ex10_1.htm


    
      
        

      
Exhibit 10.1

      


       

      
        	 
      	
                U.S. Department of
      Justice

              
		 
      
	
                United
      States Attorney

              
	
                Southern
      District of New York

              
	 
      
	 	 
	 
      	 
      
	 
      	 
      
	 
      	
                The
      Silvio J. Mollo Building

              
	 
      	
                One
      Saint Andrew's Plaza

              
	 
      	
                New
      York, New York 10007

              
	 
      	 
      
	 
      	 
      
	 
      	
                October
      29, 2009

              


      

      


       

      Via
Federal Express

      Melinda
Sarafa, Esq.

      Sarafa
Law LLC

      80 Pine
Street, Floor 33

      New York,
NY 10005

      


       

      Behnam
Dayanim, Esq.

      Paul,
Hastings, Janofsky & Walker LLP

      875
15th
Street, NW

      Washington,
DC 20005

       

       

      
        	
                 
      

              	
                Re:

              	
                Optimal Group
      Non-Prosecution Agreement

              


      

       

      Dear
Madam and Sir:

       

      On the
understandings specified below, the Office of the United States Attorney for the
Southern District of New York (the "Office") will not criminally prosecute
Optimal Group Inc. or its subsidiaries (collectively, "Optimal") for any crimes
(except for criminal tax violations, as to which this Office cannot and does not
make any agreement) related to processing by Optimal, its predecessors, or
acquired companies of internet gambling related transactions originating from
customers in the United States through and including 2006. This conduct is
described more fully in the Statement of Facts, attached hereto as Exhibit A,
which is incorporated by reference herein. This Agreement is entered into by
Optimal pursuant to authority conveyed by resolution of the Board of Directors
of Optimal. A copy of this resolution is attached hereto as Exhibit
B.

       

      Moreover,
if Optimal fully complies with the understandings specified in this Agreement,
no information provided to the Office or at its request by or on behalf of
Optimal (or any other information directly or indirectly derived therefrom) will
be used against Optimal in any criminal tax prosecution. This Agreement does not
provide any protection against prosecution for any crimes except as set forth
above, and applies only to Optimal and not to any other entities or any
individuals. Optimal expressly understands that the protections provided to
Optimal by this Agreement shall not apply to any successor entities, whether the
successor's interest arises through a merger or plan of reorganization or
otherwise, unless and until such successor formally adopts and executes this
Agreement. The protections arising from this Agreement will not apply to any
purchaser of all or substantially all of the assets of Optimal, unless such
purchaser enters into a written agreement, on terms acceptable to this Office,
agreeing in substance to undertake all of the obligations set forth in the
"Continuing Obligation to Cooperate" section of this Agreement, set forth
below.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Melinda
Sarafa, Esq

      Behnam
Dayanim, Esq.

      October
29, 2009

      Page
2

      


       

      Continuing
Obligation To Cooperate

       

      Optimal
acknowledges and understands that the cooperation it has provided to date in
connection with a criminal investigation by this Office, and its pledge of
continuing cooperation, are important and material factors underlying this
Office's decision to enter into this Agreement. Accordingly, Optimal agrees to
cooperate fully and actively with the Office, the Federal Bureau of
Investigation (the "FBI"), and any other agency of the government designated by
the Office (including the FBI, the "Designated Agencies") regarding any matter
relating to the Office's investigation about which Optimal has knowledge or
information.

       

      In this
regard, it is understood that, in connection with any matter relating to
Optimal's business and operations Optimal: (a) shall truthfully and completely
disclose all information with respect to the activities of Optimal, its officers
and employees, and others concerning all such matters about which this Office
inquires, which information can be used for any purpose, except as limited by
the second paragraph of this Agreement; (b) shall cooperate fully with this
Office and the Designated Agencies; (c) shall, at the Office's request, use its
best efforts to assist this Office in any prosecution or investigation by
providing logistical and technical support for any meeting, interview, grand
jury proceeding, or any trial or other court proceeding; (d) shall at the
Office's request, use its best efforts promptly to secure the attendance and
truthful statements or testimony of any officer, agent, employee, or former
officer, agent or employee, at any meeting or interview or before the grand jury
or at any trial or other court proceeding; (e) shall use its best efforts
promptly to provide to this Office, upon request, any document, record, or other
tangible evidence relating to this Office's continuing investigation in this and
related internet gambling-related matters about which this Office or one or more
of the Designated Agencies may inquire, and will assemble and organize
documents, records, information, and other evidence in Optimal's possession,
custody, or control as may be requested by the Office or the Designated
Agencies; and (f) shall bring to this Office's attention all criminal conduct by
and criminal investigations of Optimal or its employees that come to the
attention of Optimal's board of directors or senior management, as well as any
administrative proceeding, civil action or other proceeding brought by any
governmental authority in which Optimal is a party, related to the operation or
management of Optimal's business. It is further understood that Optimal shall
commit no crimes whatsoever. Moreover, any assistance that Optimal may provide
to federal criminal investigators shall be pursuant to the specific instructions
and control of this Office and designated investigators. Optimal's obligations
under this paragraph shall continue until the later of (1) a period of three
years from the date of the signing of this Agreement or (2) the date on which
all prosecutions arising out of the conduct described in the opening paragraph
of this Agreement are final.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Melinda
Sarafa, Esq

      Behnam
Dayanim, Esq.

      October
29, 2009

      Page
3

      


       

      Forfeiture/Disgorgement
Obligations

       

      Optimal
agrees that it will pay a total of $ 19,182,418.18 (the "Property") to the
United States as part of this Agreement, as property involved in or proceeds
received from the activities described in the Statement of Admitted Facts, all
of which will be forfeited to the United States. The Property will be subject of
a civil forfeiture complaint to be filed against Optimal in the United States
District Court for the Southern District of New York. Optimal and this Office
agree that the $19,182,418.18 seized to date by this Office shall be applied to
satisfy Optimal's forfeiture obligation under this paragraph. Optimal agrees
that it will not file a claim with the Court or otherwise contest any civil
forfeiture action and will not assist a third party in asserting any claim
against the Property. It is further understood that Optimal will not file or
assist anyone in filing a petition for remission or mitigation with the
Department of Justice concerning the Property.

       

      Additional
Obligations

       

      It is
understood that, should Optimal commit any crimes subsequent to the date of the
signing of this Agreement or fail to comply with its forfeiture/disgorgement
obligations as described above, or should it be determined that Optimal or any
of its representatives have given false, incomplete, or misleading testimony or
information, or has otherwise violated any provision of this Agreement, (a)
Optimal shall thereafter be subject to prosecution for any federal offense of
which this Office has knowledge, including perjury and obstruction of justice;
(b) all statements made by Optimal's representatives to this Office, or one or
more of the Designated Agencies, including but not limited to the appended
Statement of Facts, and any testimony given by Optimal's representatives before
a grand jury subsequent to the signing of this Agreement, and any leads from
such statements or testimony, shall be admissible in evidence in any criminal
proceeding brought against Optimal and relied upon as evidence to support any
penalty imposed on Optimal; and (c) Optimal shall assert no claim under the
United States Constitution, any statute, Rule 410 of the Federal Rules of
Evidence, or any other federal rule that such statements or any leads therefrom
should be suppressed. In addition, any such prosecution that is not time-barred
by the applicable statute of limitations on the date of the execution of this
Agreement may be commenced against Optimal, notwithstanding the expiration of
the statute of limitations between the signing of this Agreement and the
commencement of such prosecution. It is the intent of this Agreement to waive
all defenses based on the statute of limitations with respect to any prosecution
that is not time-barred on the date that this Agreement is
signed.


      
        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

      


      Melinda
Sarafa, Esq

      Behnam
Dayanim, Esq.

      October
29, 2009

      Page
4

       

       

      It is
understood that Optimal acknowledges and accepts as accurate the facts set forth
in the Statement of Facts attached as Exhibit A, which is incorporated by
reference herein. Optimal hereby agrees to maintain, with respect to its
operations, a permanent restriction on providing payment processing services for
gambling merchants in connection with customers in the United States in
violation of the law of the United States or the law of any jurisdiction within
the United States.

       

      It is
understood that this Agreement does not bind any federal, state, or local
agencies, any licensing authorities, or any regulatory authorities. If requested
by Optimal, this Office will, however, bring the cooperation and remedial
actions of Optimal to the attention of other prosecuting and other investigative
offices or other licensing or regulatory authorities.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Melinda
Sarafa, Esq

      Behnam
Dayanim, Esq.

      October
29, 2009

      Page
5

      


       

      With
respect to this matter, this Agreement supersedes all prior understandings,
promises and/or conditions between this Office and Optimal. No additional
promises, agreements, and conditions have been entered into other than those set
forth in this letter and none will be entered into unless in writing and signed
by all parties.

       

       

      
        	 
      	 
      	 
      	
                Very
      truly yours,

              	 
	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	
                PREET
      BHARARA

              	 
	 
      	 
      	 
      	
                United
      States Attorney

              	 
	 
      	 
      	 
      	
                Southern
      District of New York

              	 
	 
      	 
      	 
      	 
      	 
	 
      	 
      	
                By:

              	
                /s/
      Arlo Devlin-Brown

              	 
	 
      	 
      	 
      	
                Arlo
      Devlin-Brown

              	 
	 
      	 
      	 
      	
                Jonathan
      New

              	 
	 
      	 
      	 
      	
                Assistant
      United States Attorneys

              	 
	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	
                /s/
      Richard Zabel

              	 
	 
      	 
      	 
      	
                Richard
      Zabel

              	 
	 
      	 
      	 
      	
                Chief,
      Criminal Division

              	 
	 
      	 
      	 
      	 
      	 
	
                AGREED
      AND CONSENTED TO:

              	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
	
                /s/
      Neil Wechsler

              	 
      	 
      	
                October
      30, 2009

              	 
	
                Pursuant
      to Authority Conveyed By Resolution of the Board of Directors of
      Optimal

              	 
      	 
      	
                Date

              	 
	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
	
                APPROVED:

              	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
	
                /s/
      Melinda Sarafa, Esq.

              	 
      	 
      	
                October
      30, 2009

              	 
	
                Melinda
      Sarafa, Esq.

              	 
      	 
      	
                Date

              	 
	
                Behnam
      Dayanim, Esq.

              	 
      	 
      	 
      	 


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Exhibit
A

      


       

      STATEMENT OF
FACTS

       

      Corporate
History and Structure

       

      
        	
                 
      

              	
                1.

              	
                Optimal
      Group Inc. ("Optimal") is a Canadian corporation established in 1984.
      Under its previous name of Optimal Robotics Corp., Optimal was a provider
      of self-checkout systems to retailers and, through wholly-owned
      subsidiaries, of repair and field services to retail, financial services
      and other third-party accounts.

              


      

       

      
        	
                 
      

              	
                2.

              	
                In
      2004, following the sale of its self-checkout business and to reposition
      its business activities, Optimal acquired Terra Payments Inc. (formerly
      SureFire Commerce Inc.), a provider of payment processing and electronic
      commerce services. In conjunction with this acquisition, Optimal changed
      its name from Optimal Robotics Corp. to Optimal Group
  Inc.

              


      

       

      
        	
                 
      

              	
                3.

              	
                Following
      its acquisition by Optimal, Terra Payments became a wholly-owned
      subsidiary of Optimal known as Optimal Payments Inc. The Optimal Payments
      group of companies provided payment processing services to a variety of
      merchants, including Internet gambling merchant websites. In May 2005, the
      Optimal Payments group assets relating to the processing of transactions
      involving Internet gambling merchant websites were transferred to FireOne
      Group plc, a newly-established, Ireland-based affiliate of Optimal
      Payments. In June 2005, in conjunction with the public placement of 20% of
      FireOne Group's issued and outstanding share capital, the shares of
      FireOne Group began trading on the Alternative Investment Market ("AIM")
      of the London Stock Exchange.

              


      

       

      Payment
Processing Business (Optimal Payments/FireOne Group)

       

      
        	
                 
      

              	
                4.

              	
                Optimal's
      payment processing subsidiaries provided technology and services required
      by businesses to accept credit card, electronic check and direct debit
      payments. Such technology and services were provided for Internet
      businesses, including Internet gambling merchant websites,
      mail-order/telephone-order and retail point-of-sale
    merchants.

              


      

       

      
        	
                 
      

              	
                5.

              	
                Through
      its subsidiaries, Optimal processed payment transactions in connection
      with Internet gambling merchant websites through the use of credit and
      debit cards, electronic debit and a stored-value, electronic wallet known
      as FirePay. The Internet gambling websites were located outside of the
      United States. A substantial majority of the transactions in connection
      with Internet gambling merchant websites originated from customers located
      in the United States, including in the Southern District of New
      York.

              


      

       

      
        	
                 
      

              	
                6.

              	
                Optimal
      continued to process transactions originating from U.S. customers in
      connection with Internet gambling merchant websites until October 13,
      2006, the day the Unlawful Internet Gambling Enforcement Act ("UIGEA") was
      signed into law. On that date, Optimal stopped all transfers of U.S.
      customer funds to Internet gambling merchant websites. Shortly thereafter,
      Optimal voluntarily agreed to cooperate with the United States Attorney's
      Office for the Southern District of New York in its investigation of
      unlawful Internet gambling.

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                7.

              	
                From
      April 2004, when Optimal acquired Terra Payments, through December 2004,
      Optimal's subsidiaries processed a total of approximately $1.4 billion in
      payment transactions. Of this amount, $610 million consisted of
      transactions involving Internet gambling merchant websites, generating
      revenue of $32.8 million. Of the transactions involving Internet gambling
      merchant websites, approximately 80% originated from U.S.
      customers.

              


      

       

      
        	
                 
      

              	
                8.

              	
                During
      the year 2005, Optimal's subsidiaries processed a total of approximately
      $5.5 billion in payment transactions. Of this amount, $1.2 billion
      consisted of transactions involving Internet gambling merchant websites,
      generating revenue of $76.3 million. Of the transactions involving
      Internet gambling merchant websites, approximately 83% originated from
      U.S. customers.

              


      

       

      
        	
                 
      

              	
                9.

              	
                During
      the year 2006, Optimal's subsidiaries processed a total of approximately
      $7.4 billion in payment transactions. Of this amount, $1.3 billion
      consisted of transactions involving Internet gambling merchant websites,
      generating revenue of $84.2 million. Of the transactions involving
      Internet gambling merchant websites, approximately 82% originated from
      U.S. customers.

              


      

       

      
        	
                 
      

              	
                10.

              	
                After
      Optimal ceased processing U.S. customer transactions involving Internet
      gambling merchant websites, Optimal disposed of substantially all of the
      assets of its payment processing business, including the entirety of the
      business formerly operated by Terra Payments. Today, through its
      subsidiaries (WowWee Group Limited and related companies), Optimal is
      principally a toy and consumer electronics
  business.

              


      

       

      
        	
                 
      

              	
                11.

              	
                Optimal
      knew that its payment processing services were being provided to U.S.
      customers in connection with Internet gambling merchant websites. Optimal
      recognizes that the services provided by the Internet gambling merchant
      websites, for which Optimal's subsidiaries provided payment processing
      services, violated certain United States laws, including 18 U.S.C. § 1084
      and 18 U.S.C. § 1955.

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Exhibit B

       

       

      OPTIMAL GROUP
INC.

       

      CERTIFIED
RESOLUTION

      


       

      I do
herby certify that the following is a true and complete copy of a resolution of
the Board of Directors of Optimal Group Inc. (the "Corporation") adopted at a
meeting of the Directors duly convened and held on October 30,
2009:

       

      "WHEREAS the Board deems it to be in the best
interest of the Corporation to enter into a non-prosecution agreement with the
Office of the United States Attorney for the Southern District of New York,
substantially in the form reviewed by the Directors, including the Statement of
Facts to be annexed thereto.

       

      NOW,
THEREFORE, BE IT RESOLVED:

       

      THAT the entering into of a
non-prosecution agreement with the Office of the United States Attorney for the
Southern District of New York, substantially in the form reviewed by the
Directors, including the Statement of Facts to be annexed thereto, be and it is
hereby approved; and

       

      THAT either of the Co-Chairmen
of the Corporation, acting alone, be and is hereby authorized and empowered, for
and on behalf of the Corporation, to execute and deliver the non-prosecution
agreement with such additions, deletions or other changes as such Co-Chairman
may approve, such approval to be evidenced by his execution and delivery of the
non-prosecution agreement.

      


       

      CERTIFIED
at Montreal, this 30th day of October 2009.

       

      


      
        	
                /s/
      Leon Garfinkle

              	 
      
	
                Leon
      Garfinkle

              	 
      
	
                Senior
      Vice-President,

              	 
      
	
                General
      Counsel and Secretary