JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT (this "Agreement"), effective as of 12-3,
1996 (the "Effective Date"), is entered into by and between IGT, a Nevada
corporation ("IGT"), and Anchor Games, a d.b.a. of Anchor Coin, a Nevada
corporation ("Anchor").
WHEREAS, each of IGT and Anchor possesses unique expertise and products
relating to wagering systems and gaming technology; and
WHEREAS, IGT and Anchor desire to establish their strategic alliance in
order to benefit both parties in the marketplace of wagering systems and
gaming technology, in accordance with the terms and conditions of this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and conditions contained in this Agreement, IGT and Anchor agree as
follows:
ARTICLE I - DEFINITIONS
As used in this Agreement, the following terms shall have the indicated
meanings:
1.1 "Intellectual Properties" shall mean patents, copyrights, trademarks, trade
names, service marks, ideas, designs, concepts, techniques, discoveries or
improvements including any and all devices and computer software, whether
or not patentable and pending applications relating thereto.
1.2 "Venturers" shall mean IGT and Anchor and their permitted successors and
assigns, and "Venturer" shall mean IGT and Anchor individually.
1.3 "Participating Interest" shall mean the undivided interest of each of the
Venturers in the assets, rights and benefits of the Joint Venture as set
forth in Section 6.2 hereof.
1.4 "Property" shall mean all of the interest in property or property rights
that are owned by the Joint Venture from time to time whether personal,
real or otherwise, including the rights and benefits attached thereto or
associated therewith.
1.5 "Spin for Cash" means a gaming device that incorporates the concept of
[Confidential information set forth here has been filed separately with
the Securities and Exchange Commission under Rule 24b-2 under the
Securities Exchange Act of 1934.]
1.6 "Spin for Cash Wide Area Progressive System" means a linked wide-area
progressive gaming device system employing (i) Anchor's Spin for Cash
commonly referred to as "Wheel of Gold" or IGT's Spin for Cash commonly
referred to as "Wheel of Fortune" and (ii) the linked progressive gaming
device technology of IGT and its affiliates.
1.7 "linked wide-area progressive gaming device system" means a system
comprised of gaming devices which devices are (i) located in more than one
gaming property; (ii) all inter-connected;
1
and (iii) which all contribute a portion of "coin-in" to a common,
shared progressive jackpot. This definition is specifically intended to
exclude video lottery devices and systems.
ARTICLE II - INTERPRETATION OF AGREEMENT
2.1 ASSIGNMENT - Neither this Agreement nor any rights or obligations of any
Venturer hereunder shall be assigned or otherwise transferred nor the
duties hereunder delegated, by operation of law or otherwise by one
Venturer without the prior written consent of the other Venturer, except
that either Venturer may assign it rights under this Agreement to a direct
or indirect wholly owned subsidiary that agrees in writing to be bound by
the terms of this Agreement.
2.2 DESIGNATED SUCCESSORS - The terms and conditions contained in this
Agreement shall be binding upon and shall inure to the benefit of the
Venturers hereto and their respective permitted heirs, executors, personal
administrators, lawful legal representatives, successors and assigns.
2.3 ENFORCEABILITY OF PROVISIONS - If any covenant, obligation or provision
contained in this Agreement or the application thereof to any person or
circumstance shall to any extent be found to be invalid or unenforceable(as
to time, scope or otherwise), such invalid or unenforceable covenant,
obligation or provision will be curtailed to the minimum extent necessary
so as to be valid and enforceable to the fullest extent permitted by law.
2.4 ENTIRE AGREEMENT - This Agreement and the Schedules and Exhibits hereto
constitute the entire agreement between the Venturers and supersedes all
other prior written and prior or contemporaneous oral contracts,
agreements, negotiations and undertakings relating to the subject matter of
this Agreement between the Venturers. There are no representations,
warranties, collateral agreements or conditions affecting this transaction
other than as expressed or referred to herein.
2.5 HEADINGS - The headings herein contained are intended for convenience of
reference only and shall not form a part hereof nor affect the
interpretation of this Agreement.
2.6 JURISDICTION - This Agreement shall be governed by and interpreted in
accordance with the laws in force in the State of Nevada. The Venturers,
for themselves and on behalf of their respective agents, employees and
subsidiaries, irrevocably agree to the exclusive jurisdiction of the Courts
of the State of Nevada (or such judicial district of a court of the United
States as shall include the same) for the determination of all matters
arising hereunder.
2.7 MODIFICATION - None of the terms of this Agreement may be waived or
modified except by an express agreement in writing signed by authorized
signatories of each Venturer. The failure or delay of either Venturer in
enforcing any of its rights under this Agreement shall not be deemed a
continuing waiver or a modification by such Venturer of such right.
2
ARTICLE III - FORMATION OF JOINT VENTURE
3.1 FORMATION - IGT and Anchor hereby agree to form a joint venture which shall
be known as the "SPIN FOR CASH WIDE AREA PROGRESSIVE JOINT VENTURE," for
the limited purposes set forth and described in Section 3.3 hereof; subject
to the terms and conditions of this Agreement.
3.2 COMMENCEMENT - The business of the Joint Venture shall be conducted in
accordance with the provisions of this Agreement and shall commence on the
Effective Date and continue until terminated as provided in this Agreement.
3.3 JOINT VENTURE PURPOSE - The sole purpose of the Joint Venture shall be to
develop and market the Spin for Cash Wide Area Progressive System.
3.4 OWNERSHIP OF ASSETS - All Property owned by the Joint Venture shall be
owned by the Joint Venture as an entity in the name of " Spin for Cash Wide
Area Progressive Joint Venture." It is understood by the parties that
various governmental or regulatory agencies may not permit the ownership
structure of assets as set forth in this section. In such event, the
parties agree to negotiate in good faith and to make such commercially
reasonable accommodations to comply with permitted ownership structures or
to take such actions as are necessary to change such rules or regulations
so as to carry out the purposes of this Joint Venture. Insofar as
permitted by applicable law, no Venturer shall have any ownership interest
in such Property in its individual name or right; and each Venturer's
interest in the Joint Venture shall be personal property for all purposes.
The Venturers shall use the Joint Venture's credit and assets solely for
the benefit of the Joint Venture. No asset of the Joint Venture shall be
transferred or encumbered for or in payment of any individual obligation of
any Venturer.
3.5 PARTNERSHIP - The Joint Venture will be constituted as a partnership under
the laws of the State of Nevada. The Joint Venture shall have all powers
conferred upon partnerships under the laws of the State of Nevada in
furtherance of its purposes as set forth in Section 3.3. The Joint Venture
and the Venturers shall promptly make any and all required governmental
filings required to constitute the Joint Venture under applicable law.
Notwithstanding the foregoing, the Venturers will negotiate in good faith
and mutually agree upon such restructuring and reorganization of the Joint
Venture into a corporate entity (including, without limitation, in the form
of a limited liability company) as may be reasonably necessary and
appropriate for purposes of minimization of each Venturer's tax burden and
liability exposure.
3.6 PARTICIPATING INTERESTS - The Participating Interests of the Venturers will
be as follows:
ANCHOR IGT
50% 50%
3.7 EFFORTS - IGT and Anchor agree that during the term of the Joint Venture
they both shall devote such time, attention and resources as necessary to
adequately promote the interests of the Joint Venture and the mutual
interests of the Venturers in the success of the Joint Venture and the Spin
for Cash Wide Area Progressive System. It is specifically understood,
however, that no
3
Venturer will be required to devote full time to the Joint Venture and
that each Venturer will be entitled, subject to the terms of this
Agreement, to engage in and possess interests in other business
ventures of any and every type and description, independently or with
others, and that neither the Joint Venture nor the other Venturers
shall, by virtue of this Agreement, have any right, title or interest
in or to such other business ventures or the earnings or profits
therefrom.
3.8 EXCLUSIVITY - In consideration of mutual covenants in this Agreement, and
as a material inducement to the other Venturer to enter into this
Agreement, the Venturers hereby agree as follows:
(a) During the term of this Agreement, without IGT's prior written
consent, Anchor will not, directly or indirectly, by contract,
through affiliates or otherwise, within [Confidential information
set forth here has been filed separately with the Securities and
Exchange Commission under Rule 24b-2 under the Securities Exchange
Act of 1934], provide or sell under any terms to any third party
[Confidential information set forth here has been filed separately
with the Securities and Exchange Commission under Rule 24b-2 under
the Securities Exchange Act of 1934.]
(b) During the term of this Agreement, without Anchor's prior written
consent, IGT will not, directly or indirectly, by contract, through
affiliates or otherwise, within [Confidential information set forth
here has been filed separately with the Securities and Exchange
Commission under Rule 24b-2 under the Securities Exchange Act of
1934], provide or sell under any terms to any third party
[Confidential information set forth here has been filed separately
with the Securities and Exchange Commission under Rule 24b-2 under
the Securities Exchange Act of 1934.]
(c) Each Venturer hereby acknowledges and agrees that the limitations as
to time, geographical area and scope of activity contained in this
Section 3.8 are fair and reasonable and do not impose a greater
restraint than is reasonably necessary to protect the goodwill and
other business interests of the other Venturer.
3.9 MUTUAL RELEASE - Anchor hereby releases and forever discharges IGT of and
from any and all claims, debts, demands, actions, cross-claims, causes of
action, suits and liabilities whatsoever, both at law, statutory, in equity
or otherwise, which Anchor may now have or may hereafter claim to have
against IGT arising out of any infringement, violation or misappropriation
by IGT of Anchor's Intellectual Properties prior to the Effective Date.
IGT hereby releases and forever discharges Anchor of and from any and all
claims, debts, demands, actions, cross-claims, causes of action, suits and
liabilities whatsoever, both at law, statutory, in equity or otherwise,
which IGT may now have or may hereafter claim to have against Anchor
arising out of any infringement, violation or misappropriation by Anchor of
IGT's Intellectual Properties prior to the Effective Date.
ARTICLE IV - MANAGEMENT OF JOINT VENTURE
4.1 ADMINISTRATION AND MANAGEMENT - All decisions respecting any matter set
forth in this Agreement or otherwise affecting or arising out of the
conduct of the business of the Joint Venture shall be made by a management
committee (the "Management Committee") consisting of two individuals
appointed by each Venturer. Without limiting the generality of the
foregoing, the Management Committee shall be responsible for the following
tasks:
(a) establishing pricing for the Spin for Cash Wide Area Progressive
System;
4
(b) establishing a detailed budget for each fiscal year of the Joint
Venture;
(c) establishing billing procedures;
(d) developing a schedules, goals and plans for implementation for the
development of the Spin for Cash Wide Area Progressive System in
cooperation with each of the Venturers;
(e) contract with such parties, whether third parties or a party to
this Agreement, to perform such services or activities as are
necessary to accomplish the objectives of this Agreement, and to
comply with applicable gaming rules and regulations; and
(f) determine a model for such direct costs as may be allocated by
each Venturer to the Joint Venture.
The Management Committee shall make such decisions and take such actions as
may be necessary or desirable to carry out the purpose of the Joint Venture
and shall have all the powers that are necessary for such purpose. No
person or entity other than the Management Committee and those it expressly
authorizes in writing shall have the authority to bind the Joint Venture.
4.2 QUORUM - All four (4) members of the Management Committee are required to
constitute a quorum for any action to be taken by the Management Committee.
4.3 MEETINGS - Unless otherwise agreed, regular meetings of the Management
Committee shall be held at least every other month alternating between the
offices of Anchor in Las Vegas and IGT in Reno beginning on December 1st,
1996 on the first Thursday of the month or at such other time as all
members of the Management Committee may agree, and special meetings of the
Management Committee may be called by any member of the Management
Committee.
4.4 NOTICE - Notice of the time and place of any special meeting of the
Management Committee shall be given to each member of the Management
Committee not less than seven (7) days before the time when the meeting is
to be held by personal delivery, facsimile transmission, telegram, cable or
telex to a member's business address, from time to time. A member of the
Management Committee may, in any manner, waive notice of a meeting. The
attendance of a member of the Management Committee at a meeting of the
Management Committee shall constitute a waiver of notice of the meeting,
unless such member is attending for the sole purpose of disputing notice.
4.5 REQUISITE VOTE - Unless specifically indicated in this Agreement, at all
meetings of the Management Committee, every issue arising at such meeting
shall be decided by no less than three (3) of the four (4) members of the
Management Committee.
4.6 PARTICIPATION - A member of the Management Committee may participate in a
meeting by means of telephone or such other communication facility as may
permit all persons participating in the meeting to hear each other.
Notwithstanding any other provision of this Agreement, any action that the
Management Committee may take at a meeting duly called and held must be
taken by written consent and signed by all the members of the Management
Committee.
5
4.7 RESOLUTION RECORDING - The Management Committee shall cause to be prepared
and entered into books provided for the purpose all resolutions of the
Management Committee.
4.8 TRAVEL COSTS - The costs for travel and other expenses properly incurred by
each member of the Management Committee in attending meetings thereof shall
be reimbursed to them by the Venturer who appointed the member to the
Management Committee.
4.9 APPOINTMENT OF MANAGERS - The Management Committee may, from time to time,
appoint one or more managers to manage the day to day business and affairs
of the Joint Venture. Such managers shall exercise such powers and have
such authority as may be delegated to them by the Management Committee.
4.10 MANAGER ACCOUNTABILITY - The Management Committee and any employee, agent
or other representative appointed by the Management Committee shall not be
liable in any way to the Joint Venture or to any Venturer for action or
omission taken in good faith without gross negligence or a willful
disregard of such person's duties. Without limiting the generality of the
foregoing, except where grossly negligent or in willful disregard of their
duties, neither the Management Committee nor any employee, agent or other
representative appointed by the Management Committee shall be answerable or
accountable for any loss or liability arising out of or resulting from:
(a) acts or omissions or defaults of contractors or agents, engaged by the
Management Committee or any managers appointed by the Management
Committee or any managers appointed by the Management Committee in any
operation or work conducted for the account of or engaged for any
purpose of the Joint Venture or incidental to the business of the
Joint Venture;
(b) omission to pay rental or fees or to perform obligations imposed by
governmental authority;
(c) loss or destruction of the Joint Venture's assets from fire, explosion
or any hazard, in excess of proceeds of insurance in force and effect
at the time of loss;
(d) loss or destruction of the Joint Venture's assets from uninsurable
hazards;
(e) accounting or secretarial errors of any type.
4.11 MANAGEMENT INDEMNIFICATION - The Venturers jointly and severally shall
indemnify each present and former member of the Management Committee,
and each present and former employee, agent or other representative of
the Joint Venture, and the heirs, executors, administrators, successors
and assigns of the foregoing, from and against any and all liabilities,
costs, charges and expenses sustained or incurred in respect of any
action, suit or proceeding that is proposed or commenced against them
for or in respect of anything done or permitted by them to be done in
respect of the execution of the duties of their office. Such
indemnification shall include, without limitation, all costs, charges
and expenses that they sustain or incur in respect of the affairs of the
Joint Venture, except where such liability or costs are finally
determined to relate to their willful disregard for their duties or
gross negligence .
6
ARTICLE V - SALES OR LEASES
5.1 SALES OR LEASES. From time to time, a Venturer will sell or lease such
items as may be reasonably requested by the Joint Venture and agreed by such
Venturer, in which event such Venturer will sell or lease such items to the
Joint Venture at cost. With respect to any such lease, (i) the term will be
coterminous with the Joint Venture, (ii) the monthly lease payments to such
Venturer will be equal to 1/36th of the total cost of such items for the
first 36 months of each lease, and (iii) the lease payments to such Venturer
will be reduced to one dollar ($1) per month at such time as the Joint
Venture has repaid the total cost of the leased items. If there is not
sufficient available cash for the Joint Venture to meet its obligation under
each Lease, then lease payments will be apportioned between Venturers
ratably in accordance with the cost of the goods leased to the Joint Venture
by the respective Venturers.
ARTICLE VI - FINANCIAL CONTRIBUTIONS AND INTERESTS
6.1 LICENSES.
(a) Upon execution of this Agreement, Anchor and the Joint Venture will
enter into a license agreement pursuant to which Anchor will grant to
the Joint Venture a non-exclusive, royalty-free and paid-up license
under any of Anchor's patent rights whether owned or acquired, in its
Wheel of Gold gaming device to make, sell and use the Spin For Cash
Wide Area Progressive System. A form of such license agreement shall
be attached hereto as Exhibit A.
(b) Upon execution of this Agreement, IGT and the Joint Venture will enter
into a license agreement pursuant to which IGT will grant to the Joint
Venture a non-exclusive, royalty-free and paid-up license under any of
IGT's patent rights in its Wheel of Fortune gaming device, whether
owned or acquired, and in its wide area inter-linked progressive
wagering system, whether owned or acquired, to make, sell and use the
Spin For Cash Wide Area Progressive System. A form of such license
agreement shall be attached hereto as Exhibit B.
6.2 NO EXPENSES - Except for payments under the Anchor Lease and the IGT Lease
or as approved by the Management Committee , neither Venturer nor any of
their affiliates will be entitled to any compensation for their services or
to be reimbursed for out-of-pocket, overhead or general administrative
expenses.
6.3 ALLOCATIONS - The Venturers shall share profits and losses in proportion to
their respective Participating Interests. For Federal income tax purposes,
each item of income, gain, loss, deduction or credit entering into the
computation of the Joint Venture's taxable income shall be allocated in
proportion to their respective participating interests. A Venturer's
capital account shall be credited with (i) its contributions to the capital
of the Joint Venture; and (ii) its allocable share of Joint Venture income
and gains, and shall be debited with (i) its allocable share of Joint
venture deductions and losses; and (ii) the amount of any distributions of
the Joint Venture. The Venturers may be requested to make additional
contributions to the Joint
7
Venture based upon the unanimous recommendations of the Management
Committee. The Participating Interests of the Venturers shall remain
the same unless the other Venturer agrees otherwise and shall not be
increased by virtue of any loan, gift or other contribution made by a
Venturer unless the other Venturer agrees otherwise.
6.4 DISTRIBUTIONS - The Venturers agree that the calculation of revenues and
expenses pursuant to this Agreement shall be in accordance with generally
accepted accounting principles. The Joint Venture will distribute to the
Venturers all cash of the Joint Venture (less the amount that the
Management Committee agrees shall constitute a reasonable reserve for
working capital and anticipated expenses) to the Venturers in proportion to
their Participating Interest within 30 days after the end of each fiscal
quarter of IGT. Cash distributions shall be in accordance with the
following priority schedule (i) payments to vendors, including trade
payables to either of the Joint Venturers (ii) payments for any licensing
or regulatory fees applicable to the Joint Venture (iii) payments of any
taxes applicable to the Joint Venture and (iv) payments of any royalties of
lease fees as agreed upon by the Management Committee.
6.5 JOINT VENTURE ACCOUNTING IGT shall provide all accounting services to the
Joint Venture which shall include, but are not limited to, collection of
all accounts of the Joint Venture, payment of all debts of the Joint
Venture, maintaining complete accounting records of the Joint Venture in
accordance with the generally accepted accounting principles.
6.4 AUDITING RIGHTS - Both Venturers shall have the absolute right to review
and make copies of all books, records, and papers of the Joint Venture and
to have audits of the Joint Venture performed any time and from time to
time. The cost of one annual audit shall be borne by the Joint Venture
each year and any additional audits will be paid for by the Venturer
requesting the audit.
ARTICLE VII - PROPRIETARY TECHNOLOGY RIGHTS
7.1 OWNERSHIP - Except as otherwise provided in this Agreement, each Venturer
shall retain all rights to ownership, title or interests to any proprietary
information, any inventions and any Intellectual Properties independently
developed (without any design or technological input from the other
Venturer) by them prior to the Commencement Date of this Agreement and
during the term of the Joint Venture. All independently developed
Intellectual Properties shall remain the property of the Venturer that
developed it. It is expressly agreed that all new jointly developed (with
input from the other Venturer) Intellectual Properties that are developed
as a direct result of the Joint Venture, including tradenames and
trademarks, shall be the Property of the Joint Venture until the expiration
or termination of this Agreement for any reason, at which time all new
jointly developed intellectual property shall be jointly owned by IGT and
Anchor. No rights to the Intellectual Properties or technology of any
party is granted to the other party except as expressly set forth in this
Agreement. If the ownership of any Intellectual Property is not permitted
in a gaming jurisdiction in which the Joint Venture chooses to pursue
business, the parties agree to negotiate in good faith and make such
commercially reasonable accommodations to comply with permitted ownership
structures or to take such actions as are necessary to change such rules or
regulations so as to carry out the purposes of this Joint Venture.
8
7.2 NO INFRINGEMENT - Each Venturer hereby acknowledges the other Venturer's
Intellectual Properties with respect to the other Venturer's proprietary
gaming devices, including without limitation such [Confidential
information set forth here has been filed separately with the Securities
and Exchange Commission under Rule 24b-2 under the Securities Exchange
Act of 1934] gaming devices first originated by the other Venturer as
listed on Exhibit C attached hereto. Each Venturer hereby agrees that
it will fully respect and will not infringe or misappropriate any and
all such Intellectual Properties of the other Venturer. Each Venturer
hereby stipulates that the gaming devices as listed on Exhibit C are,
for the purposes of this Section 7.2 and without limitation, first
originated by each respective Venturer as listed. As such, it is the
intention of the parties and each Venturer agrees to not replicate,
produce, sell or distribute such or substantially similar games of the
other Venturer as are listed in Exhibit C, either individually, or
through affiliates, distributors, subsidiaries, partners or otherwise,
except as specifically set forth in this Agreement. Exhibit C shall be
appended from time to time to include such [Confidential information set
forth here has been filed separately with the Securities and Exchange
Commission under Rule 24b-2 under the Securities Exchange Act of 1934]
games as defined above or by mutual consent, or both.
ARTICLE VIII -CONFIDENTIALITY
8.1 INFORMATION DEVELOPED PRIOR TO COMMENCEMENT DATE - The Venturers agree that
during the term (and any extension) of this Agreement and continuing
perpetually thereafter, neither Anchor nor IGT shall disclose to any third
party or use for any purpose other than those specific purposes set forth
in this Agreement, without the prior written consent of the other party,
which consent shall be in the sole discretion of the party from whom such
consent is requested, any Confidential Information (as defined below)
except as provided for below. For the purposes of this Agreement
"Confidential Information" means all proprietary concepts, designs,
customer data bases, documents, information, processes, procedures, data,
results, conclusions, know-how and similar information (including knowledge
of the terms of and actions taken pursuant to this Agreement) that was or
is developed prior to the Commencement Date of this Agreement and that is
disclosed or submitted to one party by the other in connection with this
Agreement.
8.2 INFORMATION DEVELOPED DURING THE JOINT VENTURE - Notwithstanding Section
8.1, the Venturers agree that during the term of and any subsequent
extension of this Agreement and for a period of ten (10) years thereafter,
all Confidential Information, as defined in Section 8.1, that is developed
during this Agreement in connection with the Joint Venture which is
disclosed to one party by the other shall not be disclosed to any third
party or used for any purpose other than those purposes specifically set
forth in this Agreement, without the prior written consent of the other
party.
8.3 EXCLUSIONS - Anchor and IGT shall have no obligation with respect to any
portion of such Confidential Information under Section 8.1 or 8.2 that:
(a) is or later becomes generally available to the public through no fault
of the party receiving the Confidential Information; or
(b) is obtained from a third party who had the legal right to disclose the
same to the party; or
9
(c) is already rightfully possessed by the party receiving such
information as evidenced by that party's written records, predating
receipt thereof from the other party at any time; or
(d) such party can prove by clear and convincing evidence that such
information was independently developed by the receiving party without
reference to or knowledge of the disclosed information.
8.4 MAINTAINING CONFIDENTIALITY - Each Venturer agrees to use reasonable
efforts to ensure that information described in Section 8.1 and 8.2 is held
in strict confidence. Such steps shall include, but are not limited to,
explicitly labeling as "CONFIDENTIAL" all written information relating to
technology which is considered proprietary and confidential, and requiring
all employees and subcontractors who are exposed to such information in
connection with this Agreement, to execute a non-disclosure agreement
containing terms and conditions consistent with those set forth in this
Article VIII, obligating each employee and subcontractor to maintain such
information as confidential. Each Venturer will be liable for any non-
compliance with the terms and conditions of such non-disclosure agreement
by each of its employees and subcontractors. The parties agree that, in
addition to the foregoing provisions, the confidentiality letter attached
to this Agreement as Exhibit D will remain in full force and effect.
ARTICLE IX - WARRANTIES AND REPRESENTATION
9.1 WARRANTIES AND REPRESENTATIONS OF ANCHOR - Anchor warrants, as of the date
of this Agreement, that the terms of this Agreement are not inconsistent
with Anchor's other contractual arrangements relating to any and all Anchor
business activities. The Board of Directors of Anchor has taken all
actions required to be taken by law, its Articles of Incorporation, its By-
Laws or other organizational documents to authorize the execution and
delivery of this Agreement.
9.2 WARRANTIES AND REPRESENTATIONS OF IGT- IGT warrants, as of the date of this
Agreement, that the terms of this Agreement are not inconsistent with IGT's
other contractual arrangements relating to any and all IGT business
activities, and that the Board of Directors of IGT have taken all actions
required to be taken by law, its Articles of Incorporation, its By-Laws, or
other organizational documents to authorize the execution and delivery of
this Agreement.
ARTICLE X - LIABILITY
10.1 NO WARRANTY - EXCEPT AS SPECIFICALLY STATED IN ARTICLE IX, THE VENTURERS
MAKE NO EXPRESS OR IMPLIED WARRANTY AS TO ANY MATTER WHATSOEVER, WHETHER
TANGIBLE OR INTANGIBLE, DEVELOPED UNDER THIS AGREEMENT, OR THE OWNERSHIP,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF ANY INVENTION,
TEST, OR PRODUCT. IN NO EVENT WILL ANY VENTURER BE LIABLE TO THE JOINT
VENTURE OR ANY OTHER VENTURER FOR ANY PUNITIVE, SPECIAL, INCIDENTAL,
INDIRECT, OR CONSEQUENTIAL DAMAGES, INCLUDING ANY LOSS OF INCOME, PROFITS,
COST-SAVINGS, GOODWILL OR BUSINESS.
10
10.2 LIABILITY SEVERAL - The obligation of the Venturers under this Agreement to
one another shall be in every case several and shall not be, or construed
to be, either joint or joint and several .
10.3 FORCE MAJEURE - Neither Venturer shall be liable for any unforeseeable
event beyond its reasonable control not caused by the fault or negligence
of such Venturer, that causes such Venturer to be unable to perform its
obligations under this Agreement, and that it has been unable to overcome
by the exercise of commercially reasonable steps. In the event of the
occurrence of such a force majeure event, the Venturer unable to perform
shall promptly notify the other Venturer. The disabled Venturer shall
further use reasonable efforts to resume performance as quickly as possible
and shall suspend performance only for such period of time as is necessary
as a result of the force majeure event.
10.4 LIABILITY FOR ACTIONS BROUGHT OUTSIDE OF NEVADA - In the event that a
dispute, claim or suit is brought in a jurisdiction other than the State of
Nevada, against the Joint Venture or either Venturer for activities of the
Joint Venture, the Joint Venture or Venturer shall use its commercially
reasonable efforts to have the action removed to Courts of the State of
Nevada or the federal courts having jurisdiction over the state of Nevada.
If removal cannot be accomplished, it is understood that each Venturer
shall be liable for all expenses, costs, damages, losses, obligations and
liabilities, including reasonable attorney's fees, that are required to be
paid by the Joint Venture or either Venturer as a result of such action in
proportion to their Participating Interests unless said loss is due to the
gross negligence or willful misconduct of a Joint Venturer in which event
that Venturer shall bear such liabilities to the extent caused by such
gross negligence or willful misconduct.
10.5 INTELLECTUAL PROPERTY INDEMNITY. Each party agrees to defend, indemnify,
pay reasonable attorneys' fees, and hold harmless the other party against
all claims, demands, suits, losses, damages, costs, and expenses that the
other party may sustain or incur by reason of any infringement or violation
of any patent, trademark, copyright or other proprietary right of a third
party for any intellectual property provided solely by the indemnifying
party pursuant to this Agreement.
ARTICLE XI - TERM, TERMINATION AND SURVIVING RIGHTS
11.1 TERM. The initial term of this agreement shall be for a period of ten (10)
years following the Commencement Date (the "Initial Term")
11.2 TERMINATION BY MUTUAL CONSENT - Unless otherwise agreed, this Agreement
shall end on the last day of the end of the Initial Term. IGT and Anchor
may elect to terminate this Agreement, or portions thereof, by mutual
written consent at any earlier date, such consent shall be effective when
signed by authorized signatories of both Venturers.
11.3 TERMINATION FOR CAUSE - If either Venturer at any time commits a material
breach of any covenant or agreement contained herein, and fails to remedy
any such breach within thirty (30) days after receiving written notice
thereof, which notice shall specify the manner in which the Agreement has
been breached by the other Venturer, such Venturer may, at its option and
in
11
addition to any other remedy that it might be entitled to, terminate
this Agreement by notice in writing, which will be effective upon receipt.
11.4 TERMINATION WITHOUT CAUSE -. Subsequent to the Initial Term either
Venturer may terminate this Agreement without cause upon one (1) year's
prior written notice to the other Venturer.
11.5 TERMINATION AND RIGHTS IN THE EVENT OF BANKRUPTCY, INSOLVENCY - In the
event (a) either Venturer shall become insolvent or shall suspend business
or shall file a voluntary petition or answer admitting the jurisdiction of
the Court and the material allegations charged therein or shall consent to
an involuntary petition pursuant to or purporting to be pursuant to any
reorganization or insolvency law in any jurisdiction or shall make an
assignment for the benefit of creditors, or shall apply for or consent to
the appointment of a receiver or trustees of a substantial part of its
property, and (b) no credit-worthy affiliate of such Venturer that is not
affected by such proceeding or event undertakes to assume its obligations
under the provisions of this Agreement within ninety (90) days from the
date on which the Venturer becomes so disabled, then to the extent
permitted by law, the other Venturer may thereafter immediately terminate
this Agreement by giving written notice of termination to the disabled
Venturer.
11.6 ASSIGNMENT OF RIGHTS AFTER TERMINATION. - Upon termination or dissolution
of the Joint Venture, both Venturers shall be prohibited from assigning
their individual rights and interests in the Joint Venture without the
prior written approval of the other Venturer, which approval shall not be
unreasonably withheld.
11.7 SURVIVAL - Expiration or termination of this Agreement or the Joint Venture
for any reason will not release either party from any liabilities or
obligations set forth in this Agreement that (a) the parties have expressly
agreed will survive any such expiration or termination, or (b) remain to be
performed or by their nature would be intended to be applicable following
any such expiration or termination.
11.8 COMPLIANCE WITH LAW. - This Agreement and the obligations of each party
and the Spin for Cash Wide Area Progressive Joint Venture are subject to
any and all applicable laws, rules and regulations.
11.9 RIGHTS TO FULFILL & GRANT. Each party hereto hereby represents and
warrants to the other that it has all of the rights, licenses and
authority to fulfill all of its obligations under this Agreement and to
grant those rights and licenses granted by this Agreement.
ARTICLE XII -DISPUTES
12.1 SETTLEMENT AND CONTINUATION OF WORK - The Joint Venturers agree to use all
reasonable efforts to reach a fair settlement of any dispute relating to
the Joint Venture. If such efforts are unsuccessful, in either case,
remaining issues in dispute will be referred to the Management Committee
for resolution. Pending the resolution of any dispute of claim pursuant to
this Article, the Joint Venturers agree that performance of all obligations
under this Agreement shall be diligently pursued.
12
12.2 DEADLOCK:
(a) If the Management Committee becomes deadlocked (referred to as a
"Deadlocked Management Committee"), the matter creating such
Deadlocked Management Committee shall be submitted, in writing to an
Escalation Review Officer of each Joint Venturer, being the party so
designated by such Joint Venturer. A Deadlocked Management Committee
shall be deemed to be established when:
(i) a dispute arises among the Management Committee representatives
pertaining to a matter which cannot be resolved by the requisite
vote of the Management Committee within thirty (30) days after
the matter is initially submitted to the Management Committee, as
evidenced by either failure to reach a unanimous vote for matters
where a unanimous vote is specified, during the time specified;
or
(ii) the Management Committee representatives appointed by a Joint
Venturer fails to attend, or be represented by proxy, for two
consecutive meetings of the Management Committee which were duly
called.
(b) Any resolution by the Escalation Review Officers shall be made by
unanimous written consent and shall be final and binding on the Joint
Venture and Joint Venturers.
(c) Failure to Resolve a Deadlocked Management Committee - If a matter
with respect to which a Deadlocked Management Committee exists cannot
be resolved by the Escalation Review Officers, the Joint Venturers
shall employ the following mechanisms in an attempt to resolve any
matters over which a deadlock exists:
(i) Alternate Dispute Resolution - Prior to commencing any formal
litigation, the Joint Venturers will attempt to settle any
dispute arising out of this Agreement which is not the subject of
a Deadlocked Management Committee through good faith consultation
and negotiations. If those attempts fail, any Joint Venturer may
request, by written notice to the other Joint Venturer,
application of alternate dispute resolution techniques ("ADR") to
such dispute. The Joint Venturers shall select a mutually agreed
mediator or some other form of ADR, such as neutral fact-finding
within thirty (30) days of receipt of such notice by any such
Joint Venturer. No Joint Venturer may unreasonably withhold
consent to the selection of a mediator or other form of non-
binding, non-arbitration ADR and the Joint Venturers will share
the cost of ADR equally.
(ii) Litigation - If any dispute cannot be resolved by the Joint
Venturers through negotiation, mediation or another form of ADR
pursuant to (i) above within two (2) months of the notice, the
dispute may be submitted to a Nevada court for resolution. The
use of any ADR procedures will not be construed under the
doctrine of laches, waiver or estoppel to adversely affect the
right of either Joint Venturer. Nothing in this paragraph will
prevent any Joint Venturer from commencing formal litigation if
the (A) good faith efforts to resolve the dispute under these
procedures may have been unsuccessful and/or (B) any delay
13
resulting from an effort to mediate such dispute could result in
serious and irreparable injury to such Joint Venturer.
12.3 NEVADA LAW - The covenants under this Agreement are subject to
applicable laws and treaties. This Agreement shall be construed
according to the laws of the State of Nevada, United States of America.
12.4 JURISDICTION - In the event of any dispute arising between the parties
hereto that cannot be resolved in accordance with the mediation provision
of Paragraph 12.2, both parties agree to submit to the jurisdiction of the
State and/or Federal Courts situated in the State of Nevada.
ARTICLE XIII - MISCELLANEOUS
13.1 INSURANCE - Each Venturer, at its own expense, shall maintain insurance
against all risks of loss or damage from every cause whatsoever for not
less than the full replacement value thereof as determined by the
Management Committee. Each Venturer shall, at its own expense, carry
public liability and property damage insurance protecting itself with
respect to liabilities for injuries to persons and damage to property of
others resulting from the use of the Property. Such insurance shall
provide coverage of not less than $1,000,000 per occurrence, $2,000,000
aggregate. Such insurance as stated above shall be in form and with
companies acceptable to the Management Committee and shall name IGT and
Anchor as Additional Insureds and Loss Payees and provide for thirty (30)
day prior written notice to IGT and Anchor of any alteration or
cancellation of such coverage shall be provided to IGT's Insurance
Administrator, x/x XXX, X.X. Xxx 00000, Xxxx, Xxxxxx 00000-0000 and to
Anchor 000 Xxxxx Xxxx, Xxxxx X, Xxx Xxxxx, Xxxxxx 00000.
13.2 PUBLIC RELATIONS/USE OF NAME - Each Venturer shall only have the right to
publicize the Joint Venture and use the name of the other Venturer with the
prior written consent of the other Venturer and solely for the furtherance
of the interests of the Joint Venture. Each Venturer agrees to furnish
the other with the exact text to be used in publicity regarding the Joint
Venture for approval. Approval shall be in the sole discretion of the
party whose consent is sought, unless disclosure is required by applicable
law in the judgment of counsel for the Venturer making such disclosure.
Each Venturer agrees to promptly complete a review of the proposed
publicity and deliver a response thereto.
13.3 NOTICES - All notices pertaining to or required by this Agreement shall be
in writing and shall be signed by an authorized representative. They shall
be delivered by hand or sent by certified mall, return receipt requested,
with postage prepaid, addressed as follows:
If to Anchor: With Copies To:
X.X. Xxxxxxxx Xxxx Xxxxxxxxx
Executive Vice President Contracts Manager
ANCHOR COIN ANCHOR COIN
000 Xxxxx Xxxx, Xxxxx X 000 Xxxxx Xxxx, Xxxxx X
Xxx Xxxxx, Xxxxxx 00000 Xxx Xxxxx, Xxxxxx 00000
14
If to IGT: With Copies To:
Xxxxxx X. Xxxxxxx Xxxx Xxxxxxx
Executive Vice President Associate General Counsel
IGT IGT
0000 Xxxx Xxxx 0000 Xxxx Xxxx
Xxxx, XX 00000 Xxxx, XX 00000
Either Venturer may change the addressee or address by notice in writing
given to the other Venturer.
13.4 COMPLIANCE WITH GAMING REGULATIONS - Each Venturer agrees to fully comply
with all rules and regulations governing gaming and the use of gaming
devices in each and every jurisdiction in which it transacts business.
Neither Venturer shall conduct its business or act in a manner that could
reasonably be expected to jeopardize the other Venturer's gaming license or
its ability to operate its business in any jurisdiction at any time. In
the event that either Venturer does not comply with all rules and
regulations governing gaming and does not correct such non-compliance in a
prompt manner as requested by either the gaming regulatory authorities or
by the other Venturer or acts in any manner that could reasonably be
expected to jeopardize the other's gaming license, this Agreement may be
terminated by the other party if, after 5 days' written notice such
situation is not cured. Said termination is specifically limited to a
termination of this Agreement with and only with respect to the
jurisdiction(s) directly impacted by said non-compliance. This Agreement
will remain in full force and effect for all non-impacted jurisdictions.
13.5 ADDITIONAL DOCUMENTS - The Venturers covenant and agree to execute and
deliver such further documents, deeds, agreements and assurances as may be
necessary or advisable from time to time to carry out the terms and
conditions of this Agreement in accordance with its true intent.
IN WITNESS WHEREOF, the Venturers have caused this Agreement to be
executed by their duly authorized representatives as follows:
ANCHOR GAMES IGT
By: /s/ XXXX XXXXXX By: /s/ XXXXXXX X. XXXXXXXXX
---------------------- ---------------------------
Xxxx Xxxxxx Xxxxxxx X. Xxxxxxxxx
C.E.O. & Chairman of the Board C.E.O. & Chairman of the Board
15
EXHIBIT A
LICENSE AGREEMENT
[None.]
A-1
EXHIBIT B
LICENSE AGREEMENT
[None.]
B-1
EXHIBIT C
[Confidential information set forth here has been filed separately with
the Securities and Exchange Commission under Rule 24b-2 under the
Securities Exchange Act of 1934.]
D-1
Exhibit D
CONFIDENTIALITY AGREEMENT
Anchor Gaming, a Nevada corporation, and its subsidiaries
(collectively, the "Company"), and IGT, a Nevada corporation, and its
subsidiaries (collectively, the "Recipient"), are evaluating a possible
transaction (the "Transaction") relating to Anchor's WHEEL OF GOLD-TM-
Gaming Device, [Confidential information set forth here has been filed
separately with the Securities and Exchange Commission under Rule 24b-2
under the Securities Exchange Act of 1934] whereby the Company may
engage Recipient to manufacture a gaming device developed by the Company
employing the WOG concept.
In connection with evaluating the possible Transaction and, if
consummated, in fulfilling its obligations under any agreement or arrangement
concerning the Transaction, the Company, its employees, agents or
representatives has and will furnish to Recipient certain nonpublic,
confidential or proprietary information concerning the Project and/or the
business, operations or assets of the Company, including, without
limitation, plans, details, designs, stratagem, ideas, patent applications,
trademarks, copyrights, specifications, concepts and other forms of
intellectual property. All of such information, together with any additional
information such as analyses, compilations, studies or documents, prepared by
Recipient, its employees, agents or representatives or by any other
individual or entity that obtains or receives such information from or
through the Recipient, that incorporate, utilize, or is derived in any manner
from information provided by the Company, or its employees, agents
representatives relating to the WOG concept; is referred to in this Agreement
as the "Confidential Information".
In consideration of the receipt of the Confidential
Information, Recipient agrees as follows:
1. Recipient will keep the Confidential Information
confidential and will use the Confidential Information solely for the purpose
of evaluating whether to engage in a Transaction with the Company and, if
consummated, in fulfilling Recipient's obligations under any arrangement or
agreement concerning the Transaction. Without the prior written consent of
the Company, Recipient will not disclose the Confidential Information to any
individual or entity, except to its employees, agents or representatives who
in its reasonable judgment need to know the Confidential Information solely
and exclusively in connection with evaluating a possible Transaction or, if
consummated, in fulfilling Recipient's obligations under any arrangement or
agreement concerning the Transaction, and who agree in writing to be bound by
the terms of this Agreement. Recipient will be responsible and jointly and
severally liable for any breach of this Agreement by any of its employees,
agents or representatives or by any other individual or entity that obtains
or receives Confidential Information from or through the Recipient.
Recipient agrees to reimburse, indemnify and hold harmless the Company and
its employees, agents and representatives from any damage, loss or expense
incurred as a result of any use of the Confidential Information by Recipient,
its employees, agents or representatives, or any other individual or entity
that obtains or receives Confidential Information from or through the
Recipient, contrary to the terms of this Agreement.
1
2. The term Confidential Information as used in this
Agreement does not include any information that: a) is or becomes generally
available in the public domain other than through a breach of this Agreement;
b) is already known to Recipient at the time of disclosure; c) is
independently developed by Recipient without reference to the Confidential
Information; or d) is disclosed by a third party to Recipient without similar
restriction on disclosure.
3. Recipient acknowledges and agrees that the Confidential
Information has been and is being furnished to Recipient based on Recipient's
agreement that it will not use or exploit the Confidential Information or
permit the Confidential Information to be used or exploited other than as
provided in this Agreement, and that Recipient may not use or exploit the
Confidential Information or permit it to be used or exploited in any manner
that is harmful to or competitive with the business or operations of the
Company, including, without limitation, with respect to the Company's
licensees, customers (including gaming route locations and casinos),
suppliers, employees, marketing, research and development, production,
pricing, distribution or otherwise. Company further represents and Recipient
acknowledges and agrees that Company owns the rights to the WOG concept and
also all of the patents, trademarks, copyrights, and other intellectual
property associated therewith and arising therefrom (the "Company IP
rights"). Recipient agrees to respect Company's ownership in the WOG concept
and the Company's IP rights and further agrees that Recipient will not take
any action that adversely affects Company's ability to maximize Company's
exploitation of the WOG.
4. Recipient agrees that if no Transaction is effected
between Recipient and the Company or upon any request by the Company
(including, without limitation, upon the conclusion of any transaction
between the Company and Recipient), Recipient will promptly deliver to the
Company all physical embodiments containing any of the Confidential
Information, without retaining any copy, in whole or in part, and will
destroy any notes, memoranda, analyses, compilations, studies or other
documents or media prepared by Recipient or its employees, agents and/or
representatives, or any other individual or entity that obtains or receives
Confidential Information from or through the Recipient, that incorporate or
utilize or is derived in any manner from Confidential Information provided by
the Company or its employees, agents or representatives. If requested by the
Company, Recipient shall confirm such destruction to the Company in writing.
5. In the event that Recipient or any individual or entity
to whom Recipient transmits or provides, directly or indirectly, any
Confidential Information in accordance with this Agreement is requested or
legally required by oral questions, document subpoena, civil investigative
demand, interrogatories, requests for information or other similar process to
disclose any of the Confidential Information, Recipient will promptly provide
the Company with notice of such request or requirement so that the Company
may seek a protective order or take other appropriate actions. Recipient
will cooperate with the Company in its efforts to obtain such remedies and
take such other actions. In the event that such protective order or other
remedy is not obtained, Recipient will disclose only that portion of the
Confidential Information that is legally required to be disclosed and will
make reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded to the Confidential Information.
2
6. Recipient agrees that money damages would not be a
sufficient remedy for any breach of this Agreement and that, in addition to
all other available legal or equitable remedies, the Company will be entitled
to equitable relief, including injunctive relief and specific performance,
for any breach of this Agreement by Recipient. Recipient agrees to reimburse
the Company for all costs and expenses, including attorneys' fees, incurred
by it in successfully enforcing Recipient's obligations hereunder.
7. Recipient understands and agrees that no failure or delay
by the Company in exercising any right, power or privilege under this
Agreement will operate as a waiver thereof, nor will any single or partial
exercise of such a right, power or privilege preclude any other or further
exercise thereof.
8. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEVADA, WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
9. This Agreement constitutes the entire agreement and
supersedes any prior written and prior or contemporaneous oral agreements and
understandings between Recipient and the Company with respect to protection
of the confidentiality of the Confidential Information.
IN WITNESS WHEREOF, the undersigned has executed this
Agreement for the benefit of the Company and its affiliates, intending to be
legally bound.
Dated as of 3-8, 1996.
ANCHOR GAMING
By: /s/ XXXXXX X. XXXXXXXX
----------------------------
Name: XXXXXX X. XXXXXXXX
----------------------------
Title: SECRETARY
----------------------------
AGREED AND ACCEPTED:
IGT
By: /s/ XXXX XXXXXX
------------------------
Name: XXXX XXXXXX
------------------------
Title: VP MKT.
------------------------