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;
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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.
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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
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understood, however, that no 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
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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;
(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.
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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.
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.
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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 .
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
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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
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
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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.
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
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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
(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.
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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.
10.2 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.
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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 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.
12
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.
12.2 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
13
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 esulting 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.
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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
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.]
16
EXHIBIT B
LICENSE AGREEMENT
[None.]
17
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.]
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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.
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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.
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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.
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