Product Development And Integration Agreement

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:



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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



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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. PGIC92s scope shall also include Tablelink PT to the extent that its inclusion does not overlap with IGT92s scope, in which case, IGT92s 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 IGT92s 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



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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 player92s 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:



95 Overall project oversight and management

95 Establishing appropriate project leadership

95 Establishing a schedule for interfacing each Party92s Scope of Product

95 Development and approval of Specifications for jointly developed Licensed Products

95 Resolving any matters between the parties arising under this Agreement

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



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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 [85***85].



c. The Management Committee shall conduct status meetings in person or telephonically on at least a [85***85] basis detailing the [85***85] of the [85***85] and [85***85] the [85***85] and the [85***85] to be [85***85].



d. [85***85] of the Management Committee [85***85] 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 [85***85] shall be permitted to [85***85] from [85***85] for [85***85] on the [85***85], 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 [85***85] with respect to matters affecting the [85***85] of the Intelligent Table System and Licensed Products.



(i) Each Party shall [85***85] the [85***85] of its Scope of Product [85***85] Jointly Developed Technology.



(ii) Each Party shall afford [85***85 ...