Document:

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                                                                     EXHIBIT 4.4

THIS EMPLOYMENT AGREEMENT MADE AS OF THE 6TH DAY OF MARCH 2003

BETWEEN:

                                CryptoLogic Inc.
                a corporation incorporated under the laws of the
                Province of Ontario and having its head office at
              1867 Yonge St., 7th Floor, Toronto, Ontario, M4S 1Y5.

                                  (hereinafter referred to as the "Corporation")

                                                              OF THE FIRST PART,

                                      -and-

                               MICHAEL STARZYNSKI

                            an individual residing at
                              3 New Dominion Court
                             Whitby, Ontario L1P 1L5

                                     (hereinafter referred to as the "Employee")

                                                             OF THE SECOND PART.

         WHEREAS the Corporation carries on a business consisting principally of
the development of Internet related software products primarily for gaming and
electronic cash (the "Business");

         AND WHEREAS the Corporation is desirous of employing the services of
the Employee to provide management services in the role of Chief Technology
Officer in connection with the Business of the Corporation;

         AND WHEREAS the Employee is desirous of providing such services to the
Corporation, on the terms and subject to the conditions herein set out;

         NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
respective covenants and agreements of the parties contained herein, it is
agreed as follows:

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                        ARTICLE ONE--EMPLOYMENT SERVICES

1.1 AGREEMENT. The Corporation hereby agrees to hire the Employee, to provide
    management services in the role of Chief Technology Officer to the
    Corporation (the "Services"), and the Employee hereby agrees to provide such
    Services to the Corporation from the date of this Agreement, subject to
    termination as hereinafter provided. The Employee shall commence full time
    employment with the Corporation on the 17th day of March 2003.

1.2 REMUNERATION. In consideration for the rendering of Services by the
    Employee, the Corporation shall pay to the Employee a salary in the sum of
    Two Hundred and Fifteen Thousand ($215,000) Dollars per year commencing on
    the Start Date together with four weeks paid vacation per year. The salary
    shall be paid in biweekly installments and shall be subject to review
    annually. In addition, the Employee shall be eligible for all health benefit
    plans made generally available to executives of the Corporation that may
    exist from time to time. The Employee shall also receive a monthly car
    allowance of $500.00.

1.3 STOCK OPTION PLAN. The Employee shall be entitled to participate in the
    Stock Option Plan of the Corporation (the "Plan"), which is annexed as
    Exhibit 1 and forms part of this Agreement. As an inducement to enter into
    this Agreement, the Employee shall be entitled to receive as an Initial
    Grant, 60,000 stock options in accordance with the Plan (the "Initial
    Grant"), and such Initial Grant is subject to and conditional upon approval
    by the Board of Directors of the Corporation. The strike price of the
    individual options issued under the Initial Grant shall be set by the Board
    of Directors of the Corporation and shall be equal to the closing price of
    the Corporation's shares, as traded on the TSX, on the day prior to the
    approval of the Initial Grant by the Board of Directors of the Corporation.

1.4 DISCRETIONARY BONUS. The Employee may receive a target bonus of up to 40% of
    base salary in addition to the remuneration setout above. The bonus will be
    based on agreed to deliverables and company performance and paid in the
    first quarter of the calendar year subsequent to the year the bonus is
    applicable. The bonus in the first year of employment will be pro-rated
    based on the period of time the Employee has been in the employ of the
    Corporation and for Fiscal Year 2003 only, the sum of $11,000.00 is
    guaranteed. The Management Bonus Plan for 2003 is described in Exhibit 3.

1.5 EXPENSES. The Employee's expense reports shall be approved by the CEO and
    thereafter shall be reimbursed monthly for such out-of-pocket expenses,
    including travel costs actually and properly incurred by the Employee in
    connection with provision of Services. Any individual expense in excess of
    $5,000 requires prior approval of the CEO. The Employee shall furnish
    statements and vouchers to the Corporation for all such expenses. The
    Company will provide, at their expense, a parking spot at their location.

                        ARTICLE TWO - COVENANTS

2.1      PROVISIONS OF SERVICES. The Employee shall devote the Employee's
         full-time and attention to the provision of Services and the business
         of the Corporation and shall not provide employment type services to
         any other person, entity, association, firm or corporation, unless it
         is an affiliate of the Corporation. (For the purposes of this Agreement
         "affiliate" shall have the meaning as ascribed in the Business
         Corporations Act (Ontario).)

2.2      NO DELEGATION OF SERVICES. The Employee shall not delegate performance
         of the Services to anyone without the prior written consent of the
         Corporation, unless in the ordinary course of business.

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2.3      CORPORATE POLICY AND INSTRUCTIONS. The Employee will act in accordance
         with any policy of the Corporation applicable to the Employee from time
         to time, including, but not limited to, the policies contained in the
         Corporation's Employee Handbook that may exist from time to time.

2.4      CONFIDENTIAL INFORMATION. The Employee shall not use or disclose to
         anyone any confidential information with respect to the business, plans
         or affairs of the Corporation except as may be deemed necessary by the
         Employee to facilitate the provision of Services by the Employee. This
         obligation shall survive the termination of the Agreement for an
         indefinite period. The Employee further agrees to be bound by the terms
         of the Confidentiality, Intellectual Property Rights, Non-Competition
         and Non-Solicitation Agreement ("Confidentiality Agreement"), which is
         annexed as Exhibit 2 and forms part of this Agreement.

2.5      RETURN OF PROPERTY. Upon termination of this Agreement the Employee
         shall return to the Corporation any property, code, documentation, or
         confidential information which is the property of the Corporation and
         be prepared to so certify in writing.

2.6      PROMOTION OF THE CORPORATION'S INTERESTS. The Employee shall and will
         faithfully serve and use his best efforts to promote the business
         interests of the Corporation, shall not use any information he may
         acquire with respect to the business and affairs of the Corporation or
         its affiliates for his/her own purposes or for any purposes other than
         those of the Corporation or its affiliates.

2.7      REFERENCES AND RECORD CHECK. Employee consents to having a probity
         check, including a fingerprint record, completed for the purpose of
         employment and to providing a set of fingerprints to the Corporation
         for the purpose of forwarding to the RCMP in Ottawa, Ontario for a
         criminal record check against the national repository of criminal
         records for Canada. The Employee hereby authorizes the RCMP to disclose
         the results of this check to the Compliance Officer of the Corporation.
         The Employee acknowledges that the completion of this check, to the
         complete satisfaction of the Corporation, is a condition of employment.

                           ARTICLE THREE--TERMINATION

3.1      TERMINATION OF AGREEMENT BY THE CORPORATION. The Corporation may
         terminate this Agreement at any time:

                           (a)      if for cause, without notice; and

                           (b)      if without cause, on the giving to the
                           Employee the greater of, (i) six months written
                           notice or pay (including all health benefits,
                           excluding short and long term disability, described
                           herein) in lieu of notice, or (ii) written notice or
                           pay (including all health benefits, excluding short
                           and long term disability, described herein) in
                           accordance with the policy(s) of the Corporation
                           applicable to the Employee that may exist from time
                           to time. Outstanding stock options will continue to
                           vest for the period of notice.

         The Employee agrees that such notice is adequate to satisfy any claim
         he may otherwise have against the Corporation and he releases the
         Corporation, its officers and directors from any claim he might
         otherwise have against them, whether statutory or otherwise.

3.2      TERMINATION BY THE EMPLOYEE. The Employee may terminate this Agreement
         at any time by giving the Corporation two months written notice, which
         notice period the Corporation may waive in whole or in part, subject to
         paying the equivalent amount of pay (including all benefits described
         herein) instead.

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3.3      TERMINATION OF BONUS COMPENSATION. Upon termination of this Agreement
         by the Employee, the Employee will no longer be entitled to any
         unearned bonus, referred to in Article 1.4, in respect of the calendar
         year in which the Agreement is terminated. In this regard, if the
         Employee's employment is terminated by the company without cause, the
         Employee shall be entitled to the bonus, referred to in Article 1.4,
         which shall be paid on a pro rata basis having regard to the period of
         time the Employee was in the employment of the Employer for the given
         year in which the Agreement is terminated and having regard for the
         performance vs. the targets during the pro-rata period. The bonus
         described in this subsection 3.3 shall be subject to the Corporation's
         policy(s) with respect to the payment of bonuses generally.

3.4      AGREEMENTS SURVIVING TERMINATION. The Employee agrees that the
         covenants in Article 2, the Confidentiality Agreement at Exhibit 2 and
         the release contained in Article 3.1 shall survive any termination of
         this Agreement for an indefinite period.

3.5      CHANGE OF CONTROL. Notwithstanding 3.1, in the event of termination as
         a result of a change in ownership of the Corporation; or, the Board of
         Directors of the Corporation removes Lewis Rose as CEO, the Employee
         will be entitled to 9 (nine) months pay in lieu of notice. In the event
         of a Public Take-Over Bid (which shall be the successful acquisition of
         50.01% of the issued and outstanding Shares of the Company) in Exhibit
         4, all outstanding options will vest in accordance with the Share
         Purchase Option Agreement.

                             ARTICLE FOUR--CAPACITY

4.1      CAPACITY OF EMPLOYEE. It is acknowledged by the parties hereto that the
         Corporation is employing the Employee in the capacity as Chief
         Technology Officer. The Employee and the Corporation acknowledge and
         agree that this Agreement does not create a partnership or joint
         venture between them.

                    ARTICLE FIVE--GENERAL CONTRACT PROVISIONS

5.1      NOTICES. All notices, requests, demands or together communications
         (collectively, "Notices") by the terms hereof required or permitted to
         be given by one party to the other, shall be given in writing by
         personal delivery or by registered mail, postage prepaid, or by
         facsimile transmission to the party as follows:

         (a)   To the Corporation at:
                         1867 Yonge Street 7th Floor,
                         Toronto, Ontario
                         M4S 1Y5
                         Attention: Marilyn Shabot, Vice President - Human
                           Resources
                         Facsimile number 416-545-1454

         (b)   To the Employee at:
                         3 New Dominion Court,
                         Whitby, Ontario

or at any such other address or facsimile number as may be given by one party to
the other in writing from time to time.

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All such Notices shall be deemed to have been received when delivered or
transmitted, or if mailed, 48 hours after 12:01 a.m. on the day following the
day of the mailing thereof. If any Notice shall have been mailed and if regular
mail service shall be interrupted by strikes or other irregularities, such
Notice shall be deemed to have been received 48 hours after 12:01 a.m. on the
day following the resumption of normal mail service.

5.2      FURTHER ASSURANCES. The parties shall sign such further and other
         documents, cause such meetings to be held, use their best efforts to
         have resolutions passed and by-laws enacted, exercise their vote and
         influence, do and perform and cause to be done and performed such
         further and other acts and things as may be necessary or desirable in
         order to give full effect to this Agreement and every part thereof.

5.3      TIME OF THE ESSENCE. Time shall be of the essence of this Agreement and
         of every part hereof and no extension or variation of this Agreement
         shall operate as a waiver of this provision.

5.4      ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
         between the parties with respect to all of the matters herein and its
         execution has not been induced by, nor do either of the parties rely
         upon or regard as material, any representations or writings whatsoever
         not incorporated herein and made a part hereof. This Agreement may not
         be amended or modified in any respect except by written instrument
         signed by the parties hereto. Any Exhibits referred to herein are
         incorporated herein by reference and form part of the Agreement.

5.5      ENUREMENT. This Agreement shall enure to the benefit of and be binding
         upon the parties and their respective legal personal representatives,
         heirs, executors, administrators or successors.

5.6      ASSIGNMENT. This Agreement is personal to the parties and may not be
         assigned by either of them unless, in the case of the Corporation, to
         an affiliate.

5.7      CURRENCY. Unless otherwise provided for herein, all monetary amounts
         referred to herein shall refer to the lawful money of Canada.

5.8      HEADINGS FOR CONVENIENCE ONLY. The division of this Agreement into
         articles and sections is for convenience of reference only and shall
         not affect the interpretation or construction of this Agreement.

5.9      GOVERNING LAW. This Agreement shall be governed by and construed in
         accordance with the laws of the Province of Ontario and the federal
         laws of Canada applicable therein and each of the parties hereto
         irrevocably attorns to the exclusive jurisdiction of the Courts of the
         Province of Ontario.

5.10     GENDER AND NUMBER. In this Agreement, words importing the singular
         number shall include the plural and vice versa, and words importing the
         use of any gender shall include the masculine, feminine and neuter
         genders and the word "person" shall include an individual, a trust, a
         partnership, a body corporate, an association or other incorporation or
         unincorporated organization or entity.

5.11     CALCULATION OF TIME. When calculating the period of time within which
         or following which any act is to be done or step taken pursuant to this
         Agreement, the date which is the reference date in calculating such
         period shall be excluded. If the last day of such period is not a
         business day, then the time period in question shall end on the first
         business day following such non-business day.

5.12     CONFLICT. Where the terms of this Agreement are in conflict with the
         terms of any other agreements or policies, this Agreement shall govern.

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5.13     LEGISLATION REFERENCES. Any reference in this Agreement to any law,
         by-law, rule, regulation, order or act of any government, governmental
         body or other regulatory body shall be construed as a reference thereto
         as amended or re-enacted from time to time or as a reference to any
         successor thereto.

5.14     SEVERABILITY. If any Article, Section or any portion of any Section of
         this Agreement or of the Confidentiality Agreement attached as Exhibit
         2 is determined to be unenforceable or invalid for any reason
         whatsoever, that unenforceability or invalidity shall not affect the
         enforceability or validity of the remaining portions of this Agreement
         and such unenforceable or invalid Article, Section or portion thereof
         shall be severed from the remainder of this Agreement.

         IN WITNESS WHEREOF the parties have duly executed this Employment
         Agreement as of the date above first written.

SIGNED,
SEALED AND DELIVERED
in the presence of

                                           CRYPTOLOGIC INC.

/s/ Nancy Chan-Palmateer                   Per /s/ Marilyn Shabot
----------------------------                   --------------------------------
(Witness)                                      Marilyn Shabot
                                               Vice President - Human Resources

/s/ Nancy Chan-Palmateer                       /s/ Michael Starzynski
----------------------------                   ---------------------------------
(Witness)                                      Michael Starzynski

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                                    EXHIBIT 2

CONFIDENTIALITY, INTELLECTUAL PROPERTY RIGHTS, NON-COMPETITION AND
NON-SOLICITATION AGREEMENT

         Entered into as of the 25th day of February 2003

BETWEEN:

         Michael Starzynski an individual residing at 3 New Dominion Court
         Whitby, Ontario
 ("Employee")

-- and --

Cryptologic Inc., a corporation incorporated under the laws of the Province of
Ontario and having its principal place of business at 1867 Yonge Street, 7th
Floor, Toronto, Ontario M4S 1Y5 ("Employer")

         WHEREAS as part of its ongoing efforts to maintain confidential its
information and trade secrets and the information and trade secrets of its
subsidiaries, affiliates, customers, licensees and suppliers, Employer requires
that all of its employees enter into this Agreement as a condition of
employment;

         AND WHEREAS Employee understands that his/her agreement with and
acceptance of the terms and conditions contained herein are essential to
Employer's ability to compete in the global e-commerce software market and be a
viable business in that market, and that this Agreement is reasonable and
appropriate in the circumstances;

         NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
respective covenants and agreements of the parties contained herein, the sum of
one dollar paid by each party to the other and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged by
the parties hereto), it is agreed as follows:

1.       Confidential Information

1.1      Confidential Information. Employee agrees at all times during the term
of his employment and for an indefinite period thereafter to hold in confidence
and not to use, except for the benefit of Employer or to fulfill Employee's
obligations to Employer, nor to disclose to any outside parties including media,
except with the express authorization of an officer of Employer, nor to remove
from Employer's premises, except with the express authorization of an officer of
Employer, any Confidential Information.

"Confidential Information" means any proprietary information of Employer,
irrespective of form or method of transmission, including but not limited to
technical data, trade secrets, know-how, research, product plans, products,
services, customer lists (including, but not limited to, customers or licensees
of Employer on whom Employee called or with whom he became acquainted during the
term of his employment), markets, software, developments, inventions, processes,
formulas, technology, designs, drawings, engineering, hardware configuration
information, marketing, finance or other business information disclosed to
Employee by Employer, either directly or indirectly in writing, drawings, orally
or in electronic form, at any time during the course of Employee's employment
with Employer. Confidential Information does not include any

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of the foregoing items, which has become publicly known or made generally
available through no wrongful act of Employee or of others who were under
confidentiality obligations as to the item or items involved.

1.2      Former Employer Information. Employee agrees that during the term of
his/her employment with Employer he/she will not improperly use or disclose any
proprietary information or trade secrets of any former employer or other person
or entity and that he will not bring onto the premises of Employer any
proprietary information belonging to any such employer, person or entity which
is not publicly known, unless consented to in writing by such employer, person
or entity.

1.3      Third Party Information. Employee recognizes that Employer has received
and in the future will receive from third parties their confidential or
proprietary information subject to a duty on Employer's part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. Therefore, Employee agrees to hold all such confidential or
proprietary information in confidence and not to disclose it to any person, firm
or corporation or to use it except as is necessary to carry out his work for
Employer and consistent with Employer's agreement with such third parties
relating to such information.

2.       Intellectual Property Rights

2.1      Assignment of Intellectual Property Rights. Employee agrees that he/she
will promptly make full written disclosure to Employer, will hold in trust for
the sole right and benefit of Employer and hereby assigns to Employer or its
designee all right, title, and interest, including all intellectual property
rights, in and to any and all discoveries, inventions, developments, concepts,
improvements, software, notes, charts, algorithms, formulae, software code and
all other original works, whether or not patentable or registrable under
copyright or similar laws, which he/she may solely or jointly conceive or
develop or reduce to practice, or cause to be conceived or developed or reduced
to practice, during the period of time that he/she is in the employ of Employer
(collectively referred to as "Works"), and Employee hereby expressly disclaims
and waives all rights (including all moral rights) in Works in favour of
Employer.

Moreover, Employee agrees to keep and maintain adequate and current written
records (in the form of notes, sketches, drawings, or other formats) of all
Works. The records will be available to and remain the sole property of Employer
at all times, and shall be returned to Employer pursuant to Clause 5 herein.

Patent and Copyright Registrations. Employee agrees to assist Employer or is
designee, at Employer's expense, to secure Employer's rights in Works and any
copyrights, patents, or other intellectual property rights relating thereto in
any countries, including the disclosure to Employer of all pertinent information
and data with respect thereto, and the execution of all applications,
specifications, oaths, assignments and all other instruments which Employer
shall deem necessary in order to apply for and obtain such rights and in order
to assign and convey to Employer, its successors, assigns and nominees the sole
and exclusive rights, title and interest in and to such Works, and any
copyrights, patents, or other intellectual property rights relating thereto.
Employee further agrees that this obligation shall continue after the expiration
or termination of this Agreement and Employee's employment.

Originality of Works. Employee warrants that Works are original works of
Employee as author.

3.       Conflicting Employment

Employee agrees that during the term of his/her employment with Employer, he/she
will not engage in any other employment, occupation, consulting or other
business activity directly related to the business in which Employer is now
involved or becomes involved during the term of his employment, nor will
Employee engage in any other activities that conflict with his obligations to
Employer.

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4.       Non-Competition Covenant and Non Solicitation Covenant

The Employee agrees with and for the benefit of the Employer that for the period
of twelve months from the date of termination of the Employee's employment,
however caused, the Employee will not for any reason, directly or indirectly,
either as an individual or as a partner or joint venturer or as an employee,
principal, consultant, agent, shareholder, officer, director, or salesperson for
any person, firm, association, organization, syndicate, company or corporation,
or in any manner:

         (a)      carry on, be engaged in, concerned with, interested in,
                  advise, lend money to, guarantee the debts or obligations of,
                  permit his or her name or any part of it to be used or
                  employed by any person, business, firm, association, syndicate
                  company, organization or corporation concerned with or engaged
                  or interested in a business which is the same as, or
                  competitive with, the business of the Employer or any of its
                  subsidiaries or affiliates, including without limitation, any
                  business related to internet and gaming or related software
                  support within the geographical area of Ontario, or the United
                  Kingdom; or

         (b)      solicit or accept business with respect to products
                  competitive to those of the Employer or any of its
                  subsidiaries or affiliates, from any of the Employer's or any
                  of its subsidiaries or affiliates customers, wherever situate;

provided that the Employee shall be entitled, for investment purposes, to
purchase and trade shares of a public company which are listed and posted for
trading on a recognized stock exchange and the business of the public company
may be in competition with the business of the Employer or any of its
subsidiaries or affiliates provided that the Employee shall not directly or
indirectly, own more than 10% of the issued share capital of the public company,
or participate in its management or operation or in any advisory capacity.

The Employee further agrees that, during employment pursuant to this agreement
and for a period of twelve months following termination of employment, however
caused, the Employee will not hire or take away or cause to be hired or taken
away, any employee of the Employer or its subsidiaries or affiliates or,
following termination of the Employee's employment, any employee who was in the
employ of the Employer or its subsidiaries or affiliates, during the twelve
months preceding termination.

5.       Return of Employer's Documents

In the event of termination or expiration of his/her employment, Employee shall
deliver forthwith to Employer and not retain in his/her possession, copy,
reproduce, recreate or deliver to anyone else any and all devices, records,
data, notes, reports, proposals, lists, correspondence, specifications,
drawings, blueprints, sketches, materials, equipment, other documents or
property, or any copies or reproductions of any aforementioned items stored in
any medium whatsoever developed by him/her in the course of his/her employment
with Employer or otherwise belonging to Employer. Moreover, Employee agrees to
sign and deliver to Employer a "Termination Certification" in the form to be
approved by the Corporation.

6.       Representations

Employee agrees to execute any oath or verify any document required to carry out
the terms of this Agreement. Employee represents that his performance of all the
terms of this Agreement will not breach any prior agreement to keep in
confidence proprietary information acquired by him prior to his employment by
Employer. Employee has not entered into and agrees that he will not enter into
any oral or written agreement, which would conflict with this Agreement.

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7.       Equitable Remedies

Employee agrees that it would be impossible or inadequate to measure and
calculate Employer's losses or damages from a breach of the covenants set forth
herein. Accordingly, the Employee agrees that if he/she breaches any such
covenants, Employer will have available, in addition to any other right or
remedy available, the right to obtain equitable relief by way of an injunction
from a court of competent jurisdiction restraining such breach or threatened
breach and to specific performance of any such provision of this Agreement.

8.       General Provisions

8.1 Severability. The parties agree that if this Agreement or any portion hereof
shall be determined by a court of competent jurisdiction to be excessive or
invalid by reason of its extending for too great a period of time or over too
great a range of activities, it shall be interpreted to extend only over the
maximum period of time or range of activities as to which it may be
enforceable. If this Agreement or any portion thereof shall be determined to
be invalid or unenforceable for any reason, that invalidity or unenforceability
shall not affect the validity or enforceability of the remaining portions of
this Agreement, and such invalid or unenforceable portion shall be severed from
the remainder of this Agreement.

8.2 Waiver of Defenses. Employee acknowledges and agrees that all restrictions
in this Agreement are reasonable and valid and all defenses to the strict
enforcement thereof are waived.

8.3 Time of the Essence. Time shall be of the essence in this Agreement and no
extension of time or indulgence granted by Employer shall operate as a waiver
of any of the Employer's rights and remedies contained herein.

8.4 Entire Agreement. This Agreement constitutes the entire Agreement between
Employer and Employee with respect to all matters herein and its execution has
not been induced by nor do the parties rely upon or regard as material any
representations not included herein. This Agreement may not be amended or
modified except in writing signed by the parties. Any Exhibits referred to
herein are incorporated by reference and form part of this Agreement.

8.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and each of the parties
hereto irrevocably submits to the exclusive jurisdiction of the Courts of
Ontario.

IN WITNESS WHEREOF the parties have duly executed this Confidentiality,
Intellectual Property Rights, Non-Competition and Non-Solicitation Agreement on
the dates below written.

                                            CRYPTOLOGIC INC.

/s/ Michael Starzynski                      Per: /s/ Marilyn Shabot
------------------------------                   --------------------------
Michael Starzynski                               Marilyn Shabot
                                                 Vice President -Human Resources

Date: March 6, 2003                              Date: March 6, 2003

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                                    EXHIBIT 1

                                CRYPTOLOGIC INC.

                       INCENTIVE STOCK OPTION PLAN (2002)

1.       PURPOSE: The purpose of this Incentive Stock Option Plan (2002) (the
"2002 Plan") is to replace the Amended 1996 Plan and to provide effective
incentives to Directors, Officers, employees and consultants of the Corporation
(and its subsidiaries, which includes partnerships and other entities that are
controlled by the Corporation) and to reward such employees in relation to the
long-term performance and growth of the Corporation and the total return to
Shareholders. No financial assistance will be provided by the Corporation to
option holders in connection with the exercise of stock options granted under
the 2002 Plan.

2.       ADMINISTRATION: The 2002 Plan shall be administered by the Directors of
the Company. The Directors shall not by virtue of such appointment be
disentitled or ineligible to receive options. The Directors shall have full
authority to interpret the 2002 Plan and to make such rules and regulations and
establish such procedures as it deemed appropriate for the administration of the
2002 Plan, taking into consideration the recommendations of management, and the
decision of the Directors shall be binding and conclusive. The decision of the
Directors shall be binding, provided that notwithstanding anything herein
contained, the Directors may from time to time delegate the authority vested in
it under this clause to the full board, which shall thereupon exercise all of
the powers herein given to the Directors, and further provided that a decision
of the majority of persons compromising the board in respect of any matter
hereunder shall be binding and conclusive for all purposes and upon all persons.

3.       NUMBER OF SHARES: The total number of shares which are reserved and set
aside for issue to directors, officers and key employees under this 2002 Plan
shall not exceed 3,000,000 or such other number as may be approved by the
shareholders at a meeting duly called for such purpose, and no one person may
receive or hold options entitling the purchase of in excess of 5% of the number
of outstanding shares of the Company. The number of CryptoLogic Inc. shares
reserved for issuance under the 2002 Plan includes any CryptoLogic Shares that
may be issued as a result of the exercise of options granted under the Amended
1996 Plan. All common shares issued pursuant to exercise of options granted or
deemed to be granted under the 2002 Plan will be so issued as fully paid common
shares.

4.       PARTICIPATION: Options shall be granted under the 2002 Plan only to
directors, officers, other key employees or service providers, being persons
providing ongoing management or consulting services under written contract,
(Participant), or their holding companies the shares of which are held directly
or indirectly by the Participant or their spouse, minor children or minor
grandchildren, or a registered retirement saving plan of which the Participant
is the beneficiary, as shall be designated from time to time by the Directors
and shall be subject to the approval of such regulatory authorities as the
Directors shall designate, which shall also determine the number of shares
subject to such option.

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5.       TERMS AND CONDITIONS OF OPTIONS: The terms and conditions of each
option granted under the 2002 Plan shall be set forth in written option
agreements between the Company and the Optionee. Such terms and conditions shall
include the following as well as such provisions, not inconsistent with the
Plan, as may be deemed advisable by the Directors.

(a)      Number of Shares: The number of shares subject to the option.

(b)      Option Price: The option price of any shares in respect of which an
option may be granted under the 2002 Plan shall be such price as shall be fixed
by the Directors but shall be not less than the fair market value of the shares.
The fair market value shall be deemed by the Directors as either the average
between the highest and lowest prices at which the Company's common shares are
traded on the day of option is granted, or the closing price of the stock on the
day of grant. In its resolution allocating any option, the Directors may
determine that the date of grant aforesaid shall be a future date determined in
the manner specified by such resolution. The Directors may also determine that
the option price per share may escalate at a specified rate dependent upon the
year in which any option to purchase common shares may be exercised by the
Optionee.

(c)      Payment: The full purchase price of shares purchased under the option
shall be paid in cash upon the exercise thereof. A holder of an option shall
have none of the rights of a stockholder until the shares are issued to him.

(d)      Term of Option: Options may be granted under this 2002 Plan exercisable
over a period not exceeding five (5) years. Each option shall be subject to
earlier termination as provided in paragraph (f) of this paragraph 5. An option
will only become exercisable after the following vesting periods:

One-third of the options granted to Directors will vest at the date of grant,
with the balance vesting over 2 years.

b)       All other options granted will vest at a rate of one-quarter of the
total amount granted per year, the first vesting date to follow one year after
the date of grant. Vesting dates will follow annually on the anniversary date
of the original grant.

(e)      Exercise of Option: An option may be exercised in part or in its
entirety up to and including the time of its expiry. Provided however that
except as expressly otherwise provided herein, no option may be exercised unless
that Optionee is then a director, officer or employee of the Company. This 2002
Plan shall not confer upon the Optionee any right with respect to continuation
of employment by the Company.

(f)      Termination of Options: Any option granted pursuant hereto, to the
extent no validly exercised, will terminate on the earlier of the following
dates:

(i)      the date of expiration specified in the option agreement, being not
more than five (5) years after the date the option was granted;

(ii)     the date of termination of the Optionee's, employment for any cause
other than by retirement, permanent disability or death or 30 days after the
date of termination of the Optionee's position as a director or officer or
ongoing service provider;

                                                                        Page: 12

<PAGE>

(iii)    six (6) months after the date of the Optionee's death during which
period the option may be exercised only by the Optionee's legal representative
or the person or persons to whom the deceased Optionee's rights under the option
shall pass by will or the applicable laws of descent and distribution, and only
to the extent the Optionee would have been entitled to exercise it at the time
of his death if the employment of the Optionee had been terminated by the
Company on such date;

(iv)     three (3) months after termination of the Optionee's employment by
permanent disability or retirement under any Retirement Plan of the Company
during which three (3) months period the Optionee may exercise the option to the
extent he was entitled to exercise it at the time of such termination provided
that if the Optionee shall die within such three (3) month period, then such
right shall be extended to six (6) months following the death of the Optionee
and shall be exercisable only by the persons described in paragraph (f) (iii)
hereof and only to the extent therein set forth.

(g)      Non-transferability and non-assignability of Stock Option: No option
shall be transferable or assignable by the Optionee or his legal personal
representatives other than by will or the laws of descent and distribution and
shall be exercisable during his lifetime only by him.

(h)      Applicable Laws or Regulations: The Company's obligation to sell and
deliver stock under each option is subject to such compliance by the Company and
any Optionee as the Company deems necessary or advisable with all laws, rules
and regulations of Canada and any Provinces thereof applying to the
authorization, issuance, listing or sale or securities and is also subject to
the acceptance for listing of the common shares which may be issued in exercise
thereof by each stock exchange which shares of the Company are listed for
trading.

6.       ADJUSTMENT IN EVENT OF CHANGE IN STOCK: Each option shall contain
uniform provisions in such form as may be approved by the Directors to
appropriately adjust the number and kind of shares covered by the option and the
exercise price of shares subject to the option in the event of a stock split,
stock dividend, combination of shares, merger, or other relevant change in the
Company's capitalization to prevent substantial dilution or enlargement of the
rights granted to the Optionee by such option.

7.       AMENDMENT AND DISCONTINUANCE OF PLAN: The board may from time to time
amend or revise the terms of the 2002 Plan or may discontinue the 2002 Plan at
any time provided however that no such right may, without the consent of the
Optionee, in any manner adversely affect his rights under any option theretofore
granted under the 2002 Plan and such amendment shall require the prior approval
of the Toronto Stock Exchange.

8.       EFFECTIVE DATE AND DURATION OF PLAN: The 2002 Plan shall remain in full
force and effect until such time as the Directors shall have granted options on
all of the shares reserved and set aside under paragraph 3 hereof, and for so
long thereafter as options remain outstanding in favour of any Optionee.

                                                                        Page: 13
<PAGE>

                                    EXHIBIT 4

                             SHARE PURCHASE OPTION

         MEMORANDUM OF AGREEMENT made as of this 6th day of March, 2003

BETWEEN:

                                CRYPTOLOGIC INC.,
                                  a corporation
                  incorporated under the laws of the Province
                                   of Ontario,

                                      (hereinafter called the "Company")

                                                               OF THE FIRST PART

                                    - and -

                               MICHAEL STARZYNSKI

                                  an individual

                                     (hereinafter called the "Optionee")

                                                              OF THE SECOND PART

                  WHEREAS the Company has established the CryptoLogic Inc. Stock
Option Plan (the "Plan") to assist officers, directors and employees of the
Company and its subsidiaries to participate in the growth and development of the
Company by providing them with the opportunity through share options to acquire
a proprietary interest in the Company;

                  AND WHEREAS the Optionee is a director, officer or employee of
the Company, or one of its subsidiaries, and the board of directors and
President of the Company has authorized the granting to the Optionee by the
Company of the Option hereinafter contained, pursuant to and in accordance with
the provisions of the Plan.

                  NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration
of other good and valuable consideration and the sum of one ($1.00) dollar now
paid by the Optionee to the Company (the receipt and sufficiency of which are
hereby acknowledged by the Company) it is agreed by and between the parties
hereto as follows:

<PAGE>

1.                In this agreement and in any amendments hereto, the following
terms shall have the following meanings respectively:

         a)       "Expiry Time" means the close of business on the 17th day of
                  March, 2008.

         b)       "Option Period" means the period of time commencing on the
                  date hereof and terminating on the Expiry Time;

         c)       "Public Take-Over Bid" means a bid for the shares of the
                  Company in respect of which a take-over bid circular is
                  prepared and delivered to shareholders of the Company pursuant
                  to the provisions of the securities legislation of any
                  Province of Canada;

         d)       "Share" or "shares" means, as the case may be, one or more
                  common shares in the capital of the Company as constituted at
                  the date of this agreement.

2.                Subject to the terms and conditions hereinafter set out and
Board of Director and shareholder approval, the Company hereby grants to the
Optionee, an irrevocable option (the "Option") to purchase a total of 60,000
shares of the Company (the said shares being hereinafter called the "Optioned
Shares") at the price per Optioned Share equal to the average of the highest and
lowest share prices of the Company's common shares on the Toronto Stock Exchange
on the 6th day of March 2003.

3.                Subject to the terms and conditions hereinafter set out, the
Optionee shall have the right to exercise the Option granted hereby with respect
to the following respective numbers of Optioned Shares at any time or times
during the following periods of time during the Option Period:

                  i)       One quarter of the Optioned Shares if the holder
                           remains an employee with the Company until March 17,
                           2004;

                  ii)      One quarter of the Optioned Shares if the holder
                           remains an employee with the Company until March 17,
                           2005;

                  iii)     One quarter of the Optioned Shares if the holder
                           remains an employee with the Company until March 17,
                           2006.

                  iv)      One quarter of the Optioned Shares if the holder
                           remains an employee with the Company until March 17,
                           2007.

                  In the event that a Public Take-Over Bid is made at any time
during the Option Period, the Optionee shall forthwith upon and at any time
after the commencement of the Public Take-Over Bid, have the right to exercise
the Option hereby granted with respect to all of the Optioned Shares which have
not been purchased by the

<PAGE>

Optionee hereunder prior to the commencement date of the Public Take-Over Bid.
At the Expiry Time, the Option hereby granted shall forthwith expire and
terminate and be of no further force or effect whatsoever as to such of the
Optioned Shares in respect of which the Option has not then been exercised.

4.                In the event of the death of the Optionee prior to the Expiry
Time while in the employment of, or while serving as a director of, the Company
or a subsidiary of the Company, forthwith following the earlier of (i) the date
which is six (6) months following the date of death of the Optionee or (ii) the
Expiry Time, the Option shall terminate as to such of the Optioned Shares in
respect of which the Option has not then been exercised.

5.                In the event that the Optionee ceases to be employed by, or
serve as a director or officer of, or act as active consultants to, as the case
may be, the Company or a subsidiary of the Company prior to the Expiry Time
(otherwise than by reason of the death of the Optionee), upon the expiration of
30 days following the date on which the Optionee ceases to be employed by, or
serve as a director of, as the case may be, the Company or one of its
subsidiaries, the Option shall terminate as to such of the Optioned Shares in
respect of which the Option has not been exercised prior to the expiration of
such 30 day period.

6.                Subject to the provisions of clauses 3, 4 and 5 hereof, the
Option shall be exercisable at any time or from time to time prior to the Expiry
Time by the Optionee or his legal personal representatives giving a notice in
writing addressed to the Company at its head office in the City of Toronto, and
delivered to the Secretary of the Company, which notice shall specify therein
the number of Optioned Shares in respect of which the Option is being exercised,
accompanied by payment, by cash or certified cheque, in full of the purchase
price for the number of Optioned Shares specified therein. Upon any such
exercise of the Option as aforesaid, the Company shall forthwith cause the
transfer agent and registrar of the Company to deliver to the Optionee or his
legal personal representatives as he may otherwise direct in the notice of
exercise of the Option, a certificate or certificates in the name of the
Optionee or his legal personal representative (as he or they may have otherwise
so directed) representing in the aggregate such number of Optioned Shares as the
Optionee or his legal personal representative shall have then paid for and as
are specified in such notice in writing.

7.                Nothing herein contained or done pursuant hereto shall
obligate the Optionee to purchase or pay for any Optioned Shares except those
Optioned Shares in respect of which the Optionee shall have exercised the Option
in the manner hereinbefore provided.

<PAGE>

8.                In the event of any subdivision, redivision or change of the
shares of the Company at any time prior to the Expiry Time into a greater number
of shares, the number of shares deliverable by the Company on any exercise of
the Option thereafter, shall be increased to such number of shares as would have
resulted from such subdivision, redivision or change if such exercise of the
Option had been prior to the date of such subdivision, redivision or change.

                  In the event of any consolidation or change of the shares of
the Company at any time prior to the Expiry Time into a lesser number of shares,
the number of shares deliverable by the Company on any exercise of the Option
thereafter shall be reduced to such number or change if such exercise of the
Option had been prior to the date of such consolidation or change.

9.                The Optionee shall have no rights whatever as a shareholder in
respect of any of the Optioned Shares (including any right to receive dividends
or other distribution therefrom or thereon) other than in respect of Optioned
Shares in respect of which the Optionee shall duly exercise this option.

10.               Time shall be of the essence of this agreement.

11.               This agreement shall enure to the benefit of and be binding
upon the Company, its successors and assigns, and the Optionee and his legal
personal representatives. This agreement shall not be assignable by the Optionee
or his legal personal representatives.

12.               This agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario.

                  IN WITNESS WHEREOF this agreement has been executed by the
parties hereto.

SIGNED,
SEALED AND DELIVERED
in the presence of

                                                         CRYPTOLOGIC INC.
                                                         Per ___________________
                                                                A.S.O.

_______________________________                          _______________________
        (Print name)                                       Michael Starzynski<PAGE>

                                                                     EXHIBIT 4.5

                                                               EXECUTED ORIGINAL

[CANACCORD CAPITAL LOGO]

April 10,2003

CryptoLogic Inc.
1867 Yonge Street
7th Floor
Toronto, Ontario
Canada M4S 1Y5

Attention: Bob Stikeman - Vice-Chairman and Lewis Rose - President & CEO

Dear Sirs:

   PROPOSED LISTING AND POSSIBLE FUND RAISING ON THE LONDON STOCK EXCHANGE

We write to confirm and agree the terms and conditions on which Canaccord
Capital (Europe) Limited ("Canaccord") will be awarded the mandate (the
"Mandate"), to act as Sponsor, Financial Advisor and Broker to CryptoLogic Inc.
(the "Company" or "CryptoLogic") in connection with the Company's listing on the
London Stock Exchange's techMARK index (the "Listing") and any possible fund
raising associated therewith. The purpose of this letter is to set forth our
understanding of our engagement by the Company in respect of the Listing and
said fund raising (outlined in Schedule "B"). The completion of the Listing and
any possible fund raising shall be subject to, amongst other things as outlined
below, due diligence by Canaccord to our complete satisfaction and the receipt
of all necessary regulatory approvals which the Company agrees to use its best
efforts to obtain.

It is understood that this letter is an agreement in principle and is subject to
the execution by the Company and Canaccord of a formal Sponsor and Broker
Agreement and a formal Agency Agreement (the "Agreements") in a form
satisfactory to both parties. Additionally, Canaccord will use its reasonable
endeavours, subject to compliance with applicable laws and regulations and
internal compliance procedures, to provide research coverage for the Company.

In the event that for any reason no Agreements are executed, no legal obligation
will result from this letter except for any obligations of the Company to
Canaccord pursuant to paragraphs 4,6 and 7.

The Agreements shall include, without limitation, the terms listed below:

1.       DUE DILIGENCE

Canaccord and its legal advisers will be given access to the Company's
corporate, financial and other records for the purposes of conducting due
diligence, if required, in respect of the Company and the Listing and fund
raising. Due diligence shall be completed to Canaccord's complete satisfaction
prior to the completion of the Listing.

                       Canaccord Capital (Europe) Limited

          MEMBER OF THE LONDON STOCK EXCHANGE AND REGULATED BY THE SFA

              CANACCORD CAPITAL (EUROPE) LIMITED IS A WHOLLY OWNED
                      SUBSIDIARY OF CANACCORD HOLDINGS LTD

          FIRST FLOOR BROOK HOUSE 27 UPPER BROOK STREET LONDON W1K 7QF
                     TEL: 020 7518 2777 FAX: 020 7518 2778/9

                                www.canaccord.com

                 CANACCORD CAPITAL (EUROPE) LIMITED IS A LIMITED
                    COMPANY REGISTERED IN LONDON REG: 2814897

<PAGE>

[CANACCORD CAPITAL LOGO]

2.       SPONSOR AND BROKER

The Company will appoint Canaccord as its Sponsor and Broker, conditional upon
the successful completion of the Listing, at the date of the announcement of the
Listing. The appointment of Sponsor and Broker shall continue until the first
anniversary of the Listing. If the parties thereafter agree to continue their
relationship either party may terminate Canaccord's appointment under this
clause by three months' notice in writing to the other party. In the event of
termination under this clause Canaccord shall not be liable to repay any part of
its annual retainer which has been paid in advance.

3.       LISTING FEES, ONGOING RETAINERS AND TIMING

The Company will pay to Canaccord the following fees (plus, if applicable, VAT):

     1.  A Sponsor and Broker fee of(pound)125,000 of which(pound)25,000 is a
         non-refundable deposit to be paid on the signing of this agreement; and
         the remainder is due on the successful admission of the Company to the
         London Stock Exchange;

     2.  The Company shall pay Canaccord a retainer at a rate of(pound)50,000
         per annum (plus, if applicable, VAT). The Sponsor retainer is payable
         in half-yearly instalments in advance, the first said payment to be
         made on Listing; and

     3.  It is anticipated that the Listing process would take between 12 and 14
         weeks from the signing of our engagement letter, depending on the level
         of preparedness with regard to the documentation of the Company.

4.       EXPENSES

The Company will pay all of the reasonable direct expenses and fees of Canaccord
incurred in connection with the Mandate including Canaccord's legal counsel, and
consultants and specialists, if required, and all reasonable out-of-pocket costs
directly incurred by Canaccord. The payment of these expenses will be due upon
the Listing. An initial refundable retainer of (pound)25,000 shall be deposited
with Canaccord to draw down on for expenses. Individual expense items in excess
of (pound)1,000 shall be subject to the Company's prior approval. Canaccord
shall also provide the Company with a schedule of costs it will incur in
connection with the Listing within one week of the execution of this agreement.

All reasonable fees and expenses shall be payable by the Company upon receiving
an invoice from Canaccord and shall be payable by the Company whether or not the
Listing is completed, terminated or withdrawn.

5.       PUBLICITY

As is standard in the UK, the Company shall consult with Canaccord in the making
of any material public announcements and in particular shall not make any
announcement concerning the subject matter of the mandate, whether formal or
informal, without Canaccord's prior written consent, unless the Company is
required to do so by any applicable laws or stock exchange rules, in which case
the

                                       2

<PAGE>

[CANACCORD CAPITAL LOGO]

Company shall use its reasonable efforts to notify Canaccord in writing prior to
making of such announcement.

6.       TERMINATION

The Company shall be entitled to terminate the Mandate at anytime prior to the
Listing by providing Canaccord with written notice of its intention to withdraw.
In the case of Termination, the Company and Canaccord will mutually agree a
reasonable breakup fee, not to exceed (pound)100,000, based on actual costs and
efforts expended. The Company shall be entitled to return of the initial
refundable deposit, less incurred expenses up to the date of withdrawal and will
be released from all other obligations, except those that explicitly state that
they survive termination, in this agreement and the Agreements (if executed).

7.       INDEMNITY

The Company covenants and agrees to indemnify Canaccord as provided for in
Schedule "A" attached hereto.

This letter agreement will be governed by and construed in accordance with the
laws of England and Wales and the parties submit to the non-exclusive
jurisdiction of the English courts.

If this letter accurately reflects your understanding of the terms of our
agreement, please so indicate by executing and returning to us the enclosed copy
of this letter.

Yours faithfully,

Canaccord Capital (Europe) Limited

/s/ Paul Reynolds
---------------------------

Agreed and Accepted this 9 day of APRIL 2003

CryptoLogic Inc.

/s/ James Ryan
---------------------------

                                       3

<PAGE>

[CANACCORD CAPITAL LOGO]

                                   SCHEDULE "A"
                                    INDEMNITY

CryptoLogic Inc. (the "Indemnitor) hereby agrees to indemnify and hold Canaccord
Capital (Europe) Limited and/or any of its subsidiary companies or holding
companies and/or divisions and/or affiliated companies including Canaccord
Capital Corporation and Canaccord Holdings Ltd. (hereinafter referred to as the
"Adviser") and each and every one of the directors, officers, employees and
shareholders of the Adviser (together hereinafter referred to as the
"Personnel") harmless from and against any and all expenses, losses, claims,
actions, damages or liabilities, whether joint or several (including the
aggregate amount paid with the prior approval of the Company in reasonable
settlement of any actions, suits, proceedings or claims), and the reasonable
fees and expenses of its counsel that may be incurred in advising with respect
to and/or defending any claim that may be made against the Adviser to which the
Adviser and/or its Personnel may become subject or otherwise involved in any
capacity under any statute or common law or otherwise insofar as such expenses,
losses, claims, damages, liabilities or actions arise out of or are based,
directly or indirectly, upon the performance of professional services rendered
to the Indemnitor by the Adviser and its Personnel hereunder or otherwise in
connection with the matters referred to in the attached letter agreement,
provided, however, that this indemnity shall not apply:

(a)      to any liability in respect of any breach of any duties or liability
         which the Adviser may have under FSA rules or any liability the Adviser
         may incur under the Financial Services Act 1986 or the Financial
         Services and Markets Act 2000 or other applicable rules or regulations;
         or

(b)      to the extent that a court of competent jurisdiction in a final
         judgment that has become non appealable shall determine that:

         i.  in the event that, the Adviser or its Personnel, or third parties
             it has engaged, including legal counsel, consultants and
             specialists have been reckless, negligent or dishonest or have
             committed any fraudulent act in the course of such performance; and

        ii.  the expenses, losses, claims, damages or liabilities, as to which
             indemnification is claimed, were directly or indirectly caused by
             the recklessness, negligence, dishonesty or fraud referred to in
             (i).

If for any reason (other than the occurrence of any events itemised in (a) and
(b) above) the foregoing indemnification is unavailable to the Adviser or
insufficient to hold it harmless, then the Indemnitor shall contribute to the
amount paid or payable by the Adviser as a result of such expense, loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the Indemnitor on the one hand and the Adviser on
the other hand but also the relative fault of the Indemnitor and the Adviser, as
well as any relevant equitable considerations provided that the Indemnitor shall
in any event contribute to the amount paid or payable by the Adviser as a result
of such expense, loss, claim, damage or liability any excess of such amount over
the amount of the fees received by the Adviser hereunder.

Provided that none of the events itemised in (a) and (b) above have occurred,
the Indemnitor agrees that in case any legal proceeding shall be brought against
the Indemnitor and/or the Adviser and/or Personnel by any governmental
commission or regulatory authority or any stock exchange or other entity having
regulatory authority, either domestic or foreign, the Indemnitor and/or the
Adviser and Personnel of the Adviser shall be required to testify in connection
therewith or shall be required to respond to procedures designed to discover
information regarding, in connection with, or by reason of the performance of
professional services rendered to the Indemnitor by the Adviser, the Adviser
shall have the right to employ its own counsel in connection therewith, and the
reasonable fees and expenses of such counsel as well as the reasonable costs and
out-of-pocket

                                       4

<PAGE>

[CANACCORD CAPITAL LOGO]

expenses incurred by the Adviser and its Personnel in connection therewith shall
be paid by the Indemnitor as they occur.

Promptly after receipt of notice of the commencement of any legal proceeding
against the Adviser or any of its Personnel or after receipt of notice of the
commencement of any investigation, which is based, directly or indirectly, upon
any matter in respect of which indemnification may be sought from the
Indemnitor, the Adviser will notify the Indemnitor in writing of the
commencement thereof and, throughout the course thereof, will provide copies of
all relevant documentation to the Indemnitor, will keep the Indemnitor advised
of the progress thereof and will discuss with the Indemnitor all significant
actions proposed.

The indemnity and contribution obligations of the Indemnitor shall be in
addition to any liability which the Indemnitor may otherwise have, shall extend
upon the same terms and conditions to the Personnel of the Adviser and shall be
binding upon and enure to the benefit of any successors, assigns, heirs and
personal representatives of the Indemnitor, the Adviser and any of the Personnel
of the Adviser. The foregoing provisions shall survive the completion of
professional services rendered under the attached letter of agreement or any
termination of the authorization given by the attached letter of agreement for a
period of 3 years from the signing of this agreement.

MONEY LAUNDERING REGULATIONS

The Indemnitor agrees to provide such evidence of its identity and that of
directors, partners, trustees and controllers of the Indemnitor or firm and of
all connected shareholders and parties as the Adviser may reasonably require in
order to comply with its obligations under the legislation and regulations
against money laundering and drug trafficking. The Adviser may cease to act for
the Indemnitor if it fails to comply and may at any time make such disclosures
to the competent authorities as are reasonable as a result of such failure or
otherwise upon suspecting that the Indemnitor or any such connected party is
involved in money laundering.

DATA PROTECTION ACT

The Indemnitor hereby consents to the Adviser using all information it maintains
about the Indemnitor in order to send details of other services offered by the
Adviser that it considers may be of interest to the Indemnitor.

COMPLIANCE

The Indemnitor confirms to the Adviser that it will not breach any contractual,
legal, regulatory or other obligation by entering into this letter agreement and
that the Indemnitor knows of no matter as a result of which it would not be able
to give this confirmation were it required to repeat it at any time during the
term of this letter. The Indemnitor confirms that it will at all times comply
with all such obligations.

/s/ Paul Reynolds                         for Canaccord Capital (Europe) Limited
----------------------------

/s/ James Ryan                            for CryptoLogic Inc.
----------------------------

                                       5

<PAGE>

[CANACCORD CAPITAL LOGO]

                                   SCHEDULE"B"
                                  DECEMBER 2002
                                CRYPTOLOGIC INC.
                 INDICATIVE TERM SHEET FOR POSSIBLE FUND RAISING

ISSUER:                    CryptoLogic Inc. (the "Company").

AGENT:                     Canaccord Capital (Europe) Limited.

PLACING:                   Common Shares.

AMOUNT:                    To be determined.

PRICE:                     Priced in the context of the market on a day leading
                           up to the marketing, and as agreed to by the Company
                           and Canaccord.

JURISDICTIONS:             Sales to European institutional investors and if
                           mutually agreed, to North American investors as well,
                           under applicable regulations.

TYPE OF TRANSACTION:       Placement by the Company to Institutional Investors,
                           subject to a formal Placing Agreement.

LISTING:                   The Common Shares are currently listed on the Toronto
                           Stock Exchange and NASDAQ.

COMMISSION:                The Company will pay cash commission of 5.75 per cent
                           on the gross proceeds of the Placing, payable on
                           closing. The commission and Listing fee will be
                           deducted from the gross proceeds of the Placing and
                           Open Offer.

USE OF PROCEEDS:           The proceeds will be used, inter alia, to provide
                           working capital for the Company.

CLOSING DATE:              May 2003 or such other date as agreed to by the
                           Company and Canaccord.

                                       6

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