EXHIBIT 10.1
 

EXECUTION VERSION

SHARE SALE AND TRANSFER AGREEMENT

ENTERED INTO BY AND BETWEEN

BWIN.PARTY SERVICES (AUSTRIA) GMBH
Marxergasse 1B / Untere Viaduktgasse 4, 1030 Vienna
AUSTRIA

AS SELLER

AND

SHUFFLE MASTER INTERNATIONAL, INC.
1106 Palms Airport Drive, Las Vegas, Nevada 89119

AS PURCHASER

DATED
March 5 2012
 
 
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Table of Contents
 

1. Interpretation   6 1.1 Definitions   6 1.2 Schedules   18 1.3 Information  
19 1.4 Headings   19 1.5 Knowledge   19 2. SALE AND TRANSFER OF SHARES   19 3.
CONSIDERATION, SECURED FUNDING   20 3.1 Purchase Price   20 3.2 Purchase Price
Adjustment   21 3.3 Default Interest   28 3.4 No Right to Set-Off   28 3.5
Parent Guarantees   28 3.6 Network Security Deposits   28 4. WARRANTIES OF
SELLER   29 5. GENERAL MATTERS RELATING TO WARRANTIES and covenants   29 5.1
General   29 5.2 Specific Other Aspects of Claims   32 5.3 No Double Remedies  
36 6. WARRANTIES OF PURCHASER   36 6.1 Due incorporation   36 6.2 Authority   36
6.3 No violation   37 6.4 Funding   37 6.5 No antitrust clearances   37 6.6
Expiration   37 7. CONDITIONS PRECEDENT TO CLOSING   38 7.1 Conditions Precedent
  38 7.2 Long-Stop Date   42 7.3 Efforts to Fulfil the Conditions Precedent   42
8. PRE-CLOSING COVENANTS   43 8.1 Conduct   43 8.2 Regulatory Filings; Other
Actions   46

                
 
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8.3 Advice of Changes   48 8.4 Continued Access to Information   49 8.5 No Other
Negotiations   49 8.6 Tax Matters   50 9. CLOSING   51 9.1 Closing Date   51 9.2
Documents to be executed or delivered and actions to be taken   51 9.3 Right to
Rescind   55 10. Post-Closing Covenants   58 10.1 Exoneration   58 10.2
Post-Closing Measures   58 10.3 Patent License Agreement   58 10.4 Restrictions
on Use of Business Customer Data   58 11. ANNOUNCEMENTS   60 12. PAYMENTS, COSTS
AND EXPENSES   60 12.1 Costs of agreement   60 12.2 Costs of transaction   60
13. GOVERNING LAW   61 14. ARBITRATION   61 14.1 Arbitration agreement   61 14.2
Exceptions from venue   61 14.3 Scope of arbitration clause   61 14.4 Costs of
arbitration   61 14.5 Specific performance, injunctive relief   62 14.6
Applicable law   62 15. MISCELLANEOUS   62 15.1 Amendments   62 15.2 No
assignment   62 15.3 Nomination right   62 15.4 Severability   63 15.5 Entire
agreement   63 15.6 Notices   64

 
 
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List of Schedules
 

 Schedule 1.1-B    Kahnawake Migration Activities  Schedule 3.1    Working
Capital and Net Debt  Schedule 3.5-A   Parent Guarantee - Purchaser  Schedule
3.5-B      Parent Guarantee - Seller  Schedule 4        Warranties of Seller
 Schedule 4 Part 4.2     List of Subsidiaries and share capital of Subsidiaries
 Schedule 4 Part 7     Material Contracts  Schedule 4 Part 12     List of
Insurances  Schedule 4 Part 14   Unaudited Financial Statements  Schedule
7.1.6      Governmental Authority Consents  Schedule 7.1.7  Third Party Consents
 Schedule 7.1.7  Gaming Regulatory Measures (Gaming Permits)  Schedule
7.1.7          Gaming Regulatory Measures (License Surrenders)  Schedule
7.1.8     Gaming Regulatory Measures (Dissociations)  Schedule 7.1.8    Gaming
Regulatory Measures (Notices of Dissociation)  Schedule 7.1.8    Gaming
Regulatory Measures (Amended Contracts)  Schedule 7.1.8    Gaming Regulatory
Measures (Filtered Jurisdictions)  Schedule 9.2(f)      Transition Services
Agreement  Schedule 9.2(g)        Tax Deed  Schedule 10.3       License
Agreement

 
 
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THIS SHARE SALE AND TRANSFER AGREEMENT (the "Agreement") is entered into by and
between the following Persons (as defined below):

(1)
bwin.party services (Austria) GmbH is a limited liability company incorporated
and existing under the laws of Austria, having its registered office and
principal place of business in Vienna, Austria and business address Marxergasse
1B / Untere Viaduktgasse 4, 1030 Vienna, Austria, registered with the Commercial
Court of Vienna under the registration number FN 351580 f (the "Seller");

and

(2)
Shuffle Master International, Inc. is a corporation incorporated and existing
under the laws of Nevada, having its registered office and principal place of
business in Nevada and business address at 1106 Palms Airport Drive, Las Vegas,
Nevada 89119 (the "Purchaser").

PREAMBLE

WHEREAS, Ongame Network Ltd. is a limited liability company incorporated and
existing under the laws of Gibraltar, having its registered office and principal
place of business in Gibraltar and business address at Suite 1 2nd Floor
International House, 16 Bell Lane, Gibraltar and registered with the Registrar
of Companies in Gibraltar under the registration number 89063 (the "Company");

WHEREAS, the Company operates a B2B online poker business (the "Business").
Pursuant to this Agreement, the Seller wishes to sell and the Purchaser wishes
to purchase the entire issued share capital of the Company and thereby acquire
Business;
 
 
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WHEREAS, the Company (i) directly owns 100 % (one hundred per centum) of the
shares in Ongame Services AB, a limited liability company incorporated and
existing under the laws of Sweden, having its registered office and principal
place of business in Stockholm and business address at Västra Järnvägsgatan 3,
111 64 Stockholm registered with the Swedish Companies Registration Office under
the registration number 556851-7824 ("Ongame Services") and (ii) indirectly,
through Ongame Services, owns 100 % (per centum) of the shares in Ongame Markets
AB, a limited liability company incorporated and existing under the laws of
Sweden, having its registered office and principal place of business in
Stockholm and business address at Västra Järnvägsgatan 3, 111 64 Stockholm
registered with the Swedish Companies Registration Office under the registration
number 556725-7745 ("Ongame Markets")"; further, the Company (iii) directly owns
99,9 % and indirectly, through Ongame Services an additional 0,1%, of the
shares, together constituting 100% (per centum) of the shares in Ongame Markets
Malta Plc, a limited liability company incorporated and existing under the laws
of Malta, having its registered office and principal place of business in Ta'
Xbiex, Malta and business address at Suite A, Dolphin Court A (Office 6304),
Embassy Way, Ta' Xbiex XBX1071, Malta registered with the Maltese Companies
Registration Office under the registration number C 54283 ("Ongame Markets
Malta"; the Company's shares in Ongame Services, Ongame Markets and Ongame
Markets Malta are hereinafter together referred to as the "Subsidiary Shares").

WHEREAS, the Company has an authorised share capital of EUR 25,000 (euro
twenty-five thousand), which is divided into 25,000 ordinary shares of EUR 1
(euro one) each, 350 of which have been allotted and issued to the Seller and
all of which are fully paid-up, thereby corresponding to a fully paid-up share
capital contribution by the Seller to the Company of EUR 350 (euro three hundred
fifty) (the "Shares");

WHEREAS, the Purchaser is engaged in the business of, among other things,
leasing, licensing and selling proprietary games, gaming platforms and gaming
equipment;

WHEREAS, the Purchaser desires to purchase all (but not only some) of the
Shares, and the Seller wishes to sell all of the Shares on the terms and
conditions set forth herein;

WHEREAS, the Seller and the Company have furnished the Purchaser with the
requisite legal, financial, commercial and technical documents and information
in the process of a due diligence review of the Group Companies prior to the
date hereof;

NOW THEREFORE, the Purchaser and the Seller hereby agree as follows:

1.
INTERPRETATION

1.1
Definitions

In this Agreement, the following words and expressions shall have the meanings
set opposite them below:
 
 
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"ABGB" means the Austrian Civil Code as amended from time to time;

"Adjustment Amount" means the amount to be calculated in accordance with
section 3.2;

"Access Restrictions" has the meaning ascribed to it in schedule 4 section 8.2;

"Affiliate" means with respect to any specified Person, any other Person that,
directly or indirectly, is controlled by, controls or is under common control
with such first Person. For purposes of this definition, ‘control’ shall include
(i) the ownership of 50% or more of the legal or beneficial interest in any
Person; or (ii) the legal power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise; or (iii) the ability to appoint, directly
or indirectly, the majority of its directors or executive officers; or (iv) the
ability to exercise, directly or indirectly, a majority of the votes exercisable
at a general meeting; or (v) the right to receive, directly or indirectly, a
majority of the proceeds arising from: (a) any declaration of a dividend; or (b)
a distribution arising in the course of winding up, whether solvent or
insolvent, or any return of capital to shareholders or members; and the
expressions ‘controlled’ and ‘controls’ shall be construed accordingly;

"Agreement" means this Share Sale and Transfer Agreement including its Preamble
and Schedules, which form an integral part hereof;

"Alternative Transaction" means any commitment, agreement or transaction
involving or providing for the possible disposition of all or any substantial
portion of any Group Company’s business, assets or capital stock, whether by way
of merger, consolidation, sale of assets, sale of stock, stock exchange, tender
offer and/or any other form of business combination;

"Articles of Association" means the articles of association of the Company as
last amended on 20 June 2007;

"Asset Transfer Agreement" means the asset transfer agreement dated
29 July 2011, as amended on 17 August 2011, entered into between bwin Games and
Ongame Services pursuant to which all assets and liabilities relating to bwin
Games' B2B business have been transferred to Ongame Services;
 
 
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"Audited Financial Statements" has the meaning ascribed to it in section 7.1.11.

"Auditor Statement" means the statement by the Company's Auditor indicating the
Adjustment Amount;

"Basket" has the meaning ascribed to it in section 5.2.3(b).
 
 
"Blocked Jurisdictions" has the meaning ascribed to it in section 8.2 of
schedule 4;

"Business" has the meaning ascribed to it in the second WHEREAS clause of this
Agreement;

"Business Day" means any day other than a day which is a Saturday, Sunday or a
statutory or public holiday in Austria and Gibraltar;

"Business Customer" means any licensed business entity other than the Seller
that offers access to online poker play through a website or other
telecommunication facilities to Customers that interoperate with the online
poker platform operated by the Company as part of the Business;

"bwin Games" means bwin Games AB, a limited liability company incorporated and
existing under the laws of Sweden, having its registered office and principal
place of business in Stockholm and business address at Västra Järnvägsgatan 3,
111 64 Stockholm registered with the Swedish Companies Registration Office under
the registration number 556232-3567;

"Claim" means any claim of the Purchaser against the Seller pursuant to
section 5;

"Claim Notice" has the meaning ascribed to it in section 5.1.3;

"Closing" has the meaning ascribed to it in section 9.1;

"Closing Date" has the meaning ascribed to it in section 9.1;
 
 
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"Closing Notice" has the meaning ascribed to it in section 7.1.8(a);

"Company" has the meaning ascribed to it in the first WHEREAS clause of this
Agreement;

"Company's Auditor" means KPMG AB or BDO International Limited, as appointed
pursuant to the shareholder's meeting of the Company on or after the Closing
Date under Gibraltar law;

"Conditions Precedent" has the meaning ascribed to it in section 7.1;

"Contingent Consideration" has the meaning ascribed to it in section 3.1;

"Consulting and Cooperation Agreement" means the Consulting and Cooperation
Agreement by and between ElectraWorks Ltd. and the Company and entered into on
the Signing Date;

"Current Assets" shall mean the sum of net accounts receivable, Group
Receivables Trading Balances, tax authority accounts, prepaid expenses and
accrued income, and other current receivables and assets, but excluding cash at
bank and on hand, receivables of the Group Companies pursuant to the CQR
Agreement and processor clearing accounts, each as prepared on a consistent
basis and measured and calculated using the same accounting principles,
practices, methodologies and policies in accordance with International Financial
Reporting Standards. For the avoidance of doubt, Current Assets shall exclude
any Group Balances, amounts deposited with Governmental Authorities in
connection with Gaming Approvals or applications, and the Stockholm Office
Security Deposit.

"Current Liabilities" shall mean the sum of accounts payable, payroll and social
security liabilities, provisions, accruals and deferred income, and other
current liabilities, but excluding Network Security Deposits, payables of the
Group Companies pursuant to the CQR Agreement, merchant clearing accounts, and
bettors' clearing accounts, each as prepared on a consistent basis and measured
and calculated using the same accounting principles, practices, methodologies
and policies in accordance with International Financial Reporting Standards. For
the avoidance of doubt, Current Liabilities shall include all obligations to pay
ordinary course bonus or other payments to directors, officers, employees to the
extent not reflected in Net Debt or elsewhere in this Agreement, together with
the employer portion of any employment Taxes payable in respect of the
foregoing, all accrued in accordance with International Financial Reporting
Standards. For the avoidance of doubt, Current Liabilities shall not include any
amounts relating to any Group Balances.
 
 
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"Customer" means any individual in receipt of gaming services from a Business
Customer;

"Decrease" has the meaning ascribed to it in section 3.2.8;

"Disclosure Letter" means the letter issued by the Seller to the Purchaser
delivered concurrently herewith containing certain information on the Group,
which information qualifies the Warranties;

"Dissociation" has the meaning ascribed to it in section 7.1.8(b);

"Encumbrance" means and includes any claim, charge, mortgage, pledge, security,
lien, option, easement, lease, hypothecation, right to acquire, right of
pre-emption, right of conversion, priority, assignment or other third party
rights, retention of title, right of first refusal or security interest or other
similar third party rights or arrangement of any kind or nature whatsoever,
unless provided by statutory laws, regulations or the Articles of Association;

"Estimated Net Debt" has the meaning ascribed to it in section 3.2.10;

"Estimated Working Capital" has the meaning ascribed to it in section 3.2.10;

"Fairly Disclosed" means that the matter or information has been disclosed to
the Purchaser (i) in the Disclosure Letter or (ii) in this Agreement (including
any Schedules thereto), so as to make any prudent purchaser experienced in
transactions of this nature and extent, such as the Purchaser, aware of the
existence of any fact or circumstance which would qualify to such extent a
Seller's Warranty;
 
 
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"Fundamental Warranties" means the Warranties given by the Seller pursuant to
sections 1 (Authority), 2 (No Violation), 3 (Title) and 4 (Share Capital of and
Quota in Company) of Schedule 4;

"Gaming Issue" means Purchaser has been advised by a Gaming Regulatory Authority
that the consummation of the transactions contemplated by this Agreement is a
cause of concern for such Gaming Regulatory Authority and that such consummation
may impact such Purchaser’s or any of Purchaser’s Affiliates’ suitability to
continue to hold a Gaming Approval or to receive a Gaming Approval (to the
extent Purchaser or such Affiliate is in the process of seeking a Gaming
Approval) from such Gaming Regulatory Authority or may otherwise jeopardise its
standing as a licensee, which in all cases could result in a significant adverse
consequence for the Purchaser or any of its Affiliates (as determined in good
faith by the Purchaser);

"Gaming Regulatory Authority" means those international, national, state, local,
tribal and other governmental, regulatory and administrative authorities,
agencies, boards and officials responsible for or regulating gaming or gaming
activities in any jurisdiction;

"Gaming Approvals" means, as applicable, all required approvals, authorizations,
licenses, permits, consents, findings of suitability, registrations, exemptions
and waivers of or from any Gaming Regulatory Authority;

"Governmental Authority" means any national, federal, regional, state, local
tribal, Native American or other governmental body, agency, instrumentality,
commission, department, court, ministry, regulatory, self-regulatory, or similar
authority or organisation, including governmental authorities of the European
Union and including gaming regulatory authorities;

"Group Balances" means any receivables or payables due from or to the Seller or
any of its Affiliates, except for Group Receivables Trading Balances.

"Group Receivables Trading Balances" means, if and only to the extent that any
underlying trading balances due to any Group Company from bwin.party digital
entertainment plc or any of its Affiliates, arising from activity undertaken by
bwin.party digital entertainment plc’s or its Affiliates’ customers and labels,
is not separately identified in a nominal ledger account, the aggregate amount
owed under invoices issued by any Group Company to bwin.party digital
entertainment plc or any of its Affiliates for such activity during the
preceding calendar month.
 
 
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"Group" or "Group Companies" means the Company and the Affiliates controlled by
it, being Ongame Services, Ongame Markets and Ongame Markets Malta, and "Group
Company" means any one of them;

"Hurdle" has the meaning ascribed to it in section 5.2.3(a);

"Specifically Indemnifiable Matter" means any fact, matter, event or
circumstance set forth in the Disclosure Letter that is expressly identified as
a "Specifically Indemnifiable Matter";

"Increase" has the meaning ascribed to it in section 3.2.8;

"Initial Adjustment Amount" has the meaning ascribed to it in section 3.2.10;

"Initial Purchase Price" has the meaning ascribed to it in section 3.1;

"IPR" means patents, trademarks, service marks, design rights, trade dress,
copyright (including copyright in computer software), database rights and rights
in know-how, customer lists, supplier lists, proprietary processes and
algorithms, in each case, whether registered or unregistered, anywhere in the
world, including applications therefor;

"Kahnawake Migration Activities" shall be the activities described on
Schedule 1.1-B, involving (i) the migration of all Business Customer data
(including but not limited to poker player data, wagering transaction data,
wagering settlement data and wagering account debiting/crediting data) from
computer servers or other equipment located on any property or premises subject
to the jurisdiction of the Kahnawake Gaming Commission to computer servers or
equipment in Gibraltar, and (ii) the disposition by all Group Companies of all
right, title and interest in or to any computer servers or other equipment
located on any property or premises subject to the jurisdiction of the Kahnawake
Gaming Commission;
 
 
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"Kahnawake Permits" has the meaning ascribed to it in schedule 4 section 8.1;

"LIBOR" means the British Bankers Association Interest Settlement Rate for the
relevant currency and period displayed on the appropriate page of the Reuters
screen. If the agreed page is replaced or service ceases to be available, the
rate shall be the rate offered by leading banks in the London interbank market
as reported by any publicly available source of similar market data;

"License Agreement" has the meaning ascribed to it in section 10.3;

"License Surrenders" has the meaning ascribed to it in section 8.2(b)(i);

"Long-Stop Date" has the meaning ascribed to it in section 7.2;

"Loss" means all losses (including, without limitation, lost profits),
liabilities, damages (including, without limitation, damages adequately
attributable or reasonably proximate to the triggering event or circumstances),
costs (including, without limitation, legal costs and expenses for professional
advisors), quantifiable diminution in value, charges, expenses, actions, fines,
penalties, proceedings, claims, remediation, clean-up and removal costs and
demands (in each case calculated on a Euro for Euro basis) suffered or sustained
by the Purchaser or by any Group Company;

"Material Adverse Change" means the occurrence of a change, effect or event
having a Material Adverse Effect;

"Material Adverse Effect" means an individual or cumulative adverse change in or
effect on (other than a change or effect directly or indirectly caused by or
otherwise attributable to Purchaser’s breach of this Agreement or any other
action by Purchaser that violates any applicable law, rule or regulation) the
business, customers, customer relations, operations, assets, properties or
liabilities of any Group Company individually, or the sum of such adverse
changes relating to the Group Companies in the aggregate, which (i) is, or is
reasonably expected to have, an effect on the business, properties, working
capital, condition (financial or otherwise), assets, properties or liabilities
of such Group Company or the Group with an economic effect tantamount to a
reduction of the net present value of the Group in excess of EUR 3,500,000 in
the aggregate. The Parties agree that any dispute over the magnitude of the
reduction of the net present value of the Group attributable to such change or
effect shall be resolved by an independent accountant selected pursuant to
Section 3.2.7; (ii) prevents Seller from consummating the sale and transfer of
Shares hereunder; or (iii) prevents (other than as a result of any restrictions
or limitations imposed upon Purchaser by any gaming regulatory authority under
whose jurisdiction Purchaser operates) Purchaser from continuing the conduct of
each Group Company’s operations following the Closing in substantially the same
manner in which it is conducted on the Signing Date and on the Closing Date
except as otherwise expressly contemplated by this Agreement;
 
 
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"Material Contracts" means all contracts to which any Group Company is a party
or by which any Group Company is bound that (i) continues for a mandatory period
of more than one year from the date hereof and cannot be terminated on one
month's or less notice without penalty, (ii) requires payments by any Group
Company or a counter party, in the aggregate, in excess of EUR 50,000 or its
equivalent, or (iii) pertains to the lease of any real estate in which greater
than 25% of the aggregate number of employees of the Group regularly work, or
(iv) is in another way material to the undisturbed conduct of the Group
Companies' business;

"Necessary IPR" has the meaning ascribed to it in schedule 4 part 11;

"Net Debt" has the meaning ascribed to it in section 3.2.10;

"Normalised Working Capital" has the meaning ascribed to it in section 3.2.10;

"Notice of Disagreement" has the meaning ascribed to it in section 3.2.5;

"Ongame Markets" has the meaning ascribed to it in the third WHEREAS clause of
this Agreement;

"Ongame Markets Malta" has the meaning ascribed to it in the third WHEREAS
clause of this Agreement;

"Ongame Services" has the meaning ascribed to it in the third WHEREAS clause of
this Agreement;

"Party" means any one of the Seller or the Purchaser, and "Parties" means all of
them;
 
 
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"Pension Commitment" means an obligation, liability or commitment (a) to pay a
retirement pension, disability pension, pension to surviving dependents or
similar pensions to present or former employees or (b) to financially contribute
to any insurance, pension fund, plan, trust or similar institution which, in
turn, has assumed obligations, liabilities or commitments of the nature
described in sub-clause (a) above vis-à-vis its participants or beneficiaries;
provided that an obligation of the employer under applicable social security or
similar laws to make regular and recurring contributions to social security
institutions shall not fall within the definition of Pension Commitments, and
provided further that an obligation to pay severance payment shall not
constitute a Pension Commitment;

"Permits" has the meaning ascribed to it in Schedule 4 section 8;

"Person" means any individual, firm, company, entity, government (including
agencies, departments, bureaus, boards, divisions and instrumentalities
thereof), trustee, receiver, liquidator, state, regional authority, municipality
or agency of a state or any joint venture, association, partnership (whether or
not having separate legal personality) and unless specified otherwise, includes
its successors and permitted assignees;

"Pre-Closing Straddle Period" shall mean the portion of the Straddle Period
ending on the Closing Date;

"Pre-Closing Straddle Period Taxes" shall mean Taxes which accrue in the
Pre-Closing Straddle Period. For all purposes of this Agreement, in order to
apportion appropriately any Taxes relating to a Straddle Period, the portion of
any Taxes that are allocable to the Pre-Closing Straddle Period shall be (a) in
the case of income Taxes and all other Taxes that are not imposed on a periodic
basis, the amount that would be payable if the taxable year or period ended on
the Closing Date based on an interim closing of the books and (b) in the case of
any Taxes that are imposed on a periodic basis, the amount of such Taxes for the
relevant period multiplied by a fraction the numerator of which shall be the
number of calendar days from the beginning of the period up to and including the
Closing Date and the denominator of which shall be the number of calendar days
in the entire period;
 
 
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"Pre-Closing Tax Period" shall include any Tax period ending on or before the
Closing Date, including the Pre-Closing Straddle Period;

"Pre-Closing Taxes" shall mean any Taxes of any Group Company relating or
attributable to any Pre-Closing Tax Period and, for the avoidance of doubt, any
Pre-Closing Straddle Period Taxes, regardless of when a return is required to be
filed or such Taxes paid;

"Purchase Price" shall mean the Initial Purchase Price, as adjusted pursuant to
this Agreement, together with the Contingent Consideration;

"Purchaser" has the meaning ascribed to it in paragraph (2) above;

"Purchaser’s Auditor" has the meaning ascribed to it in section 3.2.2;

"Reduction in Force" has the meaning ascribed to it in section 8.1(m);

"Responsible Managers" has the meaning ascribed to it in section 1.5;

"Restricted Period" has the meaning ascribed to it in section 10.4;

"Rules" has the meaning ascribed to it in section 14.1;

"Seller" has the meaning ascribed to it in paragraph (1) above;

"Seller’s Auditor" has the meaning ascribed to it in section 3.2.2;

"Settled Claim" has the meaning ascribed to it in section 5.1.3(a);

"Shares" has the meaning ascribed to it in the fourth WHEREAS clause of this
Agreement;

"Signing Date" means the date of execution of this Agreement by the Parties;

"Specified Claims" shall mean Claims relating to Specified Warranties;
 
 
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"Specified Warranties" means the Warranties given by the Seller pursuant to
sections 8.2 (Enforcement of Access Restrictions), 11 (IPR) and 13.2
(Sufficiency of Assets) of Schedule 4;

"Stockholm Office Security Deposit" has the meaning ascribed to it in
section 9.2(a);

"Straddle Period" shall mean a taxable period beginning on the day following the
last complete Tax period ended before the Closing Date and ending after, the
Closing Date;

"Subsidiary Shares" has the meaning ascribed to it in the third WHEREAS clause
of this Agreement;

"Tax" or "Taxes" means (a) all kinds of taxes whether direct or indirect and
whether levied by reference to income, profits, gains, asset values, turnover,
added value or other reference, including, all transfer taxes (such as stamp
duties, capital transfer tax, real estate transfer tax etc) and (b) all
statutory, governmental, state, provincial, local governmental or municipal
impositions, duties (including customs duties), contributions (including,
without limitation, social security contributions, other wage or salary related
duties, contributions to statutory interest groups such as the chambers of
commerce and their subdivisions), in each case ((a) and (b)), whenever and
wherever imposed and whether imposed by way of a withholding or deduction for
account of tax or otherwise and any interest, late interest or penalties
thereon;

"Tax Deed" means the tax covenant to be executed at the Closing in the form of
schedule 9.2(g);

"Third Party Claim" has the meaning ascribed to it in section 5.2.7;

"Third Party Expenses" has the meaning ascribed to it in section 0;

"Transition Services Agreement" has the meaning ascribed to it in subsection
9.2(f);
 
 
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"Triggering Event" means the date after which both (A) the federal government
(or any branch, department or agency thereof) of the United States and/or any
state of the United States (or any branch, department or agency thereof)
authorises a Person to commence the offering of real money online poker play to
members of the general public residing in a state of the United States and (B)
such Person has commenced operations of such online poker play pursuant to a
license granted pursuant to the laws, rules or regulations specifically
regulating such online poker play. For purposes of the foregoing, the following
shall not constitute "real money online poker play": (i) online poker authorised
by any Native American jurisdiction, (ii) online poker "play for fun" or online
poker that does not involve the wagering of cash, (iii) online poker conducted
on a beta, test or otherwise provisional basis, (iv) online poker operated by
any Governmental Authority, (v) online poker conducted pursuant to laws, rules
or regulations under which the Purchaser and each Group Company are de jure
ineligible (only for so long as such ineligibility continues) to receive the
requisite license, consent or approval to supply B2B or B2C real money online
poker, unless such ineligibility is a consequence of the acquisition of the
Shares by the Purchaser from the Seller and related transactions contemplated by
this Agreement;

"Unaudited Financial Statements" has the meaning ascribed to it in Schedule 4
Part 14;

"Unlimited Claims" shall mean Claims involving fraud or Wilful Breach and Claims
relating to Fundamental Warranties;

"Wilful Breach" shall mean, with respect to any Warranty or covenant, an action
or omission (including a failure to cure circumstances or the wilful concealment
of information) that the breaching party knows is or would constitute a breach
of such Warranty or covenant or any intentional breach or any Warranty or
covenant;

"Warranty" means a representation and warranty given, in the case of the Seller
pursuant to section 4 or, in the case of the Purchaser pursuant to section 6 and
Warranties means all of the respective representations and warranties of a Party
together; and

"Working Capital" has the meaning ascribed to it in section 3.2.10.
 
 
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1.2
Schedules

The Preamble and the Schedules attached hereto form an integral part of the
Agreement.

1.3
Information

Any reference to books, records or other information means, in any form,
including, but not limited to, paper, electronically-stored data, magnetic
media, film and microfilm.

1.4
Headings

The headings in this Agreement are for the purpose of convenience only and do
not affect its interpretation and are to be ignored in construing its terms.

1.5
Knowledge

Wherever reference is made to the knowledge of the Seller in this Agreement (or
to a matter that a Seller is aware of or to expressions of like impact), such
reference shall be interpreted and understood as the actual knowledge of Peter
Bertilsson, Peter Messner, Olivia Gorajewski and Martin Lerby or any member of
the Seller's or any Group Company’s management board at any time during the
thirty (30) day period prior to the date of this Agreement (the "Responsible
Managers"), the knowledge that each Responsible Manager would reasonably be
expected to obtain in the course of diligently performing his or her duties for
the Group Companies and the knowledge that each Responsible Manager would
reasonably be expected to have after conducting a reasonable inquiry of all
relevant employees of the Group Companies who such Responsible Managers should
reasonably believe would have actual knowledge of the matters represented.

2.
SALE AND TRANSFER OF SHARES

2.1
Upon the terms and conditions of this Agreement, the Seller hereby sells and
transfers the Shares to the Purchaser and the Purchaser hereby purchases and
accepts the transfer of the Shares from the Seller, upon the terms and
conditions of this Agreement, with effect as of Closing.

 
 
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2.2
The Seller herewith grants its approval to the sale and transfer of the Shares
as contemplated in section 2.1 above.

2.3
The transfer of the Shares agreed herein takes place with effect as of Closing
having been accomplished pursuant to section 9.2. No further document,
declaration or deed needs to be executed in order to effect the transfer of the
Shares at Closing.

2.4
The Shares are sold and transferred with all rights and obligations attaching to
them under Gibraltar law and the Articles of Association, including all rights
to dividends in relation to the Shares for all periods as from the Closing Date
onwards.

3.
CONSIDERATION, SECURED FUNDING

3.1
Purchase Price

As consideration for the sale and the transfer of the Shares, the Purchaser
shall pay to the Seller EUR 19,500,000 plus or minus (as provided in the
definition of Initial Adjustment Amount in section 3.2.10) the Initial
Adjustment Amount less the absolute value of the Estimated Net Debt (the
"Initial Purchase Price").

The Initial Purchase Price shall be paid on the Closing Date free and clear of
any cost, commission or other deduction (except for such costs which are imposed
on the Seller by its bank for receipt of the funds in the Seller's accounts) by
transfer to Seller's bank account communicated by the Seller to the Purchaser at
least five (5) Business Days prior to the Closing Date.

As additional consideration for the sale and the transfer of the Shares, the
Purchaser shall pay to the Seller the following additional consideration (the
"Contingent Consideration"), if and only if the Triggering Event occurs on or
before 1,826 days following the Closing Date, in the amount set forth below:

Period in which Triggering Event occurs
Contingent Consideration
On or before 730 days following the Closing Date
EUR 10,000,000
On or after 731 days following the Closing Date and on or before 1,095 days
following the Closing Date
EUR 7,000,000
On or after 1,096 days following the Closing Date and on or before 1,461 days
following the Closing Date
EUR 5,000,000
On or after 1,462 days following the Closing Date and on or before 1,826 days
following the Closing Date
EUR 3,000,000

 
 
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No Contingent Consideration will be paid if the Triggering Event does not occur
on or before 1,826 days following the Closing Date. The Contingent Consideration
shall be paid not later than thirty (30) days following the date on which the
Triggering Event occurs free and clear of any cost, commission or other
deduction (except for such costs which are imposed on the Seller by its bank for
receipt of the funds in the Seller's accounts) by transfer to the Seller's
account set forth in this section 3.1 (or such other account which may be
notified to the Purchaser by the Seller from time to time but not later than ten
(10) days prior to the due date of the Contingent Consideration). The Contingent
Consideration shall become due and payable once and only once, if at all.

3.2
Purchase Price Adjustment

3.2.1
As soon as reasonably possible following the Closing Date, the Initial Purchase
Price shall be adjusted by an amount (the "Adjustment Amount") as determined by
the Company's Auditor in the Auditor Statement as per any deviations of Working
Capital on the Closing Date from Estimated Working Capital and any deviations of
Net Debt on the Closing Date from Estimated Net Debt, determined as provided
below.

If Working Capital on the Closing Date is more than EUR 250,000 greater than
Normalised Working Capital, the "Actual Working Capital Increase" shall be the
amount by which Working Capital on the Closing Date is more than EUR 250,000
greater than Normalised Working Capital and the Actual Working Capital Decrease
shall be EUR 0 (nil).
 
If Working Capital on the Closing Date is more than EUR 250,000 less than
Normalised Working Capital, the "Actual Working Capital Decrease" shall be the
amount by which Working Capital on the Closing Date is more than EUR 250,000
less than Normalised Working Capital and the Actual Working Capital Increase
shall be EUR 0 (nil).
 
 
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If Working Capital on the Closing Date is neither more than EUR 250,000 greater
than Normalised Working Capital nor more than EUR 250,000 less than Normalised
Working Capital, the "Actual Working Capital Increase" and the "Actual Working
Capital Decrease" shall be EUR 0 (nil).
 
The Adjustment Amount shall be determined as follows:
 
increase by
the amount (if any) by which the Actual Working Capital Increase exceeds the
Estimated Working Capital Increase;
the amount (if any) by which the absolute value of the Estimated Working Capital
Decrease exceeds the absolute value of the Actual Working Capital Decrease;
decrease by
the amount (if any) by which the Estimated Working Capital Increase exceeds the
Actual Working Capital Increase;
the amount (if any) by which the absolute value of the Actual Working Capital
Decrease exceeds the absolute value of the Estimated Working Capital Decrease;
increase by
the amount of the difference between the absolute value of the Net Debt on the
Closing Date and the absolute value of Estimated Net Debt (if Net Debt on the
Closing Date is greater than Estimated Net Debt);
decrease by
the amount of the difference between the absolute value of the Net Debt on the
Closing Date and the absolute value of Estimated Net Debt (if Net Debt on the
Closing Date is less than Estimated Net Debt)

For the avoidance of doubt, with respect to references to Net Debt and Estimated
Net Debt above, a negative number with a lesser absolute value is greater than a
negative number with a greater absolute value (e.g., -11 is greater than -12).
 
Any individual position reflected in the Auditor Statement shall be expressed in
Euros and, to the extent recorded in the books and records of the Group
Companies in currencies other than Euros, be converted at the exchange rate
published by the European Central Bank at
http://www.ecb.int/stats/exchange/eurofxref/html/index.en.html on the relevant
reference date.
 
 
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3.2.2
The Company's Auditor shall inform the Parties in the Auditor Statement about
the Adjustment Amount. The Auditor's Statement shall be delivered to the Parties
within 30 (thirty) Business Days after the Closing Date. The Parties shall
procure that the Company's Auditor, as well as one auditor designated by the
Purchaser (the "Purchaser’s Auditor" which may be the same as the Company’s
Auditor) and one auditor designated by the Seller (the "Seller’s Auditor"), are
each given all such assistance and access to books and records as they may
reasonably request in writing.

3.2.3
The Auditor Statement shall be prepared on the basis of management accounts and
closing balance sheet as per the Closing Date.

3.2.4
Unless within a period of 20 (twenty) Business Days after receipt of the
Auditor's Statement, either Party notifies the other Party in writing of any
disagreement or difference of opinion relating to the Auditor's Statement, the
Parties shall be deemed to have accepted the Auditor's Statement as accurate.

3.2.5
If, within the period of 20 (twenty) Business Days referred to in the
paragraph 3.2.3 above, either Party has any disagreement or difference of
opinion relating to the Auditor's Statement, it shall serve notice to the other
Party ("Notice of Disagreement") stating the nature and quantum of the proposed
adjustments to the Auditor's Statement and the reasons for the same.

3.2.6
If the Seller and the Purchaser are able to resolve such disagreement or
difference of opinion within 30 (thirty) Business Days of the date that the
Notice of Disagreement is deemed to be served, the Parties shall be deemed to
have accepted as accurate the Auditor's Statement as adjusted to the extent
necessitated by the Parties’ resolution. If the Seller and the Purchaser are
unable to reach an agreement within 30 (thirty) Business Days of the date that
any Notice of Disagreement is deemed to be served, the matter in dispute shall
on the application of either the Seller or the Purchaser be referred to the
decision of an independent accountant, together with the position of the
Purchaser’s Auditor with respect to each proposed adjustment and the position of
the Seller’s Auditor with respect to each proposed adjustment, with the request
that the independent accountant shall, within 30 (thirty) Business Days of
receiving the reference, make, with respect to each proposed adjustment, in
light of any views expressed by the Seller and the Purchaser, its own
independent determination of such adjustments which reflect the financial
position of the Group at the Closing. The Seller and the Purchaser shall procure
that the independent accountant is given all such assistance and access to books
and records as it may reasonably request. The decision of the independent
accountant shall, in the absence of fraud or manifest error, be final and
binding on all Parties. The Parties to this Agreement hereby waive any and all
claims against the independent accountant with respect to the contents of its
decision.

 
 
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3.2.7
The independent accountant shall be appointed by the President for the time
being of the Gibraltar Society of Chartered and Certified Accountants upon
request of either the Seller or the Purchaser. The costs of the independent
accountant shall be borne by the Parties in accordance with the degree of their
success as determined by the independent accountant. The Parties shall instruct
the independent accountant at the outset to determine the apportionment of his
costs at the conclusion of the matter in accordance with this principle.

3.2.8
Provided that the Adjustment Amount is negative, then the Initial Purchase Price
shall be reduced accordingly (the "Decrease") and, provided that the Adjustment
Amount is positive, then the Initial Purchase Price shall be increased
accordingly (the "Increase").

3.2.9
In the event of a Decrease, the Seller shall pay to the Purchaser, and in the
event of an Increase, the Purchaser shall pay to the seller the Adjustment
Amount within 10 (ten) Business Days following the date on which such amount is
agreed upon by the Parties or, in case of disagreement, the decision of the
independent accountant becomes final and binding on them. The Adjustment Amount
shall be payable in EUR, in irrevocable and immediately available funds with
value date on the date of the wire transfer to the bank account set forth in
section 3.1 (in the event of an Increase) or communicated in writing by the
recipient of the Adjustment Amount to the respective other Party at least five
(5) Business Days prior to the payment date.

3.2.10
For purposes of this section 3.2, the "Initial Adjustment Amount" means an
amount as calculated below:

 
 
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(a)
where Estimated Working Capital is more than EUR 250,000 greater than Normalised
Working Capital, the amount by which Estimated Working Capital is more than EUR
250,000 greater than Normalised Working Capital, such amount to be expressed as
a positive number (the "Estimated Working Capital Increase"; and the Estimated
Working Capital Decrease shall be EUR 0 (nil)); or

 
(b)
where Estimated Working Capital is more than EUR 250,000 less than Normalised
Working Capital, the amount by which Estimated Working Capital is more than EUR
250,000 less than Normalised Working Capital, such amount to be expressed as a
negative number (the "Estimated Working Capital Decrease"; and the Estimated
Working Capital Increase shall be EUR 0 (nil)); or

 
(c)
where Estimated Working Capital is neither more than EUR 250,000 greater than
Normalised Working Capital nor more than EUR 250,000 less than Normalised
Working Capital, EUR 0 (nil) in which case the Estimated Working Capital
Increase and the Estimated Working Capital Decrease shall be EUR 0 (nil),

and where such amount is a positive number, such amount shall be added to EUR
19,500,000 as part of the calculation of the Initial Purchase Price set out in
the first sentence of section 3.1 and where such amount is a negative number,
the absolute value of such amount shall be subtracted from EUR 19,500,000 as
part of the calculation of the Initial Purchase Price set out in the first
sentence of section 3.1.

"Estimated Net Debt" means the Seller’s good faith estimate of Net Debt as of
the Closing, as set forth in a written statement delivered to the Purchaser not
later than three Business Days prior to the Closing.

"Estimated Working Capital" means the Seller’s good faith estimate of Working
Capital as of the Closing, as set forth in a written statement delivered to the
Purchaser not later than three Business Days prior to the Closing.

 
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"Net Debt" means the aggregate net debt of the Business, including the line
items set out in Schedule 3.1 with an asterisk in the column captioned "Net
Debt" (together with any similar or equivalent accounts created in the future)
and including the following: cash at bank and on hand, receivables of the Group
Companies pursuant to the CQR Agreement, processor clearing accounts,
receivables from Seller or any of its Affiliates, payables to Seller or any of
its Affiliates, Network Security Deposits, payables of the Group Companies
pursuant to the CQR Agreement, merchant clearing accounts, bettors' clearing
accounts. For the avoidance of doubt, Net Debt shall include the following
items, if required to be accrued in accordance with International Financial
Reporting Standards at Closing:

(a) all Group Balances;

(b) all extraordinary bonuses conditioned upon continued employment ("Retention
Bonuses") payable to current or former employees or consultants of any Group
Company that become due and payable prior to, concurrent with or immediately
following the Closing, but shall exclude any such payments that become due and
payable after the Closing and other than immediately following the Closing;

(c) all extraordinary bonuses payable to employees or consultants of any Group
Company with regard to the Kahnawake Migration Activities to the extent not
previously paid;

(d)              all extraordinary payments to Poker Core employees or
consultants to the extent not previously paid;

(e)              all Pre-Closing Termination Costs to the extent not previously
paid and any Pre-Closing Termination Costs that are payable after the Closing
greater than EUR 35,000 or such higher amount as may be agreed in writing with
the Purchaser prior to Closing;

(f) all obligations (including the principal amount thereof or, if applicable,
the accreted amount thereof and the amount of accrued and unpaid interest
thereon) of the Group Companies, whether or not represented by bonds,
debentures, notes or other securities (whether or not convertible into any other
security), for the repayment of money borrowed, whether owing to banks,
financial institutions, on equipment leases or otherwise;
 
 
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(g) all deferred indebtedness of the Group Companies for the payment of the
purchase price of property or assets purchased (other than current accounts
payable incurred in the ordinary course of business);

(h) all obligations of the Group Companies to pay rent or other payment amounts
under a lease which is required to be classified as a capital lease or a
liability on the face of a balance sheet prepared in accordance with
International Financial Reporting Standards;

(i) all outstanding reimbursement obligations of the Group Companies with
respect to letters of credit, bankers’ acceptances or similar facilities issued
for the account of any Group Company;

(j) all guaranties, endorsements, assumptions and other contingent obligations
of the Group Companies in respect of, or to purchase or to otherwise acquire,
indebtedness of others; and

(k) all premiums, penalties, fees, expenses, breakage costs and change of
control payments required to be paid or offered in respect of any of the
foregoing on prepayment (regardless if any of such are actually paid), as a
result of the consummation of the transactions contemplated by this Agreement.

For the avoidance of doubt, cash as included in Net Debt shall exclude amounts
deposited with Governmental Authorities in connection with Gaming Approvals or
applications, and the Stockholm Office Security Deposit.

"Normalised Working Capital" means EUR 500,000 (such amount having been agreed
by the Parties).

"Working Capital" means the aggregate working capital of the Business comprising
the sum of Current Assets and Current Liabilities, including the line items set
out in Schedule 3.1 with an asterisk in the column captioned "Working Capital"
(together with any similar or equivalent accounts created in the future).
 
 
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3.3
Default Interest

If any sum due for payment in accordance with this Agreement is not paid on the
due date for payment, the Party in default shall pay default interest at three
months LIBOR plus 500 bps per annum (but not less than 7% per annum) on that sum
from but excluding the due date to and including the date of actual payment, to
the respective other Parties. Any such default interest shall be calculated and
compounded with the principal amount due and outstanding on a daily basis.

3.4
No Right to Set-Off

Subject to the following sentence, any right of the Parties to set-off and/or
withhold payments due under this Agreement is hereby expressly waived and
excluded. The Purchaser shall be entitled to set-off and/or withhold payments
due under this Agreement provided that the relevant claim is a Settled Claim.

3.5
Parent Guarantees

Each Party, prior to or at the Signing Date, shall deliver to the respective
other Party a parent guarantee issued by Shuffle Master, Inc. in the case of the
Purchaser and by bwin.party digital entertainment plc in the case of the Seller,
covering all of the relevant Party's obligations hereunder, to the benefit of
the respective other Party in form and substance as set out in Schedule 3.5.

3.6
Network Security Deposits

In this section 3.6, the following definition shall apply:

"Network Security Deposits" means any funds deposited with any Group Company (or
any Person nominated by them) by Business Customers to be held by or on behalf
of any Group Company and which are so held as security against any Business
Customer's failure to pay funds into the Business which would be required to
facilitate the operation of an orderly network.
 
 
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3.6.1
The Seller will indemnify the Purchaser from and against the amount by which the
amount of Network Security Deposits taken into account in the calculation of Net
Debt is less than the actual amount of Network Security Deposits owed by the
relevant Group Companies to the relevant Business Customers.  Seller’s
indemnification obligation pursuant to this section 3.6.1 shall be limited to
the sum of the Initial Purchase Price (as adjusted pursuant to section 3.2) plus
any portions of the Contingent Consideration received by the Seller.

4.
WARRANTIES OF SELLER

The Seller hereby represents and warrants to the Purchaser that, subject to the
limitations set out in section 6, the statements set forth in Schedule 4 are
true and accurate as of the Signing Date, as of the date of the Closing Notice
and as of the Closing Date, unless Fairly Disclosed.

5.
GENERAL MATTERS RELATING TO WARRANTIES AND COVENANTS

5.1
General

5.1.1
The Seller does not represent or make any other representation or warranty other
than set forth in section 4. The Seller shall not be liable for any other
representation or warranty, expressed or implied, or for the absence of the
existence of any other circumstances, matters or events relating to the Shares
and the Group Companies, each of their respective businesses or any other
matters. The Purchaser confirms that it does not rely on any other
representations or warranties from the Seller than the Warranties set forth in
section 4 of this Agreement.

 
 
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5.1.2
Subject to the provisions of this Agreement, the Seller shall indemnify the
Purchaser or, at the Purchaser's sole discretion, the relevant Group Company
from and against any Loss which the Purchaser or any of the Group Companies
suffer as result of (i) any breach of a Warranty or of any covenant of the
Seller contained in this Agreement, (ii) any Specifically Indemnifiable Matter,
or (iii) the failure of Seller to obtain the third party consent expressly set
forth in Schedule 7.1.7 (Third Party Consents). Except as expressly provided in
this Agreement, this indemnification shall be the sole remedy of the Purchaser
against the Seller for any breach of a Warranty made herein by the Seller. For
the purpose of a claim under this clause 5.1.2 the Purchaser shall not be
required to demonstrate that the Seller was at fault and the Seller shall have
no defence on the basis of the absence of fault. With respect to any fine
imposed on or third party claim made against any Group Company as a result of
any violation of any gaming-related order, judgment, decree, law, rule, or
regulation by Seller or any Group Company, which violation occurred both prior
to the Closing and following the Closing, the amount of such fine imposed on or
third party claim made against any Group Company subject to Seller’s
indemnification obligation shall be limited to the portion of such fine imposed
on or third party claim made against any Group Company that is directly related
to such violation prior to the Closing, where such apportionment shall take into
account, if applicable, (i) the relative periods of time prior to the Closing
and following the Closing during which such violation persisted, (ii) the
relative quantity of discrete violations, transactions or revenues derived as a
result of such violation prior to the Closing and following the Closing, or
(iii) such other equitable considerations as are appropriate to effect a
reasonable apportionment. Any disputes as to such apportionment shall be settled
by arbitration pursuant to section 14.

5.1.3
If the Purchaser gains knowledge of a Claim, the Purchaser shall give the Seller
written notice describing in reasonable detail the basis for such Claim within
thirty (30) Business Days thereof (a "Claim Notice"). The Claim Notice shall not
limit in any way the Purchaser’s rights or remedies and may be updated at any
time by the Purchaser’s delivery of an updated Claim Notice. Upon delivery of a
Claim Notice, the following shall apply:

 
(a)
If the breach of Warranty or covenant is capable of remedy in kind, the Seller
shall, at its sole and unfettered discretion, be entitled to remedy in kind such
breach, at its sole cost and expense, within 30 days after the date on which
such Claim Notice is served on the Seller or amended. Such breach shall only be
deemed to have been remediated if Seller’s actions put the Purchaser into the
same position as had there been no breach of such Warranty or covenant. Upon
remediation in kind of such breach, the Claim Notice shall be deemed withdrawn.
Alternatively, the Seller may accept a Claim by delivering to the Purchaser a
notice of acknowledgement within 30 days after the date on which the Claim
Notice is served on the Seller. Upon receipt of such notice, the Purchaser shall
be entitled to recovery of the full amount of any Loss subject to the Claim and
such Claim shall be deemed settled (a "Settled Claim"). The full amount of Loss
suffered or sustained in connection with a Settled Claim shall be recoverable,
regardless of any materiality or Material Adverse Effect qualification of the
breached Warranty or covenant.

 
 
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(b)
In the case the Seller does not acknowledge or, if the breach of Warranty or
covenant is capable of remedy in kind, remedy a Claim within 30 days after the
date on which the Claim Notice is served on the Seller, the Seller and the
Purchaser shall attempt in good faith to agree upon the rights of the Parties
with respect to the Claim, provided that the Parties may limit their disclosures
to each other pursuant to good faith efforts to preserve the attorney-client
privilege or any other applicable privileges. If the Parties reach agreement
with respect to a pending Claim, a memorandum setting forth such agreement shall
be signed by the Parties and any portion of the Claim covered by such agreement
that is resolved in the Purchaser’s favour shall become a Settled Claim. If no
such agreement is reached after a period of thirty (30) days, then the Purchaser
may demand arbitration of the matter and the matter shall be settled by
arbitration pursuant to section 14. The decision of the arbitral tribunal shall
be final and binding upon the Parties and any portion of the Claim that is
resolved in the Purchaser’s favour shall become a Settled Claim.

 
(c)
The Purchaser shall have the right to recover the amount of any Settled Claim
directly from the Seller, which the Seller shall pay to the Purchaser within
thirty (30) days of written demand therefor, or by set-off against the
Contingent Consideration, at the Purchaser’s option.

5.1.4
The amount of any Claim shall in no event exceed the amount required to put the
Purchaser into the same position as had there been no breach of such Warranty or
covenant.

5.1.5
Where the Seller has made a payment to the Purchaser in relation to any Claim
and the Purchaser actually recovers (whether by insurance, payment, discount,
credit, relief or otherwise) from a third party a sum which indemnifies or
compensates the Purchaser (in whole or in part) in respect of the liability or
Loss which was the subject of such Claim, the Purchaser shall (i) promptly
notify the Seller of the fact and provide such information as the Seller may
reasonably require and (ii) pay to the Seller as soon as practicable after
receipt a portion of the amount recovered from the third party (net of taxation
and less any reasonable costs of recovery) equal to the amount paid to the
Purchaser by the Seller in relation to such Claim. The Purchaser shall not be
required to take any action to seek recovery from any third party. To the extent
that the relevant Group Company is entitled to recover from any third party a
sum which indemnifies or compensates the Purchaser (in whole or in part) in
respect of the liability or Loss which was the subject of such Claim, the Group
Company shall, at its option, either (i) take all reasonable steps or
proceedings as may be necessary to achieve such recovery or (ii) assign to
Seller such entitlement for nil consideration.

 
 
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5.1.6
The Seller shall not be liable for any Claims to the extent that it would not
have arisen but for, or to the extent that it has been increased (but only the
amount of such increase) or not reduced (but only the amount of such absence of
reduction) as a result of, any voluntary act, omission or transaction carried
out before Closing by any Group Company at the written direction or written
request of the Purchaser.

5.2
Specific Other Aspects of Claims

5.2.1
Limitation in Time

 
(a)
The Seller’s liability in relation to any Claim shall be reduced or excluded, if
and to the extent that the Purchaser failed to comply with its obligations under
clause 5.1.3, first sentence, and such failure has impaired the ability of the
Seller to avoid or mitigate the Loss of the Purchaser or the Group Companies.

 
(b)
Claims based on a breach of any of the Warranties pursuant to section 4 of this
Agreement, other than breaches involving fraud or Wilful Breach shall become
time-barred (a) with the expiration of eighteen (18) months after the Closing
Date and (b) in case of breach of any of the Warranties pursuant to Schedule 4
section 6 (Taxes) with the expiration of three (3) months after expiry of the
statute of limitation period applicable to the relevant Tax, unless a Claim has
been properly initiated in accordance with this section 5 by the Purchaser no
later than such date. No specific limitation in time (other than any resulting
from applicable law) applies to the Fundamental Warranties or any Claims based
on any breach involving fraud or Wilful Breach. Claims subject to a Claim Notice
delivered by the Purchaser to the Seller on or before the aforementioned dates
of expiry shall survive until such Claims have been resolved.

 
 
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5.2.2
Due Diligence having taken place

The Purchaser has been given the possibility to conduct a comprehensive due
diligence on the Group Companies and their business prior to entering into this
Agreement, as a result of which the Parties have agreed on the wording of
specific Warranties of the Seller as set forth in section 4 above.
Notwithstanding the foregoing, neither any Warranty nor any Claim shall be
deemed to be qualified, limited or otherwise affected in any way by any
investigation conducted by or on behalf of the Purchaser prior to entering into
this Agreement or by the fact that the Purchaser (i) had knowledge of any fact,
matter, event or circumstance, whether before or after execution of this
Agreement or (ii) waived or is deemed to have waived any condition to the
Closing, except as expressly provided in this Agreement.

5.2.3
Limitation of Seller's Liability in Amount

 
(a)
Other than for Unlimited Claims, Seller shall not be liable for any individual
Claim unless the liability in respect of such Claim exceeds EUR 20,000 in which
event the Seller shall be liable for the full amount and not merely the excess
over EUR 20,000 ("Hurdle"). For the purpose of this paragraph the amount of
Claims resulting from the same or similar facts, matter, event or circumstance
shall be added together.

 
(b)
Other than for Unlimited Claims, Seller shall not be liable for any Claim unless
the aggregate amount of the liability of the Seller for all such Claims exceeds
EUR 125,000 in which event the Seller shall be liable for the full amount and
not merely the excess over EUR 125,000 ("Basket"). Any Claims not exceeding the
Hurdle shall be calculated towards (and thus reduce) the Basket.

 
(c)
Other than for Unlimited Claims or Specified Claims, Seller's liability for
breach of any of the Warranties pursuant to section 4 of this Agreement shall be
limited to 20% (per centum) of the sum of the Initial Purchase Price (as
adjusted pursuant to section 3.2) plus any portions of the Contingent
Consideration previously received by the Seller. Seller’s liability for breach
of any of the Specified Warranties pursuant to section 4 of this Agreement shall
be limited to 50% (per centum) of the sum of the Initial Purchase Price (as
adjusted pursuant to section 3.2) plus any portions of the Contingent
Consideration previously received by the Seller.

 
 
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(d)
Other than Claims involving fraud or Wilful Breach, Claims for breach of or
non-compliance with any of the Fundamental Warranties shall be limited to the
sum of the Initial Purchase Price (as adjusted pursuant to section 3.2) plus any
portions of the Contingent Consideration previously received by the Seller. None
of the aforegoing limitations shall apply to Claims involving fraud or Wilful
Breach which shall be unlimited.

5.2.4
Further Limitations

 
(a)
The Seller shall not be liable in respect of any Claim to the extent that such
Claim is attributable to, or such Claim is increased as a result of, any
legislation not in force on the Closing Date or to any change of law,
regulation, directive, requirement or administrative practice.

 
(b)
The Seller shall not be liable for any Claim to the extent that such Claim
arises or is increased as a result of any change made after the Closing Date in
any accounting or taxation policies or practice, or the length of any accounting
period for tax purposes.

 
(c)
The Seller shall not be liable for any Claim to the extent that such Claim
arises or is increased as a result of any action by any Group Company between
the Signing Date and the Closing Date at the Purchaser’s express written
request.

5.2.5
Disclosure

Except with respect to Specifically Indemnifiable Matters, the Seller shall not
be liable for any Claim in respect of any fact, matter, event or circumstance to
the extent that such fact, matter, event or circumstance has been Fairly
Disclosed.

5.2.6
Obligation to Mitigate

Following the Closing, Purchaser shall, in accordance with any applicable
obligations under the ABGB, be responsible to mitigate any Loss or damage which
it may suffer in consequence of any breach by the Seller of the terms of the
Agreement or any fact, matter, event or circumstance giving rise to a Claim
subject to the following sentence. Purchaser's responsibility to mitigate (as
set out in the preceding sentence) shall not include any obligation to take any
action in excess of that required by the applicable provisions of the ABGB,
including incurring any out-of-pocket expense unless advanced by the Seller.
 
 
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5.2.7
Procedure for Third Party Claims

If the Purchaser receives written notice of any claim or potential claim by a
third party (a "Third Party Claim") that the Purchaser reasonably believes may
result in a Claim against the Seller hereunder, the Purchaser shall:

 
(a)
promptly (and in any event within ten (10) Business Days of it) give notice of
the Third Party Claim to the Seller and ensure that the Seller and its
representatives are given all reasonable information and facilities to
investigate it, subject to the Purchaser’s right to limit its disclosures
pursuant to good faith efforts to preserve the attorney-client privilege or any
other applicable privileges;

 
(b)
not (and ensure that each of the Group Companies shall not) admit liability or
make any agreement or compromise in relation to the Third Party Claim without
prior written approval of the Seller. The Seller shall give its approval (such
approval not to be unreasonably withheld) or disapproval within ten (10)
Business Days from receipt of such notice, otherwise approval by the Seller
shall be deemed given; the Purchaser may compromise or settle any Third Party
Claim in its sole and absolute discretion; provided, that except with the
approval of the Seller or the deemed approval by the Seller, no settlement or
compromise of such Third Party Claim shall be determinative of the amount of any
Claim against the Seller;

 
(c)
(subject to the Purchaser or any of the Group Companies being indemnified by the
Seller against all reasonable out of pocket costs and expenses incurred in
respect of that Third Party Claim) ensure that it and its Affiliates shall (i)
consult with the Seller regarding the Purchaser's decision to avoid, resist,
dispute, appeal, compromise or defend the Third Party Claim, provided that the
Purchaser shall have the right in its sole discretion to conduct the defence of
or compromise of the Third Party Claim, and (ii) permit the Seller (if it elects
to do so and at its expense) to participate in, but not determine or conduct,
all proceedings and/or negotiations arising in connection with the Third Party
Claim; and (iii) provide copies of all pleadings, notices and communications
with respect to the Third Party Claim subject to the Purchaser’s right to limit
its disclosures pursuant to good faith efforts to preserve the attorney-client
privilege or any other applicable privileges.

 
 
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Any Claim that the Purchaser may otherwise have arising from a Third Party Claim
shall be reduced or excluded, if and to the extent that the Purchaser failed to
comply with its obligations set forth above and such failure has impaired the
ability of the Seller to avoid or mitigate the Loss of the Purchaser or the
Group Companies.

5.3
No Double Remedies

The Purchaser shall not be entitled to recover more than once in respect of the
same Loss suffered. If any single Loss suffered by the Purchaser results in the
breach of multiple Warranties, the Purchaser shall have the right to select
which Warranty it wishes to assert a Claim with respect to.

6.
WARRANTIES OF PURCHASER

The Purchaser herewith represents and warrants to the Seller that:

6.1
Due incorporation

The Purchaser is an entity duly organized and validly existing under the laws of
Nevada and has full requisite power and authority to carry on its business as it
is currently conducted.

6.2
Authority

The Purchaser has all requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder and, subject to the
conditions as provided in this Agreement, to consummate the transactions
contemplated by this Agreement and to perform all of the Purchaser's obligations
under this Agreement in particular the obligation to timely pay the
consideration pursuant to section 3.
 
 
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6.3
No violation

Neither the execution, delivery nor performance of this Agreement by the
Purchaser nor the consummation of the transactions contemplated hereby will
conflict with, or result in any violations of, the articles of incorporation or
by-laws of the Purchaser.

6.4
Funding

The Purchaser either has sufficient cash resources or has obtained sufficient
and unconditional financing for the consummation of the transaction contemplated
by this Agreement, in particular the payment of the Initial Purchase Price and
the Contingent Consideration, and either has sufficient cash resources or has
taken all measures commercially reasonable to assure financing of payment of the
Adjustment Amount, if applicable.

6.5
No antitrust clearances

Neither the execution, delivery or performance of this Agreement by the
Purchaser nor the consummation of the transactions contemplated hereby requires
any consent, clearance, notification, permission or waiver under the laws,
regulations or practices applied by any national or supranational antitrust or
merger control authority to which the Purchaser is subject.

6.6
Expiration

The Warranties of the Purchaser and any remedy of the Seller in respect of such
Warranties shall expire eighteen (18) months following the Closing.
 
 
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7.
CONDITIONS PRECEDENT TO CLOSING

7.1
Conditions Precedent

(A) The obligation of the Purchaser to consummate the transaction contemplated
by this Agreement is subject to the satisfaction, on or prior to the Closing
Date, of each of the following conditions (the conditions set forth in sections
7.1(A) and 7.1(B) collectively, the "Conditions Precedent"), any of which may be
waived in writing by the Purchaser:

7.1.1
Accuracy of Warranties

Each of the Warranties of the Seller set forth in this Agreement shall be true
and accurate in all material respects (except for Warranties that are qualified
by their terms by materiality or Material Adverse Effect, which Warranties as so
qualified shall be true and accurate in all respects) both at the Signing Date
and at the date of the Closing Notice as if they had been repeated at the date
of the Closing Notice. In the event that the Purchaser (i) had actual knowledge
of the falsehood or inaccuracy of any Warranty at the date of the Closing
Notice, (ii) waives the Condition Precedent in this section 7.1.1 with respect
to such falsehood or inaccuracy, and (iii) proceeds with the Closing hereunder,
the Seller shall not have any liability in relation to any Claim in respect of
such falsehood or inaccuracy.

7.1.2
Compliance with Covenants

The Seller shall have performed and complied, and with respect to sections 8.1
and 8.2 materially performed and complied, with all covenants and obligations in
this Agreement that are required to be performed or complied with by it on or
before the date of the Closing Notice.

7.1.3
Kahnawake Migration Activities

All Kahnawake Migration Activities shall have been completed to the reasonable
satisfaction of the Purchaser.
 
 
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7.1.4
No Material Adverse Change

No Material Adverse Change shall have occurred.

7.1.5
No Legal Restraints

No Governmental Authority shall have issued, enacted or adopted or threatened to
issue, enact or adopt any order, decree, injunction, legislation, action,
proceeding, ruling or judgment that (a) prevents the sale and transfer of the
Shares as provided hereunder, (b) prevents the enforceability of the key terms
and provisions of this Agreement, (c) prevents the continued conduct of each
Group Company’s operations following the Closing in the same manner in which it
was conducted on the Signing Date and on the Closing Date except as expressly
contemplated by this Agreement or (d) prevents the Purchaser or any Group
Company from owning, using, controlling or operating any of the products,
properties or assets of any Group Company after the Closing Date or seeking a
divestiture of any such products, properties or assets. No litigation or
proceeding shall have been instituted or be pending against the Seller which
could reasonably be expected to have a Material Adverse Effect.

7.1.6
Governmental Authority Consents

There will have been obtained at or prior to the Closing the permits,
authorizations and approvals by any gaming Regulatory Authority set forth on
schedule 7.1.6 which requires approval of the transactions contemplated by this
Agreement and the Services Agreement dated January 12, 2012 between bwin.party
management (Gibraltar) Limited and Ongame Network Limited shall remain in full
force and effect without any amendment following the Signing Date.

7.1.7
Regulatory Approval; License Surrenders

The relevant Group Companies shall have obtained the permits, authorizations and
approvals set forth on schedule 7.1.7 (Gaming Permits). The relevant Group
Companies shall have surrendered all licenses or approvals specified on schedule
7.1.7 (License Surrenders).
 
 
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7.1.8
Gaming Regulatory Measures

(a) If and only after all of the other Conditions Precedent to the obligation of
the Purchaser have been satisfied or waived, and the Purchaser has provided
written notice of the same to the Seller (the "Closing Notice"), the following
clauses (b) through (f) of this section 7.1.8 shall constitute the final
Condition Precedent to the obligation of the Purchaser. Until such time as all
other Conditions Precedent to the obligation of the Purchaser have been
satisfied or waived, the following clauses (b) through (f) of this section 7.1.8
shall have no effect.

(b) The relevant Group Companies shall have terminated their contractual
relationships and ceased doing business with each of the Persons specified by
any Gaming Regulatory Authority having jurisdiction over the Purchaser or any
consent, license, permit, grant, franchise, approval, qualification or other
authorization held by the Purchaser (each, a "Dissociation"), provided that the
Purchaser (i) identifies such Person to the Seller in writing, and (ii) provides
the Seller with such explanation as to the reason for the required dissociation,
subject to any constraints or limitations on disclosure imposed by such
Governmental Authority. The Seller shall indemnify the Purchaser or, at the
Purchaser's sole discretion, the relevant Group Company from and against fifty
per centum (50%) of any damages, penalties and costs paid after the Closing Date
due to such termination of relationships, unless such payment is reflected in
the Adjustment Amount, which indemnification shall be limited to 20% (per
centum) of the sum of the Initial Purchase Price (as adjusted pursuant to
section 3.2) plus any portions of the Contingent Consideration previously
received by the Seller.

(c) The relevant Group Companies shall have provided notices of termination or
intent not to renew contractual arrangements with the Persons specified on
schedule 7.1.8 (Notices of Dissociation).

(d) The contracts with the Persons specified on schedule 7.1.8 shall have been
amended in the manner set forth on schedule 7.1.8 (Amended Contracts).

(e) The Partner Agreement dated December 14, 2011 between Ongame Network Ltd.
and CQR Payment Solutions GmbH (the "CQR Agreement") shall remain in full force
and effect without any amendment following the Signing Date.
 
 
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(f) The relevant Group Companies shall have implemented, or caused its Business
Customers to implement (such implementation to be in accordance with the terms
of any geo-blocking provisions in the relevant Group Companies’ contracts with
such Business Customers, if such provisions exist, and in a commercially
reasonable manner otherwise), geo-blocking using a geo-filtering mechanism that
ensures to the highest industry standards from time to time that no Customer is
accessing the service from an IP address originating from within any of the
jurisdictions set forth on schedule 7.1.8 (Filtered Jurisdictions).

7.1.9
FIRPTA Certification

The Seller shall deliver certifications dated not more than 10 days prior to the
Closing Date, signed by each of the Group Companies, to the effect that neither
the Shares nor any of the shares of the Group Companies are "United States real
property interests" within the meaning of Section 897 of the United States
Internal Revenue Code.

7.1.10
Reduction in Force

The Reduction in Force shall have been completed.

7.1.11
Delivery of Audited Financial Statements

The Seller shall have delivered to Purchaser the audited financial statements of
the Group as of and for the fiscal year ended December 31, 2011 together with
all notes thereto and a report thereon by KPMG (the "Audited Financial
Statements").

(B) The obligation of the Seller to consummate the transaction contemplated by
this Agreement is subject to the satisfaction, on or prior to the Closing Date,
of each of the following conditions, any of which may be waived in writing by
the Seller:
 
 
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7.1.12
Accuracy of Warranties

Each of the Warranties of the Purchaser set forth in this Agreement shall be
materially true and accurate (without regard to any qualifications therein as to
materiality or Material Adverse Effect) both at the Signing Date and at the
Closing Date as if they had been repeated at the Closing Date.

7.1.13
No Legal Restraints

No Governmental Authority shall have issued, enacted or adopted or threatened to
issue, enact or adopt any order, decree, injunction, legislation, action,
proceeding, ruling or judgment that (a) prohibits or renders illegal the sale
and transfer of the Shares as provided hereunder, or (b) prevents the
enforceability of the key terms and provisions of this Agreement.

7.2
Long-Stop Date

This Agreement shall expire and shall have no further effect on the Parties
(except for sections 11 (Announcements), 13 (Arbitration) and 15
(Miscellaneous), which shall continue to apply and further except for liability
resulting from the breach of any obligations existing hereunder prior or
relating to Closing, which liabilities shall also continue to exist) unless
Closing has occurred on or prior to nine (9) months as from the Signing Date
(such date, the "Long-Stop Date"), unless the Long-Stop Date is extended by
agreement between the Parties.

7.3
Efforts to Fulfil the Conditions Precedent

7.3.1
The Parties shall use their reasonable efforts (which on the part of the Seller
includes giving appropriate instructions to the Company) to ensure that all
Conditions Precedent will be timely fulfilled and shall co-operate with each
other to the extent reasonably required in order to fully effectuate the
transactions contemplated herein; provided however that Seller shall not be
obligated to take any action that would have a negative impact on Seller’s
business (other than the Business).

 
 
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7.3.2
The Purchaser shall promptly notify the Seller sufficiently in advance of any
notification, submission, response or other communication (excluding
communications of an administrative nature) which it proposes to make or submit
to any Governmental Authority; provided this only relates to documentation and
information provided to a Governmental Authority which regulates the Purchaser’s
or any of its Affiliates’ business and further that the Purchaser shall not be
required to provide the Seller with any confidential information or business
secrets, such information to be provided to external counsel for the Seller on a
counsel-to-counsel basis only. The Purchaser agrees to take due consideration of
any reasonable comments which the Seller may have in relation to any such
notification, submission, communication or response to a request for further
information prior to making the relevant notification, submission, communication
or response (provided that any such comments have been made without undue delay
by the Seller upon receipt of reasonable notice from the Purchaser). The
Purchaser further agrees to keep the Seller fully informed as to the progress of
any notification of and the results of all meetings with any Governmental
Authority or other persons or bodies which regulates the Purchaser’s or any of
its Affiliates’ business or any of the Group Companies (unless prohibited by the
authority or other person) in connection with the transactions contemplated
herein. Notwithstanding the foregoing, the Purchaser shall have no obligations
under this Section 7.3.2 (other than providing the Seller with advance copies
and an opportunity to comment on any statements regarding the Seller) with
respect to any notification, submission, response or other communication
relating to any individual who is an officer, director or employee of the
Purchaser or its Affiliates. The Seller and the Purchaser covenant to use their
respective reasonable endeavours to procure that the conditions set out under
section 7.1 above are fulfilled as soon as reasonably practicable after the
Signing Date.

8.
PRE-CLOSING COVENANTS

8.1
Conduct

Except as otherwise provided for in this Agreement, the Seller shall procure to
the extent legally possible that, from the Signing Date and until the Closing or
termination of this Agreement (whichever is relevant), none of the Group
Companies will, without the written consent of the Purchaser (which may include
electronic mail from an executive officer of the Purchaser) (which shall not be
unreasonably withheld or delayed):

 
(a)
amend or propose to amend its articles of association or by-laws;

 
 
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(b)
split, combine or reclassify any outstanding shares of its registered capital,
or declare or pay any dividends or make any other distribution to the holders
thereof;

 
(c)
issue or sell any options, warrants, convertible securities or other rights
(contingent or otherwise) of any character to purchase, subscribe to, or
otherwise acquire any shares in a Group Company, or in any way reclassify any
shares of a Group Company;

 
(d)
merge or consolidate with or into any other corporation or change in any manner
the rights of its capital stock or the character of its business or pass a
resolution relating to voluntary liquidation or winding up or take any action in
relation to any of the foregoing.;

 
(e)
acquire (by merger, consolidation or acquisition of stock or assets) any
corporation, partnership or other business organization or division thereof or
make any equity investments therein;

 
(f)
sell any corporation, partnership or other business organization or material
division thereof or any other material asset or right or create an Encumbrance
on any of the foregoing or permit such Encumbrance to be created;

 
(g)
other than in the ordinary course of business enter into or modify any Material
Contract, lease or agreement or create any Encumbrances on any of its assets;

 
(h)
other than in the ordinary course of business, directly or indirectly, take any
action which would cause the Warranties contained herein to become inaccurate in
any material respect;

 
(i)
other than in the ordinary course of business consistent with past practice and
other than with respect to amounts of less than EUR 75,000 per single incurrence
and EUR 150,000 in the aggregate for the period from and including the Signing
Date up until and including the Closing Date incur, assume or guarantee any
financial debt;

 
 
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(j)
grant any loan or otherwise lend any money with a maturity period exceeding
30 days and EUR 100,000 per single lending, save for money market transactions
in the ordinary course of business and consistent with past practice;

 
(k)
materially change any accounting principle or policy other than required by law
or recommended by the auditors;

 
(l)
conduct its business other than in compliance with all material applicable laws,
except as otherwise conducted as of the Signing Date;

 
(m)
except in the ordinary course of business consistent with past practice,
conclude, otherwise change or amend the material terms of employment (including
compensation and benefits and entitlement to any payments or benefits following
termination of employment) with any employee, hire any new employees or
terminate the employment of any employees or increase the compensation,
commissions or perquisites payable to any agent of any Group Company, it being
understood that (i) the Seller intends to terminate the employment and
consultancy of such number of employees and consultants to reduce the total
number of full-time working equivalents (including consultants) of the Group to
not less than 150 full-time working equivalents (including consultants) and not
more than 170 full-time working equivalents (including consultants), (ii) the
Seller shall have terminated or taken the requisite measures to terminate
(including the service of notice of termination) such number of employees and
consultants as of the Closing Date (the "Reduction in Force"), (iii) the Seller
agrees to consult with the Purchaser in advance of any such termination and (iv)
the Purchaser agrees not to unreasonably withhold consent to any such
termination;

 
(n)
other than in the ordinary course of business, terminate or otherwise change or
amend the material terms of any of the agreements with Business Customers or
material suppliers; or

 
(o)
amend, terminate or waive the due performance of any portion of the Consulting
and Cooperation Agreement;

 
 
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(p)
settle any litigation or any other dispute that is not yet in litigation with
the value in dispute exceeding EUR 50,000 where the settlement amount to be paid
by the relevant Group Company exceeds the respective accrual;

 
(q)
enter into any contract or agreement that grants to a counterparty the right to
automatic adjustment of pricing or other terms based upon the pricing or other
terms contained in any oral or written agreement; or

 
(r)
agree, orally or in writing, not to compete with any third party or to refrain
from engaging in any specified lines of business or business activities,
delineated by market segment, jurisdiction or otherwise.

8.2
Regulatory Filings; Other Actions

 
(a)
Subject to the terms and conditions set forth in this Agreement, each of the
Parties hereto shall use all reasonable efforts (subject to, and in accordance
with, applicable law) to take promptly, or cause to be taken, all actions, and
to do promptly, or cause to be done, and to assist and cooperate with the other
Parties in doing (subject to the provisions of section 7.3.2), all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated herein, including
(i) the obtaining of all necessary actions, waivers, consents and approvals,
from Governmental Authorities and the making of all necessary registrations and
filings and the taking of all steps as may be necessary to obtain an approval or
waiver from, or to avoid an action or proceeding by, any Governmental Authority,
(ii) the defending of any lawsuits or other legal proceedings, whether judicial
or administrative, challenging this Agreement or the consummation of the
transactions contemplated herein and (iii) the execution and delivery of any
additional instruments necessary to consummate the transactions contemplated
herein. The Seller and the Purchaser shall use all reasonable efforts to ensure
that any such conditions or remedies are removed or reduced.

 
 
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(b)
Subject to the terms and conditions herein provided and without limiting the
foregoing:

 
(i)
the Seller shall cause the Company (A) as soon as reasonably possible in view of
the progress of the Kahnawake Migration Activities to file such documents and
instruments and take such additional actions as may be required by the Kahnawake
Gaming Commission to effect the "license surrenders" pursuant to regulation 127
of the Regulations concerning Interactive Gaming of December 2011 and the
surrender of all other licenses or approvals as set forth in schedule 7.1.8
(License Surrenders) (collectively, the "License Surrenders"), (B) to commence
the Kahnawake Migration Activities and (C) to respond as promptly as practicable
to any additional requests for information received from the Kahnawake Gaming
Commission or any other jurisdiction relevant to the License Surrenders;

 
 
(ii)
the Seller shall use all reasonable efforts to complete the Kahnawake Migration
Activities;

 
(iii)
the Seller shall cause the Company to use all reasonable efforts to cure not
later than the Closing Date any violations or defaults under any rules applied
by, the Kahnawake Gaming Commission; and

 
(iv)
the Seller shall cause the relevant Group Companies to apply for and use all
reasonable efforts (subject to, and in accordance with, applicable law) to
obtain the permits, authorizations and approvals set forth on schedule 7.1.8
(Gaming Permits) and will upon notice from the Purchaser of the enactment of any
law or applicable legal authority expressly permitting online gaming in any
jurisdiction in which a Group Company operates between the Signing Date and the
Closing Date consult with the Purchaser regarding the application for any
permits, authorizations and approvals of the relevant Governmental Authority,
and the provisions of section 7.3.2 shall apply mutatis mutandis to the Seller’s
efforts under this section 8.2(b)(iv).

 
(c)
Except to the extent taken into account in the calculation of Net Debt, Seller
shall pay in full the amount of any and all Retention Bonuses payable to current
or former employees or consultants of any Group Company that become due and
payable prior to, concurrent with or immediately following the Closing.
Purchaser shall pay or cause the relevant Group Company to pay in full the
amount of any and all Retention Bonuses payable to current or former employees
or consultants of any Group Company that become due and payable after the
Closing and other and than immediately following the Closing.

 
 
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(d)
Except to the extent taken into account in the calculation of Net Debt and
except as provided in the following sentence, Seller shall pay in full the costs
of any and all severance, continued provision of benefits or other termination
costs or liabilities (regardless of whether payable, incurred or provided prior
to or after the Closing) associated with any termination of the employment or
consultancy of any employee or consultant prior to the Closing, including such
employees or consultants as to whom Seller has taken the requisite measures
prior to the Closing to terminate, including the service of notice of
termination (including but not limited to the Reduction in Force) (“Pre-Closing
Termination Costs”). Purchaser shall pay or cause the relevant Group Company to
pay in full the costs of any and all severance, continued provision of benefits
or other termination costs or liabilities associated with any termination of the
employment or consultancy of any employee or consultant after the Closing, and
up to EUR 35,000 of Pre-Closing Termination Costs to the extent payable post
Closing or such higher amount as may be mutually agreed upon in writing by
Purchaser and Seller prior to Closing.

 
(e)
The Seller shall use best efforts to replace prior to Closing the EUR 2,000,000
deposit made by or on behalf of the Company with the National Gaming Commission
of Spain in connection with the Company’s application for a Gaming Approval with
either (i) a guarantee by the Seller or bwin.party digital entertainment plc
that can be assumed by the Purchaser or Shuffle Master, Inc. at the Closing,
(ii) a letter of credit issued on behalf of the Seller or bwin.party digital
entertainment plc that can be replaced with a letter of credit issued on behalf
of the Purchaser or Shuffle Master, Inc. at the Closing, (iii) the posting of a
performance bond or other insurance contract by the Seller or bwin.party digital
entertainment plc or (iv) an equivalent instrument that can be replaced by the
posting of a performance bond or other insurance contract by the Purchaser or
Shuffle Master, Inc. at the Closing.

8.3
Advice of Changes

The Seller will promptly advise the Purchaser in writing of (a) any event
occurring subsequent to the Signing Date that would render any Warranty of the
Seller contained in this Agreement, if made on or as of the date of such event
or the Closing Date, untrue or inaccurate, (b) any breach of any covenant or
obligation of the Seller pursuant to this Agreement, or (c) any Material Adverse
Change.
 
 
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8.4
Continued Access to Information

From and after the Signing Date and through and including the Closing Date, the
Seller shall cause each Group Company to allow the Purchaser and its agents
reasonable access at reasonable times to the files, books, records, player
transaction data (but only in a manner that is not individually-identifying,
such as an aggregated or redacted manner), technology, contracts, personnel and
offices of each Group Company, including, but not limited to, any and all
information relating to each Group Company’s Taxes, commitments, contracts,
leases, employees, customers, licenses, liabilities, financial condition and
real, personal and intangible property. Access to customers shall in any event
be closely coordinated with the Seller and the Purchaser shall only be permitted
to contact, directly or indirectly, any customers of the Group Companies subject
to a representative of the Seller participating in such communication (such as
in the form of participating in meetings or conference calls or otherwise). The
Seller shall cause the accountants of each Group Company to cooperate with the
Purchaser and its agents in making available all financial information
reasonably requested by the Purchaser, including the right to examine all
working papers pertaining to all financial statements prepared or audited by
such accountants. The Seller’s obligations under this section 8.4 shall be
subject to the Seller’s right to limit its disclosures pursuant to good faith
efforts to preserve the attorney-client privileges or any other applicable
privileges. The Seller shall not be obligated to allow the Purchaser and its
agents a degree of access under this section 8.4 that materially exceeds the
scope of access provided to the Purchaser and its agents in the course of the
Purchaser’s due diligence investigation prior to the Signing Date.

8.5
No Other Negotiations

The Seller will not, and will not authorize, encourage or knowingly permit any
director, officer, employee, stockholder, affiliate or agent of any Group
Company or any attorney, investment banker or other person on any Group
Company’s behalf to, directly or indirectly: (a) solicit, initiate, encourage or
knowingly induce the making, submission or announcement of any offer or proposal
from any person concerning any Alternative Transaction or take any other action
that could reasonably be expected to lead to an Alternative Transaction or a
proposal therefor; (b) furnish any information regarding any Group Company to
any person (other than the Purchaser) in connection with or in response to any
inquiry, offer or proposal for or regarding any Alternative Transaction; (c)
participate in any discussions or negotiations with any Person (other than the
Purchaser) with respect to any Alternative Transaction; (d) cooperate with,
knowingly facilitate or encourage any effort or attempt by any person (other
than the Purchaser) to effect any Alternative Transaction; or (e) execute, enter
into or become bound by any letter of intent, agreement, commitment or
understanding with any person (other than the Purchaser) that is related to,
provides for or concerns any Alternative Transaction.
 
 
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8.6
Tax Matters

 
(a)
The preparation and filing of Tax returns of each Group Company shall be done in
accordance with the provisions of clause 7 of the Tax Deed. The Seller shall
cause each Group Company to pay and discharge all Taxes of each Group Company
attributable to returns filed in the Pre-Closing Tax Period before the same
shall become delinquent and before penalties accrue thereon.

 
(b)
For purposes of this Agreement, (a) any Taxes relating to a Straddle Period that
are levied on a per diem basis shall be attributable to the Pre-Closing Tax
Period in an amount equal to the amount of such Taxes for the entire Straddle
Period multiplied by a fraction, the numerator of which is the number of days
during the Straddle Period that are in the Pre-Closing Tax Period and the
denominator of which is the total number of days in the Straddle Period; and (b)
any other Taxes relating to a Straddle Period shall be attributable to the
Pre-Closing Tax Period as if such Straddle Period had ended on the Closing Date.

 
(c)
Save in respect of any obligation of the Seller to a Group Company as at the
Closing Date or any amount payable as at the Closing Date, all Tax sharing, Tax
indemnity, Tax allocation, or similar agreements or arrangements with respect to
or involving any Group Company shall be terminated as of the Closing Date and,
after the Closing Date, neither the Purchaser nor any Group Company shall be
bound thereby or have any liability thereunder.

 
(d)
All transfer, documentary, sales, use, excise, stamp, registration and other
such Taxes (including all applicable real estate transfer or gains Taxes) and
related fees (including any penalties, interest and additions to Tax) incurred
in connection with the transactions contemplated by this Agreement, shall be
paid by the Purchaser (so long as no Group Company owns real estate in Gibraltar
at the Closing Date) or the Seller (if any Group Company owns real estate in
Gibraltar at the Closing Date).

 
 
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8.7
Customer Retention Cooperation

The Seller shall provide reasonable cooperation to the Purchaser in its efforts
to prepare for the post-Closing retention by the Group Companies of all Business
Customers, provided that the Purchaser shall reimburse the Seller for any out-of
pocket expenses incurred.  Such reasonable cooperation shall include
participating in telephonic or in person meetings with such Business Customers
upon the Purchaser’s request with reasonable advance notice, keeping the
Purchaser reasonably apprised of communications from or to such Business
Customers regarding the post-Closing operation of the Business and matters
affecting the post-Closing retention of such Business Customers, referring to
the Purchaser inquiries from such Business Customers regarding the post-Closing
operation of the Business or the post-Closing retention of such Business
Customers, and giving good faith consideration to Purchaser’s requests for
assistance in preparing for the post-Closing retention by the Group Companies of
such Business Customers.

9.
CLOSING

9.1
Closing Date

On the 10th Business Day ("Closing Date") following the day on which the last of
all Conditions Precedent contemplated by this Agreement are either satisfied or
waived in writing by the applicable Party, the closing of the transactions
contemplated by this Agreement ("Closing") shall take place at the offices of
the Company or at such other place as the Parties shall mutually agree.

9.2
Documents to be executed or delivered and actions to be taken

 
 
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At Closing, the Parties shall simultaneously execute and deliver the following
documents and take the following actions or cause such actions to be taken
simultaneously:

 
(a)
the Initial Purchase Price shall be paid in accordance with section 3.1 and the
Purchaser shall reimburse the Seller for (i) up to EUR 600,000 of documented,
out-of-pocket expenses incurred by the Seller in the completion of the Kahnawake
Migration Activities; (ii) up to EUR 220,000 of documented out-of-pocket
expenses incurred by the Seller in the acquisition and development of casino
game technology; (iii) up to EUR 831,000 of documented out-of-pocket expenses
incurred by the Seller in the acquisition and development of electronic gaming
platform technology; (iv) up to such additional amount of capital expenditures
requested by the Purchaser after the Signing Date and prior to the Closing Date;
(v) such portion of the documented amount of the security deposit (less any
offsets applied against such security deposit prior to the Closing Date)
deposited with the lessor of the Stockholm office (the "Stockholm Office
Security Deposit") that bears the same proportion to the total amount of the
deposit that the floor space occupied by the Group at the Closing bears to the
total floor space under lease; and (vi) if the replacement contemplated by
section 8.2(e) has been completed at or prior to the Closing, the security
deposit made by the Group in the amount of EUR 2,000,000 made by or on behalf of
the Company with the National Gaming Commission of Spain in connection with the
Company’s application for a Gaming Approval.

 
(b)
the officers and the members of the board of directors of each Group Company
will irrevocably tender their resignation;

 
(c)
the Parties shall sign a closing memorandum and shall thereby confirm that (i)
all Conditions Precedent have been fulfilled or waived in writing by the
applicable Party, and (ii) upon receipt of the Initial Purchase Price, the
Shares are transferred to the Purchaser;

 
(d)
the Seller shall deliver to the Purchaser or to whom the Purchaser may direct
the following documents of the Company THAT IS TO SAY:

 
 
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(i)
minutes of a meeting of the board of directors of the Company held on the
Closing Date dealing with the following business:

 
(A)
the acceptance of the resignation of each of the directors of each Group Company
(except those nominated by the Purchaser) and the appointment of the Purchaser’s
nominees to the board of directors of each Group Company;

 
(B)
the re-appointment of each Group Company's secretary;

 
(C)
the re-appointment of the auditors of each Group Company;

 
(D)
the approval of the share transfer of all the Shares in the Company in favour of
the Purchaser or the Purchaser’s nominees; and

 
(E)
the approval of the transfer of the registered office of each Group Company in
such manner as the Purchaser shall direct;

 
(ii)
written resignations of all the officers and directors of each Group Company
(except those appointed on the nomination of the Purchaser) each confirming that
they have no claims or rights of action against any Group Company and that no
Group Company is in any way obligated or indebted to them or any of them;

 
(iii)
a duly executed share transfer form in respect of the Shares in favour of the
Purchaser or such other person as the Purchaser may direct, together with the
relevant share certificates, all original trust documentation (if any) and such
waivers and consents as may be required to enable the Purchaser or the
Purchaser’s nominee to be registered as the sole legal and equitable owner and
holder of the Shares and all other (if any) documents of title in relation to
the Shares;

 
(iv)
the certificate of incorporation, memorandum and articles of association of the
Company as well as the common seal of the Company and the properly written-up
statutory and minute books of the Company together with all other corporate
records, documents, books of account and all insurance policies of the Company;
and

 
 
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(v)
a written receipt signed by the Seller acknowledging receipt of all amounts due
to it by any of the Group Companies and/or renouncing all claims, rights and
interest in or against all of the Group Companies of whatever nature existing at
the Closing Date (save for any Group Balances at the Closing Date or obligations
incurred under this Agreement, the Patent License Agreement, the Transition
Services Agreement or the Consulting and Cooperation Agreement);

 
(e)
the Seller shall deliver to the Purchaser or to whom the Purchaser may direct
the following documents in respect of each of Ongame Services and Ongame
Markets:

 
(i)
written resignations of all the members of the management boards (including the
managing director) of each of Ongame Services and Ongame Markets (except those
appointed on the nomination of the Purchaser) each confirming that they have no
claims or rights of action against Ongame Services and Ongame Markets (as the
case may be) and that Ongame Services and Ongame Markets (as the case may be) is
in no way obligated or indebted to them or any of them in their capacity as
members of the management boards; and

 
(ii)
all documents of title in relation to the Subsidiary Shares.

 
(f)
the Seller and the Purchaser shall have executed and delivered a transition
services agreement (the "Transition Services Agreement") in the form attached
hereto as schedule 9.2(f).

 
(g)
the Seller and the Purchaser shall have executed and delivered the Tax Deed in
the form attached hereto as schedule 9.2(g).

 
(h)
the Seller shall use its reasonable efforts to cause each of Peter Bertilsson,
Peter Messner, Martin Lerby, Fredrivk Kjell, Anders Wasterlid and Olivia
Gorajewski to have executed and delivered a letter acknowledging that the terms
of his or her employment are solely those set forth in their employment
agreements in effect at the Signing Date.

 
 
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(i)
if the Seller has succeeded in replacing prior to Closing the EUR 2,000,000
deposit made by or on behalf of the Company with the National Gaming Commission
of Spain in connection with the Company’s application for a Gaming Approval with
either (i) a guarantee by the Seller or bwin.party digital entertainment plc,
(ii) a letter of credit issued on behalf of the Seller or bwin.party digital
entertainment plc, (iii) the posting of a performance bond or other insurance
contract by the Seller or bwin.party digital entertainment plc or (iv) an
equivalent instrument, at the Closing the Purchaser shall either assume such
guarantee, replace such letter of credit with a letter of credit issued on
behalf of the Purchaser or Shuffle Master, Inc, or replace such performance bond
or other insurance contract with a performance bond or insurance contract by the
Purchaser or Shuffle Master, Inc.

In addition, the Purchaser and the Seller shall, whether before, on or after the
Closing Date, execute and deliver any further instruments, deeds, assignments or
assurances and take all other actions that are necessary or desirable to
consummate the transactions contemplated by this Agreement and to carry out the
purposes and intent of this Agreement.

9.3
Transfer of Shares

Upon fulfilment or waiver in writing by the applicable Party of all Conditions
Precedent and all actions according to section 9.2 having been completed, the
Shares shall be transferred to the Purchaser without further action by the
Parties. On or after the Closing Date, the Purchaser shall cause shareholders
meetings and board meetings to be held in Ongame Services and Ongame Markets at
which new directors are appointed and company signatures are amended. The
Purchaser shall forthwith see to it that these appointments and decisions are
registered with the Swedish Companies Registration Office.

9.4
Right to Rescind

 
 
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9.4.1
(a)
If the foregoing provisions of section 9.2 are not fully complied with by the
Seller or the Purchaser, as applicable, by or on 10th Business Day following the
day on which all Conditions Precedent are either satisfied or waived in writing
by the applicable Party, the Purchaser (in the case of non-compliance by the
Seller), or the Seller (in the case of non-compliance by the Purchaser) shall be
entitled (in addition to and without prejudice to all other rights and remedies
available to it including the right to claim Losses) by written notice to the
other Parties:

(i)         to rescind this Agreement with immediate effect; or

(ii)        to insist that Closing be effected.

The Purchaser or the Seller may rescind this Agreement with immediate effect
upon written notice to the other Party at any time prior to the Closing if such
other Party has committed a material breach of any of its covenants in this
Agreement and has not cured such material breach prior to twenty (20) Business
Days following receipt of written notice of such material breach. In the event
of any such rescission, the non-rescinding Party shall reimburse the rescinding
Party for up to EUR 1,000,000 of Losses incurred by the rescinding Party in
connection with the preparation and execution of this Agreement; any liability
of the non-rescinding Party shall be limited to such amount of EUR 1,000,000 and
any liability for Losses in excess of this amount shall be excluded.

The Purchaser may rescind this Agreement upon written notice to the Seller at
any time prior to the Closing upon the occurrence of a Material Adverse Change
following the Signing Date and prior to the Closing Date.

(b)         In the event a Gaming Issue arises, the Parties' agree to cooperate
to resolve such issue in accordance with the following procedures, subject to
any changes thereto dictated by the applicable Gaming Regulatory Authority:

(i) The Purchaser shall, in good faith, use commercially reasonable efforts to
facilitate a meeting among the Seller and the applicable Gaming Regulatory
Authority for the purpose of determining whether and how the Seller could
address and remedy the Gaming Issue. If the meeting referenced above cannot
occur despite good faith efforts, then, absent contrary direction from the
applicable Gaming Regulatory Authority, the Purchaser shall inform the Seller of
the extent to which such Gaming Regulatory Authority advised how it could
address and remedy, if at all, the concerns of such Gaming Regulatory Authority.
 
 
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(ii)        The Parties shall cooperate in good faith to attempt, if permitted
by the Gaming Regulatory Authority, to address the concerns of any such Gaming
Regulatory Authority with reasonably adequate time to permit the Seller to
effectuate a remedy.

(iii)        If (a) after complying with subsections (i) and (ii) above, the
Purchaser reasonably determines that it is unlikely that such Gaming Issue will
be resolved to the satisfaction of the applicable Gaming Regulatory Authority,
and (b) the Purchaser, acting in good faith, makes a determination that (A) the
applicable Gaming Issue may result in an investigation or adversary proceeding
which challenges the Purchaser’s or any of its Affiliates’ suitability or good
standing (including any potential loss of, threatened loss of, the imposition of
burdensome terms and conditions on any Gaming Approvals of the Purchaser or any
its Affiliates, or other disciplinary action which may cause significant harm to
the reputation and standing of Purchaser or any of its Affiliates), and (B) in
the event that the meeting referenced in clause (i) above never occurred, the
Purchaser shall provide the Seller verification of the Gaming Issue through the
following means in order of preference (I) request a writing from such Gaming
Regulatory Authority of its position with respect to the Gaming Issue, or
request an oral communication from the Gaming Regulatory Authority of its
position with respect to the Gaming Issue, or (II) provide a copy of a written
confirmation from the Purchaser to such Gaming Regulatory Authority of the
Purchaser's understanding of such Gaming Regulatory Authority's guidance or, if
advised by qualified outside gaming counsel of the Purchaser that such a
confirming letter is not appropriate under the circumstances, provide a letter
from such counsel certifying the general nature of the objection and the gravity
of the matter, then the Purchaser may rescind this Agreement with immediate
effect upon written notice to the Seller at any time prior to the Closing.

9.4.2
In the event of rescission of this Agreement pursuant to section 9.4.1, this
Agreement shall expire and shall have no further effect on the Parties (except
for sections 11 (Announcement), 13 (Arbitration) and 15 (Miscellaneous), which
shall continue to apply and further except for liability resulting from the
breach of any obligations existing hereunder prior or relating to the Closing,
which liabilities shall also continue to exist without regard to any limitations
set forth in section 5 but subject to the limitation in section 9.4.1.

 
 
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9.4.3
If this Agreement is rescinded by one Party, then such rescission shall have
effect for the whole Agreement and all Parties.

10.
POST-CLOSING COVENANTS

10.1
Exoneration

Subject to approval of the respective auditors of Ongame Services and Ongame
Markets and the Purchaser, at the first annual shareholders meetings of each of
Ongame Services and Ongame Markets following the Closing Date, the Purchaser
covenants to procure that those board members and the managing directors of
Ongame Services and Ongame Markets who have resigned on or before the Closing
Date are granted discharge from liability for their administration until the
Closing Date (or the earlier date of their resignation).

10.2
Post-Closing Measures

After Closing having been completed, the Purchaser shall procure that the
directors of the Company shall file the relevant documents with the Registrar of
Companies in Gibraltar recording the fact that (i) the Purchaser is, as of the
Closing Date, the registered as new shareholder of the Company and, (ii) the
composition of the board of directors of the Company has changed providing such
details of the resignations and new appointments to the board as well as such
other details required by Gibraltar law.

10.3
Patent License Agreement

The Purchaser acknowledges that Ongame Services and ElectraWorks Limited, a
company indirectly and wholly-owned by bwin.party digital entertainment plc,
have entered into a patent license agreement under which ElectraWorks Limited
acquires a royalty-free, non-exclusive and perpetual license to use certain IPR
currently held by Group Companies (the "License Agreement") which is attached
hereto as Schedule 10.3.

10.4
Restrictions on Use of Business Customer Data

 
 
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From and after the Closing, the Seller shall not use any Business Customer data
(including but not limited to poker player identification or contact data,
wagering transaction data, wagering settlement data and wagering account
debiting/crediting data) to directly or indirectly call upon, solicit, advise,
notify or otherwise attempt to do business with any Business Customer or any
poker player Customer of any Business Customer other than poker player Customers
of Terminated Business Customers through their accounts with such Terminated
Business Customers. This section 10.4 shall, however, not prevent the Seller
from using Business Customer Data which relate to bwin.party digital
entertainment plc or any of its Affiliates in its capacity as Business Customer.

During the period of two (2) years following the Closing Date (the "Restricted
Period"), the Seller shall not in any way, directly or indirectly, hire, solicit
for hire, induce or attempt to induce any officers, employees, representatives
or agents of any of the Group Companies to leave the employ of the Purchaser or
such Group Companies or violate the terms of their employment arrangements with
the Purchaser or such Group Companies. The Restricted Period applicable to the
Seller shall be extended by the length of any period during which it is in
breach of the terms of this section 10.4.

The Seller acknowledges that its covenants set forth in this section 10.4 are an
essential element of this Agreement and that, but for its agreement to comply
with these covenants, the Purchaser would not have entered into this Agreement.
In addition, the Seller acknowledges and agrees that the geographic scope of the
restrictions set forth in this section 10.4 are reasonable as the business of
the Group Companies and any similar competing businesses may be conducted
anywhere in the world. The Seller acknowledges that this section 10.4
constitutes an independent covenant that shall not be affected by performance or
non-performance of any other provision of this Agreement by the Purchaser. The
Seller has independently consulted with its counsel specifically in regards to
this section 10.4 and after such consultation agree that the covenants set forth
in this section 10.4 are reasonable and proper.

10.5
Return of Deposit with National Gaming Commission of Spain

 
 
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From and after the Closing, the Purchaser shall provide and shall cause the
relevant Group Company to provide reasonable cooperation to the Seller in its
efforts to effect the replacement contemplated by section 8.2(e), provided that
in connection therewith the Seller shall reimburse the Purchaser or the Group
Company for any out-of-pocket expenses incurred and the Purchaser shall not be
obligated  to take any action or omit to take any action which action or
omission would reasonably be expected to jeopardize any Gaming Approval held by
the Purchaser or any Group Company, jeopardize any application for a Gaming
Approval by the Purchaser or any Group Company, or require any deviation from
the conduct of the Business as conducted as of the Signing Date and the Closing
Date.  From and after the Closing, the Purchaser shall remit, or cause the
relevant Group Company to remit, to the Seller within five (5) Business Days
following receipt by the Purchaser or any Group Company from the National Gaming
Commission of Spain, the amount of the security deposit (or portion thereof
received by the Purchaser or such Group Company) made by the Group prior to the
Signing Date with the National Gaming Commission of Spain in connection with the
Company’s application for a Gaming Approval.

11.
ANNOUNCEMENTS

Immediately after the execution of this Agreement, the Parties shall issue
individual press releases, in the form previously agreed upon between the
Parties.

12.
PAYMENTS, COSTS AND EXPENSES

12.1
Costs of agreement

Except as otherwise provided in section 9.4.1, each Party to this Agreement
shall pay its own costs and expenses including the fees of its professional
advisors in relation to the negotiation of this Agreement and the preparation,
execution and carrying into effect of this Agreement and all other documents
referred to herein ("Third Party Expenses"); for purposes of the foregoing, any
Third Party Expenses of any Group Company incurred prior to the Closing (whether
or not invoiced prior to the Closing) shall be deemed to be Third Party Expenses
of the Seller.

12.2
Costs of transaction

Except as otherwise provided herein, all costs, duties, transfer taxes and fees
resulting from the execution of this Agreement, including, but not limited to
notarial fees and registration fees, shall be borne by the Purchaser.
 
 
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13.
GOVERNING LAW

This Agreement and any non-contractual obligations arising out of or in relation
to this Agreement shall be governed by, and construed in accordance with, the
laws of Austria, without reference to or application of any conflict of law
rules. The form of the agreement relating to the transfer of the Shares shall be
governed by the laws of Gibraltar.

14.
ARBITRATION

14.1
Arbitration agreement

All disputes, controversies, claims as well as any non-contractual obligations
arising out of or in connection with this Agreement, including the breach,
termination or invalidity thereof, shall be finally settled under the Rules of
Arbitration of the International Chamber of Commerce (the "Rules") by three
arbitrators appointed in accordance with the said Rules. The place of
arbitration shall be Vienna, Austria. The language of arbitration shall be
English, but documents may be presented in German.

14.2
Exceptions from venue

The arbitral tribunal is nevertheless authorized to carry out certain portions
of the proceedings, for example meetings, hearing of witnesses, out-of-court
viewings and the like, at a location other than the agreed upon place of
arbitration, if the arbitrators so determine. The place of arbitration shall not
be changed in consequence thereof.

14.3
Scope of arbitration clause

This arbitration clause shall also be applicable for disputes between a Party
hereto and a legal successor of the other Party or between the legal successors
of all Parties hereto. This arbitration clause shall furthermore be applicable
for disputes regarding amendments or additional agreements to this Agreement.

14.4
Costs of arbitration

 
 
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The losing Party in the proceeding shall compensate the prevailing Party for the
costs of arbitration, including reasonable legal and other costs incurred by the
prevailing Party for the arbitration. The arbitrators may determine the amount
of said legal costs without taking any guidelines for fees or disbursements into
consideration. In case a Party prevails only partially, the arbitrators are
authorized to award a proportionate amount of the costs of arbitration to such
Party.
 
14.5
Specific performance, injunctive relief

In addition to any and all other remedies to enforce the claims a Party has
under this Agreement, its Schedules and amendments that may be available under
this Agreement, each Party shall be entitled to (i) specific performance and
(ii) apply for injunctive relief with courts of law having jurisdiction.

14.6
Applicable law

This arbitration clause is governed by and construed in accordance with Austrian
law excluding its rules on conflict of laws.

15.
MISCELLANEOUS

15.1
Amendments

This Agreement may not be amended or modified, except by a written document
executed by all Parties; however, where any specific form (such as a notarial
deed) is required under applicable law, any amendment or modification hereto
needs to be made in such form. The compliance with any condition or covenant set
forth herein may not be waived, except in writing duly and validly executed by
the waiving Party.

15.2
No assignment

This Agreement and any rights and obligations hereunder cannot be transferred or
assigned in whole or in part without the prior written consent of all Parties
that shall not be unreasonably withheld.

15.3
Nomination right

 
 
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From the date hereof and no later than five (5) Business Days prior to the
Closing Date, Purchaser shall, subject to the prior written consent of the
Seller, have the right to nominate, an Affiliate of Purchaser to succeed to and
be substituted for Purchaser under this Agreement with such effect as if such
nominated Affiliate of Purchaser had been named the Purchaser herein, or to
specify an Affiliate of Purchaser to directly purchase all or a portion of the
shares of any Group Company directly from the holder thereof for such portion of
the consideration otherwise payable for the Shares pursuant to section 3 as is
specified by the Purchaser. The Seller shall not withhold its consent to such
nomination if and so far (i) such Affiliate is a 100% (per centum) subsidiary of
the same ultimate parent(s) as the Purchaser, and if there is more than one such
ultimate parent, in the same (direct or indirect) proportion,(ii) such Affiliate
validly enters into all agreements and arrangements, and assumes all obligations
of the Purchaser out of or related to this Agreement, and (iii) the Purchaser
remains jointly and severally liable for the full and punctual fulfilment of all
obligations out of or related to this Agreement so as to safeguard all rights
the Seller has under this Agreement.

15.4
Severability

In case any one or more of the provisions contained in this Agreement shall be
invalid, illegal, or unenforceable in any respect, the validity, legality or
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby. In lieu of the invalid or inoperable provision,
this Agreement shall be applied in a reasonable manner, which, so far as legally
permissible, comes as close as possible to the application of what the Parties
intended, according to the spirit and purpose of this Agreement.

15.5
Entire agreement

This Agreement constitutes the entire agreement between the Parties with respect
to the subject matter hereof. Except as expressly provided herein and save for
the confidentiality agreement entered into between bwin.party digital
entertainment plc and ShuffleMaster, Inc. dated 14 September 2011 which shall
remain in full force and effect until and including the Closing Date, all prior
agreements or understandings, if any, between the Parties or their Affiliates
with respect to the Company and the subject matter hereof shall, upon the
execution of this Agreement, be null and void.
 
 
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15.6
Notices

All notices, requests, demands and other communications, which are required or
may be given under this Agreement shall be exclusively made by (i) e-mail and/or
(ii) facsimile (telecopier) and shall be sufficient in all respects if addressed
as follows:

If to the Seller, to:
bwin.party services (Austria) GmbH
c/o bwin.party digital entertainment plc
711 Europort
Gibraltar
Attention:         Nigel Birrell
Telephone:        +350 200 78700
Telecopier:        +350 200 48521
e-mail:               nigel.birrell@bwinparty.com

with a copy to:
Brandl & Talos Rechtsanwälte GmbH
Mariahilfer Straße 116
1070 Vienna
Austria
Attention:          Thomas Talos
Telephone:          +43 1 522 5700
Telecopier:          +43 1 522 5701
e-mail:                 talos@btp.at

If to Purchaser, to:
Shuffle Master International, Inc.
Attention:          General Counsel
Telephone:         (702) 492-8880
Telecopier:         (702) 270-5326
e-mail:                klever@shufflemaster.com
 
 
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with a copy to:
Morrison & Foerster LLP
755 Page Mill Road
Palo Alto, California 94304-1018
Attention:          Timothy J. Harris
Telephone:         (650) 813-5784
Telecopier:         (650) 251-3781
e-mail:                 tharris@mofo.com
 
 
 
 
Vienna, March 5, 2012

 

 /s/ Gunther Doppler     /s/ Gavin Isaacs      bwin.party services (Austria)
GmbH           Shuffle Master International, Inc.      Name: Gunther Doppler    
 Name:  Gavin Isaacs      Title:  Managing Director         Title:  CEO    

                                                                                                                  
 
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Schedule 4
Warranties of Seller

1.
AUTHORITY AND GOOD STANDING

The Seller has (and will have on the Closing Date) good right, full power and
authority to enter into this Agreement and to sell, assign and transfer its
Shares to the Purchaser in the manner contemplated herein and to perform all of
its obligations under this Agreement. Each Group Company is a company duly
organized, validly existing and, where such concept applies, in good standing
under the laws of its jurisdiction of formation, each Group Company has the
power and authority to own, operate and lease its properties and to conduct its
business as conducted as of the Signing Date and the Closing Date. No Group
Company is in violation of its constitutional documents. This Agreement and all
other agreements contemplated by this Agreement to be executed by the Seller are
and will be valid and binding obligations of the Seller enforceable against the
Seller in accordance with their respective terms.

2.
NO VIOLATION

The execution by the Seller of this Agreement does not, and the performance by
the Seller of its obligations hereunder and the consummation by the Seller of
the transactions contemplated hereby will not (i) conflict with or violate the
articles of association or other internal governing documents of the Seller or
any Group Company, (ii) require any internal authorization, consent or approval
of any corporate body of the Seller or any Group Company or any authorization,
consent or approval of any Governmental Authority which has jurisdiction over
the Seller and the Group Companies other than those that have been obtained,
(iii) violate any Permit, law or regulation, governmental, arbitral or court
order, judgment or decree applicable to the Seller or any Group Company or any
of their respective assets (iv) result in any breach of any contract or
agreement to which the Seller or any Group Company is a party or by which the
Seller or any Group Company or any of their respective assets is or are bound,
or (v) subject any Group Company to any obligation to make any payment to any
third party (other than transfer, documentary, sales, use, excise, stamp,
registration and other such Taxes) as a consequence of the sale and transfer of
Shares hereunder, as a condition to the continued enjoyment of business
relations enjoyed by such Group Company prior to the Closing or otherwise. In
particular, the Seller has obtained approval by the board of directors of
bwin.party digital entertainment plc. No Group Company shall be subject to any
Loss as a result of any violation of any order, judgment, decree, law, rule, or
regulation by Seller or any Group Company prior to the Closing. Neither the
execution, delivery or performance of this Agreement by the Seller nor the
consummation of the transactions contemplated hereby requires any consent,
clearance, notification, permission or waiver under the laws, regulations or
practices applied by any authority (other than national or supranational
antitrust or merger control) to which the Seller or any Group Company is
subject.
 
 
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3.
TITLE

As of the Closing Date, the Seller has full title to the Shares and, indirectly,
to the Subsidiary Shares free and clear of all Encumbrances (other than any
Encumbrances under the Articles of Association).

4.
SHARE CAPITAL/QUOTA

4.1
Company

The Company has a registered share capital of EUR 25,000. The Shares owned by
the Seller have been validly issued, are fully paid-up and will be fully paid-up
as of the Closing Date. There has not been, and there will not have been as of
the Closing Date, any unlawful repayment (whether disclosed or undisclosed) of
share capital. The Shares represent a 100% (per centum) interest in the
Company's registered share capital and in all of the voting rights in the
Company's shareholders' meeting. The Company has not issued any equity
instruments, or any rights (whether present or contingent), to acquire equity
instruments, other than the Shares. Upon the Closing, the Purchaser shall become
the sole owner of 100% (per centum) of the authorised share capital of the
Company. To the Seller’s knowledge, there is no person who has asserted, and no
reasonable basis for the assertion of, any right or entitlement to any equity
interest in the Company. None of the Shares are subject to any pre-emptive
right, right of first refusal, right of first offer or other rights of third
parties that restrict the Seller’s right to transfer the Shares. The Shares have
been issued in full compliance with all applicable corporate and securities laws
and the Seller’s constitutional documents. Other than the Subsidiary Shares, the
Company has no equity or ownership interest, direct or indirect, in or loans to
any other business entity. Since inception, the Company has not repurchased,
redeemed or otherwise reacquired any of its share capital. There are no voting
agreements, proxies or voting trusts applicable to any of the Shares. As of the
Closing Date, there shall be no obligation attaching to the Shares to pay any
dividends.
 
 
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4.2
Other Group Companies

The Group Companies other than the Company have each a registered share capital
as set out opposite the name of each Group Company on Schedule 4 Part 4.2, and
each of the Subsidiary Shares represents the respective amount of interest in
the relevant Group Companies' registered share capital as set out on Schedule 4
Part 4.2. The relevant Group Companies have not issued any equity instruments,
or any rights (whether present or contingent), other than the Subsidiary Shares.
Upon the Closing, the Company shall be the direct or indirect owner of 100% (per
centum) of the authorised share capital of each of the Group Companies. To the
Seller’s knowledge, there is no person who has asserted, and no reasonable basis
for the assertion of, any right or entitlement to any equity interest in any
Group Company. None of the Subsidiary Shares are subject to any pre-emptive
right, right of first refusal, right of first offer or other rights of third
parties that restrict the Seller’s right to transfer the Subsidiary Shares. The
Subsidiary Shares have been issued in full compliance with all applicable
corporate and securities laws and the relevant Group Company’s constitutional
documents. Other than as set out on Schedule 4 Part 4.2, none of the Group
Companies has any equity or ownership interest, direct or indirect, in or loans
to any other business entity. No Group Company is obligated to make any
investment in or capital contribution to any other business entity. Since its
respective inception, no Group Company has repurchased, redeemed or otherwise
reacquired any of its share capital. There are no voting agreements, proxies or
voting trusts applicable to any of the Subsidiary Shares.

5.
NO INSOLVENCY

There is no bankruptcy, moratorium, insolvency or similar proceeding pending or,
to the knowledge of the Seller, threatened against any Group Company.

6.
TAXES

6.1
Tax Returns Filed, Taxes Paid

 
 
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(a)
Each Group Company has duly, and within the respective time limits, filed all
Tax returns, given all notices and supplied all other information required to be
supplied to all relevant Tax authorities; all such information was complete and
accurate in all material respects and all such returns and notices were complete
and accurate in all material respects. Each Group Company has established
adequate accruals or reserves for the payment of all unprovided Taxes
attributable to the Pre-Closing Tax Period, has made all required estimated Tax
payments, and has no liability for Taxes in excess of the amounts paid or
accrued and reserved.

 
(b)
All Taxes that have become due and payable for accounting periods ending on or
before 30 June 2011 by the Company (whether as tax payer or as a Person liable
for Taxes owed by another Person) have been paid as and when the same became
due.

 
(c)
No deficiencies for Taxes have been claimed, proposed or assessed or threatened
in writing against any Group Company. No Group Company has received any
notification from any relevant Tax authority regarding any potential assessment
or audit. No Tax return of any Group Company is under audit by any Tax authority
and all such past audits have been completed and fully resolved and all Taxes
and any penalties or interest determined by such audits to be due have been paid
in full. No Group Company assets are subject to any Tax lien. There is not in
effect any waiver by any Group Company of any statute of limitations with
respect to any Tax or any agreement to any extension of time for the filing of
any Tax return which has not been filed, and no Group Company has consented to
extend the period in which any Tax may be assessed or collected by any Tax
authority.

 
(d)
Each Group Company has timely withheld and remitted or otherwise paid to the
relevant Tax authority all required employment and social welfare taxes on all
compensation paid to employees and other service providers. Each Group Company
has maintained all required records with respect thereto.

6.2
Limitations

With respect to all Taxes due and payable by the Company the foregoing
warranties do not apply to the extent that such Tax liabilities
 
 
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(a)
are shown or provided for in the Unaudited Financial Statements as tax accruals
or as part of the other accruals for potential tax liabilities deducted from the
books and records of the Company; or

 
(b)
can be offset against Tax loss carry forwards that are or were available
(including as a result of subsequent Tax audits) in the period to which such
Taxes are allocable, whereby any use or reduction caused directly or indirectly
by the Purchaser of such Tax loss carry backs or loss carry forwards shall be
disregarded (it being understood that Tax losses incurred by any of the
Companies after the Closing Date and carried back into any period ending prior
to Closing Date are not taken into account).

7.
MATERIAL CONTRACTS

The Seller represents and warrants as of the Signing Date, but not as of the
Closing Date, that:

 
(a)
none of the Group Companies is party to any Material Contract other than those
listed in Schedule 4 Part 7 of the Disclosure Letter;

 
(b)
with respect to each such Material Contract, none of the respective Group
Companies or, to the Seller’s knowledge any counterparty, is in material breach
with its obligations thereunder;

 
(c)
each Material Contract is valid, binding and enforceable against the applicable
Group Company and, to the knowledge of the Seller, the other party thereto in
accordance with its terms and is in full force and effect;

 
(d)
no Group Company has received notice from any counterparty of its intention to
cancel or terminate any Material Contract and no Group Company has received
notice of any anticipated reduction in the amount of business to be transacted
under any Material Contract;

 
(e)
no Group Company has received notice from any Business Customer of any breach or
alleged breach of any network liquidity or uptime/availability covenants by
which such Group Company is bound; and

 
(f)
no Group Company has received any notice from any Governmental Authority or any
assertion by any Person alleging any violation of any competition or antitrust
laws.

8.
COMPLIANCE WITH LAWS

 
 
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8.1
Required Permits

Each Group Company holds in full force and effect all material authorizations,
permits, approvals, consents, licenses and similar instruments required for the
conduct of its business and the ownership of its properties, including without
limitation, (i) a remote gambling licence (No 33) issued by the Government of
Gibraltar valid for the period 1 July 2011 to 30 June 2012 and (ii) an
interactive gaming licence (the "Kahnawake Permit") issued by the Kahnawake
Gaming Commission valid until 31 July 2013 (collectively the "Permits"). Each
Group Company is in compliance with all Permits. All Permits other than the
Kahnawake Permit shall remain in full force and effect on the Closing Date.
Neither the Seller nor any Group Company has received any communication from any
Governmental Authority that alleges any possible violation of or any possible
revocation, withdrawal, suspension, cancellation, termination or modification of
any Permit as a result of the consummation of the transactions contemplated by
this Agreement. No employee or agent of any Group Company has used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses or made
any unlawful payment to government officials or government employees or made any
other payment in violation of applicable law.

8.2
Enforcement of Access Restrictions

Each Group Company has enforced against each Business Customer, and each such
Business Customer has complied with, the contractual restrictions and
obligations set forth in such Group Company’s agreement with such Business
Customer and all laws, rules or regulations applicable to such Business
Customer’s operations (such contractual restrictions and obligations and laws,
rules and regulations, collectively, "Access Restrictions") that are designed to
restrict such Business Customer’s marketing, promotion or operating activities
in order to comply with the terms of any Permit or any law, rule or regulation
applicable to such Group Company or Business Customer. Since January 1, 2007, no
Group Company has knowingly permitted any Business Customer to access any
business or custom from a Customer located in the United States of America
(including its territories and possessions, its states and the District of
Columbia). The Disclosure Letter sets forth a list (based upon Seller’s due
inquiry of books and records in its possession) of all jurisdictions ("Blocked
Jurisdictions"), since January 1, 2007, in which any Group Company has
undertaken measures to block the marketing, promotion or operation of the
Business. No Group Company has knowingly permitted any Business Customer or any
third party on behalf of a Business Customer, to advertise or promote the
availability of any product or service utilising the Business in any Blocked
Jurisdiction since implementation of the blocking measures related to such
Blocked Jurisdiction.
 
 
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8.3
Compliance with Other Laws

As of the Signing Date and as of the Closing Date, the operations of each Group
Company are in compliance with all laws, rules and regulations applicable
thereto except for such noncompliance that would not reasonably be expected to
have a Material Adverse Effect.

8.4
No payment processing services

As of the Signing Date and as of the Closing Date, the Group Companies are not
performing any payment processing services that require a license, permit or
approval from any financial services or banking regulatory authority.

9.
EMPLOYEES

9.1
No Latent Hiring

No Group Company is under an obligation to employ any former employee or any
other Person, save under mandatory provisions of Swedish employment law which
could cause such obligations with respect to the individuals set forth in the
Disclosure Letter.

9.2
Payment of Employee Compensation

Except for Retention Bonuses provided for in section 8.2(c) of the Agreement,
all payments to current or former employees or consultants, whether standard
remuneration, bonuses, premiums, severance, salary continuation or payments of
any other nature, due and payable by any Group Company to any of its employees
have been made.

9.3
Standard Terms

 
 
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Neither the Seller nor any Group Company has promised any employee of any Group
Company any payment or other benefit in connection with an actual or proposed
termination of his or her employment, or as a consequence of the transactions
contemplated hereby. The employment of all employees of the Group Companies is
terminable at the will of the respective Group Company, subject to compliance
with applicable law. No Group Company is bound by any oral agreement with
respect to terms of employment or compensation.

9.4
Labour Conflicts

There are no and there have not been in the three years prior to the Signing
Date any labour disputes, strikes, general slowdowns, general work stoppages or
lockouts by or with respect to the work force of any Group Company.

9.5
Pension Commitments

No Group Company has made or assumed any Pension Commitments.  No Group Company
shall be subject to any Loss as a result of Seller’s benefit policies.

9.6
Termination and Severance Costs

From and after the Closing, no Group Company shall have any obligation or
liability to pay any amounts, including but not limited to severance costs or
continued provision of benefits, to any current or former employee of any Group
Company, except as required under applicable law.

10.
LITIGATION

There are no pending, initiated, or to the Seller’s knowledge, threatened in
writing against or involving any Group Company any legal proceedings, whether
before ordinary courts, other independent courts, arbitral tribunals,
administrative authorities and other Governmental Authorities that, if decided
adversely for the relevant Group Company, would have a Material Adverse Effect
on the relevant Group Company. There is no judgment, decree, injunction, rule or
order of any ordinary courts, other independent courts, arbitral tribunals,
administrative authorities and other Governmental Authorities that names any
Group Company. To the Seller's knowledge, there do not exist any matters of fact
that are likely to result or give cause to initiation of any such proceedings
other than those regarding compliance with gaming .
 
 
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11.
IPR

Each Group Company holds full and exclusive title to or valid licenses in
respect of the IPR used in the conduct of the Business as conducted on the
Signing Date and the Closing Date ("Necessary IPR"), free and clear of all
Encumbrances. No Group Company infringes any IPR owned by any third Person in
any material way nor are there, to the Seller's knowledge, any matters of fact
that is likely to give rise to nullification of any Necessary IPR. To the
Seller’s knowledge, no third Person has infringed any Group Company’s rights in
any IPR. The Necessary IPR is sufficient to operate the Group Companies'
business, taken as a whole, as conducted on the Signing Date and as conducted on
the Closing Date. All Necessary IPR is fully transferable and licensable by the
respective Group Company without restriction or payment of any kind to any third
Person. No Necessary IPR is subject to any proceeding, decree, order, judgment
or settlement that restricts in any manner the Group’s use of such Necessary
IPR. No Group Company has granted to any third party any ownership interest or
right to acquire an ownership interest in any Necessary IPR or the right to
access any source codes to computer programs owned by any Group Company. Other
than licenses granted to Business Customers or Customers in the ordinary course
of the Business, no Group Company has granted any third party any right under
any Necessary IPR. Neither the Seller nor any Group Company has received any
notice of any assertion that any IPR of any Group Company is invalid or
unenforceable against any third Person. To the Seller’s knowledge, no current or
former employee or consultant of any Group Company has developed any IPR for any
Group Company that is subject to any obligation to assign the rights thereto to
any third Person. Each Group Company has secured valid assignments to all
Necessary IPR from the service providers who contributed to such IPR, free of
any obligation on the part of any Group Company to pay royalties or other
consideration thereon or to provide any attribution with respect thereto. Each
Group Company has paid all applicable registration or filing fees due and owing
for the registration and perfection of Necessary IPR. No Group Company has
misrepresented or knowingly failed to disclose any facts or circumstances in any
application to register or perfect IPR that would constitute fraud or a
misrepresentation or that would otherwise effect the enforceability of any Group
Company’s rights in such IPR. No Necessary IPR contains any virus or code
intentionally created to access, modify, delete or damage or disable any
computer systems and all products distributed by the Group perform, in all
material respects, the functions described in any specifications or end user
documentation distributed by the Group, free of bugs or programming errors that
adversely affect the functionality of such products other than routine bugs or
programming errors that reasonably would be expected to be timely corrected in
the ordinary course of maintenance and support services provided by the Group.
 
 
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12.
INSURANCES

Each of the Group Companies has the insurances listed in Schedule 4 Part 12 and
all such insurances are in full force and effect. The coverage under such
policies satisfies all applicable legal requirements for minimum insurance
coverage required by the Group Companies in the conduct of the Business. There
are no claims pending under any such policies. All premiums due under such
policies have been timely paid and each Group Company is in compliance with the
terms of each such policy.

13.
TITLE TO ASSETS

13.1
Ownership of Assets

Except for current assets disposed of by each Group Company in the ordinary
course of business the Group is the legal and beneficial owner of all assets
included in (i) Schedule 3 of the Asset Transfer Agreement, and (ii) the
Unaudited Financial Statements.

13.2
Sufficiency of Assets

The Group has good and marketable title to or a valid leasehold interest in all
of the assets and properties used in the conduct of the Business as conducted
during the six (6) month period preceding the Signing Date (including but not
limited to the URL www.holdempoker.com and any similar derivatives thereof, the
trade name "Hold ‘Em Poker" and all IPR associated therewith), free and clear of
all Encumbrances. Except for any cash required to finance the operations of the
Business on an ongoing basis, the assets and properties of the Group as of the
Closing Date will include all of the assets used by the Group Companies in the
conduct of the Business as of the Signing Date and as of the Closing Date.
Except for any cash required to finance the operations of the Business on an
ongoing basis, the assets used by the Group Companies in the conduct of the
Business at the Signing Date and at the Closing Date, together with the services
to be provided by the Seller under the Transition Services Agreement after the
Closing Date, shall be sufficient for the continued conduct of the Business
following the Closing Date in the same manner as conducted at the Signing Date
and at the Closing Date.
 
 
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14.
FINANCIAL STATEMENTS

The unaudited financial statements as of and for the period ended December 31,
2011 set out in Schedule 4 Part 14 (the "Unaudited Financial Statements") are
true, accurate and complete and present fairly, in all material respects, the
financial position of each of the Group Companies and the results of their
respective operations and have been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union applied on a
consistent basis with prior financial statements of the Seller and the Group
Companies and are, in all material respects, consistent with the books and
records of the Seller and the Group Companies. All reserves reflected in the
Unaudited Financial Statements are adequate for the purposes for which they were
established. Except as reflected in the Unaudited Financial Statements, no Group
Company has any liabilities (contingent or otherwise) of a nature required to be
disclosed in financial statements prepared in accordance with Financing
Reporting Standards as adopted by the European Union, other than (a) liabilities
incurred in the ordinary course of the Business subsequent to December 31, 2011,
and (b) obligations under contracts and commitments incurred in the ordinary
course of the Business and not required by Financing Reporting Standards as
adopted by the European Union to be reflected in the financial statements, which
in either case are not material to the financial condition or operating results
of the Group Companies. No Group Company is a guarantor or indemnitor of any
indebtedness of any other Person.

The Audited Financial Statements shall be substantially consistent with
Unaudited Financial Statements, save for normal and customary adjustments made
in connection with audit, which, individually or in the aggregate, do not
constitute a material deviation from the financial condition or operating
results presented in the Unaudited Financial Statements for the Group as a whole
and taking into account the below criteria in the aggregate for all Group
Companies (as if on a consolidated basis). For purposes of the foregoing, a five
(5) per centum or greater difference in revenue; earnings before interest,
taxes, depreciation and amortization; or earnings before interest and taxes
shall constitute "a material deviation" for purposes of this part 14.
 
 
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15.
ABSENCE OF CHANGES

From and after the date of the Unaudited Financial Statements, each Group
Company has operated its business in the ordinary course, consistent with past
practice, and there has not been any:

 
(a)
amendment or change in any constitutional documents of any Group Company;

 
(b)
license, sale, assignment, transfer or other disposition or agreement to do any
of the foregoing with respect to any of the assets or properties of any Group
Company outside of the ordinary course of business;

 
(c)
damage, destruction or loss of any assets or properties of any Group Company;

 
(d)
declaration, setting aside or payment of any dividend or other distribution to
equity holders by any Group Company, any split or combination or
recapitalization of any Group Company or any change in the rights or obligations
of the share capital of any Group Company;

 
(e)
resignation or termination of employment of any key employee or manager of any
Group Company;

 
(f)
material change in the compensation, employee benefits or terms of employment of
any employee of any Group Company;

 
(g)
entry into, amendment of, waiver of rights under or termination of any Material
Contract (and for purpose of this clause (g) substituting EUR 100,000 for EUR
50,000 in the definition of "Material Contracts") ;

 
(h)
written or oral indication or assertion by any counterparty to a Material
Contract of any problem or defect in the performance by any Group Company of its
obligations under any Material Contract;

 
(i)
agreement by any Group Company to provide products or services to any third
party on an exclusive basis or not to engage in any type of business activity;

 
(j)
to the Seller’s knowledge, commencement of any lawsuit, proceeding or
investigation by any Governmental Authority into any Group Company;

 
(k)
change in accounting methods or practices or revaluation of any asset or account
of any Group Company;

 
 
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(l)
amendment of any Tax return of any Group Company, making or revocation of any
material election relating to Taxes, or settlement or compromise of any claim,
action, suit, litigation, proceeding, arbitration, audit or controversy relating
to Taxes or consent to waiver or extension of any statute of limitations with
respect to any Taxes; or

 
(m)
entry into any agreement, understanding or arrangement (whether or not in
writing) to do any of the foregoing.

16.
NO MISLEADING STATEMENTS

Neither this Agreement nor any document or instrument delivered in connection
herewith contains any untrue statement of fact or omits to state any fact
necessary in order to make the statements contained herein and therein, in light
of the circumstances under which such statements were made, not misleading.
 
 
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Schedule 4 Part 4.2
List of Subsidiaries and share capital of Subsidiaries

Group Company
Registered share capital
Amount of interest
Ongame Services AB
EUR 11,000
100% (per centum)
Ongame Markets AB
EUR 11,000
100% (per centum)
Ongame Markets Malta Limited
EUR 100,000
100% (per centum)

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