**EXHIBIT        4.5**

 

**ASSET PURCHASE AGREEMENT**

 

|   | This Agreement is made the 8th day of January,                        2007. |
|--------|-----------------------------------------------------------------------------|

 

B E T W        E E N:

**PARBET.COM LTD.,**

a corporation incorporated under the laws of Malta and having a business        address at 66 Old Bakery Street, Valletta, VLT 09, Malta

(the        “**Vendor**”)

OF THE FIRST PART;

-and-

**ATLETICO NORDIC B.V.**,

a corporation incorporated under the laws of The Netherlands and having a        business address at Weena 340, 3012 NJ Rotterdam, The Netherlands

(the “**Vendor        Guarantor**”)

OF THE        SECOND PART;

-and-

|   | **WAGERLOGIC LIMITED**, |
|--------|-------------------------|

a corporation incorporated under the laws of the Republic of Cyprus and        having a business address at Nimeli Court, 41-49 Agiou Nicolaou Street, Block A,        3rd Floor, Engomi, 2408 Nicosia, Cyprus

|   | (the                        “**Purchaser**”) |
|--------|----------------------------------------------------------|

OF THE        THIRD PART;

-and-

|   | **CRYPTOLOGIC                        INC.,** |
|--------|----------------------------------------------|

a corporation incorporated under the laws of Ontario and having a business        address at 55 St. Clair West, 3rd Floor, Toronto, Ontario, Canada M4V        2Y7

(the “**Purchaser        Guarantor**”)

OF THE        FOURTH PART;

**WITNESSETH THAT**:

**WHEREAS**the Vendor is the owner of a business        which operates a virtual poker room over the internet under the brand and name        “Parbet” (the        “**Business**”);

**AND WHEREAS**the Purchaser is the owner and        operator of a business which develops and licenses software in connection with the        operation of virtual poker rooms over the internet;

**AND WHEREAS**the Vendor has agreed to sell to        the Purchaser and the Purchaser has agreed to purchase from the Vendor the Purchased        Assets, upon and subject to the terms and conditions of this Agreement;

**AND WHEREAS**the Vendor Guarantor and the        Purchaser Guarantor have agreed to guarantee the liabilities and obligations of the Vendor        and the Purchaser, respectively, arising under this Agreement;

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**NOW THEREFORE**in consideration of the premises        and mutual agreements contained in this Agreement and of other good and valuable        consideration (the receipt and sufficiency of which are acknowledged by each Party hereto),        the Parties agree with one another as follows:

| **1.** | **INTERPRETATION** |
|--------|--------------------|

| ****
**(1)** | **Definitions** |
|--------------|-----------------|

Whenever used in this Agreement, unless there is something in the subject        matter or context inconsistent therewith, the following words and terms shall have the        respective meanings ascribed to them in this Section 1(1):

(a)       “**Agreement**” means this asset purchase agreement and all        instruments supplemental to or in amendment or confirmation of this asset purchase        agreement, and all references to this Agreement shall include the attached Schedules and        “Article”, “Section”, “Subsection”, or        “Paragraph” means and refers to the specified article, section, subsection, or        paragraph of this asset purchase agreement;

(b)       “**Assumed Liabilities**” means those liabilities and        obligations of the Vendor as set forth in Schedule A attached hereto;

(c)       “**Assumption Agreement**” means the assumption and indemnity        agreement to be issued by the Purchaser to the Vendor in the form attached as Schedule        B;

(d)       “**Average Daily Revenues**” means the aggregate gross amount of        Poker Rake and Tournament House Fees earned through the operation of the Business during        the Earn Out Period, divided by 181;

(e)       “**Business**” has the meaning ascribed in the recitals to this        Agreement and, for greater certainty, specifically excludes the Vendor’s casino and        sports betting business;

(f)        “**Business Day**” means any day other than a Saturday, Sunday        or any statutory holiday in Canada, Sweden or Cyprus;

(g)       “**Closing**” means the completion of the sale to, and the        purchase by the Purchaser of, the Purchased Assets under this Agreement by the transfer and        delivery of documents of title to the Purchased Assets and the payment of the Purchase        Price;

(h)       “**Closing Date**” means January 15, 2007, or such other date as        the Parties may mutually agree in writing as the date upon which the Closing shall take        place;

(i)        “**Closing Date Liabilities**” means five thousand British        pounds (£5,000) plus the actual monetary amount of the Assumed Liabilities as at the        Closing Date;

(j)        “**Closing Statements**” means a statement to be prepared by the        Purchaser setting out the actual amount of all Closing Date Liabilities as at the Closing        Time, calculated based on the books and records of the Business as at the Closing        Time;

(k)        “**Closing Time**” means 10am Central European Time on the        Closing Date or such other time on such date as the Parties may agree as the time at which        the Closing shall take place;

(l)        “**Data Transfer Date**” means January 8, 2007 or such other        date as the Parties may agree;

 

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(m)      “**Dispute        Notice**” shall have the meaning ascribed to that term by the        Purchase Price Escrow Agreement entered into by the Vendor and the Purchaser pursuant to        Section 3(2) hereof.

(n)        “**Earn Out Period**” means the period of one hundred and        eighty-one days commencing on the date which is forty five (45) days following the Closing        Date and ending two hundred and twelve (212) days thereafter, but not including the month        of July, 2007;

(o)       “**Employees**” means those persons employed by the Vendor and        working with the Business;

(p)       “**End User**” means a customer of the Business who plays poker        through the Parbet Poker Room;

(q)       “**Escrow Agent**“ shall have the meaning ascribed to that term        by the Purchase Price Escrow Agreement entered into by the Vendor and the Purchaser        pursuant to Section 3(2) hereof;

(r)        **“Expekt.com Company Limited Financial Statements”**means, the audited financial statements of Expekt.com Company Limited as at        and for the fiscal year ended December 31, 2005,and the management        prepared, unaudited interim/stub period financial statements for the period from January 1,        2006 through to November 30, 2006, consisting of a balance sheet, statement of income and        retained earnings, statement of cash flows, together with the accountants’ notes        thereto (if applicable), true copies of which are annexed hereto as Schedule G;

(s)       “**Financial Statements**” means, collectively, the audited        financial statements of the Vendor as at and for the fiscal year ended December 31,        2005,and the management prepared, unaudited financial statements for        the period from January 1, 2006 through to November 30, 2006, consisting of a balance        sheet, statement of income and retained earnings, statement of cash flows, together with        the accountants’ notes thereto (if applicable), true copies of which are annexed        hereto as Schedule C;

(t)               “**IFRS**” has        the meaning ascribed in Section 1(8);

(u)       “**Intellectual Property Rights**” means all trade or brand        names, all domain names, business names, trade-marks, trade-mark registrations and        applications, service marks, service mark registrations and applications, copyrights,        copyright registrations and applications, patents, patent registrations and applications        and other patent rights (including any patents issued on such applications or rights),        trade secrets, proprietary information and know-how, inventions, investors’ notes,        research data, unpatented blue-prints, drawings and designs, industrial property, formulae,        processes, software, technology and other intellectual property used primarily in the        operation of the Business, together with all rights under intellectual property licences,        registered user agreements, technology transfer agreements and other agreements or        instruments relating to any of the foregoing, including, without limitation,        the intellectual property described in Schedule D hereto;

(v)       “**Interim Period**” means the period beginning        on the date of execution of this Agreement to and including the Closing        Date;

(w)      “**Legal Entity****Affiliate**” means        a legal entity which meets the definition of “affiliate” as

 

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set        forth in the*Business Corporations Act*(Ontario) R.S.O. 1990;

(x)       “**Licenses**” means all licenses, registrations,        qualifications, permits and approvals, issued by any government or governmental unit,        agency, board, body or instrumentality, whether federal, provincial or municipal, relating        to the Business, including those listed in Schedule E, together with all applications for        such licences or permits;

(y)       “**Non-Solicitation Agreement**” means the non-solicitation        agreement in the form of Schedule F;

any        of the foregoing, including, without limitation, the intellectual property described in        Schedule D hereto;

(z)       “**Parbet Poker        Room**” has the meaning ascribed in Section        4(1);

(aa)     “**Parties**        ” means the Vendor, the Purchaser, the Vendor Guarantor and the Purchaser Guarantor,        collectively, and “**Party**”        means either one of them;

(bb)     “**Person**        ” includes an individual, corporation, partnership, joint venture, trust,        unincorporated organization, the Crown or any agency or instrumentality thereof or any        other juridical entity;

(cc)     “**Poker        Rake**” means the gross amount earned by the Parbet Operator        (as that term is defined in section 4(1)) from the pot of each hand of poker played in the        Parbet Poker Room, it being acknowledged by the Parties that the Parbet Poker Room shall be        operated in and through the Purchaser’s centralized poker room, meaning that End        Users may play individual hands of poker with end users of other licensees of the Poker        Software, and in such circumstances the Poker Rake deducted from each hand of poker so        played must be divided amongst the Parbet Operator and all other licensees of the Purchaser        whose end users participated in the hand, in accordance with the Purchaser’s policies        and procedures;

(dd)     “**Poker        Software**” means the Purchaser’s proprietary software        related to the operation of virtual poker rooms over the internet;

(ee)     “**Poker        Tournament**” means a poker competition that requires the        payment of the Poker Tournament Entry Fee by the End Users who wager through the Parbet        Poker Room and who participate in the competition;

(ff)      “**Poker        Tournament Entry Fee**” means the entry fee charged to End        Users who wager through the Parbet Poker Room, for such End Users to play in a Poker        Tournament;

(gg)     “**Poker        Tournament House Fees**” means the portion of the Poker        Tournament Entry Fee earned by the Business in connection with a Poker Tournament, as        opposed to the portion of the Poker Tournament Entry Fee which is included in the prize        pool for the subject Poker Tournament;

(hh)     “**Purchase        Price**” means the purchase price to be paid by the Purchaser        to the Vendor for the Purchased Assets, all as provided in Section 3(1);

(ii)       “**Purchased Assets**” means the following properties, assets        and rights used in connection with the Business:

(i)        Intellectual Property Rights — all right, title and interest of the        Vendor in and to the Intellectual Property Rights; and

(ii)       Books        and Records — all books and records (or appropriate extracts therefrom)

 

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of the Vendor relating to the Purchased Assets and the Business (other than        those required by law to be retained by the Vendor, copies of which will be made available        to the Purchaser) including, without limitation, customer lists and other data regarding        the customers of the Business in the possession and control of the Vendor, sales records,        price lists, sales literature, advertising material and correspondence files (together        with, in the case of any such information that is stored electronically, the media on which        the same is stored).

For        clarity, the Purchaser shall not be entitled to any assignment of gaming licenses held by        the Vendor;

(jj)       “**Release Notice**” shall have the meaning ascribed to that        term by the Purchase Price Escrow Agreement entered into by the Vendor and the Purchaser        pursuant to Section 3(2) hereof.

(kk)     “**to the best of the knowledge**” when used in reference        to:

|   | (i) | the Vendor means the knowledge of the senior officers of the                        Vendor; and |
|--------|-----|-------------------------------------------------------------------------------------------------|

(ii)                  the Purchaser means the knowledge of the senior officers of the Purchaser;        and

(ll)       “**Vendor Poker Room**” means the virtual poker room operated by        the Business and owned by the Vendor.

| **(2)** | **Gender and Number** |
|---------|-----------------------|

In        this Agreement, words importing the singular include the plural and vice versa and words        importing gender include all genders.

| ****
**(3)** | **Entire Agreement** |
|--------------|----------------------|

This        Agreement, including the schedules attached hereto, together with the agreements and other        documents to be delivered under this Agreement constitute the entire agreement between the        Parties pertaining to the subject matter of this Agreement and supersede all prior        agreements, understandings, negotiations and discussions, whether oral or written, of the        Parties (including, without limitation, the Binding Term Sheet entered into by the Parties        dated the 8th day of November, 2006) and there are no warranties,        representations or other agreements between the Parties in connection with the subject        matter of this Agreement except as specifically set forth in this Agreement. No supplement,        modification or amendment to this Agreement and no waiver of any provision of this        Agreement shall be binding on any Party unless executed by such Party in        writing.

| ****
**(4)** | **Article and Section Headings** |
|--------------|----------------------------------|

Article and Section headings contained in this Agreement are included solely        for convenience, are not intended to be full or accurate descriptions of the content of any        Article or Section and shall not be considered to be part of this Agreement.

| ****
**(5)** | **Schedules** |
|--------------|---------------|

The        following Schedules are an integral part of this Agreement:

| Schedule A | Assumed Liabilities  |
|------------|----------------------|
| Schedule B | Assumption Agreement |

 

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| Schedule C | Vendor Financial Statements                                            |
|------------|------------------------------------------------------------------------|
| Schedule D | Intellectual Property Rights                                           |
| Schedule E | Licenses                                                               |
| Schedule F | Non-Solicitation Agreement                                             |
| Schedule G | Expekt.com Company Limited Financial                        Statements |
| Schedule H | Vendor Guarantor Organization Chart                                    |
| Schedule I | Conversion Process                                                     |
| Schedule J | Purchase Price Escrow Agreement                                        |
| Schedule K | Operating Policies                                                     |
| Schedule L | Material Contracts                                                     |

 

| ****
**(6)** | **Currency** |
|--------------|--------------|

Unless otherwise indicated, all monetary amounts referred to in this        Agreement are in Euros. For the avoidance of doubt, the monetary amounts referred to in        Subsections 8(1)(j) and 8(1)(k) are in the currency of the United States.

| ****
**(7)** | **Accounting Terms** |
|--------------|----------------------|

All        accounting terms not otherwise defined have the meanings assigned to them, and, other than        the management prepared, unaudited financial statements for the period from January 1, 2006        through to November 30, 2006 of each of the Vendor and the Vendor Guarantor, all        calculations are to be made and all financial data to be submitted are to be prepared, in        accordance with International Financial Reporting Standards        (“**IFRS**”).

| ****
**(8)** | **Business Days** |
|--------------|-------------------|

Whenever any action or payment to be taken or made under this Agreement        shall be stated to be required to be taken or made on a day other than a Business Day, and        payment shall be made or such action shall be taken on the next succeeding Business        Day.

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**(9)** | **Statutory Instruments** |
|--------------|---------------------------|

Unless otherwise specifically provided in this Agreement, any reference in        this Agreement to any law, by-law, rule, regulation, order, act or statute of any        government, governmental body or other regulatory body shall be construed as        a reference to those as amended or re-enacted from time to time or as a reference to any        successor to those.

| ****
**2.** | **PURCHASE AND SALE OF PURCHASED ASSETS** |
|-------------|-------------------------------------------|

| ****
**(1)** | **Purchase and Sale of Purchased Assets** |
|--------------|-------------------------------------------|

Upon        and subject to the terms and conditions of this Agreement, the Vendor shall sell, transfer,        assign and set over to the Purchaser and the Purchaser shall purchase and acquire from        the

 

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Vendor at the Closing Time, the Purchased Assets for the Purchase Price        payable as provided in Section 3(1).

| ****
**(2)** | **Assumed Liabilities** |
|--------------|-------------------------|

The        Purchaser agrees to assume and become liable only for the Assumed Liabilities at the        Closing Time by executing and delivering the Assumption Agreement to the Vendor. For        greater certainty, it is understood that the Purchaser will assume no liabilities of the        Business arising or occurring prior to the Closing Time other than those described in or        forming part of the Assumed Liabilities, it being expressly acknowledged and agreed that        the liabilities and obligations relating to the operation of the Business prior to the        Closing shall be for the account of the Vendor, and liabilities and obligations relating to        the operation of the Business following Closing shall be for the account of the        Purchaser.

| ****
**3.** | **PURCHASE PRICE AND PAYMENT** |
|-------------|--------------------------------|

| ****
**(1)** | **Purchase Price** |
|--------------|--------------------|

The        Purchase Price payable by the Purchaser under this Agreement for the Purchased Assets shall        be an aggregate sum equal to nine million Euros (€9,000,000), plus any and all amounts        payable under Article 4 hereof (“**Earn Out        Amounts**”), less the amount of the Closing Date        Liabilities.

| ****
**(2)** | **Payment of Purchase Price** |
|--------------|-------------------------------|

(a)       On the Data Transfer Date, the        Purchaser and the Vendor shall enter into a Purchase Price Escrow Agreement in the form of        the agreement attached herewith as Schedule J (the “**Purchase        Price Escrow Agreement**”), and the Purchaser shall pay an        amount equal to eight million, seven-hundred and fifty thousand Euros (€8,750,000), by        wire transfer to the escrow agent under the Purchase Price Escrow Agreement. The amounts        deposited into escrow pursuant to this Subsection 3(2)(a) shall be released and paid to the        Vendor and/or the Purchaser (as the case may be) in accordance with the terms of the        Purchase Price Escrow Agreement. In the event that all conditions of Closing set forth        herein which are for the benefit of the Purchaser are satisfied or waived thereby on or        prior to Closing, the Purchaser shall deliver an executed Release Notice to the Escrow        Agent in the form and manner contemplated by Section 5(b) of the Purchase Price Escrow        Agreement. In the event that all conditions of Closing set forth herein which are for the        benefit of the Vendor are satisfied or waived thereby on or prior to Closing, the Vendor        shall deliver an executed Release Notice to the Escrow Agent in the form and manner        contemplated by Section 5(b) of the Purchase Price Escrow Agreement. In the event that the        conditions of Closing set forth herein are not satisfied as a result of a breach by either        the Purchaser or the Vendor of any of its obligations hereunder, the non-breaching party        shall not berequired to deliver a Release Notice to the Escrow Agent        under the terms of the Purchase Price Escrow Agreement, and in the case where the        non-breaching party is the Vendor, and only in such case, the Vendor may deliver a Dispute        Notice to the Escrow Agent pursuant to the provisions of Section 5(c) of the Purchase Price        Escrow Agreement. The Vendor acknowledges and agrees that a Dispute Notice pursuant to the        provisions of Section 5(c) of the Purchase Price Escrow Agreement may only be delivered in        the event of a breach by the Purchaser of any of its obligations under this Agreement or        the Purchase Price Escrow Agreement and for no other

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reason whatsoever.

(b)       On the Closing Date, the Vendor        and the Purchaser shall make a bona fide estimate of the Closing Date Liabilities (the        “**Estimated Liability        Amount**”), which Estimated Liability Amount shall form the        basis of the downward adjustment of the amount released from escrow pursuant to the        Purchase Price Escrow Agreement.

(c)       The Vendor acknowledges that        the Purchaser shall hold back from the Purchase Price the amount of two hundred and fifty        thousand Euros (€250,000) for a period of sixty (60) days from the Closing Date, as        security for all of the Vendor’s representations, warranties and covenants hereunder        (the “**Holdback**”). Sixty (60)        days after the Closing Date and subject to Section 4(4), the Purchaser agrees to pay to the        Vendor the Holdback, by certified cheque or bank draft, less the amount of any Claim (as        that term is defined in Section 7(1)) made by the Purchaser as a result of a breach by the        Vendor of any representations, warranties and covenants hereunder; provided that the amount        of any such Claim so withheld has been finally agreed or determined amongst the Parties or,        to the extent that the amount of the Claim has not been finally agreed or determined        between the Parties before the expiry of the sixty (60) day period referred to above, the        amount is a reasonable estimate of the Claim.

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**4.** | **EARN OUT** |
|-------------|--------------|

| ****
**(1)** | **Operations Post-Closing** |
|--------------|-----------------------------|

It        is expressly acknowledged and agreed by the Purchaser that forthwith following the Closing,        the Purchaser shall license to a third party (the “**Parbet        Operator**”) all of the Purchased Assets, and the Poker        Software, for the purpose of allowing the Parbet Operator to operate a virtual poker room        over the Internet (the “**Parbet Poker        Room**”), and that the Parbet Operator shall operate the        Parbet Poker Room using the Purchased Assets throughout the Earn Out Period. The Purchaser        further agrees that, in operating the Parbet Poker Room as contemplated above, the Parbet        Operator shall, throughout the Earn-Out Period, maintain all rake back, affiliate and        promotional bonus arrangements and policies of the Vendor, as set forth in Schedule K        hereto (the “**Operating        Policies**”).

| ****
**(2)** | **Earn Out Payment** |
|--------------|----------------------|

(a)       In addition to the Purchase        Price, the Vendor shall also be entitled to receive an earn-out payment in respect of the        Purchased Assets, calculated and payable as follows:

(i)        In        the event that the Average Daily Revenues realized by the Parbet Poker Room during the Earn        Out Period exceed eighteen thousand Euros (€18,000) but are less than nineteen        thousand Euros (€19,000), the Purchaser shall pay to the Vendor an amountequal to one million Euros (€1,000,000) within sixty        (60) days of the end of the Earn Out Period, to be satisfied by certified cheque or bank        draft of the Purchaser payable to or to the order of the Vendor;

(ii)       In the event that the Average Daily Revenues realized by the Parbet Poker        Room during the Earn Out Period are equal to or exceed nineteen thousand Euros        (€19,000) but are less than twenty thousand Euros (€20,000), the Purchaser shall        pay to the Vendor an amount equal to two million Euros (€2,000,000) within sixty (60)        days of the end of the

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Earn Out Period, to be satisfied by certified cheque or bank draft of the        Purchaser payable to or to the order of the Vendor;

(iii)      In the event        that the Average Daily Revenues realized by the Parbet Poker Room during Earn Out Period        are equal to or exceed twenty thousand Euros (€20,000) but are less than twenty one        thousand Euros (€21,000), the Purchaser shall pay to the Vendor an amount equal to        three million Euros (€3,000,000) within sixty (60) days of the end of the Earn Out        Period, to be satisfied by certified cheque or bank draft of the Purchaser payable to or to        the order of the Vendor;

(iv)       In the        event that the Average Daily Revenues realized by the Parbet Poker Room during the Earn Out        Period are equal to or exceed twenty one thousand Euros (€21,000), the Purchaser shall        pay to the Vendor an amount equal to four million Euros (€4,000,000) within sixty (60)        days of the end of the Earn Out Period, to be satisfied by certified cheque or bank draft        of the Purchaser payable to or to the order of the Vendor; or

(v)        In        the event that the Average Daily Revenues realized by the Parbet Poker Room during the Earn        Out Period are less than eighteen thousand Euros (€18,000), no payment shall be made        by the Purchaser to the Vendor under this Section 4(2).

| ****
**(3)** | **Right to Audit** |
|--------------|--------------------|

It        is understood and agreed that the Vendor shall be entitled on one (1) occasion at its sole        expense to appoint a duly qualified auditor to audit the books and records of the Purchaser        and/or Parbet Operator in order to confirm the Average Daily Revenues realized by the        Parbet Poker Room during the Earn Out Period. Notwithstanding the foregoing, should the        results of the audit reveal that the actual Average Daily Revenues realized by the Parbet        Poker Room during the Earn Out Period was higher by ten percent (10%) or more from the        amount as reported to the Vendor by the Purchaser, the Vendor shall be entitled to its        reasonable expenses of such audit.

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**(4)** | **Closing Statements Purchase Price                        Adjustment** |
|--------------|-------------------------------------------------------------------------|

(a)       Closing Statements - As soon as        practicable, and in any event within thirty (30) days after the Closing Date, the Purchaser        shall prepare and deliver to the Vendor, the Closing Statements. The Vendor shall provide        any and all information, documentation and assistance as the Purchaser may reasonably        require in order to prepare the Closing Statements. The Purchaser shall permit the Vendor        twenty (20) days after their delivery to make comments and representations to the Purchaser        on such Closing Statements. The Vendor shall be provided with all reasonable access to the        books, records and other information relating to the operation of the Business as they may        reasonably request, for the purpose of reviewing the Closing Statements.

(b)       Adjustment - On or prior to the        thirtieth (30th) day following the Purchaser’s delivery of the Closing        Statements to the Vendor, and provided the Vendor has not disputed in writing the Closing        Statements in accordance with part (c) below:

(i)        In        the event that the Closing Date Liabilities exceed the Estimated Liability Amount, the        Vendor shall forthwith pay over to the Purchaser an amount equal to the Closing Date        Liabilities less the Estimated Liability Amount, by certified cheque, bank draft or other        means of immediately available funds; or

 

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(ii)       In the        event that the Estimated Liability Amount exceeds the Closing Date Liabilities, the        Purchaser shall forthwith pay over to the Vendor an amount equal to the Estimated Liability        Amount less the Closing Date Liabilities, by certified cheque, bank draft or other means of        immediately available funds.

(c)       Failure to dispute, in writing,        the Closing Statements by the twentieth (20th) day following the        Purchaser’s delivery of the Closing Statements to the Vendor shall be conclusive        evidence of the Vendor’s acceptance of the Closing Statements. All disputes related        to the Closing Statements which cannot be amicably resolved between the Parties shall be        settled by binding arbitration in accordance with Section 12(7). In the event of a dispute        which, upon its resolution, could result in a payment to the Purchaser pursuant to Section        4(4)(b)(i) above, the amount so in dispute shall be withheld from the Holdback pending        resolution of such dispute.

| ****
**5.** | **REPRESENTATIONS AND WARRANTIES** |
|-------------|------------------------------------|

| ****
**(1)** | **Representations and Warranties of the                        Vendor** |
|--------------|-------------------------------------------------------------------------|

The        Vendor hereby represents and warrants to the Purchaser as follows and acknowledges that the        Purchaser is relying on these representations and warranties in entering into this        Agreement and the transactions contemplated under this Agreement:

(a)       Organization and Good        Standing—The Vendor is a corporation duly incorporated and validly existing in good        standing under the laws of Malta, and has good and sufficient corporate power, authority        and right to enter into and deliver this Agreement and all other agreements, documents and        instruments to be executed by it as contemplated herein and to carry out the transactions        and perform each of its obligations herein and therein.

(b)       Bankruptcy, etc.— The        Vendor has not committed an act of bankruptcy, is not insolvent, has not proposed a        compromise or arrangement to its creditors generally, has not had any petition for a        receiving order in bankruptcy filed against it, has not made a voluntary assignment in        bankruptcy, has not taken any proceeding with respect to a compromise or arrangement, has        not taken any proceeding to have itself declared bankrupt or wound-up, has not taken any        proceeding to have a receiver appointed of any part of its assets, has not had any        encumbrancer take possession of any of its property, and has not had any execution or        distress become enforceable or become levied upon any of its property.

(c)       Capacity to Carry on        Business—The Vendor has all necessary corporate power, authority and capacity to own        its property and assets to carry on the Business as presently owned and carried on by it,        and the Vendor is duly licensed, registered and qualified as a corporation to do business        and is in good standing in Malta and all such licenses, registrations and qualifications        are valid and subsisting and in good standing and none of them contains any        burdensome term, provision, condition or limitation which has or may have an adverse effect        on the Purchased Assets.

(d)       Compliance with        Laws – The Vendor has operated and is operating the Business in compliance in all        material respects with all applicable laws of Malta and is not in breach of any such        laws.

(e)       Due        Authorization, etc.— The execution and delivery of this Agreement,        agreements,

 

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documents and instruments executed or to be executed by the Vendor pursuant        to this Agreement and the performance by the Vendor of its obligations hereunder or        thereunder have been duly authorized on the part of the Vendor. Each of this Agreement and        the other agreements and instruments to be executed by the Vendor in connection with this        Agreement constitute (or will constitute when executed) legally valid and binding        obligations of the Vendor, enforceable against it in accordance with its/their        terms.

(f)        Absence of Conflicting        Agreements—The Vendor is not a party to, bound or affected by or subject to any        indenture, mortgage, lease, agreement, instrument, statute, regulation, arbitration award,        charter or by-law provisions, order or judgment which would be violated, contravened,        breached by, or under which any default would occur as a result of the execution and        delivery of this Agreement or the consummation of any of the transactions contemplated        under this Agreement, including without limitation, any existing software supply agreement        to which the Vendor is a party and which relate to the supply to the Vendor of software in        connection with the operation of the Business.

(g)       Title to Purchased        Assets—The Vendor is the absolute beneficial owner of the Purchased Assets, with good        and marketable title to the Purchased Assets, free and clear of any title defects,        mortgages, pledges, hypothecs, security interests, deemed trusts, liens, charges,        encumbrances or rights or claims of others of any kind whatsoever and the Vendor is        exclusively entitled to possess and dispose of the same.

(h)       Cash on Deposit—All        customer cash on deposit with the Vendor in connection with the Business are bona fide as        it relates to the manner and purpose for which such deposits were made, which manner and        purpose is participating in the Vendor Poker Room and for no other purpose        whatsoever.

(i)        Intellectual        Property— The Intellectual Property Rights constitute all patents, trade-marks, trade        names, domain names, brand names, trade designs, service marks and copyrights and all        licenses and similar rights and property which are necessary or incidental to the conduct        of the Business and are valid and subsisting and held by the Vendor with good and        marketable title and are in good standing free and clear of all security interests, claims,        liens, objections and infringements of every nature and kind and all registrations therefor        have been kept renewed and are in full force and effect. The operation of the Business and        the provision by the Vendor of its services do not involve infringements or claimed        infringements of any patent, trade-mark, trade name, copyright or other intellectual        property right of any third party. Save and except as disclosed in Schedule D hereto, no        Employee or other Person owns, directly or indirectly in whole or in part, any patent,        trade-mark, trade name, domain name, brand name, copyright, invention, process, know-how,        formula or trade secret which the Vendor is presently using or the use of which is        necessary for the Business, or otherwise has an interest in any Intellectual Property        Rights. To the best of the knowledge by the Vendor, no third party has infringed or        breached or is infringing or breaching any of the Intellectual Property Rights. The Vendor        has not received any notice challenging the title or interest of the Vendor in the        Intellectual Property Rights, and to the best of the knowledge of the Vendor, there are no        facts upon which such a challenge could be made. There are no outstanding rights or        licenses granted to any third party

 

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to        use any Intellectual Property Rights.

(j)        Material        Contracts—The Vendor is not a party to or bound by any material contract or        commitment relating to the Business whether oral or written, save and except as disclosed        in Schedule L hereto.

(k)       No Options—No Person        other than the Purchaser has any agreement or option or any right capable of becoming an        agreement or option for the purchase from the Vendor of any of the Purchased        Assets.

(l)        Books and        Records—The books and records of the Vendor as it relates to the Business fairly and        correctly set out and disclose in all material respects, the financial position of the        Business and all material financial transactions of the Vendor relating to the Business        have been accurately recorded in Vendor’s books and records.

(m)      Financial Statements—The Financial        Statements annexed as Schedule C hereto:

(i)        have, other than the management prepared, unaudited financial statements for        the period from January 1, 2006 through to November 30, 2006, been prepared in accordance        with IFRS applied on a basis consistent with that of preceding fiscal periods;

(ii)       present        fully, fairly and correctly the assets, liabilities and financial condition of the Vendor        in respect of the Business as at the end of the period represented thereby, and the results        of its operations and the changes in its financial position for the periods then        ended;

|   | (iii) | are in accordance with the books and records of the                        Vendor; |
|--------|-------|------------------------------------------------------------------------------------|

(iv)       contain        and reflect all necessary adjustments for a fair presentation of the results of operations        and the financial condition of the Vendor in respect of the Business for the period covered        thereby; and

(v)        contain and reflect adequate provision or allowance for all reasonably        anticipated liabilities, expenses and losses of the Vendor in respect of the        Business.

(n)       Non-Arm’s Length        Transactions—Except as otherwise provided for in the Financial Statements, the Vendor        is not party to any transaction which relates to the Business with any officer, director,        employee, shareholder, corporation, partnership, legal entity or any other Person not        dealing at arm’s length (within the meaning of the*Income        Tax Act*(Canada)) with the Vendor        (“**Non-Arm’s Length        Transaction**”) for which financial consideration relating to        such Non-Arm’s Length Transaction is not based on fair market value. Without        restricting the generality of the foregoing, no material revenues of the Business are        derived from any Person not dealing at arm’s length (within the meaning of the*Income Tax Act*(Canada)) with the        Vendor, nor to the Vendor’s express knowledge, are any material        revenues of the Business derived from sources which, due to the nature of such sources, are        not likely to be sources of revenue for the Business subsequent to the completion of the        purchase and sale of the Purchased Assets to the Purchaser as contemplated        herein.

(o)       Liabilities—There        are no liabilities of the Vendor of any kind whatsoever, whether or not accrued and whether        or not determined or determinable, in respect of which the Purchaser may become liable on        or after the Closing Date other than the Assumed Liabilities.

 

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| (p) | Absence of Changes—Since December 31, 2005, there has                        not been: |
|-----|----------------------------------------------------------------------------------------------|

(i)        any material change in the condition or operations of the Business other        than changes in the ordinary and normal course of business;

(ii)       any        damage, destruction or loss, labour trouble or other event, development or condition of any        character (whether or not covered by insurance) materially and adversely affecting the        Business; or

(iii)      any change        in the accounting or tax practices in respect of the Business, the Vendor or the assets        thereof.

(q)       Absence of Unusual        Transactions—Since December 31, 2005, the Vendor has carried on the Business in its        usual and ordinary course, and in particular the Vendor has not:

(i)        transferred, assigned, sold or otherwise disposed of any of the assets used        in the Business except in the ordinary and usual course of business;

(ii)       suffered an extraordinary loss, or waived any rights of material value, or        entered into any material commitment or transaction not in the ordinary and usual course of        business;

(iii)      made any        capital expenditure, except in the usual and ordinary course of business, and no capital        expenditure will be made or authorized after the date of this Agreement by the Vendor with        respect to the Business without the prior written consent of the Purchaser;

(iv)       mortgaged, pledged, subjected to lien, granted a security interest in or        otherwise encumbered any of the Purchased Assets; or

|   | (v) | authorized or agreed or otherwise become committed to do any                        of the foregoing. |
|--------|-----|-------------------------------------------------------------------------------------------------------|

(r)        Government        Withholdings—The Vendor has deducted and remitted to the relevant governmental        authorities or entities (“**Deductions and        Remittances**”) all income taxes, unemployment insurance        contributions, pension plan contributions, employer health tax remittances and any taxes or        deduction or other amounts which it is required by statute or contract to collect and remit        to any governmental authorities or other entities entitled to receive payment of such        deduction, and for which absent such Deductions and Remittances, the Purchaser could become        liable, or which could negatively impact the value of the Purchased Assets.

(s)       Litigation—There is no,        and there has not been for a period two (2) years prior to the date of this Agreement,        suit, action, litigation, arbitration, proceeding, governmental proceeding,tribunal complaint, including appeals and applications for review in        progress, pending or threatened against or involving the Vendor which relates to the        Business or the Purchased Assets to which the Purchaser could become liable, and there is        not presently outstanding against the Vendor any judgment, decree, injunction, rule or        order of any court, governmental department, commission, tribunal, agency, instrumentality        or arbitrator which relates to the Business or the Purchased Assets to which the Purchaser        could become liable.

(t)        Consents—There are        no consents, authorizations, licenses, franchise agreements, permits,

 

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approvals or orders of any person or government required to permit the        Vendor to complete the transactions contemplated herein with the Purchaser. Without        restricting the generality of the foregoing, the Vendor expressly represents and warrants        that the transfer of personal information of any of the customers of the Vendor pursuant to        the provisions hereof does not require the consent of any third party which has not already        been obtained by the Vendor, and is otherwise not a breach of any applicable privacy or        data protection laws (the “**Privacy        Laws**”).

(u)       Licenses and Permits—All        of the Licenses, registrations, qualifications, permits, bonds and approvals issued by any        government or governmental unit, agency, board, body or instrumentality, whether federal,        state, provincial or municipal, related to the Business or necessary for the conduct of the        Business are listed on Schedule E, and are in good standing, and the Vendor is not in        default of any obligations or requirements in respect thereof.

(v)       Governmental        Consents—Other than a notice to be delivered by the Vendor to the Maltese Lotteries        and Gaming Authority        (“**MLGA**”) (which notice the        Vendor represents and warrants has already been delivered to the MLGA)), no governmental or        regulatory authorizations, consents, approvals, filings or notices pertaining to the Vendor        are required to be obtained or given or waiting period is required to expire in order that        the purchase and sale of the Purchased Assets may be consummated by the Vendor or for the        Vendor to carry out its obligations set out in this Agreement.

(w)      Tax Matters—The Vendor is not        in arrears or in default in respect of the filing of any required federal, provincial,        state, or municipal tax or other return which relates to the Business or the Purchased        Assets or to which the Purchaser could become liable or which could negatively impact the        value of the Purchased Assets; and,

(i)        all taxes, filing fees, and other assessments due and payable or collectable        from the Vendor have been paid or collected;

(ii)       no        claim for additional taxes, filing fees, or other amounts and assessments has been made        that has not been paid; and,

(iii)      no such tax        return contains any misstatement or conceals any statement that should have been included        therein.

(x)       No Knowledge of Material Facts        - Save and except as described in this Agreement, the Vendor has no knowledge of any facts        which might be reasonably expected to diminish the Purchaser’s appreciation and worth        or profitability of the Business or which, if known by the Purchaser, might be reasonably        expected to deter it from completing the transactions herein contemplated.

| **(2)** | **Representations and Warranties of the                        Purchaser** |
|---------|----------------------------------------------------------------------------|

The        Purchaser hereby represents and warrants to the Vendor as follows:

(a)       Organization and Good        Standing—The Purchaser is a corporation duly incorporated and validly existing and in        good standing under the laws of Cyprus.

(b)       Authority Relative to this        Agreement, etc.—The Purchaser has all necessary corporate power, authority and        capacity to enter into this Agreement and to perform its obligations under this Agreement;        the execution and delivery of this Agreement and the consummation of the

 

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(c)       Absence of Conflicting        Agreements—The Purchaser is not a party to, bound or affected by or subject to any        indenture, mortgage, lease, agreement, instrument, charter or by-law provision, statute,        regulation, order, judgment, decree or law which would be violated, contravened or breached        by, or under which any default would occur as a result of the execution and delivery by it        of this Agreement or the consummation of the transactions contemplated under this        Agreement, except as disclosed in this Agreement.

(d)       Enforceability of        Obligations—This Agreement constitutes a valid and binding obligation of the        Purchaser enforceable against it in accordance with its terms.

| ****
**(3)** | **Representations and Warranties of the Vendor                        Guarantor** |
|--------------|-----------------------------------------------------------------------------------|

The        Vendor Guarantor hereby represents and warrants to the Purchaser as follows:

(a)       Organization and Good        Standing—The Vendor Guarantor is a corporation duly incorporated and validly existing        and in good standing under the laws of The Netherlands.

(b)       Authority Relative to this        Agreement, etc.—The Vendor Guarantor has all necessary corporate power, authority and        capacity to enter into this Agreement and to perform its obligations under this Agreement;        the execution and delivery of this Agreement and the consummation of the transactions        contemplated by this Agreement have been duly authorized by all necessary corporate action        on the part of the Vendor Guarantor.

(c)       Enforceability of        Obligations—This Agreement constitutes a valid and binding obligation of the Vendor        Guarantor enforceable against it in accordance with its terms.

(d)       Expekt.com Company Limited        Financial Statements - The Expekt.com Company Limited Financial Statements annexed as        Schedule G hereto have, other than the management prepared, unaudited financial statements        for the period from January 1, 2006 through to November 30, 2006, been prepared in        accordance with IFRS, applied on a basis consistent with prior periods, and present fairly,        in all material respects in accordance with IFRS, the assets, liabilities and financial        condition of Expekt.com Company Limited as at and for the period ended on the date of such        financial statements, and the sales, earnings and results of operations of Expekt.com        Company Limited for the periods covered thereby and are in accordance with the books and        records of Expekt.com Company Limited

(e)       Organizational Chart –        The organizational chart attached hereto as Schedule H accurately sets forth the corporate        ownership of all entities listed thereon, and, other than specificallydisclosed in the organizational chart, the Vendor Guarantor        is the 100% direct or indirect beneficial owner of all entities listed on the said        organizational chart.

| ****
**(4)** | **Representations and Warranties of the Purchaser                        Guarantor** |
|--------------|--------------------------------------------------------------------------------------|

The        Purchaser Guarantor hereby represents and warrants to the Vendor as follows:

(a)       Organization and Good        Standing—The Purchaser Guarantor is a corporation duly incorporated and validly        existing and in good standing under the laws of Ontario.

(b)       Authority Relative to this        Agreement, etc.—The Purchaser Guarantor has all necessary

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corporate power, authority and capacity to enter into this Agreement and to        perform its obligations under this Agreement; the execution and delivery of this Agreement        and the consummation of the transactions contemplated by this Agreement have been duly        authorized by all necessary corporate action on the part of the Purchaser        Guarantor.

(c)       Enforceability of        Obligations—This Agreement constitutes a valid and binding obligation of the        Purchaser Guarantor enforceable against it in accordance with its terms.

| ****
**(5)** | **Commission** |
|--------------|----------------|

Other than a commission payable by the Vendor at its sole expense to Stella        Advisors AB, each Party represents and warrants to the other Party that no Person is        entitled to a brokerage commission, finder’s fee or other like payment in connection        with the purchase and sale contemplated by this Agreement.

| ****
**(6)** | **Non-Waiver** |
|--------------|----------------|

No        investigations made by or on behalf of the Purchaser at any time shall have the effect of        waiving or diminishing the scope of or otherwise affecting any representation or warranty        made by the Vendor in this Agreement or pursuant hereto. No waiver by the Purchaser of any        condition, in whole or in part, shall operate as a waiver of any other        condition.

| ****
**(7)** | **Nature and Survival of Representations and                        Warranties** |
|--------------|----------------------------------------------------------------------------------|

All        statements contained in any certificate or other instrument delivered by or on behalf of a        Party pursuant to or in connection with the transactions contemplated by this Agreement        shall be deemed to be made by that Party under this Agreement. All representations,        warranties, covenants and agreements contained in this Agreement on the part of each of the        Parties shall survive the Closing, the execution and delivery hereunder of any bills of        sale, instruments of conveyance, assignments or other instruments of transfer of title to        any of the Purchased Assets and the payment of the consideration contemplated under this        Agreement, except that the representations and warranties contained in this Agreement shall        only survive for one (1) year following Closing (except for the Vendor’        representations and warranties relating to title to the Purchased Assets, which shall        survive indefinitely, and relating to tax matters which shall survive for the period of        time during which the taxes to which such representations and warranties relate may be        reassessed by the relevant taxation authority, unless the Vendor has been fraudulent in        filing a return or supplying information to any taxation authority under any taxation        legislation, in which case the survival of those representations and warranties relating to        tax matters shall be unlimited) after which period of time, if no Claim shall, prior to the        expiry ofsuch period, have been made under this        Agreement against a Party with respect to any incorrectness in or breach of any        representation or warranty made in this Agreement by such Party, such Party shall have no        further liability under this Agreement with respect to such representation or        warranty.

| ****
**6.** | **OTHER COVENANTS OF THE PARTIES** |
|-------------|------------------------------------|

| ****
**(1)** | **Operation of Expekt** |
|--------------|-------------------------|

It        is expressly acknowledged that the Vendor is also the owner and operator of a virtual poker        room operating under the name and brand “Expekt” (the        “**Expekt Room**”). It is        further

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acknowledged that, as of the date hereof, the Expekt Room licenses its poker        room software from Tain Poker Ltd.        (“**TAIN**”) and participates in        TAIN’s centralized poker room. The Vendor hereby agrees that Expekt shall continue to        license its poker room software from TAIN and shall continue to participate in TAIN’s        centralized poker room, until the Closing Date, in the same manner and to the same extent        as is the case on the date hereof.

| ****
**(2)** | **Exclusivity** |
|--------------|-----------------|

From        the date hereof until the Closing Date, it is expressly agreed by the Vendor that neither        the Vendor, nor any of its officers, directors, shareholders or executives (collectively        the “**Vendor Parties**”), shall        initiate, engage or participate in any discussions, investigations or negotiations with any        Person whatsoever which relate to a proposed disposition, sale, assignment, transfer or        encumbrance of all of any part of the Business, or Purchased Assets or a proposed        disposition, sale, assignment, transfer, issuance or encumbrance of all or any material        part of the capital stock of the Vendor (collectively a        “**Restricted Transaction**”),        without the prior express written consent of the Purchaser, not to be unreasonably withheld        (it being expressly acknowledged and agreed that is shall not be deemed unreasonable to        withhold consent in respect of any Restricted Transaction which is inconsistent with, or in        any way jeopardizes, the Vendor’s ability to fulfill its obligations under this        Agreement). The Vendor further agrees that should any Vendor Party be approached by the        Person wishing to engage any Vendor Party in discussions, investigations or negotiations        relating to a Restricted Transaction, the Vendor shall forthwith advise the Purchaser in        writing of the particulars of the approach and the identity of the subject        Person.

| ****
**(3)** | **Conduct of Business Prior to Closing** |
|--------------|------------------------------------------|

During the Interim Period, the Vendor shall do the following:

(a)       Conduct Business in Ordinary        Course—Except as otherwise contemplated or permitted by this Agreement, the Vendor        shall conduct the Business in the ordinary and normal course and shall not, without the        prior written consent of Purchaser, enter into any transaction which, if entered into        before the date of this Agreement, would cause any representations or warranties of the        Vendor contained in this Agreement to be incorrect. Without restricting the generality of        the foregoing, it is expressly agreed that the Vendor shall continue to operate the Vendor        Poker Room from the TAIN centralized poker room throughout the Interim Period. Save and        except as may be otherwise expressly set forth herein, and without restricting the        generality of anything in this Agreement, the Vendor expressly agrees not to alter its        marketing of the Business betweenthe execution of        this Agreement and the Closing Date, including altering its policies in respect of        promotional bonuses, affiliate fees and rake back;

(b)       Perform        Obligations—The Vendor shall comply with all applicable laws, regulations, by-laws        and other governmental requirements of each jurisdiction in which the Business is carried        on;

(c)       Material        Changes—The Vendor shall not take any action which would result in any material        adverse change in or to the Purchased Assets or the Business or sell, transfer or dispose        of any of the Purchased Assets, other than in the ordinary course of        business;

(d)       Liens—The        Vendor shall not suffer or permit any mortgages, pledges, hypothecs,

- 17        -

 

 

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security interests, deemed trusts, liens, charges, rights or claims of other        Persons, or any other encumbrances whatsoever, to attach to or affect the Purchased        Assets;

(e)       Discharge Liabilities –        The Vendor shall pay, when due, any obligations incurred in the ordinary course of the        operation of the Business;

(f)        Preserve the Goodwill        – The Vendor shall exercise its best efforts to preserve the goodwill of the Business        and the present relationship with customers and others having business relationships with        the Business;

(g)       Maintain Assets – The        Vendor shall maintain the Purchased Assets consistent with its past practice;

(h)       Maintain Books and Records        – The Vendor shall maintain its books, records and accounts in the ordinary course of        business on a basis consistent with past practices;

(i)        Representations,        Warranties and Conditions – The Vendor shall use its reasonable commercial efforts to        ensure that the Vendor’s representations and warranties in Section 5 hereof remain        true and correct in all material respects at the Closing as if such representations and        warranties were made at and as of Closing and to satisfy or cause to be satisfied the        conditions set forth in Section 8(1); and

(j)        Advise of Changes –        The Vendor shall promptly advise the Purchaser of any material changes in the financial        condition, business affairs or prospects of the Business or the Assets.

| ****
**(4)** | **Due Diligence Investigations** |
|--------------|----------------------------------|

The        Vendor shall in good faith cooperate with the Purchaser in the conduct of its due diligence        investigations relating to the Purchased Assets, the Assumed Liabilities and the Business        (which investigations shall be completed, in the sole discretion of the Purchaser, on or        prior to the Closing Date) and shall make available to the Purchaser, on a timely basis and        upon reasonable request, any and all information, documentation and personnel related to        the Business, the Purchased Assets and the Assumed Liabilities as the Purchaser may from        time to time request; provided that the Purchaser shall not be allowed to take a copy of        any database of the Vendor’s customers and will not be provided with any personal        information of specific customers during the due diligence process, and the Purchaser may        not contact any specific customers of the Business without the prior express written        consent of the Vendor. Without restricting the generality of the foregoing, it is expressly        agreed that the Purchaser shall be entitled, as part and parcel of its due diligence        investigations, to contact any contractors and suppliers of theBusiness, in order to discuss the Business with said parties, and the Vendor        shall take any and all such steps and may be necessary or desirable in order to facilitate        such contacts and communications. It is hereby agreed by the Vendor that all information        and documentation provided to the Purchaser by the Vendor and or its agents or        representatives in respect of the Purchased Assets, the Assumed Liabilities and the        Business as part and parcel of the Purchaser’s due diligence investigations shall, to        the best of the Vendor’s knowledge, be complete and accurate in all material        respects, and the Vendor shall disclose to the Purchaser any and all information and        documentation relating to the Purchased Assets, the Assumed Liabilities and the Business as        would be considered by a reasonable purchaser to be material to its due        diligence

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investigations regarding the purchase of the Purchased Assets and the        assumption of the Assumed Liabilities.

| ****
**(5)** | **Delivery of Books and Records** |
|--------------|-----------------------------------|

At        the Closing Time, the Vendor shall deliver to the Purchaser the following documents: (i)        copies of all business books and records used in the conduct of the Business, including        without limitation, all financial, operating, legal and customer records (including,        without limitation, customer lists, databases and all other information relating to        customers of the Vendor); and (ii) copies of all employee records with respect to employees        of the Vendor hired by the Purchaser. All books and records shall be delivered to the        Purchaser in electronic format on Closing, with any relevant hard copies to be delivered to        the Purchaser within a reasonable period of time following the Closing Date.

| ****
**(6)** | **Actions to Satisfy Closing Conditions** |
|--------------|-------------------------------------------|

Each        Party hereby agrees to take all such actions as are within its power to control, and to use        commercially reasonable efforts to cause other actions to be taken which are not within its        power to control, so as to ensure compliance with any conditions set forth in Article 8        which are for the benefit of the other Party.

| ****
**(7)** | **Business Names** |
|--------------|--------------------|

Immediately after the Closing Date and in any case no later than ten (10)        days thereafter, the Vendor and the Vendor Guarantor shall make application to the relevant        authorities to change the Vendor’s corporate name, and the corporate name of any        other entity owned or controlled (directly or indirectly) by the Vendor Guarantor, and        shall discontinue further use of the names “Parbet”, “Parbet.com”,        “Parbet.com Limited” and any derivatives thereof and each agree not to directly        or through a Legal Entity Affiliate, use names similar to those names after the Closing        Date (except for such non-commercial use as may be required prior to the effective date of        the corporate name change referred to herein). Such corporate name changes shall take place        no later than thirty (30) days after the Closing Date, unless there is a delay which is        beyond the control of the Vendor. If requested by the Purchaser, the Vendor shall also take        such action as may be necessary in order to assist the Parbet Operator or any of its        affiliates to change their corporate names to names including any of the Vendor’s        former names. The Vendor shall provide the Purchaser all such reasonable evidence of        compliance with the provisions of this Paragraph 6(7) as the Purchaser may request. For        greater certainty, and subject to as is expressly set forth above, the Vendor and the        Vendor Guarantor shall not use the trade names and marks “Parbet”,“Parbet.com”, “Parbet.com Limited”,        or any derivatives thereof, in any manner, and for any purpose, whatsoever at any time        following the Closing Date.

| ****
**(8)** | **Database Conversion** |
|--------------|-------------------------|

It        is expressly acknowledged and agreed that a material part of the Purchased Assets is the        Vendor’s database of customers playing poker in the Vendor Poker Room (the        “**Vendor End Users**”). It is        further acknowledged and agreed that in order for the Purchaser to maximize the value of        the Purchased Assets being acquired, it is required to convert the Vendor End Users        into

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End        Users. In this regard, the Purchaser intends to create end user accounts for all Vendor End        Users with the Parbet Poker Room, to be accessible by all Vendor End Users immediately        following the Time of Closing (the “**New End User        Accounts**”), which New End User Accounts will be created        using the Vendor’s existing information about the Vendor End Users, including without        limitation, each said end user’s name, address, user id, password and account balance        (the “**End User        Information**”). It is expressly acknowledged and agreed by        the Parties that, in connection with establishing the New End User Accounts, the Parties        shall perform a data conversion process (as more particularly described in Schedule I)        whereby the End User Information would be extracted from the Vendor Poker Room and used to        create the New End User Accounts in the Parbet Poker Room (the        “**Conversion Process**”). It is        expressly agreed that the Vendor shall provide to the Purchaser any and all information,        documentation and assistance as the Purchaser may reasonably require in order to complete        the Conversion Process as described in Schedule I, having regard to the fact that the        Vendor is affiliated with the Person that owns TAIN, which is the centralized poker network        on which the Business is presently conducted. It is expressly acknowledged that the        Purchaser shall require the cooperation and assistance of the Vendor in completing the        software programs and other tools as are necessary in order to complete the Conversion        Process, and the Vendor agrees to provide such cooperation and assistance throughout the        Interim Period.

| ****
**(9)** | **Material Contracts** |
|--------------|------------------------|

Forthwith after the execution of this Agreement, the Vendor shall provide        the Purchaser with copies of all material contracts as set forth in Schedule L, and, to the        extent such material contracts are not evidenced in writing, detailed summaries of such        oral material contracts. As soon as reasonably practical thereafter, the Purchaser shall        review the material contracts (and/or summaries thereof) in order to determine which such        contracts the Purchaser wishes to assume as at the Closing Date        (“**Assumed Material        Contracts**”). Both the Vendor and the Purchaser agree to use        reasonable best efforts during the Interim Period to effect an assignment of the Assumed        Material Contracts to the Purchaser at the Closing Date.

| ****
**(10)** | **Additional Escrow Agent Costs** |
|---------------|-----------------------------------|

The        Vendor and the Purchaser agree to share equally in any and all additional costs and charges        levied by the Escrow Agent above and beyond the Escrow Fee (as such term is defined in the        Purchase Price Escrow Agreement) (“**Additional Escrow Agent        Costs**”). In the event that either the Purchaser or the        Vendor makes payment in full to the Escrow Agent for the AdditionalEscrow Agent Costs, one half of such Escrow Agent Costs shall        be re-imbursed to the paying party by the non-paying party.

| **(11)** | **Employees** |
|----------|---------------|

Non-Hiring of Employees – The Vendor expressly acknowledges that the        Purchaser is not required to hire any of the Employees and nothing herein shall be        construed so as to place any obligation on the Purchaser to hire any Employees. The        Purchaser shall have the right to offer employment to any of the Employees, effective to        the Closing Date. In the event that the Vendor decides to terminate any of the Employees        not hired by the Purchaser (“**Terminated        Employees**”), the Vendor agrees that it shall be liable for        the payment of all legal obligations

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relating to the termination of employment of any Terminated Employee. The        Vendor’s liability shall extend to all amounts required either by statute or at        common law to be paid to any Terminated Employee, including pay in lieu of notice,        termination pay, severance pay, vacation pay and all other outstanding amounts.

| ****
**(12)** | **Bulk Sales** |
|---------------|----------------|

The        Vendor shall comply with all bulk sales legislation in each jurisdiction in which the        Purchased Assets are located in connection with the transactions contemplated under this        Agreement.

| ****
**(13)** | **Non-Solicitation** |
|---------------|----------------------|

The        Vendor shall and shall cause the Vendor Guarantor, Conny Gesar and Christian Haupt to enter        into a Non-Solicitation Agreement in the form attached hereto as Schedule F.

| ****
**7.** | **INDEMNIFICATION** |
|-------------|---------------------|

| ****
**(1)** | **Indemnification by Vendor** |
|--------------|-------------------------------|

The        Vendor agrees to indemnify and hold the Purchaser harmless against and in respect of any        loss, damage, claim, cost or expense whatsoever, including any and all incremental        out-of-pocket costs, including, without limitation, all reasonable legal and accounting        fees, which the Purchaser may incur, suffer or be required to pay, pursuant to any claim,        demand, action, suit, litigation, charge, complaint, prosecution or other proceeding        (collectively “**Claim**”) that        may be made or asserted against or affect the Purchaser, provided, however, that the        subject matter of any such Claim relates to or arises out of or in connection with the        following matters:

(i)        any misrepresentation or breach of any warranty, agreement, covenant or        obligation of the Vendor contained in this Agreement or in any agreement, schedule,        certificate or other document required to be entered into or delivered by the        Purchaser;

(ii)       any        amount payable to or in respect of any Employee or Terminated Employee howsoever arising,        save and expect for amounts payable to Employees hired by the Purchaser and which arise or        relate to the period following the Closing Time; or

(iii)      any        liabilities of the Business relating, either directly or indirectly, to the operation of        the Business prior to the Closing Time, save and except for Assumed Liabilities.

| ****
**(2)** | **Indemnification by Purchaser** |
|--------------|----------------------------------|

The Purchaser agrees to indemnify and hold the Vendor        harmless against and in respect of any loss, damage, claim, cost or expense whatsoever,        including any and all incremental out-of-pocket costs, including, without limitation, all        reasonable legal and accounting fees, which the Vendor may incur, suffer or be required to        pay, pursuant to any Claim that may be made or asserted against or affect the Vendor,        provided, however, that the subject matter of any such Claim relates to or arises out of or        in connection with the following matters:

(i)        any misrepresentation or breach of any warranty, agreement, covenant or        obligation of the Purchaser contained in this Agreement or in any agreement, schedule,        certificate or other document required to be entered into or delivered by the Purchaser;        or

- 21        -

 

 

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(ii)       any        liabilities of the Business arising in respect of the operation of the Business on or after        the Closing Time (including, without limitation, liabilities arising from a breach of        Privacy Laws), save and except in the event that such liabilities have arisen as a result        of a breach of any representation, warranty or covenant of the Vendor or the Vendor        Guarantor hereunder.

| ****
**(3)** | **Claims by Third Parties** |
|--------------|-----------------------------|

(a)       For the purposes of this        Section 7(3) “**Third Party        Claim**” means any demand which has been made on, or        communicated to, the Vendor or the Purchaser by or on behalf of any Person other than the        persons mentioned above in this definition and which, if maintained or enforced, might        result in a loss, liability or expense of the nature described in either Subsection 7(1) or        Section 7(2).

(b)       Promptly upon receipt by either        the Purchaser or the Vendor (the        “**Indemnitee**”) of notice of        any Third Party Claim in respect of which the Indemnitee proposes to demand indemnification        from the other party to this Agreement (the        “**Indemnitor**”), the        Indemnitee shall forthwith give notice to that effect to the Indemnitor.

(c)       The Indemnitor shall have the        right, exercisable by giving notice to the Indemnitee not later than thirty (30) days after        receipt of the notice described in Subsection 7(3)(b), to assume the control of the        defence, compromise or settlement of the Third Party Claim, provided that:

(i)        the Indemnitor shall first deliver to the Indemnitee its written consent to        be joined as a party to any action or proceeding relating thereto; and

(ii)       Indemnitor shall at the Indemnitee’s request furnish it with        reasonable security against any costs or other liabilities to which it may be or become        exposed by reason of such defence, compromise or settlement.

(d)       Upon the assumption of control        by the Indemnitor as aforesaid, the Indemnitor shall, at its expense, diligently proceed        with the defence, compromise or settlement of the Third Party Claim at the        Indemnitor’s sole expense, including employment of counsel reasonably satisfactory to        the Indemnitee, and in connection with such proceedings, the Indemnitee shall co-operate        fully, but at the expense of the Indemnitor, to make available to the Indemnitor all        pertinent information and witnesses under the Indemnitee’s control and to make such        assignments and take such other steps as in the opinion of counsel for the Indemnitor are        necessary to enable the Indemnitor to conduct such defence, provided always that the        Indemniteeshall be entitled to reasonable security        from the Indemnitor for any expense, costs or other liabilities to which it may be or may        become exposed by reason of such co-operation.

(e)       The final        determination of any such Third Party Claim, including all related costs and expenses, will        be binding and conclusive upon the Parties as to the validity or invalidity, as the case        may be, of such Third Party Claim against the Indemnitor.

(f)        Should the        Indemnitor fail to give notice to the Indemnitee as provided in Subsection 7(3)(b), the        Indemnitee shall be entitled to make such settlement of the Third Party Claim as in its        sole discretion may appear advisable, and such settlement or any other final determination        of the Third Party Claim shall be binding upon the Indemnitor.

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----

 

| ****
**(4)** | **Details of Claims** |
|--------------|-----------------------|

With        respect to any claim provided for under Subsection 7(1) and Section 7(2), no indemnity        under this Agreement shall be sought unless written notice providing reasonable details of        the reasons for which the indemnity is sought is provided to the Vendor or the Purchaser,        as the case may be.

| **(5)** | **Limitation of Liability** |
|---------|-----------------------------|

The        following limitations of liability shall apply to the provisions of this Article        7:

| (a) | the Purchaser, on the one hand, and the Vendor, on the other                        hand, shall not be entitled to indemnification from the other of them until                        the aggregate amount of all of such Party’s claims for                        indemnification exceeds €100,000 and, upon the aggregate of such                        Party’s claims exceeding €100,000, the other party shall be                        required to pay any amounts owing, including such initial €100,000                        amount; provided that the maximum the Vendor and/or the Purchaser, as the                        case may be, shall be required to pay shall not exceed, in the aggregate,                        the combined sum of the Purchase Price, including all Earn Out Amounts paid                        to the Vendor; provided that, notwithstanding the foregoing, the                        Vendor’s liability in respect of i) fraudulent misrepresentations, or                        ii) a breach of the representations and warranties contained in Section                        5(t) hereof and related to Privacy Laws, shall be unlimited, and the                        Purchaser’s liability in respect of a breach of Privacy Laws by the                        Purchaser (as set forth in Subsection 7(2)(ii)) shall be                        unlimited. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | neither the Purchaser nor the Vendor shall be liable to the                        other for any indemnification claim(s) the subject of which would be wholly                        covered by any existing policy of insurance maintained by the Party raising                        the claim(s) for indemnity; provided, however, that nothing herein shall be                        construed so as to require the Purchaser or the Vendor to maintain any form                        of policy of insurance; |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | the indemnification provisions contained in this Article 7                        shall not apply to any consequential, incidental or special damages                        incurred by the Purchaser and/or the Vendor, as the case may be;                        and |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | the Vendor and the Purchaser agree to use commercially                        reasonable efforts to mitigate any damages or potential damages which may                        be the subject of a claim for indemnification. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **8.** | **CONDITIONS PRECEDENT TO THE PERFORMANCE BY THE PURCHASER                        AND THE VENDOR OF THEIR OBLIGATIONS UNDER THIS AGREEMENT** |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

| ****
**(1)** | **Purchaser’s Conditions** |
|--------------|----------------------------------|

The        obligation of the Purchaser to complete the transactions contemplated by this Agreement        shall be subject to the satisfaction of, or compliance with, at or before the Closing Time,        each of the following conditions precedent (each of which is hereby acknowledged to be        inserted for the exclusive benefit of the Purchaser and may be waived by it in whole or in        part):

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(a)       Truth and Accuracy of        Representations of the Vendor at the Closing Time—All of the representations and        warranties of the Vendor and Vendor Guarantor made in or under this Agreement, shall be        true and correct in all material respects as at the Closing Time and with the same effect        as if made at and as of the Closing Time and the Purchaser shall have received a        certificate from a senior officer of the Vendor and the Vendor Guarantor confirming the        truth and correctness of the representations and warranties of the Vendor and the Vendor        Guarantor.

(b)       Performance of        Obligations—The Vendor shall have performed or complied with, in all material        respects, all their obligations, covenants and agreements under this Agreement.

(c)       Receipt of Closing        Documentation—All instruments of conveyance and other documentation and assurances        relating to the sale and purchase of the Purchased Assets including, without limitation,        bills of sale and other documentation, and all actions and proceedings taken on or prior to        the Closing in connection with performance by the Vendor of its obligations under this        Agreement shall be satisfactory to the Purchaser and their counsel, acting reasonably, and        the Purchaser shall have received copies of all such documentation or other evidence as it        may reasonably request in order to establish the consummation of the transactions        contemplated under this Agreement and the taking of all corporate proceedings in connection        under those transactions in compliance with this Subsection 8(1)(c), in form (as to        certification and otherwise) and substance satisfactory to the Purchaser and its counsel,        acting reasonably.

(d)       Closing        Documentation—Without limiting the generality of Subsection 8(1)(c), the Purchaser        shall have received at or before the Closing Time sufficient duly executed copies of the        following:

(i)        certified copy of a resolution of the directors and shareholders of the        Vendor and Vendor Guarantor approving this Agreement and the transactions contemplated        under this Agreement;

(ii)       certificate of a senior officer of the Vendor and Vendor Guarantor        concerning the matters referred to in Subsection 8(1)(a) and confirming that all conditions        under this Agreement in favour of the Purchaser have been either fulfilled or        waived;

|   | (iii) | bill of sale; |
|--------|-------|---------------|

|   | (iv) | assignment of Intellectual Property Rights; |
|--------|------|---------------------------------------------|

|   | (v) | Non-Solicitation Agreement; and |
|--------|-----|---------------------------------|

(vi)       detailed statement from a senior officer of the Vendor setting forth all        Assumed Liabilities, and attesting to the truth and accuracy thereof.

(e)       Opinions of        Counsel for Vendor and Vendor Guarantor —The Purchaser shall have received opinions        dated the Closing Date, in form and substance satisfactory to the Purchaser, acting        reasonably, from counsel for the Vendor and from counsel for the Vendor Guarantor,        confirming the matters warranted in Subsections 5(1)(a), 5(1)(c) and 5(1)(e) in the case of        the Vendor and the matters warranted in Subsections 5(3)(a), 5(3)(b) and 5(3)(c) in the        case of the Vendor Guarantor, which opinions may rely on opinions of counsel in other        jurisdictions with respect to matters of law in those jurisdictions. In giving such        opinions, counsel to the Vendor and counsel to the Vendor Guarantor may rely on        certificates of senior officers of the Vendor

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----

(f)        Consents, Authorizations        and Registrations—All consents, approvals, orders and authorizations of or from        governmental or regulatory authorities required in connection with the completion of the        transactions contemplated in this Agreement shall have been obtained on or prior to the        Closing Time.

(g)       No Actions Taken Restricting        Sale—No action or proceeding by law or in equity shall be pending or threatened by        any person, firm, corporation, government, governmental authority, regulatory body or        agency to enjoin, restrict or prohibit the purchase and sale of the Purchased Assets        contemplated under this Agreement.

(h)       Consulting Services        Accepted—Each of Juha Kvist and Johan Wilsson shall have entered into a management        and consulting services contract with the Parbet Operator in such form, and upon such        terms, as are satisfactory to the Purchaser.

(i)        Conversion Process        – The Vendor shall have fulfilled all of its obligations in respect of the Conversion        Process, including without limitation, all obligations set forth in Schedule I        hereto.

(j)        Due Diligence – The        Purchaser shall have completed its due diligence investigations, and shall be satisfied in        its sole and absolute discretion that its due diligence investigations with respect to the        Purchased Assets, the Assumed Liabilities and the Business did not identify any issue(s)        which it deems in good faith to be commercially material to the Purchased Assets, the        Assumed Liabilities and/or the Business, or its decision to acquire same. For greater        certainty, the following shall not be considered to be commercially material:

(i)        a        drop in the average daily gross amount of Poker Rake and Poker Tournament House Fees earned        through the operation of the Business from December 1, 2006 to January 15, 2007 (excluding        December 24, 2006 and January 1, 2007); provided that the average daily gross amount of        Poker Rake and Poker Tournament House Fees earned during said period by the Business does        not fall below USD$14,250.00 per day (in the aggregate);

(ii)       a        material adverse change in the laws or regulations related to the operation of the Business        in any jurisdiction other than Malta, Sweden, Finland or Norway;

(iii)      the fact that the Vendor currently offers various payment solutions to        Vendor End Users located in Sweden and Finland, which payment solutions the Parbet Operator        may not be able to offer to End Users located in Sweden and Finland immediately following        the Closing Time.

Should the Purchaser’s due diligence investigations        identify any issue(s) which the Purchaser deems to be commercially material to the        Purchased Assets, the Assumed Liabilities and/or the Business, or the Purchaser’s        decision to acquire same, the Purchaser agrees to forthwith inform the Vendor in writing of        same and provide reasonable particulars of such issue(s).

(k)       Material Adverse        Change – There will have been no material adverse change in and to the Purchased        Assets, the Assumed Liabilities or the Business from the date of this Agreement to the        Closing Date. For greater certainty, the following shall not be considered a material        adverse

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change:

(i)        a        drop in the average daily gross amount of Poker Rake and Poker Tournament House Fees earned        through the operation of the Business from December 1, 2006 to January 15, 2007 (excluding        December 24, 2006 and January 1, 2007); provided that the average daily gross amount of        Poker Rake and Poker Tournament House Fees earned during said period by the Business does        not fall below USD$14,250.00 per day (in the aggregate);

(ii)       a        material adverse change in the laws or regulations related to the operation of the Business        in any jurisdiction other than Malta, Sweden, Finland or Norway;

(iii)      the fact        that the Vendor currently offers various payment solutions to Vendor End Users located in        Sweden and Finland, which payment solutions the Parbet Operator may not be able to offer to        End Users located in Sweden and Finland immediately following the Closing Time.

| ****
**(2)** | **Vendor’s Conditions** |
|--------------|-------------------------------|

The        obligations of the Vendor to complete the transactions contemplated by this Agreement shall        be subject to the satisfaction of, or compliance with, at or before the Closing Time, each        of the following conditions precedent (each of which is hereby acknowledged to be inserted        for the exclusive benefit of the Vendor and may be waived by the Vendor in whole or in        part):

(a)       Truth and Accuracy of        Representations of the Purchaser at Closing Time—All of the representations and        warranties of the Purchaser made in or under this Agreement, shall be true and correct in        all material respects as at the Closing Time and with the same effect as if made at and as        of the Closing and the Vendor shall have received a certificate from a senior officer of        the Purchaser and the Purchaser Guarantor confirming the truth and correctness of such        representations and warranties of the Purchaser and the Purchaser Guarantor.

(b)       Performance of        Agreements—The Purchaser shall have performed or complied with, in all respects, all        their other obligations, covenants and agreements under this Agreement.

|   | (c) | Closing Documents—The Vendor shall have received at or                        before the Closing Time: |
|--------|-----|--------------------------------------------------------------------------------------------------------------|

(i)        certified copy of a resolution of the board of directors of the Purchaser        approving this Agreement and the transactions contemplated under this Agreement;

(ii)       certificate of a senior officer of the Purchaser and the Purchaser Guarantor        concerning the matters referred to in Subsection 8(2)(a) and confirming that all conditions        under this Agreement in favour of the Vendor have been either fulfilled or waived;        and

|   | (iii) | Assumption Agreement. |
|--------|-------|-----------------------|

(d)       Opinions of        Counsel for Purchaser and Purchaser Guarantor—The Vendor shall have received opinions        dated the Closing Date, from counsel for the Purchaser and from counsel for the Purchaser        Guarantor, confirming the matters warranted in Subsections 5(2)(a), 5(2)(b) and 5(2)(d) in        the case of the Purchaser and the matters warranted in Subsections 5(4)(a), 5(4)(b) and        5(4)(c) in the case of the Purchaser Guarantor, which opinions may rely on opinions of        counsel

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in other jurisdictions with respect to matters of law in those        jurisdictions. In giving such opinion, counsel to the Purchaser and counsel to the        Purchaser Guarantor may rely on certificates of senior officers of the Purchaser and the        Purchaser Guarantor, as applicable, as to factual matters.

(e)       No Actions Taken Restricting        Sale—No action or proceeding by law or in equity shall be pending or threatened by        any person, firm, corporation, government, governmental authority, regulatory body or        agency to enjoin, restrict or prohibit the purchase and sale of the Purchased Assets        contemplated under this Agreement.

(f)        Payment of Purchase        Price—The Purchaser shall have tendered to the Escrow Agent a wire transfer for        payment of the amount of the Purchase Price required to be paid into escrow pursuant to        Section 3(2) hereof.

(g)       Conversion Process – The        Purchaser shall have fulfilled all of its obligations in respect of the Conversion Process,        including without limitation, all obligations set forth in Schedule I hereto.

(h)       Consents, Authorizations and        Registrations—All consents, approvals, orders and authorizations of or from        governmental or regulatory authorities required in connection with the completion of the        transactions contemplated in this Agreement shall have been obtained on or prior to the        Closing Time including:

| ****
**(3)** | **Failure to Satisfy Conditions** |
|--------------|-----------------------------------|

If        any condition set forth in Sections 8(1) or 8(2) is not satisfied on or before the Closing        Time, the Party entitled to the benefit of such condition (the        “**First Party**”) may terminate        this Agreement by notice in writing to the other Party and in such event the First Party        shall be released from all obligations under this Agreement, and unless the First Party can        show that the condition or conditions which have not been satisfied and for which the First        Party has terminated this Agreement are reasonably capable of being performed or caused to        be performed by the other Party then the other Party shall also be released from all        obligations under this Agreement, except that the First Party shall be entitled to waive        compliance with any such conditions, obligations or covenants in whole or in part if it        sees fit to do so without prejudice to any of its rights of termination in the event of        non-performance of any other condition, obligation or covenant, or whole or in        part.

| ****
**(4)** | **Destruction or Expropriation** |
|--------------|----------------------------------|

Up to the Closing Time, all risk of loss or damage by fire or        other cause or hazard to the Purchased Assets shall remain with the Vendor and the Vendor        shall hold all insurance policies and any proceeds thereof in trust for the Vendor and the        Purchaser. If, prior to the Closing Time, there occurs any material destruction or damage        by fire or other cause or hazard to any of the Purchased Assets, or if the Purchased Assets        or any material part of them are expropriated or forcefully taken by any governmental        authority or if notice of intention to expropriate a material part of the Purchased Assets        has been filed in accordance with applicable legislation, then the Purchaser may, at its        option:

| (a) | terminate this Agreement by notice to the Vendor;                        or |
|-----|-----------------------------------------------------------------------------|

(b)       elect to        complete the purchase and sale of the Purchased Assets, in which event        all

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insurance proceeds or expropriation proceeds, as the case may be, shall be        assigned and/or paid by the Vendor to the Purchaser; or

(c)       elect to complete the purchase        and sale subject to the Purchase Price being reduced to reflect such change or        expropriation, such reduction to be based on the book value of the Purchased        Assets.

| ****
**9.** | **CLOSING ARRANGEMENTS** |
|-------------|--------------------------|

| ****
**(1)** | **Time of Closing** |
|--------------|---------------------|

The        completion of the transactions contemplated by this Agreement shall take place at the        Closing Time on the Closing Date.

| ****
**(2)** | **Closing Arrangements** |
|--------------|--------------------------|

At        the Closing Time, upon fulfillment of all the conditions under this Agreement which have        not been waived in writing by the Purchaser or the Vendor respectively:

(a)       Purchase and Sale of Purchased        Assets—The Vendor shall sell and the Purchaser shall purchase the Purchased Assets        for the Purchase Price payable under this Agreement.

(b)       Delivery of Closing        Documents—The Parties shall respectively deliver the Closing Documents.

(c)       Actual Possession—The        Vendor shall deliver actual possession of the Purchased Assets to the Purchaser.

(d)       Payment of Purchase        Price—On the fulfillment of the foregoing terms of this Article 9, the portion of the        Purchase Price payable on Closing shall be paid as provided for in Article 3 and the        Purchase Price Escrow Agreement.

| ****
**(3)** | **Tender** |
|--------------|------------|

Any        tender of documents or money hereunder may be made upon the Parties or their respective        counsel and money may be tendered by official bank draft drawn upon a Canadian chartered        bank or by negotiable cheque payable in Euros and certified by a Canadian chartered bank or        trust company.

| ****
**10.** | **GUARANTORS** |
|--------------|----------------|

(a)       The Vendor        Guarantor, on a joint and several liability basis with the Vendor, hereby unconditionally        agrees to guarantee all of the obligations and liabilities of the Vendor hereunder. In the        event that the Vendor fails to fulfill any monetary obligations which arise pursuant to the        terms of the Agreement (other than by reason of a breach of this Agreement by the        Purchaser), the Vendor Guarantor agrees to make payment in connection therewith within        thirty (30) days after receipt of written notice by the Purchaser to the Vendor        Guarantor.

(b)       The Purchaser        Guarantor, on a joint and several liability basis with the Purchaser, hereby        unconditionally agrees to guarantee all of the obligations and liabilities of the Purchaser        hereunder. In the event that the Purchaser fails to fulfill any monetary obligations which        arise pursuant to the terms of the Agreement (other than by reason of a breach of this        Agreement by the Vendor), the Purchaser Guarantor agrees to make payment in connection        therewith within thirty (30) days after receipt of written notice by the Vendor to the        Purchaser Guarantor.

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| ****
**11.** | **NOTICES** |
|--------------|-------------|

Any        notice, direction or other instrument required or permitted to be given by either party        under this Agreement shall be in writing and shall be sufficiently given if delivered        personally, sent by prepaid first class mail or transmitted by telecopier or other form of        electronic communication during the transmission of which no indication of failure of        receipt is communicated to the sender:

| (a) | in the case of a notice to the Vendor at: |
|-----|-------------------------------------------|

66 Old Bakery Street

Valletta VLT 09

Malta

Attention: Per Sahlberg

Fax No. 356 21316334

         

| (b) | in the case of a notice to the Vendor Guarantor                        at: |
|-----|----------------------------------------------------------------------------|

Atlectico Nordic B.V.

Weena 340

3012 NJ Rotterdam

The Netherlands

Attention: Rimon Hagen

Fax No. 31 10 412 6115

| (c) | in the case of a notice to the Purchaser at: |
|-----|----------------------------------------------|

|   | Nimeli Court, 41-49 Agiou Nicolaou Street, Block A,                        3rd Floor, |
|--------|---------------------------------------------------------------------------------------|

|   | Engomi, 2408 Nicosia, Cyprus |
|--------|------------------------------|

|   | Attention: A. J. Slavinski |
|--------|----------------------------|

|   | Fax No. 357 22552500 |
|--------|----------------------|

| (d) | in the case of a notice to the Purchaser Guarantor                        at: |
|-----|-------------------------------------------------------------------------------|

|   | 55 St. Clair West, 3rd Floor |
|--------|------------------------------|

|   | Toronto, Ontario |
|--------|------------------|

|   | M4V 2Y7 |
|--------|---------|

|   | Attention: President |
|--------|----------------------|

|   | Fax No. 416 545 1454 |
|--------|----------------------|

Any such notice, direction or other instrument, if delivered        personally, shall be deemed to have been given and received on the date on which it was        received at such address, or, if sent by mail, shall be deemed to have been given and        received on the date which is five (5) days after which it was mailed, provided that if        either such day is not a Business Day, then the notice shall be deemed to have been given        and received on the Business Day next following such day. Any notice transmitted by        telecopier or other form of electronic communication shall be deemed to have been given and        received on the date of its transmission provided that if such day is not a Business Day or        if it is received after the end of normal business hours on the date of        its

- 29        -

 

 

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| ****
**12.** | **GENERAL** |
|--------------|-------------|

| ****
**(1)** | **Expenses** |
|--------------|--------------|

All        costs and expenses (including, without limitation, the fees and disbursements of legal        counsel) incurred in connection with this Agreement and the transaction contemplated under        this Agreement shall be paid by the Party incurring such expenses.

| ****
**(2)** | **Time** |
|--------------|----------|

Time        shall be of the essence of this Agreement.

| ****
**(3)** | **Assignment/Successors and Assigns** |
|--------------|---------------------------------------|

Neither this Agreement nor any rights or obligations under this Agreement        shall be assignable by either Party without the prior written consent of the other Party.        Subject to that condition, this Agreement shall enure to the benefit of and be binding upon        the Parties and their respective heirs, executors, administrators, successors (including        any successor by reason of amalgamation of any Party) and permitted assigns.

| ****
**(4)** | **Further Assurances** |
|--------------|------------------------|

Each        Party agrees that upon the written request of any other Party, it will do all such acts and        execute all such further documents, conveyances, deeds, assignments, transfers and the        like, and will cause the doing of all such acts and will cause the execution of all such        further documents as are within its power to cause the doing or execution of, as the other        Party may from time to time reasonably request be done and/or executed as may be required        to consummate the transactions contemplated under this Agreement or as may be necessary or        desirable to effect the purpose ofthis Agreement or        any document, agreement or instrument delivered under this Agreement and to carry out their        provisions or to better or more properly or fully evidence or give effect to the        transactions contemplated under this Agreement, whether before or after the        Closing.

| ****
**(5)** | **Public Notices** |
|--------------|--------------------|

All        notices to third parties and all other publicity concerning the transactions contemplated        by this Agreement shall be jointly planned and coordinated by the Vendor and the Purchaser        and no Party shall act unilaterally in this regard without the prior approval of the other        Party (such approval not to be unreasonably withheld), except where required to do so by        law or by the applicable regulations or policies of any regulatory agency of competent        jurisdiction or any stock exchange.

| ****
**(6)** | **Counterparts** |
|--------------|------------------|

This        Agreement may be executed by the Parties in separate counterparts each of which when        so

- 30        -

 

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executed and delivered shall be an original, and all such counterparts shall        together constitute one and the same instrument.

| ****
**(7)** | **Applicable Law** |
|--------------|--------------------|

This        Agreement shall be governed by and construed in accordance with the laws of England and        Wales, without giving effect to any choice or conflict of law provision or rule that would        cause the application of the laws of any other jurisdiction. Any dispute, claim or        controversy arising out of or related to this Agreement shall be resolved solely and        exclusively by binding arbitration in accordance with Rules of Arbitration of the        International Chamber of Commerce. All arbitration proceedings, including all notices sent,        filings made and testimony and documentary evidence, shall be in the English language and        take place in London, England.

| ****
**(8)** | **Confidentiality** |
|--------------|---------------------|

The        parties shall maintain this Agreement and the particulars of the transaction to which it        relates confidential, and shall not disclose any part thereof to any third party without        the prior express written consent of the other parties hereto. Unless required by        applicable law or regulation, no party shall issue a press release or other public        announcement related to the Agreement, without the prior written consent of all other        parties hereto. The Purchaser and the Vendor acknowledge the execution of a Mutual        Non-Disclosure Agreement prior to the commencement of the Purchaser’s due diligence        investigations, and further acknowledge that the Mutual Non-Disclosure Agreement remains in        full force and effect.

| ****
**(9)** | **Entire Agreement** |
|--------------|----------------------|

This        Agreement, and any other agreement entered into by the parties in connection with or        pursuant to this Agreement, together set out the entire agreement and understanding between        the parties in respect of the sale and purchase of the Business and the Purchased Assets.        It is agreed that: (i) the Purchaser has not entered into this Agreement in reliance upon        any representation, warranty or undertaking of any other party which is not expressly set        out or referred to in this Agreement, or any other agreement entered into by the parties in        connection with or pursuant to this Agreement; (ii) the Purchaser shall not be entitled to        any remedy in respect of any misrepresentation or any untrue statement made by or on behalf        of the Vendor which is not contained in this Agreement or any other        agreement entered into by the parties in connection with or pursuant to this Agreement; and        (iii) this section shall not exclude any liability for, or remedy in respect of fraud or        fraudulent misrepresentation.

 

**IN WITNESS WHEREOF**the Parties        have duly executed this Agreement this 8th day of January,        2007.

|   | **PARBET.COM LTD.** |
|--------|---------------------|

|   | ________________________________ |
|--------|----------------------------------|

|   | Name: Per Sahlberg |
|--------|--------------------|

|   | Title: |
|--------|--------|

 

 

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**ATLETICO NORDIC B.V., by its         Managing Director AMACO        MANAGEMENT SERVICES B.V.**

|   | ________________________________ |
|--------|----------------------------------|

|   | Name:J.L. de Zwart |
|--------|--------------------|

|   | Title: Deputy Managing Director |
|--------|---------------------------------|

         

|   | **WAGERLOGIC LIMITED** |
|--------|------------------------|

|   | ________________________________ |
|--------|----------------------------------|

|   | Name: A. J. Slavinski |
|--------|-----------------------|

|   | Title: Managing Director |
|--------|--------------------------|

         

|   | **CRYPTOLOGIC INC.** |
|--------|----------------------|

|   | ________________________________ |
|--------|----------------------------------|

|   | Name: Stephen Taylor |
|--------|----------------------|

|   | Title: Chief Financial Officer |
|--------|--------------------------------|

 

 

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