Document:

Unassociated Document

    Exhibit
      10-12

    
 

    THIS
      AGREEMENT made
      on
      the 30th
      November
      2005

    

    BETWEEN

     

    
      
        	(1)    	
                FRIENDS
                  OF REHAB SOCIETY
                  acting through its Executive Committee and having its office at
                  Roslyn
                  Park, Strand Road, Sandymount, Dublin 4 (“Friends
                  of Rehab”); 

              

      

    

     

    
      
        
          	(2)    	
                  REHAB
                    NET GAMES LIMITED
                    (company registration number: 269951) having its registered office
                    at
                    Rehab House, Blackhall Court, Dublin 7 (“Rehab”);
                    and

                

        

      

    

     

    
      	(3)    	
              NEW
                MEDIA LOTTERY SERVICES (INTERNATIONAL) LIMITED
                (formerly Lottery Network Services Limited) (company registration
                number:
                330027) having its registered office at Newmarket Partnership, G9,
                Calmount Park, Ballymount, Dublin 12 (“NMLS”). 

            

    

     

    WHEREAS

     

    
      	(A)	
                  Friends
                of Rehab, Rehab and NMLS have on or about the date of this Agreement
                entered into an Internet Operating Agreement (the “Internet
                Operating Agreement”)
                pursuant to which NMLS has agreed, inter alia, to provide Friends
                of Rehab
                and Rehab with the Rehab Content Site and to make the NMLS Lottery
                Games
                available on the Rehab Content
                Site.

            

    

     

    
      	(B)	
                  Friends
                of Rehab and Rehab are desirous of extending their lottery fundraising
                activities to include bingo games to be made available to players
                on the
                Internet. Friends of Rehab and Rehab have agreed with NMLS that it
                shall
                provide Friends of Rehab and Rehab with the Rehab Bingo Website and
                shall
                make NMLS Bingo Games available on the Rehab Bingo Website. NMLS
                shall
                also provide Friends of Rehab and Rehab with the creative and technical
                support required to operate and market the Rehab Bingo Website on
                the
                terms and subject to the conditions set out in this Agreement.
                

            

    

     

    
      	(C)	
                  Friends
                of Rehab and Rehab have agreed, inter alia by means of the Principal
                Agency Agreement, that Rehab will administer and discharge all fees
                in
                respect of the Rehab Bingo Website in accordance with this Agreement
                on
                behalf of Friends of Rehab.

            

    

     

    
      	(D)	
                  The
                parties have agreed to enter into this Agreement to define the terms
                upon
                which NMLS shall provide Friends of Rehab and Rehab with the Rehab
                Bingo
                Website and the NMLS Bingo Games.

            

    

     

    NOW
      IT IS HEREBY AGREED
      as
      follows:

     

    
      	1.  	
                  Interpretation

            

    

     

    
      	1.1	
                  In
                this
                Agreement, unless the context otherwise
                requires:

            

    

     

    
      
        	 	
                
                  “Agreed
                    Bingo Financial Information”

                

              	
                has
                  the meaning given to it in Clause
                  7.4;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	 	
                “Bingo
                  Intellectual Property”

              	
                means
                  the use of the names “www.rahabbingo.com”,
                  “rehabbingo.com”, “Rehab Bingo” and such other distinctive marks, logos,
                  trade marks and/or trade names arising out of or in connection
                  with the
                  Rehab Bingo Website;

              
	 	 	 
	 	
                “Bingo
                  Receipt Date”

              	
                has
                  the meaning given to it in Clause 7.4;

              
	 	 	 
	 	
                “Commencement
                  Date”
                  

              	
                means
                  the date of this Agreement;

              
	 	 	 
	 	
                “Historic
                  Bingo Marketing Costs”

              	
                has
                  the meaning given to it in Clause 7.2.2;

              
	 	 	 
	 	
                “NMLS
                  Bingo Games”
                  

              	
                means
                  the bingo games owned or licensed to and operated by NMLS on the
                  Rehab
                  Bingo Website as approved from time to time by Friends of Rehab
                  and
                  Rehab;

              
	 	 	 
	 	
                
                  “Other
                    Internet Bingo Arrangements”

                

              	
                has
                  the meaning given to it in Clause 3.2;

              
	 	 	 
	 	
                “Rehab
                  Bingo Brandnames”

              	
                means
                  www.rehabbingo.com, “Rehab Bingo Games”, “Rehab Bingo”, “Rehab
                  Multi-player Bingo” and such other Friends of Rehab and/or Rehab
                  brandnames as may be agreed in writing between the
                  Parties;

              
	 	 	 
	 	
                
                  “Rehab
                    Bingo Cash Management
                    Costs”

                

              	
                means
                  Alladdin’s Fees (or, where the Alladdin Contract is terminated or expires,
                  such fees as may be payable to any service provider in respect
                  of the
                  services previously supplied by Alladdin under the Alladdin Contract)
                  and
                  bank credit card merchant fees and clearance fees, foreign currency
                  exchange charges, bad debts, chargebacks and/or any other bank
                  charges
                  reasonably incurred by NMLS in the performance of its obligations
                  under
                  this Agreement for the applicable calendar
                  month;

              

      

      
        	 	 	 
	 	
                “Rehab
                  Bingo Disclaimer”

              	
                means
                  the disclaimers to be contained in the Rehab Bingo Website Terms
                  and
                  Conditions and to appear on the Rehab Bingo Website when an Internet
                  user
                  follows a link to or otherwise enters the NMLS Website from the
                  Rehab
                  Bingo Website, the content of which will be agreed by the Parties
                  and will
                  be included in the Rehab Bingo Procedures
                  Manuals;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	 	 	 
	 	
                “Rehab
                  Bingo Gross Proceeds”

              	
                means,
                  with respect to any calendar month, the proceeds of all sales of
                  NMLS
                  Bingo Games on the Rehab Bingo Website receivable and which are
                  received
                  by Friends of Rehab for the applicable calendar month;

              
	 	
                 

              	 
	 	
                
                  “Rehab
                    Bingo Gross Net
                    Proceeds”

                

              	
                means,
                  with respect to any calendar month, the Rehab Bingo Gross Proceeds
                  for
                  that month after the deduction of the Rehab Bingo Prize Payout
                  for that
                  month and the Rehab Bingo Cash Management Costs for that month;
                  

              
	 	
                 

              	 
	 	
                
                  “Rehab
                    Bingo NMLS Retail Commission”

                

              	means,
                the sum calculated in accordance with Clause 7.2 of this Agreement
                and
                which is payable by Rehab to NMLS for distribution and marketing
                services
                provided by NMLS hereunder;
	 	 	 
	 	
                “Rehab
                  Bingo Marketing
                  Costs”

              	
                means
                  all reasonable costs relating to the marketing, promotion and
                  advertising of the Rehab Bingo Website including, without limitation,
                  the
                  cost of marketing, promotion and advertising using the media of
                  television, radio, print publications and/or the Internet and all
                  reasonable costs incurred in respect of promotional logo design,
                  script
                  recording, photography, public relations, market research, prize
                  sponsorship and personality endorsement for the Rehab Bingo Website;
                  

              
	 	 	 
	 	
                “Rehab
                  Bingo Net Proceeds”

              	
                means,
                  with respect to any calendar month, the Rehab Bingo Gross Net Proceeds
                  for
                  that month after deduction therefrom of the Historic Bingo Marketing
                  Costs
                  and the Rehab Bingo Marketing Costs in accordance with Clause
                  7.2.2;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	 	
                “Rehab
                  Bingo Prize Payout”

              	
                means
                  the sums paid out to players by Friends of Rehab or by NMLS and/or
                  Rehab
                  on behalf of Friends of Rehab as part of or pursuant to the NMLS
                  Bingo
                  Games operated on the Rehab Bingo Website for the applicable calendar
                  month;

              
	 	
                 

              	 
	 	
                
                  “Rehab
                    Bingo Procedures
                    Manuals”

                

              	
                means
                  any and all procedures agreed by the Parties including, inter alia,
                  the
                  rules and regulations governing the operation of NMLS Bingo Games
                  on the
                  Rehab Bingo Website (including, without limitation, the theme,
                  graphics
                  and prize structures with respect thereto) as same are amended
                  by
                  agreement between the Parties from time to time;

              
	 	
                
                   

                

              	 
	 	
                
                  “Rehab
                    Bingo Website Privacy Policy”

                

              	
                means
                  the privacy policy prepared by or on behalf of Rehab and Friends
                  of Rehab
                  to be displayed on the Rehab Bingo Website providing Internet users
                  with
                  information concerning, inter alia, how their personal data is
                  used by
                  NMLS, Friends of Rehab and Rehab;

              
	 	
                 

              	 
	 	
                “Rehab
                  Bingo Website Terms
                  and Conditions”

              	
                means
                  the terms and conditions prescribed by Rehab and Friends of Rehab
                  to be
                  displayed on the Rehab Bingo Website relating to, inter alia, the
                  playing
                  of NMLS Bingo Games on the Rehab Bingo Website; 

              
	 	 	 
	 	
                “Rehab
                  Bingo Website”
                  

              	
                means
                  the website accessed through the domain name www.rehabbingo.com
                  and
                  maintained by NMLS pursuant to the terms and subject the conditions
                  of
                  this Agreement;
                  and

              
	 	 	 
	 	
                “Total
                  Bingo Marketing Costs”

              	
                has
                  the meaning given to it in Clause
                  7.2.2.

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	1.2  	
              Words
                and expressions used in this Agreement and not otherwise defined
                shall
                have the same meaning as in the Internet Operating Agreement unless
                the
                context otherwise requires.

            

    

     

     

    
      	2.  	
              Licence
                of Rehab Bingo Brandnames and
                Brandnames

            

    

     

    
      	2.1  	
              Friends
                of Rehab and Rehab hereby grant to NMLS a licence to
                use:

            

    

     

    
      	(a)  	
              the
                Rehab Bingo Brandnames and the Brandnames on the Rehab Bingo
                Website;

            

    

     

    
      	(b)  	
              the
                Rehab Bingo Brandnames on the Rehab Content Site;
                and

            

    

     

    
      	(c)  	
              for
                the purposes of promoting the Rehab Bingo Website, the Rehab Bingo
                Brandnames on the NMLS Website,

            

    

     

    and
      NMLS
      agrees to accept the licence on the terms and subject to the conditions of
      this
      Agreement. 

     

    
      	2.2  	
              The
                Parties acknowledge and agree that, subject to and in accordance
                with the
                terms of this Agreement, during the term of this Agreement, the Rehab
                Bingo Website shall be used exclusively to operate the NMLS Bingo
                Games.
                NMLS hereby acknowledges and undertakes to Friends of Rehab and Rehab
                not
                to use the Rehab Bingo Brandnames or the Brandnames for any purposes
                other
                than those permitted purposes set out in this Agreement or in the
                Internet
                Operating Agreement or on any website other than the Rehab Bingo
                Website,
                the Rehab Content Site and the NMLS Website in accordance with this
                Agreement or the Internet Operating Agreement without the prior written
                consent of (as the case may be) Friends of Rehab and/or
                Rehab.

            

    

     

    
      	3.  	
              Relationship
                of the parties

            

    

     

    
      	3.1  	
              For
                the duration of this Agreement, NMLS agrees with Rehab and Friends
                of
                Rehab that it will not either directly or indirectly be concerned
                or
                interested in or enter into any internet operating agreement or
                arrangement with any other person, charity or corporate body located
                or
                operating in the Territory to promote market, advertise, produce,
                procure,
                issue, distribute or sell bingo games on the Internet.
                For the avoidance of doubt, this Clause 3.1 does not preclude persons
                resident in the Territory purchasing entries in NMLS Bingo Games
                on the
                Rehab Bingo Website.

            

    

     

    
      	3.2  	
              From
                the Commencement Date until 31 December 2007, Friends of Rehab and
                Rehab
                agree with NMLS that they will not either directly or indirectly
                be
                concerned or interested in or enter into any internet operating agreement
                or arrangement with any other person, charity or corporate body located
                or
                operating in the Territory to promote market, advertise, produce,
                procure,
                issue, distribute or sell bingo games on the Internet (the “Other
                Internet Bingo Arrangements”).
                Provided that the Rehab Bingo Net Proceeds for each of the years
                two to
                four of this Agreement (being the periods 30 November 2006 to 29
                November
                2007, 30 November 2007 to 29 November 2008 and 30 November 2008 to
                29
                November 2009 respectively) exceeds €200,000, Friends of Rehab and Rehab
                further agree with NMLS that they shall not either directly or indirectly
                enter into any Other Internet Bingo Arrangements for each of the
                calendar
                years 2008, 2009 and 2010.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	4.  	
              Duties
                of NMLS

            

    

     

    
      	4.1  	
              NMLS
                shall provide Friends of Rehab and Rehab with the Rehab Bingo Website
                which will incorporate the NMLS Bingo Games and the Rehab Bingo
                Brandnames. 

            

    

     

    
      	4.2  	
              Using
                due care and diligence in the preparation of the Rehab Bingo Procedures
                Manuals and in the performance of its duties hereunder, NMLS shall
                at all
                times during the continuance of this Agreement provide Friends of
                Rehab
                and Rehab with a range of services including but not limited
                to:

            

    

     

    
      
        
          	
                	(i)	
                  providing
                    the NMLS Bingo Games on the Rehab Bingo Website in a manner which,
                    subject
                    to Clause 4.5, will permit all Internet users access to the Rehab
                    Bingo
                    Website on the Internet and enable any such Internet users to
                    play the
                    NMLS Bingo Games as selected by
                    Rehab;

                

        

      

    

     

    
      	 	
              (ii)

            	
              providing
                NMLS Bingo Games on the Rehab Bingo Website of a standard and content
                acceptable to Rehab and in compliance with the Rehab Bingo Procedures
                Manuals;

            

    

     

    
      	
            	(iii)	
              securely
                facilitating the transfer of money in respect of entry into the NMLS
                Bingo
                Games on the Rehab Bingo Website in accordance with instructions
                from time
                to time as may be given by Friends of Rehab and/or
                Rehab;

            

    

     

    
      	 	
              (iv)

            	
              securely
                facilitating the payment of prizes in respect of the NMLS Bingo Games
                to
                players on the Rehab Bingo Website in accordance with instructions
                from
                time to time given by Rehab;

            

    

     

    
      	 	
              (v)

            	
              providing
                and maintaining all systems, software and technical support necessary
                to
                ensure the availability of the NMLS Bingo Games on the Rehab Bingo
                Website
                on a continuous basis during the term of this
                Agreement;

            

    

     

    
      	 	
              (vi)

            	
              distributing
                NMLS Bingo Games only through the Internet or such other media and/or
                distribution channels in the Territory as agreed in writing between
                the
                Parties;

            

    

     

    
      	 	
              (vii)

            	
              employing
                or procuring the services of and remunerating at its own cost such
                other
                persons as may be required by NMLS to assist it in the performance
                of its
                duties under this Agreement;

            

    

     

    
      	
            	(viii)	
              complying
                with the Rehab Bingo Procedures Manuals, the Statutes and all other
                applicable laws and regulations relating to the operation of the
                NMLS
                Bingo Games on the Rehab Bingo Website and the services provided
                hereunder;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	(ix)	
              using
                all reasonable endeavours to ensure that the operation of the NMLS
                Bingo
                Games and financial transactions related thereto proceed without
                risk of
                breaches of security, theft or misuse of data, data loss, incorrect
                recording of events or data, incorrect processing, breaches in copyright,
                trade mark or service mark, virus propagation and player or third
                party
                systems damage;

            

    

     

    
      	
            	(x)	
              designing,
                implementing and, subject to Clause 7.2.2, discharging all fees in
                respect
                of all advertising, promotional marketing and sales programs for
                the NMLS
                Bingo Games and the Rehab Bingo Website in the manner and to the
                extent
                agreed in writing between the Parties hereto;
                and

            

    

     

    
      	
            	(xi)	
              obtaining
                at its own cost all licences relating to game software, cash management
                software (and intellectual property relating to such software)
                authorisations and third party intellectual property consents necessary
                to
                lawfully operate the NMLS Bingo Games on the Rehab Bingo Website
                other
                than such licences, authorisations and third party consents relating
                to
                Friends of Rehab and/or Rehab in the
                Territory.

            

    

     

    
      	4.3  	
              NMLS
                shall maintain proper books of account and records relating to the
                sale
                of NMLS
                Bingo Games on the Rehab Bingo Website and other transactions contemplated
                by this Agreement. Fully
                completed financial statements in the format requested by Rehab and
                audited by a professionally qualified and independent third party
                to be
                agreed and appointed by the parties prior to the Commencement Date
                will be
                given to Friends of Rehab and Rehab in the timescale specified by
                Rehab in
                Clause 7.4. 

            

    

    

    
      	4.3.1  	
              The
                parties acknowledge and agree that, to the extent that it is feasible
                and
                for so long as the obligations in respect of the maintenance and
                provision
                thereof continue under both this Agreement and the Internet Operating
                Agreement, and in order to avoid unnecessary duplication and
                administrative costs, the books of account, records and financial
                statements required to be maintained and given to Rehab under this
                Clause
                4.3 and under Clauses 7.4, 7.5 and 7.6 of this Agreement shall be
                consolidated with the books of account, records and financial statements
                required to be maintained and given to Rehab under Clauses 3.3, 5.4,
                5.5
                and 5.6 of the Internet Operating Agreement such that, in accordance
                with
                said provisions, NMLS shall maintain one consolidated set of books
                of
                accounts and records and will provide to Rehab a fully completed
                consolidated set of financial statements in respect of the Rehab
                Content
                Site and the Rehab Bingo Website and the transactions contemplated
                by this
                Agreement and by the Internet Operating
                Agreement.

            

    

     

    
      	4.4  	
              Without
                prejudice to any other duties or obligations of NMLS under this Agreement,
                NMLS undertakes to Friends of Rehab and Rehab not to do any of the
                following without the prior written consent of Friends of Rehab and
                Rehab:

            

    

     

    
      	 	
              (i)

            	
              amend
                the form or content of the Rehab Bingo Website; 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (ii)

            	
              amend
                the form, content, rules or prizes of any NMLS Bingo Game;
                and/or

            

    

     

    
      	 	
              (iii)

            	
              introduce
                or withdraw any NMLS Bingo Game on the Rehab Bingo
                Website.

            

    

     

    
      	4.5  	
              NMLS
                acknowledges and agrees with Friends of Rehab and Rehab that the
                Rehab
                Bingo Website shall contain the rules and regulations pertaining
                to
                Friends of Rehab and the operation of the NMLS Bingo Games, the Rehab
                Bingo Website Terms and Conditions, the Rehab Bingo Website Privacy
                Policy
                and the Rehab Bingo Website Disclaimer. NMLS further acknowledges
                and
                agrees that and that it shall procure that no Internet user shall
                be
                capable of playing NMLS Bingo Games on the Rehab Bingo Website until
                he or
                she has been first registered as a member of Friends of Rehab and
                agreed
                to be bound by the rules and regulations of Friends of Rehab, the
                Rehab
                Bingo Website Terms and Conditions and the Rehab Bingo Website Privacy
                Policy.

            

    

     

    
      	4.6  	
              The
                parties acknowledge and agree that neither Friends of Rehab nor Rehab
                shall be liable to NMLS for any costs or expenses incurred by NMLS
                in the
                exercise of its duties pursuant to Clause 4.1 or arising out of or
                in
                connection with providing computer hardware or software for the purposes
                of this Agreement or NMLS’s development costs in respect of the Rehab
                Bingo Website or the NMLS Bingo Games.
                Subject to Clause 7.2.2, the parties further acknowledge and agree
                that
                NMLS will be responsible for all costs in connection with the duties
                set
                out in this Clause 4 including, but not limited to, the recurring
                human
                resource costs of discharging the said duties and all recurring
                communications and administrative
                costs.

            

    

     

    
      	4.7  	
              The
                parties acknowledge and agree that the licence granted by Friends
                of Rehab
                and Rehab to NMLS pursuant to Clause 2.1 of this Agreement shall
                be
                exclusive only for the period and to the extent described in Clause
                3.2 of
                this Agreement. The parties expressly agree that nothing in this
                Agreement
                shall preclude Friends of Rehab and/or Rehab from, inter alia, entering
                into any Wireless/Mobile Phone operating or marketing arrangements
                and/or
                agreements or any arrangements and/or agreements of any nature relating
                to
                bingo games (other than bingo games covered by Clause 3.2 for the
                period
                specified therein) with any third party and using all or any of the
                Rehab
                Bingo Brandnames in relation to any such arrangements and/or
                agreements.

            

    

     

    
      	4.8  	
              Without
                prejudice to Clause 4.7, the parties acknowledge and agree that at
                any
                time during the course of this Agreement, the parties may enter into
                good
                faith negotiations to agree the terms and conditions upon which Friends
                of
                Rehab and Rehab may licence, on a non-exclusive basis, all or any
                of the
                Rehab Bingo Brandnames to NMLS for use on Mobile Phones. 

            

    

     

    
      	4.9  	
              Nothing
                in this Agreement shall preclude Friends of Rehab and/or Rehab from
                promoting, marketing, selling and advertising any Rehab Lottery Games,
                lottery tickets and/or bingo games (other
                than bingo games covered by Clause 3.2 for the period specified
                therein).

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	4.10  	
              In
                the event that any contract or arrangement which NMLS has entered
                into
                with any third party relating to the performance obligations and/or
                liabilities of NMLS under this Agreement (including, without limitation,
                the Alladdin Contract) is terminated or expires, NMLS shall procure
                a
                competent and suitably qualified replacement for said third party
                within
                10 Business Days of the occurrence of the aforesaid termination or
                expiry.

            

    

     

    
      	5.  	
              Duties
                of Rehab

            

    

     

    
      	5.1  	
              Rehab
                shall use its reasonable endeavours to assist NMLS with the marketing
                and
                administration of the NMLS Bingo Games on the Rehab Bingo Website.
                The
                parties acknowledge and agree that NMLS shall discharge all administration
                costs and, subject to Clause 7.2.2, all Rehab Bingo Marketing Costs
                in
                respect of the NMLS Bingo Games on the Rehab Bingo Website. 

            

    

     

    
      	6.  	
              Indemnification

            

    

     

    
      	6.1  	
              NMLS
                hereby agrees on demand to indemnify Friends of Rehab and Rehab and
                hold
                Friends of Rehab and Rehab harmless against any costs, claims, demands,
                causes of action and judgements whatsoever and howsoever arising
                out of
                the failure of NMLS to comply with any of its obligations under this
                Agreement including without limitation Clauses 4.2, 4.4 and 4.5.
                Without
                prejudice to the foregoing NMLS agrees on demand to indemnify Friends
                of
                Rehab and Rehab and hold Friends of Rehab and Rehab harmless against
                any
                costs, claims, demands, causes of action and judgments whatever and
                howsoever arising from, or in connection with any contract or arrangement
                entered into by NMLS with Alladdin or any third party (including,
                without
                limitation, any termination thereof) relating to the performance
                obligations and/or liabilities of NMLS under this
                Agreement.

            

    

     

    
      	6.2  	
              For
                the avoidance of doubt Friends of Rehab and/or Rehab shall not be
                deemed
                to be in breach of this Agreement or otherwise liable to NMLS by
                reason of
                delay in performance or non-performance, of any of their respective
                obligations hereunder to the extent that such delay or non-performance
                is
                due to any delay in performance or non-performance of any provision
                of any
                contract or arrangement entered into by NMLS with any third party
                relating
                to performance obligations of the parties under this
                Agreement.

            

    

     

    
      	6.3  	
              Prior
                to entering into this Agreement the parties obtained legal advice
                as to
                the legality of operating bingo games on the Internet. No party makes
                any
                representation to the others as to whether the advice received is
                correct
                and no party shall have any liability whatsoever to the others in
                the
                event that arising from an interpretation of the Statutes or any
                law in
                any jurisdiction outside of the Territory the sale of the NMLS Bingo
                Games
                on the Rehab Bingo Website is
                prohibited.

            

    

     

    
      	6.4  	
              In
                the event that arising from an interpretation of the Statutes the
                operation of bingo games on the Internet is prohibited, or there
                is any
                change in the Statutes or in any law in any jurisdiction outside
                of the
                Territory which causes such prohibition the parties agree forthwith
                to
                enter into discussions to review matters with a view to continuing
                the
                operation of this Agreement to the extent legally possible and if
                the
                parties are unable to agree amendments to this Agreement this Agreement
                shall terminate.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	7.  	
              Financial
                Provisions

            

    

     

    
      	7.1  	
              All
                monies wagered or paid by players participating in the NMLS Bingo
                Games on
                the Rehab Bingo Website shall be the property of Friends of
                Rehab and
                NMLS shall procure that Friends of Rehab is
                in receipt of all such monies as wagered or paid.
                NMLS acknowledges and agrees that, pursuant inter alia to the Principal
                Agency Agreement between Friends of Rehab and Rehab, Friends of Rehab
                and
                Rehab have agreed that Rehab shall administer the Rehab Bingo Website
                on
                behalf of Friends of Rehab and that Rehab shall be solely responsible
                to
                NMLS for discharging any payments due to NMLS under this Agreement
                and
                NMLS shall have no recourse to Friends of Rehab in the event of any
                default by Rehab in discharging any payments due to NMLS
                hereunder.

            

    

     

    
      	7.2.1  	
              In
                accordance with Clause 7.4 and subject to Clause 7.2.2 and 10 of
                this
                Agreement, Rehab shall
                pay the Rehab Bingo NMLS Retail Commission
                to NMLS which shall be: 

            

    

     

    
      	(a)  	
              Fifty
                percent of the Rehab Bingo Net Proceeds in respect of each calendar
                month
                for each of the first five years from the Commencement Date (being
                the
                period commencing on the Commencement Date and finishing on 29 November
                2010);

            

    

     

    
      	(b)  	
              Forty
                five percent of the Rehab Bingo Net Proceeds in respect of each calendar
                month for each of years six to ten from the Commencement Date (being
                the
                period commencing on 30 November 2010 and finishing on 29 November
                2015),

            

    

     

    and
      save
      as otherwise provided herein the Rehab Bingo Net Proceeds less the Rehab Bingo
      NMLS Retail Commission shall be for the benefit of Friends of Rehab. For the
      avoidance of doubt, the parties acknowledge and agree that there will be no
      Rehab Bingo NMLS Retail Commission payable to NMLS in respect of a calendar
      month if the Rehab Bingo Net Proceeds for that calendar month are zero or a
      negative amount.

     

    
      	7.2.2  	
              Friends
                of Rehab and Rehab acknowledge and agree that, subject to the provision
                by
                NMLS to Friends of Rehab and Rehab of satisfactory receipts with
                respect
                thereto and to the extent that NMLS has not, by whatever means, been
                reimbursed therefor, any Rehab Bingo Marketing Costs properly incurred
                by
                NMLS prior to the Commencement Date in respect of the Rehab Bingo
                Website
                (the “Historic
                Bingo Marketing Costs”)
                shall (in addition to the Rehab Bingo Marketing Costs for that calendar
                month) be payable to NMLS from the Rehab Bingo Gross Net Proceeds
                for the
                first calendar month of this Agreement. In the event that the Rehab
                Bingo
                Gross Net Proceeds for the first calendar month of this Agreement
                are less
                than the sum of the Historic Bingo Marketing Costs and the Rehab
                Bingo
                Marketing Costs for that month, the Rehab Bingo Gross Net Proceeds
                for
                that month shall be applied towards discharge of the Historic Bingo
                Marketing Costs and the Rehab Bingo Marketing Costs for that month
                and the
                amount of the shortfall (being the amount of such costs which remains
                outstanding after such application of the Rehab Bingo Gross Net Proceeds
                for the first calendar month of this Agreement) shall be rolled over
                and
                aggregated with the Rehab Bingo Marketing Costs for the following
                calendar
                month for payment out of the Rehab Bingo Gross Net Proceeds for that
                next
                calendar month (such aggregate amount being the "Total
                Bingo Marketing Costs")
                . If the Rehab Bingo Gross Net Proceeds for the next calendar month
                are
                less than the amount of the Total Bingo Marketing Costs, the amount
                of the
                shortfall shall again be rolled over for payment out of the following
                months Rehab Bingo Gross Net Proceeds. This process of rolling over
                any
                shortfall in or arrears of the Rehab Bingo Marketing Costs and Historic
                Bingo Marketing Costs from month to month shall continue throughout
                the
                term of this Agreement until all such costs are discharged in full.
                For
                the avoidance of doubt, all Rehab Bingo Marketing Costs properly
                incurred
                by NMLS during the term of this Agreement in respect of the Rehab
                Bingo
                Website shall be payable by Rehab to NMLS from the Rehab Bingo Gross
                Net
                Proceeds for the calendar month in which the Rehab Bingo Marketing
                Costs
                were incurred or, where the Rehab Bingo Gross Net Proceeds for that
                calendar month are less than the Rehab Bingo Marketing Costs for
                that
                calendar month, from the Rehab Bingo Gross Net Proceeds from each
                of the
                subsequent calendar months until such costs are discharged in full
                to
                NMLS. The Parties acknowledge and agree that Rehab shall not be obliged
                to
                make any payments to NMLS under this Clause 7.2.2 otherwise than
                from the
                Rehab Bingo Gross Net Proceeds (if any) for any calendar
                month.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              7.3  

            	
              In
                accordance with Clause 7.4 and subject to Clause 7.2, Rehab shall
                pay the
                Rehab Bingo NMLS Retail Commission to NMLS in respect of each calendar
                month of the term of this
                Agreement.

            

    

     

    
      	7.4  	
              Within
                10 Business Days of the expiration of each calendar month, NMLS shall
                send
                a financial statement (in a form to be agreed by the Parties) to
                Friends
                of Rehab and Rehab showing all details of the Rehab Bingo Gross Proceeds,
                the Rehab Bingo Prize Payout, the Rehab Bingo Cash Management Costs,
                the
                Rehab Bingo Marketing Costs, the Rehab Bingo Gross Net Proceeds,
                the Rehab
                Bingo Net Proceeds and the Rehab Bingo NMLS Retail Commission for
                the
                preceding calendar month and such other details as the parties may
                agree
                from time to time (the “Agreed
                Bingo Financial Information”).
                If satisfied with the financial statement in respect of the Agreed
                Bingo
                Financial Information, Friends of Rehab and Rehab will confirm their
                respective agreement and acceptance within 10 Business Days of receipt
                thereof from NMLS (the “Bingo Receipt
                Date”)
                and subject to the aforesaid acceptance Rehab shall pay the Rehab
                Bingo
                NMLS Retail Commission
                as calculated in the said agreed financial statement for the preceding
                calendar month to NMLS within 30 days of the Bingo Receipt Date.
                In the
                event of any dispute or difference of any kind between the parties
                in
                respect of the financial statement or any part thereof, the Agreed
                Bingo
                Financial Information or the amount payable by Rehab to NMLS in respect
                of
                the Rehab Bingo NMLS Retail Commission, the Parties shall resolve
                the said
                dispute in accordance with Clause 18 of the Internet Operating Agreement
                (as incorporated in this Agreement by virtue of Clause 13). If the
                Parties
                are unable to reach agreement in respect of any said dispute or difference
                within fifteen Business Days from the giving of the Dispute Notice
                in
                accordance with the said Clause 18 of the Internet Operating Agreement
                (as
                incorporated in this Agreement by virtue of Clause 13), the payment
                obligations of Rehab under this Clause 7.4 shall be suspended until
                such
                time as the parties reach agreement regarding the disputed matters
                or an
                Expert (as appointed in accordance with Clause 18 of the Internet
                Operating Agreement (as incorporated in this Agreement by virtue
                of Clause
                13)) has made his final decision in respect of the disputed
                matters.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	7.5  	
              NMLS
                shall maintain all proper books of account and records (in a form
                to be
                agreed by the Parties) relating directly or indirectly to the operation
                of
                the Rehab Bingo Website, the NMLS Bingo Games and such other matters
                as
                the Parties may from time to time agree. For the term of this Agreement
                and six years thereafter. NMLS shall allow Friends of Rehab and Rehab
                and/or their respective representatives unrestricted access to such
                documents and Friends of Rehab and Rehab shall be entitled to conduct
                audits of the same at any time during the aforesaid
                term.

            

    

     

    
      	7.6  	
              In
                accordance with Clause 4.3 and within 30 days of the expiration of
                every
                twelve month period from the Commencement Date, NMLS shall deliver
                to
                Rehab an audited financial statement for the previous applicable
                twelve
                month period of trading by NMLS which, without limitation, shall
                include
                certification of each of the previous applicable twelve monthly financial
                statements referred to in Clause
                7.4.

            

    

     

    
      	7.7  	
              The
                parties agree that, in accordance with Clause 5.2.2 of the Internet
                Operating Agreement, in the event that NMLS ceases to provide the
                services
                described in Clause 3.2 of the Internet Operating Agreement to Rehab
                and
                Friends of Rehab (by reason of the expiry, termination or otherwise
                of the
                Internet Operating Agreement), the parties shall meet no later than
                ten
                Business Days from any such cessation to agree a revised NMLS Service
                Technology Fee and the terms upon which such fee shall be payable
                by Rehab
                to NMLS in respect of the services provided by NMLS to Friends of
                Rehab
                and Rehab under Clause 4.2 of this Agreement. 

            

    

     

    
      	7.8  	
              All
                sales of NMLS Bingo Games on the Rehab Bingo Website shall be made
                on such
                terms and conditions and at such price as Friends of Rehab, Rehab
                and NMLS
                may mutually agree in advance from time to time and NMLS shall, in
                the
                course of dealing with players of NMLS Bingo Games, bring to their
                notice
                such terms and conditions.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	8.  	
              Intellectual
                Property

            

    

     

    
      	8.1  	
              Subject
                to the licence granted by Friends of Rehab and Rehab to NMLS in Clause
                2.1, nothing in this Agreement shall give NMLS any rights in respect
                of
                the Intellectual Property and the Bingo Intellectual Property of
                Friends
                of Rehab and/or Rehab or any trade names used by Friends of Rehab
                and/or
                Rehab in relation to the Rehab Bingo Website or of the goodwill associated
                therewith, and NMLS hereby acknowledges that it shall not acquire
                any
                rights in respect thereof and that all such rights and goodwill are,
                and
                shall remain, vested in Friends of Rehab and/or
                Rehab.

            

    

     

    
      	8.2  	
              Nothing
                in this Agreement shall give Friends of Rehab and/or Rehab any rights
                in
                respect of the intellectual property of NMLS (being the technical
                expertise (software and hardware) which NMLS has developed in making
                the
                NMLS Bingo Games available on the Rehab Bingo Website) or any technology
                used by NMLS in relation to the sale of NMLS Bingo Games on the Rehab
                Bingo Website and Friends of Rehab and Rehab acknowledge that they
                shall
                not acquire any rights in respect thereof and that all such rights
                and
                goodwill are, and shall remain, vested in
                NMLS.

            

    

     

    
      	9.  	
              Liability

            

    

     

    
      	9.1  	
              To
                the fullest extent permissible under Irish law, the total liability
                of
                Friends of Rehab (including, for the avoidance of doubt, the Executive
                Committee of Friends of Rehab, any member or members thereof and
                any
                member of members of Friends of Rehab) for any claim whether in contract,
                tort (including, without limitation, negligence) or otherwise, for
                any
                loss or damage howsoever caused, arising out of or in connection
                with this
                Agreement or otherwise to any party to this Agreement shall in no
                circumstances exceed the lesser of (i) the amount of the proceeds
                received
                by Friends of Rehab under this Agreement from the operation of the
                Rehab
                Bingo Website in the twelve month period prior to any claim by NMLS
                under
                this Agreement (being the sum remaining after the total amount of
                Rehab
                Bingo NMLS Retail Commission for the said twelve month period is
                deducted
                from the total amount of the Rehab Bingo Net Proceeds for the said
                twelve
                month period as calculated in accordance with Clause 7.2.1); and
                (ii)
                €10,000. For the avoidance of all doubt nothing in this clause shall
                operate to exclude or restrict any liability of Friends of Rehab
                which
                liability is of a nature which cannot be lawfully excluded or restricted
                under Irish law.

            

    

     

    
      	10.  	
              Commencement
                and Term

            

    

     

    
      	10.1  	
              This
                Agreement shall come into force on the Commencement Date and shall
                continue, unless terminated earlier pursuant to any provisions of
                this
                Agreement, for a period of 10 years from that date and shall apply
                to such
                NMLS Bingo Games which are to be used on the Rehab Bingo Site during
                that
                period. 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	10.2  	
              Following
                expiration of a 9 year period from the Commencement Date this Agreement
                may be terminated by a Party giving twelve months’ written notice of
                termination to the other Parties.

            

    

     

    
      	10.3  	
              Unless
                otherwise agreed in writing between the Parties and provided that
                the
                Rehab Bingo Net Proceeds received by Friends of Rehab under this
                Agreement
                (less any applicable Rehab Bingo NMLS Retail Commission) for each
                of the
                years five to ten of this Agreement (for the avoidance of doubt,
                year five
                shall commence on 30 November 2010 and finish on 29 November 2011
                and
                references to the following years by number shall be construed
                accordingly) is equal to or in excess of a sum of US$500,000, Friends
                of
                Rehab and Rehab
                shall, at the request of NMLS, extend the term of this Agreement
                for a
                further period of five years from the tenth anniversary of the
                Commencement Date.

            

    

     

    
      	10.4  	
              Unless
                otherwise agreed between the Parties and provided the Rehab Bingo
                Net
                Proceeds received by Friends of Rehab under this Agreement (less
                any
                applicable Rehab Bingo NMLS Retail Commission) for each of the years
                eleven to fifteen of this Agreement (for the avoidance of doubt,
                year
                eleven shall commence on 30 November 2015 and finish on 29 November
                2016
                and references to the following years by number shall be construed
                accordingly) is equal to or in excess of US$500,000 Friends of Rehab
                and Rehab
                shall, at the request of NMLS, extend the term of this Agreement
                for
                further period of five years from the fifteenth anniversary of the
                Commencement Date provided that a Party may terminate this Agreement
                during this period by giving twelve months’ written notice of termination
                to the other Parties.

            

    

     

    
      	11.  	
              Summary
                Termination

            

    

     

    
      	11.1  	
              Without
                prejudice to Clause 10.1, Friends of Rehab and/or Rehab shall have
                the
                right to terminate this Agreement by giving notice, having immediate
                effect, to NMLS in the event of the occurrence of any of the following
                events of default:

            

    

     

    
      	(a)  	
              NMLS
                establish, manage or operate the NMLS Website and/or the NMLS Bingo
                Games
                in any manner which in the opinion of Friends of Rehab and/or Rehab,
                prejudices the goodwill and/or reputation of any of the Rehab Bingo
                Brandnames, Brandnames, Friends of Rehab or any Group Company; 

            

    

     

    
      	(b)  	
              any
                third party with whom NMLS has entered into a contract in relation
                to this
                Agreement (including, without limitation, Alladdin) acts in a manner
                which, in the opinion of Friends of Rehab and/or Rehab prejudices
                the
                goodwill and/or reputation of any of the Rehab Bingo Brandnames,
                Brandnames, Friends of Rehab or any Group
                Company;

            

    

     

    
      	(c)  	
              the
                aggregate Rehab Bingo Net Proceeds (less the aggregate Rehab Bingo
                NMLS
                Retail Commission) Friends of Rehab is entitled to and receives pursuant
                to Clause 7.2 of this Agreement are less than $100,000 in any of
                years two
                to ten of this Agreement (for the avoidance of doubt, year two shall
                commence on 30 November 2006 and finish on 29 November 2007 and references
                to the following years by number shall be construed
                accordingly); 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	(d)  	
              NMLS
                commits any breach of Clause 4.4 and/or 4.5 of this Agreement; 

            

    

     

    
      	(e)  	
              NMLS
                commits what, in the opinion of Friends of Rehab and/or Rehab, constitutes
                a material breach of this Agreement or the Rehab Bingo Procedures
                Manuals; 

            

    

     

    
      	(f)  	
              the
                licensing of the Rehab Bingo Brandnames and Brandnames to NMLS and/or
                the
                sale of the NMLS Bingo Games on the Rehab Bingo Website is deemed
                to be
                prohibited under the Statutes or any law outside the Territory;
                or

            

    

     

    
      	(g)  	
              any
                contract or arrangement which NMLS has entered into with any third
                party
                relating to the performance obligations and/or liabilities of NMLS
                under
                this Agreement (including, without limitation, the Alladdin Contract)
                is
                terminated or expires and a competent and suitably qualified replacement
                for said third party is not procured by NMLS pursuant to Clause
                4.9.

            

    

     

    
      	12.  	
              Consequences
                of Termination

            

    

     

    
      	12.1  	
              Upon
                the termination of this Agreement from any cause
                whatsoever:

            

    

     

    
      
        	(i)  	
                
                  The
                    licence granted to NMLS under Clause 2.1 of this Agreement shall
                    terminate
                    with immediate effect;

                

              

      

       

    

    
      
        	(ii)  	
                
                  NMLS
                    shall immediately remove the Rehab Bingo Brandnames from the
                    Rehab Bingo
                    Website and the NMLS Website;

                

              

      

       

    

    
      	(iii)  	
              NMLS
                shall cease to seek or accept orders in respect of NMLS Bingo Games
                on the
                Rehab Bingo Website and shall cease to promote the NMLS Bingo Games
                on the
                NMLS Website;

            

    

     

    
      	(iv)  	
              NMLS
                shall refrain from incurring any liability on behalf of Friends of
                Rehab
                and/or Rehab or from in any way pledging or purporting to pledge
                Friends
                of Rehab and/or Rehab’s credit or from representing that it has the
                authority to incur liability or to pledge or purport to pledge Friends
                of
                Rehab and/or Rehab’s credit in the manner aforesaid;
                

            

    

     

    
      	(v)  	
              NMLS
                shall have no claim against Friends of Rehab and/or Rehab for compensation
                for loss of agency rights, loss of goodwill or any similar
                loss; 

            

    

     

    
      	(vi)  	
              Clause
                7 and 3.10 of the Internet Operating Agreement (as incorporated in
                this
                Agreement by virtue of Clause 13) shall continue in force in accordance
                with their terms; and

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	(vii)  	
              Subject
                as otherwise provided herein and to any rights or obligations which
                have
                accrued prior to termination, the parties shall have no further obligation
                to each other under this Agreement.

            

    

     

    
      	13.  	
              Incorporation
                of provisions of the Internet Operating
                Agreement

            

    

     

    
      	13.1  	
              The
                provisions of Clauses 1.3 to 1.5, 2.3, 3.4, 3.5, 3.10, 3.11, 4.2,
                4.3,
                6.2, 6.3, 7, 8, 11, 13.1, 13.3, 15 to 18, 19.1, 19.2, 19.4 to 19.8
                and 20
                of the Internet Operating Agreement shall apply mutatis
                mutandis
                to
                this Agreement as if the provisions thereof were set out in full
                in this
                Agreement
                and any references therein to:

            

    

     

    
      	(a)  	
              “this
                Agreement”
                shall be construed as referring to this
                Agreement;

            

    

     

    
      	(b)  	
              “Rehab
                Content Site”
                shall read “Rehab
                Bingo Website”;
                and

            

    

     

    
      	(c)  	
              “NMLS
                Lottery Games”
                shall read “NMLS
                Bingo Games”.

            

    

     

    
      	13.2  	
              For
                the avoidance of doubt, this Agreement shall constitute a separate
                agreement between Friends of Rehab, Rehab and NMLS in respect of
                the NMLS
                Bingo Games and the Rehab Bingo Website and shall be independent
                of the
                Internet Operating Agreement in all respects. Any termination or
                expiry of
                the Internet Operating Agreement shall not affect the continuance
                in force
                of this Agreement between the parties. The application of provisions
                of
                the Internet Operating Agreement mutatis
                mutandis
                to
                this Agreement by virtue of Clause 13.1 shall apply notwithstanding
                any
                termination or expiry of the Internet Operating Agreement. 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS
      whereof
      the parties hereto have executed these presents the day and year first herein
      written.

     

    

    SIGNED
      for and
      on behalf of 

    FRIENDS
      OF REHAB SOCIETY by

    in
      the
      presence of:

    _____________________

    Chairman

     

    _____________________

    Secretary

     

    ____________________

    Treasurer

    Witness: ____________________

    

    Address: ____________________

    

    Occupation: __________________

    

    

    

    PRESENT
      when the
COMMON
      SEAL

    of
      REHAB
      NET GAMES LIMITED

    was
      affixed hereto:

    _____________________

    Director

     

    _____________________

    Director/Secretary

    

    

    

    PRESENT
      when the
COMMON
      SEAL

    of
      LOTTERY
      NETWORK SERVICES LIMITED

    was
      affixed hereto:

    _____________________

    Director

     

    _____________________

    Director/SecretaryUnassociated Document

    Exhibit
      10-13

     

     

    November
      18, 2005

    Mr.
      Milton Dresner

    c/o
      New
      Media Lottery Services, Inc.

    370
      Neff
      Avenue

    Suite
      L

    Harrisonburg,
      Virginia 22801

    

    

    Dear
      Mr.
      Dresner:

    

    You
      are
      the holder of a promissory note made by New Media Lottery Services, Inc. (the
      “Company”) in the principal amount of $1,184,411.50 (the “Note”), which had
      accrued interest in the amount of $102,336.18 through October 31, 2005 for
      a
      total amount due of $1,286,747.60 (the “Debt”). 

    

    As
      you
      may be aware, the Company’s wholly owned subsidiary, New Media Lottery Services
      plc, a corporation organized pursuant to the laws of the Republic of Ireland
      (“plc”), is preparing to undertake an offering of its securities which will be
      admitted for trading on the AIM Market operated by the London Stock Exchange.
      The plc expects to raise approximately $10 million from the offering and sale
      of
      a number of shares equal to approximately 30% of the total issued capital of
      the
      plc (the “Offering”). In connection with and as a condition to the Offering, the
      Company has agreed to transfer all of its assets to a wholly owned subsidiary
      of
      plc, New Media Lottery Services International Ltd. , an Irish corporation
      (“NMLSI”). After the Offering, the Company expects to own approximately 70% of
      the authorized capital of plc. 

    

    We
      attach
      hereto a draft of the admissions document (referred to in the United States
      as a
      registration statement) which sets forth, among other things, the details of
      the
      Offering and the group’s corporate structure after completion. We are also
      attaching a copy of the Company’s last Annual Report on Form 10-KSB which
      provides information relating to the Company.

    

    The
      Company currently is completing certain corporate house-keeping matters to
      facilitate the Offering, including eliminating corporate debt such as that
      held
      by you. In consideration of the forgiveness of all Debt under the Note and
      any
      other obligations the Company may owe to you thereunder, the Company proposes
      to
      issue to you 5 million shares of its common stock, par value $.001 per share
      (the “Shares”). Under this conversion scenario, you would receive the shares at
      price of $.2573 per share. Your obligation to convert the Debt and the Company’s
      obligation to issue the Shares, is sub-ject to The London Stock Exchange plc
      having unconditionally agreed to the admission of the entire issued ordinary
      share capital of New Media Lottery Services plc to trading on AIM becoming
      effective in accordance with the AIM Rules. AIM is defined as "the AIM market
      operated by the London Stock Exchange plc.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Should
      you accept the Company’s offer to convert your debt, (i) the common stock
      issuable to you would be “restricted securities” as such term is defined under
      Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”) and
      would not be eligible for public resale unless registered under the Securities
      Act or unless an exemption from the registration requirement of the Securities
      Act was available (such as Rule 144 which provides for a one-year holding
      period); and (ii) the certificate evidencing the common stock would bear a
      legend evidencing restrictions set forth above. 

    

    If
      you
      are not already aware, the Company’s common stock has been admitted for trading
      on the Over the Counter Bulletin Board of the NASDAQ Stock Market under the
      symbol nwmd.ob. As yet, the stock has not traded and the Company cannot assure
      you that an active market ever will develop for the stock. 

    

    If
      you
      wish to accept the Company’s offer to convert your debt as evidenced by the
      Note, we ask that you please sign this letter in the space provided therefor
      below. As noted above the signature line, (i) you confirm that you are an
“accredited investor” as defined in Rule 502 of Regulation D promulgated under
      the Securities Act (the definition of which is attached hereto as Appendix
      A);
      and (ii) once you accept the Company’s offer, (A) your agreement to convert the
      Debt is irrevocable and such agreement will be relied upon by the plc’s agent in
      England overseeing the placement of the plc’s shares and (B) you will forever
      release the Company from any obligation it may have to you under the
      Note.

    

    If
      you
      wish to discuss this offer, please call Randolph Brownell at (540) 437-1688.
      If
      you wish to accept this offer, please return an executed copy of this letter
      to
      the Company.

    

    

    Very
      truly yours,

    NEW
      MEDIA
      LOTTERY SERVICES, INC.

    

    By: /s/
      John T. Carson    

    

    

    

    CONFIRMATION
      OF ACCEPTANCE

    

    The
      undersigned hereby confirms to New Media Lottery Services, Inc. as
      follows:

    

    1.
      I
      accept the Company’s offer to issue 5 million shares of the common stock of New
      Media Lottery Services, Inc. in full satisfaction of all sums and other
      obligations due or owing to me under the Note (as defined above). 

    

    2.
      I
      acknowledge that by accepting this offer and returning an executed copy of
      this
      letter to the Company, my acceptance of the offer is irrevocable.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3.
      I am
      an “accredited investor” as such term is defined in Rule 502 of Regulation D
      promulgated under the Securities Act of 1933, as amended.

    

    4.
      I
      acknowledge and understand that (i) the shares of common stock to be issued
      to
      me are “restricted securities” as such term is defined under Rule 144 of the
      Securities Act of 1933, as amended, and are not be eligible for public resale
      unless registered under the Securities Act or unless an exemption from the
      registration requirement of the Securities Act was available; and (ii) the
      certificate evidencing the shares of common stock will bear a legend evidencing
      restrictions set forth above. 

    

    5.
      My
      obligation to convert the Debt and the Company’s obligation to issue the Shares
      (as defined above), is sub-ject to The London Stock Exchange plc having
      unconditionally agreed to the admission of the entire issued ordinary share
      capital of New Media Lottery Services plc to trading on AIM becoming effective
      in accordance with the AIM Rules. AIM is defined as "the AIM market operated
      by
      the London Stock Exchange plc.

    

    6.
      I
      hereby release the Company and each of the present and former officers,
      directors, shareholders, employees, agents and attorneys thereof from any and
      all actions, causes of action, damages, judgments, liabilities, obligations
      and
      claims whatsoever (including, without limitation, any that are contingent),
      in
      law or in equity, WHETHER KNOWN OR UNKNOWN, arising out of or in connection
      with
      the Note and the Debt (as defined above).

    

    I
      have
      hereunto set my hand this 15th day of December, 2005.

    

    

    /s/
      Milton Dresner    

    Milton
      Dresner

    

    
      
        
        

      

      
        3

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