Document:

ex10_3.htm

    
Exhibit
10.3

    
 

    MODIFICATION
OF NOTE AGREEMENT

    

    THIS MODIFICATION OF NOTE AGREEMENT
(the "Agreement"), dated as
of November 11, 2008, is between CONSOLIDATED MORTGAGE, LLC, a Nevada
limited liability company ("Maker") and DESERT
CAPITAL TRS, INC., a Delaware corporation ("Payee").

     

    RECITALS:

     

    A.           Maker
and Payee entered into that certain Loan Agreement dated as of November 21,
2007, as amended by that certain First Amendment to Loan Agreement, dated as of
even date herewith (as the same has been and may be hereafter further amended,
supplemented or modified form time to time, the "Loan
Agreement").

     

    B.           Pursuant
to the Loan Agreement, Maker executed that certain Promissory Note dated as of
November 21, 2007, payable to the order of Payee in the original principal
amount of $15,500,000.00 (as the same may renewed, extended or otherwise
modified from time to time, the "Note").

     

    C.           The
payment and performance of the liabilities and obligations of Maker under the
Loan Documents (as defined in the Loan Agreement), including without limitation,
the indebtedness evidenced by the Note, are secured by that certain Pledge
Agreement dated November 21, 2007 between Sandstone Equity Investors, LLC, a
Delaware limited liability company ("Sandstone") (such
Pledge Agreement as the same may be amended, supplemented or modified from time
to time is hereinafter referred to as the "Pledge
Agreement").

     

    D.           Maker
has requested and Payee has agreed to modify certain terms of the Note subject
to the terms and conditions of this Agreement.

     

    NOW,
THEREFORE, in consideration of the premises herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

    

    ARTICLE
I

    

    Definitions

    

    1.1           Definitions.  Capitalized
terms used in this Agreement, to the extent not otherwise defined herein, shall
have the same meanings as in the Loan Agreement.

    

    ARTICLE
II

    

    Modifications

    

    2.1           Modification
of Paragraph 1.  Effective
as of the date hereof, Paragraphs 1(a) and (b) of the Note are hereby amended
and restated to in their respective entireties to read as follows and Paragraphs
1(c) and (d) are hereby added to the Note to read in their respective entireties
as follows:

    

    
      	
              (a)  

            	
              Two
      (2) quarterly installments in the principal amount of $387,500 each, plus
      accrued and unpaid interest thereon, shall be due and payable, on March
      31, 2008 and June 30, 2008; and
thereafter

            

    

    

    
      	
              (b)  

            	
              Nine
      (9) quarterly installments of accrued and unpaid interest on the
      outstanding principal balance of this Note shall be due and payable, with
      the first such installment to be due and payable on September 30, 2008,
      with like successive installments of accrued and unpaid interest to be due
      and payable on the last day of each succeeding calendar quarter thereafter
      until and including September 30, 2010; and
  thereafter

            

    

    

    
      	
              (c)  

            	
              Twenty-eight
      (28) quarterly installments in the principal amount of $387,500 each, plus
      accrued and unpaid interest thereon, shall be due and payable, with the
      first such installment to be due and payable on December 31, 2010, with
      like successive installments of principal plus accrued and unpaid interest
      to be due and payable on the last day of each succeeding calendar quarter
      thereafter until and including September 30, 2017; and
      thereafter

            

    

    

    
      	
              (d)  

            	
              A
      final installment in the amount of all outstanding principal, plus all
      accrued and unpaid interest thereon shall be due and payable on December
      31, 2017.

            

    

    

    2.2           Modification of Paragraph
2.  Effective as of July 1, 2008, Paragraph 2 of the Note is
hereby amended and restated to read in its entirety as follows:

    
 

    2. 
Interest Rate.  Interest on
the outstanding and unpaid principal balance hereof shall be computed at a per
annum rate equal to six percent (6%), but in no event shall interest contracted
for, charged or received hereunder plus any other charges in connection herewith
which constitute interest exceed the maximum interest permitted by applicable
law, said rate to be effective prior to maturity (however such maturity is
brought about).

     

    2.3           Renewal and Extension of
Indebtedness.  The indebtedness, liabilities and obligations
evidenced by the Note are hereby renewed and extended until the maturity date of
the Noted, but shall not be extinguished or otherwise impaired
hereby.

    

    ARTICLE
III

    

    Ratifications,
Representations and Warranties

    

    3.1           Ratifications.  The
terms and provisions set forth in this Agreement shall modify and supersede all
inconsistent terms and provisions set forth in the Note and except as expressly
modified and superseded by this Agreement, the terms and provisions of the Note
and the other Loan Documents are hereby ratified, confirmed, renewed and
extended and shall continue in full force and effect.  Maker and Payee
agree that the Note as modified hereby and the other Loan Documents shall
continue to be legal, valid, and binding obligations of Maker and enforceable
against  Maker in accordance with their respective
terms.  Except as otherwise specified herein, the terms and provisions
hereof shall in no manner impair, limit, restrict or otherwise affect the
obligations and indebtedness of Maker to Payee as evidenced by the Note and the
other Loan Documents.  Maker and Payee hereby
acknowledge and agree that as of the date hereof, the outstanding principal
balance of the Note is $14,225,000.

    

    3.2           Representations and
Warranties.  Maker hereby represents and warrants to Payee that
the execution, delivery and performance of this Agreement and any and all other
Loan Documents executed and/or delivered in connection herewith have been
authorized by all requisite action on the part of Maker and will not violate any
applicable order, rule or regulation of any court or governmental
authority.

    

    3.3           No
Offsets.  Sandstone and Maker each hereby acknowledge that
neither Sandstone nor Maker has any offsets or claims against, or defenses of
counterclaims to, the terms or provisions of or the other obligations of
Sandstone or Maker created or evidenced by the Note, the Loan Agreement, the
Pledge Agreement or the other Loan Documents.

    

    ARTICLE
IV

    

    Miscellaneous

    

    4.1           Survival of Representations
and Warranties.  All representations and warranties made in
this Agreement or any other Loan Document including any Loan Document furnished
in connection with this Agreement shall survive the execution and delivery of
this Agreement and the other Loan Documents, and no investigation by Payee or
any closing shall affect the representations and warranties or the right of
Payee to rely upon them.

    

    4.2           Reference to
Note.  Each of the Loan Documents, including the Loan Agreement
and any and all other agreements, documents, or instruments now or hereafter
executed and delivered pursuant to the terms hereof or pursuant to the terms of
the Loan Agreement as amended, are hereby amended so that any reference in such
Loan Documents to the Note shall mean a reference to the Note as modified
hereby.

    

    4.3           Severability.  Any
provision of this Agreement held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the remainder of this
Agreement and the effect thereof shall be confined to the provision so held to
be invalid or unenforceable.

    

    4.4           APPLICABLE
LAW.  THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED
PURSUANT HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE' LAWS
OF THE STATE OF NEVADA AND THE APPLICABLE LAWS OF THE UNTIED STATES OF
AMERICA.

    

    4.5           Successors and
Assigns.  This Agreement is binding upon and shall inure to the
benefit of Payee, Maker and Sandstone and their respective successors and
assigns, except neither Sandstone nor Maker may assign or transfer any of its
rights or obligations hereunder without the prior written consent of
Payee.

    

    4.6           Counterparts.  This
Agreement may be executed in one or more counterparts, each of which when so
executed shall be deemed to be an original, but all of which when taken together
shall constitute one and the same instrument.

    

    4.7           Effect of
Waiver.  No consent or waiver, express or implied, by Payee to
or for any breach of or deviation from any covenant, condition or duty by
Sandstone or Maker shall be deemed a consent or waiver to or of any other breach
of the same or any other covenant, condition or duty.

    

    4.8           Headings.  The
headings, captions, and arrangements used in this Agreement are for convenience
only and shall not affect the interpretation of this Agreement.

    

    4.9           ENTIRE
AGREEMENT.  THIS AGREEMENT, THE NOTE, THE LOAN AGREEMENT, THE
OTHER LOAN DOCUMENTS AND ALL OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS
EXECUTED AND DELIVERED IN CONNECTION HEREWITH AND THEREWITH EMBODY THE FINAL,
ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL, RELATING TO THE SUBJECT MATTER HEREOF, AND MAY NOT BE CONTRADICTED OR
VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO.  THERE ARE NO ORAL AGREEMENTS AMONG
THE PARTIES HERETO.

    

    

    [Signatures on immediately following
page.]

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Executed
as of the date first written above.

    

    CONSOLIDATED
MORTGAGE, LLC

    

    By: /s/Todd B. Parriott

    Todd B.
Parriott

    President

     

     

    

    DESERT
CAPITAL TRS, INC.

    

    By: /s/Stacy M. Riffe

    Stacy M.
Riffe

    Chief
Financial Officer

    

    

    

    

    

    

    By execution hereof, Sandstone Equity
Investors, LLC, a Delaware limited liability company (“Sandstone”) hereby
consents and agrees to this Modification of Note and the First Amendment to Loan
Agreement dated of even date herewith between Maker and Payee and agrees that
the Pledge Agreement dated November 21, 2007 to which it is a party, is in full
force and effect and shall remain in full force and effect and shall continue to
be the legal, valid and binding obligation of Sandstone enforceable against
Sandstone in accordance with its terms.  Sandstone further
acknowledges and agrees that the term “Indebtedness” as defined in the Pledge
Agreement includes, without limitation, the indebtedness, liabilities and
obligations of Maker to Payee evidenced by the Note, as modified
hereby.

    

    

    SANDSTONE EQUITY INVESTORS,
LLC

    

    By: /s/Todd B. Parriott

    Todd B.
Parriott

    Presidentex10.htm

     

    EXHIBIT
10.26

    

     

    FORM
OF INDEMNIFICATION AGREEMENT

     

    

    This
Indemnification Agreement, dated as of _____________, 2008, is made by and
between Shuffle Master, Inc., a Minnesota corporation (the "Company"), and
[___________] (the "Indemnitee").

     

    WHEREAS,
it is essential to the Company to retain and attract as directors and officers
the most capable persons available;

     

    WHEREAS,
the Indemnitee is a director and/or officer of the Company;

     

    WHEREAS,
the Company and the Indemnitee recognize the increased risk of litigation and
other claims being asserted against directors and officers of companies in
today's environment;

     

    WHEREAS,
basic protection against undue risk of personal liability of directors and
officers heretofore has been provided through insurance coverage providing
reasonable protection at reasonable cost, and the Indemnitee has relied on the
availability of such coverage; but as a result of substantial changes in the
marketplace for such insurance it has become increasingly difficult to obtain
such insurance on terms providing reasonable protection at reasonable
cost;

     

    WHEREAS,
the Company's Bylaws require the Company to indemnify and advance expenses to
its directors and officers to the extent provided therein, and the Indemnitee
serves as a director and/or officer of the Company, in part, in reliance on such
provisions in the Company's Bylaws;

     

    WHEREAS,
the current difficulty in obtaining adequate director and officer liability
insurance coverage at a reasonable cost, and uncertainties as to the
availability of indemnification created by recent court decisions, have
increased the risk that the Company will be unable to retain and attract as
directors and officers the most capable persons available;

     

    WHEREAS,
the Company has determined that its inability to retain and attract as directors
and officers the most capable persons would be detrimental to the interests of
the Company, and that the Company therefore should seek to assure such persons
that indemnification and insurance coverage will be available in the future;
and

     

    WHEREAS,
in recognition of the Indemnitee's need for substantial protection against
personal liability in order to enhance the Indemnitee's continued service to the
Company in an effective manner, the increasing difficulty in obtaining
satisfactory director and officer liability insurance coverage, and the
Indemnitee's reliance on the Company's Bylaws, and in part to provide the
Indemnitee with specific contractual assurance that the protection promised by
the Company's Bylaws will be available to the Indemnitee (regardless of, among
other things, any amendment to or 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    revocation
of the applicable provisions of the Company's Articles of Incorporation and
Bylaws or any change in the composition of the Company's Board of Directors or
acquisition transaction relating to the Company), the Company wishes to provide
in this Agreement for the indemnification of and the advancing of expenses to
the Indemnitee to the fullest extent (whether partial or complete) permitted by
law and as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of the Indemnitee under the directors'
and officers' liability insurance policy of the Company.

     

    NOW,
THEREFORE, in consideration of the premises and of the Indemnitee continuing to
serve the Company directly or, at its request, as an officer, director, manager,
member, partner, tax matters partner, fiduciary or trustee of, or in any other
capacity with, another Person (as defined below) or any employee benefit plan,
and intending to be legally bound hereby, the parties hereto agree as
follows:

     

    1.        Certain
Definitions.  In addition to terms defined elsewhere herein,
the following terms have the following meanings when used in this
Agreement:

     

    
      	
               
      

            	
              (a)

            	
              Agreement:  shall mean this Indemnification
      Agreement, as
      amended from time to
      time hereafter.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Board
      of Directors:  shall mean the Board of
      Directors of the Company including persons deemed to be
      directors pursuant to applicable law.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Claim:  means, without limitation except as
      explicitly set forth elsewhere in this Agreement, any threatened, asserted, pending
      or completed civil,
      criminal, administrative, investigative or other action, suit or
      proceeding of any
      kind whatsoever, or
      any appeal of any kind thereof, or any inquiry or
      investigation, whether instituted by the Company, any governmental agency or any
      other party, that the Indemnitee in good faith believes might lead to the
      institution of any such action, suit or proceeding, whether civil,
      criminal, administrative, investigative or other, including any
      arbitration or other
      alternative dispute
      resolution mechanism.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Indemnifiable
      Expenses:  means, without limitation except as
      explicitly set forth elsewhere in this Agreement, (i) all expenses and liabilities,
      including judgments,
      fines, penalties, interest, amounts paid in settlement with the approval
      of the Company, and counsel fees and
      disbursements (including, without limitation,
      experts' fees, court costs, retainers, transcript fees, duplicating,
      printing and binding costs, as well as telecommunications, postage
      and courier charges)
      paid or incurred in connection with investigating, defending, being a
      witness in or participating in (including on appeal), or preparing to
      investigate, defend, be a witness in or participate in, (including on appeal),
      any Claim
      relating to any Indemnifiable
      Event and (ii) any liabilities
      which an
      

            

    

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
       

      
        	
                 
      

              	
                 

              	
                Indemnitee incurs as a result of acting on
      behalf of the Company (whether as a fiduciary or otherwise) in connection
      with the operation, administration or maintenance of an employee benefit
      plan or any related
      trust or funding mechanism (whether such liabilities are in the form of
      excise taxes assessed by the United States Internal Revenue Service,
      penalties assessed by the Department of Labor, restitutions to such a plan
      or trust or other funding mechanism or to a participant or
      beneficiary of such plan, trust or other funding mechanism, or
      otherwise).

              

      

       

    

    
      	
               
      

            	
              (e)

            	
              Indemnifiable
      Event:  means, without limitation except as
      explicitly set forth elsewhere in this Agreement, any act or omission, whether occurring before, on or after the date of
      this Agreement, arising from the performance of
      the Indemnitee's duties or obligations to the Company or any of its
      subsidiaries,
      including in connection with any civil, criminal, administrative,
      investigative or other action, suit or proceeding to which
      the Indemnitee may hereafter be made
      a party by reason of being or having
      been an officer,
      director, manager,
      member, partner, tax
      matters partner, fiduciary or trustee of, or having served in any other capacity
      with,
      another Person or any
      employee benefit plan
      at the request of the Company.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Person:  means any individual, corporation,
      firm, partnership, joint venture, limited liability company, estate,
      trust, business association, organization, governmental entity or other entity.

            

    

     

    2.        Basic Indemnification
Arrangement; Advancement of Expenses.

     

    (a)           In the event that the Indemnitee was, is
or becomes subject to,
a party to or witness or
other participant in, or is threatened to be made subject to, a party to or witness or other
participant in, a Claim by
reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify the Indemnitee, or
cause such Indemnitee to be indemnified, to the fullest extent permitted by
Minnesota law in effect on the date hereof and as
amended from time to time;
provided, however, that no change in Minnesota law shall have the effect of reducing
the benefits available to the Indemnitee hereunder based on
Minnesota law as in effect on the date hereof or
as such benefits may improve as a result of amendments after the date hereof.
The rights of the Indemnitee provided in this Section 2 shall include, without
limitation, the rights set forth in the other sections of this Agreement.
Payments of Indemnifiable Expenses shall be made as soon as practicable but in any event no later than
thirty (30) days after written demand is presented to the Company.

     

    (b)           If so requested by the Indemnitee, the Company shall advance, or cause to be advanced
(within two business days of such request), any and all Indemnifiable Expenses incurred by the Indemnitee (an
"Expense
Advance").  The
Company shall, in accordance with such request
(but without duplication), either (i) pay, 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    or cause to be paid, such Indemnifiable Expenses on behalf of the Indemnitee, or
(ii) reimburse, or cause the reimbursement of, the
Indemnitee for such Indemnifiable Expenses.  The Indemnitee's right to an Expense
Advance is absolute and
shall not be subject to any
condition that the Board of Directors  shall not have determined that the Indemnitee is not entitled to be indemnified under
applicable law. However,
the obligation of the Company to make an Expense Advance pursuant to
this Section 2(b) shall be subject to the condition that, if, when and to the
extent that a final judicial determination is made (as to which all rights of
appeal therefrom have been exhausted or lapsed) that the Indemnitee is not
entitled to be so indemnified under applicable law, the Company shall be entitled, without further agreement or
documentation, to be reimbursed by the Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore
paid (it being understood and agreed that the foregoing agreement by the
Indemnitee shall be deemed to satisfy any requirement that the Indemnitee
provide the Company with an undertaking to repay any
Expense Advance if it is ultimately determined that the Indemnitee is not
entitled to indemnification under applicable law).  The Indemnitee's
undertaking to repay such Expense Advances shall be unsecured and
interest-free.

     

    (c)           Notwithstanding anything in this
Agreement to the contrary, the Indemnitee shall not be entitled to
indemnification or advancement of Indemnifiable Expenses pursuant to this Agreement in
connection with any Claim initiated by the Indemnitee unless (i) the Company has joined in or the Board of Directors
of the Company has authorized or consented to the
initiation of such Claim or (ii) the Claim is one to enforce the Indemnitee's
rights under this Agreement
(including an action pursued by the Indemnitee to secure a determination that the
Indemnitee should be indemnified under applicable law).

     

    (d)           The indemnification obligations of the
Company under Section 2(a) shall not apply only if, at a properly convened
meeting of the Board of Directors, and after prior written notice to the Indemnitee and
the Indemnitee and his counsel having a right to attend such meeting and present
his position to the Board of Directors, upon at least five business days written
notice of the time and place of such meeting, the Board of Directors shall have determined by
written resolution at such meeting (by majority vote of directors who are not
parties to the applicable Claim), with such resolution being adopted after
the Board consults with and receives advice from the Company's counsel, that the indemnification of the
Indemnitee is not proper in the circumstances because the Indemnitee is not
entitled to be indemnified under applicable law; provided, however, that, at the request of the
Indemnitee, the determination as to whether indemnification of the Indemnitee is
not proper in the circumstances because the Indemnitee is not entitled to be
indemnified under applicable law shall be made by independent special legal
counsel selected by the Board of Directors (or an authorized committee of the Board), after reasonable
consultation with the Indemnitee (the "Independent
Counsel").  If the Board of Directors or the Independent Counsel determines that the Indemnitee is not
entitled to be indemnified in whole or in part under applicable law, the Indemnitee shall have the right
to commence litigation in any court in the States of Minnesota or Nevada having subject matter jurisdiction
thereof and in which venue is proper, seeking an initial determination by the
court or challenging any such determination by the Board of

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Directors or the Independent Counsel or any aspect thereof, including the
legal or factual bases therefor, and the Company hereby consents to service of
process and to appear in any such proceeding.  If the Indemnitee commences legal proceedings in a court of
competent jurisdiction to secure a determination that the Indemnitee should be
indemnified under applicable law, any determination made by the Board of Directors or the Independent Counsel that the Indemnitee is not entitled to be indemnified under applicable law
shall not be binding, the Indemnitee shall continue to be entitled to receive
Expense Advances, and the Indemnitee shall not be required to reimburse the
Company for any Expense Advance, unless and until a final judicial determination is made (as to
which all rights of appeal therefrom have been exhausted or lapsed) that the Indemnitee is not entitled to
be so indemnified under applicable law.  Any determination by the
Board of
Directors or the Independent Counsel otherwise shall be conclusive and
binding on the Company and the Indemnitee.

     

    (e)           To the extent that the Indemnitee has
been successful on the merits or otherwise in defense of any or all Claims
relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein,
including dismissal without prejudice, the Indemnitee shall be indemnified
against all Indemnifiable Expenses actually and reasonably incurred in connection therewith, notwithstanding
an earlier determination by the Board of Directors that the Indemnitee is not
entitled to indemnification under applicable law.

     

    3.        Indemnification for
Additional Expenses.  The Company shall indemnify, or cause the
indemnification of, the Indemnitee against any and all Indemnifiable Expenses
and, if requested by the Indemnitee, shall advance such Indemnifiable Expenses
to the Indemnitee subject to and in accordance with Sections 2(b) and (d), which
are incurred by the Indemnitee in connection with any action brought by the
Indemnitee for (i) indemnification or an Expense Advance by the Company
under this Agreement and/or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company, regardless of whether
the Indemnitee ultimately is determined to be entitled to such indemnification,
Expense Advance or insurance recovery, as the case may be.

     

    4.        Partial
Indemnity.  If the Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
Indemnifiable Expenses in respect of a Claim but not, however, for all of the
total amount thereof, the Company shall nevertheless indemnify the Indemnitee
for the portion thereof to which the Indemnitee is entitled.

     

    5.        Burden of
Proof.  In connection with any determination by the Board of
Directors, any court or otherwise as to whether the Indemnitee is entitled to be
indemnified hereunder, the Board of Directors or court shall presume that the
Indemnitee has satisfied the applicable standard of conduct and is entitled to
indemnification, and the burden of proof shall be on the Company or its
representative to establish, by clear and convincing evidence, that the
Indemnitee is not so entitled.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6.        Reliance as Safe
Harbor.  The Indemnitee shall be entitled to indemnification
for any action or omission to act undertaken (a) in good faith reliance
upon the records of the Company, including its financial statements, or upon
information, opinions, reports or statements furnished to the Indemnitee by the
officers or employees of the Company or any of its subsidiaries in the course of
their duties, or by committees of the Board of Directors, or by any other Person
as to matters the Indemnitee reasonably believes are within such other Person's
professional or expert competence, or (b) on behalf of the Company in
furtherance of the interests of the Company in good faith in reliance upon, and
in accordance with, the advice of legal counsel or accountants, provided such
legal counsel or accountants were selected with reasonable care by or on behalf
of the Company.  In addition, the knowledge and/or actions, or
failures to act, of any director, officer, agent or employee of the Company
shall not be imputed to the Indemnitee for purposes of determining the right to
indemnity hereunder.

     

    7.        No Other
Presumptions.  For purposes of this Agreement, the termination
of any claim, action, suit or proceeding, by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo
contendere or its equivalent, shall not create a presumption that the Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law.  In addition, neither the failure of the Board of Directors to
have made a determination as to whether the Indemnitee has met any particular
standard of conduct or had any particular belief, nor an actual determination by
the Board of Directors that the Indemnitee has not met such standard of conduct
or did not have such belief, prior to the commencement of legal proceedings by
the Indemnitee to secure a judicial determination that the Indemnitee should be
indemnified under applicable law shall be a defense to the Indemnitee's claim or
create a presumption that the Indemnitee has not met any particular standard of
conduct or did not have any particular belief.

     

    8.        Nonexclusivity,
Etc.  The rights of the Indemnitee hereunder shall be in
addition to any other rights the Indemnitee may have under the Company's
Articles of Incorporation and Bylaws, the laws of the State of Minnesota, any
other agreement, or otherwise.  To the extent that a change in
Minnesota law or the interpretation thereof (whether by statute or judicial
decision) permits greater indemnification by agreement than would be afforded
currently under the Company's Articles of Incorporation and Bylaws, it is the
intent of the parties hereto that the Indemnitee shall enjoy by this Agreement
the greater benefits so afforded by such change.  No limitation of the
Indemnitee's rights pursuant to this Agreement shall in any way limit, or imply
any limitation of, the Indemnitee's rights under any other
agreement.

     

    9.        Liability
Insurance.  To the extent the Company maintains an insurance
policy or policies providing directors' and officers' liability insurance, the
Indemnitee shall be covered by such policy or policies, in accordance with its
or their terms, to the maximum extent of the coverage available for the
Company's directors or officers.

     

    10.      Period of
Limitations.  No legal action shall be brought and no cause of
action shall be asserted by or in the right of the Company against the
Indemnitee, the 

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Indemnitee's
spouse, heirs, executors or personal or legal representatives after the
expiration of two years from the date of accrual of such cause of action, and
any claim or cause of action of the Company shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such
two-year period; provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action such shorter period shall
govern.

     

    11.      Amendments,
Etc.  No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto.  No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.  In
the event the Company or any of its subsidiaries enters into an indemnification
agreement with another director, officer, agent, fiduciary or manager of the
Company or any of its subsidiaries containing a term or terms more favorable to
the indemnitee than the terms contained herein (as determined by the
Indemnitee), the Indemnitee shall be afforded the benefit of such more favorable
term or terms and such more favorable term or terms shall be deemed incorporated
by reference herein as if set forth in full herein.

     

    12.      Subrogation.  In
the event of payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery of the Indemnitee,
who shall execute all papers reasonably required and shall do everything that
may be reasonably necessary to secure such rights, including the execution of
such documents necessary to enable the Company effectively to bring suit to
enforce such rights.

     

    13.      No Duplication of
Payments.  The Company shall not be liable under this Agreement
to make any payment in connection with any Claim made against the Indemnitee to
the extent the Indemnitee has otherwise actually received payment (under any
insurance policy, any provision of the Company's Articles of Incorporation and
Bylaws, or otherwise) of the amounts otherwise indemnifiable
hereunder.

     

    14.      Defense of
Claims.  The Company shall be entitled to participate in the
defense of any Claim relating to an Indemnifiable Event or to assume the defense
thereof, with counsel reasonably satisfactory to the Indemnitee; provided that if the
Indemnitee believes, after consultation with counsel selected by the Indemnitee,
that (i) the use of counsel chosen by the Company to represent the Indemnitee
would present such counsel with an actual or potential conflict of interest,
(ii) the named parties in any such Claim (including any impleaded parties)
include the Company or any subsidiary of the Company and the Indemnitee, and the
Indemnitee concludes that there may be one or more legal defenses available to
him or her that are different from or in addition to those available to the
Company or any subsidiary of the Company or (iii) any such representation by
such counsel would be precluded under the applicable standards of professional
conduct then prevailing, then the Indemnitee shall be entitled to retain
separate counsel (but not more than one law firm plus, if applicable, local
counsel in respect of any particular Claim) at the Company's
expense.  The Company shall not be liable to the Indemnitee under this
Agreement for any amounts paid in settlement of any 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    Claim
relating to an Indemnifiable Event effected without the Company's prior written
consent.  The Company shall not, without the prior written consent of
the Indemnitee, effect any settlement of any Claim relating to an Indemnifiable
Event which the Indemnitee is or could have been a party unless such settlement
solely involves the payment of money and includes a complete and unconditional
release of the Indemnitee from all liability on all claims that are the subject
matter of such Claim.  Neither the Company nor the Indemnitee shall
unreasonably withhold its or his or her consent to any proposed settlement;
provided that
the Indemnitee may withhold consent to any settlement that does not provide a
complete and unconditional release of the Indemnitee.

     

    15.      Binding Effect,
Etc.  This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors, (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business and/or
assets of the Company), assigns, spouses, heirs, executors and personal and
legal representatives.  The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation, or
otherwise) to all or a significant portion of the business and/or assets of the
Company and/or its subsidiaries, by written agreement in form and substance
satisfactory to the Indemnitee and his or her counsel, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken
place.  This Agreement shall continue in effect regardless of whether
the Indemnitee continues to serve as an officer and/or director of the Company
of any other entity or enterprise at the request of the
Company.  Neither this Agreement nor any duties or responsibilities
pursuant hereto may be assigned by the Company to any other person or entity
without the prior written consent of the Indemnitee.

     

    16.      Severability.  If
any provision or provisions of this Agreement shall be held to be invalid,
illegal or unenforceable for any reason whatsoever, (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including,
without limitation, all portions of any paragraph of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall not in any way be affected
or impaired thereby and (b) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, all portions of any paragraph of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable and to give effect to
the terms of this Agreement.

     

    17.      Specific Performance,
Etc.  The parties recognize that if any provision of this
Agreement is violated by the Company, the Indemnitee may be without an adequate
remedy at law.  Accordingly, in the event of any such violation, the
Indemnitee shall be entitled, if the Indemnitee so elects, to institute
proceedings, either in law or at equity, to obtain damages, to enforce specific
performance, to enjoin such violation, or to obtain any relief or any
combination of the foregoing as the Indemnitee may elect to pursue.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    18.      Notices.   All
notices, requests, consents and other communications hereunder to any party
shall be deemed to be sufficient if contained in a written document delivered in
person or sent by telecopy, nationally recognized overnight courier or personal
delivery, addressed to such party at the address set forth below or such other
address as may hereafter be designated on the signature pages of this Agreement
or in writing by such party to the other parties:

     

    
      	
               
      

            	
              (a)

            	
              If to the Company, to:

            

    

     

    Shuffle
Master, Inc.

    1106
Palms Airport Drive

    Las
Vegas, Nevada 89119-3720

    

     

    Fax:   [_________]

     

    Attn:  [_________]

     

    with
a copy (which shall not constitute notice) to:

     

    [                                ]

     

    [                                ]

     

    [                                ]

     

    
      	
               
      

            	
              (b)

            	
              If to the Indemnitee, to the
      address set forth on Annex
      A
      hereto.

            

    

     

    19.      Counterparts.  This
Agreement may be executed in counterparts, each of which shall for all purposes
be deemed to be an original but all of which together shall constitute one and
the same agreement.  Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the
existence of this Agreement.

     

    20.      Headings.  The
headings of the sections and paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction or interpretation thereof.

     

    21.      Governing
Law.  This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Minnesota applicable to
Minnesota corporations.

     

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Blank.]

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

    

    
      
        
          
            
              
                
                  	 
      	
                          SHUFFLE
      MASTER, INC.

                        
	 
      	 
      
	 
      	 
      
	 
      	
                          By:

                        	 	 
      
	 
      	
                          Name:

                        	 
      
	 
      	
                          Title:

                        	 
      
	 
      	 
      	 	 
      

                

              

            

          

        

      

    

    

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex A

     

    

    
      
        
          
            
              
                
                  
                    	
                            Name and Business
      Address:

                          	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                            Attn:

                          	 
      	 
      
	
                            Tel:

                          	 
      	 
      
	
                            Fax:

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