**Exhibit
        10.18**
 
 **POKERTEK
        INC.**
 
 **KEY
        EMPLOYEE AGREEMENT**
 **for
        Mr. Christopher Halligan**
 **THIS
          KEY EMPLOYEE AGREEMENT**  ***Agreement*** ”)
          is
          entered into as of the 17th day of January, 2008, by and between **Christopher
          Halligan** (“ ***Executive*** ”)
          and **PokerTek,
          inc.** (the
“ ***Company*** ”).
  Executive
        has been employed by the Company in his current capacity since on or about
        September 24, 2007 on substantially the terms set forth in this Agreement.
        Executive and the Company desire to execute and enter into this Agreement
        setting forth the terms and conditions of Executive’s employment.
  Accordingly,
        in consideration of the mutual promises and covenants contained herein, the
        parties agree to the following:
  **1.**  **EMPLOYMENT** **BY THE COMPANY.**
  **1.1**  **Effective
        Date.** The
        effective date of this Agreement shall be January 17, 2008. Unless terminated
        sooner pursuant to Section 6, this Agreement shall end two (2) years from
        the
        effective date.
  **1.2**  **Position.** Subject
        to terms set forth herein, the Company agrees to employ Executive in the
        position of Chief Executive Officer and Executive hereby accepts such
        employment. During the term of his employment with the Company, Executive
        will
        devote his best efforts to the business of the Company.
  **1.3**  **Duties.** Executive
        shall serve in an executive capacity and shall perform such duties as are
        customarily associated with his then current title and as assigned to the
        Executive by the Company’s Board of Directors.
  **1.4**  **Other
        Employment Policies.** The
        employment relationship between the parties shall also be governed by the
        general employment policies and practices of the Company, including those
        relating to protection of confidential information and assignment of inventions,
        except that when the terms of this Agreement differ from or are in conflict
        with
        the Company’s general employment policies or practices, this Agreement shall
        control.
  **2.**  ****COMPENSATION.****
  **2.1**  **Salary** **.**
  **(a)**  Executive
        shall receive for services an annualized base salary of $160,000 per annum
        (the
“ ***Base
        Salary*** ”),
        subject to standard federal and state withholding requirements, payable in
        accordance with the Company’s standard payroll practices.
  **(b)**  The
        Company may reduce the amount of the Base Salary in connection with a general
        reduction of salary applicable to all employees of the Company that has been
        approved by the Company’s Board of Directors (“ **General
        Reduction** ”); provided , however ,
        that
        (i) in no case shall the Base Salary be reduced in a single General Reduction
        or
        series of General Reductions by more than an aggregate of twenty percent
        (20%)
        of the Base Salary; (ii) in no case shall the Base Salary be reduced for
        more
        than six months; and (iii) any and all severance payments made to Executive
        in
        accordance with Sections 6 shall be based on the Executive’s original Base
        Salary without giving effect to any General Reductions.
  **(c)**  In
        connection with Executive’s promotion to Chief Executive Officer, Executive has
        previously received a stock grant of 125,000 options at Fair Market Value
        determined by the closing price on September 28, 2007, which vest 12.5% every
        six months (together with an earlier grant of 150,000 options). In the event
        Executive’s employment is terminated by the Company for any reason except Cause,
        all stock options granted to Executive through the date of termination, will
        vest immediately, provided that Executive executes the Release (as defined
        below).
  **(d)**  Executive
        shall receive all health insurance, dental, life, and 401K benefits paid
        for by
        the Company. Executive’s Family shall receive health and dental insurance
        benefits paid for by the Company.
  
  **2.2**  **Company
        Benefits.** Executive shall be entitled to all rights and benefits for which he is eligible
        under the terms and conditions of the standard Company benefits and compensation
        practices which may be in effect from time to time and provided by the Company
        to its senior officers generally. Executive
        shall be entitled to all holidays provided
        by the Company to its senior officers generally and three
        weeks (3)  vacation
        time provided
        by the Company to its senior
        officers generally. For purposes of this Section, “provided by the Company to
        its senior officers generally” shall mean benefits provided as a policy to all
        or most members of senior management and shall not include a specific benefit
        negotiated by one or more executives as an inducement to join the Company
        in a
        senior officer position.
  **2.3**  **Expense
        Reimbursement** .
        The
        Company will reimburse Executive for reasonable business expenses in accordance
        with the Company’s standard reimbursement policy.
  **3.**  ****PROPRIETARY
        INFORMATION, INVENTIONS, AND NON-COMPETITION
        OBLIGATIONS**.**
  **3.1**  **Agreement.** Executive agrees to execute and abide by the Proprietary Information,
        Inventions, Non-Competition, and Non-Solicitation Agreement attached hereto
        as **Exhibit
        A** (the
“ ***Proprietary
        Information Agreement*** ”).
  **4.**  ****OUTSIDE
        ACTIVITIES**.**
  **4.1**  **Other
        Employment/Enterprise.** Except
        with the prior written consent of the Company’s Board of Directors, Executive
        will not, while employed by the Company, undertake or engage in any other
        employment, occupation or business enterprise, other than ones in which
        Executive is a passive investor. Executive may engage in civic and
        not-for-profit activities so long as such activities do not materially interfere
        with the performance of his
        duties hereunder.
  **4.2**  **Conflicting
        Interests.** Except
        as permitted by Section 4.3, while employed by the Company, Executive agrees
        not to acquire, assume or participate in, directly or indirectly, any position,
        investment or interest known by him to be adverse or antagonistic to the
        Company, its business or prospects, financial or otherwise.
  **4.3**  **Competing
        Enterprises.** While
        employed by the Company, except on behalf of the Company, Executive will
        not
        directly or indirectly, whether as an employee, officer, director, stockholder,
        partner, proprietor, associate, representative, consultant, or in any capacity
        whatsoever engage in, become financially interested in, be employed by or
        have
        any business connection with any other person, corporation, firm, partnership
        or
        other entity whatsoever which compete directly with the Company, throughout
        the
        world, in any line of business engaged in (or planned to be engaged in) by
        the
        Company; provided, however, that anything above to the contrary notwithstanding,
        he may own, as a passive investor, securities of any public competitor
        corporation, so long as his direct holdings in any one such corporation shall
        not in the aggregate constitute more than 1% of the voting stock of such
        corporation.
  **5.**  ****FORMER EMPLOYMENT**** **.**
  **5.1**  **No
        Conflict With Existing Obligations.** Executive
        represents that his performance of all the terms of this Agreement and as
        an
        employee of the Company does not and will not breach any agreement or obligation
        of any kind made prior to his employment by the Company, including agreements
        or
        obligations he may have with prior employers or entities for which he has
        provided services. Executive has not entered into, and agrees he will not
        enter
        into, any agreement or obligation either written or oral in conflict
        herewith.
  **5.2**  **No
        Disclosure of Confidential Information.** If,
        in
        spite of the second sentence of Section 5.1, Executive should find that
        confidential information belonging to any former employer might be usable
        in
        connection with the Company’s business, Executive will not intentionally
        disclose to the Company or use on behalf of the Company any confidential
        information belonging to any of Executive’s former employers (except in
        accordance with agreements between the Company and any such former employer);
        but during Executive’s employment by the Company he will use in the performance
        of his duties all information which is generally known and used by persons
        with
        training and experience comparable to his own and all information which is
        common knowledge in the industry or otherwise legally in the public
        domain.
  **6.**  ****TERMINATION
        OF EMPLOYMENT**** **.** The
        parties acknowledge that Executive’s employment with the Company is at-will. The
        provisions of Sections 6.1 through 6.7 govern the amount of compensation,
        if
        any, to be provided to Executive upon termination of employment and do not
        alter
        this at-will status.
  **6.1**  **Termination
        Without Cause.** The
        Company shall have the right to terminate Executive’s employment with the
        Company at any time without Cause by giving notice as described in Section
        6.7
        of this Agreement.
  
  **(a)**  In
        the
        event Executive’s employment is terminated by the Company without Cause for a
        reason other than death, disability or cessation of the Company’s business
        pursuant to Section 6.6 below, the Company shall continue to pay Executive
        his
        then-existing base salary, less applicable withholding and deductions for
        three
        (3) months as detailed herein **** from
        the
        effective date of.
  **(b)**  In
        the
        event the Executive is terminated within one year following a Change in Control
        of the Company, Executive will receive three (3) months of the base salary
        along
        with fully paid benefits.
  **(c)**  ***“Change
        of Control”*** shall
        be
        deemed to have occurred on the earliest of the following dates:
  **(i)**  The
        date
        any entity or person shall have become the beneficial owner of, or shall
        have
        obtained voting control over, fifty percent (50%) **** or
        more
        of the outstanding Common Stock of the Company;
  **(ii)**  The
        date
        the shareholders of the Company approve a definitive agreement (X) to merge
        or
        consolidate the Company with or into another corporation or other business
        entity (each, a "corporation"), in which the Company is not the continuing
        or
        surviving corporation or pursuant to which any shares of Common Stock of
        the
        Company would be converted into cash, securities or other property of another
        corporation, in each case other than a merger or consolidation of the Company
        in
        which the holders of Common Stock immediately prior to the merger or
        consolidation continue to own immediately after the merger or consolidation
        at
        least fifty percent 50% **** of
        Common
        Stock, or, if the Company is not the surviving corporation, the common stock
        (or
        other voting securities) of the surviving corporation; provided, however,
        that
        if consummation of such merger or consolidation is subject to the approval
        of
        federal, state or other regulatory authorities, then, unless the Administrator
        determines otherwise, a "Change in Control" shall not be deemed to occur
        until
        the later of the date of shareholder approval of such merger or consolidation
        or
        the date of final regulatory approval of such merger or consolidation; or
        (Y) to
        sell or otherwise dispose of all or substantially all the assets of the Company;
        or
  **(iii)**  The
        date
        there shall have been a change in a majority of the Board of Directors of
        the
        Company within a 12-month period unless the nomination for election by the
        Company's shareholders of each new Director was approved by the vote of
        two-thirds of the members of the Board (or a committee of the Board, if
        nominations are approved by a Board committee rather than the Board) then
        still
        in office who were in office at the beginning of the 12-month
        period.
  **(iv)**  Notwithstanding
        the foregoing, a Change in Control shall not be deemed to have occurred in
        the
        event the Company forms a holding company as a result of which the holders
        of
        the Company’s voting securities immediately prior to the transaction hold, in
        approximately the same relative proportions as they hold prior to the
        transaction, substantially all of the voting securities of a holding company
        owning all of the Company’s voting securities after the completion of the
        transaction.
  (For
        the
        purposes herein, the term "person" shall mean any individual, corporation,
        partnership, group, association or other person, as such term is defined
        in
        Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, other than the
        Company, a subsidiary of the Company or any employee benefit plan(s) sponsored
        or maintained by the Company or any subsidiary thereof, and the term "beneficial
        owner" shall have the meaning given the term in Rule 13d-3 under the Exchange
        Act.)
  **6.2**  **Termination
        for Cause.**
  **(a)**  The
        Company shall have the right to terminate Executive’s employment with the
        Company at any time for Cause by giving notice as described in Section 6.7
        of
        this Agreement.
  **(b)**  “ ***Cause*** ”
for
        termination shall mean misconduct, including: (i) conviction of any felony
        or
        any crime involving moral turpitude or dishonesty; (ii) participation in
        a fraud
        or act of dishonesty against the Company; (iii) continued gross neglect by
        Executive in fulfilling his duties as set forth in this Agreement that has
        not
        been cured within thirty (30) days after written notice from the Company
        of such
        gross neglect; (iv) intentional and material damage to the Company’s
        property;(v) material breach of this Agreement that has not been cured within
        thirty (30) days after written notice from the Company of such breach; provided
        that in the case of breach that are incapable of being cured, no such cure
        period shall apply, or (vi) material breach of the Proprietary Information
        Agreement.
  **(c)**  In
        the
        event Executive’s employment is terminated at any time with Cause, he will not
        receive severance pay or any other such compensation.
  
  **6.3**  **Resignation
        by the Executive for Good Reason.** Executive
        may resign his employment for Good Reason (as defined below) by giving notice
        as
        described in Section 6.7 of this Agreement.
  **(a)**  “ ***Good
        Reason*** ”
means
        (i) a reduction in Executive’s current base salary without his consent (but
        shall not include any reduction or non-payment of a bonus), unless such a
        reduction occurs as part of a General Reduction; (ii) the Company's breach
        of a
        material term of this Agreement, or (iii) any relocation without Executive's
        consent to an office of the Company located more than seventy-five (75) miles
        from the city limits of Charlotte, North Carolina. Notwithstanding the above,
        Executive must provide written notice to the Company of any event or act
        that he
        claims constitutes Good Reason within a period not to exceed ninety (90)
        days
        from the date of the initial existence of the Good Reason, and the Company
        shall
        have a period of thirty (30) days after provision of such notice to cure
        the
        basis for such Good Reason.
  **(b)**  In
        the
        event of Executive’s resignation for Good Reason, the Company shall continue to
        pay Executive the Base Salary, less applicable deductions and withholdings,
        for
        a period of three (3) months from the effective date of termination as. Under
        such circumstances, Company shall reimburse Executive the amount of any COBRA
        payments during such period.
  **(c)**  If
        Executive terminates employment for any reason other than those listed above,
        the termination will not be for Good Reason and Executive will not be entitled
        to severance pay or any other such compensation.
  **6.4**  **Voluntary
        or Mutual Termination.**
  **(a)**  Executive
        may voluntarily terminate his employment with the Company at any time by
        giving
        notice as described in Section 6.7.
  **(b)**  In
        the
        event Executive voluntarily terminates his employment for other than a Good
        Reason, he will not receive severance pay or any other such
        compensation.
  **6.5**  **Termination
        for Inability to Regularly Perform Duties.**
  **(a)**  Company
        may terminate Executive in the event of Executive’s death, or any illness,
        disability or other incapacity in such a manner that Executive is physically
        rendered unable regularly to perform his duties hereunder for a period in
        excess
        of one hundred twenty (120) consecutive days or more than one hundred eighty
        (180) days in any consecutive twelve (12) month period.
  **(b)**  The
        determination regarding whether Executive is physically unable regularly
        to
        perform his duties under (a) above shall be made by the Company. Executive’s
        inability to be physically present on the Company’s premises shall not
        constitute a presumption that Executive is unable to perform such
        duties.
  **6.6**  **Dissolution,
        Liquidation or Insolvency of the Company.**
  Notwithstanding
        the above, in the event Executive’s employment is terminated by the Company in
        connection with or as a result of the liquidation, dissolution, insolvency
        or
        other winding up of the affairs of the Company without the establishment
        of a
        successor entity to the Company, the Company shall have no obligation to
        provide
        severance or further financial consideration to Executive except for any
        reasonable expense reimbursements or base salary that Executive has accrued
        and
        earned at the time of such termination.
  **6.7**  **Notice;
        Effective Date of Termination.** Termination
        of Executive’s employment pursuant to this Agreement shall be effective on the
        earliest of:
  **(a)**  thirty
        (30) days after Executive, for any reason, gives written notice to the Company
        of his termination;
  **(b)**  thirty
        (30) days after the Company, for any reason other than Cause, gives written
        notice to Executive of his termination;
  **(c)**  immediately
        upon the Company giving written notice to Executive of his termination for
        Cause
        or as a result of an event listed in Section 6.6 above; and
  
  **(d)**  the
        expiration of the term of this Agreement.
  Executive
        will receive compensation through the thirty (30) day notice period in the
        event
        of termination for any reason. However, the Company reserves the right to
        require that Executive not perform any services or report to work during
        the
        thirty (30) day notice period.
  **7.**  ****RELEASE.**** Notwithstanding
        anything to the contrary in this Agreement, executive shall not be entitled
        to
        any severance or reimbursement of COBRA payments under any provision in this
        Agreement unless and until Executive has executed a general release
        substantially in the form attached hereto as **Exhibit B** and such
        release has become effective and can no longer be revoked(the “ ***Release*** ”),
        .
  **8.**  ****GENERAL
        PROVISIONS.****
  **8.1**  **Notices.** Any
        notices provided hereunder must be in writing and shall be deemed effective
        upon
        the earlier of personal delivery (including personal delivery by hand,
        telecopier, or telex) or the third day after mailing by first class mail,
        to the
        Company at its primary office location and to Executive at his address as
        listed
        on the Company payroll.
  **8.2**  **Severability.** Whenever
        possible, each provision of this Agreement will be interpreted in such manner
        as
        to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid,
        illegal or unenforceable in any respect under any applicable law or rule
        in any
        jurisdiction, such invalidity, illegality or unenforceability will not affect
        any other provision or any other jurisdiction, but this Agreement will be
        reformed, construed and enforced in such jurisdiction as if such invalid,
        illegal or unenforceable provisions had never been contained
        herein.
  **8.3**  **Waiver.** If
        either party should waive any breach of any provisions of this Agreement,
        he or
        it shall not thereby be deemed to have waived any preceding or succeeding
        breach
        of the same or any other provision of this Agreement.
  **8.4**  **Complete
        Agreement.** This
        Agreement and its Exhibit constitute the entire agreement between Executive
        and
        the Company. This Agreement is the complete ,
        final,
        and exclusive embodiment of their agreement with regard to this subject matter
        and supercedes any prior oral discussions or written communications and
        agreements. This Agreement is entered into without reliance on any promise
        or
        representation other than those expressly contained herein, and it cannot
        be
        modified or amended except in writing signed by an authorized officer of
        the
        Company.
  **8.5**  **Counterparts.** This
        Agreement may be executed in separate counterparts, any one of which need
        not
        contain signatures of more than one party, but all of which taken together
        will
        constitute one and the same Agreement.
  **8.6**  **Headings.** The
        headings of the sections hereof are inserted for convenience only and shall
        not
        be deemed to constitute a part hereof nor to affect the meaning
        thereof.
  **8.7**  **Successors
        and Assigns.** This
        Agreement is intended to bind and inure to the benefit of and be enforceable
        by
        Executive and the Company, and their respective successors, assigns, heirs,
        executors and administrators, except that Executive may not assign any of
        his
        duties hereunder and he may not assign any of his rights hereunder without
        the
        written consent of the Company, which shall not be withheld
        unreasonably.
  **8.8**  **Attorneys’
        Fees.** If the
        Company brings any action to enforce its rights hereunder, it shall be entitled
        to recover its reasonable attorneys’ fees and costs incurred in connection with
        such action should it prevail in the action.
  **8.9**  **Choice
        of Law.** All
        questions concerning the construction, validity and interpretation of this
        Agreement will be governed by the law of the State of North Carolina. Executive
        expressly consents to the jurisdiction of the state and federal courts for
        Mecklenburg County, North Carolina, for all actions arising out of or relating
        to this Agreement.
  **8.10**  **Right
        to Counsel** .
        Executive acknowledges that he has had the opportunity to retain independent
        legal counsel to represent the Executive in connection with the review and
        preparation of this Agreement and that Womble Carlyle Sandridge & Rice,
        PLLC, the Company’s outside special counsel, has not represented the Executive
        in connection with the review and preparation of this Agreement.
  
  **IN
          WITNESS WHEREOF** ,
          the
          parties have executed this Agreement on the day and year first above
          written.
 **PokerTek
                  Inc.**/s/ Daniel
                M.
                LascellGeneral
                CounselDate: January 17, 2008
  Accepted
        and agreed this
 17th
        day
        of January 2008.
 
 **Executive**
 
 /s/
        Christopher J.C. Halligan