Unassociated Document


    Exhibit
      10-17

     

    

      ASSET
        PURCHASE AND ASSUMPTION OF LIABILITIES AGREEMENT

      


      This
        ASSET PURCHASE AND ASSUMPTION OF LIABILITIES AGREEMENT (this "Agreement")
        is
        entered into this 13th day of March, 2006, by and between NEW MEDIA LOTTERY
        SERVICES, INC., a Delaware corporation ("NMLS"
        or the “Company”)),
        and
        NEW MEDIA LOTTERY SERVICES (INTERNATIONAL) LIMITED, an Irish limited company
        ("LTD
        ").

      


      W
        I T N E
        S S E T H:

      


      WHEREAS,
        LTD is a wholly owned subsidiary of New Media Lottery Services plc, an Irish
        corporation (“PLC”),
        all of
        the outstanding shares of which are owned by NMLS; and

      


      WHEREAS,
        PLC has engaged Zimmerman Adams International Ltd. (“ZAI”) to serve as its lead
        financial advisor and broker to sponsor PLC’s entire outstanding share capital
        for admission to trade on the AIM Market operated by the London Stock Exchange
        (“AIM”)
        pursuant to an agreement between the parties dated September 22, 2005 (the
        “Engagement Letter”); and

      


      WHEREAS,
        in furtherance of the admission of PLC’s share capital to AIM, NMLS desires to
        sell, transfer and assign to LTD, effective upon the date on which PLC’s common
        shares are admitted for trading on the AIM (the “Admission Date”), the assets
        and liabilities described herein, all as more fully described and catalogued
        on
        the List of Assets attached hereto as Exhibit 1.01 (the "Assets"),
        and
        the List of Liabilities and Obligations Transferred to and Assumed by LTD
        attached hereto as Exhibit 1.02; and

      


      WHEREAS,
        simultaneous herewith, the parties are entering into a Technology License
        Agreement
        whereby NMLS agrees to license to LTD certain specified intellectual property
        which it owns or has the right to use as of the Admission Date, on the terms
        and
        subject to the conditions provided therein, including all copyrights; patents;
        patent applications; proprietary rights, including any trademarks, trade
        secrets, service marks, rights in designs, trade or business names; technology,
        including any information, know-how, experience and records, including all
        formulas, designs, specifications, drawings, data, documents, manuals and
        instructions and all technical or other expertise and all computer software
        and
        computer programmes including, without limitation, both object code and source
        code, and records, technology, processes and methodologies relating to the
        business of NMLS or as carried on at any time up to the date of the License
        Agreement and developed by or for NMLS (the “Intellectual Property”); and


      


      WHEREAS,
        upon the Admission Date and the closing of the sale, transfer and assignment
        of
        the Assets pursuant hereto and the license of the Intellectual Property pursuant
        to the License Agreement, LTD will posses or have the right to use all of
        those
        assets necessary and required for it to operate the business of NMLS
        substantially in the manner in which NMLS has operated its business prior
        to the
        Closing Date (as defined herein);

      


      WHEREAS,
        LTD desires to purchase and acquire the Assets enumerated in Schedule 1.01
        and
        agrees to become liable to pay, perform, discharge and satisfy those liabilities
        transferred hereby and assume, pay, perform, observe and discharge in accordance
        with the respective terms thereof, all of the Company’s obligations, duties,
        commitments and liabilities under each and every agreement assigned by the
        Company to LTD hereunder, as more fully described in, and subject to, Exhibit
        1.02, as may be adjusted on the Closing Date, (collectively, the “Liabilities
        and Obligations”).

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      NOW,
        THEREFORE, in consideration of the premises and the mutual covenants contained
        in this Agreement, and for other good and valuable consideration, the receipt
        and sufficiency of which are hereby acknowledged, the parties, intending
        to be
        legally bound, agree as follows:

      


      ARTICLE
        I

      TRANSFER
        AND SALE OF ASSETS

      


      SECTION
        1.01.    Transfer,
        Assignment and Sale of Assets by NMLS to LTD.
        On the
        terms and subject to the conditions of this Agreement, on the Closing Date
        (as
        hereafter defined), NMLS shall sell, transfer, assign and deliver to LTD,
        subject, in the case of the Alladdin Agreement (as defined in Section 2.05(a)),
        to the receipt of consent from Alladdin Lotteries Limited and Alladdin Limited
        to the assignment of said agreement and the benefits and properties acquired
        thereunder and as may have been further developed, by the Company thereunder,
        and LTD shall receive from NMLS, the Assets, as may be adjusted on the Closing
        Date.

      


      SECTION
        1.02.    Consideration
        for the Assets.
        In
        consideration for the purchase and sale of the Assets, upon the terms and
        subject to the conditions set forth in this Agreement, on the Closing Date,
        LTD
        shall deliver to NMLS an executed Instrument of Assumption in the form attached
        hereto as Exhibit 1.03 (the “Instrument
        of Assumption”).
        

      


      SECTION
        1.03.    Assumption
        of and Covenant to Satisfy Certain Liabilities and Obligations by
        LTD.
        On and
        as of the close of business on the Closing Date, LTD shall assume, and satisfy
        and be liable for paying, performing and discharging the Liabilities and
        Obligations and will deliver the Instrument of Assumption in favor of
        NMLS.

      


      SECTION
        1.04.      LTD
        Indemnification of NMLS.
        LTD
        covenants and agrees to defend, indemnify and hold harmless NMLS (and its
        successors-in-interest), its stockholders, officers, directors, employees,
        agents, advisers, representatives and affiliates, and their respective heirs,
        successor and assigns (collectively, the "NMLS
        Indemnitees")
        from
        and against, and shall pay or reimburse NMLS Indemnitees for, any and all
        actions, causes of actions, suits, debts, losses, charges, complaints, claims,
        liabilities, obligations, promises, agreements, controversies, damages, and
        expenses (including attorney fees and costs actually incurred), of any nature
        whatsoever, in law or equity (collectively "Claims"),
        which
        arise out of or are related to the Liabilities and Obligations, regardless
        of
        whether known or unknown or incurred before or after the Closing Date, all
        as
        more fully described in and subject to the provisions of that certain Indemnity
        Agreement attached hereto as Exhibit 1.04 (the “Indemnity
        Agreement”).

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      


      SECTION
        1.05.    Closing.
        The
        closing of the transactions contemplated hereby (the "Closing")
        shall
        occur at such time and place as the parties shall mutually agree promptly
        after
        the satisfaction of the condition set forth in ARTICLE VI hereof (said date
        being herein referred to as the "Closing
        Date").

      


      (a)
        At
        the Closing, NMLS will deliver to LTD (i) to the extent requested by LTD,
        assignments of all trade names and assumed names; (ii) assignments of all
        the
        agreements being transferred hereby listed in Schedule 1.01(b) (iii) all
        documents of title necessary to transfer ownership to LTD of the Assets;
        and
        (iv) all other previously undelivered documents required to be delivered
        by NMLS
        to LTD at or prior to the Closing in connec-tion with the transactions
        contemplated by this Agreement.

      


      (b)
        At
        the Closing, LTD will deliver to NMLS (i) a duly executed Instru-ment of
        Assump-tion; (ii) a duly executed Indemnity Agreement; and (iii) all previously
        undelivered documents required to be delivered by LTD to NMLS at or prior
        to the
        Closing. 

      


      SECTION
        1.06. Further
        Assurances.
        At any
        time and from time to time after the Closing Date, at the request of any
        party
        hereto and without further consideration, NMLS and LTD shall execute and
        deliver
        such other instruments of sale, transfer, assignment and confirmation as
        may be
        reasonably requested in order more effectively to sell, transfer, and assign
        to
        LTD and to confirm LTD’s title to the Assets and LTD’s obligations with respect
        to the Liabilities.

      


      ARTICLE
        II

      REPRESENTATIONS,
        WARRANTIES AND COVENANTS OF NMLS

      


      NMLS
        represents and warrants to LTD as follows:

      


      SECTION
        2.01.    Organization
        and Qualification.
        NMLS is
        a corporation duly

      organized,
        validly existing and in good standing under the laws of State of Delaware
        and is
        duly licensed or qualified to transact business as a foreign corporation
        in the
        State of Virginia and is in good standing in the State of Virginia.

      


      SECTION
        2.02.    Corporate
        Power and Authority.
        NMLS
        has the corporate power and authority to own and hold its properties and
        to
        carry on its business. NMLS has the corporate power and authority to execute,
        deliver and perform this Agreement and the other documents and instruments
        contemplated hereby and thereby (collectively, the “NMLS Transaction
        Documents”). The execution, delivery and performance of the NMLS Transaction
        Documents have been duly authorized and approved by NMLS. This Agreement
        and
        each of the other agreements, documents and instruments to be executed and
        delivered by NMLS have been duly executed and delivered by, and constitute
        the
        legal, valid and binding obligation of, NMLS enforceable against NMLS in
        accordance with their terms.

      


      SECTION
        2.03.    Validity,
        Etc.
        Neither
        the execution and delivery of the NMLS Transaction Documents, the consummation
        of the transactions contemplated hereby or thereby nor the performance of
        its
        obligations under the NMLS Transaction Documents will (i) violate, conflict
        with
        or result in any breach of any trust agreement, certificate of incorporation,
        bylaw, judgment, decree, order, statute or regulation applicable to NMLS,
        (ii)
        require any consent, approval, authorization or permit of, or filing with
        or
        notification to, any governmental or regulatory authority, except for certain
        notification filings to be made with the Securities and Exchange Commission
        after the Closing Date, or (iii) violate, conflict with or result in a breach,
        default or termination of, or give rise to any right of termination,
        cancellation or acceleration of the maturity of any payment date of, any
        of the
        obligations of NMLS.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      


      SECTION
        2.04.    Ownership
        of Assets.
        NMLS
        has good, valid and market-able title to all the Assets and has the power
        and
        authority, subject, in one case, as specified in Exhibit 1.01(b), to the
        receipt
        of written consent from a third party to transfer its rights under that certain
        agreement specified in Exhibit 1.01(b), to transfer the Assets as contemplated
        hereby. 

      


      SECTION
        2.05.    Covenants
        of NMLS.
        NMLS
        hereby covenants to and agrees with LTD as follows:

      


      (a)
        Agreement
        to Obtain Consents to Assignment of Alladdin Limited Agreement.
        NMLS
        shall, after the date hereof, (i) take all such action and do all such things
        as
        may be necessary to procure the consent of each of Alladdin Limited and Alladdin
        Lotteries Limited to the assignment and transfer of the agreement among the
        parties dated May 6, 2005 (the “Alladdin Agreement”) to LTD, and (ii) take any
        other act which LTD may reasonable request to effectively transfer and assign
        the Alladdin Agreement to LTD.

      


      (b)
        Retention
        by NMLS of Benefits Derived from Alladdin Agreement in Trust for
        LTD.
        To the
        extent that NMLS realizes or receives any revenue or any other benefit of
        any
        kind from or as a result of the Alladdin Agreement prior to the transfer
        and
        assignment thereof to LTD as required in Section 2.05(a), above, NMLS shall
        hold
        all such revenues or benefits in trust for the benefit of LTD and shall promptly
        transfer to LTD, for no additional consideration, the revenues or other benefits
        received. 

      


      (c)
        Decisions
        Under Alladdin Agreement.
        To the
        extent any decisions of any nature are required to be made in connection
        with
        the Alladdin Agreement prior to its transfer to LTD, NMLS shall refer all
        such
        decisions to LTD in writing and shall permit a representative of LTD to discuss
        any issue requiring a decision with the third party. NMLS shall not take
        any
        action with respect to the Alladdin Agreement without the advice of LTD.
        

       

      ARTICLE
        III

      REPRESENTATIONS
        AND WARRANTIES OF LTD

       

      LTD
        represents and warrants to NMLS as follows:

      


      SECTION
        3.01.    Organization.
        LTD is
        duly organized, validly existing and in good standing under the laws of the
        Republic of Ireland.

      


      SECTION
        3.02.    LTD
        Power and Authority.
        LTD has
        the corporate power and authority to execute, deliver and perform this
        Agreement, the Indemnity Agreement, the Instrument of Assumption and the
        other
        documents and instruments contemplated hereby and thereby (collectively the
“LTD
        Transaction Documents”). The execution, delivery and performance of the LTD
        Transaction Documents have been duly authorized and approved by LTD. This
        Agreement and each of the other agreements, documents and instruments to
        be
        executed and delivered by LTD have been duly executed and delivered by, and
        constitute the valid and binding obligation of LTD enforceable against LTD
        in
        accordance with their terms.

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      


      SECTION
        3.03.    Validity,
        Etc.
        Neither
        the execution and delivery of the LTD Transaction Documents, the consummation
        of
        the transactions contemplated hereby or thereby, nor the performance of its
        obligations under the LTD Transaction Documents will (i) conflict with or
        result
        in any breach of any trust agreement, certificate of organization, bylaw,
        judgment,

      decree,
        order, statute or regulation applicable to LTD (ii) require any consent,
        approval, authorization or permit of, or filing with or notification to,
        any
        governmental or regulatory authority, (iii) result in a breach of or default
        (or
        give rise to any right of termination, cancellation or acceleration) under
        any
        law, rule or regulation or any judgment, decree, order, governmental permit,
        license or order or any of the terms, conditions or provisions of any mortgage,
        indenture, note, license, agreement or other instrument to which LTD is a
        party
        or (v) violate any order, writ, injunction, decree, statute, rule or regulation
        applicable to LTD.

      


      ARTICLE
        IV

      FORWARD
        COMMUNICATIONS

      


      SECTION
        4.01.    Forward
        Communications.
        Any
        written communication received at
        any
        time by NMLS with respect to any of the Assets or Liabilities shall be
        transmitted by NMLS to LTD promptly upon receipt.

      


      ARTICLE
        V

      CONDITION
        TO SALE OF ASSETS 

      


      SECTION
        5.01.    Sale
        and Completion of Admission.
        Each
        and every obligation of the parties under this Agreement, shall be sub-ject
        to
        The London Stock Exchange plc having unconditionally agreed to the admission
        of
        the entire issued ordinary share capital of New Media Lottery Services plc
        to
        trading on AIM becoming effective in accordance with the AIM Rules.


      


      ARTICLE
        VI

      MISCELLANEOUS
        PROVISIONS

      


      SECTION
        6.01.    Successors
        and Assigns.
        This
        Agreement shall be binding upon and inure to the benefit of the parties and
        their successors and permitted assigns. 

      


      SECTION
        6.02.    Governing
        Law.
        This
        Agreement and the legal relations among the parties hereto shall be governed
        by
        and con-strued in accordance with the laws of the State of Delaware, with-out
        regard to its conflicts of law doctrine.

      


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      


      


      SECTION
        6.03.    Execution.
        This
        Agreement may be executed in two or more counterparts, all of which when
        taken
        together shall be considered one and the same agreement and shall become
        effective when counterparts have been signed by each party and delivered
        to the
        other party, it being understood that both parties need not sign the same
        counterpart. In the event that any signature is delivered by facsimile
        transmission, such signature shall create a valid and binding obligation
        of the
        party executing (or on whose behalf such signature is executed) with the
        same
        force and effect as if such facsimile signature page were an original
        thereof.

       

      REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
        PAGE FOLLOWS

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, New Media Lottery Services, Inc. and New Media Lottery Services
        (International) Limited have each executed this Asset Purchase and Assumption
        of
        Liabilities Agreement as of the day and year first above written.

      


      
        	 	
                NEW
                  MEDIA LOTTERY SERVICES, INC.

                a
                  Delaware corporation

              
	
                Attest:

                 

                ___________________

              	
                 

                 

                
                  By:______________________

                

              


      

      


      


      PRESENT
        WHEN THE COMMON SEAL

      


      of
        NEW
        MEDIA LOTTERY SERVICES (INTERNATIONAL) LIMITED

      


      was
        affixed hereto:

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      


      



      EXHIBITS

      


      1.01
        List
        of Assets

      1.02
        List
        of Liabilities

      1.03
        Instrument of Assumption 

      1.04
        Indemnity Agreement

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          
EXHIBIT
          1.01

      

      LIST
        OF ASSETS

      


      (a)    (i)   Assets
        to
        be transferred and assigned effective as of the Closing Date:

      


      (A)
        Notes
        Receivable (including interest through 1/31/06):  $63,175

      New
        Media
        Lottery Serviços de Internet Ltda., a 

      corporation
        organized under Brazilian law.     

      


      (B)
        Furniture & Equipment:       $47,521.21

      Includes
        all furniture and equipment owned by NMLS.

      


      (C) The
        name
“New Media Lottery Services” and any derivations thereof or trade names
        associated therewith.

      


      (b)    (i)   Contracts
        assigned to LTD effective as of Closing Date:

      


      (A)
        Las
        Vegas Gaming, Inc. dated November 22, 2005.

      


      (B)
        Parlay Entertainment Limited agreement dated June 7, 2005.

      


      (C)
        ROK
        Corporation agreement dated December 7, 2004.

      


      (D)
        Guatemalan Paediatric Foundation agreement dated November 22, 2005.

      


      (E)
        Quotaholders’
        Agreement
        with
Cybercyte
        Sistemas dated
        June
        22, 2005.

      


      (ii)   Contract
        to be assigned effective upon receipt of consent of Alladdin Lotteries Limited
        and Alladdin Limited:

      


      (A)
        Agreement dated May 6, 2005 by and among the Company, Alladdin Lotteries
        Limited
        and Alladdin Lotteries (“Alladdin Agreement”) will be transferred and assigned
        upon the consent of Alladdin Lotteries Limited and Alladdin Lotteries to
        such
        assignment.

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      EXHIBIT
        1.02

      LIST
        OF LIABILITIES AND OBLIGATIONS 

      TRANSFERRED
        TO AND ASSUMED BY LTD

      


      (a)
        The
        following liabilities are being transferred to and assumed by LTD as of the
        Closing Date:

      


      (i)
        Deferred Compensation owed to management:  $100,000

      See
        Schedule 1.02(a)(i) for a list of deferred compensation.

      


      (ii)
        Accounts Payable:     $10,696.21

      See
        Schedule 1.02(a)(ii) for a list of accounts payables.

      


      (b)
        Contracts under which LTD is assuming all liabilities, obligations and duties
        of
        the Company as of the Closing Date:

      


      (i)
        Las
        Vegas Gaming, Inc. dated May 14, 2005.

      


      (ii)
        Parlay Entertainment Limited agreement dated June 7, 2005.

      


      (iii)
        ROK
        Corporation agreement dated December 7, 2004.

      


      (iv)
        Guatemalan Paediatric Foundation agreement dated November 22, 2005.

      


      (v)
        Quotaholders’
        Agreement
        with
Cybercyte
        Sistemas dated
        June
        22, 2005.

      


      (c)
        Obligations under the Alladdin Agreement.

      


      (i)
        LTD
        shall not assume or otherwise be responsible for any of the Company’s
        obligations or liabilities under the Alladdin Agreement until the date on
        which
        Alladdin Lotteries Limited and Alladdin Limited consent to the assignment
        thereof; provided, however that at no time shall LTD assume or be liable
        for the
        Company’s obligation to issue capital stock under the Alladdin
        Agreement.

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      EXHIBIT
        1.03

      INSTRUMENT
        OF ASSUMPTION

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      


      EXHIBIT
        1.04

      INDEMNITY
        AGREEMENT

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      SCHEDULE
        1.02(a)(i)

      DEFERRED
        COMPENSATION

      


      Randolph
        Brownell $100,000

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      SCHEDULE
        1.02(a)(ii)

      ACCOUNTS
        PAYABLE

      


      Ruffa
        & Ruffa, P.C.  $10,696.21

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        14