Exhibit
10.2








SEPARATION
AGREEMENT AND RELEASE





This
Separation Agreement and Release (“Agreement”) is made by and among Ronald
Skotarczak (“Executive”), an individual, and Lightning Poker, Inc. f/k/a
Pokermatic, Inc., a wholly owned subsidiary of Lightning Gaming, Inc. (together,
the “Company”).





WHEREAS,
the Executive is employed as an at will employee by the Company in the capacity
of President; and





WHEREAS,
the Executive and the Company mutually agreed to terminate his employment as of
March 25, 2008, and the Company desires to provide Executive with separation
benefits as set forth in this Agreement to assist Executive in the period of
transition following Executive’s separation;





NOW
THEREFORE, in consideration of the mutual promises and releases contained herein
and for other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties agree as follows:





1)
SEPARATION BENEFITS.





a)           SEPARATION
DATE AND FINAL PAYCHECK. Executive’s employment will terminate March 25,
2008(the “Separation Date”). The Executive will receive normal compensation up
to and including the Separation Date, less all required tax withholdings and
other authorized deductions.





b)           SEVERANCE
PAY. Following Executive’s execution and non-revocation of this Agreement, the
Company agrees to pay to Executive severance in the amount of three (3) month’s
salary, less all required tax withholdings and other authorized deductions, in
equal installments in accordance with the Company’s regular payroll dates and
policies.





c)           CONTINUED
COVERAGE UNDER GROUP HEALTH PLANS. Executive shall be entitled to elect to
continue coverage under the Company’s group health plans in which he was
enrolled as of the Separation Date, consistent with the status and level of
coverage that was in place as of such date, in accordance with the requirements
of the Consolidate Omnibus Budget Reconciliation Act and its relevant
regulations (“COBRA”). Executive shall be solely responsible for paying the
current co-pay for three months and thereafter the full amount of all premiums
that are chargeable in connection with such coverage, subject to all
requirements of COBRA. Upon expiration of COBRA coverage, the Executive, at his
option and his own expense, may convert such health insurance coverage to a
private policy subject to and to the extent provided by the terms of the
Company’s employee health insurance plan.




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d)           STOCK
OPTIONS.   Subject to the execution of this Agreement and the
passage of the period of time that this Agreement may be revoked (as referenced
below) without any such revocation, and subject to the terms of any stock option
grants, stock option vesting will cease on the Separation Date, at which time
the Executive has a total of 115,200 vested stock options.  The
Executive must exercise such vested stock options within two (2) years of the
Separation Date and otherwise in accordance with the terms and conditions of the
Company’s 2006 Equity Incentive Plan, a copy of which the Executive agrees and
acknowledges is in his possession.





e)           Executive
acknowledges that, except as expressly provided in this Agreement, Executive
will not receive any additional compensation, severance or benefits from the
Company after the Separation Date, and except as set forth in this Agreement or
as required by federal, state or local law, Executive shall not be entitled to
any additional benefits relating to Executive’s separation of employment;
provided, however, that this Agreement does not affect or impair Executive’s
rights to benefits as a terminated employee pursuant to any retirement plan in
which he is a participant.





2)
RELEASE. In consideration of the Company’s entering into this Agreement and the
payments and benefits set forth herein, the Executive, on behalf of himself and
his heirs, executors, administrators, successors and assigns, knowingly and
voluntarily waives, releases and forever discharges the Company, each of its
subsidiaries or affiliated companies, their respective current and former
officers, employees, agents and directors, and any successor or assign of any of
the foregoing, from any claim, charge, action or cause of action any of them may
have against any such released person, whether known or unknown, from the
beginning of time through the date of this Agreement based upon any matter,
cause or thing whatsoever related to or arising out of his employment by the
Company or his separation other than claims arising out of a breach of this
Agreement or any claim that cannot be waived by law. All such claims are forever
barred by this Agreement.





This
release and waiver includes, but is not limited to, any rights or claims under
United States federal, state or local law, for wrongful or abusive discharge,
for breach of any contract, or for discrimination based upon race, color,
ethnicity, sex, age, national origin, religion, disability, sexual orientation,
or any unlawful criterion or circumstance, including, but not limited to, rights
or claims under the Family and Medical Leave Act, claims of discrimination under
the Executive Retirement Income Security Act, the Equal Pay Act, the
Occupational Safety and Health Act, the Workforce Adjustment Retraining
Notification Act, Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, Section 1981 through 1988 of the Civil Rights Act of 1866, the
Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the
Older Workers Benefit Protection Act, the Rehabilitation Act of 1973, Executive
Order 11246 and any other executive order, the Fair Labor Standards Act and its
state and local counterparts, the Uniform Services Employment and Reemployment
Rights Act, and the Immigration Reform Control Act, all as amended. The
Executive confirms that he has no claim or basis for a claim whatsoever against
the Company with respect to any such matters related to or arising out of his
employment by the Company or his separation.




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3) TIME
TO CONSIDER AGREEMENT. Executive may take twenty-one (21) days from the date
this Release is presented to Executive to consider whether to execute this
Release, and may wish to consult with an attorney prior to execution of this
Release. Executive, by signing this Agreement, specially acknowledges that he is
waiving his right to pursue any claims under federal, state or local
discrimination laws, including the Age Discrimination in Employment Act, 29
U.S.C. Section 626 et seq., which may have arisen prior to the execution of this
Release. This Release shall become final and irrevocable upon the expiration of
the seven (7) day period following Executive’s execution of the Release, during
which time Executive may revoke this Release, and after which time this Release
shall be final and irrevocable.





4)
RESTRICTIVE COVENANTS.





(a)
Non-Solicitation.  For two years after the Separation Date, the
Executive shall not, without the prior written consent of the Company’s Chief
Executive Officer, (i) directly or indirectly solicit or employ (or encourage
any company or business organization in which he is an officer, employee,
partner, director, consultant or member of a technical advisory board to solicit
or employ) or (ii) refer to any employee search firms, any person who was
employed by the Company on the Effective Date.





(b)
Non-Compete.  For two years after the Separation Date, the Executive
shall not, without the prior written consent of the Company’s Chief Executive
Officer, at any time or for any reason, anywhere in the world, directly or
indirectly (i) engage in any business or activity, whether as an employee,
consultant, partner, principal, agent, representative, stockholder (except as a
holder of less than 5% of the combined voting power of the outstanding stock of
a publicly held company) or in any other individual, corporate or representative
capacity, or render any services or provide any advice to any business,
activity, person or entity, if the Executive knows or reasonably should know
that such business, activity, service, person or entity, directly or indirectly,
competes in any material manner with the Company’s business in automated
electronic poker tables, or (ii) meaningfully assist, help or otherwise support
any person, business, corporation, partnership or other entity or activity,
whether as an employee, consultant, partner, principal, agent, representative,
stockholder (other than in the capacity as a stockholder of less than 5% of the
combined voting power of the outstanding shares of stock of a publicly held
company) or in any other individual, corporate or representative capacity, to
create, commence or otherwise initiate, or to develop, enhance or otherwise
further, any business or activity if the Executive knows or reasonably should
know that such business, activity, service, person or entity, directly or
indirectly, competes in any material manner with the Company’s business in
automated electronic poker tables.





(c) If at
any time the Executive violates the provisions of Sections 4(a) or 4(b) above,
the Company shall retain all rights to specifically enforce any provision
relating to non-solicitation or non-competition that is in this Agreement or in
any other agreement, document or plan applicable to the Executive.




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(d)
Cooperation. The Executive hereby agrees that, from time to time upon the
reasonable request of the Company, the Executive shall reasonably assist the
Company in connection with any pending or future dispute, litigation,
arbitration or similar proceeding or investigation or any regulatory requests or
filings involving the Company, any of its employees or directors or the
employees and directors of any subsidiary.  Cooperation with
regulatory requests or filings includes, but is not limited to, any gaming
authority in any jurisdiction.





(e)           Confidentiality.
Executive hereby agrees and covenants, that:





(1) He
shall not divulge to any person or entity other than the Company, without
express written authorization of the Company’s Chief Executive Officer, any
proprietary or confidential information, whether written or oral, received or
gained by him in the course of his employment by the Company or of his duties
with the Company (“Confidential Information”), nor shall he make use of any such
Confidential Information on his own behalf or on behalf of any other person or
entity, for so long as such Confidential Information is not known to the general
public; and





(2) He
shall return or cause to be returned to the Company’s Chief Executive Officer
any and all property of the Company of any kind or description whatsoever,
including, but not limited to, any Confidential Information, which has been
furnished to him or is held by him, at his residence or elsewhere, and shall not
retain any copies, duplicates, reproductions or excerpts thereof.





5)
NON-DISPARAGEMENT. Executive and the Company each hereby covenant and agree that
neither of them will at any time, directly or indirectly, orally, in writing or
through any medium including, but not limited to, the press or other media,
computer networks or bulletin boards, or any other form of communication)
disparage, defame, or otherwise damage or assail the reputation, integrity or
professionalism of the other.  Additionally, Executive shall have the
right to review and comment upon, but not the right to approve, any press
release and/or company-wide communications announcing his departure from the
Company.





6)
MISCELLANEOUS. This Agreement is governed by the laws of the Commonwealth of
Pennsylvania. If any of the provisions of this Agreement are held to be illegal
or unenforceable, the Agreement shall be revised only to the extent necessary to
make such provision(s) legal and enforceable.





7) ENTIRE
AGREEMENT. Executive agrees that this Agreement contains and comprises the
entire agreement and understanding between Executive and the Company regarding
Executive’s separation; that there are no additional promises between Executive
and the Company other than those contained in this Agreement or any continuing
obligations other than those referenced in this Agreement; and that this
Agreement shall not be changed or modified in any way except through a writing
that is signed by both the Executive and the Company.




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I, THE
EXECUTIVE, ACKNOWLEDGE THAT I HAVE BEEN ADVISED BY THIS WRITING, AS REQUIRED BY
THE AGE DISCRIMINATION IN EMPLOYMENT ACT (ADEA) AND THE OLDER WORKERS’ BENEFIT
PROTECTION ACT (OWBPA), THAT: (a) MY WAIVER AND RELEASE DO NOT APPLY TO ANY
RIGHTS OR CLAIMS THAT MAY ARISE AFTER THE EXECUTION DATES OF THIS AGREEMENT; (b)
I HAVE BEEN ADVISED HEREBY THAT I HAVE THE RIGHT TO CONSULT WITH AN ATTORNEY
PRIOR TO EXECUTING THIS AGREEMENT; (c) I HAVE TWENTY-ONE (21) DAYS TO CONSIDER
THIS AGREEMENT (ALTHOUGH I MAY CHOOSE TO VOLUNTARILY EXECUTE THIS AGREEMENT
EARLIER); (d) I HAVE SEVEN (7) DAYS FOLLOWING THE EXECUTION OF THIS AGREEMENT TO
REVOKE THE AGREEMENT; AND (e) THIS AGREEMENT WILL NOT BE EFECTIVE UNTIL THE DATE
UPON WHICH THE RESPECTIVE REVOCATION PERIOD HAS
EXPIRED.





I, THE
EXECUTIVE, UNDERSTAND AND AGREE TO THE TERMS CONTAINED IN THIS AGREEMENT AND
INTEND, BY MY SIGNATURE BELOW, TO BE LEGALLY BOUND BY THOSE TERMS. I AM SIGNING
THIS RELEASE KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE SEVERANCE
BENEFITS DESCRIBED ABOVE.







EXECUTIVE
            COMPANY/s/ Ronald
      Skotarczak
            /s/ Brian
      HavesonDate:
    3/26/08
            Date:
    3/26/08






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STOCK
OPTION AGREEMENT




This
Stock Option Agreement ("Agreement"), dated as of March 25, 2008, is entered
into by Ronald Skotarczak ("RS"); Lightning Gaming, Inc. ("LGI"); and Lightning
Poker, Inc. ("LP"), a wholly-owned subsidiary of LGI, with reference to the
following facts and circumstances:




A.  RS
and LP have entered into a Separation Agreement and Release, dated March 26,
2008 ("Separation Agreement"), memorializing the agreement they reached on March
25, 2008 (the "Separation Date") for the termination of RS' employment with LP
as of the Separation Date, LP's provision of separation benefits to RS, and
certain related matters.




B.  RS
holds an option (the "Current Option") to purchase 115,200 shares of LGI's
common stock ("LGI Shares") at $1.10 per share, which was granted under LP's
2006 Equity Incentive Plan (the "LP Plan") and became exercisable for LGI Shares
pursuant to (i) Section 3.3 of the Agreement and Plan of Merger, dated September
28, 2007, under which LP became a wholly-owned subsidiary of LGI and (ii)
Section 8.4 of the LP Plan.  The Current Option is presently vested
and exercisable.




C.  Section
1(d) of the Separation Agreement is intended to provide a two-year period from
the Separation Date during which RS can exercise the Current
Option.




D.  The
Current Option will terminate on June 25, 2008[three months from the Separation
Date] if not exercised by then and the LP Plan does not allow for the term of
the Current Option to be extended to provide for the two-year exercise period
intended by Section 1(d) of the Separation Agreement.




E.  In
order to enable, and to induce, RS and LP to carry out the Separation Agreement
as intended, LGI has agreed to grant, and RS has agreed to accept, a new option
to purchase up to 115,200 LGI Shares that will be exercisable during the period
between the termination of the Current Option and the two-year anniversary of
the Separation Date (to the extent that the Current Option has not been
exercised prior to its termination), on the terms and conditions set forth
herein.




NOW,
THEREFORE, RS, LGI and LP agree as follows:




1.  Grant of New
Option.  LGI hereby grants an option (the "New Option") to RS
to purchase up to 115,200 LGI Shares at any time or from time to time during the
period commencing upon the termination of the Current Option, which will occur
on  June 26, 2008 and ending on the two-year anniversary of the
Separation Date; provided,
however, that if the Current Option has been exercised in whole or in
part prior to its termination, then the number of LGI Shares subject to the New
Option (the "New Option Shares") shall automatically be reduced by the number of
LGI Shares acquired through the exercise of the Current Option.  To
the extent that the New Option has not been duly and validly exercised by the
two-year anniversary of the Separation Date, the New Option shall expire and be
null and void.




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2.  Applicability of Terms and
Conditions Governing the Current Options.  Except as (i)
otherwise provided in this Agreement or (ii) the context of the Current Option
otherwise requires or contemplates, all terms and conditions applicable to the
Current Option, including, without limitation, the exercise price and automatic
adjustment of the number of shares subject to the option upon the occurrence of
certain corporate events, shall be applicable to the New
Option.  Although the New Option is not being granted under the LP
Plan, the New Option shall be deemed to incorporate by reference the terms and
conditions of the LP Plan to the same extent that such terms and conditions
govern the Current Options (unless the context otherwise requires or
contemplates).




3.  Nonqualified Stock
Option.  The New Option is not an "incentive stock option," as
defined in Section 422 of the Internal Revenue Code of 1986, as
amended.




4.  Securities Law
Restrictions.  Neither the New Option nor the New Option Shares
are being registered by LGI under the Securities Act of 1933, as amended (the
"Securities Act"), or under any state securities laws.  Without
limiting any other restrictions on the sale or other disposition of the New
Option or the New Option Shares, neither the New Option nor the New Option
Shares may be sold or disposed of in any other manner without registration under
the Securities Act and applicable state securities laws, unless it has been
satisfactorily demonstrated to LGI that such sale or other disposition is exempt
from such registration requirements.  RS consents to the placement of
a legend on the certificate(s) for the New Option Shares which evidences these
restrictions.  RS represents and warrants that any LGI Shares he
acquires through the exercise of the New Option shall be acquired for his own
account, and not with a view to distribution or resale.




5.  Relationship with Separation
Agreement.  This Agreement shall be deemed incorporated by
reference in, and an integral part of, the Separation Agreement.  A
breach of the Separation Agreement shall constitute a breach of this Agreement,
and vice versa.  In the event of any inconsistency between this
Agreement and Section 1(b) of the Separation Agreement, this Agreement shall
govern.  If RS revokes the Separation Agreement, this Agreement and
the New Option shall be null and void.




6.  Approval by Board of
Directors.  LGI represents and warrants that as of March 25,
2008, the board of directors of LGI has approved the granting of the New Option
and the issuance of LGI Shares upon the due and valid exercise of the New
Option, as provided in this Agreement.




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LIGHTNING
GAMING, INC.


By:  /s/
Brian Haveson


Name: Brian
Haveson


Title:   CEO




LIGHTNING
POKER, INC.


By:  /s/
Brian Haveson


Name: Brain
Haveson


Title:   President




/s/
Ronald Skotarczak


RONALD
SKOTARCZAK