Exhibit 10.47




 


 





 


 


PURCHASE
AND SETTLEMENT AGREEMENT


 


 


by and
between


 


 


ELIXIR
GAMING TECHNOLOGIES, INC.


(formerly
known as VendingData Corporation);


 


on the one
hand


 


 


And


 


 


SHUFFLE
MASTER, INC.,


 


on the other hand


 


 


Dated as of
March_______, 2009


 




 





 













 


PURCHASE
AND SETTLEMENT AGREEMENT


 


THIS PURCHASE AND SETTLEMENT
AGREEMENT (this “Agreement”) is made and entered into as of March _____,
2009 (the “Execution Date”), by and between (i) Elixir Gaming
Technologies, Inc., a Nevada corporation (formerly known as VendingData
Corporation) (“Seller”); and (ii) Shuffle Master, Inc., a
Minnesota Corporation (“Buyer,” and together with Seller, the “Parties”).


 


WHEREAS, subject to the
terms and conditions set forth herein, Buyer desires to purchase from Seller,
and Seller desires to sell to Buyer the Acquired Assets and the Parties desire
to settle litigation between them.


 


NOW, THEREFORE, in
consideration of the mutual covenants, agreements and understandings contained
herein and intending to be legally bound, the Parties hereto hereby agree as
follows:


 


ARTICLE I


CERTAIN DEFINITIONS


 


1.1              Certain Definitions.  For purposes of this Agreement, the following
terms have the meanings set forth below:


 


“Acquired Assets”
mean the assets, products and properties listed in Section 2.2(a);
however, the Acquired Assets shall exclude any Excluded Asset.


 


“Affiliate” of any
particular Person means any other Person controlling, controlled by or under
common control with such Person, including subsidiaries, and parent companies
of such Person.  For purposes of this
definition, “control” (including the terms “controlling,” “controlled
by” and “under common control with”) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise, and such “control” will be presumed if any Person owns
50% or more of the voting capital stock, assets or other ownership interests,
directly or indirectly, of any other Person. 
In the case of Seller, Melco International Development Ltd and its
direct and indirect subsidiaries of which it owns more than 50% shall be
considered “Affiliates” for purposes of this Agreement.


 


“Applicable Rate”
means interest at a rate per annum equal to the prime rate of interest
announced from time to time in The Wall Street Journal plus one percent
(1%), calculated on the basis of the actual number of days elapsed over 365.


 


“And” means “or”; and
“or” means “and”, as the context requires.


 


“Business Day” means
any day that is not a Saturday, a Sunday or other day on which banks are
required or authorized by Law to be closed in the State of Nevada.


 


“Code” means:  the United States Internal Revenue Code of
1986, as amended, and any reference to any particular Code section shall be
interpreted to include any revision of or successor to that section regardless
of how numbered or classified.


 


“Confidential Information”
means the same as in the Non-Disclosure Agreement.


 


“Equipment” means all
machinery, apparatuses, and equipment, and related software (excluding,
however, Inventory) which are owned by Seller and unique to and used in the
manufacture or operation of the Acquired Assets.


 


 


Page 1













 


“Excluded Assets” has
the meaning as ascribed thereto in Section 2.2(c).


 


“Gaming Permits” mean
gaming, regulatory body, certifying agency, governmental, or regulatory
licenses or approvals, or similar rights or documents applicable to any of the
Acquired Assets.


 


“Gaming Product Approvals”
mean any documentation related to the Acquired Assets issued by a gaming
regulatory body and other approving/testing gaming laboratory (e.g. Gaming
Laboratory International, a/k/a GLI) indicating and/or certifying that a
particular item or product that has been submitted to such entity for proper
approval is either approved or rejected for use in a particular gaming
jurisdiction.


 


“Indebtedness” means
the following, including, without limitation, with respect to any Lender,
whether known or unknown, fixed or unfixed, contingent, accrued or unaccrued,
liquidated or unliquidated:  (i) any
debts, liabilities or obligations of Seller for borrowed money or otherwise; (ii) any
debts, liabilities or obligations evidenced by any note, bond, debenture or
other debt security; (iii) any liabilities or obligations with respect to
which Seller is liable, contingently or otherwise, as obligor or otherwise
(including without limitation trade payables and other current liabilities); (iv) any
commitment by which Seller assures a creditor against loss (including
contingent reimbursement obligations with respect to letters of credit); (v) any
debts, liabilities or obligations guaranteed in any manner by Seller (including
guarantees in the form of an agreement to repurchase or reimburse); (vi) any
debts, liabilities or obligations under capitalized leases with respect to
which Seller is liable, contingently or otherwise, as obligor, guarantor or
otherwise or with respect to which obligations Seller assures a creditor
against loss; (vii) any debts, liabilities or obligations secured by a
lien on Seller’s assets; (viii) any amounts owed by Seller to any Person
under any non-competition, consulting or deferred compensation arrangements;
and (ix) all other debts, liabilities or obligations of any kind or
nature.  The term “Indebtedness,”
however, shall expressly exclude any obligation of an Affiliate of Seller.


 


“Intellectual Property”
means each of the following in any jurisdiction throughout the world:  (i) patents, patent applications,
divisionals, continuations, continuations in part, reissues, reexams and
associated patent families, whether in the United States or in other countries;
(ii) trademarks, service marks, trade dress, trade names, logos and
slogans (and all translations, adaptations, derivations and combinations of the
foregoing) and any internet domain names that incorporate or refer to the names
of any of the Products, together with all goodwill associated with each of the
foregoing, all of the foregoing, whether registered or common-law; (iii) copyrights
and copyrightable works; (iv) registrations and applications for any of
the foregoing; (v) trade secrets, confidential information, know-how and
inventions; (vi) computer software used in the Products (including but not
limited to source code, executable code, data, databases and documentation);
and (vii) all rights to make, have made, use, have used, sell, offer for
sale, lease, promote and otherwise deal with the Products.


 


“Inventory” means all
Product finished goods and related Product packaging materials owned by Seller
in either Seller’s or a third party’s possession as at the date hereof, and
wherever located, including consignment inventory.  For the avoidance of doubt, (a) any Product
finished good sold (whether by way of an outright sale, hire-purchase or
capital lease) by the Seller to a third party prior to Closing but the price
thereof has not been fully paid by the relevant purchaser shall not be regarded
as being owned by the Seller or included in the Inventory for the purpose of
this Agreement notwithstanding the fact that the Seller may retain possession,
title, vendor’s lien on or other similar rights in such non-fully paid Product
finished goods and (b) any Product which Seller permits any of its
distributors (or any sub-distributors of such distributors), including, without
limitation, Suzo Happ, to retain for use by such distributor or sub-distributor
shall be excluded from the Inventory and shall not be counted for purposes of
the Inventory Adjustment.


 


“Law” means any
federal, state, provincial, administrative, tribunal, gaming, local or foreign
law, statute, code, ordinance, rule, regulation or restriction (including those
of administrative agencies), including without limitation, RoHS, CE, UL and
CUL.


 


 


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“Legal Gaming Venues”
mean all casinos, gaming operators or other places where gaming or wagering is
legal and properly licensed by Law.


 


“Lenders” means
Bricoleur Partners, L.P., Bricoleur Enhanced, L.P., BRIC 6, L.P., Bricoleur
Offshore Ltd., Premier Trust of Nevada, Premier Trust, Inc., Central
Leasing Co. of NJ, LLC, Madison Leasing Co., Inc. and each of their
respective predecessor and successor entities, and “Lender” means any
one of the foregoing.


 


“Lien” means any
transfer restriction, mortgage, security interest, deed of trust, option, right
of first refusal, pledge, hypothecation, assignment, charge, deposit
arrangement, encumbrance, easement, lien (statutory or other), security
interest and any other preference, priority or preferential arrangement of any
kind or nature whatsoever, including any conditional sale contract or other
title retention agreement, the interest of a lessor under a capital lease and any
synthetic or other financing lease having substantially the same economic
effect as any of the foregoing.


 


“Litigation” means Shuffle Master, Inc. v. VendingData Corporation, Case No. 2:04-CV-1373-BES-(LRL)
pending in the U.S. District Court, District of Nevada.


 


“Loss” means any
loss, liability, demand, claim, obligation, action, cause of action, cost,
damage, diminution in value, lost profits, deficiency, Tax, penalty, fine or
expense, including without limitation, interest, penalties, lost profits, attorneys’
fees and expenses and all amounts paid in investigation, defense or settlement,
(such as expert witness fees) of any of the foregoing and the enforcement of
any rights hereunder), and whether known or unknown, fixed or unfixed,
contingent or accrued, but excluding
only unforeseeable, speculative,  and,
unless the applicable Party has committed actual fraud, exemplary and punitive
damages.


 


“Patents” mean the
issued patents and pending patent applications of Seller and each of their
patent families used in or relating to the Acquired Assets, including but not
limited to the following: patents, patent applications, divisionals,
continuations, continuations in part, reissues, reexams and associated patent
families, whether in the United States or in other countries.


 


“Person” means any
individual, sole proprietorship, partnership, joint venture, trust,
unincorporated association, corporation, limited liability company, entity or
governmental entity (whether federal, state, county, city or otherwise and including
any instrumentality, division, agency or department thereof).


 


“Products” mean,
singularly or plurally, the following owned by Seller, no matter where located
(including all models and versions thereof): (i) ShufflePro, RandomPlus
and PokerOne shufflers and any other shufflers; and (ii) DeckCheckers.


 


“Related Agreements”
mean: (i) any Schedules attached to this Agreement; (ii) a bill of
sale, a patent assignment, and a trademark assignment, in each case between
Buyer and Seller; (iii) the Escrow Agreement; (iv) the Litigation
Stipulation; (v) any Instruments of Conveyance; and (vi) the
Non-Disclosure Agreement.


 


“RoHS” means
Directive 2002/95/EC of the European Parliament and of the Council of 27 January 2003,
on the restriction of the use of certain hazardous substances in electrical and
electronic equipment , as amended, and implemented by European Union member
states.


 


“Schedules” mean the
schedules (dated as of the Closing Date) prepared by the Seller and attached to
this Agreement.


 


“Shuffler and DeckChecker
Intellectual Property” means the Patents, the Trademarks, and any other
Intellectual Property owned by Seller that is used in any Acquired Asset,
whether or not listed on any Schedule.


 


 


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“Suzo Happ” shall
mean any of the following including Affiliates and sub-distributors of the
following: Happ Controls, Inc.; AESI; Suzo International; and Suzo-Happ
Group.


 


“Taxes” mean any
federal, state, local or foreign income, gross receipts, license, payroll,
employment, excise, escheat, severance, value-added, consumption, stamp,
occupation, property, windfall, profits, environmental, customs, or any other
tax, governmental fee, governmental assessment or governmental charge of any
kind whatsoever, including any interest, penalties or additions to Tax or
additional amounts with respect to the foregoing.


 


“Tax Returns” mean
returns, declarations, reports, claims for refund, information returns or other
documents (including any related or supporting schedules, statements or
information) filed or required to be filed in connection with the
determination, assessment or collection of Taxes of any party or the
administration of any laws, regulations or administrative requirements relating
to any Taxes.


 


“TCS” shall mean any
of the following including Affiliates and sub-distributors of the following:
Technical Casino Supplies LTD, an English company; TCS Aces Pty. Ltd.; TCS
America, Inc.; and Victoria Holdings Ltd.


 


“Trademarks” mean the
registered trademarks, all common-law trademarks and the pending trademark
applications of Seller used in the Acquired Assets, together with all goodwill
symbolized thereby and associated therewith.


 


“Transferred Spare Parts”
shall have the meaning ascribed thereto in Section 2.7(c) of this
Agreement.


 


“Treasury Regulations”
mean the United States Treasury Regulations promulgated under the Code, and any
reference to any particular Treasury Regulation section shall be interpreted to
include any final or temporary revision of or successor to that section
regardless of how numbered or classified.


 


ARTICLE
II


PURCHASE AND SALE OF
ACQUIRED ASSETS


 


2.1              Basic Transaction.  The transaction contemplated in this
Agreement and in the Related Agreements (the “Transaction”) shall
consist of, as of the Closing Date:  (i)
Buyer’s purchase of the Acquired Assets; (ii) Seller agreeing to the
Non-Compete Obligations; (iii) Buyer paying Seller the Purchase Price; and (iv)
the dismissal of all pending Litigation between the Parties, including, without
limitation, the Parties’ execution and delivery of the Litigation Stipulation
and the mutual general release, in each case as provided in Section 2.2(d).


 


2.2                 (a)  Acquired Assets.  On the terms and conditions set forth in this
Agreement, Buyer shall purchase from Seller, and Seller shall sell, convey,
transfer, assign and deliver to Buyer, as of the Closing Date, all right, title
and interest, free and clear of any and all Liens, in and to each of the
following:


 


(i)         all Products;


 


(ii)         all Inventory, as set forth in Schedule 4.22(a);


 


(iii)        the Shuffler and DeckChecker Intellectual Property,
including, without limitation, the Shuffler and DeckChecker Intellectual
Property set forth in Schedule 4.13(a), together with all income, royalties,
damages and payments due or payable (other than accounts receivable
contemplated by Section 2.2(c)(i) and installment payments due or
that become due in the future under any installment contract entered into by
Seller prior to the Closing Date) with respect to any periods ending after the
Closing Date (including, without limitation, damages and payments for past and
future infringements or misappropriations thereof), the right to sue and
recover for past and future infringements or misappropriations thereof, any and
all corresponding 


 


 


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rights that, now or hereafter, may be secured
throughout the world and all copies and tangible embodiments of any such
Shuffler and DeckChecker Intellectual Property;


 


(iv)       [INTENTIONALLY OMITTED];


 


(v)        the right to receive and retain mail and other communications
to the extent relating to the Inventory, the Products or the Shuffler and
DeckChecker Intellectual Property from the Closing Date and thereafter;


 


(vi)       [INTENTIONALLY OMITTED];


 


(vii)      all of the following, if applicable and in existence, covering
or relating to any of the Products, whether in writing, electronic data,
computer software or otherwise: bills of materials, engineering drawings,
diagrams and specifications, circuit diagrams, schematics, mask works, parts
lists, models, files, histories, reports, certifications, user manuals, service
manuals, training manuals, sales literature, technical bulletins, parts
breakdowns, manufacturing work instructions, quality control work inspection
criteria, submission packages to regulators, validity studies, novelty studies,
clearance studies, infringement studies and any other documents or information
necessary to manufacture the Products. 
In this respect, a complete index of the above information and documents
with respect to the DeckChecker that exist as at the Closing Date is set forth
in Schedule 2.2(a)(vii).  For the
avoidance of doubt, Buyer acknowledges that some of the above mentioned information
and documents may never exist and some of them might have existed in the past
but due to passage of time, may have gone astray;


 


(viii)      all lists of customers and suppliers for
any of the Products; all Shuffler and DeckChecker Intellectual Property files,
attorney correspondence, and prosecution file histories, including, without
limitation, all original copies of issued patents and trademark registrations;
all advertising, marketing and promotional materials relating to any Products;
in each case regardless of whether such items are evidenced in writing,
electronic data, computer software or otherwise; provided, however,
that for the avoidance of doubt, any items described in this subsection (viii) which
are in the possession of any of Seller’s attorneys shall be included in the
Acquired Assets, and Seller agrees to instruct any such attorneys to transfer
such items to Buyer; provided, further, that nothing contained in
this subsection (viii) shall require Seller to transfer to Buyer any
information which is subject to an attorney-client privilege between Seller and
Seller’s counsel to the extent it relates to any intellectual property dispute
between the Parties; and


 


(ix)       all Gaming Product Approvals, if any, applicable to the
Products as set forth on Schedule 2.2(a)(ix) (the items in Sections
2.2(a)(vii), 2.2(a)(viii) and 2.2(a)(ix) are collectively referred to
as “Seller’s Shuffler and DeckChecker Books and Records”).


 


(b)    Seller’s Non-Compete Obligations.


 


Subject to (i) Buyer’s payment to Seller at the
Closing of $2,400,000 pursuant to Section 2.4 and (ii) Buyer causing
the fully executed Litigation Stipulation to be filed with the clerk of the
United States District Court for the District of Nevada, Seller hereby agrees
to each and all of the Non-Compete Obligations, as contained in Section 7.9
hereof; provided, however, that Seller shall be relieved of the
Non-Compete Obligations if (x) Buyer agrees in writing that (A) the
final Inventory Adjustment (as defined in Section 2.6(a)) and (B) the
Holdback Amount (as defined in Section 2.5(b)(ii)) and the Additional
Amount (as defined in Section 2.5(b)(iii)) are not subject to the
provisions of Section 2.5(b)(iv)(B)(1) and/or (2), but nevertheless
refuses for a period of thirty (30) days following a written request by Seller
to join in an instruction to the Escrow Agent to release such funds as so
agreed, or (y) an arbitrator determines pursuant to a final arbitration
award under Section 8.15 below that the Holdback Amount and/or Additional
Amount are required to be released but Buyer objects thereto.  Except as expressly set forth in this
subsection (b), under no circumstances shall Seller be relieved of the Non-


 


 


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Compete Obligations, whether
due to any breach by Buyer or any of its Affiliates of this Agreement, any
Related Agreement or otherwise.


 


(c)    Excluded Assets. 
Notwithstanding the foregoing, the following properties, assets and
rights of Seller (the “Excluded Assets”), which would otherwise be
Acquired Assets are expressly excluded from the Transaction and, as such, are
not included in the Acquired Assets:


 


(i)         any cash, cash equivalents, or accounts receivable held by
Seller, including but not limited to any trade receivables pertaining to any
Acquired Assets accruing prior to the Closing Date and any installment payments
due or that become due in the future under installment sale contracts entered
into by Seller prior to the Closing Date;


 


(ii)        all stock and other ownership interests in Seller;


 


(iii)       all real property;


 


(iv)       all standard “off the shelf” personal property, such as
furniture and computers;


 


(v)       Seller’s corporate charter and related documents, relating
solely to the organization, maintenance and existence of Seller as a
corporation;


 


(vi)      claims for and rights to receive Tax returns and refunds
relating to any Acquired Assets with respect to taxable periods preceding the
Closing Date;


 


(vii)      the Purchase Price;


 


(viii)     Seller’s rights under or pursuant to this
Agreement or any Related Agreement;


 


(ix)       the Equipment (other than the items described in Section 2.7(d));
and


 


(x)        all production supplies, other supplies, spare parts (other
than the Transferred Spare Parts) and work in progress of the Products; provided,
however, with respect to any work in progress which becomes a finished
Product after the Closing, Seller shall not sell, lease or license any such
finished Product, but rather shall either (1) transfer such finished
Product to Buyer for no additional consideration on an “as is, where is” basis
or (2) scrap such finished Product.


 


In addition to the
foregoing, Seller shall be entitled to keep and retain copies of Seller’s
Shuffler and DeckChecker Books and Records and other documents pertaining to
the Acquired Assets as reasonably required for purposes of compliance with tax,
gaming and other applicable Laws; provided, however, that Seller
shall not retain and shall promptly turn over to Buyer all originals of any
such documents and shall keep the information contained in all such documents
confidential, except to the extent required to be disclosed pursuant to
applicable Laws.


 


(d) Pending
Litigation; Releases.


 


(i)         On the Closing Date, the Parties shall:


 


(A)       execute and deliver a stipulation
dismissing with prejudice all pending Litigation between the Parties and
providing for the return to Buyer of Buyer’s $3 million deposit with the clerk
of the United States District Court for the District of Nevada (the “Deposit”),
and all accrued or due interest, if any, as Buyer’s sole property, in the form
attached hereto as Schedule 2.2(d) (the “Litigation Stipulation”);


 


(B)       execute (whether on the Closing Date or
thereafter) and deliver all other documents reasonably requested by Buyer to
carry out the foregoing.


 


 


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(ii)        Except for (A) Seller’s obligations under this Agreement
or any Related Agreement, and (B) any action or claim by Buyer or any of
its Affiliates against Seller or any of its Affiliates with respect to products
sold or purchased by Buyer or any of its Affiliates to or from Seller or any of
its Affiliates in the ordinary course of business or contractual relationships
between such parties (collectively, “Buyer Carve Outs”), Buyer, on
behalf of itself and its Affiliates, hereby releases Seller and its direct and
indirect subsidiaries and their respective officers, directors,
representatives, heirs and assigns (collectively, the “Seller Released
Parties”) from any and all claims, liabilities or expenses, which Buyer or
any of its Affiliates had or could have had, or whether asserted or could have
been asserted, for any acts or omissions of any of the Seller Released Parties
prior to the Closing Date, known or unknown, accrued or unaccrued, and
liquidated or unliquidated.


 


(iii)       Except for (A) Buyer’s obligations under this Agreement
or any Related Agreement, and (B) any action or claim by Seller or any of
its Affiliates against Buyer or any of its Affiliates with respect to products
sold or purchased by Seller or any of its Affiliates to or from Buyer or any of
its Affiliates in the ordinary course of business or contractual relationships
between such parties (collectively, “Seller Carve Outs”), Seller, on
behalf of itself and its direct and indirect subsidiaries, hereby releases
Buyer and its Affiliates and their respective officers, directors,
representatives, heirs and assigns (collectively, the “Buyer Released
Parties”) from any and all claims, liabilities or expenses, which Seller or
any of its direct or indirect subsidiaries had or could have had, or whether
asserted or could have been asserted (including, without limitation, with
respect to the Deposit), for any acts or omissions of any of the Buyer Released
Parties prior to the Closing Date, known or unknown, accrued or unaccrued, and
liquidated or unliquidated.


 


(iv)       Each Party hereby acknowledges that such Party may hereafter
discover claims or facts in addition to or different from those which such
Party now knows or believes to exist with respect to the subject matter of the
release contained in this Section 2.2(d) and which, if known or
suspected at the time of executing this Agreement, may have materially affected
such Party’s decision to enter into this Agreement.  Nevertheless, except for the Buyer Carve Outs
and Seller Carve Outs, each Party expressly waives any claim, liability or
expense that might arise as a result of such different or additional claims or
facts, and such Party hereby acknowledges, understands and agrees that the
release contained in this Section 2.2(d) extends to all claims,
liabilities or expenses, whether known or unknown, suspected or unsuspected.
Each Party further expressly waives and releases any rights and benefits which
it has or may have under any law or rule of any jurisdiction pertaining to
the matters released herein and expressly waives and releases any and all
rights and benefits conferred upon such Party by the provisions of Section 1542
of the Civil Code of the State of California (or any similar statute), which
provides as follows:


 


A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.


 


(v)        Notwithstanding anything to the contrary in this Agreement or
in the Litigation Stipulation, each of the Parties shall bear its own legal
fees and other costs and expenses in connection with the negotiation, execution
and delivery of the Litigation Stipulation and the return of the Deposit to
Buyer.


 


2.3                    Liabilities.


 


 


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Notwithstanding anything to the contrary in this
Agreement, Buyer is not and shall not assume or in any way become liable for
any liabilities, obligations, Indebtednesses or Losses of Seller or of any
nature whatsoever relating to Seller, Seller’s business, the Products, the
Shuffler and DeckChecker Intellectual Property, or any of the Acquired Assets,
whether accrued, absolute, contingent or otherwise, whether known or unknown,
whether due or to become due, whether liquidated or unliquidated (collectively,
the “Excluded Liabilities”), including without limitation:


 


(a)  any of Seller’s liabilities
or obligations for expenses or fees related to or arising out of the
negotiation, preparation, approval or authorization of this Agreement or the
consummation of the Transaction (including all attorneys, accountants,
investment bankers and brokerage fees);


 


(b)  any of Seller’s liabilities
or obligations relating to any legal action, proceeding or claim related to,
arising out of or in connection with Seller or Seller’s ownership or operation
prior to the Closing Date of the Seller’s business, the Products, the Shuffler
and DeckChecker Intellectual Property, any of the Acquired Assets, or any other
conduct, acts or omissions of Seller or Seller’s officers, directors,
employees, consultants, distributors, agents or advisors relating to any of the
foregoing, including, without limitation, any legal action, proceeding or claim
by any Lender;


 


(c)  any liabilities or
obligations in respect of any of the Excluded Assets (other than the payment of
the Purchase Price);


 


(d)  any of Seller’s liabilities
or obligations which Buyer may become liable for as a result of or in
connection with the failure by Seller to comply with any bulk sales or bulk
transfers laws or as a result of any “de facto merger” or “successor-in-interest”
theories of liability; and


 


(e)  any of Seller’s or any of its
Affiliates’ Indebtedness for royalties, distribution fees, license fees, Losses
or other obligations, whether present or future, existing or contingent,
accrued or unaccrued, known or unknown, liquidated or unliquidated, whether
under contract or for torts, to:  (i) TCS,
(ii) Happ Controls, Inc., including without limitation, AESI, and
Suzo Happ; (iii) Ten Stix; or (iv) any distributor, agent, licensee
or representative with respect to any Product.


 


2.4                    Consideration.


 


The total consideration to
be paid, in full, by Buyer for the Transaction shall be US $2,600,000 (the “Closing
Purchase Price”), plus or minus the amount, if any, of the Inventory
Adjustment (collectively, the “Purchase Price”); plus, as part of the
Transaction, Seller shall agree to the Non-Compete Obligations and the Parties
shall agree to the mutual release set forth in Section 2.2(d).


 


 


2.5                    Closing Transactions.


 


(a)  Closing.  Subject to the conditions set forth herein,
the consummation of the Transaction (the “Closing”) shall take place at
or before 10:00 a.m., Las Vegas time, on March _____, 2009 (the “Closing
Date”), at which time this Agreement shall be executed and become
effective.


 


(b)  Payment and Deliveries.  Subject to the conditions set forth in this
Agreement, at the Closing (or within the time periods specified below, where
applicable):


 


(i)         Each Party shall execute and deliver to the other an
original and a copy of this Agreement;


 


(ii)        Buyer shall (A) pay the Closing Purchase Price, less a
portion of the Closing Purchase Price equal to Two Hundred Thousand Dollars
($200,000) (the “Holdback Amount”), by wire transfer 


 


 


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of immediately available funds to an account
which has been designated in writing by Seller to Buyer, and (B) deposit
into a non-interest bearing escrow account (“Escrow Account”)
established with Greenberg Traurig, LLP as escrow agent (“Escrow Agent”)
the Holdback Amount to be held and distributed by Escrow Agent in accordance
with an escrow agreement (“Escrow Agreement”), in the form of Exhibit A
attached hereto, to be entered into at the Closing by Seller, Buyer and Escrow
Agent;


 


(iii)       Buyer shall also deposit into the Escrow Account an amount in
cash equal to Two Hundred Thousand Dollars ($200,000) (the “Additional
Amount”) to be held and distributed by Escrow Agent in accordance with the
Escrow Agreement;


 


(iv)       Seller shall deliver, transfer and convey to Buyer, free and
clear of any Liens, all right, title and interest in and to all of the Acquired
Assets.  With respect to any Inventory,
Seller shall either (at the election of Buyer) arrange for the delivery of such
properties to Buyer (at Buyer’s expense) or permit Buyer to take delivery of
the Inventory at such places where the same are located as set forth in
Schedule 4.22(a); provided, however, that (A) with respect
to the Inventory located in the People’s Republic of China, Seller shall be
solely responsible for, and shall indemnify Buyer against, any Taxes, duties,
tariffs, charges, fees or other liabilities or expenses imposed by any
governmental entity in connection with the transportation and exportation of
such inventory within and from the People’s Republic of China, and (B) with
respect to any Inventory in the possession of Suzo Happ, Seller shall use its
best efforts to ensure that Suzo Happ grants Buyer full access to such
Inventory (including, without limitation, for purposes of inspection and
delivery arrangements), and Seller acknowledges and agrees that (1) Buyer
shall be entitled to withhold, or instruct the Escrow Agent to withhold,
payment of the amount, if any, of the Inventory Adjustment owing to Seller
pursuant to Section 2.6(a)(iii) or (iv) in respect of such
Inventory until Suzo Happ has granted Buyer full access to and the opportunity
to pick up such Inventory during normal business hours following reasonable
notice by Buyer, and (2) in the event Suzo Happ has not, within ninety
(90) days after the Closing Date, granted Buyer full access to and the
opportunity to pick up such Inventory during normal business hours following
reasonable notice by Buyer, Buyer shall be entitled to receive from the Escrow
Account the amount, if any, of the Inventory Adjustment owing to Seller
pursuant to Section 2.6(a)(iii) or (iv) in respect of such
Inventory.  Buyer agrees to use
reasonable efforts to pick up any Inventory in the possession of Suzo Happ
after Suzo Happ grants Buyer full access to (including but not limited to the
ability to inspect such Inventory before pick up) and the opportunity to pick
up such Inventory.  To evidence the
transfer and conveyance of the Acquired Assets to Buyer, the Seller shall
deliver to Buyer such appropriately executed instruments of sale, transfer,
assignment, conveyance and delivery, bills of sale, assignments and
assumptions, Intellectual Property assignments or other Intellectual Property
conveyance documents, certificates of title, and all other instruments of
conveyance, including those which are
reasonably requested to effect transfer to Buyer of good and marketable
title, free and clear of any Liens, to each of the Acquired Assets, including
documents acceptable for recordation in the United States Patent and Trademark
Office, the United States Copyright Office and any other similar domestic or
foreign office, department or agency, it being understood that all of the
foregoing shall be in such form and substance prepared by the Buyer and its
counsel and incorporating reasonable comments from the Seller;


 


(v)        Seller shall also deliver, transfer and convey to Buyer, to
the extent that the same has not been delivered, transferred or conveyed to the
Buyer prior to the Closing Date:


 


(A) any and all
appropriate documentation to be filed with the U.S. Patent and Trademark Office
and the U.S. Copyright Office, reflecting the release of all Liens on any of
the Acquired Assets;


 


(B) duly authorized
UCC-3 statements evidencing release of all Liens on any of the Acquired Assets
in all jurisdictions identified by the Buyer;


 


(C) any other document,
waiver, acknowledgement, certificate, financing statement and/or release reasonably
requested by Buyer to evidence the release of any Liens on the Acquired Assets;


 


 


Page 9


 












 


(D) all third party approvals, if any,
that are necessary for the consummation of the Transaction, on terms reasonably
satisfactory to Buyer;


 


(E) Shuffler and DeckChecker Books and
Records, which such Shuffler and DeckChecker Books and Records shall be delivered
to Buyer no later than 15 days after the Closing Date;


 


(F) certified copies of resolutions of
Seller’s board of directors authorizing and approving the execution, delivery
and performance of this Agreement and the consummation of the Transaction;


 


(G) all Related Agreements (other than
Instruments of Conveyance and the Non-Disclosure Agreement) in fully-executed
form by the Seller; and


 


(H) such other documents or instruments
as are required to be delivered at the Closing pursuant to the terms hereof or
that Buyer reasonably requests prior to the Closing Date to effect the
Transaction.


 


(vi)       Buyer shall also deliver to Seller all Related Agreements
(other than Instruments of Conveyance and the Non-Disclosure Agreement) in
fully-executed form by the Buyer.


 


2.6            Inventory Adjustment.


 


(a)    Within fourteen (14) days after the Closing Date, Buyer and
Seller shall meet and conduct a joint inspection of the Inventory (the “Inventory
Inspection”) to determine the number of Fully Qualified Deck Checkers (as defined
below) and the number of Fully Qualified Shufflers (as defined below) included
in the Inventory.  Upon completion of the
Inventory Inspection, Seller or Buyer, as applicable, shall pay, or cause to be
paid in accordance with Section 2.6(c) below, to the other Party any
positive net amount determined as follows (collectively, the “Inventory
Adjustment”):


 


(i)         Seller shall pay to Buyer an amount in cash equal to the
product of (i) thirty-nine (39) minus the number of deck checkers included
in the Inventory which are Fully Qualified Deck Checkers, multiplied by (ii) Seven
Thousand Five Hundred Dollars ($7,500);


 


(ii)        Seller pay to Buyer an amount in cash equal to the product of
(i) one hundred thirteen (113) minus the number of shufflers included in
the Inventory which are Fully Qualified Shufflers, multiplied by (ii) Two
Thousand Dollars ($2,000);


 


(iii)       for each deck checker in excess of thirty-nine (39) deck
checkers which is included in the Inventory and which is a Fully Qualified Deck
Checker, Buyer shall pay to Seller an amount in cash equal to Seven Thousand
Five Hundred Dollars ($7,500); and


 


(iv)       for each shuffler in excess of one hundred thirteen (113)
shufflers which is included in the Inventory and which is a Fully Qualified
Shuffler, Buyer shall pay to Seller an amount in cash equal to Two Thousand
Dollars ($2,000).


 


Notwithstanding the foregoing or anything in this
Agreement to the contrary, Buyer shall not be required to pay Seller in excess
of Two Hundred Thousand Dollars ($200,000) in the aggregate in respect of the
Inventory Adjustment pursuant to subsections (iii) and (iv) of this Section 2.6.  For purposes hereof, (a) “Fully
Qualified Deck Checker” shall mean any deck checker which is included in
the Inventory and which is new, fully operational, in working order and
saleable, and (b) “Fully Qualified Shuffler” shall mean any
RandomPlus or ShufflePro shuffler which is included in the Inventory and which
is new, fully operational, in working order and saleable.  For purposes of this Section 2.6, the
determination as to whether any deck checker or shuffler is 


 


 


Page 10













 


fully operational, in working order and saleable shall be made in
accordance with the criteria set forth on Schedule 2.6 to this Agreement.


 


(b)    If, either (A) after completion of the Inventory Inspection,
there remains any unresolved dispute between the Parties as to whether any deck
checker or shuffler is a Fully Qualified Deck Checker or Fully Qualified
Shuffler, as applicable, and the parties are unable to resolve such dispute
within fifteen (15) days after meeting and negotiating in good faith to resolve
such dispute or (B) any Party fails to cooperate in the Inventory
Inspection within the time frame set forth in Section 2.6(a) above
(other than as a result of Suzo Happ’s failure to grant Buyer full access to
the Inventory at Suzo Happ during normal business hours following reasonable
notice by Buyer), then the Parties jointly shall promptly thereafter cause
Gaming Laboratories International, LLC (“GLI”)  to perform the relevant inspection or resolve
such dispute in favor of Buyer or Seller. 
If GLI fails to agree to perform the relevant inspection within ten (10) days
of having been requested to do so or is unable to or refuses to perform the
relevant inspection or resolve such dispute within thirty (30) days after
agreeing to do so, the Parties shall promptly cause BMM International (“BMM”)
to perform the relevant inspection and resolve such dispute in favor of Buyer
or Seller.  If BMM fails to agree to
perform the relevant inspection within ten (10) days of having been
requested to do so or is unable to or refuses to perform the relevant
inspection or resolve such dispute within thirty (30) days after agreeing to do
so, the Parties shall cause a mutually agreeable gaming testing firm to perform
the relevant inspection or resolve such dispute (whichever of GLI, BMM or the
other mutually agreed on firm that conducts the inspection or resolves the
dispute is referred to herein as the “Inspection Firm”).  In the event either Party fails to jointly
retain the Inspection Firm as required herein for a period of ten (10) days
following the request by the other Party to do so, then such requesting Party
shall be entitled to unilaterally take the actions required by this subsection (b) with
respect to such Inspection Firm.


 


(i)         If either Party alone causes the Inspection Firm to perform
the Inventory Inspection pursuant to subsection (b) above, such Party
shall deliver prompt written notice to the other Party (the “Receiving Party”)
of the results of such inspection, together with a copy of the Inspection Firm’s
report (the “Inspection Notice”).


 


(ii)        The cost of the any review by the Inspection Firm shall be
paid one-half by Seller and one-half by Buyer.


 


(c)    Subject to Buyer’s rights pursuant to Section 2.5(b)(iv)(B),
upon the final determination of the Inventory Adjustment, either by the mutual
agreement of the Parties or by determination of the Inspection Firm, the
Parties shall deliver joint written instructions to the Escrow Agent, such
instructions to be prepared in accordance with the Escrow Agreement and
delivered within two (2) Business Days after the final determination, for
purposes of instructing the Escrow Agent:


 


(i)         In the event the Inventory Adjustment is a positive net
amount payable to Seller, to (A) pay to the Seller (1) a portion of
the Additional Amount equal to the Inventory Adjustment and (2) the entire
Holdback Amount, and (B) pay to Buyer an amount equal to the Additional
Amount minus the Inventory Adjustment (provided such figure is a positive
number);


 


(ii)        In the event the Inventory Adjustment is a positive net
amount payable to Buyer, to (A) pay to the Buyer (1) a portion of the
Holdback Amount equal to the Inventory Adjustment (provided that if the
Inventory Adjustment exceeds the Holdback Amount, the Escrow Agent shall pay to
Buyer the entire Holdback Amount, and Seller shall remain liable to Buyer for
payment of the portion of the Inventory Adjustment which exceeds the Holdback
Amount) and (2) the entire Additional Amount, and (B) pay to Seller
an amount equal to the Holdback Amount minus the Inventory Adjustment (provided
such figure is a positive number);


 


 


Page 11













 


(iii)       In the event the Inventory Adjustment does not result in a
positive net amount payable to either Buyer or Seller, to pay to the Seller the
entire Holdback Amount and pay to the Buyer the entire Additional Amount; and


 


(iv)       To deduct from all payments to be made to a Party pursuant to
subparts (i) though (iii) above all reasonable bank charges incurred
by the Escrow Agent in connection with the payment to such Party.


 


(d)    The Parties agree that they will cooperate and assist in the
conduct of the Inventory Inspection and any review by the Inspection Firm,
including, without limitation, making available, to the extent necessary,
books, records, work papers, test equipment and personnel and entering into any
commercial reasonable arrangement with the Inspection Firm.


 


2.7  Service Contracts; Delivery of
Additional Materials After Closing.


 


(a)    From and after the Closing, Seller agrees to use its reasonable
efforts to cause each distributor of any Products not to extend or renew any
service contracts with any customers with respect to such Products beyond any
such contract’s current expiration date without the prior written consent of
Buyer.  All such service contracts of
which Seller has Knowledge are set forth in Schedule 2.7(a).


 


(b)    The Buyer hereby acknowledges and agrees that:


 


(i)         since January 1, 2009 and prior to the Closing Date,
the Seller has sold and delivered certain Product finished goods to its
customers or distributors, a list of such Product finished goods sold and the
delivery date thereof is set forth in Schedule 2.7(b) (collectively “Recently
Sold Goods”); and


 


(ii)        in respect of the Recently Sold Goods, the Seller is under a
contractual obligation to provide a manufacturer’s product warranty of
servicing the same on those standard terms and conditions set forth in
Schedule 4.17  and
notwithstanding anything to the contrary contained in this Agreement, any
performance of its servicing obligations in accordance with the said product
warranty by the Seller after the Closing Date shall not constitute a breach by
the Seller of the Non-Compete Obligations of this Agreement or any infringement
of Shuffler and DeckChecker Intellectual Property.


 


(c)    After the Closing, for no additional
consideration, within a reasonable time after termination of Seller’s
arrangement with Suzo Happ relating to the Products, Seller shall deliver or
use its reasonable efforts to cause to be delivered to Buyer (at Buyer’s
expense) all spare parts for any Products owned by Seller (save and except for
those spare parts which Seller has contractually agreed to provide to Suzo Happ
or allow Suzo Happ to retain possession and use pursuant to said termination
arrangement and a reasonable small quantity necessary for Seller to perform its
servicing obligations under the product warranty set forth under subsection (b)(ii) above)
(collectively, the “Transferred Spare Parts”). All such Transferred
Spare Parts shall be delivered to Buyer “as is, where is”; provided, however,
that Seller hereby represents and warrants to Buyer that Seller will transfer
good and marketable title to the Transferred Spare Parts, free and clear of any
Liens.


 


(d)    Within a reasonable time after the Closing, for no additional
consideration, Seller shall deliver or use its
reasonable efforts to cause to be delivered to Buyer (at Buyer’s
expense) the following (if applicable and in existence): all tooling, die
castings, test fixtures and apparatuses, molds and equipment owned by Seller
necessary to the manufacture of the Products or any parts for the Products, and
all related software owned by Seller necessary to the manufacture or operation
of the Products or any parts for the Products, other than commercial “off the
shelf” equipment available on standard terms. 
All such items delivered to Buyer 


 


 


Page 12













 


pursuant to this subsection (d) shall be
delivered to Buyer “as is, where is”; provided, however, that
Seller hereby represents and warrants to Buyer that Seller will transfer good
and marketable title to such items, free and clear of any Liens.  Seller advises Buyer that such items are all
such items in existence and in Seller’s possession or control but may not be
all of the items necessary to manufacture the Products in the most economical
manner.


 


(e)    If after the Closing Seller locates, obtains possession of or
acquires (with or without consideration) from any distributor or
sub-distributor, including, without limitation, Suzo Happ, any Product which is
a Fully Qualified Shuffler or a Fully Qualified Deck Checker which has not
been counted in determining the Inventory Adjustment (each an “Additional
Product”), then:


 


(i)         if Seller has not received (or is not entitled to receive)
the entire Holdback Amount and Additional Amount, Seller shall promptly deliver
(or cause to be delivered) such Additional Product to Buyer and Buyer shall pay
to Seller the amounts determined as follows (the “Additional Product
Adjustment”):


 


(A)       for each Additional
Product which is a Fully Qualified Shuffler, Buyer shall pay to Seller an
amount in cash equal to Two Thousand Dollars ($2,000); and


 


(B)       for each Additional
Product which is a Fully Qualified Deck Checker, Buyer shall pay to Seller an
amount in cash equal to Seven Thousand Five Hundred Dollars ($7,500);


 


provided, however,
in no event shall the aggregate amount required to be paid by Buyer to Seller
pursuant to this Section 2.7(e) exceed the Maximum Additional Product
Adjustment.  For purposes hereof, “Maximum
Additional Product Adjustment” means an amount equal to (1) the sum of
the Holdback Amount plus the Additional Amount minus (2) the amount
of the Inventory Adjustment which Seller has received (or is entitled to
receive) pursuant to Section 2.6; or


 


(ii)        if Seller has received (or is entitled to receive) the entire
Holdback Amount and Additional Amount, then Seller shall promptly deliver (or
cause to be delivered) such Additional Product to Buyer for no additional
consideration.


 


The Parties acknowledge and agree that
nothing contained in this Section 2.7(e) shall operate to modify any
rights or obligations of the Parties under Section 2.6 of this Agreement.


 


 


ARTICLE III


[INTENTIONALLY OMITTED]


 


 


ARTICLE IV


REPRESENTATIONS AND WARRANTIES OF
SELLER


 


Seller represents and
warrants to Buyer, as of the Closing Date, each of the following (with the
understanding that any exception to any of the Seller’s representation or
warranties disclosed on any schedule referenced in this Article IV shall
be deemed disclosed with respect to any other schedule(s) referenced in
this 


 


 


Page 13













 


Article IV only to the
extent the applicability of such exception to such other schedule(s) is
readily apparent on its face:


 


4.1            Organization and Corporate Power.  Seller is a corporation duly organized,
validly existing and in good standing under the laws of Nevada.  Seller has all requisite power and authority
and all authorizations, licenses and permits necessary to own, operate and
conduct Seller’s business as now conducted and as presently proposed to be
conducted.


 


4.2            Authorization; No Breach.  The execution, delivery and performance by
Seller of this Agreement and the Related Agreements and the consummation of the
Transaction have been duly and validly authorized by all requisite corporate
action on the part of Seller, and no other corporate proceedings on the part of
Seller are necessary to authorize the execution, delivery or performance of
this Agreement or the Related Agreements. 
No shareholder approval is required by Seller with respect to this
Agreement and the Related Agreements. 
The information set forth in Seller’s Form 10-Q for the period
ending September 30, 2008 is true and correct as such information is
applicable to the determination that no such shareholder approval is required.  Each of the individuals executing this
Agreement and the Related Agreements on behalf of Seller, including Walter
Stowe, is a corporate officer of Seller and has been duly authorized to execute
this Agreement and the Related Agreements on behalf of Seller. This Agreement
and the Related Agreements to be executed and delivered by Seller constitute
valid and binding obligations of Seller, enforceable against the Seller in
accordance with their respective terms, subject to:  (i) laws of general application relating
to bankruptcy, insolvency and the relief of debtors; and (ii) rules of
law governing specific performance, injunctive relief and other equitable
remedies.  Except as disclosed in
Schedule 4.2, the execution, delivery and performance of this Agreement
and the Related Agreements and the consummation of the Transaction does not and
shall not:  (i) conflict with or
result in any breach of any of the provisions of; (ii) constitute a
default under; (iii) result in a violation of; (iv) give any third party
the right to terminate or to accelerate any obligation under; (v) result
in the creation of any Lien upon any of the Acquired Assets or the Shuffler and
DeckChecker Intellectual Property; or (vi) other than the filing to the
relevant court for the mutual release of the Litigation, require any
authorization, consent, approval, exemption or other action by or notice to or
filing with any court or other governmental or regulatory body or authority or
any other Person (including, without limitation, any Lender), under the
provisions of Seller’s certificate of incorporation or bylaws or any indenture,
mortgage, lease, loan agreement, license, contract, understanding, commitment
or other agreement or instrument to which Seller is bound or affected, or any
Law to which Seller is subject.  Without
limiting the generality of the foregoing, except for this Agreement, and as may
be provided in any of the Related Agreements, there are no outstanding binding
agreements, options, commitments or rights entered into or granted by Seller
with, of or to any Person to purchase or otherwise acquire any of the Acquired
Assets or any interests therein.


 


4.3            [INTENTIONALLY OMITTED].


 


4.4            [INTENTIONALLY OMITTED].


 


4.5            [INTENTIONALLY OMITTED].


 


4.6            [INTENTIONALLY OMITTED].


 


4.7            Liens.


 


There are no Liens on any
of the Acquired Assets, and no Person has the right, on any basis, to assert
any Lien.


 


4.8            Acquired Assets.


 


(a)    The Acquired Assets are all of the assets, whether tangible or
intangible (other than Excluded Assets), owned by Seller that are used in or
necessary for the manufacture of the Products, other than 


 


 


Page 14













 


the Excluded Assets and the standard “off the
shelf” non-Product specific property, such as furniture and computers.


 


(b)    Seller owns good and marketable title to each of the Acquired
Assets, free and clear of any Liens.  No
third Person owns any rights in or to any Acquired Asset, including any
Shuffler and DeckChecker Intellectual Property. 
Without limiting the generality of the foregoing, each Lender has
terminated any and all Liens which such Lender had or may have had on any
Acquired Asset.


 


(c)    The Shuffler and DeckChecker Intellectual Property are all of the
Intellectual Property owned by Seller:  (x) used
in, or a part of, the conduct of that portion of Seller’s business involving or
relating to the Acquired Assets as currently conducted by Seller and (y) which
are claimed by Seller to cover any of the Products.


 


(d)    All Products installed in any Legal Gaming Venue as of the
Closing Date have been sold to a third party, and there are no leases, licenses
or “free trial” arrangements with respect to any such Products.


 


(e)    As of the Closing Date, there are no products of that portion of
Seller’s business involving or relating to the Acquired Assets on a “free
trial,” except as disclosed in Schedule 4.8(e).


 


(f)    As of the Closing Date, there are no pending orders received by
the Seller for any Product.


 


(g)    None of TCS, Suzo Happ, Ten Stix or any of their respective
subsidiaries or Affiliates currently has or claims to have any right to sell or
distribute, or act as a distributor, representative or agent of Seller or any
of Seller’s Affiliates with respect to, any of the Products.


 


4.9            [INTENTIONALLY OMITTED]


 


4.10          [INTENTIONALLY OMITTED]


 


4.11          Tax Matters.


 


Except as disclosed in
Schedule 4.11, Seller has timely filed all federal, state, local and
foreign income, information and other Tax returns which are required to be
filed under applicable legal requirements with respect to any of the Acquired
Assets; each of same are true, complete and accurate in all material respects; and all sales Taxes and all other
material Taxes, assessments and other governmental charges imposed upon Seller
with respect to any Acquired Asset have been timely paid.


 


4.12          Contracts and Commitments.


 


(a)    There are no amounts due or payable by Seller or any of its
Affiliates with respect to any Acquired Asset accruing prior to the Closing
Date, and Seller agrees to pay, when and as due, all amounts due and payable by
Seller or any of its Affiliates with respect to any Acquired Asset accruing
prior to the Closing Date, including without limitation:


 


(i)         any contract with any labor union or any bonus, pension,
profit sharing, retirement or any other form of deferred compensation plan or
any stock purchase, stock option or similar plan;


 


(ii)       any management agreement or contract for the employment of any
officer, partner, individual employee or other person;


 


(iii)       any agreement or indenture (including with any Lender)
relating to Indebtedness or to placing a Lien on any Acquired Asset; and


 


(iv)       any lease or license agreement under which Seller is lessor or
licensor of any Acquired Asset.


 


 


Page 15













 


(b)    Except as disclosed in Schedule 4.12(b) or as provided in
this Agreement, there are no contracts or agreements entered into by Seller or
any of its Affiliates, whether formal or informal, written or oral, currently
in effect, or with any remaining obligations to Seller of any kind:


 


(i)         which prohibits Seller from freely engaging in business
relating to any Acquired Assets anywhere in the world;


 


(ii)        relating to the marketing, sale, distribution, production,
advertising or promotion of any Acquired Asset;


 


(iii)       under which Seller is obligated to indemnify any third party
against any Product warranty, infringement or similar claims;


 


(iv)       relating to or constituting a power of attorney executed by or
on behalf of Seller relating to any Acquired Asset;


 


(v)        that creates any existing or future, or potential
Indebtedness of Seller on an Acquired Asset (including any Indebtedness to any
Lender);


 


(vi)       with TCS, Suzo Happ, Ten Stix or any of their respective
subsidiaries or Affiliates, or any distributor, representative or agent with
respect to any of the Products;


 


(vii)      which allows or grants any rights to any Person for the
manufacture, marketing, sale, distribution, production, advertising or
promotion of any Acquired Asset;


 


(viii)     which creates any joint venture or
partnership regarding any Acquired Asset;


 


(ix)       which affects Seller’s legal title in the Shuffler and
DeckChecker Intellectual Property;


 


(x)        which is a beta test agreement; or


 


(xi)       which relates to the research and development of any Acquired
Asset.


 


(c)    Except as disclosed in Schedule 4.12(c),
with respect to any Acquired Asset:


(i)         no contract or commitment has been
breached in any material respect or cancelled by the other party thereto (other
than contracts or commitments which have been terminated without any further
liability or obligation on the part of any party thereto);  


(ii)        Seller and each of its Affiliates have performed all
obligations under any contract currently in effect required to be performed by
Seller or any of its Affiliates and there is no material breach of or default
under any currently in effect lease, contract, commitment or other agreement to
which Seller or any of its Affiliates is a party.


 


(d)    The termination by Seller or any of its Affiliates or expiration
of any contract or agreement of Seller or any of its Affiliates, whether formal
or informal, written or oral, currently in effect, concerning any Acquired
Asset, will not constitute a breach of said contract or agreement, nor result
in any liability to Seller or any of its Affiliates.


 


(e)    Seller has provided to Buyer true, correct and complete copies of
all non-disclosure agreements to which Seller or any of its Affiliates is a
party regarding any trade secret or computer code concerning any Acquired Asset
(other than any such non-disclosure agreement with Buyer).


 


 


Page 16













 


4.13          Shuffler and DeckChecker
Intellectual Property.


(a)    Schedule 4.13(a) sets forth a complete and correct list
of all Shuffler and DeckChecker Intellectual Property, including, by
jurisdiction, all Patents and Trademarks.


 


(b)    Except as disclosed on Schedule 4.13(b) or the
applicable schedule indicated below:


 


(i)         Seller owns and possesses all right, title and interest in
and to all of the Shuffler and DeckChecker Intellectual Property;


 


(ii)        The Shuffler and DeckChecker Intellectual Property is not
subject to any Liens, existing or threatened, and further, is not subject to
any restrictions or limitations regarding use or disclosure;


 


(iii)       Except with respect to the claims of Buyer (the validity of
which Seller does not admit): neither Seller nor any of its Affiliates has
infringed, misappropriated or otherwise conflicted with, any Intellectual
Property of a third party in Seller’s or its Affiliates’ operation or
commercialization of its business relating to or involving the Acquired Assets
or in its or their sale, leasing, licensing or other exploitation of any
Acquired Asset; no Product infringes any Intellectual Property of a third
party, and no third party has made any such claim; to the best of Seller’s
Knowledge, there are no facts that indicate a likelihood of any of the
foregoing; and neither Seller nor any of its Affiliates has received any
notices regarding any of the foregoing (including, without limitation, any
demands or offers to license any Intellectual Property from any third party);


 


(iv)       Seller has taken all necessary and reasonable actions to
maintain and protect all of the Shuffler and DeckChecker Intellectual Property;


 


(v)        To the best of Seller’s Knowledge, no third party has
infringed, misappropriated or otherwise conflicted with any of the Shuffler and
DeckChecker Intellectual Property, and to the best of Seller’s Knowledge, there
are no facts that indicate a likelihood of any of the foregoing;


 


(vi)       To the best of Seller’s Knowledge, each of the claims in each
of the Patents is valid and enforceable in the jurisdiction in which the
particular Patent is issued or registered, and, to the best of Seller’s
Knowledge, will be valid and enforceable in such jurisdiction where any such
Patent is filed, but not yet issued or registered, upon issuance and
registration of such Patent; and none of the Shuffler and DeckChecker
Intellectual Property, to the best of Seller’s Knowledge, has been misused, no
claim by any third party contesting the validity, enforceability, use or
ownership of any of same has been made, is currently outstanding or is
threatened, and there are no grounds for the same;


 


(vii)      To the best of Seller’s Knowledge, each of the Trademarks is
valid and enforceable in the jurisdiction in which the particular Trademark is
issued or registered;


 


(viii)     No loss or expiration of any of the
Shuffler and DeckChecker Intellectual Property is pending or, to the Knowledge
of Seller, threatened, except for patents expiring at the end of their
statutory terms (and not as a result of any act or omission by the Seller,
including, without limitation, a failure by Seller to pay any required
maintenance fees);


 


(ix)       Neither Seller nor any of its Affiliates has agreed to
indemnify any third party for or against any interference, infringement,
misappropriation or other conflict with respect to any Shuffler and DeckChecker
Intellectual Property;


 


(x)        Seller has obtained the proper execution of all inventors so
as to vest full and complete title to Seller of all Shuffler and DeckChecker
Intellectual Property, and other than employees of Seller and consultants who
have assigned all code, underlying copyrights and other Intellectual Property to
Seller, no Person has provided software coding or design work for any of the
Products except as disclosed on Schedule 4.13(b)(x);


 


 


Page 17













 


(xi)       Neither Seller nor any of its Affiliates has disclosed any of
its trade secrets or other Confidential Information to any third party other
than pursuant to a written, and to the best of Seller’s Knowledge, valid and
binding confidentiality agreement;


 


(xii)      Seller has not licensed or granted a covenant not to sue respecting
any Shuffler and DeckChecker Intellectual Property, except as disclosed on
Schedule 4.13(b)(xii);


 


(xiii)     Within the last three (3) years,
neither Seller nor any of its Affiliates has transferred or licensed any of the
Shuffler and DeckChecker Intellectual Property to any other Person;


 


(xiv)     Neither Seller nor any of its Affiliates has granted any third
party any rights to currently possess, access or use any source code relating
to any of the Products;


 


(xv)      To the best of Seller’s Knowledge, none of the following
documentation exists with respect to any Patent:


 


(A)       Validity studies; or


 


(B)       Novelty studies; and


 


(xvi)     To the best of Seller’s Knowledge, none of the following
documentation exists with respect to any Product other than the Poker One
shuffler:


 


(A)       Clearance studies; or


 


(B)       Infringement studies.


 


 


(c)  All claims of “small entity”
status made by Seller in connection with any filings of or relating to the
Patents were made by Seller in good faith.


 


4.14      Litigation.  Except for the Litigation:  (a) there are no (and, during the two
years preceding the Closing Date, there have not been any) actions, suits,
proceedings, orders or investigations pending or, to the best of Seller’s
Knowledge, threatened that (i) challenge Seller’s ownership of the
Acquired Assets , (ii) could result in any rescission of (A) Seller’s
ownership of the Acquired Assets or (B) the transfer of the Acquired
Assets to Buyer or (iii) challenge the validity or enforceability of any
of the Shuffler and DeckChecker Intellectual Property, in each case at law or
in equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign; and (b) to the best of Seller’s Knowledge, there is no reasonable
basis for any of the foregoing.  Neither
Seller nor any of its Affiliates is subject to or bound by any outstanding
orders, judgments or decrees of any court or governmental entity with respect
to any of the Acquired Assets or any of the Shuffler and DeckChecker
Intellectual Property.  Neither Seller
nor any of its Affiliates has received any opinion or memorandum or advice from
legal counsel to the effect that Seller is exposed, from a legal standpoint, to
any material liabilities affecting any of the Acquired Assets or any of the
Shuffler and DeckChecker Intellectual Property. 
To the best of Seller’s Knowledge, there are no actual or potential
claims, or any basis therefor, by Seller or any Affiliate of Seller against
Buyer or any Affiliate of Buyer, other than claims in respect of sales of
products made and contractual obligations entered into between Seller or one or
more of its Affiliates and Buyer or one or more of its Affiliates.  Neither Seller’s current litigation with (i) Purton
or (ii) Lombino challenge Seller’s ownership of the Acquired Assets or the
validity or enforceability of nor seek rescission or return of any Products or
Shuffler and DeckChecker Intellectual Property from Seller.


 


 


Page 18













 


4.15          Brokerage.  There are and will be no claims for brokerage
commissions, finders’ fees or similar compensation in connection with the
Transaction, based on any arrangement or agreement made by or on behalf of
Seller.


 


4.16          [INTENTIONALLY OMITTED].


 


4.17          Product Warranties. 
Seller hereby makes no express or implied warranties or guarantees with
respect to any of the Products marketed, leased and/or sold or services
rendered by it, except for:  (i) those
standard terms and conditions in Schedule 4.17; (ii) those of
ownership free and clear of any Liens; (iii) the ability to transfer any
of same as part of the Transaction; and (iv) that each Product sold or
delivered and each service rendered by Seller has been in conformity in all
material respects with all applicable contractual commitments; and Seller has
no material liability or obligation for replacement or repair thereof or other
damages in connection therewith.  Since September 1,
2007, there have been no recalls, withdrawals or seizures with respect to any
Products marketed or sold by Seller in connection with its business.


 


4.18          [INTENTIONALLY OMITTED].


 


4.19          Compliance with Laws.  Except as disclosed, as required herein, on
Schedule 4.19:


 


(a)    Seller has complied and is in compliance in all material respects
with all applicable Laws relating to the operation of that portion of its
business involving or relating to the Acquired Assets and the manufacture and
selling of any Acquired Asset.  The Products
and their manufacture and sale are and have been in compliance in all material
respects with all applicable Laws, and no notices have been received by and, to
the best of Seller’s Knowledge, no claims have been filed against Seller
alleging a violation of any such Laws;


 


(b)    Seller has not received any notice, report or information
regarding any actual or alleged violation of, or any liability or potential
liability arising under any Law that relates, covers or applies to the Acquired
Assets; and


 


(c)    No officer, director, employee, consultant, advisor or agent of
Seller has been or is authorized to make or receive, and Seller does not know
of any of its officers, directors, employees, consultants, advisors or agents
making or receiving, any bribe, kickback payment or other illegal payment at
any time with respect to any Acquired Assets.


 


4.20          [INTENTIONALLY OMITTED]


 


4.21          Suppliers.


 


Schedule 4.21 sets forth a list of Seller’s
suppliers for the deck checkers, including, with respect to each such supplier,
a list of all parts which such supplier supplies to Seller.


 


4.22          Inventory.


 


(a)    To the Knowledge of Seller, all of the Inventory is listed in
Schedule 4.22(a), including location and serial number.  The number of RandomPlus and Shuffle Pro
shufflers and deck checkers set forth on Schedule 4.22(a) is true and
correct.


 


(b)    No Person other than Seller and Suzo Happ (including, without
limitation, Ten Stix) is in possession of or has any right to sell, whether as
a distributor, representative, agent or otherwise, any of the Products.


 


(c)    Schedule 4.22(c) sets forth a true, correct and complete
list of all Persons who, to the Knowledge of Seller, hold any tooling, die
castings, or molds necessary to manufacture the Products or any parts 


 


 


Page 19













 


for the Products.  To the Knowledge of Seller, no Persons other
than those listed on Schedule 4.22(c) hold any such toolings, die castings
or molds.


 


(d)    Except as disclosed in Schedule 4.22(d), all Inventory has been
manufactured in conformity with all applicable Laws.  Seller owns all Inventory, free and clear of
any Liens.


 


4.23          Product Liabilities.  Except as disclosed in Schedule 4.23,
Seller has not had and does not have any liability (and, to the best of Seller’s
Knowledge, there is no reasonable basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
it giving rise to any liability) arising out of any injury to individuals or
property as a result of the ownership, possession or use of any Products .


 


4.24          Insolvency.


 


As of the Closing Date,
Seller is not presently insolvent and does not presently intend to take any
action to cause, effectuate or authorize any of the following, whether
voluntary or involuntary, within the four (4) year period following the
Closing Date: (a) any bankruptcy, reorganization, insolvency, liquidation,
receivership, dissolution, foreclosure, winding up or relief from indebtedness,
whether in a case, action or proceeding before any court or governmental entity
(including any proceeding under the United States Bankruptcy Code) or
otherwise; (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors or other similar arrangement
in respect of Seller’s creditors generally or any portion of such creditors; or
(c) any transfer of all or substantially all of Seller’s assets to any
Person.  There is no basis for any
Affiliate of Seller to cause, take any action to effectuate or authorize any of
the foregoing or to foreclose on any of Seller’s assets.


 


4.25          Disclosure.  This Agreement does not contain any untrue
statement of a material fact or omit a material fact necessary to make the
statements contained herein or therein, in light of the circumstances in which
they were made, not misleading.  Despite
any input from Buyer, each Schedule was prepared solely by Seller, and Seller
is fully and solely responsible for the content of each.


 


4.26          Knowledge.  As used herein, the term “Knowledge”
means the actual state of knowing a thing or fact.


 


4.27          Allocation of Risks.  The representations, warranties, covenants
and agreements made herein, together with the indemnification provisions in
this Agreement, are intended among other things to allocate the economic cost
and the risks inherent in the Transaction and accordingly, a party shall be
entitled to the indemnifications or other remedies provided in this Agreement
by reason of any breach of any such representation, warranty, covenant or
agreement by another party notwithstanding whether any employee, representative
or agent of the party seeking to enforce such indemnification or any remedy
knew or had reason to know of such breach, and any such knowledge or reason to
know of such breach shall not be a defense to any indemnification, or other
claims, remedies, or defenses.


 


4.28          Modifications.  All representations, warranties and covenants
made by Seller herein in relation to the Products and the Shuffler and
DeckChecker Intellectual Property shall not extend to any modifications, updates
or adjustments made by Buyer or any of its Affiliates or agents after the
Closing Date to the extent such modification, update or adjustment caused such
representation, warranty or covenant to no longer be true.


 


 


Page 20












 


ARTICLE
V


[INTENTIONALLY OMITTED]


 


ARTICLE
VI


REPRESENTATIONS AND
WARRANTIES OF BUYER


 


As an inducement to Seller
to enter into this Agreement, Buyer hereby represents and warrants to Seller as
of the date hereof and as of the Closing Date as follows:


 


6.1            Corporate Organization and Power.  Buyer is a corporation duly formed and
validly existing under the laws of the State of Minnesota, with full corporate
power and authority to enter into this Agreement and to perform its obligations
hereunder.


 


6.2            Authorization.  The execution, delivery and performance of
this Agreement and the Related Agreements to be executed and delivered by Buyer
and the consummation of the Transaction have been duly and validly authorized
by all requisite corporate action on the part of Buyer, and no other corporate
proceedings on the part of Buyer are necessary to authorize the execution,
delivery or performance of this Agreement or the Related Agreements.  No action by the board of directors of Buyer
is necessary to authorize the execution, delivery or performance by Buyer of
this Agreement or the Related Agreements. 
This Agreement and the Related Agreements contemplated hereby to be
executed and delivered by Buyer constitute valid and binding obligations of
Buyer, enforceable against Buyer in accordance with their respective terms.


 


6.3            Governmental Authorities and
Consents.  Buyer is not required to
submit any notice, report or other filing with any governmental authority in
connection with the execution or delivery by it of this Agreement or the
consummation of the Transaction and no consent, approval or authorization of
any governmental or regulatory authority is required to be obtained by Buyer in
connection with the execution and delivery of this Agreement or the
consummation of the Transaction.


 


6.4            Brokerage.  There are no claims for brokerage
commissions, finders’ fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement made by or on behalf of Buyer.


 


6.5            Claims.  Except for the Litigation, to the knowledge
of Buyer, there are no actual or potential claims by Buyer or any Affiliate of
Buyer against Seller or any Affiliate of Seller, other than claims in respect
of sales of products made and contractual obligations entered into between
Buyer or one or more of its Affiliates and Seller or one or more of its
Affiliates.


 


 


ARTICLE
VII


ADDITIONAL AGREEMENTS


 


7.1            Survival of Representations and
Warranties.  The representations and
warranties in this Agreement and the Schedules attached hereto shall survive
the Closing, as follows:


 


(a)       any representations and warranties respecting any Tax Matters
shall terminate when the applicable statutes of limitations with respect to the
liabilities in question expire (giving effect to any extensions or waivers
thereof);


 


(b)       any representations and warranties in Sections 4.1
(Organization and Corporate Power), 4.2 (Authorization; No Breach), 4.7
(Liens), 4.8 (Acquired Assets), 4.12 (Contracts and Commitments), 4.13 


 


 


Page 21













 


(Shuffler and DeckChecker Intellectual Property), 4.15 (Brokerage),
4.24 (Insolvency), 4.26 (Knowledge) and 4.27 (Allocation of Risks) shall
terminate on the third anniversary of the Closing Date;


 


(c)    notwithstanding subsection (b) of this Section 7.1, any
representations and warranties of Seller relating to any Lender (together with
the representations and warranties described in subsection (b), the “Fundamental
Reps”) shall terminate on the day after the expiration of the applicable
statute of limitations; and


 


(d)    all other representations and warranties in this Agreement shall
terminate on the first anniversary of the Closing Date, provided that any
representation or warranty in respect of which indemnity may be sought under Section 7.2,
shall survive the time at which it would otherwise terminate pursuant to this Section 7.1
if written notice of the claim for indemnification shall have been given to the
Party against whom such indemnity may be sought prior to such time.  The representations and warranties in this
Agreement and the Schedules attached hereto shall survive for the periods set
forth in this Section 7.1 and shall in no event be affected by any
investigation, inquiry or examination made for or on behalf of Buyer or Seller,
or the Knowledge of any of Buyer’s or Buyer’s officers, directors,
shareholders, employees or agents or the acceptance by Buyer or Seller of any
certificate or opinion hereunder.  Seller
makes no representations or warranties other than set forth in this Agreement
and in the Schedules, and in any Related Agreement.  Each of the Seller and the Buyer makes no
representations or warranties other than set forth in this Agreement.


 


7.2              General Indemnification.


 


(a)  Indemnification by Seller for Benefit of Buyer. Seller
hereby fully indemnifies and holds harmless Buyer, Buyer’s officers, directors,
heirs, employees, agents, representatives, successors and assigns, and each of
its and their respective officers, directors, heirs, employees, agents,
representatives, successors and assigns and Buyer’s Affiliates (collectively, “Buyer
Indemnitees”), and save, defend and hold each of the Buyer Indemnitees
harmless against and pay on behalf of or reimburse such Buyer Indemnitees as
and when incurred for any Losses (including, without limitation, Seller’s
payment, when otherwise due by any Buyer Indemnitee, of any of Buyer Indemnitee’s
attorneys’ fees or legal costs) which any such Buyer Indemnitee may suffer,
sustain, have alleged against it, or become subject to, as a result of, in
connection with, relating or incidental to by virtue of, arising out of, or
from:  (i) any breach of any
representation or warranty made by Seller in or under this Agreement, any
Related Agreement, or any of the Schedules attached hereto or thereto; (ii) any
nonfulfillment or breach of any covenant, obligation, or agreement by Seller
under or in this Agreement, any Related Agreement, or any of the Schedules
attached hereto or thereto; (iii) any liability or obligation of Seller or
any Loss related thereto arising from any Excluded Liability or Excluded Asset,
including, without limitation, any liability or obligation (or any Loss related
thereto) to, or any Lien asserted or claimed by, any Lender; (iv) any breach
or noncompliance by Seller of Section 8.13 hereof; (v) any
Indebtedness, Loss or right claimed by any of TCS, Suzo Happ, Ten Stix, Purton
or Lombino against Seller or against Buyer in connection with this Agreement,
the transactions contemplated hereby and/or the actions, omissions or
agreements of Seller (other than with respect to Buyer’s actions or omissions
in picking up the Inventory from Suzo Happ pursuant to Section 2.5(b)(iv)(B));
(vi) any Indebtedness or Loss suffered or alleged against Buyer or any
Buyer Indemnitee attributable to any act or omission of Seller occurring prior
to the Closing Date, including, without limitation, with respect to any Lender;
and (vii) any action, claim or Indebtedness or Loss alleged by Seller or
any Affiliate of Seller against Buyer or any Affiliate of Buyer which existed
as of the Closing Date, whether known or unknown, accrued or unaccrued, or
liquidated or unliquidated (other than with respect to any breach of this
Agreement or any Related Agreement by Buyer or products sold or purchased by
Seller or any Affiliate of Seller to or from Buyer or any Affiliate of Buyer in
the ordinary course of business or contractual relationships between such
parties).  (The items in (i) through
(vii) are individually and collectively referred to herein as a “Buyer
Indemnitee Claim”).  Seller shall not have the right to deny indemnification
coverage under this Agreement to Buyer or its Affiliates based on the mere fact
that Buyer or an Affiliate of Buyer manufactured, sold, leased, licensed,
marketed, distributed or used any Acquired Asset (in the same condition as
existed as of 


 


 


Page 22













 


the Closing) in compliance with the
applicable (if any) Gaming Permits and/or Gaming Product Approvals, after
Closing.


 


(b)    Indemnification by Buyer for Benefit of Seller.  Buyer hereby fully indemnifies and holds
harmless Seller, Seller’s officers, directors, heirs, employees, agents,
representatives, successors and assigns, and each of its and their respective
officers, directors, heirs, employees, agents, representatives, successors and
assigns and Seller’s Affiliates (collectively “Seller Indemnitees”) and
save, defend and hold each of the Seller Indemnitees harmless against and pay
on behalf of or reimburse such Seller Indemnitees as and when incurred for any
Losses (including, without limitation, Buyer’s payment, when otherwise due by
any Seller Indemnitee, of any of Seller Indemnitee’s attorneys’ fees or legal
costs) which any such Seller Indemnitee may suffer, sustain, have alleged
against it , or become subject to, as a result of, in connection with, relating
or incidental to by virtue of, arising out of, or from:  (i) any breach of any representation or
warranty of Buyer in or under this Agreement, any Related Agreement, or any of
the Schedules attached hereto or thereto; (ii) any nonfulfillment or
breach of any covenant, obligation or agreement by Buyer under or in this
Agreement, any Related Agreement, or any of the Schedules attached hereto or
thereto; (iii) any Indebtedness or Loss of Seller or any of Seller’s
Affiliates, with respect to any Acquired Asset or Buyer’s conduct of its
business relating to the Acquired Assets, which arises from an act or
omission of Buyer occurring after the Closing Date (other than any
Excluded Liability and any Indebtedness or Loss resulting from any breach, or
which would constitute a breach, by Seller or its Affiliates of this
Agreement), including, without limitation, any Indebtedness (or any Loss
related thereto) to, or any Lien asserted or claimed by, any creditor of Buyer
regarding an Acquired Asset; and (iv) any action, claim or Indebtedness
alleged by Buyer or any Affiliate of Buyer against Seller or any Affiliate of
Seller which existed as of the Closing Date, whether known or unknown, accrued
or unaccrued, or liquidated or unliquidated (other than with respect to any
breach of this Agreement or any Related Agreement by Seller or products sold or
purchased by Buyer or any Affiliate of Buyer to or from Seller or any Affiliate
of Seller in the ordinary course of business or contractual relationships
between such parties) (the items in (i), (ii), (iii) and (iv) are
individually and collectively referred to herein as a “Seller Indemnitee
Claim”).  Buyer
shall not have any indemnification obligation under this Agreement, and neither
Seller nor any Affiliate of Seller shall be entitled to any indemnification
coverage under this Agreement, based on the mere fact that Buyer or an
Affiliate of Buyer manufactured, sold, leased, licensed, marketed, distributed
or used any Acquired Asset (in the same condition as existed as of the Closing)
in compliance with the applicable (if any) Gaming Permits and/or Gaming Product
Approvals, after Closing.


 


(c)    Defense of Claims. 
Any Party making a claim for indemnification under this Section 7.2
(an “Indemnitee”) shall notify the indemnifying Party (an “Indemnitor”)
of the claim in writing and, if by a third party, promptly after receiving
written notice of any action, lawsuit, proceeding, investigation or other claim
against it; and, in all events, describing the claim, the amount thereof (if
known and quantifiable), and the basis thereof; provided that the
failure to so notify an Indemnitor shall not relieve the Indemnitor of its obligations
hereunder except to the extent that (and only to the extent that) such failure
shall have caused the damages for which the Indemnitor is obligated to be
greater than such damages would have been had the Indemnitee given the
Indemnitor prompt notice hereunder.  Any
Indemnitor shall defend such action, lawsuit, proceeding, investigation or
other claim giving rise to an Indemnitee’s claim for indemnification at such
Indemnitor’s expense, and (subject to the limitations set forth below) shall
assume the defense thereof by appointing an AV-rated counsel experienced in the
subject matter of such claim and reasonably acceptable to the Indemnitee to be
the lead counsel in connection with such defense; provided  further,
that:


 


(i)         the Indemnitee shall be entitled to participate in the
defense of such claim and to employ counsel of its choice for such purpose;
provided that, as long as the Indemnitor is defending, at its sole cost, and
paying, currently and as incurred, all legal fees and litigation costs and
expenses of the Indemnitee, the fees and expenses of such separate counsel
shall be borne by the Indemnitee; but further, if Indemnitor is in breach of
any provision of Section 7.2(c), then, notwithstanding any other
provisions contained in this Agreement, 


 


 


Page 23













 


the Indemnitee shall have the right to
control the defense and settlement of such claim, with counsel of its own
choosing, and all at Indemnitor’s sole expense;


 


(ii)        the Indemnitor shall not be entitled to assume control of
such defense and shall, as incurred by the Indemnitee, pay the legal fees and
litigation expenses of counsel retained by the Indemnitee if:  (A) the claim for indemnification
relates to or arises in connection with any criminal proceeding, action,
indictment, allegation or investigation; (B) the Indemnitee reasonably
believes an adverse determination with respect to the action, lawsuit,
investigation, proceeding or other claim giving rise to such claim for
indemnification would be detrimental to or injure the Indemnitee’s
reputation,   future business prospects,
or any regulatory licenses, Gaming Permits, or Gaming Product Approvals; (C) the
claim seeks an injunction or equitable relief against the Indemnitee; (D) upon
petition by the Indemnitee, the appropriate court rules that the
Indemnitor failed or is failing to vigorously prosecute or defend such claim; (E) the
Indemnitee reasonably believes that the Loss relating to such claim for
indemnification could exceed the maximum amount that such Indemnitee could then
be entitled to recover under the applicable provisions of Section 7.2; or (F) the
Indemnitor is not in full compliance with each condition set forth in Section 7.2(c)(i) through
7.2(c)(iv);


 


(iii)       if the Indemnitor shall control the defense of any such claim,
the Indemnitor shall obtain the prior written consent of the Indemnitee before
entering into any settlement of a claim or ceasing to defend such claim if,
pursuant to or as a result of such settlement or cessation:  (A) there is any risk or jeopardy to any
Gaming Permit or Gaming Product Approval held by the Indemnitee; (B) injunctive
or other equitable relief will be imposed against the Indemnitee; (C) such
settlement does not expressly, finally and unconditionally release the
Indemnitee from all liabilities and obligations with respect to such claim,
without any prejudice to the Indemnitee; (D) such settlement involves the
Indemnitee relinquishing, limiting, or reducing any of its rights under this
Agreement or any Related Agreement; (E) any settlement adversely affects
the economic value of any of the Acquired Assets or the operation thereof, or
any other part of any Intellectual Property owned by Buyer; or (F) the
settlement requires any payment by the Indemnitee; and


 


(iv)       so long as an Indemnitor is not in breach of this Section 7.2(c),
then the Indemnitor shall not be obligated hereunder for any settlement entered
into by an Indemnitee without the Indemnitor’s prior written consent, which
consent shall not be unreasonably withheld. 
In any event, Buyer shall be entitled to settle any claim at its own
expense.


 


(d)    With respect to any Buyer Indemnitee Claim, Seller’s maximum
aggregate indemnification obligations for any of Buyer’s Losses under this Section 7.2
(the “Seller’s Cap”) shall be the Purchase Price; provided, however,
that any attorneys’ fees, court costs, or other litigation expenses related to
any Buyer Indemnitee Claim shall be excluded from and not part of the Seller’s
Cap.


 


(e)    With respect to any Seller Indemnitee Claim, Buyer’s maximum
indemnification obligations for any of Seller’s Losses shall be $1.0 million
(the “Buyer’s Cap”), provided, however, that any attorneys fees, court
costs or other litigation expenses related to any Seller Indemnitee Claim shall
be excluded from and not part of the Buyer’s Cap.


 


(f)    A Buyer Indemnitee shall not be entitled to indemnification under
Section 7.2(a)(i) unless the aggregate of all of Seller’s
indemnification obligations under Section 7.2(a)(i) exceeds Twenty
Thousand Dollars ($20,000.00) (the “Deductible”); but in such event, the
Buyer Indemnitees shall be entitled to indemnification in full for all claims
under Section 7.2(a)(i); provided, however, that Seller
shall not be entitled to the benefit of the Deductible with respect to any
breach of any Fundamental Rep or to the extent any breach of a representation
or warranty involved actual fraud.  In
the event that an indemnification claim could be made by Buyer under both Section 7.2(a)(i) and
any other subsection of Section 7.2(a), for the avoidance of doubt, Seller
shall not be entitled to the benefit of the Deductible with respect to such
claim.


 


 


Page 24













 


(g)    A Seller Indemnitee shall not be entitled to indemnification
under Section 7.2(b)(i) unless the aggregate of all of Buyer’s
indemnification obligations under Section 7.2(b)(i) exceeds the
amount of the Deductible; but in such event, the Seller Indemnitees shall be
entitled to indemnification in full for all claims under Section 7.2(b)(i);
provided, however, that Buyer shall not be entitled to the
benefit of the Deductible to the extent any breach of a representation or
warranty involved actual fraud.  In the
event that an indemnification claim could be made by Seller under both Section 7.2(b)(i) and
any other subsection of Section 7.2(b), for the avoidance of doubt, Buyer
shall not be entitled to the benefit of the Deductible with respect to such
claim.


 


(h)    If a Party is liable or responsible for a Loss, the Loss shall
also accrue interest at the Applicable Rate, beginning when the Loss is due to
be paid to the other Party, and continuing until paid in full.


 


(i)     No Party shall have the right to rescind this Agreement.


 


 


7.3              Press Release and Announcements.
 After the Closing, the Parties shall
issue a joint press release in the form attached hereto as Exhibit B
within the time period required by applicable Laws.  As required by any applicable Laws, each of
Buyer and Seller shall be permitted to issue its own related filings regarding
the Closing of the Transaction provided that the text of such filings are, to
the extent permitted by applicable Laws, not inconsistent with the joint press
release and that each Party shall not make any adverse comment or disparagement
about the Acquired Assets or the other Party’s business or products in its own
related filings.  Notwithstanding the
foregoing or anything in this Agreement to the contrary, neither Party shall
issue a press release containing any allocation of the consideration relating
to the Transaction, except that such allocation may be reflected in any
financial statements included with any such press release.


 


7.4              Expenses.  Except as otherwise expressly provided in Section 7.5
below, each Party hereto shall pay all of its own costs and expenses (including
attorneys’, accountants’ and investment bankers’ fees and other out-of-pocket
expenses) in connection with the negotiation and execution of this Agreement,
the performance of its obligations hereunder and the consummation of the
Transaction.  Without limiting the
foregoing, each Party shall pay its own expenses incurred in connection with
its efforts to satisfy the conditions to the other Party’s obligation to
consummate the Transaction.


 


7.5              Further Transfers.  Both prior to and after Closing, Seller shall
execute and deliver such further instruments of conveyance and transfer and
take such additional action (including without limitation, all documents
described or required under Section 2.5(b)) as Buyer may reasonably
request to effect, consummate, confirm or evidence the transfer, as
contemplated by this Agreement, to Buyer of the Acquired Assets (including with
respect to the transference of all Gaming Product Approvals, authorizations,
accreditations and consents, if any, in connection therewith), and Seller shall
execute such documents as may be necessary to assist Buyer in preserving or
perfecting its rights (including ownership) in the Acquired Assets
(collectively “Instruments of Conveyance”).  Seller hereby designates Buyer as Seller’s
attorney in fact and law for the purposes of executing any Instruments of
Conveyance relating to any Shuffler and DeckChecker Intellectual Property which
are not timely (but no later than 30 days from Seller’s receipt) executed by
Seller.  Following the Closing, Seller
and Buyer agree to cooperate with each other and to provide each other with all
information and documentation reasonably necessary to permit the preparation
and filing of all federal, state, local and other Tax Returns with respect to
the Acquired Assets; provided that each Party shall reimburse the other Party
for such other party’s reasonable out-of-pocket expenses in connection
therewith.  Seller agrees that,
subsequent to the Closing, it shall refer all customer inquiries with respect
to the Acquired Assets to Buyer.  Seller
further agrees that if, after the Closing, Seller discovers any Additional
Books and Records (as defined below) or Additional Tools (as defined below)
which Seller reasonably believed were not in existence as of the Closing and
which were not previously transferred to Buyer (such items shall be referred to
herein as “Discovered Items”), then (a) promptly following such
discovery, for no additional consideration, Seller shall transfer such
Discovered Items to Buyer and (b) any 


 


 


Page 25













 


such Discovered Items
which are Additional Books and Records shall automatically and without further
action by either Party become Acquired Assets for purposes of this
Agreement.  For purposes hereof, (x) the
term “Additional Books and Records” shall mean any of the following
which is owned by and in the possession of Seller: bills of materials,
engineering drawings, diagrams and specifications, circuit diagrams,
schematics, mask works, parts lists, models, files, histories, reports,
certifications, user manuals, service manuals, training manuals, sales
literature, technical bulletins, parts breakdowns, manufacturing work
instructions, quality control work inspection criteria, submission packages to
regulators, validity studies, novelty studies, clearance studies, infringement
studies and any other documents or information necessary to manufacture the
Products, and (y) the term “Additional Tools” shall mean tooling,
die castings, test fixtures and apparatuses, molds and equipment and related
software owned by Seller necessary to manufacture the Products or any parts for
the Products, other than commercial “off the shelf” equipment available on
standard terms.


 


7.6            Confidential Information.  The Non-Disclosure Agreement between Seller
and Buyer, dated December 17, 2008 (the “Non-Disclosure Agreement”),
shall remain in full force and effect after any Closing of the Transaction,
according to its terms; provided, however, that Buyer shall not
be restricted as to the use or disclosure of any information acquired by Buyer
pursuant to: this Agreement; any Schedules; or the Acquired Assets.


 


7.7            Sales and Transfer Taxes.  Except as provided in Section 2.5(b)(iv),
Seller, on the one hand, and Buyer, on the other hand, shall each pay fifty
percent (50%) of all sales, use, excise, value-added, goods and services,
transfer, recording, documentary, registration, conveyance and similar Taxes
(but not income Taxes) that may be imposed on the transfers of the Transaction
(including any stamp, duty or other Tax chargeable in respect of any instrument
transferring property and any recording fees or expenses payable in connection
with the Transaction), together with any and all penalties, interest and
additions to Tax with respect thereto. 
Buyer and Seller shall cooperate in timely making all filings, returns,
reports and forms as may be required to comply with the provisions of
applicable law in connection with the payment of any such Taxes described in
the immediately preceding sentence. 
Buyer and Seller shall cooperate in providing each other with
appropriate resale exemption certification and other similar Tax and fee
documentation.


 


7.8            [INTENTIONALLY OMITTED]


 


7.9            Covenant Not to Compete, Solicit
or Hire.


 


(a)      Seller hereby acknowledges and agrees:  that it is familiar with Seller’s Shuffler
and DeckChecker Business (as defined below), its trade secrets and other
Confidential Information; that Buyer would be irreparably damaged if Seller,
were to engage in the Shuffler and DeckChecker Business; and, in any such
event, that any such competition by Seller would result in a significant loss
of goodwill by Buyer in respect of the Acquired Assets being acquired by Buyer.  Seller hereby acknowledges and agrees that
the covenants and agreements, and Seller’s, present and future adherence
thereto, all as set forth in this Section 7.9 were, are, and continue to
be a material inducement to Buyer to enter into this Agreement and to perform
its obligations hereunder, and that Buyer would not obtain the benefit of the
bargain set forth in this Agreement as specifically negotiated by the Parties
hereto if Seller breached the provisions of this Section 7.9.  Therefore, subject to the provisions of Section 2.2(b),
in further consideration of the Purchase Price, Seller hereby agrees that, (i) on
the Closing Date and continuing thereafter for a period of seven (7) years, Seller shall not,
directly or indirectly, either for itself or through any other Person, engage
or participate in the Shuffler and DeckChecker Business and/or any related
designing, licensing, leasing, developing, manufacturing, packaging, marketing,
distributing or selling of the Products, anywhere in the world, and (ii) from
the Closing Date and continuing thereafter, Seller shall not, directly or
indirectly, either for itself or through any other Person, infringe, violate or
misappropriate any Intellectual Property of Buyer relating to any of Buyer’s
shuffler or deck checker products, including, without limitation, the Shuffler
and DeckChecker Intellectual Property (collectively, the “Non-Compete
Obligations”) (it being understood and agreed that nothing herein will
prevent Seller, or any Acquirer from engaging in slot machine 


 


 


Page 26













 


sales, leases and licenses and the
manufacture, marketing and/or sale of other table game products not related to
shufflers or deck checkers, such as gaming chips).  For purposes of this Agreement, (i) the
term “participate” includes any direct or indirect interest in any
enterprise, whether as a stockholder, member, partner, joint venturer,
franchisor, franchisee or otherwise (other than by ownership of less than ten
percent (10%) of the stock of a publicly held corporation) or rendering any
direct or indirect service or assistance to any Person, and (ii) “Shuffler
and DeckChecker Business” means the manufacture, marketing and/or sale of
shuffler and/or deck checker products.   
Seller agrees that the Non-Compete Obligations are reasonably designed
to protect Buyer’s substantial investment and is reasonable with respect to its
duration, geographical area and scope. 
Notwithstanding anything to the contrary herein or in any Related
Agreement, the Parties acknowledge and agree that the Non-Compete Obligations
shall survive any termination of this Agreement and any Related Agreement.


 


(b)    If, at the time of enforcement of any of the provisions of this Section 7.9,
a court determines that the restrictions stated herein are unreasonable under
the circumstances then existing, then the parties hereto agree that the maximum
period, scope or geographical area reasonable under the circumstances shall be
substituted for the stated period, scope or area.  The Parties further agree that such court
shall be allowed to revise the restrictions contained herein to cover the
maximum period, scope or geographical area permitted by law.


 


(c)    If Seller (w) breaches; (x) threatens to commit a
breach of; (y) challenges or contests, in any way, either directly or
indirectly; or (z) assists any Person who is so challenging or contesting,
any of the provisions of the Non-Compete Obligations, Buyer shall have the
following rights and remedies, each of which rights and remedies shall be independent
of the others and severally enforceable, and each of which is in addition to,
and not in lieu of, any other rights and remedies available to Buyer at law or
in equity:


 


(i)         the right and remedy to have the Non-Compete Obligations
specifically enforced by any court of competent jurisdiction, it being agreed
that any breach or threatened breach of the Non-Compete Obligations would cause
irreparable injury to Buyer and that money damages would not provide an
adequate remedy to Buyer; and


 


(ii)        the right and remedy to require Seller to account for and pay
over to Buyer any profits, monies, accruals, increments or other benefits
derived or received by Seller as the result of any transactions constituting a
breach of the Non-Compete Obligations.


 


(d)    Nothing in this Agreement shall prevent or prohibit Buyer
from:  (i) selling, leasing or
licensing products that have functionality that is similar to, identical to, or
overlap with functionality in any of the Excluded Assets; or (ii) selling,
leasing, or licensing products which are the same as, substantially similar to,
or compete with any Shuffler or DeckChecker Business.


 


(e)    Nothing contained in this Section 7.9 shall constitute or
imply a license, at any time, to Seller, for any of the Shuffler and DeckChecker
Intellectual Property after Closing.


 


7.10            [INTENTIONALLY OMITTED].


 


7.11            Regulatory.  Due to the highly regulated nature of Buyer’s
and Seller’s business, prior to execution of this Agreement, each Party shall
have the right to perform such due diligence on the other as may be required by
any gaming regulators in those jurisdictions where either Party possesses any
licenses, or such due diligence as either Party believes it is required to
conduct.  Both prior to and on an on
ongoing basis, each Party shall fully and reasonably cooperate with the other
related to such due diligence. 
Notwithstanding any of the provisions contained in this Agreement to the
contrary, either Party shall have the right to immediately terminate any
ongoing relationship (including without limitation this Agreement) with the
other if such other Party takes any action or fails to take any action that
jeopardizes any of the other Party’s Gaming Permits, licenses or approvals, or
in the event that such Party’s relationship with the other in any way
jeopardizes or puts at risk any of such Party’s Gaming Permits, licenses or
approvals, but any such termination shall not, in any way, alter, reduce, 


 


 


Page 27













 


modify or amend any of the
rights granted to either Party in this Agreement or in any Related Agreement,
nor Buyer’s ownership of all right, title and interest in and to the Acquired
Assets after Closing.


 


7.12          Gaming Products Approval.  For any Gaming Product Approvals applicable
to both an Acquired Asset and an Excluded Asset, Seller shall use commercially
reasonable effort to transfer such Gaming Products Approval to the maximum
extent possible, including by segregating or partially assigning such Gaming
Products Approval to the extent allowable by the applicable gaming, certifying
agency, governmental, regulatory or lab
authority.


 


 


ARTICLE
VIII


MISCELLANEOUS


 


8.1            Amendment and Waiver.  This Agreement may be amended, and any
provision of this Agreement may be waived; provided that:  (i) any such amendment or waiver shall
be binding upon Seller only if set forth in a writing executed by Seller and
referring specifically to the provision alleged to have been amended or waived;
and (ii) any such amendment or waiver shall be binding upon Buyer only if
set forth in a writing executed by Buyer and referring specifically to the
provision alleged to have been amended or waived.  No course of dealing between or among the
parties shall be deemed effective to modify, amend or discharge any part of
this Agreement or any rights or obligations of any party under or by reason of
this Agreement and a waiver of any provision by any party on one occasion shall
not be deemed to be a waiver of the same or any other breach on a future
occasion.


 


8.2            Notices.  All notices, demands and other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given:  (i) when personally delivered, sent by
telecopy (with hard copy to follow) or sent by reputable overnight express
courier (charges prepaid); or (ii) three days following mailing by
certified or registered mail, postage prepaid and return receipt
requested.  Unless a Party changes the
address to which notice may be sent to such Party under this Section 8.2
by delivering written notice of such change to the other Party in the manner
set forth above, all notices, demands and communications to Seller and Buyer
shall be deemed to have been given if delivered in the manner set forth above
to the addresses indicated below:


 


Notices
to Seller:


Elixir
Gaming Technologies, Inc.


6650
Via Austi Parkway, Suite 170, Las Vegas, Nevada 89119


Telecopy
No. (702) 617-4736


Attn:
Walt Stowe


Email:
waltstowe@elixirgaming.com


 


with
a copy to:


(which
shall not constitute notice to Seller)


Greenberg
Traurig, LLP


3161
Michelson Drive


Suite 1000


Irvine,
CA 92612


Telecopy
No. (949) 732-6501


Attn:
Daniel K. Donahue


Email:
donahued@gtlaw.com


 


 


Page 28













 


Notices
to Buyer:


Shuffle
Master, Inc.


1106
Palms Airport Drive


Las
Vegas, NV  89119


Telecopy
No. (702) 270-5326


Attn:  Jerome R. Smith


Email:  jsmith@shufflemaster.com


 


with
a copy to:


(which
shall not constitute notice to Buyer):


Paul,
Hastings, Janofsky & Walker LLP


695
Town Center Drive, Seventeenth Floor


Costa
Mesa, CA 92626


Telecopy
No. (714) 979-1921


Attn:  William J. Simpson


Email:  billsimpson@paulhastings.com


 


8.3            Assignment.  This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the Parties hereto and
their respective successors, acquirers, and permitted assigns; provided,
however, Section 7.9 shall not be binding upon any successor to Seller in
a merger, consolidation or sale of all or substantially all of Seller’s assets
unless the shareholders of Seller immediately prior to the consummation of such
transaction hold, directly or indirectly, at least 50% of the voting shares of
such successor immediately following such transaction.  This Agreement and any of the rights,
interests or obligations hereunder may be assigned or delegated by either Party
to another Person, but provided:  (i) such
Person’s rights are subject to the non-assigning Party’s rights hereunder; and (ii) the
assigning Party shall remain liable for its obligations under this Agreement.


 


8.4            Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement or the application
of any such provision to any Person or circumstance shall be held to be
prohibited by or invalid, illegal or unenforceable under applicable law in any
respect by a court of competent jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity, illegality or
unenforceability, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.


 


8.5            Interpretation.  The headings and captions used in this
Agreement and the table of contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.  Any capitalized terms
used in any Schedule or Exhibit attached hereto and not otherwise defined
therein shall have the meanings set forth in this Agreement.  Unless the context otherwise requires, the
use of the word “including” herein shall mean “including without limitation.”  The Parties hereto intend that each
representation, warranty and covenant contained herein shall have independent
significance.  If any Party has breached
any representation, warranty or covenant contained herein in any respect, the
fact that there exists another representation, warranty or covenant relating to
the same subject matter (regardless of the relative levels of specificity)
which such Party has not breached shall not detract from or mitigate the fact
that such Party is in breach of the other representation, warranty or
covenant.  The fact that certain language
was in draft of this Agreement but is not in the final version of this
Agreement shall not be given any interpretative meaning.


 


8.6            Entire Agreement.  This Agreement, the Related Agreements and
the Schedules and Exhibits hereto contain the entire agreement and understanding
between the Parties hereto with respect to the subject matter hereof and,
except as otherwise provided herein, supersede all prior agreements and
understandings, whether written or oral, relating to such subject matter in any
way.  No Party has entered into this
Agreement based on or as a result of any promise, understanding, agreement,
representation or warranty of the other Party, 


 


 


Page 29













 


unless any of same are
expressly stated, in writing, in this Agreement as an agreement, representation
or warranty of said other Party.  Without
limiting the generality of the foregoing, no provision contained in any prior
draft of this Agreement which is not expressly set forth herein shall be
binding upon or admissible as evidence of the intent of the Parties.


 


8.7            Counterparts.  This Agreement may be executed in one or more
counterparts (including by means of telecopied signature pages), all of which
shall be considered one and the same agreement, and shall become effective when
one or more such counterparts have been signed by each of the Parties and
delivered to the other Party.


 


8.8            Governing Law.  THE LAW OF THE STATE OF NEVADA SHALL GOVERN
ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEABILITY
OF THIS AGREEMENT AND THE SCHEDULES ATTACHED HERETO, AND THE PERFORMANCE OF THE
OBLIGATIONS IMPOSED BY THIS AGREEMENT, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE OF NEVADA OR
ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEVADA. 
IT SHALL BE A MATERIAL BREACH OF THIS AGREEMENT IF EITHER SELLER OR
BUYER CHALLENGES, OBJECTS TO, OR VIOLATES ANY PROVISION IN THIS SECTION 8.8.


 


8.9            No Strict Construction.  Notwithstanding the fact that this Agreement
has been drafted and prepared by one of the Parties, Buyer and Seller confirm
that each of it and its counsel have reviewed, negotiated and adopted this
Agreement as the joint agreement and understanding of the Parties, and the
language used in this Agreement shall be deemed to be the language chosen by
the Parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any Person.


 


8.10          Injunctions, Specific Performance.  Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. 
Accordingly, notwithstanding the provisions of Section 8.15 hereof,
each of the Parties agrees that the other Party shall be entitled to an
injunction to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof.  Such Party may, in addition to any other
remedy to which they may be entitled, at law or in equity, seek an injunction
or specific performance in an action instituted in any court in Clark County,
Nevada; provided, however, if the Party sought to be enjoined is
not subject to personal jurisdiction in Clark County, Nevada, such action may
be instituted in any court of the United States or any state thereof having
jurisdiction over such Party and the matter (subject to the provisions set
forth in Section 8.8).


 


8.11          No Third-Party Beneficiaries.  This Agreement is for the sole benefit of the
Parties hereto and their permitted assigns and nothing herein expressed or
implied shall give or be construed to give any Person, other than the Parties
hereto and such permitted assigns, any legal or equitable rights hereunder.


 


8.12          No Relationship.  This Agreement does not constitute and shall
not be construed as constituting a partnership, joint venture or fiduciary
relationship between Seller and Buyer. 
Neither Party shall have any right to obligate or bind the other Party
in any manner whatsoever, and nothing herein contained shall give or is
intended to give any rights of any kind to any third Persons.


 


8.13          Bulk Transfer Laws.  Seller hereby agrees that it is responsible
for compliance with any so-called bulk transfer laws of any jurisdiction in
connection with the sale of the Acquired Assets.


 


8.14          Schedules.  All Schedules attached hereto or referred to
herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein.  However, nothing
in any Schedule shall be adequate to disclose an exception to a representation
or warranty made in this Agreement unless such Schedule identifies the exception
with particularity and describes the relevant facts in reasonable detail.  Without limiting the 


 


 


Page 30













 


generality of the
foregoing, the mere listing (or inclusion of a copy) of a document or other item
shall not be adequate to disclose an exception to a representation or warranty
made in this Agreement, unless the representation or warranty has to do with
the existence of the document or other item itself.  No exceptions to any representations or warranties
disclosed on one Schedule shall constitute an exception:  (i) to a representation or warranty
unless such representation or warranty calls for exceptions set forth on the
Schedules; or (ii) to any other representations or warranties made in this
Agreement unless such exception is disclosed as provided herein on each such
other applicable Schedule.


 


8.15          Parties’ Submission to Jurisdiction.  Subject to the provisions of
Sections 8.8 and 8.10 hereof, each of Seller and Buyer submit to the
exclusive jurisdiction of binding arbitration under the American Arbitration
Association and the courts located in Clark County, Nevada, for any action or
proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding shall be heard and determined,
initially in such a binding arbitration proceeding, and, as required, with any
judgment to be filed with and enforced by any appropriate court in Clark
County, Nevada, and in any other jurisdiction, as necessary.  Subject to the provisions of Section 8.10
hereof and except for the purposes of enforcing an arbitration award, and
unless a Nevada court determines that it does not have the power to enforce
such an arbitration award, a Party shall not be entitled to bring any action or
proceeding arising out of or relating to this Agreement in any other
forum.  Nothing in this Section 8.15,
however, shall affect the right of any Party to serve legal process in any
other manner permitted by law or at equity. 
Each Party agrees that an award or judgment in any arbitration, action
or proceeding so brought shall be conclusive and may be enforced by suit on the
judgment or in any other manner provided by law or at equity.  The prevailing party in any such arbitration,
action or proceeding shall be entitled to its reasonable attorneys’ fees, in
addition to any other remedies, at law or in equity.  It shall be a material breach of this
Agreement if either Seller or Buyer challenges, objects to or violates any
provision of this Section 8.15. 
Further, and without limiting the generality of the foregoing, Seller
agrees that Seller shall not challenge the validity or enforceability of any of
the Shuffler and DeckChecker Intellectual Property in any action or proceeding
arising out of or relating to this Agreement, including, without limitation,
any such action or proceeding which seeks an injunction or specific
performance.


 


 


8.16          Circumvention.


 


Neither Party shall use,
form or dissolve any affiliated entity or related body corporate which, in any
manner, directly or indirectly, circumvents, avoids or reduces the rights or
obligations of a Party hereunder, or the intent of this Agreement, nor shall
either Party transfer or assign any assets or liabilities with the intent,
purpose or effect of doing or causing any of same.


 


 


Page 31













 


IN WITNESS WHEREOF, the
parties hereto have caused this Purchase Agreement to be duly executed as of
the date and year first written above.


 


 


ELIXIR GAMING TECHNOLOGIES,
INC.  (“Seller”)


 


 


	
  By

  	
   

  	
   

  
	
  Printed
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					



 


 


SHUFFLE MASTER, INC.  (“Buyer”)


 


 


	
  By

  	
   

  	
   

  
	
  Printed
  Name: Jerome R. Smith

  	
   

  
	
  Title:
  Executive Vice President, General Counsel,

  
	
  and
  Corporate Secretary