from selling or
leasing any Products outside the Territory or to Customers inside the Territory
where the Products are intended for installation outside the Territory, at
prices and in a manner that is solely determined by CARD.

 

2.8           Reserved Rights: All rights to the Products not expressly
granted herein to Distributor shall be fully reserved and retained by CARD.

 

ARTICLE 3

 

OBLIGATIONS
AND AGREEMENTS OF DISTRIBUTOR

 

3.1           Marketing: Distributor shall use its best efforts to further the promotion,
marketing and distribution of each of the Products in the Territory. Without
limiting the generality of the foregoing, Distributor shall have the following
obligations with respect to marketing and distribution of each of the Products:

 

(a)           to promote, market and distribute the
Products strictly limited to the Territory. In the best interest of Distributor
and to save Distributor from any claims of third parties, Distributor must
specify in all advertising, promotions, offers and all other activities that the
Products are offered in the Territory only.

 

(b)           to maintain throughout the Territory an
adequate and knowledgeable distribution force employed on a full-time basis promoting
the distribution and support of the Products;

 

(c)           to promote the Products diligently in each
country in the Territory;

 

(d)           to participate actively in sales or
merchandising programs prepared by CARD and to promote and demonstrate the
Products in all fairs and exhibitions in the Territory and to develop and
implement distribution programs for the promotion of the Products, at a minimum,
to promote, show and demonstrate Products during the most important trade shows
in the Territory.. Distributor is solely responsible for costs of such shows
including but not limited to transportation and importation costs.

 

(e)           to maintain an adequate and balanced
inventory of Products and sufficient parts to service the Territory;

 

(f)            to respond promptly to all inquiries from customers,
including complaints, to process all orders and to effect all shipments of Products;

 

(g)           to investigate diligently all leads with
respect to potential customers referred to it by CARD;

 

(h)           to keep CARD fully informed of all inquiries
and orders received by Distributor from customers located outside the
Territory;

 

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(i)            to provide CARD not later than thirty (30)
days from the end of each calendar quarter with a report of its marketing,
distribution, service and installation activities with respect to the Products
sold or leased in the Territory during such quarter, which report shall be in
such form and in such detail as CARD may reasonably require;

 

(j)            to notify CARD of all installations including
customer’s name and installation address within seven (7) days of such
installations;

 

(k)           to provide technical training and casino
staff training to its respective customers with reasonable technical support
and backup from CARD;

 

(l)            to obtain and maintain in good standing all
necessary licenses to allow Distributor to market, store and distribute the
Products in the Territory, and upon CARD’s request, to obtain copies of all
gaming licenses possessed by any customer to whom Distributor sells or leases a
Product;

 

(m)          to notify CARD of any potential or apparent
infringement of CARD’s intellectual property rights related to the Products.
CARD maintains the exclusive right to prosecute any infringement of its intellectual
property, which right CARD shall exercise at its sole discretion;

 

(n)           All regulatory approvals and permissions will
be obtained by Distributor at Distributor’s cost; and

 

(o)           to refrain from making any false or
misleading representations or statements about either CARD or any of the
Products; and further that Distributor shall only make truthful statements
about the Products that are consistent with the CARD’s documentation describing
the Products.

 

3.2           Engineering Contribution. Distributor shall provide a non-refundable
capital investment in the amount of [...***...] payable upon execution of the
Agreement, as well as engineering, testing and translating support services to
be agreed upon by the parties. In return for said capital investment, CARD will
provide to Distributor a discount of [...***...] per unit on the Distributor
Price, for the first [...***...] units of Product purchased from CARD. In the
event, for any reason, Distributor does not
purchase at least [...***...] units of Product, no refund or credit shall be
owed or made to Distributor

 

3.3           Import Documentation: Distributor shall be responsible for
obtaining all permits and satisfying all formalities as may be required to
import the Products into the Territory in accordance with the prevailing laws
and regulations.

 

3.4           Support Services: Distributor shall provide Support Services
to customers in the Territory to whom Products have been delivered in accordance
with CARD’s then current Support Service Standards, and shall at all times
maintain a sufficient staff of personnel fully trained and qualified to perform
such Support Services in the Territory. Further, only Distributor personnel
trained in the proper operation and use of the

 

*** Confidential Treatment Requested.

 

6

 

Products, as provided in Article 4.2
hereof, will provide training to Distributor’s customers in the proper
operation and use of the Products.

 

In order to provide such
Support Services Distributor is bound to establish Service Points for customers
in the Territory. Such Service Point has to carry a sufficient spare part
inventory for which Distributor shall purchase original parts from CARD at
prices set forth in the Spare Parts Price List in Exhibit V of this Agreement,
which price list is subject to change from time to time. In the event that
Distributor performs works on a Product that is still under warranty from CARD,
Distributor shall send the defective part(s) to CARD’s facility in Austria for
confirmation by CARD’s manufacturer that the defect is under warranty. If the
part(s) are under warranty, Distributor shall be provided with replacement
parts; labor costs shall be borne by Distributor. Service Points shall be
manned with technicians or engineers that have been trained by CARD. Training
of such appointed personnel will be provided pursuant to Article 4.2.

 

In the event customers are
required to send defective Products or part(s) to Distributor’s Service Point,
the time between receipt of the defective Product or part(s)and transport back
to the customer shall not exceed 2 business days.

 

3.5           Modifications to Products and CARD’s Right of
Inspection and Certification:
Distributor shall not make any modifications to or reproductions of any
Products or any parts of Products including but not limited to E.P.R.O.M.s
(Electronically Programmable Read Only Memory) without first obtaining the
written approval for such modification and/or reproduction from CARD. Distributor
agrees that CARD may, upon reasonable notice to Distributor, inspect and
certify Products in any location to ensure that Support Service Standards are
complied with in the service and maintenance of Products.

 

3.6           Due Diligence: Distributor shall, prior to entering into
this Agreement, have completed CARD’s due diligence forms to CARD’s sole
satisfaction certifying Distributor’s compliance with relevant gaming laws and
regulations and shall update such forms when reasonably requested to do so by
CARD and at least annually. Notwithstanding any other provisions that may be contained
to the contrary in this Agreement, Distributor acknowledges that CARD’s
business is highly regulated. Accordingly, both prior to and after the execution
of this Agreement, CARD shall have the right, both prior to and after any
execution hereof, to perform due diligence on Distributor or any approved
subdistributor under Article 2.4 as required by any gaming regulators in
those jurisdictions in which CARD is licensed. On an ongoing basis, Distributor
(and any approved subdistributors under Article 2.4) shall be obligated to
fully and reasonably cooperate with CARD related to such due diligence.

 

3.7           Other Agreements of Distributor: In addition to all other agreements and
obligations of Distributor contained herein, Distributor agrees that at all times
it shall be in full and timely compliance with all laws and regulations that
are applicable to it and to its business activities in all countries in the Territory,
and wherever else required to perform its obligations hereunder. Distributor
further agrees that it has the full right, power and authority to enter into
this Agreement, to perform each of its obligations required of it

 

7

 

hereunder, and that such
performance does not violate any agreements that Distributor has with any other
entity nor requires the approval or consent of any third party (other than
applicable regulatory authorities.)

 

ARTICLE 4

 

GERNERAL
OBLIGATIONS OF CARD

 

4.1           Supply of Products:

 

a)             CARD shall use its good faith commercially
reasonable efforts to supply the Products ordered by Distributor.
Notwithstanding the foregoing, CARD reserves the right to allocate its
production of Products at its sole discretion, with the proviso that CARD will provide,
at a minimum, the number of units necessary for Distributor to meet the minimum
sales obligations set out in Exhibit IV. In addition, CARD shall use its
good faith commercially reasonable efforts to supply Distributor with Spare
Parts for all Products covered hereunder at the prices set forth on Exhibit V
attached hereto.

 

b)            CARD will provide Distributor with
demonstration Products as set forth in Exhibit III at no charge EX WORKS
to Distributor during the term of this Agreement, which demonstration Products
shall at all times remain the property of CARD. Upon termination of this Agreement
for whatever reason any demonstration Products provided by CARD to Distributor
that were not previously purchased by Distributor shall be returned to CARD in
proper working order, reasonable wear and tear excepted. Distributor shall
purchase any demonstration Products at the Distributor Prices set forth in
Exhibit III hereto, which have originally been provided to Distributor at no charge,
and which Distributor sells to a third party.

 

c)             Distributor may receive further Products for
demonstration purposes at a current subsidized price as set forth in Exhibit III.
In the event that Distributor subsequently sells such demonstration Products to
a third party, the difference between the subsidized price paid by Distributor
to CARD and the Distributor Price set forth in Exhibit III shall be paid
by Distributor to CARD.

 

4.2           Training: Initially, CARD shall provide sales and Support Service training to a
reasonable number of Distributor’s sales and technical personnel at Distributor’s
facilities in Barcelona. Such training shall last for 5 (five) business days
and all costs for CARD’s employee(s) for travel, accommodation and labor are to
be borne by CARD. Such training shall include the training of Distributor’s
technicians, engineers or maintenance personnel to service the Products in
accordance with the CARD’s Support Service Standards, as well as training for a
reasonable number of Distributor’s personnel in the proper operation and use of
the Products to enable Distributor’s personnel to provide such training to the
Distributor’s

 

8

 

customers. Distributor shall
pay all salaries and all costs for travel, lodging, per diem and related expenses
for its personnel receiving training hereunder. If requested, CARD shall also
provide training to customer’s personnel, including casino staff and
technicians, with customer paying to CARD per diems at EUR 500,— /day, plus all
costs for travel, lodging, and related expenses, per person for CARD’s
personnel providing such training.

 

4.3           Promotional Material: CARD shall furnish Distributor with a reasonable
quantity of CARD’s brochures in English to be used by Distributor in preparing
its own advertising materials. Distributor may not utilize promotional or
advertising materials other than those materials supplied by CARD unless (a) it
has furnished CARD with copies for CARD’s prior review and has received CARD’s
prior written approval to use such materials and (b) any copyright notice
on the original CARD text has been accurately reproduced on Distributor’s
materials. All expenses incurred by Distributor with respect to creating
advertising materials and advertising the Products shall be borne by Distributor.
In addition, CARD will provide Distributor with all of CARD’s camera-ready
artwork and original creative work related to the Products, provided such
artwork and creative work is not subject to any geographic restriction.
Distributor is bound to treat all promotion material diligently and all
promotion material shall stay property of CARD. Further, CARD will provide
Distributor with all of its research findings regarding Product under
appropriate confidentiality agreements and CARD’s marketing representative will
be available at CARD’s office to consult with Distributor regarding such
findings and other strategic issues related to the Products. All of Distributor’s
promotional material must comply with the specific provisions of Article 3.1
(a), so that all material must specifically state that CARD’s Products are only
distributed in the Territory.

 

4.4           Manuals: CARD shall provide Distributor with a reasonable number of manuals for
each model of Products purchased by Distributor hereunder. Such manuals shall
be in English.

 

ARTICLE 5

 

ORDER
FOR PRODUCTS

 

5.1           Purchase Orders: Distributor shall submit purchase orders for
the Products to CARD in writing, whether by registered mail, e-mail or
facsimile. The Purchase order must contain at a minimum the following information:
(a) identification of the Products ordered, (b) quantities, (c) requested delivery
dates, and (d) shipping instructions and shipping address in the Territory.
All orders shall be accompanied by irrevocable letters of credit, suitable in
form and substance, in CARD’s sole discretion.

 

5.2           Acceptance of Orders: All purchase orders from Distributor are subject
to acceptance in writing by CARD at its principal office in Vienna, Austria,
which acceptance shall be delivered by registered mail, e-mail or facsimile.
Each purchase order shall be deemed to be an offer by Distributor to purchase
the Products pursuant to the terms of this Agreement and, when accepted by CARD
as hereinabove provided, shall give rise to a contract under the terms set
forth herein to the exclusion of any additional

 

9

 

or contrary terms set forth
in Distributor’s purchase order or any other document not signed by the
parties.

 

5.3           Modification of Orders: No accepted purchase order shall be modified
or cancelled except upon written statement of CARD. Mutually agreed change
orders shall be subject to all provision of this Agreement, whether or not the
change order so states.

 

5.4.          Delivery Terms: All deliveries and Products shall be EX
WORKS. For purposes of this Agreement, EX WORKS shall be construed in
accordance with INCOTERMS 2000 of the International Chamber of Commerce. CARD
shall have no further responsibility for the Products, and all risk of damage
or loss or delay of the Products shall pass to Distributor, upon their delivery
at the EX WORKS point to a common carrier specified by Distributor or, in case
that no carrier shall have been specified by Distributor on or before fifteen
(15) days prior to the requested shipment date, a common carrier selected by
CARD. At the time this Agreement is executed, the EX WORKS point is in
Illinois, USA. Distributor shall be responsible for all shipping and
import/export taxes and costs, as set forth in Article 7.1. CARD reserves
all rights with respect to the delivered Products permitted by applicable law
including, without limitation, the rights of rescission, repossession, resale
and stoppage in transit until the full amount due from Distributor has
been paid. Legal ownership title to a Product shall be retained by CARD until
Distributor shall have paid the respective Product’s purchase price in full
(including such Product’s delivery and installation). Distributor is obliged to
state the retention of title in its books. All deliveries by CARD should be
within 12 weeks or earlier. In the event of an extended delivery time the CARD
shall notify the Distributor of the delay within 3 weeks of receiving the
order.

 

5.5           Product Changes: CARD reserves the right, in its sole
discretion and without incurring any liability to Distributor, to (a) alter
the specifications for any Products; (b) discontinue the manufacture of
any Products; (c) discontinue the development of any new product, whether or
not such product has been announced in public, or (d) commence the
manufacture and sale of new products having features which make any Products
wholly or partially obsolete, whether or not Distributor is granted any
distribution rights in respect of such new products. Notwithstanding the above,
CARD shall use its good faith efforts to provide Distributor with information concerning
any such altered or discontinued Products for which manufacturing and
commercial deliveries have commenced. CARD shall provide prior notice of 90
days to Distributor for any product changes.

 

5.6           Forecasts: Distributor agrees to provide CARD with a twelve (12) month forecast
indicating Distributor’s intended purchases of Products during each calendar
quarter of such period. Such forecast shall be updated by Distributor on a
rolling basis for a new twelve (12) month period, which updated forecast shall
be received by CARD no later than thirty (30) days prior to the first day of
each succeeding calendar quarter. Such rolling forecasts by Distributor shall be
used for purposes of facilitating Distributor’s and CARD’s marketing and
regulatory product approval plans and in order to meet the lead times required
by certain of CARD’s suppliers. All forecasts provided by Distributor are
intended for planning purposes only and shall not constitute a purchase order
from Distributor to CARD.

 

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ARTICLE 6

 

PRICES
AND PAYMENTS

 

6.1.          Prices: Except as provided in Article 6.2 below, the prices to be paid by
Distributor for Products pursuant to this Agreement shall be the Distributor
Prices in effect at the time of acceptance of the relevant purchase order
submitted by Distributor. The actual price list at the time of concluding this
Agreement is attached hereto in Exhibit III.

 

6.2           Price Changes: CARD may, at any time during the term of
this Agreement increase its prices for the Products and/or the Spare Parts by providing
Distributor with at least sixty (60) days prior written notice. Increases in
prices for all Products shall not apply to purchase orders accepted prior to
the effective date of the price increase. Price decreases shall be effective
immediately upon written notice to Distributor on all such Products not yet
delivered.

 

6.3           Payment Terms: All payments due CARD hereunder shall be
paid by Distributor within 60 days of invoice date.

 

6.4           Retail Price: Upon the delivery of the Products to
Distributor, CARD shall provide Distributor with a list of suggested Retail
Prices for each of the Products. Distributor may nonetheless resell or lease the
Products at such prices as Distributor, in its sole discretion, shall
determine. Distributor shall, however, provide CARD with the initial suggested
Retail Prices for the Products to be charged to its customers and shall keep
CARD fully informed by providing CARD with any new list prices within ten (10) days
of any change in such list prices.

 

ARTICLE 7

 

TAXES

 

7.1           All deliveries of Products shall be EX WORKS.
Distributor shall be responsible for and shall pay or reimburse CARD for all
taxes, fees, duties, import deposits, assessments and other governmental
charges, however designated, under this Agreement, associated with the
performance by CARD of its obligations hereunder, the payment of any amounts by
Distributor to CARD pursuant to this Agreement, or based on the Products or
their use or import into the Distributor Territory, which are now or hereafter
imposed under or by any governmental authority or agency in or for the
Distributor Territory. Distributor shall be responsible for providing all required
governmental notifications.

 

ARTICLE 8

 

ACCEPTANCE
AND WARRANTY

 

8.1           Acceptance of Products: Distributor shall conduct any incoming
acceptance tests immediately upon arrival of the Products at the shipping

 

11

 

address in the Distributor
Territory, but in no event later than seven (7) days from the date of
receipt. Any Products not rejected by Distributor by written notice to CARD
within such period shall be deemed accepted. In case of any shortage, damage or
discrepancy in or to a shipment of Products, Distributor shall promptly notify
CARD and furnish such written evidence or other documentation as CARD may deem
appropriate. If the substantiating evidence delivered by Distributor
demonstrates to the CARD’s satisfaction that such shortage, damage or
discrepancy existed at the time of delivery of the Products at the EX WORKS
point, CARD shall promptly deliver additional or substitute Products to
Distributor in accordance with the delivery procedures set forth herein;
provided that in no event shall CARD be liable for any additional costs,
expenses or damages incurred by Distributor directly or indirectly as a result
of such shortage, damage or discrepancy in or to a shipment.

 

8.2           Warranty: The Products sold by CARD to Distributor shall be free from defects in
material and workmanship by CARD for a period of three hundred sixty five (365)
days from the date of delivery to Customer. In the event of a breach of such
warranty, CARD’s sole obligation to Distributor shall be, at no charge to
Distributor, to either replace or repair defective Products or product parts.
CARD shall not have any responsibility or bear any liability for the cost of
labor for the removal of defective parts or the installation of replacement
parts. The non-product costs associated with the warranty such as cost of
shipment of the defective, repaired or replacement parts will not be borne by
the Distributor. Expenses for transport of Spare Parts for repair or
replacement covered by the warranty and during the warranty period shall be
borne by CARD. CARD expressly excludes all responsibility for warranty claims
by customer. Any rights that Distributor may have, pursuant to section 933b
Austrian Civil Law Code, are expressly excluded and waived by Distributor.

 

In the event Distributor is
unable to repair a defective Product under warranty by replacement of defective
parts, CARD shall send technical staff to the place where the Product is
located in order to repair said Product “in situ” within seven (7) days of
a request by Distributor, at CARD’s sole expense.

 

8.3           Limited Warranty: THE WARRANTIES SET FORTH IN SECTION 8.2
ABOVE ARE INTENDED SOLELY FOR THE BENEFIT OF DISTRIBUTOR. ALL CLAIMS HEREUNDER
SHALL BE MADE BY DISTRIBUTOR AND MAY NOT BE MADE BY DISTRIBUTOR’S
CUSTOMERS. THE LIMITED WARRANTIES SET FORTH ABOVE ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, BY STATUTE OR OTHERWISE, ALL OF WHICH ARE
HEREBY DISCLAIMED AND EXCLUDED BY CARD, INCLUDING WITHOUT LIMITATION ANY WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE AND ALL OBLIGATIONS
OR LIABILITIES ON THE PART OF CARD FOR DAMAGES ARISING OUT OF OR IN
CONNECTION WITH THE USE, REPAIR OR PERFORMANCE OF THE PRODUCTS.

 

8.4           Excluded Claims: CARD shall have no obligation under any
warranty in the event that:

 

(a)           repair or replacement of any Products shall
have been required by normal wear and tear or necessitated in whole or in part
by events

 

12

 

attributable to force majeure
or the negligence of Distributor or its customers;

 

(b)           the Product shall have been modified in any
manner without prior written consent of CARD;

 

(c)           the Product shall not have been maintained or
used in accordance with CARD’s applicable operating and/or maintenance manuals,
whether by Distributor or its customer;

 

(d)           [...***...]

 

(e)           damages or defects resulting from improper
handling and/or non-usage of the original packing and the applicable packing
instruction.

 

ARTICLE 9

 

LIMITATION
OF REMEDIES 

 

9.l            Delay: CARD shall not be liable for any loss or damage caused by delay in
furnishing Products and services or any other performance under or pursuant to
this Agreement, provided however, that Distributor acting reasonably may cancel
any order if delivery terms are not met by CARD.

 

9.2           Sole Remedies: CARD shall not be liable for any damage
caused by slight negligence. The sole remedies for breach of any and all
warranties and the sole remedies for CARD’s liability of any kind (including
liability for negligence) with respect to the Products and services covered by this
Agreement and all other performance by CARD under or pursuant to this Agreement
shall be limited to the remedies provided in Article 8.2 above, subject,
however, to the further limitation of Articles 8.3, 8.4 and 9.3 hereof.

 

9.3           Consequential Damages: In no event shall CARD’s liability of any
kind to Distributor include any special, indirect, incidental or consequential
losses or damages (including without limitation, any lost profits of Distribuor
or of Distributor’s customers), even if CARD shall have been advised of the possibility
of such potential loss or damage.

 

ARTICLE 10

 

CONFIDENTIALITY

 

10.1 Non-Disclosure:
Distributor acknowledges and agrees that all Company Information is confidential
and proprietary. Distributor agrees not to use the Company’s Information during
the term of this Agreement and for a period of five (5) years thereafter
for any purpose other than as permitted or required for performance by
Distributor hereunder. Distributor further agrees not to disclose or provide
any of such Company Information to any third party and to take all necessary
measures to prevent any such disclosure by their respective present and future
employees, officers, Affiliates, subdistributors or consultants during the term
of this Agreement and for the period of five (5) years thereafter. Nothing
in this non-disclosure

 

*** Confidential Treatment Requested.

 

13

 

alters the treatment of any
information exchanged pursuant to any prior Non-Disclosure Agreement between
CARD and Distributor.

 

10.2         Limitations to Non-Disclosure: Nothing herein shall prevent Distributor
from using, disclosing or authorizing the disclosure of any Company Information
to the extent such Company Information:

 

(a)           was already in the possession of Distributor
prior to its receipt from CARD; provided, that Distributor shall promptly
notify the other of such prior possession and shall provide the other with reasonable
documentary proof thereof;

 

(b)           is or becomes part of the public domain by
reason of acts not attributable to the party bound by this confidentiality;

 

(c)           is or becomes available to the other from a
source other than Distributor which source has rightfully obtained such information
and has no obligation of non-disclosure or confidentiality to the other with
respect thereto;

 

(d)           is made available by CARD in the case of
Company Information to a third party unaffiliated with the other on an
unrestricted basis; or

 

(e)           if Distributor is obligated by law or
regulation to disclose any Company Information.

 

ARTICLE 11

 

TRADEMARKS

 

11.1         Limited Grant: CARD grants Distributor a non-exclusive, non-
transferable, and royalty-free right to use the CARD trademarks indicated on Products
specified in Exhibit I attached hereto and such other trademarks as CARD may
inform Distributor in writing from time to time, in connection with the sale or
other distribution, promotion, advertising and/or maintenance of the Products
in accordance with CARD’s standards and instructions. Distributor shall acquire
no right, title or interest in such CARD trademarks, other than the above
license, and Distributor shall not use any CARD trademarks as part of
Distributor’s corporate or trade name or permit any third party to do so
without prior written consent of CARD. Distributor is obliged to use CARD’s
trademarks on the Products and in all its brochures and publications whatsoever
in reasonable size and position.

 

11.2         Termination of Use: Distributor acknowledges CARD’s proprietary rights
to all existing trademarks and logotypes and to all trademarks and logotypes of
the CARD developed during the term of this Agreement. Distributor shall not
adopt, use or register any words, phrases or symbols that are identical to or
confusingly similar to any of CARD’s trademarks. Upon termination of this
Agreement, Distributor shall cease using the CARD trademarks.

 

14

 

ARTICLE 12

 

TERM
AND TERMINATION

 

12.1         Term: Except and to the extent otherwise specifically provided herein, this
Agreement shall take effect fourteen (14) days after Distributor’s receipt of
the approval of the Product for the Territory issued by the responsible official
LAB in Barcelona (the “Commencement Date”) and shall continue in force for a
period of twelve (12) months. Thereafter, this Agreement shall automatically
renew for subsequent periods of twelve (12) months, unless either of the
parties to this Agreement gives written notice of non-renewal at least two
months prior to the expiration of any twelve-month period.

 

12.2         Termination: Notwithstanding the provisions of Article 12.1
above, this Agreement may be terminated in writing in accordance with the following
provisions:

 

(a)           Either party may terminate this Agreement by
giving written notice to the other party in the event the other party is in
material breach of any provision of this Agreement and shall have failed to
cure such breach, if the breach itself is in fact curable, within thirty (30)
days of receipt of written notice thereof from the first party;

 

(b)           Either party may terminate this Agreement at
any time by giving notice to the other party, which notice shall be effective
upon receipt by the party to which notice is given, should the other party file
a position of any type as bankruptcy, be declared bankrupt, become insolvent,
make an assignment for the benefit of creditors, go into liquidation or
receivership or otherwise lose legal control of its business, or should the
other party or a substantial part of its business come under the control of a
third party;

 

(c)           Either party may terminate this Agreement by
giving notice to the other if the non-terminating party takes any action or
fails to take any action which jeopardizes any of the terminating party’s licenses
and/or approvals in any licensing jurisdiction wherever located; or if any governmental
agency takes any action against the non-terminating party which governmental action
jeopardizes any of terminating party’s licenses and/or approvals in any licensing
jurisdiction or in the event that Distributor (or any approved subdistributor
under Paragraph 2.4) takes any action or fails to take any action that
jeopardizes any of the CARD’s gaming licenses, approvals or permits, or in the
event that the CARD’s relationship with Distributor (or any approved
subdistributor under Paragraph 2.4) in any way jeopardizes or puts at risk any
of the CARD’s existing, pending or future gaming licenses, approvals or
permits.

 

(d)           In the event Distributor fails to purchase at
least [...***...] of the minimum quantity requirements as provided for under Section 2.3.
and/or the quantity of Products listed on Exhibit IV per contract year at
the prices set forth on Exhibit III.

 

(e)           CARD may terminate this Agreement by giving
thirty (30) days notice in case Distributor fails to effect payments to CARD in
a timely manner as required by this Agreement.

 

***Confidential Treatment
Requested.

 

15

 

(f)            Only to the extent permitted by EU
Competition Defense Regulations, CARD may terminate this Agreement by giving
thirty (30) days written notice to Distributor in the event Distributor
markets, sells, promotes, or is otherwise involved in the sale of any Products
outside the Territory.

 

(g)           In the event that Distributor has not
obtained () the approval of the Product for the Territory issued by the
responsible official LAB in Barcelona by October 1, 2005.

 

12.3         Rights and Obligations on Termination: In the event of termination of this
Agreement for any reason, the parties shall have the following rights and
obligations:

 

(a)           Termination of this Agreement shall not
release either party from the obligation to make payment of all amounts then or
thereafter due and payable, nor shall any such termination prevent or restrict
the terminating party from pursuing all of its rights and remedies against the
terminated party for any breaches of this Agreement by the terminated party;

 

(b)           CARD shall have the right, at its option, to (i) cancel
any or all accepted purchase orders which provide for delivery after three (3) months
from the effective date of termination, and/or (ii) repurchase any part or
all of Distributor’s inventory of Products in Distributor’s possession as per
termination date at CARD’s invoiced price to Distributor for such Products,
less an appropriate amount for wear and tear. CARD shall exercise its option
under this subsection by notifying Distributor in writing no later than
sixty (60) days after the effective termination date. In no event shall CARD’s option
to purchase be at a price in excess of 50% of the original price charged to
Distributor on such Products elected to be purchased. In case CARD does not
exercise its option in accordance with this paragraph, Distributor may dispose
of the Products only within the Territory;

 

(c)           Distributor’s and CARD’s obligations pursuant
to Article 10 shall survive termination of this Agreement. No other of
CARD’s obligations hereunder shall survive termination of this Agreement.

 

(d)           CARD may terminate this Agreement in the
event Distributor fails to purchase the minimum quantity of Products required
pursuant to Article 12.2 (d), but neither party shall be entitled to any
compensation or indemnification whatsoever solely as a result of a termination
pursuant to 12.2 (d).

 

12.4         No Compensation: In the event that CARD terminates this
Agreement for any reason in accordance with the terms hereof, the parties
hereby agree that, subject to the provisions of Article 12.3(a) hereof
and without prejudice to any other remedies which either party may have in
respect of any breach of this Agreement, Distributor shall not be entitled to
any compensation,

 

16

 

break-up fee, severance fee
or other like payment from CARD as a result of such termination, and
Distributor expressly waives any entitlement hereto.

 

12.5 Return of Materials
Upon Termination: All trademarks, tradenames, patents, copyrights, designs,
drawings, formulas or other data, photographs, samples, literature and sales
aids of any kind provided to Distributor by CARD shall remain the property of
CARD. Within thirty (30) days after any termination of this Agreement,
Distributor will prepare all such items in its possession for shipment, as CARD
may direct, at CARD’s expense. Distributor will not make, use, dispose of, or
retain any copies of any confidential items or information that may have been
entrusted to it. Effective upon termination of this Agreement, Distributor will
cease to use all trademarks, marks and tradenames of CARD.

 

ARTICLE 13

 

DISPUTES
AND GOVERNING LAW

 

13.1         Disputes: Any dispute, controversy, or claim arising out of or relating to this
Agreement, or the breach, termination or invalidity thereof, shall be finally
settled by arbitration in accordance with the Rules of Arbitration of the
International Chamber of Commerce, by a panel of three (3) arbitrators appointed
in accordance with said Rules. The place of arbitration shall be Vienna,
Austria. The arbitration shall be conducted in the English language. Any
judgment upon the award rendered by the arbitrator may be entered into and
enforced in any court having jurisdiction over the party against whom such
award was rendered.

 

13.2         Governing Law: This Agreement shall be governed by and
construed in accordance with Austrian law with the exception of the Austrian
conflict of law rules.

 

ARTICLE 14

 

MISCELLANEOUS

 

14.1         Relationship: This Agreement does not entitle either party
to be the employee, partner, joint venturer, agent, fiduciary or legal
representative of the other for any purpose whatsoever. Neither party is
granted any right or authority to assume or to create any obligation or
responsibility express or implied, on behalf of or in the name of the other
party. In fulfilling its obligations pursuant to this Agreement, each party
shall be acting as an independent contractor.

 

14.2         Assignment: Neither party shall have the right to assign or otherwise transfer its
rights and obligations under this Agreement except with the prior written
consent of the other party; provided, however, CARD shall be entitled to assign
any or all of its rights and obligations hereunder to any of its subsidiaries,
affiliates, successors or assigns. Any attempted assignment in violation hereof
shall be null and void.

 

14.3         Notices: Notices permitted or requested to be given hereunder shall be deemed
sufficient if sent by (a) registered or certified air mail, postage prepaid,
(b) on international-recognized courier service, such as Federal

 

17

 

Express or DHL, addressed to
the respective addresses of the parties as first above written or at such other
addresses as the respective parties may designate by like notice from time to
time or (c) sent by facsimile during business hours in the recipient’s
time zone to the last-known telefax number of the party with a confirmation
copy sent the same business day by registered mail or international courier.
Notice given by certified mail or international courier shall be effective upon
receipt by the party to which notice is given. All notices sent by facsimile
shall be deemed received on the date transmitted, provided the sending party’s
facsimile machine does not produce a transmission fault.

 

14.4         Entire Agreement: This Agreement, including Exhibits I to V
attached hereto and incorporated as an integral part of this Agreement,
constitutes the entire Agreement of the parties with respect to the subject
matter hereof and supersedes all previous proposals, oral or written, and all
negotiations, conversations or discussions heretofore held between the parties
related to the subject matter of this Agreement, including, without limitation,
the Distributorship Agreement between CARD’s predecessor entity and Distributor.

 

14.5         Amendment: This Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by written
agreement signed by the parties.

 

14.6         Severability: In case that any of the terms of this
Agreement are in conflict with any rule of law or statutory provision or are otherwise
unenforceable under the laws or regulations of any government or subdivision
thereof, such terms shall be deemed not part of this Agreement, but such invalidity
or unenforceability shall not invalidate any of the other terms of this
Agreement and this Agreement shall continue in force or, where this is not
possible, the invalid or unenforceable term shall be replaced by a valid and
enforceable provision with the same or similar meaning.

 

14.7         Waiver: No failure by either party to take any action or assert any right hereunder
shall be deemed to be a waiver of such right in case the continuation or
repetition of the circumstances giving rise to such right.

 

14. 8        Language: English shall be the governing language of this Agreement.

 

18

 

IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed on the date first written
above.

 

 

	
  SIGNED by

  	
  /s/ JAIME RIVERA

  	
   

  	
  SIGNED by

  	
  /s/ ERNST BLAHA

  	
   

  	
   

  
	
   

  	
  JAIME RIVERA

  	
   

  	
   

  	
  ING.ERNST
  BLAHA

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATE

  	
   17 May, 2005

  	
   

  	
   

  	
  DATE

  	
   17 May, 2005

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Duly
  authorized signatory 

  	
   

  	
  Duly
  authorized signatory 

  	
   

  
	
  For and
  behalf on

  	
   

  	
  For and
  behalf on

  	
   

  
	
  Machines
  Games Automatics, B.A.

  	
   

  	
  SHUFFLE
  MASTER GmbH & Co KG

  	
   

  
	
  (“Distributor”)

  	
   

  	
  (“CARD”)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  in the
  presence of:

  	
   

  	
  in the
  presence of:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ JAVIER
  PUIG ORTIZ

  	
   

  	
   

  	
  /s/ SABINE
  GROHMANN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Witness
  Signature

  	
   

  	
  Witness
  Signature

  	
   

  
	
  Name

  	
  JAVIER PUIG
  ORTIZ

  	
   

  	
   

  	
  Name

  	
  SABINE
  GROHMANN

  	
   

  	
   

  
	
  Address

  	
  [ILLEGIBLE]

  	
   

  	
   

  	
  Address

  	
   

  	
   

  	
   

  
	
  [ILLEGIBLE]

  	
   

  	
   

  	
  [ILLEGIBLE]

  	
   

  	
   

  
	
  [ILLEGIBLE]

  	
   

  	
   

  	
  [ILLEGIBLE]

  	
   

  	
   

  
	
  Occupation

  	
  Legal
  Advisor

  	
   

  	
   

  	
  Occupation

  	
  Executive
  Assistant

  	
   

  	
   

  
																				

 

19

 

EXHIBIT I

 

PRODUCTS

 

1.             Table Master Multi-player Platform Base Unit

 

2.             [...***...]
for Table Master Multi-player Platform

 

***
Confidential Treatment Requested.

 

20

 

EXHIBIT II

 

TERRITORY

 

All legal gaming customers
in SPAIN with the exception of licensed casinos.

 

Distributor represents and
warrants that it holds all relevant licences, to qualify as Distributor for the
Products in the Territory. In the event Distributor is not licensed, fails to
be licensed or loses a license necessary to qualify as a lawful Distributor
inside the Territory or any part of it and, further, fails to nominate a
licensed subdistributor, such Territory automatically discontinues to be
Territory within a period of sixty (60) days and CARD is free to distribute
directly or assign the territory to another distributor.

 

21

 

EXHIBIT III

 

PRICES

 

Table
Master Multi-Player Platform

 

	
   

  	
   

  	
   

  	
   

  	
  MGA

  
	
   

  	
   

  	
   

  	
   

  	
  SUGGESTED

  
	
  BASE UNIT

  	
   

  	
  DISTRIBUTOR PRICE

  	
   

  	
  Resale PRICE

  
	
  [...***...]

  	
   

  	
  [...***...]

  	
   

  	
  [...***...]

  

 

All PRICES QUOTED IN [...***...]

 

ALL UNITS ARE SHIPPED EX WORKS SHIPPING POINT

 

SUBJECT TO APPLICABLE SHIPPING/HANDLING,
SALES TAX, CUSTOM DUTIES, ETC. ALL OF WHICH TO BE PAID BY DISTRIBUTOR

 

The machine price should
include Coin Configuration and Bill Validators for the ordered currency and all
parts that are part of the Base unit as reflected on the BOM, provided
separately.

 

***Confidential Treatment Requested.

 

22

 

EXHIBIT IV

 

DISTRIBUTOR’S
MINIMUM QUANTITY PERFORMANCE OBLIGATIONS FOR THE PRODUCTS AT DISTRIBUTOR PRICES
SET FORTH ON EXHIBIT III FOR EACH CONTRACT YEAR OF THIS AGREEMENT

 

	
  PRODUCT

  	
   

  	
  1.-12. months 

  as of 

  Commencement 

  Date

  	
   

  	
  13.-24. months 

  as of 

  Commencement 

  Date

  	
   

  	
  25.-36. months 

  as of 

  Commencement 

  Date

  
	
  Table Master Platform

  	
   

  	
  [...***...]

  	
   

  	
  [...***...]

  	
   

  	
  [...***...]

  

 

Minimum Quantity Performance
for the following contract years to be negotiated and agreed by the parties in
time.

 

In the event Distributor
purchases [...***...] of the minimum quantity within a Contract Year, the
Distributor Price will be reduced [...***...]. ([...***...]).

 

In the event Distributor
purchases [...***...] of the minimum quantity within a Contract year, the
Distributor Price will be reduced [...***...]. ([...***...]).

 

In the event Distributor
purchases [...***...] of the minimum quantity within a Contract Year, the
Distributor Price will be reduced [...***...]. ([...***...]).

 

Any reimbursement for the
above referenced price reductions will be made at the end of each contract year
of this Agreement.

 

Nothing in
this Exhibit IV shall modify the provisions of Article 12 of the
Agreement.

 

*** Confidential Treatment Requested.

 

23

 

EXHIBIT V

 

SPARE PARTS

 

[...***...]

 

*** Confidential Treatment Requested.

 

24Exhibit 10.01

 

Cascade
Natural Gas Corporation

 

Board
of Director Orientation and Continuing Education Policy

 

The Company shall
maintain an orientation program designed to familiarize new Directors with the
Company, its management structure and operations, the industries in which the
Company operates, and key regulatory, financial, and operational issues. 
Directors shall be provided with information regarding corporate governance and
the structure and procedures of the Board and the committees on which the
Directors will serve. Director Orientation will be held
promptly (and at least within three months) following any new director’s
appointment or election to the Board. The program will provide an understanding
of the Company, its business, operations, and key personnel, and it may consist
of management presentations and other reference materials, and programs
describing the Company’s markets, competitive position and strategies,
significant financial, accounting and risk management issues, compliance programs
and Ethics Policy.

 

In
addition, Directors may attend educational programs designed to enable them
better to perform their duties and recognize and deal with various issues that
may arise during their tenure as directors.  
Directors shall be encouraged to attend appropriate Company and external
continuing director education programs to help them stay current on corporate
governance, best Board practices, financial and accounting practices, ethical
issues for directors and management, and similar matters relating to their
Board positions.  Continuing education relating to the Company’s business
matters shall occur regularly.

 

External Continuing Education, including expenses for materials and
travel, obtained through board education programs at universities and elsewhere
will be paid by the Company at up to $1,000 per fiscal year.  Attendance through a local program is
preferred.  The Chair of the Governance,
Nominating and Compensation Committee may approve reimbursement greater than
$1,000 per year.

 

Internal
Continuing Education through Company meetings or orientations shall be
compensated at the same rate as attendance at a Board meeting.

 

 

September 13, 2005

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