Document:

Exhibit 10.3

 

EXECUTION
COPY

 

AGREEMENT AND GUARANTY

 

THIS
AGREEMENT AND GUARANTY (this “Agreement”) is
made as of the 12th day of May, 2004, by Shuffle Master, Inc., a
Minnesota corporation (“SMI”), on the one hand, and Casinos Austria
Aktiengesellschaft, an Austrian stock corporation (“CASAG”) and CAI
Casinoinvest Middle East GmbH, an Austrian limited liability company (“CAI”),
on the other hand (individually, an “Obligee” and, collectively, the “Obligees”).
Except as otherwise indicated herein, capitalized terms used in this Agreement
have the- same meanings set forth in the Purchase Agreement (as defined below).

 

WHEREAS, this
Agreement is being issued pursuant to, and as a condition to the consummation
of the transactions contemplated by, the Purchase Agreement to be dated on or
about May 13, 2004 (the “Purchase Agreement”), by and among CASAG, CM,
Shuffle Master Management-Service GmbH, an Austrian limited liability company
(“SHFMMS”), and Shuffle Master GmbH, an Austrian limited liability company
(“SHFM”) in connection with the sale by CASAG and CAI to SHFMMS and SIIFM,
respectively, of partnership interests in CARD Casinos Austria Research &
Development GmbH & Co. KG (“CARD”); and

 

WHEREAS, SMI,
in furtherance of its business objectives, has agreed to guarantee the due and
punctual payment, observance and performance of certain obligations of each of
SHFMMS and SHFM (individually, an “Obligor” and, collectively, the “Obligors”)
to such Obligees under the Purchase Agreement and to take certain other actions
and enter into certain other agreements in connection therewith, all as more
fully described herein.

 

NOW,
THEREFORE, in consideration of the premises and other valuable consideration
(receipt and sufficiency of which is hereby acknowledged), each of the parties
hereto agrees as follows:

 

SECTION 1.                                Guarantee.

 

1.1                                 Subject
to the terms, conditions, and limitations hereof, SMI hereby guarantees, as
primary obligor and as a guarantor of payment and performance (and not merely
as surety or guarantor of collection), to each of the Obligees the due,
complete and punctual payment of all amounts which are or may become due and
payable by any Obligor, and the due, complete and punctual performance of all
agreements and undertakings of any Obligor, but only as follows: (i) under
Article II of the Purchase Agreement (Purchase and Sale of Shares,
including the payment of the Purchase Price and all other payments and
deliveries tp be made by the Obligors at the Closing), and (ii) under
Article IX of the Purchase Agreement (Indemnification), together with all
claims for damages arising from or in connection with the failure punctually
and completely to pay or perform such obligations ‘(such obligations being
herein collectively called the “Obligations”), in any case, subject to
the terms, conditions, and limitations applicable to the Obligors set forth in
the Purchase Agreement. Notwithstanding the above, the Obligees acknowledge and
agree that SMI has not made, and does not hereby make (and, except for the
representations and warranties of any Buyer contained in the Purchase

 

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Agreement, no Buyer, nor any Affiliate of SMI or any Buyer has made or
hereby makes), any representations, express or implied, with respect to the
inherent or trading value of the SMI Stock, the availability of a liquid or
open trading market with respect to the SMI Stock or the present or future
performance of SMI, CARD or the SMI Stock.

 

1.2                                 The
obligations of SMI under this Agreement shall be direct and primary obligations
which shall, subject to the terms hereof, constitute a guaranty of payment,
performance and compliance and not of collection, and SMI specifically agrees
that it shall not be necessary, and that SMI shall not be entitled to require,
before or as a condition of enforcing the liability of SMI under this Agreement
or requiring payment or performance of the Obligations by SMI hereunder, or at
any time thereafter, that any Person or Obligee (or any of their respective
successors and assigns) exhaust any of its rights or remedies against the
Obligors or take any other action of any kind prior to making any demand on or
invoking any of the Obligee’s rights and remedies against SMI pursuant to this
Agreement. Subject to Section 1.7, SMI agrees that the guarantee under
this Agreement shall be continuing, and that the Obligations will be paid and
performed in accordance with their terms and the terms of this Agreement, and
are absolute and unconditional, to the fullest extent permitted by applicable
law, irrespective of any circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 1.2 that the obligations of SMI
hereunder shall be absolute and unconditional only to the extent expressly set
forth herein under any and all circumstances. SMI hereby expressly waives
notice of acceptance of and reliance upon this Agreement, diligence,
presentment, demand of payment or performance, protest and all other notices
whatsoever.

 

1.3                                 The
obligations of SMI under this Section 1 shall continue and be
automatically reinstated if and to the extent that for any reason any payment
to any Obligee by or on behalf of any Obligor in respect of the Obligations is
rescinded or must be otherwise restored by such Obligee, whether as a result of
any proceedings in bankruptcy or reorganization or otherwise, and SMI agrees
that it will indemnify such Obligee on demand for all reasonable costs and
expenses (including, without limitation, fees and expenses of counsel) incurred
by such Obligee in connection with its compliance with or resistance to any
such rescission or restoration.

 

1.4                                 Until
the earlier of (a) all Obligations have been indefeasibly paid or performed in
full or (b) all of the provisions of Section 1.7 have become applicable,
SMI hereby waives: (i) all rights of subrogation or reimbursement or any
similar right or concept which it may at any time otherwise have (a) as a
result of this Agreement (whether contractual, under applicable bankruptcy law
or otherwise) to the claims of the Obligees against any Obligor and (b) any
right to enforce any other remedy which any Obligee now has or may hereafter
have against any Obligor and (ii) any benefit of, and any right to participate,
in any security or collateral given to or for the benefit of the Obligees to
secure payment of the Obligations.

 

1.5                                 SMI
agrees that, as between SMI and each Obligee, the Obligations may be declared
to be forthwith due and (in the case of payment Obligations) payable as
provided herein, notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such Obligations from becoming automatically
due and (in the case of payment Obligations) payable as against any Obligor, as
the case may be) and that, in the
event of any such declaration, such obligations that are due and (in the case
of payment Obligations) payable by any Obligor, shall forthwith become due and
(in the case of payment Obligations) payable by

 

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SMI.

 

1.6                                 This
Agreement shall inure to the benefit of the Obligees and their successors and
assigns.

 

1.7                                 Notwithstanding
anything contained herein to the contrary, SMI’s aggregate Obligations under
Section 1.1(i) shall be limited to any portion of the Purchase Price that
is not paid or delivered at the Closing in accordance with Article II of
the Purchase Agreement; and once any such unpaid or undelivered portion of the
Purchase Price has been so paid or delivered, SMI’s Obligations under
Section 1.1(i) shall be deemed to have been satisfied in full.

 

SECTION 2.                                Other Agreements.

 

2.1                                 SMI
and CASAG each agree to negotiate in good faith, and to use commercially
reasonable efforts to enter into (and/or cause one or more of its Affiliates to
enter into), a supply agreement between SMI (and/or one or more of its
Affiliates) and CASAG (and/or one or more of its Affiliates) within sixty (60)
days of the Closing Date containing the terms set forth in the draft proposed
term sheet for the supply agreement attached hereto as Exhibit 1 and such other
terms as are reasonable and customary for such an agreement.

 

2.2                                 SMI
hereby acknowledges and agrees that, pursuant to and as provided in the
Purchase Agreement, it is the intent of the parties that, following the first
anniversary of the Closing Date, the shares of SMI common stock shall be freely
tradable (subject only to the terms of the right of first refusal contained in
Section 5.5 of the Purchase Agreement) and in furtherance thereof hereby
agrees (i) to comply with the terms of the Registration Rights Agreement dated
as May 13, 2004 by and between SMI and each Obligee receiving shares of SMI
common stock at the Closing, and (ii) pursuant to and as provided in the Purchase
Agreement, at such times as such shares become freely tradable, upon the
written request of the holder of such shares, to take all other actions
necessary to remove any transfer restrictions imposed by it or any of its
Affiliates, including without limitation, by removing any restrictive legends
(other than those relating to the right of first refusal) on the certificates
representing such shares.

 

2.3                                 SMI
hereby agrees (i) to be bound by the provisions of Section 5.3 of the
Purchase Agreement as a primary obligor, including without limitation to comply
with all applicable provisions thereof relating to any exercise by SMI of any
rights granted to it thereunder, and (ii) to be bound by the provisions of
Section 5.6 of the Purchase Agreement as a primary obligor, including
without limitation to, upon request by CASAG, buy back all, but not less than
all, of the SMI Stock, all in accordance with the terms thereof.

 

2.4                                 Obligees,
jointly and severally, agree that the original signed copy of this Agreement
shall not, nor shall any certified, notarized or legalized copy thereof, ever
be brought by Obligees into the country of Austria; provided that
Obligees may bring into the country of Austria a simple copy of this Agreement
without it being certified, notarized or legalized. Any tax, stamp duty or fee,
if any, in connection with the execution, delivery or performance of this
Agreement (collectively, a “Tax”), other than any Tax arising out of any
Obligee’s breach of this Section 2.4 (which Tax will be paid by the
Obligees), shall be paid by SMI, and SW shall indemnify and hold each Obligee
and its Affiliates harmless for any such Tax and agree to indemnify and
reimburse each Obligee for any and all legal or other

 

3

 

expenses incurred in connection with such Obligee’s enforcement of this
Section 2.4 or collection of indemnifiable amounts pursuant to this
Section 2.4. Obligees jointly and severally agree to indemnify and hold
SMI harmless for any Tax, if any, incurred
as a result of any Obligee’s breach of this Section 2.4, and further
jointly and severally agree to indemnify and reimburse SMI for any and all
legal or other expenses incurred in connection with SMI’s enforcement of this
Section 2.4 or collection of indemnifiable amounts pursuant to this
Section 2.4. Nothing herein is intended to imply that this Agreement
constitutes a suretyship (Btirgschaft) obligation.

 

2.5                                 Upon
any merger or consolidation of SMI with or into any other Person (unless SMI is
the survivor entity), or the sale or other disposition of all or substantially
all of the assets of S1VII, whether in a single transaction or a series of
transactions, to any Person (any such merger, consolidation, sale or other
disposition being referred to as a “Guarantor Transfer”), SMI or the
Person formed by such Guarantor Transfer or the Person which acquires all or
substantially all of the assets of SMI (such Person being the “Successor
Guarantor”), shall deliver or cause to be delivered to each Obligee on or prior
to the effective date of such Guarantor Transfer, unless the obligations of SMI
under this Agreement (the “Guarantor  Obligations”) are assumed by
the Successor Guarantor by operation of law, an agreement, in form and
substance reasonably satisfactory to each Obligee, containing an express
assumption by the Successor Guarantor of SMI’s Obligations and an
acknowledgment and agreement (in form and substance reasonably satisfactory to
each Obligee executed and delivered by SMI under this Agreement (after giving
effect to such transfer) to the effect that this Agreement shall remain in full
force and effect and enforceable in accordance with its teams. Notwithstanding
anything herein to the contrary, unless otherwise agreed to in writing by the
Obligees, following any such merger, consolidation, sale or other disposition,
SMI shall remain jointly and severally liable for the Obligations and other
agreements hereunder.

 

2.6                                 SMI
hereby acknowledges, that the Obligees willingness to enter into the Purchase
Agreement and to consummate the transaction contemplated thereby are subject
SMI’s legal and valid execution and delivery of this Agreement.

 

SECTION 3.                                Representations and
Warranties.

 

3.1                                 SMI
hereby represents and warrants as follows (each such representation and
warranty being made as of the date hereof):

 

(i)                                     SMI is a
corporation duly incorporated, validly existing and in good standing 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.

 

(ii)                                  The
execution, delivery and performance of this Agreement have been duly and
validly authorized by all requisite corporate action on the part of SMI, and do
not require any consent or approval of, or the giving notice to, or the taking
of any other action in respect of, any stockholder or trustee or holder of any
indebtedness or obligations of SMI. This Agreement has been duly and validly
executed and delivered by SMI, and constitutes a legal, valid and binding
obligation of SMI, enforceable against SMI in accordance with its terms.

 

(iii)                               The
execution, delivery and performance of this Agreement do not and will not
conflict with or result in any violation of or default under any provision of
the organizational documents of SMI, or any indenture, mortgage, deed of trust,
instrument, law, rule or regulation binding on SMI or to which SMI is a party.

 

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(iv)                              The execution, delivery
and performance of this Agreement do not and will not result in violation of
any judgment or order applicable to SMI or result in the creation or imposition
of any Lien on any of the properties or revenues of SMI pursuant to any
requirement of law or any indenture, mortgage, deed of trust or other instrument
to which SMI is a party.

 

(v)                                 The
execution, delivery and performance of this Agreement do not and will not
conflict with and do not and will not require any consent, approval or
authorization of, or registration or filing with, any  governmental authority or agency binding on it.

 

(vi)                              The
execution, delivery and performance by SMI of this Agreement will not render
SMI insolvent, nor is it being made in contemplation of SMI’s insolvency, and
SMI does not have an unreasonably small capital.

 

3.2                                 Each
Obligee hereby represents and warrants as follows (each such representation and
warranty being made as of the date hereof):

 

(i)                                     It is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, with full corporate power and
authority to enter into this Agreement and to perform its obligations
hereunder.

 

(ii)                                  The execution,
delivery and performance of this Agreement have been duly and validly
authorized by all requisite corporate action on its part, and do not require
any consent or approval of, or the giving notice to, or the taking of any other
action in respect of, any stockholder or trustee or holder of any its
indebtedness or obligations. This Agreement has been duly and validly executed
and delivered by it, and constitutes a legal, valid and binding obligation of
it, enforceable against it in accordance with its terms.

 

(iii)                               The
execution, delivery and performance of this Agreement do not and will not
conflict with or result in any violation of or default under any provision of
its organizational documents, or any indenture,
mortgage, deed of trust, instrument, law, rule or regulation binding on it or
to which it is a party.

 

(iv)                              The
execution, delivery and performance of this Agreement do not and will not
result in violation of any judgment or order applicable to it or result in the
creation or imposition of any Lien on any of the properties or revenues of it
pursuant to any requirement of law or any indenture, mortgage, deed of trust or
other instrument to which it is a party.

 

(v)                                 The
execution, delivery and performance of this Agreement do not and will not (
conflict with and do not and will not require any consent, approval or
authorization of, or / a . registration or filing with, any governmental
authority or agency binding on it.

 

SECTION 4.                            Miscellaneous.

 

4.1                                 Governing
Law; Arbitration. (a) This Agreement, and all questions concerning the
construction, validity and interpretation of this Agreement, or breach hereof,
shall be governed by and construed in accordance with the laws of the State of
New York applicable therein (including Section 5-1401 of the New York
General Obligations Law but excluding all other choice-of-law and
conflicts-of-law rules).

 

(b)                                 All
disputes, controversies or claims arising under or relating to this Agreement
or any breach or threatened breach of this Agreement or violation, termination
or

 

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nullity of this Agreement (an “Arbitrable Dispute”), shall be
finally settled under the Rules of Arbitration of the International Chamber of
Commerce by three arbitrators appointed in accordance with the said Rules,
subject to the following:

 

(i)                                     As
more than two persons ,are party to this Agreement, it is expressly stipulated
that more than one claimant and/or more than one defendant are permitted. For
the purpose of the nomination of arbitrators, there is deemed to be only one
claimant party and one defendant party, regardless of whether multiple parties
appear.

 

(ii)                                  All
such arbitration proceedings shall take place in London, United Kingdom. The
language of the arbitration shall be the English language.

 

4.2                                 No
Waiver; Cumulative Remedies. No failure on the part of any Obligee or any
of its agents to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by any Obligee or any
of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.

 

4.3                                 Notices.
The provisions of Section 12.2 of the Purchase Agreement concerning
notices are hereby incorporated herein by reference, as if fully set forth
herein. SMI’s address and other information for purposes of such
Section 12.2 is as follows: Shuffle Master, Inc., 1106 Palms Airport
Drive, Las Vegas, Nevada 89119, Attention: Jerome R. Smith, Senior Vice
President and General Counsel.

 

4.4                                 Amendments,
etc. This Agreement, together with the exhibit hereto (which is
incorporated herein by reference), and any provision hereof or thereof may be
terminated, waived, amended, modified or supplemented only by an agreement or
instrument in writing, specifying the provision (or, if applicable, the whole
of this Agreement) intended to be terminated, waived, amended, modified or
supplemented, and executed by SMI and each Obligee in their sole discretion.

 

4.5                                 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit
of the respective successors and assigns of SMI and the Obligees; provided,
that except as otherwise provided in Section 2.5, SMI shall not assign or
transfer its rights or obligations hereunder without the prior written consent
of each Obligee. Notwithstanding anything herein to the contrary, unless
otherwise agreed to in writing by the Obligees, following any such assignment
or transfer, SMI shall remain jointly and severally liable for the Obligations
and other agreements hereunder. Any attempted assignment in breach of this
Section shall be void. SMI hereby acknowledges receipt of a copy of the
Purchase Agreement and consents in all respects (to the extent such consent may
be necessary) to the provisions of the Purchase Agreement.

 

4.6                                 Severability.
Should any of the provisions of this Agreement be or become fully or in part
invalid or unenforceable, the other provisions hereof shall remain enforceable
and in full force and effect.

 

4.7                                 Enforcement.
Any Obligee may enforce this Agreement to the extent of any Obligations owing
to it in accordance with the terms hereof.

 

4.8                                 Survival.
All warranties, representations and covenants made by SMI, whether herein or in
any certificate or other instrument delivered by it or on behalf of it under
this

 

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Agreement, shall be considered to have been relied upon by each Obligee
and shall survive the consummation of the transactions contemplated hereby on
the Closing Date regardless of any investigation made by any such party or on
behalf of any such party.

 

4.9                                 Integration.
This Agreement contains the entire and complete agreement of the parties
concerning the subject matter hereof and supercedes any prior understandings,
agreements or presentations, if any, by or between the parties, written or
oral, which may have related to the subject matter hereof.

 

4.10                           Effectiveness.
Notwithstanding any execution hereof, this Agreement shall only become
effective upon the execution and delivery of the Purchase Agreement.

 

4.11                           Counterparts.
This Agreement may be executed in multiple counterparts, each of which shall be
deemed an original but all of which taken together shall constitute one and the
same instrument.

 

IN WITNESS WHEREOF, this
Agreement has been duly executed in New York City, New York, by the undersigned
parties on this 12th day of May, 2004.

 

	
  

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  

  
	
   

  	
   

  

 

7

 

	
  

  	
   

  

 

8

 

Exhibit 1

 

Supply
Agreement Term Sheet

 

9

 

FINAL VERSION

May 11, 2004

 

TERM SHEET

 

Sales Frame Agreement

 

The Sales Frame Agreement shall be consistent with this Term Sheet and
shall be concluded between CASAG and/or its Affiliates on the one hand and SMI
and/or its Affiliates on the other no later than 30.062004.

 

1.                                       Seller:
SMI and SMI Affiliates (including CARD)

 

2.                                       Buyer.
CASAG and CASAG Affiliates (the term Affiliates includes casinos (co-) owned or
(co-) operated by a CASAG-group company)

 

3.                                       Duration:

(a)                                  start:
13.05.2004

(b)                                 indefinite

(c)                                  ordinary termination
with three months prior written notice at the end of each calendar quarter

(d)                                 minimum
duration: 31.12.2009

(e)                                  extraordinary
termination reserved

 

Purpose: Sale of all of Seller’s products now
existing or later developed, produced or traded by Seller.

 

Minimum quantity: none

 

6.                                       After
sale services: optional, at request of Buyer, on terms mutually agreed upon

 

7.                                       Full
warranty for products sold by Seller: one year

 

8.                                       Prices:
basis is list price minus applicable volume discounts as offered by Sellers
from time to time. Rebate payable in cash due 15.46 of each year for preceding
12 months (May 1 - April 30).

 

if total purchases exceed EUR 200.000, per year, then an annual rebate
(separate from any applicable  volume
discount) on the total amount of 20%;

if total purchases exceed EUR 400.000, per year, then an annual rebate
(separate from any applicable volume discount) on the total amount of 25%;

 

The first purchases under this agreement for a total amount of EUR
300.000 (after any applicable  volume
discount)- are free of charge.

 

9.                                       Rebates
Refund:

 

In the event that CASAG or any Affiliate violates the covenant not to
compete contained in Section 10.10 of the Purchase Agreement, or if either
CASAG or any CASAG Affiliate commits any acts which would be in violation of
the covenant not to compete, if such

 

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covenant were fully enforceable, then Buyers shall refund to Sellers
all rebates received.

 

10.                                 Testing:

 

For as long  as Buyer shall
enjoy all benefits of Sales Frame Agreement, CASAG shall allow Seller, at no
charge to Seller, to test new product developments in casinos owned or operated
by Buyer. Details to be mutually agreed.

 

11.                                 Confidentiality:

 

Data and information obtained (including prices and  testing results) to be kept confidential
against third parties unless on a need to know basis, or unless required by law
or statute.

 

12.                                 Law:

 

Sales Frame Agreement and deliveries under the Agreement are  exclusively subject to Austrian law
(excluding UN Sales Law and conflict of law principles of Austrian law).

 

13.                                 Disputes:

 

Disputes to be resolved by ICC arbitration; place of arbitration:
London. Governing language = English

 

11Exhibit 10.4

 

$125,000,000

 

Shuffle
Master, Inc.

 

1.25%
Contingent Convertible Senior Notes Due 2024

 

PURCHASE
AGREEMENT

 

	
   

  	
  April 15, 2004

  

 

Deutsche Bank Securities Inc.

As Representative of the

Several Initial Purchasers

60 Wall Street

New York, NY 10005

 

Ladies and Gentlemen:

 

Shuffle
Master, Inc., a Minnesota corporation (the “Company”), proposes, subject to the
terms and conditions contained herein, to issue and sell to the several
purchasers named in Schedule I hereto (the “Initial Purchasers”) for whom
you are acting as representative (the “Representative”) $125,000,000 in
aggregate principal amount of its 1.25% Contingent Convertible Senior Notes Due
2024 (the “Firm Securities”).  The
Company also proposes to issue and sell at the Initial Purchasers’ option up to
an additional $25,000,000 in aggregate principal amount of its 1.25% Contingent
Convertible Senior Notes Due 2024 (the “Option Securities” and together with
the Firm Securities, the “Securities”) as set forth below.

 

The
Securities are convertible into cash and shares of common stock of the Company,
$.01 par value (the “Common Stock”) together with the rights (the “Rights”)
evidenced by such Common Stock to the extent provided for in the Shareholder
Rights Plan dated June 26, 1998, between the Company and Norwest Bank
Minnesota, N.A., (the “Rights Agreement”). The shares of Common Stock and
accompanying Rights into which the Securities may be convertible are referred
to herein as the “Underlying Securities”. 
The Securities are to be issued pursuant to the terms of an Indenture
between the Company and Wells Fargo Bank, National Association, as Trustee (the
“Trustee”).

 

The
sale of the Securities and the Underlying Securities will be made without
registration under the Securities Act of 1933, as amended (the “Securities
Act”), in reliance on exemptions from the registration requirements of the
Securities Act.  As Representative, you
have advised the Company that the Initial

 

 

Purchasers
will offer and sell the Securities purchased by the Initial Purchasers
hereunder (the “Offering”) in accordance with Section 3 hereof as soon as
you deem advisable.

 

In
connection with the Offering, the Company has prepared a preliminary Offering
Memorandum, dated April 15, 2004 (including any and all exhibits and
appendices thereto and the information incorporated by reference therein, the
“Preliminary Offering Memorandum”) and a final Offering Memorandum, dated
April 15, 2004 (including any and all exhibits and appendices thereto and
the information incorporated by reference therein, the “Offering
Memorandum”).  Each of the Preliminary
Offering Memorandum and the Offering Memorandum sets forth certain information
regarding the Company, the Securities and the Underlying Securities.  The Company hereby confirms that it has
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum, and any amendment or supplement thereto, in connection with the
Offering by the Initial Purchasers. 
Unless stated to the contrary, all references herein to the Offering
Memorandum are to the Offering Memorandum, as supplemented or amended at the
date hereof and are not meant to include any amendment or supplement, or any
information incorporated by reference therein subsequent to the date thereof
and any references herein to the terms “amend”, amendment” or “supplement” with
respect to the Offering Memorandum shall be deemed to refer to and include any
information filed under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), subsequent to the date of the Offering Memorandum which is
incorporated by reference therein.

 

In
connection with the Offering, the Company also proposes to enter into a
Registration Rights Agreement, to be dated as of the Closing Date (as defined
below), among the Company and the Initial Purchasers (the “Registration Rights
Agreement”).

 

In
consideration of the mutual agreements contained herein and of the interests of
the parties in the transactions contemplated hereby, the parties hereto agree
as follows:

 

1.                             REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

 

(a)                             The Company
represents and warrants to the Initial Purchasers as follows:

 

(i)                                 the Company has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Minnesota, with the corporate power and
authority to own or lease its properties and conduct its business as described
in the Offering Memorandum; each of the subsidiaries of the Company (each, a
“Subsidiary” and collectively, the “Subsidiaries”) has been duly incorporated
and is validly existing

 

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as a corporation in good
standing under the laws of the jurisdiction of its organization, with the
corporate power and authority to own or lease its properties and conduct its
business as described in the Offering Memorandum; the Company and each of the
Subsidiaries are duly qualified to transact business in all jurisdictions in
which the conduct of their business requires such qualification and where the
failure to be so qualified would, individually or in the aggregate, reasonably
be expected to result in a material adverse effect on the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and the Subsidiaries taken as a whole (a
“Material Adverse Effect”); the outstanding shares of capital stock of each of
the Subsidiaries have been duly authorized and validly issued, are fully paid
and non-assessable and are owned by the Company or another Subsidiary free and
clear of all liens, encumbrances and equities and claims; and no options,
warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into shares of capital stock in the Subsidiaries
are outstanding;

 

(ii)                              the issuance
and sale of the Securities have been duly authorized by all necessary corporate
action on the part of the Company and, when executed, authenticated and
delivered to and paid for by the Initial Purchasers in accordance with the
terms of this Agreement and the Indenture, the Securities will be valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other similar
laws affecting creditors’ rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law) and will be entitled to the
benefits of the Indenture and the Registration Rights Agreement;

 

(iii)                           the execution
and delivery of, and the performance by the Company of its obligations under,
the Indenture have been duly and validly authorized by all necessary corporate
action on the part of the Company and, when duly executed and delivered by the
Company and the other parties thereto, the Indenture will be a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to

 

3

 

fraudulent transfers),
reorganization, moratorium or other similar laws affecting creditors’ rights
generally and except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law);

 

(iv)                          (x) the
outstanding shares of Common Stock have been duly authorized and validly issued
and are fully paid and non-assessable; the shares of Common Stock to be issued
upon conversion of the Securities have been duly authorized and reserved, and
when issued upon conversion of the Securities will be validly issued, fully
paid and non-assessable; and no preemptive or similar rights of stockholders
exist with respect to any of the Common Stock to be issued upon conversion of
the Securities; and (y) the Rights, if any, issuable upon conversion of the
Securities have been duly authorized and, when and if issued upon conversion in
accordance with the terms of the Indenture and the Rights Agreement, will have
been validly issued;

 

(v)                             the information
set forth under the caption “Capitalization” in the Offering Memorandum is true
and correct in all material respects; all of the Underlying Securities conform
to the description thereof contained in the Offering Memorandum in all material
respects; the form of certificate for the shares of Common Stock conforms to
the corporate law of the jurisdiction of the Company’s incorporation in all
material respects;

 

(vi)                          except as
described in or contemplated by the Offering Memorandum, there are no
outstanding securities of the Company convertible or exchangeable into or
evidencing the right to purchase or subscribe for any shares of capital stock
of the Company and there are no outstanding or authorized options, warrants or
rights of any character obligating the Company to issue any shares of its
capital stock or any securities convertible or exchangeable into or evidencing
the right to purchase or subscribe for any shares of such stock;

 

(vii)                       all of the
Underlying Securities issuable upon conversion of the Securities have been
approved for designation upon notice of issuance on the Nasdaq National Market;

 

(viii)                    each document filed, or to
be filed, by the Company pursuant to the Exchange Act and incorporated, or to be
incorporated, by reference in either the Preliminary Offering Memorandum or the
Offering Memorandum (or any amendment or supplement thereto) at the time filed
with the Securities and Exchange Commission (the “Commission”) conformed, or
will

 

4

 

conform, in all material
respects with the Exchange Act and the applicable rules and regulations
thereunder; the Preliminary Offering Memorandum as of the date thereof did not
contain any untrue statement of a material fact or omit any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Offering
Memorandum and any amendment or supplement thereto do not contain, and will not
contain, any untrue statement of a material fact, and do not omit, and will not
omit, any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty as to
statements or omissions made in the Preliminary Offering Memorandum, the
Offering Memorandum or any amendment or supplement thereto in reliance upon and
in conformity with written information furnished to them by the Initial
Purchasers specifically for use therein;

 

(ix)                            the
consolidated financial statements of the Company and the Subsidiaries, together
with related notes and schedules included in the Offering Memorandum, present
fairly in all material respects the financial position and the results of
operations and cash flows of the Company and its consolidated Subsidiaries, at
the indicated dates and for the indicated periods; such financial statements
and related notes and schedules have been prepared in accordance with generally
accepted accounting principles in the United States, consistently applied
throughout the periods indicated, except as disclosed therein, and all
adjustments necessary for a fair presentation of results for such periods have
been made; the summary financial and statistical data of the Company and the
Subsidiaries included in the Offering Memorandum present fairly in all material
respects the information shown therein and such data has been compiled on a
basis consistent with the financial statements presented therein and the books
and records of the Company;

 

(x)                               Deloitte & Touche LLP, who has certified certain
of the financial statements incorporated by reference in the Offering
Memorandum, are independent public accountants as required by the Securities
Act and the applicable rules and regulations thereunder;

 

(xi)                            except as
described in or contemplated by the Offering Memorandum, there is no action,
suit, claim or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of the Subsidiaries before

 

5

 

any court or administrative
agency or otherwise which, if determined adversely to the Company or any of the
Subsidiaries, would, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect or prevent the consummation of the
transactions contemplated hereby or in the Indenture, the Securities or the
Registration Rights Agreement, except as set forth in the Offering Memorandum;

 

(xii)                         except as
described in or contemplated by the Offering Memorandum, the Company and the
Subsidiaries have good and marketable title to all of the properties and assets
reflected in the consolidated financial statements hereinabove described or
described in the Offering Memorandum and material to the Company’s business or
operations, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except those reflected in such financial statements or described in the Offering
Memorandum and such liens, mortgages, pledge, charges and encumbrances which
are not material in amount; the Company and the Subsidiaries occupy their
leased properties under valid and binding leases;

 

(xiii)                      except as would
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect, the Company and the Subsidiaries have filed all
Federal, State, local and foreign tax returns which have been required to be
filed and have paid all taxes indicated by such returns and all assessments
received by them or any of them to the extent that such taxes have become due;
all tax liabilities have been adequately provided for in the financial
statements of the Company, and the Company does not know of any actual or
proposed additional material tax assessments;

 

(xiv)                     since the respective dates
as of which information is given in the Offering Memorandum, there has not been
any material adverse change or any development involving a prospective material
adverse change in or affecting the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise), or prospects of
the Company and the Subsidiaries taken as a whole, whether or not occurring in
the ordinary course of business, and there has not been any material
transaction entered into or any material transaction that is probable of being
entered into by the Company or the Subsidiaries, other than transactions in the
ordinary course of business and changes and transactions described in or contemplated
by the Offering Memorandum; the Company and the Subsidiaries have no material
contingent obligations which are

 

6

 

not disclosed in the
Company’s financial statements which are included in the Offering Memorandum;

 

(xv)                        neither the
Company nor any of the Subsidiaries is or with the giving of notice or lapse of
time or both, will be, in violation of or in default under i) its amended
Articles of Incorporation or Bylaws or ii) 
any agreement, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it, or any of its properties, is
bound and, solely with respect to this clause (B), which violation or default
would, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect; the execution and delivery of this Agreement, the
Indenture, the Securities and the Registration Rights Agreement, and the
issuance and sale of the Securities to the Initial Purchasers by the Company
pursuant to this Agreement, and the issuance by the Company of the Underlying
Securities issuable upon conversion of the Securities and the consummation of
the transactions herein and therein contemplated and the fulfillment of the
terms hereof and thereof will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which the Company
or any Subsidiary is a party or by which the Company or any Subsidiary or any
of their respective properties is bound, except for such conflicts, breaches or
defaults as would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect, or of the amended Articles of Incorporation
or Bylaws of the Company or any law, order, rule or regulation, judgment,
order, writ or decree applicable to the Company or any Subsidiary of any court
or of any government, regulatory body or administrative agency or other
governmental body having jurisdiction over the Company or any of the
Subsidiaries, except for such conflicts with gaming regulations that both (x)
would not have a Material Adverse Effect and (y) are not currently known to the
Company;

 

(xvi)                     the execution and delivery
of, and the performance by the Company of its obligations under, this Agreement
have been duly and validly authorized by all necessary corporate action on the
part of the Company, and this Agreement has been duly executed and delivered by
the Company;

 

(xvii)                  the execution and delivery
of, and the performance by the Company of its obligations under, the
Registration Rights Agreement have been duly and validly authorized by all
necessary corporate action on the part of the Company and, when duly executed
and delivered by the Company and the other parties

 

7

 

thereto, the Registration
Rights Agreement will be a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that (x) enforcement thereof may be (1) limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting
creditors’ rights generally and (2) subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or
at law) and (y) rights to indemnification and contribution thereunder may be
limited under applicable law;

 

(xviii)               each approval, consent,
order, authorization, designation, declaration or filing by or with any
regulatory, administrative or other governmental body necessary in connection
with the execution and delivery by the Company of this Agreement, the
Indenture, the Securities and the Registration Rights Agreement, and the
issuance and sale of the Securities to the Initial Purchasers by the Company
pursuant to this Agreement, and the issuance of the Underlying Securities
issuable upon conversion of the Securities and the consummation of the
transactions herein and therein contemplated has been obtained or made and is
in full force and effect, except for (A) the effectiveness of the Shelf
Registration Statement (as such term is defined in the Registration Rights
Agreement) under the Securities Act and the qualification of the Indenture
under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”),
in each case as contemplated by the Registration Rights Agreement, (B) such
additional steps as may be necessary to qualify the Securities for public
offering by the Initial Purchasers under state securities or Blue Sky laws, (C)
the filing of audited financial statements and unaudited pro forma financial
statements for CARD Casinos Austria Research and Development GmbH (“CARD”) with
the Commission as described in the Offering Memorandum, (D) any regulatory
approvals that may be required in connection with the Company’s acquisition of
CARD, (E) the Company’s filing of copies of all documents related to the
transaction (I) with the Mississippi Gaming Commission within fourteen (14)
calendar days after the closing of this transaction, (II) with the Nevada State
Gaming Control Board within thirty (30) days of the end of the calendar quarter
in which the transaction is consummated and (III) with other gaming regulatory
authorities and (F) the approvals of the relevant gaming regulatory authorities
(including without limitation the approval of the Nevada Gaming Commission as
described in the Offering

 

8

 

Memorandum) of the Company’s fulfillment of its obligations under the
Registration Rights Agreement;

 

(xix)                       all of the
Securities have been designated by the NASD PORTAL Market (“PORTAL”) as
PORTAL-eligible securities in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc. (the “NASD”);

 

(xx)                          (A) the
Company, each of the Subsidiaries and each of their respective directors and
executive officers hold all material licenses, certificates and permits from
governmental authorities, including gaming regulatory authorities, which are
necessary to the conduct of their businesses; (B) except as described in or
contemplated by the Offering Memorandum, the Company and the Subsidiaries each
own or possess the right to use all patents, patent rights, trademarks, trade
names, service marks, service names, copyrights, license rights, know-how
(including trade secrets and other unpatented and unpatentable proprietary or
confidential information, systems or procedures) and other intellectual
property rights (“Intellectual Property”) necessary to carry on their business
in all material respects; neither the Company nor any of the Subsidiaries has
infringed, and, except as described in or contemplated by the Offering
Memorandum, none of the Company or the Subsidiaries have received notice of
conflict with, any Intellectual Property of any other person or entity; (C) the
Company has taken all reasonable steps necessary to secure interests in such
Intellectual Property from its contractors; 
(D) except as described in or contemplated by the Offering Memorandum,
there are no outstanding options, licenses or agreements of any kind relating
to the Intellectual Property of the Company that are material to the Company and
the Subsidiaries taken as a whole; (E) except as described in or contemplated
by the Offering Memorandum, the Company is not a party to or bound by any
options, licenses or agreements with respect to the Intellectual Property of
any other person or entity that are material to the Company and the
Subsidiaries taken as a whole; except as described in or contemplated by the
Offering Memorandum, none of the technology employed by the Company has been
obtained or is being used by the Company in violation of any contractual
obligation binding on the Company or any of its officers, directors or
employees or otherwise in violation of the rights of any persons; (F) except as
described in or contemplated by the Offering Memorandum, the Company has not
received any written or oral communications alleging that the Company has
violated, infringed or conflicted with, or, by conducting its business as set
forth in the Offering Memorandum, would violate,

 

9

 

infringe or conflict with,
any of the Intellectual Property of any other person or entity; and (G) except
as described in or contemplated by the Offering Memorandum, the Company knows
of no infringement by others of Intellectual Property owned by or licensed to
the Company;

 

(xxi)                       neither the
Company nor any Subsidiary is or, after giving effect to the offering and sale
of the Securities contemplated hereunder and the application of the net
proceeds from such sale as described in the Offering Memorandum, will be
required to register as an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended (the “Investment Company Act”) and
the applicable rules and regulations thereunder;

 

(xxii)                    the Company maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with management’s
general or specific authorization; (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (C)
access to assets is permitted only in accordance with management’s general or
specific authorization; and (D) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences;

 

(xxiii)                 the Company and the
Subsidiaries comply in all material respects with all Environmental Laws (as
defined below), except to the extent that failure to comply with such
Environmental Laws would not, individually or in the aggregate, result in a
Material Adverse Effect; none of the Company or any of the Subsidiaries is the
subject of any pending or threatened federal, state or local investigation
evaluating whether any remedial action by the Company or any of the
Subsidiaries is needed to respond to a release of any Hazardous Materials (as
defined below) into the environment, resulting from the Company’s or any of the
Subsidiaries’ business operations or ownership or possession of any of their
properties or assets or is in contravention of any Environmental Law that could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect; none of the Company or any of the Subsidiaries has
received any notice or claim, nor are there pending or threatened lawsuits
against them, with respect to violations of an Environmental Law or in
connection with any release of any Hazardous Material into the environment that
could reasonably be expected, individually or in the aggregate, to result in a
Material

 

10

 

Adverse Effect; as used
herein, “Environmental Laws” means any federal, state or local law or
regulation applicable to the Company’s or any of the Subsidiaries’ business
operation or ownership or possession of any of their properties or assets
relating to environmental matters, and “Hazardous Materials” means those
substances that are regulated by or form the basis of liability under any
Environmental Laws;

 

(xxiv)                the Company and each of the
Subsidiaries carry, or are covered by, insurance in such amounts and covering
such risks as is adequate for the conduct of their respective businesses and
the value of their respective properties;

 

(xxv)                   the Company is in compliance
in all material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder (“ERISA”); no “reportable
event” (as defined in ERISA) has occurred with respect to any “pension plan”
(as defined in ERISA) for which the Company would have any material liability;
the Company has not incurred and does not expect to incur any material liability
under (A) Title IV of ERISA with respect to termination of, or withdrawal from,
any “pension plan” or (B) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the “Code”); and each “pension plan” for which the Company would
have any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such
qualification;

 

(xxvi)                assuming the accuracy of the
Initial Purchasers’ representations set forth in Section 3(c) of this
Agreement, neither the Company, nor any of its Affiliates (as defined in Rule
501(b) under the Securities Act), nor any person acting on its or their behalf
has, directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
registration of the Securities or the Underlying Securities issuable upon
conversion thereof under the Securities Act;

 

(xxvii)             neither the Company, nor any
of its Affiliates, nor any person acting on its or their behalf has engaged in
any form of general solicitation or general advertising (as those terms are
used in Rule 502(c) under the Securities Act) in connection with any offer or
sale of the Securities or the Underlying Securities issuable upon conversion
thereof in the United States;

 

11

 

(xxviii)          the Securities satisfy the
eligibility requirements of Rule 144A(d)(3) under the Securities Act;

 

(xxix)                  the Company is subject to
and in full compliance with the reporting requirements of Section 13 or
Section 15(d) of the Exchange Act;

 

(xxx)                     the Securities, the
Underlying Securities, the Indenture and the Registration Rights Agreement will
each conform in all material respects to the respective descriptions thereof
contained in the Offering Memorandum;

 

(xxxi)                  on and as of the date
hereof, no event has occurred or is continuing which constitutes, or with
notice or lapse of time would constitute, an Event of Default (as defined in
Indenture and the Securities);

 

(xxxii)               assuming that (x) the
representations and warranties of the Initial Purchasers in Section 3 hereof
are true and (y) the Initial Purchasers comply with the covenants set forth in
Section 3 hereof, the purchase and sale of the Securities pursuant hereto
(including the Initial Purchasers’ proposed offering of the Securities on the
terms and in the manner set forth in the Offering Memorandum and Section 3
hereof) is exempt from the registration requirements of the Securities Act and
does not require the qualification of an indenture under the Trust Indenture
Act;

 

(xxxiii)            there is and has been no
failure on the part of the Company or any of the Company’s directors or
officers, in their capacities as such, to comply in all material respects with
any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith, including Section 402 related to
loans and Sections 302 and 906 related to certifications; and

 

(xxxiv)           there are no indentures,
notes, loan agreements, mortgages, deeds of trust, security agreements or other
written agreements or instruments that are material to the Company.

 

2.                             PURCHASE, SALE
AND DELIVERY OF THE SECURITIES.

 

(a)                        On the basis of
the representations, warranties and covenants herein contained, and subject to
the conditions herein set forth, the Company agrees to issue and sell to the several
Initial Purchasers and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, at a purchase price of 97.0% of the

 

12

 

aggregate principal amount
thereof (the “Purchase Price”), plus accrued interest, if any, from
April 21, 2004 to the Closing Date, the principal amount of Firm
Securities set forth opposite the name of such Initial Purchaser in
Schedule I hereto.  Each Security
will be convertible at the option of the holder into a combination of cash and
Underlying Securities as provided in the Securities and the Indenture.  One or more global securities representing
the Firm Securities shall be registered by the Trustee in the name of the
nominee of the Depository Trust Company (“DTC”), Cede & Co., credited to
the accounts of such of its participants as the Representative shall request,
upon notice to the Company at least 48 hours prior to the Closing Date, with
any transfer taxes payable in connection with the transfer of the Securities to
the Initial Purchasers duly paid, and deposited with the Trustee as custodian
for DTC on the Closing Date, against payment by or on behalf of the Initial
Purchasers to the account of the Company of the aggregate Purchase Price therefor
by wire transfer in immediately available funds.  Delivery of and payment for the Firm Securities shall be made at
the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New
York 10017 at 9:30 A.M., New York City time, on the fourth full business day
following the date of this Agreement, or at such other place, time or date not
later than five business days thereafter as the Initial Purchasers and the
Company may agree upon.  Such time and
date of delivery against payment are herein referred to as the “Closing
Date.”  (As used herein, “business day”
means a day on which the Nasdaq National Market is open for trading and on
which banks in New York are open for business and are not permitted by law or
executive order to be closed.)

 

(b)                                 In addition, on
the basis of the representations and warranties herein contained and subject to
the terms and conditions herein set forth, the Company hereby grants an option
to the Initial Purchasers to purchase the Option Securities at the Purchase
Price set forth in the first paragraph of this Section 2 plus accrued
interest, if any, from April 21, 2004 to the Option Closing Date (as
defined below).  The option granted
hereby may be exercised in whole or in part by giving written notice (i) at any
time before the Closing Date and (ii) only once thereafter within 30 days after
the date of this Agreement, by you, as Representative of the Initial
Purchasers, to the Company setting forth the aggregate principal amount of
Option Securities as to which the Initial Purchasers are exercising the option
and the time and date for delivery of and payment for such Option
Securities.  The time and date for
delivery of and payment for such Option Securities shall be determined by the
Representative but shall not be later than ten full business days after the
exercise of such option, nor in any event prior to the Closing Date (such time
and date being herein referred to as the “Option Closing Date”).  If the date of exercise of the option is two
or more days before the Closing Date, the

 

13

 

notice of exercise shall set
the Closing Date as the Option Closing Date. 
The aggregate principal amount of Option Securities to be purchased by
each Initial Purchaser shall be in the same proportion to the total aggregate
principal amount of Option Securities being purchased as the aggregate
principal amount of Firm Securities being purchased by such Initial Purchaser
bears to the total aggregate principal amount of Firm Securities, adjusted by
you in such manner as to avoid fractional Option Securities.  You, as Representative of the Initial
Purchasers, may cancel such option at any time prior to its expiration by
giving written notice of such cancellation to the Company.

 

3.                             OFFERING BY THE
INITIAL PURCHASERS.

 

(a)                                  It is
understood that the several Initial Purchasers will offer and sell the
Securities in accordance with this Section as soon as they deem it
advisable to do so.  The Securities are
to be initially offered at the offering price set forth in the Offering
Memorandum.  The Initial Purchasers may
from time to time thereafter change the price and other selling terms.

 

(b)                                 Each Initial
Purchaser understands and acknowledges that the Securities and the Underlying
Securities to be issued upon conversion thereof have not been and will not be
registered under the Securities Act (except as contemplated by Section 1
of this Agreement) and may not be offered or sold, except in compliance with
the registration requirements of the Securities Act or pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act.  Accordingly, each
Initial Purchaser agrees that it will offer and sell the Securities only to
persons that it reasonably believes to be qualified institutional buyers as
defined in Rule 144A under the Securities Act.

 

(c)                                  Each Initial
Purchaser agrees that neither it nor any person acting on its behalf has
engaged or will engage in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities
Act) in connection with any offer or sale of the Securities.

 

(d)                                 Each Initial
Purchaser agrees that it is an institutional accredited investor within the
meaning of Rule 501(a) under the Securities Act.

 

4.                                       COVENANTS
OF THE COMPANY.

 

The Company covenants and agrees with the Initial
Purchasers that:

 

(a)                        The Company
will furnish to the Initial Purchasers and counsel for the Initial Purchasers,
without charge, during the period

 

14

 

mentioned in paragraph (d)
below, as many copies of the Preliminary Offering Memorandum and Offering
Memorandum, any documents incorporated by reference therein and any supplements
or amendments thereto as they may reasonably request.

 

(b)                       The Company
will not amend or supplement the Offering Memorandum, other than by filing
documents under the Exchange Act which are incorporated by reference therein,
and, prior to the completion of the distribution of the Securities by the
Initial Purchasers (as determined by the Representative), the Company will not
file any document under the Exchange Act which is incorporated by reference in
the Offering Memorandum, in each case unless the Initial Purchasers previously
have been advised of, and furnished with a copy within a reasonable period of
time prior to, the proposed filing and the Initial Purchasers shall have given
their consent to such filing, such consent not to be unreasonably
withheld.  The Company will advise the
Initial Purchasers of the time when any amendment or supplement to the Offering
Memorandum has been made or when any document filed under the Exchange Act
which is incorporated by reference in the Offering Memorandum has been filed
with the Commission and will provide evidence satisfactory to the Initial
Purchasers of each such amendment, supplement or filing.  The Company will prepare promptly upon
request by the Initial Purchasers or counsel for the Initial Purchasers any amendments
or supplements to the Offering Memorandum that may be necessary or advisable in
connection with the distribution of the Securities by the Initial Purchasers.

 

(c)                        The Company
will cooperate with the Initial Purchasers in endeavoring to qualify the
Securities for sale under the securities laws of such jurisdictions as the
Initial Purchasers may reasonably have designated in writing and will make such
applications, file such documents and furnish such information as may be
reasonably required for that purpose; provided
that the Company shall not be required to qualify as a foreign corporation in
any jurisdiction where it is not now so qualified or to file any general
consent to service of process or to subject itself to taxation  in respect of doing business  in any jurisdiction in which it is not
otherwise so subject.  The Company will,
from time to time, prepare and file such statements, reports and other
documents, as are or may be required to continue such qualifications in effect
for so long a period as the Initial Purchasers may reasonably request for
distribution of the Securities.

 

(d)                       If at any time
prior to the date on which all of the Securities shall have been sold by the
Initial Purchasers, any event shall occur as a result of which, in the judgment
of the Company or in the reasonable opinion of the Initial Purchasers, it
becomes necessary to amend or supplement the Offering Memorandum in order to
make the statements

 

15

 

therein, in the light of the
circumstances under which they were made, not misleading, or, if it is
necessary at any time to amend or supplement the Offering Memorandum to comply
with applicable law, the Company promptly will prepare an appropriate amendment
or supplement to the Offering Memorandum so that the Offering Memorandum as so
amended or supplemented will not contain statements that, in light of the
circumstances under which they were made, are misleading, or so that the
Offering Memorandum will comply with applicable law.

 

(e)                        No offering,
sale, short sale or other disposition of any shares of Common Stock or other
securities convertible into or exchangeable or exercisable for shares of Common
Stock or derivative of Common Stock (or agreement for such) will be made for a
period of 90 days after the date of this Agreement, directly or indirectly, by
the Company otherwise than hereunder or with the prior written consent of the
Representative on behalf of the Initial Purchasers.  The foregoing sentence shall not apply to (A) any Option
Securities delivered pursuant to this Agreement, (B) any shares of Common Stock
issued by the Company pursuant to existing options, (C) the issuance of shares
of Common Stock as consideration for, and employee options in connection with,
the acquisition of CARD or (D) the issuance of any shares of Common Stock or
options to purchase shares of Common Stock of the Company pursuant to employee
benefit agreements or incentive stock or director stock unit plans in effect as
of the date hereof.

 

(f)                          The Company
shall have caused each officer and director of the Company to furnish to you,
on or prior to the date of this agreement, a letter or letters, in
substantially the form attached hereto as Exhibit A-1 and, in the case of Mark
L. Yoseloff, Exhibit A-2 (collectively, the “Lock-up Agreements”).

 

(g)                       The Company
will not, nor will it permit any of its Affiliates (as defined in Rule 144
under the Securities Act) to, resell any Securities that have been acquired by
any of them.

 

(h)                       Except as
contemplated by the Registration Rights Agreement, neither the Company, nor any
of its Affiliates, nor any person acting on its behalf will, directly or
indirectly, make offers or sales of any security, or solicit offers to buy any
security, under circumstances that would require the registration of the Securities
or the Underlying Securities issuable upon conversion thereof under the
Securities Act.

 

(i)                           Neither the
Company nor any of its Affiliates, nor any person acting on its behalf will
engage in any form of general solicitation or general advertising (as those
terms are used in Rule 502(c) under the Securities Act) in connection with any
offer or sale of the Securities.

 

16

 

(j)                           So long as any
of the Securities or the Underlying Securities issuable upon conversion thereof
are “restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act, the Company will, during any period in which they are not
subject to and in compliance with Section 13 or 15(d) of the Exchange Act
or exempt from such reporting requirements pursuant to and in compliance with
Rule 12g3-2(b) under the Exchange Act, upon the request of any holder or
prospective purchaser of such restricted securities, provide to such holder or
prospective purchaser of such restricted securities any information required to
be provided by Rule 144A(d)(4) under the Securities Act.  This covenant is intended to be for the
benefit of the holders, and the prospective purchasers designated by such holders,
from time to time of such restricted securities.

 

(k)                        The Company
will cooperate with the Initial Purchasers and use its best efforts to (x)
permit the Securities to be eligible for clearance and settlement through DTC
and such other clearance and settlement systems that the Initial Purchasers may
designate and (y) arrange to have the Securities be designated by the PORTAL as
PORTAL-eligible securities in accordance with the rules and regulations of the
NASD.

 

(l)                           The Company
will use its best efforts to cause the Underlying Securities issuable upon
conversion of the Securities to be approved for designation on the Nasdaq
National Market on or prior to the Closing Date and ensure that the Underlying
Securities issuable upon conversion of the Securities remain authorized for
listing following the Closing Date.

 

(m)                     The Company shall apply the
net proceeds from its sale of the Securities as set forth in the Offering
Memorandum.

 

(n)                       The Company
will not invest, or otherwise use the proceeds received by the Company from its
sale of the Securities in such a manner as would require the Company or any of
the Subsidiaries to register as an investment company under the Investment
Company Act.

 

(o)                       The Company
will not take, directly or indirectly, any action designed to cause or result
in, or that has constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any securities of the Company.

 

5.                             COSTS AND
EXPENSES.

 

The Company will pay all
costs, expenses and fees incident to the performance of its obligations under
this Agreement, including, without limiting the generality of the foregoing,
the following:  accounting fees of the
Company;

 

17

 

the fees and disbursements of counsel for the
Company; the cost of printing and delivering to, or as requested by, the
Initial Purchasers copies of the Preliminary Offering Memorandum and the
Offering Memorandum and any supplements or amendments thereto and the printing
and production of all other documents connected with the Offering (including
this Agreement, the Indenture, the Registration Rights Agreement and any other
related agreements); the Listing Fee of the Nasdaq National Market; the
expenses arising from having the Securities designated as eligible for trading
in the PORTAL market; the expenses associated with the preparation, issuance
and delivery to the Initial Purchasers of the Securities; the fees and expenses
of the Trustee; the expenses of the “roadshow” and any other meetings with
prospective investors in the Securities; and the costs and expenses of
advertising relating to the Offering (other than advertising costs and expenses
that the Initial Purchasers expressly agree to pay).  The Company shall not, however, be required to pay for any of the
Initial Purchasers’ expenses except that, if this Agreement shall not be
consummated because the conditions in Section 6 hereof are not satisfied,
or because this Agreement is terminated by the Initial Purchasers pursuant to
Section 9(a)(i) hereof, or by reason of any failure, refusal or inability
on the part of the Company to perform any undertaking or satisfy any condition
of this Agreement or to comply with any of the terms hereof on their part to be
performed, unless such failure, refusal or inability is due primarily to the
default or omission of the Initial Purchasers, the Company shall reimburse the
Initial Purchasers for reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Securities or in contemplation of
performing their obligations hereunder; but the Company shall not in any event
be liable to the Initial Purchasers for damages on account of loss of
anticipated profits from the sale by it of the Securities.  Notwithstanding the foregoing, the Initial
Purchasers agree to reimburse the Company up to $300,000 of the foregoing
expenses incurred by the Company.

 

6.                             CONDITIONS OF
OBLIGATIONS OF THE INITIAL PURCHASERS.

 

The
obligation of the Initial Purchasers to purchase the Firm Securities on the
Closing Date and the Option Securities, if any, on the Option Closing Date are
subject to the accuracy, as of the Closing Date or the Option Closing Date, as
the case may be, of the representations and warranties of the Company contained
herein, and to the performance by the Company of its covenants and obligations
hereunder and to the following additional conditions:

 

(a)                        The Initial
Purchasers shall have received on the Closing Date or the Option Closing Date,
as the case may be, the opinion of Latham & Watkins LLP, special counsel
for the Company, dated the Closing Date or the Option Closing Date, as the case
may be, addressed to the Initial Purchasers to the effect set forth in Exhibit
B hereto.

 

18

 

(b)                       The Initial
Purchasers shall have received on the Closing Date or the Option Closing Date,
as the case may be, the opinion of Jerome R. Smith, Senior Vice President and
General Counsel to the Company, dated the Closing Date or the Option Closing
Date, as the case may be, addressed to the Initial Purchasers (and stating that
it may be relied upon by counsel to the Initial Purchasers) to the effect that:

 

(i)                                 based on such
counsel’s current knowledge and after “due inquiry,” and subject to any
modifications or qualifications in Exhibits C, D and E hereto, in connection
with the Offering Memorandum, the statements in (x) “Part, I, Item 1 – Business
–Gaming Regulation” and “Part I, Item 3 – Legal Proceedings” of the Company’s
Annual Report on Form 10-K for the Year Ended October 31, 2003 and “Part
2, Item 1 – Legal Proceedings” of the Company’s Quarterly Report on Form 10-Q
for the Three Months Ended January 31, 2004, both of which are
incorporated by reference in the Offering Memorandum and (y) the Offering
Memorandum under the heading “Regulation and Licensing” in the Offering
Memorandum, insofar as such statements constitute a summary of documents and
proceedings referred to therein or matters of law, but subject to the
qualifications and explanatory text which is also contained therein, fairly
summarize in all material respects the information called for with respect to
such documents and matters; and

 

(ii)                              such counsel
knows of no material legal or governmental proceedings pending or threatened
against the Company or any of the Subsidiaries which have not been disclosed in
the Company’s Annual Report on Form 10-K for the Year Ended October 31,
2003, as updated by the Company’s Quarterly Report on Form 10-Q for the Three
Months Ended January 31, 2004.

 

Such
counsel’s opinion shall be subject to such limitations as are typical in
attorney opinion letter for Rule 144A offerings.  “Due inquiry” for purposes of clause (i) shall mean such inquiry
as such counsel deems reasonable under all applicable facts and
circumstances.  Such counsel may note in
such opinion that the Director of Compliance does not report to such counsel.

 

(c)                        The Initial
Purchasers shall have received on the Closing Date or the Option Closing Date,
as the case may be, the opinion of Larkin Hoffman Daly & Lindgren, Ltd.,
Minnesota counsel for the Company, dated the Closing Date or the Option Closing
Date, as the case may be, addressed to the Initial Purchasers (and stating that
it may be relied upon by counsel to the Initial Purchasers) to the effect that:

 

19

 

(i)                                 this Agreement
has been duly authorized, executed and delivered by the Company;

 

(ii)                              the Company was
duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of Minnesota, with the power and authority to own
or lease its properties and conduct its business under Minnesota corporate law
as described in the Offering Memorandum under Minnesota law (it being
understood that such counsel need express no opinion with respect to the
Company’s qualification to do business in, good standing in, power, or
authority as a foreign corporation or otherwise under the laws of any other
jurisdiction);

 

(iii)                           the execution
and delivery of this Agreement, the Indenture, the Securities, the Registration
Rights Agreement and the issuance and sale of the Securities to the Initial
Purchasers by the Company pursuant to this Agreement, and the issuance of the
Underlying Securities issuable upon conversion of the Securities and the
consummation of the transactions herein and therein contemplated do not and
will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, the amended Articles of Incorporation or
Bylaws of the Company;

 

(iv)                          the outstanding
shares of Common Stock have been duly authorized and validly issued and are
fully paid and non-assessable; the shares of Common Stock initially issuable
upon conversion of the Securities have been duly authorized and reserved for
issuance upon conversion by all necessary corporate action of the Company and
when issued, assuming issuance of such shares of Common Stock in compliance
with the terms of the Notes and the Indenture, will be validly issued, fully
paid and non-assessable; and no preemptive or similar rights of stockholders
exist with respect to any of the shares of Common Stock initially issuable upon
conversion of the Securities; and the Rights, if any, issuable upon conversion
of the Securities in accordance with the terms of the Indenture and the Rights
Agreement, will be validly issued;

 

(v)                             the statements
under the caption “Description of Capital Stock” in the Offering Memorandum,
insofar as such statements constitute a summary of documents referred to
therein or matters of Minnesota corporate law, fairly summarize such documents
and matters in all material respects; and

 

(vi)                          each document
filed by the Company pursuant to the Exchange Act and incorporated by reference
in the Offering

 

20

 

Memorandum (or any amendment
or supplement thereto) at the time filed with the Commission conformed in all
material respects with the Exchange Act and the then-applicable rules and regulations
thereunder in effect at the time of such filing (it being understood that such
counsel expresses no opinion with respect to the financial statements and
schedules included therein or with respect to the exhibits filed in, or omitted
from, such documents).

 

(d)                       The Initial
Purchasers shall have received on the Closing Date or the Option Closing Date,
as the case may be, the opinions of Fox Rothschild LLP, New Jersey counsel for
the Company, Lionel Sawyer & Collins, Nevada counsel for the Company, and
Phelps Dunbar LLP, Mississippi counsel for the Company, dated the Closing Date
or the Option Closing Date, as the case may be, addressed to the Initial
Purchasers (and stating that it may be relied upon by counsel to the Initial
Purchasers) to the effect set forth in Exhibits C, D and E hereto,
respectively.

 

(e)                        The Initial
Purchasers shall have received from their counsel, Davis Polk & Wardwell,
an opinion dated the Closing Date or the Option Closing Date, as the case may
be, substantially to the effect of opinions 2, 3, 5 and 6 of Exhibit B.  In addition to the matters set forth above,
such opinion shall also include a statement to the effect that nothing has come
to the attention of such counsel which leads them to believe that the Offering
Memorandum, as of its date or as of the Closing Date or the Option Closing
Date, as the case may be, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading (except that such counsel need express no view
as to financial statements, related notes and schedules and statistical
information therein).  With respect to
such statement, Davis Polk & Wardwell may state that their belief is based
upon the procedures set forth therein, but is without independent check and
verification.

 

(f)                          The Initial
Purchasers shall have received on each of the date hereof, the Closing Date
and, if applicable, the Option Closing Date, letters dated the date hereof, the
Closing Date or the Option Closing Date, as the case may be, in form and
substance reasonably satisfactory to you, of Deloitte & Touche LLP
confirming that they are independent public accountants within the meaning of
the Securities Act and the applicable published rules and regulations
thereunder and stating that in their opinion the financial statements and
schedules of the Company examined by them and incorporated by reference in the
Offering Memorandum comply in form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act and the
respective related published rules and regulations; and containing such other
statements and

 

21

 

information as is ordinarily
included in accountants’ “comfort letters” to initial purchasers in Rule 144A
offerings with respect to the financial statements and certain financial and
statistical information contained or incorporated by reference in the Offering
Memorandum.

 

(g)                       The Initial
Purchasers shall have received on the Closing Date and, if applicable, the
Option Closing Date, as the case may be, a certificate or certificates of the
Chief Executive Officer and the Chief Financial Officer of the Company to the
effect that, as of the Closing Date or the Option Closing Date, as the case may
be, each of them severally represents as follows:

 

(i)                                 the
representations and warranties of the Company contained in Section 1
hereof are true and correct as of the Closing Date or the Option Closing Date,
as the case may be;

 

(ii)                              he or she has
carefully examined the Offering Memorandum (including the documents of the
Company incorporated by reference therein) and, in his or her opinion, as of
the Closing Date or Option Closing Date as the case may be, the statements
contained in the Offering Memorandum (including the documents of the Company
incorporated by reference therein) with respect to the Company were true and
correct in all material respects, and, with respect to the Company, such
Offering Memorandum (including the documents of the Company incorporated by
reference therein) does not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;

 

(iii)                           since the
respective dates as of which information is given in the Offering Memorandum,
there has not been any material adverse change or any development involving a
prospective material adverse change in or affecting the business, management,
properties, assets, rights, operations, condition (financial or otherwise) or
prospects of the Company and the Subsidiaries taken as a whole, whether or not
arising in the ordinary course of business; and

 

(iv)                          the Company has
performed all covenants and agreements and satisfied all conditions on its part
to be performed or satisfied under this Agreement at or prior to the Closing
Date or the Option Closing Date, as the case may be.

 

(h)                       The Company
shall have furnished to the Initial Purchasers such further certificates and
documents confirming the representations and

 

22

 

warranties, covenants and
conditions contained herein and related matters as the Initial Purchasers may
reasonably have requested.

 

(i)                           The Underlying
Securities issuable upon conversion of the Securities shall have been
designated for trading, subject to notice of issuance, on the Nasdaq National
Market and the Securities shall have been designated as PORTAL-eligible
securities.

 

(j)                           Subsequent to
the execution and delivery of this Agreement and prior to the Closing Date,
there shall not have occurred any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any review for a possible
change that does not indicate the direction of the possible change, in the
rating accorded any of the Company’s securities by any “nationally recognized
statistical rating organization,” as such term is defined for purposes of Rule
436(g)(2) under the Securities Act.

 

(k)                        The Indenture
shall have been executed and delivered by all the parties thereto and the
Registration Rights Agreement shall have been executed and delivered by the Company.

 

(l)                           The Lock-up
Agreements described in Section 4(f) shall be in full force and effect.

 

The
opinions and certificates mentioned in this Agreement shall be deemed to be in
compliance with the provisions hereof only if they are in all material respects
satisfactory to the Initial Purchasers.

 

If
any of the conditions hereinabove provided for in this Section 6 shall not
have been fulfilled when and as required by this Agreement to be fulfilled, the
Initial Purchasers may terminate their obligations hereunder by notifying the
Company of such termination in writing or by telegram at or prior to the
Closing Date or the Option Closing Date, as the case may be.

 

In
such event, the Company and the Initial Purchasers shall not be under any
obligation to each other (except to the extent provided in Sections 5 and 7
hereof).

 

7.                             INDEMNIFICATION.

 

(a)                        The Company
agrees:

 

(i)                                     to indemnify
and hold harmless each Initial Purchaser and each person, if any, who controls
any Initial Purchaser within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities to which any such Initial Purchaser or any such
controlling person may become subject under

 

23

 

the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon 
(i) any untrue statement or alleged untrue statement of any material
fact contained in any Preliminary Offering Memorandum, the Offering Memorandum
or any amendment or supplement thereto or (ii) the omission or alleged omission
to state therein a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; provided, however,
that the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission made in
any Preliminary Offering Memorandum, the Offering Memorandum, or any amendment
or supplement, in reliance upon and in conformity with written information
furnished to the Company by any Initial Purchaser specifically for use in the
preparation thereof; and

 

(ii)                                  to reimburse
each such Initial Purchaser and each such controlling person upon demand for
any reasonable legal or other out-of-pocket expenses reasonably incurred by
such Initial Purchaser or such controlling person in connection with
investigating or defending any such loss, claim, damage or liability, action or
proceeding or in responding to a subpoena or governmental inquiry related to
the offering of the Securities, whether or not any such Initial Purchaser or
controlling person is a party to any action or proceeding.  In the event that it is finally judicially
determined that such Initial Purchaser was not entitled to receive payments for
legal and other expenses pursuant to this subparagraph, such Initial Purchaser
will promptly return all sums that had been advanced pursuant hereto.

 

(b)                                 Each Initial
Purchaser agrees to indemnify and hold harmless the Company, each of its
directors and officers and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages or liabilities to which the Company or any such director,
officer or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained in
any Preliminary Offering Memorandum, the Offering Memorandum or any amendment
or supplement thereto, or (ii) the omission or the alleged omission to state
therein a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and will reimburse
any reasonable legal or other expenses reasonably incurred by the Company or
any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided,
however,
that such

 

24

 

Initial Purchaser will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in any Preliminary
Offering Memorandum, the Offering Memorandum or such amendment or supplement,
in reliance upon and in conformity with written information furnished to the
Company by such Initial Purchaser specifically for use in the preparation
thereof.  This indemnity agreement will
be in addition to any liability which each Initial Purchaser may otherwise
have.

 

(c)                                  In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
this Section 7, such person (the “indemnified party”) shall promptly
notify the person against whom such indemnity may be sought (the “indemnifying
party”) in writing.  No indemnification
provided for in Section 7(a) or (b) shall be available to any party who
shall fail to give notice as provided in this Section 7(c) if the party to
whom notice was not given was unaware of the proceeding to which such notice
would have related and was materially prejudiced by the failure to give such
notice, but the failure to give such notice shall not relieve the indemnifying
party or parties from any liability which it or they may have to the
indemnified party for contribution or otherwise than on account of the
provisions of Section 7(a) or (b).  In case any such proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding.  In any such proceeding, any indemnified
party shall have the right to retain its own counsel at its own expense.  Notwithstanding the foregoing, the
indemnifying party shall pay as incurred (or within 30 days of presentation)
the reasonable fees and expenses of the counsel retained by the indemnified
party in the event  (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel acceptable to the indemnified party within a reasonable period of time
after notice of commencement of the action. 
It is understood that the indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees and expenses of more than one separate firm for all
such indemnified parties.  Such firm
shall be designated in writing by you in the case of parties indemnified
pursuant to

 

25

 

Section 7(a) and by the Company in the case of
parties indemnified pursuant to Section 7(b).  The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.  In addition, the indemnifying party will not, without the prior
written consent of the indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding of which indemnification may be sought hereunder (whether or not any
indemnified party is an actual or potential party to such claim, action or
proceeding) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action or proceeding.

 

(d)                                 (i) To the
extent the indemnification provided for in this Section 7 is unavailable
to or insufficient to hold harmless an indemnified party under
Section 7(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Initial Purchasers on the other from the offering of the
Securities.  If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Initial Purchasers on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. 
The relative benefits received by the Company on the one hand and the
Initial Purchasers on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total discounts and commissions received by the
Initial Purchasers.  The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or the Initial Purchasers on the other and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

 

26

(ii)
The Company and the Initial Purchasers agree that it would not be just and
equitable if contributions pursuant to this Section 7(d) were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
Section 7(d).  The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this Section 7(d) shall be deemed to include any reasonable legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.  Notwithstanding the provisions of this subsection (d), (i)
the Initial Purchasers shall not be required to contribute any amount in excess
of the discounts and commissions applicable to the Securities purchased by it
and (ii) no person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

 

(e)                                  In any
proceeding relating to any Preliminary Offering Memorandum, the Offering
Memorandum or any supplement or amendment thereto, each party against whom
contribution may be sought under this Section 7 hereby consents to the
jurisdiction of any court having jurisdiction over any other contributing
party, agrees that process issuing from such court may be served upon it by any
other contributing party and consents to the service of such process and agrees
that any other contributing party may join it as an additional defendant in any
such proceeding in which such other contributing party is a party.

 

(f)                                    Any losses,
claims, damages, liabilities or expenses for which an indemnified party is
entitled to indemnification or contribution under this Section 7 shall be
paid by the indemnifying party to the indemnified party as such losses, claims,
damages, liabilities or expenses are incurred. 
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company set forth
in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of the Initial
Purchasers or any person controlling any Initial Purchaser, the Company, its
directors or officers or any persons controlling the Company, (ii) acceptance
of any Securities and payment therefor hereunder, and (iii) any termination of
this Agreement.  A successor to any
Initial Purchaser, or any person controlling any such Initial Purchaser, or to
the Company, its directors or officers or any person controlling the Company,
shall be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 7.

 

27

 

8.                             NOTICES.

 

All
communications hereunder shall be in writing and, except as otherwise provided
herein, will be mailed, delivered or faxed and confirmed as follows:  if to the Initial Purchasers, to Deutsche
Bank Securities Inc., 60 Wall Street, New York, New York 10005; Attention:
Syndicate Manager, Fax: (212) 797-9344, with a copy to Davis Polk &
Wardwell, 450 Lexington Avenue, New York, NY 10017, Attention: Alan Dean and
Alan Denenberg, Fax: (212) 450-4800; if to the Company, to Shuffle Master,
Inc., 1106 Palms Airport Drive, Las Vegas, Nevada 89119, Attention: Jerry
Smith, Fax: (702) 270-5161, with a copy to Latham & Watkins LLP, 885 Third
Avenue, New York, NY  10022, Attention:
Kirk A. Davenport II, Fax (212) 751-4864.

 

9.       TERMINATION.

 

(a)                        This Agreement
may be terminated by the Initial Purchasers by written notice to the Company at
any time prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to Option Securities) if any of the
following has occurred: (i) since the date as of which information is given in
the Offering Memorandum, any material adverse change or any development
involving a prospective material adverse change in or affecting the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and the Subsidiaries taken
as a whole, whether or not arising in the ordinary course of business, (ii) any
outbreak or escalation of hostilities or declaration of war or national
emergency or other national or international calamity or crisis or change in
economic or political conditions if the effect of such outbreak, escalation, declaration,
emergency, calamity, crisis or change on the financial markets of the United
States would, in your reasonable judgment, make it impracticable or inadvisable
to market the Securities or to enforce contracts for the sale of the
Securities, or (iii) suspension of trading in securities generally on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market
or limitation on prices (other than limitations on hours or numbers of days of
trading) for securities on either such Exchange, (iv) the enactment,
publication, decree or other promulgation of any statute, regulation, rule or
order of any court or other governmental authority which in your opinion
materially and adversely affects or may materially and adversely affect the business
or operations of the Company, (v) the declaration of a banking moratorium by
United States or New York State authorities, (vi) any downgrading, or placement
on any watch list for possible downgrading, in the rating of any of the
Company’s debt securities by any “nationally recognized statistical rating
organization” (as defined for purposes of Rule 436(g) under the Exchange Act);
(vii) the suspension of trading of the Company’s common stock by the Nasdaq
National Market, the Commission, or any other governmental authority or, (viii)
the taking of any action by any governmental body or agency in respect of its
monetary

 

28

 

or fiscal affairs which in
your reasonable opinion has a material adverse effect on the securities markets
in the United States; or

 

(b)                       as provided in
Section 6 of this Agreement.

 

10.                       DEFAULTING
INITIAL PURCHASERS.

 

(a)                        If, on the
Closing Date or the Option Closing Date, as the case may be, either of the
Initial Purchasers shall fail or refuse to purchase Securities that it has
agreed to purchase hereunder on such date, and the aggregate principal amount
of Securities which such defaulting Initial Purchaser agreed but failed or
refused to purchase is not more than one-tenth of the aggregate principal
amount of Securities to be purchased on such date, the other Initial Purchaser
shall be obligated to purchase the Securities which such defaulting Initial
Purchaser agreed but failed or refused to purchase on such date; provided
that in no event shall the principal amount of Securities that either Initial
Purchaser has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 10 by an amount in excess of one-ninth of such
principal amount of Securities without the written consent of such Initial
Purchaser.

 

(b)                       If, on the
Closing Date, either Initial Purchaser shall fail or refuse to purchase Firm
Securities which it has agreed to purchase hereunder on such date and the
aggregate principal amount of Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Firm
Securities to be purchased on such date, and arrangements satisfactory to you
and the Company for the purchase of such Firm Securities are not made within 36
hours after such default, this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchaser or of the Company.  In any such case either you or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Offering
Memorandum or in any other documents or arrangements may be effected.  If, on the Option Closing Date, either
Initial Purchaser shall fail or refuse to purchase Option Securities and the
aggregate principal amount of Option Securities with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of
Option Securities to be purchased, the non-defaulting Initial Purchaser shall have
the option to (a) terminate its obligation hereunder to purchase Option
Securities or (b) purchase not less than the principal amount of Option
Securities that such non-defaulting Initial Purchaser would have been obligated
to purchase in the absence of such default. 
Any action taken under this paragraph shall not relieve any defaulting
Initial Purchaser from liability in respect of any default of such Initial
Purchaser under this Agreement.

 

29

 

11.                                 SUCCESSORS.

 

This
Agreement has been and is made solely for the benefit of the Initial Purchasers
and the Company and their respective successors and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will
have any right or obligation hereunder. 
No purchaser of any of the Securities from the Initial Purchasers shall
be deemed a successor or assign merely because of such purchase.

 

12.                       INFORMATION
PROVIDED BY THE INITIAL PURCHASERS.

 

The
Company and the Initial Purchasers acknowledge and agree that the only
information furnished or to be furnished by the Initial Purchasers to the
Company for inclusion in the Offering Memorandum consists of the information
set forth in the last paragraph on the front cover page (insofar as such
information relates to the Initial Purchasers) and the information set forth in
the first and eighth paragraphs in each case under the heading “Plan of
Distribution” (insofar as such information relates to the Initial Purchasers).

 

13.                       MISCELLANEOUS.

 

The
reimbursement, indemnification and contribution agreements contained in this
Agreement and the representations, warranties and covenants in this Agreement
shall remain in full force and effect regardless of b) any termination of this
Agreement, c) any investigation made by or on behalf of the Initial Purchasers
or any controlling person thereof, or by or on behalf of the Company or its
directors or officers and d) delivery of and payment for the Securities under
this Agreement.

 

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

 

This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York.

 

30

 

If
the foregoing letter is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the Initial Purchasers in
accordance with its terms.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SHUFFLE MASTER, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Paul Meyer

  	
   

  
	
   

  	
   

  	
  Name:  Paul Meyer

  
	
   

  	
   

  	
  Title:  President

  

 

 

The
foregoing Purchase Agreement

is
hereby confirmed and accepted as

of
the date first above written.

 

DEUTSCHE
BANK SECURITIES INC.

As
Representative of the several

Initial
Purchasers listed on Schedule I

 

	
  By:

  	
  /s/ Paul Whyte

  	
   

  
	
   

  	
  Name: Paul Whyte

  
	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
  By:

  	
  /s/ Arthur Goldfrank

  	
   

  
	
   

  	
  Name: Arthur Goldfrank

  
	
   

  	
  Title: Director

  

 

31

 

SCHEDULE I

 

	
  Initial Purchasers

  	
   

  	
  Principal
  Amount of Firm

  Securities to be Purchased

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Deutsche Bank Securities Inc.

  	
   

  	
  $

  	
  100,000,000

  	
   

  
	
  Goldman, Sachs & Co.

  	
   

  	
  25,000,000

  	
   

  
	
  Total

  	
   

  	
  $

  	
  125,000,000

  	
   

  

 

I-1

 

EXHIBIT A-1

 

	
   

  	
  April [   ], 2004

  

 

Deutsche Bank Securities Inc.

As representative of the Initial Purchasers

60 Wall Street

New
York, NY 10005

 

Ladies
& Gentlemen:

 

The
undersigned understands that you, as the representative of the several
purchasers (the “Representative”), propose to enter into a Purchase Agreement
(the “Purchase
Agreement”) with Shuffle Master, Inc., a Minnesota corporation (the
“Company”),
providing for the offering (the “Offering”) by the several purchasers,
including the Representative (the “Initial Purchasers”), of securities
convertible into shares of common stock, par value $.01, of the Company (the “Common Stock”).

 

To
induce the Initial Purchasers to continue their efforts in connection with the
Offering, the undersigned hereby agrees that, without the prior written consent
of Deutsche Bank Securities Inc., it will not, for a period of 90 days after
the date of the Purchase Agreement, directly or indirectly, offer, sell,
pledge, contract to sell (including any short sale), grant any option to
purchase or otherwise dispose of any shares of Common Stock or enter into any
hedging transaction relating to the Common Stock or make any demand for or exercise
any right with respect to, the registration of any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common
Stock.

 

Notwithstanding the foregoing, the undersigned may transfer shares of
Common Stock acquired in open market transactions by the undersigned after the
completion of the Offering.

 

The undersigned agrees that the Company may, and that the undersigned
will, (i) with respect to any shares of Common Stock or other Company
securities for which the undersigned is the record holder, cause the transfer
agent for the Company to note stop transfer instructions with respect to such
securities on the transfer books and records of the Company and (ii) with
respect to any shares of Common Stock or other Company securities for which the
undersigned is the beneficial holder but not the record holder, cause the
record holder of such securities to cause the transfer agent for the Company to
note stop transfer instructions with respect to such securities on the transfer
books and records of the Company.

 

In addition, the undersigned hereby waives any and all notice
requirements and rights with respect to registration of securities pursuant to
any agreement, understanding or otherwise setting forth the terms of any security
of the Company

 

A-1-1

 

held by the undersigned, including any registration rights agreement to
which the undersigned and the Company may be party, provided that such waiver
shall apply only to the proposed Offering, and any other action taken by the
Company in connection with the proposed Offering.

 

The undersigned hereby agrees that, to the extent that the terms of
this letter agreement conflict with or are in any way inconsistent with any
registration rights agreement to which the undersigned and the Company may be a
party, this letter agreement supersedes such registration rights agreement.

 

The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this letter agreement.  All authority herein conferred or agreed to
be conferred shall survive the death or incapacity of the undersigned and any
obligations of the undersigned shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned.

 

	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  

 

A-1-2

 

EXHIBIT A-2

 

	
   

  	
  April      , 2004

  

 

Deutsche Bank Securities Inc.

As representative of the Initial Purchasers

60 Wall Street

New
York, NY 10005

 

Ladies
& Gentlemen:

 

The
undersigned understands that you, as the representative of the several
purchasers (the “Representative”), propose to enter into a Purchase Agreement
(the “Purchase
Agreement”) with Shuffle Master, Inc., a Minnesota corporation (the
“Company”),
providing for the offering (the “Offering”) by the several purchasers,
including the Representative (the “Initial Purchasers”), of securities
convertible into shares of common stock, par value $.01, of the Company (the “Common Stock”).

 

To
induce the Initial Purchasers to continue their efforts in connection with the
Offering, the undersigned hereby agrees that, without the prior written consent
of Deutsche Bank Securities Inc., it will not, for a period of 90 days after
the date of the Purchase Agreement, directly or indirectly, offer, sell,
pledge, contract to sell (including any short sale), grant any option to
purchase or otherwise dispose of any shares of Common Stock or enter into any
hedging transaction relating to the Common Stock or make any demand for or
exercise any right with respect to, the registration of any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock.

 

Notwithstanding the foregoing, the undersigned may transfer (a) shares
of Common Stock acquired in open market transactions by the undersigned after
the completion of the Offering and (b) an aggregate of 10,000 shares of Common
Stock by gift to charities.

 

The undersigned agrees that the Company may, and that the undersigned
will, (i) with respect to any shares of Common Stock or other Company
securities for which the undersigned is the record holder, cause the transfer
agent for the Company to note stop transfer instructions with respect to such
securities on the transfer books and records of the Company and (ii) with
respect to any shares of Common Stock or other Company securities for which the
undersigned is the beneficial holder but not the record holder, cause the
record holder of such securities to cause the transfer agent for the Company to
note stop transfer instructions with respect to such securities on the transfer
books and records of the Company.

 

A-2-1

 

In addition, the undersigned hereby waives any and all notice
requirements and rights with respect to registration of securities pursuant to
any agreement, understanding or otherwise setting forth the terms of any
security of the Company held by the undersigned, including any registration
rights agreement to which the undersigned and the Company may be party, provided
that such waiver shall apply only to the proposed Offering, and any other
action taken by the Company in connection with the proposed Offering.

 

The undersigned hereby agrees that, to the extent that the terms of
this letter agreement conflict with or are in any way inconsistent with any
registration rights agreement to which the undersigned and the Company may be a
party, this letter agreement supersedes such registration rights agreement.

 

The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this letter agreement.  All authority herein conferred or agreed to
be conferred shall survive the death or incapacity of the undersigned and any obligations
of the undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.

 

 

	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Mark L. Yoseloff

  	
   

  

 

A-2-2

EXHIBIT B

 

	
   

  	
  53rd at Third

  
	
   

  	
  885 Third Avenue

  
	
   

  	
  New York, New York  10022-4834

  
	
   

  	
  Tel: (212) 906-1200  Fax:
  (212) 751-4864

  
	
   

  	
  www.lw.com

  
	
   

  	
   

  
	
   

  	
  FIRM / AFFILIATE OFFICES

  
	
   

  	
  Boston

  	
   

  	
  New Jersey

  
	
   

  	
  Brussels

  	
   

  	
  New York

  
	
   

  	
  Chicago

  	
   

  	
  Northern Virginia

  
	
   

  	
  Frankfurt

  	
   

  	
  Orange County

  
	
   

  	
  Hamburg

  	
   

  	
  Paris

  
	
   

  	
  Hong Kong

  	
   

  	
  San Diego

  
	
  April 21, 2004

  	
  London

  	
   

  	
  San Francisco

  
	
   

  	
  Los Angeles

  	
   

  	
  Silicon Valley

  
	
   

  	
  Milan

  	
   

  	
  Singapore

  
	
   

  	
  Moscow

  	
   

  	
  Tokyo

  
	
  Deutsche Bank Securities Inc.

  	
   

  	
   

  	
  Washington, D.C.

  
	
  Goldman, Sachs & Co.

  	
   

  
	
   

  	
  File No. 038437-000

  

 

	
  c/o:

  	
  Deutsche Bank Securities Inc.

  
	
   

  	
  60 Wall Street

  
	
   

  	
  New York, New York  10005

  

 

	
  Re:

  	
  Shuffle Master, Inc.

  
	
   

  	
  $125,000,000 1.25% Contingent Convertible Senior Notes due 2024

  

 

Ladies and Gentlemen:

 

We have acted as special counsel to Shuffle Master, Inc., a Minnesota
corporation (the “Company”), in connection with the sale to you (the “Initial
Purchasers”) on the date hereof by the Company, of $125,000,000 in aggregate
principal amount of the Company’s 1.25% Contingent Convertible Senior Notes Due
2024 (the “Notes”) pursuant to a purchase agreement, dated April 15, 2004
(the “Purchase Agreement”), between you and the Company.  The Notes are being issued pursuant to an
indenture, dated the date hereof (the “Indenture”), between the Company and
Wells Fargo Bank, National Association, as trustee (the “Trustee”).  This letter is being furnished to you
pursuant to Section 6(a) of the Purchase Agreement.

 

As such counsel, we have examined such matters of fact and questions of
law as we have considered appropriate for purposes of this letter, except where
a specific fact confirmation procedure is stated to have been performed (in
which case we have with your consent performed the stated procedure), and
except where a statement is qualified as to knowledge or awareness (in which
case we have with your consent made no or limited inquiry as specified
below).  We have examined, among other
things, the following:

 

(a)                                  The Purchase
Agreement;

 

B-1

 

(b)                                 The Indenture,
the form of the Note and the Registration Rights Agreement, dated the date
hereof, between you and the Company (the “Registration Rights Agreement” and,
together with the Indenture and the Notes, the “Operative Documents”);

 

(c)                                  The offering
memorandum with respect to the Notes dated April 15, 2004 (the “Offering
Memorandum”);

 

(d)                                 The reports
filed by the Company with the Securities and Exchange Commission (the
“Commission”) and incorporated by reference into the Offering Memorandum (the
“Incorporated Documents”); and

 

(e)                                  The court or administrative
orders, writs, judgments or decrees specifically directed to the Company that
were identified to us by an officer of the Company as material to the Company
and listed in Exhibit A (the “Court Orders”).

 

As to facts material to the opinions, statements and assumptions
expressed herein, we have, with your consent, relied upon oral or written
statements and representations of officers and other representatives of the
Company, including the representations and warranties of the Company in the Purchase
Agreement.  We have not independently
verified such factual matters.

 

Whenever a statement herein is qualified as to knowledge, awareness, or
a similar phrase, it is intended to indicate that those attorneys in the firm
who have rendered legal services in connection with the transaction referenced
above do not have current actual knowledge of the inaccuracy of such
statement.  However, except as otherwise
expressly indicated, we have not undertaken any independent investigation to
determine the accuracy of any such statement.

 

We are opining herein as to the effect on the subject transaction only
of the federal laws of the United States and the internal laws of the State of
New York, and we express no opinion with respect to the applicability thereto,
or the effect thereon, of the laws of any other jurisdiction, or as to any
matters of municipal law or the laws of any local agencies within any
state.  Our opinions and confirmations
herein are based upon our consideration of only those statutes, rules and regulations
which, in our experience, are normally applicable to private placements of
convertible debt securities, provided that no opinion or confirmation is
expressed herein or in our separate letter of even date with respect to federal
or state securities laws (except to the extent stated in numbered paragraph 5
herein), tax laws, antitrust or trade regulation laws, insolvency or fraudulent
transfer laws, antifraud laws, margin regulations, usury laws, gaming laws or
other laws excluded by customary practice. 
We express no opinion as to any state or federal laws or regulations
applicable to the subject transaction because of the nature or extent of the
business of any parties to the Purchase Agreement.  Various matters concerning the gaming and other internal laws of
the states of Nevada, New Jersey and Mississippi are addressed in the opinions
of Fox

 

B-2

 

Rothschild LLP, Lionel Sawyer & Collins and Phelps Dunbar LLP,
respectively, which have been separately provided to you.  We express no opinion with respect to those
matters herein.

 

Subject to the foregoing and the other matters set forth herein, it is
our opinion that, as of the date hereof:

 

1.                                       When
executed, issued and authenticated in accordance with the terms of the
Indenture and delivered to and paid for by you in accordance with the terms of
the Purchase Agreement, the Notes will be legally valid and binding obligations
of the Company, enforceable against the Company in accordance with their terms.  The Notes are in the form contemplated by
the Indenture.

 

2.                                       The
Indenture is the legally valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.

 

3.                                       The
Registration Rights Agreement is the legally valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.

 

4.                                       The
execution and delivery of the Operative Documents and the issuance and sale of
the Notes by the Company to you and the other Initial Purchasers pursuant to
the Purchase Agreement on the date hereof do not:

 

(a)                                  violate any
federal or New York statute, rule or regulation or Court Order applicable to
the Company; or

 

(b)                                 require any
consents, approvals, or authorizations to be obtained by the Company, or any
registrations, declarations or filings to be made by the Company, in each case,
under any federal or New York statute, rule or regulation applicable to the
Company that have not been obtained or made.

 

5.                                       No
registration of the Notes under the Securities Act of 1933, as amended, and no
qualification of the Indenture under the Trust Indenture Act of 1939, as
amended, is required for the purchase of the Notes by you or the initial resale
of the Notes by you to Subsequent Purchasers, in each case in the manner
contemplated by the Purchase Agreement and the Offering Memorandum.  We express no opinion, however, as to when
or under what circumstances any Notes initially sold by you may be reoffered or
resold.

 

6.                                       The
statements in the Offering Memorandum under the caption “Description of the
Notes,” insofar as they purport to constitute a summary of the terms of the
Indenture, the Notes and the Registration Rights Agreement, are accurate
descriptions or summaries in all material respects.

 

B-3

 

7.                                       With
your consent based solely on a certificate of an officer of the Company as to
factual matters, the Company is not, and immediately after giving effect to the
sale of the Notes in accordance with the Purchase Agreement and the application
of the proceeds as described in the Offering Memorandum under the caption “Use
of Proceeds,” will not be required to be registered as an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.

 

The opinions rendered in paragraphs 1, 2, and 3 above relating to the
enforceability of the Operative Documents, are subject to the following
exceptions, limitations and qualifications: (i) the effect of bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors; (ii) the
effect of general principles of equity, whether enforcement is considered in a
proceeding in equity or at law (including the possible unavailability of
specific performance or injunctive relief), concepts of materiality,
reasonableness, good faith and fair dealing, and the discretion of the court
before which any proceeding therefor may be brought; (iii) the unenforceability
under certain circumstances under law or court decisions of provisions
providing for the indemnification of or contribution to a party with respect to
a liability where such indemnification or contribution is contrary to public
policy; (iv) we express no opinion concerning the enforceability of the waiver
of rights or defenses contained in Section 6.12 of the Indenture; (v) the
unenforceability of any provision requiring the payment of attorneys’ fees,
where such payment is contrary to law or public policy.

 

We have not been requested to express and, with your consent, do not
render any opinion as to the applicability to the obligations of the Company
under the Indenture and the Notes of Section 548 of the United States
Bankruptcy Code or applicable state law (including, without limitation,
Article 10 of the New York Debtor and Creditor Law) relating to
preferences and fraudulent transfers and obligations.

 

With your consent, we have assumed for purposes of this opinion that
(i) each of the parties to the Operative Documents (a) is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization; (b) has the requisite power and authority to execute and deliver
and to perform its obligations under each of the Operative Documents to which it
is a party; and (c) has duly authorized, executed and delivered each such
Operative Document; (ii) with respect to each of the parties to the Operative
Documents other than the Company, each Operative Document to which it is a
party constitutes its legally valid and binding agreement, enforceable against
it in accordance with its terms; and (iii) the Trustee is in compliance,
generally and with respect to acting as Trustee under the Indenture, with all
applicable laws and regulations.

 

This letter is furnished only to you in your capacity as Initial
Purchasers and is solely for your benefit in connection with the transactions
covered hereby.  This letter may not be
relied upon by you for any other purpose, or furnished to,

 

B-4

 

assigned to, quoted to, or relied upon by any other person, firm or
other entity for any purpose (including any person, firm or other entity that
acquires Notes from you) without our prior written consent, which may be
granted or withheld in our sole discretion.

 

	
   

  	
  Very truly yours,

  

 

B-5

 

EXHIBIT A

 

COURT ORDERS

 

[None]

 

B-6

 

	
   

  	
  53rd at Third

  
	
   

  	
  885 Third Avenue

  
	
   

  	
  New York, New York  10022-4834

  
	
   

  	
  Tel: (212) 906-1200  Fax:
  (212) 751-4864

  
	
   

  	
  www.lw.com

  
	
   

  	
   

  
	
   

  	
  FIRM / AFFILIATE OFFICES

  
	
   

  	
  Boston

  	
   

  	
  New Jersey

  
	
   

  	
  Brussels

  	
   

  	
  New York

  
	
  April 21, 2004

  	
  Chicago

  	
   

  	
  Northern Virginia

  
	
   

  	
  Frankfurt

  	
   

  	
  Orange County

  
	
   

  	
  Hamburg

  	
   

  	
  Paris

  
	
   

  	
  Hong Kong

  	
   

  	
  San Diego

  
	
   

  	
  London

  	
   

  	
  San Francisco

  
	
  Deutsche Bank Securities Inc.

  	
  Los Angeles

  	
   

  	
  Silicon Valley

  
	
  Goldman, Sachs & Co.

  	
  Milan

  	
   

  	
  Singapore

  
	
   

  	
  Moscow

  	
   

  	
  Tokyo

  
	
   

  	
   

  	
   

  	
  Washington, D.C.

  
	
  c/o:

  	
  Deutsche Bank Securities Inc.

  	
   

  
	
   

  	
  60 Wall Street

  	
  File No. 038437-000

  
	
   

  	
  New York, New York  10005

  	
   

  

 

	
  Re:

  	
  Shuffle Master, Inc.

  
	
   

  	
  $125,000,000 1.25% Contingent Convertible Senior Notes due 2024

  

 

Ladies and Gentlemen:

 

We have acted as special counsel to Shuffle Master, Inc., a Minnesota
corporation (the “Company”),
in connection with  the sale to you (the “Initial Purchasers”)
on the date hereof by the Company, of $125,000,000 in aggregate principal
amount of the Company’s 1.25% Contingent Convertible Senior Notes Due 2024 (the
“Notes”)
pursuant to a purchase agreement, dated April 15, 2004 (the “Purchase Agreement”),
between you and the Company.  The Notes
are being issued pursuant to an indenture, dated the date hereof, between the
Company and Wells Fargo Bank, National Association, as trustee. This letter is
being furnished to you pursuant to Section 6(a) of the Purchase Agreement.

 

The offering memorandum dated April 15, 2004 with respect to the
Notes is herein called the “Offering Memorandum,” and the reports filed by the
Company with the Securities and Exchange Commission and incorporated in the
Offering Memorandum by reference are sometimes referred to herein collectively
as the “Incorporated Documents.”

 

The primary purpose of our professional engagement was not to establish
or confirm factual matters or financial or quantitative information.  Therefore, we are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in, or incorporated by reference in, the Offering
Memorandum (or the Incorporated Documents), except to the extent expressly set forth
in the numbered paragraph 6 of our opinion letter to you of even date, and have
not made an independent check or verification thereof (except as
aforesaid).  However, in the course of
acting as special counsel to the Company in connection with the preparation by
the Company of the

 

B-7

 

Offering Memorandum, we reviewed the Offering Memorandum and the
Incorporated Documents, and participated in conferences and telephone
conversations with officers and other representatives of the Company, the
independent public accountants for the Company, your representatives, and your
counsel, during which conferences and conversations the contents of the
Offering Memorandum and related matters were discussed.  We also reviewed and relied upon certain
corporate records and documents and oral and written statements of officers and
other representatives of the Company and others as to the existence and
consequence of certain factual and other matters.

 

Based on our participation, review and reliance as described above, we
advise you that no facts came to our attention that caused us to believe that
the Offering Memorandum, together with the Incorporated Documents, as of its
date or as of the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; it being understood that we express no belief with respect
to the financial statements, schedules, or other financial data included or
incorporated by reference in, or omitted from, the Offering Memorandum or the
Incorporated Documents.

 

This letter is furnished only to you in your capacity as Initial Purchasers
and is solely for your benefit in connection with the transactions covered
hereby.  This letter may not be relied
upon by you for any other purpose, or furnished to, assigned to, quoted to, or
relied upon by any other person, firm or other entity for any purpose
(including any person, firm or other entity that acquires Notes from you)
without our prior written consent, which may be granted or withheld in our sole
discretion.

 

	
   

  	
  Very truly yours,

  

 

B-8

 

EXHIBIT C

 

[Form of Fox Rothschild LLP Opinion]

 

(1)                                  The statements in the Offering Memorandum
under the heading “Regulation and Licensing” and in the Annual Report on Form
10-K for the fiscal year ended October 31, 2003 of the Company under the
heading “Item 1. Business---Gaming Regulation—General Regulatory Licensing and
Approvals” have been reviewed by us and to the extent the same pertain solely
to the New Jersey Casino Control Act and the rules and regulations promulgated
thereunder (the “New Jersey Gaming Laws”), they are accurate and correct in all
material respects and fairly summarize the information called for; and we have
no knowledge of any material legal or governmental proceedings in the State of
New Jersey to which the Company or any affiliate that has licensed gaming
operations in the State of New Jersey (a “New Jersey Gaming Affiliate”) is a
named party wherein a claim of a violation of the New Jersey Gaming Laws is
asserted.

 

(2)                                  Each approval, consent, order,
authorization, designation, declaration or filing (each, a “New Jersey Permit”)
required of or from any governmental or regulatory body (the “New Jersey Gaming
Authorities”) under the New Jersey Gaming Laws necessary in connection with the
execution and delivery by the Company of the Purchase Agreement, the Indenture,
the Securities, the Registration Rights Agreement and the issuance and sale of
the Securities to the Initial Purchasers by the Company pursuant to the
Purchase Agreement, and the issuance of the Underlying Securities issuable upon
conversion of the Securities and the consummation of the transactions therein
contemplated has been obtained or made and is in full force in effect.

 

(3)                                  The execution and delivery by the Company
of the Purchase Agreement, the Indenture, the Securities and the Registration
Rights Agreement and the issuance and sale of the Securities to the Initial
Purchasers by the Company pursuant to the Purchase Agreement, and the issuance
of the Underlying Securities issuable upon conversion do not violate any of the
New Jersey Gaming Laws or any orders or decrees of any executive, legislative,
judicial, administrative or regulatory body of the State of New Jersey known to
us to be binding upon the Company or any of its subsidiaries.

 

(4)                                  Each of the
Company and its subsidiaries has such authorizations from the New Jersey Gaming
Authorities as are necessary to own, lease and operate its respective
properties and to conduct its business in the manner described in the Offering
Memorandum (including documents incorporated by reference therein).

 

C-1

 

EXHIBIT D

 

[Form of Lionel Sawyer & Collins Opinion]

 

 

 

(1)                                  The statements under the caption “Gaming
Regulation—Nevada Regulatory Matters” in the Annual Report on Form 10-K for the
fiscal year ended October 31, 2003 of the Company (the “2003 10-K”) and in
the Offering Memorandum under the caption “Regulation and Licensing---Nevada
Regulatory Matters,” insofar as such statements constitute a summary of matters
of Nevada law or Nevada legal conclusions, are correct in all material respects
as of the date of the Purchase Agreement and as of the date hereof.

 

(2)                                  Except as described in or contemplated by
the Offering Memorandum, or as may be required under Nevada “blue sky” laws, as
to which such counsel need express no opinion, each approval, consent, order,
authorization, designation, declaration or filing by or with any Nevada
regulatory, administrative or other governmental body necessary in connection
with the execution and delivery by the Company of the Purchase Agreement, the
Indenture, the Securities, the Registration Rights Agreement and the issuance
and sale of the Securities to the Initial Purchasers by the Company pursuant to
the Purchase Agreement, and the issuance of the Underlying Securities issuable
upon conversion of the Securities and the consummation of the transactions
therein contemplated has been obtained or made and is in full force and effect,
except for (A) the Company’s filing of copies of all documents related to the
transaction with the Nevada State Gaming Control Board within thirty (30) days
after the end of the calendar quarter in which the transaction is consummated
and (B) the approvals of the Nevada State Gaming Control Board and the Nevada
Gaming Commission of the Company’s fulfillment of its obligations under the
Registration Rights Agreement as a public offering of securities.

 

(3)                                  The Company has all authorizations,
approvals, consents, orders, licenses, certificates and permits required of or
from any governmental or regulatory body under the Nevada Gaming Control Act
and the rules and regulations promulgated thereunder (the “Nevada Gaming Laws”)
(each, a “Nevada Permit”) to own, lease and license its assets and properties,
to conduct its business as its business and properties are described in the
2003 10-K and the Offering Memorandum. 
To the best of such counsel’s knowledge, the Company has fulfilled and
performed in all material respects all of its obligations with respect to
Nevada Permits and, to the best of such counsel’s knowledge, the Company is not
in violation of any term or provision of any such Nevada Permit, nor has any
event occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or which could result in any material
impairment of the rights of the holder of any such Nevada Permits.

 

D-1

 

(4)                                  The execution and delivery by the Company
of the Purchase Agreement, the Indenture, the Securities and the Registration
Rights Agreement and the issuance and sale of the Securities to the Initial
Purchasers by the Company pursuant to the Purchase Agreement, and the issuance
of the Underlying Securities issuable upon conversion do not violate any of the
Nevada Gaming Laws or any orders or decrees of any executive, legislative,
judicial, administrative or regulatory body of the State of Nevada known to
such counsel to be binding upon the Company or any of its subsidiaries,
provided that (A) the Company files copies of all documents related to the
transaction with the Nevada State Gaming Control Board within thirty (30) days
after the end of the calendar quarter in which the transaction is consummated,
and (B) the Company obtains approvals from the Nevada State Gaming Control
Board and the Nevada Gaming Commission of the Company’s fulfillment of its
obligations under the Registration Rights Agreement as a public offering of
securities, before the shelf registration statement covering the Securities is
declared effective.

 

(5)                                  Shuffle Master
Holding Company, Inc. (“Holding”) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Nevada and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering Memorandum
(including documents incorporated by reference therein).

 

D-2

 

EXHIBIT E

 

 

April 21, 2004

 

Deutsche Bank Securities Inc.

As Representative of the

Several Initial Purchasers

60 Wall Street

New York, NY 10005

 

Re:                               Shuffle
Master, Inc.

 

11205-1

 

Ladies and Gentlemen:

 

We have acted as special Mississippi counsel to Shuffle Master, Inc., a
Minnesota corporation  (the “Company”), in
connection with the sale by the Company to the Initial Purchasers of up to
$125,000,000 in aggregate principal amount of the Company’s 1.25% Contingent
Convertible Senior Notes due 2024 (the “Securities”), pursuant to a purchase
agreement dated April 15, 2004 (the “Purchase Agreement”), between you, as
representative for the Initial Purchasers, and the Company.  This letter is being furnished to you
pursuant to Section 6(d) of the Purchase Agreement.  Capitalized terms not defined herein shall
have the meanings assigned to them in the Purchase Agreement.  Additionally, the term “Mississippi Gaming
Laws” means the Mississippi Gaming Control Act and the rules and regulations
promulgated thereunder.

 

In connection with
the opinions delivered herein, we have examined only the Confidential Offering
Memorandum (the “Offering Memorandum”) and the Purchase Agreement.  We have reviewed such documents only for the
limited purpose of the opinions rendered herein, and do not give any opinion or
statement as to the sufficiency or accuracy of the disclosure provided therein,
the enforceability thereof or the applicability of the forms used or compliance
with the requirements of such forms.  We
also render no opinion as to federal securities laws or state securities laws or
“blue sky” laws with respect to the transactions contemplated by the Offering
Memorandum.

 

In connection with the opinions herein, we have also examined and
relied upon that letter from Larry Gregory, Executive Director of the
Mississippi Gaming

 

E-1

 

Commission (the “Gaming Commission”), dated April 15, 2004,
pertaining to the Securities offering.

 

OPINIONS

 

Based upon the foregoing and subject to the other limitations,
assumptions and qualifications set forth herein, we are of the opinion that:

 

(1)                                  Except as provided in paragraph A below,
each approval, consent, order, authorization, designation, declaration or
filing by or with the Gaming Commission necessary for (i) the execution and
delivery by the Company of the (a) Purchase Agreement and (b) the Indenture and
the Registration Rights Agreement as those documents are described in the
Offering Memorandum, (the Indenture and the Registration Rights Agreement being
referred to herein as the “Other Transaction Documents”), (ii) the issuance and
sale of the Securities to the Initial Purchasers by the Company pursuant to the
Purchase Agreement, and (iii) the issuance of the Underlying Securities
issuable upon conversion of the Securities has been obtained or made and is in
full force and effect.

 

(2)                                  The execution and delivery by the Company
of the Purchase Agreement and the Other Transaction Documents, the issuance and
sale of the Securities to the Initial Purchasers by the Company pursuant to the
Purchase Agreement, and the issuance of the Underlying Securities issuable upon
conversion of the Securities, do not violate any of the Mississippi Gaming
Laws.

 

(3)                                  Each of the Company and Shuffle Master of
Mississippi, Inc. (“Shuffle Mississippi”) has such authorizations from the
Gaming Commission as are necessary to conduct its business as described in the
“Summary: Shuffle Master, Inc.” section of the Offering Memorandum.

 

(4)                                  Based solely on a certificate from the
Mississippi Secretary of State, Shuffle Mississippi has been duly incorporated
and is validly existing as a corporation in good standing in Mississippi.

 

ASSUMPTIONS, EXCEPTIONS AND QUALIFICATIONS

 

The opinions expressed herein are subject to the following additional
assumptions, exceptions, qualifications and limitations:

 

E-2

 

A.                                   As
part of the Gaming Commission “shelf approval” granted to the Company and its
affiliated companies and subsidiaries, including Shuffle Mississippi, for
public offerings or private placements of its securities, the Company is
required to report to the Executive Director of the Gaming Commission all
public offerings and private placements of its securities by simultaneously
filing with the Executive Director “all related reports, statements, etc. (and
amendments thereto)” that must be filed with the U.S. Securities and Exchange
Commission, or, if no Securities and Exchange Commission filing or reporting is
required, by filing copies of “all documents related to the transaction” within
fourteen (14) calendar days after closing the transaction.  It is our understanding that the
transactions contemplated by the Purchase Agreement and the Other Transaction
Documents do not require a filing with the Securities and Exchange Commission
at this time, and, therefore, the Company is required within fourteen (14)
calendar days after the closing of this transaction to file with the Gaming
Commission “copies of all documents related to the transaction.”  However, any future filing made with the
Securities and Exchange Commission related to the transactions contemplated by
the Purchase Agreement and the Other Transaction Documents must simultaneously
be filed with the Gaming Commission. 
Additionally, as part of said “shelf approval,” the Company is required
within fourteen (14) calendar days after the closing of this transaction to
file with the Executive Director a report of all participants in the
transaction, which shall include (at a minimum) the name, amount of securities
issued and purchase price.  Furthermore,
you should be aware that the Gaming Commission (as part of said “shelf
approval” granted to the Company and its affiliated companies and subsidiaries)
has granted the Executive Director the power to issue an interlocutory stop
order with respect to any public offering or private placement by the Company.

 

B.                                     Except
with respect to the opinion expressed above in Opinion paragraph 3 regarding
authorizations from the Gaming Commission, the opinions expressed above do not
extend to, and we express no opinion as to, whether the Company and Shuffle
Mississippi have made any filings or obtained or maintained any authorizations
or permits required by or necessary for the operation of their respective
businesses.

 

C.                                     Our
opinions expressed above in Opinion paragraphs 1 and 2 as to the lack of any
required approval, consent, order, authorization, designation, declaration or
filing by or with the Gaming

 

E-3

 

Commission and as to compliance with Mississippi
Gaming Laws are based upon a review of those statutes and regulations which, in
our experience, are normally applicable to transactions of the type
contemplated by the Purchase Agreement and Other Transaction Documents.

 

D.                                    The
recipients of this opinion understand and acknowledge that notwithstanding (but
without negating) the opinion stated in Opinion paragraph 3 above, the parties
to and the transactions contemplated by Purchase Agreement and the Other
Transaction Documents, and the suitability of the Company and Shuffle
Mississippi to conduct their businesses, remain subject to continuing review by
the Gaming Commission, and the Company and Shuffle Mississippi are subject from
time to time to administrative proceedings or investigations.  In particular, the opinion expressed in
Opinion paragraph 3 relates only to authorizations on the date hereof, and we
do not express an opinion or imply that such authorizations will continue, or
that such matters will not be affected by facts and circumstances known to us
on the date hereof.

 

E.                                      You
should be aware that the Gaming Commission retains broad discretion to require
any person directly or indirectly involved with a gaming licensee to apply for
a license or finding of suitability, including, without limitation, a lender,
holder of indebtedness or greater than 5% beneficial owner of a gaming licensee
or registered publicly traded corporation. 
For example, if, as a result of the transactions described in the Purchase
Agreement and the Other Transaction Documents, any person that does not already
hold a Gaming Commission finding of suitability or “institutional investor”
waiver will beneficially own more than 5% of the stock of the Company or
Shuffle Mississippi, the Gaming Commission may require that person to apply for
a finding of suitability or an “institutional investor” waiver.

 

F.                                      Except
only as expressly stated otherwise above, we have not undertaken any
independent investigation, verification, or inquiry as to the existence or
non-existence of any facts, judgments, legal or governmental proceedings or
other matters but have relied solely on the actual knowledge of the attorneys
in this firm that have actively represented the Company and Shuffle Mississippi
in connection with this opinion letter. 
No inference as to our knowledge of the existence or non-existence of
facts, other than the facts of which we have obtained actual knowledge, should
be

 

E-4

 

drawn from our representation of the Company
and Shuffle Mississippi.  The Company
and Shuffle Mississippi use other legal counsel in addition to our firm, and
accordingly there exist matters of a legal and/or factual nature pertaining to
the Company and Shuffle Mississippi which are not addressed by this opinion and
with respect to which we have not been consulted.

 

Except as expressly stated otherwise above, the foregoing opinions are
based on and are limited to the Mississippi Gaming Laws, and we render no
opinion with respect to other laws of the state of Mississippi or to other laws
or the law of any other jurisdiction. 
Furthermore, no opinion is expressed herein as to the effect of any
future acts of the parties or changes in existing law.  We undertake no responsibility to advise you
of any changes after the date hereof in the law or the facts presently in
effect that would alter the scope or substance of the opinions herein
expressed.  This letter expresses our
legal opinion as to the foregoing matters based on our professional judgment at
this time; it is not, however, to be construed as a guaranty, nor is it a
warranty that a court considering such matters would not rule in a manner
contrary to the opinions set forth above.

 

The opinions expressed herein are rendered as of the date hereof, are
intended solely for the benefit of the Initial Purchasers as set forth in the
Purchase Agreement and may not be used, quoted, circulated, referenced, or
relied upon by any other person without our prior written consent.

 

	
   

  	
  Yours very truly,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Phelps Dunbar, L.L.P.

  

 

E-5

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