Document:

Exhibit 10.1

Marten Transport,
Ltd.

Named Executive Officers’ Compensation Summary

On May 1, 2007, the company’s Compensation Committee approved an
approximately 8% increase to the base salary for the Company’s named executive
officers, retroactive to April 1, 2007. 
Effective April 1, 2007, the named executive officers are scheduled to
receive the following annual base salaries in their current positions:

	
  Name and Current Position

  	
   

  	
   

  	
   

  	
  Base Salary

  	
   

  
	
  Randolph L. Marten

  (Chairman, President
  and Chief Executive Officer)

  	
   

  	
  $

  	
  475,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Robert G. Smith

  (Chief Operating
  Officer)

  	
   

  	
  $

  	
  239,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Timothy P. Nash

  (Executive Vice
  President of Sales and Marketing)

  	
   

  	
  $

  	
  239,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Donald J. Hinson

  (Vice President of
  Operations)

  	
   

  	
  $

  	
  189,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  James J. Hinnendael

  (Chief Financial Officer)

  	
   

  	
  $

  	
  189,000

  	
   

  

 

 6Exhibit
10.1

 

 

 

STOCK
PURCHASE AGREEMENT

by
and among

FRANÇOIS-CHARLES
OBERTHUR FIDUCIAIRE S.A.

SCIENTIFIC
GAMES CORPORATION

and

SCIENTIFIC
GAMES HOLDINGS (CANADA) INC.

Dated
as of May 1, 2007

 

 

Table of Contents

	
  

  	
   

  	
  Page

  	
   

  
	
  Article 1. DEFINITIONS

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 2. PURCHASE AND
  SALE OF SHARES

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1.
  Purchase and Sale of Shares

  	
   

  	
  9

  	
   

  
	
  Section 2.2.
  Closing Date Transactions

  	
   

  	
  9

  	
   

  
	
  Section 2.3.
  Letter of Credit

  	
   

  	
  10

  	
   

  
	
  Section 2.4.
  Withholding Tax

  	
   

  	
  10

  	
   

  
	
  Section 2.5.
  Conversion to or from U.S. Dollars

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 3. PURCHASE
  PRICE ADJUSTMENT

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1.
  Calculation of Initial Purchase Price Adjustment

  	
   

  	
  11

  	
   

  
	
  Section 3.2.
  Post-Closing Adjustment

  	
   

  	
  12

  	
   

  
	
  Section 3.3.
  Estimate of Net Working Capital

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 4. CLOSING

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 5.
  REPRESENTATIONS AND WARRANTIES OF THE SELLER

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1.
  Organization

  	
   

  	
  13

  	
   

  
	
  Section 5.2.
  Qualification to Do Business

  	
   

  	
  13

  	
   

  
	
  Section 5.3.
  Authority

  	
   

  	
  13

  	
   

  
	
  Section 5.4. No
  Conflict or Violation

  	
   

  	
  14

  	
   

  
	
  Section 5.5.
  Consents and Approvals

  	
   

  	
  14

  	
   

  
	
  Section 5.6.
  Capitalization of FCOI

  	
   

  	
  15

  	
   

  
	
  Section 5.7.
  Subsidiaries

  	
   

  	
  15

  	
   

  
	
  Section 5.8.
  Financial Statements

  	
   

  	
  15

  	
   

  
	
  Section 5.9.
  Absence of Certain Changes or Events

  	
   

  	
  16

  	
   

  
	
  Section 5.10.
  Tax Matters

  	
   

  	
  17

  	
   

  
	
  Section 5.11.
  Absence of Undisclosed Liabilities

  	
   

  	
  19

  	
   

  
	
  Section 5.12.
  Real Property

  	
   

  	
  19

  	
   

  
	
  Section 5.13.
  Intellectual Property

  	
   

  	
  21

  	
   

  
	
  Section 5.14.
  Licenses and Permits

  	
   

  	
  24

  	
   

  
	
  Section 5.15.
  Compliance with Law

  	
   

  	
  24

  	
   

  
	
  Section 5.16.
  Litigation

  	
   

  	
  24

  	
   

  
	
  Section 5.17.
  Contracts

  	
   

  	
  24

  	
   

  
	
  Section 5.18.
  Employee Plans

  	
   

  	
  25

  	
   

  
	
  Section 5.19.
  Transactions with Seller and Affiliates

  	
   

  	
  28

  	
   

  
	
  Section 5.20.
  Environmental Matters

  	
   

  	
  29

  	
   

  
	
  Section 5.21. No
  Brokers

  	
   

  	
  29

  	
   

  
	
  Section 5.22.
  Québec Regulation 45-106

  	
   

  	
  29

  	
   

  
	
  Section 5.23.
  Suppliers and Customers

  	
   

  	
  30

  	
   

  
	
  Section 5.24. Insurance

  	
   

  	
  30

  	
   

  
	
  Section 5.25. Prohibited Payments and Actions

  	
   

  	
  30

  	
   

  
	
  Section 5.26. No
  Other Warranties or Representations

  	
   

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 6.
  REPRESENTATIONS AND WARRANTIES OF THE BUYER

  	
   

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1.
  Corporate Organization

  	
   

  	
  31

  	
   

  
	
  Section 6.2.
  Qualification to Do Business

  	
   

  	
  31

  	
   

  
	
  Section 6.3.
  Authority

  	
   

  	
  32

  	
   

  
	
  Section 6.4. No
  Conflict or Violation

  	
   

  	
  32

  	
   

  
	
  Section 6.5.
  Consents and Approvals

  	
   

  	
  32

  	
   

  
	
  Section 6.6.
  Financing

  	
   

  	
  32

  	
   

  
	
  Section 6.7. No
  Brokers

  	
   

  	
  32

  	
   

  
	
  Section 6.8.
  Investigation by the Buyer

  	
   

  	
  32

  	
   

  
	
  Section 6.9.
  Québec Regulation 45-106

  	
   

  	
  33

  	
   

  

 

 i
 

 

	
  Article 7. COVENANTS OF THE
  SELLER

  	
   

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1.
  Resignation of Directors

  	
   

  	
  33

  	
   

  
	
  Section 7.2.
  Covenants Not To Compete and Non-Solicitation Covenants

  	
   

  	
  33

  	
   

  
	
  Section 7.3.
  FCPA Disclosure Statement

  	
   

  	
  34

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 8. COVENANTS OF
  THE BUYER

  	
   

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.
  Employees and Employee Benefits

  	
   

  	
  35

  	
   

  
	
  Section 8.2.
  Access After the Closing

  	
   

  	
  35

  	
   

  
	
  Section 8.3. Use
  of Intellectual Property

  	
   

  	
  36

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 9. TAXES

  	
   

  	
  37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1. Tax
  Indemnification by Seller

  	
   

  	
  37

  	
   

  
	
  Section 9.2. Tax
  Indemnification by Buyer

  	
   

  	
  37

  	
   

  
	
  Section 9.3.
  Allocation of Certain Taxes

  	
   

  	
  38

  	
   

  
	
  Section 9.4.
  Preparation and Filing of Tax Returns

  	
   

  	
  38

  	
   

  
	
  Section 9.5.
  Transfer Taxes

  	
   

  	
  39

  	
   

  
	
  Section 9.6.
  Refunds

  	
   

  	
  39

  	
   

  
	
  Section 9.7.
  Cooperation

  	
   

  	
  39

  	
   

  
	
  Section 9.8. Tax
  Audits

  	
   

  	
  40

  	
   

  
	
  Section 9.9.
  Exclusivity; Conflicts

  	
   

  	
  41

  	
   

  
	
  Section 9.10.
  Treatment of Indemnification Payments

  	
   

  	
  41

  	
   

  
	
  Section 9.11. No
  Amendment

  	
   

  	
  41

  	
   

  
	
  Section 9.12.
  Certain Limitations

  	
   

  	
  41

  	
   

  
	
  Section 9.13.
  Limitation on Actions

  	
   

  	
  41

  	
   

  
	
  Section 9.14.
  Tax Benefits

  	
   

  	
  41

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 10.
  INDEMNIFICATION

  	
   

  	
  42

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1.
  Survival

  	
   

  	
  42

  	
   

  
	
  Section 10.2.
  Indemnification by the Seller

  	
   

  	
  42

  	
   

  
	
  Section 10.3.
  Indemnification by the Buyer

  	
   

  	
  44

  	
   

  
	
  Section 10.4.
  Procedures for Indemnification

  	
   

  	
  44

  	
   

  
	
  Section 10.5.
  Exclusive Remedy

  	
   

  	
  45

  	
   

  
	
  Section 10.6.
  Mitigation

  	
   

  	
  45

  	
   

  
	
  Section 10.7.
  Limitation on Losses

  	
   

  	
  45

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 11. CONDITIONS
  PRECEDENT TO PERFORMANCE BY THE SELLER

  	
   

  	
  46

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.1.
  Representations and Warranties of the Buyer

  	
   

  	
  46

  	
   

  
	
  Section 11.2.
  Performance of the Obligations of the Buyer

  	
   

  	
  46

  	
   

  
	
  Section 11.3. No
  Violation of Orders

  	
   

  	
  46

  	
   

  
	
  Section 11.4.
  Letter of Credit

  	
   

  	
  46

  	
   

  
	
  Section 11.5.
  OEM Agreement

  	
   

  	
  46

  	
   

  
	
  Section 11.6.
  Real Estate Lease

  	
   

  	
  46

  	
   

  
	
  Section 11.7.
  Tax Escrow Agreement

  	
   

  	
  46

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 12. CONDITIONS
  PRECEDENT TO PERFORMANCE BY THE BUYER

  	
   

  	
  47

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 12.1.
  Representations and Warranties of the Seller

  	
   

  	
  47

  	
   

  
	
  Section 12.2.
  Performance of the Obligations of the Seller

  	
   

  	
  47

  	
   

  
	
  Section 12.3. No
  Violation of Orders

  	
   

  	
  47

  	
   

  
	
  Section 12.4.
  Letter of Credit

  	
   

  	
  47

  	
   

  
	
  Section 12.5.
  OEM Agreement

  	
   

  	
  47

  	
   

  
	
  Section 12.6.
  Real Estate Lease

  	
   

  	
  47

  	
   

  
	
  Section 12.7.
  Tax Escrow Agreement

  	
   

  	
  47

  	
   

  
	
  Section 12.8.
  Other Closing Documents

  	
   

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 13. TERMINATION

  	
   

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 13.1.
  Conditions of Termination

  	
   

  	
  48

  	
   

  

 

 ii
 

 

	
  Section 13.2. Effect of
  Termination

  	
   

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 14.
  MISCELLANEOUS

  	
   

  	
  49

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 14.1.
  Successors and Assigns

  	
   

  	
  49

  	
   

  
	
  Section 14.2.
  Governing Law, Jurisdiction

  	
   

  	
  49

  	
   

  
	
  Section 14.3.
  Expenses

  	
   

  	
  49

  	
   

  
	
  Section 14.4.
  Severability

  	
   

  	
  49

  	
   

  
	
  Section 14.5.
  Notices

  	
   

  	
  49

  	
   

  
	
  Section 14.6.
  WAIVER OF JURY TRIAL

  	
   

  	
  51

  	
   

  
	
  Section 14.7.
  Amendments; Waivers

  	
   

  	
  51

  	
   

  
	
  Section 14.8.
  Public Announcements

  	
   

  	
  51

  	
   

  
	
  Section 14.9.
  Entire Agreement

  	
   

  	
  51

  	
   

  
	
  Section 14.10.
  Parties in Interest

  	
   

  	
  52

  	
   

  
	
  Section 14.11.
  Scheduled Disclosures

  	
   

  	
  52

  	
   

  
	
  Section 14.12.
  Enforcement of Certain Sections of the Agreement

  	
   

  	
  52

  	
   

  
	
  Section 14.13.
  Section and Paragraph Headings

  	
   

  	
  52

  	
   

  
	
  Section 14.14.
  Counterparts and Facsimile

  	
   

  	
  52

  	
   

  
	
  Section 14.15.
  Language

  	
   

  	
  52

  	
   

  
	
  Section 14.16.
  Reasonable Assurances

  	
   

  	
  52

  	
   

  

 

 iii

INDEX TO SCHEDULES

	
  1.1

  	
   

  	
  Debt Repayment Amount

  
	
  1.2

  	
   

  	
  Permitted Liens

  
	
  1.3

  	
   

  	
  Seller Persons with Knowledge

  
	
  2.5

  	
   

  	
  Conversion to or from US Dollars

  
	
  3.3

  	
   

  	
  Net Working Capital

  
	
  5.1

  	
   

  	
  Organizational Chart

  
	
  5.4

  	
   

  	
  Conflicts or Violations

  
	
  5.5

  	
   

  	
  Consents

  
	
  5.6

  	
   

  	
  Capitalization of FCOI

  
	
  5.7

  	
   

  	
  Subsidiaries and Equity Investments

  
	
  5.8

  	
   

  	
  Financial Statements

  
	
  5.9

  	
   

  	
  Certain Changes or Events

  
	
  5.10

  	
   

  	
  Tax Matters

  
	
  5.11

  	
   

  	
  Undisclosed Liabilities

  
	
  5.12(a)

  	
   

  	
  Owned Real Property

  
	
  5.12(b)

  	
   

  	
  Leased Real Property

  
	
  5.12(c)

  	
   

  	
  Third Party Leases

  
	
  5.12(f)

  	
   

  	
  Options

  
	
  5.12(g)

  	
   

  	
  Certificate of Occupancy/Permits

  
	
  5.12(k)

  	
   

  	
  Consent to Subject Real Property Transfer

  
	
  5.13(a)

  	
   

  	
  Intellectual Property Ownership

  
	
  5.13(e)

  	
   

  	
  Third Party Claims

  
	
  5.13(h)

  	
   

  	
  Software

  
	
  5.13(i)

  	
   

  	
  Intellectual Property Licenses and Agreements

  
	
  5.14

  	
   

  	
  Licenses and Permits

  
	
  5.15

  	
   

  	
  Compliance with Law

  
	
  5.16

  	
   

  	
  Litigation

  
	
  5.17

  	
   

  	
  Contracts

  
	
  5.18(a)

  	
   

  	
  Company Plans

  
	
  5.18(g)

  	
   

  	
  Severance Plans

  
	
  5.18(h)

  	
   

  	
  Canadian Plans Unfunded Actuarial Liability

  
	
  5.18(k)

  	
   

  	
  Employees

  
	
  5.18(l)

  	
   

  	
  Collective Bargaining Agreements

  
	
  5.19

  	
   

  	
  Transactions with Affiliates

  
	
  5.20(a)

  	
   

  	
  Environmental Matters

  
	
  5.23(a)

  	
   

  	
  Suppliers

  
	
  5.23(b)

  	
   

  	
  Customers

  
	
  5.24

  	
   

  	
  Insurance

  
	
  7.1

  	
   

  	
  Resignation of Directors

  
	
  8.1(a)

  	
   

  	
  Severance Benefit Practices

  
	
  10.2

  	
   

  	
  Debt Repayment Amounts

  
	
  10.3

  	
   

  	
  Seller Guarantee Obligations

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Real Estate Lease

  
	
  Exhibit B

  	
   

  	
  Form of Tax Escrow Agreement

  

 

 iv
 

 

	
  Exhibit C

  	
   

  	
  FCPA Disclosure Statement

  
	
  Exhibit D

  	
   

  	
  OEM Agreement

  
	
  Exhibit E

  	
   

  	
  Deed

  

 

 v

STOCK
PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT, dated as of May 1, 2007
(this “Agreement”), by and among François-Charles Oberthur Fiduciaire,
S.A., a French société anonyme (the “Seller”),
Scientific Games Corporation, a Delaware corporation (the “Parent”) and
Scientific Games Holdings (Canada) Inc., a Canadian corporation (the “Acquisition
Subsidiary”) and a wholly-owned subsidiary of the Parent.

W I T N E S S E T H:

WHEREAS, the Seller owns all of the issued and
outstanding shares of common stock (the “Common  Stock”) and all
of the issued and outstanding shares of preferred stock (the “Preferred  Stock”,
and together with the Common Stock, the “Shares”) of F.C.O.I. Canada
Inc., a corporation organized under the laws of the Province of Québec (“FCOI”);
and

WHEREAS, the Buyer desires to purchase the Shares from
the Seller, and the Seller desires to sell the Shares to the Buyer, in each
case upon the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing
premises and the respective covenants and agreements hereinafter contained and
for other good and valuable consideration, the receipt and sufficiency of which
the parties hereby acknowledge, the parties hereby agree as follows:

Article 1.

DEFINITIONS

As used in this Agreement, the following terms shall
have the following meanings:

“Acquisition Subsidiary”
— See the Preamble hereto;

“Action” — See
Section 5.16;

“Affiliates”
shall mean, with respect to a Person, any Person directly or indirectly, controlling,
controlled by or under common control with the Person specified;

“Agreement”
— See the Preamble hereto;

“AUD” shall
mean Australian Dollars;

“Business” means the
manufacture, sale or distribution of Instant Tickets or commercial games
whether physically, electronically or by any other method, and all related
services and technologies, in each case as presently carried on by the
Companies.

“Business Day”
shall mean a day, other than a Saturday, Sunday or other day on which banks in
the State of New York or in Paris, France are required or authorized to close;

 1
 

 

“Buyer” — means
Parent and Acquisition Subsidiary, jointly and severally, unless this Agreement
explicitly provides otherwise;

“Buyer Indemnitees”
— See Section 10.2(a);

“CAD” shall
mean Canadian Dollars;

“CAD GAAP”
shall mean Canadian generally accepted accounting principles;

“Canadian Financial
Statements” — See Section 5.8;

“Canadian Laws”
means applicable laws (including common law or civil law), statutes, by-laws,
rules, regulations, orders, ordinances, protocols, codes, guidelines, treaties,
policies, notices, directions, decrees, judgments, awards or requirements, in
each case of any Governmental Entity of Canada;

“Canadian Plans”
shall mean any Company Plans applicable to employees or former employees,
directors or officers, individuals working on contract with the Companies or
other individuals providing services to any of them of a kind normally provided
by employees (or any spouses, dependants, survivors or beneficiaries of any
such persons) of the Companies, in each case who are employed or providing
services primarily in Canada, excluding Canadian Statutory Plans;

“Canadian
Statutory Plans” means statutory
benefit plans which the Companies are required to participate in or comply
with, including the Canada and Québec Pension Plans and plans administered
pursuant to applicable health tax, workplace safety insurance and employment
insurance legislation, excluding any Canadian Plans;

“Canadian
Subsidiary” shall mean Oberthur Jeux et Technologies
Inc./Oberthur Gaming Technologies Inc., a corporation organized under the laws
of the Province of Québec;

“Closing” — See
Article 4;

“Closing Balance Sheet”
— See Section 3.1;

“Closing Balance Sheet
Schedule” — See Section 3.1;

“Closing Date”
— See Article 4;

“Code” shall
mean the Internal Revenue Code of 1986, as amended;

“Common Stock”
— See the recitals hereto;

“Companies”
— shall mean FCOI and each of the entities listed on Schedule 5.7, and “Company”
shall mean any one of them;

“Company Plans”
shall mean any plans, arrangements, agreements, programs, policies, or
practices, whether funded or unfunded, insured or uninsured, registered or
unregistered to which the Companies are a party or bound or in which any
employees of the 

 2
 

 

Companies participate or under which the Companies
have, or will have, any material liability or contingent liability, or pursuant
to which payments are made, or benefits are provided to, or an entitlement to
payments or benefits may arise with respect to any employees or former
employees, directors or officers, individuals working on a contract basis with
the Companies or other individuals providing services to any of them of a kind
normally provided by employees (or any spouses, dependants, survivors or
beneficiaries of any such persons) of the Companies;

“Competing
Business” means any business (i) that manufactures, sells or
distributes Instant Tickets or (ii) that competes with the Business, in each
case, anywhere in the world.

“Consents” —
See Section 5.5;

“Consolidated Financial
Statements” — See Section 5.8;

“Contract” —
See Section 5.17(c);

“Debt Repayment Amount”
shall mean (i) the amount of principal, interest and fees outstanding on the
Closing Date under the agreements referenced on Schedule 1.1(a), (ii)
the amount of principal, interest and fees outstanding as of a recent date
prior to the Closing Date under the agreements referenced on Schedule 1.1(b)
and (iii) all other indebtedness (including indebtedness listed as a current
liability) of any of the Companies in respect of borrowed money, evidenced by
debt securities, debentures, acceptances, notes or other similar obligations,
in respect of obligations under capital leases, in respect of reimbursement
obligations under letters of credit or in respect of the deferred purchase
price of property or services, except accounts payable and accrued expenses
arising in the ordinary course of business as presently conducted which are not
overdue or in default; provided that the accrual of long-service leave for any
employee who has been employed by the Australian Subsidiary for more than ten
years shall be considered to be indebtedness;

“Deed” shall
mean the certain Deed without Warranty dated April 30, 2007, and intended to be
recorded promptly thereafter, pursuant to which Oberthur Gaming Technologies
Corp. granted, sold and conveyed unto NewCo all of its interest in the Subject
Real Property (as more particularly set forth in such deed), a copy of which is
attached hereto as Exhibit E.

“Due Date”
shall mean the due date with respect to an applicable Tax Return (taking into
account valid extensions);

“Environmental Claim”
shall mean any litigation, claim, proceeding, settlement, decree, directive,
agreement, judgment, lien, action, demand, order, or notice by or on behalf of,
any Governmental Entity or Person alleging liability, penalty or sanction
arising out of, based on or resulting from the violation or alleged violation
of any Environmental Law or permit;

“Environmental Laws”
shall mean all federal, state, foreign and local laws and regulations or other
requirements of law or common law in effect as of the Closing Date and
applicable to the Seller relating to Hazardous Materials or the protection or
pollution of the environment, natural resources or human health;

 3
 

 

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended;

“ERISA Affiliate”
shall mean any entity which, together with the Companies, is treated as a
single employer under Section 4001(b)(1) of ERISA or Section 414(b), (c), (m)
or (o) of the Code;

“Excluded Taxes”
— See Section 9.1;

“FCOI” — See
the recitals hereto;

“FCOI Balance Sheet”
— See Section 5.8;

“Federal Withheld Amount”—
See Section 2.4(a);

“Final Purchase Price”
— See Section 2.1;

“Financial Statements”
— See Section 5.8;

“Governmental
Entity” shall mean any federal, state, local, provincial,
municipal or any foreign governmental, regulatory or other public body, agency,
bureau, commission or authority (including self-regulatory organizations) or
any court, tribunal or judicial or arbitral body, domestic or foreign;

“Hazardous Substance”
shall mean any substance, gas, petroleum product, chemical, microbial matter,
material or waste regulated under any Environmental Law.

“Indemnitee”
— See Section 10.4(a);

“Indemnitor”
— See Section 10.4(a);

“Independent Accounting
Firm” — See Section 3.1;

“Instant Tickets”
means instant lottery tickets, whether physical, electronic or expressed
through any other medium, that allow a player to remove a cover layer (or any
semblance thereof), whether physically, electronically or by any other method,
to reveal whether the ticket is a prize winner. 
For the avoidance of doubt, “Instant Tickets” excludes “add-ons” to
Scratch Cards, such as promotional games produced, distributed or sold by the
Seller and its Affiliates.

“Intellectual Property”
shall mean all of the following existing worldwide:  (i) 
all classes or types of patents, design patents, utility patents, including,
without limitation, originals, divisions, continuations, continuations-in-part,
extensions, reexaminations, or reissues, patent applications and invention
disclosures for these classes or types of patent rights (whether or not
patentable and whether or not reduced to practice) in all countries of the world (collectively “patents”);
(ii)  copyrights in both published works and unpublished works,
registrations and applications for copyright and associated moral rights
(collectively “copyrights”); (iii) service marks, trademarks,
trade names, brands, product and service names,

 4
 

 

logos, other identifications used or intended for use
in commerce, and other indications of source, endorsement, or sponsorship,
whether in connection with products or services, together with all goodwill
related to any of the foregoing (collectively “trademarks”); (iv) computer programs, including any
and all software implementations of algorithms, models and methodologies,
whether in source code or object code, databases and compilations, including
any and all data and collections of data, whether machine readable or
otherwise, descriptions, flow-charts and other work product used to design,
plan, organize and develop any of the foregoing, screens, user interfaces,
report formats, firmware, development tools, templates, menus, buttons and
icons, and (all documentation, including user manuals and other training
documentation, related to any of the foregoing (collectively “software”); (v) all information, ideas, methods,
procedures, algorithms, research and development, technical data,
specifications, inventions, creations, improvements, and all tangible
embodiments of the foregoing (collectively “know-how”); (vi) any
information that generally facilitates the production, manufacturing,
marketing, or sale of products or services, increases revenues, or provides an
advantage over the competition, and is not generally known, whether or not
protectable by patent or copyright, arising
under the laws of the United States or any other state, country or jurisdiction
(collectively “trade secrets”); (vii) rights in mask works (as described in 17 U.S.C. §901 et
seq.); and (viii) domain names, uniform resource locators (URLs),
whether common law, statutory or otherwise, domestic and foreign, and all
registrations, registration applications, rights related to the foregoing;

“Investment
Canada Act” shall mean the Investment Canada Act, 1985, c.28,
(1st Supp.) as amended;

“Leased Real Property”
— See Section 5.12(b);

“Leases” — See
Section 5.12(b);

“Letter of Credit”
— See Section 2.3;

“LoC Amount”
— See Section 2.3(a);

“LoC Issuer”
— See Section 2.3;

“Licenses and Permits”
— See Section 5.14;

“Lien” shall
mean any mortgage, hypothecation, pledge, security interest, encumbrance, lien,
claim or charge;

“Losses”
shall mean any damages, liabilities, losses, expenses (including all reasonable
and necessary attorney’s fees) or costs; provided, however, in no
event shall Losses include any special, incidental, punitive, or consequential
damages of any kind and however caused, including but not limited to, business
interruption or loss of profits, business opportunities, or good will;

“Marks” — See
Section 8.3(a);

“Material Adverse Effect”
— See Section 5.2;

 5
 

 

“Maximum Seller
Indemnification Amount” — See Section 10.2(b)(iv);

“Net Working Capital”
shall mean (i) the amount of current assets of the Companies (on a consolidated
basis) as of the Closing Date (including, but not limited to cash and cash
equivalents), minus (ii) the amount of current liabilities (including (a) any
indebtedness outstanding at Closing under the Toronto-Dominion Revolving Debt
following payment of the Debt Repayment Amount), (b) any fees and expenses
incurred in connection with the repayment of any Debt Repayment Amount at
Closing which are not paid by the Seller prior to Closing and (c) Taxes, but
excluding the Debt Repayment Amount) of the Companies (on a consolidated basis)
as of the Closing Date, and consistent with, as applicable, the consolidated
audited balance sheets of the Companies as of December 31, 2006, provided,
however, that, notwithstanding anything to the contrary contained in
this Agreement, Net Working Capital shall not include (i) the $2,661,195 in net
cash proceeds received from NewCo arising out of the Real Property Transfer,
(ii) any inter-Company accounts receivable and accounts payable, (iii) any
liabilities incurred by any of the Companies on the Closing Date that are not
incurred in the ordinary course of business, (iv) any accounts payable
representing FCO fees, (v) any FCO fees provision and (vi) any liabilities for
Taxes imposed on or required to be paid by any of the Companies that are
related or attributable to the Real Property Transfer;

“NewCo”
shall mean San Antonio Properties Inc., a Delaware corporation;

“OCS” shall
mean Oberthur Card Systems SA, a company incorporated under the laws of France;

“Options” — See
Section 5.12(f);

“Organizational Documents”
— See Section 5.1;

“Owned Real Property”
— See Section 5.12(a);

“Parent” — See
the Preamble hereto;

“Payoff Letters”
shall mean all relevant payoff letters to allow for the payment in full at the
Closing of the Debt Repayment Amount;

“Permitted Liens”
shall mean (a) Liens relating to personal property leases (including
financing leases), (b) mechanics’, carriers’, workmen’s, repairmen’s or
similar Liens arising or incurred in the ordinary course of business which
involve obligations that are not due and payable or which are being contested
in good faith by appropriate proceedings diligently prosecuted, (c) Liens
for Taxes, assessments and other governmental and municipal charges which are
not due and payable, or which are being contested in good faith and for which
adequate reserves are maintained, (d) Liens which, in the aggregate, do not
impair in any material respects the use or operation of the assets or property
in question with respect to their current use and operation, and (e) the Liens
set forth on Schedule 1.2;

“Person”
shall mean any individual, corporation, company, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Entity or other entity;

 6
 

 

“Post-Closing Period”
shall mean any taxable period beginning after the Closing Date;

“Pre-Closing Period”
shall mean any taxable period ending on or before the Closing Date;

“Pre-Closing Period Tax
Return” shall mean any Tax Return relating to a Pre-Closing
Period;

“Preferred Stock”
— see the recitals hereto;

“Quebec Withheld Amount”
— See Section 2.4(a);

“Real Property Documents”  shall mean the Deed and the Subject Lease.

“Real Property Transfer”
shall mean the transfer or assignment from Oberthur Gaming Technologies Corp.
to NewCo of the Subject Real Property and any distributions of proceeds with
respect thereto.

“Registered Intellectual
Property” — See Section 5.13(a);

“Scratch Cards”
shall mean the business of production, distribution and sales of prepaid cards
and associated solutions offered to mobile telephone operators.

“Seller” — See
the Preamble hereto;

“Seller Indemnitees”
— See Section 10.3(a);

“Seller’s Knowledge”,
“Knowledge of the Seller”, and other
similar phrases shall mean the actual knowledge of the individuals listed in Schedule
1.3;

“Shares” — See
the recitals hereto;

“SPPA” shall
mean the Québec Supplemental Pensions Plans Act, R.S.Q. c. R-15.1, as amended;

“Straddle Period”
shall mean any taxable period beginning on or before and ending after the
Closing Date;

“Straddle Period Tax Return”
means any Tax Return relating to a Straddle Period;

“Subsidiaries”
shall mean, with respect to any Person, any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
stock or other equity interest entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereto is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof;

 7
 

 

“Subject Lease” shall mean
that lease between San Antonio Properties Inc. and Oberthur Gaming Technologies
Corp. dated as of the Closing Date (but entered into and delivered immediately
prior to the Closing), in the form attached hereto as Exhibit A;

“Subject Real Property”
shall mean the tract or tracts of land situated in the City of San Antonio,
Bexar County, Texas, and the improvements thereon more particularly described
as the “Premises” in the Subject Lease;

“Target Net Working Capital”
shall mean $16,500,000;

“Tax” and “Taxes” shall mean any and all
federal, state, provincial, municipal, local and foreign taxes, employment
taxes, levies, fees, imposts, duties and similar governmental charges of any
nature whatsoever (including any interest, fines, assessments, penalties or
additions to tax imposed in connection therewith), including taxes imposed on,
or measured by, income, franchise, profits, capital or gross receipts, and ad
valorem, value added, capital gains, sales, goods and services, use, real or
personal property, capital stock, license, branch, payroll, withholding,
employment, social security, unemployment, compensation, utility, severance,
production, excise, stamp, occupation, premium, windfall profits, transfer and
gains taxes, and customs duties;

“Tax Benefits”
— See Section 9.14;

“Tax Claim Notice”
— See Section 9.8;

“Tax Contest”
— See Section 9.8;

“Tax Escrow Agent”
shall mean Desjardins Trust Inc., a company incorporated under the Trust and
Loan Companies Act (Canada) or any successor or permitted assign of such Tax
Escrow Agent appointed in accordance with the terms of the Escrow Agreement;

“Tax Escrow Agreement”
shall mean that certain Tax Escrow Agreement which is being executed
contemporaneously with the Closing by and among the Buyer, the Seller and the
Tax Escrow Agent, a form of which is attached hereto as Exhibit B.

“Tax Reserves”
shall mean the aggregate liability for Taxes included in the calculation of Net
Working Capital (as increased or decreased, as the case may be, to reflect any
adjustments finally agreed upon pursuant to Article 3);

“Tax Return”
shall mean any Tax return, informational return, report, declaration, or other
document (whether in tangible or electronic form) required to be filed with any
taxing authority with respect to Taxes, including any form, schedule or
attachment thereto and any amendment or supplement thereof;

“Toronto-Dominion Revolving Debt”
shall mean the short-term revolving indebtedness under the agreements
referenced on Schedule 1.1(b);

“Transaction Documents”
shall mean this Agreement and the Letter of Credit;

 8
 

 

“Transfer Taxes”
— See Section 9.5;

“USD” shall
mean United States Dollars; and

“U.S. Plans”
shall mean any Company Plans applicable to employees or former employees,
directors or officers, individuals working on contract with the Companies or
other individuals providing services to any of them of a kind normally provided
by employees (or any spouses, dependants, survivors or beneficiaries of any
such persons) of the Companies, in each case who are employed or providing
services primarily in the United States.

Article 2.

PURCHASE AND SALE OF
SHARES

Section 2.1.            Purchase
and Sale of Shares.  Subject to the
terms and conditions set forth in this Agreement, at the Closing, the Seller
will sell and transfer the Shares to the Acquisition Subsidiary, and the Parent
will purchase the Shares (as agent for and on the Acquisition Subsidiary’s
behalf) from the Seller.  The aggregate
purchase price for the Shares being purchased hereunder (plus the Debt
Repayment Amount) shall consist of cash in the amount of USD $102,661,195
subject to adjustment at the Closing provided for in Section 2.2(b)(ii)
(the “Initial Purchase Price”). 
The Initial Purchase Price shall be subject to further adjustment
following the Closing in accordance with the provisions of Article 3
hereof, as adjusted pursuant to Article 3, the “Final Purchase Price”.

Section 2.2.            Closing Date Transactions.

(a)           On the Closing Date,
the Seller shall deliver to the Acquisition Subsidiary certificates
representing the Shares, duly executed for transfer, against payment by the
Parent to the Seller of the Initial Purchase Price (less the Debt Repayment
Amount) as provided for in this Article 2, subject to applicable
withholdings as set forth in Section 2.4.

(b)           On the Closing Date,
the Parent shall pay the following amounts:

(i)                                     The
aggregate amount of the Debt Repayment Amount shall be paid in cash by wire
transfer of immediately available funds to the accounts designated in the
Payoff Letters; and

(ii)                                  The
Initial Purchase Price shall be paid in cash by wire transfer of immediately
available funds to such account as Seller shall designate in writing to Buyer
not less than two Business Days prior to Closing.  The amount of the Initial Purchase Price
shall be reduced by the Debt Repayment Amount paid pursuant to Section
2.2(b)(i) and subject to any applicable withholding pursuant to Section
2.4.

(c)           Subject to Section
2.4(a), all of the payments to be made by the Parent pursuant to this Article
2 shall be made in USD or CAD, as appropriate.

 9

 

Section 2.3.            Letter
of Credit.  In order to secure the
payment obligations that Seller may have pursuant to Article 3 and the
indemnification obligations that Seller may have from time to time pursuant to Article
9 and Article 10, prior to Closing, Seller shall cause Société
Générale Group (the “LoC Issuer”) to issue an irrevocable stand-by
letter of credit (the “Letter of Credit”) on the following terms and
conditions:

(a)           The Letter of Credit
shall be issued in the amount of $10,000,000 (the “LoC Amount”);

(b)           The Letter of Credit
shall name Buyer as the beneficiary;

(c)           The Letter of Credit
shall have a term of eighteen months from the Closing Date;

(d)           Buyer shall only be
entitled to seek payment under the Letter of Credit if Seller shall fail to pay
any amounts owing pursuant to Article 3, Article 9 or Article
10 in accordance with the terms of this Agreement; and

(e)           The LoC issuer shall
only be authorized to pay out monies under the Letter of Credit upon receipt of
(i) a joint written instruction executed by both Seller and Buyer authorizing
it to do so or (ii) a final, binding and non-appealable order of a competent
Governmental Entity providing that Buyer is entitled to draw upon the Letter of
Credit pursuant to the terms of this Agreement and the Letter of Credit.

Section 2.4.            Withholding
Tax.  Concurrently with the execution
of this Agreement, Buyer will deliver to the Tax Escrow Agent the sum of CAD
34,947,624, representing the aggregate of (i) 25% of the amount by which the
Initial Purchase Price exceeds the Debt Repayment Amount (referred to as the “Federal Withheld Amount”) and (ii) 12% of amount
by which the Initial Purchase Price exceeds the Debt Repayment Amount (referred
to as the “Quebec Withheld Amount”), by wire transfer of
immediately available funds (such amount, together with interest earned
thereon, being hereinafter referred to as the “Escrow Funds”).  Such
funds shall be delivered in and expressed in Canadian dollars, where the
calculation shall be made as of the Closing Date in accordance with Section
2.5.  The Federal Withheld Amount and
the Quebec Withheld Amount shall be held in escrow and be distributed by the
Tax Escrow Agent in accordance with the provisions of the Tax Escrow Agreement.

Section 2.5.            Conversion
to or from U.S. Dollars.  Where a CAD
amount or AUD amount has to be converted or expressed in USD, or where its USD
equivalent has to be converted or expressed in CAD or AUD, the calculation
shall be made at the relevant date at the Bank of America  rate as displayed and identified as such
on the Reuters Screen BOFC Page for USD against CAD or AUD, as applicable (or
vice-versa), at or around 12:00 p.m. New York time on such date; provided,
however, that for purposes of determining on the Closing Date any Debt Repayment
Amount or the Tax Escrow Amount where its USD equivalent has to be converted or
expressed in CAD or AUD, the calculation shall be made at the mutually agreed
rates shown on Schedule 2.5.

Section 2.6.            Holdback.  In the event that at the Closing, the aggregate
amount of the Debt Repayment Amount shall not have been paid in accordance with
Section 2.2(b)(i), USD $14,500,000.00 of the Purchase Price (the “Holdback
Amount”) shall be retained by the Buyer. 

 

 10
 

 

Immediately following the
Closing, the Buyer shall (with the consent of Seller, not to be unreasonably
withheld or delayed) (i) use its reasonable best efforts to apply the Holdback
Amount to promptly payoff the remaining Debt Repayment Amount that had not been
paid at Closing  and any interest accrued
thereon from the Closing until the date that such amount is repaid (the “Leftover
Debt Amount”) and (ii) use commercially reasonable efforts to release the
Seller, Oberthur Gaming Technologies Corp., Oberthur Jeux Et Technologies
Inc./Oberthur Gaming Technologies Inc., and any applicable Affiliate of the
Seller from liability with respect to such Debt Repayment Amount.  In the event that the Holdback Amount is
greater than the Leftover Debt Amount, the Buyer shall promptly (within 48
hours) wire such excess to the Seller. 
In the event that the Holdback Amount is less than the Leftover Debt
Amount, the Seller shall promptly (within 48 hours of notice from the Buyer)
wire such deficiency to the Buyer.

Article 3.

PURCHASE PRICE ADJUSTMENT

The Initial Purchase Price shall be subject to
adjustment as follows:

Section 3.1.            Calculation
of Initial Purchase Price Adjustment. 
As soon as practicable, but in no event later than ninety (90) calendar
days after the Closing Date, the Buyer shall deliver to the Seller the consolidated
balance sheet of the Companies as of the close of business on the Closing Date
(the “Closing Balance Sheet”), prepared in accordance with CAD GAAP,
applied on a basis consistent with and following the accounting principles,
procedures, policies and methods employed in preparing the audited consolidated
balance sheet of the Company and its Subsidiaries as of December 31, 2006.  The Closing Balance Sheet shall be
accompanied by a schedule setting forth a calculation of the Net Working
Capital.  During the preparation of the
Closing Balance Sheet by the Buyer and the period of any dispute with respect
to the application of this Section 3.1, the Seller shall cooperate with
the Buyer to the extent reasonably requested by the Buyer to prepare the
Closing Balance Sheet or to investigate the basis for any dispute.  The Closing Balance Sheet shall be examined
by the Seller, and the Seller shall, not later than thirty (30) calendar days
after receipt of the Closing Balance Sheet, deliver a schedule with respect
thereto (the “Closing Balance Sheet Schedule”).  The Closing Balance Sheet Schedule shall list
those line items, if any, to which the Seller takes exception and the Seller’s
proposed adjustment.  If the Seller fails
to deliver to the Buyer the Closing Balance Sheet Schedule within thirty (30)
calendar days following receipt of the Closing Balance Sheet, the Seller shall
be deemed to have accepted the Closing Balance Sheet for the purposes of any
adjustment to the Initial Purchase Price under Section 3.2.  If the Buyer does not give the Seller notice
of any objection to the Closing Balance Sheet Schedule within thirty (30)
calendar days following receipt of the Closing Balance Sheet Schedule, the
Buyer shall be deemed to have accepted the Closing Balance Sheet as adjusted by
the Seller for the purposes of any adjustment to the Initial Purchase Price
under Section 3.2.  If the Buyer
gives the Seller notice of objections to the Closing Balance Sheet Schedule,
and if the Seller and the Buyer are unable, within fifteen (15) calendar days
after receipt by the Seller of the notice from the Buyer of objections, to
resolve the disputed exceptions, such disputed exceptions will be referred to
BDO Seidman, LLP or another firm of independent certified public accountants (“Independent
Accounting Firm”) mutually acceptable to the Seller and the Buyer.  The Independent Accounting Firm shall, within
sixty (60) calendar days following its selection, deliver to the Seller and the
Buyer a written report 

 

 11
 

 

determining such disputed
exceptions to those line items specifically identified by the Seller in the
Closing Balance Sheet Schedule (and only such disputed exceptions), and its
determinations will be conclusive and binding upon the parties hereto for the
purposes of any adjustment to the Initial Purchase Price under Section 3.2.  The fees and disbursements of the Independent
Accounting Firm acting under this Section 3.1 shall be apportioned
between the Buyer and the Seller based on the total dollar value of disputed
exceptions resolved in favor of each such party, with each such party bearing
such percentage of the fees and disbursements of the Independent Accounting
Firm as the aggregate disputed exceptions resolved against that party bears to
the total dollar value of all disputed exceptions considered by the Independent
Accounting Firm.

Section 3.2.            Post-Closing
Adjustment.

(a)           If the Net Working
Capital is less than the Target Net Working Capital, the Initial Purchase Price
shall be reduced on a dollar-for-dollar basis by the amount of such deficiency
and, within three (3) calendar days following the final determination, pursuant
to Section 3.1, of the Closing Balance Sheet, and based upon such final
determination, the Seller shall pay to the Parent the amount of such deficiency.

(b)           If the Net Working
Capital is more than the Target Net Working Capital, the Initial Purchase Price
shall be increased on a dollar-for-dollar basis by the amount of such excess
and the Parent shall, within three (3) calendar days following the final
determination, pursuant to Section 3.1, of the Closing Balance Sheet,
and based upon such final determination, pay to the Seller the amount of such
excess.

(c)           Any payment to the
Parent under this Section 3.2 shall be made by wire transfer of
immediately available funds to such account as the Parent shall designate in
writing to the Seller.  Any payment to
the Seller under this Section 3.2 shall be made by wire transfer of
immediately available funds to such account(s) as the Seller shall designate in
writing to the Parent.

(d)           Any payments
required to be made by the Seller or the Parent pursuant to this Article 3
shall (i) be made in USD after any necessary conversions in accordance with Section
2.5 from CAD or AUD to USD; and (ii) bear interest from the Closing Date up
to but excluding the date of payment at the rate of interest publicly announced
by the New York office of the LoC Issuer from time to time as its prime rate
(with changes in such rate being effective on the date any such change is
announced by the LoC Issuer).

Section 3.3.            Estimate
of Net Working Capital.  Schedule
3.3 sets forth an estimate of the Net Working Capital as of December 31,
2006, it being agreed that the Net Working Capital as of December 31, 2006 is
provided for illustrative purposes only and is not intended to be a binding
expression of any Net Working Capital calculation required under this
Agreement.

Article 4.

CLOSING

The closing (the “Closing”) for the
consummation of the transactions contemplated by this Agreement shall take
place at the offices of Reed Smith LLP at 599 

 

 12
 

 

Lexington Avenue, New
York, New York 10022 and shall be effective as of 12:01 a.m. Eastern Standard
Time on May 1, 2007 or at such other time and place as the Seller and the Buyer
shall mutually agree in writing (such date, the “Closing Date”).

Article 5.

REPRESENTATIONS
AND WARRANTIES OF THE SELLER

The Seller hereby represents and warrants to the Buyer
as follows:

Section 5.1.            Organization.  Each of the Seller and each Company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite corporate or other
equivalent power and authority to own its properties and assets and to conduct
its business as now conducted.  Copies of
the Certificates of Incorporation and By-laws (or other comparable documents)
of each Company (collectively, the “Organizational Documents”) have been
furnished or made available to the Buyer or its representatives, and such
copies are accurate and complete.  A complete
and accurate chart showing FCOI and all of its direct and indirect Subsidiaries
is set forth in Schedule 5.1.

Section 5.2.            Qualification
to Do Business.  Each Company and
NewCo are duly qualified to do business and are in good standing in each jurisdiction
in which the character of the properties owned or leased by it or the nature of
the business conducted by it makes such qualification necessary, except where
the failure to be so qualified or in good standing would not be expected to
have a Material Adverse Effect.  As used
in this Agreement, any reference to any event, change or effect having a “Material
Adverse Effect” means such event, change or effect that, individually or in
the aggregate, is materially adverse to the business, assets, liabilities,
condition (financial or other) or results of operations of the Companies, taken
as a whole, except in each case for:  (a)
the effects of changes that arise from or relate to (i) business or economic
conditions generally or the business in which the Companies operate which do
not disproportionately affect the Companies; or (ii) the financial, banking,
currency or capital markets in general (either in the United States, Canada,
Australia or any international market) which do not disproportionately affect
the Companies; (b) any change in laws, CAD GAAP, rules, regulations, orders or
other binding directives issued by a Governmental Entity or interpretations
thereof which do not disproportionately affect the Companies; (c) any facts or
circumstances relating to the Buyer; and (d) effects, facts or circumstances
relating to the announcement of this Agreement (including the identity of the
Buyer) or the performance by the parties of the transactions contemplated by
the Transaction Documents.

Section 5.3.            Authority.

(a)           The Seller has all
requisite corporate or other equivalent authority and power to execute and
deliver the Transaction Documents and to consummate the transactions
contemplated hereby and thereby.  The
execution and delivery of such Transaction Documents and the consummation of
the transactions contemplated hereby and thereby have been duly and validly
authorized by all required corporate or other equivalent action on the part of
the Seller and no other corporate proceedings on the part of the Seller is
necessary to authorize such Transaction Documents or to consummate the
transactions contemplated hereby and thereby. 

 

 13
 

 

Such Transaction
Documents have been duly and validly executed and delivered by the Seller and,
assuming such Transaction Documents have been duly authorized, executed and
delivered by the Buyer, such Transaction Documents constitute valid and binding
agreements of the Seller, enforceable against the Seller in accordance with
their terms, except that such enforcement may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other laws, now or hereafter in effect, relating to or limiting
creditors’ rights generally, and (ii) general principles of equity (regardless
of whether a proceeding to enforce such an agreement is considered in a
proceeding at law or in equity).

(b)           NewCo had all
requisite corporate or other equivalent authority and power to execute and
deliver the Real Property Documents to which NewCo is a party and to consummate
the transactions contemplated thereby. 
The execution and delivery of the Real Property Documents to which NewCo
is a party and the consummation of the transactions contemplated thereby were
duly and validly authorized by all required corporate or other equivalent
action on the part of NewCo and no other corporate proceedings on the part of
the NewCo were necessary to authorize such Real Property Documents or to
consummate the transactions contemplated thereby.  The Real Property Documents to which NewCo is
a party were duly and validly executed and delivered by NewCo and such Real
Property Documents constitute valid and binding agreements of NewCo,
enforceable against NewCo in accordance with their terms, except that such
enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other laws, now or hereafter in effect,
relating to or limiting creditors’ rights generally, and (ii) general
principles of equity (regardless of whether a proceeding to enforce such an
agreement is considered in a proceeding at law or in equity).  Oberthur Gaming Technologies Corp. holds net
cash proceeds of $2,661,195 in cash in connection with the sale of the Subject
Real Property to NewCo and has not transferred, distributed or otherwise disposed
of such cash amount.

Section 5.4.            No
Conflict or Violation.  Except as set
forth in Schedule 5.4, the execution, delivery and performance by the
Seller of the Transaction Documents and by NewCo and Oberthur Gaming
Technologies Corp. of the Real Estate Documents to which they are a party, do
not (i) conflict with or violate any provision of any Organizational Documents
of the Seller, the Companies, or NewCo, as applicable (ii) violate any
provision of law, or any order, judgment or decree of any court or other
governmental or regulatory authority applicable to the Seller, any of the
Companies or NewCo, (iii) violate, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any contract, lease, loan
agreement, mortgage, security agreement, trust indenture or other agreement or
instrument to which the Seller or any of the Companies is a party or is bound
or to which any of its properties (whether owned or leased) or assets is
subject, or (iv) result in the creation or imposition of any Lien upon any of
the assets, properties or rights of the Seller or any of the Companies, except
in the case of clauses (ii), (iii) or (iv), for such violations, breaches,
defaults or Liens that would not be expected to have a Material Adverse Effect.

Section 5.5.            Consents
and Approvals.  Schedule 5.5
sets forth a complete list of all consents, waivers, authorizations or
approvals (each, a “Consent”) of, or filing with, any Governmental
Entity, or of any other Person, that is required in connection with the execution,
delivery and performance by the Seller of the Transaction Documents or by NewCo
or Oberthur Gaming Technologies Corp. of the Real Estate Documents to which
each is a party, other than Consents 

 

 14
 

 

or filings the failure of
which to obtain would not (i) materially impair the ability of the Buyer
to conduct the operations of the Companies following the Closing in
substantially the same manner as presently conducted or (ii)
materially impair or delay the ability of the Seller to consummate the
transactions contemplated hereby.

Section 5.6.            Capitalization of FCOI.

(a)           The authorized
capital stock of FCOI consists of (i) an unlimited number of shares of Common
Stock, no par value, of which 251 shares of Common Stock are outstanding and
(ii) an unlimited number of shares of Preferred Stock, of which 9,838 shares of
Preferred Stock are outstanding.  The
Shares are the sole outstanding shares of capital stock of FCOI.  The Shares represent as of the date hereof
and will represent as of the Closing Date, in the aggregate, 100% of the issued
and outstanding shares of voting and non-voting capital stock of FCOI.

(b)           All of the Shares
are duly authorized, validly issued, fully paid and non-assessable and free of
any preemptive rights in respect thereto. 
The Seller has, and will have at the Closing, valid title to all of the
Shares, free and clear of any Liens (other than Permitted Liens), excepting
only restrictions on the subsequent transfer of such shares under applicable
law.  Except as provided on Schedule
5.6, there are no outstanding (i) securities convertible into or
exchangeable for shares of FCOI (ii) options, warrants or other rights to
purchase or subscribe for shares of FCOI or (iii) contracts, commitments,
agreements, understandings or arrangements of any kind relating to the issuance
of any shares of FCOI, any such convertible or exchangeable securities or any
such options, warrants or rights, pursuant to which, in any of the foregoing
cases, FCOI is subject or bound.  There are
no voting trusts, stockholders’ agreements or other similar instruments
restricting or relating to the rights of holders of Shares to vote, transfer or
receive dividends with respect to the Shares.

Section 5.7.            Subsidiaries.  Schedule 5.7 lists each Subsidiary of
FCOI and the authorized and outstanding capital stock of each such
Subsidiary.  Except for the interests in
the Subsidiaries, FCOI does not directly or indirectly own, or hold any rights
to acquire, any capital stock or any other securities, interests or investments
in any other Person.  All issued and
outstanding shares of capital stock of each of the Subsidiaries are duly
authorized, validly issued, fully paid and non-assessable, and are owned,
directly or indirectly, by FCOI, free and clear of all Liens other than
Permitted Liens.  Except as provided on Schedule
5.7, there are no outstanding (i) securities convertible into or
exchangeable for the capital stock of the Subsidiaries, (ii) options, warrants
or other rights to purchase or subscribe for capital stock of the Subsidiaries
or (iii) contracts, commitments, agreements, understandings or arrangements of
any kind relating to the issuance of any capital stock of the Subsidiaries, any
such convertible or exchangeable securities or any such options, warrants or
rights, pursuant to which, in any of the foregoing cases, any of the
Subsidiaries is subject or bound.  The
Subsidiaries have no ownership interest in any other Person which is not a
Subsidiary.

Section 5.8.            Financial
Statements.  Attached as Schedule
5.8 are (a) the audited (in accordance with CAD GAAP) consolidated
balance sheets of the Companies for each of the fiscal years ended December 31,
2004, December 31, 2005 and December 31, 2006 (the “FCOI Balance Sheet”),
and the related audited consolidated statements of income, retained earnings
and cash flows of the Companies, together with all related notes and schedules
thereto (collectively 

 

 15
 

 

referred to herein as the
“Consolidated Financial Statements”), (b) the audited (in accordance with
CAD GAAP) balance sheet of the Canadian Subsidiary for each of the fiscal years
ended December 31, 2004, December 31, 2005 and December 31,
2006, and the related audited statements of income, retained earnings and cash
flows of the Canadian Subsidiary together with all related notes and schedules
thereto (collectively referred to herein as the “Canadian Financial
Statements”, and, together with the Consolidated Financial Statements, the “Financial
Statements”).  The Financial
Statements (x) were or will be prepared in accordance with the books of account
and other financial records of FCOI and the Canadian Subsidiary,
(y) present or will present fairly in all material respects the
consolidated financial condition and results of operations of FCOI and the
Canadian Subsidiary as of the dates thereof or for the periods covered thereby,
and (z) have been or will be prepared in accordance with CAD GAAP (as
indicated therein), applied on a basis consistent with the past practices of
FCOI and the Canadian Subsidiary.

Section 5.9.            Absence
of Certain Changes or Events.

(a)           Except
as set forth in Schedule 5.9, since December 31, 2006, there has not
been:

(i)                                     any
Material Adverse Effect;

(ii)                                  any
material loss, damage, destruction or other casualty to the material assets or
properties of the Companies or NewCo (other than any for which insurance awards
have been received or insurance claims are pending);

(iii)                               any
change in any method of accounting or accounting practice of the Companies; or

(iv)                              through
the date hereof, any loss of the employment, services or benefits of any
significant employee of the Companies with the title of vice president or
above.

(b)           Since December 31,
2006, except as set forth in Schedule 5.9 hereto, each of the Companies
has not, and with respect solely to Section 5.9(b)(iii) NewCo has not,:

(i)                                     incurred
any material obligation or liability (whether absolute, accrued, contingent or
otherwise) except in the ordinary course of business, consistent with past
practice;

(ii)                                  failed
to discharge or satisfy any material Lien (other than Permitted Liens) or pay
or satisfy any material obligation or liability (whether absolute, accrued,
contingent or otherwise), other than liabilities or Liens being contested in
good faith and for which adequate reserves have been provided, Liens for Taxes
not yet due and payable, and Liens arising in the ordinary course of business
that do not, individually or in the aggregate, interfere in any material
respect with the use or operation of any of its material 

 

 16
 

 

                                                assets,
properties or rights in the ordinary course of business, consistent with past
practice;

(iii)                               mortgaged,
pledged or subjected to any Lien, any of its material assets, properties or
rights, except for Permitted Liens;

(iv)                              sold
or transferred any of its material assets or canceled any material debts or
claims or waived any material rights, except in the ordinary course of
business, consistent with past practice;

(v)                                 defaulted
on any material obligation;

(vi)                              sold
or transferred (other than to another Company) any material patents, trademarks
or copyrights or any material patent, trademark or copyright applications;

(vii)                           entered
into any transaction material to its business, except in the ordinary course of
business consistent with past practice;

(viii)                        laid off
any significant number of its employees, except in the ordinary course of
business consistent with past practice;

(ix)                                discontinued
the offering of any material services or product of its business;

(x)                                   incurred
any material liability for the payment of severance benefits, except in the
ordinary course of business consistent with past practice;

(xi)                                declared,
paid, or set aside for payment any dividend or other distribution in respect of
shares of its capital stock, membership units or other securities, or redeemed,
purchased or otherwise acquired, directly or indirectly, any shares of its
capital stock, membership units or other securities, or agreed to do so; or

(xii)                             entered
into any agreement or made any commitment to do any of the foregoing.

Section 5.10.          Tax
Matters.  Except as set forth on Schedule
5.10:

(a)           Each Company has (i)
filed (or there has been filed on its behalf) all income and other material Tax
Returns required to be filed by it, and all such Tax Returns were true, correct
and complete in all material respects and (ii) paid on a timely basis all Taxes
shown to be due and payable on such Tax Returns.

(b)           Each Company has
complied in all material respects with all applicable laws relating to the
payment and withholding of Taxes and has, within the time and manner 

 

 17
 

 

prescribed by law, paid over to the proper Governmental Entity in all
material respects all amounts required to be withheld and paid over under all
applicable laws.

(c)           There are no Liens for
Taxes imposed on the assets of any Company except for Liens for Taxes not yet
due and payable or Liens for Taxes being contested in good faith.

(d)           Except
as set forth on Schedule 5.10(d), to the Knowledge of the Seller, no
examination or audit or appeal of any Tax Return of any Company is currently in
progress.  There is no dispute or claim
concerning any liability for taxes required to be paid, collected or remitted
by any Company that is  claimed or
raised by a taxing authority in writing.

(e)           None
of the Companies has (i) waived any statute of limitations with respect to
Taxes of such Company or agreed to extend the period for assessment or
collection of any such Taxes which period has not expired, (ii) requested or
received any extension of time within which to pay any Taxes or to file any Tax
Return of such Company, which Tax Return has not yet been filed, or (iii)
requested or received any extension of time within which to file any material
elections relating to Taxes for which such Company is or may be liable.

(f)            To
the Knowledge of the Seller, none of the Companies has any liability for Taxes
of any Person under Treasury Regulation 1.1502-6 (or any similar provision of
state or local income Tax law), as a transferee or successor or by contract.

(g)           None of the
Companies are a party to or bound by any tax indemnity, tax sharing or tax
allocation agreement.

(h)           Since January 1,
2002, to the Knowledge of the Seller, no claim has been made in writing by any
Tax authority in a jurisdiction where any of the Companies has not filed a Tax
Return that it is or may be subject to Tax by such jurisdiction.

(i)            No ruling with
respect to Taxes has been requested by or on behalf of any of the Companies
that could reasonably be expected to result in Taxes for a period beginning
after the Closing Date.

(j)            Since January 1,
2004, no Company has distributed stock of another Person, or has had its stock
distributed by another Person, in a transaction that was purported or intended
to be governed in whole or part by Section 355 or Section 361 of the Code.

(k)           No Company is a
party to any agreement, contract, arrangement or plan that has resulted or
could result, separately or in the aggregate, in the payment of any “excess
parachute payment” within the meaning of Section 280G of the Code (or any
corresponding provision of state or local income Tax law).

(l)            No Company will be
required to include any item of income in, or exclude any item of deduction
from, taxable income for any taxable period (or portion thereof) ending after
the Closing Date as a result of any: (i) change in method of accounting for a
taxable period ending on or prior to the Closing Date; (ii) “closing agreement”
as described in Section 7121 of the Code (or any corresponding or similar
provision of state or local income Tax law) executed 

 

 18
 

 

on or prior to the
Closing Date or (iii) inter-company transaction or excess loss account
described in Treasury Regulations Section 1502 of the Code (or any
corresponding or similar provision of state or local income Tax law).

(m)          Except as set forth
in Schedule 5.10(m) hereto, to the Knowledge of the Seller, all income,
sales (including goods and services, harmonized sales and provincial or
territorial sales) and capital tax liabilities of each Company have been
assessed by the relevant Governmental Entities in all material respects and
notices of assessment have been issued in writing to each such entity by the
relevant Governmental Entities for all taxation years ending prior to the
Closing Date, except for the taxation year ending the day immediately preceding
the Closing Date for which no notice of assessment has been issued.

(n)           To the Knowledge of
the Seller, none of the Companies has acquired property from a non-arm’s length
Person, within the meaning of the Income Tax
Act (Canada), for consideration, the value of which is less than the
fair market value of the property acquired in circumstances which would
reasonably be expected to subject it to a liability under section 160 of the Income Tax Act (Canada).

(o)           Each Company carrying
on business in Canada is duly registered under subdivision (d) of Division V of
Part IX of the Excise Tax Act
(Canada) with respect to the goods and services tax and harmonized sales tax
and under Division I of Chapter VIII of Title I of the Quebec Sales Tax Act with respect to the
Quebec sales tax, and the registration numbers of each of them are  set forth on Schedule
5.10(o).

(p)           To the Knowledge of
the Seller, Oberthur Gaming Technologies Corp. has a net operating loss carry
forward, as of the date hereof, in an amount equal to at least $9,375,000.

Notwithstanding
anything to the contrary contained in this Agreement, this Section 5.10
is the only Section in this Agreement in which representations and warranties
relating or attributable to Taxes and/or Tax Returns are made by the Seller,
including for purposes of any other Section in this Article 5.

Section 5.11.          Absence
of Undisclosed Liabilities.  Except
(i) for liabilities set forth in Schedule 5.11, (ii) for liabilities
accrued or reserved against on the FCOI Balance Sheet, (iii) for liabilities
incurred or accrued in the ordinary course of business consistent with past
practice since December 31, 2006 or (iv) as would not result in an increase in
the aggregate liabilities and obligations of the Companies, taken as a whole,
of greater than CAD250,000, measured as of December 31, 2006 as reflected on
the FCOI Balance Sheet, the Companies do not have any indebtedness or liability
of a character required under CAD GAAP to be reflected on the face of a balance
sheet, which is not shown or provided for on the FCOI Balance Sheet.

Section 5.12.          Real
Property.

(a)           Schedule
5.12(a) contains a description of each parcel or subdivided lot of real
property owned by each Company and by NewCo (together with all improvements
thereon and personal property and fixtures therein and all other rights of such
Company with respect thereto, the “Owned Real Property”) setting forth
the address, legal description and owner of 

 

 19
 

 

each parcel of Owned Real
Property, including the properties reflected as being so owned on the Financial
Statements.  Each Company that owns Owned
Real Property has good, valid and insurable fee simple title to such Owned Real
Property, free and clear of all Liens other than Permitted Liens.

(b)           Schedule
5.12(b) contains a true, correct and complete list of the real property
leased, subleased or licensed to each Company (the “Leased Real Property”
and, together with the Owned Real Property, the “Real Property”), the
Contracts (collectively, the “Leases”) pursuant to which such property
is leased, subleased or licensed to each Company, the expiration date of each
Lease for the Leased Real Property and the current fixed monthly rent owing
thereunder.  The rental set forth in each
Lease of the Leased Real Property is the actual rental payable thereunder, and
there are no separate agreements or understandings with respect to the
same.  Seller has made available true,
correct and complete copies of all material Leases and Third Party Leases to
Buyer.  Except as set forth on Schedule
5.12(b), there are no material guarantees for the Companies or other
Persons in favor of the Lessor under any Leases.

(c)           Schedule
5.12(c) contains a true and complete list of all leases, subleases or
licenses in favor of third parties encumbering the Real Property (the “Third
Party Leases”), including a description of the Company or NewCo that is the
lessor, sublessor or licensor thereof, as applicable, and of each third-party
lessee, sublessee or licensee thereunder, as applicable, the parcel leased,
subleased or licensed thereunder and the current fixed monthly rent payable
under the relevant lease, sublease or license agreement.  The rental set forth in each such lease,
sublease or license is the actual rental payable thereunder, and there are no
separate written agreements or understandings with respect to the same.  Except as described in Schedule 5.12(c),
none of the Companies or NewCo is a party to any agreement permitting any other
Person any rights to the use, occupancy or enjoyment of any of the Real
Property pursuant to any lease, sublease or license, occupancy or other
agreement, nor has any Company or NewCo assigned, pledged or encumbered its
interest under any Lease, sublease or license listed in Schedules 5.12(b)
and (c) to any third party.

(d)           Other
than the Real Property, none of the Companies is the owner or lessee or
licensee of, or subject to any agreement or option to own, license or lease any
real property or any interest in any real property.

(e)           The
Seller has made available to the Buyer, to the extent available, for each
parcel of Real Property any and all title insurance policies, title reports,
surveys, certificates of occupancy and audits, appraisals, Permits, evidence of
Liens, title documents and other documents relating to or otherwise affecting
the Real Property in the possession, custody or control of each Company or
NewCo.  There are no contractual or legal
restrictions that preclude or restrict in any material respect the ability to
use the Real Property for the purposes for which it is currently being used.

(f)            With
respect to each Lease for Leased Real Property and each Third Party Lease,
except as otherwise set forth in Schedule 5.12(f), none of the Companies
or NewCo has exercised or given any notice of exercise, nor has any lessor or
landlord or tenant or licensee exercised or received any notice of exercise of,
any presently exercisable option, right of first offer or right of first
refusal contained in any such Lease or Third Party Lease, including, without 

 

 20
 

 

limitation, any such
option or right pertaining to purchase, expansion, renewal, extension or
relocation (collectively, “Options”). 
To the Knowledge of Seller, each of the Companies has the full right to
exercise any Options contained in the Leases and licenses pertaining to the
Leased Real Property on the terms and conditions contained therein and upon due
exercise would be entitled to enjoy the full benefit of such Options with
respect thereto, subject to the terms and conditions pertaining thereto.

(g)           Except
as set forth in Schedule 5.12(g), all the Real Property is occupied by
the Company in possession under a valid and current certificate of occupancy or
similar permit and no Company occupies any Real Property in violation of such
certificate of occupancy.

(h)           To
Seller’s Knowledge, each Lease is in full force and effect and is valid,
binding and enforceable in accordance with its respective terms, subject to
insolvency and creditors’ rights laws. 
To Seller’s Knowledge, neither any Company nor any other party to a
Lease or a Third Party Lease has given to the other party written notice of any
default under any Lease or Third Party Lease. 
To Seller’s Knowledge, the Companies are not in default under any Lease
or Third Party Lease and no other party to a Lease is in default thereunder.

(i)            To
Seller’s Knowledge, the Companies have not received written notice of any
violation of a Permitted Lien to which the Real Property is subject and, to the
knowledge of the Companies, there are no material violations of Permitted Liens
to which the Real Property is subject. 
To Seller’s Knowledge, the Companies have not received written notice
from any utility company or municipality of any fact or condition which could
result in the discontinuation of presently available or otherwise necessary
utilities or services for any of the Real Property.

(j)            To
Seller’s Knowledge, the Companies have not received written notice of, pending
or contemplated (i) rezoning, condemnation or other similar proceeding
affecting the Real Property or (ii) any special assessment against the Real
Property.

(k)           Except
as set forth on Schedule 5.12(k), no consent, waiver, authorization or
approval was required in connection with the execution and delivery or performance
of the Deed or the Subject Lease.

Section 5.13.          Intellectual
Property.

(a)           Schedule 5.13(a)(i) sets forth
an accurate and complete list of all issued patents and pending patent
applications, registered trademarks, pending applications for registration of
marks, registered copyrights and copyright applications, and Internet domain
names owned by any of the Companies in any jurisdiction worldwide (“Registered
Intellectual Property”).  Schedule
5.13(a) lists (i) the record owner of each such item of Registered
Intellectual Property, (ii) the jurisdictions in which each such item of
Registered Intellectual Property has been issued or registered or in which any
such application for issuance or registration has been filed, as applicable,
and (iii) the registration or application date, as applicable, for each such
item of Registered Intellectual Property. 
All necessary registration, maintenance, renewal and other relevant
filing fees in connection with any of the Registered Intellectual Property (or
any Intellectual Property required to have been listed on Schedule 

 

 21
 

 

5.13(a))
have been timely paid, and all necessary documents, certificates and other
relevant filings in connection with such Registered Intellectual Property have
been timely filed with the relevant Governmental Entities and Internet domain
name registrars in the United States or foreign jurisdictions, as the case may
be, for the purpose of maintaining such Registered Intellectual Property and
all issuances, registrations and applications therefor have been maintained,
except where the Companies have, in their reasonable business judgment, decided
to abandon such Registered Intellectual Property (or any Intellectual Property
required to have been listed on Schedule 5.13(a)).  Schedule 5.13(a)(ii) sets forth a list
of material trademarks owned by any of the Companies in any jurisdiction
worldwide, and for which the Company owns no registrations or pending
applications.

(b)           The Companies are the sole and
exclusive owners of all right, title and interest in and to all of the
Registered Intellectual Property listed or required to be listed on Schedule
5.13(a) free and clear of all Liens, other than Permitted Liens.  The Companies are the sole and exclusive
owners of, or have valid rights (pursuant to written Intellectual Property
licenses granted by a third Person to the Companies) to use, sell, license and
otherwise commercially exploit, as the case may be, all other Intellectual
Property used, sold, licensed and otherwise commercially exploited by the Companies
in connection with the Business of the Companies as currently conducted,
including the Scratch Cards business.  To
the Knowledge of the Seller, the Registered Intellectual Property is valid and
enforceable.

(c)           To the Knowledge of the Seller, the development,
manufacturing, licensing, marketing, importation, offer for sale, sale or use
of any products and services in connection with the business of the Companies
as currently conducted, and the present business practices, methods and
operations of the Companies, do not infringe, constitute an unauthorized use or
misappropriation of, or violate any Intellectual Property or privacy or
publicity right of any Person, nor does such use constitute a breach of any
agreement, obligation, promise or commitment by which the Companies may be
bound.  To the Knowledge of the Seller,
the Intellectual Property owned by or licensed to the Companies (excluding the
Marks) includes all of the material Intellectual Property necessary and
sufficient to enable the Companies to conduct the Business of the Companies as
currently conducted, including the Scratch Cards business.

(d)           To the Knowledge of the Seller, no
Person is infringing, violating, or misappropriating any Intellectual Property
owned or exclusively licensed by the Companies, none of the Companies is a
party to any legal proceeding alleging such infringement, violation or
misappropriation of Intellectual Property owned by the Companies and no such
claims have been made in writing since January 1, 2004 by the Companies against
any Person.  None of the Companies is a
party to any interference, opposition, cancellation, reexamination or other
contest, proceeding, action, suit, hearing, investigation, charge or claim with
respect to any Intellectual Property owned by the Companies.

(e)           Except as set forth on Schedule
5.13(e), none of the Companies is the subject of any pending or, to the
Knowledge of the Seller, threatened legal proceeding that (i) involves a claim
of infringement, misappropriation, dilution or violation of any Intellectual
Property or right of privacy or publicity by any Person against the Companies,
or (ii) challenges the ownership, use, validity or enforceability of any
Intellectual Property owned or exclusively licensed by the Companies.  Except as set forth on Schedule 5.13(e),
none of the Companies has 

 

 22
 

 

received written
(including by electronic mail) notice of any such threatened claim since
January 1, 2004.

(f)            No trade secrets or any other
confidential information (including source code) of the Companies have been
authorized by the Companies to be disclosed or, to the Seller’s Knowledge, have
been actually disclosed by the Companies to any employee or any third Person
other than pursuant to a written agreement restricting the disclosure and use
of such trade secrets or any other confidential information by such employee or
third Person.  The Companies have taken
reasonable security measures to protect the confidentiality of all trade
secrets and any other confidential information of the Companies (and any
confidential information owned by a third Person to whom the Companies have a
confidentiality obligation) that are material to the Business of the Companies.

(g)           Each employee, agent, consultant and
contractor of the Companies who has contributed to or participated in the
conception, creation or development of any Intellectual Property, products or
services on behalf of the Companies, has executed a valid written assignment in
favor of the respective Company or Companies (as applicable) as assignee, that
has caused the conveyance to the Companies, of all right, title, and interest
in and to all Intellectual Property, throughout the world, arising from such
individual’s or entity’s work for the Companies.

(h)           Schedule 5.13(h) sets forth a
complete list in all material respects of (i) all software developed by or for
the Companies and exclusively owned by the Companies, and (ii) all software not
exclusively owned by the Companies or any of its Subsidiaries and incorporated,
embedded or bundled with any software listed in subclause (i) above (excluding
such software licensed to the Companies under a shrink-wrap or click through
agreement through commercial distributors or in consumer retail stores),
specifying whether such software is of the type described in subclause (i) or
subclause (ii) above and indicating any ownership interest of the
Companies.  None of the Companies have
incorporated any “open source,” “freeware,” “shareware” or other software
having similar licensing or distribution models in any software developed,
licensed, distributed or otherwise exploited by the Companies.  Except as set forth on Schedule 5.13(h),
none of the Companies is a party to any source code escrow agreement or any
other agreement (or a party to any agreement obligating the Companies to enter
into a source code escrow agreement or other agreement) requiring the deposit
of source code or related materials for any such software identified on Schedule
5.13(h).

(i)            Schedule 5.13(i) sets forth a
complete list in all material respects of all licenses and agreements to which
one or more of the Companies is a party granting rights with regard to any
Intellectual Property owned by the Companies and any Intellectual Property
owned by a third person used in connection with the Business of the Companies,
other than customer contracts entered into in the ordinary course of
business.  With respect to such licenses
and agreements with regard to any Intellectual Property, (i) the Companies are
not in breach or default with respect thereto, and no event has occurred which,
with notice or lapse of time, would constitute a breach or default or permit
termination, modification or acceleration thereunder and (ii) the Companies
have not repudiated any provision thereof. 
The Companies have no agreement to indemnify any individual or entity
against any charge of infringement of 

 

 23
 

 

any Intellectual
Property, other than indemnification provisions normal and usual for the
Companies’ industry contained in license agreements arising in the ordinary
course of business.

(j)            The consummation of the transactions
contemplated hereby will not, in and of itself, pursuant to any Contract to
which the Companies are a party or by which any assets or properties of the
Companies are bound, result in the loss or impairment of the Buyer’s right to
own or use any Intellectual Property that is material to the Business of the
Companies, including the Scratch Cards Business.

Section 5.14.          Licenses
and Permits.  Schedule 5.14
sets forth a true and complete list of all material licenses, permits, authorizations
and approvals issued or granted to the Companies by any Governmental Entity,
including any material licenses, permits, authorizations and approvals issued
or granted to NewCo in respect of the Subject Real Property (the “Licenses
and Permits”), and all material pending applications therefor.  Each License and Permit is valid and in full
force and effect, and is not subject to any pending or, to Seller’s Knowledge,
threatened administrative or judicial proceeding to revoke, cancel, suspend or
declare such License and Permit invalid in any material respect.  The Companies hold all licenses and permits
that are material to the business of the Companies and, to the Seller’s
Knowledge, the Companies are in compliance in all material respects with the
terms and conditions of the Licenses and Permits.  Copies of the Licenses and Permits and all
pending applications therefor have been made available to the Buyer.

Section 5.15.          Compliance
with Law.  Except as set forth in Schedule
5.15, to Seller’s Knowledge, the operations of the businesses of each of
the Companies is conducted and the assets of each of the Companies and Newco
are maintained in accordance in all material respects with all applicable laws,
regulations and orders of all Governmental Entities having jurisdiction over
such entity and its assets, properties and operations.  Except as set forth in Schedule 5.15,
none of the Companies has received written notice since December 31, 2006, of
any material violation (or any investigation with respect thereto) of any such
law, regulation or order, and none of the Companies is in default in any
material respect with respect to any order, writ, judgment, award, injunction
or decree of any Governmental Entity or arbitrator, material to the operations
of its business.

Section 5.16.          Litigation.  Except as set forth in Schedule 5.16,
there are no claims, actions, suits, proceedings or investigations (each, an “Action”)
pending or, to the Knowledge of the Seller, threatened, before any Governmental
Entity or Person brought by or against any of the Companies, involving or
relating to the Companies, the assets, properties or rights of any of the
Companies or the transactions contemplated by this Agreement, other than
Actions which would not reasonably be expected to result in losses greater than
CAD $75,000.

Section 5.17.          Contracts.

(a)           Schedule
5.17 sets forth a complete and correct list of all Contracts (as defined below)
as of the date hereof.

(b)           Each
Contract is valid, binding and enforceable against the Company which is a party
thereto in accordance with its terms, except that such enforcement may be 

 

 24
 

 

subject to (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other laws, now or hereafter in effect, relating to or limiting creditors’
rights generally, (ii) any restrictions on enforceability of agreements with
insurance companies or managing general agents arising out of legal challenges
to contingent commissions, overrides, or other payments by such companies or
agents to insurance brokers, and (iii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or
in equity, and including any state-law limitations on enforceability of
non-solicitation, non-compete and other restrictive covenants).  To the Seller’s Knowledge, each of the
Contracts is in full force and effect. 
Each of the Companies has performed in all material respects all
obligations required to be performed by it to date under, and is not in
material default, under any Contract to which it is a party and, to Seller’s
Knowledge, no other party is in default in respect thereof, and no event has
occurred which, with due notice or lapse of time or both, would constitute such
a default.  The Seller has delivered or
otherwise made available to the Buyer or its representatives complete copies of
all written Contracts.

(c)           A
“Contract” means any material agreement, contract or commitment to which
any Company is a party or by which it or any of its assets are bound
constituting:

(i)                                     a
mortgage, indenture, security agreement, guaranty, pledge or other agreement or
instrument relating to the borrowing of money or extension of credit;

(ii)                                  an
employment, severance, sales agent or consulting agreement;

(iii)                               a
joint venture, partnership or limited liability company agreement;

(iv)                              a
non-competition agreement purporting to restrict the business activities of the
Companies or any other agreement or obligation which purports to limit in any
material respect the manner in which, or the localities in which, the business
of the Companies may be conducted;

(v)                                 an
agreement requiring capital expenditures by the Companies in excess of
$500,000;

(vi)                              an
agreement with any of the suppliers or customers of the Company set forth in Schedule
5.23(a) or (b); or

(vii)                           an
agreement limiting or restricting the ability of any of the Companies to make
distributions in respect of its capital stock.

Section 5.18.          Employee
Plans.

(a)           Schedule
5.18(a) sets forth each of the Company Plans, and separately designates
each Canadian Plan and U.S. Plan.

(b)           Current
and complete copies of all written Company Plans as amended to date and all
booklets describing the Company Plans which have been provided to persons 

 

 25
 

 

entitled to benefits
under the Company Plans have been delivered or made available to the Buyer
together with copies of all material documents relating to the Company Plans,
including, as applicable:

(i)                                     all
trust agreements, funding agreements, insurance contracts and policies,
investment management agreements, subscription and participation agreements,
benefit administration contracts, and any financial administration contracts;

(ii)                                  the
most recent financial and accounting statements and reports for each Company
Plan;

(iii)                               the
most recent actuarial report (whether or not such actuarial reports were filed
with a Governmental Entity) and any supplemental cost certificates filed with
any Governmental Entity; and

(iv)                              all
annual information returns or other returns filed with, and significant
correspondence with, any Governmental Entity within the last three years.

(c)           To the Seller’s
Knowledge, each Company Plan is, and has been, administered in compliance with
the terms of such Company Plan and all applicable Laws (including, without
limitation, all Canadian Laws, the Code and ERISA) and collective agreements,
as applicable.  There is no investigation
by a Governmental Entity or material claim (other than routine claims for payment
of benefits) pending or, to the Knowledge of the Seller, threatened in writing
involving any Company Plans, and no material facts exist which could reasonably
be expected to give rise to any such investigation or claim (other than routine
claims for payment of benefits).

(d)           Except as disclosed,
the Companies have no formal plan and have made no promise or commitment,
whether legally binding or not, to create any additional Company Plan or to
improve or change the benefits provided under any Company Plan.

(e)           Except as disclosed,
none of the Company Plans provide for benefit increases or the acceleration of,
or an increase in funding obligations that are contingent upon or will be
triggered by the entering into of this Agreement or the completion of the
transactions contemplated herein.

(f)            To the Seller’s
Knowledge, all employer and employee payments, contributions or premiums
required to be remitted, paid to or in respect of each Company Plan have been
paid or remitted in a timely fashion in accordance with its terms and all
applicable Laws.

(g)           Except as disclosed
on Schedule 5.18(g), none of the Company Plans provide benefits beyond
retirement or other termination of service to employees or former employees or
to the beneficiaries or dependants of such employees, except (a) for coverage
mandated by Sections 601 through 608 of ERISA and Section 4980B(f) of the Code,
(b) 

 

 26
 

 

retirement benefits under
any Company Plan that is qualified under Section 401(a) of the Code or similar
provision under Canadian law, and (c) deferred compensation that is
accrued as a current liability on the applicable, books and records of the
Companies.

(h)           With respect to each
Canadian Plan:

(i)                                     No
Canadian Plan constitutes a “multiemployer pension plan,” as defined in the
SPPA.

(ii)                                  No
event has occurred respecting any registered Canadian Plan which would entitle
any Person (without the consent of the Companies) to wind-up or terminate any
Canadian Plan, in whole or in part.  No
Canadian pension plan has been partially or fully wound-up or terminated.

(iii)                               There
are no entities other than the Companies participating in any Canadian Plan.

(iv)                              Where
the assets of any Canadian Plan are invested in units of a unitized trust
sponsored by the Companies, no entity other than the Companies or a person
acting in relation to a Canadian Plan holds units of any such unitized trust
and the unitized trust has been established, qualified, invested and
administered in accordance with the terms of such unitized trust and all
Canadian Laws.

(v)                                 Except
as set forth on Schedule 5.18(h), each Canadian Plan is “solvent” and no
Canadian Plan has incurred any “unfunded actuarial liability” within the
meaning of the SPPA, as of December 31, 2006. 

(i)            With respect to the
U.S. Plans:

(i)                                     Except
as disclosed, none of the U.S. Plans are subject to Title IV of ERISA or
Section 302 of ERISA or Section 412 of the Code, and no U.S. Plan constitutes a
“multiemployer pension plan,” as defined in Section 3(37) of ERISA.

(ii)                                  None
of the Companies or any ERISA Affiliate has withdrawn at any time within the
previous six years from any multiemployer plan or incurred any withdrawal
liability which remains unsatisfied, and no events have occurred and no
circumstances exist that could be reasonably be expected to result in any such
liability to the Companies or any ERISA Affiliate.

(iii)                               No
event has occurred and no condition exists that would subject the Companies by
reason of its affiliation with any current or former member of its “controlled
group” (within the meaning of Section 414 of the Code) to any (i) tax, penalty,
fine, (ii) Lien 

 

 27
 

 

                                                (other
than a Permitted Lien) or (iii) other liability imposed by ERISA, the Code or
other applicable laws.

(iv)                              Each
U.S. Plan intended to qualify under Section 401(a) of the Code has received a
determination letter, or can rely on an opinion letter, from the Internal
Revenue Service stating that it so qualifies and that its trust is exempt from
taxation under Section 501(a) of the Code, and, to the Knowledge of the Seller’s,
nothing has occurred since the date of such letter that could reasonably be
expected to result in the loss of such qualification or exempt status.

(j)            With respect to
Company Plans that are not Canadian Plans or U.S. Plans, to the Seller’s
Knowledge (i) if they are intended to qualify for special tax treatment, such
Company Plans meet all requirements for such treatment, and (ii) if they are
intended to be funded and/or book-reserved, such Company Plan are fully funded
and/or book reserved, as appropriate, based upon reasonable actuarial assumptions.

(k)           Schedule 5.18(k)
sets forth a complete list of the employees of the Companies, together with
their titles, service dates, current wages, salaries or hourly rate of pay,
vacation entitlement, commissions and bonus (whether monetary or otherwise).  Except as disclosed in Schedule 5.18(k),
no employee of the Companies is on layoff, short-term or long-term disability
leave, parental leave, extended absence or receiving benefits pursuant to
workers’ compensation legislation.

(l)            Except for the collective
bargaining agreements listed in Schedule 5.18(l), no union has
bargaining rights with respect to any employees of the Companies and none of
the Companies is a party, either directly, voluntarily or by operation of law,
to any collective bargaining agreement, letter of understanding, letter of
intent or other written communication with any bargaining agent, union or
association which may qualify as a union, which would apply to any employees of
the Companies. There are no outstanding or, to the knowledge of the Seller,
threatened unfair labour practices, complaints or applications relating to any
union, including any proceedings which could result in certification of a union
as bargaining agent for employees, and there have not been any such proceedings
within the last three years.  To the
knowledge of the Seller, there are no threatened or apparent union organizing
activities involving any employees of the Companies.  None of the Companies has any problems
relating to its employees that might materially affect the value of the
Companies. The Companies are not in violation of any provision of any
collective bargaining agreement listed in Schedule 5.18(l).

Section 5.19.          Transactions
with Seller and Affiliates.  Except
as set forth in Schedule 5.19, none of the Companies is a party to any
agreements or arrangements with the Seller, any of the directors, officers,
managers, members, partners or stockholders of the Seller or any Affiliate of
the Seller (other than any Company) or immediate family member of any of the
foregoing including, without limitation, agreements under which it:  (i) leases any real or personal property
(either to or from such Person); (ii) licenses technology (either to or from
such Person); (iii) is obligated to purchase any tangible or intangible asset
from or sell such asset to such Person; (iv) purchases products or services
from such Person;  (v) pays or receives
commissions or other payments; or (vi) provides or receives any other material
benefit.  Neither the Seller nor any of 

 

 

 28
 

 

its Affiliates (other
than any of the Companies) owns or has any rights in or to any of the assets,
properties or rights used by any of the Companies in the ordinary course of
their business except with respect to the rights of the Companies to use the
following trade names and their derivatives: “OBERTHUR,” “FRANÇOIS-CHARLES
OBERTHUR,” “FCO” and “FCOF,” which belong to Seller or its Affiliates (other
than the Companies).

Section 5.20.          Environmental
Matters.

(a)           Except as set forth
on Schedule 5.20(a), the Companies are and have been in material
compliance with all applicable Environmental Laws.

(b)           There is no
Environmental Claim pending or, to the Seller’s Knowledge, threatened in
writing against any Company.

(c)           There has been no
release or threatened release by the Companies or migration of any Hazardous
Substance at any Real Property which could reasonably be expected to give rise
to any actual or alleged liability for personal injury, property damage,
natural resource damage or environmental response action that could be material
to the Companies.

(d)           To Seller’s
Knowledge, the Companies have not sent or arranged for the transport of any
Hazardous Substance to any site for which the Companies could reasonably be
expected to be liable for undertaking or paying for environmental investigation
or any other action to respond to the release or threatened release or
migration of any Hazardous Substance under applicable Environmental Law.

(e)           The Companies have
no material liability arising under applicable Environmental Laws or pursuant
to any written agreement relating to any business or property previously or
currently owned, leased or operated by the Companies.

(f)            The Companies have
in full force and effect all insurance policies or other financial assurances
required under Environmental Laws.

(g)           None of the
Companies’ Real Property is contaminated with Hazardous Substances that could
reasonably be expected to be subject to investigation, cleanup, remediation,
monitoring, removal, abatement, replacement, or other associated costs or
actions under applicable Environmental Law.

(h)           The Seller and the
Companies have delivered to Buyer complete and accurate copies of all material
reports, studies, investigations, analyses, notices and assessments in their
possession, custody or control relating to the Companies current or former
businesses or properties and related to Environmental Laws or Hazardous
Substances.

Section 5.21.          No
Brokers.  No broker, finder or
similar intermediary has acted for or on behalf of, or is entitled to any
broker’s, finder’s or similar fee or other commission from any of the Companies
in connection with this Agreement or the transactions contemplated hereby.

Section 5.22.          Québec
Regulation 45-106.  FCOI is a “private
issuer” as defined in Section 2.4 of Regulation 45-106
respecting  Prospectus
and Registration Exemptions (Québec).

 29

Section 5.23.   Suppliers and Customers.

(a)           Schedule 5.23(a)
sets forth a list of the top twenty-five (25) suppliers of the Companies by
dollar amount paid by the Companies (taken together) during each of (i) the
twelve-month period ended December 31, 2006 and (ii) the three month period
ended March 31, 2007, from whom any of the Companies has purchased goods and/or
services.  As of the date hereof, to
Seller’s Knowledge, no such supplier has expressed in writing to any of the
Companies its intention to cancel or otherwise terminate or materially reduce
or modify its relationship with any of the Companies.

(b)           Schedule 5.23(b)
sets forth a list of the top twenty-five (25) customers of the Companies by
revenue derived by the Companies (taken together) during each of (i) the
twelve-month period ended December 31, 2006 and (ii) the three month period
ended March 31, 2007, to whom any of the Companies has sold goods and/or
services.  Except as set forth on Schedule
5.23(b), as of the date hereof, to Seller’s Knowledge, no such customer has
expressed in writing to the Companies its intention (i) to cancel or otherwise
terminate or materially reduce or modify its relationship with any of the
Companies or (ii) to not exercise its option to extend or renew its agreement
with any of the Companies.

Section 5.24.   Insurance.  Schedule 5.24 lists the material
surety bonds, fidelity bonds as well as the insurance companies, policy
numbers, aggregate coverage amount and type, and deductibles of all material
policies of title, liability, fire, casualty, business interruption, workers’
compensation and other forms of insurance insuring each of the Companies and
their assets, properties (including, in the case of Oberthur Gaming
Technologies Corp., the Subject Real Property) and operations.  The Seller
has made available to the Buyer a true and complete copy of all such bonds and
policies.  Except as set forth in Schedule 5.24, all such
policies and bonds are in full force and effect and none of the Companies is in
material default under any provisions of any such bond or policy of insurance
nor has any of the Companies received written notice of cancellation of or
cancelled any such insurance without replacement thereof.  For all pending
claims made under such bonds or policies prior to the date hereof, the
Companies have timely complied with any applicable notice provisions, except
where the failure to so comply would not materially adversely affect the
operation of the business of the Companies as currently conducted.

Section 5.25.   Prohibited Payments and Actions.  To Seller’s Knowledge, no director, officer,
shareholder or employee, agent or other person acting on behalf of the
Companies:

(a)           has
made or authorized the use of any assets of any of the Companies for any contributions,
gifts, offers, payments, promises of payment, things of value, entertainment or
other unlawful expenses to any official or employee of Canada or any foreign
national state, or instrumentality thereof, to any candidate for public office,
to any political party, or any officer or employee thereof;

(b)           has authorized or effected the
establishment or maintenance of any unlawful or unrecorded fund of monies or
other assets;

 30
 

(c)           has authorized or effected the making
of any false or fictitious entries in the books or records of the Companies;

(d)           has authorized or effected the making
of any unlawful payment;

(e)           has paid, or offered, or agreed to
pay any political contribution;

(f)            is
an official or employee of a Canadian or foreign national
state, or local government or any agency or instrumentality thereof; an
official of a political party, or a candidate for political office; or

has been prosecuted,
convicted of or pleaded guilty to a criminal offence or illegal activity
including one involving fraud, corruption, or moral turpitude or is so far as
he is aware not the subject of any government investigation for such offences,
and that he is not now listed by any government agency as debarred, suspended,
proposed for suspension or debarment, or otherwise ineligible for government
programs.

Section 5.26.   No Other Warranties or
Representations.  BUYER ACKNOWLEDGES
THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE 5,
SELLER MAKES NO OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED.  BUYER IS NOT RELYING ON ANY REPRESENTATIONS
AND WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, THE
COMPANIES, OR THEIR RESPECTIVE AFFILIATES, AGENTS OR REPRESENTATIVES, AS TO ANY
MATTERS CONCERNING THE SAME EXCEPT AS PROVIDED IN ARTICLE 5 AND ANY TRANSACTION
DOCUMENTS AND THE SUBJECT LEASE.  NOTHING
HEREIN CONTAINED IS INTENDED TO CREATE ANY THIRD PARTY BENEFICIARY RIGHTS.

Article 6.

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer hereby represents and warrants to the Seller
as follows:

Section 6.1.   Corporate Organization.  Each of the Parent and the Acquisition
Subsidiary is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has all requisite corporate
power and authority to own its properties and assets and to conduct its
business as now conducted.  True and
correct copies of the Certificate of Incorporation and By-laws (or other
comparable documents) of the Parent and the Acquisition Subsidiary have been
furnished to the Seller or its representatives, and such copies are accurate
and complete.

Section 6.2.   Qualification to Do Business.  Each of the Parent and the Acquisition
Subsidiary is duly qualified to do business as a foreign corporation and is in
good standing in every jurisdiction in which the character of the properties
owned or leased by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing would not have a material adverse effect on the ability of the Parent
or the Acquisition Subsidiary to consummate the transactions contemplated
hereby.

 31
 

 

Section 6.3.   Authority.  Each of the Parent and the Acquisition
Subsidiary has all requisite corporate power and authority to enter into the
Transaction Documents and to consummate the transactions contemplated herby and
thereby.  The execution and delivery of
such Transaction Documents and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
required corporate action on the part of each of the Parent and the Acquisition
Subsidiary, and no other corporate proceedings on the part of each of the
Parent and the Acquisition Subsidiary are necessary to authorize such
Transaction Documents or to consummate the transactions contemplated hereby and
thereby.  Such Transaction Documents have
been duly and validly executed and delivered by each of the Parent and the
Acquisition Subsidiary and, assuming such Transaction Documents have been duly
authorized, executed and delivered by the Seller, such Transaction Documents
constitute valid and binding agreements of each of the Parent and the
Acquisition Subsidiary, enforceable against each in accordance with their
terms, except that such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other laws, now
or hereafter in effect, relating to or limiting creditors’ rights generally,
and (ii) general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).

Section 6.4.   No Conflict or Violation.  The execution, delivery and performance by
each of the Parent and the Acquisition Subsidiary of the Transaction Documents
do not (i) violate any provision of the Certificate of Incorporation or By-laws
(or other comparable documents) of each of the Parent or the Acquisition Subsidiary
as applicable, (ii) violate any provision of law, or any order, judgment or
decree of any court or other Governmental Entity applicable to each, (iii)
violate, result in a breach of or constitute (with due notice or lapse of time
or both) a default under any Contract, lease, loan agreement, mortgage,
security agreement, trust indenture or other agreement or instrument to which
either the Parent or the Acquisition Subsidiary is a party or by which it is
bound or to which any of its properties or assets is subject, except in the
cases of clauses (ii) or (iii) for such violations, breaches or defaults that
would not, individually or in the aggregate, have a material adverse affect on
the ability of the Parent or the Acquisition Subsidiary to consummate the transaction
contemplated hereby.

Section 6.5.   Consents and Approvals.  The execution, delivery and performance by
the Buyer of the Transaction Documents do not require the Consent of, or filing
with, any Governmental Entity, or of any other Person, except such Consents or
filings, the failure of which to obtain or make, individually or in the
aggregate would not have a material adverse effect on the ability of the Buyer
to consummate the transactions contemplated hereby.

Section 6.6.   Financing.  The Buyer will have at the Closing sufficient immediately available funds,
to pay in cash the Initial Purchase Price and to pay any other amounts payable
pursuant to this Agreement and to effect the transactions contemplated by this
Agreement.

Section 6.7.   No Brokers.  No broker, finder or similar intermediary has
acted for or on behalf of, or is entitled to any broker’s, finder’s or similar
fee or other commission from the Buyer in connection with this Agreement or the
transactions contemplated hereby.

Section 6.8.   Investigation by the Buyer.  The Buyer is an informed and sophisticated participant in the transactions
contemplated by this Agreement and has conducted its own independent
review and analysis of the business, operations, technology, assets,
liabilities, results 

 32
 

of operations, financial
condition and prospects of the Companies and acknowledges that the Seller has
provided the Buyer with access to certain of the personnel, properties, assets,
premises and records of the Companies for this purpose.  In entering into this Agreement, the Buyer
has relied solely upon its own investigation and analysis, and the Buyer (i)
acknowledges that neither the Seller nor any of its Affiliates, agents or
representatives makes or has made any representation or warranty, either
express or implied, as to the Companies, their business or operations, or the
accuracy or completeness of any of the information provided or made available
to the Buyer or its directors, officers, employees, Affiliates, agents or
representatives, except as and only to the extent expressly set forth herein
with respect to the representations and warranties contained in Article 5
of this Agreement and subject to the limitations and restrictions contained in
this Agreement, and (ii) agrees,
to the fullest extent permitted by law, that neither the Seller, nor its
Affiliates, or their respective officers, directors, shareholders, employees,
agents, representatives, successors or assigns shall have any liability or
responsibility whatsoever to the Buyer or its directors, officers, employees,
Affiliates, agents or representatives on any basis (including, without
limitation, in contract or tort, under federal or state securities laws or
otherwise) based upon any information provided or made available, or statements
made, to the Buyer or its directors, officers, employees, Affiliates, agents or
representatives (or any omissions therefrom), including, without limitation, in
respect of the specific representations and warranties of the Companies set
forth in Article 5 of this Agreement, except as and only to the extent
expressly set forth in Article 9 and Article 10 herein with
respect to such representations and warranties and subject to the limitations
and restrictions contained in this Agreement. 
As of the date hereof, the Buyer is not aware of any facts, events or
circumstances that would cause any of the representations and warranties of the
Companies set forth in Article 5 of this Agreement to be untrue or
inaccurate in any respect.

Section 6.9.   Québec Regulation 45-106.  Buyer is an “accredited investor” as defined
in paragraph (m) of Section 1.1 of the Regulation 45-106 Respecting Prospectus
and Registration Exemptions (Québec), implementing the National Instrument
45-106 adopted by the Canadian Securities authorities.

Article 7.

COVENANTS OF THE SELLER

The Seller covenants as follows:

Section 7.1.   Resignation of Directors.  The Seller shall cause each of the directors
of the Companies set forth on Schedule 7.1 to submit letters of
resignation effective on or before the Closing.

Section 7.2.   Covenants
Not To Compete and Non-Solicitation Covenants.

(a)           Seller agrees that
from the Closing Date until the thirty-six (36) month anniversary of the
Closing Date, it shall and shall cause its Affiliates to refrain from engaging,
directly or indirectly, in any Competing Business.  For the avoidance of doubt, the sale by
Seller or any of its Affiliates of any of their products (other than Instant
Tickets) offered for sale, or contemplated to be offered for sale, as of the
Closing Date, shall not be deemed to be engaging 

 33
 

directly or
indirectly in a Competing Business and shall not be deemed to be a breach of
this Section 7.2(a).

(b)           Seller agrees that
from the date hereof until the eighteen (18) month anniversary of the Closing
Date, it shall not and shall cause its Affiliates not to, directly or
indirectly, solicit, endeavor to entice away from any of the Companies, or
otherwise interfere with the relationship of any of the Companies with any
Person who is, or was within the  eighteen (18) month period prior to the
Closing Date, a client, customer, vendor or supplier of any of the Companies,
in each case, for purposes of providing to any such client, customer, vendor or
supplier any services that would be competitive with a Competing Business.

(c)           The Seller
acknowledges that the officers and other employees of the Companies are
valuable to the operation of the business of the Companies.  Accordingly, the Seller agrees that from the
date hereof until the twelve (12) month anniversary of the Closing Date, it
shall not, and shall cause its Affiliates not to, directly or indirectly, hire
or attempt to hire, solicit, induce, recruit or encourage any of the officers
or other employees of any of the Companies to terminate their employment
relationship with any of the Companies in order to work for any other Person;
provided, that nothing in this Agreement shall prohibit (i) the Seller or any
of its Affiliates from hiring Emmanuele Savare and Jean-Francois Durand; (ii)
hiring or attempting to hire, solicit, induce or recruit any officer or
employee that has been terminated by one of the Companies for cause or without
cause; or (iii) hiring or attempting to hire any officer or employee with the
prior written consent of the Buyer.

(d)           It is the intent of
the parties to this Agreement that the provisions of this Section 7.2
shall be enforced to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is sought.  Notwithstanding the foregoing, if any
particular provisions or portions of this Section 7.2 shall be
adjudicated to be invalid or unenforceable, such provisions or portion thereof
shall be deemed amended to the minimum extent necessary to render such provision
or portion valid and enforceable, such amendment to apply only with respect to
the operation of such provisions or portions in the particular jurisdiction in
which such adjudication is made.  In
addition, the Seller acknowledges and agrees that damages and remedies at law
for any breach of this Section 7.2 will be inadequate and impractical,
that such breach would cause the Buyer and its Affiliates (including the
Companies) irreparable harm and that the Buyer and its Affiliates (including
the Companies) shall be entitled to specific performance and other equitable
remedies (including an injunction and tortuous interference claims) and such
other relief as a court or tribunal specified in Section 14.2 may deem
appropriate in addition to any other remedies that Buyer or its Affiliates
(including the Companies) may have under applicable law or under the terms of
this Agreement.

Section 7.3.   FCPA
Disclosure Statement.  The Seller
will complete, sign, and return to the Buyer along with this executed Agreement
the FCPA Disclosure Statement attached to this Agreement as Exhibit C,
and it will immediately provide the Buyer with any supplementary report required
under Exhibit C.

 34

Article 8.

COVENANTS OF THE
BUYER

Section 8.1.   Employees and
Employee Benefits.

(a)           Beginning on the
Closing Date and ending no earlier than the first anniversary of the Closing
Date, Buyer shall provide, or shall cause to be provided, to each employee of the
Company immediately prior to the Closing Date with compensation and employee
benefits that are substantially the same in the aggregate (excluding any
equity-based compensation) to the compensation and employee benefits provided
to such employees immediately prior to the Closing Date. Anything herein to the
contrary notwithstanding, in the event that the employment of any employee
shall be terminated by any Company prior to the first anniversary of the
Closing Date for any reason, Buyer shall cause such Company to provide, at
Buyer’s expense, each such employee with severance benefits at least equivalent
to the severance benefits to which such employee would have been entitled under
the Companies’ severance benefit practices on the date hereof, and set forth on
Schedule 8.1(a). Buyer shall specifically assume any Company Plans for
which specific assumption is required by applicable law.

(b)           As of the Closing
Date, the Buyer shall cause the Companies to continue all Company Plans (other
than Company Plans that are U.S. Plans) (the “Continued Plans”), and the
benefits thereunder, until the first anniversary of the Closing Date in
accordance with their terms and applicable law. Following the first anniversary
of the Closing Date, Continued Plans may be amended or terminated as determined
by the Buyer in its sole discretion. To the extent that any Company Employee
become eligible to participate in any employee benefit plans, programs and
agreements maintained by or contributed to by Buyer and its Subsidiaries, Buyer
shall, or shall cause its Subsidiaries to cause each such plan, program or
arrangement to treat the prior service with the Companies or any of their
respective Subsidiaries of any Company Employee (to the same extent such
service is recognized under analogous plans, programs or arrangements of the
Companies or any of their respective Subsidiaries prior to the Closing Date) as
service rendered to Buyer or any of its Subsidiaries, as the case may be, for
all purposes; provided, however, that such crediting of service shall not (i)
operate to duplicate any benefit or the funding of such benefit under any plan,
(ii) require the crediting of past service for benefit accrual purpose under
any defined benefit pension plan or similar arrangement or (iii) with respect
to any newly adopted plan, program or arrangement, be credited if past service
credit will not be provided to employees of Buyer or its Subsidiaries
participating in such plan. Buyer shall also cause each employee benefit plan,
program and agreement maintained by or contributed to by Buyer and its
Subsidiaries to waive any preexisting condition or waiting period limitation
which would otherwise be applicable to a Company Employee on or after the
Closing Date (to the extent such limitation would not apply under the
corresponding Company Plan). Notwithstanding the foregoing, any Buyer Plan that
could replace a Canadian Plan in Quebec shall first be registered in Quebec and
shall comply with the provisions of the SPPA.

Section 8.2.   Access After the
Closing. The Buyer shall afford the Seller, and to the accountants, counsel
and representatives of the Seller, reasonable access on and after the Closing
Date to those portions of the properties, assets, books, Contracts, and files
and records of the Companies that relate to activities prior to the Closing
Date (as well as to the employees and 

 35
 

auditors of the Companies
with knowledge of the activities of the Companies prior to the Closing Date) so
as to permit the Seller to comply with applicable financial reporting, tax and
any other legal requirement; provided, however, that (i) the
Seller and its representatives shall take such action as is deemed necessary in
the reasonable judgment of the Buyer to schedule such access and visits in such
a way as to avoid disrupting the normal business of the Buyer, (ii) the Buyer
shall not be required to take any action that would constitute a waiver of the
attorney-client or other privilege and (iii) the Buyer need not supply the
Seller with any information that, in the reasonable judgment of the Buyer, the
Buyer or the Companies are under a contractual, fiduciary or legal obligation
not to supply.

Section 8.3.   Use of
Intellectual Property.

(a)           Buyer acknowledges
and agrees that it has no rights in and to any marks or names owned, used or
licenses by Seller or any of its Affiliates (other than any Company) including
the “OBERTHUR,” “FRANÇOIS-CHARLES OBERTHUR,” “FCO” and “FCOF” names and marks
(the “Marks”) and, following the Closing Date, Buyer and the Companies
shall not have any right, title or interest in and to, or right to use, the
Marks or any marks or names confusingly similar thereto.

(b)           As soon as reasonably
practicable after the Closing Date, but in no event later than sixty (60) days
following the Closing Date, Buyer shall take whatever steps are necessary to
change the name of each Company to a name that does not include any of the
Marks or any term similar or related thereto, and to otherwise cease use of the
Marks, and shall take all actions necessary and appropriate to de-register the
name of each of the Companies with the appropriate Governmental Entities and to
register each Company’s new name with such authorities and forward a copy of
such filing to Seller forthwith following receipt.

(c)           As soon as
reasonably practicable after the Closing Date but in no event later than sixty
(60) days following the Closing Date, each Company shall take whatever steps
are necessary to change any “doing business as” designations of “OBERTHUR,” “FRANÇOIS-CHARLES
OBERTHUR,” “FCO” and “FCOF” to a designation that does not include “OBERTHUR,” “FRANÇOIS-CHARLES
OBERTHUR,” “FCO” and “FCOF” or any of the other Marks with any term similar
thereto, and to otherwise cease use of such name, and shall take all actions
necessary and appropriate to cancel such “doing business as” designation with
the appropriate Governmental Entities.

(d)           Buyer covenants that
after the Closing Date and except as provided for in this Section 8.3,
it will not, and will cause each Company to not, adopt, use or register or
authorize others to adopt, use or register, any trade names, trademarks,
service marks or Internet domain names consisting of or incorporating the Marks
or any marks, names or Internet domain names confusingly similar thereto.

(e)           Notwithstanding
anything in this Agreement to the contrary, the representations and warranties
provided by Seller pursuant to Article 5 shall not apply to the Marks.

Section 8.4.   Guarantees. After
the Closing, the Buyer shall use commercially reasonable efforts to diligently
cooperate with the Seller to assume, reject or terminate as soon as 

 36
 

practicable, but in any
event no later than 90 days after Closing, guarantees of the Business
(including any letters of credit, security
interests, obligations and other
similar undertakings) provided by Seller or Affiliates of the Seller;
provided that in any event Seller or its respective Affiliates shall be permitted
to terminate such guarantees (including any letters of credit, security interests, obligations and other similar undertakings)
after the 90th day if the Buyer fails to assume, reject or terminate such
guarantees (including any irrevocable letters of credit, security interests, obligations and other similar undertakings)
within such 90-day period after the Closing. After the Closing, the Seller
shall use commercially reasonable efforts to diligently assist the Buyer with
its efforts to assume, reject or terminate guarantees of the Business
(including any letters of credit, security
interests, obligations and other
similar undertakings) provided by Seller or Affiliates of the Seller.

Article 9.

TAXES

Section 9.1.   Tax
Indemnification by Seller. Subject to the limitations set forth or referred
to in this Article 9, Seller shall indemnify and
hold harmless Buyer in respect of and against (without duplication):

(a)           all liabilities for
Taxes imposed on the Companies with respect to Pre-Closing Periods, and with
respect to any Straddle Period, the portion of such Straddle Period ending on
the Closing Date and as determined in the manner provided in Section 9.3;

(b)           Losses relating to
any breach of a representation or warranty set forth in Section 5.10;
and

(c)           all reasonable and
necessary out-of-pocket expenses for advisors of the Buyer resulting from a
breach of any obligation of Seller set forth in this Article 9;

provided,
however, that Seller shall not be responsible for and shall not
indemnify Buyer for (i) all Transfer Taxes for which Buyer is liable
pursuant to Section 9.5, (ii) an amount equal to the aggregate amount of
Tax Reserves, (iii) any and all Taxes imposed on the Companies as a result of
any election under Section 338 of the Code; (iv) any and all Taxes imposed on
the Companies as a result of any action taken by Buyer after the Closing on the
Closing Date that is not in the ordinary course of business or that result from
a breach of any of Buyer’s obligations pursuant to this Agreement; and (v) any
and all Taxes imposed on or required to be paid by any Person that are related
or attributable to the Real Property Transfer (collectively, “Excluded Taxes”).

Section 9.2.   Tax
Indemnification by Buyer. Buyer shall indemnify and hold harmless Seller in
respect of and against (without duplication):

(a)           all Excluded Taxes;

(b)           all liabilities for Taxes imposed on
the Companies with respect to any Post-Closing Period;

 37
 

(c)           all liabilities for Taxes imposed on
the Companies with respect to a Straddle Period, but only with respect to the
portion of such Straddle Period beginning after the Closing Date, as determined
in accordance with the principles set forth in Section 9.3; and

(d)           all Taxes and reasonable and
necessary out-of-pocket expenses for advisors of the Seller resulting from a
breach of any obligation of Buyer set forth in this Article 9.

Section 9.3.   Allocation of
Certain Taxes.

(a)           Buyer and Seller
agree that if any Company is permitted but not required under applicable Tax
laws to treat the Closing Date as the last day of a taxable period, Buyer and
Seller shall treat such day as the last day of a taxable period.

(b)           The portion of any
Taxes for a Straddle Period allocable to the portion of such Straddle Period
ending on the Closing Date shall be deemed to equal (i) in the case of Taxes
that (x) are based upon or related to income or receipts or (y) imposed in
connection with any sale or other transfer or assignment of property, other
than Transfer Taxes described in Section 9.5, the amount which would be
payable if the taxable year ended on (and included) the Closing Date, and (ii)
in the case of Taxes not described in Section 9.3(b)(i) (including Taxes
imposed on a periodic basis (such as real property Taxes)), the amount of such
Taxes for the entire period multiplied by a fraction the numerator of which is
the number of calendar days in the period ending on (and including) the Closing
Date and the denominator of which is the number of calendar days in the entire
period. For purposes of this Agreement, all transactions (including whether
commercial or fiscal in nature) that occur on the Closing Date but after the
Closing and that are not incurred in the ordinary course of business of a
Company shall be considered to be attributable to the period that commences on
the day following the Closing Date. For purposes of Section 9.3(b)(i),
any exemption, deduction, credit or other item that is calculated on an annual
basis shall be allocated pro rata per day between the period ending on the
Closing Date and the period beginning the day after the Closing Date.

Section 9.4.   Preparation and
Filing of Tax Returns. Buyer shall prepare and timely file or cause to be
prepared and timely filed (at its own cost and expense) all Pre-Closing Period
Tax Returns and Straddle Period Tax Returns of each Company. Buyer shall
deliver or cause to be delivered drafts of each such Pre-Closing Period Tax
Return and Straddle Period Tax Return to Seller for its review at least thirty
(30) days prior to the Due Date of such Tax Return and, with respect to each
Straddle Period Tax Return, shall notify Seller in writing of Buyer’s
calculation of Seller’s share of the Taxes of each Company relating to such
Straddle Period (determined in accordance with this Section 9.4);
provided, however,
that such draft of such Pre-Closing Period Tax Return and Straddle Period Tax
Return and, with respect to each Straddle Period Tax Return, the calculation of
Seller’s share of the Tax liability for such Straddle Period (determined in
accordance with this Section 9.4),
in each case, shall be subject to Seller’s review and approval. If Seller
disputes any item on such Pre-Closing Period Tax Return or Straddle Period Tax
Return and/or, with respect to any Straddle Period Tax Return, the calculation
of Seller’s share of liability for such Straddle Period, it shall notify Buyer
of such disputed item (or items) and the basis for its objection within fifteen
(15)  days of the receipt of such draft of
such Tax Return and calculation. Buyer and Seller shall act in good faith to
resolve any dispute as 

 38
 

promptly as practicable. If
Buyer and Seller cannot resolve any disputed item, the item in question shall
be resolved in the same manner provided for resolving disputes in Section
3.1.

Section 9.5.   Transfer Taxes.
Notwithstanding anything to the contrary contained in this Agreement, Buyer
shall be responsible for the payment of all transfer, sales, use, stamp,
conveyance, value added, recording, registration, documentary, filing and other
similar Taxes and administrative fees (including, without limitation, notary
fees) arising in connection with the consummation of the transactions
contemplated by this Agreement (“Transfer Taxes”).
Buyer shall be responsible for preparing and filing all Tax Returns required to
be filed in connection with Transfer Taxes, and Seller shall cooperate with
Buyer in connection with the preparation of any such Tax Return relating to
Transfer Taxes.

Section 9.6.   Refunds. Buyer
shall pay to Seller (a) all Tax refunds and credits of Taxes (including any
interest in respect thereof) received by any of Buyer or its Affiliates or any
Company after the Closing Date and attributable to Taxes paid by any Company
with respect to any Pre-Closing Period except to the extent such refunds or
credits are taken into account on the Closing Balance Sheet, and (b) the
portion of all refunds of Taxes or credits of Taxes (including any interest in
respect thereof) received by any of Buyer or its Affiliates or any Company
after the Closing Date and attributable to Taxes paid by any Company with
respect to any Straddle Period (such portion to be allocated in a manner
consistent with the principles set forth in Section 9.3) except to the
extent such refunds or credits are taken into account on the Closing Balance
Sheet. Any such refunds or credits of Taxes required to be paid by Buyer to
Seller pursuant to this Section 9.6 shall be paid within five
Business Days of the receipt of such refunds or credits of Taxes by Buyer, its
Affiliates or any Company. The Buyer shall and shall cause each Company to
cooperate with the Seller in obtaining refunds and credits of the Companies
relating to Pre-Closing Periods and Straddle Periods (including through
amendment of Tax Returns).

Section 9.7.   Cooperation.
Buyer and Seller and their respective Affiliates shall cooperate in the
preparation of all Tax Returns of or relating to the Companies and the conduct
of all Tax audits or other administrative or judicial proceedings relating to
the determination of any Tax of any Company for any Tax period for which one
party could reasonably require the assistance of the other party in obtaining
any necessary information. Such cooperation shall include, but not be limited
to, furnishing prior years’ Tax Returns of any Company or return preparation
packages to the extent related solely to any Company illustrating previous
reporting practices or containing historical information relevant to the
preparation of Tax Returns of any Company, and furnishing such other
information within such party’s possession requested by the party filing such
Tax Returns of or relating to any Company as is relevant to their preparation. Such
cooperation and information also shall include without limitation provision by
any of the Companies to Seller of powers of attorney for the purpose of signing
Tax Returns (or, if required under applicable Law, causing the Company to sign
a Pre-Closing Period Tax Return) and defending audits and promptly forwarding
copies of appropriate notices and forms or other communications received from
or sent to any Taxing authority which relate to any Company, and providing
copies of all relevant Tax Returns of any Company, together with accompanying
schedules and related work papers, documents relating to rulings received by
any Company or other determinations by any Taxing authority with respect to any
Company and records concerning the ownership and Tax basis of property of any
Company, which the requested party may possess. Buyer and Seller and their
respective Affiliates shall make their respective 

 39
 

employees and facilities
available on a mutually convenient basis to explain any documents or
information provided hereunder.

Section 9.8.   Tax Audits. Buyer
shall deliver a written notice to Seller in writing promptly following any
demand, claim, or notice of commencement of a claim, proposed adjustment,
assessment, examination or other administrative or court proceeding with
respect to Taxes of any Company for which Seller may be liable pursuant to this
Article 9 (“Tax Contest”)
and shall describe in reasonable detail (to the extent known by Buyer or such
Company) the facts constituting the basis for such Tax Contest, the nature of
the relief sought, and the amount of the claimed Losses, if any (the “Tax Claim Notice”), provided, however, that no delay or failure on the part of Buyer to
notify Seller pursuant to this Section 9.8
shall relieve Seller of any liability or obligations under Article 9
except to the extent that Seller is prejudiced as a consequence of such
failure.

(a)           With respect to Tax
Contests for Taxes of any Company for a Pre-Closing Period, Seller may elect to
assume and control the defense of such Tax Contest by written notice to Buyer
within sixty (60) days after delivery by Buyer to Seller of the Tax Claim
Notice. If Seller elects to assume and control the defense of such Tax Contest,
it (i) shall bear its own costs and expenses, (ii) shall be entitled to engage
its own counsel and (iii) may (x) pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with any Taxing authority, (y)
either pay the Tax claimed or sue for refund where applicable Law permits such
refund suit or (z) contest, settle or compromise the Tax Contest in any
permissible manner, and Buyer shall (and shall cause its Affiliates including
the applicable Company) to cooperate with Seller in pursuing such Tax Contest
(including by providing appropriate powers of attorney). If Seller elects to
assume the defense of any Tax Contest, (i) Seller shall keep Buyer reasonably
informed of all material developments and events relating to such Tax Contest
and (ii) at its own cost and expense, Buyer shall have the right to participate
in (but not control) the defense of such Tax Contest.

(b)           In connection with
any Tax Contest that relates to Taxes of any Company for a Pre-Closing Period
that Seller does not elect to control pursuant to Section 9.8(a), such
Tax Contest shall be controlled by Buyer and Seller agrees to cooperate with
Buyer in pursing such Tax Contest, provided, however, that none
of Buyer or its Affiliates (including such Company) shall enter into any
settlement or compromise with respect to any such Tax Contest that relates to
Taxes of any Company for a Pre-Closing Period without the prior written consent
of Seller, which consent shall not be unreasonably withheld or delayed. In
connection with any Tax Contest that is described in this Section 9.8(b)
and controlled by Buyer, Seller shall be entitled to participate in such Tax
Contest and Buyer shall keep Seller reasonably informed of all material
developments and events relating to such Tax Contest and shall provide Seller
with copies of all correspondence, documents and notes of meetings and telephone
calls relevant to the Tax Contest (to the extent Seller elects not to
participate in such meetings and telephone calls) and, at its own cost and
expense, Seller shall have the right to participate in (but not control) the
defense of such Tax Contest.

(c)           Buyer and Seller
shall jointly control (at each party’s own cost and expense) all Tax Contests
relating to Straddle Periods of the Companies. The parties agree to cooperate
with each other in pursuing any such Tax Contest and neither Buyer nor Seller shall
(or shall permit 

 40
 

any of their
Affiliates including the Companies) to settle a Tax Contest relating to a
Straddle Period of any Company without the other Party’s prior written consent,
which consent shall not be unreasonably withheld or delayed.

Section 9.9.   Exclusivity;
Conflicts. Notwithstanding anything to the contrary contained in this
Agreement, (i) this Article 9 shall
be the exclusive means by which a Party to this Agreement may seek
indemnification relating or attributable to Taxes or Tax Returns, (ii) claims
for indemnification pursuant to Section 9.1 and
Section 9.2 may be made by a party at
any time prior to the 30th day after the expiration of the statute of
limitations (including any extension thereto) applicable to the Tax matter to
which the claim relates and (iii) to the extent there is any inconsistency
between the terms of this Article 9 and
any other provision of this Agreement, the provisions of this Article 9 shall govern and control; provided,
however, that Sections
10.2(b)(iii) and (v), 10.4(b), 10.5 and 10.6, (or the
principles of such Sections and any limitations contained therein) shall apply
to this Article 9. No claim related or
attributable to Taxes or Tax Returns may be asserted after the expiration of
the applicable survival period.

Section 9.10.   Treatment
of Indemnification Payments. Any indemnification payments made to an
Indemnitee pursuant to this Agreement shall be treated as an adjustment to the
Final Purchase Price for Tax purposes.

Section 9.11.   No
Amendment. Neither Buyer nor any of its Affiliates (including any Company)
shall amend or cause to be amended any Tax Return of any Company relating to a
Pre-Closing Period or Straddle Period without the consent of Seller.

Section 9.12.   Certain
Limitations. Notwithstanding anything to the contrary contained in this
Agreement, Seller shall not be required to indemnify or hold harmless Buyer and
its Affiliates (including after the Closing, the Companies) in respect of or
against any and all Losses resulting from, relating or attributable to (i) Taxes
or Tax Returns other than as set forth in (subject to the proviso set forth in Section 9.1) Sections 9.1(a),
9.1(b) (solely to the extent of Taxes of
the Companies for Pre-Closing Periods and the portion of any Straddle Periods
ending on the Closing Date (determined in accordance with Section 9.3))
and 9.1(c); and (ii) any Tax attribute of
any Company, including but not limited to any net operating loss carryover or
credit carryover, any capital loss or Tax attribute which may be affected in
any way by the acquisition of control under applicable law, or the
determination that any such Tax attribute is subject to any limitation on its
use under applicable Law.

Section 9.13.   Limitation
on Actions. Neither Buyer nor any of its Affiliates (including after the
Closing, the Companies) shall take any action after the Closing (other than any
action after the Closing on the Closing Date that is in the ordinary course of
business) relating or attributable to a Pre-Closing Period or Straddle Period
of the Companies that could result in any increased Tax liability (or a
reduction in a Tax refund or credit) in respect of a Pre-Closing Period of any
Company or the portion of a Straddle Period of any Company ending on the
Closing Date (determined in accordance with the principles of Section 9.3).

Section 9.14.   Tax
Benefits. Notwithstanding anything to the contrary contained in this
Agreement, all indemnification payments otherwise required to be made by the
Seller to the Buyer (or any Buyer Indemnitee) pursuant to this Agreement shall
be reduced by the amount of 

 41
 

any Tax Benefits related
or attributable to the Loss that gave rise to such indemnity payment. For
purposes of this Agreement, “Tax Benefits” shall mean the sum of any
increased deductions, losses or credits allowable or decreases in income, gains
or recapture of credits allowable, multiplied by the combined highest marginal
federal, state, provincial and local Tax rate in the applicable jurisdiction.

Article 10.

INDEMNIFICATION

Section 10.1.   Survival.
Subject to Section 9.9, each of the
representations and warranties set forth in this Agreement shall survive the
Closing for a period terminating eighteen (18) months after the Closing Date; provided, however, that
(i) the representations and warranties of the Seller set forth in Section 5.6 (Capitalization of FCOI), and the related rights
of the Buyer Indemnitees to indemnity with respect to any breach thereof in
accordance with the applicable Sections hereof, shall survive for a period
terminating sixty (60) months after the Closing Date, (ii) the representations
and warranties of the Seller set forth in Section 5.18
(Employee Plans) and the related rights of the Buyer Indemnitees to indemnity
with respect to any breach thereof in accordance with the applicable Sections
hereof, shall survive for a period terminating thirty-six (36) months after the
Closing Date and (iii) the representations and warranties of the Seller set
forth in Section 5.20 (Environmental Matters) and
the related rights of the Buyer Indemnitees to indemnity with respect to any
breach thereof in accordance with the applicable Sections hereof, shall survive
for a period terminating twenty-four (24) months after the Closing Date. After
the survival periods set forth in the previous sentence, the representations
and warranties shall terminate and have no further force or effect. No claim or
action arising out of or related to a breach of a representation or warranty
under this Agreement (whether such claim or action would be pursuant to such
section or under any other theory of liability) shall be asserted by any
Indemnitee after such survival period, unless notice of such claim or action is
given to the Indemnitor in accordance with Section 10.4
prior to the end of such survival period.

Section 10.2.   Indemnification
by the Seller.

(a)           Notwithstanding the
Closing, the Seller shall indemnify and agree to save and hold the Buyer, its
directors, officers, and employees (the “Buyer Indemnitees”), harmless
against any Losses incurred by any Buyer Indemnitee after the Closing, to the
extent such Losses arise out of or result from any one or more of the
following:

(i)                                     a
breach of any representation or warranty of the Seller contained in Article
5 of this Agreement;

(ii)                                  a
breach of any of the covenants or agreements of the Seller contained in this
Agreement; or

(iii)                               the
Seller’s failure to pay in full (including any fees and expenses relating to
such Loss) the Debt Repayment Amounts shown on Schedule 10.2(a)(iii); provided,
however, to the extent that any such Losses are reflected in the
post-closing adjustment pursuant 

 42
 

to Section 3.2 of this Agreement, the Buyer
shall not be entitled to indemnification for such Losses pursuant to this
Section 10.2(a)(iii).

(b)           Notwithstanding
anything in this Section 10.2 to the contrary:

(i)                                     the
Seller shall not have any liability with respect to matters covered by Section
10.2(a)(i) or (ii) (whether such liability would be pursuant to such
section or under any other theory of liability) unless the aggregate of all
Losses relating thereto for which the Seller would, but for this Section
10.2(b)(i), be liable exceeds on a cumulative basis an amount equal to USD
$500,000 (subject to Section 10.2(b)(ii)) (at which point, subject to
the other limitations herein, the Seller will be liable to the Buyer
Indemnitees for all such Losses from the first dollar of Losses); and

(ii)                                  the
Seller shall not have any liability with respect to matters covered by Section
10.2(a)(i) or (ii) (whether such liability would be pursuant to such
section or under any other theory of liability) for any individual items where
the Loss relating thereto is less than USD $50,000 and such items shall not be
aggregated for purposes of clause (i) of this Section 10.2(b);

(iii)                               the
Seller shall not have any liability with respect to matters covered by Section
10.2(a)(i) or (ii) and/or Section 9.1 (whether such liability would
be pursuant to such section or under any other theory of liability) for any
breach of a representation or warranty if the Buyer otherwise is aware of such
breach prior to the Closing; and

(iv)                              the
maximum amount for which the Seller shall be liable with respect to matters
covered by Section 10.2(a)(i) or (ii) whether such liability would be
pursuant to such section or under any other theory of liability shall not
exceed in the aggregate USD $10,000,000 (the “Maximum Seller Indemnification
Amount”);

(v)                                 the
maximum amount for which the Seller shall be liable with respect to matters
covered by Section 9.1 shall not exceed the Final Purchase Price reduced
by the Maximum Seller Indemnification Amount; and

(vi)                              the
maximum amount for which the Seller shall be liable with respect to matters
covered by Section 10.2(a)(iii) shall not exceed $20,000,000.

(c)           Notwithstanding
anything in this Agreement to the contrary, for purposes of Section 10.2, in
determining the amount of any Losses, no effect shall be given to any
qualification as to materiality or Material Adverse Effect.

 

 43

 

Section 10.3.          Indemnification
by the Buyer.

(a)           Notwithstanding the
Closing, the Buyer shall indemnify and agree to save and hold the Seller, its
directors, officers and employees (the “Seller Indemnitees”) harmless
against any Losses incurred by any Seller Indemnitee after the Closing, to the
extent such Losses arise out of or result from any one or more of the
following:

(i)                                     a
breach of any representation or warranty of the Buyer contained in Article 6
of this Agreement;

(ii)                                  a
breach of any covenant or agreement of the Buyer contained in this Agreement;
or

(iii)                               guarantee
obligations of the Seller or its Affiliates (including any letters of credit)
under any of the agreements listed in Schedule 10.3(a)(iii).

(b)           Notwithstanding
anything in this Section 10.3 to the contrary:

(i)                                     the
Buyer shall not have any liability with respect to matters covered by Section
10.3(a)(i) or (ii) unless the aggregate of all Losses relating thereto for
which the Buyer would, but for this Section 10.3(b)(i), be liable exceeds
on a cumulative basis an amount equal to USD $500,000 (subject to Section
10.3(b)(ii) and (iii)) (at which point, subject to the other limitations
herein, the Buyer will be liable to the Seller Indemnitees for all such Losses
from the first dollar of Losses);

(ii)                                  the
maximum amount for which the Buyer shall be liable with respect to matters
covered by Section 10.3(a)(i) or (ii) shall not exceed in the aggregate
USD $10,000,000; and

(iii)                               the maximum amount for
which the Buyer shall be liable with respect to the agreements and matters
covered by Section 10.3(a)(iii) shall not exceed the Initial Purchase Price;

(c)           Notwithstanding
anything in this Agreement to the contrary, for purposes of Section 10.3, in
determining the amount of any Losses, no effect shall be given to any
qualification as to materiality or Material Adverse Effect.

Section 10.4.          Procedures for Indemnification.

(a)           If a party entitled
to indemnification under this Article 10 (an “Indemnitee”)
asserts that a party obligated to indemnify it under this Article 10 (an
“Indemnitor”) has become obligated to such Indemnitee pursuant to Section
10.2 or 10.3, or if any suit, action, investigation, claim or
proceeding is begun, made or instituted as a result of which the Indemnitor may
become obligated to an Indemnitee under Section 10.2 or 10.3,
such Indemnitee shall give prompt written notice thereof to the Indemnitor; provided,
however, that the failure of 

 

 44
 

 

the Indemnitee
to give notice to the Indemnitor shall not release the Indemnitor of its indemnification
obligations hereunder, except to the extent the Indemnitor shall have been
prejudiced by such failure.  The
Indemnitor shall have the right, but not the obligation, to defend, contest or
otherwise protect the Indemnitee against any such suit, action, investigation,
claim or proceeding at its sole cost and expense.  If the Indemnitor so elects to defend,
contest or otherwise protect the Indemnitee, the Indemnitee shall (i) make
available to the Indemnitor all relevant books and records in its possession
and (ii) cooperate and assist the Indemnitor to the extent reasonably
possible.  The Indemnitee shall have the
right, but not the obligation, to participate at its own expense in the defense
thereof by counsel of the Indemnitee’s choice. 
If the Indemnitor fails to defend, contest or otherwise protect against
such suit, action, investigation, claim or proceeding, the Indemnitee shall
have the right to do so, including, without limitation, the right to make any
compromise or settlement thereof, and the Indemnitee shall be entitled to
recover the entire cost thereof from the Indemnitor, including, without
limitation, reasonable attorneys’ fees, disbursements and amounts paid as the
result of such suit, action, investigation, claim or proceeding.

(b)           Recoupment Under
the Letter of Credit.  From and after
the Closing Date (but subject to Article 10), a Buyer Indemnitee shall
first be required to seek recovery with respect to any Loss pursuant to Article
9 and this Article 10 from the Letter of Credit in accordance with
the terms of Section 2.3.

Section 10.5.          Exclusive
Remedy.  Notwithstanding any
provision of this Agreement to the contrary, (a) absent fraud or intentional
misrepresentation on the part of any party or a claim for injunctive relief,
indemnification claims brought in accordance with and subject to either Article 9
or this Article 10, as the case may be, shall be the exclusive
remedy of any Indemnitee after the Closing with respect to, arising out of or
resulting from the subject matter of this Agreement and (b) except as provided
in Section 9.9, this Article 10 shall not apply to Taxes or Tax
Returns or any matter governed by Article 9.

Section 10.6.          Mitigation.  Each Indemnitee shall make commercially
reasonable efforts to mitigate any claim or liability that such Indemnitee
asserts under Article 9 and this Article 10.  In the event that an Indemnitee shall fail to
make such commercially reasonable efforts to mitigate any claim or liability,
then notwithstanding anything else to the contrary contained herein, the
Indemnitor shall not be required to indemnify such Indemnitee for that portion
of any Loss that could reasonably be expected to have been avoided if such
Indemnitee had made such efforts.

Section 10.7.          Limitation on Losses.  Notwithstanding anything in this Agreement to
the contrary, the amount of any Losses shall be reduced to the extent of any
insurance payments received by an Indemnitee for such Losses; provided,
however, that nothing in this Section 10.7 shall provide a basis for any
Indemnitor to delay making any payments otherwise required to be made by it
hereunder.  Each Indemnitee shall use its
best efforts to file and pursue any insurance payments which may be owing in
order to mitigate such Losses.

 

 45
 

 

Article 11.

CONDITIONS
PRECEDENT TO PERFORMANCE BY THE SELLER

The obligations of the Seller to consummate the
transactions contemplated by this Agreement are subject to the fulfillment, at
or before the Closing Date, of the following conditions, any one or more of
which may be waived by the Seller in its sole discretion:

Section 11.1.          Representations
and Warranties of the Buyer.  The
representations and warranties made by the Buyer in this Agreement shall be
true and correct as of the date here of, and, except to the extent such
representations and warranties refer to a specific date, as of the Closing Date
as though made by the Buyer on and as of the Closing Date, except where the
failure of such representations and warranties to be so true and correct would
not constitute a material adverse effect on the Buyer’s ability to consummate
the transactions contemplated hereby. 
The Seller shall have received a certificate to that effect dated the
Closing Date and signed by an executive officer of the Buyer.

Section 11.2.          Performance
of the Obligations of the Buyer.  The
Buyer shall have performed in all material respects all obligations required
under this Agreement to be performed by it on or before the Closing Date, and
the Seller shall have received a certificate to that effect dated the Closing
Date and signed by an executive officer of the Buyer.

Section 11.3.          No
Violation of Orders.  No preliminary
or permanent injunction or other order issued by any court or other
governmental or regulatory authority, domestic or foreign, nor any statute,
rule, regulation, decree or executive order promulgated or enacted by any
Governmental Entity that declares this Agreement invalid or unenforceable in
any respect or which prevents the consummation of the transactions contemplated
hereby shall be in effect; and no action or proceeding before any court or
regulatory authority, domestic or foreign, shall have been instituted or
threatened by any Governmental Entity or by any other Person, which seeks to
prevent the consummation of the transactions contemplated by this Agreement or
which challenges the validity or enforceability of this Agreement, and which in
any such case has a reasonable likelihood of success in the opinion of counsel
to the Seller.

Section 11.4.          Letter
of Credit.  The LoC Issuer shall have
executed and delivered the Letter of Credit to the Seller.

Section 11.5.          OEM Agreement.  The Seller and OCS each shall have executed
and delivered an OEM agreement substantially in the form attached hereto as Exhibit
D.

Section 11.6.          Real
Estate Lease.  Immediately prior to
the Closing, Oberthur Gaming Technologies Corp. and NewCo each shall have
executed and delivered a lease agreement in respect of the Subject Real
Property substantially in the form attached hereto as Exhibit A.

Section 11.7.          Tax
Escrow Agreement.  The Seller, the
Buyer and the Tax Escrow Agent each shall have executed and delivered a tax
escrow agreement substantially in the form attached hereto as Exhibit B.

 

 46
 

 

Article 12.

CONDITIONS
PRECEDENT TO PERFORMANCE BY THE BUYER

The obligations of the Buyer to consummate the
transactions contemplated by this Agreement are subject to the fulfillment, at
or before the Closing Date, of the following conditions, any one or more of
which may be waived by the Buyer in its sole discretion:

Section 12.1.          Representations
and Warranties of the Seller.  Each
of the representations and warranties made by the Seller in Section 5.6 (Capitalization of FCOI) shall be true and correct
in all respects, as of the date hereof, and, except to the extent such
representations and warranties refer to a specific date, as of the Closing
Date.   Each of the other representations
and warranties made by the Seller in this Agreement  shall be true and correct as of the date hereof, and, except
to the extent such representations and warranties refer to a specific date, as
of the Closing Date, except where the failure of such representations and
warranties to be so true and correct would not constitute a Material Adverse
Effect.  The Buyer shall have received a
certificate to that effect dated the Closing Date and signed by an executive
officer of the Seller.

Section 12.2.          Performance
of the Obligations of the Seller. 
The Seller shall have performed in all material respects all obligations
required under this Agreement to be performed by it on or before the Closing
Date, and the Buyer shall have received a certificate to that effect dated the
Closing Date and signed by an executive officer of the Seller.

Section 12.3.          No
Violation of Orders.  No preliminary
or permanent injunction or other order issued by any court or governmental or
regulatory authority, domestic or foreign, nor any statute, rule, regulation,
decree or executive order promulgated or enacted by any Governmental Entity,
which declares this Agreement invalid in any respect or prevents the
consummation of the transactions contemplated hereby shall be in effect; and no
action or proceeding before any court or governmental or regulatory authority,
domestic or foreign, shall have been instituted or threatened by any
Governmental Entity or by any other Person which seeks to prevent the
consummation of the transactions contemplated by this Agreement or which
challenges the validity or enforceability of this Agreement, and which in
either such case has a reasonable likelihood of success in the opinion of
counsel to the Buyer.

Section 12.4.          Letter
of Credit.  The Seller and the LoC
Issuer shall have executed and delivered the Letter of Credit to the Buyer.

Section 12.5.          OEM Agreement.  The Seller and OCS each shall have executed
and delivered an OEM agreement substantially in the form attached hereto as Exhibit
D.

Section 12.6.          Real
Estate Lease.  Oberthur Gaming
Technologies Corp. and NewCo each shall have executed and delivered the Subject
Lease.

Section 12.7.          Tax
Escrow Agreement.  The Seller, the
Buyer and the Tax Escrow Agent each shall have executed and delivered a tax
escrow agreement substantially in the form attached hereto as Exhibit B.

 

 47
 

 

Section 12.8.          FCPA Disclosure Statement.  The Buyer shall have received an executed
FCPA Disclosure Statement in the form attached to this Agreement as Exhibit C.

Section 12.9.  Other Closing Documents.  The Buyer shall have received such other
certificates, instruments and documents in confirmation of the representations
and warranties of the Seller or in furtherance of the transactions contemplated
by this Agreement as the Buyer or its counsel may reasonably request.

Article 13.

TERMINATION

Section 13.1.          Conditions
of Termination.  Notwithstanding
anything to the contrary contained herein, this Agreement may be terminated at
any time before the Closing:

(a)           By mutual written
consent of the Seller and the Buyer;

(b)           By the Buyer, if
Seller has breached any representation, warranty, covenant or agreement
contained in this Agreement and has not cured such breach within ten Business
Days after written notice to the Seller (provided, that the Buyer is not then
in material breach of the terms of this Agreement, and provided further, that
no cure period shall be required for a breach which by its nature cannot be
cured) such that the conditions set forth in Section 12.1 or Section
12.2 hereof, as the case may be, will not be satisfied;

(c)           By the Seller, if
the Buyer has breached any representation, warranty, covenant or agreement contained
in this Agreement and has not cured such breach within ten Business Days after
written notice to the Buyer (provided, that the Seller is not then in material
breach of the terms of this Agreement, and provided further, that no cure
period shall be required for a breach which by its nature cannot be cured) such
that the conditions set forth in Section 11.1 or Section  11.2
hereof, as the case may be, will not be satisfied;

(d)           By the Seller or the
Buyer if:  (i) there shall be a final,
non-appealable order of a federal or state court in effect preventing
consummation of the transactions contemplated hereby; or (ii) there shall be
any final action taken, or any statute, rule, regulation or order enacted,
promulgated or issued or deemed applicable to the transactions contemplated
hereby by any Governmental Entity which would make consummation of the
transactions contemplated hereby illegal; or

(e)           By the Seller or the
Buyer if the Closing shall not have been consummated by 12:01 AM Eastern
Standard Time on May 2, 2007; provided that the right to terminate this
Agreement under this Section 13.1(e) shall not be available to any party
whose failure to fulfill any material obligation under this Agreement has been
both willful and the cause of, or resulted in, the failure of the Closing to
occur on or before such date.

Section 13.2.          Effect
of Termination.  In the event of the
termination of this Agreement as provided in Section 13.1 hereof, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of the Seller or the Buyer, or their respective
officers, directors, stockholders, partners, or other Persons under their
control, except to the extent that 

 

 48
 

 

such termination results
from the willful breach by a party hereto of any of its representations,
warranties, covenants or agreements set forth in this Agreement, and provided
that the provisions of Article 13 and Article 14 hereof shall
remain in full force and effect and survive any termination of this Agreement.

Article 14.

MISCELLANEOUS

Section 14.1.          Successors
and Assigns.  No party hereto shall
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other parties hereto and any such attempted assignment
without such prior written consent shall be void and of no force and effect; provided,
however, that Buyer may (i) assign any or all of its rights and
interests hereunder to one of its Subsidiaries and (ii) designate such
Subsidiary to perform its obligations hereunder (in any and all of which cases
Buyer nonetheless shall remain responsible for the performance of all of its
obligations hereunder).  This Agreement
shall inure to the benefit of and shall be binding upon the successors and
permitted assigns of the parties hereto.

Section 14.2.          Governing
Law, Jurisdiction.  This Agreement
shall be construed, performed and enforced in accordance with, and governed by,
the laws of the State of New York, without giving effect to the conflict or
choice of law rules thereof.  The parties
hereto irrevocably and unconditionally submit to the exclusive jurisdiction of
the United States District Court for the Southern District of New York or any
New York State court sitting in Manhattan for the purpose of enforcing this
Agreement.  In any action, suit or other
proceeding, each of the parties hereto irrevocably and unconditionally waives
and agrees not to assert by way of motion, as a defense or otherwise any claims
that it is not subject to the jurisdiction of the above courts, that such action
or suit is brought in an inconvenient forum or that the venue of such action,
suit or other proceeding is improper. 
Each of the parties hereto also agrees that any final and unappealable
judgment against such party in connection with any action, suit or other
proceeding shall be conclusive and binding on such party and that such award or
judgment may be enforced in any court of competent jurisdiction, either within
or outside of the United States.  A
certified or exemplified copy of such award or judgment shall be conclusive
evidence of the fact and amount of such award or judgment.

Section 14.3.          Expenses.  All of the fees, expenses and costs incurred
in connection with this Agreement and the transactions contemplated hereby
shall be paid by the party hereto incurring such fees, expenses and costs.

Section 14.4.          Severability.  In the event that any part of this Agreement
is declared by any court or other judicial or administrative body to be null,
void or unenforceable, said provision shall survive to the extent it is not so
declared, and all of the other provisions of this Agreement shall remain in
full force and effect.

Section 14.5.          Notices.  All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (i) on the date of service if served personally on the
party to whom notice is to be given; (ii) on the next Business Day after
transmission if sent via facsimile transmission to the facsimile number given
below, 

 

 49
 

 

and telephonic
confirmation of receipt is obtained promptly after completion of transmission;
(iii) on the day after the day of delivery to Federal Express or similar
overnight courier or the Express Mail service maintained by the United States
Postal Service; or (iv) on the fifth day after mailing, if mailed to the party
to whom notice is to be given, by first class mail, registered or certified,
postage prepaid and properly addressed, to the party as follows:

	
  If to the Seller:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  François-Charles Oberthur Fiduciaire, S.A.

  
	
   

  	
  102, boulevard Malesherbes

  
	
   

  	
  75017 Paris

  
	
   

  	
  France

  
	
   

  	
  Attn:

  	
  Thomas Savare

  
	
   

  	
   

  	
  Jean-Michel Guichot

  
	
   

  	
  Telecopy:

  	
  +33 (1) 44 15 10 30

  
	
   

  	
   

  	
   

  
	
  Copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Reed Smith LLP

  
	
   

  	
  599 Lexington Avenue

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attn:

  	
  David M. Grimes, Esq.

  
	
   

  	
   

  	
  Brian E. Burns, Esq.

  
	
   

  	
  Telecopy:

  	
  (212) 521-5450

  
	
   

  	
   

  	
   

  
	
  If to the
  Parent:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Scientific Games Corporation

  
	
   

  	
  750 Lexington Avenue,

  
	
   

  	
  25th Floor

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attn:

  	
  Ira H. Raphaelson, Esq.

  
	
   

  	
  Telecopy:

  	
  (212) 754-2372

  
	
   

  	
   

  	
   

  
	
  Copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Willkie Farr & Gallagher LLP

  
	
   

  	
  787 Seventh Avenue

  
	
   

  	
  New York, New York 10019

  
	
   

  	
  Attn:

  	
  Steven A. Seidman

  
	
   

  	
   

  	
  Laura L. Delanoy

  
	
   

  	
  Telecopy:

  	
  (212) 728-9763

  
	
   

  	
   

  	
  (212) 728-9662

  
				

 

 50
 

 

	
  If to Acquisition
  Subsidiary:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Scientific Games Holdings (Canada) Inc.

  
	
   

  	
  c/o Scientific Games Corporation

  
	
   

  	
  750 Lexington Avenue,

  
	
   

  	
  25th Floor

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attn:

  	
  Ira H. Raphaelson, Esq.

  
	
   

  	
  Telecopy:

  	
  (212) 754-2372

  
	
   

  	
   

  	
   

  
	
  Copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Willkie Farr & Gallagher LLP

  
	
   

  	
  787 Seventh Avenue

  
	
   

  	
  New York, New York 10019

  
	
   

  	
  Attn:

  	
  Steven A. Seidman

  
	
   

  	
   

  	
  Laura L. Delanoy

  
	
   

  	
  Telecopy:

  	
  (212) 728-9763

  
	
   

  	
   

  	
  (212) 728-9662

  
				

 

Any party may change its address for the purpose of
this Section by giving the other parties written notice of its new address in
the manner set forth above.

Section 14.6.          WAIVER
OF JURY TRIAL.  EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS PROVIDED FOR HEREBY.

Section 14.7.          Amendments;
Waivers.  This Agreement may be
amended or modified, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written instrument
executed by the parties hereto, or in the case of a waiver, by the party
waiving compliance.  Any waiver by any
party of any condition, or of the breach of any provision, term, covenant, representation
or warranty contained in this Agreement, in any one or more instances, shall
not be deemed to be nor construed as a further or continuing waiver of any such
condition, or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.

Section 14.8.          Public
Announcements.  The parties agree
that after the signing of this Agreement, the Seller shall not, and shall not
permit the Companies to, and the Buyer shall not, make any press release or
public announcement concerning this transaction without the prior written
approval of the other parties, unless a press release or public announcement is
required by applicable law, regulation or requirement of any securities
exchange.  Before a party makes any such
announcement or other disclosure required by law, regulation or requirement of
any securities exchange, such party agrees to give the other parties prior
notice and an opportunity to comment on the proposed disclosure.

Section 14.9.          Entire
Agreement.  The Transaction Documents
and the Confidentiality Agreement, dated as of August 31, 2006, between the
Seller and the Buyer contain the entire understanding among the parties hereto
with respect to the transactions contemplated hereby and 

 

 51
 

 

supersede and replace all
prior and contemporaneous agreements and understandings, oral or written, with
regard to such transactions.  All
Exhibits and schedules hereto and any documents and instruments delivered
pursuant to any provision hereof are expressly made a part of this Agreement,
as fully as though completely set forth herein.

Section 14.10.        Parties
in Interest.  Nothing in this
Agreement is intended to confer any rights or remedies under or by reason of
this Agreement on any Persons other than parties hereto and their respective
successors and permitted assigns.  Nothing in this Agreement is intended to
relieve or discharge the obligations or liability of any third persons to the
Seller or the Buyer.  No provision of
this Agreement shall give any third parties any right of subrogation or action
over or against the Seller or the Buyer.

Section 14.11.        Scheduled
Disclosures.  Disclosure of any
matter, fact or circumstance in a Schedule to this Agreement shall be deemed to
be disclosure thereof for purposes of any other Schedule hereto to the extent
that such matter, fact or circumstance would, on its face, apply as a
disclosure under such other Schedule. 
Any disclosure on a Schedule to this Agreement of any contract,
document, liability, default, breach, violation, limitation, impediment or
other matter, although the provision for such disclosure may require such
disclosure only if such contract, document, liability, default, breach,
violation, limitation, impediment or other matter be “material,” shall not be
construed against any party to this Agreement, as an assertion by such party,
that any such contract, document, liability, default, breach, violation,
limitation, impediment or other matter is, in fact, material.

Section 14.12.        Enforcement
of Certain Sections of the Agreement. 
The parties hereto agree that irreparable damage would occur if Sections
7.2 and 8.3 of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. 
It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereto, this being in addition to any
other remedy to which they are entitled at law or in equity.

Section 14.13.        Section
and Paragraph Headings.  The section
and paragraph headings in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.

Section 14.14.        Counterparts
and Facsimile.  This Agreement may be
executed in counterparts, each of which shall be deemed an original, but all of
which shall constitute the same instrument. 
Executed signature pages to this Agreement may be delivered by facsimile
and such facsimiles will be deemed as sufficient as if actual signature pages
bad been delivered.

Section 14.15.        Language.  The Parties hereto acknowledge that they have
requested that this Agreement and any Transaction Documents be drafted in the
English language.  Les parties aux
présentes reconnaissent qu’elles ont exigé que la présente convention et tous
les documents de transactions qui s’y rattachent soient rédigés en anglais.

Section 14.16.        Reasonable
Assurances.  For a reasonable period
of time after the Closing, if any further action is necessary to carry out the
transactions contemplated by this Agreement, Buyer and Seller shall use
commercially reasonable efforts to take all such all actions, and to do, or 

 52
 

 

cause to be done, all
things necessary or advisable consistent with applicable law to consummate and
make effective in an expeditious manner the transactions contemplated hereby.

[Remainder of page
intentionally left blank]

 

 53

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed as of the date first above written.

	
  

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FRANÇOIS-CHARLES OBERTHUR FIDUCIAIRE, S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Savare

  	
   

  
	
   

  	
   

  	
  Name: Thomas Savare

  	
   

  
	
   

  	
   

  	
  Time: Director General Delegue

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PARENT:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SCIENTIFIC GAMES CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DeWayne E. Laird

  	
   

  
	
   

  	
   

  	
  Name: DeWayne E. Laird

  	
   

  
	
   

  	
   

  	
  Title: Vive President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ACQUISITION SUBSIDIARY:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SCIENTIFIC GAMES HOLDINGS (CANADA) INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ira H. Raphaelson

  	
   

  
	
   

  	
   

  	
  Name: Ira H. Raphaelson

  	
   

  
	
   

  	
   

  	
  Title: Director and Secretary

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