Settlement Agreement - Shuffle Master Inc., Progressive Games Inc. and Mikohn Gaming Corp.
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT is made and entered into this 28th
day of December, 1999, between SHUFFLE MASTER, INC. ("SHFL"), a Minnesota
corporation, PROGRESSIVE GAMES, INC. ("PGI"), a Delaware corporation, and MIKOHN
GAMING CORPORATION ("MIKN"), a Nevada corporation.
W I T N E S S E T H
WHEREAS, PGI, a wholly owned subsidiary of MIKN, is the owner
of the United States patents and rights related thereto identified and described
in Exhibit 1 attached hereto (the "PGI Patents"); and
WHEREAS, PGI and SHFL are parties to lawsuits identified in
Exhibit 2 attached hereto concerning the PGI Patents and PGI is a plaintiff
against numerous defendants, which are customers of SHFL alleged to have
infringed the PGI Patents, in the lawsuits identified in Exhibit 3 attached
hereto (the lawsuits identified in Exhibits 2 and 3 are collectively referred to
herein as the "Lawsuits"); and
WHEREAS, the parties are desirous of settling and resolving
the Lawsuits on the terms set forth herein; and
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and
conditions set forth below and other good and valuable consideration, the
receipt and sufficiency of which all parties acknowledge, it is agreed as
follows:
1 LICENSE AGREEMENTS.
Upon the execution of this Agreement, the relevant parties shall
execute and deliver the License Agreements attached hereto as Exhibits 4 through
7 and the Cross-Supplier Agreement attached as Exhibit 8.
2 CONSENT DECREES.
Upon the execution of this Agreement, the PGI and SHFL shall execute
and deliver Consent Decrees with respect to each of the Lawsuits in the form of
Exhibit 9 attached hereto (the "Consent Decrees"). PGI and SHFL shall thereafter
take all appropriate action to cause the Consent Decrees to be filed with the
appropriate courts, the intended result being a complete termination of the
Lawsuits as between PGI and SHFL.
3 STIPULATED DISMISSAL.
Upon the execution of this Agreement, PGI and SHFL shall execute and
deliver a stipulated dismissal, in the form of Exhibit 10 attached hereto,
dismissing all claims and
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counterclaims in the Lawsuits between PGI and SHFL without prejudice and all
claims and counterclaims in the Lawsuits against all parties other than SHFL and
PGI with prejudice. The stipulated dismissals shall not be filed with any court
until all Consent Decrees are filed and entered.
4 MUTUAL RELEASE.
Effective upon the execution of this Agreement, PGI and SHFL hereby
releases and forever discharges the other, together with its past, present and
future officers, directors, shareholders, employees, agents, representatives,
customers, subsidiaries, parent companies and affiliates, and their successors,
heirs and assigns, from any and all claims, demands, damages, actions, causes of
action, suits, debts, liabilities and obligations, liens, costs and expenses of
any nature, character and description, known or unknown, accrued or not yet
accrued, anticipated or unanticipated, arising from or related to the leasing,
licensing, operation, making, using, selling or offering for sale of the live
casino table card games known as "Let It Ride", "Let It Ride Bonus", "Let It
Ride - The Tournament", "Bahama Bonus" and "Three Card Poker" and all claims
raised or which could have been raised in the Lawsuits which are not disposed of
by the Consent Decrees.
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6 REPRESENTATIONS AND WARRANTIES OF SHFL.
Effective on the date hereof, SHFL hereby represents and warrants that:
6.1 SHFL is a corporation duly organized and existing under the laws of
Minnesota.
6.2 SHFL has the corporate power and authority to execute, deliver and
perform this Agreement, and the other instruments and documents required or
contemplated herein. Such execution, delivery and performance have been duly
authorized by all necessary action on the part of SHFL, do not and will not
require the approval of the shareholders of SHFL and do not and will not
contravene the Certificate of Incorporation or By-Laws of SHFL.
6.3 The execution, delivery and performance of this Agreement by SHFL
will not result in any violation by SHFL of any law, rule or regulation
applicable to SHFL. SHFL is not a party to, or subject to or bound by, any
agreement, judgment, injunction or decree of any court or governmental authority
which may restrict or interfere with the performance of this Agreement. This
Agreement is a valid and binding obligation of SHFL enforceable in accordance
with its terms.
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6.4 SHFL has no knowledge of any present condition or contingency which
SHFL can reasonably expect may adversely affect its ability to perform its
obligations under this Agreement.
7 REPRESENTATIONS AND WARRANTIES OF PGI.
Effective on the date hereof, PGI hereby represents and warrants that:
7.1 PGI is a corporation duly organized and existing under the laws of
Delaware.
7.2 PGI has the corporate power and authority to execute, deliver and
perform this Agreement, and the other instruments and documents required or
contemplated herein. Such execution, delivery and performance have been duly
authorized by all necessary action on the part of PGI, do not and will not
require the approval of the shareholders of PGI and do not and will not
contravene the Certificate of Incorporation or By-Laws of PGI.
7.3 The execution, delivery and performance of this Agreement by PGI
will not result in any violation by PGI of any law, rule or regulation
applicable to PGI. PGI is not a party to, or subject to or bound by, any
agreement, judgment, injunction or decree of any court or governmental authority
which may restrict or interfere with the performance of this Agreement. This
Agreement is a valid and binding obligation of PGI enforceable in accordance
with its terms.
7.4 PGI has no knowledge of any present condition or contingency which
PGI can reasonably expect may adversely affect its ability to perform its
obligations under this Agreement.
8 REPRESENTATIONS AND WARRANTIES OF MIKN.
Effective on the date hereof, MIKN hereby represents and warrants that:
8.1 MIKN is a corporation duly organized and existing under the laws of
Nevada.
8.2 MIKN has the corporate power and authority to execute, deliver and
perform this Agreement, and the other instruments and documents required or
contemplated herein. Such execution, delivery and performance have been duly
authorized by all necessary action on the part of MIKN, do not and will not
require the approval of the shareholders of MIKN and do not and will not
contravene the Certificate of Incorporation or By-Laws of MIKN.
8.3 The execution, delivery and performance of this Agreement by MIKN
will not result in any violation by MIKN of any law, rule or regulation
applicable to MIKN. MIKN is not a party to, or subject to or bound by, any
agreement, judgment, injunction or decree of any court or governmental authority
which may restrict or interfere with the performance of this Agreement. This
Agreement is a valid and binding obligation of MIKN enforceable in accordance
with its terms.
8.4 MIKN has no knowledge of any present condition or contingency
which MIKN
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can reasonably expect may adversely affect its ability to perform its
obligations under this Agreement.
9 COOPERATION.
SHFL, PGI and MIKN shall cooperate with one another in obtaining any
governmental approvals, licenses or permits necessary to consummate the
transactions contemplated by this Agreement.
10 ADDITIONAL AGREEMENTS.
SHFL, PGI and MIKN agree to execute any additional instruments or
agreements necessary to effectuate the intent of this Agreement or to comply
with any law or government regulation applicable to this Agreement or the
parties.
11 ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of SHFL, PGI and MIKN.
12 NO PRIOR AGREEMENTS.
This Agreement, including the exhibits and any agreements reflected
therein, contain the entire agreement of the parties, and supersedes any and all
prior contemporaneous agreements or understandings, written or oral.
13 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be an original but all such counterparts
shall constitute one and the same agreement. Any signature page of this
Agreement may be detached from any counterpart without impairing the legal
effect of any signatures thereof, and may be attached to another counterpart,
identical in form thereto, but having attached to it one or more additional
signature pages.
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17 TERMS OF AGREEMENT ARE CONFIDENTIAL.
The terms of this Agreement and all negotiations concerning this
Agreement are confidential and shall not be disclosed to any other person or
entity not a party to this Agreement unless required by law. The foregoing
notwithstanding, the parties may each issue a press release announcing
settlement of the Lawsuits provided the form of the press release is approved by
the other party.
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IN WITNESS WHEREOF, the undersigned shall be deemed to have
executed this Agreement as of the date specified on page one hereof.
SHUFFLE MASTER, INC. PROGRESSIVE GAMES, INC.
By /s/ Mark L. Yoseloff By /s/ Charles H. McCrea, Jr.
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Its Exec. V. Pres. Its Ex. V.P. & Secretary
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MIKOHN GAMING CORPORATION
By /s/ Charles H. McCrea, Jr.
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Its Ex. V.P. & Secretary
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