Exhibit 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:
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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. 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
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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
[…***…].
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
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(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 [
