Document:

Exhibit 10.1

 

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

 

PATENT PURCHASE AGREEMENT

 

This
Patent Purchase Agreement (this “Agreement”)
is made and entered into as of June 13, 2005 (the “Effective
Date”), by and between IGT (together with each of its affiliates
and wholly owned subsidiaries “IGT”), a
Nevada corporation, and Shuffle Master, Inc. (together with each of its
affiliates and wholly-owned subsidiaries “SMI”), a
Minnesota corporation.

 

1.0                   Definitions.

 

1.1                   “Alcorn Patents”  means all patents and
patent applications identified on Exhibit A as Alcorn patents or
applications, and all patents in the same Patent Family as any of the
foregoing.

 

1.2                 “ENPAT Patents”  means all patents and
patent applications identified on Exhibit A as ENPAT patents or
applications, and all patents in the same Patent Family as any of the
foregoing.

 

1.3                   “Fishbine Patents”  means all patents
and patent applications identified on Exhibit A as Fishbine patents or
applications, and all patents in the same Patent Family as any of the
foregoing.

 

1.4                   “Patent Family” means, with respect to a patent or
patents, and/or a patent application or applications (the “Reference
Patents or Applications”), (a) any and all reissues,
reexaminations, continuations, continuations-in-part, divisionals, and foreign
counterparts thereof (“Derived Patents”);
(b) any patents which issue from or claim a priority date to the Reference
Patents or Applications or the Derived Patents (“Daughter
Patents”); (c) any and all patents, patent applications or
provisional applications from which the Reference Patents or Applications, the
Derived Patents or the Daughter Patents claim priority directly or through
another patent or patent applications (“Grandparent/Parent
Patents or Applications”); (d) any and all reissues,
reexaminations, continuations, continuations-in-part, divisionals, and foreign
counterparts of the Grandparent/Parent Patents or Applications; (e) any
patents which issue from or claim a priority date to the Grandparent/Parent
Patents or Applications (“Sister Patents or
Applications”); (f) any and all reissues, reexaminations,
continuations, continuations-in-part, divisionals, and foreign counterparts of
the Sister Patents or Applications; and (g) any patents which issue from or
claim a priority to the Sister Patents or Applications.

 

1.5                   “PGIC”
means Mikohn Gaming Corporation, a Nevada corporation doing business as
Progressive Gaming International Corporation.

 

1.6                   “PGIC
Scope of Product” shall have the meaning set forth in the
Three-Party Agreement.

 

1.7                   “Purchased
Patents” means the ENPAT Patents, the Schubert Patents, and the
Fishbine Patents.

 

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1.8                   “RFID”
means radio frequency identification.

 

1.9                   “Schubert Patents” means all patents and patent applications
identified on Exhibit A as Schubert patents or applications, and all
patents in the same Patent Family as any of the foregoing.

 

1.10            “Three-Party Agreement”
means that certain Product Development and Integration Agreement, effective as
of June 13, 2005, by and among PGIC, SMI and IGT.

 

2.0                   Term.

 

2.1                    Term.  The term of
this Agreement shall commence upon the Effective Date and continue until the
last to expire of i) the Alcorn Patents or ii) the Purchased Patents (whichever
expiration is the latest), subject to the terms of Section 5.4 (the “Term”).

 

3.0                   Patent
Purchase.

 

3.1                   Acquisition of Joint Ownership Interest in Purchased Patents.  Subject to the receipt of the consideration
specified in Section 5.1 SMI hereby assigns, transfers and conveys to IGT,
subject to the terms of Section 5.4, and IGT hereby accepts, an equal and
undivided joint ownership interest in and to: (a) all Purchased Patents,
including without limitation, the right (subject to Section 8.3 hereof),
to sue or bring other actions for past, present and future infringement
thereof, subject to the terms and conditions set forth in this Agreement; and (b) all
rights, obligations and liabilities relating to the Purchased Patents,
including without limitation: (i) [...***...], and [...***...] of the [...***...] as [...***...],
only for [...***...] the [...***...] on [...***...], excluding the [...***...] of [...***...]; and
ii) rights, obligations, limitations or liabilities under the existing ENPAT
Patent license agreements with PGIC and Bourgogne/GPI.

 

3.2                   IGT and SMI Use of
Purchased Patents.  As
joint owners of the Purchased Patents, each of IGT and SMI shall have the right
to use and enjoy all rights under the Purchased Patents, without restrictions,
including but not limited to, the rights to make, have made, use, import,
export, offer to sell, sell and have sold (subject to the terms and conditions
contained in the Three-Party Agreement and except as set forth in Sections 3.1,
3.3, 3.4, 5.4, and 7), and without any right or obligation of accounting,
profit-sharing or royalty payment with respect to the other party (except as
set forth in Sections 3.3 and 6).  The
limitations on IGT’s and SMI’s use of the Purchased Patents with respect to
sublicensing, assignment and transfer shall continue even after any termination
of the Three-Party Agreement.  This Section does
not grant either Party the right to sell one or more of the Purchased Patents.

 

3.3                   IGT and SMI Licensing of
Purchased Patents.  Except
as set forth in the Three-Party Agreement, neither IGT nor SMI will grant any
licenses under any Purchased Patents to any third party without the express,
advance, written consent of the other party in each instance, which consent may
be granted, withheld or conditioned in the other party’s sole and absolute
discretion.  The royalties from any such
license(s) shall be shared equally by IGT and SMI, except as provided for in Section 6.2.  Each of SMI and IGT hereby consent to the
grant of a non-exclusive license of the ENPAT

 

***Confidential Treatment
Requested

 

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Patents
to PGIC, solely for the purposes set forth in, and subject to the terms of, and
limitations contained in, the Three-Party Agreement and in this Agreement.

 

3.4                   IGT and SMI Sale of
Purchased Patents. 
Neither IGT nor SMI will assign, transfer convey or grant any right,
title or interest in or to any Purchased Patents to any third party without the
express, advance, written consent of the other party in each instance, which
consent may be granted, withheld or conditioned in the other party’s sole and
absolute discretion.

 

3.5                   Further Assurances. 
Each party shall execute and deliver to the other party such instruments
of assignment, consent, powers of attorney and other instruments as may be reasonably
requested by each party in order to vest in IGT joint ownership of the
Purchased Patents, or, if applicable to divest IGT of any ownership of the
ENPAT Patents pursuant to Section 5.4. 
Each party shall, at the other party’s expense, execute any documents,
and perform any acts reasonably requested by said other party, consistent
herewith and to implement of the content of this Agreement.    If either party fails to do so within 15
days of the other party’s request, and said other party does not promptly and
reasonably object within such time period to the execution of such
documentation or the performance of such acts, then the requesting party and
its agents and representatives are authorized to perform such acts and execute
all such documents in said other party’s name and on said other party’s behalf,
including filing and/or recording such documents in appropriate governmental or
administrative offices.

 

3.6                   Reserved Rights.  Except for the rights expressly granted by
each party under this Agreement, each party reserves all rights in any
intellectual property owned, acquired or created by such party, and no rights
are granted to the other party in such intellectual property except as
expressly set forth herein.

 

3.7                   Due Diligence. 
Subject to the execution of the Commonality of Interest protective
agreement referenced in Section 3.9, any protective orders that may govern
such disclosure, and this Agreement, IGT shall have the right to immediately
meet with and receive all materials from SMI’s legal representatives related to
any litigation involving the Purchased Patents, and/or any prior investigation
or prior due diligence involving the Purchased Patents.  Legal fees and costs incurred by SMI from SMI’s
legal representatives with respect to IGT receiving information related to any
litigation involving the Purchased Patents shall be [...***...] by [...***...].  All other legal fees and costs incurred under
this Section 3.7 shall be [...***...] by [...***...].

 

3.8                   Prior Patent Representations & Warranties.  SMI shall assign and vest in IGT an equal
share of all representations and warranties that SMI has received or has rights
to, from any previous owner or warrantor of any of the Purchased Patents.

 

3.9                   SMI Full Disclosure. 
SMI and IGT shall make reasonable attempts, within twenty (20) days of
the Effective Date, to enter into a Commonality of Interest protective
agreement, such agreement being for the purpose of [...***...] and [...***...] relating
to the [...***...].  Subject to the terms of
such and agreement, SMI shall, within ninety (90) days of the Effective Date,
provide to IGT [...***...], [...***...], [...***...] relating to the [...***...] and/or [...***...]
related to the [...***...], without any [...***...], by SMI.

 

***Confidential Treatment
Requested

 

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4.0                   Covenant
Not To Sue

 

4.1                   Covenant Not to Sue on Alcorn Patents.  IGT on its own behalf, and on behalf of any
heirs, assigns, successors, affiliates and acquirers (“Successors”), hereby
agrees that neither it nor its Successors will assert any claim of patent
infringement (including direct infringement, contributory infringement, and
inducing infringement) of the Alcorn Patents against SMI, its officers,
directors, employees, agents, customers or Successors (either of SMI or its
multi-station product line), arising out of SMI’s (or any of SMI’s customers or
SMI’s Successor’s), making, having made, using, selling or offering to sell any
[...***...] on a [...***...], provided the [...***...]: (a) has [...***...]; (b) has
no [...***...] but no [...***...] per a [...***...], and each [...***...] is only [...***...] to [...***...]
on and [...***...] in association with a [...***...] that is [...***...] or common to the [...***...];
(c) is designed to [...***...] or [...***...] a [...***...], limited to [...***...]; (d) is
not [...***...] in any manner to [...***...] with any [...***...] from the [...***...] for
purposes of [...***...] and/or [...***...] and/or [...***...] in any manner; (e) is
not used with, and/or is not [...***...] to [...***...] with, any [...***...]; and (f) is
not operable to be played by, or wagered upon by, any [...***...] not [...***...] at an
associated [...***...].  The term of this
Covenant Not to Sue shall commence upon the Effective Date and continue until [...***...].  Except as otherwise provided herein, SMI will
not assign, transfer convey or grant any right, title or interest in or to this
Section 4.1 to any third party without the express, advance, written
consent of IGT, which consent may be granted, withheld or conditioned at IGT’s
sole and absolute discretion.  Further,
any and all [...***...] and any device(s) [...***...] is not contemplated nor deemed to
be included within the scope of this Section 4.1.

 

5.0                   IGT
Payments.

 

5.1                   Consideration.  In consideration for an equal and undivided
joint ownership interest in the ENPAT, Schubert and Fishbine Patents, the
reimbursement of the Mindplay Litigation Costs, and the SMI Covenant, IGT shall
pay to SMI the sum of Ten Million, Five Hundred and Ten Thousand Dollars
($10.510 million) (the “First Payment”), which sum shall be due to SMI upon
execution of this Agreement and payable within ten (10) days, and in
addition, the Future Payment shall be either paid or not paid, as set forth in Section 5.4.

 

5.2                   Nonrefundability.  The First Payment shall be non-refundable,
and if and once made, the Future Payment shall be non-refundable.

 

5.3                   Continuing Litigation.  For the [...***...] Litigation, the [...***...] for [...***...]
(from the law firm of [...***...]) shall be retained unless dismissed by [...***...],
at [...***...].  [...***...] shall [...***...] the [...***...]
of such continuing litigation.  [...***...]
agrees that the [...***...] from the law firm of [...***...] shall, and have agreed to,
[...***...] for all existing litigation with respect to the [...***...], subject to [...***...]
by [...***...] of [...***...].  Subject to the
terms and conditions of Section 8.4, beginning as of [...***...], and for only
the claims pending before the court in the [...***...] Litigation on  [...***...], excluding the [...***...] shall [...***...]
in all [...***...], including all [...***...]. 
If [...***...] or [...***...] are

 

***Confidential Treatment
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[...***...],
in [...***...] or in [...***...], any [...***...] or other [...***...] as a result of the
lawsuit, [...***...].

 

5.4                   Future Payment. 
IGT may, at IGT’s sole discretion, pay to SMI the sum of Four Million,
Eight Hundred and Seventy-five Thousand Dollars ($4.875 million) (the “Future
Payment”), which sum will be paid on or by June 29, 2007.  IGT may elect to make the Future Payment on
or prior to June 29, 2007.  If IGT
does not make the Future Payment on June 29, 2007, then SMI shall give IGT
written notice thereof and IGT shall have twenty (20) additional business days
to make the Future Payment.  If the
Future Payment is not made within said twenty (20) additional business day
period, then: (a) IGT’s entire ownership interest, including the rights
afforded per said ownership interest as identified in Section 3.2 in the
ENPAT Patents shall immediately revert to SMI; (b) SMI shall not owe IGT
for any Royalties that accrue from the ENPAT Patents after June 29,2007; (c) the
SMI Covenant provision of the Three-Party Agreement as contained in Sections
6(b)(i) and 6(b)(ii) thereof shall be immediately severed from the
Three-Party Agreement and such severed Sections shall be of no further force or
effect; and (d) IGT shall have no further obligations and liabilities, as
conveyed in this Agreement, relating to the ENPAT Patents.  All other terms of this Agreement and the
Three-Party Agreement shall survive this Section 5.4, including but not
limited to all Scope of Product and other Covenant provisions, ownership
interests in the Fishbine and Schubert Patents and [...***...].

 

6.0                   SMI
Payments.

 

6.1                   IGT  Share of SMI Royalties.  Subject
to Section 5.4 and except as provided in Section 6.2 hereof, SMI
will pay IGT an amount equal to 50% of any and all fees or royalties actually
received by SMI from the licensing of the Purchased Patents to any third party
or from otherwise permitting any third party to use the Purchased Patents,
including all licenses and permitted uses existing as of the Effective Date
(the “Royalties”).

 

6.2                   IGT Share of Royalties from PGIC.  Pursuant to and in accordance with Section 7(d) of
the Three-Party Agreement, for any additional license scope granted by IGT
and/or SMI to PGIC to any of the Purchased Patents, IGT shall receive [...***...]
of all Royalties collected, regardless of whether collected by IGT or SMI.

 

6.3                   Payment Terms.  The Royalties for each quarter during the Term shall be paid
to IGT within 30days of the end of such quarter during which the corresponding
fees, royalties or other consideration was actually received by SMI, in United
States dollars, without deductions for taxes, assessments, fees, or charges of
any kind.

 

6.4                   Royalty Reports.  Along with each such payment of Royalties to
IGT, SMI shall include the report received from each licensee describing the
circumstances from which such Royalties were derived, which report shall
include, without limitation, (a) an accounting of all fees, royalties or
other consideration derived from the licensing of the Purchased Patents to
third parties or from otherwise permitting third parties to use the Purchased
Patents, (b) the calculation of Royalties thereon, (c) identification
of the particular Purchased Patents under license, (d) the names and
addresses of all licensees of the Purchased Patents.

 

***Confidential Treatment
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6.5                   Records.  SMI shall keep true and accurate books of its
account containing all particulars that may be necessary for the purpose of
verifying the accuracy of the Royalties payable and paid to IGT hereunder.  Such books and the supporting data shall be
open at all reasonable times for five years following the end of the calendar
year to which they pertain, to inspection by IGT and/or an accountant employed
by IGT for the purpose of verifying SMI’s Royalty obligations or other SMI
obligations under this Agreement.  The
costs of such inspection shall be borne by IGT unless the amounts paid by SMI,
pursuant to the royalty reports and amounts received from the licensees, are
determined to be less than 95% of the amount payable under this Agreement in
any consecutive six-month period, in which case SMI shall immediately pay to
IGT the amount of such underpayment, plus interest at the maximum legal rate
allowable, and shall be responsible for payment of IGT’s reasonable costs of
such inspection.

 

6.6                   Collection Efforts. 
SMI shall use commercially reasonable efforts to collect all fees,
royalties or other consideration due to SMI derived from the licensing of the
Purchased Patents to third parties or from otherwise permitting third parties
to use the Purchased Patents.  Any third
party collection expenses, fees or costs incurred by SMI under this Section 6.6
shall be borne equally by SMI and IGT, and IGT shall properly reimburse SMI for
its share of such third party expenses, fees or costs.

 

7.0                   SMI
Restrictive Covenant.

 

7.1                   SMI Restrictive Covenant. 
Prior to the expiration or termination of the Three-Party Agreement,
and subject to a potentially shortened period as set forth in Sections 5.4 and
7.2 of this Agreement, or in the Three-Party Agreement, SMI will not make, have
made, use, offer for sale, sell, import, export or otherwise commercially
exploit any systems, products or services covered by any of the Purchased
Patents except pursuant to the Three-Party Agreement, provided however, that
there shall be no restrictions of any kind on SMI’s rights to confidentially
and internally develop any products, whether or not covered by the Third Party
Agreement.

 

7.2                   Potential Modification of Restrictive Covenant.  Notwithstanding
the foregoing, if after five (5) years from the Effective Date, PGIC/IGT
have not installed at least 5,000 tables with automated chip tracking
technology, then SMI may request that IGT release SMI from the requirements of Section 7.1.  Upon such request, IGT will negotiate with
SMI, in good faith, the terms and conditions that would be acceptable for said
release, and IGT shall warrant and indemnify PGIC’s consent necessary to carry
such a release.

 

8.0                   Protection
of Purchased Patents.

 

8.1                   Patent Prosecution and Maintenance.  Within 30 days of the Effective Date, SMI
shall (a) deliver to IGT a copy of all of its correspondence with the
USPTO or other relevant patent office relating to the Purchased Patents, along
with all associated files and notes, retaining a copy of the same for itself,
and (b) instruct such offices to update the attorney of record to include
such attorney as IGT may specify. 
Thereafter, [...***...] shall (a) maintain all issued Purchased Patents
except for the [...***...]; (b) prosecute all unissued Purchased Patents
except for the [...***...]; (c) upon the request of [...***...], provide [...***...]
with all correspondence with the

 

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USPTO
or other relevant patent office relating to the prosecution and maintenance of
all Purchased Patents; and (d) use commercially reasonable efforts to
consult with [...***...] with regard to all filings or other prosecution or
maintenance of the Purchased Patents.  To
the extent there is a disagreement between [...***...] regarding the
appropriateness of a filing, which is brought to [...***...] attention prior to the
filing, [...***...] shall be [...***...] on the [...***...],[...***...], and [...***...].  [...***...] shall [...***...] in the [...***...] of such
prosecution and maintenance, and shall [...***...] have a duty to reasonably
cooperate in such prosecution.   [...***...]
shall bill [...***...] for its share of such third party expenses, and [...***...]
shall pay such bills within 30 days of receipt. 
If and when the [...***...] is made in accordance with [...***...],[...***...]
shall, at its sole discretion, maintain all issued [...***...] and prosecute all
unissued [...***...].

 

8.2                   Patent Disclosures. 
Throughout the term of this Agreement, each party shall promptly, but in
no event later than 30 days after receipt of notice thereof, notify the other
party (a) of any nullity actions, oppositions, reexaminations or
declaratory judgment actions of which it is aware alleging the invalidity or
unenforceability of any Purchased Patents; (b) if it reasonably believes
that the Purchased Patents are being infringed by a third party; or (c) of
any [...***...] of which such party is aware that could reasonably be expected to [...***...]
as permitted under this Agreement [...***...] to such [...***...].

 

8.3                   Enforcement of Purchased Patents.  Subject to applicable law, each party shall
have the right to enforce and bring suit against infringers of the Purchased
Patents in accordance with this Section 8.3.  Neither party may bring suit against any
infringer of the Purchased Patents without first notifying the other of such
infringement and consulting with the other regarding any potential
litigation.  Until such time that [...***...]
shall not have the authority to bring suit against any infringer of the [...***...]
unless receiving prior approval from [...***...], provided that [...***...] makes
reasonable efforts in the enforcement of the [...***...]; if [...***...] does not make
such reasonable efforts, then [...***...] shall have the authority to bring such
suit.  After such consultation and/or
approval, either party may commence litigation against the infringer or
infringers which were the subject of such notice and consultation.  The party commencing the litigation shall
give the other party prompt notice of the commencement of any such litigation
and the date of first service of a complaint, and the other party may
voluntarily join such litigation by providing the party commencing the
litigation with notice of such election. 
Whether or not the other party elects to voluntarily join such
litigation, such other party shall cooperate at the expense of the party
commencing the litigation in every reasonable way with the party commencing the
litigation with respect to such litigation. 
The party commencing such litigation shall control such litigation,
except where the other party has voluntarily joined such litigation, in which
case the parties shall jointly make all decisions regarding such
litigation.  In the event of such
voluntary joining, IGT and SMI shall [...***...], including without limitation, [...***...];
and [...***...] shall [...***...].

 

8.4                   Settlement of Any Litigation.  If one of IGT or SMI wants to accept a
settlement offer (which offer must be [...***...] unless otherwise agreed by mutual
agreement of IGT and SMI), and the other party does not, then the party wanting
to accept the settlement shall [...***...]; and the non-accepting party shall [...***...]
and be

 

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[...***...].  Further the non-accepting party must [...***...]
and [...***...].  If [...***...] wants to opt out
of a litigation after voluntarily joining such litigation, without respect to a
settlement offer, such opt out will be subject to [...***...].

 

8.5                   Marking. 
Each party agrees to mark all
products sold or placed into the field with the patent numbers of any Purchased
Patents which cover such products.

 

8.6                   Confidential Information.  With respect to all technology
related to optical or RFID chip reading and that is within the Scope of Product
in the Three-Party Agreement, and that is a trade secret of a party, or that
has been generally held in confidence by such party prior to the Effective
Date, such party shall continue to hold such information in confidence, and
shall not disclose such information to any person except as expressly permitted
herein, unless required by law or otherwise legally compelled to disclose such
information; provided, however, that to the extent that such party may become
so legally compelled, then such party may disclose such information only if it
shall first have used reasonable efforts to obtain, and, if practicable, shall
have afforded the other party the opportunity to obtain, an appropriate
protective order or other satisfactory assurance of confidential treatment for
the information required to be so disclosed. 
This Section 8.6 and any confidentiality obligations herein shall
not apply when any patents related to optical or RFID chip reading are
published by the U.S.P.T.O.

 

9.0                   Warranties;
Disclaimers; Liability Limitations.

 

9.1                   General
Representations and Warranties.  Each
party represents and warrants to the other as follows: (a) it is a valid and existing corporation and in good standing
under the laws of the state of its incorporation; (b) it has the corporate
power and authority required to carry on its activities as they are now
conducted; (c) it has the has full legal right and corporate power,
without the consent of any other person to execute, deliver and to perform its
obligations under this Agreement; (d) all corporate and other actions
required to be taken by it to authorize the execution, delivery and performance
of this Agreement and all transactions contemplated hereby have been duly and
properly taken; (e) no consent, approval, authorization or filing of any
certificate, notice application, report or other document with any governmental
authority is required on the part of such party in connection with the valid
execution and delivery of this Agreement or the performance by such party of
any of its obligations hereunder; and (f) the execution, delivery and
performance of this Agreement do not violate or conflict with any law
applicable to it, any provision of its charter or bylaws, any order or judgment
of any court or other agency of government applicable to it or any of its
assets, or any contractual restriction binding on or affecting it or any of its
assets.

 

9.2                   SMI Intellectual Property
Representations and Warranties.  SMI
hereby makes the following representations and warranties to IGT, in each case,
as of the Effective Date.  Except, as
applicable, for: i) the [...***...] to the [...***...] to [...***...], copies of which
agreements [...***...] acknowledges receipt; ii) the [...***...]; and iii) the [...***...];
(a) SMI has all rights necessary to grant the assignment of rights in the
Purchased Patents granted to IGT hereunder; (b) SMI has not granted to any
other person or entity any rights, licenses or privileges in the Purchased
Patents that would conflict with the rights granted to IGT hereunder; (c) SMI
is not a party to any

 

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agreements
which would require any third-party consents, waivers or authorizations needed
for SMI to grant the assignment of rights in the Purchased Patents in accordance
with the terms of this Agreement; (d) assuming that [...***...], and [...***...],
SMI has no actual knowledge, without any duty of inquiry or investigation that,
the [...***...]; (e) the Purchased Patents are not, as of the Effective Date,
subject to any lien or other encumbrance, and excluding any preexisting
licenses and the claims referenced in 8.2(d); (f) [...***...] and the [...***...]
and [...***...] involving the [...***...], there are no [...***...] of any [...***...] or to
SMI’s actual knowledge, and without any duty of inquiry or investigation, any [...***...];
and (g) SMI will not unilaterally impair or otherwise adversely affect the
rights of IGT in any of the Purchased Patents, other than what may result from
any approval, denial of approval, decision, joint action or joint omission by
IGT and SMI.

 

9.3                   IGT Intellectual Property Representations and
Warranties IGT hereby makes the following representations and
warranties to SMI, in each case, as of the Effective Date: (a) IGT has all
rights necessary to grant the Covenant Not to Sue in the Alcorn Patents granted
to SMI hereunder; (b) IGT has not granted to any other person or entity
any rights, licenses or privileges in the Alcorn Patents that would conflict
with the rights granted to SMI hereunder; (c) IGT is not a party to any agreements
which would require any third-party consents, waivers or authorizations needed
for IGT to grant a Covenant Not to Sue in the Alcorn Patents in accordance with
the terms of this Agreement; and (d) the Alcorn patents are not, as of the
Effective Date, subject to any lien or other encumbrance that would materially
adversely affect the rights granted to the Alcorn Patents to SMI hereunder.

 

9.4                   Warranty
Disclaimers.  EXCEPT AS EXPRESSLY
PROVIDED HEREIN, NEITHER PARTY MAKES ANY WARRANTIES TO THE OTHER WITH REGARD TO
ANY PRODUCTS, SERVICES OR INTELLECTUAL PROPERTY RIGHTS LICENSED, PURCHASED,
DELIVERED OR PERFORMED HEREUNDER, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
VALIDITY OR NON-INFRINGEMENT.

 

9.5                   Limitations
on Liability.  Neither party shall be liable to the
other for any consequential or incidental damages arising out of any breach of
this Agreement or any claims relating thereto.

 

10.0            Indemnification.

 

10.1            Indemnification
Obligations.  Each party
(the “Indemnifying Party”) shall
indemnify, defend and hold the other party and its officers, directors,
employees and agents (the “Indemnified Party”)
harmless from any and all damages, costs and expenses arising from any third party
claims, threats, proceedings or suits (“Third Party Claims”)
to the extent such Third Party Claims arise from or relate to the Indemnifying
Party’s breach of any representation, warranty or covenant hereunder.

 

10.2            Indemnification
Procedures. Upon receiving notice of any Third Party Claim
covered by Section 10.1, the Indemnified Party shall notify the
Indemnifying Party promptly; provided, however, that the right of
indemnification hereunder shall not be adversely affected by a failure to give
such notice, unless and only to the extent that

 

***Confidential Treatment
Requested

 

9

 

the
Indemnifying Party is materially prejudiced thereby. The Indemnifying Party may
assume control of the defense of any such claim; provided, however, that the
Indemnified Party may, at its own cost and expense, participate through its
attorneys or otherwise, in such investigation, trial and defense of such claim
and any appeal arising therefrom.  The
Indemnifying Party shall not settle any such claim without the Indemnified
Party’s prior written consent (which consent shall not be unreasonably withheld
or delayed), unless such settlement is solely for monetary damages for which
the Indemnified Party is fully indemnified under this Agreement. If the
Indemnifying Party does not assume full control over the defense of a claim
pursuant to this Section 10.2, then the Indemnifying Party may participate
in such investigation, defense or trial, solely at its cost and expense, and
the Indemnified Party shall have the right to defend or settle such claim in
such manner as the Indemnified Party deems appropriate, solely at the cost and
expense of the Indemnifying Party.

 

11.0            General
Terms and Conditions.

 

11.1            Notices.  Wherever
under this Agreement one party is required or permitted to give written notice
to the other, such notice will be deemed given if made in writing and delivered
either by hand, by a recognized overnight delivery service (with delivery
charges prepaid), by first class, registered or certified United States mail
(postage prepaid), or by facsimile transmission (provided that in the case of
facsimile transmission, a confirmation copy of the notice shall be delivered by
hand, by a recognized overnight delivery service (with charges prepaid), or by
first class, registered or certified United States mail (postage prepaid)
within two days of facsimile transmission), addressed to each party as follows:

 

If to
SMI, such notices shall be delivered to:

 

Legal
Department

Attention:
Jerry Smith Senior

Vice
President and General Counsel

Shuffle
Master, Inc.

1106
Palms Airport Drive

Las
Vegas, Nevada 89119

 

with
copies to:

 

Paul
Meyer, President and Chief Operating Officer

Rich
Baldwin, Senior Vice President and Chief Financial Officer

Shuffle
Master, Inc.

1106
Palms Airport Drive

Las
Vegas, Nevada 89119

 

10

 

If to
IGT, such notices shall be delivered to:

 

Legal
Department

Ken
Creighton

IGT

9295
Prototype Drive

Reno,
NV  89511

 

with
copies to:

 

Rich
Pennington

E.V.P.,
Corporate Strategy

IGT

9295
Prototype Drive

Reno,
NV  89511

 

and

 

Mark
Hettinger

Director,
Corporate Strategy

IGT

9295
Prototype Drive

Reno,
NV  89511

 

or
such other address as any such party may designate in writing, and delivered to
the other parties hereto pursuant to this Section 11.1.

 

11.2            Relationship of the Parties.  The
parties will remain at all times independent contractors.  In all matters relating to this Agreement,
each party hereto will be solely responsible for the acts of its employees and
agents, and employees or agents of one party shall not be considered employees
or agents of the other party.  No party
will have any right, power or authority to create any obligation, express or
implied, on behalf of any other party nor shall either party act or represent
or hold itself out as having authority to act as an agent or partner of the
other party, or in any way bind or commit the other party to any
obligations.  Nothing in this Agreement
is intended to create or constitute a joint venture, partnership, agency, trust
or other association of any kind between the parties or persons referred to
herein.

 

11.3            No Third Party Beneficiary.  Except
as set forth herein, this Agreement will not confer any rights or remedies on
any person other than the parties hereto and their respective successors and
permitted assigns.

 

11.4            Integration.  This
Agreement contains the entire understanding of the parties with regard to the
subject matter contained herein and thereon, and supersedes all prior
agreements or understandings of the parties with respect to the subject matter
of this Agreement.

 

11.5            Modification; Waiver.  No
alleged waiver, modification or amendment to this Agreement shall be effective
against either party hereto, unless in writing, signed by the party against
which such waiver, modification or amendment is asserted.  The

 

11

 

failure
or delay of either party to insist upon the other party’s strict performance of
the provisions in this Agreement or to exercise in any respect any right,
power, privilege, or remedy provided for under this Agreement shall not operate
as a waiver or relinquishment thereof.

 

11.6            Severability.  If
any provision of this Agreement, or the application thereof, is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder
of the provisions of this Agreement will in no way be effected, impaired or
invalidated, and to the extent permitted by applicable law, any such provision
will be restricted in applicability or reformed to the minimum extent required
for such provision to be enforceable.

 

11.7            Assignment.  Neither
party may assign its rights or delegate its obligations under this Agreement
without the prior written consent of the other party, which can be withheld in
such party’s sole discretion.  Any merger, consolidation, or sale of
all or substantially all of the assets of either party, or any other
transaction in which more than fifty percent (50%) of the voting securities of
either party is transferred, shall be deemed an assignment of this Agreement by
such party for the purposes of this Section 11.7.  Any purported transfer or assignment in
violation of this Section 11.7 shall be void.

 

11.8            Successors and Assigns. 
This Agreement inures to the benefit of, and is binding upon, the
permitted successors and permitted assigns of the parties.

 

11.9            Terms of Agreement. 
Both SMI and IGT agree that this Agreement and its provisions shall
remain confidential, protected as confidential information, and shall only be
distributed to those persons within SMI and IGT that have a need to know,
subject to any disclosure required by law or regulation to the SEC, Department
of Justice, any gaming regulatory entity or any court or tribunal of competent
jurisdiction.  Notwithstanding the
foregoing, either party shall have the right to disclose the terms of this
Agreement to its attorneys, accountants, actual and potential sources of
financing, and potential acquirers, under appropriate non-disclosure agreements
or duties.

 

11.10      Surviving Provisions.  The
following provisions of this Agreement shall survive any expiration of this
Agreement for a period of six years: 
Sections 8.2(b), 8.4 8.5, 9, 10 and 11.

 

11.11      Governing Law.  This
Agreement shall be governed and construed in accordance with the internal laws
of the State of Nevada without giving effect to applicable conflict of laws
provisions.

 

11.12      Jurisdiction.  Subject
to Section 11.13, with respect to any litigation arising out of or
relating to this Agreement, each party agrees that it shall be filed in and
heard by the state or federal courts with jurisdiction to hear such suits
located in the State of Nevada.

 

11.13      Mediation.  Any
controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall first be addressed by the CEO’s of the parties upon the
request of either party.  If such
officers cannot settle the matter to the parties’ mutual

 

12

 

satisfaction
with 15 days, then either party may request mediation of such dispute, with a
mediator mutually agreed upon by the parties, and the other party shall
cooperate in good faith with such mediation.

 

11.14      Equitable Relief. 
The parties agree that a breach of this Agreement may cause irreparable
harm to the non-breaching party, and the non-breaching party will be entitled
to seek injunctive or other equitable relief to prevent breaches of the
provisions of this Agreement and to seek to enforce specifically this Agreement
and the terms and provisions hereof, in addition to any other remedy to which
the non-breaching party may be entitled, at law, in equity or otherwise.

 

11.15      Counterparts.  This
Agreement may be executed in one or more counterparts (and by facsimile), all
of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party.

 

11.16      Attorney’s Fees. 
With respect to any dispute, litigation, arbitration or proceeding
instituted by a party to collect any monies alleged to be due it against the
other party, or to otherwise enforce the terms of this Agreement, the
prevailing party shall also be entitled to recover its attorney’s fees and
litigation costs and expenses, in addition to any other remedies obtained by
it.

 

11.17      Affiliate or Subsidiary Responsibility.  Shuffle Master, Inc. shall be
responsible for all acts of any affiliate or wholly-owned subsidiary of Shuffle
Master, Inc. in connection with this Agreement, and any breach of this
Agreement by any SMI entity shall be deemed a breach by Shuffle Master, Inc.  IGT shall be responsible for all acts of any
affiliate or wholly-owned subsidiary of IGT in connection with this Agreement,
and any breach of this Agreement by any IGT entity shall be deemed a breach by
IGT.

 

 

Both
SMI and IGT, by their duly authorized signatures below, agree to this Agreement
and all of the terms and conditions herein.

 

	
  IGT

  	
   

  	
  SHUFFLE MASTER,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signed:

  	
  /s/ Rich Pennington

  	
   

  	
   

  	
  Signed:

  	
  /s/ Paul Meyer

  	
   

  
	
   

  	
   

  	
   

  
	
  Printed Name:
  Rich Pennington

  	
   

  	
  Printed Name: Paul Meyer

  
	
  Title: EVP
  Corporate Strategy

  	
   

  	
  Title: President and COO

  
							

 

13

 

Exhibit A

Referenced Patents

 

1.  ENPAT
Patents and Patent Applications

 

U.S. Patent 5,735,742

U.S. Patent 5,651,548

 

2.  Schubert
Patents and Patent Applications

 

U.S. Patent 6,313,871

U.S. Application No. 10/703,029

 

3.  Fishbine Patents

 

U.S. Patent 5,781,647

U.S. Patent 6,532,297

U.S. Application No. 10/385,150

U.S. Application No. 11/072,173

 

4.  Alcorn
Patents

 

U.S. Patent 5,643,086

U.S. Patent 6,106,396

U.S. Patent 6,147,522

U.S. Patent 6,620,047

U.S. Application No. 10/601,465

U.S. Application No. 10/292,154

 

14Exhibit 10.2

 

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

 

PRODUCT DEVELOPMENT AND
INTEGRATION AGREEMENT

 

This Sales, Marketing,
Distribution and Product Integration Agreement (the “AGREEMENT”) is made and
entered into effective as of June 13, 2005 (the “EFFECTIVE DATE”), by and
among Shuffle Master, Inc., a Minnesota corporation, its
affiliates and each of its wholly owned subsidiaries (“SMI”) located at 1106 Palms
Airport Drive, Las Vegas, Nevada 89119-3730, MIKOHN
GAMING CORPORATION, a Nevada corporation doing business as Progressive Gaming
International Corporation, its affiliates and each of its wholly owned
subsidiaries, (“PGIC”) with a primary business address of 920 Pilot Road, Las
Vegas, Nevada 89119, and IGT, its affiliates and each of its wholly owned
subsidiaries, (“IGT”) located at 9295 Prototype Drive, Reno, Nevada 89510.  Each of PGIC, SMI and IGT may hereinafter be
referred to individually as a “Party” or collectively as the “Parties.”

 

RECITALS

 

WHEREAS, PGIC and IGT have entered into a separate agreement for the
development and distribution of the Intelligent Table System (hereinafter
referred to as the “PGIC-IGT Agreement”);

 

WHEREAS,
PGIC, SMI and IGT intend to enter into a relationship, the scope of which
includes using complementary
capabilities, technologies, and resources of the three parties for the
sales, marketing, distribution, product integration, service, and support
associated with Table Game Systems, Smart Tables, Table Game Bonusing, RFID,
Card Recognition, Shufflers and Intelligent Shoes, and shared reporting and
analysis;

 

WHEREAS, PGIC
and IGT believe that a better Intelligent Table System can be developed that
includes SMI products;

 

WHEREAS, SMI
believes that a better Intelligent Table System can be developed that includes
PGIC and IGT products;

 

WHEREAS, PGIC
and IGT also believe that SMI has valuable intellectual property that is
important to the development of the Intelligent Table System;

 

WHEREAS, SMI
also believes that IGT and PGIC have valuable intellectual property that is
important to the development of the Intelligent Table System;

 

WHEREAS,
PGIC, SMI and IGT wish to enter into an Agreement providing the framework
wherein these activities will occur, in accordance with the terms contained herein.

 

IT IS THEREFORE AGREED AS
FOLLOWS:

 

1.     Definitions:
The following definitions shall have the following meanings:

 

1

 

a.     “Appendix
(Appendices)” shall mean any attached Licensed Product Appendix mutually agreed
to among PGIC, SMI and IGT and signed by all of the Parties detailing any
further areas of agreement between the Parties.

 

b.     “Card
Shufflers” shall mean a mechanical device that is associated gaming equipment
(as that term is understood in the gaming industry) that shuffles physical
playing cards into a random or near random order and used for table gaming.

 

c.     “Confidential
Information” shall mean any software, documentation, data drawings, benchmark
tests, specifications, trade secrets, object code and machine-readable copies
of software, source code, financial information, financial terms between the
Parties, any information that by its nature would reasonably be considered
confidential and any other proprietary information supplied by any Party in
furtherance of this Agreement.

 

d.     “Contributing
Party” shall mean a Party that materially contributes to the creation of
Jointly Developed Technology.

 

e.     “Jointly
Developed Technology” shall mean all technology jointly developed by two or
more Contributing Parties pursuant to this Agreement.

 

f.      “ENPAT
Patents” shall mean all patents and patent applications identified on Exhibit A
as ENPAT patents or applications, and all patents in the same Patent Family as
any of the foregoing.

 

g.     “Hill
Patents” means all patents and patent applications identified on Exhibit A
as Hill patents or applications, and all patents in the same Patent Family as
any of the foregoing.

 

h.     “IGT
Technology” shall mean any and all of the following: inventions, works of
authorship, technology, know-how, source or object code, algorithms, methods,
processes, procedures, work-arounds and Intellectual Property Rights provided
by or independently developed or owned by IGT.

 

i.      “IGT
Scope of Product” shall be circumscribed by the SOA and be defined to include (1) casino
systems, and (2) player tracking, loyalty, reward, and bonusing systems;
including but not limited to Table Touch and systems providing such data
processing and reporting functionality.

 

j.      “Intellectual
Property Rights” means any and all rights existing now or in the future under
patent law, copyright law, trade secret law, trademark law and any and all
similar proprietary rights, and any and all renewals, extensions, and
restorations thereof, relating to the Licensed Product.

 

k.    “Licensed
Product(s)” means any product within the SOA that is developed in accordance
with the terms of this Agreement and/or as specified in any Appendix(s),
including but not limited to the Intelligent Table System.

 

l.      “Patent Family” means, with respect to a patent or patents,
and/or a patent application or applications (the “Reference
Patents or Applications”), (a) any and all reissues,
reexaminations, continuations, continuations-in-part, divisionals, and foreign
counterparts thereof (“Derived Patents”);
(b) any patents which issue from or claim a priority date to the Reference
Patents or Applications or the Derived Patents (“Daughter
Patents”); (c) any and all patents, patent applications or
provisional applications from which the Reference Patents or Applications, the
Derived Patents or the Daughter Patents claim priority directly or through
another patent or patent applications (“Grandparent/Parent
Patents or Applications”); (d) any and all reissues,
reexaminations, continuations, continuations-in-part, divisionals, and foreign
counterparts of the Grandparent/Parent Patents or Applications; (e) any
patents which issue from or claim a priority date to the Grandparent/Parent
Patents or Applications (“Sister Patents or
Applications”); (f) any and all reissues, reexaminations,
continuations, continuations-in-part, divisionals, and

 

2

 

foreign
counterparts of the Sister Patents or Applications; and (g) any patents
which issue from or claim a priority to the Sister Patents or Applications.

 

m.    “PGIC
Scope of Product” shall be circumscribed by the SOA and be defined to include (1) table
data collection systems, (2) bet recognition, (3) automated chip
tracking, (4) Tablelink CT/GT, (5) table/casino/cage RFID systems,
and (6) payoff recognition.  PGIC’s
scope shall also include Tablelink PT to the extent that its inclusion does not
overlap with IGT’s scope, in which case, IGT’s scope shall have precedence.

 

n.     “PGIC
Technology” means any and all of the following: inventions, works of
authorship, technology, know-how, source or object code, algorithms, methods,
processes, procedures, work-arounds and Intellectual Property Rights provided
by or independently developed or owned by PGIC.

 

o.     “Shoes”
shall mean a physical device that is associated gaming equipment (as the term
is understood in the gaming industry) that is placed on a gaming table and
houses playing cards, identifies (reads) the cards prior to dealing and
presents a card for dealer extraction one at a time.

 

p.     “Intelligent
Table System” means the system developed in accordance with the terms of the
Agreement, which will consist of several layers of development or integration
of two or more of the IGT Scope of Product, PGIC Scope of Product and SMI Scope
of Product.

 

q.     “SMI
Patents” shall mean means all patents and patent applications identified on Exhibit A
as SMI patents or applications, and all patents in the same Patent Family as
any of the foregoing.

 

r.     “SMI
Scope of Product” shall be circumscribed by the SOA and be defined to include (1) Card
Shufflers and Shoes (2) card and chip sorters and verifiers [contained in
Card Shufflers and Shoes], and (3) bonusing that is performed entirely by
and within the SMI Scope of Product (1) and (2).

 

s.     “SMI
Technology” shall mean any and all of the following: inventions, works of
authorship, technology, know-how, source or object code, algorithms, methods,
processes, procedures, work-arounds and Intellectual Property Rights provided
by or independently developed or owned by SMI.

 

t.      “Specifications”
means the descriptions of the technical requirements, component parts,
features, functionality, performance criteria, operating conditions,
interfaces, data transfer, processing parameters and protocols associated with
any Licensed Product and agreed upon by the Management Committee.

 

u.     “Table
Link CT” refers to a system (including gaming chips) utilizing RFID to track
gaming chips to monitor all bets made at a table game, which can be coupled
with chip tray and other accessories at a table game.

 

v.     “Table
Link GT” refers to card recognition using intelligent shoe that provides data
for player strategy analysis to be sent to a backend analysis module.

 

w.    “TableLink
PT” refers to PGIC table game management system software comprised of a
networked table system with a computer at the table game level to register and
collect selected data, including:  player
ratings, accounting transactions, openers, closers, markers and head count
tracking. This table game management system software will also interface to
various table devices including: tracking units, displays, and shufflers, among
others. It will also interface with backend Casino Management Systems as
necessary and applicable.

 

x.     “Table
Touch” refers to IGT’s table game management system software comprised of
a networked table system with a computer or tracking equipment at the table
game level to register and collect selected data, including but not limited to
one or more of the

 

3

 

following:  player ratings, accounting transactions,
openers, closers, markers and head count tracking. This table game management
system software will also interface to various table devices including:
tracking units, displays, and shufflers, among others to be decided by the
affected Parties. It will also interface with backend Casino Management Systems
as necessary and applicable.

 

y.     “Territory”
shall mean all jurisdictions worldwide in which the Licensed Products can
lawfully be sold, leased, licensed or otherwise distributed.

 

z.     “Third
Party” means a person or entity other than IGT, PGIC or SMI.

 

2.     Scope of the Agreement (or “SOA”):

 

The purpose of this Agreement is to create a comprehensive automated table
management solution using complementary capabilities, technologies, and
resources of the three Parties. The SOA shall be limited to the following
areas:

 

a.     Data collection and processing related to all player and game activity at
the table (pit) excluding the poker room (as it is commonly known in the gaming
industry).

 

b.     Back office data processing, analysis and reporting related to those
items set forth in subsection (a) above.

 

c.     Integration and interfacing of (one or more of) shoes, shufflers, chip
readers, card readers, card and chip sorters/verifiers, table monitoring
systems and back end-processing systems in connection with those items set
forth in subsection (a) above.

 

d.     Enhancements to shoes, shufflers, chip readers, card readers, card and
chip sorters/verifiers, table monitoring systems and back end-processing
systems in connection with those items set forth in subsection (a) above.

 

e.     Automated chip recognition/reconciliation and tracking at the table and
in the cage/chip bank.

 

f.      Progressive systems (excluding “Table Level Bonusing Systems”), player
bonusing, rewards and loyalty systems that utilize real-time data facilitated
by automated data collection excluding play outcomes (only as related to
subsections (a) thru (f) above). Table Level Bonusing Systems include
any “traditional” bonus that increments via a percentage of, or a portion of
the player’s wager related to game outcomes. 
This bonus may only be connected to a stand alone table, multiple tables
within a single site or multiple tables at multiple sites.

 

Any items which are not set forth or described in the SOA shall be
excluded from the Scope of Product of all Parties unless later added in writing
by the Management Committee.

 

3.     Management Committee:

 

a.     The Parties
shall establish a project executive committee consisting of one (1) senior
level employee from each Party (the “Management Committee”). All decisions
respecting any matter that is set forth in this Agreement and that involves all
three Parties shall be made by the Management Committee.  Without limiting the generality of the
foregoing, the Management Committee shall be responsible for the following:

 

•      Overall project
oversight and management

•      Establishing
appropriate project leadership

•      Establishing a schedule for
interfacing each Party’s Scope of Product

•      Development and
approval of Specifications for jointly developed Licensed Products

•      Resolving any
matters between the parties arising under this Agreement

•      Handling the
general management of the relationship created by the Agreement

 

4

 

b.     The Management
Committee shall make such decisions and take such actions as are necessary or
desirable to carry out the purpose of this Agreement. All issues decided by the
Management Committee must be decided by [...***...].

 

c.     The Management
Committee shall conduct status meetings in person or telephonically on at least
a [...***...] basis detailing the [...***...] of the [...***...] and [...***...] the [...***...]
and the [...***...] to be [...***...].

 

d.     [...***...] of the
Management Committee [...***...] required to constitute a quorum for any action to
be taken by the Management Committee.

 

e.     Any one or more
of the Parties may submit proposals for Management Committee review and
approval.  The Management Committee shall
develop and approve an Appendix to this Agreement detailing agreements specific
to each new Licensed Product.

 

f.      Although [...***...]
shall be permitted to [...***...] from [...***...] for [...***...] on the [...***...], no
implied license to any Intellectual Property Rights shall be construed or
conveyed by such permission.

 

g.     Notwithstanding
anything contained in this Agreement to the contrary, any and all matters and
decisions associated with Jointly Developed Technology shall be managed and
determined solely by the Contributing Parties.

 

4.     Product
Development and Integration:

 

a.     Each of IGT,
PGIC and SMI shall use commercially reasonable efforts to expeditiously develop
and implement interfaces between their respective Scope of Product to develop
the Intelligent Table System.

 

(i)      SMI shall be
primarily responsible for the development and integration of SMI Scope of
Product into the Intelligent Table Systems.

 

(ii)     PGIC shall be
primarily responsible for the development and integration of the PGIC Scope of
Product into the Intelligent Table Systems.

 

(iii)    IGT shall be
primarily responsible for the development and integration of the IGT Scope of
Product into the Intelligent Table Systems.

 

b.     Each Party
shall designate sufficient dedicated resources to timely perform its
responsibilities hereunder.

 

c.     Each Party
shall afford [...***...] with respect to matters affecting the [...***...] of the
Intelligent Table System and Licensed Products.

 

(i)            Each
Party shall [...***...] the [...***...] of its Scope of Product [...***...] Jointly
Developed Technology.

 

(ii)           Each
Party shall afford [...***...] to the [...***...] of the Intelligent Table System and
Licensed Products.

 

(iii)          Each
Party shall provide [...***...] and [...***...] required to [...***...] the [...***...] of the
Intelligent Table System and the Licensed Products.

 

(iv)          Each
Party agrees to make [...***...] with the Intelligent Table System on a [...***...].

 

(v)           Each
Party agrees to develop integrated and innovative technology within their Scope
of Product for exclusive use with the Intelligent Table System.

 

d.     Each Party shall
use commercially reasonable efforts to satisfy the reasonable technical
requests of the other Parties so long as the requests are within the SOA.

 

(i)            The
Parties shall agree on the costs to be incurred, which agreement shall not be
unreasonably withheld or delayed.

 

***
Confidential Treatment Requested

 

5

 

(ii)           If
a Party is unable to accommodate a request, the requesting Party may seek to
have a Third Party satisfy such request, provided that the requesting Party
does not disclose Confidential Information of the other Parties without their
approval.

 

e.     Each Party
shall use commercially reasonable efforts to accommodate special customer
requests by providing assistance within its Scope of Product, even if the
results of such request do not provide a direct benefit to that Party, provided
that such results are beneficial to the Intelligent Table System.

 

(i)            Each
Party shall have the option, at its sole cost and expense to require one or
both of the other Parties to hire or provide one dedicated qualified resource
to facilitate custom development deemed necessary or desirable. Each Party
agrees to the foregoing obligation.

 

(ii)           The
Parties shall agree on the costs to be incurred for the provision of the dedicated
resource, which agreement shall not be unreasonably withheld or delayed.

 

(iii)          The
requesting Party shall be responsible for the costs of the dedicated resource.

 

f.      Each Party
shall use commercially reasonable efforts to develop interfaces to Third Party
applications, including but not limited to displays, electronic eyes,
surveillance systems and scheduling software, and other host casino management
system products.  The Parties agree that
such Third Party products may be incorporated into the Intelligent Table System
at such time as an applicable Appendix is executed.

 

g.     All
responsibilities defined above shall be limited to the SOA.

 

5.     Marketing and Distribution:

 

a.     Unless
otherwise agreed by IGT and PGIC IGT shall distribute the IGT Scope of Products
and the PGIC Scope of Products pursuant to the PGIC-IGT Agreement SMI agrees
that PGIC may have products covered by both the original ENPAT license and the
right under the Non-Exclusive Patent License as attached sold by IGT with PGIC’s
royalty obligations as they were in the original licenses.

 

b.     SMI shall be
responsible for the distribution and pricing of SMI Scope of Products.

 

c.     Jointly
Developed Technology shall be distributed by the Contributing Party that is in
the best position to optimize the value of that Jointly Developed Technology.

 

d.     All Parties
agree to cooperate in the creation of marketing and collateral materials.

 

(i)       Each Party
shall designate a marketing contact which may be changed in that Party’s sole
and absolute discretion by providing written notice to the other Parties.

 

e.     Each Licensed
Product shall be [...***...] by the [...***...] for the [...***...] of [...***...] under which
such Licensed Product is [...***...]. Jointly Developed Technology shall be [...***...]
by [...***...].

 

f.      Each Party
shall provide [...***...] for Licensed Products falling under its Scope of Products
to the Management Committee for [...***...] to [...***...] of the [...***...] for [...***...].  Each Party shall, from time to time, provide [...***...]
of [...***...] to the Management Committee.

 

g.     The Parties
agree to [...***...] their Scope of Product to Intelligent Table System customers
at [...***...] those [...***...] by the [...***...] to [...***...] of [...***...] and [...***...].

 

6.     Covenants:

 

a.     Mutual
Covenant. The Parties recognize that each Party is contributing valuable
technology, patents, and other know how and expertise related to its Scope of
Product 

 

***
Confidential Treatment Requested

 

6

 

and
that by combining each Party’s know how, patents, technology, and expertise,
the Parties can better develop the Intelligent Table System.  While the
Parties today do not sell identical commercial products within each other’s
Scope of Product, each Party wants to insure that another Party
does not use the Contributing Party’s technology, know how, patents,
and expertise to develop and sell products outside of the Intelligent Table
System in competition with the applicable Party.  Therefore, each Party
agrees to not compete within the scope of the other Parties’ Scope of Product
without the prior written consent of the applicable Party.

 

i.          As
an exception to the foregoing, [...***...] may [...***...] its [...***...] to [...***...]
provided that [...***...] of [...***...] and [...***...] of the [...***...] from the [...***...]
and [...***...] of such [...***...].  [...***...] and
[...***...] agree to provide an [...***...] to [...***...] the transfer of [...***...] to the [...***...]
product.  No implied license is granted
by any of SMI, IGT or PGIC by virtue of the foregoing exception with respect to
any [...***...] of the [...***...] product.  Furthermore,
[...***...] is [...***...], by reason of the foregoing exception, from [...***...] with the
[...***...] product.  Notwithstanding the
foregoing, at such time as [...***...] and [...***...] with such a [...***...], SMI shall
be [...***...] of its [...***...] to [...***...] and [...***...] the [...***...] of [...***...];
however, at such time as [...***...] or [...***...] with such a [...***...] product, [...***...]
shall be [...***...] solely of its [...***...] to [...***...] either [...***...] or [...***...], as
the case may be, of the [...***...] of [...***...]. Furthermore, [...***...] product is not
the subject of this Agreement or of this non-compete, and [...***...] nor [...***...]
shall [...***...] any [...***...] therefrom or [...***...] any [...***...] thereto.

 

ii.         As
a second exception to the foregoing, [...***...] but [...***...] extensions thereof.

 

iii.        iv.        Notwithstanding
anything contained herein to the contrary, the Mutual Covenant not to compete
shall not preclude a Party from practicing within its Scope of Product nor
shall it preclude any Party from permitting a Third Party to compete within its
Scope of Product.

 

b.     SMI Covenant.
Subject to the SMI Covenant set forth in 6 (b)(i),but subject to the provisions
of section 5.4 of the Patent Purchase Agreement, IGT and SMI both have the
right to make, have made, use, sell, have sold, import, and export products under
the ENPAT Patents [...***...] provided, however, if such use avoids royalties that
would otherwise be due from PGIC, then PGIC will remain responsible for such
royalties.

 

i.           Notwithstanding
anything in this Agreement to the contrary, SMI shall not, for the first three (3) years
of this Agreement, make, have made, use, sell, have sold, import, export,
sublicense, or distribute, any products that use automated chip tracking
technology or technology covered by the SMI Patents; except that SMI may
internally develop such products.  This section may
be terminated and severed pursuant to the Patent Purchase Agreement.

 

ii.          After
the first 3 years of this Agreement, the scope of the SMI Covenant shall be
modified.  During the second three years
of this Agreement, SMI shall not make, have made, use, sell, have sold, import,
export, sublicense, or distribute, any products that use RFID or optical chip
tracking technology or technology covered by the SMI Patents, other than
pursuant to this Agreement; except that SMI may internally develop such
products. This section may be terminated and severed pursuant to the
Patent Purchase Agreement.

 

***
Confidential Treatment Requested

 

7

 

iii.         Notwithstanding
the foregoing, if after five (5) years from the Effective Date, PGIC/IGT have
not installed at least 5,000 tables with automated chip tracking technology,
then SMI may request that PGIC and IGT release SMI from the SMI Covenant.  Upon such request, IGT will (on behalf of IGT
and PGIC) negotiate with SMI, in good faith, the terms and conditions that
would be acceptable for said release. 
PGIC consents to any such release negotiated by IGT.

 

iv.         For
the avoidance of doubt, SMI is not prohibited from making, using or selling RFID
products provided that such RFID products are not within the SOA, nor within
the Scope of Product of either IGT or PGIC and provided further that said RFID
products are not prohibited by this Section 6(b).

 

c.     PGIC Covenant.
Notwithstanding anything in this Agreement to the contrary, PGIC shall retain
all rights, subject to the IGT-PGIC Agreement, to its shoe technology and shoe
intellectual property, including licensing rights and the right to protect such
from any unauthorized use.  However, PGIC
will not itself make, or have made for PGIC, sell or have sold for PGIC,
import, distribute or export any Intelligent Shoe product within the SOA for a
period of [...***...].  Excepting SMI, no
Party may purchase or sell any Intelligent Shoe product from or to a Third
Party during said [...***...] period. 
Notwithstanding the foregoing, PGIC may [...***...].

 

i.         [...***...].

 

7.     Ownership and License Rights:

 

a.     Ownership
of Individual IP: The Parties shall each retain all rights, title, and interest
in or to their respective technology and intellectual property that may be
utilized in the Intelligent Table Systems or any Licensed Product.  Any and all rights not specifically granted
under this Agreement are reserved to the owner(s). No implied licenses to
Intellectual Property Rights shall be construed under this Agreement.

 

b.     Jointly
Developed Technology: Each Jointly Developed Technology, and all Intellectual
Property Rights therein, shall be jointly owned by the applicable Contributing
Parties. Responsibility for the prosecution and maintenance of the Jointly
Developed Technology shall be determined by the Contributing Parties prior to
commencement of development.  Costs
associated with such prosecution and maintenance shall be shared equally by the
Contributing Parties.  Decisions
regarding litigation and related actions against Third Party infringers of the
Jointly Developed Technology shall be made by the Contributing Party(ies). Any and all rights with respect to the ownership, pricing
and exploitation of Jointly Developed Technology shall be reserved solely to
Contributing Parties.

 

c.     Covenants
with Respect to Jointly Developed Technology: 
During the term of this Agreement, each Contributing Party covenants not
to use or license the Jointly Developed Technology without the prior written
consent of the other Contributing Party(ies). 
After the expiration or earlier termination of this Agreement or upon
termination of a Party’s rights pursuant to Section 14, each Contributing
Party shall own an equal and undivided interest in the applicable Jointly
Developed Technology with the other Contributing Party(ies), free to use
(non-exclusively) in its sole discretion, with no right or obligation of
accounting or profit-sharing to any Party. Provided however, that no
Contributing Party may sublicense Jointly Developed Technology without the
prior written consent of the other Contributing Party(ies)

 

d.     PGIC
License. Although the automated chip tracking and casino and cage portions of
RFID are included within the PGIC Scope, their inclusion does not imply a
license to the SMI Patents beyond that which has already been granted in a
separate license agreement. 
Notwithstanding the foregoing and provided that no breach of the GPI
license agreement is caused, SMI and IGT hereby grant PGIC such additional
license

 

***
Confidential Treatment Requested

 

8

 

scope under the SMI patents as is
necessary so that PGIC can fully perform under this Agreement subject to the
terms and conditions set forth on Exhibit B

 

e.     SMI Scope.
Although an element of bonusing is included in the SMI Scope of Product, such
inclusion does not imply a license or an obligation to grant a license to the
IGT or the Acres Gaming bonusing patents.

 

f.      LIMITATIONS
AND RESERVATION OF RIGHTS. Except as otherwise provided herein, no Party may,
without the express written authorization of the other Contributing Party(ies),
sub-license or authorize any Third Party to sell, lease,
license, sublicense, or otherwise dispose of Jointly Developed Technology.

 

g.     SMI
Trademark. Should the Management Committee decide to use the name “Intelligent
Table System” for the Intelligent Table System, then Shuffle Master hereby
grants a royalty free perpetual license to use the trademark “Intelligent Table
System.”

 

h.     No
[...***...] may, without the [...***...] of the Management Committee, at any [...***...]
the [...***...] of [...***...] to or [...***...] with any [...***...] or [...***...] which [...***...]
can, by reason of such [...***...] or [...***...],[...***...] the [...***...] of or [...***...] to
the [...***...] pursuant to this Agreement. 
Any such unapproved [...***...] must be [...***...].

 

8.     Revenue Flows:

 

a.     Revenues shall
be administered, collected and enjoyed [...***...].

 

i.      For purposes of clarification, revenues from
the exploitation of [...***...] shall be administered, collected and enjoyed [...***...].

 

ii.     For purposes of clarification, revenues from
the exploitation of [...***...] shall be administered, collected and enjoyed [...***...].

 

iii.    Revenues from the exploitation of [...***...]
shall be [...***...].

 

9.     Representations, Warranties and Covenants:

 

a.     Each Party hereby covenants, represents and
warrants to the others that (i) each person assigned to perform the
services and/or the development work shall have the proper skill, training and
background so as to be able to perform the such services and/or development
work by such Party in a competent and professional manner and (ii) all
services and/or development work and any work product and other materials or
documentation delivered under this Agreement by such Party shall have been
completed in a thorough and professional manner.

 

b.     Each Party hereby covenants, represents and
warrants to the other Parties that it has the corporate power and authority to
execute, deliver and perform this Agreement and other instruments and documents
required or contemplated herein.  Such
execution, delivery and performance have been duly authorized by all necessary
action on the part of such party, do not and will not require the approval of
the shareholders of such Party and do not and will not contravene the
Certificate of Incorporation or By-Laws of such Party.

 

c.     Each Party represents and warrants that it
has obtained all of the necessary authority, approvals and permissions
including, but not limited to, the approval of its board of directors (if
necessary) to enter into this Agreement and to perform all of its duties and
obligations pursuant to this Agreement.

 

d.     Each
Party warrants that they have the right to grant the licenses set forth in this
Section 9.  In the event any Party
breaches any of these warranties, any non-breaching Party may terminate this
Agreement immediately and the breaching party shall indemnify and hold

 

***
Confidential Treatment Requested

 

9

 

harmless the
non-breaching Parties for any claims, grievances, causes of action, suits,
demands, actions, damages, costs or losses arising out of such breach.

 

e.     EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NO PARTY MAKES ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE
LICENSED PRODUCTS OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT.

 

10.  Indemnification: IGT shall defend, indemnify and hold PGIC or
SMI harmless from any claims brought by a Third Party alleging IGT’s Technology
infringes on any Third Party’s intellectual property rights, except those
claims caused by the negligence or willful misconduct of SMI or PGIC.

 

PGIC shall defend, indemnify and hold IGT or SMI
harmless from any claims brought by a Third Party alleging that PGIC’s
Technology infringe on any Third Party’s intellectual property rights, except
those claims caused by the negligence or willful misconduct of SMI or IGT.

 

SMI shall defend, indemnify and hold IGT or PGIC
harmless from any claims brought by a Third Party alleging that SMI’s
Technology infringe on any Third Party’s intellectual property rights, except
those claims caused by the negligence or willful misconduct of IGT or PGIC.

 

IGT will defend, indemnify and hold PGIC or SMI
harmless from claims brought against them by third parties arising out of the
negligent performance by IGT of its responsibilities or obligations under this
Agreement, excepting those claims caused by the negligence or willful
misconduct of SMI or PGIC.

 

PGIC will defend, indemnify and hold IGT or SMI
harmless from claims brought against them by third parties arising out of the
negligent performance by PGIC of its responsibilities or obligations under this
Agreement, excepting those claims caused by the negligence or willful
misconduct of SMI or IGT.

 

SMI will defend, indemnify and hold PGIC or IGT
harmless from claims brought against them by third parties arising out of the
negligent performance by SMI of its responsibilities or obligations under this
Agreement, excepting those claims caused by the negligence or willful
misconduct of IGT or PGIC.

 

The above indemnifying
Party shall be responsible for defending, indemnifying and holding harmless the
indemnified Party provided that the indemnifying Party is promptly notified in
writing of any such dispute as soon as is reasonably practicable and
indemnifying Party is permitted to select counsel and control the defense
and/or settlement.

 

11.  Term and TerminationThe initial term of this Agreement is six (6) years
from the Effective Date, except as otherwise specifically provided herein.
Thereafter, the Agreement shall be automatically renewed upon each anniversary
thereof for an additional year unless any Party delivers written notice of its
intent to terminate the Agreement 120 days prior to the

 

10

 

expiration of the term.
Revenue distribution and pricing will be reviewed at the time of each renewal
period.

 

a.     This Agreement may be terminated sooner in
accordance with the following provisions:

 

i.      Mutual agreement of the Parties.

 

ii.     A material breach of this Agreement and
failure to cure the breach within thirty (30) days of written notice thereof.

 

iii.    Any Party may terminate this Agreement if any
other Party ceases business operations, makes a general assignment for the
benefit of creditors, becomes insolvent, files or has filed against it a
bankruptcy petition or is required by any governmental entity to end the
Agreement due to regulatory or licensing purposes.

 

b.     In the event this Agreement is terminated,
unless precluded by law, order or regulation, the Parties shall [...***...].

 

c.     In the event this Agreement is terminated,
unless precluded by law, order or regulation, the Parties may [...***...].

 

12.  Confidentiality: PGIC, SMI and IGT acknowledge that each
Party’s Confidential Information constitutes valuable trade secrets and that
they shall use the Confidential Information of the other solely in accordance with
the provisions of this Agreement. No Party may disclose, either directly or
indirectly, the Confidential Information of a disclosing Party to any Third
Party without the Disclosing Party’s prior written consent, except to the
extent that a party is required to provide any such information to any
governmental regulatory authorities.  Any
Party required to disclose the other Party’s Confidential Information to any
governmental regulatory authority shall first give the disclosing Party fifteen
(15) days written notice so that the other Party can submit an appropriate
objection if it so wishes. The foregoing provisions regarding confidentiality
do not apply to information that: (a) was in the recipient’s possession
before receipt from the disclosure and was not acquired, directly or
indirectly, from the disclosing Party; (b) is or becomes available to the
public through no fault of the recipient; (c) is received in good faith by
the recipient from a Third Party having no legal prohibition preventing the
Third Party from disclosing the information and is not subject to an obligation
of confidentiality owed to the Third Party; (d) is independently developed
by the recipient without reference to information received hereunder.

 

13.  Survival of Terms: The rights and obligations of the parties
under Paragraph 10 (Indemnification) and Paragraph 12 (Confidentiality) shall
survive termination of this Agreement for any reason.

 

14.  Assignment:  No party may transfer or assign any of the rights or obligations under
this Agreement by contract, operation of law or otherwise, without the prior
written authorization of the other, which may not be unreasonably withheld.
Withholding of consent to transfer or assign any rights to a competitor of a
Party shall not be deemed to be unreasonable. Any merger, consolidation, or
sale of all or substantially all of the assets of IGT, PGIC or SMI, or any
other transaction in which more than fifty percent (50%) of the voting
securities of IGT, PGIC or SMI is transferred, shall be deemed an assignment of
this Agreement by IGT, PGIC or SMI, as applicable.  Any attempt to assign this Agreement in
contravention of this provision shall be void and of no effect at the option of
the other two Parties. Each Party

 

***
Confidential Treatment Requested

 

11

 

hereto explicitly agrees, as
a material inducement to enter into this Agreement that in the event of an
unauthorized attempt to assign this Agreement, including but not limited to the
acquisition of a Party by a competitor of another Party, as described above,
the remaining two Parties shall have the option to terminate the rights of the
Party attempting such assignment (“Assigning Party”), provided however, that (1) the
mutual covenant set forth in section 6 shall survive any such termination
and be binding upon the Assigning Party; (2) the right of the Assigning
Party to enforce said covenant shall terminate and (3) any Jointly
Developed Technology for which the Assigning Party is a Contributing Party
shall be deemed jointly owned by the Contributing Parties pursuant to the terms
and conditions of Section 7(c).

 

15.  Dispute Resolution:  If a
dispute arises under this Agreement which cannot be resolved by the Management
Committee, the Parties shall employ the following mechanisms in an attempt to
resolve any matters over which a deadlock exists:

 

a.     The matter creating the deadlock shall be
submitted in writing to the CEO of Each Party. The deadlock must be resolved by
a unanimous decision by the CEO’s.  If
the CEO’s cannot resolve the issue within 20 business days, the Parties shall
submit the dispute to binding arbitration subject to the provisions of sections
15 (b) and (c) below.

 

b.     Except as set forth in section 15(c.)
below, any controversy or claim arising out of or related to this Agreement, or
breach thereof, shall be settled by binding arbitration administered by the
American Arbitration Association under its Commercial Arbitration Rules, and
judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. The place of the arbitration shall be the City of
Reno, Nevada.  Three qualified
arbitrators shall be appointed in accordance with the Rules of the
American Arbitration Association and this Agreement.  Such qualified arbitrators shall be members
of the Nevada Bar and shall have experience in gaming law matters. The Parties
and arbitrators shall treat all aspects of the arbitration proceedings,
including, without limitation, discovery, testimony and other evidence, briefs
and the award, as strictly confidential, provided, however, that any award or
order rendered by the arbitrator(s) may be entered as a judgment or order in
court as provided herein or except as required by law or regulation.

 

c.     Notwithstanding the forgoing, the Parties
shall not be obligated to submit the following disputes to binding arbitration
and may seek relief in a court of competent jurisdiction in Nevada:

 

i.          Disputes involving substantive issues
relating to the patents, including without limitation, patent validity,
enforceability and/or infringement, except with respect to the Hill Patents for
which any Party may have the option to require arbitration in accordance with
the provisions of section 15(b).

 

ii.         Disputes for which a Party is seeking
injunctive relief.

 

16.  Relationship of the Parties: The Parties agree that the relationship
between them is that of independent contractors. There is no relationship of
partnership, joint venture, employment, franchise, or agency between the
parties.  Neither IGT, SMI nor PGIC shall
have the right to enter into any commitments or relationships on behalf of the
other, or to bind the other, except to the extent allowed under this Agreement.
Each Party shall be responsible for their own taxes, fees and costs.

 

12

 

17.  Entire Agreement: This Agreement, including the documents and
instruments referred to herein, constitutes the entire agreement of the parties
with respect to the subject matter hereof and all prior rights, negotiations
and representations are merged herein.

 

18.  Waiver: The failure of either party to this Agreement
to insist upon the performance of any of the terms and conditions of this
Agreement, or the waiver of any breach of any of the terms and conditions of
this Agreement, shall not be construed as thereafter waiving any such terms and
conditions, but the same shall continue and remain in full force and effect as
if no such forbearance or waiver had occurred.

 

19.  Effect of Partial Invalidity: The invalidity of any portion of this
Agreement will not and shall not be deemed to affect the validity of any other
provision.  In the event that any
provision of this Agreement is held to be invalid, the parties agree that the
remaining provisions shall be deemed to be in full force and effect as if they
had been executed by both parties subsequent to the removal of the invalid
provision.

 

20.  Modification of Agreement: Any modification of this Agreement or
additional obligation assumed by either party in connection with this Agreement
shall be binding only if evidenced in writing signed by each party or an
authorized representative of each party.

 

21.  Applicable Law: This Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Nevada
regardless of the choice of law rules of such state or any other
jurisdiction. All disputes arising out of this Agreement shall be subject to
the exclusive jurisdiction of either the state or federal courts located in
Reno, Nevada, and the parties agree and submit to the personal and exclusive
jurisdiction and venue of these courts.

 

22.  Notices: Any notice or notices which any parties
hereto deems necessary, useful or convenient to give to any other party or
parties hereto, at any time and from time to time, shall be in writing and
shall be personally served upon or mailed to the parties at the following
addresses:

 

	
  IGT

  	
  Progressive Gaming International Corporation

  
	
  Attn: General Counsel

  	
  Attn: General Counsel

  
	
  9295 Prototype Drive

  	
  920 Pilot Road

  
	
  Reno, Nevada 89510

  	
  Las Vegas, Nevada 89119

  
	
  (775) 448-0120 Fax

  	
  (702) 263-1681 Fax

  
	
   

  	
   

  
	
  With copy to:

  	
  With copy to:

  
	
  IGT

  	
  Progressive Gaming International Corporation

  
	
  Attn: CEO

  	
  Attn: CEO

  
	
  9295 Prototype Drive

  	
  920 Pilot Road

  
	
  Reno, Nevada 89510

  	
  Las Vegas, Nevada 89119

  
	
  (702) 896-6992 Fax

  	
  (702) 263-1681 Fax

  
	
   

  	
   

  
	
  With copy to:

  	
  With copy to:

  
	
  IGT

  	
  Progressive Gaming International Corporation

  
	
  Attn: Richard Pennington

  	
  Attn: CFO

  

 

13

 

	
  9295 Prototype Drive

  	
  920 Pilot Road

  
	
  Reno, Nevada 89510

  	
  Las Vegas, Nevada 89119

  
	
  (775) 448-1488 Fax

  	
  (702) 263-1681 Fax

  
	
   

  	
   

  
	
  With copy to:

  	
   

  
	
  IGT

  	
   

  
	
  Attn: Richard Rowe

  	
   

  
	
  7115 Amigo Street, Suite 150

  	
   

  
	
  Las Vegas, Nevada 89119

  	
   

  
	
   

  	
   

  
	
  (702) 263-7583 Fax

  	
   

  
	
   

  	
   

  
	
  Shuffle Master, Inc.

  	
   

  
	
  Attn: General Counsel

  	
   

  
	
  1106 Palms
  Airport Drive

  	
   

  
	
  Las Vegas,
  Nevada 89119-3730

  	
   

  
	
  (702) 270- 5161 Fax

  	
   

  
	
   

  	
   

  
	
  With copy to:

  	
   

  
	
  Shuffle Master, Inc.

  	
   

  
	
  Attn: CEO

  	
   

  
	
  1106 Palms
  Airport Drive

  	
   

  
	
  Las Vegas,
  Nevada 89119-3730

  	
   

  
	
  (702) 270-5130 Phone

  	
   

  
	
  (702) 270-5161 Fax

  	
   

  

 

A Party may change a notice
address at any time by providing written notice to the other Parties.

 

23.  Attorneys’ Fees and Costs: If any legal action or any arbitration or
other proceeding is brought for the enforcement of this Agreement or because of
an alleged dispute, breach, default or misrepresentation in connection with any
provisions of this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys’ fees and other costs incurred in that
action or proceeding, in addition to any other relief to which he may be
entitled.

 

24.  Counterparts: This Agreement may be executed in any number
of counterparts, each which shall be deemed to constitute but one and the same
instrument.

 

25.  Headings: Article and paragraph headings contained
in this Agreement are inserted only as a matter of convenience and
reference.  Said captions shall not be
construed to define, limit, extend or describe this agreement of the intent of
any provision hereof.

 

26.  Execution of Additional
Documents: Each Party agrees
to perform any further acts and to execute and deliver any documents which may
be reasonably necessary to effectuate the provisions of this Agreement.

 

14

 

27.  Patent Purchases:  IGT
shall purchase a 50% interest in the SMI Patents pursuant to the terms and
conditions of the Patent and Technology Purchase Agreement attached hereto as Exhibit A.
In the event of a conflict between this Agreement and the Patent Purchase Agreement
(“PPA”) with respect to the subject matter of the PPA, the PPA shall control.

 

28.  Non-Party Beneficiaries:  It is
not intended, and this Agreement shall not be construed, to provide any entity
or person not a Party to this Agreement with any benefits or to obligate the
parties to this Agreement to any entity or person not a Party to this
Agreement.

 

29.  Press Release: Subject to applicable laws and regulations,
each of SMI, PGIC and IGT shall mutually agree with respect to the timing and
content of all press releases that are related to the subject matter
hereof.  No Party shall issue a press
release without the prior written consent of the other Parties, which consent
shall not be unreasonably withheld or delayed.

 

30.  Execution Statement.  The undersigned individuals represent that they are of legal capacity
and authorized to sign this Agreement in a representative capacity on behalf of
the indicated party they represent.  Each
party has relied upon that representation in entering into this Agreement

 

IN
WITNESS WHEREOF, the parties hereto have entered into this Agreement this 13th
day of June 2005.

 

 

	
  “IGT”

  	
   

  	
  “PGIC”

  
	
   

  	
   

  	
   

  
	
  IGT, a Nevada corporation

  	
   

  	
  MIKOHN GAMING CORPORATION, a

  
	
   

  	
   

  	
  Nevada corporation, doing business as

  
	
   

  	
   

  	
  PROGRESSIVE GAMING

  
	
   

  	
   

  	
  INTERNATIONAL CORPORATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Rich Pennington

  	
   

  	
  By:

  	
   /s/ Mike Dreitzer

  
	
  Name:

  	
   Rich Pennington

  	
   

  	
  Name:

  	
   Mike Dreitzer

  
	
  Title:

  	
   EVP Corp Strategy

  	
   

  	
  Title:

  	
   EVP/GC

  
	
  Date:

  	
   6/13/05

  	
   

  	
  Date:

  	
   6/13/05

  
	
   

  	
   

  	
   

  
	
  Shuffle Master, Inc., a Minnesota

  corporation

  	
   

  	
   

  
	
  By:

  	
  /s/ Paul Meyer

  	
   

  	
   

  	
   

  
	
  Name: Paul Meyer

  	
   

  	
   

  
	
  Title:

  	
  President & COO

  	
   

  	
   

  
	
  Date:

  	
  6/13/05

  	
   

  	
   

  
								

 

15

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