**SETTLEMENT
      AGREEMENT**





This
      SETTLEMENT AGREEMENT (“Agreement”) is entered into and made effective on July
      __, 2005, (the “Effective Date”) by and between Shuffle Master, Inc. (“Shuffle
      Master”), a Minnesota corporation having a principal place of business at 1106
      Palms Airport Drive, Las Vegas, Nevada 89119, on the one hand, and VendingData
      Corporation, a Nevada corporation having a principal place of business at 6830
      Spencer Street, Las Vegas, Nevada 89119, Casinovations, Inc., a Nevada
      corporation having a principal place of business at 6830 Spencer Street, Las
      Vegas, Nevada 89119, and Casinovations
      Sales Inc., a Nevada corporation having a principal place of business at 6830
      Spencer Street, Las Vegas, Nevada 89119, on the other hand (collectively
      “VendingData”) .





**RECITALS**





WHEREAS,
      on May 30, 2000, the United States Patent and Trademark Office issued U.S.
      Patent No. 6,068,258 (“the ‘258 patent”) entitled “Method and Apparatus For
      Automatically Cutting and Shuffling Playing Cards”;





WHEREAS,
      on December 4, 2001, the United States Patent and Trademark Office issued U.S.
      Patent No. 6,325,373 (“the ‘373 patent”) entitled “Method and Apparatus For
      Automatically Cutting and Shuffling Playing Cards”;





WHEREAS,
      Shuffle Masters owns all rights, title and interest in and to the ‘258 and ‘373
      patents;





WHEREAS, ** VendingData
      manufactures, sells, and offers for sale card shuffling devices now known as
      the
      Random Ejection Shuffler, Continuous Random Ejection Shuffler, and the “digital”
version of either of these shufflers, model numbers CVI-6, CVI-6 SD, CVI-6
      S,
      CVI-8, CVI-C, CVI-CP, CVI-C (C1, B, OR C2) as made, used and sold in the United
      States prior to the Effective Date (collectively referred to herein as the
“RES
      Shufflers”), and consistent with this, the RES Shufflers do not include products
      not accused of infringement of the ‘258 and ‘373 patents in the Action such as
      the shuffler now known as the Poker-1 or the PokerOne or future VendingData
      shuffler products that use VendingData’s random ejection technology;





WHEREAS,
      on or about March 27, 2002, Shuffle Master filed suit in the United States
      District Court, District of Nevada (the “Court”) against VendingData (Case No.
      CV-S-02-0438-JCM-PAL) (“Action”) alleging causes of action for patent
      infringement of the ‘373 patent under 35 U.S.C. § 271, et seq. based on
      VendingData’s manufacture, sale, and offer for sale of its RES
      Shufflers;




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WHEREAS,
      on or about July 25, 2002, Shuffle Master amended its Complaint in the Action
      to
      allege against VendingData causes of action for patent infringement of the
‘258
      patent under 35 U.S.C. § 271, et seq. based on VendingData’s manufacture,
      sale, and offer for sale of its RES Shufflers;





WHEREAS,
      on or about August 8, 2002, VendingData filed its Answer to Shuffle Master’s
      Amended Complaint and Counterclaims in the Action seeking a declaration that
      the
      patents in suit were not infringed, invalid and/or unenforceable and alleging
      certain causes of action including claims for breach of contract and
      misappropriation of trade secrets;





WHEREAS,
      VendingData represents and warrants that it has removed or disabled any counter
      or alphanumeric display in its RES Shufflers; and





WHEREAS,
      Shuffle Master and VendingData wish to fully resolve and settle all issues
      and
      disputes arising out of and related to the Action.





**AGREEMENT**





In
      consideration of the mutual understandings and covenants set forth herein,
      the
      receipt and sufficiency of which are hereby agreed, the parties agree as
      follows:





**1.**  **CONSIDERATION**





1.1  **Covenant
      Not to Sue.** As
      provided below, and subject to the terms and conditions set forth herein,
      Shuffle Master conditionally agrees not to sue VendingData for infringement
      of,
      or allege that any its products infringe, the ‘258 and ‘373 patents. This
      covenant not to sue (the “Covenant”) shall extend to all claims of the ‘258
      patent and all claims, except claims 6 and 7, of the ‘373 patent, as well as any
      patent claim covering displays, counters or registering use issuing from any
      reissue, continuation or continuation in part patent application related to
      the
‘258 and ‘373 patents. Unless sooner ended pursuant to the terms hereof, the
      Covenant shall last for the life of the ‘258 and ‘373 patents or any such
      related patent. The Covenant shall not extend to any claims of the 6,139,014
      patent or the 5,695,189 patent. The Covenant is personal to VendingData and
      can
      be transferred, sublicensed and/or assigned by VendingData, subject to the
      balance of this paragraph 1.1, only in connection with the transfer or sale
      of
      all or substantially all of the assets of VendingData’s business, which transfer
      or sale occurs after the full Second Payment has been made to Shuffle Master;
      provided, however, that the Covenant cannot and shall not be transferred,
      sublicensed or assigned in any manner until Shuffle Master receives the full
      Second Payment, and further provided that any purported transfer, sublicense
      or
      assignment, or any sale or transfer of 50% or more of the assets or stock of
      VendingData, which purported transfer, sublicense or assignment or sale or
      transfer occurs prior to the date that Shuffle Master receives the full Second
      Payment, shall serve to immediately terminate the Covenant, which termination
      shall be retroactive to the Effective Date. If, for any reason, the full Second
      Payment is not paid to Shuffle Master on the Due Date, then the Covenant shall
      immediately terminate on the first day after the Due Date, which termination
      shall be retroactive to the Effective Date. Any termination of the Covenant
      shall not affect any other provision or term of this Agreement, unless otherwise
      expressly stated herein, nor shall any termination of the Covenant limit or
      preclude Shuffle Master from pursuing any other rights or remedies legally
      available to it, whether at law or in equity, including without limitation:
      x)
      to execute and otherwise collect on the Judgment; or y) to file suit for
      infringement of either the ‘373 or ‘258 patents (or both) or any other patents
      previously covered by the Covenant against any VendingData product relating
      to
      any acts or omissions after the Effective Date. Further, VendingData agrees
      that
      it shall not allow, cause, effectuate or institute any change of control of
      its
      ownership or any sale or transfer of a majority of its stock or assets until
      the
      full Second Payment is made to Shuffle Master. Shuffle Master shall have the
      right to obtain injunctive relief to enforce the provisions of this Paragraph
      1.1, in addition to any other rights and remedies available to it, and to
      recover its attorney’s fees in the event of any breach by VendingData of any
      provision of this Paragraph 1.1.




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1.2  **Settlement
      Sum.** VendingData
      shall pay Shuffle Master the sum of eight hundred thousand dollars ($800,000)
      as
      set forth in this paragraph. VendingData
      shall pay four hundred thousand dollars ($400,000) by wire transfer to Citibank
      Account No. 500228226, ABA Routing 122401710; Swift # CITIUS33; Account name
      Shuffle Master, Inc. Concentration Account; Bank Address 2215 Rampart, Las
      Vegas, Nevada 89128 within two (2) days of the Effective Date, after which,
      within two (2) days, the parties shall file the order of dismissal set forth
      in
      Section 1.4. No later than ten (10) months after the Effective Date (the “Due
      Date”), VendingData shall pay the remaining four hundred thousand dollars
      ($400,000) of the settlement sum (the “Second Payment”). On the Effective Date,
      VendingData shall also provide Shuffle Master with an original executed
      confession of judgment (the “Judgment”) on this Agreement (in the form of
      Exhibit A attached hereto) in the amount of $400,000, which Shuffle Master
      shall
      have the right to immediately file. Subject to the foregoing, Shuffle Master
      shall execute on the Judgment only in the event VendingData fails to make timely
      payment of the Second Payment. Further, if the Second Payment is not timely
      made, then all applicable provisions of Paragraph 1.1 hereof shall apply and
      be
      available to Shuffle Master. Upon payment of the Second Payment, Shuffle Master
      shall immediately take any and all action necessary to nullify, cancel and
      expunge the Judgment.




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1.3 **No
      Validity or Enforceability Challenges.**  VendingData
      hereby agrees not to challenge, cause to be challenged, or cooperate with others
      in challenging, directly or indirectly, the
      validity or enforceability of any of the patent claims encompassed by the
      Covenant in
      any
      court or tribunal, or before the U.S. Patent and Trademark Office (PTO), or
      in
      any arbitration proceeding, or in any other manner or proceeding.





1.4  **Dismissal** .
      As of
      the Effective Date all
      claims and counterclaims in the Action are hereby dismissed with prejudice,
      each
      party to bear its own costs and attorneys’ fees. Concurrently herewith, the
      parties shall have executed a joint stipulation of dismissal pursuant to Federal
      Rule of Civil Procedure 41 in the form attached hereto as Exhibit B. Shuffle
      Master shall file said stipulation of dismissal as provided in Paragraph 1.2
      herein.





**2.**  **MUTUAL
      RELEASES**





2.1  **VendingData
      Release For Past Acts.** Upon the
      execution of this Agreement, VendingData, on its behalf and on behalf of its
      predecessors, officers, directors, heirs, assigns, successors and attorneys,
      hereby generally and specifically releases and discharges Shuffle Master, and
      its predecessors, successors, divisions, parents, subsidiaries and each of
      their
      shareholders and assigns, successors, agents, directors, officers, employees,
      representatives, attorneys, and all persons acting by, through, under, or in
      concert with any of them, (the "SMI Releasees") from any and all claims,
      liabilities, actions, causes of action, obligations, costs, damages, attorneys'
      fees, losses, and demands, known or unknown, arising out of or relating to:
      i)
      VendingData's requests for a declaratory judgment on the '258 and '373 patents;
      ii) the claims and counterclaims asserted or which could have been asserted
      in
      the Action, including but not limited to any alleged theft, by any of the SMI
      Releasees, prior to the Effective Date, of any trade secrets, or confidential
      information, or any alleged breach of any non-disclosure agreements or other
      contracts entered into, prior to the Effective Date, by any of the Shuffle
      Master Releasees; and/or iii) any acts or omissions of any of the SMI Releasees
      prior to the Effective Date.  The above release shall not preclude
      VendingData from pursuing any x) legally available affirmative defenses in
      Civil
      Action No. CV-S-04-1373-JCM; or y) the declaratory relief counterclaim already
      pled in Civil Action No. CV-S-04-1373-JCM; nor does this release preclude
      VendingData from pursuing any other legally available affirmative defenses,
      but
      VendingData shall not be able to pursue or raise any counterclaims or causes
      of
      action related to any acts or omissions released in this paragraph 2.1 (other
      than the declaratory relief counterclaim already pled), since any such
      counterclaims and causes of action related to any acts or omissions of any
      of
      the SMI Releases prior to the Effective Date have been and are hereby released
      in this paragraph 2.1.




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2.2  **Shuffle
      Master Release For Past Acts.** Upon the
      execution of this Agreement, Shuffle Master, on its behalf and on behalf of
      its
      predecessors, officers, directors, heirs, assigns, successors and attorneys,
      hereby generally and specifically releases and discharges VendingData and its
      predecessors, successors, divisions, parents, subsidiaries and each of their
      shareholders and assigns, successors, agents, directors, officers, employees,
      representatives, attorneys, and all persons acting by, through, under, or in
      concert with any of them, (the "VendingData Releasees") from any and all claims,
      liabilities, actions, causes of action, obligations, costs, damages, attorneys'
      fees, losses, and demands, known or unknown, arising out of or relating to:
      i)
      any claim that any RES Shuffler infringes the claims of the '258 and '373
      patents which were actually asserted in the Action; ii) the claims and
      counterclaims asserted or which could have been asserted against the RES
      Shuffler in the Action; and/or iii) any acts or omissions of any of the
      VendingData Releasees prior to the Effective Date, provided however, that none
      of the above releases shall release any claims of Shuffle Master that
      VendingData's PokerOne shuffler infringes U.S. Patent No. 6,655,684.





**3.**  **REPRESENTATIONS
      AND WARRANTIES.**





3.1 **VendingData
      Representations and Warranty.** VendingData
      represents and warrants that it has removed or disabled any counter or
      alphanumeric display in RES Shufflers within its custody or control as of the
      Effective Date of this Agreement.




3.2  **Shuffle
      Master Representations and Warranty.** Shuffle
      Master represents and warrants that it has ownership of the ‘258 and ‘373
      patents, and has all necessary authority to convey the Covenant.





3.3  **Common
      Representations and Warranties.** Each
      party represents and warrants that:




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(a)  The
      terms
      of this Agreement are contractual and are the result of negotiations by the
      parties. Each party has cooperated in the drafting and preparation of this
      Agreement. Each party has had the opportunity to draft, review and edit the
      language of this Agreement with the assistance or advice of counsel, of its
      choosing, thus no presumption for or against any party arising out of drafting
      all or any part of this Agreement will be applied in any action relating to,
      connected to, or involving this Agreement. Accordingly, each party hereby waives
      the benefit of any federal, state or local law providing that in cases of
      uncertainty, language of a contract should be interpreted against the party
      who
      caused the uncertainty to exist; and





(b)  It
      has
      carefully read this Agreement, it knows and understands the contents of this
      Agreement, and it is signing this Agreement freely and without
      duress.





(c)  It
      has
      the full right, power and authority to enter this Agreement and perform all
      of
      its obligations set forth herein.





(d)  The
      consent of no other person or entity is required in order for each party to
      enter into this Agreement and to perform each of its obligations, duties or
      acts
      required of it as set forth herein.





**4.**  **MISCELLANEOUS**





4.1  **No
      license.** No
      part
      of this Agreement is intended to be, or shall be construed in any way to be,
      or
      shall be a license or right of any kind, express or implied, to VendingData
      under either the ‘258 or ‘373 patents, or under any other patent owned by or
      licensed to Shuffle Master.





4.2  **Agreement
      Binding on Successors.** Subject
      to the provisions of paragraph 1.1, this Agreement shall be binding upon and
      inure to the benefit of the heirs, executors, administrators, personal
      representatives, officers, agents, successors in interest and assigns of the
      respective parties hereto.





4.3  **Entire
      Agreement.** This
      Agreement sets forth the entire agreement between the parties as it relates
      to
      the subject matter of this Agreement, and it replaces, supersedes any and all
      prior agreements, promises, proposals, representations, understandings,
      negotiations, written or not relating to the same.




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4.4  **Consideration.** The
      parties hereby expressly acknowledge and agree that each and every term and
      condition of this Agreement is of the essence and constitutes a material part
      of
      the bargained for consideration, without which this Agreement would not have
      been executed.





4.5  **No
      Tolling.** Nothing
      contained herein shall toll or extend any statute of limitations respecting
      any
      claim or counterclaim (actual or potential) of either party, or toll or extend
      the limitations period for any claim or counterclaim (actual or potential)
      of
      either party.





4.6 **** **Modifications.** This
      Agreement may only be changed or modified by a writing signed by the other
      party
      against whom enforcement of any change or modification is sought. This Agreement
      may only be amended in writing by mutual consent of the parties. A failure
      of
      either party to exercise any right provided for herein shall not be deemed
      to be
      waiver of any right hereunder.





4.7 **Governing
      Law.** This
      Agreement shall be construed in accordance with and be governed by the internal
      laws of the State of Nevada, without regard to choice of laws principles. The
      parties agree that United States District Court for the District of Nevada,
      Judge Mahan, shall retain exclusive jurisdiction over the enforcement of the
      terms and conditions of this Agreement. All disputes arising under or relating
      to this Agreement shall not be filed or otherwise brought other than before
      this
      same United States District Court for the District of Nevada. The parties
      consent to the referral of any such action to Magistrate Peggy A. Leen pursuant
      to Federal Rule for Civil Procedure 73(b).





4.8 **Confidentiality.** The
      parties hereto acknowledge that this Agreement and the terms of this Agreement
      are confidential. Neither the parties nor their counsel may convey to third
      parties the terms of this Agreement, except that the terms of the Agreement
      may
      be disclosed to accountants, tax preparers and insurers as reasonably necessary,
      or as may be ordered by a court, or pursuant to a legal process, SEC or
      regulatory requirement, or to enforce the terms of this Agreement or otherwise
      required by contract, regulation or law.





4.9  **Agreement
      Not an Admission of Liability.** The
      parties hereto agree and acknowledge that this Agreement is a compromise
      settlement of each party's disputed claims, and that the sums and covenants
      given in consideration of this Agreement, as well as the execution of this
      Agreement, shall not be construed to be an admission of liability on the part
      of
      any party with respect to the disputed matters set forth above.




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4.10  **Rescission** .
      In the
      event of any breach of this Agreement, either party shall have the right to
      seek
      and recover all of its actual damages for the breach, including without
      limitation its attorneys' fees, as well as the applicable rights and remedies
      set forth in Paragraphs 1.1 and 1.2 hereof, relating to any failure by
      VendingData to timely make the Second Payment, but shall not have the right
      to
      rescind the Covenant, the dismissals or the releases granted
      herein.





4.11  **Execution
      of Documents.** Each
      party shall execute such instruments and documents and do or cause to be done
      such other acts, if any, as are reasonably necessary or appropriate to effect
      the transactions contemplated by this Agreement.





4.12  **Counterparts.** This
      Agreement may be executed in any number of counterparts, each such counterpart
      shall be deemed an original instrument, and all such counterparts together
      shall
      constitute but one agreement.





4.13  **Warranty
      of Authority.** Each
      person whose signature appears below represents and warrants that he or she
      is
      authorized to execute this Agreement on behalf of the respective party and
      to
      bind that party to the terms of this Agreement.




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**Shuffle Master, Inc.**
            
            **VendingData Corporation**By: _____________________
            
            By: _____________________Name:___________________
            
            Name:___________________Title:____________________
            
            Title:____________________Date:____________________
            
            Date:____________________





**Casinovations, Inc.**By: _____________________Name:___________________Title:____________________Date:____________________
  **Casinovations Sales, Inc.**By: _____________________Name:___________________Title:____________________Date:____________________
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